COURT FILE No.: Toronto DFO 10 11129 B1

DATE: 2012-02-29

Citation: Boland v. Boland, 2012 ONCJ 102

ONTARIO COURT OF JUSTICE

BETWEEN:

Clifford K. Boland

Applicant

— AND —

Elizabeth Boland

Respondent

Before Justice E. B. Murray

Heard on October 25, 2011, January 25 and 26, 2012

Reasons for Judgment released on February 29, 2012

Fareen L. Jamal ..................................................................................................... for the applicant

Alexandra Seaton ................................................................................................ for the respondent

MURRAY, E. B. J.:

[1] This is a motion by the Applicant Clifford Boland (“Cliff”) , asking that his obligation to pay spousal support to his former wife, the Respondent, Elizabeth Boland (Elizabeth”) pursuant to their 2004 separation agreement be reduced from $6000 monthly to $3000 monthly commencing January 1, 2010, and be terminated as of January 1, 2011. Alternatively, Cliff asks that payments be reduced to $3000 monthly commencing January 1, 201o; $2000 monthly as of January 1, 2011; and terminated as of January 1, 2012. Elizabeth opposes this request, arguing that the motion is premature. She asks that she be paid $16,414.84 which she says is owing to her pursuant to the cost of living clause in their agreement.

[2] Cliff is 72 years of age, and suffering from prostate cancer. He has worked as a mutual funds advisor/salesman and as a financial coach. His evidence is that he has been progressively slowed by his illness, and that he has retired effective December 31, 2011. Elizabeth is 60 years of age, and not employed. She accepts that Cliff should be free to retire, but questions whether he has really withdrawn from the workforce.

[3] Both Cliff and Elizabeth have repartnered since their separation. Cliff married Rona Birenbaum (“Rona”), his business partner, in 2007. Elizabeth began cohabiting with Peter Spellicsy (“Peter”) in 2005.

[4] The issues which I have to decide are as follows:

1. Does the agreement allow for a review de novo of Elizabeth’s entitlement to and quantum of support, or is Cliff limited to arguing that there should be a change in the support arrangements set out in the agreement because there has been a material change in circumstances?

2. What is Cliff’s income currently, and what was his income in 2010 and 2011? Three issues arise in determining Cliff’s income.

• Should his Suncor pension, which totals approximately $69,000 annually, be excluded when determining his income for spousal support purposes?

• What portion of Cliff’s IPP pension should not be considered income for spousal support purposes? The agreement provides that the income from the portion that was equalized shall be excluded from consideration, but the parties do not agree as to what that portion is.

• Has Cliff actually withdrawn from his business?

3. Has Elizabeth taken reasonable steps to find suitable employment or retrain? If not, how should this affect entitlement to or quantum of support?

4. Does Elizabeth receive a financial benefit from her cohabitation with Peter? If so, what effect should this have on entitlement to or quantum of support?

5. If a reduction of support is in order as of January 1, 2011, should it be retroactive to 2010? Cliff commenced his motion on December 21, 2010.

6. Does Cliff owe Elizabeth money by virtue of the cost of living clause in the agreement?

EVIDENCE

Background- the parties’ marriage

[5] The parties married on May 21, 1981 and separated on June 30, 2001. The marriage was traditional: Cliff was the breadwinner, and Elizabeth cared for the parties’ three children; Matthew, born December 23, 1981, Alexandra, born December 13, 1985, and Edward, born April 19, 1989. It was a second marriage for Cliff, and a first marriage for Elizabeth. They met while working together at Suncor. At the time of the marriage, Elizabeth left her position as an executive recruiter. During the marriage she stayed out of the paid workforce, caring for the children and the household, and entertaining friends and business associates.

[6] Cliff was a hard worker. The parties had a very comfortable lifestyle. They lived in a home in Rosedale. Elizabeth had the assistance of a nanny when the children were young.

[7] Cliff worked as a financial coach, mutual fund advisor, and salesperson, registered with Queensbury Strategies Inc. Cliff formed a corporation, Clifford Boland and Associates (“CB&A”), which received commissions from Queensbury; CB&A paid Cliff wages. In 1998, Cliff set up the Boland Family Trust in order to benefit Elizabeth and the children in the event of his death. The Trust holds 50% of the shares in CB&A.

The Separation

[8] Elizabeth was shocked when Cliff announced in June 2001 that he wanted a separation. The parties had just finished renovating a farmhouse, using money from Elizabeth’s inheritance.

[9] After separation, the children stayed with Elizabeth in the matrimonial home. After three years of acrimonious litigation, the parties signed a separation agreement on September 15, 2004.

[10] The agreement equalized their net family property, and the matrimonial home was sold. The agreement provided that Cliff pay child support to Elizabeth in an amount of $2012 monthly for the two younger children (Matthew was no longer dependant), and $ 6,000 monthly for spousal support.

[11] The spousal support provisions of the agreement are set out below:

SECTION 7

SPOUSAL SUPPORT

1. Commencing this first month following the closing of the sale of the matrimonial home, and on the first day of each month, Clifford will pay to Elizabeth, for her support, the sum of $6000.00. The spousal support payment shall be included in the income of Elizabeth for income tax purposes and deducted from the income of Clifford. The parties agree that on October 1, each year, commencing October 1, 2005, each party shall provide proof of their income from all sources. Both parties' income may increase. by $30,000.00 and this will not be considered a material change in circumstances prompting a review of spousal support. While a review is being considered and until a determination is made between the parties or by a Court, the spousal support payments will continue as above.

2. The spousal support payable to Elizabeth shall also be subject to review by the Court on application by either party in the event of a material change of circumstances (subject to S. 7.1) which includes but is not limited to the following:

a) when she is no longer in receipt of child support;

b)if either party cohabits with another in a relationship resembling marriage for a period - greater than 12 months, or remarries;

c) Clifford retires or semi-retires;

to the extent that such events can be established at such time to constitute a material change in circumstances. In any event the spousal support entitlement and quantum may be reviewed after September, 2006 on the Application of either party to the Court. Elizabeth will in the interim use her best efforts to become economically self sufficient, and shall take reasonable steps to find suitable employment or to retrain so long as this is economically feasible. Pending the determination of the review, the spousal support payments shall continue.

3. Clifford's 1PP Pension has been valued as of valuation date for equalization purposes at a net value of $216,122.35. Clifford's RRSP has been valued as of valuation date for equalization purposes at $189,381.17, less income tax liability at 32%. Elizabeth's RRSP has been valued .is of valuation date for equalization purposes at $239,499.38, less income tax liability at 32%. The value as of valuation date of these pensions and RRSPs has been equalized pursuant to the terms of this Agreement.

4. For the purposes of calculating Clifford's income concerning the issues of the quantum of his future obligation to pay spousal support to Elizabeth, the income produced from that portion of the 1PP pension and the RRSP which have been equalized, will not be included in Clifford's income. Likewise any income realized by Elizabeth from that portion of her RRSP and any other asset that has been equalized, ie. the farm, which has been equalized shall not included in her income for the purposes of a determination of spousal support.

5. Upon provision of proof from Clifford, the parties will confirm that:

a) Clifford is a member of the Suncor Pension Plan (hereafter the " SERP Plan") Elizabeth is entitled to a 75% spouse's pension subject to indexing by way of death benefit under the Plan;

b) Clifford's interest in the Plan is property within the meaning of the Family Law Act, as is Elizabeth's survivor pension,

c) A report containing a valuation of Clifford's entitlement under the Plan was obtained from Eckler Partners Ltd. Clifford's pension was valued at $232,167.00 (after-tax). The Eckler Partners Ltd. also provided a value for Elizabeth's survivor pension under the plan at $140,231.00 (after-tax);

d) The value of Clifford's interest in the Plan is included in his net family property as is the value of Elizabeth's survivor pension under the plan, as valued by the Eckler Partners Ltd. Report. The parties have included the above values in the calculation of the equalization of their net family properties in arriving at the equalization payment provided for under this Agreement;

e) Clifford is now in receipt of pension income pursuant to the Plan. Elizabeth is not receiving income from the pension which is paid to Clifford.

f) Clifford and Elizabeth intend by this Agreement that:

i) Elizabeth's interest in her survivor pension and death benefit is preserved;

ii) On Clifford's death Elizabeth will receive her survivor's pension and death benefit;

iii) The plan will be directed to ensure that Elizabeth's survivor pension and death benefit is to be maintained and that any and all benefits which had accrued to Elizabeth under – the Plan as at the date of the parties' separation shall continue, unless due to a factor - beyond the control of Clifford, the value cannot be maintained;

iv) Clifford shall direct, in writing that Elizabeth shall continue to receive any and all information she requests or requires from the Plan regarding her survivor pension and death benefit

g.)Clifford directs the administrator of the Plan to:

i) comply with all applicable terms of this Agreement, and

ii) to take all steps required to protect Elizabeth's interest in and claims to her survivor pension and death benefit under Clifford's plan as provided in this Agreement

iii) For these purposes, Clifford and Elizabeth waive the application of any limitation period which might otherwise apply. If, for any reason, within Clifford's control any term in this Agreement concerning Elizabeth's entitlement to her survivor pension and death benefit under the Plan is not fulfilled, the parties will execute any amendments to this Agreement that may be necessary to give effect to this agreement.

6. Clifford and Elizabeth will sign any documents required to carry out these pension terms.

7. Nothing in this Agreement effects or reduces Elizabeth's entitlement to receive her survivor's or death benefit under Clifford's pension with Suncor.

8. For security for payment of spousal support in addition, Clifford must maintain his estate as Beneficiary of the Survivor Benefit of his IPP pension and his RRSP and will provide proof from time to time on request. This may provide a pool from which Elizabeth may claim for spousal and/or child support in the event of a shortfall;

9. On the 1^st day of October each year commencing October 1, 2005, the spousal support will increase by the lessor, of the percentage increase in the income of Clifford for that calendar year, or, the cost of living for the City of Toronto.

[12] The separation also triggered litigation between Cliff and Elizabeth about the winding-up of the Boland Family Trust. That litigation is ongoing.

Events post-agreement

[13] In January, 2005 Edward began living primarily with Cliff. In the same year, Alexandra (who was attending university outside of Toronto) began living primarily at Cliff’s home during holidays and vacations. The parties agreed that Cliff’s child support payments would cease.

[14] In 2005 Elizabeth began cohabiting with Peter.

[15] In 2007, Cliff married Rona. Rona has a 12-year old daughter from her prior marriage for whom she shares joint custody with her former husband. Rona is also a licensed salesperson of mutual funds and advisor registered with Queensbury. She and Cliff had become business partners in 2000, forming a financial planning firm called “Caring for Clients”.

Cliff’s business

[16] Sales of mutual funds are a regulated business. A salesperson needs to be licensed with the Mutual Funds Dealers Association and work through an investment company, such as Queensbury. A mutual fund salesperson has a “book of business”—essentially, a list of clients.

[17] During his marriage to Elizabeth, Cliff identified his clients at Queensbury by a code—“0680”. He channelled commission paid by Queensbury through CB&A, which paid him a salary. Cliff maintained this system with respect to 0680 clients after the separation.

[18] Cliff and Rona have a book of business with joint clients that started when they purchased books of business from other Queensbury advisors in 2003. Those clients are identified by the code “0580”. They share the revenue from this source equally. Cliff and Rona have no written agreement with respect to this aspect of the business; Cliff’s evidence is that he had a “psychological agreement” with Rona that on the retirement or death of one of them, that the other would be entitled to the 0580 book of business without payment to the other or their estate.

[19] Commissions from 0580 clients are paid to Cliff directly, not through CB&A.

[20] At the beginning of the trial in October 2011, Cliff testified that he had not decided whether to retire. Cliff testified that on his retirement Queensbury would offer the 0680 book of business for sale to mutual fund salespeople; Queensbury policy guarantees a minimum price of .035 of the value of assets under management in a book of business. Cliff estimated that 0680 had assets under management of approximately 15 million dollars in value, and thus might yield a minimum of $70,000.[^1]

[21] Cliff testified that, based on his conversations with Rona, he did not expect her to purchase his 0680 business on retirement, whether through the process described above or pursuant to a succession agreement that he and Rona had signed in 2001.[^2] Rona did not give evidence.

[22] Cliff was questioned by Rona’s lawyer at trial about his interest in “Caring for Clients”. His evidence is that Caring for Clients is Rona’s business, and that he has not received income from that business. An internet posting for Caring for Clients shows Cliff as president of the company; Cliff testified that the internet information showing him as president is outdated

[23] A newsletter from Caring for Clients that went into evidence says that the firm offers “financial planning with a difference”, and produces a newsletter to “keep our clients and potential clients informed about current market conditions, tax tips, recent news and other money related matters”. The newsletter states that the business was formed by Cliff and Rona as a partnership in 2000 “to create a more complete lifecycle of client care”, and that mutual funds are provided through Queensbury. . Rona and Cliff and two other individuals, Emily Sorrell and Alexandra Boland, are described as the firm’s financial “team”. Alexandra is Cliff and Elizabeth’s daughter.

Cliff’s health

[24] Cliff was diagnosed with aggressive prostate cancer in July 2008, which has metastasized to his spine and sacrum. He has undergone surgery and radiation treatment. Since Cliff’s illness he has been able to spend less time at work. Cliff testified that he has been able to retain his clients despite his illness because he has clients with confidence in him who are understanding about his limitations. After Cliff’s diagnosis, he hired Alexandra to perform some tasks, such as preparation of reports. Cliff testified that Rona has done much of the work involved in servicing his 0680 and his 0580 clients.

[25] In October 2010, Cliff was told by his doctor that he had between 1-2 years left to live. Early in 2011, Cliff’s pain increased. He began further radiation treatments, and was prescribed strong pain-killers.

[26] In his evidence-in-chief on October 25, 2011, Cliff said that he was scheduled to meet with his doctors in two days to decide whether to commence chemotherapy immediately, or whether to wait until sometime in 2012. If chemotherapy was to commence immediately, he had decided to retire right away. The trial was adjourned to allow him to consult with his doctors and make a decision.

[27] When the trial resumed, Cliff filed an affidavit with updating evidence. Cliff was to begin chemotherapy shortly. A report from his physician says that:

• Cliff’s pain and the medication he has been prescribed reduce his stamina and ability to concentrate, particularly in the late afternoon;

• Cliff’s chemotherapy may lengthen his life, and improve the quality of life.

Cliff’s retirement

[28] Cliff testified at the resumption of the trial on January 25, 2012, that he has retired, relinquished his license, and resigned from Queensbury as of December 31, 2011.

[29] Cliff’s cross-examination concluded late in the day on January 26, 2012. I advised that I had a few questions of clarification that I would put to him first thing the next day. On January 27^th, Cliff arrived with an email from a Ms. Betty Jo Royce of Queensbury, which addressed the implications of his resignation. Cliff wanted that email to be admitted in evidence. The email stated that:

• Cliff could not solicit mutual funds, make trades, or represent that he was a representative of Queensbury.

• No trades will be placed under his code 0680, and clients under 0680 would be told that they needed to have their accounts transferred to another advisor. After 90 days, clients would be contacted to arrange a transfer to another advisor.

• His name would be removed from code 0580.

[30] Ms. Royce’s letter was in response to an email of December 20, 2011, from Cliff. I ruled that I would admit the Royce letter, provided that Cliff’s December 20^th email also went into evidence. Counsel made efforts, and Cliff’s email was provided. The copy of the email sent from Ms. Royce’s office had been directed to Hugh McLelland and other management at Queensbury, and had an addition which indicated that the text had been sent to what Cliff referred to as “A” and “B” clients. The text of that email is set out below:

Hugh F. McLelland

From: Clifford Boland clifford@caringforclients.com>

Sent: Tuesday, December 20, 201112:07 PM

To: Hugh F. McLelland; John Webster; Bob Seal

Subject: FW: Personal Changes for 2012

FYI : message to select "A" & :B" clients sent out today. cb

From: Clifford Boland Jmailto:cboland@queensbury.coml

Sent: Tuesday, December 20, 2011 9:32 AM

To: difford@caringfordients.com

Cc: Rona Birenbaum; Alexandra Boland; Emily SoreII

Subject: Personal Changes for 2012

Hi Everyone

As you are aware, I have been dealing with a serious illness for the past 3 years. Wherever possible, I have attended meetings with Rona and participated in client discussions as much as possible. Given my limited time and opportunity to keep up to date regarding the investment world, I have delegated much of the technical analyses and recommendations to Rona. My limited time and energy has been frustrating because of its impact on my responsibility for maintaining the highest standard of professional knowledge. Also important for consideration, is the uncertainty of my future health.

So, starting in 2012 I have decided to do two things.

1. I will retire from my sales representative position with Queensbury Strategies Inc and as such, will not renew my investment licence

AND

2. I will continue to assist Rona and our two associates, Alexandra and Emily, in an advisory capacity. My advisory role will be only with select clients with whom Ilwe have had a much broader relationship and friendship such as with you.

From your perceptual point of view there will be no changes.

Thank you for your understanding and I look forward to chatting in the New Year. In the meantime, please contact me at any time if you have any questions.

Best Personal Regards, Clifford

[31] The email was further signed “Clifford Boland, Financial Coach.”

[32] The newsletter from Caring for Clients sent in January 2012 is signed by “Rona, Clifford, Emily & Alexandra”.

Cliff’s income

[33] Cliff submitted letters from his accountant, Wayne Culverson, that addressed his income for 2008-2011, and contained predictions about Cliff’s income for 2012 and future years. Mr. Culverson relied upon information from Cliff and Rona, and records of Queensbury commission payments. He was not called by Cliff to give evidence.

[34] Cliff receives income from several sources:

• Queensbury remittances ( both T4A and through CB&A, up to and including 2012);

• Suncor pension

• IPP pension (since 2010)

• RRIF and LIF

• CPP

• Small amounts of other investment income

[35] Cliff’s income from these sources as shown on his tax returns was $231,075 in 2008 and $184,992 in 2009.

[36] Evidence with respect to Cliff’s income for some preceding years—2004-2007—indicates that his income has fluctuated, from approximately $185,000 to approximately $256,000 annually.

[37] When this proceeding began, Cliff said in his change information statement that, based on advice from his accountant, he expected his 2010 income to be $182, 570, and his 2011 income to be between $150,000 to $180,000.

[38] Cliff underestimated his income for both years.

[39] Cliff’s tax return for 2010 shows his income was $212,485.

[40] The Culverson letter of January 10, 2012 estimates that Cliff’s income from all sources for 2011 will be $209, 500. Cliff acknowledged in his evidence that additional business income for 2011of $9140 should be added, to yield a total income for that year of $218, 640.

[41] In the January 10^th letter, Mr. Culverson estimated that Cliff’s income for for 2012 will be $187,600. This estimate is based on based on Cliff’s announcement that he retired as of December 31, 2011. Despite his retirement, Mr. Culverson advises that Cliff will receive income from CB&A in 2012 because the practice has been that income received by CB&A in one year is paid to Cliff as a salary in the following year in an amount sufficient to reduce CB&A’s tax owing to zero.

[42] Based on Cliff’s advice that he had withdrawn from business, Mr. Culverson projected annual income for Cliff for 2013 and future years based only on non-business sources of income. This would mean that Cliff will receive total income in those years of approximately $109,000.

[43] Cliff also presented evidence about the value of the IPP pension that would represent the portion that was not equalized in the separation agreement. IPP pension payments started as of 2010. The separation agreement stipulates that the “net value” of Cliff’s IPP pension at separation was $216, 122.35. A letter from a pension plan administrator submitted in evidence by Cliff states that the “market value” of this pension as of December 31, 2010 is $399, 775.17.

Cliff’s expenses and resources

[44] Cliff’s net worth is approximately $1million, inclusive of his interest in the home which he and Rona share[^3]. His latest financial statement indicates expenditures of $191,448 annually, inclusive of the $6,000 monthly payments to Elizabeth.

[45] The statement does not indicate whether Cliff pays 100% or some lesser proportion of the costs of the household he shares with Rona. It does not indicate Rona’s income.

Elizabeth’s income, expenses, resources, and efforts to find work

[46] Elizabeth’s sources of income are Cliff’s spousal support payments and approximately $28-43,000 annually in investment income. Her investment income is derived from assets equalized in the agreement, and thus excluded by virtue of section 7(4) of the agreement from inclusion in her income for the purposes of determination of spousal support.

[47] Elizabeth’s net worth is approximately 1.1 million

[48] Elizabeth received a BA in Sociology in 1973, and worked as an executive recruiter with Suncor at the time of her marriage to Cliff in 1981. She did not work outside the home during the marriage[^4].

[49] Since the separation agreement was signed, Elizabeth has made some effort to find employment and to retrain, but has not met with success. In 2005-2006 she met with a career counsellor and interviewed with two placement agencies in an effort to re-enter her former field of work. She was advised that she was unlikely to be successful, given her lengthy time out of the workforce. She testified that in the executive recruitment business that “contacts are everything”, and she has no contacts. Elizabeth also felt that her age was a handicap.

[50] Elizabeth realized that she needed to improve her computer skills, and has taken two courses to that end, one in 2005 and one in 2010. She monitors Workopolis, and testified that she has sent her resume to at least a dozen postings without response. Two years ago she took a job demonstrating food products in supermarkets; she left after two months, as the work was too physically demanding. She is currently enrolled in a culinary arts program at a community college. She admitted candidly that she participates in the program primarily out of personal interest, and not because she expects that it will lead to employment.

Elizabeth’s cohabitation with Peter

[51] Elizabeth and Peter entered into a cohabitation agreement in 2008. They were each represented by experienced family law lawyers in the negotiation and preparation of the agreement. Elizabeth testified that they both wanted the agreement because each had experienced difficult divorces, and each had children from their prior marriages whom they wanted to benefit.

[52] The contract provides as follows:

• they are completely separate as to property, and will have no claim against each other’s property;

• while Elizabeth lives with Peter in the home he owns, she shall contribute to the home’s expenses “as agreed upon from time to time”;

• they acknowledge that each of them is “financially independent and does not require financial assistance from the other”;

• they release any rights that either of them has to claim or receive support from the other, except in the event of separation;

• if they separate after 2007, Peter will pay support to Elizabeth in a tax- free lump sum, starting at $50,000 and escalating each year by $72,000 to a maximum of $450,000.

[53] Elizabeth testified that she pays for all her personal expenses, and that her contribution to the costs of Peter’s residence consists of payment of the costs for all the food, including alcoholic beverages for the household, and for certain household operating expenses, such as carpet-cleaning or gardening expenses. Peter pays for all the “hard” expenses connected with the home, such as utilities, realty tax, and major repairs. When the parties travel to Florida annually, Peter pays the rent for their accommodation and she pays for the food and beverages. Elizabeth estimated that she pays between $1200-1500 monthly for these expenses. The cost of utilities paid by Peter is about $1000-$1100 monthly; Elizabeth did not know the amount he pays for realty taxes.

[54] Elizabeth testified that Peter is retired, and receives a Suncor pension of approximately $115, 000 annually. Elizabeth believes that he has some investment income, but does not know the particulars. As set out above, Peter also owns the home in which they reside, which is mortgage-free.

Edward

[55] The parties’ youngest child, Edward, is in his last year of university. Until this last academic year, his major expenses for tuition and accommodation were financed through an RESP and the family trust. Those sources are exhausted. Each party testified that he or she has contributed to Edward’s expenses other than tuition and accommodation. There has been conflict between them about payment for Edward’s rent for this term. Elizabeth was offended by the tone of Cliff’s demand that she contribute to this expense. Cliff then paid for two months rent, and when Elizabeth attempted to send Edward money for future rent payments, Edward told her that Cliff had provided him with all the funds needed.

ANALYSIS

A variation or a review?

[56] Cliff’s lawyer submits that this case is a de novo review of Elizabeth’s entitlement to and quantum of spousal support.

[57] Elizabeth’s lawyer argues that, when read in context, the following provision of the separation agreement does not allow for.

“In any event the spousal support entitlement and quantum may be reviewed after September, 2006 on the Application of either party to the Court.”

She submits that the phrase “in any event” relates only to “a trigger of the review and not the terms of the review”. She argues that Cliff must demonstrate a material change in circumstances if he is to pursue his motion, although he is not restricted to reliance upon the three possible material changes set out in the agreement.

[58] I do not agree. The language of paragraph 7.2 of the agreement is clear. It first allows for what is termed a “review” based on a material change in circumstances—in other words, a variation motion. It separately provides for a review as to entitlement or quantum; no precondition is listed, other than that the application must be commenced after September 2006.

[59] As the Supreme Court of Canada held in Leskun v. Leskun, (2006) 2006 SCC 25, S.C.J. 25 at paragraph 37, a review allows a party to “bring a motion to alter support awards without having to demonstrate a material change in circumstances”. A review is to be treated as an original application for support.

[60] The Court held in Leskun that review provisions are justified where there is genuine uncertainty at the time of trial about an important issue related to support. In Leskun, the uncertainty concerned whether the wife would be able to return to work.

[61] The agreement here is not explicit in setting out the reason for the review. However, the fact that section 7.2, immediately after the sentence which provides for the review, states that “Elizabeth will in the interim use her best efforts to become economically self sufficient” suggests at least one reason for the review.

[62] Elizabeth’s counsel argues that it could not have been the parties’ intention to arrange for a de novo review within two years of the agreement, given the length of the marriage, the absence of Elizabeth from the paid workforce because of the role she played in that marriage, and Elizabeth’s age at the time of the agreement. I cannot accept that argument. It was open to Elizabeth to seek to lead parole evidence as to the parties’ intentions at the time of the agreement, upon establishing that the wording of section 7.2 was ambiguous. Elizabeth did not do so.

[63] However, the fact that this proceeding is a review does not mean that I should ignore the terms agreed to by the parties are irrelevant. Courts have recognized that on review applications the parties’ separation agreement is relevant, and should be accorded considerable weight. (See MacEachern v. MacEachern, (2006) R.F.L. L(6^th) 315 (B.C.C.A.); Judd v. Judd, 2010 BCSC 153)

[64] In addition, on a de novo review, I must consider the relevant sections of the Family Law Act, set out below.

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

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

(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;

• (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: S.O. 1997, c. 20, s. 3(3), effective December 1, 1997 (O. Gaz. 1997 p. 1978).

• (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: S.O. 2005, c. 5, s. 27 (12), effective March 9, 2005 (R.A.).

• (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.

[65] I will discuss the application of these factors to this case below.

Cliff’s income

[66] Cliff’s income is a crucial factor to be determined in assessing his capacity to provide support. It is trite law that the onus in a support case is on a party to lead evidence to establish his/her income on the balance of probabilities.

IPP pension

[67] Section 7.4 of the agreement explicitly excludes some sources of income for the purpose of calculating income in determination of spousal support. The income produced from the portion of Cliff’s IPP pension that was equalized is one such source. After separation, Cliff contributed to this pension and it grew in value. Cliff started receiving income from this pension in 2010.

[68] When this hearing commenced, the parties were in agreement that approximately 45% of Cliff’s IPP income was derived from post-separation growth in the plan. The basis for this conclusion was the difference between the agreed-upon value of this pension at the date of separation of $212, 488.25 and the value of $399,715.17 ascribed to the pension as of December 31, 2010 by the IPP pension administrator.

[69] During Cliff’s evidence, he testified that it was his understanding that this latter value was not adjusted for income tax that would be payable. This evidence led Cliff’s lawyer to argue that, when the current value of this pension was adjusted for tax at a rate of 38%, that only 23 % of his IPP pension should be considered as income for support purposes.

[70] The total amount of IPP pension received by Cliff in 2010 was $22, 976.22.

[71] My conclusion is that the value of Cliff’s IPP that should be included in his income for the purpose of the spousal support analysis is 45% of the December 31, 2010 figure.

[72] The letter from the plan administrator is ambiguous as to whether the figure given was adjusted for tax payable by Cliff or not. Cliff chose not to call the administrator to give evidence on this point, or to present an affidavit from him. I would have expected that Cliff , who solicited the letter solely for the purpose of determining the value of this pension for support purposes, would ask that any value given to the pension reflect an adjustment for tax payable.

[73] I am unwilling to adjust the current value of the IPP pension utilized to determine support downward from the previously agreed-upon figure based solely on Cliff’s belief that the figure he put in evidence was not reduced for tax payable.

Suncor Pension

[74] Counsel do not question that it was open to the parties in their agreement to excluded income from certain equalized assets but not others from consideration in the determination of spousal support. They disagree as to the interpretation of the agreement on this point. Cliff’s lawyer submits that the agreement, when read in conjunction with the general rule against double-dipping in the jurisprudence[^5], excludes the income from Cliff’s Suncor pension from consideration. Elizabeth’s lawyer does not agree

[75] I have concluded that the entire amount of the Suncor pension should be included in Cliff’s income for support purposes for the reasons set out below.

[76] Section 7 of the separation agreement is a detailed provision which deals with the conditions under which spousal support may be varied or terminated, with what future income of the parties will not be considered income for the purposes of determination of spousal support, and with the provision of security for the payment of spousal support by Cliff, particularly as to support in the event of his death.

[77] The parties turned their minds to what income sources if any should be excluded when spousal support was considered in the future. Section 7(4) sets out certain income sources that will not be included in income for the purpose of determination of spousal support. It specifies that the portion of Cliff’s IPP pension and RRSP’s that have been equalized are not included. No mention is made of exclusion of any part of Cliff’s Suncor pension. The Suncor pension which was already in pay when the agreement was signed; the IPP pension was not.

[78] The interpretive principle of expression unius est exclusio alterius is applicable here. Why would the parties only specify in section 7(4) that income from the equalized portion of Cliff’s IPP pension and his RRSP’s was to be excluded if they also intended to exclude income from the Suncor pension? It would have been simple to add Cliff’s Suncor pension as another source of excluded income under section 7.4, but the parties did not do so. No other section of the agreement deals with income which is to be excluded from consideration for support purposes.

[79] It is apparent to me that the parties did not intend to exclude from Cliff’s income the income stream income from some assets that were subject to equalization, namely, income from the Suncor pension and income from his business.

[80] The particulars of Cliff’s income at the time of execution of the agreement support this conclusion. The last financial statement sworn by Cliff before the execution of the agreement indicates that he had two principal sources of income—his Suncor pension and commissions, i.e., his business income. This income was the source of his payment of spousal support to Elizabeth, and it was derived from assets that were subject to equalization. If the Suncor pension was income that was the basis for an agreement about the spousal support to be paid by Cliff when the agreement was signed in 2004, how can it be argued that the parties intended that the pension be excluded from consideration in 2012?

[81] Cliff’s lawyer argues that the reference in section 7.5 of the agreement to Cliff’s Suncor pension (and Elizabeth’s survivor pension) as “property” implies that the parties intended that that pension be excluded in the calculation of Cliff’s income. I do not agree. When section 7.5-7.8 of the agreement are read as a whole, what is clear is that the parties intended to do their best to insure that Elizabeth retained entitlement to the Suncor survivor’s pension as security for her support payments, even if Cliff had another spouse at the time of his death.

[82] If Cliff was of the view that there was ambiguity in the agreement on this point, it was open to him to seek to have parole evidence admitted as to the parties’ intentions when the agreement was negotiated. He did not do so.

Has Cliff retired from business?

[83] Elizabeth did not at the beginning of the hearing take the position that Cliff should be required to work, given his age and medical condition. She questioned whether he would actually retire, despite his stated intention. She continued to raise this question after he announced his retirement.

[84] Judges in support cases are wary of an assertion by a party, particularly if that party is self-employed, that he or she is going to suffer a marked reduction in income in the future. There is an onus on that party to provide substantive evidence of the change which is predicted.[^6]

[85] I was initially of the view that Cliff had met this onus. Cliff was not just predicting that his income was going to decrease because the market was bad. Cliff’s health was failing. He decided to retire, and turned in his dealer’s license. He testified that when he took this step, he was “neutralized”.

[86] However, evidence emerged that persuaded me that Cliff has not been entirely candid with the court about his business plans. I refer to Cliff’s email assuring special clients that he would continue to work with Rona and the team in Caring for Clients in an “advisory role”, and that there would be “no change” from the client’s point of view in how he dealt with them. I refer to the Caring for Clients newsletter of January 2012— sent after Cliff’s retirement—offering financial advice, and signed by Cliff and Rona.

[87] The evidence is that Cliff plans that his important clients will be working with Rona, and with him in an advisory role. With respect to 0680 clients, this could be accomplished if Rona purchased the book of business through Queensbury, or if the clients simply chose to bring their business to her. As Cliff acknowledged, clients are not compelled to work with any particular advisor. With respect to the 0580 clients, Cliff effected the assignment of them to Rona by the resignation of his license.

[88] The role that Cliff plans to play in the business is of value, and will continue to help in generating income. Cliff’s testimony was that he has loyal clients who respect his judgement. His continued involvement in the business is planned presumably so that Rona can retain these clients. The financial results of Cliff’s involvement in the business may not be that different from the years 2008-2011, when, according to Cliff, Rona and Alexandra had done much of the work involved in servicing his clients, while he had participated in client meetings.

[89] It may be that Rona will pay Cliff for his involvement in the business. Or it may be that all income generated from the business will be paid to her, and be taxable in her hands.

[90] I conclude that income should be imputed to Cliff in an amount commensurate with the value of the work that he provides to Rona in her business.

[91] What amount should be imputed? As Cliff was not candid about his plans, I have no evidence from him that would assist in fixing an amount. One approach would be to find that his income from business would be the same as his income in 2011, since, as he assured clients, the work he will do will not fundamentally change from the work he did before he resigned his license.

[92] I do not feel that this is a fair approach. It does not acknowledge the significant change in Cliff’s situation; he will be unable to conduct trades and receive commissions. It also does not acknowledge the work that will be done by Rona. In the absence of better evidence from Cliff and Rona, I have decided that a fair and rational approach is to impute 50% of the business income which Cliff enjoyed in 2011 to him in 2012 and in future, until there is a further change.

Calculation of Cliff’s income

[93] The parties agreed that, despite the fact that CPP was not mentioned in section 7.4 of the agreement as a type of income that should be excluded from consideration when spousal support was determined, that it would be excluded for the purposes of this case. Based on that agreement and my findings set out above, I make the following findings as to Cliff’s income for support purposes for the years in question.

2010

Line 150 income $212,488.25

Less CPP - 10,305.00

Less 55% IPP - 12,636.92

Total $189,546.33

2011

[94] Elizabeth’s lawyer argued that a capital gain of approximately $38,000 should be added to Cliff’s income for 2011, on the basis of evidence that Cliff realized an investment in that year. Although there is evidence that Cliff realized an investment of $38,000 in 2011, Cliff’s evidence is that this was not a capital gain. I will not add this amount into income. My calculations for 2011 are set out below:

Culverson report $209,500

Add amount missed

from CB&A 2010 statement

for salary[^7] + 9,140

less CPP - 10,400

less 55% IPP -12,760

less RRIF and LIF income[^8] - 5,100

Total $190,344

2012

[95] In the Culverson letter, Cliff is shown as receiving business income in 2012 from commissions paid to CB&A in 2011, following the accounting system set out above. Mr. Culverson does not include for 2012 any income from commissions that would have been paid directly to Cliff (as in previous years from 0580 clients) , based on Cliff’s advice that he had retired. Because I have decided to impute income to Cliff at the rate of 50% of that earned prior to his “formal” retirement, I include below 50% of the commissions paid directly to him in 2011 as income for 2012.

Culverson report $187,600

Add 50% of commissions

Paid to Cliff in 2011 + 10,300

Less CPP - 10,500

Less 55% IPP -12,760

Less RRIF and LIF income[^8] -5,100

Total $169,540

2013

Income for 2011(last year

before “formal” retirement) $190,344

Less 50% of business income[^9] - 50,300

Total $140,044

[96] Future years income will be based on 2013 income, absent further change.

Elizabeth’s income

[97] All of Elizabeth’s income other than support payments from Cliff is derived from equalized assets. Thus, pursuant to section 7.4 of the agreement, her income for support purposes is zero, unless income is attributed to her. Cliff argues that an annual figure of $25,000 should be attributed to her.

Elizabeth’s efforts to find work

[98] The Supreme Court of Canada clarified in Leskun that there is no “duty” for a support recipient to become self-sufficient. What is expected of a support recipient is that he or she make efforts to contribute to his or her own support which are reasonable efforts, considering all the circumstances. The court was interpreting the provisions of the Divorce Act, but the same expectation applies to an individual in receipt of support pursuant to the support provisions of the Family Law Act. Section 30 of the Act provides that a spouse has an obligation to provide for his/her own support, “to the extent that he or she is capable of doing so”.

[99] The Boland separation agreement sets out specific expectations of Elizabeth in this regard. In reference to the September 2006 review, it stated that Elizabeth will “in the interim use her best efforts to become economically self-sufficient”, and will “take reasonable steps to find suitable employment or to retrain so long as this is economically feasible”.

[100] I find that Elizabeth has not made reasonable efforts to contribute to her own support over the 7 ½ years since the agreement was signed.

[101] Within the first year after the agreement was signed, she reasonably concluded that it was not realistic for her to return to her former career as an executive recruiter. I have no evidence that she consistently pursued any other work that might be within her capabilities, or that she has been diligent in seeking the retraining that might be helpful to her. Elizabeth has made occasional well-meaning but unfocussed attempts to earn income—the two months spent demonstrating food products in a supermarket, for example. Elizabeth has also taken two computer skills courses. However, I have no evidence that she refocused her job search to look for employment which would use her new computer skills, other than a vague reference to sending “over a dozen” resumes for unspecified positions. Elizabeth has not sought out further retraining. She acknowledges that her current enrolment in a culinary arts program is because of personal interest, not because she believes that it will lead to a job.

[102] There is no evidence that Elizabeth suffers from any health problems—physical or emotional—that would impede her from getting and keeping a job. I suspect that Elizabeth has not been more energetic in pursuing employment or retraining because there has been no economic pressure upon her to do so. Currently, her income from investments and Cliff’s support payments allow her a comfortable lifestyle.

[103] Elizabeth is personable, and has a liberal arts education. I accept that Elizabeth will have difficulty competing for certain types of jobs because of her age. But many women who are aged 60, work outside the home, on a full or part-time basis. I do not think it unreasonable to expect that Elizabeth could obtain employment in an office or retail establishment that did not demand a high level of skill and would pay at least minimum wage.

[104] I do not expect that Elizabeth will work as long as Cliff has. There will come a time—at age 65, or perhaps before—when it would be reasonable for her to retire. I do not expect that Elizabeth to work full-time hours, given her age and the difficulties which she had in the position at the supermarket.

[105] I have decided that it is fair to impute income to Elizabeth in an amount of $9,840 annually. This represents a minimum wage income, working 20 hours weekly for 48 weeks of the year. My imputing income to Elizabeth does not mean that she must work outside the home. What it does mean is that her support entitlement, if any, shall be made taking into account the income imputed to her.

Elizabeth’s repartnering

[106] A former spouse who is in receipt of spousal support is not automatically disentitled from receipt of support because she or he repartners[^10]. Repartnering is simply a factor to be taken into account in the assessment of entitlement to and quantum of support.

[107] The caselaw indicates that the significance of the repartnering will vary, depending on a number of factors, such as :

• the duration and stability of the new relationship;[^11]

• the value to the support recipient of any benefits she or he receives by reason of this new relationship;[^12]

• the existence of any legal obligation of the new partner to provide support;[^13]

• the economic circumstances of support recipient’s new partner, sometimes in comparison to his or her former partner.[^14]

[108] Also relevant in the analysis is whether the basis for the recipient’s support entitlement is compensatory of partially compensatory[^15]. As was said by Justice G. M. Barrow in Kelly v. Kelly[^16], “”Remarriage does not compensate the receiving spouse for that which was foregone during an earlier marriage.”

[109] Cliff’s counsel urged that the court should be guided by a principle enunciated in the case of M(C.L.) v. M. (R.A.)[^17], to the effect that remarriage by a recipient spouse places an onus upon that spouse to demonstrate that there is a continuing basis for support, despite the remarriage. She relies upon the case of M. (K.A) v. M. (P.K.)[^18] and other cases[^19] in which a lengthy period of cohabitation with a second spouse led to stepped-down reductions or a termination of the spousal support obligation of the first spouse. Those cases emphasize the growing support obligation of the recipient’s second spouse as the new relationship matures.

[110] This case is distinguished from the cases relied upon by Cliff by the fact that Elizabeth and Peter have entered into a cohabitation agreement which provides that they release their rights to spousal support from each (except in the event of a separation), and acknowledges that they are financially independent and do not require assistance from the other.

[111] Elizabeth and Peter were entitled to enter into this agreement. Section 53 of the Family Law Act provides that two persons who are not married to each other “may enter into an agreement in which they agree on their respective rights and obligations during cohabitation[^20], or on ceasing to cohabit or on death, including:

a) ownership in or division of property;

b) support obligations[^21];

c )the right to direct the education or moral training of their children, but not the right to custody of or access to their children; and

d) any other matter in the settlement of their affairs.

[112] Cliff did not challenge the validity of this agreement. He was unable to refer to any cases in which support payments were reduced or terminated because of repartnering despite such a cohabitation agreement[^22].

[113] The fact that Peter has no legal obligation to support Elizabeth must be a significant factor in this analysis.

[114] However, although Peter has no legal obligation to contribute to Elizabeth’s support, if he in fact is doing so and their cohabitation provides financial benefits to Elizabeth that reduce her need, then that is a factor which I should take into account. Cliff’s lawyer urged me to consider the provision of the cohabitation agreement for support for Elizabeth in the event of her separation from Peter as an indicator of the value of the current benefits which she receives from this cohabitation. Specifically, counsel argued that I should conclude from this provision that Elizabeth currently receives benefits from Peter in the amount of $72,000 annually.

[115] I do not accept that submission. Elizabeth’s uncontested evidence is that she spends about the same, perhaps a little more, than Peter on the expenses of running the household which they share. Elizabeth pays for all of her personal expenses for items such as automobile, clothing, medical and dental care, personal care, and all expenses connected with her children.

[116] I do not find that Elizabeth receives any financial benefit from this cohabitation with Peter except in one respect. My perception is that the value of the accommodation she enjoys is likely more than the amount which she contributes to the running of the household which would be Peter’s responsibility. In other words, Elizabeth would likely have to spend more than $500- 750 (one half the amount she spends on provisions for the household) monthly to enjoy such accommodation if she lived alone. I do not have evidence which allows a precise quantification of this benefit. My finding with respect to this benefit will be considered in determining the quantum of spousal support, if any.

Entitlement to support

[117] Elizabeth has the onus to establish that she is entitled to spousal support. I find that she has met this onus.

[118] In Bracklow v. Bracklow[^23], the Supreme Court of Canada found that are three grounds for spousal support: compensatory, contractual, or needs-based. Although Bracklow was decided under the Divorce Act, the Supreme Court observed that this analysis was applicable to support claims determined under provincial statutes.

[119] The basis for a recipient’s entitlement to spousal support can be relevant on a review or a variation application. As set out above, a spouse or former spouse may not have a legal need for support, but may still be entitled to support on compensatory grounds.

[120] Elizabeth and Cliff did not set out the basis for Elizabeth’s entitlement to support in their separation agreement. Few separating spouses do. I heard almost no evidence and little argument about the roles which the parties adopted during the marriage and whether Elizabeth had an entitlement to support on compensatory grounds.

[121] It is clear from the evidence that:

• The parties had a long marriage—20 years;

• Elizabeth left her career as an executive recruiter to assume the role of housewife and mother, and had been out of the workforce for 20 years at the time of separation;

• Cliff built a successful career in the business world during that time;

• the parties’ personal and economic lives were integrated.

[122] I have little difficulty in concluding that, as in Hartshorne v. Hartshorne[^24], Elizabeth and Cliff “divide(d )their family responsibilities in such a way as to make a joint investment in one career” -- Cliff’s career. Thus, one basis for her support entitlement is compensatory.

[123] Elizabeth also has a continuing entitlement to spousal support on the basis of need. Her annual expenses according to her financial statement are $124, 430. Except for Elizabeth’s monthly contribution to an RRSP in the amount of $1080, Cliff did not question whether these expenses were reasonable. Even if the RRSP expense is removed from Elizabeth’s budget, her expenses are $111, 470 annually. Given Cliff and Elizabeth’s former standard of living and Cliff’s current standard of living, these expenses do not seem unjustified. Taking into account the $9,840 annually which I have imputed to Elizabeth and her investment income of $28000-$43000 annually, Elizabeth would have unfunded expenses of more than $58,000 annually if she received no spousal support.

Quantum of support

[124] In determining the appropriate quantum of support for Elizabeth, I take into account the relevant factors set out at section 33(9) of the Act.

• Elizabeth and Cliff had a lengthy marriage, 20 years.

• The effect on Elizabeth’s earning capacity of the role she assumed was negative, profound, and lasting.

• Elizabeth contributed to Cliff’s career development by the role she assumed in the marriage.

• Elizabeth is 60 years of age

• Elizabeth is in good health.

• Elizabeth has a capacity to contribute to her own support which she has not realized, and which is represented in the income which I have imputed to her.

• Both Elizabeth and Cliff have significant net worth, of $1-1.1 million.

• Elizabeth’s needs are fairly represented by the expenses set out in her financial statement, after the deduction of $1080 monthly for RRSP contribution. It should be noted that some of these expenses should be eliminated shortly[^25].

• Cliff has the capacity to provide for Elizabeth’s support. Cliff did not argue that he did not have the means to pay support. He argued than Elizabeth should be disentitled to support, and that it was unfair to require him to pay support.

• With the exception of Edward, who requires support for a few months until the end of this school term, Cliff and Elizabeth have no children who require support from them.

• Although Cliff has a potential obligation to provide for Rona’s support, there is no evidence that she requires support from him.

• Elizabeth has no right to obtain support from Peter.

[125] Should the Spousal Support Advisory Guidelines be considered in this case? Professor Carol Rogerson, one of the authors of the Guidelines, has said that the Guidelines can be useful on variations or reviews, but that they should be used with caution because “they were not designed to address some of the more complex issues that can arise on variation, such as the impact of remarriage, second families and retirement”[^26]. Having said that, some courts[^27] dealing with variations or reviews in cases of repartnering refer to the Guidelines as a barometer as to the reasonableness of a possible quantum of support. Counsel for both parties appear to agree with this practice, as both provided the court with SSAG calculations in support of their submissions.

[126] In this case, I have considered the SSAG calculations in reaching my decision. Given the findings which I have made about the very limited benefit to Elizabeth from her relationship with Peter, this factor does not have the complicating effect for the analysis which Professor Rogerson identified in other cases of repartnering.

[127] SSAG calculations based on 2011 figures (with Cliff having an income of $190,344 and Elizabeth having an income of $9, 840) yield a range of spousal support amounts of $4513 (low); $5265 (midway); and $6017 (high).

[128] SSAG calculations based on 2012 figures (with Cliff with an income of $169,540 and Elizabeth with an income of $9840) yield a range of spousal support amounts of $3992 (low); $4658 (midway); and $5323 (high).

[129] SSAG calculations for 2013 and going forward (with Cliff having an income of $140,044 and Elizabeth having an income of $9840) yield a range of spousal support amounts of $3255 (low); $3798 (midway); and $4340 (high).

Appropriate quantum of support

[130] Based on all the factors referred to above, I have decided that Cliff shall pay support to Elizabeth in the following amounts. In determining these amounts, I have referenced the SSAG ranges. For each year, I considered a higher amount of support within the SSAG range because of the partially compensatory nature of Elizabeth’s entitlement, but rejected that possibility because of the benefit which she receives in sharing accommodation with Peter.

[131] For the year 2011, and for the reminder of that year, Cliff shall pay support in the amount of $5,000 monthly. This amount meets Elizabeth’s needs, less the contributions she budgeted for her RRSP.

[132] Commencing January 1, 2012, and for the remainder of that year, Cliff shall pay support in the amount of $4,600 monthly. This amount takes into account Cliff’s reduced income for that year, and will require a concomittant reduction of expenditure by Elizabeth.

[133] Commencing January 1, 2013, and on the first day of each month following, Cliff shall pay support in an amount of $3,900 monthly. This figure reflects the further reduction of Cliff’s income for support purposes as determined by me, and will require a further reduction of expenditure by Elizabeth.

Retroactive claim

[134] Cliff’s claim to have his support obligation reduced for 2010 is a claim for a retroactive variation, not a review. He has established that at least two of the circumstances contemplated as material changes that could trigger a variation have taken place: each party has commenced cohabitation with another spouse, and Elizabeth is no longer in receipt of child support.

[135] Counsel agreed that Cliff claim should be assessed pursuant to the test for claims for retroactive child support set out in D.B.S. v. S.R.G., (2006) S.C.R.231. They rely upon the Supreme Court of Canada’s decision in Kerr v. Baranow, (2011) 2011 SCC 10, S.C.J. 10 in which the court found that “similar considerations to those set out in the context of child support are also relevant to deciding the suitability of a retroactive award of spousal support. Specifically, these factors are the needs of the recipient, the conduct of the payor, the reason for the delay in seeking support and any hardship the retroactive award may occasion on the payor spouse. Because spousal support has a different legal foundation than child support, there are differences in the analysis set out by Justice Cromwell in Kerr v. Baranow. For example, Justice Cromwell states that “concerns about notice, delay and misconduct generally carry more weight in relation to claims for spousal support”.

[136] Both cases concerned a claim for an increase in support. It is not immediately apparent how the principles set out in those cases apply to a claim for a decrease or termination of support, and counsel had few submissions in this regard.

[137] Before embarking on an analysis of Cliff’s claim, it is useful to focus on what reduction might be ordered if a retroactive order was made. Cliff’s income in 2010 of $212,485, after the requisite adjustments are made, is approximately the same as his 2011 income of $209,500 before the same adjustments. If I found it appropriate to make a retroactive award, the quantum of support would be the same as that ordered for 2011, $5,000 monthly.

[138] There are some cases[^28] in which trial courts have attempted to apply D.B.S principles to requests for retroactive reduction in child support.

[139] Those cases recognize that the objectives of flexibility (responding to changes in a timely manner in order to assure that children receive support at appropriate level) and certainty (the reliance interest of both the payor and the recipient on the terms of the prior order or agreement) identified by the Supreme Court as important in claims for increases of support are also in play in requests for retroactive decreases.

[140] Justice William Dyer in D.M. v. S.A., 2008 NSFC 15, explains how the D.B.S. test might be modified in claims for a retroactive reduction of child support obligations. I apply that modified test here, with further modification appropriate a case involving spousal support obligations.

• The presumptive start date for a retroactive award will be the date of effective notice (the date that the payor indicated to the recipient parent that a reduction or rescission of support is requested), accompanied by appropriate disclosure to support the request, if that request is based on a change in the payor’s circumstances. Here, Cliff gave notice to Elizabeth in his lawyer’s letter of November 2010. However, he did not furnish any financial disclosure in that letter, and none was provided until the action was commenced.

• Unreasonable delay by a payor in seeking a reduction, while not fatal to a claim, is a negative factor in considering the request. Cliff was not asked why he delayed commencing the motion, and I thus have no evidence on this point.

• Blameworthy conduct by either party may be relevant. Either a support claimant or a support payor may be guilty of such conduct if he or she fails to disclose information detrimental to his or her claim for support or to the defence of such a claim. I do not find that Elizabeth failed to disclose such information. After the action started, Cliff provided ample disclosure of his income to the end of 2011, but as noted above was not completely open about his business plans in the future.

• Circumstances of the support payor. I have no evidence that Cliff has need that might support a claim for a retroactive decrease.

• Hardship Elizabeth has the resources to repay a retroactive award from capital.

[141] The Ontario Court of Appeal has found that the date of commencement of a case for spousal support is the “usual commencement date for an order[^29]. As a review of spousal support is akin to an original application, I applied the same principal as to commencement date of the order I made above for support in a reduced amount commencing January 1, 2011. Considering the circumstances set out above, and particularly the delay in Cliff’s notice to Elizabeth that he wished to review support and the delay in commencing the action, I see no reason to make an order that begins January 1, 2010.

Cost of living increase

[142] Section 7(9) of the agreement provided that on October 1^st of each year that Cliff will increase the support payment to Elizabeth by the lesser of the percentage increase in Cliff’s income for that calendar year or the cost of living for the City of Toronto. Cliff has never paid the increase, and Elizabeth claims it in a lump sum of $16,414.84. Cliff does not question Elizabeth’s calculation of this amount, but asserts that the claim cannot be enforced because it is not clear what his base income for spousal support purposes was when the agreement was signed. He asks, if the base income is not clear, how can we measure his increases in income after 2004?

[143] Elizabeth’s lawyer has calculated Cliff’s income for 2004 ( the year the agreement was signed) and subsequent years in reference to line 150 of his tax return. In 2004 Cliff reported that his income was $184,911.

[144] Section 7(9) itself does not specify what Cliff’s base income was; that is not unusual in a cost-of living clause in an agreement. Normally, I would say that it would not be controversial to use the income reported by an individual on line 150 of his tax return as an accurate representation of his income for any given year, unless the parties to an agreement had agreed to use another figure. For example, if a payor is self-employed and there are arguments about deduction of expenses from gross income, the parties may agree to use a figure for income higher than that shown on line 150 of the payor’s return, for some or all purposes.

[145] In this case, Cliff and Elizabeth agreed to use the figure of $230,000 as Cliff’s income for the purpose of determining the table amount of child support, but they did not agree to use this figure for other purposes. Therefore, I find that reference to line 150 of Cliff’s tax return is an accurate representation of Cliff’s income but for one modification. The parties agreed that when spousal support was being determined, that certain sources of Cliff’s income would be excluded from the calculation, income from the equalized portion of Cliff’s IPP pension and of his RRSP’s.

[146] The cost of living escalator for spousal support in the agreement should employ this definition of Cliff’s income, starting with his line 150 income for each year and deducting those income sources excluded by the agreement. The calculations furnished by Elizabeth’s lawyer do not do that.

[147] The evidence indicated that Cliff began to enjoy income from these excluded sources in 2010. For that reason, I am not considering any increase in support after December 31, 2009.

[148] I order that Cliff pay Elizabeth the sum of $9412.98, representing the amount owing pursuant to section 7(9) of the agreement from October 1, 2005 up to December 1, 2009.

[149] Pursuant to this judgment, Elizabeth has an obligation to pay monies to Cliff and Cliff has an obligation to repay monies to Elizabeth. The differential amount which Elizabeth owes to Cliff may be deducted by him from current support payments owed to Elizabeth at a rate of $1000 monthly.

[150] Without seeing any offers to settle which were exchanged, it appears that success in this case is fairly evenly divided. However, if either party wishes to claim costs, written submissions no longer than 4 pages, exclusive of offers, should be served and filed within 15 days. Reply submissions should be served and filed within a further 15 days.

Released: February 29, 2012 Signed: Justice E. B. Murray

[^1]: As noted above, the trust has an interest through its shareholding in CB&A in the proceeds of any sale of Cliff’s interest in 0680. The share structure of CB&A would limit Cliff’s income from such a sale to $105,000.

[^2]: Cliff testified that Rona would not attempt to exercise her rights under this agreement because of legal objections raised by Elizabeth.

[^3]: I have not taken into account Cliff’s estimate of income tax owing on disposition of LIF and RRIF funds, as Elizabeth did not include this contingent liability in her financial statement.

[^4]: She obtained a real estate license in the ‘80’s, but never worked in this field.

[^5]: See Boston v. Boston, 2001 SCC 43.

[^6]: See Rasmussen v. MacDonald, (1997) 11182 (SK QB), 34 R.F.L. (4th) 451 (Sask. U.F.C.)

[^7]: Acknowledged by Cliff in evidence

[^8]: Income from Cliff’s RRSP’s at separation excluded as per section 7.4 of agreement. Comparison of the value of Cliff’s RRSP at date of separation from his financial statement to the value of his RRIF in his December 20, 2010 financial statement do no indicate an increase in value after the date of separation.

[^9]: Culverson report of January 10, 2012 stated that total business income for 2011 was $100,600.

[^10]: See B.G. v. G. L., 1995 65 (SCC), 15 RFL (4th) 201 S.C.J.

[^11]: Balazsy v. Balazsy, 2009 CarswellOnt 5982 (S.C.J.); M. (K.A.) v/ M. (P.K.), 2008 BCSC 93

[^12]: Juvatopolos v. Juvatopolos, 2004 O.J. 4381 (S.C.J.)

[^13]: Stenhouse v. Stenhouse, 2011 ABQB 530 ; Juvatopollos v. Juvatopolos, supra.

[^14]: M. (C.L..) v. M. (R.A.), 2008 BCSC 217; Kelly v. Kelly, 2007 BCSC 227, 2007CarswellBC 342 (S.C.)

[^15]: Fritsch v. Fritsch, (2008) CarswellOnt 7838 S.C..J.

[^16]: supra, note 11.

[^17]: At footnote11

[^18]: M. (K.A.) v. M. (P.K.), 2008 BCSC 93

[^19]: See Balazsy v. Balazsy, supra note 8; Kelly v. Kelly, supra note 11; M. (C.L.) v. M. (R.A.),supra note 14.

[^20]: My emphasis.

[^21]: My emphasis.

[^22]: In Kelly v. Kelly, supra note 11, the former wife alleged that she had an oral agreement with her new partner, but the presiding judge did not accept that evidence.

[^23]: (1999) 715 (SCC), S.C.J. 14

[^24]: (2004) 2004 SCC 22, S.C.J. 20

[^25]: E.g., the obligation to contribute to Edward’s expenses will terminate in the spring of 2012. It appears that the debt for past legal fees will be paid by year end.

[^26]: Fritsch v. Fritsch, supra note 12, quoting from The Spousal Support Advisory Guidelines: Ontario Update”, November 21, 2008.

[^27]: For example, in Balazsy v. Balazsy, supra note 8, the court relied in part of the SSAG calculations; in Fritsch v. Fritsch, supra note 12, the court determined that it was not appropriate to rely the SSAG.

[^28]: D.M. v. S.A., 2008 NSFC 15; Haq v.Haq, 2011 CarswellOnt 5150 (C.J.)

[^29]: MacKinnon v. MacKinnon, (2005) O.R. (3d) 175.