COURT FILE NO.: FC-13-167-00

DATE: 20150610

CORRECTED DATE: 20150615

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

LYNDA JOHNSON

Applicant

– and –

DOUGLAS TAYLOR

Respondent

COUNSEL: J. Ironside for the Applicant D. Clark for the Respondent

HEARD: June 1, 2, 3 and 4, 2015

Corrected decision: The text of the original judgment was corrected on June 15, 2015 and the description of the correction is appended

HEALEY J.

OVERVIEW

[1] These Reasons for Judgment follow the trial of a case commenced on January 31, 2013. The parties were able to settle the issues of custody and access by final Order dated October 23, 2014. They share joint custody of their two daughters, the primary residence of the children being with the applicant, and specified access to the respondent that includes alternating weekends and holidays.

[2] Just prior to, and ongoing during the trial, the parties also settled the issues of: the length of cohabitation; the amount of the respondent’s income for 2013 and 2014; the quantum of retroactive child support to be paid for 2013 and 2014; the quantum of retroactive s.7 expenses to be paid by the respondent for the period from date of separation to present; health benefit coverage for the children, and the allocation of s.7 expenses for the current year.

[3] The issues remaining for the Court to determine are:

i) The respondent’s income for 2012 and 2015;

ii) The quantum of ongoing child support, commencing July 1, 2015;

iii) The retroactive child support claim of the applicant for 2012, and for the first six months of 2015. Although the applicant claims child support retroactive to October 15, 2012 and ongoing, as mentioned above, the parties have settled the quantum of child support that accrued in 2013 and 2014;

iv) A determination of what qualifies as a s.7 expense for these parties, and a mechanism for future allocation of such expenses;

v) Travel arrangements for the children during the school year;

vi) Retroactive and ongoing spousal support – entitlement, quantum, duration, retroactivity and indexing;

vii) Whether the applicant is entitled to a deduction for an inheritance received during the marriage, and depending on that determination, the amount of the equalization payment; and

viii) ancillary orders relating to life insurance, post-secondary education costs, and the future planning of the savings held in trust for the children.

FACTS NOT IN DISPUTE

[4] The facts that are not in dispute are as follows:

[5] The parties married on December 14, 1998 in Jamaica and separated on October 15, 2012, after an almost 14 year marriage. The applicant was 47 at the date of separation and is now 49 years of age. The respondent was 49 at the date of separation and is now 51 years of age.

[6] The parties met in Peterborough in the fall of 1991, when both were attending Trent University, and dated thereafter. They began to cohabit together in a relationship of permanence in Toronto on January 1, 1995. Accordingly, their relationship is 17 years, 10 months in duration.

[7] The parties have two children: Haley, born June 30, 2005 and presently 9 years old, and Megan, born October 12, 2006 and presently 6 years of age. The parties were 39 and 41 at the time they became parents.

[8] The respondent has been an electrician since the 1980s. He has worked in that field almost continuously, other than during the time that he completed a degree at Trent University from 1989 to 1993, during another very brief period in the fall of 1993 when he attended Carleton University, and during a six to eight month period of voluntary unemployment prior to Haley’s birth.

[9] The applicant has a degree from Trent University in biology and environmental research science. Other than for a brief period in 1992, she has not been employed in that field. Prior to their marriage the applicant worked in various jobs. This included being employed by a company owned by her father for a few months in 1994, in a bookkeeping role. After the parties began their cohabitation, the applicant worked in various short-term positions. In 1996 she obtained a job at Sterling Tile and Carpet in Toronto as an accounts receivable administrator, where she worked continuously until tendering her resignation in October, 2007 following the end of her second maternity leave. That was the last full time job ever held by the applicant.

[10] The applicant took a full year of maternity and parental leave following the birth of each child, from June, 2005 to June, 2006, and again from October, 2006 to October, 2007.

[11] In September, 2005, the applicant received the sum of $10,000 from her grandmother’s estate.

[12] At the time of the parties’ separation on October 15, 2012, they were residing in Newmarket, Ontario. Four days later the applicant left the matrimonial home, a move that was discussed by the parties in advance. She and the children moved to Collingwood, where the applicant’s father and step-mother reside, and where she was raised. The respondent remained living in the matrimonial home, paying for all expenses associated with that property, until it was sold with a closing date of May 30, 2013. The parties agreed that some of the funds be released to each of them at the time of closing, with a further distribution in 2014, such that each has received the amount of $125,000 from the proceeds of sale. The sum of $60,000 remains in the real estate lawyer’s trust account to be distributed following a final determination in this matter.

[13] The respondent paid child support to the applicant very soon after separation. She received $1,600 by cheque on November 15, 2012, and a further $1,600 by cheque on December 13, 2012. This amount continued to be paid for the first six months of 2013. The quantum of child support then changed to $1,322 per month commencing July 1, 2013, pursuant to the temporary Order of Olah, J. dated June 13, 2013. Child support has been paid in that amount since that date and there are no arrears owing.

[14] In 2013, the respondent began to pay spousal support in the amount of $750 from January 15 to and including June 15, at which time spousal support increased to $1,009 per month commencing July 15, 2013, pursuant to the temporary Order of Olah J. referenced above. It has been paid in that amount since that date and there are no arrears owing.

[15] Based on the respondent’s 2013 line 150 income of $136,895, the parties agree that, in accordance with the Federal Child Support Guidelines, SOR/97-175, as amended (the “Guidelines”) child support to be paid in 2013 should have been $1,860 per month. Based on the respondent’s 2014 line 150 income of $111,461, the parties agree that the quantum of child support to have been paid in 2014 was $1,555 per month.

[16] For 2015, the parties agree that the pro rata sharing of s.7 expenses will be done on the basis of 30% from the applicant and 70% from the respondent, which is an agreement reached for expediency rather than on the basis of an application of accurate income figures. For retroactive s.7 expenses, they have agreed that the respondent will pay to the applicant the amount of $2,000.

[17] The applicant and the children continue to reside in Collingwood, in a home owned jointly by the applicant and her father, Roy Johnson, the latter having assisted her with its purchase. The house was purchased on December 11, 2012 for $271,000.

[18] Haley and Megan are both attending Cameron Street Public School in Collingwood, in grades 3 and 4. In the fall of 2015, Haley will be attending a new school in order to participate in an extended French program, and Megan will remain at the current school.

[19] With respect to the net family property calculations, the parties agree that no further values remain in dispute other than the applicant’s claim to exclude her $10,000 inheritance.

ISSUES

Respondent’s Income for 2012 and 2015

2015:

[20] The respondent is a member of an electrical union, IBEW Local 353. Throughout his work life, he has been employed in both unionized and non-unionized positions. It is undisputed that the respondent's historic income has been as follows: 2009 – $90,951; 2010 – $94,870; 2011 – $100,003; 2012 – $165,971; 2013 – $136,895; and 2014 – $111,461.

[21] 2012 and 2013 were particularly high income years for the respondent. The reason for this, which is undisputed in the evidence, is that the company for which the respondent worked at the time, Ozz Electric Inc., hired him into a management position at the beginning of 2011. He had a base salary of $100,003 in 2011. His role was to project manage solar installations for the company. That position entitled him, at the discretion of the employer, to potentially receive a performance or profit-sharing bonus in February of the subsequent year, and a loyalty incentive bonus to be paid out in December of the same subsequent year. Accordingly, although the respondent earned each of these bonuses in 2011, they were not paid out to him until 2012. Further, at the beginning of 2012 a review was held and he negotiated a higher base salary of $120,000 for that year. Accordingly, the respondent's income for 2012 includes both his increased base salary plus bonuses totalling a gross amount of $46,328.75. Accordingly, his line 150 income from all sources for 2012 was at a historic maximum of $165,971.

[22] Similarly, in 2013 he received both the profit-sharing bonus and loyalty incentive bonus earned in 2012, totalling a gross amount of $37,500, elevating his line 150 income $136,895. However, change occurred at the end of January, 2013 when Ozz Electric Inc. changed its business plan to move out of solar installations, and the respondent’s management position came to an end. He was offered a union position in the same company, which he accepted. This was a position which provided compensation on an hourly basis set by the union contract. While a bonus structure remained in place, the source of the bonus was from that of the union pool, which was smaller than the management pool and shared among a greater number of members. Accordingly, the respondent's line 150 income for 2014 dropped to $111,461. I accept as a fact that this decline in income from the previous two years was involuntary, and brought the respondent’s earnings back to the same approximate level that they had been before he obtained the management position.

[23] The respondent remained with Ozz Electric Inc. in the same hourly-wage position until October, 2014. His gross earnings were $82,969.94for 2014. At that time, without any hiatus in his employment, he accepted a position with a new company, Hart-Well Electrical Company Limited (“Hart-Well”), where he remains to date. The respondent stated that he accepted the new position because he wanted to work in a smaller organization more aligned to his style of work. His gross earnings from Hart-Well for 2014 were $25,219.20. This is a union position which offers no bonus. The letter from Hart-Well setting out its offer of employment indicates that the respondent’s pay is based on a 40 hour week for 52 weeks annually, with a salary equivalent to the IBEW Local 353 foreman's rate. The respondent testified that his gross pay now never varies, and is $2,101.60 per week, or $109,283.20 per annum. His last year-to-date pay notification for 2014 confirms this weekly salary.

[24] According to the respondent, the only variable for the current year is the interest income that he may earn in 2015. Since 2009, the respondent’s line 150 income has included a modest amount for interest earned, usually less than $100. The exception to this was 2014, as a result of the proceeds received by the respondent from the sale of the matrimonial home pursuant to a temporary Order made in that year. In 2014, his interest income was $1,156.74. The respondent testified, and I accept, that most of the savings have now been spent on legal fees and accordingly interest income will be less than 50% of that previously reported. He will not receive a loyalty incentive bonus in 2015 because he did not remain at Ozz Electric Inc. for the full year.

[25] The applicant's counsel argued that the "wildcard" remaining for 2015 is the respondent’s potential entitlement to a bonus from Ozz Electric Inc. for the nine months in which he worked in 2014, and urged the Court to apply s.17 of the Guidelines to use a three-year income average from 2012 to 2014. The applicant’s counsel also urged this method upon the Court because of the respondent’s voluntary change in employers, resulting in a reduction in his income.

[26] As set out above, the respondent experienced fluctuations in his income even while employed at Ozz Electric Inc., resulting from decisions made by the employer that were beyond his control. Rather than terminating his employment in January, 2013, he accepted the offer of a lower paid, union position. Although the respondent’s reason for accepting the position at Hart-Well Electrical in 2014 was vague, the fact is that he continues to maintain well-paid employment at a level even higher than that which the family enjoyed prior to 2012, without any periods of unemployment since the parties' separation. Also, there is no evidence that his income is likely to reach 2012 or 2013 levels this year. For these reasons, this Court declines to take a three-year average of his income for the purpose of calculating his current support obligations.

[27] I agree, however, that the status of any profit-sharing bonus owed to the respondent from Ozz Electric Inc. for 2014 remains an unknown. The respondent did not testify as to whether he received a bonus in February, 2015. His financial statement sworn February 9, 2015, simply indicates that there is no bonus structure at his current employment. Similarly, his financial statement sworn on May 4, 2015 provides the same information. In the past, the respondent's financial statements have not always reliably reported his base income or bonus. For example, on his financial statement sworn June 1, 2013, the respondent erroneously reported that his annual income was $92,664. He indicated that his 2013 bonus would be paid in February, 2014, and estimated a monthly amount of $625 in relation to such bonus. However, omitted from that financial statement is any reference the fact that he received a $30,000 profit-sharing bonus at the end of February, 2013, which had been earned in 2012. I do not accept, as urged upon this Court by the applicant's counsel, that the respondent deliberately intended to mislead the Court or the applicant. I reach this conclusion on the basis of his testimony, which I accept, that he relied upon his counsel to accurately complete the form but later realized that he had not been as clear as he could be in helping her to understand his bonus structure, resulting in confusion. I also reach this conclusion on the basis that the respondent was, overall, credible in his testimony, that he voluntarily paid support almost immediately after the separation, and that he has provided extensive financial disclosure throughout this proceeding in order to assist in determining his income for support purposes.

[28] However, given that his income numbers are not finalized for 2015, this Court finds that the most reliable current income to use at this point, to set ongoing support, is the respondent's 2014 total income in the amount of $111,461. The difference between that number and the income figure of $109,252 urged upon the Court by the respondent’s counsel is only $2,209, and results in a difference of only $25 per month in child support.

2012:

[29] As earlier indicated, the respondent received two bonus payments in 2012, earned in 2011. He first received a performance bonus paid in February, 2012 in the amount of $37,063. In December of that year, he received his loyalty incentive bonus in the amount of $9,265.75. The first amount was received prior to separation. The respondent provided evidence of how the sum of $37,063 was spent by the parties during the marriage. First, $15,000 of that was deposited into the respondent’s RRSP, for which he provided proof. Of the remaining $22,063, $11,971.69 was deducted as income tax, leaving a remainder of $10,091.31. The respondent provided evidence that $4,000 was paid into the children's education savings fund, first by transfer into the parties' joint ING Direct account. The applicant has maintained a register report with Quicken software for separate savings accounts for each of the parties' daughters, from the time that the accounts were opened until present. Those ledgers show deposits of $2,000 to each of the accounts nine days after the sum had been transferred into the parties' joint account. The respondent also testified that the amount of $2,000 was used to pay down the mortgage, but he had no documentary proof. Nonetheless, the applicant did not dispute that such sum had been paid. Further, he testified that approximately $3,880 was used to pay a bathroom contractor and purchase materials for renovations in the matrimonial home.

[30] I accept the argument of the applicant's counsel that there should be no adjustment to income for 2012 for money spent on renovations to the matrimonial home, as there is no proof that she received the benefit at the time of sale through an increased property value. However, the applicant did receive direct benefit from a capital payment on the mortgage. Further, she will receive the benefit of the RRSP contribution and its increase in value through the equalization payment. Finally the children's accounts are agreed by both parties to be trust accounts, and so I find that the $2,000 deposited into each should be characterized as funds designated solely to the benefit of the children’s anticipated post-secondary education costs or for their own use, and therefore not as funds available for child support. Accordingly, I find that there should be an adjustment to the respondent’s 2012 income for the non-recurring amounts that should not be allocated to income in order to avoid “double counting”, such that the following amounts be deducted: the RRSP purchase, the education fund contribution and the mortgage payment, totalling $21,000. I find, accordingly, that the respondent’s income for 2012 is $144,971. For such income, the Table amount for two children is $1,953 per month.

2015 Table Support

[31] Having found that $111,461 is the appropriate figure to use for the respondent’s current income, the final order will provide that child support shall be paid in the amount of $1,555 per month commencing July 1, 2015. The retroactive child support calculations will take into account that such sum should have been paid from January 1, 2015 to and including June 1, 2015.

Retroactive Child Support

[32] As earlier indicated, the respondent made two payments to the applicant for child support in 2012, in the form of cheques dated November 19, 2012 and December 12, 2012, each in the amount of $1,600. The respondent's counsel argues that no further support should be payable for 2012 because this was an amount agreed to by the parties, was an amount proposed by the applicant in a draft separation agreement prepared by her counsel in October, 2012, and such agreement was confirmed by the applicant when she cashed the two cheques.

[33] The draft separation agreement referred to was never executed. I find as a fact that any reasonable negotiations between the parties came to an abrupt halt as a result of two actions taken by the respondent. The first was his closing of the joint account, transferring the balance to an account solely in his name. This occurred a couple of months after separation. The second such action occurred on January 19, 2013, when the respondent changed the door locks and access codes for the garage in order to prohibit the applicant from having access to the matrimonial home. From the evidence presented, the second of these actions stemmed from the respondent feeling that he needed to control the removal of joint belongings from the home by the applicant prior to any agreement being reached between them. However, from the evidence presented, I also find as a fact that the respondent was open to a reconciliation, the applicant was not, and when she advanced a request for spousal support after obtaining legal advice, the respondent became motivated to be less conciliatory than he had been in the past. The applicant then commenced this action, in which she specifically made a claim for support retroactive to October 15, 2012.

[34] Section 55 of the Family Law Act, R.S.0. 1990, c. F.3 provides that a domestic contract is unenforceable unless made in writing, signed by the parties and witnessed. That Act defines a “domestic contract” to include a separation agreement. The question in this case is whether the parties reached a final and binding oral agreement at the time, which when viewed objectively, makes it apparent that the signing of the formal document is only intended to make solemn record of an already complete and binding contract: Andrews v. Lundrigan, 2009 ONCA 160 (Ont. C.A.). I find that this was not the case. There were many terms contained in the draft separation agreement prepared by the applicant’s counsel, in respect of which it is clear, by the very fact of this trial, that the parties never reached consensus. To suggest that the parties had reached an agreement on one subject while being at odds on others indicates that there was no formation of contract. There was no certainty on all of the essential terms of a settlement arising from this couple’s marriage breakdown. Accordingly, I find as a fact that there was no agreement reached by the parties regarding the quantum of support to be paid in 2012. Cashing the cheques was a practical necessity, rather than conduct demonstrating affirmation of a bargain struck.

[35] When the applicant left the matrimonial home, she had no source of income. As previously stated, the respondent shortly thereafter terminated her access to the joint household account. His stated reason for doing so was that he had initially set up the account and deposited money into it for joint house and family expenses, and that this was no longer necessary, presumably because of the separation. Although the applicant resided with her father for several months after the separation, and it is clear from his testimony that he likely assisted in covering the day-to-day needs of both the applicant and the children, he had no legal obligation to do so. The law is clear that upon separation, the obligation to support one’s children is immediate. In this case, all of the preceding facts lead this Court to the conclusion that an award of child support retroactive to October 15, 2012 is appropriate.

[36] The respondent seeks some reduction in support because of the fact that he travels approximately 1,000 km per month to facilitate access to the children. His best estimate of the increased cost of access is approximately $190 per month. The reason for such travel is twofold; the applicant moved to Collingwood following the separation, and the respondent moved to Toronto. The respondent travels to Collingwood to pick up the children. At the end of the access visit the parties usually meet at a destination north of Barrie. Unquestionably the respondent is doing the bulk of the driving and bearing the associated cost. In response, the applicant's counsel argues that, given that the children reside primarily with their mother, she bears the cost of their transportation when required for activities, entertainment, and necessities.

[37] The presumptive rule set out in s. 3 of the Guidelines is that, unless otherwise provided, the amount of support for children under the age of majority is the amount set out in the applicable Table. It is only in the case of shared custody, where a parent exercises a right of access to, or has physical custody of, a child for not less than 40% of the time over the course of the year, that the Court may take into account any increased costs associated with the shared custody arrangements. The respondent does not have access for at least 40% of the available time. The reduction in the Table amount urged upon this Court by the respondent’s counsel is not one provided for in the legislation, nor supportable in the case law.

[38] This Court calculates the retroactive child support as follows:

Year and Income	Child Support payable pursuant to the Guidelines	Child Support paid voluntarily or pursuant to the Order of June 13, 2013	Retroactive child support owed
2012 (Oct. 15 to Dec 31) $144,971	2.5 months x $1,953 = $4,882.50	2 months x $1,600 = $3,200	$1,682.50
2013 (Jan 1 to June 30) $136,895	6 months x $1,860 = $11,160	6 months x $1,600 = $9,600	$1,560
2013 (July 1 to Dec 31) $136,895	6 months x $1,860 = $11,160	6 months x $1,322 = $7,932	$3,228
2014 (Jan 1 to Dec 31) $111,461	12 months x $1,555 = $18,660	12 months x $1,322 = $15,864	$2,796
2015 (Jan 1 to June 30) $111,461	6 months x $1,555 = $9,330	6 months x $1,322 = $7,932	$1,398
Total Retroactive Child Support Owing			$10,664.50

Section 7 Expenses

[39] The issue of the children's activities was addressed in the final Order of October 23, 2014. That Order provides that the parties are to exchange information regarding proposed activities, including costs, and other relevant information to enable each to make an informed decision about the activity. If the parties are unable to agree on the children's extra activities, the issue may be brought to a parenting coordinator for determination.

[40] I therefore agree with the respondent's position that the intervention of the Court in decisions around which extracurricular activities the children will be enrolled in would be res judicata. However, the applicant seeks confirmation from the Court that the future sharing of such expenses shall be done in proportion to the respective incomes of the parties. Further, as the final Order only addresses decision-making around expenses for extracurricular activities, she asks that the Court address the sharing of potential future expenses for both daycare and post-secondary education, when and if those costs are incurred.

[41] This Court agrees that putting in place a final Order to address these issues is desirable, in order to reduce the uncertainty for the parties and the potential for future litigation, and so they will be addressed in the Order issued by this Court.

Travel Arrangements for the Children

[42] The applicant seeks an order permitting her to take the children out of school for up to five days consecutively in order to facilitate travel to Florida during the winter to spend time with their paternal grandfather and his wife. She primarily seeks to do this because her father and stepmother reside in Sarasota, Florida for the winter, and her testimony was that the close relationship between the children and their grandparents makes it difficult for the children to be without them for six months.

[43] The respondent resists such an order, as he does not want the children to miss school for longer than three days unless it is for an extraordinary vacation such as a trip to the middle East, China, or an educational trip of such magnitude. He testified that he does not want the children to learn that travel is more important than education.

[44] The applicant’s evidence is that the travel to Florida does not interfere with school, as she arranges for homework to be given in advance by their teachers, and devotes time to it daily while they are away. She believes that there is educational value to the travel to Florida because of the types of activities that the children are exposed to, such as the Barnum & Bailey museum. She further testified that flights during the March break and Christmas are very expensive, and that the access schedule does not permit travel at other times unless the children miss school.

[45] As with any decision involving children, the focus is always on their best interests. The evidence of the applicant, which goes uncontradicted, is that the children both perform well in school. There is no evidence that any time missed by them in the past has caused any academic difficulties. I am also satisfied that, were this to change, the applicant is possessed of sufficient common sense that she would not jeopardize their educational performance for the sake of discretionary travel. There is also evidence that their grandfather and his wife have been a source of stability and security for the children since the separation, and allowing for them to be reunited for approximately one week out of the half-year that they are in Florida would seem to be in the children’s best interests. Accordingly, an order shall issue permitting each parent to plan a vacation, without the consent of the other, that involves an absence of up to five days from school.

Spousal Support

[46] The applicant seeks an order for spousal support in the amount of $2,242 per month commencing June 15, 2015, until terminated on October 15, 2023. She also seeks an order fixing the retroactive support at $19,464.

[47] The respondent concedes that the applicant is entitled to a spousal support order, but asks the Court to order support in the amount of $1,009 per month until terminated on June 30, 2021, a period totalling 8.5 years. The respondent seeks to have income imputed to the applicant in the amount of $25,000, and argues that the applicant has not demonstrated a need for spousal support that would entitled her to anything more than support in the low range of the Spousal Support Advisory Guidelines. He argues that since the separation, she has acquired a new vehicle, is the joint owner of a mortgage-free residence, and has travelled to Florida several times, indicating that her needs are minimal. Using his calculations, he takes the position that there is no retroactive spousal support owed.

[48] The applicant testified that she has rheumatoid arthritis and fibromyalgia, and has been referred to a neurologist and hematologist by her family doctor as a result of recent numbness in her hands and arms. Although no medical evidence was available, she testified that recent tests have shown an excessive protein in her blood, and her family doctor is trying to rule out a bone cancer or multiple sclerosis. She indicated that she has tried to push through these ailments to maintain her employment but has had to take time off to stay healthy. While she conceded that she stays active through biking, gardening, swimming, skiing and other such activities, she testified that she undertakes these activities in part on the advice of physicians who have counselled her against inactivity, due to her reported conditions.

[49] In terms of her work history, the applicant testified that she worked in Port Dover doing research for Ontario Fish Producers after she finished her course at Trent University in 1992, then worked at Bayshore Trust in the summer of 1993 before moving to Ottawa with the respondent in the fall of 1993, where the respondent planned to attend Carleton University for another program that fall. At that time the parties moved together to Napean, in the Ottawa area, and rented an apartment together. However, the respondent left the program after a few months. The applicant stayed in Napean and looked for work. The respondent moved back to Toronto in order to work to, in part, earn the money to pay the penalty for breaking the one year lease for the Napean apartment. Ultimately the applicant did not find work in Ottawa, so she moved to Collingwood in 1994, and the respondent continued to work as an electrician in Toronto. She then worked for her father briefly in 1994. This Court heard evidence from her father, Roy Johnson, who testified that at that time he operated a building supply dealership, and was also involved in developing and selling commercial and residential properties in Collingwood. In that position, she helped with administrative work in the office staffed by three others, including an office manager. Mr. Johnson testified that work was delegated to the applicant, and that she worked under supervision. The evidence of both the applicant and her father was that this position lasted only a few months, and was not contradicted by the respondent. The only evidence that the respondent had regarding this position was that he believes that the applicant was working for her father in a bookkeeping capacity of some sort during that time period.

[50] This Court heard evidence that the parties intended to buy a home together in Collingwood in 1994; when that deal fell apart they moved to Toronto. The respondent testified that initially the applicant was not working, but recalled that she was looking for bookkeeping and other opportunities. The applicant did in fact find short term positions unrelated to her degree, such as courier work and other work through a temporary agency, including working for a radio company for a short period, in the accounts receivable department.

[51] In 1996 the applicant obtained her first and only long-term job, which was with Sterling Tile and Carpet (“Sterling”), where she worked in a full-time position continuously until her first maternity leave in 2005. At that company, she worked as an accounts receivable administrator. She had no education in that area, but had exposure to bookkeeping from helping in her father's company in 2004. She testified that she had no experience but "talked her way into the job". She believes that she started at $21,000 per annum. In the last full year that she worked at Sterling, being 2004, her line 150 income was $59,389.45.

[52] The applicant took one year off for maternity leave, but when she went back to work in June, 2006, she was pregnant with Megan. The applicant began her next maternity leave in October, 2006 just before Megan's birth. She testified that the parties decided together that she would take another full year of maternity and parental leave. Thereafter, they decided that economically it made sense for the applicant to stay at home due to the daycare costs. Accordingly, she resigned from Sterling Tile and Carpet effective October, 2007, at the end of her second maternity leave.

[53] It was the applicant's evidence that the parties together discussed and decided that it was best for their children for one parent to be with them at all times. It was decided that she stay home to be the primary caregiver. After tendering her resignation, she never worked full time again.

[54] Corroborating the applicant's evidence is a draft covering letter and resume, which both parties testified were prepared in June, 2008. The contents of that covering letter states, in part:

… At present, I am searching for part-time employment in the late afternoon/evening. I have worked in an office environment for over 15 years, beginning as an accounts receivable/payable clerk and working my way into a senior receivables administrative role. Not only do I understand how a small business operates, I also have a knowledge of fundamental accounting principles…

[55] I find as a fact that this letter overstates the applicant's skills and work history in order to enhance her value to potential employers, as she never worked in an office environment continuously for 15 years. Further, her accounting background is limited to a two-part accounting course completed through Centennial College in 1998. Other than that, the only education that she has in bookkeeping is from 1994, when she took a course at Georgian college in Collingwood, likely in conjunction with assisting in her father's business. As she testified, and I accept, she may have a general sense of accounting principles in theory, but her work history could never be characterized as providing her with an accounting background. At best, her proficiencies are in the accounts receivable area, and her last exposure to software packages used in an office environment dates back to 2006.

[56] More importantly, the letter underscores the applicant's testimony that the intention of the parties was that one parent would always be available to provide care for their children. As the primary wage earner, the arrangement was that the respondent would continue in the work force, and that any jobs obtained by the applicant would need to accommodate her availability to the children during the day.

[57] In that vein, when the girls started school, the applicant testified that she wanted to be engaged in helping the family financially, so took in two boys for daycare. This occurred throughout the academic year from September, 2010 to June, 2011. She testified that the respondent did not want her to be working and said that her income was insignificant, and that he wanted her to be available for their children. She testified that her earnings from providing daycare were in the range of $4,000. She testified that the respondent's mother ran a daycare from her home and she expressed a desire to do the same thing in order to contribute financially and to have financial independence, but the respondent wanted her to be available to meet the needs of the children and family foremost.

[58] The applicant's second part-time position was that of a crossing guard, beginning in October, 2012. She testified that the respondent was against her taking this job, questioning how she was going to look after the children. Thereafter the separation occurred and the applicant left this job when she moved to Collingwood.

[59] In contrast, the evidence of the respondent is that it was largely the applicant who decided to remain out of the workforce. For example, he testified that it was the applicant who decided that she would resign at the end of her second maternity leave. His testimony is that the intention of both parties was that she was going to seek other full-time employment when the girls were older and it was sufficiently feasible. When they had such discussions, they did not discuss the age that the children would be when the applicant returned to work. He testified that his mother offered daycare services to them for one year at no cost, but that they did not accept this offer since the applicant's job search was not fruitful. He testified that she was looking for both full-time and part-time employment as early as 2008.

[60] The parties decided that they would leave Toronto in 2009, which is the year in which they moved to Newmarket. The respondent testified that during this time in 2009, when they were searching for a better home environment, the applicant's job search was put on hold. Thereafter they engaged in renovations to the Newmarket property, during which time the applicant did not pursue work. He testified that at that time they were in agreement that that was the appropriate way to handle both the renovations and the care of the children. They took occupancy of the Newmarket home on July 24, 2009. At that time both children were still pre-school age; Haley began junior kindergarten that fall.

[61] The respondent testified that after 2009 there were ongoing discussions between himself and the applicant about family finances and the needs of the home. He testified that the parties needed two incomes and wanted to send both children to university, as well as to be able to afford new vehicles and to continue their trips and vacations.

[62] The respondent agreed with the sporadic work history outlined by the applicant for 2010 and 2011, although his testimony was that she stopped providing childcare for the two boys in the summer of 2011 because she was worried about taking care of four children around the pool located in the backyard of the matrimonial home.

[63] By the fall of 2012, just prior to separation, the girls were in grades one and two. Given that the children were now attending school full-time, the respondent testified that the parties had discussed the applicant returning to work full-time. She disputes such an agreement. To the best of the respondent’s knowledge, the applicant was not looking for bookkeeping work in either 2011 or 2012. He confirmed that she worked one day as a crossing guard in the fall of 2012, before their separation.

[64] The applicant testified that the parties agreed that she would go back to Collingwood to her family's home at the time of separation. She believed that it remained her obligation to look after the girls primarily, and her priority was to provide stability. Accordingly, at the beginning of the separation she was not looking for work, as in her view the parties were in agreement that she should focus on meeting the needs of the children.

[65] Subsequently, the applicant began to put out resumes, but has had no responses. As she does not have an accounting degree, she has found it hard to find work in that field. During the current school year she has worked as a crossing guard for the Town of Collingwood, earning $18.04 per hour, working a total of 80 minutes per day, five days a week, with the exception of statutory holidays.

[66] Beginning in July, 2014, the applicant also worked for her father's company, Johnson Group, performing bookkeeping services for his commercial companies. In 2014 she earned a total of $3,850. She is no longer working at Johnson Group, as she was let go in January of this year. She testified that she could not do the job and did not have the qualifications, and so was terminated. Roy Johnson testified that even though the applicant was only required to work six hours per week, she was unable to perform the duties expected. He testified that his management office is now a one-person office, and the intention was to train the applicant to do the job. The role to be fulfilled was a bookkeeping job, keeping track of incoming rents and keeping the books and records, and managing his real estate. The applicant was paid $20 per hour on a contract basis. He testified that the person who now holds the job is a trained bookkeeper, who receives $27 per hour. It was his testimony that because the applicant was not being supervised and did not have the necessary work experience and skills, combined with the various pressures that she now has, she did not perform as expected and he was required to terminate her employment. I accept that this was not a ruse undertaken by the applicant and her father to bolster her spousal support claim a trial; the applicant became spontaneously emotional in her testimony, for the only time during the trial, when testifying as to how she had been terminated because she could not fulfill the requirements of the position.

[67] In 2014, the applicant's line 150 income was $21,363.38, comprised of support payments received of $12,108. It also included self-employment income of $4,757.50 as a result of working for her father and invoicing him on an hourly basis. She also worked for her aunt, helping with her husband who has had a stroke. She also invoices her aunt, who pays her on an hourly basis.

[68] The applicant’s historic line 150 income has been: 2009 - $3,823; 2010 -$4,938; 2011 - $6,328; 2012 - $1,320; 2013 - $7,447; 2014 - $21,362.

[69] In 2015, she expects to earn approximately $4,000 as a crossing guard, which will end this month. She has given her resignation to the Town of Collingwood because of the upcoming change in Haley’s school. She continues to try to find employment that will allow her to accommodate the children's school hours. In the fall of 2015 they will be in two different schools and will be using two different bus routes. She is looking for a job between the hours of 9:00 a.m. and 2:30 p.m., unless she can locate after-school day care for the children. She testified that she is actively looking for employment. One possibility that may be open to her is to become qualified to provide meditation counselling through the school system. She testified that she is taking her meditation coaching license online. Someone at the school approached her and advised her that the school system has funding for such a program, but development of the program has been put on hold. As yet, she has no indication of the potential hours of work or rate of pay.

[70] She testified that she is actively putting out a resume everywhere, while trying to look after the children and her health.

[71] As is often the case with spousal support, this is a case in which the payor is attempting to mitigate the obligation created by the relationship by seeking to portray its history in a more advantageous manner. Regardless of the subjective intention of either party, the objective evidence is that this was a traditional marriage in which the parties coped with balancing the demands of childcare, homecare and income-earning in a way that made sense to them at the time. In the same way that the respondent testified that it suited the family to have the applicant at home while the renovations were occurring in the Newmarket home, I find as a fact that the roles assumed by each of them arose out of a mutually satisfactory arrangement that best suited the needs of the family as a whole, throughout the entire term of the marriage. The effect of that arrangement was to create a dependency in the applicant, who is now economically disadvantaged because her currency in the job market has weakened after being out of it since, effectively, the start of her first maternity leave in 2005. She now finds herself, at almost 50 years of age, with a work history that contains only one long-term employer of 10 years’ duration, followed by a period of unemployment of now almost equivalent duration, other than very low income, temporary and part-time positions.

[72] The added complexities to the separated spouse’s life brought on by ongoing, primary care of children was highlighted by the Supreme Court of Canada in Moge v. Moge 1992 CanLII 25 (SCC), [1992] 3 S.C.R. 813, at pp.867-68:

The most significant economic consequence of marriage or marriage breakdown, however, usually arises from the birth of children. This generally requires that the wife cut back on her paid labor force participation in order to care for the children, an arrangement which jeopardizes her ability to ensure her own income security and independent economic well-being. In such situations, spousal support may be a way to compensate such economic disadvantage.

If childcare responsibilities continue past the dissolution of the marriage, the existing disadvantage continues, only to be exacerbated by the need to accommodate and integrate those demands with the requirements of paid employment. In that regard, I adopt without reservation the words of Bowman J. in Brockie v. Brockie (1987), 1987 CanLII 989 (MB QB), 5 R.F.L. (3d) 440 (Man. Q.B.), aff’d (1987), 1987 CanLII 141 (MB CA), 8 R.F.L. (3d) 302 (Man. C.A.), at pp. 447-48:

It must be recognized that there are numerous financial consequences accruing to a custodial parent, arising from the care of a child, which are not reflected in the direct costs of support of that child. To be a custodial parent involves adoption of a lifestyle which, in ensuring the welfare and development of the child, places many limitations and burdens upon that parent… A custodial parent is seldom free to accept shiftwork, is restricted in any overtime work by the daycare arrangements available, and must be prepared to give priority to the needs of the sick child over the demands of an employer.

[73] The testimony of the applicant highlights the constraints of the custodial parent described by Bowman J. in Brockie. She has two young, primary school-aged children. Potential employment will have to either occur during school hours or will have to involve before or after school day care, or both, such child care necessarily having to accommodate the fact that the children attend different institutions. She is required to also take into account, to the extent possible, the afterschool activities that the children have enjoyed during their lives so far. The employment secured will have to make sense economically, in other words, it will need to exceed the cost of daycare. The spousal support calculations of the respondent urged upon this Court would require that a full-time minimum-wage be imputed to the applicant. Accordingly, the scenario presented by the respondent is that the applicant work a full day, coordinate all of the children's needs during that same day, and assume the full range of homemaking responsibilities including cooking, cleaning and laundry, as well as the demands of the children for her attention. In addition to these constraints, in looking for employment the applicant is hampered by her age, her lack of recent employment experience, changes in office modalities that have occurred since 2005, atrophy of her skills in the area of administering accounts receivable, and the fact that she is living in a relatively small city. It was suggested to the applicant during her cross-examination that there may be jobs in Toronto similar to the job that she held at Sterling. Such a suggestion, with the additional complexities to both the applicant and the children's lives in a scenario where the applicant would commute such a distance, is patently unreasonable. Further, the applicant moved to Collingwood to have the support of her father, where housing has been obtained at a price affordable to her. On top of all of these challenges, the applicant may have health difficulties that require accommodation, the extent to which is currently being evaluated.

[74] On the other hand, the parties have now been separated for over two and a half years and spousal support has been paid during most of that time. The applicant has not taken any steps to upgrade her skills or training in the area in which she has employment experience. Even though she did not meet with success during her employment with her father, in the evaluation of this Court, she is an intelligent, highly-organized and personable woman who could potentially be an asset to an employer. Although I am satisfied on her evidence that she is neither lazy nor unmotivated, I am also not satisfied that a job search has been her foremost priority. Her testimony in this regard was somewhat vague, and she presented no documentary evidence of her search for employment. Unfortunately, her situation makes it likely that she is, absent re-training, most qualified for low-skilled, part-time work in the retail or the service industry, yet she presented no evidence that she has applied for such jobs. While the online meditation certification is a potential route to a job with the school board, the potential of it coming to fruition seems like a long shot and perhaps not the most feasible solution. While a period of adjustment following separation is certainly necessary and reasonable, the obligation of a spouse to attempt to achieve economic independence, to the extent possible, is one to which the Court must have regard.

[75] The respondent’s counsel submits that income should be imputed to the applicant in an amount up to as much as $35,000 per annum, having regard to her degree, her ten year work history, her 2004 earnings, and her experience in the area of bookkeeping, including the courses taken in the 1990s. She relies on Drygala v. Drygala (2002), 61 O.R. (3d) 711, 2002 CanLII 41868 for the proposition that s. 19(1)(a) of the Guidelines permits imputation of income to a spouse who is intentionally unemployed or underemployed. In my view, it would be an error to base imputed income on a salary that was earned eleven years ago, in Toronto, when the situation of the applicant has now changed dramatically given the addition of two children. However, the applicant’s counsel concedes that an appropriate figure for imputation of ongoing income is $20,000, a figure which this Court will accede to but which is still likely pushing the outside limits of what may be available to the applicant.

[76] The relevant statutory provisions that are to be considered are contained in the Divorce Act as follows:

15.2 SPOUSAL SUPPORT ORDER - (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) FACTORS – 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 or either spouse.

(6) OBJECTIVES OF SPOUSAL SUPPORT ORDER – 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.

[77] There are three conceptual bases for spousal support entitlement, which are compensatory, contractual and non-compensatory: Bracklow v. Bracklow (1999), 1999 CanLII 715 (SCC), 44 R.F.L.(4th) 1 (S.C.C.) at para. 49. Bracklow makes clear that all of the statutory factors, including the length of the relationship and the relative independence of the parties throughout the relationship, must be considered together: para. 61.

[78] As previously discussed, any support order in this case must address both the non-compensatory need for sufficient financial assistance to the applicant that she is relieved of the economic hardship of running a household on her own earnings together with child support. An income of $20,000 per annum, which I have found to the be the correct amount to be imputed to her, would leave her household at a much reduced standard of living in comparison to that of the respondent. In this case, compensatory support is also a factor, as this fact situation is a classic one for showing the economic disadvantage to one party in remaining out of the workforce, and assuming primary responsibility for child care. The property division in this case will not lead the applicant to economic self-sufficiency. The sole reason for the applicant’s withdrawal from the workforce was the birth of the parties’ children, and the interdependence that that created for the parties. Such need was addressed by the Ontario Court of Appeal in Roseneck v. Gowling (2002), 2002 CanLII 45128 (ON CA), 167 O.A.C. 203, 35 R.F.L. (5th) 177 (Ont. C.A.) at para. 61 as follows:

Compensatory support is intended to compensate a spouse upon the breakdown of the marriage for contributions made to the marriage, such as sacrifices made for a spouse's career and loss of economic opportunities sustained as a consequence of raising children. This is particularly applicable where a property division is insufficient to achieve this result: see Moge, supra at 843-849. Where a spouse has the capacity to be self-sufficient but the spouse’s ability to enjoy the same standard of living as during the marriage has been negatively impacted as a result of the marriage breakdown, compensatory support helps to ensure that the economic impact of this breakdown is equitably shared: Linton v. Linton (1990), 1990 CanLII 2597 (ON CA), 1 O.R. (3d) 1 (Ont. C.A.). As pointed out by Carol Rogerson in "Spousal Support Post - Bracklow: The Pendulum Swings Again" (2001) 19 C.F.L.Q. 185 at 191, the compensatory principle fits most comfortably the situation where, as a result of having children, the parties have developed an interdependency and merger of their economic lives.

[79] Given both the ages of the children and the need for compensatory support in this case, this Court finds it appropriate to fix support in the mid-range of the Spousal Support Advisory Guidelines for a relationship of 18 years duration. Although the length of the formal cohabitation is slightly less than this, it is more equitable to round up from the point of 17 years and 10 months, than to round down. For 2012 and 2013, I decline to impute any income as it is unreasonable to expect the applicant to have applied herself to obtaining a job during this period of transition.

[80] What must also be factored in, however, is the fact that the respondent assumed all of the payments for the matrimonial home for the 7 ½ months leading up to its sale. He estimated the cost of so doing to be $2,100 per month. This cost was not disputed by the applicant and is borne out in the respondent’s financial statements. The sum of $1,050 should therefore be deducted from spousal support payments owed for those months to recognize the joint obligation of both spouses for maintaining that asset.

[81] Accordingly, based on the parties’ respective incomes from 2012 to 2015, the retroactive spousal support claim shall be calculated as follows:

Year and Income of Each Spouse	Spousal Support payable pursuant to the SSAGs (Mid-Range)	Spousal Support paid voluntarily or pursuant to the Order of June 13, 2013	Retroactive Spousal Support owed
2012 (Oct. 15 to Jan 15) $1,320 (A) $144,971(R)	3 months x $2,777 = $8,331 Less expenses 3 months x $1,050 = $3,150	3 months x $0 = $0	$5,181
2013 (Jan 15 to June 15) $7,447 (A) $136,895 (R)	6 months x $2,251 = $13,506 Less expenses 4.5 months x $1,050 = $4,725	6 months x $750 = $4,500	$4,281
2013 (July 15 to Jan 15) $7,447 (A) $136,895 (R)	6 months x $2,251 = $13,506	6 months x $1,009 = $6,054	$7,452
2014 (Jan 15 to Jan 15) $20,000 (A) $111,461 (R)	12 months x $1,332 = $15,984	12 months x $1,009 = $12,108	$3,876
2015 (Jan 15 to June 15) $20,000 (A) $111,461(R)	6 months x $1,332 = $7,992	6 months x $1,009 = $6,054	$1,938
Total Retroactive Spousal Support Owing			$22,782

[82] An order will issue fixing the retroactive spousal support in the foregoing amount of $22,782 to the date of the order, and ongoing support shall be ordered in the amount of $1,332 per month for an indefinite duration, subject to variation and possible review.

[83] Having regard to the factors to be considered in the Divorce Act as previously set out, I decline to terminate support at a definite date given the length of the financial interdependency in this case, the age of the applicant, and the need to ensure that the financial repercussions of the roles assumed by each during the marriage are shared equitably if the applicant is ultimately never able to achieve her own financial independence, through what will need to become diligent and ongoing efforts.

Indexing

[84] It is appropriate that a support award be indexed to reflect corresponding increases in the cost of living. Given the respondent’s work history, with an anticipated three-income figure likely set through collective bargaining in the years to come, he will be in a better position than the applicant to bear the risk of inflation. This relevant consideration was set out by Perkins J. in Hogan v. Hogan, 2001 CarswellOnt 3436 (Ont. S.C.J.) at para. 38. This is particularly so given his testimony that, as of recently, he now holds the designation of master electrician.

EQUALIZATION

[85] The sole issue to be determined is whether the applicant had proven, on the balance of probabilities, that she is entitled to an exclusion for an inheritance received from her grandmother’s estate during the marriage, in the amount of $10,000, pursuant to ss. 4(2)1 and 4(2)5 of the Family Law Act, R.S.O. 1990 c. F.3. The onus is on the spouse claiming the exclusion to lead evidence showing that the inheritance was not used for the common purposes of the family: Belgiorgio v. Belgiorgio, 2000 CanLII 22733 (ON SC), [2000] O.J. No. 3246, 2000 CarswellOnt 3060 (Ont. S.C.J.), at para. 30.

[86] The respondent’s position is that first, the inheritance money was spent on landscaping the parties’ home in 2006, and that secondly, even if the evidence supporting that contention is not accepted by the Court, the applicant has been unable to trace the funds to show that they have been kept in a separate fund and not used for family purposes prior to separation.

[87] The applicant testified that she and the respondent kept separate savings and general bank accounts throughout the period of their marriage, with the exception of a joint ING Direct account used to pay household bills. I also accept the testimony of the respondent that the applicant had access to his accounts, and would occasionally perform transactions in those accounts with his consent.

[88] The applicant was able to show a copy of her grandmother’s will delivered to her under cover of a letter dated December 6, 2004 from solicitors Besse, Merrifield & Cowan LLP. She testified that she is one of the seven grandchildren listed in the will, to whom a bequest of $10,000 was given, as clearly stated in the will. She also put into evidence a copy of a bank draft dated September 8, 2005 payable to her in the sum of $10,000. The applicant testified that she initially deposited the bank draft into her Toronto Dominion Bank account, then transferred it into her unregistered ING Direct Investment Savings Account ending in #0553. She produced a statement from this account for the period July 1, 2005 to September 30, 2005, which indicates a deposit of $10,000 made on September 29, 2005. However, on valuation date, the balance remaining in her ING account ending in #0553 was only $4,295.83. This would corroborate that at some point she moved the funds from that account, in accordance with her further testimony, which was that she later opened an Investment Savings Account and deposited $5,000 one year and $5,000 the next. However, the evidence supporting that contention is lacking. Schedule 7 of her 2005 personal tax return, which records contributions to an RRSP, indicates that only $1,540 was contributed to the end of December 31, 2005, and no amounts contributed during the period January 1 to March 1, 2006, being the contribution periods for 2005. Her income tax returns for 2006, 2007 and 2008 were not entered into evidence.

[89] Further, evidence was led which shows that the applicant contributed to an RRSP account even prior to marriage, and so any RRSP account opened after 2005, as she testified was done, would necessarily be different from that earlier account. The only account owned by the wife on the date of separation which contained a value in excess of $10,000 was her ING Direct RRSP account ending in account #4033, which had a value of $114,472.53 on the date of separation. The evidence found in her sworn financial statements is that this account existed at the date of marriage. Accepting the applicant's uncontradicted evidence that the parties maintained separate savings and investment accounts throughout the marriage, the applicant increased her savings portfolio from approximately $48,000 on the date of marriage to $121,000 on the date of separation, that increase being almost entirely attributable to growth in her RRSP. Although it is possible that the funds in the ING Direct Investment Savings Account ending in #0553 were transferred to her ING Direct RRSP account ending in account #4033 at some point, the applicant did not produce a Quicken ledger for either of these accounts, even though she testified that she maintained one for the unregistered account at least. Accordingly, it remained unclear on the evidence as to when the $10,000 was transferred into an RRSP account, and where that account was held, at the conclusion of the applicant’s direct and cross examinations.

[90] The evidence became even murkier when the applicant gave further information in reply, testifying that her inheritance money was later transferred into her Tax Free Savings Account. However, the only tax-free savings account listed in the applicant's financial statement is an ING Direct account which contains no entry for the valuation date.

[91] Given the conflict in the applicant's own evidence, this Court is unable to determine whether the inheritance money remained in her unregistered savings account, or, at some indeterminate point, was placed in her ING Direct RRSP account or a different registered account, or possibly even a tax-free savings account.

[92] The other evidence surrounding the inheritance is that invoices from Down to Earth Landscaping that were paid in May, 2006 totalling $12,000 were paid from the respondent's account. I find as a fact that this was the case given the cheque numbers recorded on the record of payment, and the corresponding cheque numbers found in the Quicken ledger maintained by the applicant throughout the marriage to record transactions in the respondent's TD Bank account. The applicant's testimony is that she maintained such registers for all of the bank accounts maintained by the parties, and regularly reconciled the transactions recorded by her against the bank statements. Her evidence was that the money for the payment of the landscaping costs was transferred to the respondent's sole TD account from their joint account. When challenged on this by the respondent’s counsel, who suggested that the applicant's earlier evidence was that the joint account typically did not contain large amounts of savings because it was just used for covering household bills, the applicant testified that during the renovations there would not have been insignificant amounts in the joint account. The question remains whether the money from her grandmother's estate was transferred to the joint account at some point, and used to pay for the landscaping.

[93] I find as a fact that the applicant's inheritance was used for the landscaping. I reach this conclusion on the basis of the conflicting evidence provided by the applicant regarding the investment vehicle into which this money was held from time to time. Further, in May, 2006 the parties were essentially a one-income household, other than maternity benefits being received by the applicant, as the applicant had not had her full-time wage from Sterling since June, 2005. As the parties were expecting Megan at the time the landscaping was done, it was known that there would be another maternity leave starting in October, 2006. Given that all of the evidence in this case shows the parties to have been extremely financially conservative and focused on saving, I find it unlikely that they would undertake expensive landscaping work at that particular time, unless there was a readily available source of funds.

[94] I also reach this conclusion based on the evidence provided by the respondent's sister, Sharon Taylor, who testified that she attended a family event where the new landscaping was viewed. She testified that she had a specific conversation with the applicant about the cost of the landscaping during that gathering. She testified that no one else was present during the conversation. The context presented by Ms. Taylor for this conversation was that she and her husband were adding a deck to their home at the time, and were expecting a load of wood to be delivered that very day to their own backyard. She testified that she asked the applicant if the applicant would mind sharing the cost of the landscaping with her. It was clear from the way that she couched this evidence that Ms. Taylor knew that this was a personal question and one that the applicant may not wish to answer, making it likely that it was asked when no one else was present. She testified that the applicant did share the information with her, and told her that she had used money from her grandmother's inheritance to pay for the landscaping.

[95] In response, the applicant testified that she would never have shared this type of information with the respondent's sister, both because she kept her family’s finances private, and because she did not have the kind of relationship with Ms. Taylor where she would discuss such things.

[96] While overall I find the applicant to have testified truthfully and accurately to the best of her ability throughout this proceeding, I conclude that on this matter her recollection is flawed. While it is possible that Ms. Taylor may have aligned her evidence to assist her brother, as suggested by the applicant's counsel, the fact that she could recollect quite clearly the context in which the conversation occurred strongly suggests that it was one that had reason to remain fixed in her memory. I find that Ms. Taylor's evidence is credible, and taken together with all of the other evidence surrounding the issue of the inheritance, leads the court to the conclusion that the applicant's inheritance money was more likely than not the original source of the landscaping payment.

[97] When the $10,000 exclusion is removed from the net family property of the applicant, it results in an equalization payment in the amount of $34,659.58 by the respondent to the applicant.

Life Insurance

[98] The applicant seeks an order securing spousal and child support payments in the event of the respondent’s death. While the respondent did not provide testimony on this point, in the email exchange marked as Exhibit 25, he indicated to the applicant that he did not believe that it was necessary, as he did not own a policy of life insurance during their marriage.

[99] It is appropriate that the respondent put in place a policy, as the support payor, to secure his obligations, particularly given the duration of spousal support determined to be payable by the Court, and the young ages of the children. Although the evidence demonstrates that the respondent is a conscientious support payor and fiscally conservative, the Court has no power to direct a distribution of his estate absent an application by the applicant at the time of his death, and therefore it is appropriate that security be put in place at this time.

Health Benefits

[100] The respondent testified that he has health benefit coverage available through his union and that he will maintain coverage for the children.

Children’s Savings Accounts

[101] In 2007, the parties opened ING Direct (now Tangerine) savings accounts for each of their daughters. The position of the applicant is that a portion of the total savings should be reserved for future educational needs, but that some of the money contained in the accounts that was given to the children on their birthdays, Christmas, or special events, should be segregated and allowed to be spent by the children in their discretion when they are old enough to do so. The position of the respondent is that the entirety of the funds should be designated as educational funds, as that was the intention in setting up the accounts.

[102] Again, the applicant has maintained Quicken ledgers to record all deposits to these two accounts since their opening. At the time of trial, the balance held in Haley's account was $14,629.12, and the balance held in Megan's account was $14,503.95. The applicant testified that she had reviewed each of the entries prior to trial, in order to ascertain a total of the deposits that in her view were made exclusively for educational use. For Haley, this amount is $8,298.16, and for Megan is $8,403.95.

[103] The respondent testified that it was the intention of the parties in setting up the accounts that all deposits would be used for their daughters’ future education, as the parties had discussed the importance of educational savings even before Haley was born. He cited as an example the fact that when a baby shower was held in honour of Haley’s impending birth, the parties requested the family provide financial contributions to her educational savings. He testified that in future years the parties made it known that at Christmas and birthdays they would appreciate the money for educational savings. He testified that deposits were also made to the accounts from his pay or bonuses. The evidence of both parties is that the Child Tax Credit cheques were also deposited to these accounts.

[104] I find the testimony of each of the parties on this issue to be equally credible and meritorious. The only fair way to deal with these accounts is to order that each be split equally, and that each party deal with the money as he or she deems fit, provided that it remains held in trust for each of the children, and some portion of it be designated for education. The respondent has indicated his desire to hold the entirety such funds outside of an RESP due to the restrictions on that investment vehicle. The applicant indicated her desire to invest what she considers to be the educational portion of the accounts into an RESP. However, should either the applicant, or the respondent if he has a change in viewpoint, decide to keep a portion of the savings to provide directly to the children for purposes other than education, then here she should be free to decide that issue.

Prejudgment Interest

[105] The applicant seeks prejudgment interest on all retroactive support amounts and the equalization payment. I am ordering prejudgment interest on one-half of the retroactive support only. Although the applicant’s entitlement to the equalization payment arose at the date of separation, one of the impediments to settlement of that issue was her position on the inheritance, on which issue she was unsuccessful at trial. Dividing the retroactive support number in half is “rough justice”, the best that can be done given the accrual of such obligation over time.

FINAL ORDER

[106] For the foregoing reasons, this Court orders that a final order shall issue in the following terms:

1. There is a finding that the parties commenced cohabitation on January 1, 1995, and the length of their relationship was 18 years.

2. Based on this Court’s findings that the income of the respondent was $144,971 in 2012, $136,895 in 2013, $111,461 in 2014, and estimated to be $111,461 in 2015, the respondent shall pay retroactive child support to the applicant for the two children of the marriage, Haley Johnson Taylor born June 30, 2005 and Megan Johnson Taylor born October 12, 2006, fixed in the amount of $10,664 at the date of this Order.

3. Commencing July 1, 2015 and on the first of each month thereafter, the respondent shall pay child support to the applicant for the two children in the amount of $1,555.

4. The respondent shall pay to the applicant arrears of s. 7 expenses fixed at May 31, 2015 in the amount of $2,000.00.

5. The applicant and respondent will annually exchange their income tax returns, enclosures and notices of assessments by June 1st of each calendar year, commencing June 1, 2016.

6. If either the applicant or the respondent request to do so, the parties will adjust the Table amount of child support and s. 7 expenses paid each calendar year based on their exchange of income tax returns, enclosures and notices of assessment by June 1st of each calendar year, retroactive to January 1st of that same year, commencing June 1, 2016. The Table support shall be based on the respondent’s total Line 150 income. The proportionate sharing of s.7 expenses shall be based on the ratio of the total Line 150 income shown on each of the parties’ Income Tax Returns.

7. The amount of any s. 7 expense, and the parties’ proportionate share of such expense, shall be determined after the deduction of any subsidies, benefits or income tax deductions or credits for such expense.

8. Section 7 expenses may include, but are not limited to:

   a. medical and dental expenses for the children not covered by any benefit plan available to either party;

   b. daycare; and

   c. post-secondary school expenses.

9. The s. 7 expenses to be shared in 2015, by agreement of the parties, include summer camp fees (currently one week for each child), and the cost of dance lessons, recitals and costumes.

10. Provided that the applicant and the respondent have agreed upon the s. 7 expenses in advance, except post-secondary expenses specifically dealt with in subsequent paragraphs herein, the respondent shall pay 70% of the s. 7 expenses to the applicant based upon the agreed income ratio of 70/30 between the respondent and applicant until December 31, 2015. By way of clarification, the respondent will continue to pay on this ratio until June 1 of the following year at which time the income tax returns are to be exchanged as required in paragraph 5 above.

11. Post-secondary school expenses/costs shall be dealt with as follows:

    a. Child support shall be paid in accordance with the Federal Child Support Guidelines for the months of May, June, July and August of each year the child is in post-secondary school, including the said months after the child completes their course of study.

    b. The amount of the s. 7 post-secondary school expenses shall be estimated. By way of example, s. 7 post-secondary school expenses are currently estimated to be in the area of $20,000.00 per annum per child if the children were attending a post-secondary school to-day. With respect to the s. 7 post-secondary school expenses, the parties are entitled to:

    i. Deduct 100% of any bursary or scholarship money the child receives for the year;

    ii. 100% of any RESP or similar education fund established for the children as set out below;

    iii. Deduct 100% of any government grant received by the child;

    iv. Deduct 50% of an OSAP or other government loan;

    v. The child is expected to work and contribute 50% of their net earnings from any employment earnings toward their share of the costs of their education;

    vi. The applicant and respondent shall then be responsible for the remainder of the educational costs of their children pro-rated as required by s. 7 of the Federal Child Support Guidelines.

12. Support for the children shall end when the child ceases to be a dependent which shall occur upon the happening of one or more of the following events:

    a. The child ceases to be primarily resident with the applicant. A child is considered to be primarily resident with the applicant even if the child,

    i. Is on vacation;

    ii. Is hospitalized temporarily;

    iii. Is in full time attendance at an educational institution;

    iv. Pursues summer employment;

    b. The child becomes 22 years of age and ceases to be in full time attendance at an educational institution;

    c. The child obtains an undergraduate degree, diploma or certificate;

    d. The child becomes 18 years of age, and not in full time attendance at an educational institution;

    e. The child marries;

    f. The child dies;

    g. The wife/applicant dies;

    h. Nothing in this provision abdicates the responsibility of child support or s. 7 obligations should a child “take a victory lap” or otherwise have year off, and then return to school (secondary or post-secondary). As such, while there may be a hiatus in the child support or s. 7 obligations, those obligations will be reactivated upon the child returning to full time attendance as contemplated by paragraph 12(b) above.

13. The applicant and respondent shall take all the necessary steps to divide equally the children’s funds from TANGERINE (formerly ING), and each may transfer the one-half share to new accounts at the financial institution of his or her choice, provided that such funds continue to be held in trust for the children. Each shall be at liberty to apply all or part of such funds for educational purposes as set out in paragraph 11(b)(ii) above, provided that not less than 70% of the total funds held in each child’s account are used for educational purposes at the time that such child becomes eligible for such expense.

14. The remainder of the funds together with any accrued interest shall be turned over to the child who beneficially owns the said funds upon their 21st birthday, although the parties, on consent, may encroach upon the said funds prior to such date as they together deem appropriate for the health, welfare or other benefit of the child.

15. The respondent shall keep the children on any group benefit plan available to him at his place of employment for so long as they are dependants. If such plan, or any portion thereof is not direct pay to the service provider, and the respondent receives payment of any deductible or other amount from the group insurer for money paid by the applicant, the respondent shall reimburse the applicant within 30 days of receipt of such money.

16. The respondent shall pay spousal support to the applicant commencing on June 15, 2015 in the amount of $1,332 per month for an indefinite duration, subject to variation and possible review.

17. Spousal support shall be indexed in accordance with s. 34(5) of the Family Law Act.

18. The respondent shall pay the applicant retroactive spousal support fixed in the amount of $22,782 for the period October 15, 2012 to June 15, 2015.

19. The respondent shall obtain a life insurance policy in the amount of $400,000.00, and maintain the same so long as there is a support obligation owing, naming the applicant as the irrevocable beneficiary, subject to right to review the quantum of the insurance by June 1, 2017, and bi-annually thereafter.

20. If either the applicant or respondent plans a vacation out of Canada with the children, that parents will give the other a detailed itinerary at least 14 days before it begins, including the name of any flight carrier and flight times, accommodations, including address and telephone numbers, and details as to how to contact that parent during the trip.

21. If either the applicant or the respondent plans a vacation with the children which results in an absence of more than five (5) days from their regular school days, the consent of the other parent is required.

22. If either the applicant or the respondent plans a vacation outside of Canada with the children, the other parent will provide a notarized letter authorizing the children to travel with the travelling parent.

23. If either the applicant or the respondent plans a vacation outside of Canada without the children, that parent will give the other a telephone number where he or she can be reached in the case of an emergency or if the children wish to contact the parent.

24. The respondent shall pay to the applicant the sum of $34,659 to equalize their Net Family Property.

25. The law firm of Brown Law is hereby authorized to release to the applicant the entirety of the funds held in its trust account to the benefit of the parties, without necessity of the respondent’s authorization or direction, and one-half of such amount shall be credited to the total amount owing from the respondent to the applicant under the terms of this Order.

26. This Order bears pre-judgment interest calculated on the sum of $18,946 from January 31, 2013 at the applicable rate set out in the Courts of Justice Act, R.S.O. c. C.43, as amended.

27. Costs of the case shall be apportioned such that 75% are attributable to a determination of the issues relating to child and spousal support.

28. A Support Deduction Order shall issue.

COSTS

[107] If the parties are unable to agree upon the costs of the case, they may make submissions in writing, no longer than 3 single-spaced pages, plus any offers to settle, case law authorities and bill of costs on which they seek to rely. The applicant’s submissions are due by June 29, 2015, the respondent’s by July 13 and any reply by July 20. All submissions are to be directed to the office of the judicial assistants in Barrie, to my attention.

HEALEY J.

Date: June 15, 2015

1. Correction to the retroactive spousal support amount in para. 106 (18).