COURT FILE NO.: FS-15-403750 DATE: 20170418

ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

DIMITAR POPOVSKI In person Applicant

• and -

TATJANA PIRKOVA In person Respondent

HEARD: March 20, 21, 22, 23 and 24, 2017

MESBUR J

REASONS FOR DECISION

Introduction and issues to be decided:

[1] The parties were married in 2003 and separated at the end of 2008 when they were both 36 years old. They are the parents of a 12 year old daughter, “A”. To the parties’ credit, they have resolved all issues regarding parenting in a consent to a final order. It provides for a two-week rotating residential schedule for A. In week one, A resides with her mother from Monday to Thursday morning, and with her father from Thursday morning until Sunday at 4:00. In week two, A resides with her mother from Monday to Wednesday morning and with her father after that until Saturday at 8:00 p.m. The consent has additional provisions concerning holidays, PA days and summer vacation.

[2] Coming to this agreement was a difficult process for the parties, and required the involvement of the Office of the Children’s Lawyer (OCL) to do so. As I have said, the parties have sensibly resolved issues regarding A. As a result, the only issues for this trial are financial ones.

[3] The applicant, Mr. Popovski, commenced this proceeding well after the 6-year limitation period to claim equalization of net family property had expired. His claims were limited to a claim for divorce, and child-related issues. When the respondent, Ms. Pirkova, responded to the claim, her answer was also limited to child-related issues, as well as claims for both spousal and child support. She did not assert a claim for equalization of net family property.

[4] The case has been conferenced extensively, and many judges have heard and adjudicated many long motions. Somewhere along the way, Ms. Pirkova raised issues regarding equalization of net family property. In an order dated September 28, 2016 Stevenson J granted Ms. Pirkova leave to serve and file an Amended Answer to seek equalization of net family property and a form 13.1 financial statement. They were to be served and filed by October 14, 2016. Ms. Pirkova failed to do so. She has never adequately explained her failure.

[5] As part of the trial management process, Ms. Pirkova was given permission to bring a motion at the commencement of trial for leave to amend her pleading to claim equalization of net family property. She did not do so in any formal way. Ms. Pirkova filed no material. She did not serve and file an amended Answer. She had no notice of motion to request permission to advance the claim. She filed nothing to address any reason for her delay, or any reason why the court should exercise its discretion in her favour under s.2(8) of the Family Law Act. Mr. Popovski strongly resisted any leave being granted, citing the passing of the limitation period, the additional delay even after the proceedings were commenced, Ms. Pirkova’s failure to comply with the timetable set for her to advance the claim, the overall passage of time, and the fact the parties’ assets had already essentially been divided.

[6] For oral reasons given at the commencement of trial, I declined to grant leave to amend. As I see it, the limitation period is a complete defence to any claim for equalization. I was provided with nothing to persuade me this is a case to exercise my discretion and extend the time to make a claim for equalization.

[7] Accordingly, the issues for this trial were limited to Ms. Pirkova’s claims for child support and spousal support, both prospectively and retroactively and Mr. Popovski’s claims for post-separation adjustments and credits in relation to child support. Central to deciding all these issues is determining each party’s income, including imputing income to Ms. Pirkova.

The parties’ background, relationship and work history:

[8] Ms. Pirkova is originally from Macedonia. Before coming to Canada, Ms. Pirkova lived in the United Kingdom for several years, primarily pursuing post-graduate studies. She obtained a Masters degree in marketing from Westminster University during her time in the UK. Ms. Pirkova worked briefly in the UK before immigrating to Canada.

[9] Mr. Popovski is also originally from Macedonia, and also immigrated to Canada. When the parties met here in 2003, Ms. Pirkova was working in some fashion, and Mr. Popovski had his own business, providing training and teaching project management. Ms. Pirkova began to assist him in his business.

[10] The parties began to live together sometime in the summer 2003. They moved into Mr. Popovski’s apartment on Bloor St. Mr. Popovski puts the date at August, while Ms. Pirkova suggests it was June 1. On the balance of probabilities, I conclude they began to live together July 1, 2003. They continued to work in Mr. Popovski’s business together.

[11] A was conceived in the fall of 2003 and the parties decided to marry. They were married in Antigua on January 17, 2004. They continued to live in their Toronto apartment until A was born on July 3, 2004, and then moved to a two-bedroom apartment on Avenue Road.

[12] By the end of the year the parties had purchased a house in Woodbridge. They moved into their new home sometime in January of 2004. At this point, Mr. Popovski had obtained a salaried position with his present employer as a project manager at a salary of about $85,000.

[13] After A’s birth, Ms. Pirkova was not initially employed. She looked for work in her field of marketing, and was only able to find a job in Halifax at the QEII Foundation. It was to pay $85,000. Ms. Pirkova began the job in September of 2006. She took the position, hoping it would help her to build her resume. She commuted between Halifax and Toronto, working remotely from Toronto as often as she could. Unfortunately, she was dismissed from her job in late December of 2006 or early January of 2007. Since then, she has not worked as an employee for anyone.

[14] Instead, Ms. Pirkova decided to open her own business. This was a small coffee kiosk in a medical building. In 2007, Ms. Pirkova’s notice of assessment shows her line 150 income as $34,957.

[15] In September of 2008, Ms. Pirkova sold the coffee kiosk business for $40,000. Before this sale, Ms. Pirkova had entered into another agreement of purchase and sale with another prospective purchaser, but that transaction failed to close. As a result, Ms. Pirkova retained the $10,000 deposit. That money, however, remains the subject matter of some litigation. Ms. Pirkova says she had borrowed most of the money for the kiosk from her father, and ultimately repaid him some $20,000 from the sale proceeds.

[16] Meanwhile, the parties had decided to separate. I have concluded they separated at the end of December 2008. The parties therefore cohabited from July 1, 2003 until December 31, 2008, a period of 5 years and 6 months. Each was 36 years old at the date of separation. Although the parties officially separated at that time, they continued to reside in their home until it was sold the following summer.

[17] After selling the coffee kiosk, Ms. Pirkova decided to embark on another business venture. She went into the restaurant business, opening a restaurant called Café St Germaine on Avenue Road near Lawrence. Although the café garnered good reviews, Ms. Pirkova says her difficulties in obtaining a liquor licence impaired the business’ profitability. By 2014, she was struggling to pay her rent and the landlord shut the café for a period for non-payment of rent.

[18] Ms. Pirkova was then able to negotiate a brief reduction in rent during February to March of 2014. Even with the reduction, things did not improve, and Ms. Pirkova was in continued negotiations with her landlord. As a result, she ultimately had to close in 2015. During the roughly 4 years Ms. Pirkova owned and operated the café, she was not able to pay herself a salary. She cashed RRSPs and relied on loans and gifts from family and friends to support herself and A.

[19] Although Ms. Pirkova attempted to sell the restaurant as a going concern, she could find no buyer. She finally negotiated with her landlord, and was able to return the premises to him. She sold as much of the equipment as she could, and that was the end of the café.

[20] Ms. Pirkova takes the position she has been actively seeking employment since the café closed, but has had no luck. She has had some interviews, and has sent out many job applications through LinkedIn. Most recently, she began taking courses to qualify as a securities professional. While she passed one of the exams, she failed another. She attributes her difficulties in part to difficulties with anxiety and depression, exacerbated by these prolonged proceedings.

[21] At trial, Ms. Pirkova expressed an inclination to qualify as a real estate agent. She seems to think this would be a good way to earn significant income. She has not yet followed through with this plan.

[22] The parties’ incomes are critical to determining the issues, as are findings as to the parenting and financial arrangements between the parties after their separation and up until temporary orders were made in this lawsuit.

Determining Mr. Popovski’s income:

[23] Determining Mr. Popovski’s income is fairly easy. He works as a project manager for a large corporation. He has worked for them for about ten years. He is a T4 employee. In addition, he has some investment income, and some potential additional income from an application business he has developed. At present, that business operates at a loss. I therefore consider Mr. Popovski’s line 150 income as stated on his annual Notices of Assessment as the fairest determination of his income.

[24] As a result, I find Mr. Popovski’s income for support purposes since separation to be as follows:

a) 2013 $ 98,317 b) 2014 $100,449 c) 2015 $102,345 d) 2016 $104,991

[25] I do not have financial records back to 2008 when the parties separated. I do know, however, that when Mr. Popovski started his employment with his current employer, he began at a salary of $85,000. I assume, therefore, that his income between 2009 and 2013 was at least $85,000 per year. I will use that figure for any retroactive adjustments.

Determining Ms. Pirkova’s income:

[26] Ms. Pirkova’s income is somewhat more problematic. As I have said, Ms. Pirkova holds a Masters Degree in marketing from Westminster University in the United Kingdom. She obtained the degree before immigrating to Canada. She obtained her undergraduate education in Macedonia.

[27] Ms. Pirkova’s first job after A was born was not until A was about two years old. This was Ms. Pirkova’s job in Halifax at a salary of $85,000 per year. Her employment, however, lasted only about 4 months. I therefore conclude that in 2006 Ms. Pirkova would have earned about $30,000.

[28] Ms. Pirkova’s notice of assessment from 2007 shows line 150 income of about $37,000. This was the last year the parties lived together. I assume this is income generated from the kiosk. The kiosk was sold in September of 2009. This coincided with the point at which the parties sold the matrimonial home. The kiosk sale was followed by the café.

[29] During the years she ran the café, Ms. Pirkova did not draw a salary from the business. She testified, and I believe her, that she lived from cashing in RRSPs, and from loans and gifts from family and friends. She asserts she owes her father over $400,000 at this point.

[30] From the totality of the evidence I conclude Ms. Pirkova has not had any employment in her field since 2006 – a period of ten years. Since then, she has struggled in business, and failed. At best, she was able to earn $37,000 in 2007, nearly 10 years ago. Since closing the café in 2014 Ms. Pirkova has been looking for employment, but has found none. She has had no income in over seven years.

[31] It may be Ms. Pirkova is looking for work at higher levels than her out of date qualifications would warrant. Her friend Steve Braithwaite testified that if she were to look for work in retail as a stopgap, this might impair her chances of finding a managerial position elsewhere. Ms. Pirkova herself said that when she ran her café, she would not have hired someone overqualified who might simply quit on finding a better job.

[32] While this argument has some merit, the lengthy passage of time with no job suggests to me Ms. Pirkova is likely setting her sights too high. Her work experience is outdated. She has no recent experience in her field. The focus of her job search does not really address Ms. Pirkova’s obligation to contribute to her own support. Last summer, Stevenson J heard Ms. Pirkova’s motion for temporary support. Stevenson J commented: [1]

I am concerned that reasonable efforts have not been made by the respondent in the past year and a half since the closing of her restaurant to obtain some form of income to assist with the support of [A] and her own support. It does appear on the record before me that the respondent has been attempting to obtain employment that will earn a more significant income. While I understand the respondent’s desire to obtain such employment given her educational background, she should have pursued some employment in order to contribute to the support of [A] and her own costs. She has chosen not to do so.

[33] I share the same concerns. While Ms. Pirkova might have been able to earn $85,000 a decade ago, the passage of time and intervening events make that unlikely now. When I look at Ms. Pirkova’s more recent work history, I cannot conclude she has the ability to earn any more than about $30,000 a year. I impute annual income to her at that level now, and would impute the same $23,000 income to her as Stevenson J did, for all prior years from 2009 until 2015.

[34] I will use these factual findings regarding each party’s income to decide the child support issues.

Child support:

[35] In this case, child support involves an analysis of both prospective and retroactive claims for child support. It also requires an analysis of the parenting arrangements the parties have had in place for A since the sale of the family home. The parenting arrangements are relevant since payment of table support depends on whether the parties have always had a shared parenting arrangement or not.

[36] Section 9 of the Child Support Guidelines (CSGs) provides

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

(a) the amounts set out in the applicable tables for each of the spouses; (b) the increased costs of shared custody arrangements; and (c) the conditions, means, needs and other circumstances of each spouse and of any child for whom support is sought.

[37] If the parties share custody as contemplated by s.9, then the starting point for child support is the set off amount between the table support amounts each parent would pay to the other. The court then looks at the increased costs of shared custody, and last, considers the conditions, means, needs and other circumstances of the parents and the child.

[38] Stevenson J considered the parties’ parenting arrangements when she decided a motion in February of 2016. At that time, she determined the parenting schedule resulted in the 40% threshold being met. She also decided the shared parenting regime had been in place since September 1, 2015. No evidence at trial causes me to come to a different conclusion.

[39] Stevenson J simply applied a straight setoff in determining table support since there was no evidence before her of any increased costs resulting from the shared parenting arrangement. I also had no evidence at trial of any such increased costs. Accordingly, I too will apply a simple setoff to decide the amount of table support to be paid.

Prospective child support:

[40] There are two aspects to prospective child support: table support and section 7 expenses.

Table support

[41] As I have said, the parties share custody of A, who spends roughly equal time with each of them. Set-off of table amounts as contemplated by s. 9 of the Child Support Guidelines (CSG) is the most appropriate way to determine monthly support for A. This was the methodology Stevenson J chose for temporary child support. I see no reason to depart from her well-reasoned analysis of the issue.

[42] The current temporary support order requires Mr. Popovski to pay set-off table support of $702 per month, based on his income of $100,800 and Ms. Pirkova’s imputed income of $23,000.

[43] Since I have determined Ms. Pirkova’s imputed income to be $30,000 and Mr. Popovski’s actual income to be $105,000, the setoff amount between them is now $674. I will not make a retroactive adjustment to Stevenson J’s order. Accordingly, commencing May 1, 2017 Mr. Popovski will pay Ms. Pirkova $674 table support for A.

Section 7 expenses

[44] The parties have not been able to agree on the appropriate s.7 expenses for A. Mr. Popovski has maintained medical and dental coverage for A, who is also covered on Mr. Popovski’s partner’s extended health benefits. Since the parties separated, A has been enrolled in daycare or after school care, soccer, day camp, piano and other activities. Mr. Popovski has paid for these expenses. He has not consulted with Ms. Pirkova and obtained her consent before incurring any of them. Stevenson J’s temporary order required the parties to share proportionally in A’s s.7 expenses, with Mr. Popovski paying 65% and Ms. Pirkova paying 35% provided that:

Neither party shall incur any such expense without first obtaining the consent of the other party, such consent not to be unreasonably withheld.

[45] As far as I can tell, Mr. Popovski has never obtained Ms. Pirkova’s consent before incurring expenses, although the parties have certainly had many email exchanges and discussions over the years about such things as child care, soccer, camp and the like.

[46] There are also RESPs that the parties have been contributing to, both before and after the separation. Mr. Popovski wants Ms. Pirkova to be required to contribute to the RESPs as well.

[47] While contributing to an RESP is an excellent plan, I fail to see how the expense of an RESP falls into the definition of s.7 expenses. Section 7 of the Child Support Guidelines deals with “extraordinary expenses” in the following way:

Special or extraordinary expenses

7 (1) In a child support order the court may, on either spouse’s request, provide for an amount to cover all or any portion of the following expenses, which expenses may be estimated, taking into account the necessity of the expense in relation to the child’s best interests and the reasonableness of the expense in relation to the means of the spouses and those of the child and to the family’s spending pattern prior to the separation:

(a) child care expenses incurred as a result of the custodial parent’s employment, illness, disability or education or training for employment;

(b) that portion of the medical and dental insurance premiums attributable to the child;

(c) health-related expenses that exceed insurance reimbursement by at least $100 annually, including orthodontic treatment, professional counselling provided by a psychologist, social worker, psychiatrist or any other person, physiotherapy, occupational therapy, speech therapy and prescription drugs, hearing aids, glasses and contact lenses;

(d) extraordinary expenses for primary or secondary school education or for any other educational programs that meet the child’s particular needs;

(e) expenses for post-secondary education; and

(f) extraordinary expenses for extracurricular activities.

(1.1) For the purposes of paragraphs (1)(d) and (f), the term extraordinary expenses means

(a) expenses that exceed those that the spouse requesting an amount for the extraordinary expenses can reasonably cover, taking into account that spouse’s income and the amount that the spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate; or

(b) where paragraph (a) is not applicable, expenses that the court considers are extraordinary taking into account

(i) the amount of the expense in relation to the income of the spouse requesting the amount, including the amount that the spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate,

(ii) the nature and number of the educational programs and extracurricular activities,

(iii) any special needs and talents of the child or children,

(iv) the overall cost of the programs and activities, and

(v) any other similar factor that the court considers relevant.

[48] Therefore, for an expense to be shared as a s.7 expense it must first fall into one of the categories in 7(1)(a) to (f). Second, it must be reasonable, necessary and affordable, having regard to the parties’ accustomed standard of living prior to the separation. Last, in the case of those expenses deemed “extraordinary”, that is, expenses for primary or secondary education or for extracurricular activities, these expenses must “exceed those expenses a spouse can reasonably cover taking into account that spouse’s income and the amount that the spouse would receive under the applicable table…”

[49] As I see it, the RESP is not an expense for post-secondary education, as contemplated by the Guidelines. RESPs are savings vehicles, earmarked for post-secondary education of a child, but not necessarily required to be used for that purpose. I have no evidence that Mr. Popovski is prohibited from withdrawing from the RESP he has established. Importantly, I have no evidence A will necessarily attend a post-secondary institution. If and when that occurs, the funds in the RESP, if any, can be taken into account in apportioning the parent’s obligations to contribute to the cost of post-secondary education.

[50] A participates in soccer. She has had piano lessons in the past, and has gone to some summer camp programmes. Ms. Pirkova objects to camp, saying she is in a position to have A stay with her during the summer – both on her days and Mr. Popovski’s days. She takes the position that s.7 expenses should only be shared if both parents agree to the expense prior to its being incurred. She says that if and only if that is the case, the parents should contribute in proportion to their incomes. I tend to agree, particularly when it comes to summer camp. This was the result of the temporary order. I see no reason to alter that provision on a going forward basis.

[51] Accordingly, the parties will share A’s s.7 expenses with Mr. Popovski paying 77% of the cost and Ms. Pirkova bearing 23%, based on the proportions their current incomes bear to one another. They will share only those expenses they have each consented to before the expense is incurred. Neither will unreasonably withhold consent. If the parties have not both consented to a s.7 expense, then the party incurring the cost will bear it without contribution from the other.

[52] This leaves the issue of whether there should be any adjustments on account of either table support or s.7 expenses before the effective date of Stevenson J’s order.

Retroactive child support:

[53] The interim child support order was made with effect September 1, 2015. As I see it, the interim order is fair and reasonable in all the circumstances, and is based on factual findings very similar to the ones I have made at trial. Accordingly, I will make no adjustment at all to the child support between September 1, 2015 and the date of the final order under the provisions of this judgment.

[54] In order to decide the issue of retroactive child support before September 1, 2015, I must consider the parties’ incomes, the custody arrangement they had for A, and the financial arrangements they had in place before the temporary child support order was made. It is only then can I determine whether anything is owed for retroactive child support.

December 2008 to August 2009

[55] The parties separated in December of 2008, but both continued to live in the matrimonial home until it was sold the following summer. While they were both under the same roof, they continued to maintain their joint bank account. Mr. Popovski’s salary continued to be deposited into that account, and the family’s expenses were paid out of it in the same manner as they had always been.

[56] As I see it, Mr. Popovski contributed appropriately to child support during this period.

August 2009 to September 2015

[57] When the matrimonial home was sold, the net proceeds of sale were deposited into the joint account. The parties rented apartments close to one another for A’s benefit. Because Ms. Pirkova did not have regular employment, the leases for both apartments were taken in Mr. Popovski’s name. The rental payments for both came out of the joint account.

[58] Although Mr. Popovski seemed to suggest that his salary continued to be deposited into the joint account after the house sale, the documents he produced do not bear this out. In September of 2009, there is a deposit from his employer in the sum of $2,460. After that date, a few small cheques from the employer went into the joint account. They totalled about $600. No further deposits came from Mr. Popovski.

[59] For her part, Ms. Pirkova’s tax refund was deposited into the joint account. This was about $4,500. The parties continued to operate the joint account until July 2011.

[60] Mr. Popovski has prepared a spread sheet showing the use of the joint proceeds of sale after the separation. [2] He seems to suggest Ms. Pirkova had more benefit from the funds than Mr. Popovski did. That being said, the parties organized their financial affairs in a fashion acceptable to each of them until the account was closed. I decline to make any further adjustment, particularly since there is no outstanding claim for equalization of net family property.

[61] As I see it, most of the money in the joint account after separation came from the house proceeds of the parties’ jointly owned home. The use of the joint account is therefore reflective of the parties’ use of their joint asset. Mr. Popovski deposited essentially nothing into the account after September of 2009, and thus made no direct contribution from his income to A’s table support in that regard. The issue is whether he should have, having regard to both the parenting arrangement between the parties and their respective incomes.

[62] Although both parties tried to maximize the time they spent with A and minimize the time the other parent spent, it is absolutely apparent that the parties have had a shared custody arrangement for A ever since they separated. Ms. Pirkova confirmed on cross-examination that she and Mr. Popovski had always had a schedule where A was with her 4 days and with her father 3 days every week. If this is the case, then I conclude the parties have always had a shared parenting regime as contemplated by s.9 of the Child Support Guidelines. [3]

[63] Therefore, from August of 2009 (when the parties physically separated) until September 1, 2015 (the effective commencement date of the temporary order) the parties also had a shared parenting arrangement. For this period, the parties should have at least paid setoff table support, and shared A’s special expenses in proportion to their incomes. I will deal first with retroactive table support, if any, and then with retroactive s.7 expenses.

[64] I have no accurate historical income information for either party from the date of their separation until 2013, other than Mr. Popovski earned $85,000 when he started his job with current employer, and Ms. Pirkova earned $35,000 in 2007 and essentially nothing since then.

[65] Mr. Popovski’s income ranged from $85,000 in 2009 to $102,345 in 2015. I have assumed his income at $85,000 for each of 2009, 2010, 2011 and 2012. For 2013 his income was $98,317. In 2014 it was $100,449. In 2015 it was $102,345.

[66] Thus, Mr. Popovski should have paid the following in table support:

2009 5 months @ $759 $ 3,795 2010 12 months @ $759 $ 9,108 2011 12 months @ $759 $ 9,108 2012 12 months @ $762 [4] $ 9,144 2013 12 months @ $867 $10,404 2014 12 months @ $883 $10,596 2015 8 months @ $898 $ 4,490 TOTAL $56,645

[67] During the same period, Ms. Pirkova should have paid Mr. Popovski the following, based on her imputed income of $23,000:

2009 5 months @ $195 $ 975 2010 12 months @ $195 $2,340 2011 12 months @ $195 $2,340 2012 12 months @ $184 $2,208 2013 12 months @ $184 $2,208 2014 12 months @ $184 $2,208 2015 8 months @ $184 $1,472 TOTAL $13,751

[68] Thus, absent any other adjustments, Mr. Popovski should have paid the net amount of $42,894 to Ms. Pirkova as setoff table support. This does not, however, take into account the sharing of s.7 expenses.

Issue of retroactive s.7 expenses

[69] Ms. Pirkova takes the position she did not agree to most of the s.7 expenses Mr. Popovski incurred. For example, she suggests that child care costs were only incurred to accommodate Mr. Popovski’s work. She says she could have taken care of A during Mr. Popovski’s time, and thus she should make no contribution. I disagree. The Guidelines specifically state that child care expenses incurred by a custodial parent because of his or her employment are s.7 expenses. The parties share joint custody and always have. Child care expenses are a proper expense.

[70] When I look at the parties’ respective incomes over the years, on average Mr. Popovski should have paid about 80% and Ms. Pirkova should have paid 20%. I will apply these proportions to past s.7 expenses, to determine if any further retroactive adjustment is necessary.

[71] Mr. Popovski is the one who has paid most of the s.7 expenses. He has summarized all of them at tab 1 of exhibit 1. They include day care, summer camp, drama, power soccer, painting, drama, winter soccer, piano and other activities. The total amounts he paid between 2009 and the effective date of the temporary order comes to about $21,000. [5]

[72] Ms. Pirkova’s share of them is 20% or $4,200. This figure must offset what Mr. Popovski owes in terms of setoff table support.

Ultimate setoff on child support

[73] Each party is seeking retroactive adjustments back to 2009, a period of 8 years. Both delayed in seeking any relief from the court.

[74] Ms. Pirkova takes the position she and Mr. Popovski had discussions about child and spousal support for years before Mr. Popovski commenced this proceeding. She says she was always made to believe that they would resolve it between themselves. She suggests Mr. Popovski led her to believe he was willing to pay half of his income because he knew she did not have income. Ms. Pirkova asserts that it was only in 2014 when Mr. Popovski hired a lawyer that things changed, and he even threatened to seek sole custody of A.

[75] Ms. Pirkova has produced an email dated July 7, 2011 from Mr. Popovski to her in which she translates a phrase in Macedonian as “you will be getting 50% of my income.” I have no way of knowing whether this translation is accurate. There is no question, however, that Mr. Popovski sent Ms. Pirkova an email on that date.

[76] I accept Ms. Pirkova’s evidence that she and Mr. Popovski discussed A’s support consistently during their separation. I also accept Mr. Popovski’s evidence that he continually tried to engage Ms. Pirkova in contributing to A’s s.7 expenses. Accordingly, even though there has been considerable delay by both parties, I am prepared to order a full retroactive adjustment on child support, both for table support and s.7 expenses.

[77] As I have set out above, Mr. Popovski owes Ms. Pirkova $42,894 net on account of retroactive table support. Ms. Pirkova owes Mr. Popovski $4,200 on account of retroactive s.7 expenses. Mr. Popovski will therefore pay Ms. Pirkova $38,694 for retroactive child support, including adjusting for each party’s obligation to pay s.7 expenses.

[78] I turn now to consider Ms. Pirkova’s claim for spousal support.

Ms. Pirkova’s claim for spousal support:

[79] On July 6, 2016 Stevenson J made an order requiring Mr. Popovski to pay temporary spousal support of $1,683 per month, commencing July 1, 2016. This was based on Mr. Popovski’s income of $100,800 and imputed income of $23,000 to Ms. Pirkova.

[80] On the evidence at trial, I have concluded Ms. Pirkova’s imputed income is $30,000. Mr. Popovski’s line 150 income is $105,000 (rounded). The issues for me are first, Ms. Pirkova’s entitlement to spousal support, and second, if I find entitlement, the appropriate type of order, amount, commencement date and termination date, if any.

Entitlement

[81] The parties lived together for 5 years and 6 months. At the time of trial they had been separated for 8 years and 3 months. The current support order has been in place since July of last year, and is based on the assumption Ms. Pirkova could earn at least minimum wage. Thus, for nearly 8 years, Mr. Popovski paid no spousal support.

[82] Mr. Popovski takes the position Ms. Pirkova has no entitlement to spousal support. He referred me to sections 15.2(4) and (6) of the Divorce Act which set out factors for the court to consider in deciding spousal support and the objectives of spousal support. They read:

Factors

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

(a) the length of time the spouses cohabited;

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

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

Objectives of spousal support order

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

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

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

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

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

[83] The court must first look at the means, needs and other circumstances of the parties. Mr. Popovski earns more than $100,000 per year. He has re-partnered, and his partner earns about the same as he does. She also has a dependent child.

[84] In July of 2015 Mr. Popovski and his partner purchased a home together in north Toronto on Castlefied Avenue. Their home is close to A’s school. Mr. Popovski testified this was a driving force behind the choice of home. He described the home as old, and needing a great deal of work. The floor plan and photos he produced for the property show a typical north Toronto home with living room, dining room and kitchen on the main floor, and three bedrooms and a bathroom on the second floor. It appears to be well maintained and nicely decorated. I do not know if the basement is finished or not. Mr. Popovski puts the current value of his half interest in the property at $405,000. I have no expert evidence as to the current value of the home, but Mr. Popovski’s estimate strikes me as extremely conservative.

[85] Mr. Popovski shows the current value of his half share of the outstanding mortgage on his home at just under $377,000. His equity in the property is at least $28,000 if not significantly more.

[86] Mr. Popovski drives a Toyota Prius, which he purchased after the separation. He values it at $16,000. He has a loan for the car. He explained that although he could have purchased the car outright out of his own resources, he earns a higher rate of return on his investments than the interest rate charged on the loan, and therefore chose to borrow, in order to maximize his returns.

[87] As to his other assets, Mr. Popovski has savings and savings plans totalling about $183,600, compared with only $21,000 when the parties separated. Mr. Popovski has also started his own business on the side. Although his financial statement shows the company having a nil value, its corporate financial statement for the year ended December 31, 2016 shows cash on hand of $25,528 as compared with just over $17,000 the year before. The corporation has no significant liabilities, [6] other than amounts owing to Mr. Popovski as its sole shareholder. For the year ended December 31, 2016 the corporation owed Mr. Popovski $33,000, an increase from $23,000 the year before. From this I conclude first, Mr. Popovski was able to invest an additional $10,000 in his corporation between 2015 and 2016, and second, Mr. Popovski could repay his shareholder’s loan in part, and thus withdraw significant cash from the corporation without any tax consequences. Clearly, both Mr. Popovski’s income and his assets have increased significantly since the parties separated.

[88] In contrast, Ms. Pirkova’s circumstances have declined. She no longer has any of her share of the proceeds of sale of the matrimonial home. She has used all her savings and RRSPs to live and maintain herself and A. Ms. Pirkova’s two business ventures have failed, and she has no current income.

[89] That being said, Ms. Pirkova’s bank accounts have historically shown significant balances, and she is also registered as the owner of a condominium in midtown Toronto. Mr. Popovski makes much of this, and suggests Ms. Pirkova is living in the lap of luxury, in a new building with numerous amenities like a gymnasium and swimming pool, in the heart of Yorkville. He takes the position she is the beneficial owner of the condominium, which, together with what she shows in the bank prove she has significant assets. He argues this all means Ms. Pirkova has no need of or entitlement to spousal support.

[90] Ms. Pirkova’s bank accounts have indeed shown significant balances over the years. Ms. Pirkova explains that her father needed to move his money out of Macedonia into offshore accounts after the war in the former Yugoslavia. She testified she has held his money in trust for him in accounts in her name in the UK when she lived there, in Iceland and then in Canada, after she moved here. I believe her. In part, her testimony was confirmed by her friend Steve Braithwaite.

[91] Mr. Braithwaite and Ms. Pirkova have known each other for eight years. He confirmed he had seen bank statements from a failed Icelandic bank some years ago. Mr. Braithwaite testified Ms. Pirkova told him the money in the account was her father’s, and she was trying to collect it on his behalf. This confirms, in part, Ms. Pirkova’s evidence that after the financial crash in the mid-2000s, she tried to recover as much as she could of her father’s money which had been held in her name in various failed banks. As she explained it, these financial institutions had paid very high rates of return, which is why her father had his investments there. Ultimately, Ms. Pirkova said she was able to recover about 65% to 75% of her father’s money. Once she moved to Canada, Ms. Pirkova moved her father’s funds into accounts in her name here.

[92] While Ms. Pirkova’s accounts have historically held large balances, as I see it, there is no way she could have accumulated these funds herself. She says she has held the money in trust for her father. When she has used some of it (which she has), her father has characterized it as either a loan or a gift. He confirms this in an affidavit sworn in Macedonia. Mr. Braithwaite testified he understood Ms. Pirkova’s father loans and gifts her money, and that the condo where she lives is owned by her father or her brother.

[93] It is true the condominium in which Ms. Pirkova and A live describes the building’s neighbourhood as Yorkville. It is at Yonge and Church streets. It appears to be a new building with reasonable amenities. Ms. Pirkova’s friend, Mr. Braithwaite, described her apartment as a two bedroom/two bathroom unit with open kitchen/dining room. He said the kitchen has a fridge, stove, dishwasher and microwave. The only television he has seen is a small set in A’s bedroom. From this I infer Ms. Pirkova’s apartment is comfortable and well-located, just as Mr. Popovski’s home is comfortable and well-located.

[94] Mr. Popovski takes the position Ms. Pirkova is over-housed, and paying far too much. He suggested she could have found cheaper apartments elsewhere, and should even have looked for subsidized housing. Ms. Pirkova takes the position the cheaper apartments she looked at were dirty and bug infested. She did not look for subsidized apartments. I find it shocking that Mr. Popovski would want his daughter to live half the time in sub-standard housing, while he enjoys all the amenities of a comfortable north Toronto home. I have no issue with Ms. Pirkova’s choice of location for herself and A, particularly since she has sold her car, and no longer has that expense. Her current location allows her to take transit most places, or walk.

[95] Ms. Pirkova initially suggested she was renting the condominium apartment from a friend at a rental of $2,080 per month. She produced a lease purporting to confirm this. Mr. Popovski then produced the parcel register for the property. [7] It shows Ms. Pirkova as the registered owner of the unit, which was purchased for just under $600,000 and is subject to a first mortgage in favour of CIBC in the amount of $521,250 and a second mortgage in favour of Ms. Pirkova’s father in the amount of $466,000. Ms. Pirkova says she owes this sum to her father for money he has advanced to her over the years. This is confirmed, in part, in an affidavit Ms. Pirkova’s father provided last year. In it, he states first that he has given his daughter $260,000 that she is required to return. He goes on to say he has given Ms. Pirkova 8,000 euros in cash, but funds must be returned because they represent his life savings and are necessary for him and his wife in their retirement.

[96] Ms. Pirkova’s explanation for how title to the condominium came to be registered in her name was somewhat convoluted, but what I conclude is that her brother and/or her father (with perhaps others) have invested in this condominium. If the property is registered in her name, and if she lives there for two years, when the property is sold, it will have been her principal residence and any profit will be free of capital gains tax. Steve Braithwaite also confirmed that he understood Ms. Pirkova’s brother and father purchased the unit. As far as he knows, Ms. Pirkova would not have money to buy a condominium herself.

[97] The second mortgage on the condominium in favour of Ms. Pirkova’s father secures any indebtedness she owes him, and protects his position. It would have been helpful to have had these arrangements corroborated by Ms. Pirkova’s brother, for example. Nevertheless, I believe her.

[98] In sum, therefore, Ms. Pirkova’s current assets (apart from what she holds in trust) are minimal. She has exhausted the $167,000 she received as her half share of the matrimonial home proceeds of sale, her RRSPs and savings. Her debts, apart from what she owes her father, are relatively minimal as well. She has no actual income.

[99] This, then, summarizes the parties’ current means and circumstances. I turn now to consider the factors enumerated in the Divorce Act when considering spousal support.

[100] The parties cohabited for about 5 ½ years. This is neither a lengthy period of time, nor the shortest period of cohabitation.

[101] During cohabitation, Ms. Pirkova took care of the household and assisted Mr. Popovski in his business. After A’s birth in the summer of 2004, Ms. Pirkova took care of her and the household. Ms. Pirkova testified that she had a “big depression” after A was born, but no one really understood it. I believe her.

[102] It was only when Ms. Pirkova found employment in the fall of 2006 in Halifax that she was not devoting most of her time to the family. After the end of the Halifax position and starting her business ventures, Ms. Pirkova devoted more of her time to business, and the parties shared more of the household work, assisted at times by family members, babysitters and daycare. Mr. Popovski travelled extensively overseas for business, and when he did so Ms. Pirkova was the one to run the household and take care of A.

[103] For his part, Mr. Popovski has always worked outside the home for a very good salary, in a demanding job. That being said, he is a devoted father and has played an active parental role in A’s life, particularly since the parties separated and effectively shared parenting ever since then. While each parent tried to minimize the time spent by the other parenting A, I conclude that they have always had a shared parenting arrangement for her.

[104] As to the existence of any support order, since July 1 there has been a spousal support order in place requiring Mr. Popovski to pay $1,683 per month in spousal support. However, until that time, Mr. Popovski paid nothing to Ms. Pirkova either by way of child support or spousal support.

[105] As I see it, the marriage has had economic consequences for Ms. Pirkova. First, she assisted Mr. Popovski in his business, enhancing his employability, while doing nothing for her own.

[106] Second, she was out of the work force for a period of about two years after A was born. This represents more than a third of the period of cohabitation. I accept Ms. Pirkova’s evidence that she suffered an untreated post-partum depression after A’s birth. Clearly, this has had an impact on her ability to work and arises directly from the marriage.

[107] Third, child support will ultimately apportion between the parties the economic consequences of caring for A. That being said, until last summer no child support was paid. As a result, Ms. Pirkova has had to borrow from family and friends to support A when A was in her care. Those economic consequences have yet to be redressed. In contrast, Mr. Popovski’s net worth has increased considerably, in large part because he has paid nothing in child support.

[108] Fourth, in considering Ms. Pirkova’s ability to become self-supporting, it is true Ms. Pirkova is highly educated and very capable. Unfortunately has not had employment commensurate with her education in more than ten years. She is hampered, to some degree, by anxiety and depression.

[109] Ms. Pirkova testified she tried hard to find work. At one point, she had seven interviews with Microsoft, but ultimately was not offered a position. Her failure to find a job informed her decision to try her hand at her own businesses, which ultimately failed. Since the business failures, she has looked for employment. She produced evidence of scores of applications. They seem somewhat unfocused, and perhaps unrealistic. Ms. Pirkova would be far better served to obtain some career counselling and assistance in focusing her job search. It seems to me her employment goals are unrealistic, given the length of time she has been out of the work force, and particularly given the length of time since she was actually employed by someone else.

[110] What all this means is that contrary to Mr. Popovski’s position, Ms. Pirkova is only able to work at a level of about $30,000 a year. This has been her earning capacity since A was born.

[111] Ms. Pirkova was at home with A until she began her brief employment in Halifax. At the beginning of the relationship, Ms. Pirkova assisted Mr. Popovski with his business, rather than seeking paid employment elsewhere. As I see it, Ms. Pirkova clearly has and had an entitlement to spousal support.

[112] What then is the appropriate amount of spousal support? In this context, I also consider whether this is a case for a lump sum.

Quantum and duration of periodic spousal support or a lump sum

[113] Once the court has decided a spouse is entitled to spousal support, the law requires the court to consider the Spousal Support Advisory Guidelines (SSAGs) in deciding both the amount of periodic spousal support and its duration. If the court decides to award a lump sum instead of periodic support, the SSAGs also provide some assistance in determining the appropriate range of amounts for a lump sum.

[114] Here, when I consider the length of the marriage/cohabitation, the parties’ ages at separation, their daughter’s age and their current incomes, the SSAGs suggest a range of periodic spousal support from a low of $1,212 to a midpoint of $1,585 to a high of $1,940.

[115] The SSAGs also provide guidance on the duration of spousal support in circumstances such as these. They suggest an indefinite or unspecified duration, subject to variation and possibly review, with a minimum duration of 2.75 years and a maximum duration of 6 years from the date of separation.

[116] I recognize the parties have been separated for more than 8 years at this point. Delay has been a hallmark or how each has dealt with financial issues arising out of their marriage and separation. During that time, however, no spousal support has been paid at all until the temporary order of last July. In the circumstances of this case, I would see the ultimate duration of spousal support as running from the date of the temporary order, rather from the date of separation.

[117] Last, the SSAGs provide a range of lump sum payments instead of periodic payments for spousal support, if I decide a lump sum is more appropriate than periodic support. The lump sums range from a high of $60,379 to a midpoint of $48,036 to a low of $35,590. There are many reasons for the court to consider a lump sum. Many of them arise here.

[118] When I look at Mr. Popovski’s financial situation today, he owns a 50% interest in a home with increasing value in Toronto’s real estate market. He has savings and savings plans totaling $183,613 as of the date of trial. Of this figure, about $103,000 is in RRSPs, leaving about $80,000 in liquid funds. He also has access to an additional $25,000 or so in tax-paid cash from his corporation. Clearly, Mr. Popovski is in a position to pay a lump sum.

[119] Mr. Popovski complains that he simply cannot meet his own living expenses while paying periodic spousal support. He testified the burden of spousal support is having a negative effect on his current relationship. He worries about exposing his daughter to yet another family separation. Mr. Popovski’s position provides yet another reason to order a lump sum.

[120] Lump sums can provide a clean break between parties. A clean break is appropriate here, given the length of time the parties have been separated. Mr. Popovski’s capital position and cash flow challenges also militate in favour of a lump sum. Last, a lump sum will give Ms. Pirkova some financial security while she finalizes her career plans and finds employment. For all these reasons I conclude spousal support should be satisfied with a lump sum.

[121] What is the appropriate amount for a lump sum? As I have said, the SSAGs suggest a range from about $35,500 to $48,000 to $60,000. All of these lump sum figures, however, are designed to satisfy the spousal support entitlement entirely. Here, of course, periodic support has been paid for ten months. Mr. Popovski has paid $16,830 in taxable/deductible support. Although I do not have any accurate evidence of what the after tax cost of these payments might be, if I assume a blended tax rate of about 25% [8] , the after tax cost to Mr. Popovski would be about $12,500. Thus, if I consider a lump sum, which is not tax deductible, as the appropriate result, I would credit Mr. Popovski with about $12,500 on account of it.

[122] As I see it, a lump sum in the mid-range is a reasonable resolution of spousal support. Taking into account the credit above, Mr. Popovski should pay lump sum spousal support of $35,500 unless there are other considerations to come to a different conclusion.

[123] If I order Mr. Popovski to pay the actual setoff amount regarding child support, together with the lump sum for spousal support above, he would be required to pay a total of $74,194 to Ms. Pirkova. This would effectively transfer most of his non-RRSP savings to Ms. Pirkova. The question is whether this is the appropriate result, having regard to the delays occasioned by each party, and the difficulties in fairly reinventing the past. As I see it, this result would impose some hardship on Mr. Popovski, while creating somewhat of a windfall for Ms. Pirkova.

[124] Since child support must always be given priority, I would not reduce Mr. Popovski’s obligations regarding retroactive child support, but would reduce the lump sum for spousal support slightly.

[125] Balancing all these calculations and factors, Mr. Popovski will therefore pay Ms. Pirkova $30,000 as a lump sum for spousal support, in full and final settlement of her entitlement to spousal support. The lump sum is payable forthwith. Until the payment is made, Mr. Popovski will continue to pay the monthly periodic spousal support of $1,683 under the temporary order. If there is delay in payment of the lump sum, these monthly periodic payments will compensate Ms. Pirkova for the lost use of the money owing to her. As a result, there will be no further reduction of the lump sum on account of any further periodic payments being made. Also, since each party bears responsibility for the considerable delay, I do not see this as a case for interest prior to the date of this order.

Conclusion:

[126] For all these reasons, a final order will issue in the following terms:

a) Mr. Popovski will forthwith pay Ms. Pirkova the sum of $38,694 for retroactive child support, including both table support and section 7 expenses; b) Mr. Popovski will forthwith pay Ms. Pirkova a lump sum of $30,000 for spousal support in full and final settlement of all her claims for spousal support. Until the lump sum is paid, Mr. Popovski will continue to pay the temporary spousal support ordered by Stevenson J; c) Commencing May 1, 2017 Mr. Popovski will pay Ms. Pirkova setoff table support of $674 per month, based on Mr. Popovski’s income of $105,000 and Ms. Pirkova’s imputed income of $30,000; d) The parties will share A’s s.7 expenses with Mr. Popovski paying 77% of the cost and Ms. Pirkova paying 23%, based on the proportions their current incomes bear to one another. They will share only those expenses they have each consented to before the expense is incurred. Neither will unreasonably withhold consent. If the parties have not both consented to a s.7 expense, then the party incurring the cost will bear it without contribution from the other; e) Support Deduction Order to issue; and, f) The parties will exchange the income information required by the Child Support Guidelines on May 1 each year in order to adjust both setoff table support and their proportionate shares of A’s section 7 expenses. Any adjustment will be will effect on May 1, commencing May 1, 2018.

[127] Since both parties have represented themselves at trial, and since the court has ordered no costs for any of the attendances up to and including the motion before Stevenson J in July of 2016, I do not see this as a case for costs. Each party will therefore bear his or her own costs and expenses of the trial, (including the costs of the two motions which were reserved to trial) unless either of the parties made a settlement offer to the other that would have resulted in the identical result as this judgment, or would have provided the other party with benefits greater than those awarded under this judgment.

[128] If and only if there are offers in those terms, the parties will submit their settlement offers and costs outlines, in writing, within 2 weeks of the release of these reasons. If I do not receive submissions within that time frame, there will be no order as to costs.

MESBUR J

Released: 18042017

[1] Reasons for Decision of Stevenson J released July 6, 2016 [2] Exhibit 1, tab 12 [3] If A has resided with her father at least 3 days a week, then she is with him 3/7 of the time, or 42.8% of the time. This clearly meets the 40% threshold for shared parenting. [4] The child support tables changed in 2011 [5] Since the temporary order was effective as of September 1, 2015 and dealt with s7 expenses, I have included only 2/3 of the 2015 expenses, that is to say, for the 8 months up to the date of the order. [6] The only other liabilities shown, other than owing to shareholder, are trades payable of $395. [7] This document was produced for the first time during cross-examination, even though the parties were not to rely on any documents that had not already been produced. This surprise document created a degree of unfairness for Ms. Pirkova, so I allowed her considerable leeway in attempting to explain it. [8] This is roughly the percentage Mr. Popovski’s total tax payable represented of his total income in his 2014 tax return