Court File and Parties

COURT OF APPEAL FOR ONTARIO DATE: 20230710 DOCKET: COA-22-CV-0026 Roberts, Favreau and Copeland JJ.A.

BETWEEN

Elaine Lois Nairne Applicant (Appellant)

and

Andrew Ian MacKenzie Nairne Respondent (Respondent)

Counsel: Mark Feigenbaum, for the appellant Jacqueline M. Mills and Elise Visco, for the respondent

Heard: April 11, 2023

On appeal from the order of Justice Mario D. Faieta of the Superior Court of Justice, dated July 19, 2022.

Favreau J.A.:

Introduction

[1] The appellant, Elaine Nairne, and the respondent, Andrew Nairne, were married for 21 years. They have two adult children. They separated in 2015. They are both chartered accountants. By the time they separated, Ms. Nairne earned $118,516 and Mr. Nairne earned $423,748 per year.

[2] The trial judge awarded Ms. Nairne $2,500 per month in spousal support until Mr. Nairne’s retirement from his current employment. The trial judge also made an order based on a proposal by Mr. Nairne that the matrimonial home would be transferred to Ms. Nairne and that Mr. Nairne’s share of the proceeds from the transfer would be in the form of an interest-free mortgage to Ms. Nairne until she dies, decides to sell the home, or no longer resides in it on a fulltime basis.

[3] Ms. Nairne appeals the quantum and duration of the spousal support. She argues that the trial judge failed to consider the significant disproportion in their incomes and the different contributions they made throughout the marriage to raising the children and looking after the household.

[4] Considering the trial judge’s award in its totality, I find that he made no reversible errors in his award of spousal support. The award must be looked at as a whole, including the benefits Ms. Nairne will receive from the interest-free mortgage. The trial judge considered all the relevant factors and his decision is therefore subject to considerable deference on appeal.

[5] I would dismiss the appeal.

The parties’ marriage and separation

[6] Ms. Nairne was born in 1954. Mr. Nairne was born in 1960. They married in 1993 and separated in 2015.

[7] The parties own a mortgage-free house that was valued at approximately $1.8 million at the time of the trial, which was in 2021.

[8] The parties have two children, who were born in 1994 and 1996. At the time of separation, the children were 19 and 20 years old. Following the separation, the children lived with Ms. Nairne in the matrimonial home during the summer and attended university out of town for the rest of the year.

Mr. Nairne’s employment and income

[9] Mr. Nairne became a chartered accountant in 1990, before the couple married. By 2005, Mr. Nairne was Vice-President, Accounting & Administration for Kilmer Van Nostrand, where he continued to work at the time of the trial. In 2015, the year the parties separated, Mr. Nairne’s annual income was $464,442, which included employment income of $423,748. In 2021, at the time of the trial, it was estimated that Mr. Nairne’s annual income for that year would be $316,000 plus a possible bonus of approximately $75,000.

[10] At the time of the trial, Mr. Nairne was 60 years old. He intended to retire at age 65. The trial judge found that his income from his investment plan after retirement would be between $105,775 and $115,209, and that it would steadily decline as his capital declined.

Ms. Nairne’s employment and income

[11] Ms. Nairne became a chartered accountant in 1999, approximately five years after the couple’s eldest child was born. Throughout her career, Ms. Nairne held positions involving the financial administration of hospitals and other health care organizations. At the time of their separation in 2015, Ms. Nairne worked as Director, Finance and Administration of Community Care Access Centres and her annual income was $169,206, which was broken down between employment income of $118,516.93 and RRSP withdrawals. At the time of the trial, in 2021, she worked as the Chief Financial Officer and Director of Casey House and her estimated annual income was $122,000.

[12] The evidence at trial was that Ms. Nairne intended to retire at the age of 67 in March of 2022. She anticipated that her monthly income after retirement would be $6,878.26.

Support payments prior to trial

[13] After their separation, Ms. Nairne brought a motion for spousal support and child support. On September 26, 2019, Shore J. dismissed the motion for child support on a without prejudice basis, finding that there was insufficient evidence regarding whether the children attended university on a full-time basis. She also found that Ms. Nairne was entitled to interim spousal support retroactive to January 1, 2019, but she did not determine the amount given that it would be dependent on the amount of child support.

[14] On December 1, 2020, Mr. Nairne started paying $4,000 per month to Ms. Nairne on a without prejudice basis and subject to offsetting this amount from any awards ultimately made at trial.

Trial judge’s decision

[15] Prior to trial, the parties resolved division of property issues other than the matrimonial home. Mr. Nairne agreed to pay $70,000 to Ms. Nairne. The issues left for trial were child support, including section 7 expenses, spousal support and the sale of the matrimonial home.

[16] On the issue of child support, the trial judge awarded retroactive child support to Ms. Nairne in the amount of $103,368. This was based on the parties’ agreement that the children lived with Ms. Nairne during the summer months while they attended university. The trial judge also found that Mr. Nairne was entitled to reimbursement of section 7 expenses from Ms. Nairne in the amount of $31,191.54. Offsetting these amounts, the trial judge found that Mr. Nairne owed Ms. Nairne $72,176.46 for child support.

[17] Ms. Nairne sought spousal support of $849,250 from the date of separation to December 2021, based on a monthly amount of $10,750. She also sought $13,438 per month going forward on an indefinite basis.

[18] Mr. Nairne took the position that he should pay a lump sum amount for spousal support of $238,329 from the date of separation to December 31, 2021, which he said was the equivalent of a mid-range award under the federal Spousal Support Advisory Guidelines (the “Guidelines”). This proposed amount included a deduction for the $4,000 per month he had paid to Ms. Nairne since December 1, 2020. Mr. Nairne also suggested that he pay spousal support going forward at the low end of the Guidelines until he retired.

[19] Mr. Nairne also made a proposal for the transfer of the matrimonial home to Ms. Nairne on the basis that his share of the proceeds from the transfer would be in the form of a payment and interest-free mortgage to Ms. Nairne until she dies, decides to sell the home, or no longer resides in it on a fulltime basis. At trial, Ms. Nairne indicated that she would agree to this proposal. The trial judge described the proposal as follows:

At trial, the Respondent made the following novel proposal to allow the Applicant and their children to remain in the matrimonial home. The Respondent proposes to transfer his interest in the matrimonial home to the Applicant on the following terms: (a) he will receive a mortgage that represents his 50% equity in the matrimonial home less any payment for child support and spousal support that he owes the Applicant up to the date of trial and less any uncharacterized payments of $4,000 that he has paid to the Applicant on a without prejudice basis; (b) each party shall obtain an appraisal of the value of the matrimonial home and its value will be deemed to be the average of the two appraisals; (c) there will be no interest on this mortgage; (d) there will be no mortgage payments of either principal or interest on this mortgage; (e) the mortgage will be due if the Applicant dies, sells the matrimonial home or if she no longer resides in the home on a fulltime basis.

[20] When considering whether to award spousal support to Ms. Nairne, the trial judge rejected her claim that such an award should be compensatory. In reaching this conclusion, the trial judge considered the evidence of the role Ms. Nairne played throughout the marriage:

Based on the Applicant’s evidence, which was accepted by the Respondent, I find that the Applicant worked full-time through their marriage except for two periods of maternity leave that lasted six months. The children were in daycare from the age of six months. The parties employed a housekeeper for most of their marriage. The parties equally shared the responsibility of dropping off and picking up the children. Generally, the Respondent father dropped off the children in the morning and the Applicant mother picked up the children in the afternoon. If the Applicant had to work late, then they would switch roles. The Applicant was primarily responsible for taking the children to their activities. She states that the Respondent did “some” cooking, gardening, and repairs around the home. Starting in 2010, the Respondent worked long hours and weekends. The parties became disengaged, as the Respondent shopped and cooked for himself.

The Applicant’s closing submission that she was the primary parent during the marriage is not supported by the evidence. Further, when asked in cross-examination, what sacrifices she made during the marriage, the Applicant did not respond to the question, but instead described how she had reduced her household expenses after their separation.

[21] The trial judge also found that Ms. Nairne’s claim for spousal support on a needs basis was “questionable”. In reaching this conclusion, the trial judge considered Ms. Nairne’s income as compared to her expenses. He also considered that, while Ms. Nairne had incurred debt since separation, she refused to produce financial documents, such as bank statements, and those debts appeared to be tied to the litigation, including the cost of a private investigation. He also considered that both parties were relatively close to retirement and their relative incomes upon retirement would not be significantly different, especially given that Ms. Nairne had a guaranteed pension and Mr. Nairne would be depending on diminishing capital.

[22] Ultimately, the trial judge awarded Ms. Nairne $2,500 in spousal support per month to continue until Mr. Nairne retires from his current employment at Kilmer Van Nostrand. The trial judge justified terminating spousal support when Mr. Nairne retires on the basis that both parties intended to retire relatively soon, evidence was available about their circumstances upon retirement, and this would avoid a motion for change.

[23] In addition, the trial judge accepted Mr. Nairne’s proposal regarding the disposition of the matrimonial home. He described the benefits of this proposal for Ms. Nairne as follows:

Given that the matrimonial home was appraised to have a fair market value of $1.8 million, the Respondent’s offer is generous given that the amount of spousal support owed up to the date of trial is $239,329; the net amount of child support is $72,176.46 and that about seven payments of $4,000 per month have been made since trial… the mortgage given to the Respondent would amount to about $561,000.00. This proposal would result in the Applicant remaining the sole owner of the matrimonial home for the rest of her life if she wished. It also offers the potential for rental income from the self-contained unit in the matrimonial home. On the other hand, this proposal would deprive the Respondent of access to his capital for potentially the rest of the Applicant’s life.

Analysis

[24] The starting point in reviewing any spousal support decision is significant deference, absent reviewable error. As the Supreme Court cautioned in Hickey v. Hickey, [1999] 2 S.C.R. 518, at para. 11, “appeal 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.”

[25] Ms. Nairne raised several issues in her notice of appeal. However, by the time the appeal was argued, her primary submission was that the trial judge erred in awarding only $2,500 per month in spousal support. She argues that this amount is too low and that it fails to account for the role she played throughout the marriage. On appeal, Ms. Nairne suggests that spousal support in the approximate range of $15,000 to $20,000 per month should have been awarded. She also argues that the trial judge erred in terminating spousal support when Mr. Nairne retires from Kilmer Van Nostrand.

[26] In my view, the trial judge made no reviewable errors in the quantum or duration of spousal support. He took all relevant factors into consideration and his decision is entitled to deference. I address both issues raised by Ms. Nairne separately below.

(1) Quantum of spousal support

[27] The spousal support award of $2,500 per month cannot be looked at in isolation. As reviewed above, it is evident that, in making this award, among other factors, the trial judge considered the financial benefit Ms. Nairne would receive from an interest-free mortgage on the matrimonial home, potentially for the rest of her lifetime. Notably, this is a proposal to which Ms. Nairne agreed. While the trial judge did not calculate the specific value of this benefit to Ms. Nairne, there is no doubt that it is significant, even if it runs only to the point when and if Ms. Nairne no longer resides at the property fulltime or sells it.

[28] The value of the property was approximately $1.8 million at the time of trial. Once the amounts for past child support and spousal support are deducted from Mr. Nairne’s share of the value of the house, Ms. Nairne receives an interest-free mortgage of approximately $561,000. There can be no question that the value to Ms. Nairne of not having to pay interest on a mortgage of approximately $561,000 is substantial. The $2,500 per month award while Mr. Nairne continues to work must be viewed in combination with the value of the interest-free mortgage. The value of the interest-free loan will continue to accrue to Ms. Nairne after Mr. Nairne retires, at a time when the disparity between the parties’ incomes will be much smaller. In the circumstances, taking into consideration, as the trial judge did, the significant value to Ms. Nairne of the interest-free mortgage, among the other factors he considered, I see no error in principle in his award of spousal support.

[29] This finding is not meant to endorse the trial judge’s approach to the award of spousal support as appropriate in other circumstances. An interest-free mortgage is a benefit, but it is only a benefit until Ms. Nairne decides to sell or stop residing in the house, and it does not provide her with any additional monthly amounts for living and other expenses. However, this case presented the trial judge with unique circumstances. This included the fact that Ms. Nairne agreed to the proposal, but sought additional spousal support. It also included the trial judge’s factual finding that Ms. Nairne had not made complete financial disclosure. Ultimately, the trial judge was best placed to take all circumstances into account, including the totality of payments made between the parties: Fletcher v. Manitoba Public Insurance Corp., [1990] 3 S.C.R. 191 at p. 205.

[30] My conclusion that the trial judge did not make any reversible errors is also not meant to endorse all facets of the trial judge’s approach to assessing Ms. Nairne’s entitlement to spousal support. The trial judge arguably took a narrow approach in his assessment of the evidence regarding the parties’ respective roles during the marriage and needs following the marriage, and in reaching the conclusion that Ms. Nairne had not established any compensatory entitlement and only “questionable” needs based entitlement. Ms. Nairne only became a chartered accountant five years after their first child was born and, throughout her career, she worked in the public sector earning far less than Mr. Nairne. In addition, while the trial judge recognized that Mr. Nairne retreated from the relationship in 2010, approximately five years before the separation, he appears to have given little to no weight to Ms. Nairne’s primary role in looking after the children during this time. In determining entitlement to spousal support on the basis of compensation and need, the trial judge was required to step back and weigh the overall circumstances of the parties, rather than requiring, to the extent he may have done so, Ms. Nairne to prove in detail the role she played prior to the marriage breakdown and her financial needs after the breakdown: Moge v. Moge, [1992] 3 S.C.R. 813, at pp. 866-70; Bracklow v. Bracklow, [1999] 1 S.C.R. 420, at para. 36.

[31] However, despite the issues that I have identified with the trial judge’s approach to assessing Ms. Nairne’s entitlement to spousal support, the trial judge did advert to all relevant circumstances, including those set out under s. 15.2 of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), and s. 33(8) of the Family Law Act, R.S.O. 1990, c. F.3. He determined that she was entitled to retroactive spousal support which was at around the mid-range of the Guidelines and accepted that she had some entitlement to spousal support until Mr. Nairne’s retirement. As reviewed above, looking at the award as a whole, the trial judge committed no error in principle in his award of spousal support, nor is his award clearly wrong.

(2) Duration of spousal support

[32] Ms. Nairne also challenges the trial judge’s order terminating spousal support when Mr. Nairne retires from Kilmer Van Nostrand. She argues that the trial judge should not have placed a time limit on the payment of spousal support and that, even if it was appropriate for him to do so, the time limit should not refer to his retirement from a specific employer. I see no error in the trial judge’s termination of spousal support when Mr. Nairne retires, especially given that Ms. Nairne will continue to benefit from the interest-free mortgage thereafter. However, as conceded by Mr. Nairne, the order should be modified to remove the specific reference to Kilmer Van Nostrand, in the event Mr. Nairne works for a different employer before he retires.

Conclusion

[33] I would dismiss the appeal, except that I would modify paragraph 4 of the order to remove the reference to Kilmer Van Nostrand.

[34] I would reject Mr. Nairne’s request for costs on a substantial indemnity basis. This was not a frivolous appeal. I would award costs in the amount of $20,000 to Mr. Nairne, inclusive of disbursements and HST, which both parties agreed was a reasonable amount for costs of this appeal on a partial indemnity basis.

Released: July 10, 2023 “L.B.R.” “L. Favreau J.A.” “I agree. L.B. Roberts J.A.” “I agree. J. Copeland J.A.”