COURT FILE NO.: FC-16-2406

DATE: 2019/05/14

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Diana Georgieva Yovcheva

Applicant

– and –

Bojidar Eliev Hristov

Respondent

Aaron Mackenzie, for the Applicant

Self -represented

HEARD: December 10, 11, 12 and 13, 2018 and February 4 and 5, 2019

REASONS FOR JUDGMENT

Justice A. Doyle

1The Applicant wife seeks retroactive and ongoing child support, ongoing s. 7 special and extraordinary expenses, and retroactive and ongoing spousal support from the Respondent husband. She also seeks security for support payments and an order that the husband obtain a health plan for her and the children.

2The issue of determining the husband’s income for determining support is particularly complex as prior to separation, the husband operated his own roofing business on a cash basis without declaring income or recording expenses.

3After separation, the husband incorporated due to the threats by the wife that she would report him to CRA. The husband submits that he now operates his roofing business “by the book”, i.e. submits all receipts and expenses and makes all necessary payments to third parties such as CRA.

4The issues for determination are as follows:

1. What is the husband’s income for the purposes of determining support?

2. Is retroactive child support owing?

3. Is retroactive spousal support owing?

4. What credits should the husband receive for payments made since separation?

5. What is the amount of ongoing child support?

6. What is the amount of ongoing spousal support?

7. Should the husband be ordered to obtain an extended health plan?

8. Should the husband be ordered to obtain a life insurance policy?

5On consent, the parties have agreed to a divorce based on the ground of a one year separation.

6The parties also agreed that they would execute any documents to ensure that both parties’ signatures would be required to obtain funds from the children’s Registered Educational Savings Plan (RESP). A court order will issue confirming this agreed term.

Background

7The parties commenced cohabitation on June 28, 2002 and married on February 1, 2003. They separated on September 1, 2015. There are two children of the marriage: Angela, born March 1, 2005, and Daniel, born August 1, 2006, who live primarily with the wife.

8The husband moved out of the residence in late December 2015 following the purchase of his own home.

9Master Fortier’s Order dated January 9, 2017 ordered the husband to continue to pay $1,510 monthly for the mortgage, $465 per month in realty taxes, $98 per month for house insurance; $420 per month for RESP, karate at $120 per month and dance lessons at $170 per month.

10The wife is 52 years of age and works at a local school board earning an annual income of $34,974. The husband is 65 years of age and since 2016, he has been running his roofing business as a company with his son. The husband’s income is in dispute.

11The terms of the Minutes of Settlement resolving the parenting and property issues were incorporated into a Final Court Order dated December 10, 2018.

12The parties have joint custody of their two children and the father will have the children on a regular basis, namely the first, second and fourth weekend of each month and every second Wednesday evening. The wife is permitted to travel to Bulgaria with the children for six weeks each summer.

13Regarding the property issues, the parties agreed as follows:

− the husband would pay the wife $170,000 as an equalization payment;

− each party would receive $20,000 from the proceeds of the Emerald property sale;

− no value was assigned to the timeshare in Las Vegas; and

− the matrimonial home located on Mattawa Street, in Ottawa will be listed and sold at the earliest date of May 31, 2019 or the release of this decision.

1. What is the husband’s income for the purposes of determining support?

Wife’s position

14The wife alleges that, during the marriage, the husband had threatened that if they separated, he would only work until 70 years of age, transfer his business to his older son from his previous marriage, and earn a salary lower than her income.

15Hence, she submits that the husband is purposely under-reporting his income to avoid support obligations.

16The wife submits that the Court should impute income to the husband as follows:

2014

$ 126,910

2015

$ 196,815

2016

$ 103,960

2017 and beyond

$142,471

(averaging income earned in the years 2014, 2015 and 2016)

Husband’s Position

17The husband indicates that he is now earning substantially less than he was during the parties’ cohabitation:

(1) he no longer receives money for contracts in cash;

(2) employers are hard to keep and, at times, they are not reliable;

(3) he is sharing profits with his son (although to date, the company has been incurring losses); and

(4) he now has to pay substantial sums for HST, WSIB, EHT and payroll remittances which are costs that he previously did not incur.

18The husband submits that his income is as stated in lines 150 of his personal tax returns:

2016

$ 62,467

2075

$ 75,169

2018

the husband indicates various figures from his employment income:

o -$40,000 of employment income in his financial statements dated November 3, 2018 and December 14, 2018;his draft order indicates $35,000 per annum; and

o in his written submissions, he submits his employment income is $25,000 per year.

Analysis

Introduction

19In determining the husband’s income for support purposes, the Court will review the husband’s roofing business before and after separation, the two experts’ reports (Mr. Hilton for the wife and Mr. Desnoyers for the husband) and then provide its findings and decision.

20Once income is determined, the Court will determine the level of retroactive and ongoing child support and spousal support.

Before separation of September 2015

21The husband has been a roofer for over 20 years. At the beginning of his career, he worked for another roofer. In 1997, he commenced his own business and admits to completing cash sales on his roofing contracts.

22During the roofing seasons (not winter months), the husband worked long hours from 6 a.m. to 6 p.m. and in the summer, he would at times work until 8:30 or 9:00 p.m.

23Until he incorporated in April 2016, he accepted cash for contracts, did not declare all income earned, did not complete payroll deductions (including CPP and EI), did not make WSIB, payroll and EHT payments, paid his employees in cash and did not record his business expenses.

24The wife was aware of the husband’s manner in conducting his business and she prepared his tax return based on the information that he provided her.

25According to the BH Roofing Business Income Summary 2011 to 2015, his income (Exhibit 6) (after tax adjustments made for unreported income) was as follows:

Year

Gross Income

Net Income

Profit Margin

2011

$356,675

$163,329

45.79%

2012

$267,902

$94,917

35.43%

2013

$238,347

$86,052

36.10%

2014

$344,148

$115,534

33.57%

2015

$439,079.25

$155,388

35.39%

After separation

26After the separation, the wife threatened to report the husband to CRA on the basis that he was neither declaring all income earned nor was he making payments in compliance with tax laws.

27The husband was very concerned with this threat and, in April 2016, he incorporated his roofing business and made his son half owner. His son participated in the incorporation documents and became owner of 50 class A common shares.

28Kathy Ptaszkiewcz (the business accountant) testified that the husband provides her with credit card statements, bank statements and source documents for the business. On an annual basis, she prepares the income and balance statements and completes the corporate tax return.

29On a weekly basis, the husband provides her with the employees’ hours and she prepares the paycheques along with making the necessary source deductions and remittances.

30The business accountant stated that the husband denies that he has any cash sales. She ensures expenses in both credit card and bank statements are properly expensed for the corporation.

31Ms. Ptaszkiewcz was advised by the husband that the wife was going to report him to CRA so, upon the husband’s instructions, she readjusted 2012, 2013 and 2014 incomes based on what the husband told her. No readjustments were made for 2015.

32The Court finds Kathy Ptaszkiewcz to be a credible witness who is performing her duties and obligations as an accountant for the company in that she:

(a) ensures that payroll cheques, and remittances are completed;

(b) pays HST on a quarterly basis;

(c) ensures expenses incurred on credit card and bank statements are for the business; and

(d) records the income and expenses for the purposes of completing the financial statements for the business.

33She has taken fraud accounting courses and is aware of fraudulent aspects of accounting. She appeared sensitive to the business owner’s obligation to report and her duties as an accountant to complete accounting information accurately and in accordance with the regulations.

34However, she is no position to have full knowledge as to whether the husband continues to accept cash for contracts.

Legal Principles

35The relevant sections of the Federal Child Support Guidelines, S.O.R./97-175, as amended (“Guidelines”) are set out below:

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

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

36Sections 18 and 19 of the Guidelines provide that the Court is not bound by Line 150 shown in the T1 Annual General Return for the purposes of determining support.

37Section 18 comes into play when the payor is the sole shareholder of a corporation. This section gives the Court discretion to attribute some or all of the pre-tax income of a corporation to the shareholder, director or officer personally or, in the alternative, to attribute an amount less than or equal to the pre-tax corporate income that is commensurate with the services that the parent provides to the corporation:

18. (1) Where a parent or spouse is a shareholder, director or officer of a corporation and the court is of the opinion that the amount of the parent’s or spouse’s annual income as determined under section 16 does not fairly reflect all the money available to the parent or spouse for the payment of child support, the court may consider the situations described in section 17 and determine the parent’s or spouse’s annual income to include,

(a) all or part of the pre-tax income of the corporation, and of any corporation that is related to that corporation, for the most recent taxation year; or

(b) an amount commensurate with the services that the parent or spouse provides to the corporation, provided that the amount does not exceed the corporation’s pre-tax income.

38Section 19 provides that the Court may impute to a spouse “such amount of income … as it considers appropriate” and provides a non-exhaustive list of such circumstances:

19. The court may impute such amount of income to a parent or spouse as it considers appropriate in the circumstances, which circumstances include,

(a) the parent or spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of any child or by the reasonable educational or health needs of the parent or spouse;

(b) the parent or spouse is exempt from paying federal or provincial income tax;

(c) the parent or spouse lives in a country that has effective rates of income tax that are significantly lower than those in Canada;

(d) it appears that income has been diverted which would affect the level of child support to be determined under these guidelines;

(e) the parent’s or spouse’s property is not reasonably utilized to generate income;

(f) the parent or spouse has failed to provide income information when under a legal obligation to do so;

(g) the parent or spouse unreasonably deducts expenses from income;

(h) the parent or spouse 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; and

(i) the parent or spouse is a beneficiary under a trust and is or will be in receipt of income or other benefits from the trust.

39Imputing income is one method by which the court gives effect to the joint and ongoing obligation of parents to support their children. See: Drygala v. Pauli (2002), 2002 CanLII 41868 (ON CA), 61 O.R. (3d) 711 (Ont. C.A.).

40A self-employed person has the onus of clearly demonstrating the basis of his or her net income. This includes demonstrating that the deductions from gross income should be taken into account in the calculation of income for support purposes. See Whelan v. O’Connor (2006), 2006 CanLII 13554 (ON SC), 28 R.F.L. (6th) 433 (Ont. S.C.). This principle also applies where the person’s employment income is derived from a corporation that he or she fully controls. See: MacKenzie v. Flynn, 2010 ONCJ 184.

41The self-employed person has an inherent obligation to put forward not only adequate, but comprehensive records of income and expenses, from which the recipient can draw conclusions and the amount of child support can be established. See: Meade v. Meade (2002), 2002 CanLII 2806 (ON SC), 31 R.F.L. (5th) 88 (Ont. S.C.). This includes the obligation to present information in a user-friendly fashion. A recipient should not have to incur the expense to understand it. See: Reyes v. Rollo (2001), 2001 CanLII 28260 (ON SC), 24 R.F.L. (5th) 120 (Ont. S.C.).

42The onus rests upon the parent seeking to deduct expenses from income to provide meaningful supporting documentation in respect to those deductions, failing which an adverse inference may be drawn. See: Orser v. Grant, [2000] O.J. No. 1429 (S.C.)

43The Court will usually draw an adverse inference against a party for his or her failure to comply with their disclosure obligations as provided for in s. 21 of the Guidelines and as a result impute income. See Smith v. Pellegrini, 2008 CanLII 46927 (ON SC), [2008] O.J. No. 3616 (Ont. S.C.); and Maimone v. Maimone, 2009 CanLII 25981 (ON SC), [2009] O.J. No. 2140 (Ont. S.C.).

44It is appropriate in these circumstances to gross-up the payor’s income, as the payor is declaring and paying tax on substantially less income than the payor is actually earning. This is done to ensure consistency of treatment where a party is found to have arranged his affairs to pay less tax on income. See Sarafinchin v. Sarafinchin (2000), 2000 CanLII 22639 (ON SC), 189 D.L.R. (4th) 741 (Ont. S.C.).

45The test for imputing income for child support purposes applies equally for spousal support purposes. See Rilli v. Rilli, 2006 CanLII 34451 (ON SC), [2006] O.J. No. 4142, (Ont. S.C.); Perino v. Perino (2007), 2007 CanLII 46919 (ON SC), 46 R.F.L. (6th) 448 (Ont. S.C.) and Murray v. Murray (2003), 2003 CanLII 64299 (ON SC), 66 O.R. (3d) 540 (S.C.), reversed on other grounds in (2005), 76 O.R. (3d) 548 (C.A.).

Expert report of Joseph Hilton of BDO

46Mr. Hilton was retained by the wife to review the husband’s business documents and provide income estimations for 2014, 2015 and 2016. The Court qualified him as an expert in income valuations.

47As stated above, in 2014 and 2015 the husband was operating the business as a sole proprietorship under B.H. Roofing and income calculation would be on a different scale than in 2016 and forward. Mr. Hilton confirms that all revenue is generated during the months from April to December and a significant amount of cash was paid for contracts which did not appear in tax documents.

48He notes that on April 1, 2016, the husband incorporated his business under B.H. Roofing Inc. and his son, Ilain Hristov, became a 50% shareholder. At the time, the assets were rolled into B.H. Roofing and he states that the son did not contribute significant assets or capital to the company.

49To determine income in accordance with the Guidelines, Mr. Hilton starts with the husband’s Line 150 on his personal income tax return and made the following adjustments:

− replaced taxable dividends and capital gains with actual amounts; and

− added potential unreported business income and potential unreported revenues from years 2014 to 2016 and a related tax gross up to account for the tax benefit of unreported income.

50In addition, he indicates that certain cheques were converted directly to cash at the bank so that they did not appear on the husband’s bank statements as a deposit or a withdrawal (i.e. no paper trail). Based on the husband’s Canada Trust receipts, he converted payments received by cheque totaling $91,920 in 2014 and $165,167 in 2015 into cash using this method.

51In addition, Mr. Hilton indicates that he did not receive a summary of all revenues and expenses for the year 2014 and 2015.

52In Schedule two of his report, he provides his conclusions of available income for support:

2014

$126,910

2015

$209,682

2016

$145,413

2014

53Based on the 2014 receipts provided to Mr. Hilton, the estimated total gross revenue would have been $328,033 and his gross profit margin was $115,525. As he did not receive the husband’s actual operating expenses, this estimate does not include vehicle expenses, waste removal, advertising and office expenses.

54Although, the husband states that he filed two T1 adjustments for undeclared income for 2014 with CRA, Mr. Hilton did not receive a copy of either of them.

55The absence of proof of filing of these forms accounts for the difference in income determination for 2014 by the two experts.

56Mr. Hilton notes that Mr. Desnoyers assumed that the second T1 adjustment was filed for 2014 and hence this would reduce the amount of income being declared. So if it was filed, Mr. Hilton would agree with Mr. Desnoyers’ conclusion that the husband’s 2014 income was $115,000. If a second T1 adjustment was not filed for 2014 then his income for 2014 was $126,910.

57If the first T1 adjustment form was not filed, then, according to Mr. Hilton, the husband’s 2014 income was $138,000.

2015

58For 2015, Mr. Hilton found the husband’s income to be $196,850. Since Mr. Hilton did not have figures for the September to December contracts, he used average sales in 2014 and 2016. Also, he assumed that contracts signed in August were not completed by August 31 so those were backed out of the $132,000 estimate from September to December. The main difference is Mr. Desnoyers’ estimate of income earned from the September to December contracts.

2016

59The husband incorporated his roofing business April 1, 2016 and no income was generated during the months of January to March. He noted that the revenues were significantly lower for the period ending March 31, 2017 with a gross revenue of $239,913 (compared to 2015 gross revenue of over $439,000).

60The husband had not previously submitted HST, payroll deductions including paying the employer portion of the expenses. When one estimates a 35% profit margin, Mr. Hilton stated that one needs to adjust 2017 fiscal year numbers to account for the HST and payroll. There is an expanded version on Note 3 of Schedule 7 factoring in those additional expenses and a revised estimate of $20,075.

61Based on the following expenses – cost of sales, salaries, benefits and less salary paid to the husband, the total expenses for 2016 were $188,136.

62Mr. Hilton indicates that the significant reduction in revenues and gross profit margin may be an indicator that the husband is not reporting all revenues being earned by the action based on the actual cost of sales and salaries incurred during the period ending March 31, 2017. He submits that, assuming a 35% gross profit margin, he could have maintained he should have potential unreported revenues of $49,527 in 2016.

63Therefore, in his opinion, the husband should be imputed the total potential undeclared revenues of $49,507.02 as available income for the calculation of support for 2016.

64His estimation of 2016 income based on the above is $145,413.

65Mr. Hilton did not make any calculations for 2017 income as he did not have the husband’s tax return nor other documents that he requested.

66He was concerned with the fact that the son received one half of the interest in the company without a value being assigned. As a family member receiving a share of the company, CRA would be suspicious of this transfer of wealth without the payment of taxes. A fair market value should have been assigned.

Jean-Claude Desnoyers’ report

67The Court found Jean-Claude Desnoyers to be an expert in income determination.

68In his report dated February 7, 2018, he provided the following income estimates:

2014

$115,000

2015

$144,000

2016

$ 70,000

[69]

2017 (projected income)

$ 61,000

70In preparing his report, Mr. Desnoyers reviewed an unaudited financial statement for the year ending March 31, 2017, the husband’s personal income tax returns for 2014, 2015 and 2016, a table showing gross income realized on the projects and the report dated November 24, 2017 prepared by Mr. Hilton. He also interviewed the husband.

71Mr. Desnoyers notes that after the April 2016 incorporation, the husband commenced collecting HST and remitting it to CRA in accordance with regulations. In addition there were payroll expenses associated with the wages.

72He also noted that the husband has had five surgeries and does not work on the roof since the end of 2014. He admitted that if the second T1 adjustment form had not been filed, then his income would be $124,000 for support purposes.

73He indicates that the average sales with HST from 2011 to 2015 were $315,851 or $279,514 before HST. He has considered the $10,000 of cash on recorded sales of 2016 and $15,000 of unrecorded sales in 2017. The husband denies he told Mr. Desnoyers that he had cash sales in 2017. It was his understanding that the husband had told him that he had received $15,000 cash in 2017. “but maybe I did not understand or ask the question properly”.

74He indicates that the decrease of the business’ profitability in 2016 and 2017 is due to HST remittance and payroll expenses that were not paid before incorporation. He states that Mr. Hilton failed to consider that in 2016, the husband had payroll expenses other than basic wages.

75For 2014, he used the same totals as Mr. Hilton who used receipts to determine the undeclared income for 2014.

76For 2015, he believed that based on the previous years, the husband’s estimate of income earned in the last four months of that year was reasonable. The husband said that his wife had the documents for those months.

Accountants’ Discussions

77Justice Summers’ Court Order directed that the experts discuss the matter in accordance with the Family Law Rules. The accountants communicated in October 2018 and discussed the differences in their respective reports.

78Below is a summary of their discussions regarding the years 2014, 2015 and 2016. There was no agreement between the accountants regarding the husband’s income.

2014 income and missing second T1 adjustment form

79In their discussions, Mr. Desnoyers found his 2014 income was $115,382 and Mr. Hilton found his income was $126,910.

80The issue is whether the husband filed an amended 2014 T1 showing business income of $49,000 instead of the approximate $20,000 which was filed in the exhibits. If he did not file the second T1 showing business income of $49,000 then according to Mr. Hilton, the husband’s income should be $126,910.

81Mr. Hilton suggested a midpoint of $121,146.

2015 and estimating the last four months of contracts

82The main difference in their opinions is how to calculate income for the last four months of 2015 as contracts/receipts were missing.

83Mr. Desnoyers relied solely on the husband’s oral representations whereas Mr. Hilton believes that the Court should look at other information. Mr. Desnoyers used the estimates as provided by the husband for those missing four months set out on tables he had prepared. Mr. Desnoyers’ estimate was $80,000 in revenue.

84On the other hand, Mr. Hilton’s relied on signed contracts without corresponding receipts. As the four months of invoices and receipts for September to December 2015 were missing, Mr. Hilton took the average of 2014 and 2016, which was $132,000 for that period of time.

85Therefore, for 2015, Mr. Hilton found that for the purposes of determining support, the husband’s income was $196,815 whereas Mr. Desnoyers’ opines the husband’s 2015 income was $143,831.

86The accountants discussed that the midpoint is $170,323.

2016 and whether income should be split with son

87The accountants agreed to estimate revenue in 2016 on the assumption that roofing contracts produced a 35% profit margin based on prior years’ results once there is an adjustment for payroll remittances and HST. This 35% profit margin is in line with the previous years of 2012, 2013 and 2014 and 2015.

88In the email from Mr. Hilton to Mr. Desnoyers dated October 30, 2018, Mr. Hilton confirmed that the numbers based on a 35% profit margin would be as follows:

− Costs of sales (materials): $124,967

− Add HST thereon: $16,246

− Salaries and benefits:$106,627

− Less salary paid to husband: ($43,458)

− Less employer portion of payroll costs (CPP, EI WSIB EHT): ($12,299)

− Total costs of sales: $192,083

− Divide by .65

− Revenues based on a 35% gross profit margin: $295,512

− Less revenues based on company’s financial statement $239,913

− Add HST $31,189

− Reported revenues with HST: $271,102

− Unreported revenue based on 35 % profit margin is $24,410 ($295,512 - $271,102)

− Tax gross-up at 39.8% marginal rate $16,138

− Total unreported income and tax gross-up $40,549

89Based on the unreported income of $40,549, the husband’s income is $103,960 if he is entitled to all of the profits and his income would be $83,416 if 50% of the unreported income is split equally between him and his son.

90The midpoint between the two estimates is $93,553.

Analysis- Conclusion

91Section 18 of the Guidelines is designed to address the unfairness resulting in a payor trying to manipulate his income through a corporate structure for the purpose of decreasing his child support obligation.

92For the reasons set out below, the Court finds that Line 150 of the husband’s personal income tax returns does not fairly reflect available income to him for purpose of determining support.

93The Court will impute income for the following reasons:

− On the balance of probabilities, the Court finds that the husband continues to receive unreported income and complete cash sales;

− Even though there has been a significant drop in income earned by the husband, the Court finds based on the history of the business, there is a profit margin of 35%;

− Contradictions between the husband and his son regarding the operation of the business;

− The husband is the operating mind of the company; and

− Lack of complete financial disclosure.

Cash sales

94There has been a history of cash sales admitted by the husband. It is a mode of the operation of his business for at least the past two decades.

95The husband and son admit that prior to the incorporation in April 2016, they had had cash sales of $10,000 in 2016 from roofing contracts.

96Despite the fact that the husband says he stopped completing cash sales after incorporation, Mr. Desnoyers mentions in his report that the husband told him that he had received $15,000 in cash sales in 2017.

97The husband denies that he told this to Mr. Desnoyers. The husband and son both deny any cash receipts for sales.

98I accept Mr. Desnoyers’ evidence that the husband admitted to cash sales in 2017, and as an independent and impartial expert who was hired by the husband to complete an income analysis, there was no reason for him to record something that was not told to him. It was a statement made by the husband that was against his interest and although the husband on reflection wishes to deny this admission, I find that on the balance of probabilities that he indeed told this to his own expert.

99The Court finds that given the pattern of cash sales in the years during the marriage and after separation, cash sales are part of the way the husband conducts his business. Although he may have incorporated and has an accountant and tries to conduct business “by the book”, the industry does permit him to continue to do cash sales that are not recorded.

100The husband’s admission of receiving cash sales in 2017 coupled with the fact there has been a significant drop in the profit margin causes the Court to pause and find that his Line 150 income does not properly reflect his income for determining support.

Profit margin

101The profit margin has dropped since incorporation. I agree with Mr. Desnoyers that it is, in part, as a result of the husband having to now remit the HST and pay payroll remittances.

102I agree that the husband has incurred extra costs in running a business since incorporation.

103Yet this does not account for the drastic drop of available income to the husband from $115,000 in 2014 and $143,000 in 2015 which are his own expert’s figures.

104The husband indicates that he is now receiving an employment income of only $35,000 to $40,000 and showing an annual loss of over $32,000 in 2016 and over $24,000 in 2017.

105I accept that income in the roofing business fluctuates and the current gross incomes have not reached the gross revenue figures in 2011, 2014 and 2015.

106I accept that the husband has expenses running his business and payment of salary to his son.

107Yet, the husband’s position is that he now has no profit margin for 2017. He paid himself a salary but that amount was slightly more than the business loss for that year.

108In 2017, his gross revenue of $270,000 (comparable to the other pre-separation years) and one assumes a profit margin of 35%, this would result in a finding of undeclared income. Further details are provided below.

109These numbers defy logic in light of the previous business profitability. The husband who has proven to be successful business owner, is now providing shareholder loans to a company that previously was financially successful but is now running at a loss.

110I find that the loss of profitability is partially due to the fact that the husband is, on the balance of probabilities, still conducting cash sales or not declaring all roofing contracts and that a profit margin of 35% is reasonable.

Contradictions between husband and his son

111The Court finds that the husband was not credible in certain aspects of his testimony. The father gave contradictory evidence regarding the son’s contribution to the new company. He said his son paid for the truck of $15,000 with his savings, and then he stated that he had paid for it himself and his son reimbursed him through instalments.

112There were numerous contradictions:

− The husband said payroll is now documented and paid in accordance with CRA regulations through the business accountant. Yet, his son admits that even now, at times, he pays employees in cash if they work for only a day or two and leave the job.

− Prior to the separation, the son said that it was 100% cash business whereas the husband said it was 50% cash.

− The son stated that currently there are no cash sales. He did not even know that his father admitted to $15,000 of cash sales in 2017.

Husband is the operating mind of the company

113Firstly, the husband is the operating mind of the company as he has control of the operation of the business and running expenses. He decides the salaries paid to himself and his son. He runs all financial aspects of the business and the son, not only has no knowledge of those finances, his input or approval is not sought nor provided.

114Although the son was involved in the incorporation, he hands over the financial operation to the father. The husband is mastermind of the company.

115The son says he trusts his father and the Court finds that this is not unreasonable. However, he is not aware of any of the financial aspects of the workings of the corporation, he has not seen the financial statements and is completely unaware of the lack of profitability of the business.

116The Court is concerned with respect to the father and son’s respective contributions to the company. I agree with Mr. Hilton that the fair market value of the company should have been established when the husband incorporated and made his son half owner. The son was required to bring forth some value to the company upon becoming half owner. He purportedly brought a truck into the company.

117As stated above, there were some contradictions of how the truck was paid for by the son. The Court notes that son bringing in an asset being a non-arms’ length arrangement, the Court assumes that the husband arranged his affairs that would not only provide some succession planning but minimize his income for the purposes of determining support.

118It is not the Court’s task to dictate how a company is run. However, the Guidelines do provide a lens from which the Court can scrutinize the workings of a company to ensure that the income attributed to the husband is in line with the objectives of the Guidelines and its provisions. The Court can review payments made to third parties who are at non-arms’ length when attributing income to a payor spouse.

119Secondly, the Court does not find it extraordinary that the son, even with a university degree, would work with his father as part of succession planning.

120The son has a history with the husband’s business. The son started working part-time in 1998. In 2011, when he graduated from Lakehead University, he moved back to Ottawa and worked part time.

121In 2013, 2014 and 2015 (before the separation), he worked full time with his father. He became half owner of the business in April 2016.

122Finally, based on the evidence, the Court cannot conclude that the son’s salary is disproportionate to his work performed. The son’s role is a roofer and has responsibility of the workers when his father is seeking roofing contracts.

123Although, there is no evidence that there were ever other full-time employees in the past earning equal to his income of over $30,000, the son’s evidence is that he works full time for the father and has been trained to be a roofer.

Lack of complete financial disclosure

124The Court notes that, over the course of the litigation, the husband had provided extensive disclosure which did permit the wife’s expert to prepare a report.

125The husband indicates that Payroll remittances, deductions and HST filings as well as bank statements showing incomes deposited into the business bank account were submitted to the wife.

126However, the disclosure was not completely fulsome. Mr. Hilton indicates that he did not receive a summary of all revenues and expenses for the year 2014 and 2015.

127Specifically for 2014, Mr. Hilton estimated his income because he did not receive the husband’s actual operating expenses and does not include vehicle expenses, waste removal, advertising and office expenses. Mr. Hilton asked for the 2017 documents and they were not provided.

128The failure to provide complete records without a reasonable and credible explanation leads the Court to make an adverse inference against the husband with respect to his income and expense reporting. These records relate to the period prior to separation.

129After incorporation, the Court notes that he did not provide the complete records regarding the payroll information to the business accountant. However, in my view, this does not impact the calculation of income, given that the Court accepted the evidence of the business accountant that the records were properly provided to her.

Income Findings

130Mr. Hilton scrupulously reviewed the contracts and receipts provided to him. Therefore, as discussed below, I prefer to accept Mr. Hilton’s estimate of income earned from September to December 2015 based on averages rather than relying on the husband’s expert’s estimate which were based on the husband’s representations. As an expert, Mr. Desnoyers was entitled to rely on evidence provided by the owner but certainly this self-serving information without an analysis and confirmation of the facts does weaken the strength of his report.

131As found below, I accept Mr. Hilton’s opinion regarding incomes to be imputed for 2014, 2015 and 2016.

132The wife invites the Court to average the 2014, 2015 and 2016 incomes to determine child support for 2017 and 2018 and ongoing. However, in my view, it is not reasonable and appropriate to use pre-incorporation figures to determine post-separation income.

133As stated in Halliwell v. Halliwell, 2017 ONCA 349, 138 O.R. (3d) 671, where the husband’s income fluctuates significantly due to inherent unpredictability of income from a business, the averaging approach can be appropriate.

134In Decaen v. Decaen, 2013 ONCA 218, 303 O.A.C. 261, the Court of Appeal found that s. 17 is permissive rather than mandatory, which allows the court to look at the spouse’s income over the last three years in appropriate circumstances.

2014

135I find that the husband’s 2014 income is $126,910.

136The husband’s Line 150 income was $35,465 (consisting of dividends of $1,441, rental income of $12,693.10, taxable capital gains of $4,688.90, utility trailer income rental of $4,685.94, self-employment income of $11,958.40).

137I accept Mr. Hilton’s figure of $126,910 for this year. Mr. Desnoyers states that it is $115,382 as he states that a second T1 adjustment was filed adding in a further $49,000 of undisclosed income. The second T1 adjustment form was not filed nor was the revised Notice of Assessment showing his revised income for the purposes of taxes.

138It is worthy to note, that there was no documentary evidence filed that event the first T1 adjustment form was filed but the Court accepts Ms. Ptaszkiewcz’s evidence on this point, i.e. that she had refiled for 2014, 2015 and 2016 when told to do so by the husband due to the wife’s threats to report him to CRA.

2015

139I find that the husband’s 2015 income for support purposes is $170,323.

140His Line 150 was $94,488 which consisted of $67,000 of business income, $873.82 of dividends, rental income of $15,023.36, capital gains of $11,552.54.

141The difference between the experts for this year is in how each calculates the income earned for the four months, September to December, as there were no receipts provided. Mr. Desnoyers relied on the husband’s oral representations which, in my view, are self-serving and undocumented. I prefer Mr. Hilton’s approach of using the average from the other years to determine the income for that time period.

142However, as the roofing business is subject to fluctuations and the evidence indicates that the husband’s business varies from year to year, the Court does not find it would be fair to only rely on the average of the years 2014 and 2016. This is especially true as it would then skew the 2015 numbers to make it an exceptionally lucrative year and there is no evidence of why this was so.

143It would be fair for the year 2015 to average the two experts’ opinions for income as had been discussed between them in their October discussion which was ordered by Summers J. and confirmed in an email dated October 30, 2018 from Mr. Hilton to Mr. Desnoyers.

144The midpoint would be $170,323 and the Court finds that this figure is the husband’s income for 2015.

2016

145The husband’s Line 150 is $62,465 which includes $43,457.50 from business income, two dividends of $456.99 and $813, net rental income of $17,366.49, and capital gains of $799.

146The income statement for the company for the fiscal year ending March 31, 2017 shows gross revenue of $239,912, cost of goods (roofing materials) of $124,967 and payroll expenses of $106,627. The company had a net loss of $34,118.73.

147The issue is whether the husband’s restructuring of the company so that the son receives half of the income is appropriate in law.

148Put another way, given that the payments to the son is a non-arms’ length payment, is the distribution of the income as currently set up by the husband appropriate given the history of the roofing business. As discussed above, the husband is the operating mind and manager of the company and he should receive credit for the unreported income.

149For the purposes of 2016, the Court adopts Mr. Hilton’s estimate and determines that his 2016 income was $103,960.

2017

150The income statement for fiscal year ending March 31, 2018 showed gross revenue of $270,872.55 with cost of roof materials of $144,414.88; wages and salaries of $93,738 and a net loss of $23,765.15. The husband denies receiving any funds from cash sales.

151In 2017, the amount due to Shareholders was $44,199.

152The husband’s Line 150 was $75,167 which consisted of $35,700 from employment income, $2,159.76 from CPP, $10,500 from rental income, $16,808.51 of capital gains and $10,000 from RRSP.

153If the Court proceeds with the same process as the methodology that the two experts discussed when dealing with the income for the year 2016, i.e. a 35% profit margin, then the figures are as follows:

− Cost of sales (materials): $144,414.88

− Add HST thereon: $18,773.93

− Salaries and benefits: $93,738

− Less salary paid to the husband ($35,700)

− Less employer portion of payroll costs (CPP, WSIB, EHT) ($10,812) proportionate to the 2016 figures of $12,299 for $106,627 in salaries)

− Total cost of sales: $210,414.81

− Divide by .65

− Revenues based on a 35% profit margin: $323,715.09

− Revenues based on financial statement: $270,827.55

− Add HST: $35,207.58

− Reported Revenues with HST - $306,035.13

− Potential unreported revenues for 2017: $17,679.96

− Tax gross up at 39.8% marginal rate: $7036.62

− Total unreported income and tax gross-up - $24,734.58

154As discussed below, this unreported income should be attributed to the husband.

155As far as the son is aware, the company does not accept cash payments. If he is to be believed on this point, then the husband has not historically shared his cash revenue from the business. In addition, as discussed above, the husband is for all intents and purposes the managing and operating mind of the company and he has control of the finances and bookkeeping. The son is not involved nor is he even aware that the company ran at a loss in the past two years. This is not an indication of an involved and participating partner. He is at a non-arms’ length status with the father and the Court finds that any unreported income should be attributed solely to the husband.

156Therefore, for 2017 his income was as follows:

− Employment income of $35,700

− CPP of $2,159

− Rental income of $10,500

− Capital gains of $33,617.02 (as per Coghill (2006), 2006 CanLII 21778 (ON SC), 27 R.F.L. (6th) 434 (Ont. C.A.) , where capital gain is reported when determining income the figure of $16,808.51 is replaced by the actual amount of capital gain realized and received)

− $10,000 of RRSP

− $24,734.58 (unreported income as calculated above based on a 35% profit margin)esdx

− Totalling: $116,710.60

2018

157The husband’s 2018 T4 slip shows income of $34,650 (whereas his financial statement dated November 14, 2018 declares $3,333 per month or approximately $40,000 in annual income). For 2018, Ilian’s T4 income is $34,650.

158The amount due to Shareholders increased to $77,591.

159In his December 3, 2018 sworn financial statement, the husband declares his employment income from his roofing business to be $40,000 per year, $7,440 from pension income (CPP and OAS) and $6,600 from net rental income for a total of approximately $54,000.

160Payments made to governmental agencies include:

− Remittances to Workplace Safety and Insurance Board for 2016 of $2,146, $2,552 and $2,697;

− WSIB remittances for 2017 of $1,851, $3,391 and $2,755;

− WSIB remittances for 2018 of $1,879.06, $2,526.66 and $1,851.08.

161As stated above, the Court accepts the husband’s employment income declared of $40,000 per year, $7,440 from pension income (CPP and OAS) and $6,600 from net rental income for a total of approximately $54,000.

162We have no figures from the business to determine a calculation of unreported income based on 35% profit margin as was done for 2016 and 2017.

163I note the unreported income (grossed up for taxes) in 2016 was $40,549 and in 2017 was $24,734.

164The average of those two figures is $32,641.50.

165The Court is prepared to impute this unreported income to his reported income. Therefore, for 2018, the husband’s income for the purposes of determining support is $86,641.50 ($54,000 + $32,641.50).

2. Is Retroactive Child Support owing?

Legal Principles

166Pursuant to the Divorce Act, 1985, c. 3 (2nd Supp.), the Court has jurisdiction to order retroactive child support. Pursuant to s. 37(2.1)(a) of the Family Law Act, R.S.O. 1990, c. F.3 (“FLA”), the Court has jurisdiction to order retroactive child support payments.

167In D.B.S. v. S.R.G., 2006 SCC 37, [2006] 2 S.C.R. 231, the Supreme Court of Canada set out the principles in the exercise of that discretion. The Court articulated two overarching principles governing claims for retroactive child support and retroactive increases in support: 1) Each parent has an obligation to ensure that his/her child receives proper support in a timely manner; and 2) courts considering these claims must balance the payor’s interest in the certainty of the status quo with the need for fairness and flexibility.

168The Court set out four factors to be considered in such claims:

1. Reason for the delay in bringing the claim;

2. Conduct of the payor parent;

3. Circumstances of the child;

4. Hardship that may be caused by a retroactive award.

169Effective notice is defined as any indication by the recipient parent that child support should be paid, or if it already is, that the current amount needs to be renegotiated. All that is required is for the subject to be broached. Once that has been done the payor can no longer assume that the status quo is fair.

170Blameworthy conduct on the part of the payor parent should be considered when determining this issue.

171Once the issue is raised, the recipient must still be responsible in moving the discussion forward. If he or she does not receive a response, legal action should be contemplated. A prolonged period of inactivity after effective notice may indicate that the payor’s reasonable interest in certainty has returned. Thus, even if effective notice has already been given, it will usually be inappropriate to delve too far into the past.

172Courts should craft the order to minimize hardship. Hardship to the payor parent may be mitigated by a judgment which allows for payment of an award in instalments: D.B.S. at para. 116; Connelly v. McGouran, 2007 ONCA 578, 41 R.F.L. (6th) 1, at para. 34; Olaveson v. Olaveson (2007), 2007 CanLII 23168 (ON SC), 40 R.F.L. (6th) 327 (Ont. S.C.), at para. 19.

173Once a court decides to make a retroactive award, it must then determine the amount. There are two elements to this decision: first, the court must decide when the order should be retroactive to and second, the Court must decide the amount of support that would adequately quantify the payor’s deficient obligations during that time.

174In determining whether to make a retroactive award, a court will need to look at all the relevant circumstances in front of it. The payor’s interest in certainty must be balanced with the need for fairness and flexibility. There is no priority to the above considerations, none of these factors is decisive and should all be considered.

Analysis

Introduction

175In this case, notice was provided by the wife to the husband right after the separation in September 2015. There was no delay on the part of the wife. A court application was commenced shortly thereafter in November 2015.

176Regarding blameworthy conduct, the Court considers the husband’s acts in the arranging of his business affairs and continuing to accept cash payments even after incorporation to be blameworthy conduct.

177On the other hand, the husband did provide financial assistance pursuant to Master Fortier’s order in paying the carrying costs of the matrimonial home. He also paid for s. 7 special and extraordinary expenses, contributed to the children’s RESP, and paid some funds to the wife.

178What is left to determine now that income has been determined is whether the amounts paid by the husband were reasonable given his income and what impact this would have had on the children had they received the appropriate level of support. The wife did not proffer any evidence to show the financial impact on the children due to lack of the appropriate child supported. In fact, the husband also paid for their activities and orthodontic work and her recent financial statement does not show significant debts accrued since separation.

179Regarding hardship, certainly, a payment of retroactive support, if ordered, could have an impact on the husband’s financial affairs which will be discussed further below.

Calculation of retroactive child support

2015

180The husband was living in the matrimonial home until Christmas time in December 2015. He paid for the household expenses and living expenses until he moved out. Child support payable for December 2015 based on an income of $170,323 is $2,243.68 per month. However, the Court notes that while living there, he continued to make the payments and the Court will not order retroactive support for that year.

2016

181Based on an income of $103,960, his child support payable per month for that year was $1,464.10 per month (using 2011 tables).

2017

182Based on income of $116,710, his child support payable for that year would have been $1,619.95 per month for 11 months. The Guideline tables changed on November 22, 2017 – the amount would then be $1,675.52 per month.

2018

183Based on an income of $86,641, his child support payable for that year would have been $1,306.97 per month.

184Before determining what amount of child support is owing on a retroactive basis, the Court will deal with retroactive spousal support and then discuss payments made by the husband since separation and what amount can be credited towards retroactive support.

3. Is Retroactive Spousal Support owing?

Entitlement

185The Court must first determine if the wife is entitled to spousal support.

Legal Principles re Entitlement

186The Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), provides for the following:

15.2 (1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse.

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

(3) The court may make an order under subsection (1) or an interim order under subsection (2) for a definite or indefinite period or until a specified event occurs, and may impose terms, conditions or restrictions in connection with the order as it thinks fit and just.

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

o (a) the length of time the spouses cohabited;

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

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

(5) In making an order under subsection (1) or an interim order under subsection (2), the court shall not take into consideration any misconduct of a spouse in relation to the marriage.

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

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

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

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

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

187The Court is directed to look at the economic circumstances of each spouse’s role during the marriage in determining support.

188Moge v. Moge, 1992 CanLII 25 (SCC), [1992] 3 S.C.R. 813, and Bracklow v. Bracklow, 1999 CanLII 715 (SCC), [1999] 1 S.C.R. 420, set out the following examples of compensatory support:

a) A spouse's education, career development or earning potential have been impeded as a result of the marriage because, for example:

a. A spouse has withdrawn from the workforce, delays entry into the workforce, or otherwise defers pursuing a career or economic independence to provide care for children and/or spouse;

b. A spouse's education or career development has been negatively affected by frequent moves to permit the other spouse to pursue these opportunities;

c. A spouse has an actual loss of seniority, promotion, training or pension benefits resulting from absence from the workforce for family reasons;

b) a spouse has contributed financially either directly or indirectly to assist the other spouse in his or her education or career development.

189The SSAG’s set out the following examples of economic disadvantage:

1. Home with children full-time or part-time

2. Secondary earner

3. Primary caregiver of the children after separation

4. Moving for payor’s career

5. Support for payor’s education or training

6. Working in family business

One needs to ask where the recipient would be if he or she had continued in the labour force.

190The same test for imputing income in child support cases (Drygala v. Pauli) applies in spousal support cases. Rilli v. Rilli, [2006] O.J. No. 2142 (S.C.); Perino v. Perino (2007), 2007 CanLII 46919 (ON SC), 46 R.F.L. (6th) 448) (Ont. S.C.).

191“Means” refers to available money and includes "all pecuniary resources, capital assets, income from employment or earning capacity, and any other source from which gains or benefits are received, together with, in certain circumstances, money that a person does not have in possession but that is available to such person": Leskun v. Leskun, 2006 SCC 25, [2006] 1 S.C.R. 920, at para. 29 quoting J.D. Payne & M.A. Payne, Canadian Family Law (Toronto: Irwin Law, 2001), at p. 195, and Berger v. Berger, 2016 ONCA 884, 85 R.F.L. (7th) 259.

Analysis

192All four objectives of the Divorce Act must be considered. No single objective is a paramount in the analysis.

193I have considered the three foundational elements of spousal support set out in Bracklow.

194For reasons set out below, the Court finds that the wife is entitled to spousal support based on both a compensatory and non-compensatory basis.

195In 2002, the wife moved from Bulgaria to Canada to move in with the husband who had sponsored her. While in Bulgaria, she worked full time as a teacher of chemistry and physics for seven years. She had earned her Masters’ degree in chemistry and physics in 1991 and also had a degree in economics.

196When she arrived in Canada, she attended courses to learn English and obtain computer literacy at Algonquin College and completed the courses in winter 2003.

197She had the first child in 2005 and the husband told her that she did not need to work as he was busy in the roofing business. She did some part time work at restaurants and there was no pressure to work. Rather, he encouraged her to take care of the home and the children. He also was concerned regarding the cost of day care.

198She obtained a diploma in professional accounting in 2011 at Algonquin College.

199After graduation she worked at H & R Block part time in the winter of 2012 and full time in April. As her work schedule interfered with the husband’s business hours, she found another job with a private accounting firm with more convenient hours.

200This is a thirteen-year relationship with two children with a wife who left a teaching position in Bulgaria to be with the husband. She has been able to educate herself during the marriage so that the economic impact on her working potential was diminished. However, her role as a homemaker and child care giver, enabled the husband to fully focus his time on his roofing business.

201She returned to the work force after separation but only worked part time to avoid daycare costs as the children were only in school for six hours.

202The wife’s entitlement is compensatory in nature as:

− The husband asked her not to work so she could take care of the house and children;

− she left Bulgaria where she was working in a professional capacity as a teacher to join the husband in Canada;

− she worked part time in the marriage to permit her to be home with the children and part time work were jobs such as in retail or completing tax returns during tax season;

− she was the primary house-maker and child care giver; and

− the husband’s roofing business was demanding and required long hours, especially in the summer, and hence the load of the household management and the caring of the children fell on the wife.

203On the other hand, she was able to educate herself with English courses, computer courses and accounting to enable her to compete in the work force. This education that was encouraged by the husband and paid mostly by him lessened the economic impact on the wife as she could make herself employable when trying to find full time work.

204Her resume shows that she obtained her professional accounting diploma from Algonquin College in 2011 and a Bachelor of commerce in Bulgaria in 2000.

205Her work experience includes: May 2016 – casual office support, tax season 2015 – 2016 with a private accounting firm, and 2012 to 2015 – H & R Block seasonal employee preparing and filing of personal tax returns, 2011 to present – bookkeeper and tax preparation with various small businesses.

206Her computer applications include Trillium, Simply Accounting, DT Max Profile, MS office Suite, and small business accounting applications.

207The wife is also in need of support. With a modest income of $34,000 per annum and monies she receives from Child Tax Benefit, her budget indicates that she is not able to meet her needs even after the child support is paid to her by the husband.

208She has been working full time since August 29, 2017, during the school months. Typically, she takes a six-week summer vacation to Bulgaria which has been a pattern for a number of years. The wife and children visit family there.

Should the Court impute income to the Wife?

209Regarding the issue of imputing income to her, the principles of imputing income applies equally to the support claimant if she is intentionally under-employed, unless it is by virtue of her reasonable educational needs, the needs of the child or reasonable health needs: Drygala v. Pauli.

210For the reasons set out below, the Court declines to impute income because:

− the number of years she was out of the workforce;

− she had only worked part-time during the marriage;

− the husband wanted her to stay home to take care of the children;

− she had two young children in her full-time care after separation; and

− even though she did not provide proof of attendance at job fairs or following up with federal government jobs, she made reasonable efforts to look for work including but not limited to: applying to accountants’ office.

211Regarding her job applications after separation, she could not recollect how many jobs she applied for in 2015 or 2016 and states that she sent proof of job applications to the husband’s lawyer.

212She does continue to take 6 weeks-vacation in the summer to take the children to Bulgaria which is where her family lives. By virtue of her working with a school board, where teachers and staff do have time off in the summer, Christmas and March break, she has these weeks to spend with the children. I am not prepared to impute income even though she has the summers off.

213During the marriage, she did attend Algonquin College on two occasions and received educational certificates. Her resume indicates that she completed courses for computer skills. These courses helped her in obtaining her current full-time work with the school board. She claims that she did apply for government jobs, other accounting firms and retail and department stores.

Legal Principles re Retroactive spousal support

214In Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, the Supreme Court sets out following principles for retroactive spousal support:

1. DBS factors apply as modified for spousal support (circumstances of spouse are relevant as opposed to circumstances of the child).

2. Presumptively, the date of the claim being issued is the start date for support, unless there is a reason to order otherwise.

3. The failure to bring a temporary motion should not be penalized as we should be encouraging people to avoid the cost of bringing temporary motions. This is particularly the case, where the claimant moves the matter quickly to trial after obtaining disclosure.

4. “Spousal support has a different legal foundation than child support. A parent-child relationship is a fiduciary relationship of presumed dependency and the obligation of both parents to support the child arises at birth. It that sense, the entitlement to child support is “automatic” and both parents must put their child’s interests ahead of their own in negotiating and litigating child support. Child support is the right of the child, not of the parent seeking support on the child’s behalf, and the basic amount of child support under the Divorce Act, (as well as many provincial child support statutes) now depends on the income of the payor and not on a highly discretionary balancing of means and needs. These aspects of child support reduce somewhat the strength of concerns about lack of notice and lack of diligence in seeking child support. With respect to notice, the payor parent is or should be aware of the obligation to provide support commensurate with his or her income. As for delay, the right to support is the child’s and therefore it is the child’s, not the other parent’s position that is prejudiced by lack of diligence on the part of the parent seeking child support: see D.B.S., at paras. 36-39, 47-48, 59, 80 and 100-104. In contrast, there is no presumptive entitlement to spousal support and, unlike child support, the spouse is, in general, not under any legal obligation to look out for the separated spouse’s legal interests. Thus, concerns about notice, delay and misconduct generally carry more weight in relation to claims for spousal support” (at para. 208).

5. D.B.S. emphasized the need for flexibility and a holistic view of each matter on its own merits; the same flexibility is appropriate when dealing with “retroactive” spousal support.

General comments

215The wife is entitled to retroactive spousal support commencing January 2016 for the same reasons articulated above regarding retroactive child support.

216With respect to where in the range he should pay, the Court considers his generous access to his children three out of four weekends and sharing of holidays. He has provided for them and although the Court will not order a payment to an RESP, he has been contributing on a regular basis.

217The level of Spousal support should take into account the fact that the husband’s business does fluctuate, the amount of time he has the children, the advantages that the wife had during the marriage in obtaining courses and education. Hence, the proper amount should be the mid-range of the SSAGs.

218Her current income from a contract at the Ottawa-Carleton District School Board is $34,974 per year and as found above, the husband’s income provides that spousal support is payable.

2015

219She worked for H & R Block and another professional corporation earning $16 per hour part-time and earned $8,615 in 2015. He moved in December and as discussed above, he covered expenses while residing there. There will be retroactive spousal support paid for that month.

2016

220She earned $8,381 and the Court imputed his income to be $103,960. The mid-range spousal support is $1,133 per month.

2017

221She earned $10,335 and the Court imputed his income to be $116,710.60. The mid-range spousal support is $1,274 per month.

2018

222She earned $17,587 and the Court imputed his income to be $86,641. The mid-range spousal support is $419 per month.

223Therefore the total of child support and spousal support owing as of December 31, 2018 is $86,659.01.

224Based on my decision below regarding the ongoing support payable, i.e. $1500.23 per month of child support and $266 per month of spousal support for a total of $1766.23 per month, the amount of $8831.15 is owed for 2019 until the end of May 2019.

225The total amount of retroactive support up to May 31, 2019 is $95,489.16

4. What credits should the husband receive for payments made since separation?

226The evidence confirms that the husband paid $1,510 per month on the mortgage as follows:

2016 (x 12)

$ 18,120

2017 (x 12)

$ 18,120

2018 (x 12)

$ 18,120

2019 (for 5 months to end of May)

$ 7,550

TOTALING

$61,910

227He also paid property taxes at $465 per month:

2016 (x 12)

$ 5,580

2017 (x 12)

$ 5,580

2018 (x 12)

$ 5,580

2019 (for 5 months to end of May)

$ 2,325

TOTALING

$19,065

228He paid house insurance at $98 per month:

2016 (x 12)

$ 1,176

2017 (x 12)

$ 1,176

2018 (x 12)

$ 1,176

2019 (for 5 months to end of May)

$ 490

TOTALING

$ 4,018

229Therefore the total amount that the husband paid for carrying costs is $84,993.

230He also agreed to continue making RESP contributions in the amount of $420 per month. This does not count for child support but certainly must figure in the analysis when determining what, if any, retroactive child support is payable by the father.

2016 (x 12)

$ 5,040

2017 (x 12)

$ 5,040

2018 (x 12)

$ 5,040

2019 (for 5 months to end of May)

$ 2,100

TOTALING

$17,220

231He agreed to pay for dance lessons for Angela. It is not clear if they have continued indefinitely but these payments are clearly s. 7 expenses:

2016 (x 12)

$ 2,040

2017 (x 12)

$ 2,040

2018 (x 12)

$ 2,040

2019 (for 5 months to end of May)

$ 850

TOTALING

$6,630

232Pursuant to Master Fortier’s interim order, the father also agreed to pay for Karate lessons for Daniel at $120 per month. Daniel did not continue these lessons after 2016. Again, these payments factor in the father’s contribution to s. 7 expenses. There is no evidence what mother contributed to extracurricular activities. However, it is noted that given her modest income post separation, her contribution would have been minimal:

2015 (x 4)

$ 480

2016 (x 12)

$ 1,440

TOTALING

$ 1,920

233There is no dispute the father paid for Orthodontic expenses as follows:

2016

$ 2,070

2017

$ 1,000

234These constitute s. 7 payments.

235Husband says he provided the wife with an additional $13,760 in direct payments.

236For 2015, they lived under the same roof. He paid the expenses for the home including the trip to the Caribbean.

237He benefits from the increase in equity yet she was able to live there rent free tying up his equity until the home is sold.

238He is not claiming a repayment of the overpayment of support that he says he made.

239It is noteworthy that even in last few years when the father is claiming an employment income of under $40,000 per year, he has managed to maintain the payments for the home and the RESP in the amount of approximately $2500 per month (which is almost $30,000 per year)

Legal principles

240In Adams v. Adams (2001), 2001 CanLII 8527 (ON CA), 15 R.F.L. (5th) 1 (Ont. C.A.), the Court did not permit the husband to receive the full proceeds from the sale of the home as he claimed he had prepaid some mortgage payments after separation until the sale of the home.

241The Court found that she was an equal owner based on constructive trust principles and she was entitled to receive half of the almost $80,000 paid down on the mortgage after separation.

242In Kumar (Litigation guardian of) v. McKenna, [2003] O.J. No. 5473 (Ont. S.C.), the Public Guardian and Trustee sought credits against support arrears for voluntary payments that were made by Dr. Kumar for personal expenses related to their daughter (summer camp and doctor’s bill) and expenses related to the matrimonial home, such as taxes and insurance. The court stated the following at paras. 49-50:

49The right of set-off is typically not available against support payments. Although narrow exceptions to this proposition exist, a payor who makes payments to a third party that are actually owed to a payee necessarily risks a determination that there has been non-compliance with the order to pay, even if the payments have been made for the payee's benefit: Webb v. Webb (1984), 1984 CanLII 4940 (ON CJ), 42 R.F.L. (2d) 422 (Ont. Prov. Ct.).

50One of the narrow exceptions is where there is express agreement or acquiescence by the payee that the payments should be made in lieu of support. Another exception is where payments are made on behalf of children for expenses that are reasonable and that the payee would necessarily have incurred in any case: Bale v. Bale, [2001] O.J. No. 4196 (Ont. S.C.J.). I note that in Bale , Aston J. expressly stated that the exceptions should be applied narrowly, as credit for voluntary payments sets a "dangerous precedent" (at para. 21).

243The court held that the payments with respect to expenses related to the daughter fell within that narrow exception and consequently credited the full amount made to third parties as they were reasonable expenses that the mother would necessarily have incurred.

244Regarding the payments related to the matrimonial home, the Court credited him for half of the amount of the payments, reflecting the parties’ ownership interest in the home. The court credited to the husband with half of the mortgage payments, half the payments made for utilities, and half of the expenses for the upkeep of the home.

245In Harrison v. Harrison (2001), 2001 CanLII 60967 (ON SC), 14 R.F.L. (5th) 321 (Ont. S.C.) – The parties had separated and moved into a new residence with separate quarters. The father had been paying mortgage, insurance, taxes, hydro and heat since they had separated and moved into the new residence. He had also advanced cash payments to applicant mother. Court ordered retroactive spousal and child support but credited husband one-half of the house expenses against retroactive support arrears (at para. 57).

246In Alexander v. Alexander, 2015 ONSC 5639, while this case is slightly more complicated due to the facts, the Court found that the father did owe retroactive child support, subject to credit from mortgage payments the father had made. The father was credited with half of the mortgage payments he had made during a certain period of time.

247Where the case gets complicated is in the calculation of the mortgage payments paid. The parties had agreed that the father would make the payments to service the mortgage from the time he moved out of the house until trial. The father had made the mortgage payments, but had used 80,000 in equity for an investment that lost all of its value, unbeknownst to the mother. When he used that money, he converted the mortgage to a credit line. Consequently, the payments on the line of credit were covering only the interest. The court therefore found that the agreement between the parties ended when the father stopped paying capital for the mortgage in 2008. The court accepted that the amount he had paid on the capital was approximately $5,000. The court held that he would be credited for one half of the $5,000. For the rest of the payments on the line of credit, he would only be credited 19% as he disadvantaged the mother and children.

Analysis

248Based on the above, the court finds that the total amount of retroactive amount owing for child and spousal support up until May 31, 2019 is $95,489.16.

249The payments made by the husband pursuant to Master Fortier’s Order benefited both parties. The equity in the home increased and the children had a roof over their heads with no residential disruption as a result of the separation.

250As joint owner, he was equally responsible for these payments of mortgage, taxes and insurance. He is not claiming occupation rent from the wife.

251He should benefit from half of the mortgage, realty taxes and insurance payments made since separation.

252If he is credited with half of the carrying costs of the home of $42,496.50 (1/2 of $84,993) then the retroactive amount towing is $52,992.66.

253Secondly, he made other payments. He contributed $17,220 to RESP’s. Although, these payments did not provide an immediate financial benefit to the children, it is a future benefit for them and he was continuing a pattern of payment that had occurred before separation.

254He also paid $1920 for karate plus $6630 for dance and $3070 for orthodontic plus an extra $13,760 in direct payments to the wife. These are not disputed by the wife and they total $25,380.

255Based on the factors set out in DBS, I find that there should be some retroactive support payments made. As stated in Chrintz v. Chrintz [1993] O.J. No. 3289, retroactive child support may be granted to compensate for any deficit where a parent has failed to assume his fair share of the child support obligations. However, the Court notes that in the last filed financial statement of the wife, she has not incurred any significant debt since separation.

256The husband should receive full credit for the direct payments to the wife in the amount of $13,760 and that leaves a balance of $39,232.66.

257He had a responsibility to pay for s. 7 expenses and given the wife’s low income he had to bear the burden the lion’s share of these expenses.

258The s. 7 expenses were voluntarily made and benefited the children. The RESP contributions did not have any immediate financial benefit to the children but does provide for their future post-secondary educational needs.

259Certainly, those funds paid towards RESP could have been a significant benefit to the wife who had to try to support herself on her small income. Her housing costs were paid for but there are still the other living expenses that she had to pay such as food, clothing, toiletries, transportation, school fees, etc. A review of her financial statement filed in November 2018, does not indicate an increase in debts other than small amounts owing on her credit cards.

260Therefore, taking into consideration the above facts and the principles set out in DBS, the Court orders the amount of $15,000 in retroactive support.

5. What is the amount for Ongoing Child support?

Legal Principles

261In determining child support, the Court must consider current income. See s. 2(3) of the Guidelines, Emmerson v. Emmerson 2017 ONCA 917, Coghill v. Coghill.

262As stated in Mason v. Mason, 2016 ONCA 725, 132 O.R. (3d) 641, at para. 138, “… the Guidelines rely on the more recent past to predict the near future and do not adopt averaging as a default methodology.”

263While the husband’s income may have been much higher in the past years when he had significant undisclosed incomes, the Court must consider his current income to determine ongoing support.

264However, the Court notes that it is not obligated to use the average of the past three years. In Punzo v. Punzo, 2016 ONCA 957, 90 R.F.L. (7th) 304, the Court of Appeal stated that the fact that an amount is not an average of the three preceding years of income is permissible under s. 17 of the Guidelines.

265On the other hand, in Halliwell, where a spouse’s income fluctuated significantly due to inherent unpredictability of income from business interests, an averaging approach is appropriate.

266In Decaen, the Court stated that courts can look at the last three years but there is requirement that they average the past three years.

267It is worth commenting that for the purposes of calculating support, I am including capital gains which the husband earned in 2016 and 2017. I am also including RRSP income received in 2017.

268In Ludner v. Ludner, 2014 ONCA 827, 52 R.F.L. (7th) 17, the Court permitted the inclusion of RRSP if this would be fair and reasonable in light of any pattern of income.

269See also Fraser v. Fraser 2013 ONCA 715, 40 R.F.L. (7th) 311, where the Court stated that RRSP income is included in Line 150 income and subject to ss. 17 to 20 of the Guidelines, RRSP income is presumptively part of a spouse’s income for the purposes of determining child support.

Analysis

270For the purposes of determining 2016 post-incorporation income I am considering that both accountants for the purposes of their discussion for 2016 income developed a calculation of gross revenue earned assuming a 35% profit. This calculation took into account the HST, remittance and other expenses paid.

271It is appropriate under s. 17 of the Guidelines for the Court in the determination of income to have regard for the past three years:

2016

$ 103,690.00

2017

$ 116,710.60

2018

$ 86,641.50

272The husband submits that he now has an annual employment income of approximately $35,000 per year plus CPP of $2,160 and OAS of $5,160 and $6,600 net rental income for a total of $48,920 per year.

273Based on the above, a fair and reasonable income is the average of the husband’s first three years of his incorporated business attributing all unreported income to him, i.e. $102,347.37 per annum. Again, as stated above, the husband is the operating mind of the company and the son does not acknowledge receiving any unreported income.

274I find that it is appropriate that he pay child support on the amount determined of $102,347, which is based on the average of 2016, 2017 and 2018.

275Therefore, commencing on the first day of the month following the sale of the matrimonial home, he will pay the amount of $1,500.23 per month as child support.

Termination of Child support

276The wife is requesting an order that the support order is non-variable until the youngest child attains the age of 18 or August 1, 2024.

277Given the husband’s current age of 65, that he has some health issues, the Court is not prepared to order him to continue paying child support until 2024.

278The husband certainly has a financial responsibility to meet the financial needs of his children. He must bear the financial consequences of his decision to have another family later in life. His children are entitled to be supported by both parents to the best of the parents’ ability.

279It is not uncommon for people to work into the 70’s and late 70’s.

280However, this is dependent on a number of factors as set out in Justice Trousdale’s decision in St-Jean v. Fridgen, 2017 ONSC 7680, 3 R.F.L. (8th) 92. Although that case dealt with a variation application to terminate spousal support on retirement, some of the factors are relevant: here:

− Age of each party at the date of separation and at the hearing;

− The length of the marriage;

− Whether there were children;

− The role each party played in the marriage;

− The financial circumstances of each party at the date of separation and at the current date including income, expenses, assets and debts;

− Whether either party has re-partnered;

− The medical situation of each party;

− Whether the spousal support was needs-based support or compensatory support or contractual support or a combination;

− Reasons for retirement and whether it was voluntary;

− Economic advantages or disadvantages arising from the marriage or its breakdown;

− The financial consequences arising from the care of the children and any obligation to support the children; and

− Economic hardship arising from the marriage breakdown.

281In that case, Justice Trousdale found it reasonable for the payor to retire at age 65 after 41 years of employment.

282The Court will not restrict him from applying to vary support in the event of a material change of circumstances before the youngest turns 18 years of age. Of course, if he were to do so, then he must also establish why he is retiring and whether based on the factors set out in St-Jean, he is entitled to do so. Certainly, if he is healthy and able to continue to play a role in the roofing business and minimize his physical labour, then he may find it difficult to terminate his support obligations. The Court will not speculate on the possible scenarios which would entitle him to apply for variation, but at this time, it declines to make a non-variable order until the year 2024.

283Although there is an expectation given the ages of the children, the fact that he is the main bread winner, and his financial responsibility to his wife who was economically impacted due to the marriage as a result of her role in the marriage and that the economic impact continued to affect her after separation due to the young ages of her children, he has a legal and moral duty to continue to remain in the workforce as long as possible.

284His son’s participation in the business allows him to minimize the physical aspect of the roofing business and allows him to continue to increase revenue by obtaining contracts and networking.

285Therefore, by June 1st of each year, the parties will exchange tax documents, including their personal income tax returns and notices of assessment. In addition, the husband will provide his most recent corporate financial statement including balance sheet and income statement as well as his most recent corporate tax return and notice of assessment.

286Ms. Youcheva may demand further information as provided by s. 21 of the Guidelines.

Section 7 expenses

287On an ongoing basis, the parties will share the s. 7 special and extraordinary expenses in proportion to their respective incomes, i.e. the husband’s proportionate share will be 75% and the wife’s will be 25% in accordance with the presumption under s. 7(2) of the Guidelines.

288No s. 7 expenses will be incurred for which the parent expects the other parent to contribute unless their written consent is first obtained and that consent shall not be unreasonably withheld.

6. What is the amount for Ongoing Spousal Support?

Parties’ positions

289The wife wishes spousal support for seven years based on income of $142,471 per annum or a lump sum in spousal support (although her reply submissions requested a lump sum in child support as well).

290The husband submits that the wife should be working full time and not take summers off. She has not made all reasonable efforts to find full time employment after the separation.

Legal Principles

291The principles are set out by Court of Appeal in Davis v. Crawford, 2011 ONCA 294.

292It is well accepted – and undisputed – that a lump sum award should not be made in the guise of support for the purpose of redistributing assets: Mannarino v. Mannarino (1992), 1992 CanLII 14022 (ON CA), 43 R.F.L. (3d) 309; Willemze-Davidson v. Davidson (1997), 1997 CanLII 1440 (ON CA), 98 O.A.C. 335 (C.A.), , at para. 32. Moreover, the governing legislation does not recognize redistribution of assets as one of the purposes of a spousal support award.

293A lump sum order can be made to “relieve [against] financial hardship, if this has not been done by orders under Parts I (Family Property) and II (Matrimonial Home)”: Family Law Act, R.S.O. 1990, c. F.3, s. 33(8)(d).

294In any event, the purpose of an award must always be distinguished from its effect. Any lump sum award that is made will have the effect of transferring assets from one spouse to the other. The real question in any particular case is the underlying purpose of the order: Willemze-Davidson, at para. 32.

295Similarly, it is well accepted that an important consideration in determining whether to make a lump sum spousal support award is whether the payor has the ability to make a lump sum payment without undermining the payor’s future self-sufficiency.

296Most importantly, a court considering an award of lump sum spousal support must weigh the perceived advantages of making a lump sum award in the particular case against any presenting disadvantages of making such an order.

297The disadvantages of such an award can include: the real possibility that the means and needs of the parties will change over time, leading to the need for a variation; the fact that the parties will be effectively deprived of the right to apply for a variation of the lump sum award; and the difficulties inherent in calculating an appropriate award of lump sum spousal support where lump sum support is awarded in place of ongoing indefinite periodic support.

298In the end, it is for the presiding judge to consider the factors relevant to making a spousal support award on the facts of the particular case and to exercise his or her discretion in determining whether a lump sum award is appropriate and the appropriate quantum of such an award.

299As we have said, we do not endorse the submission that lump sum spousal support awards must be limited to “very unusual circumstances” as a matter of principle. Nonetheless, we agree that most spousal support orders will be in the form of periodic payments. To a large extent, this is for four very practical reasons.

Here, monies are simply not available to fund a lump sum support award either to take the place of, or to supplement, an award of periodic support. Instead, support will be paid from one spouse’s income, the only available source for support payments, and it will be paid to finance the ongoing needs of the other spouse, which will generally be of a periodic rather than lump sum character.

Here, circumstances for the husband may change as he works into his late 60’s. The parties may re-partner or change careers or the parties’ means and needs will change, which will outweigh the considerations favouring a lump sum award.

The case at bar can be distinguished from Sharpe, in which the Court found a strong possibility that the husband would disobey a court order: he was intentionally under-employed, there was a possibility that the payor’s livelihood was or would become precarious, had sufficient assets from which a lump sum could be paid, he was about to leave the jurisdiction, a desire to terminate contact between the parties, and the wife was taking job retraining or upgrading course.

In Davis, the husband’s assets were substantially higher than the wife and he was likely to receive a substantial inheritance in the near future.

Analysis

300Firstly, I have already dealt with the issue of imputing income to the wife and the court has declined.

301Secondly, I do not find that this is a case for lumps sump spousal support.

302The SSAG indicate the following the ranges: low - $0, mid - $266, and high - $692 are based on the husband’s imputed income of $102,347 and the wife’s income of $34,400. As discussed above, the husband will should continue to pay the mid-range of spousal support of $266 per month.

303The husband is now 65 years of age and although he has had five surgeries and suffers from arthritis, he continues to work full time and intends to do so until 70 years of age. Of course, this is dependent on his health. He has arthritis, joint pain, has had five surgeries – two elbows, two hernias and one for his shoulder, although there are no medical reports filed.

304This is not a case for lump sum support for the following reasons:

− The husband has been faithfully paying the payments ordered by Master Fortier in 2017;

− The wife claims that he did not pay child support and hence a lump sum should be ordered, but the parties agreed to the order and no further motion for support was made pending trial;

− The wife also argues for lump sum child support as he has not been forthright with respect to his income and there is a likelihood that he will not respect a court order for support. But this assumes that there are no enforcement options available to the wife through the Family Responsibility Office and the husband does have assets and requires his driver’s license for his employment;

− There is no reason to believe that he will not continue to follow a court order for support;

− A lump sum support would strip the husband from his assets and would really amount to a redistribution of property;

− This case does not justify the extraordinary remedy based on the facts;

− The wife relies on Sharpe v. Sharpe (1997), 1997 CanLII 12236 (ON SC), 27 R.F.L. (4th) 206 (Ont. Gen. Div.), t where the Court enunciated certain principles that should be considered in ordering a lump sum award:

o Difficulties enforcing periodic payments – here, the wife submits that he will be difficult with respect to enforcement, but the Court finds that there is no history of that being the case here. In any event, there are provisions permitting enforcement of support which includes suspension of driver’s licence.

o Possibility of the payor’s livelihood becoming precarious – The Court finds that the husband has operated a roofing business for decades. here the Court cannot make a prediction;

o Availability of sufficient assets – Although, the husband has assets, an award of a lump sum as requested by the wife would deprive him of any assets for himself and would amount to a redistribution of assets.

o Payor will leave the jurisdiction – There is no evidence that the husband is a flight risk.

− Desirability of terminating personal contact between the parties – the parties here have agreed to joint custody whereby they will need to jointly parent the children; and

− No evidence that the wife is taking more retraining or upgrading and requires a lump sum award.

305In my view the SSAGs provide an appropriate result: Fisher v. Fisher, 2008 ONCA 11, 88 O.R. (3d) 241, at para. 103.

306The parties’ property settlement will allow the wife to be in the current financial position:

− $170,000 equalization payment;

− Half interest in the matrimonial home on Mattawa. Once it is sold, and the agreement was that it would be listed on May 1, 2019, she will receive approximately $100,000 from her share of the net sale proceeds if it sells at the value attributed to the home by the parties; and

− $32,000 in TFSA.

307Spousal support will continue until there is a material change of circumstances and end in seven years from the date of this Order. The SSAG’s indicate a range for duration from 6.5 years to a maximum of 13 years from separation. The husband will pay for another 7 years, i.e. 2026 which will be over 10 years of support. He will then have met his legal obligation to his wife.

7. Should the husband be ordered to obtain a health plan?

308S. 34(1) of the Family Law Act provides the court jurisdiction to make an order requiring a spouse to cover his or her child on an existing plan:

Powers of court

34. (1) In an application under section 33, the court may make an interim or final order,

(j) requiring that a spouse who has an interest in a pension plan or other benefit plan designate the other spouse or a child as beneficiary under the plan and not change that designation; and

The court held that the court did not however have jurisdiction to order the father to obtain a plan.

309Lindsay v. Jeffrey, 2014 ONCJ 1, in which the father was working as a mechanic without any medical dental and/or extended benefits plan. The mother asked that the father obtain a medical, dental and extended health benefits plan. The court dismissed the mother’s claim as it held that its jurisdiction was limited to requiring the father to cover child on existing plan.

310The husband has never had an extended health plan. No authority has been provided by the wife that would allow a court to order the husband to obtain the same. I therefore decline to make such an order.

311Rather, pursuant to s. 7 of the Guidelines, the Court’s order will include that any medical or dental costs must be shared in proportion to the parties ‘respective incomes.

8. Should the husband be ordered to obtain a life insurance policy?

Position of the parties

312The wife would like security for the support payments in the event of the death of the husband.

313The husband is 65 years old. He does not have a life insurance policy and would likely be only be able to obtain one at a very considerable cost.

Analysis

314The husband previously had a life insurance policy during the parties’ marriage and cohabitation but it was cancelled with full knowledge of the wife. The premiums for the policy were very high given the age of the husband.

315Again, there is no authority provided that would require a husband to seek and obtain a life insurance policy.

316The Court will order that the husband’s support payments will be binding on his estate.

317He did state that his estate would be divided equally with his four children, 36-year-old, son 41-year-old daughter (with two children), and his two children in this case.

318Unlike the Grassie v. Grassie, 2013 ONSC 1198 decision, the husband was 38 years old and had already had a life insurance police in force.

319The Court does not have the jurisdiction to order the husband to obtain a life insurance police but according to the FLA, the Court can order that his current one name wife as beneficiary for security.

320The husband is prepared to make the support payments a first charge on the estate.

321The Court is not prepared to order the husband who is 65 years of age to obtain life insurance at this stage. The premiums would be prohibitive. I accept his evidence that the parties cancelled his policy due to high premiums.

322The support payments will be a first charge on is estate.

Conclusion

323A divorce Order will be issued.

324The parties will cooperate and sign all necessary documents to ensure that the RESP is jointly held and will require both signatures for any withdrawal.

325The Husband will pay $15,000 in retroactive support payable by the earliest date of the sale of the matrimonial home or December 31, 2019.

326Commencing June 1, 2019, the husband will pay child support in the amount of $1,500.23 for two children based on an imputed income of $102,347 per annum.

327Commencing June 1, 2019, the husband will pay to the wife the mid-range of spousal support of $266 per month until there is a material change of circumstances. The final payment will be May 1, 2026.

328On an ongoing basis, the parties will share the s. 7 special and extraordinary expenses in proportion to their respective incomes, i.e. the husband’s proportionate share will be 75% and the wife’s will be 25%. No s. 7 expenses will be incurred for which the parent expects the other parent to contribute unless their written consent is first obtained and that consent shall not be unreasonably withheld.

329Commencing June 1st, 2019, and by June 1st of each year, the parties will exchange tax documents including the parties’ recent personal income tax return and notice of assessment. In addition, the husband will provide his most recent corporate financial statement including balance sheet and income statement as well as his most recent corporate tax return and notice of assessment.

330The husband’s support payments will be binding on his estate.

331If the parties cannot agree on the issue of costs, then the wife shall provide her two-page costs submissions along with her Bill of Costs and any offers to settle by May 29, 2019.

332The husband will provide his two-page costs submissions along with his bill of costs and any offers to settle by June 12, 2019.

333The wife may file a one-page reply by June 21, 2019.

334In the event that the parties cannot agree on any post trial accounting while the parties were waiting for this decision, the parties may seek a further date before me. Costs of that appearance will be dealt with at the end of the hearing in accordance with the factors set out in the Family Law Rules.