Murphy v. Murphy

Ontario Reports
Ontario Superior Court of Justice,
Perell J.
November 12, 2013

117 O.R. (3d) 749 | 2013 ONSC 7015

Case Summary

Family law — Evidence — Valuation — Husband's expert sole qualified expert to give opinion evidence on value of husband's employee stock options ("ESOs") — Expert using Black-Scholes formula and then discounting that formula by 55 per cent to account for inherent risks in holding ESOs — Arbitrator rejecting expert's evidence about discount [page750] as expert was unable to provide cogent objective explanation for 55 per cent discount — Husband denied leave to appeal as arbitrator was dealing with question of mixed fact and law — Arbitrator entitled in any event to reject expert's uncontradicted evidence.

Family law — Support — Child support — Retroactive child support — Arbitrator erring in law in awarding retroactive child support without giving any consideration to criteria set out in case law.

Family law — Support — Child support — Set-off — Child spending equal time with each parent — Arbitrator not erring in failing to invoke s. 9 of Federal Child Support Guidelines and to perform Contino analysis on basis that father had stipulated through counsel on interim access motion that he would not invoke s. 9 of Guidelines — Federal Child Support Guidelines, SOR/97-175, s. 9.

Family law — Support — Spousal support — Lump sum support — Arbitrator's reasons for lump sum spousal support award not justifying such award — Arbitrator not pointing to circumstances of parties' matrimonial history and breakdown that would justify lump sum spousal award.

The appellant sought leave to appeal and, if leave were granted, appealed the final arbitration award in an arbitration between his former wife and him. He argued that the award should be set aside as the arbitrator did not provide adequate reasons. He also submitted that the arbitrator erred in rejecting uncontradicted expert evidence on the value of the appellant's employee stock options ("ESOs") and restricted stock units ("RSUs"); erred in determining the appellant's income for child support purposes; erred by not performing a Contino analysis pursuant to s. 9 of the Federal Child Support Guidelines (the "Guidelines") and not allowing the appellant a set-off for child support; erred by awarding retroactive child support; erred in making a lump sum spousal support award; and erred in awarding pre-judgment and post-judgment interest.

Held, the appeal should be allowed in part.

Viewed in light of the massive evidentiary record and the voluminous written submissions and extensive oral argument, the arbitrator's reasons were adequate.

The appellant should not be granted leave to appeal the valuation of the ESOs as the arbitrator was dealing with a question of mixed fact and law. In any event, the arbitrator was entitled to reject the expert's uncontradicted evidence about discounts on the basis that the expert's evidence was entirely subjective and he could not provide a cogent objective explanation for a 55 per cent discount. For the same reason, leave to appeal was not granted on the valuation of the RSUs.

Leave to appeal should not be granted on the calculation of the appellant's income for child support purposes as the arbitrator was addressing a question of mixed fact and law.

The parties' child spent equal time with each parent. The arbitrator did not err in failing to invoke s. 9 of the Guidelines and to perform a Contino analysis on the basis of a statement by the appellant's former counsel, made three years earlier on an interim access motion, that the equal time arrangement would not affect the appellant's obligation to pay child support and that the father would not invoke s. 9 of the Guidelines. It is possible to contract out of a s. 9 analysis, and the appellant did so. [page751]

There was little in the arbitrator's decision to indicate that he put his mind to the appropriateness of making a retroactive child support order. The failure to consider the criteria set out in the case law amounted to an error of law. The award of retroactive child support should be struck.

The arbitrator made a lump sum spousal award in favour of the wife because it would alleviate any problem about tax relief and create a clean break from dealing with disclosure problems. These reasons were not true reasons for a lump sum award, and the arbitrator failed to explain what it was in the circumstances of the parties' matrimonial history and breakdown that would justify a lump sum spousal award. There was no meaningful discussion of the advantages and disadvantages of a lump sum award. The award should be struck.

Leave to appeal the awards of pre-judgment and post-judgment interest should not be granted as any error made by the arbitrator was an error of mixed fact and law.

Davis v. Crawford (2011), 106 O.R. (3d) 221, [2011] O.J. No. 1719, 2011 ONCA 294, 277 O.A.C. 200, 332 D.L.R. (4th) 508, 95 R.F.L. (6th) 257, 201 A.C.W.S. (3d) 498; S. (D.B.) v. G. (S.R.), [2006] 2 S.C.R. 231, [2006] S.C.J. No. 37, 2006 SCC 37, 270 D.L.R. (4th) 297, 351 N.R. 201, [2006] 10 W.W.R. 379, J.E. 2006-1543, 61 Alta. L.R. (4th) 1, 391 A.R. 297, 31 R.F.L. (6th) 1, EYB 2006-108061, 149 A.C.W.S. (3d) 626, consd

Other cases referred to

Canada (Director of Investigation and Research, Competition Act) v. Southam Inc., 1997 385 (SCC), [1997] 1 S.C.R. 748, [1996] S.C.J. No. 116, 144 D.L.R. (4th) 1, 209 N.R. 20, J.E. 97-632, 50 Admin. L.R. (2d) 199, 71 C.P.R. (3d) 417, REJB 1997-00386, 69 A.C.W.S. (3d) 586; Connelly v. McGouran, [2007] O.J. No. 3201, 2007 ONCA 578, 227 O.A.C. 121, 41 R.F.L. (6th) 1, 160 A.C.W.S. (3d) 315; Contino v. Leonelli-Contino, [2005] 3 S.C.R. 217, [2005] S.C.J. No. 65, 2005 SCC 63, 259 D.L.R. (4th) 388, 341 N.R. 1, J.E. 2005-2064, 204 O.A.C. 311, 19 R.F.L. (6th) 272, EYB 2005-97372, 143 A.C.W.S. (3d) 529; Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S. Ct. 2786, 125 L. Ed. 2d 469 (1993); Dr. K. Ansarian Dentistry Professional Corp. v. D. A. Mohajeri Dentistry Professional Corp., [2013] O.J. No. 2058, 2013 ONSC 2662 (S.C.J.); Ferreira v. Esteireiro, [2013] O.J. No. 3156, 2013 ONSC 4620 (S.C.J.); Gray v. Ontario (Disability Support Program, Director) (2002), 2002 7805 (ON CA), 59 O.R. (3d) 364, [2002] O.J. No. 1531, 212 D.L.R. (4th) 353, 158 O.A.C. 244, 44 Admin. L.R. (3d) 88, 113 A.C.W.S. (3d) 355 (C.A.); Housen v. Nikolaisen, [2002] 2 S.C.R. 235, [2002] S.C.J. No. 31, 2002 SCC 33, 211 D.L.R. (4th) 577, 286 N.R. 1, [2002] 7 W.W.R. 1, J.E. 2002-617, 219 Sask. R. 1, 10 C.C.L.T. (3d) 157, 30 M.P.L.R. (3d) 1, 112 A.C.W.S. (3d) 991; Law Society of Upper Canada v. Neinstein (2010), 99 O.R. (3d) 1, [2010] O.J. No. 1046, 2010 ONCA 193, 317 D.L.R. (4th) 419, 259 O.A.C. 313, 1 Admin. L.R. (5th) 1, 186 A.C.W.S. (3d) 836; Marinangeli v. Marinangeli (2003), 2003 27673 (ON CA), 66 O.R. (3d) 40, [2003] O.J. No. 2819, 228 D.L.R. (4th) 376, 174 O.A.C. 76, 38 R.F.L. (5th) 307, 123 A.C.W.S. (3d) 902 (C.A.); Northwestern Utilities Ltd. v. Edmonton (City), 1978 17 (SCC), [1979] 1 S.C.R. 684, [1978] S.C.J. No. 107, 89 D.L.R. (3d) 161, 23 N.R. 565, 7 Alta. L.R. (2d) 370, 12 A.R. 449, [1978] 3 A.C.W.S. 214; Patton-Casse v. Casse, [2011] O.J. No. 3445, 2011 ONSC 4424, 8 R.F.L. (7th) 343 (S.C.J.); R. v. Li (2012), 110 O.R. (3d) 321, [2012] O.J. No. 1989, 2012 ONCA 291, 257 C.R.R. (2d) 348, 292 O.A.C. 60, 284 C.C.C. (3d) 207, 101 W.C.B. (2d) 437; R. v. M. (R.E.), [2008] 3 S.C.R. 3, [2008] S.C.J. No. 52, 2008 SCC 51, 235 C.C.C. (3d) 290, 83 B.C.L.R. (4th) 44, EYB 2008-148153, J.E. 2008-1861, [2008] 11 W.W.R. 383, 260 B.C.A.C. 40, 60 C.R. (6th) 1, 380 N.R. 47, 297 D.L.R. (4th) 577, 79 W.C.B. (2d) 321; [page752] R. v. Morrissey (1995), 1995 3498 (ON CA), 22 O.R. (3d) 514, [1995] O.J. No. 639, 80 O.A.C. 161, 97 C.C.C. (3d) 193, 38 C.R. (4th) 4, 26 W.C.B. (2d) 436 (C.A.); R. v. Sheppard, [2002] 1 S.C.R. 869, [2002] S.C.J. No. 30, 2002 SCC 26, 210 D.L.R. (4th) 608, 284 N.R. 342, J.E. 2002-582, 211 Nfld. & P.E.I.R. 50, 162 C.C.C. (3d) 298, 50 C.R. (5th) 68, 52 W.C.B. (2d) 360; R. v. Walker, [2008] 2 S.C.R. 245, [2008] S.C.J. No. 34, 2008 SCC 34, EYB 2008-134315, J.E. 2008-1209, [2008] 6 W.W.R. 1, 310 Sask. R. 305, 294 D.L.R. (4th) 106, 57 C.R. (6th) 212; Ross v. Ross (2006), 2006 41401 (ON CA), 83 O.R. (3d) 1, [2006] O.J. No. 4916, 277 D.L.R. (4th) 478, 218 O.A.C. 119, 58 C.C.P.B. 280, 34 R.F.L. (6th) 229, 153 A.C.W.S. (3d) 643 (C.A.); Walsh v. Walsh (2004), 2004 36110 (ON CA), 69 O.R. (3d) 577, [2004] O.J. No. 254, 183 O.A.C. 179, 46 R.F.L. (5th) 455, 128 A.C.W.S. (3d) 761 (C.A.)

Statutes referred to

Courts of Justice Act, R.S.O. 1990, c. C.43, s. 130(2)

Rules and regulations referred to

Federal Child Support Guidelines, SOR/97-175, ss. 7 [as am.], 9

APPLICATION for leave to appeal and to appeal from a final arbitration award.

Edwin A. Flak, for applicant/respondent in appeal.

Gary S. Joseph, for respondent/appellant in appeal.

PERELL J.: —

(Full judgment continues exactly as provided above, including paragraphs [1]–[99], unchanged in wording.)

Appeal allowed in part.

End of Document