Davis v. Crawford
106 O.R. (3d) 221
2011 ONCA 294
Court of Appeal for Ontario,
Goudge, Simmons, Cronk, R.P. Armstrong and Lang JJ.A.
April 14, 2011
Family law -- Support -- Spousal support -- Lump sum -- Court's ability to award lump sum spousal support not restricted to situations where there is real risk that periodic payments would not be made or to other limited and very unusual circumstances.
The parties were common law spouses. They began living together in 1982, when the appellant was 41 and the respondent was 42 years old, and separated after 23 years. Both parties contributed to the household expenses from their respective incomes during the relationship. The respondent was diagnosed with a non-malignant brain tumour in 1999. She suffered a stroke in 2000 and retired from the workforce following surgery. With minor exceptions, her assets consisted of her share of the proceeds of sale of a jointly owned property and her pension. The trial judge awarded the respondent lump sum spousal support in the amount of $135,000. The appellant appealed.
Held, the appeal should be dismissed.
A court's ability to award lump sum spousal support is not restricted to situations where there is a real risk that periodic payments would not be made or to other limited and very unusual circumstances. A lump sum order can be made to relieve against financial hardship. An important consideration in determining whether to make a lump sum spousal support award is whether the payor has the ability to make a lump sum payment without undermining the payor's future self-sufficiency. A court considering an award of lump sum spousal support must weigh the perceived advantages of making a lump sum award in the particular case against any disadvantages.
The trial judge did not err in making a lump sum award in the circumstances of this case. Having regard to her findings that the appellant had greater assets and means than he was prepared to acknowledge and that he was attempting to shelter assets from the respondent's reach, it was apparent that she concluded there was a real risk that the appellant would not pay periodic support and that that factor alone mandated an award of lump sum support. Further, the appellant's failure to make proper disclosure made a clean break between the parties desirable. [page222]
APPEAL from the judgment of Marshman J., 2009 23872 (ON SC), [2009] O.J. No. 1959, 71 R.F.L. (6th) 54 (S.C.J.) for an award of lump sum spousal support.
Cases referred to E. (T.A.) v. E. (M.E.), 2003 57410 (ON CA), [2003] O.J. No. 3300, 175 O.A.C. 394, 43 R.F.L. (5th) 321, 124 A.C.W.S. (3d) 1107 (C.A.); Elliot v. Elliot (1993), 1993 3429 (ON CA), 15 O.R. (3d) 265, [1993] O.J. No. 2308, 106 D.L.R. (4th) 609, 65 O.A.C. 241, 48 R.F.L. (3d) 237, 43 A.C.W.S. (3d) 110 (C.A.); Mannarino v. Mannarino, 1992 14022 (ON CA), [1992] O.J. No. 2730, 43 R.F.L. (3d) 309, 37 A.C.W.S. (3d) 716 (C.A.); Willemze-Davidson v. Davidson, 1997 1440 (ON CA), [1997] O.J. No. 856, 98 O.A.C. 335, 69 A.C.W.S. (3d) 706 (C.A.), consd Other cases referred to Chiang (Trustee of) v. Chiang (2009), 93 O.R. (3d) 483, [2009] O.J. No. 41, 2009 ONCA 3, 78 C.P.C. (6th) 110, 305 D.L.R. (4th) 655, 49 C.B.R. (5th) 1, 257 O.A.C. 64, 174 A.C.W.S. (3d) 105; Fisher v. Fisher (2008), 88 O.R. (3d) 241, [2008] O.J. No. 38, 2008 ONCA 11, 232 O.A.C. 213, 163 A.C.W.S. (3d) 432, 288 D.L.R. (4th) 513, 47 R.F.L. (6th) 235; Greenberg v. Daniels, 2005 456 (ON CA), [2005] O.J. No. 87, 194 O.A.C. 115, 20 R.F.L. (6th) 287, 136 A.C.W.S. (3d) 335 (C.A.); Hickey v. Hickey, 1999 691 (SCC), [1999] 2 S.C.R. 518, [1999] S.C.J. No. 9, 172 D.L.R. (4th) 577, 240 N.R. 312, [1999] 8 W.W.R. 485, J.E. 99-1206, 138 Man. R. (2d) 40, 46 R.F.L. (4th) 1, REJB 1999-12847, 88 A.C.W.S. (3d) 1044; R. v. Palmer, 1979 8 (SCC), [1980] 1 S.C.R. 759, [1979] S.C.J. No. 126, 106 D.L.R. (3d) 212, 30 N.R. 181, 50 C.C.C. (2d) 193, 14 C.R. (3d) 22, 17 C.R. (3d) 34, 4 W.C.B. 171; Sengmueller v. Sengmueller (1994), 1994 8711 (ON CA), 17 O.R. (3d) 208, [1994] O.J. No. 276, 111 D.L.R. (4th) 19, 69 O.A.C. 312, 25 C.P.C. (3d) 61, 2 R.F.L. (4th) 232, 45 A.C.W.S. (3d) 1101; Vynnyk v. Baisa, [2008] O.J. No. 3747, 2008 ONCA 657, 55 R.F.L. (6th) 239, 169 A.C.W.S. (3d) 610 Statutes referred to Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) [as am.], s. 15.2, (1) Family Law Act, R.S.O. 1990, c. F.3 [as am.], ss. 5, 33(8) [as am.], (d), (9) [as am.], 34(1)(a), (b) Authorities referred to Rogerson, Carol, and Rollie Thompson, Spousal Support Advisory Guidelines (Ottawa: Department of Justice Canada, 2008)
Erin L. Reid, for appellant. William R. Clayton, for respondent.
The judgment of the court was delivered by
SIMMONS and LANG JJ.A.: --
I. Introduction
1The issue on this appeal is whether the trial judge erred in awarding lump sum spousal support to the respondent in the amount of $135,000. To decide this issue, it is necessary that we consider the principles that govern such awards.
2For the reasons that follow, we would dismiss the appeal. [page223]
II. Background
3The appellant and the respondent were common law spouses. They began living together in London, Ontario in December 1982, when they were 41 and 42 years of age respectively. Both parties had been married previously and both had children from their former marriages.
4After 23 years together, the parties separated in June 2005. At the time of trial in February 2009, the appellant was 64 years of age and the respondent was 66.
(1) The parties' work histories
(a) The appellant
5When the parties began living together in 1982, the appellant had just started a collection business, Imperial Collection Agencies, with a business partner. The appellant owned 50 per cent of Imperial through a numbered company, 1145441 Ontario Limited ("114"), and his business partner, David Gordon, owned the other 50 per cent.
6In about 1996, Mr. Gordon indicated he planned to retire. The appellant bought him out in 1997 and incorporated a new business, Torlon Credit Recovery Inc. Torlon purchased Imperial's client list and subsequently paid a percentage of its revenue to Imperial.
7Mr. Gordon died in late 2003. As a result of insurance payouts, the appellant's company, 114, received a capital dividend of $220,000 and a regular dividend of $112,707. The company, in turn, declared dividends to the appellant, which were paid out to him and his daughter Kathy between October 2004 and July 2006. According to the appellant's evidence at trial, he gave his daughter Kathy $125,476 and loaned her another $50,000, which he subsequently forgave.
8The appellant also testified that he sold the Torlon business to a Stephen Shaw in August 2003. He said that he retired from Torlon in 2003 and that he subsequently received only small payments to reimburse him for expenses incurred assisting Mr. Shaw and entertaining clients. He claimed that he retained half the shareholdings only to ensure that a corporate loan was repaid.
9According to the appellant, as of January 2009 (the month before the trial began), the retained earnings in 114, from which he had previously been drawing dividend income, were exhausted. From this point on, he testified, his only sources of income would be his RRSP and CPP, plus Old Age Security when he turned 65. The appellant valued his RRSP at $435,871 as of [page224] March 2008. He testified that he had been told by his financial advisor to withdraw $1,700 monthly from his RRSP to make it last as long as possible.
(b) The respondent
10Between 1982 and 1996, the respondent worked full-time at University Hospital in London in the human resources department. She was promoted during this period and by 1996 was earning an annual salary of $53,000. She retired in 1996, and received a $30,000 severance package. The respondent worked intermittently between 1996 and 1999, and did some work for Torlon during this period.
11In 1999, the respondent was diagnosed with a non- malignant brain tumour. She had successful surgery in January 2000, but suffered a stroke and was hospitalized for three months. Following her surgery, the respondent retired from the workforce.
12At the time of trial, the respondent's income was $2,250 per month, consisting of about $1,210 per month from a workplace pension and about $1,040 per month in Old Age Security and CPP payments. Her financial statement, sworn January 12, 2009, shows a monthly deficit of income versus expenses of $1,470.76.
(2) The parties' living arrangements during cohabitation
13Until 1997, the parties lived in houses owned by the appellant in London. They moved to Toronto in 1997, but soon after moved to an apartment in London and then to a cottage they had purchased on Kosh Lake in 1990. In 2002, they purchased a property on White Lake; in 2003, they sold the Kosh Lake property.
14During the course of their relationship, the parties both contributed to their household expenses from their respective incomes. On the trial judge's undisputed findings, they "enjoyed a comfortable lifestyle throughout their relationship" and lived in "upscale housing", at least while in London. They "enjoyed cottaging from early on . . . and enjoyed searching for properties with older 'tear down' cottages".
15The respondent raised issues at trial concerning whether the appellant improperly diverted to himself portions of the proceeds of sale of the Kosh Lake property or portions of the proceeds of various mortgages on both the Kosh Lake and White Lake properties.
(3) Post-separation arrangements
16Following the parties' separation, the respondent continued to live in the White Lake property until it was sold in 2006 for $625,000. [page225]
17The appellant maintained the mortgage on the White Lake property while the respondent occupied it. He also continued to pay the loan payments on a car in his name that the respondent drove. Although, at some point, the appellant cancelled the respondent's medical coverage, he reinstated it after she confronted him and thereafter maintained it, at least until the White Lake property was sold. Based on our review of the record, it appears that, prior to the sale of the White Lake property, the appellant was making payments benefitting the respondent amounting to more than $1,500 per month.
18Subject to a consent payout of $25,000 to each party, the net proceeds of sale of the White Lake property were held in trust pending trial. As of December 4, 2008, the appellant's share of the net proceeds was $172,041.50.
(4) The respondent's application and the positions of the parties at trial
19The respondent issued her application against the appellant on December 6, 2007. She made no direct claim regarding property. In addition to lump sum spousal support, the respondent claimed periodic spousal support commencing June 8, 2005. She did not bring a motion for interim support prior to trial.
20At trial, the respondent's sole request was for lump sum spousal support in an amount equal to the appellant's share of the net proceeds of sale of the White Lake property. The appellant countered that, on the facts of this case, the respondent was not entitled to any spousal support.
III. The Trial Judge's Reasons
21In the course of reviewing the background facts of this matter, the trial judge rejected the appellant's evidence that he did not divert to his own use moneys from the sale of the Kosh Lake property or from the mortgaging of the Kosh Lake and White Lake properties. She also noted [at para. 21], "[t]he [respondent] had every reason to believe that the White Lake cottage would be free and clear of any mortgages when it was ultimately sold".
22The trial judge began her analysis by considering the financial positions of the parties. She found that [at para. 28], "[w]ith some minor exceptions, the [respondent's] assets consist of her interest in the White Lake property and her [workplace] pension which generates approximately $1,200 per month".
23Turning to the appellant, the trial judge observed [at para. 29], "[t]he [appellant's] assets are more difficult to quantify". [page226] She noted the details of his RRSP and then stated [at para. 29], "[h]owever, I find that the [appellant] also has other assets, some of which are not capable of quantification". The trial judge itemized three other financial resources to which she concluded the appellant was entitled.
24First, she found that the appellant was the beneficial owner of $175,476 paid by 114 to his daughter Kathy in late 2005 and 2006. Second, she concluded that Torlon continued to do business and that the appellant continued to be a one-half owner of that business. She said [at para. 31], "[t]his is an asset which I cannot ignore but cannot quantify". Third, she concluded [at para. 32] that it was "highly likely" that the appellant and his new significant other were "engaging in the same venture which the parties did during their cohabitation, i.e., purchasing a tear-down cottage and building a new one".
25The trial judge found that the respondent's existing assets and means were "considerably less" than the appellant's. She noted as well that the appellant was likely to receive a significant inheritance from an uncle in the near future.
26Importantly, the trial judge recognized the significance of the parties' cohabitation, observing [at para. 33], "[w]hile they may not have commingled their financial resources as many partners do, they lived together and relied on each other for financial and non-financial support over a lengthy period". She also concluded [at para. 36], "[t]he [respondent] will never be able to maintain a reasonable lifestyle in any way comparable to that enjoyed by the parties during cohabitation without support from the [appellant]".
27The trial judge rejected the appellant's argument that, as an unmarried spouse, he could not be required to pay lump sum spousal support from assets not subject to the provincial property regime. She concluded that this was an appropriate case for lump sum spousal support, and that the respondent was entitled to an award of $135,000 [at paras. 41, 45-46]:
The [appellant] argues that any order I make for lump sum support is in effect a redistribution of assets which is not permitted by the Act because the parties were not married . . . I disagree. Section 34(1)(b) of the Family Law Act specifically permits the payment of a lump sum for support. I can think of no more appropriate case for lump sum support than the present one. The [respondent] is deprived of any claim for property because the parties were not married. That does not mean that the [appellant's] assets should not be available for a support order, if the [respondent] is otherwise entitled to support, and I find that she is. . . . . .
I find that in the circumstances of this case the [respondent] is entitled to lump sum support. However, I do not agree with her contention that I [page227] should simply order a lump sum equal to the [appellant's] share of the net proceeds of sale of the White Lake property.
I have come to the conclusion that an appropriate lump sum payment for spousal support is $135,000. That puts the [respondent] in a slightly better position than she would have been had the White Lake property been mortgage-free. At a 4 per cent rate of interest, it will generate approximately $1,000 monthly income for 15 years. The quantification of lump sum support is not an exact science but I find the sum of $135,000 is fair. (Emphasis added)
IV. The Appellant's Position on Appeal
28The appellant submits that the trial judge erred in awarding spousal support on the facts of this case, as the parties' assets and means are approximately equivalent. He contends that the trial judge made palpable and overriding errors and engaged in speculation in holding that he (the appellant) has assets in addition to his RRSP and his share of the proceeds of sale of the White Lake property. In support of this submission, the appellant delivered a motion to admit fresh evidence in an effort to demonstrate that the trial judge's findings concerning the moneys he gave his daughter and his ongoing interest in Torlon are wrong.
29In any event, the appellant submits that the trial judge's decision to award lump sum spousal support is contrary to the principles enunciated in Mannarino v. Mannarino, 1992 14022 (ON CA), [1992] O.J. No. 2730, 43 R.F.L. (3d) 309 (C.A.). In Mannarino, this court said that lump sum spousal support is only to be awarded in very unusual circumstances, where there is a real risk that periodic support will not be paid, and that lump sum spousal support should not be awarded to effect a redistribution of property in the guise of support or where it would be unfair to deprive the payor of the ability to apply for a variation:
The law is clear that lump sum maintenance should be awarded only in very unusual circumstances, where there is a real risk that periodic payments would not be made. Such awards should not constitute a redistribution of family assets in the guise of support. See Jazenko v. Jazenko (1985), 1985 4972 (ON SC), 46 R.F.L. (2d) 351 (Ont. Dist. Ct.), and Zabiegalowski v. Zabiegalowski (1992), 1992 13978 (ON SC), 40 R.F.L. (3d) 321 (Ont. U.F.C.). . . . . . .
Execution of the judgment at trial would result not only in a substantial redistribution of family property but would make it impossible for the husband to apply to the court for a reduction of support should there be a substantial change in his personal circumstances in the future.
In our view, the judgment for lump sum support in this case was contrary to the law and was unfair. [page228]
30The appellant submits that his interpretation of Mannarino has been applied in a number of decisions of this court (for example, see Elliot v. Elliot (1993), 1993 3429 (ON CA), 15 O.R. (3d) 265, [1993] O.J. No. 2308 (C.A.); Willemze-Davidson v. Davidson, 1997 1440 (ON CA), [1997] O.J. No. 856, 98 O.A.C. 335 (C.A.); E. (T.A.) v. E. (M.E.), 2003 57410 (ON CA), [2003] O.J. No. 3300, 43 R.F.L. (5th) 321 (C.A.)) -- and that recent decisions departing from the Mannarino principles were incorrectly decided (for example, see Greenberg v. Daniels, 2005 456 (ON CA), [2005] O.J. No. 87, 20 R.F.L. (6th) 287 (C.A.); Vynnyk v. Baisa, 2008 ONCA 657, [2008] O.J. No. 3747, 55 R.F.L. (6th) 239 (C.A.)).
31The appellant acknowledges that lump sum spousal support may properly be awarded in other limited circumstances: situations involving very short-term marriages; in some circumstances, to effect "a clean break" between the parties, particularly in situations involving domestic violence; and perhaps even in very exceptional cases as an award of compensatory support.
32However, the appellant submits that these situations fit generally within the Mannarino principles. They are made only in very unusual circumstances involving at least some of the Mannarino factors together with other limited special circumstances, such as those described above.
33The appellant contends that an award of lump sum spousal support is always inappropriate where it is used to effect a redistribution of capital or where there is a possibility that one party may need to vary the order.
34According to the appellant, none of the factors that would justify an award of lump sum spousal support is present in this case and the factors that are present militate against such an award. In particular, the appellant points out that he voluntarily paid the respondent's living expenses until the White Lake property was sold. Thereafter, he continued to pay her car loan and provide medical benefits. Further, on the facts of this case, the appellant takes the position that the lump sum award amounts to a redistribution of capital. Finally, the appellant argues that, depending on his health, he may well require his share of the proceeds of sale of the matrimonial home as he ages to provide for himself.
35In the alternative, the appellant submits that the amount of the lump sum award is excessive.
V. Analysis
(1) The trial judge's findings concerning the appellant's assets
36We are not satisfied that the appellant has demonstrated that the trial judge made palpable and overriding errors or that [page229] she engaged in speculation in holding that the appellant has assets in addition to his RRSP and his share of the proceeds of sale of the White Lake property.
37The trial judge's findings concerning the appellant's assets are findings of credibility, which are entitled to considerable deference. She found it "impossible to believe" that the appellant, an experienced businessman, favoured one of his daughters over his other children by providing her with a gift of $175,476 on the eve of his retirement, particularly where his evidence was not supported by any testimony from the daughter.
38Similarly, the trial judge found it "simply not believable" that the appellant had no ongoing interest in Torlon where the appellant retained a 50 per cent interest in the company, where no post-2005 financial statements were produced and where his evidence was not supported by any testimony from Mr. Shaw.
39Further, the trial judge found the appellant's testimony that he had no knowledge about a mortgage his significant other placed on her property "simply incredible" having regard to the appellant and respondent's history of purchasing tear-down cottages and the fact that his evidence was not supported by any testimony from his new partner.
40The trial judge's findings of credibility were rooted in her assessment of the evidence. Having rejected the appellant's evidence, it was open to the trial judge to draw the inferences that she did based on the record that was before her. There is no basis upon which to interfere with her findings regarding the appellant's assets.
(2) The appellant's fresh evidence application
41The appellant's fresh evidence application is dismissed. The application consists largely of affidavits and exhibits that could have been produced at trial. The material contains no explanation as to why the affiants of the affidavits were not called at trial and no explanation concerning why the exhibits that existed at the time of trial were not produced prior to trial.
42We also note that the 2006 and 2007 financial statements for Torlon that Mr. Shaw claims were prepared following the trial are undated. Moreover, Mr. Shaw's explanation that Torlon has "only recently been able to afford to have these Statements prepared" is bald and unpersuasive.
43As a whole, the fresh evidence application fails entirely to meet the requirement of demonstrating that such evidence could not have been obtained, by the exercise of reasonable diligence, prior to trial: [page230] R. v. Palmer, 1979 8 (SCC), [1980] 1 S.C.R. 759, [1979] S.C.J. No. 126; Sengmueller v. Sengmueller (1994), 1994 8711 (ON CA), 17 O.R. (3d) 208, [1994] O.J. No. 276 (C.A.).
44The proposed fresh evidence that is central to the issues on appeal is the affidavits of the appellant's daughter and Mr. Shaw.
45The appellant's daughter's affidavit supports the appellant's claim that he, in fact, advanced to her a significant sum of money. [See Note 1 below] However, the fact that the money was advanced to the appellant's daughter was not the issue at trial. The issue was whether the money was being sheltered for the appellant.
46The daughter explains that the appellant gave her the money so she and her husband could purchase a house where the appellant could live with them. However, the fact remains that the appellant's name does not appear on a deed to property to which he apparently contributed about $150,000. Although this omission is not addressed directly by the appellant's daughter, the explanation appears to be that it was intended that the appellant could live in the home, rent and utility free, in the future. The same plan apparently remains in effect as a contingency plan for the future, even though the appellant is not living with his daughter now.
47Significantly, the affidavit of the appellant's daughter does not provide any disclosure of her family's income and assets that would reveal whether she and her husband have funds equivalent to the moneys advanced by the appellant available in relatively liquid form elsewhere.
48Having regard to the appellant's failure to call his daughter as a witness at trial, the relationship between the parties, the timing of the alleged gift (post-separation and allegedly on the eve of, or post, retirement) and the daughter's failure to provide financial disclosure, her affidavit, filed on the fresh evidence application, lacks sufficient weight to meet the fourth branch of the Palmer test for the admission of fresh evidence (credible evidence, which if believed, could reasonably, when taken with the other evidence adduced at trial, be expected to have affected the result). [See Note 2 below] [page231]
49Mr. Shaw's affidavit confirms, by relatively bald statements, the appellant's evidence that Torlon pays the appellant only for expenses. Appended to the affidavit are unaudited and undated financial statements for Torlon for 2006 and 2007. Mr. Shaw gives no explanation concerning why the appellant continues to retain an interest in Torlon. This material, too, lacks sufficient weight to meet the fourth branch of the Palmer test.
50The remaining affidavit from Dwayne Scott deals with issues collateral to the central issues on appeal.
(3) The principles for awarding lump sum spousal support
51We reject the appellant's submission that Mannarino should be treated as restricting a court's ability to award lump sum spousal support to situations "where there is a real risk that periodic payments would not be made" or to other limited and "very unusual circumstances". To the extent that Mannarino has been interpreted in that way, in our view, that interpretation is incorrect.
52Both the Family Law Act, R.S.O. 1990, c. F.3 and the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) contain provisions conferring a broad discretion on judges to make an award of periodic or lump sum spousal support, or to make an award comprising both forms of support.
53Sections 34(1)(a) and (b) of the Family Law Act provide as follows:
34(1) In an application under section 33, the court may make an interim or final order, (a) requiring that an amount be paid periodically, whether annually or otherwise and whether for an indefinite or limited period, or until the happening of a specified event; [and] (b) requiring that a lump sum be paid or held in trust. (Emphasis added)
54Section 15.2(1) of the Divorce Act reads as follows:
15.2(1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse. (Emphasis added) [page232]
55Both Acts include sections addressing the purposes of an order for spousal support and the factors to be taken into account in making such an award: see Appendix 'A'.
[56] Specifically, s. 33(8) the Family Law Act provides that the purposes of spousal support are to (a) recognize the spouse's contribution to the relationship and the economic consequences of the relationship for the spouse; (b) share the economic burden of child support equitably; (c) make fair provision to assist the spouse to become able to contribute to his or her own support; and (d) relieve financial hardship, if this has not been done by orders under Parts I (Family Property) and II (Matrimonial Home).
57None of these sections contains restrictions of the type set out in Mannarino.
58Had Parliament or the legislature intended that the discretion to make an award of lump sum spousal support to a married or an unmarried spouse be as highly constrained as the appellant argues is prescribed in Mannarino, those bodies surely would have said so. Moreover, we can find nothing in the legislative history relating to either Act, or to predecessor Acts, suggesting such an intention.
59However, the spousal support provisions in both Acts and the jurisprudence interpreting those provisions (including Mannarino and its progeny) do provide considerable guidance concerning the factors that should be considered in determining whether an award of lump sum spousal support is appropriate in any particular case.
60It is well accepted -- and undisputed -- that a lump sum award should not be made in the guise of support for the purpose of redistributing assets: Mannarino; Willemze-Davidson v. Davidson, supra, at para. 32. Moreover, the governing legislation does not recognize redistribution of assets as one of the purposes of a spousal support award.
61That said, a lump sum order can be made to "relieve [against] financial hardship, if this has not been done by orders under Parts I (Family Property) and II (Matrimonial Home)": Family Law Act, s. 33(8)(d).
62In any event, the purpose of an award must always be distinguished from its effect. Any lump sum award that is made will have the effect of transferring assets from one spouse to the other. The real question in any particular case is the underlying purpose of the order: Willemze-Davidson, at para. 32.
63Similarly, it is well accepted that an important consideration in determining whether to make a lump sum spousal [page233] support award is whether the payor has the ability to make a lump sum payment without undermining the payor's future self-sufficiency.
[64] Under s. 33(9) of the Family Law Act, "[i]n determining the amount and duration, if any, of support for a spouse . . . in relation to need, the court shall consider" among other things: (a) the dependant's and respondent's current assets and means; (b) the assets and means that the dependant and respondent are likely to have in the future; . . . . . (d) the respondent's capacity to provide support. (Emphasis added)
65These statutory provisions make it clear that ability to pay is an important consideration in making an award of spousal support, including lump sum spousal support.
66Most importantly, a court considering an award of lump sum spousal support must weigh the perceived advantages of making a lump sum award in the particular case against any presenting disadvantages of making such an order.
67The advantages of making such an award will be highly variable and case-specific. They can include but are not limited to terminating ongoing contact or ties between the spouses for any number of reasons (for example, short-term marriage; domestic violence; second marriage with no children, etc.); providing capital to meet an immediate need on the part of a dependant spouse; ensuring adequate support will be paid in circumstances where there is a real risk of non-payment of periodic support, a lack of proper financial disclosure or where the payor has the ability to pay lump sum but not periodic support; and satisfying immediately an award of retroactive spousal support.
68Similarly, the disadvantages of such an award can include the real possibility that the means and needs of the parties will change over time, leading to the need for a variation; the fact that the parties will be effectively deprived of the right to apply for a variation of the lump sum award; and the difficulties inherent in calculating an appropriate award of lump sum spousal support where lump sum support is awarded in place of ongoing indefinite periodic support.
69In the end, it is for the presiding judge to consider the factors relevant to making a spousal support award on the facts of the particular case and to exercise his or her discretion in [page234] determining whether a lump sum award is appropriate and the appropriate quantum of such an award.
70As we have said, we do not endorse the submission that lump sum spousal support awards must be limited to "very unusual circumstances" as a matter of principle. Nonetheless, we agree that most spousal support orders will be in the form of periodic payments. To a large extent, this is for four very practical reasons.
71First, in many instances, moneys will simply not be available to fund a lump sum support award either to take the place of, or to supplement, an award of periodic support. Instead, support will be paid from one spouse's income, the only available source for support payments, and it will be paid to finance the ongoing needs of the other spouse, which will generally be of a periodic rather than lump sum character.
72Second, for married couples, the court will have determined already the amount to be paid to equalize the value of the spouses' net family properties: see s. 5, Family Law Act. In many circumstances, this payment will obviate any requirements a dependent spouse may have for transitional capital.
73Third, in many cases, there will be no considerations favouring a lump sum award from the perspective of either spouse.
74Fourth, in at least some cases where there are considerations favouring a lump sum award, the general exigencies of life, including the possibility that the parties' means and needs will change, will outweigh the considerations favouring a lump sum award.
75Irrespective of whether the proposed support is periodic or lump sum, it is incumbent upon counsel to provide the judge deciding the matter with submissions concerning the basis for awarding and the method of calculating the proposed support, together with a range of possible outcomes. Further, it is highly desirable that a judge making a lump sum award provide a clear explanation of both the basis for exercising the discretion to award lump sum support and the rationale for arriving at a particular figure. Clear presentations by counsel and explanations by trial judges will make such an award more transparent and enhance the appearance of justice. Over time, this approach will undoubtedly foster greater consistency and predictability in the result.
76As part of this approach, where an award of lump sum spousal support is made as a substitute for an award of periodic support, it is preferable that, with the benefit of submissions from counsel, the judge consider whether the amount awarded is [page235] in keeping with the Spousal Support Advisory Guidelines (Ottawa: Department of Justice Canada, 2008) (the "Guidelines"). If it is not, some reasons should be provided for why the Guidelines do not provide an appropriate result: Fisher v. Fisher (2008), 2008 ONCA 11, 88 O.R. (3d) 241, [2008] O.J. No. 38 (C.A.), at para. 103.
(4) Application of the principles for awarding lump sum spousal support to the facts of this case
(a) Standard of review
77Appeal courts should not overturn support orders unless the reasons disclose an error in principle, a significant misapprehension of the evidence or unless the award is clearly wrong: Hickey v. Hickey, 1999 691 (SCC), [1999] 2 S.C.R. 518, [1999] S.C.J. No. 9, at para. 11.
(b) Discussion
78Although the trial judge did not offer a detailed explanation for her award, read fairly, her reasons make it clear that she awarded lump sum spousal support based on a real concern that the appellant would not pay periodic support and to effect a clean break between these parties. Again, while the trial judge did not say so explicitly, it is apparent that these factors outweighed considerations militating against lump sum spousal support.
79A main theme of the trial judge's reasons was her credibility-based findings that the appellant had greater assets and means than he was prepared to acknowledge and that he was attempting to shelter assets from the respondent's reach. Having regard to these findings, it is readily apparent that the trial judge concluded there was a real risk the appellant would not pay periodic support and that this factor alone mandated an award of lump sum support, even though the appellant would be deprived of the ability to seek a variation. Further, the appellant's failure to make proper disclosure made a clean break highly desirable -- in the absence of a clean break, the respondent likely faced unending litigation to maintain her entitlement to spousal support.
80In all the circumstances, we see no basis on which to interfere with the trial judge's decision to award lump sum spousal support.
81Turning to quantum, as we read her reasons, the trial judge awarded an amount of support that she concluded would generate an income stream of $1,000 per month for 15 years using a 4 per cent interest rate. [page236]
82It is unfortunate that the trial judge did not provide additional details concerning how she arrived at either the $1,000 per month quantum or the 15-year duration as the basis for her calculations. However, the respondent's financial statement discloses that the respondent has a monthly deficit well in excess of $1,000 per month based on claimed expenses that are in a relatively modest range. Further, it is apparent from her reasons that the trial judge was satisfied that the appellant had the means to maintain a much higher standard of living than the respondent and that, without a significant payment, the respondent would be relegated to a significantly lower standard of living than that which the parties enjoyed together for 23 years. Although the trial judge did not refer specifically to the income tax consequences of a lump sum support award, she is an experienced family law judge and we are not prepared to conclude that she did not take the income tax consequences into account. On our review of the record and the trial judge's reasons, it is reasonable to conclude that the trial judge decided that her calculations should be premised on the respondent receiving $1,000 per month, net of tax. Finally, given that the respondent had attained the age of 66 and that there was no evidence indicating she was not in good health, we cannot say that using a 15-year income stream projection was unreasonable. In making that award, the trial judge undoubtedly took account of the contingency that the respondent's need for support could be longer or shorter than 15 years. Although a more detailed explanation of the figures the trial judge used in making her calculations would have been desirable, in the end, we cannot say the award was clearly wrong.
83We note that the appellant does not challenge the trial judge's arithmetic. Indeed, neither counsel provided us with any calculations to establish that the award of $135,000 is clearly wrong in any way, including as being outside the ranges that would be generated by the Guidelines.
VI. Disposition
84Based on the foregoing reasons, the appeal is dismissed. The respondent may file brief written submissions concerning costs of the appeal within seven days of the release of these reasons and the appellant may respond within seven days of receiving the respondent's submissions.
Appeal dismissed. [page237]
APPENDIX 'A'
PART III SUPPORT OBLIGATIONS . . . . .
Order for support
33(1) A court may, on application, order a person to provide support for his or her dependants and determine the amount of support.
Applicants
(2) An application for an order for the support of a dependant may be made by the dependant or the dependant's parent. . . . . .
Purposes of order for support of spouse
(8) An order for the support of a spouse should, (a) recognize the spouse's contribution to the relationship and the economic consequences of the relationship for the spouse; (b) share the economic burden of child support equitably; (c) make fair provision to assist the spouse to become able to contribute to his or her own support; and (d) relieve financial hardship, if this has not been done by orders under Parts I (Family Property) and II (Matrimonial Home).
Determination of amount for support of spouses, parents
(9) In determining the amount and duration, if any, of support for a spouse or parent in relation to need, the court shall consider all the circumstances of the parties, including, (a) the dependant's and respondent's current assets and means; (b) the assets and means that the dependant and respondent are likely to have in the future; (c) the dependant's capacity to contribute to his or her own support; (d) the respondent's capacity to provide support; (e) the dependant's and respondent's age and physical and mental health; (f) the dependant's needs, in determining which the court shall have regard to the accustomed standard of living while the parties resided together; [page238] (g) the measures available for the dependant to become able to provide for his or her own support and the length of time and cost involved to enable the dependant to take those measures; (h) any legal obligation of the respondent or dependant to provide support for another person; (i) the desirability of the dependant or respondent remaining at home to care for a child; (j) a contribution by the dependant to the realization of the respondent's career potential; (k) Repealed. (l) if the dependant is a spouse, (i) the length of time the dependant and respondent cohabited, (ii) the effect on the spouse's earning capacity of the responsibilities assumed during cohabitation, (iii) whether the spouse has undertaken the care of a child who is of the age of eighteen years or over and unable by reason of illness, disability or other cause to withdraw from the charge of his or her parents, (iv) whether the spouse has undertaken to assist in the continuation of a program of education for a child eighteen years of age or over who is unable for that reason to withdraw from the charge of his or her parents, (v) any housekeeping, child care or other domestic service performed by the spouse for the family, as if the spouse were devoting the time spent in performing that service in remunerative employment and were contributing the earnings to the family's support, (v.1) Repealed. (vi) the effect on the spouse's earnings and career development of the responsibility of caring for a child; and (m) any other legal right of the dependant to support, other than out of public money.
Conduct
(10) The obligation to provide support for a spouse exists without regard to the conduct of either spouse, but the court may in determining the amount of support have regard to a course of conduct that is so unconscionable as to constitute an obvious and gross repudiation of the relationship.
Application of child support guidelines
(11) A court making an order for the support of a child shall do so in accordance with the child support guidelines. [page239]
Exception: special provisions
(12) Despite subsection (11), a court may award an amount that is different from the amount that would be determined in accordance with the child support guidelines if the court is satisfied, (a) that special provisions in an order or a written agreement respecting the financial obligations of the parents, or the division or transfer of their property, directly or indirectly benefit a child, or that special provisions have otherwise been made for the benefit of a child; and (b) that the application of the child support guidelines would result in an amount of child support that is inequitable given those special provisions.
Reasons
(13) Where the court awards, under subsection (12), an amount that is different from the amount that would be determined in accordance with the child support guidelines, the court shall record its reasons for doing so.
Exception: consent orders
(14) Despite subsection (11), a court may award an amount that is different from the amount that would be determined in accordance with the child support guidelines on the consent of both parents if the court is satisfied that, (a) reasonable arrangements have been made for the support of the child to whom the order relates; and (b) where support for the child is payable out of public money, the arrangements do not provide for an amount less than the amount that would be determined in accordance with the child support guidelines.
SPOUSAL SUPPORT ORDERS
Spousal support order
15.2(1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse.
Interim order
(2) Where an application is made under subsection (1), the court may, on application by either or both spouses, make an interim order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse, pending the determination of the application under subsection (1). [page240]
Terms and conditions
(3) The court may make an order under subsection (1) or an interim order under subsection (2) for a definite or indefinite period or until a specified event occurs, and may impose terms, conditions or restrictions in connection with the order as it thinks fit and just.
Factors
(4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including (a) the length of time the spouses cohabited; (b) the functions performed by each spouse during cohabitation; and (c) any order, agreement or arrangement relating to support of either spouse.
Spousal misconduct
(5) In making an order under subsection (1) or an interim order under subsection (2), the court shall not take into consideration any misconduct of a spouse in relation to the marriage.
Objectives of spousal support order
(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should (a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown; (b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage; (c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and (d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.
Notes
Note 1: The appellant claims that he gave his daughter about $175,000. In her affidavit, she confirms that the appellant advanced about $150,000 for the purchase of a house.
Note 2: This court has observed on other occasions that there may be a difference between the final branch of the Palmer test and the final branch of the Sengmueller test, in that the final branch of the Sengmueller test may set out a more stringent test. For example, see Chiang (Trustee of) v. Chiang (2009), 2009 ONCA 3, 93 O.R. (3d) 483, [2009] O.J. No. 41 (C.A.), at paras. 72-77. The parties did not address this issue. It is unnecessary that we resolve it. We have reached our conclusion applying the less stringent test.
