OVERVIEW

[1] The remaining issues in this application came before me by way of trial.

[2] The parties have previously resolved all issues arising from the breakdown of their marriage save for the following:

(a) child support, both ongoing and retroactive;

(b) spousal support, both ongoing and retroactive;

(d) life insurance as security for support; and

(e) costs.

[3] Central to determination of most of the issues outstanding is the issue of the Respondent’s income. Most of the evidence presented at trial focused on this issue.

[4] The following facts are not in dispute:

(a) The parties began cohabiting in June 1993.

(b) The parties married on June 26, 1999.

(d) The parties have one biological child of their relationship, namely, Georga Byrne born October 10, 2001.

(e) The Respondent had two children by a prior relationship, namely, Hilton Byrne born May 10, 1990 and Katherine Byrne born January 20, 1993.

(f) Tragically, Hilton died shortly after a skateboarding accident in October 2010.

[5] While this trial took place over five years after Hilton’s passing, that sad event permeated much of the evidence presented at trial and had a significant impact upon the manner in which this proceeding unfolded. I will expand on this issue later in my reasons.

APPLICANT’S POSITION

[6] It is the Applicant’s position that there ought to be judgment in the following terms:

(a) The income of the Respondent to be imputed at $629,000.00 per annum and the Applicant’s at $7,000;

(b) The Respondent to pay the Applicant monthly child support for the child Georga, on the 1^st day of every month, in the amount of $4,808.00 based upon imputed income of $629,000.00

(c) The parties to pay for Georga’s s. 7 expenses in proportion to their incomes with the Respondent paying for 65% of Georga’s s. 7 expenses and the Applicant paying for 35% based upon his imputed income of $629,000.00 if the Applicant is receiving SSAG mid-range spousal support.

(d) The Respondent to pay the Applicant spousal support, in the amount of $17,088.00, per month commencing on December 1, 2015, subject to a variation in the event of a material change in circumstances.

(e) The Respondent pay the Applicant, spousal and child support arrears in the amount of $452,755.00 plus interest;

(f) The Respondent to maintain a life insurance policy with a face value of at least 1,938,466.00, naming the Applicant as the irrevocable beneficiary for 100% of the policy so long as the Applicant is entitled to support for herself and/or Georga.

(g) The Respondent to pay the Applicant’s costs on a full recovery basis in an amount to be determined by the Court.

[7] The Applicant submits that during their 18 year relationship the parties enjoyed a very comfortable lifestyle with multiple vacations and a large luxurious home. During their co-habitation the Applicant cared for the Respondent’s children by his prior relationship and in particular was supportive of Hilton as he struggled in school. It is further submitted that the income of the Respondent for support purposes is as follows:

(a) 2010 - $573,000 for child support; $345,000 for spousal support

(b) 2011 - $922,000

(d) 2013 - $629,000 (average 2010 – 2012 income)

(e) 2014 - $629,000

(f) 2015 - $629,000

[8] The Applicant further submits that the Respondent has failed to fully comply with his court ordered disclosure obligations resulting in an incomplete picture of his income history, particularly in respect of the 2013, 2014 and 2015 tax years. Adverse inferences should be drawn, it is submitted.

[9] The Applicant further submits that while the Respondent has paid monies to her following separation through his corporate holdings, he has underpaid both child and spousal support and accordingly retroactive support is payable.

RESPONDENT’S POSITION

[10] The Respondent concedes the Applicant’s entitlement to both child and spousal support but maintains that he has overpaid support following separation. Duration of spousal support is an issue. The Respondent submits that there was a separation of the parties for the period 1997 to 1998 of approximately nine months duration and such should “reset” the clock in terms of measurement of duration of the parties’ cohabitation for spousal support purposes.

[11] The Respondent submits that the Applicant is well educated and capable of earning an income in excess of $70,000 per annum.

[12] The Respondent further submits that the Applicant has not made bona fide efforts to pursue employment following separation but has chosen instead to be largely unemployed.

[13] Regarding the Respondent’s income, he relies upon the evidence of Ms. Bonnie Prussky regarding 2009-2012, and for 2013 forward submits $392,000 ought to be imputed to him for support purposes. He concedes his disclosure failures but argues for the most part the missing disclosure is not material.

RESPONDENT’S INCOME

[14] As the central issue in this proceeding is the Respondent’s income, I intend to start my analysis with that issue.

[15] Before proceeding it is instructive to outline the Respondent’s corporate holdings.

STADIA INDUSTRIES LTD. (hereinafter “Stadia”)

[16] In 1989 the Respondent incorporated Stadia. At that time the Respondent and his two brothers each held one-third of the common shares. By the date of marriage the shareholdings had been reorganized such that the Respondent and the Pamela West Family Trust (the “Trust”) indirectly held one-third of Stadia. By the date of separation, the Respondent and the Trust indirectly held 100 percent of Stadia.

[17] Stadia is the Respondent’s primary income vehicle. Stadia installs and services glass windows and doors for commercial and retail clients. In 2013, when Bonnie Prussky of A.P. Valuations Limited prepared her Report, the business had approximately 19 employees including two sales representatives, 15 technicians, one driver and one shop technician. Mr. Byrne was the president and was involved in all aspects of the operations.

KATHIL INVESTMENTS INC. (hereinafter “Kathil”)

[18] In September 1998 the Respondent incorporated Kathil, transferring his one-third shareholdings in Stadia to Kathil in exchange for 475,000 Class X shares and 100 Class A common shares in Kathil. At the date of separation Kathil was an investment holding company, the assets being comprised of cash, investments and its holdings in Stadia.

NORTHERN STADIA OHD INC. (hereinafter “Northern Stadia”)

[19] Northern Stadia was incorporated in October 2008. The shares were then owned equally by the Respondent and Mr. Wilson Bojorque. Northern Stadia was an overhead door company. It ceased operations in 2010.

2054226 ONTARIO INC.

[20] 2054226 was incorporated in 2004. The Applicant is the sole shareholder of 2054226. As of the date of separation 2054226 was an inactive holding company.

BYRNE PARTNERS CORP. (hereinafter “BPC”).

[21] BPC was incorporated in 1997 by the Respondent’s father, whose interest was sold to the Respondent in 2006. As of October 1, 2008, 2054226 was the sole shareholder of BPC.

[22] As of the date of separation BPC operated a call-centre which facilitated contract work for repair and service work on behalf of national retailers. It continues in that line of business.

1480260 ONTARIO INC. operating as HEAD START (hereinafter “1480260”).

[23] 1480260 was incorporated in 2001. The Respondent was the sole shareholder until 2009 when he transferred his shares to Ruth Jackson, the Applicant’s mother. The company was dormant until 2009. Currently 1480260 operates as labour company for Stadia and BPC’s administrative staff. It functions as a flow-through entity with 1480260 paying the administrative staff of Stadia and BPC which are off-set by fees charged to Stadia and BPC.

THE RESPONDENT’S INCOME TAX RETURNS

[24] The Respondent’s Income Tax Returns are summarized as follow:

(a) 2011 – Notice of Reassessment – Line 150 Total Income - $111,902

(b) 2012 – T1 General – Line 150 Total Income - $110,135 (being comprised of T4 employment income of $110,000 and interest and other investment income of $135)

(d) 2013 – Notice of Assessment – Line 150 Total Income - $110,000

(e) 2014 – T1 General – Line 150 Total Income - $110,071 (being comprised of T4 employment income of $110,000 and interest and other investment income of $71)

RESPONDENT’S FINANCIAL STATEMENTS

[25] The Respondent’s various Financial Statements filed in this proceeding are summarized as follows:

(a) Financial Statement sworn September 29, 2011 identifying employer as Stadia, annualized income of $113,930 and gross income in the previous year from all sources of $113,930.

(b) Financial Statement of Respondent sworn January 17, 2014 identifying employer as Stadia, annualized income of $113,930 and gross income from all sources in the previous year of $113,930.

(c) Financial Statement of Respondent sworn March 31, 2014 identifying Stadia as employer, total annualized income of $113,930 and gross income from all sources in the previous year of $113,930.

(d) Financial Statement sworn May 22, 2015 identifying Stadia as employer, annualized income of $110,100 and gross income from all sources in the previous year of $110,000.

REPORT OF A.P. VALUATIONS LIMITED DATED AUGUST 16, 2013 (hereinafter the “2013 APV REPORT”)

[26] The 2013 APV Report was commissioned by prior counsel for the Respondent. The Report’s author, Bonnie Prussky was qualified as an expert and she testified at trial. She indicated that in calculating the Respondent’s income she was guided by the Federal Child Support Guidelines and further in determining income for support purposes she made adjustments to the Respondent’s Line 150 income to reflect:

(a) related party salaries;

(b) discretionary expenses;

[27] With respect to related party salaries, salaries paid to the Applicant, Georga Byrne and Katherine Byrne were added back as they were considered to be in excess of services provided.

[28] With respect to discretionary expenses, she added back discretionary expenses, summarized in her Report, based on discussions with the Respondent, his Chief Financial Officer (Mr. Stan Citrin) and her review of detailed accounting records.

[29] She applied an income tax gross-up to related party salaries and discretionary expenses representing the income tax benefit received by the respondent.

[30] Of particular note is Ms. Prussky’s determination that no corporate pre-tax income ought to be attributed to the Respondent for the purposes of determining his income. She noted that Stadia was a defendant in several lawsuits at the date of separation. The outcomes of those matters were uncertain at that time. At the date of the 2013 APV Report, one of the lawsuits was settled for $150,000 and another lawsuit was ongoing. She assumed the pre-tax income earned in 2011 was required to fund the litigation, operations and losses incurred in 2012. Broadly put, in considering the particular circumstances of the Respondent’s business, pre-tax corporate income should not be imputed for the years addressed in her report.

[31] The result of her analysis is summarized as follows:

	2012	2011	2010	2009
Total Income per tax return Line 150	$110,135	$110,568	$113,931	$110,000
Adjustments	$281,939	$221,431	$231,020	$215,963
Estimated income for support purposes	$392,074	$331,999	$344,951	$325,963
Rounded	$392,000	$332,000	$345,000	$326,000

PAULA WHITE VALUATIONS INC. REPORT DATED JULY 2, 2015 (hereinafter the “PWV Report”)

[32] Paula White gave testimony at trial for the Applicant and was qualified as an expert. She authored the PWV Report. It was essentially a critique of the 2013 APV Report.

[33] Ms. White agreed with Ms. Prussky’s analysis of the Respondent’s income for 2012; that is the Respondent’s income for 2012 should be treated as $392,000 for support purposes.

[34] The only difference in Ms. White’s opinion compared to that of Ms. Prussky was in her attribution of pre-tax corporate income to the Respondent in each of the 2009, 2010 and 2011 income tax years as follows:

	2011	2010	2009
Income for Guideline Purposes per APV Report	$332,000	$345,000	$326,000
Attribution of pre-tax corporate income	$590,000	$228,000	$320,000
Income for Guideline Purposes	$922,000	$573,000	$646,000

[35] In concluding the corporate pre-tax income ought to be attributed to the Respondent as income, Ms. White observed that the main operating companies (Stadia and BPC) were profitable in most of the years under review. She noted that the 2013 APV Report declined to attribute corporate pre-tax income to the Respondent in fiscal 2009/2010 as income generated in those years had been reflected in the valuation of the companies at the date of separation on April 25, 2010. In Ms. White’s view, since these fiscal years pre-date separation and as there is no pre-separation support obligation, “double-dipping” is not an issue. She felt the income analyses for 2009 and 2010 were useful in providing the court with information regarding income over the longer term, averages of income, patterns of income, and so on. Her determination of pre-tax corporate income is based on income available for distribution to shareholders for fiscal 2009 and 2010. In 2010, Stadia paid $118,000 to the Respondent as repayment of a shareholder loan. In 2011, Stadia paid $162,000 to the Respondent as repayment of a shareholder loan. These monies were included in the Respondent’s income as they were available for distribution.

[36] For 2011, Ms. White noted that the 2013 APV report noted unusual and non-recurring circumstances. In Ms. White’s view, it was for the court to determine the relevance of fluctuations in income and it was helpful to provide the court with the information and calculations relevant to such analysis.

[37] Ms. White noted that the 2013 APV Report stated that the companies did not have sufficient liquidity to distribute income. She disagreed.

[38] Regarding Stadia, in fiscal 2009 Stadia generated approximately $362,000 of pre-tax income and had a working capital ratio of 1.5 to 1. During 2009 Stadia provided $353,000 to Kathil, but borrowed approximately $33,000 from the Respondent (net amount $320,000). The money provided to Kathil was invested in cash/short term investments. In Ms. White’s view the net amount of related party loans of $320,000 made during fiscal 2009 indicates the amount of income available for distribution to shareholders and thus it was added to income. Based on her view of statistics for comparable companies she assumed a target working capital ratio of 1.5 to 1 is applicable to Stadia. Given that working capital ratio she did not believe that Stadia had sufficient working capital to notionally distribute the remaining $42,000 of its 2009 pre-tax income.

[39] Regarding Stadia in fiscal 2010, Stadia generated approximately $413,000 of pre-tax income and had a working capital ratio of 1.53 to 1. During fiscal 2010 Stadia advanced approximately $110,000 to Kathil and repaid approximately $118,000 to the Respondent for a total of $228,000 in distributions; accordingly, $228,000 of 2010 pre-tax income was available to shareholders and, given the working capital ratio, the remainder of income was not available.

[40] Regarding Stadia for fiscal 2011, Stadia generated approximately $590,000 of pre-tax income and had a working capital ratio of 2.1 to 1, indicating excess working capital of approximately $358,000. In addition, during 2011 Stadia advanced approximately $145,000 to related companies (mostly Kathil, which increased its cash on hand by $123,000) and repaid $162,000 of shareholder loans to the Respondent ($307,000 in aggregate). She assumed that the related party payments of $307,000 was available to shareholders. In addition, based on the excess amount of working capital, she assumed that the lesser of (a) remaining pre-tax profit of $283,000 (i.e. $590,000 less $307,000 equals $283,000) and (b) excess working capital of $358,000, was available to shareholders. As a result, she added to the Respondent’s 2011 income the entire pre-tax profit of $590,000 (i.e. $307,000 plus $283,000).

[41] Ms. White indicated that if there were legitimate losses in 2013, 2014 and 2015 there would be no attribution of corporate pre-tax income, similarly as in 2012.

RESPONDENT’S EVIDENCE

[42] It should be noted at the outset that some of the Respondent’s evidence regarding his income must be considered to have dubious reliability. In his testimony the Respondent conceded that he had not reviewed many of his personal financial statements. He also testified that his memory lacks clarity, something he attributes to the ongoing difficulties he experiences in coping with the loss of his son. Further, the Respondent conceded that several bank accounts in which he held a joint interest with third parties had not been included in his financial statements, choosing instead to disclose only those accounts regarding which he was “active”. He also did not disclose accounts held with other family members, where asked by those family members not to disclose such accounts. Having said this, it is important to note that there is a distinction between reliability and credibility. In general, I found both parties to be credible witnesses; however, I ascribe diminished reliability to the Respondent’s evidence for the foregoing reasons.

[43] It has also been conceded by the Respondent that he has failed to fully comply with his disclosure obligations; in particular, and significantly with respect to the issue of his income, he failed to comply with the order of May 28, 2015 requiring delivery of an Income Analysis regarding his 2013, 2014 and 2015 income by no later than July 31, 2015. At the commencement of trial in late November 2015 this Report had still not been completed, although completion was imminent. The Respondent’s explanation that he needed time to review the draft report with his Chief Financial Officer before it was finalized does not excuse his dilatory approach to this and other issues of disclosure. I ruled that the late report would not be received in evidence except on consent of the Applicant. The Applicant did not consent.

[44] The Respondent testified that he was agreeable with the income figures attributed to him by the 2013 APV Report.

[45] He disagreed with the attribution of corporate pre-tax income in accordance with the PWV Report.

[46] He confirmed that Kathil was little more than a bank account which he used to hold money for the payment of bills for Stadia. He preferred this method as it required the Stadia accounting department to contact him for release of money from Kathil in order to pay bills. In this manner he was able to maintain an element of control. This was the purpose in moving $320,000 to Kathil in the fiscal year ending January 31, 2009.

[47] He testified that no monies have been paid to him from Kathil since 2001 or 2002. Kathil never did any business and never had any assets other than a bank account. Kathil simply held operating money for Stadia.

[48] Regarding the $228,000 from Stadia to Kathil in 2010, a similar approach was adopted as for 2009.

[49] In 2011 the Respondent described a number of factors which produced a very unusual year and those factors influenced certain decisions. Those factors included Hilton’s passing in October 2010 which threw the Respondent into an emotional tailspin. He was sleeping on the couch at Stadia because he could not stand the quiet at his home which he had previously shared with Hilton. Also, Stadia was facing a number of lawsuits with approximately 2.1 million dollars in contingent liabilities outstanding. He was not active in the company as a result of his emotional tailspin and found it easier to leave the company in the control of Mr. Citrin. Monies were therefore set aside in Kathil in order to cover operational costs and the anticipated expenses associated with the lawsuits. The money in Kathil was never paid out to the Respondent by way of salary or dividend; rather, it flowed back and forth between Kathil and Stadia between 2010 and 2012.

[50] The Respondent further testified that he chose as a business practice not to rely upon an operating line of credit to finance Stadia’s operations. Since Stadia began to bid on larger contracts and it was too expensive to be bonded, Stadia pledged its line of credit. In the result cash had to be retained to pay for vehicles, salaries, raw materials and so on.

[51] Also, fiscal 2011 included substantial non-recurring income from the G20 summit.

APPLICANT’S EVIDENCE

[52] The Applicant relies upon the opinions expressed in the PWV Report in respect of the Respondent’s income for support purposes.

[53] In addition, the Applicant notes the Respondent’s lifestyle post-separation, including his two vehicles, extensive travel, purchase of a new home and extensive renovations.

ANALYSIS REGARDING RESPONDENT’S INCOME

[54] As indicated above, the primary dispute between the experts is whether, pursuant to s. 18(1) of the Guidelines, corporate pre-tax income should be attributed to the Respondent for the purpose of determining his income for support purposes for 2009, 2010 and 2011. The experts and parties are agreed that the Respondent’s income in 2012 was $392,000. Of course, it is necessary to determine his income for 2013, 2014 and 2015 as well; however, there was no expert testimony regarding income for these years.

[55] Ultimately my objective is to find a fair and reasonable figure that is consistent with a preponderance of the evidence and responsive to the Applicant’s legitimate concerns regarding the Respondent’s failure to comply with his disclosure obligations. The objective should not be to punish the Respondent by imputing to him an income so high that it can be viewed as out of step with the evidence. While an adverse inference can and will be drawn where a party fails to comply with court-ordered disclosure obligations, the inference should still be rooted in the evidence and such extrapolations as can be reasonably inferred from material non-disclosure.

[56] Regarding child support, under the Divorce Act income is determined by applying sections 15 to 20 of the Federal Child Support Guidelines (the “Guidelines”). The first step is to determine the payor spouse’s “annual income” under s. 16 of the Guidelines. “Annual income” is the payor’s “total income” as it appears on his T1 general form income tax return as adjusted according to Schedule III. “Total income” is the amount that appears at line 150 of a payor’s income tax return. It is also subject to considerations contained in sections 17 to 20, which give the court limited discretion in specified situations.

[57] As summarized above the Respondent’s Income Tax Returns have consistently shown Total Income of approximately $110,000, without Schedule III adjustments.

[58] While s. 17 of the Guidelines is relevant to the issue of non-recurring income, this section is not triggered unless the court is of the view that s. 16 of the guidelines would not be the fairest determination of income (see Walsh v. Walsh, 2008 CanLII 586 (ON SC), [2008] WDFL 1750 (S.C.J.)).

[59] It is clear that s. 17 of the Guidelines is engaged. The Respondent concedes that his income is consistent with the opinion of Ms. Prussky and accordingly it is not as set out in his tax returns. Therefore, determination of his income under s. 16 would not be the fairest determination of his income. Section 17 permits me to consider the Respondent’s income over the last 3 years and determine an amount that is fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non-recurring amount during those years.

[60] In addition, section 18 of the Guidelines is engaged as the Respondent is “a shareholder, director or office of a corporation” and I have concluded that income determined under s. 16 does not fairly reflect all the money available for payment of child support. As a result, I “may” consider the s. 17 situations and determine the spouse’s income to include “all or part of the pre-tax income of the corporation, and of any corporation that is related to that corporation, for the most recent taxation year…”

[61] Also, s. 19 of the Guidelines permits a court to “impute such amount of income to a spouse as it considers appropriate in the circumstances…” including those non-exhaustively listed thereafter.

[62] In Brophy v. Brophy, 2004 CanLII 25419 (ON CA), [2004] O.J. No. 17 (O.C.A.) the trial judge had rejected the submission at trial that the pre-tax corporate profits of a parties’ corporation should be used to determine that parties’ income for support purposes. Instead the trial judge relied on a different calculation including other adjustments to his reported income. The Court of Appeal saw no error in the trial judge’s determination in this regard.

[63] The trial decision in Brophy formulated a helpful approach. There, it was held that a court should exercise its discretion to include corporate pre-tax income with the support payor’s income using the following considerations and questions:

(1) Because of the separate legal entity of the corporation, should there be a general reluctance by the court to automatically corporate income to the shareholder?

(2) Is there a business reason for retaining earnings in the company?

(3) Is there one principal shareholder or are there other bone fide arms-length shareholders involved?

(4) What is the historical practice of the corporation for retaining earnings?

(5) What degree of control is exercised by the payor over the corporation?

[64] In Rapoport v. Rapoport, [2011] O.J. No. 5607 (ONSC) the court observed that “the attribution of corporate profits (retained earnings) in a corporation controlled by the payor is permitted under s. 18 of the Guidelines where the court determines that the amount of the payor’s income does not fairly reflect all the income available to him.” After referring to the Brophy case the trial judge concluded that it was correct to include the retained earnings in the husband’s annual income as the husband was the company’s only shareholder,

…so there was no other shareholder who had a right to share the retained earnings, and the husband ultimately exercised sole control of the corporation and therefore its financial operations. Also there was no business or historical reason put forward as to why profits had been retained. The money was available to the husband if he wanted it. It should be attributed to him so that he could not shelter himself from child support obligations.

[65] Applying the tests enunciated in Brophy I observe as follows:

(a) Despite the separate legal entity of the income vehicles available to the Respondent, the court should be open to attributing corporate income to the Respondent as shareholder as to do otherwise would potentially shelter income available to him as child support.

(b) The Respondent testified regarding his business practice of retaining cash for the purpose of replacing equipment as required, rather than leasing equipment. Despite the above stated concerns regarding the reliability of the Respondent’s evidence, there is no reason to reject the Respondent’s evidence in this regard. This evidence appears consistent with the balance of the evidence presented regarding the business finances. Also, this evidence pertains to a business practice rather than to precise calculation of the Respondent’s income. The carelessness and lack of reliability which I attribute to the Respondent relates to his personal financial statements filed in this proceeding and his failure to fully comply with disclosure orders as distinguished from his evidence regarding the broader issue of his business practices. I am satisfied that it was prudent for the Respondent to retain monies in the business given his emotional turmoil following the loss of the parties’ son and in an effort to promote stability for the business as he emotionally disengaged from its day to day operations. Thus, as contemplated in Brophy and Rapoport, there were business and historical reasons for the Respondent’s retention of monies in the business.

(c) It would appear that the Respondent and the trust indirectly held 100% of the shares of Stadia as of the date of separation. In the absence of evidence to the contrary, I am assuming that such continues to be the case. Although I have not been provided specific details, the conclusion that the Respondent is the directing mind of Stadia is supported by the evidence.

(d) The historical practice of the business regarding retained earnings is addressed in sub para. (b) above.

(e) Historically the Respondent has exercised control over the corporation, subject to the evidence summarized above following Hilton’s death and the Respondent’s disengagement from the day to day operations of the corporations. During this time he had ceded some control to his Chief Financial Officer.

[66] In her testimony Ms. Prussky indicated that she did not attribute corporate pre-tax income to the Respondent as a result of her analysis of the Respondent’s circumstances for the relevant time periods. She considered the outstanding lawsuits and the contingent liability associated therewith in concluding that 2011, in particular, was an unusual year and in observing that it was prudent to keep money in Kathil and Stadia to deal with these contingencies. She observed that there was no history of the Respondent stripping funds out of the companies. Due to the concerning issues presenting it was safer to hold some of the money back to address those issues.

[67] The Respondent testified that rather than leasing equipment he was in the practice of retaining cash for the purpose of replacing equipment as required. Despite the above stated concerns regarding the reliability of the Respondent’s evidence, there is no reason to reject the Respondent’s evidence in this regard and it appears consistent with the balance of the evidence presented regarding the business finances. This evidence pertains to a business practice rather than to precise calculation of his income about which the Respondent has demonstrated some carelessness.

[68] I am satisfied that it was prudent for the Respondent to retain monies in the business given his emotional turmoil following the loss of the parties’ son and in an effort to promote stability for the business as he emotionally disengaged from its day to day operations. I am also satisfied that there was an historical practice of retaining monies in the business for legitimate business reasons as outlined above.

[69] I note Ms. White’s opinion is based in part upon her observations regarding movement of monies from Stadia to Kathil. The Respondent testified as noted above regarding the nature of the movement of these monies and I am satisfied that his explanation is reasonable and accurate. He was not shaken in cross-examination on this issue and there was no evidence to the contrary.

[70] Based on the evidence summarized in part above, I am satisfied that the events in 2011 were unusual and non-recurring and thus should not be treated as a useful yardstick by which to measure attribution of corporate pre-tax income.

[71] The Applicant argues that the Respondent’s lifestyle belies an income much greater than that which he acknowledges. She stated that during the marriage “no expense was spared” for the children or the parties, they “wanted for nothing”, they enjoyed multiple vacations per year (some of which included extended family), Hilton attended private school, the parties did extensive renovations to their home and so on.

[72] On the other hand, the Respondent gave evidence of a couple living well but within their means. The expenses that were expensed through the business were added back to his income in the 2013 APV Report. He testified that he financed modest renovations to his home through monies from his mother, who owns a marina. He acquired a home in Barrie following separation with his share of insurance proceeds relating to Hilton’s death.

[73] In Bak v. Dobell, [2007] ONSCA 304 the court said:

Equally clearly, however, a payor’s lifestyle often will be relevant to whether a court may impute income under s. 19(1) of the Guidelines. For example, it may be apparent from lifestyle that a payor is receiving undeclared income because he or she has historically worked, lives comfortably with the usual trappings and yet declares minimal income for tax or child support purposes. In such a case, the recipient who calls evidence of the payor’s lifestyle will ask the court to draw the reasonable inference that the payor must have a great income than he or she has disclosed.

[74] In Marinangeli v. Marinangeli, 2003 CanLII 27673 (ON CA), 66 O.R. 3^rd 40 (O.C.A.), the court stated:

While the courts have differed in their approach when dealing with non-recurring income, the recurring theme is that the child of the marriage is that a child of the marriage should benefit from a sudden increase in lifestyle and money available to the family.

[75] Having reviewed the evidence on the issue of lifestyle, I find it too imprecise and vague to be of assistance. The lifestyle of the Respondent, both before and after separation, is not necessarily inconsistent with the level of income he asserts should be ascribed to him. Similarly, it is not necessarily consistent with the dramatically higher level of income the Applicant urges me to impute to him.

[76] Regarding Ms. White’s evidence, I found her to be a perfectly credible witness. Her approach was to present an alternative analysis of the Respondent’s income; however, I prefer the approach outlined by Ms. Prussky as it is consistent with the findings I have made regarding the Respondent’s business practices as set out above. Further, Ms. Prussky’s income figures are not at odds with the evidence I have heard regarding lifestyle.

[77] For the foregoing reasons I conclude that the Respondent’s income for support purposes for 2009, 2010, 2011 and 2012 should exclude pre-tax corporate income and is in accordance with the opinion expressed by Ms. Prussky in the 2013 APV Report as follows:

(a) 2009 - $326,000

(b) 2010 - $345,000

(d) 2012 - $392,000

[78] As noted above the experts were in agreement that if there was a reported loss in 2012, there would be no attribution of corporate pre-tax income to the Respondent. The Stadia Financial Statements for the fiscal year ending January 31, 2013 recorded a loss of $187,100. The Financial Statements for Stadia for the fiscal year ending January 31, 2014 report a loss of $79,648. The Financial Statements for Stadia for the fiscal year ending January 31, 2015 report a loss of $97,673. I appreciate that these are “notice to reader” Financial Statements, meaning that they have been prepared on the basis of information provided by corporate management and without audit or a review engagement. This renders them potentially unsafe to rely upon and I do consider them with an appropriate degree of caution; however, the evidence is uncontradicted that the income of the business is accurately tracked and without cash component. Business was conducted on a “business to business” basis and thus all transactions are invoiced. Therefore, I have no reason to conclude that the Financial Statements are not generally accurate.

[79] Having so found, as the experts were agreed that no corporate pre-tax income should be attributed to the Respondent in 2012 due to the business loss that year, and as there are business losses in 2013, 2014 and 2015 (based on the business Financial Statements for those year ends) I conclude that no corporate pre-tax income should be attributed to the Respondent for 2013, 2014 and 2015.

[80] That still leaves a question of what income should be attributed to the Respondent in the broader sense for the purpose of determining support for the years 2013, 2014 and 2015.

[81] I cannot ignore the frustration expressed by the Applicant both directly and through her counsel regarding the Respondent’s failure to fully comply with his disclosure obligations as noted above. The Respondent accepted full responsibility during his testimony for his shortcomings in this regard. I accept that his failure to comply is rooted in part in the emotional turmoil resulting from the loss of the parties’ son. It is clear that both parties continue to struggle with this terrible loss. It is more likely than not that the Respondent found the burden of participating in this litigation overwhelming as he struggled to deal with other issues. Having said that, the Applicant’s frustration is completely understandable and justified.

[82] In the circumstances it is reasonable for the Applicant to request that I draw an adverse inference from the Respondent’s failure to fully comply with his disclosure obligations. I am prepared to draw an adverse inference in concluding that the income disclosure of the Respondent, had it been provided, would more likely than not have disclosed a higher level of income than that suggested by the available evidence for the year 2013, 2014 and 2015. My ultimate determination of income should be based upon the evidence and reasonable extrapolation therefrom, informed by such adverse inferences as may reasonably arise from the Respondent’s failure to provide material disclosure within his control.

[83] The Respondent’s T4 income has been roughly consistent at $110,000 per annum and that he continued to receive T4 income of approximately $110,000 per annum.

[84] The adjustments for the years 2009 through 2012, excluding corporate pre-tax income, are agreed upon by the experts and have been summarized above. Those adjustments range from the low end of $215,963 to the high end of $281,939. The adverse inference that I draw is that the adjustments to the Respondent’s income would be at least at the high end experienced in 2012 being $281,939 and probably higher than that. I find therefore that adjustments to the Respondent’s T4 income are $300,000 for each of 2013, 2014 and 2015.

[85] A potential “double-dipping” issue was identified in evidence and submissions. Ms. Prussky for the Respondent indicated that some of his pre-tax corporate income in 2010 and 2011 should be excluded as to do otherwise would result in “double-dipping” because such funds were considered in determining the issue of equalization. Given my conclusion that no pre-tax corporate income will be attributed to the Respondent the issue of “double-dipping” does not arise.

[86] For the most part the foregoing analysis has been in the context of determining a spouse’s income for child support purposes under the Guidelines; however, subject to avoiding “double-dipping” issues such as those addressed immediately above, there is no reason why similar principles cannot be applied to determination of a spouse’s income for spousal support purposes as well. The objective remains the same: to find a fair and reasonable figure that is consistent with a preponderance of the evidence.

[87] Therefore, the income history upon which child and spousal support will be assessed is as follows:

(a) 2009 - $326,000

(b) 2010 - $345,000

(d) 2012 - $392,000

(e) 2013 - $410,000

(f) 2014 - $410,000

(g) 2015 - $410,000

APPLICANT’S INCOME

[88] The Applicant graduated from Seneca College in 1988 with a Chemical Pharmaceutical Diploma.

[89] In 1993 when the parties met she was working at Allstate Insurance Company at reception. She was there until 1995. During that time she was earning $20,000 - $22,000 per year.

[90] While attending Seneca College from 1995 to 1998 she worked part-time at Allstate as a Loss Report Taker for a few months but she found that it was too much to pursue employment while attending College full time.

[91] In 1999 she commenced employment with Apotex as a validation chemist. She remained until a few months before Georga was born in 2001, departing early due to health issues related to the pregnancy.

[92] Her income from Apotex was approximately $42,000 per annum. From August of 2001 when she left Apotex until date of separation she did not work outside the home.

[93] She stayed at home caring for the children.

[94] In 2009 she secured a BSc from the University of Waterloo after completing an online program of study.

[95] There was some income splitting with the Respondent following the Respondent acquiring his father’s interest in the business although she did do some picking up of cheques and documents on behalf of the business. Primarily she was caring for the children and the parties’ home.

[96] The Applicant’s income tax information is summarized as follows:

(a) 2010 – total income $54,884 being $14,000 from 1480260 and $40,884 from BPC.

(b) 2011 – line 150 total income $63,109 being comprised of $59,769 from BPC and the balance ($3,340) from a source not made clear in the evidence.

(d) 2013 – total line 150 income $99,247 being comprised of $93,000 from BPC and the balance (that is, $6,247) “net business income”.

(e) 2014 – total line 150 income $94,689 being comprised of $93,000 from BPC and the balance (that is, $1,700) from net business income.

[97] The Applicant testified that she was not an employee of BPC and that the Respondent was paying her through the company in lieu of support. There is no dispute in this regard. Therefore this income will not be attributed to the Applicant for support purposes.

[98] Following separation, in September 2010, the Applicant started working part-time for Scientists in School giving workshops in York Region. When Hilton passed away in October 2010 she put off further involvement in this employment until February 2011. She also needed to take time away from employment when Georga had an accident and was recovering following an injury to her leg.

[99] The Applicant has not worked full-time since the date of separation. She, like the Respondent, struggled with Hilton’s loss. She assisted the children in dealing with their grief. She was in therapy and still is. Georga is also in therapy.

[100] She continues to work for Scientists in School earning an estimated $6,000 - $7,000 per year. She is 45 years of age at time of trial.

[101] She believes that she might require further heart surgery next year. There was no medical evidence to this effect; as a consequence, I cannot give this evidence much weight. The possibility and the effects of the surgery are too speculative to have any influence on my deliberations.

[102] There was no medical or other expert evidence suggesting the Applicant is impeded in any way respecting her employability.

[103] Were she to retrain for a position similar to that she previously had at Apotex, she believes that it would require eight to ten months and approximately $10,000 in fees as a result of the dramatically changed technology associated with that employment.

[104] Georga is now 14 years old and can be left at home alone while she is working and she acknowledges she could have done this when Georga was 13 last year. When the parties separated Georga was in grade 9 and attending school full-time. Hilton and Katherine were both adults at date of separation and Georga was with the Respondent for approximately 42 percent of the time following separation.

[105] The Applicant acknowledged that she needs to go back to work full-time but she does not believe that she has the necessary skills to do so at this point.

[106] She attributes her not having secured full-time employment as yet to all of the turmoil that the family was experiencing following separation. She testified that she has not been able to go back to school to upgrade because she has had to be available for the children.

ANALYSIS RE APPLICANT’S INCOME

[107] The same broad legal framework that applied above to determination of the Respondent’s income is available for determination of the Applicant’s income; however, the Applicant’s circumstances are much less complex. Regarding income for child support purposes, s. 19 of the Guidelines will be the primary focus of my analysis.

[108] Section 19 (1) of the Guidelines, in matters pertaining to child support, entitles the court to impute an appropriate amount of income where a spouse is intentionally under-employed. The list of circumstances set out in s. 19(1) is not exhaustive. I find the approach set out in s. 19 to be useful in determining a party’s income in relation both to child and spousal support.

[109] The Applicant is a very intelligent woman of 45 years of age who has also struggled post-separation to cope with the loss of the parties’ relationship, the loss of their son Hilton and the emotional fall-out for the children. I have no doubt that, as with the Respondent, the Applicant found life at time overwhelming and circumstances sufficiently debilitating that it was not reasonable or realistic to expect her to return to school promptly after separation to pursue retraining, although Georga was already attending school full-time and spending much of her time under the Respondent’s care.

[110] In 2001, when last employed full time, the Applicant was earning about $42,000 per year.

[111] In 2011 the Applicant had income of $3,340 from a source other than BPC. In 2012 she made $3,676 from an unnamed source. In 2013 and 2014 she had net business income of $6,247 and $1,700 respectively. On the evidence it is probable that this income was from part-time employment with Scientists in School. Obviously, it has not been significant.

[112] Probably the best indicator of the Applicant’s earning potential is her income from Apotex in 2001 in the amount of $42,000.

[113] In the year following separation, with the Applicant not having been employed since 2001, some nine years prior, it would not be reasonable in these circumstances to expect her to generate any income. The combination of her long absence from the workforce, lack of up-to-date skills and the emotional fall-out arising from Hilton’s death rendered prompt resumption of employment unrealistic.

[114] I would reasonably expect perhaps another year in retraining during which little or no income would be generated, bringing us to approximately 2 years post separation.

[115] I pause at this juncture to observe that in my view the Applicant has not been applying herself to pursuit of self-sufficiency with the level of diligence reasonably expected almost 6 years after separation and with a child who has long been in full-time attendance at school, particularly in the absence of any medical evidence confirming any impediments to her full time employment.

[116] After a year for retraining I would reasonably expect the Applicant, with her upgraded skillset, to be able to generate income starting at $35,000 per annum with a reasonable annual increase thereafter. With such rate of income starting two years after separation, being April 2012 (one-third of the way through 2012), two-thirds of $35,000, or $23,100 would be imputed in 2012.

[117] For the foregoing reasons, I impute the following income to the Applicant for support purposes:

(a) 2010 - $0

(b) 2011 - $0

(d) 2013 - $37,500

(e) 2014 - $40,000

(f) 2015 - $42,500

SUPPORT

[118] The parties separated on April 25, 2010. What child and spousal support ought to have been paid thereafter? And what should be paid on an ongoing basis?

[119] In the history of this proceeding there has never been a child or spousal support order; instead, the Respondent paid the Applicant as a T4 employee of Stadia (in pre-tax dollars) and he covered many expenses for the Applicant through his business in after-tax dollars.

[120] After separation it appears that Georga resided primarily with the Applicant, although pursuant to the order of July 17, 2013 the child spent approximately 6 out of 14 days with the Respondent. The parties are largely agreed that for the most part following separation Georga was in the Respondent’s care approximately 42% of the time.

[121] On January 24, 2014 Georga’s primary residence was ordered to be with the Applicant, although the prior care schedule per the July 17, 2015 order was to continue. The Applicant was awarded sole custody on a final basis.

[122] The parties have submitted calculations regarding retroactivity. The Applicant’s calculations assume she has primary care of Georga. The Respondent’s calculations assume the parties are sharing care of Georga. In written submissions for the Respondent the care arrangement is characterized as a “near shared parenting schedule for Georga.”

[123] I received no evidence at trial to assist me in conducting the kind of analysis contemplated by s. 9 of the Guidelines and Contino v. Leonelli-Contino, 2005 SCC 63, [2005] S.C.J. No. 65 (SCC); in particular, I have no evidence of the increased costs of the alleged shared custody arrangement.

[124] In the absence of such evidence and in light of both the sole custody order in favour of the Applicant and the Respondent’s own characterization of the care arrangement not as “shared parenting” but as “near shared parenting”, I am proceeding with my analysis on the basis that Georga has been in the Applicant’s primary care. This will have no effect in any years for which I impute no income to the Applicant.

[125] Child support is governed by s. 15.1 of the Divorce Act and of course the Guidelines. It is determined on the care arrangement in place for Georga and the parties’ respective incomes. I have made the necessary findings for these components, and the results are summarized in the chart below.

[126] As I have found the Respondent’s income in 2015 to have been $410,000, his ongoing child support obligation will be commensurate with that level of income, until changed by agreement in writing between the parties or court order.

[127] As for spousal support, same is governed by s e 15.2 of the Divorce Act. The court is entitled to make such interim or final order as it “thinks reasonable”, taking into consideration the condition, means, needs and other circumstances of each spouse, including the length of time the spouses cohabited, the functions performed by each during cohabitation and any order, agreement or arrangement relating to support of either.

[128] The objectives of a spousal support order are to:

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.

[129] The Spousal Support Advisory Guidelines (“SSAG”) are a useful starting point in any analysis of spousal support. Although the SSAG do not represent binding law on the issue, they do assist the court in assessing the parties’ relative incomes and the impact of various possible support scenarios.

[130] I have considered the SSAG with the parties’ incomes as found above. In my view the mid-SSAG figure represents a reasonable quantitative assessment of spousal support, reflective of the condition, means and needs of the spouses and both the compensatory (explained further below regarding the issue of duration) and non-compensatory models of spousal support.

[131] The following chart summarizes my analysis of the issues of child and spousal support, assuming primary care of Georga to the Applicant, based on my income findings above and utilizing the mid-SSAG figure for spousal support where applicable:

Year	Duration	Respondent’s Income	Applicant’s Income	Child Support Payable	Mid-Spousal Support Payable	Totals
2010	May – Dec (8 months)	$345,000	$0	$2706 per month x8 = $21,648	$9409 per month x 8 = $75,272	$96,920
2011	Jan – Dec (12 months)	$332,000	$0	$2610 per month x 12 = $31,320	$9024 per month x 12 = $108,288	$139,608
2012	Part 1 – Jan – April (4 months)	$392,000	$0	$3054 per month x4 = $12,216	$10,774 per mth x4 =$43,096	$55,312
2012	Part 2 – May – Dec (8 months)	$392,000	$23,100 (imputed)	$3054 per month x 8 = $24,432	$9939 per month x 8 = $79,512	$103,951
2013	Jan – Dec (12 months)	$410,000	$37,500	$3187 per month x12 = $38,244	$10,015 per month x12 = $121,080	$158,424
2014	Jan – Dec (12 months)	$410,000	$40,000	$3187 per month x12 = $38,244	$9940 per month x 12 = $119,280	$157,534
2015	Jan – Dec (12 months)	$410,000	$42,500	$3187 per month x12 = $38, 244	$9858 per month x 12 = $118,296	$156,540

[132] Grand total of all child support payable from date of separation to December 31, 2015 is $204,348 (pre-tax dollars).

[133] Grand total of all spousal support payable from date of separation to December 31, 2015 is $663,931 (post-tax dollars).

CREDITS CLAIMED BY RESPONDENT

[134] Exhibit 7 represents a summary, without receipts, of “Amounts paid to or for Kellie Whalen from May 2010 to date”. It was compiled by the Respondent. I am treating the document as roughly current up to the time of trial, at least from the Respondent’s perspective. The Applicant challenged the figures contained in the summary on the basis that no receipts have been produced to corroborate same. At the same time she acknowledged never having asked for same specifically.

[135] I also note that many of the expenses paid by the Respondent, or the Respondent’s company, to the Applicant’s benefit were expenses that would have been easy for the Applicant herself to track and secure proof (for example gasoline expenses, Master card purchases, dental expenses not covered by benefits, property taxes, car repairs).

[136] The Applicant submits that the Respondent failed to produce an Affidavit Listing Documents pursuant to r. 19(1) of the Family Law Rules which requires that every party give the other party an affidavit listing every document that is relevant to any issue in the case and in the parties’ control and available to the party on request. The Applicant had requested the Affidavit but same was never provided. It is argued that had the Respondent done so it would have referred to the all of the receipts for the expenses for which he is now seeking credit.

[137] Rule 19(10) specifies some options available to the court in the event of non-compliance including ordering that a document favourable to the parties’ case may not be used except with the court’s permission. The Respondent has not sought to tender any receipts into evidence that have not been produced in advance.

[138] While it would have been preferable for the Respondent to produce these relevant documents to the Applicant prior to trial, given the Applicant’s failure to ever ask specifically for these documents and her own ability to confirm many of the numbers referred to, leads me to conclude that I should ascribe meaningful weight to the Respondent’s evidence in this regard.

[139] I will now review the list of credits sought by the Respondent:

(a) Payroll: It is acknowledged by the Applicant that following separation she has received T4 income from the Respondent’s business totalling $471,748.15 as of trial in November 2015. According to the Respondent’s submissions, by December 31, 2015 she will have been paid approximately $485,000 since separation. The parties are agreed that the Respondent should receive credit in this regard. Therefore there shall be a credit in the amount of $485,000 through December 31, 2015.

(b) 407 ETR – The Respondent claims $1178.72. The Applicant never asked for or received any receipts but she is not disputing the amount. Therefore $1178.72 will be allowed to the credit of the Respondent.

(c) Car Insurance – The Respondent seeks credit in the amount of $8396.80. The Applicant never asked for backup documentation with respect to this claimed expenditure, but she disputes the amount. I have no reason to dismiss the Respondent’s uncontradicted evidence. Therefore, $8396.80 will be allowed to the Respondent.

(d) Telus cellphone – The Respondent seeks credit in the amount of $4175.87 paid to the benefit of the Applicant. The Applicant never asked for any backup documentation. She acknowledges that the company paid for her phone. There is no reason to disregard the Respondent’s evidence in this regard and therefore this claim for credit will be allowed.

(e) Bell Cellphone – The Respondent seeks credit in the amount of $2332.14. Again, the Applicant never asked for backup documentation. There is no reason to disregard the Respondent’s evidence. Therefore the claim will be allowed.

(f) BMO Mastercard – The Respondent seeks credit in the amount of $52,513.06. Stadia is the account holder. The Applicant has a card for this account. The account has a $1500 per month limit. The Applicant suggested it was impossible to reach the claimed level of expenditure; however, I note that it has been over sixty months since separation and at $1500 per month that alone would account for $90,000 in available credit. Again, the Applicant never asked for any backup documentation. She could as easily have kept track of her expenditures. I have no reason to disregard the Respondent’s evidence and therefore this item will be allowed as a credit to the Respondent.

(g) Enbridge Gas re: Matrimonial Home – The Respondent claims credit of $5269.72. The Applicant does not ask for any backup documentation. She indicated that she had been paying the gas expense for at least three years but acknowledged that the Respondent is entitled to some credit. The Respondent’s evidence was more precise in this regard and I have no reason to disregard it. I am therefore allowing the amount claimed.

(h) Petro Canada Gasoline – The Respondent seeks a credit of $27,266.83. The credit card account was in Stadia’s name. The Applicant had a card for the account for over sixty months. She indicated that she averaged about $300 per month and claimed that an expense of $4000 in one month was not possible; however, it appears that the Applicant was mistaken in her evidence in this regard. It appears that she has misinterpreted a reference to a total of $4558 in payments covering the period March 1, 2011 to October 17, 2011. She did not seek backup documentation from the Respondent. She could have kept track of these expenditures herself. I have no reason to disregard the Respondent’s evidence in this regard and therefore the claim for credit will be allowed in the amount of $27,266.83.

(i) Town of Aurora Parking Ticket – The Respondent seeks a credit of $25. The Applicant wife never asked for backup documentation. She could have kept track of this expense herself. There is no reason to disregard the Respondent’s evidence and the Applicant does not deny the expense. It is therefore allowed.

(j) Wilson, Christen In Trust – The Respondent initially sought credit in the amount of $81,700. The Respondent has withdrawn his request for credit for $6700 which comprises part of his claim for the $81,700, thus reducing his claim in this regard to $75,000. The remainder of this claim relates to para. 4 of the temporary order of Justice Mulligan dated October 23, 2013 which provides as follows:

The Respondent, Timothy Byrne, shall pay to the Applicant, Kellie Whalen-Byrne, interim disbursements in the amount of $75,000 payable as follows:

(a) $25,000 on or before October 31, 2013; and

(b) $50,000 on or before December 15, 2013,

and such payments shall be payable to the Applicant’s counsel in trust. The aforesaid payment is without prejudice to the issue of whether or not such payment shall be credited against an equalization payment.”

The Respondent argues that the $75,000 payment referred to in this order should now be credited to him against any support found owing to the Applicant. On April 24, 2015 Justice Jarvis incorporated Minutes of Settlement into an order regarding resolution of property and equalization issues. In particular the Minutes of Settlement provided:

(1) The Respondent shall pay to the Applicant $399,000 in full and final satisfaction of the issues of division of net family property, pre-judgment interest and costs in relation to the issue of property and all other claims in the preceding hearing save and expect the issues of:

(a) ongoing child and spousal support;

(b) retroactive child and spousal support.

(7) The Respondent shall transfer the 2011 Chevy Tahoe Hybrid to the Applicant within 30 days of the execution of these Minutes of Settlement.

(8) The Respondent shall be responsible for any tax implications, liabilities, fees, legal fees or expenses associated with transferring the title of the Chevy Tahoe Hybrid 2011 from Byrne Partners to the Applicant within 30 days of these Minutes of Settlement. The Applicant shall have possession of the vehicle and shall be responsible for certifying the vehicle.

In reviewing the Minutes of Settlement it is clear that document was intended as a final resolution of the issues specified therein. The fact that there is no specific reference to the $75,000 interim disbursement payment does not mean it has not been accounted for in some manner in the parties’ negotiations on these issues. In the October 23, 2013 Order the $75,000 was characterized as “interim disbursements”; in other words, this was a property transfer, not a support order. It is thus captured by the Minutes of Settlement regarding settlement of the property issues.

I therefore conclude that the Respondent is not entitled to a further credit of any of the $81,700 in this regard.

(k) MTO Licence Sticker – The Respondent seeks credit of $246 in this regard. The Applicant agrees. Therefore this credit will be allowed.

(l) Empire Life Benefits – The Respondent seeks credit of $10,412.21. The Applicant never asked for any backup documentation. The Applicant indicated that she was not sure regarding the amount being claimed by the Respondent. The Respondent confirmed in his evidence that the amount claimed relates only to expenditure in relation to the Applicant and the children, and not the Respondent. I have no reason to disregard the Respondent’s evidence and I therefore allow this claim.

(m) Dr. Budolowski, Dentist (not covered by benefits) – The Respondent seeks a credit of $1248.12 in this regard. The Applicant indicated that she was not certain regarding the amount. She never asked for any backup documentation. This is another expense that she could easily have confirmed herself and kept track of. I have no reason to disregard the Respondent’s evidence and it is therefore allowed.

(n) Martha McCarthy – The Respondent withdraws his claim for credit of $16,500 in this regard.

(o) Direct Payments to Applicant from Respondent – The Respondent withdraws his claim for $111,500 in this regard.

(p) Appliance Canada (Stove) – The Respondent seeks credit of $2260. The Respondent purchased a stove to replace a broken stove in the matrimonial home post-separation. The Respondent selected the stove, paid for it and arranged delivery to the matrimonial home. The Applicant says that the Respondent said “Merry Christmas” when dropping it off. The Respondent denies this. This is unlike other expenditures referred to above in that the Applicant had no say regarding this expenditure; rather, the Respondent simply acted unilaterally. I am not allowing the credit claimed in this respect.

(q) Property Tax Regarding Matrimonial Home – The Respondent claims $4352.48 in this regard. The Applicant has not asked for backup documentation. She agrees that the Respondent should get credit. I have no reason to disregard the Respondent’s evidence and therefore the claim is allowed in the amount of $4352.48.

(r) Russell Layton (Applicant’s Personal Taxes) – The Respondent seeks credit of $200 paid to have the Applicant’s personal income taxes prepared. The Applicant did not instruct the Respondent to have someone do her taxes. Again, she had no say in incurring this expense and I am therefore not allowing it.

(s) Car Repair – The Respondent seeks credit of $2988.79 in this regard. The Applicant agrees that the Respondent should receive a credit but she was uncertain regarding the amount. She never asked for any backup documentation. There is no reason to disregard the Respondent’s evidence and therefore his claim will be allowed in the amount of $2988.79.

(t) Car Payments – The Respondent seeks a credit of $23,564.30 in this regard. The Respondent gave very little evidence on this issue. The Applicant says the payments relate to a Chevy Tahoe motor vehicle which is still in BPC’s name. She says that she purchased it with $20,000 of her own funds with the balance paid by BPC at $400 per month. The vehicle has been included in the property settlement referred to above. I conclude that it is captured by the terms of the property settlement and fully accounted for in accordance with the terms of the Minutes of Settlement. Therefore no further claim for credit should be allowed.

[140] Total of allowed credits: $485,000 in payroll (pre-tax) and $120,405.74 in non-payroll (post-tax) funds.

ACCOUNTING RE: RETROACTIVITY AND CREDITS

[141] As the Respondent’s support obligations and credits have accrued in both pre and post-tax dollars it is necessary to address some accounting issues arising as a result.

[142] I find the simplest method to address these issues is to apply pre-tax credits to pre-tax obligations, and post-tax credits to post-tax obligations.

[143] As indicated above I have found total child support payable by the Respondent through December 31, 2015 in the amount of $204,348, in post-tax funds. I have also found the Respondent is entitled to $120,405.74 in post-tax credits. Therefore the difference of $83,942.26 is owing by the Respondent to the Applicant in retroactive child support through December 31, 2015.

[144] As indicated above I have found spousal support payable by the Respondent through December 31, 2015 in the amount of $663,931, in pre-tax funds. I have also found the Respondent is entitled to $485,000 in pre-tax credits. Therefore the difference of $178,931 is owing by the Respondent to the Applicant in retroactive spousal support through December 31, 2015. If this amount is paid in a lump sum it must be discounted for tax.

[145] I will invite further brief submissions from the parties regarding terms of payment of these amounts if they are unable to agree.

[146] There may also be need to address issues of post-trial accounting if the Respondent has continued to make payments to the Applicant beyond December 31, 2015 and beyond those which have been addressed as credits above.

DURATION OF SPOUSAL SUPPORT

[147] The Applicant submits that the parties commenced cohabiting in June 1993 and had a “temporary separation” from October 1996 to March 1997 (not October 1995 to March 1996 as submitted by the Applicant in her written submissions at para. 82). The Applicant testified that around that time she was a witness in a sexual assault trial and “we decided after that I would move into my mother’s place for a few months”. She testified that in December of 1996 the Respondent proposed to her but she was “not ready” and the parties continued to see each other. In cross-examination she conceded that the parties were having difficulty in their relationship. She disagrees with the Respondent’s position that the parties separated for nine months from 1997 to 1998. She acknowledged that she went out with someone a few times between October 1996 and March 1997.

[148] According to the Respondent the parties began to cohabit in 1994. When giving this testimony the Respondent said: “I am not sure re: the math”. The parties separated for a period of nine to twelve months from 1997 to 1998, they had some “challenges due to stuff” the Applicant was dealing with. They “fell apart”. The Respondent was dating someone else. The Applicant had moved out of their home into her mother’s home in Toronto. The separation lasted about nine months. The parties were separating their affairs.

[149] In considering this issue I note the Applicant in her application alleged that the parties started living together in June 1993. In his answer the Respondent agreed that that family history was “correct”.

[150] Given the Respondent’s admitted uncertainty with dates and his acknowledgment in the Answer noted above, I find that the parties began cohabiting in June 1993.

[151] For the same reasons I accept the Applicant’s evidence and find that the Applicant moved out of the parties’ home in October 1996 until March 1997.

[152] I also find that during their time apart the parties each saw other people after encountering difficulties in their relationship.

[153] It appears that following the Applicant moving in with her mother the parties continued to be open to the possibility of continuing a relationship; however, both parties were taking steps to put distance between themselves (ie. cessation of cohabitation and pursuit of relationships with other persons other than the other party). The most reasonable interpretation is that the parties intended to be separate from one another subject, at best, to the possibility of resumption of cohabitation. I find therefore that the period of cohabitation for consideration in respect of the Applicant’s claim for spousal support commences March 1997 and concludes with separation on April 10, 2010 for a period of thirteen years.

[154] The Spousal Support Advisory Guidelines suggest a duration of support of 6.5 years to 13 years from the date of separation. This is not a binding range but rather merely a suggestion.

[155] Section 15.2(3) of the Divorce Act permits me to make a spousal support order for a definite or indefinite period or until a specified event occurs. Further, I am entitled to impose terms, conditions or restrictions in connection with the order as I think fit and just.

[156] The factors to consider and the objectives of an order for support as set out in s. 15.2 (4) and (6) of the Divorce Act have been identified earlier in these Reasons.

[157] I find that the duration for spousal support which is appropriate in this case to be eleven years from the date of separation for the following reasons:

(a) Although both parties have been involved parents, it is clear that the respondent assumed the more prominent role in this regard, particularly given her absence from the workplace and thus greater availability. She cared for Georga and the Respondent’s children by a prior relationship.

(b) The Applicant interrupted her career and cared for the parties’ child Georga, and, when they were younger, the Respondent’s children by a prior relationship. Her absence from the workforce for a period of 9 years as of separation put her at a competitive disadvantage. At the same time, the Respondent benefitted from the Applicant’s sacrifice in this regard as he was able to focus on building his business with considerable success.

(c) In my analysis regarding the Applicant’s income I have already addressed what I find to be reasonable expectations regarding her earning ability over time following separation. I am measuring the Applicant’s duration of entitlement from the date of separation in April, 2010; thus, eleven years duration expires in March, 2021, just over 5 years from now. This is more than the Applicant reasonably requires to return meaningfully to the workplace, but included is a component of compensatory support to address her sacrifices from which the Respondent has benefitted.

(d) The period of an additional 5 years (approximately) from now would reasonably promote the Applicant’s economic self-sufficiency.

SECTION 7 EXPENSES

[158] Only the Applicant testified regarding s. 7 expenses. I was given very little detail and she confessed that she did not know what a s. 7 expense was. She made reference to clothing, band, uniforms, snowboard equipment, glasses and hair expenses.

[159] Not all of these expenses would qualify as special or extraordinary expenses within the meaning of s. 7 of the Guidelines. Without more detail I am not able to conclude that any of the expenses broadly referenced by the Applicant would qualify as s. 7 expenses.

[160] However, it is appropriate that there be an order for sharing of appropriate expenses.

[161] I will therefore include an appropriate provision in my judgment summarized below.

LIFE INSURANCE

[162] The Applicant seeks an order requiring the Respondent to maintain a policy of life insurance upon his own life with a face value of at least $1.9 million, naming the Applicant as the irrevocable beneficiary for 100% of the policy for so long as the Applicant in entitled to support for herself and/or Georga.

[163] The Respondent takes the position that there is no evidence that he currently owns a life insurance policy. His Financial Statements do not reflect ownership of a policy and he was not cross-examined on this point. The law is clear, he argues, that any order in this regard can only apply to existing policies. In law, the Respondent cannot be compelled to purchase a policy so as to secure his support obligation.

[164] The Respondent’s position is correct in relation to applications for support under the FLA; however, this is an application for support under the Divorce Act. In Katz v. Katz, 2014 ONCA 606, [2014] O.J. No. 3909 (O.C.A) in paras 66 and 71 as follows:

In my respectful view, the principle in Feinstat on which the Respondent relies is incorrect. Section 34(1) of the Family Law Act lists specific powers of a court when making a support under s. 33. Section 34(1)(i) permits a court in an application under s. 33 to “make an interim or final order….requiring that a spouse who has a policy of life insurance as defined under the Insurance Act designate the other spouse or child as beneficiary irrevocably”.

The situation under the Divorce Act is somewhat different. There is no provision similar to s. 34(1) of the Family Law Act listing the specific powers of the court in an application for support. Rather, the court is given broad discretion to impose terms, conditions or restrictions in connection with the order or interim order as it thinks fit and just: s. 15(1)(4) (child support), s. 15.2(3) (spousal support). It is generally accepted that as part of its discretionary power under these sections, the court may impose terms aimed at securing payment of a support order: see Trinidad vs. Trinidad, (2007), 2007 CanLII 52985 (ON SC), 47 RFL 6^th 128 (ONSC) at para. 97; Jardine-Vissers v. Vissers, 2011 NSSC 195, [2011] NSSC 195, 303 NSR 2^nd 200, at para. 44. With respect to a child support order made under the Divorce Act, s.12 of the Federal Child Support Guidelines gives a court express authority to order a spouse to supply security.

[165] I am therefore satisfied that I have the authority to order that the Respondent secure life insurance and maintain same for the purpose of securing his child and spousal support obligations.

[166] Unfortunately, no evidence was led as to whether there is any impediment to the Respondent securing life insurance coverage. Further, I have received little evidence on the basis of which to draw conclusions about an appropriate face amount.

[167] I will therefore be seeking further brief written submissions from the parties on these issues.

DIVORCE

[168] Both parties claim a divorce in their respective pleadings.

[169] Either party may pursue the issue of divorce by filing a Form 36 affidavit submitted to my attention.

CONCLUSION

[170] For all the foregoing reasons, judgment shall issue in the following terms:

(1) Commencing March 1, 2016 the Respondent shall pay child support for the child Georga in the amount of $3,187 per month.

(2) Commencing March 1, 2016 the Respondent shall pay to the Applicant spousal support the sum of $9,858 per month until March 31, 2021.

(3) The Respondent shall pay retroactive child support to the Applicant fixed in the amount of $83,942 (subject to amendment for post-trial accounting). Timing of payment shall be determined following receipt of submissions from the parties.

(4) The Respondent shall pay retroactive spousal support to the Applicant in the amount of $178,931 (subject to discount for tax if paid in a lump sum and to amendment for post-trial accounting). Timing of payment shall be determined following receipt of submissions from the parties.

(5) Within 30 days the parties shall provide (through my assistant at Barrie) brief written submissions regarding:

a. Whether there is any impediment to the Respondent securing life insurance as security for support.

b. The appropriate quantum for face amount of the life insurance.

c. Timing of payments of retroactive child and spousal support referred to above.

d. Post-trial accounting of payments by Respondent to Applicant for which credit is sought.

(6) The parties shall share the child’s special and extraordinary expenses proportionally to their respective incomes as they may agree from time to time or as may be ordered by the court.

(7) Either party may proceed to secure Divorce Judgment by filing a Form 36 Affidavit for Divorce.

(8) If unable to agree on costs, the parties may provide written submissions on costs, restricted to four pages each within 30 days to be provided through my assistant at Barrie.

Douglas J.

Released: February 17, 2016

Whalen-Byrne v. Byrne, 2016 ONSC 1172

Case Summary