COURT FILE NO.: FC 08-2478

DATE: 2014/06/24

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Pauline Elizabeth Kerr

Applicant

– and –

Jan Tadeusz Erland

Respondent

Self-Represented

Self-Represented

HEARD: March 3-7, and 10-12, 2014 in Ottawa

REASONS FOR Decision

Blishen J.A.

Introduction

[1] Pauline Kerr and Jan “Ted” Erland began litigation regarding their matrimonial issues in September 2008, six months after separation. The litigation has continued for five-and-a-half years with no final order. During that time, the parties have settled the parenting and property issues by way of agreements signed in April 2012. At that time, both parties were represented by counsel. Now after years of litigation they are representing themselves.

[2] The remaining issues at trial were:

1. imputation of income to Dr. Kerr;

2. retroactive and ongoing child support;

3. sharing of the special and/or extraordinary expenses for the children;

4. Mr. Erland’s claim for ongoing and retroactive spousal support;

5. some minor parenting issues; and

6. life insurance.

[3] As previously stated, this case has been before the court for five-and-a-half years. It has been characterized by an ongoing lack of trust, hostility and conflict between the parties. Although their parenting agreement signed April 9, 2012 provides for week about shared parenting of the two children of the marriage, Laura, now 12, and Alec, now 10, the children continue to be affected by the conflict and difficulties in communication between their parents. This is reflected in the January 31, 2014, Voice of the Child Report completed by Sally Bleeker, M.S.W., R.S.W., ordered by Justice Mackinnon on January 6, 2014. Although Laura refused to attend for the assessment, ten year old Alec, who is aware of the court battle and rising tensions, told Ms. Bleeker he would like to build a wall between his parents to deal with their fighting. The most important thing Alec wanted to tell the trial judge was to “tell them to stop.”

[4] Although Alec does not wish to change the balance of time that he spends with each parent, Ms. Bleeker indicated he was showing considerable signs of stress and anxiety such as bedwetting, inability to focus, feeling things were his responsibility, and fear of impending disasters. Although powerless to make things better, Alec sees himself as carrying the burden of solutions for the family. Ms. Bleeker concludes, this “is far too much for a 10 year-old to bear” and is a recipe for future mental health problems. She recommends parenting coordination and this Court echoes her recommendation in the strongest possible terms. If there is any hope for an ongoing shared parenting arrangement between such highly conflicted individuals, parenting coordination will be necessary.

[5] Most of the parenting issues were not before me at trial. The focus was on Mr. Erland’s claims for child and spousal support based on an imputation of income to Dr. Kerr.

Background Facts

[6] The parties met in 1998 when Dr. Kerr was doing her residency in pediatrics at the University of Ottawa, Children’s Hospital of Eastern Ontario (“CHEO”) and Mr. Erland was teaching at Immaculata High School in Ottawa. After dating for a while, they were engaged in 1999 and in June 1999, Dr. Kerr moved into the townhouse owned by Mr. Erland. Together they planned to build a single family home, and Mr. Erland sold his townhouse with a closing date after the home was to have been constructed. Unfortunately, due to a number of difficulties with the construction project, the parties never took possession of the home and moved to Mr. Erland’s brother’s home in Kanata.

[7] In June 2000, Dr. Kerr received her license to practice and in July began a fellowship in clinical immunology and allergy at McGill University in Montreal. While there, she travelled back and forth to stay with Mr. Erland at his brother’s home approximately two to three times a month.

[8] The parties were married on September 30, 2000. Dr. Kerr continued her fellowship in Montreal and worked part-time at CHEO and the Ottawa Hospital General Campus in the neo- natal intensive care unit.

[9] In August 2001, the parties moved into a home they purchased in Stittsville. Dr. Kerr was pregnant and in September 2001 moved back to Ottawa on a maternity leave from her McGill fellowship. Laura was born on October 17, 2001 and Dr. Kerr’s maternity leave continued until the end of April 2002.

[10] Mr. Erland was on paternity leave from October 2001 to September 2002, overlapping for approximately the first seven months with Dr. Kerr.

[11] Dr. Kerr was able to finish the last electives of her fellowship by writing from home and obtained her fellowship in clinical immunology and allergy in May 2002. She began working as an allergist at the Smyth Medical Centre with Dr. Ham Pong, in May 2002. Laura was put into a private home daycare and Mr. Erland returned to teaching at Immaculata High School in September 2002.

[12] Mr. Erland was not happy at Immaculata High School and obtained a transfer to All Saints High School in Kanata, closer to the matrimonial home in Stittsville. Dr. Kerr continued to commute, approximately 45 minutes each way, to her employment with Dr. Ham Pong in Ottawa.

[13] On September 19, 2003, Alec was born and Dr. Kerr was again on maternity leave for six months. She returned to work with Dr. Ham Pong, approximately three days per week for a further four months. Mr. Erland took a leave from February to June 2003, prior to Alec’s birth, returned to teach the fall term from September to December 2003, and took a further year’s parental leave from January 2004 to February 2005. Once Dr. Kerr went back to work, both Laura and Alec were in home daycare in Stittsville.

[14] On March 3, 2004, Dr. Kerr established a professional corporation, Pauline Kerr Medicine Professional Group. Mr. Erland was put on the payroll and did some basic bookkeeping for the corporation. The parties were doing well financially and in May 2004 they bought a cottage for $390,000 and the adjacent lot for $90,000.

[15] Laura began Junior Kindergarten in the fall of 2004 and began attending the school daycare. Alec began attending the daycare with her in January 2005.

[16] Dr. Kerr stated she was becoming increasingly stressed by the long commute to and from her practice with Dr. Ham Pong in Ottawa. She did most of the drop offs of the children at school while Mr. Erland did most of the pickups from daycare, between 3:15 and 3:30 p.m. Dr. Kerr also drove Laura to Irish dancing classes and wanted to be able to volunteer at the children’s school. Therefore by late 2006, with Mr. Erland’s agreement, she decided to move her employment in order to be closer to home.

[17] In 2006, while still working with Dr. Ham Pong in Ottawa, Dr. Kerr’s line 150 income was $175,581 and Mr. Erland’s was $82,321.

[18] In the fall of 2007, Dr. Kerr left the Ottawa Clinic and began working as an allergist at the Appletree Medical Clinic, eventually running her practice out of the clinic on Baseline Road. This reduced her commute from 45 to approximately 30 minutes each way. In addition, although her work there was not as challenging and her income was somewhat reduced, she found it less stressful.

[19] During this time, the parties were eager to pay down the debt on their joint properties. Therefore, on May 15, 2007, Mr. Erland was added as a non-voting shareholder to Dr. Kerr’s corporation. Together they planned to take a shareholder loan in order to pay down the debt. They could take such a loan, interest free for two years and in addition could split any required dividend income. In May 2007, a $165,000 shareholder loan was taken out of Dr. Kerr’s corporation and $155,000 was put on the cottage mortgage. Dr. Kerr had earlier taken $35,000 from her line of credit, given its lower interest rate, and put it onto the matrimonial home mortgage.

[20] In 2007 Dr. Kerr’s line 150 income was $161,299 while Mr. Erland’s was $86,526.

[21] In late 2007 and into 2008, Dr. Kerr became more and more dissatisfied with the marriage as she felt she was performing most of the parental and household duties. In February 2008 she consulted a lawyer and on March 18, 2008, she indicated to Mr. Erland she wished to separate. Mr. Erland moved into a separate bedroom. In April, her lawyer wrote a letter to Mr. Erland requesting the name of his counsel and indicating the matter should move forward. The parties continued to reside together in the matrimonial home.

[22] By September 2008, the situation with the parties residing together in the matrimonial home became intolerable. Dr. Kerr left with the children, went to a hotel and on September 22 brought an emergency motion requesting custody and exclusive possession of the matrimonial home. Her motion was not successful. Justice Toscano Roccamo ordered the children remain in the matrimonial home and the parents move in and out. She ordered shared parenting on a week about basis from Friday to Friday. The children’s nanny, who had been hired by Dr. Kerr, was to remain in the home with the children. The parties were ordered to contribute equally to the costs of the matrimonial home, the nanny, and childcare expenses. In addition, the children were to be enrolled in counselling as soon as possible.

[23] Although this was a temporary order, the “nesting” arrangement remained in effect for many years, until a parenting agreement was finalized on April 9, 2012. The parties did their best to estimate ongoing expenses for the shared home and agreed to put an equal amount of $2,600 per month into the joint account to pay those expenses.

[24] After the temporary order, Mr. Erland again began to reside in his brother’s home in Kanata approximately 10 minutes from the matrimonial home. He did not pay rent to his brother who was often absent from the home. Dr. Kerr initially resided with her mother in downtown Ottawa, approximately 45 minutes away from the matrimonial home. In 2009 she bought a townhouse within walking distance of the matrimonial home.

[25] In 2008, the year the parties separated, Dr. Kerr’s line 150 income was $155,795 while Mr. Erland’s was $85,933.

[26] In the fall of 2008, the parties began mediation which continued through 2009 but unfortunately came to a standstill in July 2009.

[27] By February 2009, the two-year interest free shareholder loan taken out of Dr. Kerr’s corporation needed to be paid back. Mr. Erland did not wish to re-mortgage the cottage or otherwise contribute to paying off the loan. Therefore Dr. Kerr borrowed funds from her great uncle and received deemed dividends. Mr. Erland refused to split the deemed dividends. Dr. Kerr also increased her line of credit limit and took out funds to put on the shareholder loan as bridge financing. She was required to pay her uncle back by May 2009, which she did by taking out another shareholder loan from her corporation with interest. Therefore, although the cottage mortgage was substantially reduced by the shareholder loan, there was a significant financial loss to Dr. Kerr.

[28] In the fall of 2009, the parties agreed to try an arrangement whereby Mr. Erland would have exclusive possession of the matrimonial home and assume the costs and expenses. Dr. Kerr would have the children at her townhouse, along with a nanny, on her weeks. This arrangement lasted from October to December 28, 2009 when Dr. Kerr again began returning to the matrimonial home on her weeks with the children and the nesting arrangement continued.

[29] In 2009 the line 150 incomes for Dr. Kerr and Mr. Erland were $128,562 and $89,825 respectively.

[30] In June 2010, Dr. Kerr suffered a knee injury, which required surgery and necessitated disability benefits for a good portion of 2011. That year, Dr. Kerr’s income dropped significantly, although she had to declare deemed dividends on her tax return. She sold her townhouse and rented a room until the nesting arrangement ended with the parenting agreement in April 2012. At that point, she once again began to rent a townhouse.

[31] Dr. Kerr left the Appletree Clinic and on October 24, 2011 began to work at Health Canada as a medical evaluator. She wished for more stability in a government position which offered disability, sick leave, other benefits, and a pension. In addition, Dr. Kerr maintained her corporation although she suffered a corporate loss in 2012. She also continued to do occasional walk-in clinic work with the Appletree Clinic in pediatrics. In 2012 her line 150 income was $136,647.

[32] Dr. Kerr testified the salary for a full-time medical officer at the highest level at Health Canada is $169,148. Although she qualified at this level, Dr. Kerr opted to do income averaging in order to have more time off with the children in the summer. In addition, as of December 31, 2013, she began to work part‑time resulting in a current salary of $122,500 annually.

[33] Mr. Erland continues to teach full-time at All Saints High School in Kanata. His 2012 employment income was $94,694 but he had a capital gain that year from the sale of a lot resulting in a line 150 income of $115,943. His 2013 T-4 slip shows employment income of $94,351.34.

[34] Mr. Erland’s financial statement from January 20, 2014 and his Statement of Earnings and Deductions from the School Board, show his 2014 income to be $94,618.

[35] In early April 2012, the parties, both represented by counsel, signed a written parenting agreement providing for shared joint custody of the children who alternate residences on a week about basis. The change-over day is Friday after school. The agreement further provides for shared holidays. The parties are to make important decisions about the children’s welfare together. Each parent is responsible for driving the children to their activities when the children are with them and the parents are to share in proportion to their incomes the cost of Laura’s Irish dancing lessons, Alec’s golf, skiing, snowboarding and karate, and swimming and soccer for both.

[36] On April 28, 2012, the parties, both represented by counsel, executed a written agreement settling the issues related to property and equalization. Pursuant to the agreement, Mr. Erland bought out Dr. Kerr’s interest in the matrimonial home and the cottage and Dr. Kerr made an equalization payment of $55,000 to Mr. Erland. Mr. Erland assumed all costs of the matrimonial home and the cottage.

[37] The remaining real property, the cottage lot, was to be listed for sale privately. The lot was never sold necessitating an order by Justice Mackinnon that it be listed for sale by Royal LePage Realty and the parties sign a listing agreement on or before January 31, 2014. That has now been done.

[38] Mr. Erland remains in the matrimonial home, which is worth approximately $600,000. He continues to work full-time at All Saints High School in Kanata with an annual income of $94,618.

[39] In September 2013, Dr. Kerr bought a home for $415,000 in Kanata.

[40] There has never been any agreement or court order for the payment of child or spousal support. Those issues remain outstanding and necessitated this trial.

Positions of the Parties

[41] Mr. Erland argues income should be imputed to Dr. Kerr on the basis of intentional under employment and given the unreasonable deduction of certain expenses from her income. He argues income should be imputed to her in the amount of $311,687 which was the level of income she was earning with Dr. Ham Pong in private practice as an allergist from 2002 to 2007. He relies on the expert evidence of a chartered accountant and business valuator, Mr. David Clarke, in imputing income to Dr. Kerr.

[42] Mr. Erland further argues child support should be payable by Dr. Kerr on an ongoing and retroactive basis based on her imputed income and his gross annual income, on a set off basis as outlined under s. 9 of the Federal Child Support Guidelines, S.O.R./97-175 (“CSG”).

[43] Finally he requests an order of spousal support based on the disparity of incomes, his needs and to compensate him for the disadvantage he suffered due to the sudden break-up of the marriage.

[44] Dr. Kerr argues her income should be determined by relying on the expert evidence of chartered accountant and business valuator, Mr. Steven Pitman. She states the reduction in her income over the years has been due to the needs of her children and the necessity to reduce her hours and change her lifestyle in order to meet those needs.

[45] She argues against retroactive child support as she has always paid the vast majority of expenses for the matrimonial home as well as for the children, including the children’s activities during the nesting agreement, and has continued to pay most of the children’s expenses. Going forward it is her assumption this will continue. She requests the set off amount of child support be reduced to take that into consideration.

[46] Finally, Dr. Kerr argues that after a seven-and-a-half year marriage during which she assumed the majority of childcare responsibilities and costs, and Mr. Erland retained a stable, full-time job as a teacher with excellent benefits, no spousal support should be paid. She states Mr. Erland’s current net worth is greater than hers and he continues to reside in the matrimonial home, which is worth more than her home. In addition he has the cottage for his summers off and for his vacation time with the children. She argues Mr. Erland is not entitled to any spousal support on a needs, contractual or a compensatory basis.

Law and analysis

Income Determination

[47] Sections 15-20 of the CSG deal with calculating a spouse’s annual income for the purposes of child support.

[48] Section 16 of the CSG indicates that subject to sections 17 to 20, a spouse’s annual income for the purposes of child support is determined using the sources of income set out in the T1 General form issued by the Canada Revenue Agency (“CRA”), or what is commonly referred to as Line 150 income, adjusted in accordance with Schedule III of the CSG.

[49] In a situation such as this where Dr. Kerr is a shareholder, director or officer of a corporation, s. 18 of the CSG may also be considered. Section 18 indicates if the Court is of the opinion that the amount of the spouse’s annual income as determined under s. 16 does not fairly reflect all the money available to the spouse for the payment of child support, the court may determine the annual income to include under s. 18(a) or s. 18(b):

(a) all or part of the pre-tax income of the corporation, and of any corporation that is related to that corporation, for the most recent taxation year; or

(b) an amount commensurate with the services that the spouse provides to the corporation, provided that the amount does not exceed the corporation’s pre-tax income.

[50] In addition, the argument made by Mr. Erland in this case is that pursuant to s. 19(1)(a) of the CSG the Court should impute income to Dr. Kerr as she is intentionally under employed and, pursuant to s. 19(1)(g), she unreasonably deducts expenses from income:

[51] There is no dispute as to Mr. Erland’s income over the relevant time frame. His line 150 incomes from the year of separation, 2008 through 2014 were as follows:

2008: $85,933

2009: $89,825

2010: $91,131

2011: $93,656

2012: $115,943

2013: $94,351.34

2014: $94,618

[52] Determining Dr. Kerr’s income for support purposes is more complex. She began working at Health Canada in October, 2011. Before that time, she was effectively self-employed. All of her earnings and business expenses were run through her corporation, Pauline Kerr Medicine Professional Group. Dr. Kerr relied upon the expert evidence of Mr. Pittman as to the appropriate determination of her income while Mr. Erland called Mr. Clarke with respect to the appropriate income to be imputed to Dr. Kerr.

Expert Evidence

[53] The evidence of both experts is summarized in the following table:

Year	2008	2009	2010	2011	2012
Clarke	$234,227	$182,725	$96,289	$74,275	$131,487
Pittman	$164,512	$141,121	$101,760	$48,335*	$109,876*

• These amounts were not included in Mr. Pittman’s original report but were provided to the Court by Mr. Pittman in Schedule 1, filed as Exhibit “13” at trial. That schedule adjusted Mr. Clarke’s estimates in accordance with Mr. Pittman’s methodology to calculate Dr. Kerr’s income.

[54] Both experts agreed that in addition to Dr. Kerr’s line 150 taxable income, all of her corporation’s taxable income should be attributable as income to her pursuant to s. 18(a) of the CSG. Neither expert accounted for or deducted retained earnings in the corporation. As Mr. Pittman testified, the nature of Dr. Kerr’s business does not require retained earnings. All of the income received by the corporation is in fact income received by Dr. Kerr herself and therefore income available for child support. Based on the expert evidence and pursuant to s. 18 of the CSG I find that all of the corporation’s income should be attributable to Dr. Kerr and included as income to her for the purposes of child support.

[55] As noted above, given the shareholder loan taken out of Dr. Kerr’s corporation in May 2007, Dr. Kerr was required to declare deemed dividends on her income tax returns.

[56] Line 120 of an individual’s Tax Return represents the dividend income from Canadian and foreign companies. The amount of dividend income reported on this line is the grossed-up amount not the actual amount of the dividend income received by the taxpayer. Section 5 of Schedule III outlines the treatment of dividend income for the purposes of calculating income under the CSG as follows:

Schedule III Adjustments to Income

Dividends from taxable Canadian corporations

5. Replace the taxable amount of dividends from taxable Canadian corporations received by the spouse by the actual amount of those dividends received by the spouse

[57] Therefore the actual dividend income received and not the taxable or grossed-up amount found on the tax return, is to be used to determine a payor’s income for the purposes of child support.

[58] Although Dr. Kerr was required to declare dividend income, neither expert included the dividends as a separate income source given that both had included all of the income received by Dr. Kerr’s corporation as income attributed to her personally. To include the dividend income would be double counting. Therefore, Dr. Kerr’s income as determined by the experts does not reflect dividends she declared, regardless of whether or not those dividends translated to money in her pocket. Given the difficulties with double counting and based on the expert evidence I agree that the dividend income, which I note was never received as cash by Dr. Kerr, should not be included as income.

[59] Under s. 19(1)(h) of the CSG the Court can impute additional income to a party where that party “derives a significant portion of income from dividends, capital gains or other sources that are taxed at a lower rate than employment of business income or that are exempt from tax”. Mr. Clarke did include in his calculation of Dr. Kerr’s income the interest that she saved by taking out a shareholder loan from her corporation as opposed to a loan from another lending institution. This will be dealt with below.

[60] Both experts agreed the most significant difference between their respective calculations arose from how each treated Dr. Kerr’s corporate expenses. Mr. Pittman considered everything to be a legitimate business expense as those expenses had been scrutinized by Dr. Kerr’s accountant, Mr. Greg Tierney. Mr. Pittman did not add back any of those expenses into the corporation’s income. In contrast, Mr. Clarke attempted to estimate the proportion of business expenses that were, in fact, personal expenses which should therefore be added back into the corporation’s income and consequently attributed to Dr. Kerr. The difference created by each expert’s relative treatment of the corporate expenses is exaggerated by the necessary tax gross-up on those personal expenses.

[61] The other two main areas of difference in the expert evidence were as to: the treatment of the shareholder loan taken from the corporation in 2007 and the treatment of disability income received by Dr. Kerr in 2010 and 2011.

[62] With respect to the shareholder loan, as noted above, Mr. Clarke added the interest benefits that Dr. Kerr indirectly received by taking out an interest-free loan from her corporation, as opposed to taking an interest-bearing loan from another source. In addition, he did not include an investment loss when she cashed in an investment early in order to pay back, in part, the shareholder loan. By contrast, Mr. Pittman did not attribute any interest benefit to Dr. Kerr and did deduct the investment loss.

[63] The disability benefits received by Dr. Kerr were included in the income calculation done by her expert, Mr. Pittman, while Mr. Clarke neglected to include the benefits. They should be included as income.

[64] Finally, there is a yearly difference in income attributable based on the experts’ treatment of the fact that Dr. Kerr’s corporate year end does not line up perfectly with the calendar year, but occurs at the end of February. However, this difference, as both experts explained, is not of concern as it evens out when multiple years’ incomes are reviewed and considered.

Shareholder loan

[65] I find that any financial effect of the shareholder loan on Dr. Kerr should be neutralized. Section 17(2) of the CSG provides that where a spouse incurs a non-recurring capital or business loss investment, the court may adjust the amount of the loss, including related expenses and carrying charges and interest expenses, to arrive at such amount as the court considers appropriate.

[66] In this case, the shareholder loan was taken out by agreement between Dr. Kerr and Mr. Erland prior to the parties’ separation for their mutual benefit, to pay down the mortgage on their matrimonial property.

[67] In Tosczak v. Tosczak, 2011 SKQB 288, [2011] S.J. No. 645, the payor’s husband’s income in 2009 was artificially increased due to a shareholder loan from his corporation which was ultimately declared to be a dividend. This money went into the construction of the matrimonial home; it was taken out and used before separation and benefited both parties in this regard. The court held that the shareholder loan should form no part of the calculation of the payor’s income; neither the dividends nor any tax benefit were imputed to the party.

[68] In this case it was left solely to Dr. Kerr to deal with the tax and other repercussions of carrying the shareholder loan. Therefore, I find that no interest benefit should be attributed to Dr. Kerr or imputed to her income. In addition, the investment loss incurred due to the necessary early cashing in of a corporate investment should be deducted from Dr. Kerr’s income. This was a real loss that she bore in order to pay back the loan.

Business expenses

[69] Although Mr. Pittman provides an opinion that all the expenses claimed by Dr. Kerr through her corporation were legitimate corporate expenses, I find that some of those expenses were indeed personal in nature and others are either personal or are simply not reasonable business expenses.

[70] As noted above, s. 19(1)(g) of the CSG permits the court to impute income to a spouse considered appropriate in the circumstances, including where the spouse unreasonably deducts expenses from income. Section 19(2) provides that the reasonableness of an expense deduction is not solely governed by the deduction is permitted by the Income Tax Act.

[71] In Osmar v. Osmar (2000) 2000 22530 (ON SC), 8 R.F.L. (5^th) 368 at para. 5 (Ont. Sup. Ct. J.) (“Osmar”), the court provided a thorough example of how business expenses may be examined in order to ascertain which, if any, of those expenses should be imputed back to the payor’s income. In that case, the court imputed all expenses which could be considered a “subsidy of [the payor’s] personal lifestyle” back to the payor’s income, even though such expenses were properly included as business expenses for tax purposes. Such expenses included golfing, meals, entertainment, car expenses, personal accounting and legal services. The court noted that the CSG “require the court to examine expenses from the perspective of balancing the business necessity against the alternative of using those funds for child support” (Osmar, para. 5).

[72] Dr. Kerr provided the experts with her bank and Visa statements. Mr. Clarke reviewed her 2011 statements and highlighted the items he believed, based on their nature and on the nature of Dr. Kerr’s business, to be personal expenses. Mr. Clarke found that $13,663 of personal expenses were claimed as corporate expenses and therefore should be added back into Dr. Kerr’s income, along with the appropriate gross-up. Having reviewed those 2011 bank and Visa statements, filed as Exhibits, and in light of Dr. Kerr’s evidence with respect to her corporate expenses, I find, taking a conservative approach, approximately $3,500 - $4,000 of expenses characterized by Mr. Clarke as personal expenses in 2011 were indeed legitimate business expenses. Those expenses should therefore be deducted from Mr. Clarke’s income estimates.

[73] In determining the gross-up on expenses which I have determined to be legitimate business expenses, I am guided by a chart provided to the court by Mr. Pittman (see Exhibit 14). This chart provides expert evidence extrapolating the 2011 figures to the other years and as to the appropriate gross-up. I have relied upon this chart to determine the appropriate amount of business expenses, with the appropriate gross-up, to be deducted from Dr. Kerr’s income from 2008 to 2012. Mr. Pittman uses the figure of $3,720 for 2011 which I find appropriate based on the evidence.

[74] In addition, there were certain employment expenses which Mr. Clarke determined to be unreasonable business expenses in 2008 and 2009 and therefore added to Dr. Kerr’s income. It was unclear why that approach was taken. Mr. Pittman’s testified those amounts were in fact legitimate employment expenses and should therefore be deducted from Mr. Clarke’s income estimate. I agree.

[75] Therefore, using Mr. Clarke’s estimates of income as a starting point and adjusting for the above findings, I impute income to Dr. Kerr considering the issues of the shareholder loan, disability benefits, investment loss, and in particular, the appropriate business expenses as follows for the years 2008 to 2012:

	2008	2009	2010	2011	2012
Clarke’s assessment of income	234,227	182,725	96,289	74,275	131,487
Interest benefit on shareholder loan	(9,300)	(6,400)	(6,500)	(600)	(600)
Non-taxable disability benefits			28,263	10,261
Employment expenses	(4,242)	(2,565)
Inappropriately classified personal expenses with gross-up	(12,449)	(12,353)	(8,642)	(6,940)	(4,403)
Corporate Investment Loss		(2,209)			(442)
Calculated income	$206,027	$160,965	$109,410	$76,996	$126,484

[76] In October, 2012, Dr. Kerr began her present employment with Health Canada. Therefore, for 2013 and 2014 she was an employee, although she maintained her corporation. The appropriate amount of income to be imputed to Dr. Kerr for those years, if any, will be discussed below.

Intentional underemployment

[77] As noted above, Mr. Erland argues Dr. Kerr is intentionally underemployed and pursuant to s. 19(1)(a) of the CSG, income should be imputed to her in the amount of $311,687 representing the amount she could reasonably expect to earn as a private practitioner in her allergy specialty. Mr. Erland takes this amount from Mr. Clarke’s estimate of Dr. Kerr’s 2006 income. It is unclear why Mr. Erland chose to use that particular amount.

[78] Dr. Kerr argues she now has more secure employment with Health Canada which permits her to better accommodate her children’s needs. Prior to separation, the decision made to leave practice with Dr. Ham Pong to work at the Appletree Clinic, was a mutual decision taken, according to Dr. Kerr, for the benefit of the children and family unit.

[79] In Drygala v. Pauli (2002), 2002 41868 (ON CA), 61 O.R. (3d) 711 (C.A.), the Ontario Court of Appeal established a three-pronged approach for the court to consider in determining whether a spouse is intentionally underemployed or unemployed and, if so, the appropriate income under the circumstances:

(1) Is the spouse intentionally underemployed or unemployed?

(2) If so, is this caused by the needs of a child under the age of majority or by the reasonable educational or health needs of the parent?

(3) If no, what income is appropriate is imputed under the circumstances?

In Le Page v. Porter (2002), 2000 22516 (ON SC), 7 R.F.L. (5^th) 335, at para. 27 I referred to Hanson v. Hanson, 1999 6307 (BC SC), [2000] B.C.W.L.D. 234 (S.C.) at para. 14 and enumerated the following principles to be considered in determining a spouse’s capacity to earn an income:

1. There is a duty to seek employment in a case where a parent is healthy and there is no reason why the parent cannot work.

2. When imputing income on the basis of intentional underemployment, a court must consider what is reasonable under the circumstances. The age, education, experience, skills and health of the parent are factors to be considered in addition to such matters as availability of work, freedom to relocate and other obligation.

3. A parent’s limited work experience and job skills do not justify a failure to pursue employment that does not require significant skills or employment in which the necessary skills can be learned on the job.

4. Persistence in unremunerative employment may entitle the court to impute income.

5. A parent cannot be excused from his or her child support obligations in furtherance of unrealistic or unproductive career aspirations.

6. As a general rule, a parent cannot avoid child support obligations by a self-reduction in income.

[80] In the case at bar, I find factors 2, 5 and 6 above to be relevant.

[81] The first question is, given Dr. Kerr’s circumstances, what is reasonable with respect to employment? Dr. Kerr is 45 years old, well-educated with a specific medical specialty in clinical immunology and allergy. She had an excellent position with Dr. Ham Pong but, prior to separation, made the decision with Mr. Erland, to leave that position to work at the Appletree Clinic. She wished to spend more time and felt she had to spend more time, meeting the needs and demands of her children. The move to Health Canada after separation was to a position that did not require her level of education or expertise. She is a relatively young, healthy, well-educated, experienced medical specialist. There are few immunology allergy specialists in the Ottawa community, according to her own evidence. Given that her children are now in school full-time and she has a week about shared parenting arrangement with Mr. Erland, Dr. Kerr has the freedom to choose to continue working with the Federal Government or to once again practice medicine privately.

[82] Dr. Kerr has chosen a career with Health Canada as a medical evaluator. She chose that employment as she wished for more stability in a government position which offered disability, sick leave, other benefits and a pension. In addition, she testified she wished to spend more time with her children and therefore chose to work only 4 days a week and to have an extra 6 weeks off during the year, using income averaging. This would be in addition to 4 weeks paid vacation. She argues her children need her and Mr. Erland has the summers off and other vacation time given his work as a high school teacher. She wishes to have the same time to spend with her children.

[83] Considering: Dr. Kerr’s past income while in private practice and when she worked at the Appletree Clinic, the above evidence regarding her income earning capacity and the other factors listed above, I find Dr. Kerr is intentionally underemployed. I note that if Dr. Kerr were working full-time at the level for which she is qualified at Health Canada as a medical evaluator, her salary would be comparable to that earned as an allergist with the Appletree Clinics. I find merit in Dr. Kerr’s explanation as to why she left her practice with Dr. Ham Pong prior to separation. At that particular point in time, based on all the evidence before me, I find her change in employment was largely caused by the needs of her children. Now, however, the needs of Laura and Alec do not require Dr. Kerr to work only 4 days a week nor do they require her to have an extra 6 weeks off during the year.

[84] In Selznick v. Selznick, 2012 ONCA 686, the Ontario Court of Appeal imputed an extra $60,000 income to the lawyer mother who was intentionally underemployed as she had chosen to remain home and only work on a part-time basis, despite the fact this was not necessary nor reasonable for childcare obligations. Additionally, the court refused to include the cost of the mother’s nanny as a s. 7 expense, given that all the children were teenagers and were involved in after-school activities.

[85] The general rule is a parent cannot avoid child support obligations by a self-reduction of income. Therefore, Dr. Kerr’s choice to work less than full-time and less than year round should not exempt her from paying child support based on an imputed full-time salary.

[86] Dr. Kerr also seeks to deduct from her salary losses, or expenses she incurs through maintaining her corporation. These expenses are related to continuing education and other programs Dr. Kerr takes to maintain licensing requirements. Her position with Health Canada does not require her to maintain her practicing license and Dr. Kerr is not able to recoup those expenses through any continuing private practice. Therefore, I do not find it reasonable for Dr. Kerr to leave private practice along with its higher income earning potential, to work at a position with Health Canada, while at the same time incurring the additional expenses that accompany a private practice. Therefore corporate losses should not be deducted from her income.

[87] In conclusion, I find an appropriate income to impute to Dr. Kerr to be the income she could receive at her level for a full-time position with Health Canada. As noted above this income is similar to, if not higher than, what she earned at the Appletree Clinic. I impute income to her of $169,148 for 2013 and 2014.

Child support

[88] Mr. Erland requests an order of child support retroactive to the date of separation in 2008 and going forward, pursuant to s. 15.1 of the Divorce Act in accordance with the CSG.

Retroactive child support

[89] An order for retroactive child support is not a given. See Titova v. Titov, 2012 ONCA 864, 29 R.F.L. (7th) 267.

[90] The Supreme Court of Canada considered the factors appropriate in determining whether to award retroactive support in S. (D.B.) v. G. (S.R.); W. (L.J.) v. R. (T.A.); Henry v. Henry; Hiemstra v. Hiemstra, [2006] S.C.J. No. 37, 2006 SCC 37 (S.C.C.). At para. 95 the Supreme Court of Canada warned:

It will not always be appropriate for a retroactive award to be ordered. Retroactive awards will not always resonate with the purposes behind the child support regime; this will be so where the child would get no discernible benefit from the award. Retroactive awards may also cause hardship to a payor parent in ways that a prospective award would not. In short, while a free-standing obligation to support one’s children must be recognized, it will not always be appropriate for a court to enforce this obligation once the relevant time period has passed.

[91] The Supreme Court of Canada lists the factors the court should consider before awarding retroactive child support. None of the factors however are decisive.

Reasonable Excuse for Delay

[92] First, the court must consider whether there is a reasonable excuse as to why the recipient did not seek child support earlier. Reasonable excuses may include: fears that the payor would react vindictively, lack of financial or emotional means to bring an application, and inadequate legal advice.

[93] In the case at bar, no specific evidence was led by Mr. Erland as to why he did not seek interim child support. He did request child support retroactive to the date of separation in his Answer dated February 25, 2010 but never pursued child support through the court thereafter.

[94] There is evidence the parties delayed bringing motions and pursuing the issues to trial, as they were attempting to use alternative dispute resolution, including mediation, to resolve the issues. They did in fact resolve the property and parenting issues by way of agreements signed in April, 2012. Nevertheless, those agreements and the negotiations between the parties did not address child support. Mr. Erland was always free to bring a motion for that relief.

[95] Mr. Erland testified one of the reasons he had a problem in seeking support was Dr. Kerr delayed disclosure relevant to the determination of her income. There is evidence of communications between the parties to this effect. However, Mr. Erland had Dr. Kerr’s tax returns and sufficient financial disclosure to bring a motion for interim child support and yet he did not.

Conduct of Payor Parent

[96] Was there any blameworthy conduct on Dr. Kerr’s part?

[97] In S. (D.B.) the Supreme Court of Canada indicates blameworthy conduct may be characterized as anything that privileges the payor’s interests over those of the children and may include avoiding or ignoring child support obligations or the children’s right to an appropriate amount of child support. Hiding income level increases; misleading a recipient parent into believing the child support obligations are being met while knowing that they are not and intimidating a recipient parent would all be classified as blameworthy conduct, as would consciously choosing to ignore child support obligations.

[98] Based on the evidence in the case at bar, I find Dr. Kerr paid a significantly higher proportion of the children’s expenses, including expenses for clothing and other necessities, as well as extracurricular activities. She did not hide her income level, mislead Mr. Erland or intimidate him in order to dissuade him from bringing an application or a motion for child support. As Dr. Kerr and Mr. Erland had a shared parenting arrangement, it was not clear how much, if any, child support Dr. Kerr should pay to Mr. Erland. Dr. Kerr was well aware she needed to provide adequately for the children and she did so. I do not find the evidence to demonstrate any blameworthy conduct on Dr. Kerr’s part that would militate in favour of a retroactive child support award.

Circumstances of the Children

[99] The third factor the court must consider is the current and past circumstances of the children.

[100] In S. (D.B.) the Supreme Court of Canada noted a child who is presently enjoying a relatively high standard of living may benefit less from a retroactive award than a child who is in need. In addition, the court states it is a core principle of child support that after separation, a child’s standard of living should be as close as possible to the standard of living he/she enjoyed while his/her parents were together. Decision makers should examine whether the children suffered hardship in the past, due to being deprived of child support. A retroactive award could compensate the child for those circumstances.

[101] In this case, the children enjoyed in the past and continue to enjoy a relatively high standard of living at each parent’s household. There is no evidence that the children suffered hardship or were in need due to the lack of child support payments. This case is somewhat unusual as between September, 2008 and April, 2012, the children continued to live a lifestyle very similar to their pre-separation lifestyle due to the nesting order made by Justice Toscano Roccamo. The children remained in the matrimonial home with their parents moving in and out. They continued to attend their extracurricular activities and had the advantages of being supported emotionally and physically by both their parents.

[102] During the nesting arrangement, each parent lived in the matrimonial home with the children one week on and one week off. On his weeks outside of the matrimonial home, Mr. Erland was able to live at his brother’s home which was generally unoccupied and provided to him rent-free. As a result of the shared parenting arrangement, Mr. Erland benefitted by having half of his housing costs paid by Dr. Kerr. She, on the other hand, was required to pay for a second residence, in addition to paying half the cost of the matrimonial home. In fact, the evidence shows she paid more than half the costs for maintaining the matrimonial home.

[103] After the nesting arrangement ended in April, 2012, the children continued to reside in the matrimonial home when in their father’s care. In addition, while with their father, the children had access to the matrimonial cottage which was transferred to Mr. Erland as part of the property settlement. The children continued to participate in their extracurricular activities for which Dr. Kerr paid the majority of associated costs.

[104] Dr. Kerr initially rented a townhouse. Then in September, 2013 she bought a home for approximately $415,000. I find that while spending their weeks with Dr. Kerr, the children had a slight decline in their standard of living as she occupied and continues to occupy a smaller home and at this point does not own a cottage.

[105] Dr. Kerr paid for nearly all of the children’s extra expenses including $27,895.30 for Laura’s dance between 2008 and 2013. Dr. Kerr also paid nearly four times as much towards the matrimonial home mortgage in the amount of $40,502.07 compared to $11,235.34 by Mr. Erland at a time when both parties should have been contributing equally. She paid approximately five times as much on general children’s expenses, $41,842.08 as compared to $8,314.28 including the cost for extra health and dental care. Mr. Erland did contribute approximately $9,000 more to child care costs, although he received a $4,000 tax credit for this.

Hardship to the Payor

[106] The final factor outlined by the Supreme Court of Canada is whether a retroactive award would occasion hardship on the payor. Hardship may be exacerbated by the fact that retroactive awards are based on past income levels which may have since declined.

[107] Dr. Kerr testified she is not in a financially favourable position and it would cause her hardship if she was required to pay a significant amount of retroactive or ongoing child support. Dr. Kerr based that position on continuing at her current salary level with Health Canada. This includes working part-time and income averaging in order to take additional weeks of vacation. As noted above, I find that Dr. Kerr has chosen to be underemployed. I do not find an order for retroactive child support would cause significant hardship to Dr. Kerr, as she continues to have a good net disposable income.

[108] In reviewing and balancing all of the factors, I find Mr. Erland has not met the test for establishing a retroactive award of child support. As noted in Thompson v. Thompson, 2013 ONSC 5500, the test for establishing retroactive child support is an onerous one, requiring very specific evidence. Mr. Erland did not lead sufficient evidence as to why he did not pursue child support earlier nor did he lead any evidence to demonstrate the children suffered as a result of the non-payment of child support by Dr. Kerr. Finally, he did not lead sufficient evidence of blameworthy conduct on the part of Dr. Kerr. Both parents provided evidence and acknowledge the children have had and continue to have, a relatively high standard of living. There will be no order for retroactive child support.

Ongoing child support

[109] Since the beginning of 2014, it has been clear to both parties this matter would proceed to trial and Mr. Erland would be seeking child support. However, Dr. Kerr chose to continue to pay the majority of the children’s expenses. She argues this will no doubt continue and therefore any child support payable should be less than the set-off amount. I find that position unreasonable.

[110] Since separation, Dr. Kerr and Mr. Erland have had a shared parenting arrangement formalized in their parenting agreement of April, 2012. Each parent has the children in his or her care approximately 50% of the time on a week about basis.

[111] Section 9 of the CSG states:

9. Where a spouse exercises a right of access to, or has physical custody of, a child for not less than 40 per cent of the time over the course of a year, the amount of the child support order must be determined by taking into account

a) the amounts set out in the applicable tables for each of the spouses;

b) the increased costs of shared custody arrangements; and

c) the conditions, means, needs and other circumstances of each spouse and of any child for whom support is sought.

[112] In Contino v. Leonelli-Contino, 2005 SCC 63, [2005] 3 S.C.R. 217 (“Contino”), the Supreme Court of Canada clarified the principles of child support where the parents share custody. First, the court eliminated some of the presumptions which had been expressed in previous jurisprudence, and held there was:

(a) no presumption of table amount;

(b) no automatic reduction in child support for shared custody;

(c) no set formula;

(d) no use of pro-rated set-off;

(e) no multipliers;

(f) no need to separate out section 7 expenses; and

(g) no need to resort to section 10 of the CSG.

[113] The court set out the method to be used in determining the quantum of child support, as follows:

1. Determine the simple set-off amount.

2. Review the child expense budget.

3. Consider the ability of each parent to bear the increased costs of shared custody and the standard of living for the children in each household.

4. Distinguish between initial orders or agreements and variations.

[114] The set-off amount provides a starting point which focuses the court on the fact that both parents must make a financial contribution. However, this starting point must be adjusted based, first, on the increased costs attributable to shared custody and, second, on the fairness of the result in light of the conditions, needs, means and circumstances of the parties and their children.

[115] With respect to the increased costs of a shared custody arrangement, the Supreme Court found this factor not to be limited to those expenses assumed by the payor parent as a result of increased access time. Not all increased costs will result directly from the actual amount of time spent with the children. Rather, the court will be called upon to examine the budgets and actual child care expenses of each parent.

[116] Section 9 recognizes the increase in costs assumed by one parent does not necessarily lead to a decrease in costs assumed by the other. Section 9(c) requires the court to consider principles of fairness and, importantly, the standard of living of the children in each household along with the ability of each parent to absorb the costs required to maintain the appropriate standard of living in the circumstances.

[117] In considering the set-off amount as a starting point for 2014 and going forward Mr. Erland’s annual income is $94,618. I have imputed $169,148 to Dr. Kerr. Therefore her support payment would be $2,230 whereas Mr. Erland’s would be $1,350 for a set-off amount of $880.

[118] Based on the parties’ financial statements and evidence at trial, Mr. Erland appears to have a net worth of approximately $185,782 greater than Dr. Kerr’s net worth. His financial statement filed in January, 2014 notes a net worth of approximately $752,192 while Dr. Kerr’s last financial statement shows a net worth of $566,410. To Mr. Erland’s financial statement I added half the value of the cottage lot which still has not been sold and in Dr. Kerr’s last financial statement I subtracted her mortgage to determine their respective net worth.

[119] Despite the discrepancy in net worth, it does not appear on an ongoing basis there is an unequal distribution of the negative financial effects of any shared custody arrangements. Nor is there anything else in the condition, needs, means and circumstances of either party or of the children to suggest a deviation from the set-off amount would be necessary or appropriate. While Mr. Erland does own the cottage and a larger home, Dr. Kerr is able to provide the children with a similar standard of living while they are with her.

[120] While Dr. Kerr’s budget demonstrates she spends significantly more on the children’s expenses than does Mr. Erland, it is clear that most of this disparity is due to choices Dr. Kerr has made. In this case, there is no reason why one parent should or must incur more child-related expenses nor indeed more expenses generally due to the ongoing shared parenting arrangement. Choosing to spend more on a child does not exempt a parent from paying child support in a shared custody arrangement.

[121] Therefore, in conclusion I find Dr. Kerr should pay Mr. Erland monthly child support in the set-off amount of $880 commencing January 1, 2014 and on the first of each month thereafter. I note this will leave Dr. Kerr with approximately 54.6% of the parties’ combined net disposable income, while Mr. Erland is left with 45.4%. At this point in time, Dr. Kerr owes 6 months of child support in the amount of $5,280 payable to Mr. Erland within 30 days. Commencing July 1, 2014, the ongoing monthly child support is to be paid through, and enforced by, the Family Responsibility Office.

[122] Commencing July 1, 2014, I find it more appropriate that the parties contribute, in proportion to their incomes, to any special or extraordinary expenses for the children pursuant to s. 7 of the CSG. In this case, Dr. Kerr is to contribute 64% while Mr. Erland is to contribute 36%.

[123] As outlined under s. 7(1) of the CSG those special expenses will include: 1. child care expenses necessary due to employment responsibilities, 2. any medical or dental costs not covered by insurance, 3. three extracurricular activities for each child per year, to include Laura’s Irish dancing if she decides to continue, 4. two summer camps for each child, and 5. counselling services. It is highly recommended both children receive counselling as recommended by Sally Bleeker in her Voice of the Child Report. The parties may also agree upon other s. 7 expenses to be shared proportionate to their incomes.

Spousal support

[124] As noted above, Mr. Erland is requesting both retroactive and ongoing spousal support.

[125] Section 15.2 of the Divorce Act, R.S.C. 1985, c. 3 (2^nd Supp.) as am. (“Divorce Act”) governs spousal support and states as follows:

(1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse.

(4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including

(a) The length of time the spouses cohabited;

(b) The functions performed by each spouse during cohabitation; and

(c) Any order, agreement or arrangement relating to support of either spouse.

(5) In making an order under subsection (1) or an interim order under subsection (2), the court shall not take into consideration any misconduct of a spouse in relation to the marriage.

(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should

a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;

b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;

c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and

d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.

[126] In Moge v. Moge, 1992 25 (SCC), [1992] 3 S.C.R. 813, at para. 75, the Supreme Court of Canada recognized that “marriage per se does not automatically entitle a spouse to support.” The starting point for determining a spousal support dispute is to recognize the objectives of spousal support as enumerated in s. 15.2(6) of the Divorce Act. No single objective is paramount, and all objectives must be borne in mind. Against this background, the court must consider the factors set out in s. 15.2(4), which guides the court’s inquiry into the conditions, means, needs and other circumstances of each spouse.

[127] There are three bases for an award of spousal support: (1) contractual; (2) compensatory; and (3) non-compensatory, or needs-based: Bracklow v. Bracklow, 1999 715 (SCC), [1999] 1 S.C.R. 420. Spousal support awarded on a contractual basis is meant to hold the parties to a previous agreement. This basis for awarding spousal support is inapplicable in this case, as there was at no time an agreement between the parties regarding spousal support. Similarly, there is no needs-based justification of spousal support. Mr. Erland is completely self-sufficient; he is in good health and has secure employment as a well-paid teacher at the top of his pay level. Although Dr. Kerr’s income was higher, there was no evidence to suggest he is, or was at any time post-separation, in need of financial support from her, nor that his standard of living has deteriorated due to the breakup of the marriage.

[128] The only basis upon which Mr. Erland may be entitled to spousal support is compensatory. Compensatory spousal support acknowledges the contributions of a spouse to the marriage and any financial opportunities which the spouse has foregone for the sake of the family or other spouse. Generally, compensatory support awards are seen where a spouse has sacrificed career opportunities for the family, where a spouse has provided significant contributions to the household (such as by assuming primary caregiver responsibilities), and/or where a spouse had made significant contributions to the other spouse’s career.

[129] There was no evidence presented to suggest Mr. Erland forwent career opportunities. Rather, Dr. Kerr supported Mr. Erland’s decision to move from one school to another. Mr. Erland has now reached the top of his pay grade as a teacher. In fact, the evidence presented suggested that it was Dr. Kerr who made several sacrifices in her career for the sake of the family, such as leaving Dr. Ham Pong’s clinic and not pursuing career opportunities outside Ontario.

[130] There is little evidence that Mr. Erland contributed in any significant way to Dr. Kerr’s career. This is not a case where Mr. Erland actively supported Dr. Kerr through her studies. While there is some evidence that Mr. Erland provided occasional bookkeeping and other services to Dr. Kerr’s corporation, these were not substantial contributions, and Mr. Erland was paid for his services.

[131] The only evidence led by Mr. Erland to support his spousal support claim is he was an active parent. He suggested he took on a disproportionate share of household and childcare responsibilities. Dr. Kerr testified that, in fact, she would often have to rearrange her schedule to take care of the children’s needs, as Mr. Erland would not want to use a sick day or otherwise interfere with his employment. Dr. Kerr disputes Mr. Erland’s assertion that he assumed more than one half of the household duties. Based on all the evidence, I find that although Mr. Erland was by no means an absent parent and husband, it was Dr. Kerr who assumed more than her share of childcare and household responsibilities. While this was to a large extent her choice, it does not change the fact that Mr. Erland has not provided sufficient evidence to prove on a balance of probabilities he made significant household and childcare contributions entitling him to spousal support on a compensatory basis.

[132] Furthermore, the evidence is clear that Mr. Erland left Dr. Kerr to deal with the financial repercussions of the shareholder loan, including the interest paid to her uncle and tax liability for the dividends which she declared to eliminate the loan. On the other hand, Mr. Erland was able to buy a property and sell it in 2013, realizing a significant capital gain. These facts further militate against an award of spousal support.

[133] Spousal Support Advisory Guidelines calculations indicate if there was to be an award of spousal support, a duration of between 3.75 years and 8 years from the date of separation would be appropriate. The parties have now been separated for 6 years during which time Mr. Erland has been able to live in the matrimonial home which he owns and to use the matrimonial cottage which he also now owns. In addition, as noted above, he has a net worth of $752,192 which is over $185,000 more than Dr. Kerr.

[134] In conclusion, based on all the evidence and considering the principles and factors outlined under s. 15.2 of the Divorce Act, and the relevant jurisprudence, I do not find Mr. Erland entitled to spousal support, either retroactively or going forward.

Parenting issues

[135] As noted above, the parties signed and have been following a parenting agreement as of April, 2014. Dr. Kerr has provided a detailed proposed order with respect to parenting at Tab 11 of the Trial Record. The parties agree on incorporating the parenting arrangement into a court order as suggested with a few changes.

[136] Paragraph 3.6 will remain as in the original agreement and the proposed para. 3.7 will eliminate the phrase “and on their other week they will do at least one of Laura’s dance carpool drives”. Otherwise, this proposed parenting order commencing at p. 2 under the heading “Parenting” subpara. 3.11, through p. 5 ending with “all other terms will remain in force and effect” will be made part of this court order.

[137] As noted above, it is strongly recommended that the parties engage a parenting coordinator given the conflict between them and the resulting significant difficulties for their children, in particular the extreme emotional distress exhibited by Alec when assessed by Sally Bleeker.

Life insurance

[138] A life insurances clause as per the draft order at Tab 11 of the Trial Record, paragraphs 25 through 27, will form part of this court order.

Costs

[139] Rule 24(1) of the Family Law Rules O.Reg. 114/99 r. 24(1) indicates there is a presumption that a successful party is entitled to costs. A successful party who has behaved unreasonably may be deprived of some or all of his/her own costs or may be ordered to pay all or part of the unsuccessful party’s costs (Rule 24(4)).

[140] In this case Dr. Kerr was the more successful party. On the evidence at trial I do not find that she behaved unreasonably as noted in Rule 24(5)(a). However, any offers to settle served by either party must be considered.

[141] The amount of costs payable to Dr. Kerr should be assessed considering the factors under Rule 24(11).

[142] If the parties cannot reach an agreement on costs, written submissions of no more than two pages with attached offers to settle and an itemization of the amount of costs are to be provided by Dr. Kerr within two weeks of the release of this judgment, followed by Mr. Erland within a further two weeks.

Blishen, J.A.

Released: June 24, 2014

COURT FILE NO.: FC 08-2478

DATE: 2014/06/24

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Pauline Elizabeth Kerr

Applicant

– and –

Jan Tadeusz Erland

Respondent

REASONS FOR Decision

Blishen, J.A.

Released: June 24, 2014