COURT FILE NO.: 30562/08 DATE: 2017 06 29

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: Karen Burke Applicant – and – Murray Burke Respondent

Counsel: Lydia Moritz, for the Applicant Avy Ben-Zvi, for the Respondent

HEARD: March 22, 29, 30, 31, April 1, 11, 12, 13, June 14, 15, 16, 17, October 26, 27, 28, November 24, 2016

REASONS FOR JUDGMENT Woollcombe J.

Introduction and Issues

[1] Karen and Murray Burke began cohabitating on March 31, 1985. They were married on September 6, 1986. They have three children: Lauren, born April 22, 1988, Kevin, born August 21, 1989 and Leah, born March 8, 1994.

[2] The Burkes separated on June 30, 2006. Mr. Burke continued to live in the matrimonial home until November 5, 2007, at which point he left.

[3] While the parties resolved a few issues by way of minutes of settlement at the outset of the trial, there are a significant number of issues about which they are completely at odds. As a result, the trial in this matter was both protracted and acrimonious, with serious allegations being made by each of them against the other.

[4] At the end of the trial, the parties agreed that they would make final submissions in writing. Both have now done so.

[5] I have carefully reviewed the written submissions of both counsel. The applicant provided an initial volume with 39 pages of written submissions, with references to transcripts and relevant charts, exhibits and calculations. She also included two volumes of authorities.

[6] The respondent filed four volumes of written submissions in response. This includes 40 pages of submissions, with references to transcripts and case law. The submissions are not responsive to some of the issues raised in the applicant’s submissions. There are also references to charts in other volumes. There is little by way of explanation justifying the numbers in the charts. Four volumes of authorities were filed, some of which appear to me wholly unrelated to the issues that are before me. There are also documents and calculations included that are not explained in the submissions [1] . In a number of respects, as I will set out, I am left confused by what can only be fairly characterized as unhelpful written submissions from the respondent.

[7] The applicant filed reply submissions to the respondent’s submissions. These address a number of the critical difficulties with the positions taken by the respondent.

[8] From the written materials that are before me, and the submissions made by the parties in their opening comments to me, I find that the issues to be determined are:

a. What equalization payment is owed?

On March 24, 2016, the parties agreed that the respondent owed an equalization payment to the applicant of $188,732.65, subject to a determination by the court of two issues. Those issues are:

• First, what is the proper legal characterization of the funds in the respondent’s Retirement Compensation Arrangement Trust (“RCA Trust”). More specifically, are these funds a contingent asset for the purpose of equalization or do they generate an income stream to consider when support is determined;

• Second, is the TD Canada Trust (“TDCT”) account held in the joint names of the applicant and her mother, Joan Valentini, an asset owned by the applicant for equalization purposes.

• In addition, there is an issue of whether there should be pre-judgment interest on any equalization payment and, if so, how much.

b. What order should be made in relation to the matrimonial home and how should the parties’ interests in the equity of the home be determined?

The parties agreed on March 24, 2016 that the matrimonial home at 2131 Dunvegan Avenue in Oakville should be valued at $925,000. They also agreed that the respondent is obligated to pay to the applicant $13,664.86, which reflects half of the home repairs since separation. However, there are a number of disputes between them in relation to the home. While the trial proceeded on the basis that the applicant planned to buy the respondent out of his interest in the matrimonial home, in his written submissions, the respondent has requested that the home be sold forthwith and that the proceeds be held in trust by counsel. In addition, the parties raise the following issues:

• What mortgage balance should be used to determine the respondent’s equity in the home;

• What, if any, adjustments should be made on the basis of the applicant’s payment of property taxes on the matrimonial home since separation;

• Should notional or dispositional costs be deducted from the respondent’s value of the home; and

• Should the applicant be required to pay occupational rent to the respondent for living in the matrimonial home since separation?

c. What order should be made respecting interest payments on the joint CIBC line of credit and loan since separation?

While the parties agreed that each would pay half of the amounts owing on the CIBC line of credit and loan (which as of October 24, 2016 were $69,390.59 and $32,375.69 respectively), there is an issue between them about the interest payments that have been made.

d. What, if any, arrears in child support are owed by the respondent to the applicant?

This involves determining what the correct table support amounts were for the period since 2007, which necessitates a determination of the respondent’s income over the relevant time. The parties have reached some agreements as to his income in some of these years. After determining the respondent’s income and the total amount that was payable, a deduction must be made for the amount that has been collected through FRO or otherwise paid. Both the applicant and the respondent suggest that there has been an overpayment of child support.

e. Should income be imputed to the applicant for the period since separation and, if so, how much?

The applicant is content for $30,000 to be imputed to her after 2007. The respondent suggests that income should be imputed to her for the following reasons: she has not complied with disclosure orders, inheritance advances given to her from her mother are properly understood as income, income is generated from the joint TDCT account she holds with her mother, which is said by the respondent to be a business account, and she is underemployed.

f. What, if any, arrears of spousal support are owed and what spousal support order should be made prospectively?

Determining whether there are spousal support arrears requires determining what has been paid by the respondent as spousal support over the period from separation until 2015, and what should have been paid by him. In order to decide future spousal support, a conclusion needs to be reached as to whether the funds in the RCA Trust should be understood as generating income for the respondent for support purposes. The respondent’s income going forward needs to be determined, as does the applicant’s income. Finally, there needs to be consideration as to whether any future spousal support should be paid as a lump sum or periodically.

g. What, if any, arrears of s. 7 payments are owed by the respondent for the period since separation?

Determining this issue requires consideration of what the respondent paid in terms of s. 7 expenses and what he should have paid, once his proportionate share of the expenses is calculated. This cannot be determined until a finding is made about what the spousal support payments should have been from 2006 to 2015.

h. Security and non-depletion orders.

The applicant has sought various security and non-depletion orders. The respondent also seeks a charging order.

Summary of Important Background Facts

[9] The applicant was born on October 4, 1955. She completed a Bachelor of Arts at the University of Western Ontario in 1978. She later took some business courses and was a credit short of an Honours Bachelor of Commerce. She began work as an internal auditor at an accounting firm in Toronto.

[10] The respondent was born on November 9, 1953. He obtained a degree in civil engineering from the University of Waterloo in 1978.

[11] In 1983 or 1984, the parties met. They moved in together to the respondent’s condominium at the Palace Pier in Toronto in March 1985. They were married in September 1986. They bought a house in Mississauga. Both were working.

a) The applicant’s early career and role as mother

[12] On April 22, 1988, the Burke’s first child, Lauren, was born. The applicant took a maternity leave from her employment at Manulife. It was her evidence that by that point, Mr. Burke was travelling quite a bit for work, including on international trips.

[13] The applicant returned to work as a Senior Control Officer at Manulife after her maternity leave and Lauren was in daycare. The applicant said that there were challenges as she did all of the dropping off and picking up of Lauren, and she was unable to work overtime when requested by her employer at busy periods, such as at the end of financial quarters.

[14] On August 21, 1989, their second child Kevin, was born. The applicant took a four month maternity leave. Her father passed away in December 1989. She testified that she had a change of heart and decided to stay home as a full-time mother. Her salary at Manulife had been $40,000. In the period that followed, she said that she was solely responsible for all aspects of the children’s lives and of the family home.

[15] Their third child Leah was born on March 8, 1994. Around that time, the parties bought their home in Oakville at 2131 Dunvegan Avenue.

b) The respondent’s early career

[16] The respondent spent his early career employed by Shell, Petro Canada and then, beginning in 1986, at Stake Technology.

[17] The respondent testified that he had stock options at Stake Technology and that in February 2000, he cashed them and made around $250,000. In March 2000, the respondent left his position at Stake Technology, stopped working outside the home, and stayed out of the workforce and at home, engaged in stock trading.

[18] Not happy with trading, in November 2000, Mr. Burke began working for Honeywell. There, his salary was between $80,000 and $85,000 and he had a pension plan. He remained there until January 2003. At that point, he became involved in an employment dispute. He was terminated and ultimately received a settlement of $98,000.

[19] At that point, the respondent said that he was asked by Jeremy Kendall to return to Stake Technology on a contract. He did so from January until November 2003. Then, in November 2003, he was hired on full time and was named a Vice President and Manager. His salary was $185,000.

[20] At some point in 2004, Stake Technology changed its name to Sunopta Inc. The respondent worked for a division of Sunopta Inc. His salary in 2005 was $202,000 and in 2006 it was $227,000.

c) The parties’ commitment to their children’s extracurricular activities

[21] From the time the children were young, both parents believed that they should be actively engaged in a range of competitive sports. There was a great deal of evidence adduced about the various sports that each of the three children partook in including swimming, skating, power-skating, figure skating, hockey, inline hockey, skiing and field hockey. It became clear to me that they were talented athletes whose parents both supported and encouraged them greatly. I have no doubt that hours and hours of time were spent taking the children to their many practices, games and competitions over the years from the time they were young until they completed high school.

[22] The evidence as to the relative roles that the parents played in the lives of the children was not consistent. The applicant says that because of the respondent’s travels and work schedule, she carried the much larger share of responsibilities – for groceries, cooking, household chores, homework, and extracurricular activities. The respondent was adamant about the critical role that he played with the children.

[23] I find that while the respondent was working full time, he was also actively engaged in helping the children with homework and in supporting their many extra-curricular activities including driving them to practices, games and tournaments. Given his work, and the fact that the applicant was not working outside the home, it is obvious that she played a more significant role than he did in the home and in raising their children.

d) The Separation

[24] The applicant and respondent separated on June 7, 2006. At that time, the respondent was working for Sunopta Inc. He had stock options that had accumulated over his time there. These options were treated as an asset and were valued (at $160,000) for the purpose of determining the equalization figure that was agreed to by the parties. They are not at issue in these proceedings.

[25] On June 11, 2007, a year after separation, the respondent resigned from Sunopta Inc. and was immediately hired by Sunopta Bioprocess Inc. His new salary was $330,000. He also received capped restricted stock units (“RSU”s). These could not be sold unless one of two events occurred: first, if this private company went public and second, if there was a change in ownership of the company.

[26] The respondent remained in the matrimonial home until November 5, 2007. He continued to pay the mortgage principal and interest, insurance and property taxes, the interest on a joint loan and line of credit, and the utilities, phone, car, and internet bills.

[27] The applicant’s Form 8 Application was brought on May 8, 2008. The respondent’s Answer was filed on July 9, 2008.

[28] The first court order in this matter was made by Van Melle J. on September 2, 2008 following consent Minutes of Settlement. The respondent agreed to pay child support of $2,364 per month beginning on October 1, 2008. At this time, the respondent stopped paying the utilities, car payments, and car insurance that he had been paying since separation.

[29] A further order was made by Justice Herold on February 19, 2009. He ordered that the respondent pay child support of $2,586 per month and spousal support of $1,500 per month commencing February 15, 2009. He was also ordered to continue paying the mortgage principal, interest, taxes and insurance on the matrimonial home.

[30] On November 10, 2009, Gray J ordered the respondent to pay $10,000 in retroactive s. 7 expenses and an ongoing monthly contribution to s. 7 expenses of $2,000, effective December 1, 2009.

[31] The respondent continued to work for Sunopta Bioprocess Inc. until August 31, 2010. On that date, there was a merger between Sunopta Bioprocess Inc. and a company called Mascoma. This change of control or ownership triggered the respondent’s ability to realize value in the RSUs he had been granted in June 2007.

[32] The respondent sought the advice of tax lawyer Evelyn Schusheim. After being provided with some choices, the respondent decided that for him, it made the most sense for the money from the RSUs to be transferred into a Retirement Compensation Arrangement, known in these proceedings as an RCA Trust. Just under $3,000,000 was deposited into the RCA Trust in August 2010.

[33] The respondent never disclosed to the applicant the existence of the RSUs after they were issued to him in June 2007. He never disclosed to the applicant that they had been paid out in August 2010. Despite numerous orders for financial disclosure, the respondent did not disclose the creation or existence of the RCA Trust.

[34] In the years that followed, the respondent kept the RCA Trust secret and used the funds in it to loan money to his family members, who then loaned the money back to him. Structuring the loans in this manner ensured that he would not have to declare income from the RCA Trust on his income tax returns, which would have meant revealing its existence to the applicant as he was required to disclose those tax returns. Yet, at the same time, this approach appears to have ensured that the respondent had access to the funds to use as he wished. In addition to making loans to his family members, the respondent also used the RCA Trust funds to make unsecured, on demand loans of over $640,000 to Sharon Cheyne, a woman with whom he disputes being in a common law relationship. The evidence reveals a considerable mingling of their financial affairs, despite the respondent’s denial of this.

[35] It appears that the respondent did not take any distribution of income from the RCA Trust until 2013. He did so again in 2014. It is noteworthy that he did not file his income tax returns for 2013 or 2014, which revealed these distributions, until 2015, after the applicant had already become aware of the existence of the RCA Trust.

[36] It is apparent from the evidence that the respondent took significant steps to ensure that he and Ms. Cheyne would benefit from the RCA Trust, but that the applicant would not learn of its existence while the matrimonial issues were outstanding.

[37] As a result of the merger between Mascoma and SunOpta BioProcess Inc. in August 2010, as described above, the respondent began working for Mascoma. His relationship with his employer deteriorated and by early 2012 he stopped working for Mascoma and went on short term disability. He began legal action against Mascoma in February 2012.

[38] The respondent stopped making child support, s. 7 and spousal support payments in April 2012.

[39] The respondent’s legal action against Mascoma was settled with the respondent receiving a severance package, paid to him over twenty-four months, starting on November 15, 2013. The respondent has not worked since and indicates that he does not plan to work.

[40] The Burke children are now all independent adults, having completed their university degrees.

Credibility Findings

[41] Both the applicant and respondent testified and were vigorously cross-examined. Counsel for each suggests that the other is not credible. While some of the issues to be determined in this case are legal, or are matters in which the evidence is not in dispute, there are a number of issues that turn on the credibility of the parties. Accordingly, I will make some brief comments about their credibility.

[42] I found the applicant to be quite believable. She appeared to me to have worked hard to ensure that all relevant disclosure had been made. She was cooperative about producing those items that were outstanding and which were relevant. For instance, when it was clear that she did not have the backup documents to support what she claimed to have paid in s. 7 expenses, she put together a document that explained what and where the backup documents were (in what was marked as Exhibit 35). When she testified, I found that she was responsive to questions, answered in a thoughtful manner, and was careful not to embellish or exaggerate. She did not appear to be trying to conceal anything. She was forthright and candid.

[43] The respondent suggests that the applicant is not credible and that she lied on her tax returns. He has provided a chart setting out what are said to be contradictions between the applicant’s affidavit evidence and her trial testimony. I have reviewed this chart carefully, comparing the affidavit evidence to the trial evidence.

[44] I do not accept the respondent’s position that the applicant has repeatedly lied. By way of example, I note that during the applicant’s cross-examination, much was made by Mr. Ben-Zvi of the fact that the applicant had testified that her business always made a profit. Under cross-examination, she agreed that she had not filed tax returns over the years from 2005 to 2008. She was asked why she did not report her income, and answered that she did not have taxable income and so did not think she was required to file a return. She was clear that she did not think she needed to file a return because she had no taxable income.

[45] I am asked to infer that the applicant lied to Revenue Canada. In my view, the evidence does not support such a finding of deliberate deception. The applicant may or may not be correct about what was required of her from Revenue Canada. I need not decide that. But she testified that she did what she believed she was required to do. There is no basis to draw any adverse inference against her in relation to this issue.

[46] Similarly, it was suggested to the applicant that she had unilaterally decided to stop working after her maternity leave with Kevin and that she had effectively reneged on a “deal” with the respondent that she would return to work. While she denied there having been a “deal”, she candidly agreed that the respondent had wanted her to work, but that she had wanted to stay home with the children. I do not think much turns on this in terms of the applicant’s credibility.

[47] I also note the applicant’s evidence during what can only be described as a protracted, aggressive and unfocused cross-examination by Mr. Ben-Zvi, a great deal was made of various issues that seem quite unrelated to the issues before me. The applicant was accused of taking many trips with her mother. She did so and both she and her mother testified that her mother generously paid for them. It was suggested to the applicant that she does not need support as she will inherit money from her mother. Whether and when the applicant may inherit money from her mother is, in my view, both uncertain and not relevant to the issues before me. The applicant was patient and fair when she responded to this cross-examination.

[48] By contrast, I did not find the respondent to be a credible witness. During his examination in-chief, he seemed more intent on providing lengthy speeches promoting himself than in answering questions. But it was during cross-examination that it became clear that his evidence was not reliable. During cross-examination, in addition to being arrogant and belligerent, I found him to be evasive about answering questions that seemed straight-forward, and to be dishonest about some of the issues about which he was questioned.

[49] There are many examples that could be provided about the respondent’s evasiveness and lack of truthfulness. I will select only a couple of the most egregious examples: first, the respondent’s evidence about his relationship with Sharon Cheyne and the nature of their intertwined finances and, second, the manner in which the respondent disclosed the existence of the RCA Trust.

[50] First, in my view, the respondent’s evidence about his relationship with Sharon Cheyne, and whether she was his common-law spouse, was evasive and very unpersuasive. There was evidence that appeared to undermine his position. Furthermore, when evidence was put to him suggesting that they were common-law spouses, despite the compelling evidence that they are, he denied it.

[51] For example, the respondent was cross-examined about his Minutes of Settlement relating to his lawsuit with Mascoma (Exhibit 45), and the fact that there was a confidentiality clause precluding disclosure, with several exceptions including that he could disclose to his common-law spouse. He signed the document without amending it. His evidence was that the Minutes refer to his common-law spouse, but that he does not a have a common-law spouse. Clearly, his counsel had a different understanding at the time.

[52] Similarly, when he was cross-examined about what email address he used when sending emails to his counsel, Ms. Schusheim, the respondent agreed that he used Ms. Cheyne’s email. The September and October 2013 emails exchanges between Ms. Schusheim and the respondent, at Tab 9 of Exhibit 12A are a good example of this. This is another piece of evidence of their relationship.

[53] Mr. Burke was asked about a Ford Focus vehicle and shown an insurance policy for the car for July 2014 through July 2015 (Exhibit 62). The names of the insured are Murray Burke and Sharon Cheyne. There is one address listed – that of 350 Bronte Road. Mr. Burke said that this was not his car and never had been. He offered no explanation for why they appear to have a joint policy that listed them at the same address.

[54] Mr. Burke agreed that when he got together with his children for celebrations like Christmas, they had been at 350 Bronte Road, and at other locations, including Sharon Cheyne’s home and her parent’s home, again suggesting a common-law relationship.

[55] An August 8, 2012 letter from Ms. Schusheim to the respondent’s investment advisor (Exhibit 12A, Tab 9, page 69) authorizing the release of $35,000 from his RCA account to Ms. Cheyne, describes her as his “spouse”. His lawyer clearly understood that was who she was.

[56] A letter of January 6, 2014 from Ms. Schusheim’s associate to his investment advisor (Exhibit 12A, Tab 4, page 107) confirmed that there was to be $10,000 transferred to Ms. Cheyne’s bank account, that she lived with Mr. Burke at 350 Bronte Road, and that the funds would be used to pay the realty taxes for the respondent’s property.

[57] A letter of January 14, 2014 from Ms. Schusheim to the respondent’s investment advisor (Exhibit 12A, Tab 4, page 98) indicated that the respondent was making a distribution from the trust to Sharon Cheyne, who lived with him at 350 Bronte Road, for $16,100. The respondent testified that the letter had a mistake as Ms. Cheyne did not live with him.

[58] The respondent was shown a Bank of Montreal (“BMO”) printout statement of Assets and Liabilities that he held jointly with another person, whose name was redacted. The respondent testified that he had “no ability to know” whose name had been redacted, and that he did not know if Ms. Cheyne’s name had been redacted. He said that it could have been his father or sister. I cannot accept this evidence. It seems obvious that the respondent knows the name of the person with whom he held these assets and liabilities at BMO. I find that he deliberately tried to withhold from the court the fact that he knew that the answer was Ms. Cheyne. Even when he was shown Exhibit 55 at Tab 7, a Mastercard statement for an account he holds with Ms. Cheyne, his evidence was that both names were on the account, but that it was not joint. Similarly, in respect of Tab 11 of Exhibit 55, he agreed that she has a credit card and that he had signing authority, but testified that it is her account.

[59] Finally, I observe that the respondent has chosen to make unsecured loans to Ms. Cheyne for $640,000. Doing so, absent any explanation as to why this was a good investment for his RCA Trust, is an inexplicable decision in the absence of them being involved in a close personal or common-law relationship.

[60] Viewed cumulatively, I find that the evidence supports a finding on a balance of probabilities that the respondent and Ms. Cheyne are in a common-law relationship. Further, I find that he has repeatedly attempted to deceive the court about this fact.

[61] A second basis for my finding that Mr. Burke was not credible about his relationship with Ms. Cheyne flows from his evidence about whether their finances were intertwined. Mr. Burke has denied that his finances are intertwined with Ms. Cheyne’s. A careful review of the evidence reveals that his position is demonstrably false, as it is abundantly clear that he has chosen to create a web of intricately intertwined finances. There are many aspects of the evidence that highlight this, only a few of which I will mention:

• He is the guarantor on a mortgage secured against the property at 100 Bronte Road, unit 215. The documents at Tab “T” of Exhibit 55 reveal that this condominium was purchased on September 4, 2012 and that it was evaluated at $475,000. Both the respondent and Ms. Cheyne applied for the mortgage that was taken from the BMO in respect of the condominium. When asked whether he authorized the release of funds from the RCA Trust for the payment price, the respondent said he did not believe so. However, the respondent was then shown a document at page 69 of Tab 9 of Exhibit 12A, which is a Letter of Authorization from Ms. Schusheim to the respondent’s financial advisor authorizing the release of $35,000 from the RCA Trust account. It was sent on August 8, 2012. This document indicates that it was for the purchase of property. It also describes Ms. Cheyne as the respondent’s spouse. The respondent then agreed that the letter authorized the funds for Ms. Cheyne, but he said that the description of her as spouse was incorrect. Ultimately, he agreed that the funds were for Ms. Cheyne to purchase the condominium. He described these funds as a “loan” to Ms. Cheyne, although he agreed that there is no proof of a loan. The respondent denied that he is a 50 percent owner at this condominium. He said that while it is rented out, Ms. Cheyne collects the rents.

• There are other examples of the respondent having money deposited from the RCA Trust into Ms. Cheyne’s account. For instance, the respondent agreed that he authorized Ms. Schusheim to have his investment advisor for the RCA Trust release $80,500 on July 5, 2013 by way of bank draft to him. He testified that this was put into an account held by Sharon Cheyne;

• The respondent testified that in 2012 he cashed out an RRSP and withdrew $126,500.96 as is indicated in his 2012 RRSP income. Asked where it went, he said that it went into an account of Sharon Cheyne.

[62] The respondent’s evidence about the money he gave to Ms. Cheyne seemed to know no bounds. For example, the respondent acknowledged that there was a foreign wire payment by Ms. Cheyne to purchase property in the Dutch Antilles at page 4 of Tab 3 of Exhibit 55. He had no idea where that property was. He agreed that on March 24, 2015, he had authorized Ms. Schusheim to ask his investment advisor to prepare a bank draft for $300,000 from the RCA Trust to go to Ms. Cheyne. The documents in Tab 3 of Exhibit 55 show that there was a deposit to Ms. Cheyne’s account followed by a Canadian wire out of that account for $268,739.70. Again, the respondent claimed not to know the address of the villa.

[63] Mr. Burke’s evidence about the financial arrangements he and Ms. Cheyne entered into respecting an agreement of purchase and sale for a property at 9 West Street in Oakville suggests further co-mingling of funds. The purchase price was $1,200,000. The closing date was initially scheduled for November 6, 2013 but was delayed so that the purchasers could secure financing. When the house closed in January 2014, only the respondent’s name was on title. Lawyer Dianna Morrison explained that the house had been paid for through a loan from the bank to the respondent alone for just under $900,000. The balance was paid by Ms. Cheyne, who delivered a bank draft for $250,000. Mr. Burke signed a handwritten promissory note that Ms. Cheyne contributed $300,000 to the home. It was Mr. Burke’s evidence that Ms. Cheyne took a second mortgage on her Bronte Street condominium and that he then lent her money from the RCA Trust ($280,409.80) to pay down that second mortgage.

[64] As I understand the transaction, the RCA Trust lent Ms. Cheyne $300,000. She put this money into her condominium so that she could borrow against it and make a loan to Mr. Burke of $300,000 to purchase West Street. He then signed that he was indebted to her for the $300,000. Six months later, Mr. Burke and Ms. Cheyne executed charge documents against the West Street property in the amount of $280,000.

[65] In my view, the evidence summarized here is a partial picture of the evidence supporting my conclusion that the respondent was not forthright about his relationship with Ms. Cheyne and was not forthright about how intermingled their finances are. It was clear to anyone listening to his evidence that it was replete with self-serving falsehoods. This causes me to question the truthfulness of his evidence more generally.

[66] Quite apart from Mr. Burke’s deception in relation to Ms. Cheyne, however, is another significant example of his willingness to lie. In my view, the most critical example of Mr. Burke’s deliberate deception about his financial situation relates to the very late disclosure of the existence of the RCA Trust.

[67] There is no question that the respondent filed multiple financial statements, while assisted by counsel, in which he failed to mention the existence of the RCA Trust. Indeed, in his Financial Statements sworn July 18, 2012, December 13, 2013 and October 9, 2014, all of which were after the creation of the RCA Trust, the respondent made no mention of the RCA Trust. Further, he was questioned in July 2014 and said nothing about the existence of the RCA Trust.

[68] There were multiple disclosure orders made by the court in these proceedings. For instance, on October 3, 2013, after the creation of the RCA Trust, the respondent was ordered to provide an updated sworn financial statement. On September 25, 2014, the respondent was ordered to provide a draft of his 2013 income tax return within 14 days. This, of course, would have required him to disclose that he had taken a distribution from the RCA Trust in 2013. It seems clear that this did not happen as a further order was made by Justice Fitzpatrick on April 13, 2015 that the respondent was required to file his income tax returns for 2013 and 2014 by May 15, 2015.

[69] It was not until the eve of the first trial date in April 2015, after the applicant’s counsel discovered the existence of the RCA Trust and brought a motion to adjourn the trial, that the respondent first acknowledged the existence of the RCA Trust. Even then, there are significant difficulties with his credibility because of what the respondent chose to say to Justice Fitzpatrick at the appearance at which the trial was adjourned.

[70] In the context of that motion, Mr. Burke said the following to Justice Fitzpatrick:

Your Honour, may I speak…I just wanted to let you know that Mr. Jeffrey Richey did not know anything about this. I did not disclose any of this to him…

[71] The transcript of that appearance is before me as Exhibit 66. The respondent takes no issue that this is what he said. However, before me, the respondent testified that what he said before Fitzpatrick J. was not true, that Mr. Richey (his former counsel) was aware of the existence of the RCA Trust and that Mr. Richey asked him to say this. This is a profound change. Yet, when asked directly whether he had lied to the court, which he plainly had on his own evidence, the respondent was, as he so often was during the trial, evasive. He testified that “as far as I knew”, Mr. Richey knew about the RCA Trust and that Mr. Richey knew of it before he was served with the motion. When it was suggested to Mr. Burke that he and counsel must have conspired to lie to the court, Mr. Burke sought to minimize his own role, and to distance himself from any responsibility by justifying that he did as requested by his lawyer. He then injected into his evidence, completely gratuitously in my view, that Mr. Richey is now suspended from practicing law. He elaborated that this led him to conclude that Mr. Richey “has issues”.

[72] The only inference to draw from the respondent’s evidence about this appearance before Justice Fitzpatrick is that he is prepared to lie when it suits his purposes. He will blame others when he can. He does not accept his own responsibility for deception. This causes me to have serious concerns about his credibility more generally and about the contentious areas of his evidence.

[73] Mr. Burke claims that his failure to disclose the existence of the RCA Trust in all of his financial statements was as a result of instructions from counsel. He also claims that he thought that the RCA Trust, and the West Street property (which he also did not disclose and which, as set out previously, he and Ms. Cheyne jointly made an offer to purchase in late 2013), were “excluded property”. It was not clear to me what he meant by that term, except that this appears to be his excise for never including the property on his financial statements. Of course, in his various financial statements, he was required to include all assets, even if they were not owned on valuation date and even if they are not properly included for the purpose of equalization.

[74] I cannot and do not accept the respondent’s evidence that he made some sort of honest mistake, or had a misunderstanding as a result of what he was told by counsel. I find that the respondent took whatever steps he could, including lying on sworn financial statements and to Justice Fitzpatrick (if his evidence before me is to be believed) in order to prevent the applicant from learning that he had an undisclosed $3,000,000 asset.

[75] Having made those preliminary findings about credibility generally, I turn now to the many issues raised by the parties in this trial.

The Issues to be determined

a) What equalization payment is owed?

[76] On March 24, 2016, the parties agreed by way of Minutes of Settlement that the respondent owed an equalization payment to the applicant of $188,732.65 subject to a determination by this court of the following issues:

a) whether the respondent’s RCA Trust is an asset for equalization purposes or whether it is income for support purposes;

b) whether the TDCT account in the joint names of Joan Valentini and the applicant is an asset for equalization purposes.

[77] I will address each of these issues.

i) The nature of the respondent’s RCA Trust

[78] One of the most significant issues between the parties is the nature of the RCA Trust. It is the applicant’s position that the RCA Trust is a source of income for support purposes. Accordingly, the applicant seeks a lump sum spousal support payment for all future spousal support. In the alternative, the applicant submits that the RCA Trust is property for equalization and seeks a vesting order in her favour in respect of it.

[79] It is the respondent’s position that the applicant has no claim over his RCA trust. The respondent says that it is property that was received by the respondent well after separation and so should not be subject to equalization. The respondent did not address the question of whether the RCA Trust generates income that should be considered for support purposes because it is his position that the applicant is not entitled to spousal support.

The background to the creation of the RCA Trust from the RSUs

[80] There was a significant amount of evidence adduced about the history leading the creation of the RCA Trust.

[81] There is no question that on the date of separation, the respondent was employed at Sunopta Inc. He had worked at Stake Technology from 1986 to early 2000. He left and returned to Stake Technology on contract. Stake Technology became SunOpta Inc. In November 2003, he entered into an employment contract with SunOpta Inc.

[82] Beginning in January or February, 2007, the respondent worked, while in the employ of SunOpta Inc., to secure private funding for the SunOpta BioProcess Group, which was still a division of SunOpta Inc. He was successful in raising $30 million U.S.. The respondent said that in fact, he had secured $30 million less eight per cent, and so it was only $28,000,000.

[83] In June 2007, SunOpta Inc, was a large corporation in the business of sourcing, processing, packaging and supplying organic, non-genetically modified and natural foods in Canada, the United States, Europe and worldwide. In June 2007, the respondent resigned from SunOpta Inc., and entered into a contract with SunOpta Bioprocess Inc. A letter from Jeremy Kendall, CEO of SunOpta Bioprocess Inc. and Steve Bromley, President and CEO of SunOpta Inc., dated June 8, 2007 (tab 26 of Exhibit 45) indicates that that Mr. Burke was offered the position of President and Chief Operating Officer for SunOpta BioProcess Inc. effective June 6, 2007. At the time, SunOpta BioProcess Inc. was a small company with ten to fifteen employees. The respondent’s role changed with his new position from manager of engineering, development of equipment and installation, to assuming an executive role with responsibilities for finance, sales and team leadership. His new salary was $330,000.

[84] The respondent disputes that his new position with SunOpta BioProcess Inc. was a reward for having secured financing.

[85] In addition to a base salary, retroactive to January 1, 2007, the employment contract with SunOpta BioProcess Inc. set out provisions respecting the respondent’s existing SunOpta Inc. stock options and new Capped Restricted Share Units that he would be receiving. While the contract calls these units Capped Restricted Share Units, these are what have been referred to throughout these proceedings as the Restricted Share Units or “RSUs”.

[86] The contract provided that the respondent would be awarded 500,000 Capped Restricted Share Units (“CRS”) of SunOpta BioProcess Inc., as set out in Appendix B of the Contract, to be registered in the Burke Family Trust, and which vested 100 per cent on the date of closing. The contract provides that the CRS units “shall be redeemed at the point of purchase of SBI by a third party or at the Initial Public Offering of the stock of SBI.

[87] Appendix B provides further information about this Capped Restricted Share Unit Plan or RSU Plan. The purposes of the Plan are identified as to: promote and encourage individual contribution to the corporation, motivate participants to remain with the corporation, provide compensation that is reflective of responsibility, commitment and risk and to “reward Participants for their past efforts for and on behalf of the Corporation and to participate in the future success of the Corporation”. Mr. Kendall testified that because of his seniority, the respondent was awarded more CPS units than others.

[88] Under the Plan, the RSUs units did not vest immediately. Indeed, they did not become available for payout unless, as set out previously, one of two possible things happened. The earlier of these events triggered payout. The two events triggering payout were: first, the closing date on an initial public offering (IPO) or, second, the close of business the day before a “change of control” as defined in the plan.

[89] The respondent remained in the employ of SunOpta BioProcess Inc. from June 2007 going forward. More than three years later, on August 31, 2010, Mascoma USA acquired SunOpta BioProcess Inc. This qualified as a “change of control” and triggered a payout of the value of the RSUs that had been granted under the respondent’s June 2007 contract with SunOpta BioProcess Inc. The respondent worked for SunOpta Bioprocess Inc. until August 30, 2010. That day, he entered into a new employment contract with Mascoma Canada.

[90] The respondent testified that because he was to receive a payout from the RSUs, he consulted with tax lawyer Evelyn Schusheim. The respondent decided that for him, it made the most sense for the money from the RSUs to be transferred into a Retirement Compensation Arrangement trust (“RCA” Trust).

[91] Ms. Schusheim, a lawyer, testified the RCA Trust is an arrangement put in place as a way for employers to provide income to senior employees in the future.

[92] In the case of the respondent, she explained that there was a RCA Trust Agreement and a Retirement Income Plan Agreement, both of which are dated August 31, 2010. They were done together. The first is a trust agreement that set out the terms of the trust. The second is an agreement to create the trust and pay funds into the trust.

[93] In the Retirement Income Plan Agreement Recitals, there is a recognition, first, that the respondent was in the employ and service of SBI (Sunopta BioProcess Inc.) from 1986 to 2000 (when it was called Stake Technology) and from 2003 onwards. Second, there is also a recognition that he is entitled to certain amounts under the 2007 Capped Restricted Share Unit Plan and the 2007 Capped Stock Option Plan. Third, there is an acknowledgement that the Plan and RCA Trust are intended to constitute a retirement compensation arrangement for the purpose of providing the respondent with an income in his retirement. The Plan provides that the date upon which he can start receiving payments are when he is 65 or retires or provides notice that he wishes to receive payment in accordance with the Plan. It provides that all income derived from the Trust Fund, net of expenses and refundable taxes payable, accumulates and is added to the capital of the Trust Fund.

[94] The Trust Agreement provides, at s. 9.3 that the member is permitted to request to terminate the plan and to take as a lump sum payout the amount in the Trust Fund.

[95] Ms. Schusheim said that the trustee does not make the investment decisions as they are made by an investment manager.

[96] The Plan provides that if the respondent dies, his surviving spouse is entitled to the funds, unless he provides notice that someone else should receive the funds. Ms. Schusheim said that the respondent had not designated anyone else.

[97] She explained that the initial contribution to the RCA Trust by the employer was $2,958,229.

[98] Ms. Schusheim explained the manner in which funds within the RCA Trust accrue and are taxed, using the example in exhibit 13. She assumed that there was a $3,000,000 contribution to the trust. Half of that would go to the refundable tax account and half into the trust. Assuming that during the year, the trust generated an income of $50,000, half of that would go to the refundable tax account and half to the trust. If the member were to take a distribution of $150,000, the trust would remit $50,000 to Canada Revenue Agency (“CRA”) as a withholding tax and pay him $100,000. The trust would be reduced by $150,000. The refundable tax account is then reduced by $150,000 because that is paid to the trust. It is then refunded when the tax return is completed.

[99] The result of the structure of the RCA Trust, as explained by Ms. Schusheim, is that over time, the respondent will get the benefit of all three million dollars.

[100] The respondent’s employment contract with Mascoma, dated August 30, 2010, was filed as Exhibit 58. The employment contract sets out that the respondent had been the president and chief technology officer of SunOpta BioProcess pursuant to an employment agreement dated June 8, 2007. The contract also states that SunOpta BioProcess Inc. sold to Mascoma Canada all of the issued and outstanding shares in capital of SunOpta BioProcess Inc. The respondent’s evidence was that it was not a sale but a share swap.

[101] In any event, the contract sets out the remuneration and benefits that are to be given to the respondent. His base salary was to be $328,000. He was to receive an annual bonus of up to 35 per cent of his base salary. He was to be awarded an initial grant of 670,000 shares of common stock in Mascoma Corporation, under the Mascoma incentive plan, and had the potential to be awarded additional options in subsequent years. The contract further provided that the initial grant would be subject to vesting as follows: the option to purchase 40 per cent of the shares vested immediately on the grant day and the option to purchase the remaining shares vested in equal installments over the next 36 months. As a result, by August 30, 2013, all of the shares would have vested.

[102] The respondent worked for Mascoma from August 2010. He testified that by the fall of 2011, things were not going well. His responsibilities were taken from him. He said that by August 2011 he had no duties. He had a health related leave of absence in early 2012. He began legal action against Mascoma in February 2012.

[103] That legal action against Mascoma was settled with Minutes of Settlement that are filed as tab 34 of Exhibit 45. The respondent received a total amount of $334,500 in equal instalments over twenty-four months from his termination date of November 9, 2013. He had twelve months to exercise the 670,000 vested options he held at termination at a strike price of $.69. Ms. Schusheim testified that the respondent did not exercise these options in Mascoma. She said that to do so, he would have had to withdraw money from the RCA Trust.

[104] While the termination agreement with Mascoma was being negotiated, the respondent consulted with Ms. Schuscheim about whether he could have the settlement put into the RCA Trust account. The respondent denied that he was trying to place the money into the RCA Trust account in order to hide it from the applicant.

The transactions in relation to the RCA Trust

[105] Ms. Schusheim testified that she never had any concern about any of the transactions conducted by the RCA Trust. There was an amendment to the Trust Agreement entered into on February 24, 2011. It permitted the trust to borrow funds and to provide guarantees of indebtedness. The agreement provided that this amendment was retroactive to the date of the initial agreement in order to ensure that if the trust had borrowed previously, it would be in compliance with the terms of the trust. Ms. Schusheim confirmed that if the trust were to loan money, that would be a form of investment and that it would be expected to generate income which would then be disclosed on the tax return for the trust.

[106] There is evidence that the trust had made loans before the amending agreement and that it continued to do so after.

[107] On March 8, 2011, the trust loaned to Robert Burke, the respondent’s father (with the respondent’s sister Patricia Burke as Power Of Attorney (“POA”) for the father), the amount of $164,000, at an interest rate of one per cent. This loan is still outstanding and the interest will be paid when the loan is re-paid. On February 28, 2011, the respondent borrowed $165,000 from his father with an interest rate of one per cent. So, while the respondent did not take income from the trust, he authorized a loan to his father and borrowed from his father. The loans were unsecured and payable on demand.

[108] In 2012, the respondent authorized the trust to pay $35,000 to Sharon Cheyne, who was listed as his spouse in the authorization. Ms. Schusheim testified that she thought that this was an advance on a loan.

[109] There are additional loans made in 2013. On March 12, 2013, the trust loaned $10,000 to Patricia Burke and the respondent then borrowed this amount from Patricia Burke. When it was suggested to Ms. Schusheim that the respondent appeared to want to borrow from the trust, which he could have done within reason, she had no explanation as to why this is not what he did.

[110] In 2014, the respondent authorized distribution of funds from the trust into a BMO account in the name of Sharon Cheyne. Ms. Schusheim testified that Ms. Cheyne and Mr. Burke lived together and that she understood that the funds were to pay the mortgage at 350 Bronte Road, where they lived, and for legal fees. She testified about the authorization of a series of distributions over 2014. A chart setting out all of the distributions made by the trust to Sharon Cheyne’s BMO account (held jointly with her daughter) in 2014 was entered as Exhibit 54. In total, there was $128,2448.12

[111] In addition to these distributions to Ms. Cheyne, the trust made significant loans to her. On December 17, 2014, the trust loaned $340,000 to Ms. Cheyne. On March 24, 2015, the trust issues a bank draft to Ms. Cheyne in the amount of $300,000. Again, Ms. Schusheim said that this was a loan. The interest rate is two per cent and none of it has yet been paid. The loans are for as long as the lender wishes.

[112] Ms. Schusheim indicated that at that time, she was concerned that the loans were unsecured. She wrote to the respondent on April 6, 2015 and advised him that if the loans to Ms. Cheyne were not repaid to the trust by the end of 2015, they would be recorded as income distributed to him. She testified that this was not their intention but that she did think that they should take security for the loans made by the trust. She said that while these sort of loans are not prohibited by Revenue Canada they could be concerned about the loan being unsecured or could impute interest.

[113] It was Ms. Schusheim’s evidence that as of March 2015, the balance in the refundable tax account was $1,348,957.45. The balance in the trust account was $81,104.40, from which she said that there was $16,889.18 owed in taxes and $3,985 owed in fees, leaving $60,230.22. The market value of the respondent’s trust account was $651,350.31 (from Exhibit 12C). The trust was owed $640,000 plus interest by Sharon Cheyne. In total, therefore, the RCA trust is worth $2,700,537.98.

The applicable legal principles

[114] Section 4 of the Family Law Act says that the value of property must be determined as of valuation date, or the date of separation. There is no doubt that on valuation date, the respondent did not own the Restricted Share Units that later paid out the money that was put into the RCA Trust.

[115] However, s. 4 defines property, for the purpose of determining net family property as “any interest, present or future, vested or contingent, in real or personal property”.

[116] In Ross v. Ross, [2006] O.J. No. 4916 (C.A.), the Court of Appeal considered whether stock options, received after the date of separation, were property for the purpose of determining net family property. At para. 22, Rouleau J.A., for the majority, held:

To me stock options are more properly considered to be an employment related benefit and should be treated as such. Accordingly, stock options awarded to a spouse by his or her employer after the valuation date ought to be included in the spouse’s net family property if, on the valuation date, the spouse had earned the right to the options.

[117] It is clear, therefore, that employee related benefits awarded after valuation date may be included in net family property if, if on valuation date, the spouse had earned the right to that property. The Court explained, at para. 24, that the issue to be decided is whether the spouse was entitled “as of right” to the benefit at the date of separation.

The respondent had no entitlement to the RSUs on the date of separation

[118] On the facts before me, I cannot conclude that the respondent had earned an entitlement to the RSUs at the date of separation. In June 2006, he was working at SunOpta Inc. He was earning a good salary. He was receiving options. He had never received RSUs. He had no entitlement to RSUs and it could not reasonably have been anticipated that RSUs would ever be awarded to him. The RSUs were not awarded to the respondent until a year after the separation.

[119] I acknowledge that there is a reference in the respondent’s contract with SunOpta BioProcess Inc, signed in June 2007, to the fact that he had worked for SunOpta Inc. for a number of years. While there is a reference in the contract to the fact that the RSUs were intended, in part, to reward the respondent for previous work with the corporation, I cannot read the contract as suggesting that the RSUs were something that the respondent had become entitled to a year earlier.

[120] I cannot conclude that the funds that were later paid into the RCA Trust are property for the purpose of equalization.

[121] Given that the parties agreed that the only issue was whether the RCA Trust was an asset for equalization, or a generator of income for support purposes, and my conclusion that it was not property for the purpose of equalization, I find that it is a source of income that must be considered when support is determined. I will consider it further when I discuss the issue of support.

ii) Is the joint TD Canada Trust account an asset for the applicant?

[122] The applicant was made joint on a TD Canada Trust (“TDCT”) account with her mother, Ms. Valentini, in July 2005. From June 2006 until the time of trial, she testified that she had received a substantial amount of money from her mother, none of which had been paid back. As of the date of separation, she had received $34,445 from her mother. By the date of trial, the amount was $365,951.

[123] At the outset of the trial, I understood it to be the respondent’s position that the money in this account belonged to the applicant and so needed to be factored into the equalization. I will address this position briefly, although I did not understand it to be the position being advanced by the respondent in his written submissions, apart from in his order sought. Instead, I understand his position to be that the money advanced to the applicant by her mother should was a gift that should be imputed to her as income for the purpose of determining support.

[124] I will summarize briefly the relevant evidence in relation to this joint account.

[125] The applicant was asked how she characterized the money that came from Ms. Valentini. She said that she viewed it as a loan and that it was her mother who characterized it as an advance on her inheritance. The applicant testified that she has always known that these funds would be deducted from whatever she will otherwise inherit on her mother’s death.

[126] There was detailed evidence by Ms. Burke about what money she received at what points in time from her mother. Ms. Valentini’s bank statements were entered as exhibits.

[127] Joan Valentini also testified. She described herself as having a very close relationship with her daughter, the applicant. She explained that the TDCT account had been her husband’s from the early 1990s and that she continued it after he died in February 2003.

[128] She explained that shortly after her husband’s death, she herself was hospitalized. There were bills that needed to be paid and she had not been able to do so. She decided after this that it made sense for the account to be joint so that her daughter could look after the account if she became ill again. The applicant’s name was added to the account a few months later in 2003.

[129] Ms. Valentini testified that between the time her name was added to the account and the date of separation, the applicant never did any transactions for her and never put any money into the account. This was the only account on which the applicant was joint with her mother.

[130] After separation, Ms. Valentini said that the applicant has never done a transaction on the account, has never deposited anything to it, has never written a cheque on it and has never held any money in the account. All of the transactions on the account have been done by Ms. Valentini and it was her evidence that she is the owner of all of the funds in the account.

[131] Ms. Valentini described her careful accounting system for this account. On a monthly basis, she checks the bank statements against her notes of the transactions she has done on the account. She was shown her notes and the statements, all of which were made exhibits in this trial. There are numerous places in which she has written on the statements “loan to Karen” or “inheritance advanced to Karen”.

[132] Ms. Valentini explained that when she provided this money to the applicant, it was not a gift, and was intended to be deducted from the inheritance that her daughter would receive upon Ms. Valentini’s death. She said that the amount that she gave to the applicant varied by year and was dependent on whether the respondent was paying her support. She testified that she gave money to the applicant as it was needed and when it was requested.

[133] Exhibit 14 has Ms. Valentini’s hand-written record of all of the money that she advanced to the applicant. It appears to me that Ms. Valentini provided money to the applicant on a fairly regular basis over 2006 through 2008. This includes both before separation and after separation in 2006 (almost $16,000 before separation in 2006, and almost $20,000 after separation) and amounts of over $44,000 in 2007 and just over $65,000 in 2008.

[134] The notes and bank records reflect that after the respondent began paying support in May 2009, the amounts from Ms. Valentini decreased, although there appears to be $16,000 advanced after that and a notation that $14,000 of that was for counsel. The advances decease to $10,900 in 2010 and there was nothing given to the applicant on 2011. By 2012, the advances increase again, amounting to $22,000 that year.

[135] There was a protracted cross-examination of Ms. Valentini by Mr. Ben-Zvi on the uses that Ms. Valentini made of the money in this bank account. She was cross-examined on loans that she made to other people. While this cross-examination seemed very far afield and irrelevant to me at the time, counsel insisted that he was going to demonstrate that the TDCT account was a business account and that the applicant was a co-owner of the account. I understood his position to be that the applicant was thus responsible for the loans made from the account, and was a recipient of interest paid into it by various loan recipients. Ms. Valentini was consistent and unequivocal that the account was a personal account and not a business account and that she reported any interest she received to Revenue Canada. In the end, this cross-examination appears to have little bearing on the arguments advanced by the respondent, except for the submissions relating to Ms. Valentini’s credibility.

[136] In her written submissions, the applicant’s position is that she does not have any beneficial ownership in the TDCT account that she holds jointly with her mother and that the account should not be considered an asset for the purpose of equalization.

[137] In his written submissions, the respondent takes the position that Ms. Valentini was contradictory in her evidence respecting whether this account was a personal account or a business account because, while she testified that it was personal, she also said that she used it to make loans. I am asked to draw a negative inference against her on the basis that “she is lying about the use of the TDCT account”. In the proposed final order, the respondent asks for an order declaring the applicant a joint owner and beneficiary of the TDCT account.

[138] The starting point for the legal analysis is the Supreme Court of Canada decision in Pecore v. Pecore 2007 SCC 17, [2007] 1 S.C.R. 795. In that case, at para. 36, the majority of the court held that when a parent transfers title in property to an adult child for no consideration, there is no presumption of advancement to the adult child. The presumption is of a resulting trust for the parent. The presumption may be rebutted. Evidence that would be relevant includes bank documents, control and use of the funds and tax treatment of the account. See also: Andrade v. Andrade 2016 ONCA 468, 131 O.R. (3d) 532, at para. 59.

[139] In my view, there is no evidentiary support for a determination that the TDCT account was the applicant’s asset. I begin from the Pecore presumption against advancement. In determining whether that presumption has been rebutted, I look to the evidence before me. I find that the account had Ms. Valentini’s money and that she controlled it. The applicant did not ever control the money or view it as hers. Certainly, there is no evidence to support an inference that it was her property on the date of separation. This account should not be factored into the equalization calculation.

[140] Accordingly, the agreed amount of equalization will not be affected by the existence of this account. The respondent’s position that the money provided by Ms. Valentini to the applicant should be considered as the applicant’s income will be considered when I analyze the submissions about what income should be imputed to the applicant for the purpose of spousal support.

iii) Should there be an order in respect of pre-judgment interest for the equalization owing?

[141] Section 130 of the Courts of Justice Act permits the court, in the exercise of its discretion, to award pre-judgment interest from the date of the cause of action. In this case, the applicant seeks pre-judgment interest calculated from July 1, 2006 on the equalization payment as agreed to in the Minutes of Settlement of $188,732.65. A total of $37,594.88 is sought.

[142] In Burgess v. Burgess, [1995] O.J. No. 546, 24 O.R. (3d) 547 (C.A.), the Court of Appeal set out the principles applicable to a determination of whether pre-judgment interest should be awarded. The Court noted that “as a general rule, the payor spouse is required to pay pre-judgment interest on an equalization payment owing to the payee spouse”. However, the Court recognized that exceptions to this rule are made when the payor spouse cannot realize the asset giving rise to the equalization payment until after the trial, does not have use of it prior to the trial, the asset generates no income, and the payor spouse has not delayed the case being brought to trial. While most cases involve the matrimonial home, some also involve a pension.

[143] It is the respondent’s position that no award of pre-judgment interest should be made in this case. The argument is made that the major asset of the family is the matrimonial home and that it has increased in value since separation, to the benefit of the applicant. The argument is made that the respondent sought sale of the home in his Answer and that the applicant has delayed this. The respondent submits that, apart from the non-disclosure of his RCA Trust, which is said not to be relevant to the equalization issue, he has not delayed the trial and that the applicant’s non-disclosure has delayed the trial.

[144] In her Reply submissions, the applicant says that the equalization payment in this case arises from the respondent’s RRSP’s, stock options and investments that were held by him prior to trial, could have been transferred to the applicant, could have been used to generate income and could have been sold. In fact, the applicant did sell his shares in the fall of 2007 and earned in excess of $300,000. It is submitted that the general rule ought to apply.

[145] In my view, the applicant is entitled to pre-judgment interest on the equalization payment that is due. This equalization is not related to the money owed in relation to the matrimonial home, which I will deal with below, and so the respondent’s submissions that refer to the matrimonial home are largely irrelevant. I have not been persuaded that there is any reason to depart from the usual rule.

[146] I accept the applicant’s calculation as to pre-judgment interest as set out at tab B of her written submissions. This chart sets out the pre-judgement interest that accrued on the basis of the established pre-judgment interest rates. I order that the respondent pay pre-judgment interest of $37,594.88.

iv) Conclusion on equalization

[147] There will be an equalization award of $188,762.35 to the applicant. The equalization will not be changed as a result of the TDCT account as it is not an asset on the applicant’s side. It will also not be changed as a result of the RCA Trust as it was not an asset that the respondent had any entitlement to on the date of separation. The applicant is entitled to prejudgment interest of $37,594.88.

[148] Accordingly, the total amount owing to the applicant on account of equalization is $226,357.23.

b) What order should be made in relation to the matrimonial home and how should the parties’ interests in the equity of the home be determined?

[149] In her opening address, Ms. Moritz advised me that it was the intention of the parties for the applicant to purchase the respondent’s share in the matrimonial home at 2131 Dunvegan Avenue in Oakville. This was never challenged by Mr. Ben-Zvi. I understood that to facilitate this transfer of the home, the parties agreed on March 24, 2016 that the matrimonial home should be valued at $925,000. They also agree that the respondent is obligated to pay to the applicant $13,664.86, which reflects half of the home repairs since separation. The trial proceeded before me on the basis that the applicant would purchase the respondent’s share of the matrimonial home.

[150] While I do not see the respondent taking any objection to the applicant purchasing his share of the matrimonial home, the parties have very different views about how to calculate how much the applicant should pay to do so. There is a significant question about their relative entitlements to the equity in the home.

[151] There are four issues to be decided. The first is what mortgage balance should be used to determine the respondent’s equity in the home – the mortgage as of date of separation or the mortgage now. The second is what, if any, adjustments should be made on the basis of the applicant having paid the property taxes on the matrimonial home since separation. The third is whether the applicant should be required to pay occupational rent to the respondent for living in the home since separation. The final is whether there should be a deduction from the respondent’s share of the home for dispositional costs.

[152] I will address each of these separately.

[153] In conducting my analysis, I am mindful of the fact that in his tax returns, the respondent made a claim for support that included the costs of the mortgage on the home and the property taxes. He has thus received a considerable benefit already for having made the mortgage and tax payments. I am also mindful of the fact that the respondent was under a court order to pay these expenses, beginning on February 15, 2009. There can be no doubt that had Herold J. not made a separate order for the mortgage and property taxes, he would have made an increased spousal support order. This reinforces that these expenses were instead of a larger spousal support order and that through his tax deduction, the respondent has been compensated for having made these payments. It is also important to observe that the respondent unilaterally stopped making these payments for both the mortgage and the property taxes in 2012.

[154] The other important observation to make is that the respondent has benefitted from what is undoubtedly a very significant increase in the value of the matrimonial home from 2006 when the parties separated until 2016 when they agreed that its value was $925,000.

[155] A spousal support payor, who is covering the cost of the mortgage and taxes through those support payments and is able to claim a tax deduction for them is not entitled to also claim a credit on equalization for reduction of the mortgage for a payment that was in the nature of spousal support: Kimpton v. Kimpton, 2003 CarswellOnt 2552 (Ont.S.C.) at para. 94.

i) What mortgage balance should be used to determine the respondent’s equity in the home?

[156] The applicant suggests that in determining the respondent’s value of equity in the matrimonial home, the mortgage as of the date of separation should be the value used. On June 30, 2006, the mortgage was $238,988.26.

[157] While the respondent has chosen not to make explicit written submissions about this issue, his position in his “Post Separation Family Asset/Debt Calculation” appears to be that the mortgage value to be used should be the current mortgage, which he puts at $68,404 (I note that exhibit 61 is the CIBC statement as of October 24, 2016 which provides a mortgage of $69,710.60). He seeks credit for half the value of the mortgage payments since separation, which he says is $154,196.

[158] It is important to set out what has happened in terms of payments of the mortgage since separation.

[159] The applicant testified that after separation, the respondent continued paying the mortgage under an informal agreement.

[160] The first court order respecting the mortgage was made by Herold J. on February 19, 2009. He ordered that the respondent was “to continue paying the mortgage principle, interest, taxes and insurance” on the home. At that point, the mortgage was $204,821.41. In addition, Justice Herold ordered that there be $1,500 a month paid in spousal support, beginning February 15, 2009.

[161] It was the applicant’s evidence that the respondent stopped making mortgage payments in 2012. She said that his September 2012 payment was reversed by the bank. She said that he made the October 2012 payment but that she paid the mortgage after this. At the end of October 2012, the mortgage was $127,347.10. I understood the respondent to acknowledge during his evidence that he stopped paying the mortgage in the fall of 2012.

[162] The applicant submits that in his tax returns, the respondent claimed as support all of the money that was paid on account of the mortgage and other expenses for the home. For instance, in his 2009 T1General, he claimed support payments of $49,679.40. This deduction appears to include not only the $16,500 that he paid in spousal support, but also the amounts he paid for the mortgage, insurance and taxes.

[163] Similarly, in 2010, the respondent claimed $49,679 as a support deduction. Again, he agreed that $18,000 was the spousal support he paid and that the balance was for mortgage, insurance and taxes.

[164] Similarly, in 2011, the respondent claimed for $49,954.88 when only $18,000 was paid by him as spousal support. The rest was mortgage, insurance and taxes.

[165] Finally, in 2012, the respondent claimed $49,954.88 as a support deduction. He had paid only $6,000 in spousal support and the rest, $43,954.88, was on account of the mortgage, insurance and taxes was $43,954.88.

[166] The applicant’s position is that the respondent received a tax benefit by deducting both the mortgage and the tax payments that he made as spousal support. She submits that the respondent is not entitled to benefit from a reduction in the mortgage over the time period that he was paying spousal support and the support recipient was paying the mortgage. She says that he is seeking credit for the payments he made on the mortgage as spousal support and he should not receive additional credit through the reduction of the mortgage.

[167] The respondent’s position is that he paid the mortgage at an accelerated rate and that when he stopped working in 2012, he needed to have the payments reduced, but the applicant refused.

[168] In my view, the fair result, bearing in mind the spousal support deductions that the respondent has claimed is for the value of the mortgage to be that on the date of separation, which was $238.988.26. The respondent’s equity in the home should thus be reduced by half this amount, or $119,494.13.

ii) What, if any, adjustments should be made on the basis of the applicant’s payment of property taxes on the matrimonial home since separation?

[169] The applicant makes a similar argument in relation to the property taxes paid on the matrimonial home.

[170] The respondent paid the property taxes on the home under an informal agreement until 2009. He was ordered by Herold J. to continue doing so on February 19, 2009. He did so until September 2012 when he stopped making any payments. As he did in relation to mortgage payments, the respondent claimed as a support deduction on his income tax the payments he made on account of the property taxes.

[171] The total property taxes paid since separation are $66,247.56. The applicant says that the respondent received 100 per cent credit for all property taxes he paid as spousal support. She says that he should reimburse her for half the property taxes paid between 2007 and 2016. Thus, her claim is for $33,123.78.

[172] The respondent has chosen not to make written submissions that respond directly to this argument. I understand his position to be that he paid the property taxes until 2012 and that he should not be found owing anything on account of them.

[173] It is clear to me that the respondent paid the property taxes on the home for 2007 through to 2012. He has also had the tax benefit of claiming those payments as spousal support and thus tax deductible. He has paid nothing since 2012.

[174] As the respondent received the benefit of the spousal support tax deduction for the property taxes, and has paid nothing since 2012, it is my view that he should reimburse the applicant for half of the property taxes, or $33,123.78.

iii) Should the applicant be required to pay occupational rent to the respondent for living in the matrimonial home since separation?

[175] In his Answer dated July 22, 2008, the respondent did not seek occupation rent. He did seek sale of the matrimonial home. Justice Herold made an order that the applicant to have exclusive possession of the home on February 19, 2009.

[176] In the trial scheduling endorsement form of March 11, 2015, there is no indication that the respondent would be seeking an order for occupation rent. In the trial scheduling endorsement form of October 3, 2015, while the respondent indicated that there was an issue of possession of the home, there was no indication that occupation rent would be sought. In his opening submissions, while Mr. Ben-Zvi referred to the fact that the respondent had been living in the matrimonial home since separation, he made no submission that the respondent was seeking occupation rent.

[177] There was no trial evidence adduced on the issue of occupation rent.

[178] However, in his written submissions, the respondent submits that the applicant should be ordered to pay occupation rent for her exclusive possession of the home while the respondent paid the costs of the home. He has not provided any submissions as to what that occupation rent should be or how it should be calculated by me.

[179] The applicant did not deal with this issue in her initial written submissions, presumably because she had no idea that this was even an issue that was being raised. In her reply submissions, she submits that this was not a trial issue. This is true. It was never a trial issue and I first learned it was an issue upon reading the respondent’s written submissions.

[180] Section 24(1) of the Family Law Act provides that a court may, on application, by order:

(c) direct a spouse to whom exclusive possession of the matrimonial home is given to make periodic payments to the other spouse.

[181] An order for occupation rent is a discretionary remedy. A number of cases have commented that it is to be granted only in exceptional cases (See Wawzonek v. Page, 2015 ONSC 4374 at para. 228; Ombac v. George 2015 ONSC 1938). Such an order may be made where it is reasonable and equitable to do so, taking into consideration all of the circumstances. The onus is on the claimant to satisfy the court that an order is appropriate.

[182] In Griffiths v. Zomosco, [2001] O.J. No 2096, 54 O.R. (3d) 397 (C.A.) at para. 48, the Court set out some factors to consider in determining whether to order occupation rent paid. These include: the timing of the claim for occupation rent, the duration of the occupancy, the inability of the non-occupying spouse to realize on her equity in the property, any reasonable credits to be set off against occupation rent and any other competing claims in the litigation.

[183] Additional factors to be considered were set out shortly after the release of the Court of Appeal’s decision, but without reference to it, in Higgins v. Higgins, [2001] O.J. No. 3011 (S.C.J.). Those factors include:

• The conduct of the non-occupying spouse, including the failure to pay support;

• The conduct of the occupying spouse, including the failure to pay support;

• Delay in making the claim;

• The extent to which the non-occupying spouse has been prevented from having his or her equity in the home;

• Whether the non-occupying spouse moved for sale of the home and, if not, why not;

• Whether the occupying spouse paid the mortgage and other carrying charges of the home;

• Whether children resided with the occupying spouse and, if so, whether the non-occupying spouse paid or was able to pay child support;

• Whether the occupying spouse has increased the selling value of the property.

[184] In summary, occupation rent is a way to balance the equities in order to achieve a just result in all of the circumstances.

[185] The respondent lived in the home until November 5, 2007. I assume that no claim for occupation rent is made until after that point.

[186] I observe that occupation rent was not sought by the respondent on any interim motion. It was not pled and was sought, for the first time, in 2017 in counsel’s written submissions after the conclusion of the trial. No evidence was provided to me as to what rent would be appropriate or how it would be calculated. The Court of Appeal has observed that there is onus on the party seeking occupation rent to provide evidence as to what market rent would have been: Stelco v. Stelco, 2014 ONCA 370 at para. 5

[187] I am very troubled by the manner in which the issue of occupation rent has been raised. While I do not think that the law forecloses consideration of the issue because it was not pleaded (Frick v. Frick, 2016 ONCA 799 at paras. 34-40; Stelco at para. 4), the late timing of the claim is far from ideal.

[188] I have considered all of the circumstances. The parties have agreed that the respondent will benefit from the increase in value in the home from the time of his departure until the 2006. The appreciation is significant. He has been credited for the fact that he paid the mortgage as well as the insurance and taxes up to 2012 in that he received a tax deduction for those payments as spousal support. After 2012, of course, the respondent stopped paying these costs, despite the fact that he was under a court order to do so. The applicant thus made all of the payments for the mortgage, property taxes and insurance from 2012 forward.

[189] Given my views about the respondent’s unwillingness to make timely disclosure as required under the Rules, his deception about the RCA Trust, and his inexcusable delay in even making a claim for occupation rent, I decline to order the applicant to pay occupation rent: Rebiere v. Rebiere 2015 ONSC 1324.

iv) Should notional or dispositional costs be deducted from the respondent’s value of the home

[190] The applicant seeks a deduction of dispositional costs of five per cent of the respondent’s share of the matrimonial home, which she says is $23,125. Her position is that once her adult children move out of the home, she will “more likely than not” sell it.

[191] The respondent submits that there should be no dispositional cost deduction.

[192] Recently, in Bortnikov v. Rakitova, 2016 ONCA 427, leave to appeal refused [2016] S.C.C.A. 331 the Court of Appeal set out the following general rule at para. 11:

As a general rule, in determining whether dispositional costs should be deducted from an asset’s value, the analysis should take into account evidence of probable timing of the asset’s disposition. It is appropriate to deduct disposition costs from net family property “if there is satisfactory evidence of a likely disposition date and it is clear that such costs will be inevitable when the owner disposes of the assets or is deemed to have disposed of them…An allowance for disposition costs from net family property should not be made in the case “where it is not clear when if ever, a sale or transfer of property will be made”… However, it is not necessary for the court to determine whether the disposition of the assets is inevitable; rather the court should determine on the basis of the evidence whether it is more likely than not that the assets would be sold, at which point disposition costs would inevitably be incurred…[citations omitted]

[193] While the applicant was clear that she wished to purchase from the respondent his interest in the matrimonial home, she did not testify that she had any plan to sell the home. Her evidence was that her youngest child Leah, who was to graduate in April 2016, planned to move home after graduation.

[194] In my view, dispositional costs for the matrimonial home are not appropriate in this case. There is no evidence that the home is likely to be sold in the foreseeable future. There is no evidence that the operating expenses for the home are in arrears or that the applicant will be unable to afford the home going forward. While I accept that the applicant will sell it at some point in the future, and that there will be some expenses for real estate fees incurred at that time, these are speculative at this point: Oskalns v. Oskalne, [2016] ONSC 4428 at paras. 67-69.

v) Conclusion on the matrimonial home

[195] On consent, the value of the matrimonial home is: $925,000

The respondent’s share in the home (50%): $462,500

This is to be reduced by his share of the mortgage: $119,494.13

It is reduced to account for his share of property taxes: $33,123.78

It is reduced by half the value of the costs of home repairs, as agreed $13,665.86

There will be no reduction for dispositional costs.

The applicant will not be charged occupation rent.

$296,216.23

[196] Accordingly, the value for which the applicant may purchase the respondent’s interest in the home is $ 296,216.23.

[197] As already noted, the equalization owed by the respondent to the applicant is $226,357.23. This means that the applicant will owe to the respondent a total of his interest in the home ($296,216.23) less equalization (226,357.23) which is $69,859.

c) What order should be made respecting interest payments on the joint CIBC line of credit and loan since separation?

[198] In their Minutes of Settlement dated March 24, 2016, the parties agreed that each would pay half of the outstanding CIBC line of credit and of the CIBC loan (which as of October 24, 2016 were $69,390.59 and $32,375.69 respectively). The loan is to be discharged within 30 days of the conclusion of these proceedings and the line of credit is to be closed at the same time.

[199] There is an issue between the parties about the interest payments that have been made on the loan and the line of credit and who should bear them.

[200] The applicant’s evidence was that the CIBC loan was taken in the summer of 2005 so that the respondent could buy stock in his employer’s company, either Stake Technology or SunOpta Inc. The original loan appears to have been for $52,250 and was taken on June 3, 2005. The applicant thought that it was a short term loan to be paid back within a few months. The respondent did not recall that to have been the case.

[201] The CIBC Line of Credit was for $70,000. While the applicant was not sure who had accessed the funds, she said that they were used to invest in Stake Technology stock. She testified that this was a joint decision made by her and the respondent.

[202] The respondent agreed that he had used the funds borrowed through the loan and line of credit to purchase shares and stocks in SunOpta Inc. He said that it was a mutual decision made by the applicant and him.

[203] It was put to the respondent that in his financial statement sworn on July 9, 2008, he had claimed the entire CIBC line of credit as his debt. He said he thought that had been an error.

[204] The applicant testified that she believed that the respondent cashed these investments in September of 2007. This belief was based on her seeing his 2007 Tax Return. That return revealed that in 2007, while the respondent’s employment income was $330,000, he reported an income of $740,000.

[205] The applicant testified that the respondent continued paying these two debts after separation. He stopped paying the loan interest in the fall of 2012. He stopped paying the line of credit interest in early 2013.

[206] The chart prepared by the respondent and entered into evidence as Exhibit 44 sets out the total amounts paid by the respondent in respect of the CIBC loans on an annual basis. The total he claims to have paid was $40,771.38. Of course, I note that he has included payments made before separation. I deduct these and find that he has paid $38,947.54.

[207] The applicant testified that she made the interest payments after that time.

[208] A chart entered as Exhibit 23 sets out the interest payments that the applicant claims she has made on the loan and the line of credit since the respondent stopped making payments. She says she has paid $10,980.00 on the line of credit and $8,552.16 on the loan. In total, therefore, she has paid $19,532.16.

[209] It is the applicant’s position that she should be reimbursed for all of this. She submits that when the respondent sold the stock he bought with these loans, he made a significant profit. He did not pay the loans back. Instead, he reinvested the money, without telling her.

[210] The respondent testified that he reinvested the profit he had made from this as well as the money he had made by exercising his options. He bought shares of SunOpta Inc. at $14.00 a share. He said that it turned out that there was an investigation and employees were not allowed to buy and sell shares. When that ban was lifted in July or August 2008, the share prices had fallen to $4 or $5 a share. He thus sold his stock at a huge loss because he owed taxes.

[211] While the respondent has made written submissions about only the joint line of credit, and not the joint CIBC loan, I will assume that he intended for his submissions in respect of the line of credit to also apply to the joint loan. The respondent’s position appears to be that it would be unfair to order that he be solely responsible for the joint line of credit and the interest owed.

[212] The issue is not responsibility for the principal owed on the joint line of credit and the joint loan. The Minutes of Settlement make clear that the parties have agreed that this will be shared equally.

[213] The issue is whether there should be an order made respecting the interest payments that the applicant claims to have paid and for which she says the respondent should be entirely responsible.

[214] I observe that the only evidence I have is that the parties took these liabilities on jointly during the course of their marriage. The expectation of both parties was that the respondent, who was working, would pay the interest costs. He did from 2006 until the fall of 2012. He paid $38,947.54 after separation. The applicant has paid all of the interest costs since 2012, amounting to $19,532.19.

[215] While the respondent made a substantial profit from selling the shares that he financed though these loans, the applicant has or will receive part of the benefit of that in that her spousal support claim relies on some of the income he earned from the capital gains he made in the fall of 2007.

[216] There is no perfect was to share the interest costs. I have decided to share the interest costs between them in the same way that the principal is shared. The respondent has not asked that he be credited for having paid more than 50 per cent of the costs. In these circumstances, I decline to make the order that the applicant seeks for the respondent to reimburse her for the interest charges that she has paid on the line of credit and the loan.

d) What if any arrears in child support are owed by the respondent to the applicant or what is his credit for overpayment?

[217] The applicant does not claim arrears of child support. Indeed, it is her position that there has been an overpayment of child support, and that the overpayment collected by FRO should be applied to s. 7 and/or spousal support owing. The parties agreed, in Minutes of Settlement, that FRO had collected a total of $394,720.74 in support payments from 2008 to March, 2016.

i) The respondent’s income and the table support owed

[218] There is no dispute that the respondent should have been paying table child support to the applicant for the support of his children. The issue is with respect to what his income was.

[219] After reviewing his line 150 income in his tax returns, the parties are agreed about what his income is for support purposes for the years 2006, 2008, 2009, 2010, 2011 and 2012. Determinations need to be made in respect of his incomes for 2007, 2013 and 2014. The chart below sets out the positions of each of the parties, as presented in their written submissions, respecting the respondent’s child support obligations over the relevant period and my conclusions.

[220] In respect of 2007, the respondent’s income was comprised of his salary, bonus and the significant gains he made on his sale of shares and options in the fall of 2007. Neither party asks me to use his line 150 income. The applicant has taken what she characterizes as a “compromised position” and seeks to have the respondent’s income imputed for 2007 at $475,264, rather than the $740,742 in his line 150 income. She bases this income on his salary plus bonus of $374,241 plus the capital gains he had of $101,023. In my view, while it would have been reasonable to use the respondent’s line 150 income for child support, I accept that the position taken by the applicant is reasonable. The respondent’s position that this was an extraordinary gain, and that it was followed by a subsequent loss in 2008 does not, in my view, justify a reduction of the amount he suggests for 2007. Accordingly, I shall use the applicant’s compromised position in respect of the respondent’s income and find his income to be $475,264. Child support payable was $65,196.

[221] In respect of 2012, the respondent’s line 150 income was $203,784. The parties have agreed that his income for 2012 was $89,284. The applicant says in her submissions that this was a compromised position and that she acceded to the respondent’s request to reduce his income by $126,500, which was from cashing an RRSP. I am going to use that income as it is what the parties appear to agree should be used for spousal support (according to Exhibit 21.) His income for 2012 was $89,284 and the child support payable was $6,360.

[222] In respect of 2013, the applicant’s position is that the respondent’s income was his line 150 income of $169,518. In Exhibit 19, the respondent indicated that he disagreed with the income used by the applicant to determine child support for 2013. On his own chart, he uses an income of $89,284. At tab E of his submissions, he uses an income of $203,785 for the purpose of calculating child support. This is, in fact, higher than the income used by the applicant. They take positions within $1,000 of each other for the child support owing that year. I find that his income that year was his line 150 income of $169,518 and that child support owed by him was $5,628.

[223] For 2014, the respondent indicated that he disagreed with the income used by the applicant for him. She uses the line 150 income of $355,092. On his charts, he uses the income of $153,312. I have been provided with no explanation for his figure. I have reviewed his CRA Notice of Assessment dated September 24, 2015. It indicates a line 150 income of $355,194. Absent some explanation for using a lower number, that is the appropriate income. Little turns on this as the parties are only a couple of hundred dollars apart in terms of what child support is payable for 2014. Child support payable for 2014 was $11,124.

[224] In respect of 2015, the respondent indicated that he disagreed with the applicant’s figure for 2015 income. However, in his charts, he has used the identical figure as the applicant for his 2015 income and agrees to within a couple of dollars as to the child support that was payable. I conclude that his income for support purposes in 2015 was $153,312 and that his child support obligation was $5,148.

[225] The following chart summarizes the positions of the parties on the respondent’s income and my findings as to the respondent’s income and child support owing over the period from 2006 to 2015.

Year       Line 150   Applicant’s position on his income   Applicant’s position C/S payable   Respondent’s position on income   Respondent’s position on C/S payable   Finding on income   Finding on C/S payable
2006       $227,594   $227,594                             $19,044                            $226,834                          $20,424                                $227,594            $19,044
2007       $740,742   $475,264                             $65,196                            $330,526                          $47,520                                $475,264            $65,196
2008       $331,217   $331,217                             $41,880                            $331,217                          $41,716                                $331,217            $41,716
2009       $340,036   $340,036                             $42,963                            $340,037                          $42,744                                $340,036            $42,744
2010       $341,134   $341,134                             $38,184                            $341,134                          $38,180                                $341,134            $38,180
2011       $326,699   $326,699                             $36,660                            $326,699                          $36,672                                $326,699            $36,660
2012       $203,784   $89,284                              $6,360                             $89,284                           $6,360                                 $89,284             $6,360
2013       $169,518   $169,518                             $5,628                             $203,785                          $6,644                                 $169,518            $5,628
2014       $355,092   $355,094                             $11,124                            $344,494                          $10,808                                $355,092            $11,124
2015       No tax return   $153,312                             $5,148                             $153,312                          $5,152                                 $153,312            $5,148
Total                 $272,187                             $256,210                                                                                                   $271,800

[226] As can be seen, the applicant and respondent are very close in terms of what child support was payable by the respondent to the applicant in respect of their children, with only minor differences, as reflected in the chart above. The applicant’s position is that a total of $272,187 was payable. The respondent puts the total in his chart at $256,210. The difference is largely due to the different positions taken in respect of the 2007 income. When they agree about the income and disagree about the child support payable as a result of that income by a few dollars, I have taken the lower value. I have concluded that the total child support payable over the years 2006 to 2015 was $271,800.

[227] In order to determine whether the respondent has over paid or under paid child support, there needs to be an accounting of what he paid to the applicant directly by way of child support and what was collected by the Family Responsibility Office (“FRO”).

ii) Direct child support payments made by the respondent

[228] The respondent’s direct payments include both direct child support payments and payments made by him in respect of the costs for the family of remaining in the home, beyond the mortgage and property taxes, which have already been addressed and for which he has claimed spousal support deductions.

[229] As set out in the applicant’s chart at tab “D”, and based on Exhibit 20, the respondent should be credited with child support payments that were paid directly by him. These amounted to $5,133 in 2007 and $304 in 2008, for a total of $5,437.

[230] The parties do not agree as to which additional direct payments made by the respondent should be considered on account of child support.

[231] The respondent has provided, at Exhibit 44, a chart of what he says he paid on account of Bell, Rogers, life insurance, Cogeco, home/auto insurance and hydro over the years from 2006 until 2015. His chart also includes the mortgage and CIBC loan payments, which I have addressed already when I considered his claim as to how to apportion the costs paid on those debts. It is also important to note that in Exhibit 44, the respondent claimed medical and dental expenses which he agreed in Exhibit 19 should not be included.

[232] In her chart on child support arrears at tab “D” of her materials (which is based on Exhibit 20) the applicant deducts from the child support owing the amounts that the respondent paid for gas, Bell, Rogers, home/auto insurance and a car lease for 2006 through 2009. She also deducts the funds that he paid directly for child support. It was her evidence that she used the respondent’s support chart (Exhibit 44) to generate her total numbers for expenses paid by the respondent. She agrees with almost all of his chart in terms of what those payments were. Their disagreements are set out in Exhibit 19.

[233] I have examined the differences between the positions taken by the applicant and respondent as to what the respondent should be credited for direct child support payments made to support the children. I have determined why there are differences between the applicant’s and respondent’s positions and made findings as to what the proper credit to the respondent should be. These are set out in the chart below. In reaching these numbers, I have used the numbers on the applicant’s chart at Exhibit 20 and the respondent’s chart at Exhibit 44 (excluding mortgage payments, CIBC loan payments, and claims under the health/medical/dental column).

[234] In respect of 2006, the difference between the two numbers is accounted for by the $1,177.45 that the respondent claims was paid in life insurance. The evidence of the applicant was that she did not accept this as a legitimate expense as this was the respondent’s policy and that these were the premiums he paid. While she had not seen the policy, she understood that the children were the beneficiaries. Her position is that these are not legitimate child support payments.

[235] The respondent did not testify about the life insurance premiums and has provided no submissions as to why they are legitimate child support payments. In these circumstances, I decline to include them as payments for which he should receive credit for child support. This finding affects his claims in each of 2006 through to 2009 as set out below. For 2006, I find that the respondent should be credited for $10,374.92.

[236] For 2007, apart from the life insurance, which accounts for a difference between them of $2,534.88, the applicant’s only other issue with the respondent’s numbers on Exhibit 44 is in relation to the payments of $3,737.68 and $3,091.43 said by him to be payments to lease a Honda. It is clear from the evidence that these payments were not, in fact, lease payments.

[237] The applicant testified that the $3,737.68 is in relation to a vehicle that was leased and was then returned with damage. She said that the $3,091.43 was money spent by the respondent to repair on old Jimmy for the children.

[238] The respondent agreed that the $3,737.68 was a damage cost when the applicant’s Honda was turned in on October 19, 2007. He said that the $3,091.43 was a cost that he paid for a re-build of the Jimmy for the children.

[239] I am not sure why the parties agree that the lease payments on the Honda are properly considered as child support payments. But that appears to be the position taken by both the applicant and the respondent. Consistent with this position, I am going to allow the $3,737.93 payment for the damage to the Honda to also be claimed by the respondent. The respondent was making lease payments for the vehicle that was used for the children. The vehicle apparently had damage when it was returned. If the lease payments are properly considered child support, as both parties say that they should be, then I think the damage repair should be as well.

[240] I am not persuaded that the payment for the Jimmy re-build can be claimed by the respondent as a child support payment related to the lease. There is no evidence from him as to how this is a proper child support payment. I decline to permit him to claim this payment as child support in 2007.

[241] For 2007, the respondent will be credited for $18,410.20.

[242] For 2008, the parties agree about what the respondent paid. The difference in the amounts provided by each flows from the fact that the respondent has claimed the payments he made for life insurance and the applicant does not include these. As indicated already, I am not prepared to permit him to claim for the costs of life insurance. The respondent will be credited for $7,484.67.

[243] For 2009, the applicant accepts the respondent’s claims. In her chart at tab “D”, as set out above, the applicant says that the amount should be $876.34. However, Exhibit 44 sets out payments by the respondent of $3,965.52. When the life insurance premium of $2,204.43 is deducted, the amount that is claimed is $1,761.09. This will be the amount for 2009.

[244] There are no claims other than respecting life insurance made by the respondent for household expenses after 2009. As I am disallowing those, there will be no further credits to the respondent for direct child support payments.

[245] The following chart summarizes the positions of the parties on the respondent’s payments towards child support and my findings for the period 2006 to 2009.

YEAR   Applicant’s position on payments made   Respondent’s position on payments made   Finding on payments made
2006   $10,374.92                              $11,452.37                               $10,374.92
2007   $14,675.52                              $23,924.74                               $18,410.20
2008   $7,484.67                               $10,102.05                               $7,484.67
2009   $876.34                                 $3,665.52                                $1,761.09
Total  $33,411.45                              $49,144.68                               $38,030.88

[246] I conclude that the respondent made direct payments in respect of child support of $38,030.88 as set out in this chart in addition to the agreed upon direct payment of $5,437 as set out above. The total credit he should receive is $43,467.88.

iii) Conclusion on the child support overpayment

[247] In their Minutes of Settlement, the parties agreed that FRO collected a total of $394,720.74. A total credit for payments made outside of FRO will be $43,467.88. This means that the respondent must be credited with having paid $438,188.62 in support.

[248] The total child support payable by the respondent, based on the chart at paragraph 225, is $271,800. When this is deducted from what he has paid, the result is that, when only child support is considered, the respondent has an overpayment of $166,388.62.

[249] This credit for overpayment of child support must be carried forward into the assessment of whether there are arrears of spousal support and s. 7 expenses.

e) Should income be imputed to the applicant for the period since separation and, if so, how much?

[250] The issue of what income should be imputed to the applicant over the period since separation is one of the most contentious issues before me. It has an effect on the issues of retroactive s. 7 expenses, as well as on the issues of retroactive and prospective spousal support.

[251] The applicant’s position, as I understand it, is that her income should be imputed at $30,000 from 2008 onwards.

[252] The respondent has provided two scenarios for how the respondent’s income should be imputed. In the each, he imputes to her $37,533, which he says is the average amount of money loaned to her by her mother over the period from 2006 to 2012. He takes the position that these loans should be understood as income. The respondent also attributes to the applicant an income of $12,500 from her small business.

[253] For 2006, the respondent says that the applicant’s income is the loan from her mother plus her business income, or $50,033. For 2007 onwards, he submits that the $30,000 that she accepts should be imputed ought to be added to the $50,033, resulting in an income from 2007 onwards of $80,033.

[254] In the respondent’s alternative scenario, he adds to the $80,033 the income he imputes to the applicant on the basis of the joint account held by her and her mother, which he submits generated substantial incomes that she had available to her.

[255] There are a number of issues to be considered in determining what income should be imputed to the applicant.

i) Should income be imputed to the applicant on the basis that she has failed to comply with her disclosure obligation?

ii) Should any of the “inheritance advances” provided to the applicant by her mother be treated as income for the applicant?

iii) Is the TDCT account that is jointly held by the applicant and her mother a business account and, if it is, should income from that account be imputed to the applicant?

iv) Is the applicant intentionally underemployed?

i) Should income be imputed to the applicant on the basis that she has failed to comply with her disclosure obligation?

[256] As the respondent points out, s. 19(1)(f) of the Child Support Guidelines permits the court to impute income to a spouse as it considers appropriate in the circumstances. These circumstances include when a spouse has failed to provide income information when under a legal obligation to do so.

[257] As I understand the respondent’s position, he invites the court to draw a negative inference against the applicant and to impute income to her on the basis that she has failed to disclose her true income on multiple financial statements and that she has lied to Revenue Canada about the true income from her personal business.

[258] The respondent’s position that the applicant has not complied with her disclosure obligations was repeated throughout the trial and again in his written submissions.

[259] I have carefully reviewed the portions of the cross-examination of the applicant that are said to support the respondent’s position that she has lied to Revenue Canada. While the respondent may not agree with the positions taken by the applicant, I cannot conclude from her evidence that she has intentionally deceived Revenue Canada.

[260] Ultimately, in terms of disclosure, I understand the only thing that the respondent asserts that the applicant has not provided is ten cancelled cheques written on the TDCT Account, the account that was jointly held by the applicant and her mother, Joan Valentini. In addition, she has not provided disclosure of all of the documents relating to the account dating back to 2006 (although she produced the bank statements since the date of separation).

[261] I observe that the respondent brought a disclosure motion on February 25, 2016, shortly before the trial was scheduled to begin, seeking disclosure of a number of items related to the TDCT joint account. Gray J. was satisfied that there had been some disclosure provided already and observed that Ms. Valentini and the applicant could both be cross-examined about this account at trial. He declined to make a further disclosure order.

[262] Mr. Ben-Zvi brought a mid-trial motion before me on April 11, 2016. In response to being served with that motion, Ms. Moritz, while opposed to the relief sought by the respondent, brought to court (via Ms. Valentini) the cheques written on the joint account over the previous years and indicated that she was prepared to provide them to the respondent. I understood that these cheques go back to 2010. In light of Ms. Valentini’s and the applicant’s willingness to produce the cheques, and despite my concern at the time that there had been no meaningful challenge to the applicant’s assertion that she had nothing to do with the account (other than that her mother had added her name to the account for reasons that she gave during her evidence), I ordered the cheques that had been brought to court, which went back six years, be provided to the respondent. Counsel advised me that there was about 132 cheques. At the time, the respondent was seeking cheques going back even further, but my view was that a decision respecting production of these did not need to be made until there had been further evidence.

[263] On June 17, 2016, when the trial was adjourned until October 2016, I ruled that no further motions could be brought except before me and “only if there are significant changes” warranting a motion.

[264] In the absence of any reference to that ruling, Mr. Ben-Zvi brought a further motion returnable October 26, 2016. That motion was heard on October 28, 2016.

[265] In the October 26, 2016 motion, Mr. Ben-Zvi sought an order for “complete disclosure” of the jointly held TDCT account and an order that the applicant provide disclosure of “all bank transactions” with respect to the joint account, including “receipts for all bank transactions for the past five years” and an order for the applicant to provide disclosure of ten “missing cheques” for the TDCT account.

[266] In his submissions, Mr. Ben-Zvi advised that the TDCT disclosure was the most significant relief sought in that motion (the motion also sought orders permitting him to call a medical expert in relation to the respondent’s health and requiring the applicant to attend for a vocational assessment). It was his position that the applicant had “wilfully failed to provide disclosure” as she had been ordered to. He said that he only had the TDCT account cheques from 2011 onwards and wanted them back to the date of separation. He also said that he required the joint TDCT bank statements back to 2000. It seemed to be his position that the missing cheques were key.

[267] Subsequently, Mr. Ben-Zvi clarified that he needed the deposit slips for the account to clarify what it was used for. He made the submission that it would be impossible for a “woman of that age”, referring to Ms. Valentini, to go through the transactions that she did on that account. It was his position that if the applicant signed any of the missing cheques, that would be very telling against her.

[268] Asked which cheques corresponding to the bank statements were missing, Mr. Ben-Zvi identified eight cheques written on various dates between 2010 and 2015 for amounts between $249.95 and $2,564.44. Although he would have known what dates were missing when he cross-examined Ms. Valentini, she was not asked any questions about what these cheques had been for. It appeared from the evidence and submissions as though at least one of the cheques alleged to be missing (for $995, dated September 10, 2010) was in the cheques that had been provided.

[269] In response to the respondent’s motion, Ms. Moritz noted that the respondent had all of the bank statements for the account going back to 2006. They are produced in Exhibit 28. The submission was made that the bank statements speak for themselves. The cheques that were provided go back to April 22, 2010. That was all that Ms. Valentini had when she attended at court. The argument was made that the motion was not timely and was merely a fishing expedition. She also pointed out that of the eight cheques alleged to be missing, four were in the pile provided and that there were only four that were in fact missing.

[270] I dismissed the respondent’s motion and indicated that I would provide reasons in my final judgment. These are my reasons.

[271] The respondent knew when Ms. Valentini was testifying what cheques she had provided and what was missing. It is evident to me that he had not carefully cross-referenced what he had and did not have and chose, instead, to make repeated all-encompassing allegations of non-disclosure, and to suggest that there were ten missing cheques, when the evidence suggests that there were only four. Ms. Valentini was not asked anything about these four cheques. Had Mr. Ben-Zvi actually been concerned about the cheques, he would have inquired of Ms. Valentini what they related to.

[272] There was nothing in Ms. Valentini’s evidence to support the respondent’s broad allegation of the TDCT account being an account used as a personal account for the applicant. Indeed, the evidence established that Ms. Valentini used the account for her own purposes and that she controlled what went in and out of it. It is clear that she is an astute woman who carefully recorded what she was doing. She did not let her daughter write cheques on the account. There is no basis whatsoever in the evidence for the respondent’s position that the applicant had any control at all over this account. The evidence is unequivocal that she did not.

[273] It was and is my view that the respondent’s dogged persistence in seeking to obtain more and more information about this account amounts to an unwarranted fishing expedition designed to deflect attention from what should be the real issues in this case. The respondent’s position that these cheques have been withheld because they likely were signed by the applicant and would show her access to the TDCT account is a bald allegation for which there is no evidentiary foundation. I cannot accept this completely speculative allegation that flies in the face of the uncontroverted evidence of both Ms. Valentini and Ms. Burke.

[274] Moreover, the respondent has all of the bank statements going back to the date of separation. He has all 130 cheques written on the account since April 2010 except four, which he chose not to cross-examine on. There is no evidentiary basis to conclude that there is anything nefarious in the missing four cheques. There is no reason for him to have the additional cheques going back to 2006 or all of the deposit slips.

[275] Having heard the evidence of Ms. Valentini and the applicant relating to the TDCT account, I am not persuaded on the evidence before me that the applicant has failed to provide full financial disclosure in relation to this account.

[276] The evidence on this issue was uncontroverted that this account was controlled by Ms. Valentini. She said, and I accept, that she is the only person who ever wrote a cheque on the account. The applicant said the same thing. All of the cheques that were produced confirm this. In my view it is far too speculative to think that anything relevant would have been discovered had Ms. Valentini and the applicant been ordered to produce more cheques written on the account from further back.

[277] I cannot conclude, as the respondent urges me to, that the applicant has violated court orders about disclosure or that she has failed to comply with disclosure rules.

[278] The irony of the respondent’s position on this issue of failing to make full financial disclosure is not lost on me. It is he who knowingly and intentionally failed to disclose the existence of the almost $3,000,000 he held in the RCA Trust at the time it was created on August 31, 2010 and for the years that followed. There was an obligation to make disclosure, even if the respondent’s position was that it was not property for the purpose of equalization. It was only when it was discovered by the applicant on the eve of trial in April, 2015 that disclosure of it was made. If there is a party to this litigation against whom findings of bad faith for non-disclosure should be made, that party is not, in my opinion, the applicant.

ii) Should any of the “inheritance advances” provided to the applicant by her mother be treated as income for the applicant?

Positions of the parties

[279] The respondent’s position is that $37,533 is the average amount received by the applicant from her mother annually and that this amount should be imputed to her as income on the basis that such a loan is in fact income. In his written submissions, the respondent has set out the case law that he says supports his position.

[280] In her reply submissions, the applicant says that the loans from Ms. Valentini were to maintain the family’s basic lifestyle. They were given mainly after separation, until the applicant began receiving child support in 2009, and again in 2012 when the respondent stopped making support payments. The position taken is that these loans were to make usual, day-to-day payments and for legal fees.

The Legal Principles

[281] Some analysis of the applicable law is required. The starting point is that income is to be determined, in accordance with s. 16 of the Child Support Guidelines, using the sources of income set out under the heading “Total income” in the T1 General form issued by the Canada Revenue Agency. Gifts are not included under that heading. Under s. 19 of the Child Support Guidelines, there is a list of circumstances that a court may consider in imputing income to a parent or spouse, if appropriate. Gifts are not included in that list.

[282] In Bak v. Dovell 2007 ONCA 304, 86 O.R. (3d) 196, the Court of Appeal observed at para. 74, that since gifts are not included within the ambit of imputed income, it can be presumed that in the normal course, the legislature did not intend the receipt of gifts to be an appropriate circumstance in which to impute income.

[283] The Court went on to say, “a court will consider whether the circumstances surrounding the particular gift are so unusual that they constitute an “appropriate circumstance” in which to impute income”. A list of factors to be considered were then set out at para. 75 and includes: the regularity of the gifts, the duration of their receipt, whether the gifts were part of the family’s income during cohabitation that entrenched a particular lifestyle, the circumstances of the gifts that earmark them as exceptional, whether the gifts do more than provide a basic standard of living, the income generated by the gifts in proportion to the payor’s entire income, whether they are paid to support an adult child through a crisis or period of disability, whether the gifts are likely to continue and the true purpose and nature of the gifts.

[284] In Bak, the Court of Appeal affirmed the trial judge’s decision that the payments made by the husband’s father to him were gifts and should not be imputed to him as income. The trial judge made that determination on the basis that the gifts from the father were purely voluntary, that the husband had no entitlement to them, that they were intended to encourage self-sufficiency, that they did not provide an extraordinary lifestyle and that they were provided to enable the husband to stay off welfare.

[285] The respondent relies on the decision in Horowitz v. Nightingale (2015) ONSC 190. In that case, the applicant wife was successful in having imputed to the husband’s income $50,000 per year on the basis that he received such an amount from his parents annually. The parties separated in 2013. In an email sent by the husband to the wife, he referred to the fact that his parents had given him “$50,000 each year” to help with “all of your expenses”. The motions judge found that the parents had provided a sum of at least $50,000 annually since 2006, thus for a duration of at least eight years. He also found that the money was used for the family and upholding the charitable obligations of their faith, leading to a conclusion that the money was part of the family income and contributed to the lifestyle that the family enjoyed. Finally, he concluded that the gifts were likely to continue in the foreseeable future.

[286] The respondent also relies on Chao v. Chao, 2016 ONSC 7911. It is a case in which the issue to determine was the proper characterization of advances made by the respondent’s parents over the course of the marriage and whether the advances were gifts or loans. I do not find the analysis in the case to be of assistance in determining whether to characterize the money given by Ms. Valentini to the applicant as income for the applicant.

Analysis

[287] I find that the money given to the applicant by her mother in the period since separation is not properly characterized as income. I say this for the following reasons.

[288] The evidence of Ms. Valentini was that she probably began giving money to the applicant in 2000 for living expenses, although she did not recall the amount. She testified that she began giving the applicant money on a more regular basis closer to the date of separation because the respondent was not providing her with money.

[289] There is no evidence that money from Ms. Valentini was provided to the applicant and respondent on a regular basis during the marriage and counted on by them to meet their regular expenses. Indeed, it was the respondent’s evidence that the applicant’s parents were supportive but that although they had a great deal of money, they were not financially supportive. There is, therefore, no history of the family depending on this money for its regular expenses during the marriage.

[290] The evidence of the applicant was that the money from her mother was the only thing that she and the children had after separation in 2006 as the respondent was not paying any child or spousal support. She depended less on her mother when the respondent was contributing to the family’s expenses. The chart below sets out in summary fashion the money that the applicant received by year from her mother. As it reveals, she had received a total of $287,404 from her mother by the end of 2014.

June – Dec 2006   $19,081
2007              $43,591
2008              $66,500
2009              $38,500
2010              $9,960
2011              $0
2012              $22,600
2013              $62,645
2014              $24,527
Total             $287,404

[291] It is noteworthy that the first child support order for $2,354 per month began on October 1, 2008. On February 19, 2009, a child support order of $2,586 per month and a spousal support order of $1,500 per month beginning on February 15, 2009 was made. On November 10, 2009, an order was made for $10,000 to be paid on account of s. 7 arrears and for s. 7 payments of $2,000 a month to begin on December 1, 2009. The respondent stopped paying the utilities, car payments, car insurance etc. in the fall of 2008. He stopped making child support, s. 7 and spousal support payments in April 2012. He stopped paying the mortgage in the fall of 2012 and then the interest on the line of credit and CIBC loan.

[292] On the basis of the money that was given to the applicant, I accept her evidence that the money was to pay for the necessities for the family. Significant amounts were advanced to her in 2006 after separation and 2007. The advances remained high in 2008. While child support began in October 2008, this was also the time when the respondent stopped making other payments. Ms. Valentini gave her daughter less in 2009, less still in 2010 and nothing in 2011. I accept that this was because the applicant was receiving money as a result of the court ordered support payments, which included child support, spousal support and s. 7 expenses. Then, when the respondent stopped making those payments in 2012, the applicant again turned to her mother.

[293] I find that the true purpose of the money from Ms. Valentini was to support the applicant and her children.

[294] I also rely on the evidence that this money was an advance on inheritance. Ms. Valentini accounted for the gifts to the applicant carefully. She explained that all of the money would be deducted from the inheritance that the applicant will ultimately receive. The applicant understood this. It seems to me that this is a further factor weighing against the money being considered income. While income generated by an inheritance may be income, the inheritance itself is not. I liken what the applicant received to inheritance, in accordance with the evidence.

[295] Further, while I accept that the applicant and her family certainly did not live in poverty, and took numerous trips, including after separation, the applicant’s evidence was that her mother mostly paid for the trips (including a ski trip, Mexican cruise, trip to the Domincan Republic, a trip to Africa and an annual June trip to her mother’s Muskoka property) and that they were not financed by the gifts or advances that she received.

[296] I do find that these are gifts that are not likely to go on indefinitely. In support of this conclusion, I rely on the fact that when the applicant was not in need, Ms. Valentini gave her no money. For instance, the handwritten notes in Exhibit 14 reveal that there was no money given by Ms. Valentini to her daughter from March 11, 2010 until March, 2012.

[297] While the respondent takes the view that imputing of income should be done on the basis of an averaging of the funds given to the applicant, I think this is too simplistic and that there needs to be a more nuanced analysis done of when money was given in relation to when the respondent was making payments. When I conduct this analysis, it confirms to me that this was not a scheme to give the applicant money to live a lavish lifestyle. It was a concerned mother who wanted to ensure that her daughter was able to meet her family’s needs when her spouse was not doing so.

[298] I decline to impute as income to the applicant any of the money advanced to her by her mother.

iii) Is the TDCT account that is jointly held by the applicant and her mother a business account and, if it is, should income from that account be imputed to the applicant?

[299] The respondent has provided three scenarios for the income that should be imputed to the applicant. In the third of these scenarios, he suggests that the TDCT account held jointly between the applicant and her mother was a business account that generated income. He has suggested using 50 per cent of the income deposited into the jointly held TDCT account for the years 2006 through 2015 and has used what he says is the average annual deposits. As a result, in addition to the $80,033 that he says should be imputed to the applicant, he adds significant figures, and suggests imputing income to her of the following amounts:

2006   $277,868
2007   $564,194
2008   $539,216
2009   $309,658
2010   $1,078,731
2011   $333,343
2012   $268,734
2013   $333,387
2014   $378,974
2015   $403,505
2016   $451,561

[300] I have carefully reviewed the evidence of Ms. Valentini about this account. First, I observe again, as I have already stated, that while it was a jointly held account, the only evidence before me is that it was used by Ms. Valentini for her own purposes and that the applicant never conducted any transactions on the account. The evidence of Ms. Valentini is that she invested her money by making loans and then collecting interest. She used this account to do so. She said that she reported profits made in the TDCT account to Revenue Canada. She said that this was not her business account and that she had a separate business account.

[301] I do not accept the respondent’s submission that Ms. Valentini lied about the uses she made of this account. I found her evidence to be responsive to the questions that were asked and credible.

[302] I cannot conclude that it would be appropriate to impute income from the loans made using this account to the applicant as business income. There is no evidence that the applicant received or had available to her funds as business income from this account. I see no basis in the evidence for imputing the income as sought by the respondent.

iv) Is the applicant intentionally underemployed?

[303] One of the significant issues to be determined is whether the applicant is intentionally underemployed and, if she is not, what income is reasonably imputed to her. She says that an imputation of $30,000 annually from 2008 forward is reasonable.

The respondent’s motion for a mid-trial vocational assessment

[304] After my ruling on June 17, 2016 that no further motions could be brought absent a significant change in circumstances warranting a motion, the respondent brought a motion, returnable October 26, 2016, in which he sought an order that the applicant attend for a vocational assessment.

[305] The motion was heard on October 28, 2016. In his submissions, which made no mention of what change in circumstances warranted him bringing the mid-trial motion, the respondent took the position that such an assessment would assist the court in determining how much income should be imputed to the applicant.

[306] The respondent’s position was that there is jurisdiction to order that such a report be prepared: Ziebenhaus (Litigation guardian of) v. Bahlieda 2015 ONCA 471, 126 O.R. (3d) 541. Relying on Murray v. Murray, [2003] O.J. No 3350, 66 O.R. (3d) 540 (S.C.J.) at para. 113, and C.R. v. P.R., [2014] O.J. No. 4537 (S.C.J.) at paras. 82-83. The respondent submitted that other courts had found such reports to be useful. This was the basis for his request.

[307] In response, the applicant noted that that the litigation in this matter had been ongoing since 2008 and that the respondent had never chosen, over the years he could have, to bring this motion. Her position was that the applicant could have been further cross-examined about her work skills and that this motion by the respondent was a clear violation of the Family Law Rules.

[308] I declined to make the order sought by the respondent and indicated that I would explain my reasons in my final judgment in this matter. These are my reasons.

[309] While I accept that a vocational assessment may, in some cases, be useful in determining what income should be imputed, it was and is my view that such an assessment is not necessary in this case. Moreover, I was of the view that this was a further motion, brought by the respondent very late in the proceedings, with the intent of unnecessarily prolonging the trial. It was significant to me that the motion could have been brought immediately after the applicant had testified in April 2016, but the respondent chose not to do so. I concluded that permitting such a report, which would then likely have necessitated the applicant being recalled to testify and be cross-examined, would unnecessarily have extended the trial and would, ultimately, have been of little benefit. I was of the view that on the basis of the evidence before me, I would be able to determine what income should be imputed to the applicant. Accordingly, I did not think a vocational assessment order was appropriate at the point at which the order was sought.

What could the applicant realistically be expected to have earned between 2007 and 2016

[310] The respondent suggests that the applicant has failed to make efforts to obtain full time work. Effectively, his position is that she is intentionally underemployed. He relies on Moon v. Moon, 2011 ONSC 1834, 3 R.F.L. (7th) 381 in support of his argument that the applicant has a duty to make reasonable contributions to her own support and that of her children. I note that the applicant’s case is quite factually different from the wife in the Moon case. There, the wife was 43 when the parties separated after a 15-year marriage, and 47 when the court imputed an income of $25,000 per year to her. The applicant before me was 50 at the time of separation after a 20-year marriage in which she had not worked for 17 years.

[311] The applicant’s situation needs to be carefully reviewed. She graduated from university with a Bachelor of Arts in 1978. She worked as an internal auditor with an accounting firm beginning in about 1983. She earned about $18,000. She remained there for three or four years and left in 1986 with a salary of about $30,000. She subsequently moved to work at Manulife as a senior control officer. Her salary was about $34,000. She took a four month maternity leave after Lauren’s birth in 1988 and returned to work until Kevin’s birth in August of 1989. Her salary when she left was about $40,000. She has not held full-time employment since 1989.

[312] The applicant said that she decided to stay home after Kevin’s birth. The respondent insists that he always expected that she would return to work and that he wanted her to do so. She denied that they ever had a “deal” that she would return to work, although she did agree that the respondent wanted her to return to work at a reasonable time following Leah’s birth in 1994. The applicant explained that even with one child in daycare, with the respondent’s and her work requirements, she had difficulties with daycare logistics. With the respondent’s busy work schedule involving regular travel, sometimes for two weeks at a time, and with three young children who were extremely active in extra-curricular activities, it would have been very challenging for the applicant to have sought and maintained full-time paid employment outside the home in the mid-1990s with her family responsibilities. In any event, it did not happen.

[313] The applicant did begin, in 1991 or 1992, a small business in which she sold to travel agencies various travel accessories such as luggage, money belts and first aid kits. She said that for the first couple of years it did well and generated $5,000 to $10,000, but that after that it dropped off. She continues that business today, although it has not shown much profit to date.

[314] In addition, the applicant testified that in 1995, she worked for a year or two part-time as a merchandiser for a food company.

[315] The applicant was born in October 1955 and was 50 when the couple separated. Beyond the two part-time positions, the applicant has not worked since August 1989. That means that when the parties separated in June 2006, she had been out of the work force for almost seventeen years. She is now sixty-two and has not worked full-time for almost twenty-eight years.

[316] The applicant was asked why she had not returned to work in 2007 when Lauren and Kevin were at university and Leah was in grade 8. She said that she did work part-time and that she was maintaining the household and being responsible for Leah’s activities and tutoring. She agreed under cross-examination that she was savvy with numbers and accounting, but did not agree that she had skills that are marketable in today’s work force.

[317] She was cross-examined on an affidavit she swore on October 7, 2009 in support of a motion for support. She explained that while she has a computer at home, she has very limited computer skills. Her evidence was that her accounting skills were not marketable as she lacked computer skills. It was suggested to her that she could take a course, and she responded that she did not think anyone would hire her.

[318] I think that there was some onus on the applicant to seek some work to assist in supporting herself by earning an income following separation in 2006. The question is then what income can reasonably be imputed to her.

[319] While the applicant agreed with Mr. Ben-Zvi’s suggestion that possibly if she had stayed working in the same position at Manulife, her salary would likely have risen to $70,000, I do not see this as an accurate foundation upon which to impute a $70,000 income to her. She had been out of the work force for seventeen years when they separated. There is no basis to say that she was employable at the same salary, adjusted for inflation, as the position she left in 1989.

[320] I do not accept the suggestion that she had the skills to return to the workforce and earn what she had earned before her children were born. She stayed home to raise the children. She said that the respondent wanted her to do that when they were little. As a result, her skills became less and less marketable and more and more outdated. She had no reason to keep them up to date. There is nothing realistic in the implicit suggestion that she could have simply returned to the sort of job she had before.

[321] That said, there is no evidence of any real steps ever being taken by the applicant to find full-time employment.

[322] I think it is only fair and reasonable in these circumstances for some income to be imputed to the applicant. She is well educated, articulate and clearly capable. I think it is reasonable to impute to her more income than minimum wage would generate. It is difficult to say, however, what precisely she should have been able to earn in 2007.

[323] I accept the applicant’s evidence that had she worked full time on her travel accessories business from 2007, she likely could have earned in the range of $30,000. This appears to be more than the business ever did make, but she had never pursued it on a full-time basis. Had this not proven profitable, I think it is reasonable to conclude that the applicant could have secured other employment that would have earned her in the range of $30,000 since 2007. Accordingly, I will impute that income to her from 2007 forward.

v) Conclusion on the income to impute to the applicant

[324] I will impute to the applicant $30,000 from 2007 onwards. This will affect her claim for retroactive s. 7 expenses and spousal support.

f) What if any arrears of spousal support are owed and what spousal order should be made prospectively?

[325] There are a number of issues to determine relating to spousal support.

[326] The starting point is the Divorce Act which, in s. 15.2 (6) sets out the objectives of a 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.

[327] Broadly speaking, the purpose of spousal support is to relieve economic hardship that results from marital breakdown. All four of the objectives set out in s. 15.2 (6) are to be considered. No single objective, including economic self-sufficiency, is paramount.

[328] Compensatory spousal support is intended to compensate for economic disadvantages incurred because of the role of the spouse during the marriage. Non-compensatory support addresses the issue of economic hardship arising from the marriage.

[329] It is the applicant’s position that the respondent has underpaid his spousal support over the period from 2006 through 2016. It is her position that this was a long-term marriage and that she has entitlement to spousal support on a compensatory and non-compensatory basis for an indefinite duration. She has provided an outline of how she determines the arrears and prospective spousal support, based on the incomes of the parties, child support and s. 7 expenses and tax consequences.

[330] I understand the position of the respondent to be that the applicant should not be entitled to spousal support on a compensatory or non-compensatory basis. Relying on Kovac v. Kovac, 2013 ONSC 4593, the respondent says in his written submissions:

… in our case the applicant should not be entitled to compensatory spousal support or non-compensatory support. This is because the applicant unilaterally chose not to have full-time employment for over 20 years, but still has her personal business. The applicant is in line to inherit a lot of money from her elderly mother, which includes approximately $7 million dollars in a joint TDCT account. Lastly, all three children are now adults. Although the applicant remained at home to take care of children, the respondent had gone to work because he was the breadwinner. Even after the children were older, it was the applicant who chose not to work, not the respondent who encouraged her to do so. Therefore, it solely the actions [sic] of the applicant which led her to be at an economic disadvantage.

[331] In my view, the respondent mis-understands the purposes of spousal support and the factors that are to be considered in determining entitlement and quantum.

[332] This was a long term marriage in which the applicant stayed home with the children. She and the respondent both believed that the children should be actively involved in a wide range of sports from a young age. The applicant is the person who had primary responsibility for ensuring that all three children were able to have this involvement. She was the person who was primarily responsible for the shopping, cooking, meal preparation, laundry and household chores. She took the children to the doctor. She had primary responsibility for their social and recreational activities, including considerable driving for their competitive sports. She was home while the respondent travelled extensively for work and to advance his career. While the respondent certainly was a supportive father who took the children to their sports activities and encouraged their activities, the evidence persuades me that the applicant played a much more significant role in the upbringing of the children.

[333] The applicant gave up her career to raise her children. She has suffered hardship as a result of the breakdown of the marriage.

[334] I find that the applicant is entitled to spousal support from the time of separation and going forward for an indefinite duration.

i) Are there arrears of spousal support and is the applicant entitled to arrears?

[335] In order to determine whether there are arrears of spousal support owing, a determination needs to be made as to what the appropriate spousal support order was for the period between 2006 and 2015. This should be done using the incomes as I have found them to be for 2006 going forward.

[336] This means that the applicant’s income is $0 or zero for 2006 and should be imputed at $30,000 for each year thereafter.

[337] The respondent’s income is that set out above in the chart at paragraph 225 and reproduced below in the chart at paragraph 339. I have used the “with child support” formula, taking into whether child support was payable for each child for the full year or only the summer months (as set out in Exhibits 21 and 22).

[338] I observe that when the applicant provided her calculations, as set out in tabs “G” and “H” of her written submissions, she calculated spousal support owing for this period as $845,660 using the “high” range of the SSAGs and as $752,060 using the “mid” range of the SSAGs.

[339] Although I calculated the spousal support at both the high and mid ranges, I have concluded that the support should be mid-range. I say this because with the high amount of child support and with the mid-range of spousal support, the result is what I view as a fair share of net disposable income for each of the spouses. My Divorce-mate calculations are close to, but not identical to, those of the applicant.

Year   Applicant’s Income   Respondent’s Income   SSAG Mid
2006   0                    $227,594              $30,256
2007   $30,000              $475,264              $131,124
2008   $30,000              $331,217              $88,554
2009   $30,000              $340,036              $91,060
2010   $30,000              $341,134              $91,324
2011   $30,000              $326,699              $86,400
2012   $30,000              $89,284               $17,864
2013   $30,000              $169,518              $48,400
2014   $30,000              $355,092              $114,432
2015   $30,000              $153,312              $42,644
Total                                             $742,058

[340] This leads to a conclusion that the total amount of spousal support that ought to have been paid by the respondent over this period was $ 742,058.

Direct spousal support payments made by the respondent

[341] The respondent must receive credit for both the direct payments that he made in relation to spousal support and for the spousal support collected through FRO.

[342] The respondent paid the mortgage principle, interest and taxes from the time of separation until part way through 2012. The applicant says that he should be credited for $201,949.02 on account of these payments, which were part of his spousal support, as set out in Exhibits 21 and 22. I agree that he should be credited for these direct amounts. This reduces his arrears of spousal support from $742,058 to $540,108.98.

[343] Of course this amount owing is subject to any credit owing to the respondent for excess funds collected by FRO, as I discuss below under “Summary of Findings”.

Conclusion on arrears of spousal support

[344] The applicant suggests that whatever the amount is that is owed by the respondent as arrears of spousal support should be reduced by 30 percent because of notional income tax. In her written submissions, she asks that each party have the opportunity to consult with the appropriate professionals about the tax consequences of a lump sum award of retroactive spousal support. I am prepared to accede to this request and arrangements should be made by the parties to return before me to address the issue of whether and how the lump sum award of spousal support arrears that I have conclude is appropriate, as set out below, should be “netted down”.

ii) Is the applicant entitled to spousal support going forward?

[345] In my view, the applicant is entitled to spousal support going forward. Determining what that support should be and how it should be structured depends on three issues:

• Is the RCA Trust a source of income for support purposes?

• Should other income be imputed to the respondent?

• Should income be imputed to the applicant?

• What is the appropriate amount of spousal support?

• How should future spousal support be structured?

Is the RCA Trust a source of income for support purposes?

[346] In their Minutes of Settlement, I understood the parties to agree on an amount of equalization, subject to whether the RCA Trust was an asset for the purpose of equalization or a source of income for support purposes. As I have indicated in my discussion of equalization, the respondent now takes the position that it is not a source of income for support purposes.

[347] Although the respondent made written submissions as to why the RCA Trust was not properly included as net family property for the purpose of equalization, he has not provided any detailed argument as to why it is not income for the purpose of spousal support, although he has argued that the applicant is not entitled to spousal support and seeks an order that spousal support cease. He has also taken the position that the RCA Trust will generate an income going forward. Indeed, he takes the position that it will be the only source of the respondent’s income now that he has been terminated from Mascoma and has chosen to retire.

[348] In the charts contained in his written submissions, Volume 2, tab E, the respondent takes the position that his income in 2016 going forward is $0 or zero. In other words, he has not done any calculation as to the income he expects to generate through the RCA Trust.

[349] In my view, the RCA Trust should be considered for income purposes going forward. The RCA Trust was created as a tool to generate income for the respondent in his retirement with tax consequences that are as advantageous as possible for him.

[350] The money for the RCA Trust came as a result of the redemption of the Capped Restricted Share Units that were awarded to the respondent in June 2007 when he began his new position with SunOpta BioProcess Inc. In my view, as set out above, there is no doubt that these CRS Units were awarded, at least in part, to reward the respondent’s past efforts at SunOpta Inc. and Stake Technology. Most of his distinguished career that was being rewarded occurred during the course of the marriage. The applicant’s role in the family and with the children was a significant factor in enabling the respondent to be the success that he was, and contributed in a significant way to the decision that was made to award him the CRS Units.

[351] The value of the RCA Trust when the respondent was given the initial cash settlement was $2,958.229.84. The respondent has taken two distributions from the RCA Trust. The first was in 2013 and was for $127,500. In addition, in 2014, there was a distribution to the respondent for $172,215.

[352] If, as the applicant suggests, an assumed return rate of four per cent per year for the past six years, the income that the trust generated was $53,170 per year. The income taken by the respondent from the trust, therefore, offsets the income that the trust should have generated.

Should other income be imputed to the respondent?

[353] The applicant suggests that there be income other than that generated by the RCA Trust imputed to the respondent going forward.

[354] First, the applicant says that there is no evidence about the respondent being unable to work. As I address later in these reasons, the respondent chose to lead no medical evidence as to why he has not returned to work since his termination from Mascoma.

[355] The applicant submits that the respondent is a 50 per cent beneficial owner of the condominium owned by Sharon Cheyne at 350 Bronte Road and that this unit is rented out and generates income. The applicant submits that the respondent owns the property at 9 West Street and that the evidence before me is that it is rented and generates income.

[356] It is very difficult, as the applicant has acknowledged, to determine with precision what the respondent’s income will be going forward. Certainly, I conclude that his income should include funds from the RCA Trust. But, I am not going to also impute to him rental income that he may earn from properties that he and Sharon Cheyne own. But, I will factor into the prospective spousal support determination the fact that he likely will have income beyond whatever is generated by the RCA Trust.

Should income be imputed to the applicant?

[357] The applicant says that going forward, she should not have the $30,000 imputed to her. I agree. The respondent has chosen to stop working. It seems to me unfair to impute a nominal income to the applicant and not to the respondent, particularly when there is no evidence that he is unable to work and it appears that he has the potential to earn other income through rents he and Ms. Cheyne are collecting. Going forward, I will not impute any income to the applicant.

What is the appropriate amount of spousal support and how should it be structured?

[358] The applicant has proposed a number of possible ways to determine what income the respondent has from the RCA Trust so that spousal support can be calculated. These scenarios assume two the different values for the value of the RCA Trust (either the $2,958,229 from the date it was created or its current value of $2,738,301). They also assume different annual withdrawals. The applicant asks that the spousal support payments for the future be made as a lump sum order rather than periodically.

[359] It is my view that if I were to make an order other than for a lump sum payment, there is a serious risk that the respondent would not make the required payments. He has demonstrated over the period since separation that he is prepared to lie about his assets in order to avoid making support payments. He has a history of non-disclosure, deception and non-payment. Given that neither party plans to return to work, and that the only asset upon which I am determining spousal support is the RCA Trust, which has a known value now, I do not see this as a case in which the respondent would be likely in a position to seek a variation in the future. Furthermore, I think that a clean break between the parties is the best way in which to put an end to this protracted and acrimonious litigation: Racco v. Racco 2014 ONCA 330.

[360] The respondent has chosen to make no submissions as to what his annual income is from the RCA Trust. This suggests to me that he wishes to avoid acknowledging that this significant asset, which he chose to hide from the applicant, does generate an income that he alone seeks to benefit from. This strengthens my view that there should be a lump sum prospective spousal support order made.

[361] I will use the current value of the RCA Trust of $2,738,301 as the value to determine spousal support, recognizing that this is the lower of the two values proposed by the applicant. As this is a fund that is supposed to provide income to the respondent in retirement, it may and should be assumed that he will withdraw funds from it annually. The scenarios proposed by the applicant have him withdrawing between $119,700 and $137,000 annually.

[362] In one of the applicant’s scenarios, she has suggested withdrawals of $137,000 per year for 20 years. This is what the RCA Trust could pay out if its face value were simply divided over 20 years, and assuming that it was not also generating annual growth and income. In fact, this is a conservative estimate of how it would slowly be depleted.

[363] Under this scenario, the applicant says that a Divorce Mate calculation of the SSAG would lead to monthly spousal support of between $3,596 and $4,795. Were there to be a lump sum payment, it should be between $702,933 and $898,581. In my view, this is the appropriate range for a lump sum payment to the respondent. While the applicant asks that there be a high range of spousal support, given that I am acceding to her request for a lump sum, I award her mid-range support and make the lump sum order for $800,524.

g) What if any arrears of s. 7 payments are owed by the respondent for the period since separation?

[364] The parties have very different views about what the s. 7 expenses have been since 2006 and what amounts have been paid by each of them. I have been given pages and pages of documents that purport to set out what the s. 7 expenses were and what was paid by each of them. Part of the problem is that the respondent was ordered by Justice Coats on March 24, 2016, before the trial commenced, to provide his yearly summaries of what he says he paid by March 26, 2016. He did not do so. His chart, marked as Exhibit 44, was first presented when he testified. This meant that the applicant was not able to comment on it while she testified.

[365] The respondent’s chart does have errors, as became apparent during the respondent’s cross-examination. However, it is a starting point for determining what s. 7 expenses he paid. Ultimately, the applicant helpfully acknowledged that most of the s. 7 payments said to have been made directly by the respondent were in fact made by him, or at least she was not disputing them. She did dispute a number of particular claims. The respondent testified about these.

[366] The result of the manner in which this evidence unfolded is that it is virtually impossible to figure out with any certainty what the legitimate s. 7 expense were and what was paid by each of the parties. While the written submissions of the applicant assist, the respondent has not made any written submissions explaining the evidence. He merely relies on Exhibit 44, some of which was clearly wrong, as the respondent acknowledged during his evidence. I am left with little assistance from him.

[367] The applicant estimated in Exhibit 20 what she thought the annual s. 7 expenses were for 2006 to 2015. In her written submissions, she says that I should use these figures as the expenses. In many respects, her position is fair. She has acknowledged what the respondent paid, and claims to have paid the balance herself.

[368] In Exhibit 35, the applicant provided a year-by-year chart of the individual items that she says she paid and for which she can provide supporting documentation. She has provided cancelled cheques, credit card statements and references to bank statements for each of these payments. One difficulty is that the applicant has not provided documentation supporting all of the claims made in Exhibit 20. A further difficulty is that Exhibit 20 is organized by academic year rather than by calendar year. The respondent, of course, has also provided no documentation of what he claims to have paid directly.

[369] The respondent has not provided his estimate as to what the total s. 7 expenses were. He has, however set out what he says he paid by way of s. 7 expenses on a year by year basis Exhibit 44. As I have indicated, the applicant agrees with many of these claims, but disputes others. Counsel led the respondent through those area of disagreement. In addition, some of the money collected by FRO from the November 2009 order of Gray J. onwards is on account of s. 7. The respondent must be credited for having paid this as well.

[370] When I compare the applicant’s estimate to the total of what each party claims to have paid on an annual basis, it is clear that the applicant’s estimate in the handwritten chart at the back of Exhibit 20 is not entirely accurate.

[371] In my view, while the total s. 7 expenses suggested by the applicant in Exhibit 20 are an estimate, the more accurate manner in which to calculate the s. 7 expenses that were paid is to use her documentation in Exhibit 35 and the respondent’s documents and claims as set out in his evidence and in Exhibit 44. I will now review the year-by-year s. 7 expenses claimed by each party.

[372] In order to determine what the total s. 7 expenses were, I will review the claims made by each of the parties and then add those. A determination will then be made of what each of them paid.

[373] After determining what the total s. 7 expenses were, I will then determine what proportionate share each party should have paid, based on their incomes. I will then determine whether there has been an overpayment or underpayment by the respondent of s. 7 expenses.

i) The total s. 7 expenses as claimed by the parties

[374] In 2006, the applicant says that she paid $3,190.39 in s. 7 expenses. She has itemized in Exhibit 35 what these included. The difficulty is that a quick glance of these items makes it pretty clear that some of them may or may not be legitimate s. 7 expenses. For instance, I am not sure that a December 14, 2006 expense for Lauren for $370.50 at Lululemon is an appropriate s. 7 expense. There are other claims for clothes. There are claims for meals while at hockey tournaments. I am really not persuaded that all of the claims are legitimate s. 7 expenses, although I note that the respondent did not appear to take issue with the individual expenses claimed.

[375] For 2006, the respondent has claimed $26,783.03 for the three children. The applicant takes issue with a number of these expenses in relation to Lauren. There are significant expenses, including in the amounts of $1,527.26 and $1,000, as well as others for less money, that are disputed. It was the respondent’s evidence that most of these are recorded in his records as internet transfers. Some are Visa payments. There is one for Rogers. There is one for a $313.00 bill for clothing for Lauren at Aritzia, which I question as far as whether it was a legitimate s. 7 expense.

[376] I am not able to make an individual determination for each individual s. 7 item claimed by each of the parties. Overall, I am persuaded that if the claims made by each of the parties are added together the total makes sense. Most of the respondent’s claim is in relation to Lauren, who was away at university.

[377] I accept that the applicant paid $3,190.37 and the respondent paid $26,783.03. The total s. 7 expenses for this year were $29,973.40. I acknowledge that this is well in excess of what the applicant estimated were the total s. 7 expenses for the year, but clearly acknowledges what she claims she paid and what the respondent claims he paid.

[378] For 2007, the applicant says that she paid $3,556.28 in s. 7 expenses. On the basis of what she says that these covered in Exhibit 35, I permit that claim. It is slightly less than the amount she appears to have claimed to pay on the chart in Exhibit 20 when she gives credit to the respondent for what he paid.

[379] The respondent claims to have paid $59,812.38. The applicant disputes a number of these claims.

[380] For instance, the respondent makes three claims for s. 7 expenses for Kevin in 2007 that are disputed by the applicant. He says that they were made directly to Kevin in 2007. One is for $6,192.00. The other is for $6,200. The respondent testified that one was for tuition but that he does not have proof of payment. The respondent then said that the $3,000 that year was also for Kevin at the University of Guelph. The applicant agreed that the respondent paid Kevin’s tuition and residence that year. It seems to me to make sense that he should be able to claim the $18,287 he says that he paid for Kevin that year.

[381] The respondent claims a total of $37,049.38 for s. 7 expenses for Lauren in 2007. This includes internet transfers that were made that do not say that they were to Lauren, let alone what they were for. While Mr. Ben-Zvi mused about calling Lauren to explain these, she was not called as a witness in these proceedings. In addition, the respondent says he paid Lauren’s $8,515 Visa bill. I have no evidence as to when this was, and whether this was a legitimate s. 7 expense in the absence of any evidence whatsoever as to what the bill was for. In my view, the claim for $37,049 cannot possibly all be for legitimate s. 7 expenses for Lauren while she was away at university. I observe that it is a significant increase over the $22,777.39 he claimed for Lauren the year before. The applicant asks me to take judicial notice of the fact that the cost of a university student living away from home is about $15,000 to $20,000 per year. Having reflected on the lack of explanation for the extremely high s. 7 claim in relation to Lauren that year, I have determined that the respondent may claim only $25,000 for s. 7 expenses paid for Lauren in 2007.

[382] The result is that his total claim for s. 7 expenses is that $18,287 for Kevin, $4,476 for Leah and $25,000 for Lauren, adding to $47,763. When this is added to the applicant’s s. 7 payment, the total s. 7 for 2007 was $51,319.28. Again, I acknowledge that this appears to be more than the applicant estimated for the total s. 7 expenses for the year, but is the best estimate I can reach as far as what the totals were, based on their positions.

[383] In 2008, the applicant claims that she paid $3,947.30 in s. 7 expenses, which she has documented. In addition, when I look at what she says the respondent did not pay from her chart at Exhibit 20, it is clear that her overall claim is higher than this. She seems to be claiming for having paid for Lauren’s tuition, as well as books and supplies, food and transportation for Lauren and Kevin, although she does not provide documentation for these.

[384] The respondent’s claim for 2008 is a total of $35,837.58. The applicant disputes that many of these are legitimate s. 7 expenses.

[385] For instance, in relation to Lauren, the applicant disputes payments of $5,000 and $1,665.08 for Lauren. The respondent could not say where they were from. The respondent agreed that three claims he made for Leah for $2,364 were not actually s. 7 expenses and were child support payments. He also agreed that he had claimed a $5,000 expense for Kevin was in relation to an order Gray J. made on November 9, 2008 for him to pay $10,000 in s. 7 arrears and that it had been accounted for through his credit for payments collected by FRO. The $5,000 claim in relation to Lauren, which the respondent cannot explain, is likely the other part of that arrears.

[386] Due to the concerns about the legitimacy of these claims raised by the applicant, and to some extent acknowledged by the respondent, I deduct from the respondent’s claim the two $5,000 claims that would be double counted as they were collected by FRO and the three $2,364 child support payments. The result is that the respondent is credited for $18,745.58.

[387] The total s. 7 expenses for 2008 are thus the applicant’s claim of $3,947.30 that she can document, some additional amount that she has not been able to document, and the respondent’s claim of $18,745.58. I accept from the chart at Exhibit 20 that the overall s. 7 expenses were much higher that simply adding these two amounts. If they were the $49,583 that the applicant suggests, and the respondent’s payment of $18,745.59 is deducted, then the remaining $30,837.42 was paid by the applicant. This is the finding I make.

[388] In 2009, the applicant claimed a total of $15,771.08 in terms of expenses that she can document. She suggests that the total expenses for this year were $31,129.

[389] The respondent has claimed $17,836.72 for 2009. The applicant indicated that she accepted as legitimate all of the expenses claimed by the respondent for 2009 except a claim of $2,826.08 for Kevin. The respondent thought it was for the University of Guelph. This appears to make sense as Kevin was at university and his s. 7 expenses with that amount included are about the same as the year before. The respondent will be permitted his claim for $17,836.72.

[390] This would put the total s. 7 expenses for 2009 were $33,607.80. This is less than the total estimate for these expenses by the applicant, which was $39,129. Her claims, which are not part of those she documented, include claims for tuition, books, supplies, food and transportation for Lauren and Kevin while at university. Having reviewed these claims, and bearing in mind what appear to have been the annual s. 7 expenses for this family, I accept that the total s. 7 expenses were $39,129. I will credit the applicant with having paid the difference between that amount and what the respondent paid, or $21,292.28.

[391] In 2010, the applicant claims to have paid $21,554.84 in s. 7 expenses that she can document. She says that the total for 2010 was $26,322 and that this includes payments that she made for tuition for Lauren and Kevin as well as their other expenses at university. I accept that she should be credited for this amount, less the respondent’s claim of $1,960 that he paid directly, or $24,362.

[392] In 2011, the applicant says that the total s. 7 expenses were $26,322. The respondent has not claimed to have made any direct payments. The applicant has documented a total of $19,345.50 in Exhibit 35 and set out in Exhibit 20 to what the expenses that she paid were attributable. I accept that she paid the $26,322.

[393] In the years after 2010, I rely on the applicant’s chart at Exhibit 20 as to the total s. 7 expenses that she paid for the three children. The respondent makes no claim for having made direct payments over these years.

Year   Applicant’s position on s. 7 paid by her   Finding of s. 7 expenses paid by respondent   Finding of total s. 7 expenses paid by applicant and respondent
2006   $3,190.39                                  $26,783.03                                    $29,973.34
2007   $3,556.28                                  $47,763.00                                    $51,319.28
2008   $30,837,42                                 $18,745.58                                    $49,583
2009   $21,292.28                                 $17,836.72                                    $39,129
2010   $24,362.20                                 $1,960.00                                     $26,322
2011   $26,322                                    0                                             $26,322
2012   $21,249                                    0                                             $21,249
2013   $21,501                                    0                                             $21,501
2014   $21,501                                    0                                             $21,501
2015   $21,501                                    0                                             $21,501
Total                                                                                           $113,088.33

The proportionate shares of the s. 7 expenses

[394] With the total s. 7 expenses for each year calculated, there must be a calculation made as to what the respondent’s proportionate share of s. 7 expenses was, based on his income, had he paid the spousal support that I have found was appropriate for each year. He is to then be credited for the s. 7 payments that he made.

[395] The chart below sets out the total s. 7 expenses and what the respondent’s income was after paying the appropriate spousal support. There is then a calculation of the per cent of s. 7 expenses that the respondent should have paid, based on their relative incomes, adjusted for spousal support. The next column has the amount of s. 7 expenses that the respondent should have paid, had he paid his relative share. Finally, the final column sets out has an indication of whether the respondent over paid or under paid s. 7 expenses on the basis of the direct payments he made.

Year   Total s. 7   Respondent’s income with deduction for spousal support   Proportionate share of s. 7 expenses that the respondent should have paid   Amount of s. 7 expenses that the respondent should have paid   Over/under payment of s. 7 made directly expenses by the respondent
2006   $29,973.34   $197,388                                                 87%                                                                         $25,995.31                                     Over $787.71
2007   $51,319.28   $344,140                                                 68%                                                                         $34,954.04                                     Over $12,809.97
2008   $49,583      $242,663                                                 67%                                                                         $33,309.51                                     Under $14,563.93
2009   $31,129      $248,976                                                 67%                                                                         $26,310.11                                     Under $8,473.39
2010   $26,322      $249,810                                                 67%                                                                         $17,707.49                                     Under $15,747.49
2011   $26,322      $240,299                                                 67%                                                                         $17,732.46                                     Under $17,732.46
2012   $21,249      $71,420                                                  60%                                                                         $12,722.61                                     Under $12,722.61
2013   $21,501      $121,118                                                 61%                                                                         $13,052.25                                     Under $13,052.25
2014   $21,501      $240,660                                                 63%                                                                         $13,436.87                                     Under $13,436.87
2015   $21,501      $110,668                                                 60%                                                                         $12,840.36                                     Under 12,840.36
Total               $208,061.01                                                                                                                                                                         Under $94,972.68

[396] This chart shows that the respondent should have paid s. 7 expenses of $208,061.01. He made direct payments of $113,088.33. This leaves an underpayment of $94,972.68, as shown on the chart. He must be credited for the payments that FRO collected on account of s. 7 expenses following Justice Gray’s 2009 order that he pay $10,000 in s. 7 arrears and ongoing s. 7 expenses of $2,000 a month.

h) Summary of Findings

[397] For ease of reference, I have consolidated my conclusions respecting the property and financial issues as set out in these reasons.

[398] The applicant is owed $188,762.35 in equalization and prejudgment interest of $37,594.88. The total amount owing to the applicant on account of equalization is $226,357.23.

[399] The parties have agreed that the matrimonial home should be transferred to the applicant. It is valued at $925,000, making the respondent’s value $462,500. I concluded that the respondent’s interest in the home was to be reduced by his share of the mortgage on the date of separation ($119,494.13), by his share of the property taxes owed ($33,123.78) and by his half of the value of the home repairs, as the parties agreed ($13,665.86). It should also be reduced on account of the equalization owing ($226,357.23).

[400] The result is that the applicant may purchase the respondent’s interest in the home for $69,859.

[401] With the transfer of the home, applicant shall provide the respondent with a release from the CIBC mortgage obligation or will discharge the existing mortgage and re-finance the home as necessary.

[402] On consent, within 30 days of the release of this decision, each of the parties is to pay half of the balance owing on the CIBC loan, which is approximately $35,058.00, and the CIBC Personal Line of Credit, which is approximately $69,000.

[403] I made the following findings in respect of support arrears.

[404] First, in respect of child support, the respondent had an overpayment of $166,388.62 when the payments he had made directly and through FRO were accounted for. This surplus must be used to reduce any arrears that the respondent has for s. 7 expenses and spousal support. There were orders in place for FRO to collect funds for both s. 7 and spousal support.

[405] When the s. 7 expenses were properly calculated, having regard to what the support should have been, the respondent was in arrears by $94,972.68.

[406] The respondent is in arrears on account of spousal support of $540,108.98.

[407] When the arrears of s. 7 expenses and spousal support are added together, the total arrears amount to $635,081.66. However, this must be reduced by the overpayment for child support collected by FRO of $166,388.62. Reducing the arrears by this amount removes the arrears for s. 7 expenses such that there are no s. 7 arrears. However, with the credit that remains for the funds collected by FRO, there are arrears of spousal support of $468,693.04.

[408] As I indicated above, the parties will be permitted to appear before me and make submissions respecting whether this figure for spousal support arrears should be “netted down” to account for the tax consequences of a lump sum order.

[409] From whatever lump sum spousal support order is made following the further submissions of counsel, there needs to be a deduction for the amount owed by the applicant to the respondent for the purchase of the home. I have fixed this at $69,859.

[410] I have concluded that the respondent is to pay to the applicant a one-time lump sum for all future spousal support obligations in the amount of $800,524. This is to be paid by certified cheque or money order within 90 days of the release of this judgment.

i) Security and non-depletion orders

[411] On April 13, 2015, Justice Fitzpatrick made a non-depletion order in relation to the RCA Trust. That order remains in place.

[412] The applicant asks that an order that prohibits the respondent from accessing the RCA Trust, including the refundable tax account, until he has satisfied this court order. In my view such an order is appropriate.

[413] The applicant has demonstrated that with unfettered access to the RCA Trust, he has the ability to deplete it and has chosen to deplete it in a variety of ways. His loans to Ms. Cheyne are an excellent example of this. Unrestrained, there is nothing to prevent him from collapsing the trust and doing whatever he wishes with the funds. I am concerned, in light of his past conduct, that he might well choose to do just that.

[414] Once all required payments have been made in accordance with this judgment, the order restraining him from removing or withdrawing and funds from the RCA Trust may be rescinded.

[415] In the event that the respondent wishes to access the RCA Trust to make the payments set out in this judgment, the applicant and her counsel will cooperate.

[416] The applicant also asks that I make an order deleting the charge in the amount of $280,000 registered to Ms. Cheyne on 9 West Street. I am not prepared, on the basis of the record before me, to make the order that the applicant seeks, which is to find that the charge on the West Street property is invalid. While I accept that the circumstances that led to that charge are suspicious, given the timing of the charge, I do not think I have sufficient evidence to find that this was a fraudulent means used by the respondent to defeat the applicant’s security claim.

[417] The applicant also asks that there be a charging order on 9 West Street.

[418] The total amount of money that the respondent owes to the applicant includes the $800,524 lump sum payment for future spousal support as well as something likely less than the 468,693.04 (less $69,569) on account of the equalization, purchase of matrimonial home and amounts owing for spousal support arrears. The total amount will be less than $1,200,000.

[419] There is, therefore, more than sufficient funds to cover this in the RCA Trust. By making an order that the respondent cannot access the RCA Trust until he complies with the terms of this judgment, I have ensured that the applicant is protected.

[420] The respondent has asked that I make a charging order on 9 West Street, Oakville in favour of Mr. Ben-Zvi for legal fees and disbursements. I decline to make this order. It is for Mr. Burke and his counsel to sort the issue of fees out.

j) Additional Issue relating to Mr. Burke’s health

[421] There is no evidence about Mr. Burke’s current state of health.

[422] In the Trial Management Conference form, the respondent never raised any issue about his health or suggested that there would be medical evidence about his health offered at trial. During his examination-in-chief, aside from testifying that he had health issues in early 2012 that resulted in him going on short-term disability, the respondent gave no evidence that he suffered from any ongoing health issues.

[423] While there was medical evidence that was contained in a binder of material that the respondent sought to file for its truth on the trial, once counsel for the applicant objected to the admissibility of the medical evidence, counsel for the respondent made no further argument as to its admissibility and agreed, as I understood his position, that the evidence was not admissible. I understood his position to be that he would discuss the matter further with his client.

[424] On June 17, 2016, while the respondent was under cross-examination, the respondent’s counsel advised that he wished to call medical evidence relating to the respondent’s health when the matter resumed in October, 2016. Counsel for the applicant vehemently objected noting that she had been given no notice of this, that her case was closed and that permitting this would be unfair.

[425] I made a brief oral ruling against the respondent. There was no evidentiary basis in the respondent’s evidence for expert medical opinion evidence. He had offered no evidence about his current or recent health. He had offered no explanation for raising the issue at this point in the trial. The applicant had been given no notice that this was an issue and had closed her case. I viewed what the respondent was seeking to do as procedurally unfair.

[426] That day, I also ruled that no further motions were to be brought except before me and only if there was a “significant change in circumstances”.

[427] Notwithstanding my order, the respondent brought a further motion, returnable October 26, 2016. As set out above, this related, in part, to disclosure relating to the applicant’s TDCT account. The respondent also sought an order allowing the respondent to subpoena a medical expert to testify during the trial regarding the respondent’s health, specifically regarding the respondent’s medical letters.

[428] During his submissions on this motion, the respondent effectively abandoned this aspect of the relief sought and observed that he respected the previous ruling.

[429] While I dismissed the respondent’s motion, I indicated that in my final ruling on the trial I would provide my reasons.

[430] In my view, nothing had changed from June 2016 warranting the respondent being permitted to adduce expert medical opinion evidence. There was no basis in his evidence for him to adduce such evidence and permitting him to do so at that late stage in the trial would have been unfair to the applicant.

k) Returning before me on the issue of the appropriate award for spousal support arrears

[431] The parties may arrange with the trial coordinator for an appearance before me of a maximum of one hour (half an hour each) in order to make submissions on what they say the spousal support arrears award ought to be. As I have indicated, I have found that the arrears of spousal support owing are $468,693.04. I would like the assistance of counsel as to whether and how this figure should be “netted down” to account for the tax consequences. Each party may file written submissions on this issue in advance of the oral hearing, should they wish to do so. Material is to be filed one week before the date for the oral hearing.

l) Costs

[432] The parties have not yet had an opportunity to make submissions respecting costs. The applicant is clearly the more successful party. Costs submissions need not be delayed pending the additional one hour appearance before me. The applicant shall have three weeks from the release of this decision to file costs submissions of not more than five pages, in addition to her bill of costs and any relevant authorities.

[433] The respondent shall have two weeks from receipt of the applicant’s costs submissions to file his responding submissions respecting costs. His submissions are not permitted to be longer than five pages, in addition to any bill of costs and relevant authorities.

[434] There will be no reply costs submissions without leave of the court.

Woollcombe J.

Released: June 29, 2017

COURT FILE NO.: 30562/08 DATE: 2016 06 29 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: Karen Burke Applicant – and – Murray Burke Respondent REASONS FOR JUDGMENT Woollcombe J. Released: June 29, 2017

[1] I note, by way of example, that there is a document at Tab “G” of Volume 3 of the respondent’s written submissions entitled “Murray Burke Marriage Time Line” which is referred to in his written submissions. It is unclear to me what its value is. It appears in some respects to be a summary of the evidence from Mr. Burke’s perspective. However, it is not merely factual and is replete with commentary. It refers to the concerns and decisions of Sharon Cheyne, who was not a witness in these proceedings. This appears to me to be an attempt by the respondent to indirectly provide evidence from her. The document also refers to medical evidence that is not before the court. In my view, the inclusion of this sort of document in the written submissions is both unhelpful and distracting.