SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 02-FP-281213-0001
DATE: 20120904

RE: WENDY ROCHELLE MYERS, Applicant/Appellant

A N D:

DARBY KELLY VICKAR, Respondent

BEFORE: MESBUR J.

COUNSEL:
Edwin Flak and Avagene Serkin for the Appellant
Kenneth Cole and K. Chapman for the Respondent

HEARD: July 31 and August 1, 2012

E N D O R S E M E N T

Introduction:

[ 1 ] Wendy Myers appeals a supplementary arbitration award delivered by Stephen Grant (the Arbitrator) on August 12, 2011. She asks the court to set aside the award in its entirety. Her former husband, Darby Vickar takes the position the Arbitrator was correct in his decision and the appeal should therefore be dismissed.

[ 2 ] Ms. Myers and Dr. Vickar were husband and wife. They separated in 2002 after a 17½ year marriage. During the marriage, Dr. Vickar practiced as a radiologist at the Trillium Health Centre. He continues his radiology practice there. Ms. Myers had some employment outside the home during the marriage, but was primarily responsible for the parties’ three children and the home. Since separation, she has done some retraining.

[ 3 ] The parties’ three children are Caleigh, now 24, Michael now 21, and Shawn now 17. Since the separation the two older children have completed post-secondary degrees. Shawn is finishing high school at the York School in Toronto.

[ 4 ] The separation was clearly a difficult event for this family. It remains so. For the last ten years, the parties have been in almost constant litigation or alternative dispute resolution.

[ 5 ] At first, Ms. Myers commenced a family law action, claiming the usual types of relief. After some initial skirmishes the parties eventually negotiated a separation agreement, which they signed in August of 2004.

The separation agreement

[ 6 ] The financial arrangements in the separation agreement were somewhat unusual and arose in large part because of Dr. Vickar’s suicide attempt the week after the separation. As a result of his injuries, Dr. Vickar was on disability benefits from June of 2002 until April of 2004. The benefits reduced over that period as he returned to work on a gradually increasing basis. [^1]

[ 7 ] The separation agreement quantified Dr. Vickar’s income for 2003 at somewhere between $400,000 and $430,000 with Ms. Myers’ income fixed at about $16,000 for the same year. The parties agreed to set child support and section 7 expenses for June 2004 to December 2004. They deemed these figures a “reasonable arrangement within the meaning of subsections 15.2(7) and (8) of the Divorce Act for this period of time.

[ 8 ] As a result, Dr. Vickar’s obligations during this six month period were to pay $6,250 per month in table support for the children, and 100% of the children’s special expenses. These were enumerated as Caleigh’s tuition for Branksome Hall, net of her scholarship, tuition for both Michael and Shawn at the York school and fees for Shawn and Michael at Camp White Pine. These section 7 expenses came to a yearly total of $54,420. [^2]

[ 9 ] Child support was to be subject to review in the 2005 calendar year, with effect January 1. The agreement also provided for further review of child support after 2005 if either party requested it in writing. The agreement required the parties to try to resolve disputes through negotiation, or failing success, through mediation.

[ 10 ] As far as spousal support was concerned, the parties agreed that in light of Dr. Vickar’s disability and recent return to work, the inability to estimate his 2004 income and his assumption of the child support obligations, there would be no spousal support in 2004. The parties agreed to address the issue of spousal support as part of the 2005 review process. They specifically agreed that spousal support would be determined in accordance with the factors and objectives outlined in the Divorce Act . The agreement makes no mention of the Spousal Support Advisory Guidelines ( SSAGs ) . At that time, of course, the first Draft Proposal of the SSAGs had not yet been released. It is dated January of 2005.

[ 11 ] The agreement said that if the parties could not agree on support when they entered into the 2005 review process, then they would deal with the issue under the dispute resolution provisions of the agreement. Those provisions required the parties first to exchange financial disclosure, second, to attempt to negotiate a resolution, third, if negotiation failed to try mediation, and last, if they did not try mediation or it failed to go to court.

[ 12 ] The agreement went on to say that any spousal support payable at any time after January 2005 could be changed if there were a material change in circumstances even if the change was foreseen, unforeseen, foreseeable or unforeseeable. [^3]

[ 13 ] When it came time in 2005 to conduct the first review of the terms of the separation agreement, the parties were not able to resolve matters themselves. They did try mediation with Mr. Grant, the current Arbitrator. He was able to facilitate a settlement which resulted in the parties executing an amending separation agreement in August of 2006.

The amending agreement

[ 14 ] The amending agreement resolved the issues of child and spousal support for the period between January 1, 2006 and June 30, 2008.

[ 15 ] The amending agreement sets out specific child support obligations during this period, depending on the number of children residing with Ms. Myers. The obligations are based on “an agreed income” of $485,000 for Dr. Vickar, “which is subject to adjustment in accordance with subparagraphs 4.5 and 4.6 below.” [^4] Those provisions required the parties to engage in a “summary review and reconciliation process” on May 30, 2007 with the assistance of the Arbitrator as mediator/arbitrator.

[ 16 ] The purpose of this summary review was to review various “accountable items” (some specific enumerated section 7 expenses) as well as to decide if Dr. Vickar’s income significantly deviated from the agreed on figure of $485,000. The amending agreement goes on to specify, in somewhat excruciating detail, the disclosure process. This included what the Arbitrator could require from the parties in order to decide the reasonableness of business expenses Dr. Vickar was deducting or the section 7 expenses Ms. Myers was claiming for the children.

[ 17 ] On the issue of spousal support, Ms. Myers specifically waived any claim for spousal support for the period from the date of separation until June 30,, 2008. She undertook not to claim any spousal support for any period prior to June 30, 2008.

[ 18 ] This time the Arbitrator was unable to mediate a resolution to these issues and decide what the new arrangements should be in place in 2008. As a result, the parties moved into the first arbitration with the Arbitrator. They executed an arbitration agreement which submitted the following issues for arbitration:

a) Table support for 2009 forward, including whether any amount should be paid to a child directly;

b) Whether there should be an adjustment to either table support or section 7s for the period prior to July 1, 2008;

c) If there should be, what is the amount Dr. Vickar should have paid, and how should any under or over payment be addressed;

d) If there should not be an adjustment to table support or section 7s for the period before July 1, 2008, what is the appropriate amount of table support or section 7s for July 1, 2008 forward. How should any under or over payment be addressed;

e) What is the appropriate amount for section 7 expenses in 2009 and should they be paid to Ms. Myers or a third party;

f) What is the appropriate amount of spousal support, if any, Dr. Vickar should pay for 2009 and duration of same;

g) If there is a spousal support award, should Dr. Vickar have to secure it with life insurance, and if so, how much;

h) Any further issues the parties raise concerning further steps the Arbitrator can or should take;

i) costs

[ 19 ] The arbitration agreement says the issues of child support and spousal support “shall be determined in accordance with the provisions of the Family Law Act, R.S.O. 1990 c. F.3 as amended, or the Divorce Act R.S.C. 1991 c.3 (2ns Supp.) as amended, as may be applicable, and the Federal Child Support Guidelines. The arbitration agreement makes no reference to the Spousal Support Advisory Guidelines .

The first arbitration

[ 20 ] The Arbitrator conducted the first arbitration in November of 2009, and delivered his reasons on September 27, 2010 following his receipt of written submissions between March 2010 and September 2010. The arbitration was to determine (1) child support, including both table support and section 7 expenses, on both a retroactive and prospective basis; and (2) spousal support. The Arbitrator indentified additional points he needed to address. These included whether to apply a formula to determining Dr. Vickar’s income; table support from July 2006 to June 2008, and from July 2008 onwards; section 7 expenses for the same periods; and quantum and terms of spousal support, if any.

[ 21 ] The Arbitrator determined that he had the power to set a formula for determining Dr. Vickar’s income, and agreed with Ms. Myers’ lawyer’s submission that a formula would be the best way of proceeding. The Arbitrator decided on a formula that would simply add up Dr. Vickar’s actual receipts from July 1 to June 30 from his “informal partnership” at the hospital, and deduct a flat 4% from that amount to account for reasonable business expenses. I infer he chose this time period because it would provide the most up to date income for the period right up to the date where support would either be payable or adjusted.

[ 22 ] Using this formula, the Arbitrator decided Dr. Vickar’s net income for 2009 was $616,624. That was the income figure to be used for child support. He also decided that since the two older children were pursuing post-secondary studies away from Toronto, Dr. Vickar should pay table support for one child for 8 months of the year, and for two children when Michael was also living with his mother. He left it to the parties to sort out the necessary arithmetic; otherwise, he would deal with it.

[ 23 ] As to section 7 expenses, the Arbitrator included all of Shawn’s singing lessons, dental and other medical expenses, and Michael’s travel and related expenses to and from University as part of the section 7s Dr. Vickar was required to pay.

[ 24 ] When it came to payment for post-secondary expenses, the Arbitrator decided that it was reasonable to expect each child to contribute $1,000 per year to those expenses, with their father paying the balance.

[ 25 ] The Arbitrator decided that Dr. Vickar should pay all of Caleigh’s educational expenses for the 2009-2010 academic year. He determined that if Caleigh pursued graduate studies, she would remain a child of the marriage, entitled to child support.

[ 26 ] When looking at Michael and Shawn’s post-secondary costs, the Arbitrator determined that 1//3 of an RESP should be attributed to Michael’s costs, with the balance going to Shawn’s. Dr. Vickar would be responsible for the balance of the costs, less each child’s $1,000 per year notional contribution.

[ 27 ] On the issue of spousal support, the Arbitrator pointed out that under the amending agreement, Ms. Myers had agreed that the earliest date on which she could claim spousal support would be July, 2008, “in order to enable the financial focus to be on the children’s needs and expenses.” [^5]

[ 28 ] Dr. Vickar took the position there should be no spousal support. He argued there was no “causal connection” between Ms. Myers’s alleged need for spousal support and the breakdown of the marriage.

[ 29 ] Ms. Myers’ counsel pointed to the increased parental role Ms. Myers had assumed, both during and after the separation. She took the position Ms. Myers should have 50% of the net disposable income (NDI) after appropriately crediting Dr. Vickar for his section 7 expenses.

[ 30 ] In approaching the issue of spousal support, the Arbitrator said that in order to decide the amount, if any, of spousal support Dr. Vickar should pay, he had to consider “the economic disadvantages Ms. Myers sustained, if any, from the roles assumed in the marriage or marriage breakdown, the relative equality of both parties’ households and their differences in earning capacities.” [^6] the Arbitrator decided first to impute income of $35,000 per year to Ms. Myers. He then reviewed all the salient facts, and found she had been economically disadvantaged by the roles assumed in the marriage and on its breakdown. In his reasons, the Arbitrator referred to Ms. Myers’ affidavit in which she outlined the negative economic consequences she had suffered.

[ 31 ] The Arbitrator considered the retroactive child support he had ordered Dr. Vickar to pay, his obligation to pay 100% of the section 7 expenses and how this might create a limited ability for Dr. Vickar to pay spousal support. The Arbitrator then discussed the length of the marriage, the roles each of the parties had taken on in the marriage, and their relative earning capacities. He discussed Ms. Myers’ work history and the fact she had been out of the work force from 1995 to the date of separation.

[ 32 ] The Arbitrator considered the parties’ relative capital positions, including Ms. Myers’ depletion of assets compared with Dr. Vickar’s increase in net worth. He discussed (and rejected) Dr. Vickar’s argument that Ms. Myers was “overhoused” and should sell her home and buy something cheaper.

[ 33 ] The Arbitrator then concluded that “whether by way of compensatory or ‘needs-based’ support, Ms. Myers clearly has an ongoing entitlement”. He found she had been economically disadvantaged by the roles assumed in the marriage and on its breakdown and, “especially now, when one child is close, if not entirely ‘off the payroll’ and the second child is in a similar situation. Dr. Vickar has not only some obligation but also an ability to contribute to Ms. Myers’ support.” [^7]

[ 34 ] The Arbitrator then went on to say: “making the best stab I can at a reasonable allocation of Net Disposable Incomes between the two households, I find that an award of $2,750, taxable to Ms. Myers deductible by Dr. Vickar, per month is reasonable in these circumstances.” [^8] The Arbitrator made no reference to the SSAGs in his reasons.

[ 35 ] The Arbitrator went on to decline to order retroactive spousal support, while retaining the right to entertain further submissions on the issue of spousal support, “to determine the appropriate retroactive and current spousal support allowance if I am off-base on this, given the retroactive calculations the parties must undertake and their current circumstances.” [^9] He concluded by saying that because of the uncertainty in Ms. Myers’ future career, whether in her current venture or as a law clerk, when Shawn finished high school, the parties could review Dr. Vickar’s spousal support obligations. [^10]

[ 36 ] Neither party appealed this decision. They tried to do all the calculations the award required, but were unable to do so. As a result, matters came back on before the Arbitrator to decide on various calculations and recalculations resulting from the original award. Although he was able to resolve some of the issues with the parties, he was not able to resolve them all. As a result, the Arbitrator needed to decide on Dr. Vickar’s income for support purposes, Ms. Myers’ request for collateral financial disclosure, child support, and spousal support, including whether there should now be a retroactive component to spousal support.

[ 37 ] The Arbitrator heard argument on these issues on April 7, 2011 and delivered his report on August 12, 2011. This second report is the award which is the subject of this appeal.

The arbitral award under appeal:

[ 38 ] The Arbitrator proceeded on the basis of a written record and oral submissions from counsel. The Arbitrator dealt with the issues he needed to decide on the following basis.

[ 39 ] When it came to deciding Dr. Vickar’s income for support purposes, Ms. Myers’ counsel changed position, and argued that instead of applying the formula her counsel had argued for so passionately in the original arbitration, the methodology should revert to a strict application of income determination under the Child Support Guidelines. The Arbitrator declined to change the approach to income determination. First, he noted that the formula he had imposed created a method for calculating Dr. Vickar’s income prospectively. The Arbitrator went on to say:

While it is tempting to re-adjust on the basis that we now know Dr. Vickar’s 2010 income, prudence dictates that the parties stay the course as Ms. Myers’s counsel, Ms. Morris, urged me to do at the time.

[ 40 ] As a result of applying the formula he had determined in the first award, the Arbitrator found Dr. Vickar’s income for 2010 to be $607,949, and based his findings for table support on this sum. Since Dr. Vickar continues to be responsible for 100% of the children’s special expenses, the actual quantum of his income is not particularly germane to that issue.

[ 41 ] The Arbitrator then turned to the question of spousal support. He did not repeat the analysis of section 15 of the Divorce Act which he had set out in paragraphs 117-143 of the first award. [^11] He said:

I have, however, recognized and continue to recognize that her assumption of much of the household management and child-rearing, especially after the separation may have adversely affected her ability to earn an income and to that extent she has sustained an economic disadvantage arising from the marriage and its breakdown.

That is offset to a large extent by the fact that even nine or so years ago when the parties separated, all of the children were in school full time and the two older ones were adolescents...

I also heard much debate about what percentage of the Net Disposable Income (“NDI”) with which each party is left. [^12]

[ 42 ] The Arbitrator considered Dr. Vickar’s position that spousal support should terminate, or that he should attribute a higher income to Ms. Myers. He also discussed Ms. Myers’ position that he should make a significant retroactive award, at a higher sum.

[ 43 ] In determining the issue of prospective spousal support the Arbitrator highlighted “the need to redress economic disadvantage to the extent possible for as long as appropriate” as his guiding principle. He rejected Divorcemate calculations under the SSAGs as inapplicable because Dr. Vickar earns more than $350,000 a year. He did find the suggested range of duration for support of 8.5 to 17 years post-separation of some use.

[ 44 ] The Arbitrator then concluded in paragraphs 162 and 163 of his reasons:

After considering all these circumstances, I award Ms. Myers spousal support of $3,500 per month, increasing to $4,250 per month as of June 1, 2012, variable only in the event of a material change in circumstances, annually indexed to the cost-of-living (not to exceed 3% in any twelve month period from June to May, given that this is not on a calendar year basis). I am basing these amounts, again, on the predicate that Ms. Myers is capable of earning $35,000 per year and impute that amount of income to her. Suffice to say, these spousal support payments are taxable to Ms. Myers and deductible by Dr. Vickar under sections 56.1 and 60.1 of the Income Tax Act.

I base this change in amount consistent with the time that Caleigh and Michael will have finished their respective educational programs, thus freeing Dr. Vickar from these financial obligations.

[ 45 ] The Arbitrator also decided that the appropriate commencement date for spousal support should be January 1, 2010 rather than July 1, 2010. July was the date he had ordered in the first award. He did not accede to Ms. Myers’ request that spousal support should begin with effect July 1, 2008 or at least earlier than January 1, 2010.

[ 46 ] Following the release of the award, Ms. Myers changed counsel to Mr. Flak. Relying on sections 40(1) and 44(1) of the Arbitration Act, he asked the Arbitrator to explain certain matters and correct others. Dr. Vickar’s counsel responded, and then the Arbitrator delivered a further report, which he called “supplementary report #2”. In it, he corrected some typographical errors, but essentially declined to revisit his decision in any material way.

[ 47 ] Ms. Myers then appealed.

The grounds for appeal:

[ 48 ] Although her notice of appeal states the grounds of appeal somewhat differently, Mr. Flak confirmed that the essence of Ms. Myers’ position is that the Arbitrator erred in the following ways:

a) He failed to apply the provisions of sections 16 and following of the Child Support Guidelines in calculating Dr. Vickar’s income for child support purposes and therefore incorrectly calculated his income;

b) Because he failed to calculate Dr. Vickar’s income properly, the Arbitrator failed to calculate the appropriate amount of table support correctly;

c) He was wrong to reject the SSAGs as the appropriate methodology to calculate the quantum of spousal support;

d) He failed to consider the provisions of the Divorce Act when determining the quantum of spousal support and the appropriate commencement date;

e) He failed to deliver sufficient reasons to explain how he arrived at the quantum of spousal support he determined;

f) He should have made spousal support commence in July 2008 rather than January of 2010;

The standard of review:

[ 49 ] While the parties do not disagree on the law concerning the standard of review, they take different views on which standard applies here. They agree that on a question of law, the standard of review is correctness. On a question of mixed fact and law, the award can only be set aside if the Arbitrator made an overriding and palpable error. Similarly, on a question of fact, the award can only be set aside on the basis of an overriding and palpable error. [^13]

[ 50 ] Ms. Myers takes the position that every error she suggests the Arbitrator made was an error of law. Therefore, she says the standard of review is correctness. To the contrary, Dr. Vickar says the alleged errors in the award are all questions of mixed fact and law, and therefore the award can only be set aside if the Arbitrator made an overriding and palpable error.

[ 51 ] In Housen v. Nikolaisen , Iacobucci J explained the differences among the three types of issues in the following way:

a) On a pure question of law, the basic rule with respect to the review of a trial judge's findings is that an appellate court is free to replace the opinion of the trial judge with its own. Thus the standard of review on a question of law is that of correctness;

b) The standard of review for findings of fact is that such findings are not to be reversed unless it can be established that the trial judge made a “palpable and overriding” error. A palpable error is one that is “plainly seen.” A fundamental reason for general deference to the trial judge is the presumption of fitness – a presumption that trial judges are just as competent as appellate judges to ensure that disputes are resolved justly. Another reason for this level of deference is that the trial judge will have had the opportunity of actually observing the witnesses at the trial.

c) Questions of mixed fact and law involve applying a legal standard to a set of facts. Both mixed fact and law and fact findings often involve drawing inferences; the difference lies in whether the inference drawn is legal or factual. A court of appeal should not interfere with a trial judge's reasons unless there is a palpable and overriding error. The same proposition is sometimes stated as prohibiting an appellate court from reviewing a trial judge's decision if there was some evidence upon which he or she could have relied to reach that conclusion. [citations omitted]

[ 52 ] When I look at the essence of the grounds of appeal here, I conclude the following.

[ 53 ] On the issue of the calculation of Dr. Vickar’s income for child support purposes, it seems to me the heart of the issue is the initial question of whether the Arbitrator was obliged to apply sections 16 and following of the Child Support Guidelines in order to determine Dr. Vickar’s income. This is a question of law.

[ 54 ] The question of whether the Arbitrator erred in his calculation of Dr. Vickar’s income is a question of mixed fact and law because it required him to apply the law to the facts as he found them.

[ 55 ] On the issue of whether the Arbitrator should have used the Spousal Support Advisory Guidelines ( SSAGs ) to determine spousal support, that discreet issue is a question of law. As is the case with the determination of the amount of spousal support itself, I see that as a question of mixed fact and law for the same reasons as I have articulated regarding the calculation of Dr. Vickar’s income.

[ 56 ] Whether the Arbitrator properly considered the provisions of the Divorce Act in determining spousal support is also a question of mixed fact and law, for the same reasons as I have set out regarding determining the quantum of spousal support or Dr. Vickar’s income.

[ 57 ] This brings me to the question of the adequacy of reasons as a ground of appeal. It has been held that failure to provide adequate reasons forecloses proper appellate review and is an error of law and a reversible error. [^14] The Supreme Court of Canada, in Newfoundland and Labrador Nurses’ Union v Newfoundland and Labrador (Treasury Board) has more recently addressed the issue of adequacy of reasons in an arbitral award and has held that inadequate reasons, in and of themselves, do not create a free standing ground of appeal. [^15] In addressing the adequacy of reasons as a ground of appeal I will follow, as I must, this most recent decision of the Supreme Court of Canada. I will discuss this issue more fully below, in the section headed “Adequacy of reasons”.

Discussion:

Did the Arbitrator err in maintaining a formula to determine income?

[ 58 ] Answering this question first requires me to look at the parties’ arbitration agreement as well as the first arbitral award, since both inform this issue. I must also remember that the arbitration itself arose out of the terms of the amending separation agreement which provided for a “summary review” of the support issues.

[ 59 ] The arbitration agreement set out the various issues to be decided and specifically stated that issues related to child and spousal support “shall be determined in accordance with the provisions of the Family Law Act, R.S.O. 1990, c. F.3 as amended, or the Divorce Act , R.S.C. 1991 c. 3 (2 nd supp.) as amended, as may be applicable, and the Federal Child Support Guidelines.” [^16]

[ 60 ] At the first arbitration Ms. Myers’ lawyer specifically asked the Arbitrator to create a formula to determine Dr. Vickar’s income instead of strictly using s. 16 of the Child Support Guidelines . Over the objections of Dr. Vickar’s counsel, the Arbitrator agreed, and decided that using a formula would be the fairest way of determining Dr. Vickar’s income. [^17] The Arbitrator decided Dr. Vickar’s income would be determined by using his gross professional income actually received in the period June of one year to July of the next, less 4% for operating/business expenses. In coming to this original formula, the Arbitrator did not include interest income, dividend income or capital gains in his calculation of Dr. Vickar’s income for child support purposes. Ms. Myers did not appeal this finding. I therefore conclude she was content with it. Dr. Vickar did not appeal either.

[ 61 ] When it came to the second arbitration, Ms. Myers took a different position. Instead of the formula she had urged before, Ms. Myers really wanted a hybrid of the two approaches. She wanted to use the line 150 income from Dr. Vickar’s tax return with all the adjustments mandated by the Child Support Guidelines , but wanted to retain the 4% calculation of expenses, and apply it to Dr. Vickar’s gross professional income in order to create a larger net income for determining support.

[ 62 ] The Arbitrator declined to change approaches. He noted that while the formula might result in a slightly lower income for calculating child support at present, Dr. Vickar’s increased receipts in the last six months of the year would fall into the calculation of his income for the next year. The income would therefore be higher for the next twelve month period, as would table support payable for that period.

[ 63 ] I see no error, in the Arbitrator’s doing so. It was a practical, predicable and less expensive methodology for the parties to easily calculate both table support and section 7 expenses, and was responsive to their own decision to approach the issue in a summary fashion. In this context, it must be remembered that the parties submitted these issues to arbitration, and to an arbitrator whom they specifically chose for his particular expertise in matters of spousal and child support. They had been working with the Arbitrator as both mediator and arbitrator over a long period of years, during which time he would have developed a particular knowledge of their circumstances, and desired approach to resolving the issues between them.

[ 64 ] It seems to me that the time to object to the formula approach was when it was first imposed. Having asked the Arbitrator to impose a formula, it hardly lies in Ms. Myers’ mouth to object to it later. Having been asked to apply a formula, and deciding to do so, I cannot see that the Arbitrator was wrong when he later declined to change his mind.

Did the Arbitrator err in failing to require Dr. Vickar to produce financial statements from the professional corporation?

[ 65 ] Ms. Myers suggests the Arbitrator fell into reversible error when he rejected her request to require Dr. Vickar to produce the financial statements from the professional corporation that receives and then distributes his professional income.

[ 66 ] The Child Support Guidelines require a party who controls a corporation to produce certain information from that corporation, including financial statements. There is no suggestion here that Dr. Vickar controls the professional corporation through which he and the other dozen radiologists at Trillium bill and receive their income from OHIP.

[ 67 ] I do not fault the Arbitrator for deciding not to compel this production, particularly in light of his correct decision to continue with the formulaic approach to determining Dr. Vickar’s income. The Arbitrator had the necessary information from the chief radiologist about Dr. Vickar’s actual monthly receipts from the corporation, and could therefore apply the formula to this information to determine income without the need for the financial statements themselves.

Did the Arbitrator err in determining table support?

[ 68 ] Since I have concluded the Arbitrator was correct to retain the formula for calculating Dr. Vickar’s income, I cannot interfere with the Arbitrator’s determination of income. As a result, his calculation of table support was correct.

Did the Arbitrator err in declining to apply the SSAGs?

[ 69 ] The heart of Ms. Myers’ appeal is that the Arbitrator should have applied the SSAGs in deciding the appropriate level of spousal support. She argues that had the Arbitrator done so, he would have awarded her spousal support of more than $14,000 per month, instead of the $3,500 (increasing to $4,250) he actually ordered. Ms. Myers points out that even if Dr. Vickar earned only the SSAGs “ceiling” of $350,000, the award at the midrange of SSAGs calculations would have given her spousal support of nearly $7,000 per month.

[ 70 ] First, I note that the parties’ original separation agreement did not make reference to the SSAGs. This is hardly surprising since the SSAGs were not released in final form until 2008 (although draft guidelines were disseminated in 2005). When the parties executed the arbitration agreement in 2010, however, the SSAGs were in widespread use, and had had appellate review in Ontario in Fisher v Fisher . [^18] The parties made no reference in the arbitration agreement to applying the SSAGs in determining spousal support. I assume this was deliberate.

[ 71 ] More importantly, however, the SSAGs are not legislation. They are exactly what they are described to be; namely guidelines to advise on a reasonable range of spousal support and a reasonable duration for spousal support in various varied circumstances. They are based on an income sharing model of support, derived from a review and careful analysis of the results in spousal support cases across Canada over the years, in terms of the quantum of support, ages and incomes of the parties, length of the marriage, and number of children. Indeed, Professors Rogerson and Thompson write in the first iteration of the SSAGs “the informal, advisory nature of these guidelines means that the formula outcomes are never binding and departures are always possible on a case by case basis where the formula outcomes are found to be inappropriate.” [^19]

[ 72 ] In looking at the SSAGs, one must keep in mind that the Divorce Act does not create an income sharing model of spousal support. The statute requires the court to consider various enumerated factors and objectives in deciding the quantum of spousal support. Income sharing is not among them. The SSAGs are based on an analysis of results in spousal support cases that have applied the necessary factors and objectives. The results have been expressed as the share of net disposable income (NDI) that each spouse will have.

[ 73 ] Courts across Canada have approached the SSAGs with varying degrees of enthusiasm. Some seem to apply them almost routinely, while others are quite resistant to do so. The SSAGs themselves articulate some particular limitations to their application. These were reviewed in the leading appellate decision in Ontario, Fisher v. Fisher . There, Lang J.A., writing for a unanimous court said, among other things:

Importantly, the Guidelines do not apply in many cases. They specifically do not apply at all in certain enumerated circumstances, including where spouses earn above $350,000 or below $20,000. Further, they only apply to initial orders for support and not to variation orders. They are thus prospective in application. They do not apply in cases where a prior agreement provides for support and, obviously, in cases where the requisite entitlement has not been established. They will not help in atypical cases. As well, there will be regional variations, as well as rural and urban variations, that may be seen to merit divergent results based on variations in cost of living or otherwise. Importantly, in all cases, the reasonableness of an award produced by the Guidelines must be balanced in light of the circumstances of the individual case, including the particular financial history of the parties during the marriage and their likely future circumstances. [^20]

[ 74 ] Needless to say, this decision binds this court and bound the Arbitrator. The arbitrator declined to apply the SSAGs, quoting Fisher. Here, we are dealing with an income over $350,000, what is effectively a variation order, and a situation with a prior agreement. Given the history of this case, and the particular support arrangements the parties originally made, one can only view this case as “atypical”. All these are exceptions to applying the SSAGs. In my view, the Arbitrator’s conclusion not to apply the SSAGs was correct. This aspect of the appeal must therefore fail.

[ 75 ] If the Arbitrator was correct when he declined to apply the SSAGs to decide spousal support, how did he come to his decision, and did he make any error in doing so?

Did the Arbitrator make an overriding and palpable error in determining spousal support?

[ 76 ] Ms. Myers says the Arbitrator failed to consider and properly apply the provisions of the Divorce Act when he decided the issue of spousal support . I disagree.

Factors and objectives under the Divorce Act

[ 77 ] In the first award, the Arbitrator reviewed the facts of the case in light of the objectives of spousal support set out in the Divorce Act , and also considered the factors the Act requires the court to consider in determining spousal support. I have already discussed the specific findings and conclusions the Arbitrator made on this issue in the first award. In the award under appeal, the Arbitrator again considers these factors and objectives, and concludes Ms. Myers still needs support. He then moves to determine the quantum of spousal support. In deciding the appropriate amount of spousal support, the Arbitrator says he used a comparison of NDI in each party’s household to come to the amount he awarded.

Adequacy of reasons

[ 78 ] It is here that Ms. Myers says the Arbitrator again fell into reversible error because, she says, his reasons don't “show his work”, as her counsel put it; namely, nowhere in his reasons does the Arbitrator actually set out what proportion of NDI he felt was appropriate for each of the parties and how he came to his determination of the NDI each would have at the end of the day.

[ 79 ] In considering the adequacy of reasons in the context of an appeal, one must first look at the “reason for reasons”. The Ontario Court of Appeal, in Bodnar v. Blackman [^21] put it this way:

The requirement that a judge give reasons for decision is clear. It is an inherent aspect of the discharge of a judge's responsibilities. See R. v. Sheppard (2001), 2002 SCC 26 () , 162 C.C.C. (3d) 298 (S.C.C.). As Binnie J. noted at para. 24 of Sheppard:

[T]he requirement of reasons is tied to their purpose and the purpose varies with the context. At the trial level, the reasons justify and explain the result. The losing party knows why he or she has lost. Informed consideration can be given to grounds for appeal. Interested members of the public can satisfy themselves that justice has been done, or not, as the case may be.

The need for reasons in the family law context was recently affirmed by this court in Young v. Young (2003), 2003 3320 (ON CA) , 63 O.R. (3d) 112. At para. 27 of Young, Laskin J.A., writing for the court, states:

The desirability of reasoned reasons in a criminal case rests on three main rationales: public confidence in the administration of the justice system, the importance of telling the losing party the reasons for having lost, and making the right of appeal meaningful. These three rationales also apply to a family law case and are relevant in this case.

[ 80 ] When I consider the adequacy of the Arbitrator’s reasons, I cannot look at the second award in isolation. Just as the first award reviewed the factors and objectives of spousal support before quantifying spousal support and setting a commencement date, it also referred to NDI as the preferred methodology for determining spousal support. No one appealed the first decision, and therefore it created the template for the second.

[ 81 ] The Supreme Court of Canada’s seminal decision in Dunsmuir v. New Brunswick , [^22] was elucidated further in the Supreme Court’s decision in Newfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador (Treasury Board) [^23] . Although neither party referred to the Supreme Court’s decision in Newfoundland and Labrador Nurses’ Union , [^24] these two cases must inform my approach to the issue of whether the Arbitrator provided sufficient reasons.

[ 82 ] In Newfoundland and Labrador Nurses’ Union , Abella J, writing for a unanimous court, describes Dunsmuir as a “transformative decision” of the Supreme Court. She says in Dunsmuir the Supreme Court explained “that the purpose of reasons, when they are required, is to demonstrate ‘justification, transparency and intelligibility’”. [^25]

[ 83 ] Newfoundland and Labrador explains that what the Court meant in Dunsmuir about “justification, transparency and intelligibility” is a “respectful appreciation that a wide range of specialized decision-makers routinely render decisions in their respective spheres of expertise …” Abella J went on to say that she did not see Dunsmuir as standing for the proposition that the ‘adequacy’ of reasons is a stand-alone basis for quashing a decision, or as advocating that a reviewing court undertake two discrete analyses – on for the reasons and a separate one for the result.” [^26]

[ 84 ] Some other comments Abella J made are also apposite here. She notes, “Reasons may not include all the arguments, statutory provisions, jurisprudence or other details the reviewing judge would have preferred, but that does not impugn the validity of either the reasons or the result under a reasonableness analysis.” [^27] Importantly, Abella J refers to the particular role of arbitrators. While her comments in this case refer to labour arbitrators in particular, they are no less applicable here, where the parties specifically chose an arbitrator with the experience and expertise they wished to assist them in resolving their particular family law issues. Abella J says at paragraph 23: “the arbitrator in this case was called upon to engage in a simple interpretive exercise … This is classic fare for labour arbitrators. They are not writing for the courts, they are writing for the parties who have to live together for the duration of the agreement.”

[ 85 ] One can equally say that here determining income and quantum of child and spousal support is “classic fare” for the Arbitrator. Similarly, in considering his reasons I must remember that the Arbitrator is not writing for the courts, but rather for the parties.

[ 86 ] Here, although the parties do not have to “live together” for the duration of the agreement, their financial lives are bound together by its terms, for its duration. Their financial lives have already been bound together and changed as circumstances warranted for over a decade. That lengthy history and the Arbitrator’s own lengthy relationship with the parties informed his decision.

[ 87 ] Importantly for this case, there will be a further review of support by June of 2014 when Shawn is firmly ensconced in post-secondary studies. In this respect Abella J’s comment at paragraph 25 of Newfoundland and Labrador Nurses’ Union is particularly helpful: “Arbitration allows the parties to the agreement to resolve disputes as quickly as possible knowing that there is the relieving prospect not of judicial review, but of negotiating a new collective agreement with different terms…”

[ 88 ] As I have said, I must begin with the original award to put the award under appeal into context. In the original award, the Arbitrator ordered Dr. Vickar to pay only $2,750 per month in spousal support, even though the Arbitrator found Dr. Vickar’s 2009 income to be $616,624 and estimated his 2010 income to be about $630,000 less 4% for expenses. He used an approach of looking at each party’s net disposable income (NDI) to arrive at the appropriate initial level of spousal support.

[ 89 ] In the first arbitration, the Arbitrator made reference to many different NDI calculations that were before him. Mr. Cole referred me, as an example, to various calculations that were in Dr. Vickar’s affidavit that was before the Arbitrator at the first arbitration. Mr. Flak suggests that these calculations were clearly wrong, since they included an assumed income of $40,000 for his client (the Arbitrator imputed $35,000); they included amounts Ms. Myers receives from her parents as “income”; (the Arbitrator rejected this argument); they include as income “excess proceeds” from the sale of Ms. Myers’ home (the Arbitrator held it was unreasonable to make that assumption); and, they include as part of the Ms. Myers’ NDI the payments for section 7 expenses, which are paid to third parties, and do not actually form part of what the appellant has to live on. The Arbitrator rejected the proposition that section 7 expenses should form part of Ms. Myers’ NDI.

[ 90 ] Looking at all these factors, considering the high level of child support, the fact Dr. Vickar paid all the section 7 expenses, and based on his rejecting various arguments Dr. Vickar made, the Arbitrator concluded in the first instance that spousal support of $2,750 per month was appropriate, and reflected an appropriate division of NDI in each party’s household.

[ 91 ] As I have already said, neither party appealed the original decision.

[ 92 ] The first award therefore creates a financial context to address the second award. In fact, the second award is styled “supplementary award”, since it builds on the accepted findings in the first award. In a sense, the second award was somewhat like a variation, which begins with the assumption that the original award was correct. I must make the same assumption. Looking at it as a whole, I understand why the Arbitrator might not flesh out his reasoning more in the supplemental report: the parties accepted his first approach, and therefore he saw no need to elucidate it further. He was simply building on and supplementing his reasoning and conclusions from the first arbitration.

[ 93 ] When I apply the concepts from Dunsmuir and Newfoundland and Labrador Nurses’ Union to the Arbitrator’s reasons, I cannot conclude he erred in terms of the sufficiency of his reasons. This is particularly so when I read the award under appeal in the context of both the original award and also the fact that the Arbitrator has been working in mediation and arbitration with these parties since 2005. While it might have been preferable had he “shown his work” more, I am satisfied he was alive to all the issues he had to decide and made no error in coming to the conclusions he did.

Retroactivity

[ 94 ] I also reject Ms. Myers’ suggestion that the Arbitrator erred in failing to make her spousal support award start before January 1, 2010. In arriving at his conclusions regarding retroactivity, the Arbitrator was exercising a discretion. I cannot see that he exercised it improperly. At paragraphs 164 and 165 of the award the Arbitrator articulated reasons to decline further retroactivity. These reasons were based primarily on the issue of tax deductibility of retroactive support. These reasons support the exercise of the Arbitrator’s discretion. This ground of appeal must also fail.

Some additional issues

[ 95 ] Ms. Myers also suggests that the Arbitrator should have required Dr. Vickar to make changes to the life insurance he is required to maintain. I am not persuaded this issue was actually before the Arbitrator, and therefore give no effect to this ground of appeal.

Conclusion:

[ 96 ] The appeal is therefore dismissed. Counsel have agreed on the appropriate quantum of costs. Dr. Vickar will therefore have his party and party costs of the appeal, fixed, as agreed, at $12,500.

MESBUR J.

Released: 20120904

[^1]: See paragraph 5.2 of the parties’ separation agreement of August 2004
[^2]: See paragraph 5.4 of the parties’ separation agreement of August 2004
[^3]: See paragraph 7.5 of the parties’ separation agreement of August 2004
[^4]: Paragraph 3.5 of the amending agreement.
[^5]: paragraph 114 of the first arbitration award
[^6]: Paragraph 121 of the first award
[^7]: Paragraph 143 of the first award
[^8]: First award at paragraph 144
[^9]: Ibid. paragraph 146
[^10]: This will occur at the end of the 2012/13 academic year.
[^11]: While the Arbitrator did not specifically refer to the express provisions of the Divorce Act in his discussion of spousal support in the first award, his analysis clearly encompasses a discussion of all the necessary factors and objectives outlined there.
[^12]: Paragraphs 146, 147, 148 and 150
[^13]: See Housen v. Nikolaison , 2002 SCC 33 () , [2002] 2 S.C.R. 235
[^14]: Economical Mutual Insurance Co. v. Great West Casualty Co., [2010] O.J. No. 5796
[^15]: Newfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador (Treasury Board) , 2011 SCC 62 () , [2011] S.C.J. No. 62 (S.C.C.), which is discussed more fully below in the section “Adequacy of reasons”.
[^16]: Arbitration agreement at paragraph 5
[^17]: The Child Support Guidelines, of course, in sections 15(2) and 17 permit parties to agree on income for child support purposes, or permit the court to reject s. 16 to calculate income if it would not be the fairest determination of that income.
[^18]: Fisher v. Fisher , 2008 ONCA 11 () , [2008] O.J. No. 38 (O.C.A.)
[^19]: The Spousal Support Advisory Guidelines: A Draft Proposal, at section 4.4.2
[^20]: Ibid at paragraph 96 [citations and references omitted]
[^21]: 2006 31803 (ON CA) , [2006] O.J. No. 3675 (O.C.A.) at paragraphs 10 and 11
[^22]: 2008 SCC 9 () , 2008 S.C.C. 9, [2008] S.C.R. 190
[^23]: Op cit at footnote 15
[^24]: Although Ms. Myers’ counsel referred me to the Newfoundland and Labrador Court of Appeal’s decision, but not the Supreme Court’s decision in Newfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador (Treasury Board)
[^25]: Newfoundland and Labrador Nurses’ Union at paragraph 1 , quoting Dunsmuir at paragraph 47
[^26]: Ibid at paragraphs 13 and 14
[^27]: Ibid paragraph 16