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COURT FILE NO.: FC-13-1556 DATE: 2018/08/09 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: Umna Majeed Applicant – and – Javaid Iqbal Chaudhry Respondent

COUNSEL: Sonia Smee, for the Applicant Ajay Duggal and Pankaj Sharma, counsel for the Respondent

HEARD: January 15, 16, 17, 18 and 19, May 28, 29, 30 and 31, 2018 (at Ottawa)

SHELSTON, J,

Overview

1The parties married on April 2, 1993 in Pakistan. The parties separated on October 31, 2011 in Ottawa, Ontario. The parties lived together for 18 years. There are no children of the marriage.

2The issues at the beginning of this trial are as follows:

(a) divorce; (b) the applicant’s entitlement to spousal support; (c) the commencement date, quantum and duration of said spousal support; (d) security by way of life insurance for spousal support; (e) a claim by the applicant that the respondent owes her $36,028.69; (f) a claim by the applicant requesting that the respondent remove her name from U.J. International Corporation; and (g) costs.

3At the end of the applicant’s submissions, the applicant’s counsel advised the respondent and the court, for the first time, that the applicant was withdrawing her claim seeking an order that the respondent pay her $36,028.69.

Credibility

4I find that the applicant was overall a credible witness. At times, she confused the chronology and dates of certain events during the marriage and subsequent separation. I found that she answered the questions put to her in a straightforward manner and that her testimony was not contradicted by other testimony or written documentation.

5On the other hand, I found that the respondent was evasive in his answers to questions, that his testimony was contradicted by his own affidavit material, that he changed his testimony when confronted with conflicting evidence and that he is prepared to lie about circumstances when it is to his advantage. Some of the examples are as follows:

(a) the respondent testified that he did not consider the applicant’s family to be wealthy. However, in the first sentence of paragraph 26 of the respondent’s affidavit dated November 6, 2014, he stated:

In response to paragraph 25, the applicant’s family is rich and owned shops which were worth millions of Rupees.

(b) the respondent testified that he did not help the applicant financially with her educational pursuits. However, in the fifth and sixth sentence of paragraph 20 of the respondent’s affidavit dated November 6, 2014, the respondent stated:

I supported her both financially and emotionally and she passed her Bachelor of Arts exam in two attempts. I further encouraged her emotionally and supported her financially to obtain her Master’s degree while she was living in my home at Wahdat Colony, Lahore.

(c) the respondent testified that the decision to come to Canada was for different reasons for the applicant then for the respondent. The respondent indicated that the applicant wanted to come to Canada to be closer to her sister and he wanted to find work in his field. However, in the second sentence of paragraph six of the respondent’s affidavit dated November 6, 2014, he stated:

I was working as a veterinarian in Pakistan and it was my idea to move to Canada in order for us to obtain a better future.

(d) the respondent testified that he needed money to come to Canada and he did not sell property and did not have savings. However, in paragraph six of the respondent’s affidavit dated November 6, 2014, the respondent stated:

I paid for her full way to Canada with money that I had earned prior to coming to Canada, money I obtained through selling the family car, a piece of land and a benevolent fund that I had received from work.

Despite swearing an affidavit that he sold the family car and sold a piece of land, the respondent testified that it was actually his brother who sold his own car and his own piece of land;

(e) in cross-examination, the respondent denied that he had a cleaning lady. However, in paragraph 33 of his affidavit dated November 9, 2016, the respondent admitted that he had a cleaning lady at his home in 2013;

(f) the respondent testified that when he was in Buffalo, New York, he paid for all the expenses of his one-bedroom apartment and the respondent paid for the cost of the apartment in Ottawa. However, in paragraph 19 of the respondent’s affidavit dated November 6, 2014, the respondent stated:

While I was in Buffalo, most of my paychecque went Umna. The money was used to pay for rent in Ottawa, buying furniture, television and other household items. The cell phones at that time were under her contract and it was our understanding of that I would pay big bills like furniture, TV, electronics, the bank loan of approximately $9000 which was for my examination fees, schooling, meals and part for household items.…

(g) the respondent never told his employer that he was actually living in Ottawa as he used his sister’s address in Dallas/Fort Worth, Texas as his residence in communication with his employer, the Pakistani government;

(h) the respondent admitted that in 2011 he signed the applicant’s signature on the incorporation documents for U.J. International Services Inc. The respondent testified that the applicant agreed that he could sign and that she planned to go into nursing and it would take approximately one year to complete the course so that she could move to British Columbia. The applicant denies that she ever was advised that the respondent was incorporating a company or that the respondent was signing her name on her behalf;

(i) the respondent admits that when he made an application for a mortgage for his current residence he indicated his income was $120,000 a year but he conceded in cross-examination that he really did not have that much income. He justified his response by indicating that it was his anticipated income and not his actual income; and

(j) in cross-examination, the respondent denied that he withdrew $7,000 to $8,000 as a down payment for his home in Vancouver from U. J. International Services Inc. However, in the respondent’s affidavit dated September 2015, at paragraph 28 in the second sentence, the respondent admits:

I took $5000–$7000 from UJ International towards the down payment, a further $15,000 was borrowed from a friend and I borrowed just under $20,000 for my brother.

In cross-examination, once confronted with the contradiction, the respondent changed his evidence and testified that he took the $5,000–$7,000 as a loan that he repaid. There is no evidence to support such a statement.

6Based on my findings, when there is a conflict in the evidence, I prefer the evidence of the applicant.

Findings of Fact

7At the time of the marriage, both parties lived in Pakistan. The applicant was 24 years of age and had obtained a Master’s degree in the Urdu language. The respondent was 43 years of age and was employed by the government of Punjab as a veterinary officer in the livestock/dairy department. He had obtained a Doctor of Veterinary Medicine degree and had a Master’s of Science in animal reproduction.

8From 1993 to 1997, the applicant worked as a homemaker and obtained a Bachelor of Arts degree while the respondent worked. The applicant cooked and did the laundry. During this period of time, the applicant attended a hairdressing school and graduated with a diploma as a makeup artist/hairdresser. She started working at a vocational school for makeup/hairdressing.

9The parties had a very traditional marriage whereby the respondent made all of the decisions and the applicant supported him.

10One of the benefits of the respondent’s employment is that he was provided a rental unit and that the cost was deducted from his pay. The parties resided primarily at the applicant’s parents’ home but at times the respondent would stay in the rental unit paid by his employer.

11While working, the respondent discussed with the applicant the plan that he would come to North America. The applicant supported the respondent in this plan.

12During this period of time, the parties wanted to have a child but were unable to conceive. They attended different specialists for assistance. The applicant felt shame because she was not pregnant while the respondent was frustrated, angry and blamed her for not getting pregnant.

13In November 2002, the respondent was successful in his application, was accepted and moved to Ottawa where he resided with a friend and started studying to become a veterinarian. He did not find work for the first five months and then found employment as a security guard. He also worked at a gas station.

14From November 2002 until February 2004, the applicant remained in Pakistan but moved to Ottawa on February 27, 2004. The parties rented an apartment. Upon arrival in Canada, the applicant could speak very little English and consequently she started to study English as a second language. She wanted to improve her ability to speak and comprehend English to allow her to pursue a license in hairdressing.

15In February 2004, the respondent was laid off from his employment as a security guard. The applicant was not working for an employer but she would cut hair for friends and work for a lady on a part-time basis. During this period of time, the respondent was preparing for the first part of a two-part examination to be licensed as a veterinarian.

16In May 2004, the respondent was rehired as a security guard. He did not disclose this fact to the welfare authorities and the respondent told the applicant that they should only disclose it if asked. Neither party disclosed that change in their financial circumstances to the welfare authorities.

17By early 2005, the applicant commenced a hairdressing course and obtained her license to be a hairdresser in November 2005.

18In May 2005, the welfare authorities became aware that the parties had been working while receiving welfare benefits. The parties were charged that between March 31, 2003 and March 1, 2005, they did by deceit, falsehood or other fraudulent means, defraud the city of Ottawa Community and Protective Services of a sum of money of a value not exceeding $5,000.

19However, the respondent was in Pakistan for employment purposes when the charges were laid because when he came to Canada in November 2002, he had taken a leave of absence with his employment with the Pakistani government. The respondent was in Pakistan from November 2005 to November 2006. The respondent did not use his address in Canada when making the application but rather he used the applicant’s sister’s address in Dallas/Fort Worth, Texas. The respondent never told the Pakistani government that he was living in Ottawa.

20After receiving her diploma in November 2005, the applicant found a job as an assistant hairdresser with the Richmond Beauty Salon and started on December 23, 2005. She was continuing to receive social assistance and was working two days per week and living in a bachelor apartment.

21The respondent remained in Pakistan until November 2006. Upon returning to Canada, the respondent was charged with welfare fraud.

22Upon his return, the respondent passed the first part of the two-part qualifying examinations to become a veterinarian and was preparing for the second part of the examination.

23By December 2006, the applicant continued working part-time with the Richmond Beauty Salon where she continues to work today. The respondent was not working. In early 2007, an employment opportunity became available for the applicant to work at a different salon but the respondent refused to allow her to accept that position because she would be working with a male hairdresser.

24In early 2007, the respondent was working at different animal clinics on a volunteer basis to obtain the necessary practical experience required for the second part of his licensing process. During this period of time, the applicant’s income was the main source of income for the parties.

25The applicant continued to work part-time at the Richmond Beauty Salon until April 2007 when she became a full-time employee. When the applicant was a part-time employee her responsibility was to clean the salon as well as shampooing clients. When she became a full-time employee her role changed and she was doing colouring, highlighting and shampooing while the hairdressers would do the styling and the hair cutting. The applicant’s income was based on salary and tips.

26When the applicant came to Canada in February 2004, she went to a fertility clinic in Ottawa. From 2005 to 2007, she tried but was not able to become pregnant. During this time the parties were both frustrated and argued. The doctor suggested in vitro fertilization but that was an expensive treatment that the parties could not afford. The respondent pressured the applicant to borrow more money from her family. To save her marriage, the applicant asked her sister in Texas for the money. On December 13, 2008, the applicant’s sister wired her $20,000. The sum of $19,841.93 was deposited into the applicant’s Bank of Montreal account on December 14, 2008. The estimated cost for the in vitro fertilization was $19,000. The applicant, the respondent and the applicant’s sister agreed that the respondent was borrowing the money but that it was to be repaid. In total, the sister lent the parties $13,364.62 for the criminal fraud charges and $19,841 for the in vitro treatments. The applicant never became pregnant.

27The parties still had the criminal convictions before them. I find that both parties were charged with fraud and that the sum of $13,394.98 was paid as restitution on behalf of both parties. As a result of the restitution, both parties received absolute discharges. I accept the evidence of the applicant that the respondent directed the applicant to borrow money from her sister to pay restitution to Ontario Works. I find that the respondent knew when the restitution was paid as he was very concerned about the negative impact a criminal record would have on his application for a veterinary license.

28From November 2006 to the end of December 2007, the respondent was studying for his veterinary examinations. The applicant worked full-time, prepared meals for the respondent and was very supportive of his educational plan.

29The parties discussed future plans where the respondent would be the main wage earner, the applicant would be a homemaker and that good days were coming for this family, including buying a house and the respondent purchasing a veterinary practice. By the end of December 2007, the respondent passed the exams.

30The respondent began looking for employment in Ottawa in early 2008. He was able to find part-time work but was unsuccessful in obtaining full-time work. He decided to apply outside of Ottawa and in May 2008, he accepted a position in Buffalo, New York on a one-year contract that was extended to two years. He rented a one-bedroom apartment and started working in June 2008. As the applicant could not work in the United States, she could not move with him. The parties’ plan was that the applicant would stay in Ottawa and that the respondent would look for jobs and practices in Ottawa. The respondent came back to Ottawa every two weeks and the applicant would visit him in Buffalo on long weekends.

31While in Buffalo, the respondent would send money back to the applicant to help pay the rent, his cell phone bill and his student loan. In March 2009, while visiting the respondent, the applicant observed women’s clothing in the respondent’s closet and bathroom as well as a condom. The respondent became angry and started choking the applicant by the neck. The applicant was confused but still wanted to save her marriage. She stayed in the apartment with the respondent for another two days. The parties did not speak after this incident and the respondent drove the applicant to the bus station without any communication. She then returned to Ottawa.

32In September 2009, the respondent and applicant attended a conference in Texas. After the conference, the parties returned to Buffalo. One day soon after returning, the telephone rang and the applicant answered the phone and spoke to a woman. The respondent heard the applicant in discussion with the woman at which point he started to pound her on the back of her neck. The applicant did not call the police as she wanted to save her marriage. Again, the applicant was dropped off at the bus station and the parties did not speak to each other for approximately three weeks.

33The respondent denies that he ever assaulted the applicant and denies that he had an extramarital affair while in Buffalo. I accept the evidence of the applicant as to what happened on both occasions in Buffalo.

34In December 2009, the respondent’s employment in Buffalo ended and he returned to Ottawa. In February 2010, the parties returned to Pakistan for a family vacation. The applicant had not been back to Pakistan since February 2004. The parties visited family then individually spent time with their own family. Approximately one week later, the applicant and respondent met. The respondent introduced the applicant to his new wife whom he had married on February 17, 2010. The applicant was shocked. The respondent never told her of his plan to marry another woman. The respondent and his family told her that the respondent wanted to have children so the respondent decided to remarry. The applicant decided not to mention the respondent’s remarriage to her mother. The respondent did not want anyone to know that he had remarried in Pakistan. The parties returned to Ottawa on March 9, 2010. The respondent’s new wife remained in Pakistan with his family but the respondent hoped that she would soon join the respondent in Ottawa.

35Once the parties returned to Ottawa, the respondent began pressuring the applicant on ways to have the respondent’s second wife admitted to Canada. He proposed that the parties lie on court papers to pretend that they had been separated so that he could obtain a divorce to allow the respondent to bring his second wife to Canada. The applicant refused.

36Then, the respondent proposed that the applicant approach one of her friends and propose that this friend hire the respondent’s second wife as a nanny. The friend refused.

37During this period of time from March 2009 to December 2010, the applicant worked full-time while the respondent worked part-time. The respondent placed significant pressure on the applicant to make arrangements to have the respondent’s second wife come to Canada. In addition, the applicant was under significant financial pressure because she could not afford the respondent’s cell phone bills which were under the family plan and to which the respondent was not contributing. Despite the request by the applicant to curb his expenses, the respondent was increasing the long distance calls.

38In December 2010, the respondent advised the applicant that he planned to move to Vancouver to work with a friend who had a veterinary practice. The respondent proposed that he would set up a veterinary practice and that the applicant could join him in Vancouver where she could open a salon. Further, the respondent insisted on restarting the immigration process in Vancouver to have his second wife admitted into Canada and resurrected the plan that the second wife could be an employee of the applicant or a nanny with a friend in Vancouver.

39In December 2010, the respondent moved to Vancouver and started working at the Mainland Veterinary Clinic owned by a friend. The applicant remained in Ottawa. Despite his efforts, the second wife was refused admittance into Canada and, as of the date of the trial, remains in Pakistan with the respondent’s family.

40While in Vancouver, the respondent indicated he wanted to buy into his friend’s veterinary practice but that he needed money. The respondent was frustrated with the applicant because, in his eyes, she could not save enough money. The respondent was oblivious to the fact that the applicant was the only wage earner and that she paid for the gas for his car, the cell phone and the long distance charges while he was in British Columbia.

Separation

41By mid-2011, the respondent was living in Vancouver. The relationship between the parties was strained as the respondent was not earning income and contributing to the parties’ expenses.

42In March 2012, the parties argued over a cell phone bill incurred by the respondent. He called the applicant bad names and at that point she had enough. This was the last time she had a telephone call with the respondent. Despite the applicant’s evidence that she indicated that the actual separation was in March 2012, the parties agreed during this proceeding that the date of separation is October 31, 2011, which was incorporated into the order of Justice MacKinnon dated November 13, 2014.

43Even though the marriage was over, cultural pressures on the applicant influenced her not to seek divorce proceedings. She went back to see her family in Pakistan in 2013 and when she returned to Ottawa, she retained a lawyer and started proceedings on July 4, 2013.

44Things turned from bad to worse for the applicant. She received an eviction notice from her apartment requiring her to pay $2,223.21 by December 1, 2014 or be evicted. She was able to borrow $3,000 from her employer. She also ran into difficulties regarding the Rogers cell phone bill incurred by the respondent that she was required to pay. All these pressures culminated in the applicant making a consumer proposal on December 11, 2015 where she declared $1,000 of assets, being furniture and debts of over $24,877.06 which did not include the sums borrowed from her sister.

45When the applicant decided to commence proceedings, she borrowed the $2,000 retainer from her employer. Five years later, she has not been able to pay back that money because she is continuing to incur legal fees. Currently, the applicant owes her employer approximately $20,000 including $4,000 borrowed in January 2018 for the first week of this trial.

46The applicant is a diabetic, suffers from sciatica and has injured her right arm, requiring physiotherapy. Due to her lack of resources, the applicant is not able to follow the recommended physiotherapy but rather pursues physiotherapy when she can afford it. Currently, the applicant has difficulty doing certain tasks where she is required to stand for more than 30 minutes and use her arm.

47On the other hand, things have gone relatively well for the respondent. While in Vancouver, the respondent proposed going into business with four other people in creating the Intercitz Emergency Clinic (IEC). This company operated for approximately one year after which two of the original five partners quit the company. Differences arose between the three remaining partners and the business was sold. The respondent did not receive any remuneration or share of the sale proceeds because he was not an original investor at the time.

48In 2011, the respondent incorporated U.J. International Services Inc. and completed the forms with the applicant being the owner of the Corporation. The respondent’s testimony was that he needed to have a corporation if he was going to invest in the IEC enterprise. I accept the evidence of the applicant that she was completely unaware that the respondent had signed her name on the incorporation documents and that any corporation was being created. Since the sale of IEC, the company known as U.J. International services Inc. has been dormant.

49The respondent then opened another veterinary clinic, Terra Nova Village clinic with Dr. Sharma in Vancouver. Over time, the respondent bought out Dr. Sharma’s interest. Today, the respondent resides in Richmond, British Columbia, in a three-bedroom home valued by the respondent at $620,000, with his current partner and their three-year-old child. He is the sole owner of a veterinary clinic and works full-time.

Since separation

50Since separation, the respondent has had two children. The respondent’s second wife lives in Pakistan with their three-year-old son. The respondent’s partner in Richmond has a daughter. Since 2010, the respondent has travelled to Pakistan in 2011, the winter of 2013–2014, the fall of 2014 and in 2015. The respondent spent over a month in 2018 in Pakistan, being the year that his father passed away.

51After separation, the applicant went to night school part-time two nights per week and obtained a high school diploma in June 2014. In August 2014, the applicant took pre-health courses at Algonquin College but could not continue due to her health, work and the legal process.

52The applicant would like to complete the one year pre-health sciences certificate to explore options to become a registered dietitian or nutritionist and that there could be jobs available in hospitals or health clinics. After the completion of the one year pre-health signed certificate, the applicant would have to complete between two to three years of full-time study to obtain a bachelor’s degree which she would supplement by working part-time. Despite providing no evidence, the applicant testified that there are always jobs available and that she could earn $60,000 a year.

Divorce

53The parties married on April 2, 1993 and separated on October 31, 2011. There is no chance of reconciliation. I grant a divorce order.

Spousal Support

54The applicant seeks the following relief:

(a) spousal support from November 1, 2011 to May 1, 2022 at the high range of the Spousal Support Advisory Guidelines (“SSAG’s”) to permit the applicant to re-educate herself; (b) spousal support from June 2022 to April 1, 2030 at the mid-range of the SSAG’s; and (c) an annual cost-of-living adjustment to the spousal support in accordance with the increase in the Consumer Price Index.

55The respondent’s position is as follows:

(a) the applicant has no entitlement to spousal support either on a compensatory or a non-compensatory basis; and (b) in the alternative, if there is any entitlement to spousal support, periodic support should end and a lump sum payment of $1,200 be paid by the respondent to the applicant.

Legislative and jurisprudential framework

56Subsection 15.2(1) of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), provides that “[a] court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sums and periodic sums, as the court thinks reasonable for the support of the other spouse”.

57Subsection 15.2(2) states that, where an application is made under subsection (1), the court may, on application by either or both spouses, make an interim order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums as the court thinks reasonable for the support of the other spouse, pending the determination of an application under subsection (1).

58Section 15.2(4) states that a court, in making an order under subsection (1) or an interim order under subsection (2), shall take into consideration the condition, means, needs, and other circumstances of each spouse and, more specifically:

(a) the length of time the spouses cohabited; (b) the functions performed by each spouse during cohabitation; and (c) any order, agreement or arrangement relating to support of either spouse.

59Section 15.2(6) states that an order 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) apportioned 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) insofar as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.

60In order to achieve a fair and equitable distribution of resources, all four of the objectives of section 15.2(6) should be examined: see Moge v. Moge, 1992 SCC 25, [1992] 3 S.C.R. 813, at p. 866.

61In Chutter v. Chutter, 2008 BCCA 507, 301 D.L.R. (4th) 297, held, at paras. 50–51:

Compensatory support is intended to provide redress to the recipient spouse for economic disadvantage arising from the marriage or the conferral of an economic advantage upon the other spouse. The compensatory support principles are rooted in the “independent” model of marriage, in which each spouse is seen to retain economic autonomy in the union, and is entitled to receive compensation for losses caused by the marriage or breakup of the marriage which would not have been suffered otherwise (Bracklow v. Bracklow, 1999 SCC 715, [1999] 1 S.C.R. 420], at paras. 24, 41). The compensatory basis for relief recognizes that sacrifices made by a recipient spouse in assuming primary childcare and household responsibilities will often result in a lower earning potential and fewer future prospects of financial success (Moge, at 861-863; Bracklow, at para. 39)....

In addition to acknowledging economic disadvantages suffered by a spouse as a consequence of the marriage or its breakdown, compensatory spousal support may also address economic advantages enjoyed by the other partner as a result of the recipient spouse’s efforts. As noted in *Moge* at 864, the doctrine of equitable sharing of the economic consequences of marriage and marriage breakdown underlying compensatory support “seeks to recognize and account for both the economic disadvantages incurred by the spouse who makes such sacrifices and the economic advantages conferred upon the other spouse”. [Emphasis in original.]

62In Moge, L’Heureux Dubé J. stated, at pp. 864–65, 870 (references omitted):

Presumably, there will be the occasional marriage were both spouses maximize their earning potential by working outside the home, pursuing economic and educational opportunities in a similar manner, dividing up the domestic labour identically, and either making no economic sacrifices for the other or, more likely, making them equally. In such a utopian scenario there might be no apparent call for compensation. The spouses are able to make a clean break and continue on with their respective lives. Such cases would appear to be rare.

Although the doctrine of spousal support which focuses on equitable sharing does not guarantee to either party the standard of living enjoyed during the marriage, this standard is far from irrelevant to support entitlement…. As marriage should be regarded as a joint endeavour, the longer the relationship endures, the closer the economic union, the greater will be the presumptive claim to equal standards of living upon its dissolution.

63In Papasodaro v. Papasodaro, 2014 ONSC 30, McGee J. stated, at para. 59:

The Divorce Act does not measure individual contribution as much as it measures financial connectedness and the resulting circumstances when the marriage ends. Provided that need is found, the basis for non-compensatory support is firmly mandated by the Act.

Entitlement to spousal support

64I find that the applicant is entitled to compensatory support. During the marriage, the applicant worked to support the respondent to allow him to study to qualify for a veterinarian license in Canada. I find that the respondent has received an economic advantage as a result of the assistance of the applicant. Today, the applicant continues to live in a small apartment with no assets and earns approximately $30,000–$35,000 per year. The respondent has a large three-bedroom home and travels to India every year.

65I find that the parties came to Canada for a better life, that they dreamed that the respondent would open a veterinarian clinic, that they would own a home and that things would be much better.

66I find that the functions performed by the applicant during cohabitation, such as being the main wage earner and assuming the domestic functions in providing support to the respondent to pursue his career, conveyed upon him a significant advantage that requires compensation to the applicant.

67I find that the applicant is entitled to non-compensatory support. The applicant’s financial statement sworn September 6, 2017 indicates that based on her monthly income and spousal support of $650 per month, her gross monthly income is $4,026.79. Based on an examination of the applicant’s expenses in the said financial statement, her monthly expenses are $4,195.85 of which $633.33 are related to legal fees, business valuations and investigators resulting in a net monthly expense of $3,562.52. I find that the applicant’s budget is very meagre.

68She has no assets except as of September 6, 2017 there is $284 in her bank account and she has debts of $22,127.50. The applicant shops at Walmart for her food, has no money for gifts or vacation and cannot afford physiotherapy for her arm. She needs support.

Commencement of spousal support

69The applicant seeks spousal support retroactive to the date of separation. The respondent submits that there was no evidence of a request for spousal support before the commencement of proceedings on July 4, 2013.

70In MacKinnon v. MacKinnon (2005), 2005 ONCA 13191, 75 O.R. (3d) 175 (C.A.), the Court of Appeal stated three principles applicable to spousal support:

(a) spousal support usually commences from the date of the application or from the date of the demand for financial information; (b) retroactive spousal support only applies to any claim made for the period of time prior to the commencement of proceedings; and (c) any claim after the commencement of proceedings is a prospective claim.

71In Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, the Supreme Court of Canada confirmed that the principles applicable to claims for retroactive child support set out in D.B.S. v. S.R.G.; L.J.W. v. T.A.R.; Henry v. Henry; Hiemstra v. Hiemstra, 2006 SCC 37, [2006] 2 S.C.R. 231, were relevant in deciding the suitability of retroactive spousal support. The four considerations are as follows:

(a) whether there was a reasonable excuse for why the claimant did not pursue child support or increased child support earlier; (b) the conduct of the payor parent. The court characterized “blameworthy conduct” as “anything that privileges the payor parent’s own interests over his/her child’s right to an appropriate amount of support” (D.B.S., at para 106). It emphasized that a payor cannot simply hide their income increases from the recipient parent in hopes of avoiding larger child-support payments; (c) consideration of the present circumstances of the child; and (d) any hardship that may be occasioned by a retroactive order.

72In Kerr, the court cautioned that there are different principles and objectives with respect to the right to spousal support and the right to child support, and that any retroactive claim must be analysed within this framework. In addition, the court identifies the two competing interests that must be taken into consideration. Firstly, the interest of the payor of having certainty knowing his or her legal obligations and, secondly, the general policy of having an incentive for spousal support claimants to advance their claim promptly.

73In this case, the parties agree that no notice was given to the respondent of any claim being advanced by the applicant for spousal support prior to the commencement of proceedings on July 4, 2013. Consequently, spousal support shall be payable as of the date of the commencement of proceedings being July 4, 2013.

Quantum of Spousal Support

Applicant’s income

74The applicant’s income tax returns and declared annual income are as follows:

(a) 2010, $29,979; (b) 2011, $33,085.83; (c) 2012, $31,872; (d) 2013, $27,054; (e) 2014, $37,930.92; (f) 2015, $37,590.73, including $2,500 of spousal support; (g) 2016, $38,781.52, including $3,000 of spousal support; and (h) 2017, $31,365 of employment income.

Respondent’s income

75Both parties engaged the services of financial expert witnesses to prepare income reports for the purposes of determining the respondent’s income for the years 2012 to 2016. The applicant retained Mr. Steve Pittman of Andrews & Co. who prepared two reports dated January 10, 2018 and May 21, 2018. The respondent retained Ms. Melanie Russell of Kalex Valuations Inc. who prepared an income report dated April 19, 2018.

76Mr. Pittman testified and was qualified as an expert witness on the issue of the respondent’s income for spousal support purposes. Based on the consent of the parties and admissions by the parties, Ms. Russell was not required to testify. At the beginning of Mr. Pittman’s testimony, the respondent consented to the income of the respondent in the years 2012, 2013 and 2014 as stated below:

77For the year 2015, the difference was that Mr. Pittman indicated that the respondent’s income was $70,453 and that Ms. Russell determined the respondent’s income to be $65,737. Counsel for the applicant consented to a finding that the respondent’s income in 2015 was to be $65,737.

Year 2016

78For the year 2016, the parties differ. The applicant relies on the report dated May 21, 2018 prepared by Mr. Stephen Pittman who concludes that the respondent’s income in 2016 should be fixed at $126,316. At the trial, Mr. Pittman varied his written report and reduced the income of the respondent by $23,281 resulting in the respondent’s income being fixed at $102,830 based on him receiving additional information after completing his initial report.

79The respondent’s expert, Kalex Valuations Inc., opined that the respondent’s income in 2016 should be fixed at $64,156.

80The difference between Mr. Pittman’s conclusions and Ms. Russell’s conclusions are related to three issues. The first issue is the available corporate income that Ms. Russell has prorated to arrive at an amount for the calendar year. Mr. Pittman in his report determined that any available income in the August 31 fiscal year was attributed entirely to the calendar year. Secondly, the difference in the treatment of professional fees and interest incurred by U.J. International Services Inc. Finally, the differences in the treatment of the shareholder loan owed by the respondent to Terra Nova Village are the most significant between the experts.

81I accept the evidence of Mr. Pittman that any funds drawn out as a shareholder loan must be repaid within the next fiscal year or becomes income in the hands of the shareholder. Mr. Pittman’s conclusion is that the shareholder loan of $42,486 should be included in the respondent’s income for 2016 or the year 2017. Either way, Mr. Pittman’s evidence is that the shareholder loan must be accounted for in either the year 2016 or 2017.

82Ms. Russell concluded that there would be no attribution of income to the respondent because the withdrawal of funds from the shareholder loan was a one-time event and that he intended to repay the shareholder loan. I find that there has been no evidence provided as to the terms of the payment plan or the payments. In lieu of attribution, Ms. Russell added a 5% interest benefit of $3,670 to the respondent’s income in 2016.

83In Plese v. Herrjavec, 2015 ONSC 7572, the court in interpreting section 18 of the Federal Child Support Guidelines held that where the payor has access to funds that are not reflected on his income tax return, the court can consider that income to increase his income.

84In the circumstances, I find that it is fair and reasonable to attribute the shareholder loan back as income to the respondent in 2016. I accept the conclusions of Mr. Pittman that the respondent’s income should be set at $102,830 for 2016.

Year 2017 and forward

85The respondent stated that his income in 2017 will be $54,000. I have imputed income to the respondent in 2016 of $102,830 and have not accepted his declared income of $54,000 as stated on his income tax return. Both experts retained by the parties conclude that the respondent’s income in 2016 is more than $54,000 as declared on his tax return.

86The respondent’s financial statement indicates a monthly shortfall of $1,140.05. Upon a review of the respondent’s debts, he has one loan from a friend for $10,000, two other loans for down payments on the home totalling $34,000, a loan from a friend of $20,000 to pay spousal support and outstanding legal fees of $12,000. The financial statement mentions basic expenses but is silent with respect to other expenses such as spousal support, clothing, hair, vacations, household supplies, meals outside the home, etc.

87I do not find the respondent to be credible. His standard of living exceeds his declared income. I find that the respondent’s financial statement dated September 12, 2017 is not reflective of the respondent’s income.

88Section 16 of the Federal Child Support Guidelines sets out the general rule that income is determined using the sources of income set out under the heading “Total income” in the T1 General form issued by the Canada Revenue Agency (“line 150 income”):

Subject to sections 17 to 20, a parent’s or spouse’s annual income is determined using the sources of income set out under the heading “Total income” in the T1 General form issued by the Canada Revenue Agency and is adjusted in accordance with Schedule III.

89Sections 17 and 18 permit a court to depart from line 150 income where the court is of the opinion that the determination of the spouse’s line 150 income would not be the fairest determination of income.

90Section 17(1) of the Federal Child Support Guidelines provides that if the court is of the opinion that the determination of a spouse’s annual income under section 16 would not be a fair determination of that income, the court may have regard to the spouse’s income over the last three years and determine an amount that is fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non-recurring amount during those years.

91Section 17(2) of the Federal Child Support Guidelines provides that where a spouse has incurred a non-recurring capital or business investment loss, the court may, if it is of the opinion that the determination of the spouse’s annual income under section 16 would not provide the fairest determination of the annual income, choose not to apply sections 6 and 7 of Schedule III and adjust the amount of the loss, including related expenses and carrying charges and interest expenses, to arrive at such amount as the court considers appropriate.

92The decision to average a spouse’s income over a three-year period is discretionary and not mandatory (Decaen v. Decaen, 2013 ONCA 218, 303 O.A.C. 261).

93I find that the respondent’s income has fluctuated over the last three years. Both parties had asked that I average the respondent’s income over a five-year period from 2012 to 2016 which I refused to do because the parties consented to a finding for his income in the years 2012 to 2015. I imputed an income to the respondent in the year 2016. However, starting in 2017, I find it is fair and reasonable to impute an income to the respondent on a go forward basis using the three-year average based on his fluctuating income.

94In the years 2014, 2015 and 2016, the respondent’s total income was $239,590.99. The three-year average of that income equals $79,863.66 per year.

SSAG’s calculations

95At the conclusion of the trial, I directed the applicant to provide, by June 11, 2018, her DivorceMate calculations indicating the various ranges of spousal support for the years 2012 to 2017, including the net after-tax cost/benefit of spousal support for each party. I directed the respondent to provide his calculations by June 25, 2018. I received the calculations from the applicant.

96I did not receive any calculations from the respondent. Instead, by letter dated June 19, 2018, counsel for the respondent submitted in paragraph 2, 3 and 4 the following in reference to the Divorcemate calculations submitted by counsel for the applicant:

I do not take objections to the calculations itself but my objection shall be to the evidentiary issues. These calculations were not put to the applicant in her chief examination or to the respondent in his cross-examination. The evidentiary value of these calculations is in question given the fact that it does not justify any issue with regards to the litigation unless the calculations have been tested on merit by asking the witnesses question regarding such calculations.

The witness did not describe as to what amount in Divorcemate support calculations she required as spousal support. The witness also did not disclose as to why and on what grounds such amount (low, mid or high spousal support) should be granted.

These calculations portray a significant prejudice to the respondent. Therefore, I take a position that these calculations are of no value and should not be considered as there is no evidence to prove the need and standard of living even on a low threshold figure as provided in the calculations.

97I reject the respondent’s submission that the failure to put the calculations to the witnesses renders the calculation of little value. The SSAG’s are a tool to assist the court in determining the range and duration of spousal support. In Halliwell v. Halliwell, 2016 ONSC 182, Justice Harper described the SSAG’s as follows at paragraph 108:

Since Moge and Bracklow were decided, the Spousal Support Advisory Guidelines (SSAGs) have been enacted. Unlike the Divorce Act, the SSAGs are not statutory authority. They are guidelines designed to advise on a reasonable range of spousal support and a reasonable duration for spousal support in various circumstances. While the SSAGs are advisory, courts are nevertheless required to consider them in deciding spousal support. I use the SSAGs as one indicator of what might be a fair and reasonable amount of support. I impute the income of Martin based on the average of his last three years. In my view this is the best indicator of his available income for support purposes.

98Based on the respondent’s submissions, the respondent does not dispute the factual information included in the DivorceMate software calculation, such as the parties’ age, the length of cohabitation or the applicant’s age at the date of separation.

Income tax and retroactive spousal support

99I have ordered that spousal support should start as of July 2013. The issue of the income tax considerations for retroactive spousal support must be considered in my analysis.

100The respondent submits that the lump sum retroactive spousal support should be calculated by reducing the support by 45% based on the respondent’s tax bracket of 45%. The applicant made no submissions on this point. There is no expert evidence to support a finding that the spousal support should be reduced by 45% as alleged by the respondent.

101In the Spousal Support Advisory Guidelines: The Revised User’s Guide (“RUG”) (April 2016), professors Rogerson and Thompson discuss the income tax ramifications of retroactive lump sum payments at page 110:

Retroactive spousal support is paid in the form of a lump-sum. Ordinarily, lump-sum spousal support is neither deductible to the payor, nor taxable in the hands of the recipient. This means that any calculation of periodic spousal support, or increased support, must be discounted or netted down to arrive at an after-tax amount.

102In Charron v. Carrière, 2016 ONSC 7523, Doyle, J. reviewed the various approaches used by courts in netting out the retroactive lump sum spousal support and sets out the various factors to consider in determining the applicable tax rate to be applied to retroactive spousal support.

103In this case, the applicant has not had the benefit of spousal support retroactive to July 2013. The first order for spousal support was made by Justice MacKinnon on November 13, 2014 ordering the respondent to pay spousal support of $650 per month commencing November 1, 2014. The respondent never paid any support until he was ordered by the court. On the other hand, the respondent has not had the ability to deduct the spousal support on a retroactive basis for the years 2013 to 2016.

104When I balance the positions of the parties, including a review of the net after-tax costs/benefit of the spousal support calculated in the DivorceMate calculations filed by the applicant, I find it is fair and reasonable that the average of the parties’ net after-tax cost/benefit should be applied to the non-deductible years 2013 to 2016 inclusive.

Range of spousal support

105The SSAG’s provide certain guidelines to assist the court in determining the range of spousal support. The length of the marriage is a significant factor to be considered when the entitlement to support is based on both a compensatory and non-compensatory basis where there are no children. The midrange is not the default position.

106In this case, the parties lived together for 18 years. The entitlement to support is both on a compensatory and non-compensatory basis. The respondent has two children; one child resides with the respondent and his partner who is in receipt of an undisclosed amount of disability insurance. The respondent has a second child with his wife in Indian. No information has been provided about their needs.

107Taking into consideration all these factors, I find that the mid-point is the appropriate range.

Summary of spousal support

Year 2013

108Based on the respondent’s annual income of $99,119 and the applicant’s annual income of $27,064, I order the respondent to pay to the applicant the midrange of the spousal support, being the sum of $1,353 per month, being the midpoint between the two after-tax costs/benefits of spousal support between the parties commencing July 1, 2013 up to and including December 1, 2013.

Year 2014

109Based on the respondent’s annual income of $72,907 per month and the applicant’s annual income of $37,930, I order the respondent to pay to the applicant the midrange of the spousal support, being the sum of $665 per month, being the midpoint between the two after-tax costs/benefits of spousal support commencing January 1, 2014 up to and including December 1, 2014.

Year 2015

110Based on the respondent’s annual income of $65,737, the applicant’s annual income of $35,090 and the SSAG, I order the respondent to pay to the applicant the midrange of spousal support, being the sum of $607 per month, being the midpoint between the two after-tax costs/benefits of spousal support commencing January 1, 2015 to and including December 1, 2015.

Year 2016

111Based on the respondent’s annual income of $102,830, the applicant’s annual income of $35,781, I order the respondent to pay to the applicant the midrange of spousal support, being the sum of $1,247 per month, being the midpoint between the two after-tax costs/benefits of spousal support commencing January 1, 2016 to and including December 1, 2016.

January 1, 2017 and going forward

112Based on the respondent’s annual income of $79,863.66 and the applicant’s annual income of $31,365, I order that commencing January 1, 2017 on the first day of each month thereafter, the respondent shall pay to the applicant the midrange of spousal support in the amount of $1,301 per month.

Arrears of support

113The respondent shall be given credit for support payments made since November 1, 2014. The resulting arrears are to be paid within three months of my decision on costs.

Duration of spousal support

114According to the SSAG’s, the duration of spousal support ranges from 9.25 to 18.5 years from the date of separation, subject to variation and possible review.

115Counsel for the applicant submits that rather than start from the date of separation in October 2011, the spousal support should commence on July 1, 2018 until December 1, 2031, with the last payment to be made over 20 years after separation. The applicant provided no jurisprudence to support such a submission. I reject this submission as the SSAG’s calculate duration from the date of separation rather than the date of trial.

116The respondent submits that the duration is between 5 to 10 years from the date of separation with the 5 year date being October 2016 and the 10 year date being October 31, 2024.

117In this case, spousal support was not paid until the order of Justice MacKinnon dated November 13, 2014. The parties separated in October 2011. I did not order any spousal support until July 1, 2013 because I found no evidence of a request being made. Once the request was made, the respondent was on notice that the applicant was requesting spousal support and that he may have a liability for such a payment. I have considered the following factors:

(a) the applicant was 24 years of age at the date of marriage, 42 years of age at the date of separation and 49 years of age at the date of this trial; (b) the respondent was 34 years of age at the date of marriage, 52 years of age at the date of separation and 59 years of age at the date of the trial; (c) the parties resided together for 18 ½ years; (d) the applicant earns her income at the salon; (e) the applicant has very little assets including any savings or retirement plan; (f) the applicant is entitled to both compensatory and non-compensatory support; (g) the applicant may to return to Algonquin College to pursue a degree in nutrition, which will take time; (h) the respondent is a veterinarian with an average annual income in the years 2014, 2015 and 2016 of approximately $79,000; (i) the respondent has received a distinct advantage as a result of the support of the applicant during their marriage; and (j) the applicant has sustained an economic loss as a result of this marriage.

118I find it will take time for the applicant to accumulate some savings for her retirement. Further, her budget shows that she is living very frugally when compared to the lifestyle of the respondent. She may return to school and incur additional costs.

119I find that it is fair and reasonable that the respondent should pay to the applicant spousal support for 13 years commencing July 1, 2013 up to and including June 1, 2026. At the end of the spousal support, the applicant will be 57 years of age and the respondent will be 67 years of age.

Annual cost of living adjustment

120With respect to the indexation of the spousal support, at trial, the applicant requested that support be adjusted each year in accordance with the increase in the cost of living. The respondent made no submission at trial with respect to indexation.

121The court has the discretion to order indexation under the Divorce Act in a manner consistent with the Family Law Act (Linton v. Linton (1990), 1990 ONCA 2597, 1 O.R. (3d) 1, 24 A.C.W.S. (3d) 524 (Ont. C.A.). Pursuant to subsection 34(5) of the Family Law Act, indexation may be ordered in accordance with the percentage change in the Consumer Price Index for Canada.

122One of the policy considerations behind indexation is that it insulates the support payee from the erosion of support by inflation and it avoids the need for future variation applications (Linton at paras. 102-106).

123Where the entitlement to spousal support is based on non-compensatory and compensatory factors, it is appropriate that spousal support be indexed annually to the cost of living (Meiklejohn v. Meiklejohn (2001), 2001 ONCA 21220, 150 O.A.C. 149, 19 R.F.L. (5th) 167 (Ont. C.A.).

124I have found that the applicant is entitled to spousal support based on non-compensatory as well as compensatory factors. I see no reason why the spousal support should not be indexed.

125Consequently, I order the spousal support shall be increased annually, commencing January 1, 2019, and on the first day of January of each subsequent year by the percentage change in the Consumer Price Index for Canada for prices of all items since the same month of the previous year, as published by Statistics Canada.

Security for the payment of spousal support

126The applicant provided the court with the draft order which included a request that the respondent obtain a life insurance policy of $300,000 with the applicant as the irrevocable beneficiary, requiring the respondent to take medical examinations or tests required to obtain the policy, to provide a copy of the policy with the applicant designated as the revocable beneficiary and signing required forms permitting the applicant to confirm directly with the respondent’s insurer that the policy is unencumbered and in force. In addition, in the event that the respondent were to die prior to the end of spousal support and the life insurance is not in place, the respondent’s estate would continue to pay the support.

127Upon a review of the application filed by the applicant on July 4, 2013, there was no request for security for spousal support. In the opening statement made by the applicant’s counsel, there was a request for security for spousal support.

128During the trial evidence, there were no questions put to the respondent regarding any existing life insurance policy or the respondent’s ability to purchase life insurance. The financial statement filed by the respondent in this proceeding does not disclose any life insurance policy owned by the respondent.

129In the applicant’s closing submissions, there were no submissions regarding security for spousal support. The respondent did not address the issue of life insurance in his submissions.

130In Katz v. Katz, 2014 ONCA 606, 377 D.L.R. (4th) 264, the Court of Appeal confirmed that the court is given broad discretion to impose terms, conditions and restrictions in connection with an order for child or spousal support, including the power to order a spouse to obtain insurance to secure the payment or to be binding on the payor’s estate. In Katz, supra, the court identified certain factors to be considered in determining the quantum of life insurance once the issue of insurability and the cost of the insurance is resolved.

131I decline to order security for spousal support for the following reasons:

(a) the applicant’s application fails to request any security for spousal support. Pleadings are important as they outline to the parties and to the court the specific claims for relief to be decided at a trial. It is fundamentally unfair for a party to make submissions regarding a claim for relief that was not pled, was not discussed during the trial and no evidence was led regarding the claim for relief; and (b) even if I were to consider the request, there was no evidence led during the trial as to whether the respondent has a life insurance policy and there is no evidence led during the trial as to the ability of the respondent to obtain life insurance and the potential cost.

Claim By the Applicant Requesting that the Respondent Remove Her Name from U.J. International Corporation

132The applicant made no submissions on this issue. I dismiss this claim.

Costs

133If the parties are unable to resolve the issue of costs by August 31, 2018, the applicant shall submit her costs submissions, not to exceed three pages, plus any offers to settle, and a detailed bill of costs by September 14, 2018. The respondent shall submit his cost submissions, not to exceed three pages, plus any offers to settle, and a detailed bill of costs by September 28, 2018. The applicant may file reply submissions by October 5, 2018.

Shelston J.

Released: August 9, 2018