COURT FILE NO.: FS-12-76575-0000 DATE: 2015-12-18

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

LEILANI BROWN Applicant

• and -

DAVID BROWN Respondent

COUNSEL: Justin Clark, for the Applicant John P. Schuman, for the Respondent

HEARD: February 24, 25, 26, April 28, 29, and May 1, 2015

REASONS FOR JUDGMENT

CORRECTION NOTICE

February 1, 2016: Paragraph 137 replaces the corresponding paragraph in the original judgment issued on December 18, 2015.

Tzimas, J.

[1] The applicant, Leilani Brown, (Ms. Brown), commenced an application against the respondent, David Brown (Mr. Brown) in November 2012. In it she sought spousal support and equalization of the parties’ net family property. She also asked that the claims advanced by Mr. Brown be dismissed. Mr. Brown disputed the claim in its entirety. For spousal support, he asked that it be dismissed in its entirety. On equalization, he advanced a claim in the amount of $438,049.33, as well as a credit of $43,033.37 in relation to a joint account held by the parties and interest he paid on that account.

[2] The trial of this proceeding occurred over the following dates: February 24, 25, 26, April 28, 29, and May 1, 2015. The Court heard from the parties as well as Mr. Bhardwaj and Mr. Jackson. A break in the trial was needed because Ms. Brown’s financial expert, Mr. Bhardwaj, had not been provided with certain critical documents for his analysis. That failing was partly the result of late and incomplete disclosure by Mr. Brown, and partly because certain documentation that was provided to Ms. Brown’s previous counsel was never forwarded to Mr. Bhardwaj for his consideration. In the interests of justice and to ensure as full of an accounting analysis for the court’s benefit, a break in the trial was allowed to enable Mr. Bhardwaj to incorporate the additional documents into his analysis.

[3] There were two issues for the court’s determination. The first concerned equalization. Particular challenges on that issue related to the treatment of the matrimonial home, the valuation of Mr. Brown’s business, and Mr. Brown’s debts to Revenue Canada. There were other differences between the parties’ respective net family property statements, but they were minor.

[4] The second issue concerned Ms. Brown’s claim for spousal support. Here, the overriding difficulty lay with Mr. Brown’s incomplete and selective disclosure of his income. His position that Ms. Brown could not make out a claim for spousal support was premised primarily on the argument that both he and Ms. Brown had similar incomes and that neither of them gave up opportunities for higher incomes because of the marriage.

[5] In my review of the evidence of the parties, the submissions of their counsel, and the applicable law, on equalization, I conclude that Ms. Brown owes Mr. Brown an equalization payment of $107,540.28. On spousal support, I conclude that Ms. Brown is entitled to such support. With an imputed income of $95,000 to Mr. Brown and an income of $69,000 to Ms. Brown, a lump sum payment in the midrange, based on the calculations provided by Ms. Brown comes to a figure of $97,000, and I conclude that she is entitled to that sum.

[6] The parties are also entitled to certain credits. First, on account of the increase in value of the matrimonial home from the valuation date to the date of sale, each party shall receive a credit from the net proceeds of $74,750.00. That represents a 50 percent share for each party. Mr. Brown shall also be reimbursed by Ms. Brown the net sum of $55,000 on account of the reconciliation of the joint line of credit.

[7] Finally, I leave the issue of a possible 25 percent pension transfer by Ms. Brown in partial satisfaction of her equalization obligation to Mr. Brown to her discretion. Although Ms. Brown requested an order for such a transfer, in light of the outcomes in this judgment, she may no longer have the same cash flow concerns she raised at trial. However, if that remains a concern she may proceed with such a transfer, in accordance with the Pension Benefit Act, R.S.O. 1990, c. p.8 (P.B.A.).

BACKGROUND

[8] The parties agree with the following background facts. The parties had a twenty-five year relationship. After dating for six years, they were married on October 17, 1992. They separated with no reasonable prospect of reconciliation on October 28, 2011. The parties were divorced on August 6, 2014.

[9] At the time of the trial the Applicant was 45 years old and the Respondent was 48 years old. There were no children of the marriage, though they attempted to have children several times. Those attempts included a number of in-vitro fertilization treatments, and eight unsuccessful pregnancies for Ms. Brown.

[10] Until they separated, the parties resided together at 4190 Wakefield Crescent, in Mississauga, Ontario. The home was purchased in July of 1995 and it was initially owned in the names of both parties. It was transferred solely to Ms. Brown’s name in November 2005. This was done to protect Mr. Brown from his creditors. Both parties contributed to the matrimonial home and Mr. Brown managed all the bills connected to the home until the date of separation.

[11] The parties agree that at the time of separation the home was worth $463,000. In the fall of 2014, the home was sold for $612,500. The net proceeds of the sale totalled $335,713.50 and are currently held in an interest generating trust account by Ms. Brown’s counsel.

[12] At the time of the trial, Ms. Brown worked for the Region of Peel as a Welfare Fraud Investigator. On her 2013 tax return, she reported a line 150 income of approximately $69,849.

[13] Mr. Brown was the sole owner of David Brown Associates, a land use development and consultancy company. In particular, much of Mr. Brown’s work involved support to developers with their applications to the Committee of Adjustments. He started up the company in October 1998. At the trial, the court heard that he closed the business shortly before the trial commenced and he started working as a salaried employee for David Small, a professional acquaintance. Mr. Brown explained that he knew Mr. Small for several years and offered his services on several past land use projects.

[14] Mr. Brown also ran unsuccessfully in five provincial and municipal elections, the most recent attempts being the June 2014 provincial election in Hamilton and the fall 2014 municipal elections. At the time of the trial, Mr. Brown was listed as the current candidate of record for the Ontario Progressive Conservative Party for Hamilton East-Stoney Creek.

[15] The parties agreed that Mr. Brown made monthly payments to Ms. Brown post-separation from October 2011 to February 2013 that totalled $37,739.65. That came to an average monthly payment of $2,219.98. The parties dispute the nature and treatment of these payments. Ms. Brown asked the court to recognize such payments as spousal support. Mr. Brown disputed that characterization and argued that the payments reflected the financial cost of maintaining the matrimonial home from the date of separation to the time of sale in November 2014.

[16] The parties also agreed with the valuations of their respective pensions, with Ms. Brown’s pension valued at $319,991.82 and Mr. Brown’s pension valued at $80,881.23.

ISSUE 1: Equalization

[17] The parties presented widely divergent views and approaches to equalization. The parties prepared various NFP scenarios and worksheets. The principal disagreements between them related to the treatment of the matrimonial home and the valuation of Mr. Brown’s business. Additionally, there were material differences with the way counsel applied various credits to determine the appropriate payout figure. Finally, the parties had minor differences in their approaches to a number of other items in the equalization analysis.

[18] In light of these various differences, I reviewed each of the differences in the parties’ respective NFP analyses, made my own findings on each section of the net family property of each spouse, to conclude that Ms. Brown owes Mr. Brown an equalization payment of $107,540.28.

a) Matrimonial Home / Land

[19] The most significant difference between the NFP statements of the parties was with the treatment of the matrimonial home. Although Ms. Brown put before the court four NFP statements for the court’s consideration offering four different approaches to her analysis, her primary position was that the matrimonial home was only in her name at the time of separation, that this was an agreed upon arrangement to credit-proof Mr. Brown from his creditors, that a trust claim did not arise, and that she was entitled to keep the difference between the value of the matrimonial home on the valuation date and the price for which it sold, that difference being $149,500. The underlying rationale for Ms. Brown’s position was that Mr. Brown could not on the one hand protect himself from creditors and on the other hand claim an interest for family law purposes. Ms. Brown was prepared to recognize certain credits to Mr. Brown on account of the his continued contributions to the maintenance of the home post-separation and until March 2013 and on account of certain withdrawals she made against their joint line of credit in the total sum of $120,000.

[20] In light of that theory, in her primary NFP analysis, Ms. Brown listed the full value of the matrimonial home as of the valuation date of $463,000 in her column. In one of the alternative scenarios, Ms. Brown used the sale price of the matrimonial home of $612,500, recognized a trust interest in the matrimonial home for Mr. Brown and divided the sale price of $612,500 equally such that each of the net family property statements listed a value of $306,250 for the matrimonial home.

[21] Mr. Brown disputed Ms. Brown’s approach and contended that he had an interest in the house. He argued for a resulting trust or alternatively a constructive trust, grounded on an unjust enrichment analysis. He argued that he was entitled to share in the value of the matrimonial home as of the date of sale and not the date of separation. Mr. Brown also indicated, through his counsel’s written submissions to the court, that he “is not seeking to be put on title after the sale, only to share in the increase in value of the home post-separation, which is a monetary award for restitution”.

[22] Mr. Brown’s counsel submitted an NFP statement where he included the total sale price of $612,500 in Ms. Brown’s land column. In an alternative NFP statement, counsel presented a scenario that did not recognize an equitable interest in the matrimonial home in favour of Mr. Brown. In it, Mr. Brown gave a value of $463,000 for the matrimonial home and listed it entirely in Ms. Brown’s land column. However, he then claimed certain credits on account of the monies he advanced towards the maintenance and carrying costs of the home.

[23] The first question that has to be resolved before proceeding with an equalization analysis and the determination of the equalization payment concerns the ownership of the matrimonial home. Section 10(1) of the Family Law Act R.S.O. 1990, c.F.3 (“FLA”), provides for the determination of questions of title between married spouses. This includes a consideration of any beneficial interest in property. This determination must be made before there can be an equalization calculation: see Martin v. Sansome, 2014 ONCA 14, 118 O.R. (3d) 522; Korman v. Korman, 2015 ONCA 578, 126 O.R. (3d) 561.

[24] The facts of this case give rise to the classic question: If the home is in the name of the wife because the husband wishes to shield it from the his creditors, can the husband argue that the wife owns the home on a resulting trust for him, or will it be deemed a gift to the wife because of his intention to shield the home from his creditors? The underlying rationale for that question lies in the view that it would be inappropriate to permit a person to do one thing for creditor-proofing purposes but another for family law purposes. Ms. Brown’s counsel relied on that perspective as a foundation for the equalization claim that he advanced on Ms. Brown’s behalf.

[25] The Court of Appeal of Ontario put this issue to rest some time ago in its decision in Launchbury v. Launchbury (2005), 2005 10640 (ON CA), 12 R.F.L. (6th) 393 (Ont. C.A.). In that case, the presumption of a resulting trust pursuant to s. 14 of the FLA was upheld because the wife failed to rebut it. There, the matrimonial home was purchased with joint funds of the spouses but it was placed in the wife’s name for reasons that included its protection from the husband’s creditors. The Ontario Court of Appeal upheld the trial judge’s conclusion that, in those circumstances, the wife held the property one half in trust for the husband. In the court below, Justice Van Melle found no evidence to suggest that the husband intended to gift his half interest in the matrimonial home to the wife. Nor was there any evidence that any creditor or potential creditor was prejudiced.

[26] More recently in Korman, the Ontario Court of Appeal reviewed s. 14 of the Family Law Act and noted, at para. 26:

Section 14 of the Act affirms the presumption of a resulting trust in determining questions of ownership between spouses in the context of gratuitous property transfers. Where the presumption is invoked, the party resisting the imposition of a resulting trust is required to disprove that his or her spouse is the beneficial owner of an interest in the disputed property.

[27] Relying on Nussbaum v. Nussbaum (2004), 2004 23086 (ON SC), 9 R.F.L. (6th) 455 (Ont. S.C.), the Court of Appeal noted in Korman that “any motivation to shield the property from the Husband’s potential creditors does not in itself rebut the presumption of a resulting trust” (at para. 38). Although evidence that somebody intended to evade his or her creditors can be evidence of an intention to gift an entire interest in a property, that intention is a question of fact to be determined from all of the evidence.

[28] On the evidence before this court, the parties agreed that the home was purchased for $211,000. They put down a joint payment of approximately $10,000 and registered the property in both of their names. At some later point in time, when Mr. Brown started up his own business, his accountant recommended that the home be registered in Ms. Brown’s name only and the transfer was made. The parties used a secured line of credit to pay down the balance of the purchase price. At the time of separation, Ms. Brown believed that there was an outstanding sum of $107,000.

[29] There was no evidence before this court that the transfer of Mr. Brown’s half share in the matrimonial home to Ms. Brown was intended as a gift to her. To the contrary, the parties managed the property as if they were joint owners. Significantly, by virtue of Mr. Brown’s higher income, the evidence before the court suggested that Mr. Brown made greater contributions towards the home payments and its upkeep than did Ms. Brown. As I discuss more fully below, the difference in contributions was reflected in the continued monthly payments that Mr. Brown made after the date of separation. A substantial percentage of each such payment related directly to the household costs, though I find below that a portion reflected spousal support payments.

[30] Ms. Brown did not lead any evidence to rebut the presumption of a resulting trust pursuant to s. 14 of the FLA. Accordingly, for the purposes of determining the NFP of each of the parties, I conclude that Ms. Brown had title to 50 percent of the matrimonial home, she held the remainder 50 percent share in trust for Mr. Brown. For the purposes of the NFPs of the parties, and in accordance with the approach laid out in Korman, using the value of the home as at the valuation date of $463,000, each NFP should reflect a 50 percent ownership in the matrimonial home, giving each as value of $231,500.

[31] Insofar as the property’s appreciation from its value on valuation day of $463,000 to $612,500 is concerned, the treatment of that increase in value is to be treated as a post-equalization credit. In other words, separate and apart from the results of the equalization calculation, given the finding that each party holds a 50 percent interest in the matrimonial home, each party is entitled to a 50 percent credit from its appreciated value, meaning that each party will receive a credit of $74,750.

b) General Household Items and Vehicles

[32] Though the parties agree on the values of their respective vehicles, they disagree on how to treat the household contents and the jewellery. Ms. Brown included a “zero” value for both her and Mr. Brown in relation to “Household goods and furniture”. Mr. Brown allocated $10,000 to Ms. Brown and $4,500 to himself.

[33] In my review of the evidence, I note that Mr. Brown admitted that he never had the household items appraised. He also indicated that he was prepared to walk away from the household items, though he qualified that by suggesting that he would do so in the context of a settlement. On the totality of the evidence before the court, there was no evidence to substantiate the figures proposed by Mr. Brown. There is no question that there were household goods and furniture items that belonged to each of the parties at the time of separation. However, the list of items reviewed by Ms. Brown supports a finding that household items owned by the parties cancel each other out.

[34] Regarding Mr. Brown’s position that he was deprived of the opportunity to pick up his belongings. I have considered both his version of events and Ms. Brown’s and I believe Ms. Brown. I find that Mr. Brown did not care to pick up his belongings and did not use the opportunities he was given to do so. Ms. Brown’s apprehension over Mr. Brown’s attendance at the home and her approach to this issue may not have been the preferred way, but given the acrimony between the parties, it is understandable, particularly since she shouldered the complete burden of preparing the house for sale, selling it, and then packing and vacating it.

[35] Jewellery is another category for which there is a significant divergence in the figures being advanced by the parties. Ms. Brown acknowledged that she had some jewellery much of which she received from Mr. Brown for birthdays and Christmas. Ms. Brown indicated that Mr. Brown had some jewellery as well. She had no idea how Mr. Brown came up with a valuation figure of $28,000. She said that the ring that was the primary valuable item on Mr. Brown’s list had a number of inclusions and imperfections such that she would be surprised if it appreciated from several hundred dollars to a few thousand dollars. Mr. Brown’s evidence did not offer the court any insight as to how he determined the proposed figures. As with the household items, I find that both parties had some jewellery but the respective values cancel each other out and accordingly it is appropriate to attribute a zero value for both parties.

c) Bank Accounts and Savings, Securities and Pensions

[36] The parties ultimately agreed on the figures that they allocated to each in their respective NFP statements.

[37] I note that in the initial stages of the Application Ms. Brown was less than forthcoming with her accounts with PACE but that issue was resolved at the very latest, in the course of the trial and there is nothing further for this court to address.

[38] The only remaining difference between the parties in this category, rests with the treatment of Ms. Brown’s pension. Ms. Brown would like to transfer 25 percent of her pension to Mr. Brown to account for part of the equalization payment that she would otherwise have to make. This arrangement would leave her with a reasonable cash flow to meet her immediate financial needs. In light of that objective, Ms. Brown listed in her NFP statement what amounts to 75 percent of her pension on her side of the column and 25 percent to Mr. Brown’s side of the column, as if that transfer had already occurred on the date of separation. Mr. Brown, in his NFP statement, did not account for the transfer and placed the full value of Ms. Brown’s pension on her side of the column.

[39] The approach proposed by Ms. Brown is incorrect. On the date of separation there was no transfer. The proposed purpose for the transfer of part of the pension would be to use it as a part payment for the equalization payment that Ms. Brown would owe. It follows that before a transfer can be considered, it is necessary to determine the quantum of the equalization payment. Once that figure is known, it then becomes possible to determine whether a transfer is needed at all, and if so, how the transfer is to be made. For the purposes of equalization as codified in the Family Law Act, Ms. Brown must therefore reflect the full value of her pension in her NFP analysis as of the date of separation. That figure, accepted by both parties, is $319,991.82.

[40] In addition, as of the valuation date, the income tax calculated on account of the anticipated pension is to be based on the full value of the pension included in Ms. Brown’s NFP. The disposition cost that would accompany the transfer is something that would also be determined and reconciled at the time of the transfer should that ultimately occur. That determination, however, would be linked to the actual value of the 25 percent interest.

[41] Insofar as the transfer in and of itself is concerned, the Pension Benefits Act, R.S.O. 1990, c.P.8 (PBA), allows for up to 50 percent of the imputed value of a pension, as updated with interest, to be paid to the other spouse: see PBA, ss. 67.3(6) and 67.4(5).

[42] In this instance, setting aside credits, a spousal support set-off and the possible costs implications of the litigation, absent a pension transfer, Ms. Brown faces a significant liquidity issue in the payment of her equalization obligation. The problem would not exist if it were not for the fact that one of the two major assets in Ms. Brown’s NFP statement is her pension, which will vest in the future. In other words, proportionately speaking, it is her pension that is causing a potential financial hardship to Ms. Brown because she must come up with funds today, for an asset that will vest in the future. In the circumstances it is appropriate to preserve to Ms. Brown the option to transfer 25 percent of her pension to enable her to better manage her equalization obligations. That said, once Ms. Brown considers the full financial implications of this judgment it will be for her to determine whether the transfer continues to make financial sense or whether she can satisfy her equalization payment without the need for such a transfer.

[43] Regarding the value of the proposed 25 percent pension transfer, it was not clear to the court if Ms. Brown’s proposed figure of $79,997.96 included interest. In any event, that figure would have to be updated to the date of the actual transfer. The spouse of the plan member may be entitled to interest that accrued from the valuation date to the beginning of the month in which the transfer is made: see Herringer v. Herringer, 2014 ONSC 7291, 124 O.R. (3d) 195. Since the transfer has not occurred, it stands to reason that the figure presented at trial either did not include interest, or if it did, the total figure was not based on the date of disposition. As neither party turned its mind to this specific issue, if the parties are unable to agree on the appropriate monetary figure that would be applied to adjust Ms. Brown’s equalization payment to Mr. Brown, the parties may make further submissions to this court. If Ms. Brown decides against such a transfer, then the 25 percent value is a non-issue.

[44] Finally, I note that s. 67.3(2) of the PBA prescribes the manner in which an eligible spouse may transfer a lump sum from his or her pension plan. Accordingly, if Ms. Brown decides to proceed with the proposed transfer, it is to be undertaken in accordance with the requirements of the PBA.

d) Business Interests

[45] The next item of significant contention between the parties concerns the valuation of Mr. Brown’s business and how it should be treated in his NFP statement. Mr. Brown listed a negative value for his business on account of the outstanding GST liability of $43,120.00. His counsel relied on the Ontario Court of Appeal’s decision in Buttar v. Buttar, 2013 ONCA 517, 116 O.R. (3d) 481, at paras. 18 and 21, to suggest that the tax liability of a business would be included in the disposition costs of a business and accordingly that liability should be included in the assessment of the overall value of a business.

[46] Ms. Brown suggested that the court impute a value of $50,000 to Mr. Brown’s business on account of representations he made to Ms. Brown at various times during the course of the marriage that he could sell his business for that sum. Ms. Brown advanced that position even though her own expert, who undertook a business valuation and who was called to testify, gave the business a “nil” value. Ms. Brown’s explanation as to why the court should ignore her own expert and prefer her own assessment rested on the overriding view that her expert did not benefit from Mr. Brown’s full co-operation and that he worked with only limited disclosure. Had Mr. Brown provided full disclosure, a business value of $50,000 would be a supportable value.

[47] I have difficulty with both positions for the following reasons. First, regarding Ms. Brown’s position, I am unable to disregard the evidence of her own expert. Even with Mr. Bhardwaj’s limited terms of reference, his analysis was nonetheless sound, reasonably comprehensive, and convincing. He was neither hostile nor incompetent. Principal among those conclusions was his observation that Mr. Brown’s business was essentially just Mr. Brown, and that there was nothing to sell, except, for example, a client list or a particular expertise. Customers came to Mr. Brown for his expertise and knowledge. Ms. Brown chose to lead that evidence, knowing full well, or at least her counsel understood, that the expert gave the business a “nil” value.

[48] In contrast to Mr. Bhardwaj’s analysis, Ms. Brown’s proposed figure of $50,000 had no foundation other than Mr. Brown’s past representations to her in the past. But Ms. Brown, through her counsel, has also urged this court not to believe anything coming from Mr. Brown, as he could not be trusted for anything. How could the court give any weight to Ms. Brown’s evidence concerning Mr. Brown’s musings at various times about the value of his business, when Ms. Brown’s overall thesis, as articulated by her counsel, was to ask the court to disbelieve anything Mr. Brown had to say because he was a liar and a cheat? There is no question that Mr. Brown presented with serious credibility issues. His conduct during the marriage, his extra-marital activities with prostitutes and escorts, his affair towards the end of his marriage, and his significant debts to Revenue Canada both personally and on account of the G.S.T. he collected in his business but did not remit, all while he also ran for office both provincially and municipally, were activities that were deeply troubling and so absolutely contrary to the kind of “gentleman” that Mr. Brown tried to portray in court. To use Mr. Brown’s own word, his conduct was “destructive”. But that finding only compounds the court’s concern with the ability to give any weight to anything that Mr. Brown might have ever said to Ms. Brown or to anyone about the value of his business. He clearly had no concerns about lying to Ms. Brown during the marriage. So how could the court place any weight on the alleged representation? Ms. Brown in effect is telling the court, “don’t believe anything Mr. Brown says, but believe me when I tell you that in the past, contemporaneous with other lies, Mr. Brown’s representation about his business being worth $50,000 was in fact true”. That contradiction is problematic and cannot be reconciled.

[49] Mr. Brown’s analysis, as presented by his counsel, is problematic for different reasons. The case referred to his counsel is not helpful and easily distinguishable. Unlike the treatment of capital gains tax as a cost of disposition, the payment of G.S.T. was on account of monies collected from third parties that ought to have been remitted to the CRA. Somewhere in the analysis of the business, the monies collected by Mr. Brown’s business would have had to be shown and reconciled such that the liability to pay the G.S.T. to Revenue Canada would be cancelled out by the client remittances and collections. There was no evidence before the court showing the collection of those funds. When his accountant, Mr. Jackson was asked about how Mr. Brown handled G.S.T., his accountant initially testified that this was an issue between him and Mr. Brown. When pushed on cross-examination, it became evident that it was a longstanding problem that resulted in certain voluntary disclosures to Revenue Canada so as to avoid the payment of penalties. No other evidence was forthcoming on whether and how that issue was resolved. I fail to see how the G.S.T. debt could be treated as a disposition cost when on the other side of the equation, David Brown & Associates collected the tax from its clients.

[50] Compounding this analysis is the fact that Mr. Brown did not sell his business but merely shut it down. He did not produce his own valuation and but for the G.S.T. issue, he believed that his business had a nil value. That aligns with Mr. Bhardwaj’s view. Accordingly, in terms of Mr. Brown’s NFP statement, Mr. Brown’s company, David Brown and Associates, is to be given a “nil” value.

e) Treatment of the Joint Line of Credit

[51] The parties also disagree on how the court divergent views on how the Court ought to consider the treatment of their joint line of credit. The parties did not dispute that at the time of separation they had a joint TD Canada Trust Line of Credit. They both accessed that account for various expenses related to the matrimonial home and their personal expenses. For example, Ms. Brown recalled that at one point, Mr. Brown withdrew $20,000 from the joint line of credit to pay for his outstanding income taxes.

[52] It is not disputed that Ms. Brown withdrew the sum of $70,000 from this joint line of credit on November 3, 2011. She said that she did that on the advice of her legal counsel at the time and for the purposes of supporting herself, supporting the various household expenses, and securing funds for the anticipated legal fees that would likely be incurred to address her separation. She also noted that when Mr. Brown left the matrimonial home she was concerned about how she would support herself and meet the various household expenses. Ms. Brown accessed an additional sum of $50,000 from the same joint account on April 24, 2013. She said that she needed that sum to cover off legal expenses and to pay for various improvements and maintenance of the matrimonial home in anticipation of its sale. Mr. Brown accessed the sum of $10,000 from the same account on January 18, 2012.

[53] The joint line of credit was frozen at Mr. Brown’s request in May 2013. The matrimonial home was sold on November 26, 2014. The outstanding sums of $120,000 (Ms. Brown’s withdrawals), and $10,000 (Mr. Brown’s withdrawal) for a total of $130,000, were paid in full from the proceeds of the sale. Mr. Brown submitted to the court that following the determination of equalization he should be credited fully with $120,000 on account of the monies Ms. Brown withdrew from the joint line of credit and Ms. Brown should be credited with $10,000 on account of the monies that he withdrew from the joint line of credit. He also submitted that he should be credited for the interest payments that he paid on his own to the joint line of credit from May 2, 2013, until April 1, 2014. Mr. Brown’s overall analysis was linked to whether or not the court would find a resulting trust or a constructive trust in his favour with respect to the matrimonial home. The various models of analysis that were proposed were more confusing to the court than they were helpful.

[54] Ms. Brown disagreed with Mr. Brown’s submissions. She submitted that Mr. Brown should be credited for half of the $120,000, representing his half of the monies that she drew from the joint line of credit and that she should be credited with half of the $10,000 that Mr. Brown withdrew from the same account.

[55] On this subject, and having regard to my finding above of a resulting trust for the matrimonial home, I agree with Ms. Brown’s approach to the credit reconciliation. Recognizing that the line of credit account was a joint account, it is appropriate that the party who drew down on the joint line of credit post-separation is the party who has to pay back the sum owing on that account. In other words, if the debt on the joint line of credit were still owing to the bank, the person who drew down on the account would have to pay that outstanding sum back to the bank. Since the debt was satisfied from the proceeds of the sale of the matrimonial home, and since those proceeds would otherwise be shared equally between the parties, Ms. Brown must reimburse Mr. Brown for the 50 percent share of the net proceeds he would have received, but for the repayment of the debt. Similarly, Mr. Brown must reimburse Ms. Brown for the 50 percent share of the net proceeds she would have received, but for the repayment of his debt.

[56] To illustrate the point more clearly, working with Ms. Brown’s draws totalling $120,000 and relying on the principle that the net proceeds are shared equally between the parties, Ms. Brown must reimburse Mr. Brown for her use of his 50 percent share to pay down the $120,000; in other words, Ms. Brown must credit Mr. Brown with the sum of $60,000. In the same vein, Mr. Brown must reimburse Ms. Brown for his use of her 50 percent share to pay down the $10,000. That means that Ms. Brown must pay to Mr. Brown a net credit of $55,000 on account of the line of credit reconciliation.

f) Other Liabilities

[57] Ms. Brown took issue with the inclusion of Mr. Brown’s personal income tax debts to Revenue Canada in his NFP. She argued that he should not be allowed to have the benefit of those debts on equalization given his deliberate failure to meet his obligations. Ms. Brown also argued that at a time when Mr. Brown should have been paying his taxes, he chose to divert his funds to pay for prostitutes and escorts. Ms. Brown acknowledged that she became aware of Mr. Brown’s tax indebtedness during the marriage and was not very happy about it. She also said that she did not take any steps to address the issue.

[58] Mr. Brown opposed this submission on the basis that both he and Ms. Brown enjoyed the benefit of using funds that should have been paid to Revenue Canada. Counsel for Mr. Brown went as far as to suggest that Ms. Brown could have left the marriage sooner in response to Mr. Brown’s persistent difficulties with his payments to Revenue Canada.

[59] The arguments raised by Ms. Brown on this issue go to the question of whether there should be an unequal division of the net family property of the parties and not whether Mr. Brown’s debt to the CRA ought to be excluded from Mr. Brown’s net family property statement. Such an adjustment would follow the determination of the equalization figure. It follows that Mr. Brown’s net family property statement must reflect the true value of his assists and liabilities and that includes the full debt of $39,270.51 to the CRA.

g) Unequal Division of Net Family Property

[60] The unequal division of the net family property is addressed in s. 5(6) of the FLA which provides:

The court may award a spouse an amount that is more or less than half the difference between the net family properties if the court is of the opinion that equalizing the net family properties would be unconscionable, having regard to,

(a) a spouse’s failure to disclose to the other spouse debts or other liabilities existing at the date of the marriage;

(b) the fact that debts or other liabilities claimed in reduction of a spouse’s net family property were incurred recklessly or in bad faith;

(c) the part of a spouse’s net family property that consists of gifts made by the other spouse;

(d) a spouse’s intentional or reckless depletion of his or her net family property;

(e) the fact that the amount a spouse would otherwise receive under subsection (1), (2) or (3) is disproportionately large in relation to a period of cohabitation that is less than five years;

(f) the fact that one spouse has incurred a disproportionately larger amount of debts or other liabilities than the other spouse for the support of the family;

(g) a written agreement between the spouses that is not a domestic contract; or

(h) any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of property.

[61] Furthermore, the court’s discretion to order unequal division pursuant to s. 5(6) is “strictly limited”: Serra v. Serra, 2009 ONCA 105, 93 O.R. (3d) 161, at para. 57; Ward v. Ward, 2012 ONCA 462, 111 O.R. (3d) 81, at paras. 27-28. The Ontario Court of Appeal has stated the threshold of unconscionability under s. 5(6) is “exceptionally high”, and to cross the threshold, an equal division of net family property must “shock the conscience of the court”: Serra, at para. 47; Symmons v. Symmons, 2012 ONCA 747, 298 O.A.C. 224, at para. 36. In Lo v. Lo, 2011 ONSC 7663, 15 R.F.L. (7th) 344, McDermot J. observed, at para. 236, “where the amount of the equalization payment itself is not shocking, there must be other circumstances which combine with the result in order to ‘shock the conscience of the court.’”

[62] Mr. Brown’s counsel relied on Consentino v. Consentino, 2015 ONSC 271, 55 R.F.L. (7th) 117 to argue that Mr. Brown's conduct, however morally objectionable did not cross the unconscionable conduct threshold contemplated by s. 5(6) of the FLA. He argued that Mr. Consentino’s conduct was far more dramatic and reprehensible than Mr. Brown’s conduct and yet that did not amount to unconscionable conduct or result in an unequal division of the net family property. By analogy, Mr. Brown should not be subjected to an unequal division either.

[63] Having regard for the exceptionally high unconscionability threshold under s. 5(6) of the FLA, on the evidence before me, I am unable to conclude that Mr. Brown’s conduct crosses it to then support an unequal division of the property in favour of Ms. Brown. To begin with, in coming to this conclusion it is important to note that for the purposes of an unequal equalization payment, Mr. Brown’s conduct cannot be considered in the abstract but rather in relation to the impact of that conduct on his financial position. On this particular point, it is too simplistic for Mr. Brown to rely on Consentino, Consentino v. Consentino, 2015 ONSC 271, 55 R.F.L. (7th) 117, for the proposition that since somebody else’s allegedly more reprehensible misconduct did not cross the unconscionable threshold, then neither should Mr. Brown’s allegedly less reprehensible conduct. That argument misses the more material finding that Mr. Consentino’s extra-marital activities did not have any significant impact on his debts and liabilities. That, together with Mrs. Consentino’s awareness of the affairs gave shape to that Court’s conclusions or unconscionability.

[64] In this instance, the evidence concerning the impact of Mr. Brown’s extra-marital activities on his debts and liabilities is inconclusive and in any event if there was an impact, its magnitude is not significant enough to support an unequal division of the net family property. First, I find that at least some of Mr. Brown’s CRA debt pre-dated Mr. Brown’s extra-marital activities. Second, I find that Ms. Brown was aware of Mr. Brown’s debt to the CRA. Mr. Jackson described it as a chronic problem and Ms. Brown alluded to that characterization. Third, in the time period that Mr. Brown accrued his debt, the couple enjoyed luxurious vacations and a very comfortable lifestyle. Although I strongly disagree with the suggestion that Ms. Brown should have walked away from the marriage as a response to Mr. Brown’s chronic debt problem with CRA, she could have refused to participate in some of the more luxurious travels or activities, or in any event engaged in a conversation about how the debt ought to be managed. There was no evidence before the court that she took any such or similar steps being taken.

[65] My inability to evaluate the impact of Mr. Brown’s extra-marital activities on his debts and liabilities is further impeded by the limited evidence on the breakdown of the accumulated debt of approximately $39,000. There was some evidence that the sum of $2,560.52 accounts for penalties and interest but there was no further analysis other than the observation that the debt arose from the years 2007, 2010 and 2011. Although the evidence is sufficient to conclude that some monies Mr. Brown spent on his extra-marital activities would have gone a substantial way to relieving his CRA debts, it is insufficient to conclude that those monies would have had a significant impact on the reduction of Mr. Brown’s debt.

[66] In the totality, and to be clear, although Mr. Brown’s personal conduct was morally reprehensible, not only towards his wife but to his electorate, given his multiple attempts to run for public office at the same time as his growing debt to CRA, I am unable to conclude that it can be characterized as so unconscionable so as to allow for an unequal division of the net family property in favour of Ms. Brown.

g) Equalization and Credits

[67] To the extent that there are additional minor discrepancies in each party’s respective NFP reconciliation that have not been specifically addressed in my reasons above, I have preferred the valuations proffered by Ms. Brown.

[68] In the totality, Ms. Brown’s NFP comes to $463,074.28. Mr. Brown’s NFP comes to $247,993.72. The equalization payment therefore owing by Ms. Brown comes to $107,540.28.

[69] As also noted above, Ms. Brown owes Mr. Brown the sum of $55,000 on account of the joint line of credit reconciliation. Finally, each party is entitled to 50 percent of the appreciated value of the matrimonial home from the date of valuation to the date of sale, meaning that each will get a credit of $74,750. If there are additional net proceeds of the matrimonial home that the parties are unable to reconcile, the may seek this Court’s assistance, although such division, in principle should be on an equal basis.

SPOUSAL SUPPORT

[70] Spousal support is the second issue over which the parties have significantly divergent views both with respect to entitlement and to Mr. Brown’s income. There are two components to this issue. The first concerns entitlement to spousal support and the second concerns the quantum of such support.

a) Position of the Parties

[71] Ms. Brown claimed that she is entitled to both compensatory and non-compensatory spousal support and that such support ought to be determined on the basis of an imputed income of $200,000 to Mr. Brown. She also submitted that the high acrimony and hostility between the parties would support a lump sum payment of such support to allow her to make a clean break from Mr. Brown.

[72] Mr. Brown disputed any award for spousal support. He submitted that Ms. Brown did not suffer any hardship as a result of the marital breakdown; to the contrary, she was better off than he was. Mr. Brown also testified that he was the one who had to leave the matrimonial home, that he has had to be supported by his girlfriend, that he continues to have very significant debts to address, and that his inability to access his assets has been most compromising to him. Mr. Brown also challenged the suggested imputation of income. He submitted that he was back to being a salaried employee working for an acquaintance, and that his income is no more than $85,000. Mr. Brown also admitted, in his reconciliation of his business expenses, wherever he could, he increased those figures so as assist him with his position in the matrimonial proceedings.

i) Ms. Brown’s Evidence

[73] In support of her claim, Ms. Brown led evidence that Mr. Brown was the primary income-earning spouse. She testified that they both worked and deposited their earnings in a joint account but that Mr. Brown was the one who took care of all the household payments, entertainment, vacations, and other household-related expenses. This was largely uncontested by Mr. Brown.

[74] Ms. Brown also testified that she supported Mr. Brown’s ambitions fully during their 19 year marriage, that she continued to work to ensure a steady income while Mr. Brown started up his business, she supported Mr. Brown through several unsuccessful electoral campaigns, and she had eight unsuccessful pregnancies including two that followed in-vitro fertilization treatments. Ms. Brown also testified that she suffered from bilateral tendonitis and de Quervain’s syndrome, that she has two herniated discs in her neck which affected her ability to work without pain, and that she required various work accommodations to meet her employment requirements.

[75] Ms. Brown explained to the court that she would have liked to pursue a Master’s degree in Criminology but Mr. Brown discouraged her from doing so because that would jeopardize their financial position given his ambitions and aspirations. In other words, Mr. Brown wanted to ensure that she would maintain a steady income source, together with benefits and a pension plan, for both of them while he pursued his political goals and ambitions, as well as his business.

[76] On the subject of her own earning capacity, Ms. Brown testified that although she had a full-time position as a Welfare Fraud Investigator for the Region of Peel and since separation her salary increased significantly to an annual sum of $69,849, she had reached her maximum earning potential for the position she occupied. She also believed that her career advancement and her ability to pursue other opportunities in the future would be impacted by her health limitations and the need for various accommodations.

[77] On the quantum of support, Ms. Brown testified that Mr. Brown’s declared income of $50,000 was entirely unsupportable given the lifestyle that they had over the 19 years of marriage. She testified that over the years, Mr. Brown’s business and financial records were never a true reflection of his actual income. Oftentimes Mr. Brown’s clients paid him in cash. She gave the example of one developer who undertook substantial landscaping for their garden in exchange for Mr. Brown’s services. She estimated the work to have a value of $50,000. Ms. Brown also testified that Mr. Brown relied on cash payments to run his various campaigns. Ms. Brown recounted one occasion when Mr. Brown handed her an envelope of $5,000 and asked her to give it to a campaign worker, with whom he subsequently had an affair. Finally, Ms. Brown said that Mr. Brown always kept a stash of cash about an inch or so thick in his night table.

[78] In contrast to Mr. Brown’s contention that for a number of years he only earned $50,000 and that since December 2014 his salary was set at $85,000, Ms. Brown pointed to a lifestyle that had them taking multiple annual vacations, regular meals at restaurants, and generally a very comfortable lifestyle. On the basis of all that evidence, Ms. Brown asked that the court impute an income of at least $200,000 for the purposes of calculating the appropriate spousal support.

[79] Mr. Bhardwaj also testified on Mr. Brown’s probable income. As noted above, Ms. Brown retained him as an accounting expert and he testified in support of her claims. Mr. Bhardwaj was limited in his analysis by Mr. Brown’s incomplete disclosure. However, on the records before him, Mr. Bhardwaj concluded that Mr. Brown’s income was in the range of $95,000, as opposed to the $50,000 that Mr. Brown claimed. Mr. Bharwaj supported that conclusion by engaging in a detailed analysis of Mr. Brown’s business activities, the General Ledger for David Brown and Associates, business expenses and personal expenses.

[80] Among his observations, Mr. Bhardwaj noted that Mr. Brown did not separate his business from his personal expenses, though following some additional disclosure, Mr. Bhardwaj acknowledged that there appeared to be a way to identify the differences. Mr. Bhardwaj explained that he was not asked to conduct a forensic analysis. Nor was he asked to evaluate the legitimacy of any expense being characterized as business or personal. More significantly, Mr. Bhardwaj noted that Mr. Brown took money from his company for his personal use as he needed such funds. In his overall reconciliation of Mr. Brown’s figures, he noted personal lifestyle expenses in 2010 in the range of $76,000 or so and in 2011 in the range of $92,727.55. Those figures, to be clear, were based on what Mr. Brown chose to disclose.

[81] Ms. Brown also asked the court to make a lump sum order on spousal support. She raised various reasons for such an order, her principal concern being the hostility and high level of acrimony between the parties. She speaks of the need for a clean break and a desire to terminate all contact with Mr. Brown.

ii) Mr. Brown’s Evidence

[82] In support of his opposition to any claim for support, counsel for Mr. Brown argued that Ms. Brown did not experience any difficulty meeting her needs. He relied on his cross-examination of Ms. Brown, when in effect she said that she was able to meet her needs. She also said that from October 2012 until February 2013, Mr. Brown deposited monies in their joint account. He also relied on Ms. Brown’s evidence that between March 2013 and April 2014 her financial situation did not change, even though Mr. Brown stopped making payments into the joint account. Finally, counsel argued that Ms. Brown’s lifestyle did not change as she took vacations to Mexico, Brussels and Fort Lauderdale.

[83] Counsel for Mr. Brown went further and asked the court to conclude that Ms. Brown’s lifestyle improved dramatically post-separation, expressing the view that her answers concerning her lifestyle were evasive, that she failed to call the first valuator whom she retained to value Mr. Brown’s income and then did not advise a subsequent valuator of the work done by the first valuator, and that although she undertook to call three witness to speak to Mr. Brown’s lifestyle during his marriage, she elected not to do so.

[84] On compensatory support, Mr. Brown submitted that such a claim is extremely difficult to make in a marriage where there are no children and where both parties worked throughout the marriage without one leaving a career to look after the other spouse. Mr. Brown did not believe that Ms. Brown made any disproportionate sacrifice in their marriage to warrant compensatory spousal support. He did not believe that she suffered any loss of earning capacity as a result of having to accommodate his lifestyle preferences and professional aspirations. In short, Mr. Brown concluded that Ms. Brown did not make a marital investment that then resulted in a post-marriage reduction in earning capacity for her.

[85] Regarding Ms. Brown’s various medical conditions, and the corresponding need for accommodations and limitations on future advancement, counsel for Mr. Brown took the position that Ms. Brown’s refusal to disclose her medical records to support her contentions compromised that aspect of her claim as it was impossible to verify her various alleged conditions. He asked that the court not take any of that testimony into account as part of its analysis of Ms. Brown’s support entitlement.

[86] Insofar as his income was concerned, Mr. Brown was steadfast in his position that his income during the marriage did not exceed $50,000. He explained that he had recently become an employee of David Small and that he was earning a salary of $85,000. Mr. Brown provided no evidence other than a general letter of employment to substantiate his current employment arrangement.

[87] Mr. Brown testified that when he ran in the provincial elections, he was mindful of the fact that an MPP’s salary was approximately $120,000 but that he was not running for the money; rather, he hoped to make a difference. He said that 2011 and 2012 were busy years for his business, that he paid his assistant $38,000 as well as bonuses of up to $2,000 annually and that he kept “a little stash of money” at home. He described that “stash” to be between $100 and $200. Finally, Mr. Brown admitted that as at the time of the trial he had not remitted his 2013 and 2014 income taxes.

[88] Mr. Jackson, who was Mr. Brown’s accountant, also testified. He reviewed the accounting related to Mr. Brown’s business activities. He verified various advances made by Mr. Brown’s business to Mr. Brown, he testified at some length about Mr. Brown’s income tax liabilities, and he acknowledged that Mr. Brown had not asked him to prepare the 2013 and 2014 returns.

b) Legal Principles

[89] The claim advanced by Ms. Brown engages the need to determine three questions: entitlement, quantum and the circumstances that permit the payment of a lump sum.

[90] Entitlement to spousal support is informed by ss. 15.2(1)-(6) of the Divorce Act, R.S.C. 1985, c.3. Those subsections provide:

15.2 (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.

(2) Where an application is made under subsection (1), the court may, on application by either or both spouses, make an interim 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, pending the determination of the application under subsection (1).

(3) The court may make an order under subsection (1) or an interim order under subsection (2) for a definite or indefinite period or until a specified event occurs, and may impose terms, conditions or restrictions in connection with the order as it thinks fit and just.

(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.

[91] Those sections are complemented by s. 33(9) of the Family Law Act, R.S.O. 1990, c. F.3, which provides:

(9) In determining the amount and duration, if any, of support for a spouse or parent in relation to need, the court shall consider all the circumstances of the parties, including,

(a) the dependant’s and respondent’s current assets and means;

(b) the assets and means that the dependant and respondent are likely to have in the future;

(c) the dependant’s capacity to contribute to his or her own support;

(d) the respondent’s capacity to provide support;

(e) the dependant’s and respondent’s age and physical and mental health;

(f) the dependant’s needs, in determining which the court shall have regard to the accustomed standard of living while the parties resided together;

(g) the measures available for the dependant to become able to provide for his or her own support and the length of time and cost involved to enable the dependant to take those measures;

(h) any legal obligation of the respondent or dependant to provide support for another person;

(i) the desirability of the dependant or respondent remaining at home to care for a child;

(j) a contribution by the dependant to the realization of the respondent’s career potential;

(k) Repealed: 1997, c. 20, s. 3 (3).

(l) if the dependant is a spouse,

(i) the length of time the dependant and respondent cohabited,

(ii) the effect on the spouse’s earning capacity of the responsibilities assumed during cohabitation,

(iii) whether the spouse has undertaken the care of a child who is of the age of eighteen years or over and unable by reason of illness, disability or other cause to withdraw from the charge of his or her parents,

(iv) whether the spouse has undertaken to assist in the continuation of a program of education for a child eighteen years of age or over who is unable for that reason to withdraw from the charge of his or her parents,

(v) any housekeeping, child care or other domestic service performed by the spouse for the family, as if the spouse were devoting the time spent in performing that service in remunerative employment and were contributing the earnings to the family’s support,

(v.1) Repealed: 2005, c. 5, s. 27 (12).

(vi) the effect on the spouse’s earnings and career development of the responsibility of caring for a child; and

(m) any other legal right of the dependant to support, other than out of public money.

[92] Subsection 15.2(6)(a)-(d) speaks in particular to four objectives that inform the “equitable sharing of the economic consequences of marriage or marriage breakdown”: see Moge v. Moge, 1992 25 (SCC), [1992] 3 S.C.R. 813. They concern the recognition of the economic advantages and disadvantages to the spouses that result from the marriage breakdown as well as the apportionment of financial consequences, relief from economic hardship, and in so far as is practicable, the promotion of economic self-sufficiency for both spouses. A marriage is to be regarded as a joint endeavour. The longer the relationship, the greater the presumptive claim to equal standards of living upon its dissolution: see Moge, at p. 870.

[93] In the context of the facts of this case, it is important to recognize that even where a spouse has the capacity to be self-sufficient, if the spouse’s ability to enjoy the same standard of living as the one during the relationship is adversely affected by the breakdown, then compensatory support is appropriate to ensure that the economic impact of the breakdown is shared in an equitable manner: see Wright v. Lavoie, 2014 ONSC 6690, 53 R.F.L. (7th) 96, at para. 67.

[94] It is also significant to recognize the extent of the court’s discretion to consider the particular facts and objectives of the legislation. I note that the Court remarked in Moge, at pp. 866-67:

The exercise of judicial discretion in ordering support requires an examination of all four objectives set out in the Act in order to achieve equitable sharing of the economic consequences of marriage or marriage breakdown. This implies a broad approach with a view to recognizing and incorporating any significant features of the marriage or its termination which adversely affect the economic prospects of the disadvantaged spouse.

[95] The Court also recognized that families did not have to fall strictly within a particular marriage model for one spouse to suffer disadvantages from a marriage and its dissolution. This is especially significant in this case where there seemed to be a distinguishing undercurrent to the effect that, since the Browns were childless, somehow that was relevant to the consideration of Ms. Brown’s entitlement to spousal support. The Supreme Court of Canada, in Moge, at p. 869, expressly recognized that even in childless marriages, where couples make certain decisions during the marriage that results in an economic disadvantage to one of the spouses but an advantage to the other, on the dissolution of the marriage that disadvantaged spouse should be compensated: “Any economic disadvantage to that spouse flowing from that shared decision in the interest of the family should be regarded as compensable” (Moge, at p. 869). Such disadvantages could include the foregoing of career aspirations and career advancements: see also Bracklow v. Bracklow, 1999 715 (SCC), [1999] 1 S.C.R. 420.

[96] On the subject of the quantum of support, and more specifically the determination of Mr. Brown’s income for the purposes of determining spousal support, the principles of imputing income for the purposes of child support (Federal Child Support Guidelines, S.O.R./97-175, ss. 18, 19(1)-(2)) are equally applicable to the determination of income for the purposes of spousal support: see Laurain v. Clarke, 2011 ONSC 7195, 16 R.F.L. (7th) 316; Sobiegraj v. Sobiegraj, 2014 ONSC 2030.

[97] A lump sum payment has been considered to be appropriate in circumstances where the level of acrimony between the parties is such that it would be desirable to terminate ongoing contact between the parties and to encourage a clean break: see Roukema v. Roukema, 1997 CarswellOnt 1003 (Ont. Gen. Div.); Sharpe v. Sharpe (1997), 1997 12236 (ON SC), 27 R.F.L. (4th) 206 (Ont. Gen. Div.). In Sharpe, at para. 47, the Court considered several criteria for such a payment. The two most relevant considerations: the availability of sufficient funds and the desirability to terminate personal contact between the parties. In Davis v. Crawford, 2011 ONCA 294, 106 O.R. (3d) 221, the Ontario Court of Appeal dispelled the motion that such payments should be restricted to very unusual circumstances.

c) Findings

i. Entitlement to Spousal Support

[98] Having regard for the above legal principles and the evidence before this court, I turn to my findings of fact and corresponding application of the legal principles.

[99] Beginning with entitlement to spousal support, I conclude that Ms. Brown is entitled to spousal support. Going forward, Ms. Brown will endure some economic disadvantages that result from her marriage to Mr. Brown and its breakdown. Absent some spousal support, she will face economic hardship. The immediate effects of the separation were blunted to some extent by a) some support that she received from Mr. Brown in the first several months following the separation, b) her withdrawal of substantial funds from the parties’ joint line of credit, c) her cashing in of RRSPs, and d) the sale of the matrimonial home. An increase in Ms. Brown’s salary post separation also helped to cushion, to some limited extent, that transition. I note, however, that some of these steps were temporary self-help measures. The RRSP savings have been spent and the funds from the joint line of credit have been paid back from the proceeds of the matrimonial home. Mr. Brown will be made whole with the reconciliation outlined above and Ms. Brown’s repayment to him of $55,000.

[100] Ms. Brown’s reality is that after nineteen years of marriage and a preceding six-year relationship, for a total of a twenty-five year relationship with Mr. Brown, Ms. Brown has to start over. I find her submission that she has to struggle sometimes to put food on the table rather exaggerated. I highly doubt that her hardship will come down to such a dramatic effect. However, I do find that on her own, she will have difficulties maintaining the standard of living that she enjoyed with Mr. Brown.

[101] I also find that Ms. Brown was a fully supportive and dedicated spouse during the whole twenty-five year relationship. She agreed to put her professional aspirations to the side in favour of supporting Mr. Brown’s aspirations to start up his own business, which he did very successfully, and to run in five elections, which he did with less success. That was her marital investment and both she and Mr. Brown enjoyed the returns on that investment as it enabled them both to enjoy a relatively luxurious lifestyle that included regular and multiple travels to five-star destinations, housekeeping support at home, regular meals at restaurants, the use of two vehicles and owning a home in a very comfortable neighbourhood.

[102] Mr. Brown’s resulting successful business together with Ms. Brown’s contributions also created the foundation for Mr. Brown to be able to run multiple electoral campaigns without having to worry about the risk to his financial position. I do not view the unsuccessful outcome of those election campaigns as a reflection of a lesser effort on either of the Browns’ part, as election outcomes are dependent on a multitude of variables, some of which are in a candidate’s control but many are not. I highlight this point only to underscore Ms. Brown’s significant support of Mr. Brown’s political aspirations. I accept Ms. Brown’s testimony regarding her efforts and I note that although her closed personality was not terribly suited for campaigning and she did not enjoy the experience, she stood by Mr. Brown in all his efforts. In terms of the return on that particular marital investment, Mr. Brown may have lost his campaigns, but he gained name recognition in his community and that in turn helped him in building the clientele for his business.

[103] I accept Ms. Brown’s testimony that she wanted to return to school to complete a Master’s degree in Criminology but that Mr. Brown did not support her aspirations. Such a career trajectory for Ms. Brown would have compromised Mr. Brown’s aspirations to start up his own business. It would have also been problematic in the face of his political aspirations and the need to have a guaranteed income while he pursued those ambitions. Ms. Brown explained:

Q. Did your marriage in any way impact your career?

A. My marriage did impact my career. I wanted to return to school, I was looking at completing my Masters’ degree in criminology. That was something I discussed with my husband. He was not supportive of that. He did not want me returning to school to obtain my Masters’ degree. He wanted me to stay at my steady government job where I had a good pension plan and benefits. At that point Mr. Brown had left his career with the City of Mississauga and had started his own business, so he was self-employed and he was also starting to have political interests, as well. And so I stayed at my job so that my husband could pursue his goals and I’d hoped that he would be successful in his political aspirations so then I could look at pursuing my goals.

Q. You mentioned politics specifically, I mean, in what way would that impact your own goals?

A. Mr. Brown was self-employed at that point, so when Mr. Brown was going through a political, an election campaign, I would have a steady job during that time and he would not really be working very much during that period so we would rely more on my income. As well I had the benefits, the pension plan and with Mr. Brown being self-employed he didn’t have that. And he made it very clear to me that he did not want me to pursue my Masters’ Degree and I felt that that was a decision a husband and wife made together and was not in agreement with that.

[104] Ms. Brown’s testimony aligns with the evidence concerning the parties’ nineteen years of marriage. Ms. Brown maintained a stable income and she also had benefits and built up a good pension. Although Mr. Brown was unsuccessful in his electoral campaigns, I find that Mr. Brown’s business was very successful. It was so successful that in his testimony, Mr. Brown indicated that when he ran on the various campaigns, he could keep his business going with the assistance of one employee. The relatively luxurious lifestyle that the parties came to enjoy during their marriage as Mr. Brown’s business grew underscores the value of Ms. Brown’s marital investment.

[105] I also find that Ms. Brown’s eight failed pregnancies, including two that were the result of in-vitro fertilization treatments, are relevant to my overall consideration of Ms. Brown’s contribution to the marriage and to the subject of spousal support. Ms. Brown’s multiple attempts to have a child were very significant. They cannot be ignored or minimized by their outcome. Such efforts take a significant physical and mental toll on the mother and that has to be recognized. In my view she did everything she could to have a family.

[106] In making these findings, I have considered and rejected a number of Mr. Brown’s contentions regarding Ms. Brown’s contributions to their lifestyle and activities during the marriage and her subsequent financial situation. Mr. Brown’s contention that Ms. Brown’s lifestyle had actually improved following the separation was founded on very selective extracts from Ms. Brown’s testimony in court. Although there were instances in her testimony when Ms. Brown seemed to exaggerate the extent of her hardship, there is no question in the court’s mind that she is facing economic hardship. Some of that hardship will result from the substantial equalization payment that she will have to make, which includes Ms. Brown’s accumulated pension. Mr. Brown will continue to receive the benefit from those sacrifices by sharing in Ms. Brown’s pension.

[107] More significantly, in advancing the position that Ms. Brown is in a better financial position than she was during the marriage, Mr. Brown seemed to forget that he supported Ms. Brown for almost 16 months following the separation. On this particular point, I find that Mr. Brown’s payments between October 2011 and February 2013 amounted to a combination of spousal support and payment for the various household expenses. The sum total of those monthly contributions was what was needed for Ms. Brown to continue to maintain her lifestyle and to maintain the matrimonial home. Mr. Brown knew that. He only stopped those payments when he came to realize that Ms. Brown had drawn funds from the joint line of credit, thereby obtaining access to funds from a different source.

[108] In suggesting that Ms. Brown was better off after the marriage, Mr. Brown also failed to take into account some of Ms. Brown’s temporary self-help measures, for which Mr. Brown will be reimbursed as a result of this judgment. There is no question that Ms. Brown did try to maintain the lifestyle she was accustomed to over the preceding twenty-five years or so. But she did so with funds that she did not really have. She is entitled to maintain a lifestyle in line with the lifestyle she enjoyed when she was married. She will only be able to do so with a spousal support contribution from Mr. Brown.

[109] Mr. Brown’s questioning of Ms. Brown’s professional aspirations and the further suggestion that a Master’s degree would not have put Ms. Brown in a better financial position, while relevant in the overall analysis, was mean-spirited and was used to divert the court’s attention away from Ms. Brown’s actual contributions to the marriage. It was raised in support of the contention that Ms. Brown did not do anything extraordinary in the marriage to merit spousal support. It did not seem to occur to Mr. Brown that he would likely not have been able to take on the various risks he did both professionally and personally without the knowledge that he could fall back on his wife’s basic but secure salary, along with her benefits and her pension.

[110] The reality is that Mr. Brown had no evidence to support his contention that a Master’s degree would not have improved Ms. Brown’s own professional and career aspirations, or that Ms. Brown did not actually have such ambitions. I recognize that Ms. Brown agreed that she had not looked into the types of opportunities that she might have obtained if she had a Master’s degree in Criminology. However, I do not consider the absence of such evidence to be fatal to the overriding fact that Ms. Brown agreed to stay in her position as a government employee so as to maintain a stable income, to maintain benefits for both her and Mr. Brown and to acquire a substantial pension. That agreement, in and of itself, compromised Ms. Brown’s ability to pursue her own professional aspirations and to secure a better financial position post-separation.

[111] I also note that on the evidence before the court, Ms. Brown received a substantial increase in her salary after her separation such that her income increased from approximately $54,000 to $69,000. That, however, is not to be taken to reflect an improvement post-separation to Ms. Brown’s overall financial position. Viewed against Ms. Brown’s overall earning capacity, the position she holds, and the long-term income prospects, I accept Ms. Brown’s evidence that she has plateaued in her position such that she is very unlikely to obtain any future promotions or any substantial increase in her earning capacity. The increase is relevant to the quantum of spousal support, as I explain below, but it does not affect my conclusions on entitlement to such support.

[112] On the subject of children and my findings concerning the implications of the eight failed pregnancies, I am unable to accept Mr. Brown’s equation of the being childless and its implications on spousal support. Mr. Brown equated the awarding of spousal support to having to care for children. In both the written and the oral submissions, his argument did not go very much past the bald suggestion that since they did not have any children, Ms. Brown should not receive any spousal support. Underpinning that position was a clear resentment of being childless that Ms. Brown reflected in her testimony and which Mr. Brown did not deny:

Mr. Brown felt that he had lost the election because we didn’t have children and I, obviously, was not able to produce children and he felt that the voters were looking for a family man, someone with children and that he was placing a lot of blame on him losing the election on the fact that we were not able to have children.

[113] In advancing the position that Ms. Brown was childless and therefore not entitled to spousal support, Mr. Brown made no mention whatsoever of Ms. Brown’s eight pregnancies. The inability to have children does not automatically eclipse any entitlement to spousal support. The analysis is far more complex than a simple zero-sum approach of children/no children.

[114] As I noted in my review of the legal principles above, courts have recognized that even where couples are childless, there are economic advantages and disadvantages that result from the marriage breakdown, there ought to be economic relief from economic hardship, and steps should be taken to promote the self-sufficiency for both spouses. In this instance, Ms. Brown’s repeated attempts to have children and the toll that this took on her represents just one of the many elements of her marital investment that ought to be taken into account when considering her entitlement to spousal support.

[115] Finally, with respect to Ms. Brown’s medical conditions and the alleged limitations on her earning capacity and employment, I find that they are relevant considerations to be factored into the overall analysis on entitlement. The limited evidence that Ms. Brown chose to lead on the issue makes it difficult to gauge the extent of the impact that Ms. Brown’s conditions will have on her future earning capacity, or to make any finding.

[116] Ms. Brown told the court about her various conditions, the most important being a workplace injury that required her to miss months of work, the two herniated discs, her bilateral tendonitis, and the de Quervain’s syndrome. Ms. Brown also referenced her cancer diagnosis and the fact that she had to undergo chemotherapy.

[117] Counsel for Mr. Brown took issue with these particular allegations and asked that the court not give the evidence any weight because Ms. Brown did not produce any reports from specialists or other treating physicians to verify her various conditions. He objected to any evidence being led regarding Ms. Brown’s cancer because there had been no disclosure whatsoever on that point. Counsel for Ms. Brown did not pursue that particular condition further. At the same time however, Mr. Brown acknowledged that Ms. Brown was being accommodated at work on account of her injuries and that she received WSIB compensation for her non-economic loss.

[118] Ms. Brown justified her failure to provide any supporting evidence about her various conditions on the view that Mr. Brown was fully aware of her conditions and that the only reason he was seeking disclosure of her medical file was to invade her privacy.

[119] The exchange between the parties on the subject of Ms. Brown’s medical conditions was revealing in more ways than one. Their respective approaches reflected their bitterness towards each other, their anger, and their complete mistrust. Mr. Brown’s suggestion, through his counsel’s written submissions, that Ms. Brown’s income ought not to be impacted by her medical conditions given the accommodations that her employer has provided, acknowledged, in effect, some of Ms. Brown’s limitations. But there was no evidence to suggest that an accommodation today will continue to respond to Ms. Brown’s limitations in the future. On Ms. Brown’s end, her resistance to any disclosure, while understandable to some extent, left the court with a limited understanding of the full extent of her limitations and the potentially negative impact on her future earning capacity. Mr. Brown’s admissions on the subject is sufficient for the court to take into account Ms. Brown’s medical limitations and to make an award that extends over a longer period than would otherwise be appropriate. But Ms. Brown’s resistance to fuller disclosure limits the court to a mid-range award as opposed to something more significant.

ii. Quantum of Spousal Support

[120] Having established entitlement to spousal support, I turn to the quantum of such support. That requires me to make findings on the parties’ respective incomes. For Ms. Brown, there is no disagreement that her income is $69,849.

[121] For Mr. Brown, I am unable to accept his contention that his income during the marriage was limited to an annual sum of $50,000 and that the increase to $85,000 merely post-dated his separation from Ms. Brown. The evidence before me simply does not support such a contention. I am also unable to accept Ms. Brown’s contention that I impute Mr. Brown’s income at $200,000. That suggestion is rich to say the least and is unfounded by the evidence before the court.

[122] On the evidence before me, I am prepared to impute an income of $95,000 to Mr. Brown. That conclusion is supported by the following findings. First, Mr. Brown built a successful business that enabled both him and Ms. Brown to enjoy a very comfortable life together. The kinds of activities that they did together, such as travelling, enjoying five-star destinations, and eating out regularly, are just a few indicators of the comforts they enjoyed and expenses they incurred. It is highly doubtful that they would be able to afford such comforts, in addition to having to pay for their home, starting up a business, and running for multiple elections on the income figures suggested by Mr. Brown. On the other hand, a combined income in the range of $150,000 would allow for the noted expenses.

[123] Further support for the imputed figure is found in Mr. Bhardwaj’s analysis. He suggested, based on his review of the documents that were made available to him, that Mr. Brown earned an income of $95,000 in 2011. As I noted above, I found Mr. Bhardwaj to be credible and helpful to the court even with the limited terms of reference that he was asked to employ. I note the caution by Ms. Brown’s counsel that Mr. Bhardwaj’s analysis was limited by Mr. Brown’s incomplete disclosure as well as his failure to disclose fees he received in cash.

[124] My difficulty with that caution, while valid, is that the evidence before me was insufficient to quantify the extent of such cash fees and payments. I recognize that Mr. Brown did not contest Ms. Brown’s example of the $50,000 worth of landscaping to their matrimonial home that they received from a developer in exchange for Mr. Brown’s services. Mr. Brown’s acknowledgment that he kept a “stash” of money at home was of some significance, even though Mr. Brown then made a feeble attempt to distance himself from that statement by indicating that the stash was about $100 - $200. I am also prepared to draw a negative inference against Mr. Brown’s limited disclosure. Finally, Mr. Brown’s expenses for his extra-marital activities which I find were in the range of $1,000 to $2,000 monthly over a two year period also speak to the scope of Mr. Brown’s personal expenses and by implication his income. However, the court was not provided with much more with which to work. For example, there was no evidence of any secret off-shore banking accounts, or even separate banking arrangements to allowing for a tracing of the suggested cash funds. Even with respect to this couple’s lifestyle, it did not reflect one that was supported by a $200,000 income on Mr. Brown’s part. Such an imputation is just not supported by the evidence.

[125] Mr. Brown’s evidence that he negotiated a salary of $85,000 with David Small is further indication that an imputed income of $95,000 is within an appropriate range. I note in this regard that there were many aspects to this arrangement that troubled the court. For starters, it did not make any sense that Mr. Brown would stop operating his own business and take up employment with David Small doing substantially the same work as before. He worked with Mr. Small in the past as David Brown and Associates and he could continue to do so in the future. Mr. Brown’s transition was especially questionable given Mr. Bhardwaj’s estimate that Mr. Brown’s personal goodwill in the company translated to a value of between $60 - 70,000. Mr. Brown refused to provide any details concerning his employment arrangement with David Small. He testified that the salary of $85,000 did not include any bonuses but he was exceptionally coy about the prospect of earning any bonuses.

[126] The timing of the transition to being an employee, combined with Mr. Brown’s candid admission that he did everything he could to characterize as many of his earnings as possible as expenses, so as to improve his position in the litigation, only magnified the court’s concerns over Mr. Brown’s credibility, both generally and specifically in relation to his suggested employment arrangements.

[127] Finally, Mr. Brown’s admission that in 2015 he was completing projects on files he had before he moved to David Small would suggest that he would be earning something more than the suggested income of $85,000 for that year. What was not clear to the court was whether that work would be folded into the David Small billings or whether Mr. Brown would be compensated separately.

[128] On the totality of the evidence specific to Mr. Brown’s employment with David Small, it is reasonable to impute an income that is higher by $10,000 than the income of $85,000 reported by Mr. Brown. The additional $10,000 is sufficient to account for likely bonuses, additional fees from past David Brown projects, as well as the very likely prospect that, given Mr. Brown’s close acquaintance with Mr. Small, the two may have very well set an artificial salary to assist Mr. Brown through these proceedings. Obviously, the court is speculating on this latter point but Mr. Brown’s failure to come to the court with clean hands allows for such a negative inference.

[129] On the totality of the evidence before me, I impute an annual income of $95,000 to Mr. Brown.

[130] Using an imputed income of $95,000 to Mr. Brown and an income of $69,000 for Ms. Brown, the Spousal Support Advisory Guidelines identify a monthly support payment of $618 at the low end, $720 in the mid-range and $823 at the high end. The midpoint for a lump sum payment for spousal support over nineteen years ranges from $82,019 at the low end, $96,064 at the mid-range, and $110,645 at the high range. The period of nineteen years is appropriate given Ms. Brown’s age and her accepted medical conditions.

[131] The suggested monthly payments align with the support payments that Mr. Brown included in the average monthly payments of $2,200 he made to Ms. Brown. As I noted above, these payments were consistent with the payments Mr. Brown was making towards the expenses of the household and towards Ms. Brown’s needs. Although the parties did not provide the court with a detailed breakdown of their overall expenses before and after, there was sufficient evidence to conclude that roughly two-thirds of that monthly payment supported household expenses and roughly one third supported Ms. Brown’s personal needs. Extrapolating from that analysis, a monthly support payment at the midrange of $720 or a lump sum support payment of $96,064 would be an appropriate support award.

iii. Monthly Award or Lump sum

[132] The only outstanding question to resolve is whether it is appropriate on the facts of this case to order a lump sum support payment or whether to order monthly payments. Having regard for the case law and the treatment of this issue in the past, I find that a clean break between the parties is essential. Regrettably, the animosity and acrimony between the two parties was palpable through the trial.

[133] Ms. Brown was deeply hurt by the way her marriage ended with Mr. Brown. Although she was very measured in her testimony, it was evident to the court that she was grappling with a combination of anger and sadness. The best thing she could do for herself will be to move on with her life and regain her sense of self-worth and self esteem.

[134] Mr. Brown was evidently very bitter and very angry with the situation. His suggested remorse over his past conduct was not convincing. What was very troubling to the court was his mean-spirited attitude towards Ms. Brown. He projected all the disagreements between him and Ms. Brown as being the fault of Ms. Brown. Most distasteful was his decision to have his current common-law partner in court, especially on the days that Ms. Brown testified. That individual, who was the person with whom Mr. Brown had his affair, sat in court smiling and making faces while Ms. Brown gave her evidence. Although the Court did not initially appreciate the identity of that person and considered her to be a support person for Mr. Brown, the Court eventually had to caution that individual about her overall demeanour. In the days that followed, that individual’s attendance trailed off. I can only conclude that her attendance was intended to unnerve and make Ms. Brown uncomfortable. More significantly, it reflected very dramatically on the extent of Mr. Brown’s own meanness and underscored the need for both to have a clean break.

[135] Insofar as other considerations that are brought into such an analysis are concerned, although it would not be the animating reason for ordering a lump sum payment, it is significant that there are sufficient funds for a lump sum payment to be made. On the balance of the considerations, although there was no evidence to conclude that Mr. Brown’s livelihood will become precarious or that he will leave the jurisdiction, given the negative qualities of his personality, I would not put it past him to use the monthly payments as a tactical tool to continue to make Ms. Brown’s life miserable. That would run the risk of causing continued frustration and unnecessary expenses. A clean break would eliminate such a risk.

[136] In the circumstances, I conclude that a lump sum payment in the mid-range amount of $96,064 and representing a period of nineteen years, on account of Ms. Brown’s various medical conditions, is an appropriate award.

FINAL DISPOSITION

[137] To sum up, on equalization, Ms. Brown owes Mr. Brown an equalization payment of $107,540.28. Ms. Brown and Mr. Brown are to receive a credit of 50 percent of the increased value in the matrimonial home between the valuation date and the date the home was sold. That means that each will get a credit of $74,500. Ms. Brown is also to reimburse Mr. Brown the sum of $55,000 on account of his 50 percent share of the joint line of credit.

[138] On the subject of spousal support, Ms. Brown is entitled to spousal support. For the reasons noted above, that sum has been determined on the basis of an imputed income of $95,000 for Mr. Brown and an income of $69,000 for Ms. Brown. It is appropriate in all the circumstances for the support obligation to be satisfied by a lump sum payment from Mr. Brown to Ms. Brown. On the basis of the Spousal Support Advisory Guidelines, the midpoint obligation for such a payment comes to a total payment of $96,064 and I so order.

[139] Given the respective payment obligations, Ms. Brown may or may not care to transfer her pension as she originally requested. That decision is left to her discretion. If the parties run into any difficulties reconciling the various figures, they may seek out an appointment with my office to address the situation.

[140] On the subject of costs, in the absence of knowing anything about possible settlement offers, and the consideration of such offers, the success in this case is divided. The parties are therefore strongly encouraged to resolve the issue of costs between them. That said, if they are unable to reach agreement, Ms. Brown shall have until December 30, 2015, to make submissions and Mr. Brown shall have until January 18, 2016, to respond. Submissions by both sides are not to exceed four pages, double-spaced. They are also to attach a Bill of Costs and all invoices associated with their respective disbursements.

Tzimas, J.

Released: December 18, 2015