Fielding v. Fielding, 2018 ONSC 5659

COURT FILE NO.: FS-12-375231

DATE: 20180928

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

VICTORIA FIELDING

Applicant

– and –

JOHN CRAIG FIELDING

Respondent

Gary Joseph and Elissa Gamus, for the Applicant

Ilana Zylberman and Michael Zalev, for the Respondent

HEARD: June 4 to 8, 11 to 15, & July 26, 2018

P.J. Monahan J.

Introduction

[1] Family law and practice over at least the past generation has been informed by a recognition that the consensual resolution of family law disputes is in the manifest best interests of all concerned, particularly children. This understanding is reflected in a wide variety of statutory provisions, both federal and provincial, mandating courts, lawyers and other service providers to encourage parties to seek to resolve their disputes through voluntary agreement rather than litigation.[^1]

[2] The vast majority of parties involved in family law proceedings heed these calls for compromise and voluntary resolution of their disputes. Over 90% of family law disputes settle before trial. But cooperation must be chosen by the parties involved rather than imposed through law. Regardless of the fact that a voluntary resolution is generally in the best interest of all involved, there will inevitably remain a minority of cases where one or both of the parties are determined to pursue their dispute to the (usually bitter) end.

[3] This is one of those minority of cases.

[4] Craig and Victoria Fielding are highly educated professionals who separated nearly eight years ago and have now been divorced for over four years. Two separate trials were required to settle the terms of their divorce – a three-week trial dealing with parenting issues in 2013[^2] and a two-week trial on property matters in 2014.[^3] Victoria appealed both decisions to the Court of Appeal, but her appeals were dismissed on December 18, 2015.[^4]

[5] In late 2016, the parties commenced this litigation, seeking to alter the terms of child and spousal support ordered by Mesbur J. in the 2014 property trial. The trial on these motions to change has taken two weeks of court time, created a trial record comprising 143 exhibits that fill 9 bankers’ boxes, and has cost Craig and Victoria, collectively, somewhere approaching $1 million.

[6] Ironically, very little that is legally relevant to the issues before me has actually changed in the past four years. There has been no material change in any circumstance relevant to spousal support and thus no basis to modify Mesbur J.’s spousal support order. With respect to child support, I make certain adjustments necessary in order to take account of the fact that Craig and Victoria’s three children are now four years older and their living arrangements have differed slightly from what was anticipated by Mesbur J. But even the changes in child support that I order are relatively modest, and proceed on the basis of the child support framework put in place in 2014.

[7] In addition to resolving these matters, I attempt to fashion a framework going forward that both Victoria and Craig can live with, and that can provide them with a path out of the thicket of ruinous litigation that has darkened their lives for the past eight years. That path has a promise of freedom, not only for Victoria and Craig but for their three children, who were never given a choice as to whether their lives would be disrupted by their parents’ divorce and its aftermath.

Background

1. The earlier trials

At the 15 day parenting trial in 2013, the Applicant, Dr. Victoria Fielding,[^5] had sought sole custody of the three children of the marriage, Katie (then age 17) and twins Sean and Natalie (then age 15). The Respondent, Dr. Craig Fielding, sought sole custody of Katie and Sean and joint legal custody of Natalie, with primary residence to the mother. In her extensive reasons, in which she described the family as “highly dysfunctional”, Mackinnon J. awarded sole custody of Katie and Sean to Craig, and sole custody of Natalie to Victoria. Mackinnon J. also ordered Victoria to pay costs to Craig in the amount of $345,000.[^6]

[8] A 10 day trial on financial issues was then held before Mesbur J. in early 2014. Both Victoria and Craig are physicians (although Victoria had retired from practice in 2007 due to a physical disability.) A significant issue prior to this trial centred around allegations made by Victoria to the effect that Craig had significant undisclosed income which, in her view, required a forensic audit of his plastic surgery practice and personal spending. She brought two motions seeking extensive disclosure regarding his plastic surgery practice in order to enable such an audit to take place. Both these disclosure motions were dismissed, the first by Kiteley J. in January 2013, who found that there was no basis to require a forensic audit of Craig’s medical practice and no indication that further layers of disclosure were reasonable or necessary. These findings were confirmed by Paisley J. in February 2014, in his reasons dismissing Victoria’s second disclosure motion.

[9] The dispute over Craig’s income was resolved on the eve of the property trial when Victoria proposed that the parties stipulate Craig’s income to be $850,000. Despite the fact that this income level was over $100,000 higher than what Craig had stated in his most recent sworn financial statement, he accepted the proposal and this was the income level used by Mesbur J. The parties also agreed that Victoria’s existing income, consisting of tax-free disability benefits as well as investment income and capital gains, was approximately $220,000 per year.

[10] In her comprehensive reasons, Mesbur J. resolved the financial issues arising out of the breakdown of the parties’ marriage. Of particular relevance to the current proceeding are her findings with respect to child and spousal support.

[11] With respect to child support, given the custody arrangements ordered by Mackinnon J., the parties had agreed that a simple set off was the appropriate arrangement for table child support. Based on their agreed income levels, Craig owed Victoria $6,433 monthly support for Natalie, while Victoria owed Craig $2,810 monthly support for Katie and Sean, for a net set off of $3,633 payable by Craig commencing April 1, 2014 and continuing until August 31, 2014.

[12] Katie planned to attend an out-of-town university commencing September 1, 2014. Accordingly, Mesbur J. ordered that during the months of September 2014 through April 2015, and for each subsequent academic year during which Katie was in full-time attendance at the out-of-town university, Victoria would not be required to pay Craig table child support. Instead, the parties would share Katie’s post-secondary expenses as “Special or Extraordinary Expenses” in accordance with s. 7 of the Federal Child Support Guidelines.[^7] If Katie returned to Craig’s home in the summers, Victoria’s obligation to pay table child support would resume for the months of May to August inclusive. Mesbur J. did not specify whether this same framework would apply in the event that Sean and/or Natalie commenced post-secondary studies away from home. She did order the parties to exchange all income information required under s. 21 of the Guidelines by May 15 of each year and to make any necessary adjustments in child support with effect on June 1 of each year.

[13] With respect to s. 7 expenses, Mesbur J. noted that the expenses contemplated by s. 7 are those that exceed amounts that a spouse “can reasonably cover, taking into account that spouse’s income and the amount that the spouse would receive under the applicable table”. She agreed that tuition costs and other educational expenses, such as books and laptop computers, fell within the scope of s. 7. However, she rejected claims made by the parties for inclusion within s. 7 of general food expenses, normal school supplies, social events and extracurricular activities, on the basis that these expenses were not “extraordinary”, having regard to the amount of the individual expenses in relation to each party’s income and the amount of table support each would receive from the other.

[14] The s. 7 expenses previously incurred by the parties for the support of their three children and accepted by Mesbur J. were substantial.[^8] Mesbur J estimated that, going forward, s. 7 expenses for the three children would be approximately $100,000 annually, falling into the following categories:

1. private school fees including all incidental fees charged by the schools (apart from school-related extracurricular activities), uniforms, books, computers;

2. University costs, including tuition, books, accommodation, food, and travel to and from the University for holidays. The University costs were to be net of any Registered Education Savings Plans (“RESP”) amount applied to those costs;

3. uninsured medical and dental costs, including the cost of therapy; and

4. any other expenses the parties agreed, in writing, to share.

[15] Mesbur J. ordered that these expenses be split 68/32 between Craig and Victoria based on their respective agreed incomes, with the parties ordered to exchange information on s. 7 expenses each paid during the year by December 31, in order to determine whether either party owed money to the other. The first such annual calculation would be made as of December 31, 2014.

[16] With respect to spousal support, Victoria had proposed that her and Craig’s income should be equalized going forward, such that she should receive half of the parties’ net disposable income. Mesbur J. noted that such equalization of income was not required by the Divorce Act[^9] and, in her view, this result was not appropriate here. Instead, Mesbur J. found that Victoria was entitled to sufficient funds to meet her reasonable needs, which she determined would require an after-tax income of approximately $22,500 per month. (Victoria had submitted a proposed budget of approximately $35,000 per month, but Mesbur J. reduced this budget substantially.) Taking into account Victoria’s other income, Mesbur J. concluded that an award of $10,000 per month in spousal support was appropriate in the circumstances. She declined to order a cost of living adjustment in the support payments, nor did she require an automatic review at a future date, leaving the issue of any changes in spousal support to a time when there had been a material change of circumstances, in accordance with the Act. Craig was also required to maintain extended health, medical and dental benefits for Victoria as long as he was required to pay spousal support or until further court order.

[17] With respect to costs, Mesbur J. found that, taken as a whole, Craig’s ultimate positions on the eve of trial were reasonable and Victoria’s were not. As a result, she concluded that overall, Craig enjoyed more success at trial than did Victoria. At the same time, Mesbur J. found that Craig’s financial disclosure was inadequate and that this should result in a reduction of the costs to which he would otherwise have been entitled. In the result, she ordered Victoria to pay Craig his costs on a partial indemnity basis, in the amount of $210,000.

[18] As noted above, Victoria appealed both trial decisions, including their respective costs awards. Both appeals were dismissed, with the Court of Appeal ordering Victoria to pay costs of $50,000 in respect of the unsuccessful appeals.

2. Subsequent child support issues and a return to litigation

[19] Mesbur J. had ordered Victoria to vacate the matrimonial home on High Park Avenue in Toronto by August 22, 2014. However, Victoria decided she preferred to purchase Craig’s interest in the home and continue to reside there in order “to try to bring the kids back together and be with me…”[^10] The parties agreed on a purchase price of $2.3 million and Victoria acquired Craig’s interest in the matrimonial home on that basis.

[20] Although Mackinnon J. had awarded Craig custody of Sean and Katie, Sean returned to the High Park Avenue home in August 2014 and he resided there with Victoria until the end of March 2015. Sean returned to live with Craig at the end of March 2015, where he remained until June 2016 when he moved back to Victoria’s home on High Park Avenue.

[21] In the fall of 2016, both Sean and Natalie commenced university studies, with Sean enrolling at Wilfrid Laurier University and Natalie at Queen’s University. In her testimony on this proceeding, Victoria maintained that Sean returned home on most weekends during the 2016 – 17 academic year and that Natalie also returned home frequently, particularly during her reading weeks and over the December holiday period.

[22] The commencement of post-secondary studies by Sean and Natalie prompted Craig to bring a motion to change in November 2016 (the “Motion to Change”) in which he sought an order confirming that he did not have to pay table child support to Victoria during the months when all three children were away at university. He also sought various other forms of relief, including reimbursement for any overpayment of child support since Sean and Natalie’s departure for university in September 2016, as well as reimbursement for Victoria’s proportionate share of the s. 7 expenses paid by Craig in 2014 and 2015. Craig also sought updated financial disclosure from Victoria and an order requiring her to reimburse him for certain minor expenses he had paid in connection with the home on High Park Avenue.

[23] In her response to the motion to change (the “Response”), filed in December 2016, Victoria sought updated financial disclosure from Craig. She also sought substantial changes in Mesbur J.’s orders for child support and spousal support, including a retroactive and prospective increase in the quantum of monthly spousal support, a cost of living allowance increase in that support, and an order terminating Victoria’s obligation to pay child support in respect of Katie as of August 28, 2014.

3. Disputes over Craig’s income

[24] Although the parties had agreed just prior to the property trial that Craig’s income for child support purposes was $850,000, Victoria continued to believe that Craig had substantial unreported cash income from his medical practice. As was the case prior to the 2014 property trial, she still wanted to undertake a forensic audit of his plastic surgery practice and personal spending, and retained a business valuator in late 2016 for this purpose. Craig retained his own financial expert, Steve Ranot of Marmer Penner Inc. (“Ranot”), who filed a number of expert reports regarding Craig’s income for the 2014 to 2017 period.[^11]

[25] Victoria brought a disclosure motion in order to obtain the documentation needed to prepare the forensic review of Craig’s income, expenses and lifestyle. The requested disclosure was extensive, including documentation for every expense on Craig’s financial statement, as well as financial records from Craig’s mother’s estate as well as from his current wife.[^12]

[26] Victoria’s motion for disclosure came before Backhouse J. on February 8, 2018. Backhouse J. summarily dismissed the requested disclosure, noting that “proportionality in this case is completely lacking”. As Backhouse J. emphasized, this is not a de novo proceeding, since Mesbur J. had already resolved the financial issues between the parties at the 2014 trial. Craig had already provided extensive disclosure in the current proceeding, and had provided an income valuation for the years relevant to the Motion to Change. Craig had conceded that there was a cash component to his practice but he had denied that any of the cash he receives is unreported. Backhouse J. concluded as follows:

The kind of disclosure the Applicant is seeking was not considered appropriate during the main proceeding. There is nothing in the Record that makes it appropriate now. The applicant’s allegation of unreported income is only that…I find that for the purposes of this motion, the Applicant’s allegation does not rise above conjecture. This disclosure request continues to be a fishing expedition or “spot check type of audit” request…From an objective standpoint, this can only be characterized as a campaign by the Applicant to harass the Respondent.

[27] Backhouse J. found that the disclosure motion should never have been brought and ordered costs payable by Victoria to Craig in the amount of $74,000.

[28] Despite Backhouse J.’s pointed comments in dismissing the disclosure motion, Victoria was undeterred in her desire to undertake a forensic audit of Craig’s medical practice. The business valuator that she had retained in the fall of 2016 withdrew from the case without filing an expert report, just prior to the argument of the disclosure motion before Backhouse J. Victoria proceeded to retain a new expert, Brian Mozessohn of the firm SLF Valuations Inc. (“Mozessohn”).

[29] Pursuant to a revised trial management schedule set by Horkins J. in December 2017, Victoria had been required to submit her responding expert report on Craig’s income by April 10, 2018. She failed to meet that deadline. Instead, on April 16, 2018, Mozessohn sent a detailed 11-page disclosure request that included many of the same items which had been considered and rejected by Backhouse J. For example, Mozessohn requested a report detailing all of the patients of Craig’s practice for the 2017 fiscal year, the dates of their appointments, fee estimates for any procedures, the dates any procedures were performed, any amounts paid along with the method of payment, and a copy of all receipts. Counsel for Craig responded by noting that many of the requested items had already been provided to Victoria’s earlier business valuator, while many others had already been disposed of by Backhouse J.

[30] Although Craig did not respond to many of the items requested in Mozessohn’s April 16, 2018 request, Mozessohn had been provided with all of Craig’s banking records for the past three years, including both his business and personal accounts. On May 20, 2018, Mozessohn sent Ranot a spreadsheet summarizing all of the deposits to and withdrawals from Craig’s bank accounts for the 2014 to 2017 period. The spreadsheet identified over 2,600 transactions and was 91 pages long. Mozessohn indicated that the total deposits in each year exceeded the revenue from Craig’s professional practice. Mozessohn asked Ranot to review the spreadsheet and “provide detailed explanations with supporting documentation as to why the total deposits in each year…exceeded the revenue from the Practice”.

[31] Given the limited time available prior to trial, Ranot was only able to respond to a limited number of the items on the 91 page spreadsheet. On May 25, 2018, Mozessohn filed his expert report on Craig’s income for the 2014 to 2017 period, and also included an estimate of Craig’s income for the 2018 year (the “Mozessohn Report”). Mozessohn’s calculations of Craig’s income were substantially higher than those of Ranot, primarily because Mozessohn imputed substantial income to Craig based on various provisions in s. 19 of the Guidelines.

[32] Given the late filing of the Mozessohn Report, Victoria moved at the commencement of the trial for leave to extend the time for the filing of his Report. Craig was prepared to permit the Report to be admitted, provided that Mozessohn’s estimates of Craig’s income for the 2018 year were excluded. After hearing argument at the commencement of the trial, I ruled that the Mozessohn Report should be admitted in its entirety, subject to a determination as to the appropriate weight to be attached to it. As discussed in some detail below, based on the numerous errors, inconsistencies and miscalculations in the Mozessohn Report, as well as Mozessohn’s inconsistent and unpersuasive testimony at trial, ultimately I attach little or no weight to any part of his Report.

Issues

[33] There were numerous specific issues raised by the parties in this proceeding. They fall into five broad categories: (1) what are the respective incomes of the parties for the purposes of determining child support for the 2014 to 2018 period; (2) based on the respective incomes of the parties as determined pursuant to (1) above, as well as the actual living arrangements of the children, what are the respective obligations of the parties in respect of table child support for the 2014 to 2018 period; (3) what amounts are payable by the parties in respect of the s. 7 expenses that have been paid by each of them for the 2014 to 2017 period; (4) what framework should govern child support (both table child support as well as s. 7 expenses) on a going forward basis; and (5) has there been a material change in circumstance sufficient to justify a change in the spousal support of $10,000 monthly ordered by Mesbur J. at the property trial?

[34] The specific issues raised within each of these five categories are as follows:

1. Determining the parties’ respective incomes for 2014 to 2018

1.1. Does Mesbur J.’s order limit the period of time during which the parties’ incomes can be adjusted for Guidelines purposes?

1.2. What weight should be attached to the expert income reports provided by the parties?

1.3. What is Craig’s Guidelines income for 2014 to 2018?

1.4. What is Victoria’s Guidelines income for 2014 to 2018?

2. Table Child Support for 2014 to 2018

2.1. Should Craig be required to pay table child support to Victoria during the months when Sean and Natalie are away at university?

2.2. Did Victoria's obligation to pay table child support for Katie terminate effective January 1, 2017?[^13]

2.3. Did the parties’ respective obligations to pay child support for Katie terminate on April 30, 2018?

2.4. Based on the determinations above, has either party over- or under-paid in respect of their obligations for table child support for the period April 1, 2014 to May 30, 2018?

3. Section 7 expenses from 2014 to 2017

3.1. Of the s. 7 expenses claimed by Craig from 2014 to 2018, what amounts fall within the framework approved by Mesbur J.?

3.2. Of the s. 7 expenses claimed by Victoria from 2014 to 2018, what amounts fall within the framework approved by Mesbur J.?

3.3. Has either party over- or under-paid their share of s. 7 expenses since 2014?

4. Child support going forward

4.1. What framework should apply to the payment of child support (both in respect of table child support as well as s. 7 expenses) on a going forward basis?

5. Spousal support

5.1. Has there been a material change in circumstances since the property trial that would justify a change in the spousal support ordered by Mesbur J.?

1. Determining the parties’ respective incomes for 2014 to 2018

1.1 Does Mesbur J.’s order limit the period of time during which the parties’ incomes can be adjusted for Guidelines purposes?

[35] It is clear that it is not open to the parties or this Court to go behind Mesbur J.’s April 2014 order. It is therefore necessary to determine the extent to which Mesbur J.’s determination of the respective incomes of the parties was intended to govern in the period subsequent to her decision.

[36] Based on the consent of the parties, Mesbur J. found Craig’s income to be $850,000 and Victoria’s income to be $220,000. She ordered that these income levels should be the basis for calculating the parties’ respective obligations for 2014 both in respect of table child support as well as the payment of s. 7 expenses. She further ordered the parties to exchange all income information required under the Guidelines by May 15 of each year, and to make any necessary adjustments to child support with effect on June 1 of each year. The first such exchange of information was to occur in May 2015 and the first adjustment in incomes was to have effect June 1, 2015.

[37] In short, on a proper reading of Mesbur J.’s order, no adjustment in the parties’ respective incomes for child support purposes can occur prior to the 2015 year. Accordingly, her determination of the parties’ respective incomes continues to apply for the 2014 year. Nevertheless, for completeness and in the event that such calculations are relevant for purposes of any appeal, in these reasons I set out my findings with respect to the respective incomes of the parties for 2014.[^14]

1.2 What weight should be attached to the expert income reports provided by the parties?

[38] There were two expert reports filed with respect to the calculation of Craig’s income for support purposes. Neither party challenged the expertise of the other’s expert and both were qualified as experts without the necessity of a voir dire.[^15] Nevertheless, while the evidence of both experts was admitted into evidence, the weight to be attached to their evidence remains a matter for determination by the Court. As I describe below, there was a dramatic difference in the quality, validity and reliability of their evidence.

I. Ranot’s evidence

[39] Ranot prepared a series of four reports setting out his calculation of Craig’s Guidelines income. His first report, prepared in June 2016, set out his calculation of Craig’s income for the 2014 and 2015 years. These calculations were updated in a report dated May 31, 2017, which also added Ranot’s income calculations for the 2016 year. In January 2018, Ranot filed a further report in which he updated his earlier calculations and added a calculation of Craig’s 2017 income. His fourth and final report, dated April 18, 2018, updated his calculations of Craig’s income for the years 2014 to 2017 inclusive. Ranot also testified at trial and, in the course of his testimony, made slight adjustments to his April 18, 2018 calculations of Craig’s income.

[40] Ranot’s calculations will be reviewed in more detail below. By way of overview, in his April 18, 2018 report he found that Craig’s Guidelines income ranged from a low of $725,000 in 2017 to a high of $1,046,000 in 2014, for an average of approximately $830,000 over the four year period. At the outset of the trial, I instructed the parties’ experts to meet in an effort to narrow their differences and, if possible, arrive at a consensus position on Craig’s income. As a result of those discussions, Ranot made a number of relatively minor adjustments in his calculation of Craig’s income. In addition, he excluded Craig’s non-recurring income, and did not include an income tax gross up on Craig’s investment income, on the basis that this investment income was not “significant” within the meaning of s. 19(1)(h) of the Guidelines. These adjustments reduced Ranot’s calculations of Craig’s Guidelines income, such that Craig’s income fluctuated from a low of $707,267 in 2017 to a high of $765,215 in 2014, for an average of approximately $718,000 over the four year period. This amount represented a reduction of over $100,000 from the average calculated in his April 18, 2018 report.

[41] Ranot also undertook what he described as a “reasonableness calculation” in order to determine whether there was a basis for concluding that Craig had significant unreported income. Ranot was provided with two separate sworn statements of Craig’s net worth, the first as of the date of the parties’ separation in December 2010, the second prepared in early 2014. He then reviewed Craig’s income and expenses over the course of the 39 months between the two net worth statements. Based on this analysis, Ranot would have expected Craig’s net worth to have decreased by approximately $300,000. In fact, however, Craig’s net worth decreased by more than this amount. On this basis, Ranot concluded that there was no reason to believe that Craig had significant unreported income.

[42] During cross-examination, counsel for Victoria pointed out that Ranot had revised some of his calculations of Craig’s income over the course of his various income reports. For example, in his May 2016 report he had calculated Craig’s income for 2014 as $941,624, whereas in his April 18, 2018 report he calculated Craig’s income for 2014 as $1,046,000, an increase of over $100,000. Counsel for Victoria argued that in light of this significant variance, reduced weight should be accorded to Ranot’s income calculations.

[43] In his evidence, Ranot provided a clear explanation for the variance in his calculation of Craig’s 2014 income over the course of his various income reports. In the course of responding to inquiries from a business valuator retained by Victoria, it had come to Ranot’s attention that certain discretionary expenses (including those for a home office, club dues and for matrimonial litigation costs) had originally been incorrectly deducted from Craig’s income. Not only was it necessary to add these expenses back into income, the relevant amounts then had to be grossed up for income tax purposes. The net effect was the significant increase in Craig’s 2014 income noted above.

[44] While the variances in Ranot’s calculation of Craig’s 2014 income between the various reports were significant, Ranot explained in a straightforward manner the basis for those variances. In light of those explanations, I do not find the variances to be troubling, nor do they raise any concerns as to the reliability and validity of his overall analysis.

[45] I would further point out that there were no significant variances in Ranot’s income reports in terms of his calculations for Craig’s income in the 2015 and 2016 years. Moreover, while there was a variation between Ranot’s initial calculation of Craig’s 2017 income in the January 2018 report as compared with his final calculation in the April 2018 report, the variance was in the opposite direction, with Ranot revising Craig’s income downward from approximately $785,000 to $725,000 for 2017. (Ranot attributed this change to an incorrect report from Craig’s investment advisor, who had overestimated his 2017 investment income; there was no significant variance in Ranot’s calculation of Craig’s professional income between his January 2018 and April 2018 income reports.)

[46] At trial, Ranot testified in an entirely direct and candid manner. He openly acknowledged the fact that there had been variances in his calculation of Craig’s income for 2014 over the course of his various reports. He displayed a high degree of familiarity with the Guidelines and the manner in which they have been judicially interpreted. He also displayed the appropriate degree of independence from his client. Indeed, his willingness to make significant upward revisions in his calculation of Craig’s 2014 income in his various reports, in response to queries from Victoria’s business valuator, is an indication of the independence and fair-mindedness that he brought to his analysis.

[47] As I describe below, I do not accept all of Ranot’s evidence, particularly his view that Craig’s investment income should not be subject to an income tax gross up under s. 19(1)(h) of the Guidelines. Nevertheless, in my view his analysis and conclusions set out a good faith, independent and reasonable calculation of Craig’s income by a highly qualified expert, and his evidence is entitled to significant weight.

II. Mozessohn’s evidence

[48] Mozessohn was retained in early March 2018 following the resignation of Victoria’s earlier business valuator. On May 25, 2018, he prepared a report estimating Craig’s Guidelines income for the 2014 to 2018 years (the “May 25, 2018 Calculations”). The May 25, 2018 Calculations were significantly higher than those of Ranot. Mozessohn was of the view that Craig’s Guidelines income ranged from a low of $852,000 in 2016 to a high of $1,170,000 in 2014, for an average during the 2014 to 2017 years of $964,000. Further, although he had limited records for the 2018 year, he estimated that Craig’s Guidelines income for 2018 would be $1,014,000.

[49] There were two principal reasons for the differences between Ranot’s and Mozessohn’s calculations. First, Mozessohn included in Craig’s professional income a significant number of discretionary expenses (and a gross up for income tax purposes on those expenses) not included by Ranot. Second, Mozessohn imputed a significant amount of investment and other income to Craig based on various provisions in s. 19 of the Guidelines.

[50] As noted earlier, on May 20, 2018 Mozessohn had provided Ranot with a 91-page spreadsheet summarizing all of the deposits to and withdrawals from Craig’s bank and investment accounts for the years 2014 to 2017. Mozessohn asked Ranot to explain the fact that the deposits into these accounts exceeded the revenues from Craig’s professional practice. He had not yet received a response to this request by May 25, 2018 when he prepared his income report. Accordingly he included the 91-page spreadsheet summarizing the approximately 2,600 transactions into and out of Craig’s various bank accounts as a Schedule to his report. Although he did not impute income to Craig based on these “unexplained deposits”, he described the absence of an explanation for them as a “Scope Limitation” on his conclusions. He indicated that, upon receiving the requested disclosure and explanations, he would revise his report accordingly and that the revisions could well be material.

[51] In the course of his cross-examination at trial, Mozessohn conceded that a number of his May 25, 2018 Calculations were in error. He was subsequently recalled by the Applicant as part of her Reply evidence, to provide the Court with his revised calculations in light of the various concessions he had made in his initial testimony. The effect of these concessions was to lower significantly Mozessohn’s May 25, 2018 Calculations, such that Craig’s professional and other income ranged from a low of $777,000 in 2016 to a high of $1,136,000 in 2014, for an average of $889,000 over the 2014 to 2017 period (as opposed to the $964,000 average in his May 25, 2018 Calculations). However, in his Reply evidence, Mozessohn elected to impute income to Craig based on “unexplained deposits” into Craig’s bank and investment accounts, and also to apply an income tax gross up to these “unexplained deposits”. The assumption underlying this imputation of income was that the “unexplained deposits” represented cash or other unreported income which Craig received but which he did not report and on which he did not pay tax. This resulted in an additional $149,000 being added to Craig’s income in each of the four years in question. Thus, taking all of these various adjustments into account, Mozessohn’s evidence in Reply was that Craig’s Guidelines income ranged from a low of $926,000 in 2016 to a high of $1,285,000 in 2014, for an average of $1,038,000 over the four year period (the “Reply Calculations”).

[52] Mozessohn was cross-examined on his Reply Calculations and, in the course of that examination, was forced to concede that a number of his Reply Calculations were also in error. Counsel for Craig also presented documentary evidence explaining virtually all of the “unexplained deposits”, prompting Mozessohn to concede that the vast majority of these deposits did not in fact represent unreported income.

[53] Mozessohn then produced a further revised set of calculations, taking into account the concessions he made in the course of his Reply evidence. However, Mozessohn continued to insist that an average of $107,000 should be imputed on the basis of “unexplained deposits” for each of the 2014 to 2017 years. In the result, Mozessohn’s final calculations of Craig’s Guidelines income ranged from a low of $887,000 in 2016 to a high of $997,000 in 2014, for an average of $936,000 for the four year period (the “Final Calculations”).

[54] By themselves, changes in position by a valuation expert are not necessarily a cause for concern. What was problematic in this case, however, was that many of the positions taken by Mozessohn were obviously untenable, either because they were inconsistent with the wording of the Guidelines or because he had ignored settled judicial interpretations of the relevant Guidelines provisions. Thus, in the course of his testimony, Mozessohn was forced to admit that many of his conclusions were wrong and should be abandoned. In the process, Mozessohn often seemed to have very little understanding of the established meaning and interpretation of the Guidelines, even though he had been tendered as an expert qualified to give evidence on these issues.

[55] These concerns were reinforced by the fact that Mozessohn was hesitant and evasive in his testimony. When confronted with a questionable conclusion from his report, he would initially resist acknowledging the difficulty by, for example, trying to avoid answering the question, asking for the question to be repeated or rephrased, or answering a different question than that posed. Eventually, he would be forced to concede that his position was untenable.

[56] Lest it be thought that these comments are unduly harsh, I offer below examples of the erroneous or problematic aspects of Mozessohn’s analysis and evidence:

i. Imputation of increases in value of investments held within registered accounts

[57] Mozessohn imputed to Craig increases in the market value of his investments in his registered retirement accounts between 2014 and 2017, despite the fact that Craig did not receive any income from these accounts.[^16] He did so on the basis that the market value of Craig’s registered investments was “significant” in relation to Craig’s total net worth.[^17] He therefore determined that it would be appropriate to impute to Craig the gain in market value on his registered investments based on s. 19(1)(h) of the Guidelines, which provides that a court may impute income to a spouse who “derives a significant portion of income from dividends, capital gains or other sources that are taxed at a lower rate than employment or business income or that are exempt from tax”. Mozessohn also acknowledged that the logic of his position would require a similar imputation on investment gains within a registered pension plan, even if no pension was actually being paid, if the value of the pension was significant in relation to the individual’s total net worth.

[58] It was pointed out to Mozessohn that he had misread the Guidelines, since s. 19(1)(h) refers to imputing income in cases where a spouse derives “significant income” from certain investments, but makes no reference to the market value of those investments in relation to the person’s total net worth. Mozessohn acknowledged that he had not considered the question of whether Craig’s income from his registered investments was “significant”, but had simply considered whether the market value of his registered investments was significant in relation to his total net worth.[^18]

[59] Mozessohn was also asked whether there was any legal precedent or authority for imputing income based on gains in the market value of investments held within a Registered Retirement Savings Plan (“RRSP”), where no amounts were actually paid out of the registered account. He disclosed that in the course of his engagement, he had requested the assistance of Victoria’s counsel on this question in the form of two memoranda, dated May 18, 2018 and May 22, 2018 (the “MacDonald & Partners Memoranda”). Mozessohn indicated that he had relied in particular on the second memorandum dated May 22, 2018, but he had not disclosed either his request for research, or the existence of the MacDonald & Partners Memoranda, anywhere in his report, contrary to rr. 20.1(10)6.ii. & iii. of the Family Law Rules.[^19] The MacDonald & Partners Memoranda were subsequently produced and entered as exhibits.

[60] In my view, Mozessohn’s request for and reliance on the MacDonald & Partners Memoranda, combined with his failure to acknowledge same, was improper. Experts are under a duty to provide evidence that is fair, objective and nonpartisan.[^20] They are also expected to have expertise in relation to the matters upon which their opinion is being sought. If an expert requires legal advice on a particular matter, the expectation would be that they obtain that advice from a source independent of the parties to the litigation. If for some reason the expert believes it is necessary to seek the legal opinion of counsel to one of the parties in the litigation, the Rules make it clear that they are obliged to disclose that fact. Mozessohn acknowledged that he was required to disclose his reliance on the MacDonald & Partners Memoranda in his report, but made no attempt to explain or excuse this violation of rr. 20.1(10)6.ii. & iii, thereby raising serious concerns about his independence and impartiality.

[61] These concerns were reinforced by the circumstances that unfolded in this case. The May 22, 2018 Memorandum, prepared by a junior lawyer at MacDonald & Partners, does not attempt to provide a neutral or objective assessment of the circumstances under which it might be legally appropriate to impute income from investments held within an RRSP. Instead, what the Memorandum does is suggest ways in which such imputation could be justified, either based on various subsections in s. 19 or by selectively quoting from certain prior court cases. The Memorandum identifies a 2011 decision of the New Brunswick Queen’s Bench which had imputed income based on gains within an RRSP even though funds had not actually been withdrawn.[^21] The Memorandum does caution that this New Brunswick case has not been followed in Ontario.[^22] But, what is not pointed out is that imputing income from gains within an RRSP in circumstances where no funds have been withdrawn would be directly contrary to the manner in which the Guidelines have generally been judicially applied in the past, and is not supported by the wording of s. 19(1)(h).[^23]

[62] Mozessohn received the May 22, 2018 Memorandum just days prior to the delivery of his May 25, 2018 report. He indicated that he read the Memorandum, but did not read the cases that it referenced. Apparently, he came to the conclusion that, because MacDonald & Partners had been able to identify a single New Brunswick case in which a court had imputed income from investment gains within an RRSP, it would be appropriate to do so in this case.

[63] On cross-examination, it became evident that Mozessohn was unable to offer any plausible justification for his position on this matter. He was eventually forced to concede that he had erroneously based his analysis on the market value of Craig’s registered investments (rather than the income derived from those investments), and that he was wrong to impute income to Craig based on s. 19(1)(h) of the Guidelines. Having made this concession, he then suggested that he needed further time to consider whether the imputation of income from Craig’s RRSP could be justified on the basis of some other provision in s. 19. Craig’s counsel pointed out that Mozessohn was expected to have undertaken his analysis when he prepared his report, rather than attempt to formulate a revised position in the middle of his cross-examination. At this point he simply capitulated, stating that “I concede on this issue”, and agreeing that the amounts he had imputed to Craig from Craig’s RRSP should be backed out of his calculations.

ii. Imputation of income on funds paid to Victoria and to the Canada Revenue Agency (“CRA”)

[64] In April 2014, Craig sold investments worth $400,000, primarily in order to pay $300,000 in legal fees to his counsel for their services in connection with the trial before Mesbur J. The remaining proceeds (approximately $100,000) were used to make a $64,000 payment to Victoria on May 8, 2014 in connection with the matrimonial litigation between the parties, as well as to fund various other expenses, including a payment of approximately $27,000 to the CRA on April 29, 2014, and support payments to Victoria of $13,633 on May 7, 2014.

[65] Mozessohn imputed income that could have been earned on this $100,000 on the basis of s. 19(1)(e) of the Guidelines, which provides that income may be imputed to a spouse where “the spouse’s property is not reasonably utilized to generate income”. He calculated the imputed income based on an annual compounded rate of return of 9.4%, since he believed that this was the average rate of return on Craig’s investment portfolio.[^24] This resulted in the imputation of approximately $54,000 in income to Craig over the years 2014 to 2018.

[66] Mozessohn indicated that he was instructed by Victoria’s counsel to impute income on the $64,000 that was paid to Victoria on May 8, 2014. He imputed income on this amount “for the court’s consideration”, because he deemed the request from Victoria’s counsel in this regard to be “not unreasonable”. He further indicated that he did not receive any instruction from Victoria’s counsel with respect to whether to impute income on the remaining $36,000 that had been utilized for taxes and support payments and had made this decision on his own.

[67] During cross-examination, Mozessohn was asked how he could justify imputing income on funds that had actually been paid to Victoria, since Craig no longer had the funds in his possession. If anyone was under an obligation to invest the funds, it was Victoria rather than Craig. Similarly, money paid to the CRA was no longer in Craig’s possession and thus could not possibly constitute property that was “not reasonably utilized to generate income”.

[68] Mozessohn indicated that he had imputed income on this $100,000 since he had not been able to determine whether Craig’s request to liquidate the investments had been made prior to or after April 11, 2014, which was the date of Mesbur J’s decision in the property trial. Mozessohn had requested clarification from Ranot as to the date upon which Craig had delivered instructions to sell the investments, but had not received a response. Because his disclosure request had not been answered, he decided to impute income on these funds to Craig. He did indicate that if it could be shown that the request to liquidate the investments had been made after April 11, 2014, he might change his mind on the point.

[69] What Mozessohn failed to explain is what possible difference this date could make for the purposes of s. 19(1)(e) of the Guidelines. It is obviously inappropriate to impute income to Craig on money he had already paid to Victoria, regardless of the date upon which he gave instructions to his financial advisor to obtain the funds. Mozessohn was repeatedly asked to explain how the date upon which Craig had issued instructions to liquidate his investments could possibly be relevant to this issue. As the exchange below reveals, Mozessohn was simply unable and/or unwilling to answer this question:

Q. And then you were told to undertake a calculation that imputes income to Craig on the $64,000 that went to Victoria, that you know went out on May 8, for some reason relating to some instructions about an order, does that make any sense to you, Mr. Mozessohn?

A. My concern though was, you know, this matter unfortunately is in my outstanding, outstanding disclosure in terms of timing. This matter, if the information had been provided to me, may have resulted in the calculation for the court’s consideration not be included.

Q. Okay. So, let me ask you this. How would that have impacted your analysis?

A. It would have impacted on the basis that it may not have been an issue and therefore my calculation would have comprised only $36,000 and not $100,000.

Q. But whether Craig instructed his financial advisor that he needed to liquidate $400,000 on April 1 versus April 5, or April 10 versus April 11, how does that impact whether you should be imputing income to him on an amount of money that you know was paid to his ex-wife? I am trying to understand the logic Mr. Mozessohn of what you are telling me.

A. Can you rephrase that to a specific question?

Q. No, I want you to answer that question, I am not going to give you a different question, I want you to answer this question.

A. Can you repeat the question.

Q. I am happy to repeat it. I want to understand, you said that if you knew the date that Craig Fielding instructed his financial advisor to liquidate the $400,000, that would somehow have impacted your analysis and I want to understand how and why that would have had an impact?

A. It may not have had an impact on my analysis.

Q. Do you agree it may not have or do you agree – – okay you say it may not have, do you agree that it should not have?

A. I cannot stay at this point given the outstanding disclosure related to that.

[70] Rather than provide direct answers to reasonable questions, Mozessohn is here engaged in an exercise in obfuscation. He is attempting to deflect attention away from the difficulties with his own analysis by suggesting that the issue somehow relates to a lack of disclosure by Craig. In my view, any fair-minded and knowledgeable expert would have acknowledged that imputing income on money Craig had paid to Victoria is manifestly inappropriate. Mozessohn’s refusal to acknowledge the obvious, along with the fact that he simply followed instructions from Victoria’s counsel – even where those instructions had no legal basis – is extremely troubling. It reinforces the concern that he failed to appreciate his duty to assist the Court with neutral and objective evidence, even if it might not advance the interests of his client.

[71] Mozessohn was also asked to explain why he had imputed income on the funds Craig had paid to the CRA on April 29, 2014 and to Victoria for child support on May 7, 2014. He suggested that Craig might have had the capacity to make these payments out of his other sources of income and that he “potentially took out $100,000 that he may not have needed to or was required to take out, and that could have earned income…” He also noted that he had asked Ranot to explain how Craig had spent this money and had been informed that it had been used to fund support obligations, ongoing professional fees and living expenses. He deemed that response inadequate but noted that, had he been provided with a more specific explanation, he might well have concluded that no imputation of income was appropriate. (It was not until Mozessohn’s cross-examination that he was informed that the money had been paid to the CRA.)

[72] In my view, Mozessohn’s imputation of income on the $36,000 paid to the CRA and to Victoria was without merit. Paragraph 19(1)(e) of the Guidelines permits imputation of income only where a spouse’s property “is not reasonably utilized to generate income”. Although Mozessohn had not been provided with the specifics as to how the $36,000 had been spent, there was no doubt that the funds had, in fact, been expended and were no longer available to Craig for investment purposes.[^25] As such, these funds could not properly be characterized as property available to be utilized to earn income. Mozessohn’s suggestion that Craig could have paid these expenses out of other sources of income and used the $36,000 to generate income was entirely speculative.

[73] What must also be kept in mind is that s. 19(1)(e) refers to circumstances where a spouse’s property is not “reasonably utilized to generate income” (my emphasis). The determination of whether a spouse is “reasonably” dealing with his or her assets to generate income is an objective test.[^26] Reasonableness must be determined having regard to the entire context, including the extent to which a spouse is in fact generating income from their assets. In this case, Craig has an extensive investment portfolio and over the last four years has regularly generated in excess of $100,000 in investment income annually. This context reinforces the conclusion that it was inappropriate to rely upon s. 19(1)(e) to impute income on funds that Craig had legitimately paid to the CRA and to Victoria.

iii. Imputation of income based on cottage acquisition

[74] In July 2015, Craig and his current wife[^27] jointly acquired a cottage property in Picton, Ontario for a purchase price of approximately $360,000. The purchase price was largely funded by Craig.[^28] Accordingly, on the instructions of Victoria’s counsel, Mozessohn imputed income to Craig based on 50% of the purchase price compounded at 9.4% annually. This resulted in an imputation to Craig of approximately $66,000 in income over the 2015 to 2018 period, which Mozessohn included in his report “for the court’s consideration”.

[75] Although Mozessohn indicated that he had included this imputation of income based on instructions from Victoria’s counsel, he was of the view that the imputation “made sense” because Craig could have required his wife to pay for half the value of the cottage, which would have left him with more money to invest. As such, in Mozessohn’s view, Craig was not “reasonably utilizing his property to earn income”.

[76] The first difficulty with this conclusion is that Mozessohn admitted on cross-examination that Craig’s purchase of the cottage was entirely reasonable.[^29] Had Craig acquired the cottage solely in his own name, Mozessohn conceded that it would not have been appropriate to impute income on any of the funds utilized. Thus, Craig’s decision to acquire the cottage jointly with his current wife, as opposed to in his own name, did not affect his ability to earn income; in either circumstance, the money that Craig had invested to purchase the cottage would not be earning income.

[77] Second, on what basis could it be said that Craig’s decision to acquire the property jointly with his current wife was unreasonable? There is no legal obligation on Craig to deal with his wife on an arm’s-length basis. He and his wife are perfectly entitled to purchase a recreational property for the use of his family (including the children from his first marriage), without requiring his wife to fund half (or indeed any of) the purchase price for the property. Otherwise, assuming his current wife is not in a position to advance 50% of the purchase price, Craig and his family would be deprived of the opportunity to acquire and enjoy a recreational property unless Craig elected to acquire the property in his own name only. I see no basis for utilizing the Guidelines to supervise the manner in which spouses choose to acquire recreational properties.

[78] When these propositions were put to Mozessohn in cross-examination, he had no meaningful response. He obviously had no basis for determining whether Craig’s decision to purchase the property and fund the entire purchase price was reasonable or unreasonable. His only response was to “reiterate my statement that I prepared this calculation at the request of counsel”. But if Mozessohn had no reasoned justification for the position taken in his report, it is no answer to attempt to retreat and shelter behind a client’s instructions. Quite the opposite. Once again, it is evident that Mozessohn was simply acting in accordance with instructions from his client, as opposed to exercising his own independent judgment as to what was reasonable in the circumstances.

iv. Imputation of income based on “unexplained use of funds”

[79] Craig had received significant funds from sources outside of his professional practice in the last number of years. This included $950,000 received in September 2014 as proceeds from the sale of his interest in the former matrimonial home to Victoria; payment of $633,000 in January 2016 from Victoria as a result of the costs orders made in the earlier litigation between the parties; and proceeds of approximately $594,000 from Craig’s mother’s estate, received in 2016 and 2017.

[80] Mozessohn had analysed Craig’s accounts in an attempt to determine how Craig had utilized these funds. He was able to identify the manner in which approximately $1.55 million of the total $2.185 million received had been used or distributed. However, he was unable to establish what Craig had done with approximately $634,000 of the funds he received. He therefore imputed income to Craig on the “unexplained use of funds of $634,000”, using an annual compounded rate of return of 9.4%. He did so on the basis that Craig’s property was “not reasonably utilized to generate income”, in accordance with s. 19(1)(e) of the Guidelines. This resulted in the imputation of approximately $45,000 in income to Craig over the 2014 to 2017 period.

[81] I have already noted the fact that s. 19(1)(e) requires a finding that a spouse is not “reasonably utilizing” his or her property to earn income. Mozessohn made no such finding. Instead, he required Craig to account for how he had utilized the funds he received and, to the extent that Craig was unable to provide an explanation that Mozessohn deemed acceptable, he imputed income accordingly. This has the effect of reversing the normal rule that the burden is on the party seeking to impute income to justify the reasonableness of the imputation.[^30]

[82] It was pointed out to Mozessohn that in fact Craig had deposited approximately $1.25 million from these funds received into his investment accounts in order to earn income. Mozessohn himself had acknowledged that in his report, noting that $750,000 of the $958,000 received from Victoria on account of the sale of the matrimonial home, and $500,000 of the $633,000 received from Victoria on account of legal costs, were invested and were earning income. Mozessohn was asked to explain how he could have concluded that Craig was not “reasonably utilizing” his property to earn income. Mozessohn was unable to do so. He simply conceded that he had been wrong to impute income on amounts received in respect of the sale of the matrimonial home or on account of legal costs. However he continued to insist that unless Craig provided him with a detailed explanation as to how he had utilized the funds he received from his mother’s estate, it was appropriate to impute income to Craig on such amounts.

[83] There was no evidence suggesting that the funds received from Craig’s mother were available to invest and earn income. Craig had utilized the funds for other purposes, and Mozessohn conceded that the money had been spent. Mozessohn wanted Craig to justify how he had spent the money, and explain why Craig had not been able to fund those expenses through other income or assets. In the absence of an explanation Mozessohn deemed acceptable, he would impute income on the funds in question. This is using s. 19(1)(e) to supervise the manner in which a party manages his or her financial affairs, which is beyond the purpose of the provision, or the manner in which it has been judicially interpreted.

[84] I see no basis upon which Mozessohn was entitled to insist upon a specific accounting for the manner in which Craig used the funds he received from his mother’s estate. Not only had the inheritance already been spent, Craig has substantial investment accounts and is generating substantial investment income. In my view, his property is clearly being “reasonably utilized” to generate income. Accordingly, Mozessohn’s reliance on s. 19(1)(e) to impute income based on the “unexplained use of funds” was inappropriate and without foundation.

v. Imputation of income based on “unexplained deposits”

[85] As discussed earlier, a major focus of Mozessohn’s analysis was on the “unexplained deposits” included within the 91 page spreadsheet summarizing the approximately 2,600 transactions involving Craig’s bank and investment accounts dating back to 2014. The deposits were “unexplained” in the sense that Mozessohn had been unable to identify the source of the funds for the deposits in question, based on his analysis of funds flowing into and out of these various accounts. Mozessohn also found that the total deposits into Craig’s accounts exceeded the revenues from his professional practice. Mozessohn’s concern was that Craig was receiving substantial cash income not reported on his financial statements, but which was revealed through these unexplained deposits into his various accounts.

[86] In his May 25, 2018 report, Mozessohn described these unexplained deposits as a “Scope Limitation” on his conclusions. That is, he did not at that time regard it as appropriate to impute income to Craig based merely on the fact that he had not been able to identify the source of funds for these various deposits. This was in my view fair and appropriate, since there might be an entirely straightforward explanation for these deposits. It should also be noted that Mozessohn had only requested an explanation for the unexplained deposits on May 20, 2018, just two weeks in advance of the opening of the trial. Mozessohn’s expert report was delivered late and raised numerous challenging and significant issues, in addition to that involving the “unexplained deposits”. It was simply not reasonable to expect Craig to provide a meaningful response on the issue of the unexplained deposits in the limited time available prior to trial.

[87] In the course of his initial cross-examination, counsel provided Mozessohn with an explanation for many of the unexplained deposits. In no case was the deposit a result of unreported cash income from Craig’s professional practice. The funds came from a wide variety of sources, including: repayment of a loan that Craig had made earlier to his sister; funds contributed by Craig’s current wife toward the purchase of their cottage; Craig’s monthly salary drawn from the practice; withdrawals from his investment accounts; tax refunds from the CRA; funds received from his children’s educational savings plans; and repayment of funds loaned by Craig to pay estate taxes on Craig’s mother’s estate. In each case, Mozessohn agreed that the funds did not represent income of the practice and that it would not be appropriate to impute income to Craig based on any of the various deposits discussed.

[88] What this exchange indicated was that there were in fact very straightforward explanations for a substantial number of the deposits which Mozessohn had not been able to explain. This confirmed that it would be appropriate to undertake further due diligence before deciding to impute income to Craig based on these unexplained deposits. Instead, however, Mozessohn decided that he would impute income to Craig on any of the deposits that had not been discussed during his initial cross-examination. When questioned on his second cross-examination as to why he had changed his position, he indicated that, since he did not receive an explanation for these deposits during his initial cross-examination, he now simply assumed that they represented cash income to Craig’s professional practice.

[89] In my view, this assumption on Mozessohn’s part was entirely unreasonable. The purpose of cross-examination is not to provide disclosure. There was no suggestion that Craig was not in a position to provide explanations as to the remaining deposits into his accounts. This reflected, once again, Mozessohn’s failure to approach his responsibilities to the Court in a neutral and objective manner.

[90] The unreasonableness of Mozessohn’s decision to impute income on these remaining unexplained deposits was made clear during his second cross-examination as part of Victoria’s Reply evidence. In his analysis of the unexplained deposits, Mozessohn had not distinguished between deposits to Craig’s corporate accounts as distinct from those to his personal accounts. Craig’s counsel provided Mozessohn with an analysis which indicated that, taking into account certain transfers to the corporate accounts which could be identified and explained, the total deposits to the corporate accounts did not exceed the professional revenue to the practice. Mozessohn agreed with this analysis of the deposits into the corporate accounts.

[91] This left the issue of the unexplained deposits to Craig’s personal accounts. Mozessohn had identified total deposits of approximately $700,000 into Craig’s personal accounts over the 2014 to 2017 period that could not be explained. Craig’s counsel proceeded to go through the deposits one by one and was able to provide Mozessohn with an explanation for approximately $620,000 of these deposits. This represented close to 90% of all of these deposits, and included every instance in which the amount being deposited exceeded $10,000. Mozessohn agreed with the explanation in virtually all cases.

[92] Mozessohn spent a tremendous amount of time and money on the issue of these so-called “unexplained deposits”,[^31] and required Craig to do likewise.[^32] Through this effort, Craig was able to explain the vast majority of the funds deposited into his accounts. While there were a few deposits that remained unexplained as of the conclusion of the trial, there was no reason to believe that, with further due diligence, these remaining deposits could not also be explained. The larger point is simply that Mozessohn’s decision to impute income to Craig based on these unexplained deposits was manifestly unreasonable. Had Craig been given a fair opportunity to respond, based on the evidence at trial I expect that he would have been able to provide a reasonable explanation for the vast majority of these deposits.

III. Conclusion regarding the weight to attach to each expert’s income reports

[93] I earlier included that Ranot’s evidence was credible and entitled to significant weight. In my view the same cannot be said for Mozessohn’s evidence.

[94] The concerns I have described are merely illustrative of the numerous difficulties with Mozessohn’s income analysis. Given the seriousness of these concerns, and the important gatekeeper role of the court in relation to expert evidence, I have given consideration to whether it would be appropriate to exclude his evidence entirely, despite the fact that he was qualified as an expert at the beginning of the trial.

[95] In White Burgess Langille Inman v. Abbott and Haliburton Co.,[^33] the Supreme Court of Canada emphasized the fact that expert witnesses have a special duty to the Court to provide fair, objective and non-partisan assistance. Cromwell J. noted that there have been long-standing concerns about whether expert witnesses hired by the parties are impartial in the sense that they are expressing their own unbiased professional opinion. To respond to the concerns about the impact on the litigation process of expert evidence of dubious value, the threshold requirements for the admissibility have been tightened and judges are now required to play an important role as “gatekeepers” to screen out proposed evidence whose value does not justify the risk of confusion, time and expense that may result from its admission. Cromwell J. affirmed that the duties and responsibilities of experts include the fact that expert evidence presented to the Court “should be, and should be seen to be, the independent product of the expert uninfluenced as to form or content by the exigencies of litigation”[^34] (emphasis in original).

[96] Cromwell J. summarized the expert’s duty in the following terms:

Underlying the various formulations of the duty are three related concepts: impartiality, independence and absence of bias. The expert’s opinion must be impartial in the sense that it reflects an objective assessment of the questions at hand. It must be independent in the sense that it is the product of the expert’s independent judgment, uninfluenced by who has retained him or her or the outcome of the litigation. It must be unbiased in the sense that it does not unfairly favour one party’s position over another. The acid test is whether the expert’s opinion would not change regardless of which party retained him or her.[^35]

[97] These principles and requirements are reflected in r. 20.1 of the Rules.

[98] Given my concerns regarding Mozessohn’s independence and impartiality, there is certainly a basis upon which it might be concluded that his evidence should be excluded entirely. The fundamental concern is that Mozessohn failed to undertake his analysis with the independence and neutrality that is expected of expert witnesses in our courts. Instead of providing the Court with an independent and credible calculation of Craig’s income, he adopted positions that would result in the highest possible income calculations for Craig. Moreover, he failed to comply with r. 20(10)6.iii., which requires that the expert’s report list every document relied on in forming his opinion. As discussed earlier, Mozessohn failed to disclose that he relied upon the MacDonald & Partners Memoranda, regarding the imputation of income on Craig’s registered investments. He provided no adequate explanation for this violation of the Rules which, in itself, is reason to question his neutrality in this litigation.

[99] Nevertheless, given that counsel did not challenge the admissibility of Mozessohn’s evidence and he was qualified as an expert at the commencement of trial, Victoria was not provided with notice and opportunity to make submissions on this issue. I therefore conclude that despite the serious concerns I have identified, it would not be appropriate at this stage to exclude his evidence. At the same time, I find that his evidence is entitled to minimal weight. To the extent that his evidence differs from that of Ranot, I prefer the evidence of the latter to the former.

1.3 What is Craig’s Guidelines income for 2014 to 2018?

[100] I begin by noting that I do not believe it is appropriate, on the basis of the record before me, to attempt to calculate Craig’s actual 2018 Guidelines income. No year-end financial statements are available for Craig’s professional corporation. Mozessohn attempted to estimate Craig’s 2018 income by analysing deposits into Craig’s professional corporation’s bank accounts. However, Ranot was of the view that it was not possible to accurately project Craig’s 2018 on this basis. Ranot indicated that any estimate of Craig’s 2018 income prepared on the basis of the information currently available will produce an estimate that is either too high or too low, and “the only thing I would have been certain of is that it was wrong”.

[101] I recognize that the Guidelines generally require the use of most current information in determining a spouse’s income.[^36] At the same time, this is not an invitation for the Court to engage in projections of income based on unreliable and/or uncertain information.[^37] I accept Ranot’s evidence that any estimate of Craig’s 2018 income would be inherently speculative.

[102] Accordingly, I calculate Craig’s actual Guidelines income for the 2014 to 2017 years only. Given that Craig’s income has fluctuated materially over these years, in my view the fairest way to determine Craig’s child support obligations for 2018 is to use the average of his Guidelines income over the last 3 years.

[103] Ranot’s calculations of Craig’s Guidelines income, as determined in his April 18, 2018 income report, is set out on Table 1:

Table 1

Ranot’s April 18, 2018 Calculation of Craig’s Guidelines Income 2014 – 2017

	2014	2015	2016	2017
Professional Income	$624,939	$614,270	$504,364	$657,620
Investment Income	$153,516	$170,472	$235,231	$67,647
Income from non-recurring items	$267,718	$27,000	Nil	Nil
Total	$1,046,173	$811,742	$739,595	$725,267

[104] On the basis of his cross-examination as well as discussions that occurred between the income experts, Ranot made a number of adjustments to these income calculations. These adjustments included the following:

• an increase in Craig’s professional income in 2014 and 2015, as a result of adding certain discretionary expenses back into income, along with an associated income tax gross up;
• eliminating the income tax gross up on Craig’s recurring investment income on the basis that this income was not “significant” for the purposes of s. 19 of the Guidelines; and
• eliminating the nonrecurring income in 2014 and 2015 on the basis of s. 17 of the Guidelines.

[105] These adjustments resulted in Ranot’s final calculations of Craig’s Guidelines income as set out in Table 2:

Table 2

Ranot’s Final Calculation of Craig’s Guidelines Income 2014 – 2017

	2014	2015	2016	2017
Professional income	$652,699	$619,378	$504,419	$657,620
Recurring investment income	$112,516	$120,472	$155,230	$49,647
Nonrecurring investment income	Nil	Nil	Nil	Nil
Total	$765,215	$739,850	$659,649	$707,267

[106] Taking the calculations set out in Table 2 as the starting point, I consider each of these categories of income in turn.

I. Professional income

[107] By the conclusion of the trial there were very little remaining differences between Ranot and Mozessohn on the issue of Craig’s professional income. For example, in the three most recent years (2015 – 2017), the differences between the two experts were in the range of $10-$15,000 in each year. As I have earlier found, to the extent that there are differences in the opinions of the experts, I prefer that of Ranot. I therefore accept the calculations of Craig’s professional income set out on Table 2 above for the 2014 to 2017 period.

[108] There remains the question of whether Craig was earning cash income that was not reported on his financial statements or the books and records of his professional corporation. As discussed earlier, Ranot’s opinion was that there was no reason to believe that Craig was earning unreported income. He came to this conclusion on the basis of a “reasonableness analysis”, which compared the differences in Craig’s net worth between December 2010 and early 2014. Based on Ranot’s review of Craig’s income and expenses over the course of the 39 months between the two net worth statements, Ranot would have expected Craig’s net worth to have decreased by approximately $300,000. Because Craig’s net worth decreased by more than this amount, Ranot concluded that there was no reason to believe that Craig was earning unreported income.

[109] I have discussed in some detail Mozessohn’s attempt to establish that Craig was earning unreported income through his identification of numerous “unexplained deposits”. However, as I have previously explained, these concerns were addressed over the course of Mozessohn’s two cross-examinations. By the end of Mozessohn’s second cross-examination, the vast majority of these deposits had in fact been explained. I am further of the view that, with additional time and the opportunity to undertake further due diligence, it is likely that Craig would have been able to provide reasonable explanations for the handful of deposits that had to that point not been explained. I therefore find that the so-called “unexplained deposits” do not give rise to a concern that Craig has been earning unreported income.

[110] Victoria’s counsel also argued that a controversy over the swearing of an affidavit by Leslie Campbell (“Campbell”), Craig’s long-time office manager, supported an inference that Craig was earning unreported cash income. Campbell initially swore an affidavit on January 15, 2018 in which she stated that there had been occasions when patients had paid “a few thousand dollars for a procedure in cash – the most I can recall was a payment of $6,000 in cash”. Campbell subsequently swore an amended affidavit on January 23, 2018 in which these references to patients paying substantial amounts of money in cash were deleted.

[111] Campbell was cross-examined on February 1, 2018 as to why she had made this change in her affidavit.[^38] She explained that she had received an initial version of the affidavit which contained these references to substantial cash payments and that, after reviewing it, she had directed that these references should be omitted. On January 15, 2018 she had inadvertently sworn the original rather than the amended version, which is why the references to substantial cash payments were included in the January 15, 2018 sworn version of the document. She subsequently swore the amended version without the references to cash deposits on January 23, 2018.

[112] Regardless of the differences between these two versions of the affidavits, Campbell was clear in both versions of the document that any cash payments received were fully documented. She affirmed that “I can state with 100% certainty that there has never been a time when Dr. Fielding has received a payment in cash and that payment has not been documented.”[^39] She also acknowledged that in certain circumstances, Craig collected cash payments directly from patients who might have undergone minor procedures at the hospital, but that this was rare and any such cash payments were documented on the patient’s chart. Campbell would then receive a copy of the patient’s chart and input the relevant payment information into the office billing system, in order to keep track of payments and accounts receivable. Campbell further affirmed that she is generally the only person in the office who deals directly with billings,[^40] and that all patients normally go through her before they see Craig.

[113] This is consistent with Craig’s evidence on these issues. Craig indicated that in preparation for this trial, an analysis had been done in order to determine the amount of cash payments received in his professional practice. He candidly acknowledged that this analysis indicated that cash transactions represent approximately 7% of revenues of his professional practice. However, he maintained that all cash payments are recorded on the books and records of his professional corporation. He affirmed that he does not receive any unreported cash income.

[114] Finally, Victoria’s counsel attempted to argue that Craig had deducted some personal expenses on his income tax returns that were not legitimate business expenses under the Income Tax Act,[^41] supporting the inference that he has substantial unreported cash income. In her testimony, Victoria claimed that during the marriage, Craig would sometimes come home from work carrying a “wad of cash” in his pocket, which was then used to pay living expenses. These claims have been made by Victoria for many years, and have caused the expenditure of hundreds of thousands of dollars in an effort to verify her allegations. Despite this expenditure and the involvement of a number of experts, there is no concrete or reliable evidence to support her claims of unreported cash income.

[115] Craig candidly acknowledged that he does in fact receive cash payments as part of his practice. I regard it as significant that it was possible to undertake an analysis of these cash transactions, which corroborates Craig’s assertion that the cash transactions in the practice are recorded. These considerations support the conclusion that the cash received in the practice is recorded in the manner described by both Craig and his office manager. I found Craig to be a credible and forthright witness. I accept his and Campbell’s evidence that Craig does not receive substantial, unreported cash income from his professional practice.

[116] I therefore find that the income from Craig’s professional practice for the years 2014 to 2017 is as set out in the first row of Table 2 at para. 105 above.

II. Recurring investment income

[117] The calculations of Craig’s recurring investment income as set out in the second row of Table 2 at para. 105 above were largely accepted by Mozessohn. By the end of the trial, the only significant remaining difference between the two experts in terms of recurring investment income was whether it was appropriate to apply an income tax gross up to this income.[^42]

[118] Ranot took the position that Craig’s investment income was not “significant” and therefore the income should not be grossed up in accordance with s. 19(1)(h) of the Guidelines. Ranot noted that the Guidelines do not define the circumstances in which a spouse’s income from dividends, capital gains or other sources of income should be characterized as “significant”. He argued that the term “significant” in s. 19 of the Guidelines should be interpreted in light of the manner in which that term is defined in various provisions of the ITA.

[119] Ranot noted that the ITA defines “significant” in a number of contexts and that, generally, amounts less than 10% are considered less than significant while amounts in excess of 25% are considered to be significant.[^43] Ranot argued that in light of these benchmarks, Craig’s investment income over the last four years should not be considered to be “significant” and thus should not be subject to an income tax gross up.

[120] Mozessohn did not turn his mind to what would constitute “significant income” for the purposes of the Guidelines and thus his evidence is of no assistance on the issue.

[121] The ITA definitions of “significant” referenced by Ranot arise in rather different contexts, where the concern is to identify non-arm’s length relationships or situations where one party or entity is in a position to exercise influence or control over another entity. I certainly agree that in instances where a support payor derives more than 10% of his or her total income from sources that are taxed at a lower rate, such income would necessarily constitute “significant” income for the purposes of s. 19(1)(h) of the Guidelines. But, even in instances where lower-taxed income represents less than 10% of total income, it may still be significant.

[122] In my view, “significant” in this context should be interpreted having regard to the purposes of the Guidelines enumerated at s. 1, which include “to establish a fair standard of support for children that ensures that they continue to benefit from the financial means of both spouses after separation”. The Merriam-Webster dictionary defines “significant” as “having or likely to have influence or effect”. Thus, to the extent that the lower-taxed income is such that it “would have influence or effect” on the standard of support available to the children, such income should be regarded as “significant” and subject to an income tax gross up pursuant to s. 19(1)(h).

[123] On this basis, I have little difficulty in concluding that Craig’s investment income is significant. Over the period 2014 to 2017, he earned investment income ranging from a low of approximately $50,000 in 2017 to a high of $155,000 in 2016. This level of income would certainly have a meaningful effect on the amount of child support payable by Craig in each of these years. Accordingly, it should be subject to an income tax gross up in accordance with s. 19(1)(h).

III. Non-recurring investment income

[124] Craig had received non-recurring investment income in 2014 and 2015, the amounts of which are not in dispute. In April 2014, he realized a capital gain of $161,718, resulting from the disposition of approximately $400,000 in investments from his personal investment account. This enabled him to pay legal fees, as well as to make an equalization payment to Victoria. In addition, in each of 2014 and 2015, he also achieved $27,000 in tax savings by causing his professional corporation to issue dividends to his daughter Katie for tax splitting purposes.

[125] By the end of the trial, there was no dispute that the gain of $161,718 (along with the $79,000 income tax gross up on that gain) should be excluded from his Guidelines income as a nonrecurring item, in accordance with s. 17(1) of the Guidelines. This is consistent with a ruling of Mesbur J. in the 2014 trial, where she had held that that a 2012 capital gain realized by Victoria, arising from the sale of securities in order to fund the matrimonial litigation, should not be included in her Guidelines income.[^44]

[126] Conversely, I see no basis to exclude the tax benefit associated with the issue of dividends to Katie from Craig’s Guidelines income. Although the issuance of these dividends was nonrecurring, it was done solely to achieve tax savings to Craig. I see no reason why it should be excluded from Craig’s Guidelines income on the basis of s. 17(1). Nor do I believe it should be excluded on the basis that it is not “significant”. The issuance of these dividends cannot be considered in isolation from Craig’s other investment income during the relevant years. In both 2014 and 2015, Craig received over $100,000 in investment income, which I have earlier found to be “significant” for the purposes of the Guidelines. It necessarily follows that in these years, all of his investment income, including the dividends to Katie and the associated tax benefit, must be considered as “significant”. I therefore hold that the $27,000 in tax savings from income splitting on the dividends paid to Katie in 2014 and 2015 should be included in Craig’s Guidelines income for those years.

IV. Conclusion regarding Craig’s Guidelines income for 2014 to 2018

[127] Based on the above, I set out in Table 3 my determination of Craig’s Guidelines income for the years 2014 to 2017. As mentioned, I have omitted the 2018 income since year-end figures are not available. Further, I would note that the average of Craig’s Guidelines income over the past three years is $760,589. This is the income figure that I will utilize in determining Craig’s support obligations for the first five months of 2018.

Table 3

Craig Fielding’s Guidelines Income 2014 – 2017

	2014[^45]	2015	2016	2017
Professional income	$652,699	$619,378	$504,419	$657,620
Recurring investment income (including income tax gross up)	$153,516	$170,472	$235,231	$67,647
Nonrecurring investment income	$27,000	$27,000	Nil	Nil
TOTAL	$833,215	$816,850	$739,650	$725,267

1.4 What is Victoria’s Guidelines income for 2014 to 2018?

[128] Victoria argues that her Guidelines income should be determined solely on the basis of her disability income (with an appropriate income tax gross up), on the basis that her allowable tax deductions exceed her other income. Craig takes the position that certain expenses that Victoria has deducted from her income are unreasonable and should be imputed as income on the basis of s. 19(1)(g) of the Guidelines.

[129] Table 4 below sets out an analysis of Victoria’s taxable income adjusted for Guidelines purposes. There is no dispute with respect to the Line 150 income amounts set out in Table 4. Nor is there any dispute with respect to the adjustments to Line 150 income set out below with respect to: (i) deducting spousal support payments received, in accordance with Schedule III, s. 3(a) of the Guidelines; (ii) replacing the taxable amount of dividends from taxable Canadian corporations with the actual amount of those dividends, in accordance with Schedule III, s. 5 of the Guidelines; and (iii) replacing the taxable capital gains realized in the year with the actual amount of such capital gains, in accordance with Schedule III, s. 6 of the Guidelines.

Table 4

Victoria Fielding’s Adjusted Taxable Income 2014 – 2017

	2014	2015	2016	2017
Line 150 income	$215,885.85	$224,4015.15	$160,181.34	$186,675.59
Deduct support payments received	($90,000)	($120,000)	($120,000)	($120,000)
Substitute actual Cdn dividends	($7,721.20)[^46]	($8,879.80)[^47]	($5,629.40)[^48]	($9,871.28)[^49]
Replace taxable cap gain with actual	$87,427.48	$55,356.10	$1,895.83	$23,786.70
Deduct carrying charges/interest	($16,802.55)	($57,765.91)	($54,005.90)	($64,311.82)
Deduct capital gain as non-recurring	($174,854)	($110,712)	($3,792)	($47,574)
Deduct union, prof. and like dues	($2,257.50)	($2,530)	($95)	Nil
Deduct income of V’s father, N. & S.	($1,633.12)	($4,873.20)	($11,202.40)	($7,375.63)
Adjusted Taxable income	$10,044.96	-$25,003.66	-$32,647.53	-$38,670.44

[130] The key difference between the parties was with respect to the deductibility, for Guidelines purposes, of certain of Victoria’s carrying charges and interest expenses. The amounts set out in Table 4 are those that were claimed as deductions on Victoria’s income tax returns for the relevant years. Craig agreed that a portion of these claimed expenses are deductible under the Guidelines, but objected to deducting the interest and/or carrying charges associated with a loan that is being used to earn investment income (the “Loan”) and that is secured by a mortgage on Victoria’s current residence (the former matrimonial home). Craig argues that allowing this deduction will open the door in the future for a support payor to borrow money for investment purposes and securing such a loan against his or her personal residence, in an effort to reduce child support obligations. Craig argues that the carrying charges associated with the Loan should be imputed as income to Victoria pursuant to s. 19(1)(g) of the Guidelines as an unreasonable deduction of expenses from income.

[131] Most of the cases that have considered s. 19(1)(g) have done so in the context of the reasonableness of claimed business expenses. It is clear that a party who claims that expenses are being unreasonably deducted from income has the burden of proving that the expenses are unreasonable.[^50] However, in order to demonstrate that a claimed expense is unreasonable, it is not necessary to establish that a party who has claimed a deduction has acted improperly or outside the norm for claiming expenses in the income tax context. Rather, the issue is whether the full deduction of the expense results in a fair representation of the actual disposable income that is available to the party for personal expenses.[^51] Courts have also emphasized that support payors should not be permitted to manipulate their financial affairs so as to prefer their own interests over those of their children.[^52]

[132] Taking into account these considerations, in my view the carrying costs associated with the Loan should not be regarded as an unreasonable deduction from income. Although the reasonableness of an expense deduction is not solely governed by whether the deduction is permitted under the ITA, the Guidelines expressly provide that carrying charges that are deductible under the ITA are also deductible for Guidelines purposes.[^53] There is no dispute between the parties that the Loan is being used to generate income and that the carrying charges associated with the Loan are in fact deductible under the ITA. Nor is there any evidence to suggest that the Loan was obtained for the purpose or with a view to reducing Victoria’s child support obligations. Moreover, the income generated by the Loan will itself be taxed and taken into account in the eventual calculation of Victoria’s income for child support purposes. If the income generated by the Loan is to be included as income for child support purposes, then it is only fair that the expenses associated with the Loan similarly be deductible.

[133] I would also observe that Victoria’s disability income will terminate when she reaches age 65 and it is therefore desirable that she attempt to accumulate assets that will assist her in funding her retirement. Given that this is the purpose of the Loan, I see no basis for characterizing the carrying charges she has legitimately incurred as an unreasonable deduction from income pursuant to s. 19.

[134] The parties are also in agreement that the capital gains realized by Victoria during these years should be deducted for Guidelines purposes as nonrecurring income under s. 17. Victoria testified that her capital gains realized since 2014 have enabled her to fund the prior and current litigation. On this basis I agree that the capital gains for these years should not be included in her income for child support purposes. This is consistent with my determination that Craig’s 2014 capital gain should be excluded from his Guidelines income, and follows the earlier similar determination by Mesbur J. in the 2014 property trial discussed above.

[135] Victoria argued that she should be permitted to deduct her legal fees associated with her matrimonial litigation for Guidelines purposes. The amounts are substantial, totaling approximately $1.036 million over the 2014 to 2017 period. Deducting these expenses would have the effect of reducing her Guidelines income to zero.

[136] I would not allow this deduction for a number of reasons.

[137] First, regardless of whether these legal fees are deductible under the ITA,[^54] the Guidelines make no provision for the deduction of legal fees. Nor do I believe it is consistent with the policy of the Guidelines to permit parties to materially reduce or even eliminate their obligation to provide support for their children through the pursuit of expensive family law litigation. Of course, parties are free to undertake such litigation and to incur the substantial costs it entails. But if they so choose, they must be prepared to fund the litigation out of their own resources and not rely on such expenditures as a basis to materially reduce their child support obligations. I would also point out that I have already eliminated the capital gains realized by Victoria during the 2014 to 2017 period on the basis that these capital gains were realized in order to fund this litigation. If I were to allow the legal fees themselves to also be deducted, this could be seen as amounting to a “double deduction” on account of such fees. This surely cannot have been the intention of the Guidelines.

[138] There is no dispute with regards to the deductibility of income received by Victoria which was in fact attributable to her father, Natalie or Sean. I also accept Victoria’s position that her payment of professional dues should be deductible in accordance with Schedule III of the Guidelines.

[139] As Table 4 demonstrates, other than in 2014, the result of these various adjustments is that Victoria’s Line 150 income is reduced to zero. I therefore accept Victoria’s position that for the 2015 to 2017 years, her Guidelines income should be based on her disability income grossed up for tax purposes.

[140] Accordingly, Victoria’s Guidelines income, factoring in the appropriate gross up on her disability payments, is as set out in Table 5 below. Since Victoria’s disability payments for 2018 are known, I have included the relevant calculations for 2018.

Table 5

Victoria Fielding’s Guidelines Income 2014 – 2018

	2014[^55]	2015	2016	2017	2018
Adjusted Taxable Income	$10,044.96	Nil	Nil	Nil	Nil
Disability income	$118,860	$124,018	$129,745	$134,333	$137,000
Gross up on disability income	$60,952	$66,869	$68,885.13	$78,101	$79,961
Guidelines income	$189,856.96	$190,887	$198,630.13	$212,434	$216,961

2. Table Child Support for 2014 to 2018

2.2 Should Craig be required to pay table child support to Victoria during the months when Sean and Natalie are away at university?

[141] At the 2013 parenting trial, Mackinnon J. had awarded custody of Katie and Sean to Craig, and custody of Natalie to Victoria. The parties had agreed before Mesbur J. that a simple set off was the appropriate arrangement for table child support, payable while the children were residing with their parents. Based on their agreed income levels, this resulted in a net set off payment of $3,633 per month payable by Craig commencing April 1, 2014.

[142] Katie planned to commence postsecondary studies at an out-of-town university commencing September 2014. Accordingly, Mesbur J. ordered that, since Katie would not be residing with Craig while away at university, Victoria would not be required to pay child support for her during the academic year. Instead, the parties would share Katie’s postsecondary expenses as “extraordinary expenses” in accordance with s. 7 of the Guidelines. If Katie returned to Craig’s home in the summers, Victoria’s obligation to pay table child support for her would resume for the months of May to August inclusive.

[143] By the summer of 2016, both Sean and Natalie were living with Victoria. They turned 18 in August of that year. In September 2016, Sean enrolled at Wilfrid Laurier University and Natalie at Queen’s University. Mesbur J. had not specified whether the child support arrangements she had ordered for Katie should also apply to Sean and Natalie. Craig was of the view that the identical framework should apply for the two younger children and that, while they were living away from home attending university, his obligation to pay table child support should cease. However, Victoria was of the view that, because both Sean and Natalie frequently returned home on weekends and holidays during the academic year, Craig should be under a continuing obligation to pay table child support for the children even while they were away at school.

[144] In her examination-in-chief, Victoria indicated that she had prepared a chart setting out the number of days that Sean and Natalie lived with her during their first two years at university. She testified that she added up the days that the children were living at home, and calculated those days as a percentage of the calendar days during the academic year. She found that in the fall semester 2016 Sean came home “approximately 57% of the days” during the term; in the winter 2017 term the amount of time Sean spent at home “may have dropped by a few percentages… It would still be over 50% for the time”; while in winter 2018 Sean’s time spent at home “drops a bit… It is probably in the around 40%”. As for Natalie, Victoria testified that she returns home from Queen’s University less frequently than Sean, but spends about 30% of the academic term residing in Toronto with Victoria, while attending university full-time at Queen’s.

[145] Victoria’s evidence during cross-examination was somewhat different. She was asked to produce the charts setting out the basis for her calculations of the percentage of days Sean and Natalie lived with her during the academic year. She indicated that the “charts” were “just scribbles and approximations”. She referred to a document that had been produced by counsel which recorded the residences of the three children by month dating back to 2014 and explained that “it is essentially that chart there… It is not an accurate chart. I mean I can try to look for the scribbles”.

[146] While Victoria’s evidence on this issue was somewhat equivocal, I am prepared to accept that, particularly during the fall 2016 academic term, Sean frequently returned home on weekends and on school breaks. Natalie, whose university is located somewhat farther away from Toronto, had also come home on weekends and school breaks, but less frequently than Sean. The question is what significance should be attached to these findings, in light of the fact that Mesbur J. had already put in place a child support framework applicable when Katie was away at university. Mesbur J.’s framework was not challenged on appeal and is therefore legally correct. On what basis can it be said that the child support framework that has been utilized with respect to Katie should not also be applied to Sean and Natalie?

[147] I note that courts in Ontario have generally dealt with these issues in accordance with s. 3(2)(b) of the Guidelines.[^56] This directs the Court to make an order for child support that “it considers appropriate, having regard to the condition, means, needs and other circumstances of the child and the financial ability of each spouse to contribute to the support of the child”. In considering what is appropriate in cases where a child is attending university out of town, courts have primarily had regard to the actual costs of providing for the needs of the child while away at university, taking into account the child’s ability to contribute to his or her own education, but have also sometimes factored in a contribution toward the cost of maintaining the family home to return to on weekends and school breaks.[^57]

[148] Mesbur J. made a determination as to the child support arrangements that would apply while Katie was away at university. While it was certainly open to her, under s. 3(2)(b), to order Victoria to continue to pay some form of table child support while Katie was away at university, she declined to do so. Nor was her determination in this regard dependent on the frequency of Katie’s visits home during the academic year. Although not explicit, I believe it is implicit in her order that the same framework should apply in the event that Sean and Natalie were to begin attending university away from home.

[149] I accept that s. 3(2)(b) does not mandate a formulaic approach. But neither is it an invitation to adopt arbitrary or unprincipled outcomes. In my view, it would be appropriate to order different support arrangements for Sean and/or Natalie only if it could be shown that either Sean’s or Natalie’s needs or circumstances differed from Katie’s and warranted such an order.

[150] The challenge is that I have no evidence in this regard. Even assuming that Sean and Natalie have returned home on a regular basis during their first two academic years, in what way are their needs or other circumstances different from Katie’s? Mackinnon J.’s reasons in the parenting trial record the fact that all three children of this marriage have suffered and bear scars as a result of the high conflict between the parents.

[151] Moreover, what am I to make of Victoria’s evidence that Sean returned home more frequently than Natalie during the academic year? I have no way of knowing with certainty the reasons why Sean and/or Natalie returned home frequently during the academic year.[^58] Am I to order that Craig pay table child support for one but not the other during the academic year? At what point do Sean’s or Natalie’s visits home cross a threshold, thereby justifying a different framework from that applied to Katie? It is not uncommon for students at university, particularly during the commencement of their studies, to return home on weekends and holidays, and yet Mesbur J. did not regard this as a material consideration in her determination on this issue.

[152] In my view, the fairest and most reasonable approach is simply to apply Mesbur J.’s framework for paying child support during out-of-town postsecondary studies to Sean and Natalie for so long as they continue their undergraduate university studies away from home. Craig will be responsible for paying his proportionate share of s. 7 expenses and, in the event that Sean and/or Natalie return home in the summers to live with Victoria, for paying table child support during the months of May to August inclusive.

2.2 Did Victoria’s obligation to pay child support for Katie terminate effective January 1, 2017?

[153] Victoria’s views on her child support obligations in respect of Katie differed significantly from her approach in respect of Sean and Natalie. In this litigation, she initially took the position that her obligation to pay child support in respect of Katie should be terminated effective August 2014. She took this position on the basis that Craig had failed to foster a relationship between her and Katie, and Craig had not provided court-ordered information concerning Katie and her schooling and residence. She also took exception to the fact that Katie has received dividends and investment income from Craig’s professional corporation.

[154] This position was rather remarkable given the fact that by August 2014, when Victoria claimed her support obligations to Katie were at an end, the ink was hardly dry on Mesbur J.’s order clearly recognizing Victoria’s obligation to continue to support Katie. I would further observe that in her reasons following the parenting trial, Mackinnon J. had found that Victoria had contributed to her relationship problems with Katie and had failed to acknowledge this reality, either to herself or to her children. Victoria’s attempt to “disentitle” Katie to support just as the latter was about to move away from home for the first time and commence full-time university studies is a telling confirmation of the accuracy of Mackinnon J’s findings in this regard.

[155] Perhaps in recognition of the fact that her initial position on this issue was manifestly untenable,[^59] Victoria took a different approach at trial. She argued that her obligation to support Katie terminated at the end of December 2016 because this was the last period of time that Katie had resided with Craig.

[156] I find there is no merit to Victoria’s assertion that Katie’s entitlement to continued child support was dependent upon her returning home to live with Craig during holiday periods. Mesbur J.’s child support order was not premised on Katie residing with Craig for part or all of the year. Indeed, Mesbur J. expressly contemplated that even though Katie might not return to live with Craig during the summer months, the parties would continue to be under an obligation to provide the necessary support to enable her to complete her university degree. The only consequence flowing from Katie’s decision not to return home to live with Craig in the summer months was that Victoria would be relieved of the obligation to pay table child support for the months of May to August inclusive.

[157] Apart from the fact that Katie no longer returned to live with Craig in the summer months beginning in 2017, there is no indication of any other change that would justify a variation in Mesbur J.’s child support order. Craig testified that, although Katie was no longer residing with him during the summer months and during holidays after December 2016, she continued with her full-time university studies and remained in need of support. With the benefit of that support, Katie has pursued her studies diligently and has gone on to complete her degree successfully. Taking into account the Farden factors,[^60] in my view Katie remained a “child of the marriage” until at least the completion of her undergraduate degree.

[158] I therefore dismiss Victoria’s claim that her obligation to pay child support in respect of Katie terminated effective December 2016.

2.3 Did the parties’ respective obligations to pay child support for Katie terminate on April 30, 2018?

[159] By the commencement of this trial in June 2018, Katie’s circumstances had changed. She had successfully completed her undergraduate degree, was working in Toronto for the summer months and living with a friend. She was planning to study public health and had been accepted into a suitable program at Western University commencing in the fall 2018. Craig is no longer seeking child support payments from Victoria in respect of Katie, and Victoria likewise believes that she no longer has an obligation to make such support payments. In effect, both parties are in agreement that Katie is no longer a “child of the marriage” and is therefore in a position to provide for her own support. I have no evidence to the contrary. Accordingly, I agree that the parties’ respective obligations to pay child support for Katie ended on April 30, 2018.

2.4 Based on the determinations above, has either party over- or under-paid in respect of their obligations for table child support for the period April 1, 2014 to May 30, 2018?

[160] The parties have agreed that the children’s living arrangements from April 1, 2014 to May 30, 2018 were as set out below.

[161] For the period April 1, 2014 to December 31, 2014:

• from April 1 until June 30, Katie and Sean lived with Craig, and Natalie lived with Victoria;
• in July, Katie lived with Craig, Natalie lived with Victoria, and Sean lived with third parties;
• in August, Katie lived with Craig, and Sean and Natalie lived with Victoria; and
• from September 1 to December 31, Katie was enrolled in university in London, Ontario, and Sean and Natalie lived with Victoria.

[162] For the period January 1, 2015 to December 31, 2015:

• from January 1 to March 31, Katie was enrolled in university in London, Ontario, and Sean and Natalie lived with Victoria;
• in April, Katie was enrolled in university in London, Ontario, Sean lived with Craig, and Natalie lived with Victoria;
• from May 1 to August 31, Katie and Sean lived with Craig, and Natalie lived with Victoria; and
• from September 1 to December 31, Katie was enrolled in university in London, Ontario, Sean lived with Craig, and Natalie lived with Victoria.

[163] For the period January 1, 2016 to December 31, 2016:

• from January 1 to April 30, Katie was enrolled in university in London, Ontario, Sean lived with Craig, and Natalie lived with Victoria;
• in May, Katie and Sean lived with Craig, and Natalie lived with Victoria;
• from June 1 to August 31, Katie lived with Craig, and Sean and Natalie lived with Victoria; and
• from September 1 to December 31, Katie was enrolled in university in London, Ontario, Sean was enrolled in university in Waterloo, Ontario, and Natalie was enrolled in university in Kingston, Ontario.

[164] For the period January 1, 2017 to December 31, 2017:

• from January 1 to April 30, Katie was enrolled in university in London, Ontario, Sean was enrolled in university in Waterloo, Ontario, and Natalie was enrolled in university in Kingston, Ontario;
• from May 1 to August 31, Katie lived with her friend in Toronto, Ontario and Sean and Natalie lived with Victoria; and
• from September 1 to December 31, Katie was enrolled in university in London, Ontario, Sean was enrolled in university in Waterloo, Ontario, and Natalie was enrolled in university in Kingston, Ontario.

[165] For the period January 1, 2018 to May 31, 2018:

• from January 1 to April 30, Katie was enrolled in university in London, Ontario, Sean was enrolled in university in Waterloo, Ontario, and Natalie was enrolled in university in Kingston, Ontario; and
• in May, Katie lived with her friend in Toronto, Ontario and Sean and Natalie lived with Victoria.

[166] These living arrangements give rise to the following obligations in respect of table child support during the nine-month period from April 1, 2014 to December 31, 2014:

• with respect to Craig, there were three months in which he had two children residing with him, two months in which he had one child residing with him, and four months in which he had no children residing with him;
• given Victoria’s income, which Mesbur J. determined to be $220,000 for 2014, Vicki owes Craig $2,810 for each of the three months in which he had two children residing with him, and $1,781 for each of the two months in which Craig had one child residing with him, for a total amount owing from Victoria to Craig for 2014 of $11,992;
• with respect to Victoria, there were five months in which she had two children residing with her, and four months in which she had one child residing with her;
• given Craig’s income, which was determined by Mesbur J. to be $850,000 for 2014, Craig owes Victoria $9,992 for each of the five months in which she had two children residing with her, and $6,433 for each of the four months in which she had one child residing with her, for a total owing by Craig to Victoria for 2014 of $75,732;
• after setting off these two amounts against each other, the net result is that Craig owed Victoria $63,740 for 2014.

[167] The parties’ respective table child support obligations for the 2015 year are as follows:

• with respect to Craig, there were four months in which he had two children residing with him, five months in which he had one child residing with him, and three months in which he had no children residing with him;
• given Victoria’s income, which I have determined to be $190,887 for 2015, Victoria owes Craig $2,478 for each of the four months in which he had two children residing with him, and $1,566 for each of the five months in which Craig had one child residing with him, for a total amount owing from Victoria to Craig for 2015 of $17,742;
• with respect to Victoria, there were three months in which she had two children residing with her, and nine months in which she had one child residing with her;
• given Craig’s income, which I have determined to be $816,850 for 2015, Craig owes Victoria $9,614 for each of the three months in which she had two children residing with her, and $6,198 for each of the nine months in which she had one child residing with her, for a total owing by Craig to Victoria for 2015 of $84,624;
• after setting off these two amounts against each other, the net result is that Craig owed Victoria $66,882.

[168] The parties’ respective table child support obligations for 2016 are as follows:

• with respect to Craig, there was one month in which he had two children residing with him, seven months in which he had one child residing with him, and four months in which he had no children residing with him;
• given Victoria’s income, which I have determined to be $198,630.13 for 2016, Victoria owes Craig $2,566 for the month in which he had two children residing with him, and $1,622 for each of the seven months in which Craig had one child residing with him, for a total amount owing from Victoria to Craig for 2015 of $13,920;
• with respect to Victoria, there were three months in which she had two children residing with her, and five months in which she had one child residing with her;
• given Craig’s income, which I have determined to be $739,650 for 2016, Craig owes Victoria $8,734 for each of the three months in which she had two children residing with her, and $5,626 for each of the five months in which she had one child residing with her, for a total owing by Craig to Victoria for 2016 of $54,332;
• after setting off these two amounts against each other, the net result is that Craig owed Victoria $40,412.

[169] The parties’ respective table child support obligations for 2017 are as follows:

• with respect to Craig, he did not have any children residing with him in 2017, with the result that Victoria does not owe him any table child support for this year;
• with respect to Victoria, there were four months in which she had two children residing with her, and eight months in which she had no children residing with her;
• given Craig’s income, which I have determined to be $725,267 for 2017, Craig owes Victoria $8,570 for each of the four months in which she had two children residing with her, for a total owing by Craig to Victoria for 2016 of $34,280.

[170] The parties’ respective table child support obligations for the period January 1, 2018 to May 31, 2018 are as follows:

• Craig did not have any children residing with him during this period, with the result that Victoria does not owe him any table child support;
• Victoria had two children residing with her for one month, and no children residing with her for four months;
• given Craig’s income, which for purposes of his 2018 child support obligations I have determined to be $760,589 (the average of his Guidelines income over the last three years) Craig owes Victoria $8,973 for the month in which she had two children residing with her.

[171] It is now necessary to factor in the amounts actually paid by Craig in order to determine whether he has over or underpaid table child support. That calculation is set out in Table 6 below:

Table 6

Table Child Support Net of Actual Payments April 1, 2014 to May 31, 2018

Year	Amount Craig owed to Victoria	Amount paid by Craig	Balance owing by Craig
2014[^61]	$63,740	$36,653	$27,087
2015	$66,882	$51,508	$15,374
2016	$40,412	$51,508	-$11,096
2017	$34,280	$51,508	-$17,228
2018[^62]	$8,973	$22,121	-$13,148
TOTAL	$214,287	$213,298	$989

[172] The result is that Craig underpaid Victoria on account of table child support by $989 over the period April 1, 2014 to May 31, 2018 and this amount is owed to Victoria.

3. Section 7 Expenses from 2014 to 2017[^63]

[173] Mesbur J. had set out a detailed framework to govern claims with respect to s. 7 expenses, as described earlier in these reasons. Given this framework, it should have been a relatively straightforward matter for the parties to settle their respective claims for s. 7 expenses. Unfortunately this proved not to be the case and disputes over these issues consumed a considerable amount of time at this trial.

[174] The parties had considerable difficulty presenting their claims for s. 7 expenses in an organized and comprehensible manner and, instead, attempted to spend time during the trial justifying the expenses they had paid and disputing various expenses claimed by each other. Given that the parties are claiming a combined total of slightly more than $325,000 in s. 7 expenses, such an approach was obviously not feasible or desirable. Counsel were instructed to determine those s. 7 expenses which were accepted by both parties and identify those expenses which remained in dispute. The parties were unable to perform these calculations by the end of the trial on June 15, 2018. Following further discussion with counsel on July 26, 2018, the parties were instructed to provide the Court with supplementary written submissions summarizing their expenses claimed, attempting to explain how those expenses fit within Mesbur J.’s framework, and identifying expenses claimed by the other party which had not been accepted. Through this process, each party withdrew certain expenses that had initially been claimed, accepted expenses claimed by the other that had initially been disputed, such that ultimately the differences between the parties narrowed somewhat.

[175] Over the 2014 to 2017 period, Craig claimed expenses totaling $232,582.09 and Victoria claimed expenses totaling $162,440.46, for a total combined s. 7 expense of $395,022.55 over the four years. Factoring in the contributions from educational savings plans and scholarships of $68,656.28, this left a net expense of $326,366.27. The amounts paid by the parties, net of the educational savings plans and scholarships, is set out by year in Table 7 below.

Table 7

Section 7 Expenses Net of EAP/Scholarships 2014 to 2017

	Paid by Craig	Paid by Victoria	Total expenses for year
2014	$80,753	$20,622.63	$101,375.63
2015	$71,492	$33,032.42	$104,524.42
2016	$32,945	$43,984.03	$76,929.03
2017	$12,346	$31,191.19	$43,537.19
Total	$197,536	$128,830.27	$326,366.27

[176] Each party continues to dispute certain expenses claimed by the other. The principal areas of dispute that remain are as follows:

1. Victoria argues that Craig’s claims for private school tuition in 2014, 2015 and 2016 include expenses for items that were excluded by Mesbur J., such as meal plans, transit token plans, cafeteria charges, tutoring, art supplies, graduation picture, etc. Accordingly, she has reduced the amounts claimed by Craig by 20%;

2. Victoria argues that certain tax benefits that Craig received on account of his payment of private school tuition should be deducted from his claim for s. 7 expenses; and

3. Craig argues that certain expenses claimed by Victoria are patently unreasonable, including expenses for furniture for Sean and Natalie, excessive moving expenses associated with their moves to university, excessive general living expenses, and claims for certain medical expenses.

[177] Having carefully reviewed the extensive documentation that has been submitted, I have determined that the most prudent and proportionate approach in the circumstances is to accept the expenses claimed by both parties. I note that as a result of discussions that occurred at and following trial, each party made good faith efforts to bring their expenses within the framework set out by Mesbur J. The total expenses that are now being claimed, prior to factoring in the contributions from educational assistance plans and scholarships, are approximately $100,000 per year. This was the level of expense that had been anticipated by Mesbur J. Any benefit that might be gained by further parsing of these expenses is far outweighed by the time, effort and cost that such an exercise would entail.

[178] On this basis, Table 8 below sets out the parties’ required contributions to the total s. 7 expenses, in light of their respective incomes. Note that in all cases the expenses paid are those net of contributions from educational savings plans and/or scholarships. Moreover, as required by s. 3.1 of Schedule III, the spousal support paid by Craig is deducted from his income for the purposes of these calculations. This means that Craig’s proportionate share of the s. 7 expenses for 2014 is 68% (as determined by Mesbur J.); for 2015 it is 69%; for 2016 it is 66%; for 2017 it is 65%; and for 2018 it will be 66%.

Table 8

Proportionate Share of s. 7 Expenses for 2014 to 2017

	Total Expenses	Craig’s share	Craig paid	Victoria’s share	Victoria paid	Result
2014	$101,375.63	$68,935	$80,753	$32,441	$20,622.63	Craig overpaid $11,818
2015	$104,524.42	$72,122	$71,492	$32,402	$33,032.42	Craig underpaid $630
2016	$76,929.03	$50,773	$32,945	$26,156	$43,984.03	Craig underpaid $17,828
2017	$43,537.19	$28,299	$12,346	$15,238	$31,191.19	Craig underpaid $15,953
Total	$326,366.27	$220,129	$197,536	$106,237	$128,830.27	Craig underpaid $22,593

[179] Accordingly, on the basis of the above calculations, over the four years in question, Craig underpaid his share of s. 7 expenses by $22,593 and this amount is owed to Victoria.

4. Child Support Issues Going Forward

4.1 What framework should apply to the payment of child support (both in respect of table child support as well as s. 7 expenses) on a going forward basis?

[180] Given the extraordinary difficulties that these parties have had in resolving relatively straightforward matters regarding their respective obligations for child support, I believe it is necessary to attempt to set out as specific a framework as possible to govern their respective child support obligations in the future. The hope is that such a specific framework will reduce future disputes and thus the need for additional wasteful litigation. One positive development is that the issues have been simplified somewhat in that only Sean and Natalie will be entitled to child support in the future and, given their age, the period for such support has a limited time horizon.

[181] To avoid any doubt on the matter, Mesbur J.’s framework for table child support will continue to apply to Natalie and Sean for the remainder of their undergraduate degree programs. That is, Craig will pay table child support to Victoria for those months in which Natalie and/or Sean reside with her while they are not in school, and vice versa. This means that, assuming they both remain in full-time attendance at university for the next two years, no table child support will be payable by either Craig or Victoria during the months of September to April inclusive.

[182] With respect to s. 7 expenses, Victoria has submitted a projection for 2018 of the anticipated expenses for Sean and Natalie. I accept the following:

1. tuition and other mandatory academic fees;

2. academic supplies (including books, art supplies for Natalie and computer for each of Sean and Natalie)

3. housing, consisting of rent, utilities, Internet and telephone; and

4. uninsured medical expenses actually incurred of up to $1,500 per year child, including costs for therapy.

[183] Victoria has projected a variety of other s. 7 expenses for each of Sean and Natalie, including $30 a month for laundry, $900 a month for food, $250 per month for “personal expenses”, $62.50 per month for clothing, $500 per year for “move housing” and $1,500 per year for transportation. In my view these expenses are excessive, taking into account that all of their academic fees, academic supplies and housing costs (including Internet and telephone) have already been accounted for.

[184] I would therefore provide a lump-sum payment of $600 per month for each of Sean and Natalie (for a total of $4,800 over the eight months of the academic year) to cover all of their day-to-day living expenses. Combined with the other expenses identified above, this will provide each of Sean and Natalie with approximately $30,000 per year to fund their post-secondary education, which exceeds the estimated costs per year as set out on the Wilfrid Laurier University website.[^64] If either Sean or Natalie wishes to spend in excess of those amounts, they will have to fund those costs themselves. This is entirely appropriate given that s. 3(2)(b) of the Guidelines requires that the means, in addition to the needs, of a child over the age of majority should be taken into account in determining the appropriate level of child support.

[185] Craig invites me to make a determination that the parties’ child support obligations in relation to Sean and Natalie should cease upon their completion of their respective undergraduate degrees, which is expected in May 2021. He argues that such a determination is necessary and appropriate in order to limit future disputes between the parties over their child support obligations. He further argues that this would be consistent with my determination that the parties’ child support obligations with respect to Katie have come to an end with her completion of undergraduate studies.

[186] In my view, such a determination is premature. I do not believe it is possible to predict with any confidence today what the “conditions, means, needs and other circumstances” of either Sean or Natalie will be in two years’ time. It may well be that their circumstances will be such that they should no longer be considered “children of the marriage”, as that term has been interpreted under the Act. But, I do not believe that I can make that determination now, without knowing how events will unfold over the next 12 to 24 months. I would also note that ongoing conflict between parents cannot be utilized as a justification to reduce or limit their obligations to support their children. Accordingly, I decline to make a determination now as to the duration of Sean and/or Natalie’s entitlement to child support.

5. Spousal Support

[187] Victoria argues that there has been a material change in circumstances since the spousal support order of Mesbur J. in April 2014. She argues that these changed circumstances justify a substantial increase in spousal support. In contrast, Craig argues that there has not been any material change that would justify a variation of Mesbur J.’s spousal support order.

[188] Amongst the changes identified by Victoria justifying a variation in spousal support are the following:

1. her expenses have increased as a result of her purchase of the matrimonial home to accommodate herself and her children. Her expenses now substantially exceed those that were permitted by Mesbur J.;

2. Sean has returned to live with her, as opposed to living with Craig, which was the expectation at the time of Mesbur J.’s order;

3. even though Sean and Natalie are now away at university during the academic year, they return home often on weekends and holidays; and

4. Craig has increased his professional income. In addition, he received a substantial inheritance from his mother and has now remarried, which should provide him with additional resources.

[189] As the Supreme Court of Canada noted in L.M.P. v. L.S.,[^65], an existing support order can be varied pursuant to s. 17 of the Act only when there has been a material change in the conditions, means, needs or other circumstances of either spouse since the making of that order. A two-step process is mandated. First, the Court must determine whether there has been a change in the condition, means, needs or circumstances of either spouse since the order was made. The change must be “material”, meaning that it must be a change that, if known at the time, would likely have resulted in different support terms.

[190] What amounts to a material change will depend on the actual circumstances of the parties at the time of the order. In general, a material change must have some degree of continuity and not merely be a temporary set of circumstances. The burden is on the party seeking the variation to establish the material change in circumstances.

[191] Assuming the threshold condition requiring the existence of a material change has been satisfied, the second stage of the analysis is to determine the extent of change in the existing order that is appropriate. A Motion to Change is not a hearing de novo; any variation in the order should be limited to changes justified by the material change, in accordance with the objectives set out in s. 17(7) of the Act.

[192] I see no merit to Victoria’s claim that there has been a material change in circumstances for the purposes of spousal support. Craig continues to work as a physician and his income has not increased; in fact, it is somewhat lower than the $850,000 figure that was the basis of Mesbur J.’s spousal support calculation. Although he has remarried, he testified that he funds most of his current household’s living expenses. The fact that Craig received a lump sum inheritance from his mother subsequent to the parties’ divorce cannot in my view constitute a basis for varying spousal support.

[193] Turning to Victoria’s circumstances, I note that she continues to receive a disability income, and the quantum of that income has increased since 2014. As for the fact that her expenses may have increased, particularly given her decision to purchase Craig’s interest in the matrimonial home, such increased expenses cannot in and of themselves justify a variation in spousal support. One cannot spend one’s way into a “material change in circumstances” for the purposes of s. 17 of the Act.[^66] In this case, the matrimonial home is a substantial three-story property of over 5,000 square feet, valued at over $2 million in 2014. It has seven bedrooms and a three-car garage. At the time of the trial before Mesbur J., it was contemplated that the property would be sold and Victoria would move to more modest accommodations. Instead, Victoria decided to purchase Craig’s interest in the property because she hoped that retaining the family home would induce the children to return to live with her. While that was certainly her choice to make, it was a personal choice as opposed to one that was required by circumstances beyond her control and cannot constitute a “material change” for spousal support purposes.

[194] As for change in the children’s residences since 2014, particularly Sean’s decision to live with Victoria rather than Craig, these have been fully accounted for in the adjustments that have been made in child support and cannot be relied upon as the basis for an adjustment in spousal support. The same applies with respect to the fact that Sean and Natalie may return home often during the academic year, a circumstance that was fully considered in my earlier analysis of child support issues.

[195] I conclude that Victoria has failed to prove that there has been a material change in the conditions, means, needs or other circumstances of either party and, accordingly, would not vary Mesbur J.’s spousal support order.

6. Medical Insurance

[196] Mesbur J. had required Craig to maintain Victoria on his extended medical and dental coverage for so long as he is required to pay spousal support. Apparently some difficulties have been encountered in permitting Victoria to submit claims directly to the insurance company. The parties are agreeable to an order authorizing Victoria to submit claims and receive payments directly from the insurance company, along with associated statements and other relevant information, and I so order.

Disposition

[197] A final order will therefore issue in the following terms:

1. Craig will pay Victoria $989 on account of underpaid table child support for the period April 1, 2014 to May 31, 2018 inclusive;

2. Craig will pay Victoria $22,593 for his proportionate share of the s. 7 expenses that he underpaid for the period April 1, 2014 to December 31, 2017;

3. the child support framework for a child who attends full-time postsecondary school away from home that was established in para. 12 of Mesbur J.’s order dated April 9, 2014 shall apply to Sean and Natalie for such time as they are in full-time attendance during the academic year such that:

I. in the months of May to August (inclusive), table child support shall be paid for a child who lives with a parent during these months, and no table child support shall be paid for a child who does not live with a parent during these months; and

II. in the months of September to April (inclusive), no table child support shall be paid by either parent to the other;

4. the parties’ respective obligations to pay child support for Katie ended on April 30, 2018;

5. Craig’s Guidelines income for 2018 is determined to be $760,589, and Victoria’s Guidelines income for 2018 is determined to be $216,961, and those income figures shall be utilized for the purposes of calculating table child support commencing June 1, 2018;

6. Craig’s share of s. 7 expenses for the 2018 year is 66% and Victoria’s is 34%;

7. the parties will continue to disclose their relevant financial and income information, and update and/or reconcile their child support obligations accordingly effective January 1, 2019, in accordance with the schedule and directions of Mesbur J.;

8. As of January 1, 2018, the permissible s. 7 expenses for each of Sean and Natalie shall be limited to the following;

I. tuition and other mandatory academic fees;

II. academic supplies (including books, art supplies for Natalie and computer for each of Sean and Natalie)

III. housing, consisting of rent, utilities, Internet and telephone;

IV. uninsured medical expenses actually incurred of up to $1,500 per year per child, including costs for therapy; and

V. a lump sum payment of $600 per month during the academic year to cover general living expenses;

9. provided that Victoria (as well as Natalie and Sean) remain eligible for coverage under Craig’s medical and dental insurance plans, Victoria, Natalie and Sean shall be entitled to submit claims directly to Craig’s medical and dental insurer, receive payments directly from the insurer, and receive statements and other information relevant to the claims submitted or their entitlements under such plans;

10. all of the other claims of the parties are hereby dismissed; and

11. a support deduction order will issue. Unless the order is withdrawn from the Director’s Office, it shall be enforced by the Director and amounts owing will be paid to the Director, who shall pay them to the person to whom they are owed.

[198] With respect to costs, Craig shall file his written cost submissions within 21 days, Victoria will have 21 days to respond, and a reply, if any, shall be delivered within 14 days thereafter. Enforcement of the payments set out in paras. 197(1) and (2) is stayed, pending issuance of my costs order.

P. J. Monahan J.

Released: September 28, 2018.

COURT FILE NO.: FS-12-375231

DATE: 20180928

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

VICTORIA FIELDING

Applicant

– and –

JOHN CRAIG FIELDING

Respondent

REASONS FOR JUDGMENT

P. J. Monahan J.

Released: September 28, 2018.

[^1]: See, for example, recent amendments proposed by the Government of Canada to the Divorce Act, R.S.C. 1985, c. 3 (2nd supp.), imposing a duty on parties to a proceeding to attempt to resolve matters through a “family dispute resolution process” which is defined as a “process outside of court that is used by parties to a family law dispute to attempt to resolve any matters in dispute, including negotiation, mediation and collaborative law”. See Bill C-78, An Act to amend the Divorce Act, the Family Orders and Agreements Enforcement Assistance Act and the Garnishment, Attachment and Pension Diversion Act and to make consequential amendments to another Act, 1st Sess., 42nd Parl., 2018, s.8 (first reading 22 May 22 2018).

[^2]: Fielding v. Fielding, 2013 ONSC 5102, 39 R.F.L. (7th) 59, Mackinnon J. [parenting trial].

[^3]: Fielding v. Fielding, 2014 ONSC 2272, Mesbur J. [property trial].

[^4]: Fielding v. Fielding, 2015 ONCA 901, 129 O.R. (3d) 65.

[^5]: Although the current litigation was commenced by Dr. Craig Fielding, the parties have agreed that I should refer to Dr. Victoria Fielding as the Applicant and to Craig Fielding as the Respondent and, accordingly, that is the terminology used in these reasons.

[^6]: Fielding v. Fielding, 2014 ONSC 100, 39 R.F.L. (7th) 109.

[^7]: SOR/97-175, as amended [the Guidelines].

[^8]: The s. 7 expenses accepted by Mesbur J. for 2011 were $84,840; for 2012, $114,398; and for 2013, $110,199.

[^9]: R.S.C. 1985, c.3 (2nd Supp.), as amended [the Act].

[^10]: Unless otherwise specified, all references to viva voce evidence relate to testimony heard during the present proceeding.

[^11]: Ranot filed a total of four reports reports, dated June 22, 2016, May 31, 2017, January 22, 2018 and April 18, 2008. The differences in the calculations of Craig's income in these different reports is considered below.

[^12]: Craig remarried in 2017.

[^13]: Although Victoria initially argued that her obligation to pay child support for Katie terminated in August 2014, during this proceeding she conceded that her obligation to pay child support continued at least until December 2016.

[^14]: I note for clarity that, while Mesbur J.'s determination of the parties’ incomes for 2014 is final, this does not necessarily preclude an adjustment in the child support payable to take account of changes in the children's circumstances or living arrangements. In fact, the actual living arrangements of the children deviated from that anticipated by Mesbur J., as Sean began residing with Victoria commencing August 2014 even though Craig had been awarded custody of Sean at the parenting trial.

[^15]: Given the late filing of Mozessohn's expert report, Craig challenged the admissibility of the portion of Mozessohn's report dealing with the calculation of Craig's income for 2018. As noted above, at the beginning of trial I ruled that Mozessohn's report would be admitted in its entirety, subject to a determination of the appropriate weight to be given to his evidence.

[^16]: Mozessohn imputed to Craig the following income, based on increases in value in Craig's registered accounts: $42,900 in 2014; $58,100 in 2015; $47,300 in 2016; and $63,700 in 2017.

[^17]: The market value of Craig's investments in his registered accounts was approximately $1.233 million in May 2018. Mozessohn claimed that Craig's total net worth as of that date was approximately $1.778 million. In fact, Mozessohn had incorrectly read Craig's financial disclosure; his net worth, as set out on his financial disclosure, was approximately $3.778 million. Mozessohn had overlooked Craig's investment in his Professional Corporation of approximately $1.950 million, even though such investment was expressly referenced.

[^18]: I note in passing that Mozessohn's "net worth" analysis would turn the Guidelines on their head since individuals with larger net worth would be less likely to have income imputed to them on the basis of s. 19(1)(h). Suppose, for example, that Craig's total net worth was $20 million rather than $3.788 million (as shown on his financial statements). In this scenario, the relative value of Craig's registered investments could be characterized as being insignificant in relation to his total net worth, in which case Mozessohn apparently would not have imputed income from his registered investments.

[^19]: O. Reg. 114/99 [the Rules].

[^20]: Rules, r. 20.1(1)(a).

[^21]: See R. (C.M.M.) v. R. (R.W.A.), 2011 NBQB 159, 342 D.L.R. (4th) 210. The facts of that case were highly unusual since the support payor was not employed and was claiming that he had minimal income for child support purposes. The circumstances here are obviously quite different, a point that was not made in the May 22, 2018 Memorandum.

[^22]: Horowitz v. Nightingale, 2015 ONSC 190, 56 R.F.L. (7th) 424, at para. 41.

[^23]: Only funds actually withdrawn from an RRSP constitute Line 150 income. Thus, absent a withdrawal, the support payor has not "derived income" from the RRSP. Nor is income from an RRSP taxed at a lower rate or exempt from tax, since funds withdrawn from an RRSP are taxed as income in the normal course. The effect of the RRSP is simply to defer the payment of such tax. Counsel was unable to cite a single Ontario case in which a court has imputed income based on gains within an RRSP where no funds had been withdrawn from the RRSP.

[^24]: In fact, Mozessohn was mistaken on this point since the 9.4% was the gross rather than the net rate of return on Craig's investments and did not take into account fees or taxes. Mozessohn admitted on cross-examination that he was not even aware whether the 9.4% figure represented a gross or net rate of return. Having acknowledged that using a gross rate of return was not appropriate, he nevertheless failed to revise his calculations and, in both his Reply Calculations as well as his Final Calculations, he continued to use a 9.4% compounded rate of return on income imputed to Craig.

[^25]: After the $64,000 payment to Victoria on May 8, 2014, there was only $5,000 left in the bank account from which the $36,000 proceeds had been withdrawn.

[^26]: Swales v. Swales, 2010 ABCA 292, 90 R.F.L. (6th) 314, at para. 10.

[^27]: At the time of the cottage purchase, Craig had not yet remarried but did so in 2017.

[^28]: His current wife had made a modest contribution of $10,000 for the purchase price with the remainder being funded by Craig.

[^29]: Mozessohn could hardly have taken a different position since Victoria also owned a cottage which she valued at approximately $282,000.

[^30]: Bekkers v. Bekkers (2008), 2008 CanLII 864 (ON SC), 49 R.F.L. (6th) 119 (Ont. S.C.), at para. 22 [Bekkers].

[^31]: Mozessohn indicated that he and his team had spent a total of 645 hours on this engagement and billed Victoria approximately $185,000 for their work between March 11 and June 10, 2018. However Mozessohn did not specifically identify the amount of time and money allocated to the issue of the unexplained deposits, but it was clearly a substantial focus of his efforts.

[^32]: Ranot's fees for this engagement were approximately $132,000, the majority of which was spent responding to disclosure requests, attending at trial and responding to the income report prepared by Mozessohn.

[^33]: 2015 SCC 23, [2015] 2 SCR 182 [White Burgess].

[^34]: White Burgess at para. 27, citing National Justice Campania Naviera S.A. v. Prudential Assurance Co., [1993] 2 Lloyds Rep. 68 (Q. B.), at p. 81, endorsed on appeal, “Ikarian Reefer” (The), Re, [1995] 1 Lloyd’s Rep. 455 (Eng. C.A.), at p. 496.

[^35]: White Burgess at para. 32.

[^36]: See s. 2(3) of the Guidelines.

[^37]: Morrissey v. Morrissey, 2015 PECA 16, 69 R.F.L. (7th) 277, at para. 20.

[^38]: The transcript of her February 1, 2018 cross-examination was entered on consent as evidence in the trial.

[^39]: Campbell did acknowledge in cross-examination that small amounts of cash are kept on hand in the office to cover minor office expenses such as stamps or other incidental purchases. Although Victoria’s counsel attempted to argue that this “petty cash” could have been substantial, I see no basis for such a conclusion.

[^40]: Campbell did acknowledge that in cases when she is away from the office, an assistant will sometimes accept payments, but that generally this is Campbell's responsibility.

[^41]: R.S.C. 1985, c. 1, (5th Supp.) [ITA].

[^42]: Mozessohn continued to maintain that income should be imputed to Craig from "unexplained use of funds". For the reasons described earlier, I do not find such imputation of income to be appropriate.

[^43]: See Ranot's article, "What Is Significant?" (March 2017) Money & Family Law at pp. 15-16.

[^44]: See para. 168 of Mesbur J's reasons. As will be discussed below, I take the same approach with respect to nonrecurring capital gains realized by Victoria in the past few years, and exclude the gains from her Guidelines income.

[^45]: The calculation for 2014 is included for completeness and clarity only. As previously discussed, Mesbur J.'s determination of Craig's income for 2014 continues to apply and thus her figure of $850,000 will be utilized in the child support calculations made below.

[^46]: The actual dividends were $20,318 instead of $28,039.20.

[^47]: The actual dividends were $23,369 instead of $32,248.80.

[^48]: The actual dividends were $14,813 instead of $20,442.40.

[^49]: The actual dividends were $17,545.00 instead of $27,416.28.

[^50]: Bekkers at para. 22.

[^51]: Izyuk v. Langley, 2015 ONSC 2409, at para. 86.

[^52]: Szitas v. Szitas, 2012 ONSC 1548, at para. 61.

[^53]: See Schedule III, s. 8 of the Guidelines.

[^54]: I note that the circumstances in which legal fees are deductible in matrimonial litigation are extremely limited: see Canada Revenue Agency, Interpretation Bulletin IT-99R5, "Legal and Accounting Fees" (11 December 1998) at ss. 17 to 21 (as amended).

[^55]: I provide this income figure for 2014 for completeness. As previously discussed, Victoria's Guidelines income for 2014 will be based on the $220,000 figure utilized by Mesbur J.

[^56]: See Park v. Thompson (2005), 2005 CanLII 14132 (ON CA), 77 O.R. (3d) 601 (C.A.); Lewi v. Lewi (2006), 2006 CanLII 15446 (ON CA), 80 O.R. (3d) 321 (C.A.).

[^57]: Jahn-Cartwright v. Cartwright, 2010 ONSC 923, 81 R.F.L. (6th) 423.

[^58]: For example, Craig testified that he understood that Sean had a girlfriend in Toronto which was a primary reason for his desire to return on weekends. I have no way of verifying the accuracy of the statement. I merely point out that the mere fact that a university student might choose to return home on weekends during an academic year does not necessarily give rise to additional child support obligations, taking into account that s. 3(2)(b) requires that the student’s own financial resources be considered.

[^59]: I note that the parent must be largely blameless for any breakdown of the relationship with the child in order to terminate his or her child support obligations. See Turner v. Ansell, 2012 ONSC 2598, 20 R.F.L. (7th) 287, at paras. 11-15.

[^60]: See Farden v. Farden (1993), 1993 CanLII 2570 (BC SC), 48 R.F.L. (3d) 60 (B.C.S.C.).

[^61]: April 1, 2014 to December 31, 2014 only.

[^62]: January 1, 2018 to May 31, 2018 only.

[^63]: This section regroups the following three subquestions: (i) of the s. 7 expenses claimed by Craig from 2014 to 2018, what amounts fall within the framework approved by Mesbur J.; (ii) Of the s. 7 expenses claimed by Victoria from 2014 to 2018, what amounts fall within the framework approved by Mesbur J.; and (iii) Has either party over- or under-paid their share of s. 7 expenses since 2014?

[^64]: A printout from the WLU website entered into evidence estimates costs per year for two academic terms ranging from $20,341-$28,487 per year.

[^65]: 2011 SCC 64, [2011] 3 S.C.R. 775.

[^66]: See P.(W.C.) v. P.(C.), 2005 BCCA 60, 24 R.F.L. (6th) 11, at paras. 12-16, where the decision by a spouse to purchase a larger home than anticipated at the time of the earlier order did not constitute a material change for the purposes of s. 17 of the Act.