Lacroix v. Valois

Lacroix v. Valois
Collection
Supreme Court Judgments
Date
1990-10-18
Report
[1990] 2 SCR 1259
Case number
19134
Judges
Lamer, Antonio; La Forest, Gérard V.; Gonthier, Charles Doherty; Cory, Peter deCarteret; McLachlin, Beverley
On appeal from
Quebec
Subjects
Appeal
Family law
Notes
SCC Case Information: 19134
Decision Content
Lacroix v. Valois,[1990] 2 S.C.R. 1259
Louise Lacroix Appellant
v.
Normand Valois Respondent
indexed as: lacroix v. valois
File No.: 19134.
1990: April 26; 1990: October 18.
Present: Lamer C.J.* and La Forest, Gonthier, Cory and McLachlin JJ.
on appeal from the court of appeal for quebec
Family law ‑‑ Compensatory allowance ‑‑ Divorce ‑‑ Bankruptcy ‑‑ Bankrupt husband discharged prior to claim for compensatory allowance ‑‑ Whether discharge of bankrupt husband bar to claim for compensatory allowance ‑‑ Whether allowance "provable claim" within meaning of Bankruptcy Act ‑‑ Whether bankruptcy at end of cohabitation irrefutable evidence of lack of enrichment ‑‑ Civil Code of Quebec, art. 559 ‑‑ Bankruptcy Act, R.S.C. 1970, c. B‑3, ss. 2, 148.
Family law ‑‑ Compensatory allowance ‑‑ Divorce ‑‑ Criteria for obtaining compensatory allowance ‑‑ Continuing enrichment ‑‑ Time at which enrichment of patrimony to be evaluated ‑‑ Civil Code of Quebec, art. 559.
Divorce ‑‑ Lump sum ‑‑ Waiver ‑‑ Order granting lump sum set aside by Court of Appeal ‑‑ Minutes of trial indicating that wife waived "any claim for an alimentary pension, limiting herself to an allowance" of $55,000 ‑‑ Whether wife waived any claim of an alimentary nature ‑‑ Divorce Act, R.S.C. 1970, c. D‑8, s. 11.
Appeal ‑‑ Divorce ‑‑ Supreme Court of Canada ‑‑ Application for leave to appeal filed within time limit set by Court but granted after time expired ‑‑ Whether leave to appeal granted out of time ‑‑ Divorce Act, R.S.C. 1970, c. D‑8, s. 18(2).
Appeal ‑‑ Divorce ‑‑ Supreme Court of Canada ‑‑ Leave to appeal ‑‑ Whether s. 41 of Supreme Court Act and s. 18(1) of Divorce Act can both be relied on in same case to obtain leave to appeal ‑‑ Supreme Court Act, R.S.C. 1970, c. S‑19, s. 41(1) ‑‑ Divorce Act, R.S.C. 1970, c. D‑8, s. 18(1).
Appeal ‑‑ Divorce ‑‑ Court of Appeal ‑‑ Applicable rules ‑‑ Divorce decree granting compensatory allowance and lump sum ‑‑ Notice of appeal filed pursuant to provisions of Divorce Act , not provisions of Code of Civil Procedure ‑‑ Whether filing of appeal inscription pursuant to Divorce Act valid with respect to compensatory allowance ‑‑ Divorce Act, R.S.C. 1970, c. D‑8, s. 17(3) ‑‑ Code of Civil Procedure, R.S.Q., c. C‑25, art. 495 ‑‑ Civil Code of Quebec, art. 559.
The parties were married in 1969 under the regime of separation of property and ceased all cohabitation in 1977. In the course of the marriage respondent went into business with his wife, who at the time had substantial liquid capital, but all their business ventures failed. After the cohabitation ceased appellant became completely destitute, while respondent, after making an assignment of his property in January 1978 and being discharged in 1979, became a shareholder and the prime mover of a transportation company and co‑owner of a residence. In June 1981 appellant filed a divorce petition and asked the Superior Court to order respondent to pay her the sum of $55,000 and the sum of $250 a week as alimony. At the hearing of the petition appellant waived "any claim for an alimentary pension, limiting herself to an allowance" of $55,000. When the decree absolute was granted, the Superior Court ordered respondent to pay appellant the sum of $40,000 both as a compensatory allowance and as a lump sum indemnity for re‑establishment and maintenance. The Court of Appeal set aside the trial judgment with respect to the corollary relief. This appeal is to determine whether the Court of Appeal erred in finding that the sum awarded by the Superior Court was not justified under art. 559 C.C.Q. and s. 11 of the Divorce Act . However, before answering the main issue, the Court must dispose of certain preliminary issues of a procedural nature which could have an effect on the jurisdiction of the Court of Appeal and on that of this Court.
Held: The appeal should be allowed.
(1) Supreme Court of Canada's jurisdiction
Although leave to appeal was granted after the time limit set by this Court had expired, the order granting leave to appeal under s. 18(2) of the Divorce Act was not out of time since the notice of application for leave to appeal was filed within the time limit set. Like most court orders which are reserved, the order granting leave to appeal is retroactive to the date of the application. Section 18(2) , which refers to leave to appeal, in fact refers to the date on which the notice of application was filed, being the date on which the leave order is deemed to have been made.
As long as there is no conflict in their application, s. 41(1) of the Supreme Court Act and s. 18(1) of the Divorce Act can confer jurisdiction on this Court and both provisions can be relied on in the same case in order to obtain leave to appeal. Since in this case the leave order makes no distinction between the question of the lump sum and that of the compensatory allowance, this Court is thus free to consider that it duly has before it these two aspects of the appeal under its enabling legislation, and so to examine any issue of mixed law and fact which may have to be disposed of in resolving the dispute.
(2) Court of Appeal's jurisdiction
The filing of the appeal inscription in accordance with the procedure specified in the Divorce Act is valid for all questions disposed of in a divorce decree, including the award of a compensatory allowance. The possibility of incorporating the claim for a compensatory allowance into the divorce proceedings at the trial level is well recognized: the language of art. 559 C.C.Q. cannot be circumvented in this regard. It is entirely natural for the same to be true of the procedure applicable to appeals. It is clearly not appropriate to create a mandatory procedural distinction at the appeal level in dealing with questions which are closely related at trial.
(3) Compensatory allowance and lump sum
In order to be awarded a compensatory allowance a party must establish (1) his or her contribution; (2) the enrichment of his or her spouse's patrimony; (3) the causal link between the two; and (4) the proportion in which the contribution made possible the enrichment. Each of these elements must be evaluated with great flexibility. Further, the enrichment must subsist and must be evaluated at the time of the divorce. Determining the existence and value of the enrichment at the time of the divorce will very much depend on the circumstances. There is no indication in the present case that as a question of fact the trial judge did not find an enrichment that still existed at the time of the divorce. There was evidence in the record on the basis of which the trial judge could conclude there had been a contribution by appellant which resulted in an enrichment of respondent, despite the intervening bankruptcy which occurred in the interval, and the Court of Appeal was wrong to intervene on the question of the compensatory allowance. The court made an initial error in finding that the trial judge had mistakenly applied s. 148(1) of the Bankruptcy Act. The latter referred to s. 148 as a whole. Subsection (2) provides that the legal effect of a discharge order extends only to claims provable in bankruptcy. The trial judge thus correctly held that the order discharging respondent was not a bar to the awarding of a compensatory allowance. A "claim" arising out of art. 559 C.C.Q. is not a claim provable in a proceeding brought pursuant to the Bankruptcy Act. The Court of Appeal made a second error in stating that respondent's bankruptcy and discharge constituted an estoppel ("fin de non‑recevoir") to the claim for a compensatory allowance. The term "estoppel" has a well defined legal meaning which cannot be taken to describe the effect produced by the bankruptcy of a defendant spouse on the rights of the other spouse to a compensatory allowance. The court probably regarded respondent's bankruptcy as absolute and irrefutable evidence that no enrichment was still in existence from the matrimonial relationship. A bankruptcy occurring before the action for an allowance is not irrefutable evidence either of the lack of enrichment at the time of the divorce or of the lack of correlation between the contribution prior to the bankruptcy and the assets subsequently found in the defendant's patrimony.
The Court of Appeal was also wrong to intervene on the question of the lump sum. The court concluded that the trial judge had no claim of an alimentary nature before him and quashed the order awarding a lump sum solely on the basis of a waiver alleged by respondent, an allegation based on the ambiguous wording of the minutes of trial. First, the language used in the minutes indicates that appellant waived "any claim for an alimentary pension, limiting herself to an allowance" of $55,000. Clearly, a person does not waive a claim for a lump sum by waiving a claim for an alimentary pension. The word "allowance" must be given its ordinary meaning here and may include a lump sum or a compensatory allowance. With the benefit of the record as a whole, the trial judge considered that he had before him a claim of an alimentary nature. The Court of Appeal, which did not have transcripts available to it and was not in a position to analyse the minutes in light of the record as a whole, should not have intervened.
Cases Cited
Applied: Pelech v. Pelech, [1987] 1 S.C.R. 801; Droit de la famille‑‑203, [1985] C.A. 339; referred to: Air‑Care Ltd. v. United Steel Workers of America, [1976] 1 S.C.R. 2; Cie Immobilière Viger Ltée v. Lauréat Giguère Inc., [1977] 2 S.C.R. 67; Gingras v. Gagnon, [1977] 1 S.C.R. 217; Beausel v. Langevin, [1975] C.A. 223; Caisse populaire de Sacré‑Coeur, Saguenay v. Dufour, C.A. Québec, No. 200‑09‑000060‑779, March 4, 1981; Droit de la famille‑‑67, [1985] C.A. 135; Sabourin v. Charlebois, [1982] C.A. 361; Cass. civ. 1st Ch., January 9, 1979, Bull. civ. I, No. 11, p. 8 (R. v. L.); Cass. civ. 1st Ch., May 30, 1979, Bull. civ. I, No. 161, p. 130 (D. v. L.); Cass. civ. 1st Ch., October 26, 1982, Bull. civ. I, No. 302, p. 257 (Perrin v. Chevrier); M.D. v. P.‑H.D., [1988] R.L. 139; Droit de la famille‑‑649, [1989] R.D.F. 325; Droit de la famille‑‑688, [1989] R.D.F. 532; Banque canadienne nationale v. St‑Germain, [1942] Que. K.B. 496; Droit de la famille‑‑271, [1986] R.D.F. 49; Droit de la famille‑‑594, [1989] R.J.Q. 271; Droit de la famille‑‑1097, [1987] R.D.F. 222.
Statutes and Regulations Cited
Act to amend the Civil Code of Québec and other legislation in order to favour economic equality between spouses, S.Q. 1989, c. 55.
Act to establish a new Civil Code and to reform family law, S.Q. 1980, c. 39, s. 70.
Bankruptcy Act, R.S.C. 1970, c. B‑3, ss. 2, "claim provable in bankruptcy", 148.
Civil Code of Quebec, arts. 462.1 et seq. [ad. 1989, c. 55, s. 8], 559 [rep. idem, s. 23].
Code of Civil Procedure, R.S.Q., c. C‑25, art. 495.
Divorce Act, R.S.C. 1970, c. D‑8, ss. 11, 12, 18.
Supreme Court Act, R.S.C. 1970, c. S‑19, ss. 41(1) [rep. & sub. 1974‑75‑76, c. 18, s. 5], 52 [idem, s. 7].
Authors Cited
Baudouin, Jean‑Louis. Les Obligations, 3rd ed. Cowansville, Que.: Yvon Blais, 1989.
Baudouin, Louis. Le droit civil de la province de Québec. Montréal: Wilson & Lafleur, 1953.
Comtois, Roger. "La prestation compensatoire: une mesure d'équité" (1983), 85 R. du N. 367.
Cossette, André. "Le régime de la séparation de biens est‑il disparu avec la naissance de la prestation compensatoire?" (1985), 87 R. du N. 456.
Goré, François. L'enrichissement aux dépens d'autrui. Paris: Dalloz, 1949.
APPEAL from a judgment of the Quebec Court of Appeal, [1985] C.A. 5 (sub nom. Droit de la famille‑‑176), varying a judgment of the Superior Court[1]. Appeal allowed.
Gérard Dugré, for the appellant.
Pierrette Rayle and Suzanne Anfousse, for the respondent.
//Gonthier J.//
English version of the judgment of the Court delivered by
GONTHIER J. ‑‑ This appeal is brought pursuant to s. 41 of the Supreme Court Act, R.S.C. 1970, c. S‑19 (now R.S.C., 1985, c. S‑26, s. 40(1) ), and s. 18 of the Divorce Act, R.S.C. 1970, c. D‑8. It raises certain questions as to the rules governing a compensatory allowance, in particular in the event of a bankruptcy and a discharge order prior to any claim for an allowance and the requirement that the enrichment must subsist when proceedings are brought.
The appeal also raises questions regarding the assessment of the facts by the trial judge and the legitimacy of the Court of Appeal's intervention. Because these questions arise in the specific circumstances of this case, before proceeding any further I should point out that the Court is not called upon to deal with the principal aspects of the ongoing debate regarding the principles that should govern the granting of compensatory allowances, even though this is the first appeal it has heard in the field.
1. Facts and Proceedings
The parties were married in 1969 under the regime of separation of property. After a brief separation followed by a reconciliation in 1971, they finally ceased all cohabitation in 1977. At the time of the marriage the respondent held employment in a local paper mill at a gross salary of $140 a week. In 1972 the respondent gave up his job to go into business with his wife, who at the time had substantial liquid capital, having received $140,000 following the accidental death of her first husband, with whom she had had two children. The appellant had also received $47,000 as a particular legatee of her father, who died in 1973. All the businesses operated by the parties failed. According to the trial judge the appellant is now completely destitute while the respondent, after making an assignment of his property in January 1978 and being discharged in 1979, became the "brain trust" of a successful moving equipment transportation company, and is the co‑owner of a residence which is "far from modest though mortgaged".
By a divorce petition dated June 2, 1981 the appellant asked the Superior Court to order her husband to pay her the sum of $55,000 in non‑exclusive overall settlement of her alimentary pension, and the sum of $250 a week as alimony. At the hearing of the petition the appellant said that she was abandoning any claim for an "alimentary pension", and was simply asking for an "allowance" of $55,000.
The decree nisi was granted on June 17, 1983. On the following October 7, Laroche J. granted a decree absolute and ordered the respondent to pay the appellant the sum of $40,000, both as repayment of money and as a compensatory allowance and lump sum indemnity for re‑establishment and maintenance, the whole without interest. The amount was to be payable in annual instalments of $5,000 commencing on November 1, 1983 with a final instalment of $10,000 on November 1, 1989.
On October 12, 1983 the respondent filed an appeal and subsequently obtained an order staying the provisional execution of the judgment with respect to the corollary relief, except for the obligation connected with the first instalment. No joint record was prepared for the Court of Appeal, which set aside the trial judgment with respect to the corollary relief without having the benefit of consulting the record as a whole.
2. Applicable Legislation
The awarding of a compensatory allowance and a lump sum was based on the following legislation:
‑- article 559 of the Civil Code of Quebec:
559. The court, in granting a divorce, may order either spouse to pay to the other, as consideration for the latter's contribution, in goods or services, to the enrichment of the patrimony of the former, an allowance payable immediately or by instalments, taking into account, in particular, the advantages of the matrimonial regime and marriage contract.
The compensatory allowance may be paid, wholly or in part, by the granting of a right of ownership, use or habitation in accordance with articles 458 to 462.
‑- sections 11 and 12 of the Divorce Act :
11. (1) Upon granting a decree nisi of divorce, the court may, if it thinks it fit and just to do so having regard to the conduct of the parties and the condition, means and other circumstances of each of them, make one or more of the following orders, namely:
(a)an order requiring the husband to secure or to pay such lump sum or periodic sums as the court thinks reasonable for the maintenance of
(i)the wife,
(ii)the children of the marriage, or
(iii)the wife and the children of the marriage;
(b)an order requiring the wife to secure or to pay such lump sum or periodic sums as the court thinks reasonable for the maintenance of
(i)the husband,
(ii)the children of the marriage, or
(iii)the husband and the children of the marriage; and
(c)an order providing for the custody, care and upbringing of the children of the marriage.
(2) An order made pursuant to this section may be varied from time to time or rescinded by the court that made the order if it thinks it fit and just to do so having regard to the conduct of the parties since the making of the order or any change in the condition, means or other circumstances of either of them.
12. Where a court makes an order pursuant to section 10 or 11 , it may
(a)direct that any alimony, alimentary pension or maintenance be paid either to the husband or wife, as the case may be, or to a trustee or administrator approved by the court; and
(b)impose such terms, conditions or restrictions as the court thinks fit and just.
3. Judgments Below
Superior Court
Laroche J. did not consider it necessary to discuss in detail in his reasons the various aspects of the two parties' financial venture. From the considerable evidence presented during six days of hearing, he selected and mentioned two points: the state of the respondent's patrimony as indicated by the accounting documents filed and the appellant's right to the money she had to pay as endorser after the respondent's bankruptcy. In the opinion of Laroche J., this is a [TRANSLATION] "financial contribution" which presents no problems in terms of evidence. According to the evidence adduced this financial contribution amounts, with interest, to a total of $32,640.48, which the judge then increased to $40,000 as an allowance for support and re‑establishment. Laroche J. explained the purpose of his order as follows:
[TRANSLATION] The awarding of this sum will be such as to allow [the appellant] to achieve financial independence and to finally terminate relations between the parties, after a "common adventure", both emotional and financial, which is unique of its kind.
As regards the effect of the respondent's bankruptcy and discharge on the appellant's rights, the trial judge explained:
[TRANSLATION] In law, needless to say, the order discharging the respondent's bankruptcy is not a bar to the awarding of such an amount and the performance of obligations of this kind between the parties, as a consequence of s. 148 of the Bankruptcy Act.
The respondent was accordingly ordered to pay the appellant the sum of $40,000, on the terms I described in the summary of facts.
Court of Appeal, [1985] C.A. 5
Turgeon J.A. ‑- reasons concurred in by Tyndale J.A.
After reproducing most of the trial judgment in his reasons, Turgeon J.A. noted the reference by the trial judge to s. 148 of the Bankruptcy Act, R.S.C. 1970, c. B‑3. This section provides inter alia that a discharge order does not release the bankrupt from any debt or liability under a maintenance order. The trial judge concluded from this that he could make an award in this case despite the respondent's bankruptcy and discharge. In the opinion of Turgeon J.A., the compensatory allowance is not alimentary in nature as art. 559 C.C.Q. is found in Subsection 1, dealing with the "Settlement of the financial interests of the spouses" and not in Subsection 2, dealing with the "Effects of divorce as to support". The respondent's discharge was thus possible having regard to his potential obligations under art. 559 C.C.Q.
Turgeon J.A. then mentioned what in his opinion must be proven by the plaintiff to obtain a compensatory allowance, at pp. 7‑8:
[TRANSLATION]
(1) his or her contribution;
(2) the enrichment of his or her spouse's patrimony;
(3) the causal link between the two;
(4) the proportion in which the contribution made possible the enrichment.
He added, and this passage is important:
[TRANSLATION] These four conditions must coexist and these four things must exist, or at least subsist, at the time the court grants the divorce. [Emphasis added.
The judge noted that in this case the enrichment no longer existed at the time of the divorce, since the respondent had made an assignment of his property. He concluded, at p. 8:
[TRANSLATION] In my opinion [the respondent's] bankruptcy and discharge are an estoppel to [the appellant's] claim for a compensatory allowance. The amounts paid by [the appellant] as endorser of certain debts contracted by her husband are a bar to her claim for a compensatory allowance.
Article 559 C.C.Q. does not alter the rules of suretyship. It does not have the effect of imposing on [the respondent] an obligation from which he has been discharged under the Bankruptcy Act.
With respect, I am of the view that the trial judge made an error of law.
There was accordingly no basis for the compensatory allowance order. In the view of Turgeon J.A., the amount awarded in this regard was $32,640.48, the balance having been awarded as a lump sum (although the entire amount was combined in the conclusions of the trial judgment, this breakdown is indicated in the trial judge's reasons). Turgeon J.A. considered that as the appellant had abandoned her alimentary claim, this second part of the order was therefore also without foundation: the judge's award went beyond what had been sought.
Turgeon J.A. accordingly allowed the appeal and struck out the financial order in the divorce decree, but reserved the appellant's right to claim alimentary support under the law.
McCarthy J.A. -‑ concurring opinion
I shall simply reproduce the short reasons of McCarthy J.A. (at pp. 8‑9):
[TRANSLATION] I have had the advantage of reading the opinion of my colleague Turgeon J.A.
Article 559 C.C.Q. gives the judge granting the divorce discretion, provided there is a "contribution . . . to the enrichment of the patrimony" of the spouse. Since what is involved is "compensation" (not indemnification) for this contribution, I am of the view that the enrichment must subsist at the time of the divorce.
In the present case the enrichment of the husband's patrimony as a result of his wife's contribution was not still in existence when the divorce decree was granted. The judge consequently did not have any discretion under art. 559.
With respect to the lump sum awarded by the judge beyond the provisions of art. 559, I would emphasize that he had no claim of an alimentary nature before him.
Like my colleague I would allow the appeal, with each party paying their own costs.
4. Issues
The appellant submitted the following issues to the Court:
1.Did the Court of Appeal err in finding that the award of the sum of $40,000 was not justified under art. 559 C.C.Q.?
2.Did the Court of Appeal err in finding that the award of the sum of $40,000 was not justified under s. 11 of the Divorce Act ?
5. Analysis
Before moving on to the main issues, which I shall deal with in the order suggested by the appellant, I must dispose of certain preliminary issues of a procedural nature which both sides argued could have an effect on the jurisdiction of the Court of Appeal and on that of this Court in the case at bar.
A. Preliminary Issues
(a) Jurisdiction of This Court
The respondent maintains that the order granting leave to appeal to this Court under the Divorce Act was made out of time. The relevant provision reads as follows:
18. . . .
(2) Leave to appeal under this section may be granted within thirty days from the pronouncing of the judgment or order being appealed from or within such extended time as the Supreme Court of Canada or a judge thereof may, before the expiration of those thirty days, fix or allow.
In the present case the judgment appealed from was pronounced on November 9, 1984 and the appellant filed a notice of motion for an extension of time on December 6, 1984. This motion was granted the following day and the time was extended to January 21, 1985. The appellant filed her notice of application for leave to appeal on December 27, 1984 and the order of this Court granting leave to appeal was made on January 31 following. As the respondent indicated, the notice of application for leave to appeal was filed within the time limit set by the order extending the time, but leave to appeal was in fact granted after the time fixed by that order had expired. The provision cited above refers quite clearly to the leave to appeal rather than the application to obtain it. The respondent argued that leave must in fact be granted within the time mentioned, which was not the case here.
The result of adopting this interpretation offends common sense. On this reading the time limit at issue would be imposed on this Court, and its length fixed by its own order in cases of an extension. The parties' rights would subsist or be extinguished, depending on whether the leave order was made before or after the time limit fixed, regardless of the diligence exercised by the respective parties. Such a result seems to me to be both unfair and absurd. It will suffice to recall here the remarks made by Dickson J. in Air‑Care Ltd. v. United Steel Workers of America, [1976] 1 S.C.R. 2, at p. 8, regarding the parties' rights in relation to the excessive length of time which an administrative tribunal had allowed to elapse before making its decision:
The right of a party should not be lost or in any way prejudiced as the result of dilatory conduct on the part of a Board over which it has little or no control.
The length of this Court's deliberations in a case depends on a host of factors connected with its internal operation and it is inconceivable that a litigant could be prejudiced by the effect of the law.
The answer to the respondent's questions lies in the retroactivity of an order granting leave to appeal. Like most court orders which are reserved, the order granting leave to appeal is retroactive to the date of the application. It is in this respect similar to an order made from the bench following an oral application, and in the absence of any indication to the contrary it similarly produces its legal effects from the time the application is duly submitted.
I am therefore of the view that the time limits mentioned in the provision refer in fact to the date on which the notice of application was filed, being the date on which the leave order is deemed to have been made. In the case at bar the notice of application for leave to appeal was filed on December 27, 1984, that is nearly a month before the time limit set by this Court expired.
The respondent also drew the Court's attention to s. 18(1) of the Divorce Act , which states that an appeal to this Court with leave lies on a question of law:
18. (1) An appeal lies on a question of law to the Supreme Court of Canada with leave of that court from a decision of the court of appeal under section 17.
An appeal authorized under the Supreme Court Act may concern issues of mixed law and fact. Section 41(1) read as follows at that time:
41. (1) Subject to subsection (3), an appeal lies to the Supreme Court from any final or other judgment of the highest court of final resort in a province, or a judge thereof, in which judgment can be had in the particular case sought to be appealed to the Supreme Court, whether or not leave to appeal to the Supreme Court has been refused by any other court, where, with respect to the particular case sought to be appealed, the Supreme Court is of the opinion that any question involved therein is, by reason of its public importance or the importance of any issue of law or any issue of mixed law and fact involved in such question, one that ought to be decided by the Supreme Court or is, for any other reason, of such a nature or significance as to warrant decision by it, and leave to appeal from such judgment is accordingly granted by the Supreme Court.
In the case at bar the application for leave to appeal was based on both Acts and the leave order was granted without specifying the Act, as requested in the application. In the respondent's submission the appeal relating to the application of the Divorce Act must necessarily have been authorized under that Act and, consequently, with respect to the lump sum this Court has jurisdiction only over questions of law raised by the award made.
In my opinion Pelech v. Pelech, [1987] 1 S.C.R. 801, disposes of this question in the appellant's favour. It was argued in that case that the right to rely on the Divorce Act , which is more specific, in order to seek leave to appeal, precluded the application of the Supreme Court Act , which is more general in its application. This Court rejected the argument and held that both statutes could confer jurisdiction on it as long as there was no conflict in their application (p. 825).
The functional test for the existence of a conflict which appears to have been adopted allows the maximum area of overlap and responds to this Court's concern that the procedural avenues of access to the Court should be kept open. The criteria used to guide this Court in exercising its discretion under each of the provisions are not identical and it is in the interests of justice to see that both avenues can be used. In my view, it should be possible for them both to be relied on in the same case in order to obtain leave to appeal.
In the case at bar, the leave order makes no distinction between the question of the lump sum and that of the compensatory allowance. This Court is thus free to consider that it duly has before it these two aspects of the appeal under its enabling legislation, and so to examine any issue of mixed law and fact which may have to be disposed of in resolving the dispute.
(b) Court of Appeal's Jurisdiction
In this Court the appellant argues that the Court of Appeal never had before it an appeal regarding the conclusions of the trial judgment on the compensatory allowance. The respondent appealed the trial judgment by filing a notice in the office of the Court of Appeal, in accordance with the requirements of the Divorce Act , but no notice of inscription was served on or filed with the office of the Superior Court as required by art. 495 of the Code of Civil Procedure, R.S.Q., c. C‑25. In the appellant's submission, the Court of Appeal went beyond the limits of its jurisdiction to the extent of its intervention regarding the compensatory allowance. The question is therefore whether the filing of the inscription in appeal pursuant to the Divorce Act is valid with respect to the compensatory allowance.
The respondent refers to a dispute in the Court of Appeal concerning the proper procedure in the case of an appeal from a Superior Court judgment disposing both of matters governed by the Divorce Act and matters governed by the Civil Codes. After a period of uncertainty (see Beausel v. Langevin, [1975] C.A. 223; Caisse populaire de Sacré‑Coeur, Saguenay v. Dufour, C.A. Québec, No. 200‑09‑000060‑779, March 4, 1981; Droit de la famille‑‑67, [1985] C.A. 135), the Court of Appeal disposed of this issue in a leading judgment rendered in Droit de la famille‑‑203, [1985] C.A. 339. Stressing that the compensatory allowance takes the form of corollary relief when it is ordered in a divorce decree, LeBel J.A. held that the procedure set out in the federal Act was applicable to all incidental matters covered in divorce proceedings.
I agree that the filing of the appeal inscription in accordance with the procedure specified in the Divorce Act is valid for all questions disposed of in a divorce decree, including the award of a compensatory allowance. The possibility of incorporating the claim for a compensatory allowance into the divorce proceedings at the trial level is well recognized: the language of art. 559 C.C.Q. cannot be circumvented in this regard. It seems entirely natural for the same to be true of the procedure applicable to appeals. It is clearly not appropriate to create a mandatory procedural distinction at the appeal level in dealing with questions which are closely related at trial.
On the preliminary questions, it can be said that the Court of Appeal and this Court have both been validly presented with the appeal relating to the compensatory allowance as well as to the lump sum ordered under the Divorce Act . For all aspects of the appeal this Court may rule on issues of mixed law and fact, deriving the necessary jurisdiction from its enabling Act.
B. Main Issues
The awarding of a compensatory allowance or lump sum rests upon a decision that depends to a large extent on the trial judge's ability to assess the facts. In performing this difficult judicial exercise, there are many factors which the trial judge may legitimately consider as, in relation to both compensatory allowances and lump sums, the legislator has recognized the need for broad discretion by adopting enabling provisions which have an essentially open texture. In such a context, the function of an appellate court is to correct errors of law made at trial in exercising the discretion conferred by law. It goes without saying that assessing the facts is the prerogative of the trial judge and that, unless it can identify such an egregious error in this regard that it indicates an error of legal principle, the Court of Appeal is not justified in intervening.
In this appeal the appellant is essentially challenging the legitimacy of the Court of Appeal's intervention, first on the question of the compensatory allowance and second on that of the lump sum. In view of the considerable volume of evidence adduced at trial and the fact that no joint record was submitted to the Court of Appeal, I think it is advisable to consider the questions raised in the manner proposed by the appellant.
(a) The Compensatory Allowance
Quebec law has long recognized the freedom of matrimonial agreements and the right of spouses to opt for the regime of separation of property. It is well known that a great many flagrant injustices have resulted from this regime: one of the spouses, usually the wife, was often left destitute by a divorce while the other spouse had capitalized throughout the marriage on contributions of money and unpaid labour. From time to time other regimes also produced certain injustices requiring redress. The courts were certainly aware of these injustices, but generally refused to intervene in the absence of legislative authority.
First, the Court of Appeal refused its concurrence to the orders of a compensatory nature made at the time of the divorce as part of the lump sum, because their effect was to retroactively extinguish the effects of a freely made and executed contract. After all, the lump sum is alimentary in nature. From the same concern that agreements freely concluded for the separation of property should be respected, the courts also seldom recognized that a tacit partnership could exist between spouses. The person affected found it hard to establish the existence of a tacit partnership contract existing alongside a written marriage contract, duly concluded before a notary, the terms of which hardly lent themselves to such a possibility. Finally, it was felt that generally the doctrine of unjust enrichment could not be used to mitigate this type of injustice, as the cause of the enrichment was the matrimonial regime or association: Sabourin v. Charlebois, [1982] C.A. 361. It will be noted that the decisions of the Quebec courts have diverged in this respect from the position taken by French courts: Cass. civ. 1st Ch., January 9, 1979, Bull. civ. I, No. 11, p. 8 (R. v. L.); Cass. civ. 1st Ch., May 30, 1979, Bull. civ. I, No. 161, p. 130 (D. v. L.); Cass. civ. 1st Ch., October 26, 1982, Bull. civ. I, No. 302, p. 257 (Perrin v. Chevrier).
This is the context in which the remedy by way of a compensatory allowance was introduced on December 1, 1982. There has in general been little consideration of the general objectives of this legislative innovation. It is clearly intended to mitigate the injustices produced by the implementation of a freely adopted matrimonial regime, by making it possible to compensate a spouse who has enriched the patrimony of the other spouse by his or her contribution of goods or services (see Roger Comtois, "La prestation compensatoire: une mesure d'équité" (1983), 85 R. du N. 367).
The problems arise when it comes to determining how far the discretion conferred on the judge extends. The wording of the article is very broad and in practice it allows the judge to extinguish completely the regime of separation of property chosen by the spouses (see André Cossette, "Le régime de la séparation de biens est‑il disparu avec la naissance de la prestation compensatoire?" (1985), 87 R. du N. 456). The legislature has, however, elected to preserve freedom of choice in matrimonial agreements. For this reason, the courts could hardly create a posteriori an obligatory and retroactive judicial partnership of acquests by adopting an overly broad interpretation of the discretion conferred on them. On the other hand, limiting the ordinary meaning of the provision by an excessive deference to freedom of matrimonial agreements would be to ignore the purpose sought by the legislature. Moreover, the latter has recently chosen to limit this freedom considerably by creating a mandatory family patrimony: Act to amend the Civil Code of Québec and other legislation in order to favour economic equality between spouses, S.Q. 1989, c. 55; Civil Code of Quebec, arts. 462.1 et seq.
The courts must therefore seek to correct injustices in accordance with the purpose of the law, without in so doing extinguishing the spouses' freedom of choice in so far as the legislature has chosen to preserve it. It is not an easy exercise and the judgments of the Court of Appeal show that the problems to be encountered are many. The Court of Appeal held in the case at bar that the awarding of a compensatory allowance by the trial judge was vitiated by error.
The elements which a party must establish in order to be awarded an allowance are stated by the Court of Appeal as follows, at pp. 7‑8:
(1)his or her contribution;
(2)the enrichment of his or her spouse's patrimony;
(3)the causal link between the two;
(4)the proportion in which the contribution made possible the enrichment.
This statement results from the wording of art. 559 and the natural incorporation of the remedy introduced by it into the general principles of civil law. I do not think there is any need to alter this statement, except to note that there must be great flexibility in evaluating the items it contains.
It seems particularly clear that too much rigidity in applying the burden of proof imposed on the plaintiff with respect to each of these items would result in denying the beneficial effects of the remedy. The Court of Appeal has quite properly pointed out many times in subsequent cases that these items must be viewed as a whole, by an assessment free of calculations made to the nearest dollar (see, for example, M.D. v. P.‑H.D., [1988] R.L. 139; Droit de la famille‑‑649, [1989] R.D.F. 325; Droit de la famille‑‑688, [1989] R.D.F. 532). The matrimonial context is special in that the keeping of precise, penny‑pinching accounts which could eventually be used as evidence in a court is hard to rec