COURT FILE NO.: FC-16-288

DATE: 2019/04/17

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Norine Hum

Applicant

– and –

Dianne (David) Skoll

Respondent

D. Larry Segal, for Ms. Hum

J. Alison Campbell, for Ms. Skoll

HEARD: January 21-31, February1-8, 2019 (at Ottawa)

JUDGMENT

linhares de sousa

introduction

[1] The matter before the Court involves mutual claims under the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), and the Family Law Act, R.S.O. 1990, c. F.3 (the “FLA”). The specific issues for determination are the following:

(a) divorce;

(b) custody and access;

(c) property issues under the FLA, including the determination of value of property, the division and an accounting of joint property and a claim for an unequal division of net family property;

(d) income determination for both parties for support purposes;

(e) spousal support, both retroactive and prospective;

(f) child support, both retroactive and prospective;

(g) section 7 expenses for two children, both retroactive and prospective;

(h) security for spousal and child support obligation; and

(i) costs.

FACTUAL BACKGROUND LEADING TO SEPARATION

[2] The Applicant, Norine Hum, and Respondent, Dianne (David) Skoll, are 59 and 52 years old respectively. They commenced to cohabit in approximately May of 1990 and were married on August 4, 1991.

[3] There are three children of their union, namely Elizabeth Leah Skoll (dob 23 May, 1994), Gillian Margaret Skoll (dob March 6, 1998) and Rebecca Phoenix Skoll (dob June 15, 2002). The current circumstances of the three children are as follows.

[4] Elizabeth has finished her education and is now independent.

[5] Gillian is in the final years of her post-secondary education at Wilfred Laurier University and living in Waterloo. Gillian will be financially dependent on her parents until she completes her post-secondary education, which is anticipated for April, 2020. The evidence showed that because Gillian changed her course of studies after she commenced her post-secondary education, the anticipated completion date for her post-secondary education may be later than 2020.

[6] With respect to financial support for Gillian, fortunately, she has access to a substantial RESP, contributed to during the marriage and after separation by both her parents, that can be expected to fund her post-secondary education until its completion.

[7] During her school breaks, Gillian has not always returned to Ottawa to reside with her parents. She remained in Waterloo during the spring/summer of 2017 but returned to reside with her parents in Ottawa during the spring/summer of 2018. During that period she alternated her residence between both parents on a weekly basis. It is not clear what Gillian will do for the coming school break and her parents will accept whatever decision she makes.

[8] Gillian appears, on the evidence, to have a good relationship with both her parents, and as an adult child, is able to deal directly with her parents regarding any extra financial support she may need. Hence, going forward, unless circumstances change, there does not seem to be an evidentiary foundation or imperative for ordering child support for the adult child Gillian and so no order will be made. There is a claim made by Ms. Hum for retroactive child support and section 7 expenses for Gillian for the period of time Gillian lived with her in the past.

[9] Rebecca is currently completing her high school education anticipated to be completed in the spring of 2020. It is expected that Rebecca will go on to pursue post-secondary education and will be financially dependent on her parents for some time. Rebecca, too, has a substantial RESP that can be expected to fund her post-secondary education. A support order for Rebecca is required.

[10] During the early years of the couple’s cohabitation and marriage, they each pursued their respective educations. Ms. Hum trained and began working full-time as a registered nurse until the birth of their first child, Elizabeth. After the birth of Elizabeth and after taking about one year to care for her, Ms. Hum returned to nursing, working nights and weekends.

[11] During the periods of Ms. Hum’s evening and weekend on-call employment, the evidence showed that Ms. Skoll cared for the child. In this way, together with the care-giving assistance of maternal and paternal grandmothers, the parties minimised their reliance on outside and non-family care-givers.

[12] This became the pattern of employment for Ms. Hum with the births of the subsequent two children, Gillian and Rebecca. The Family began to use daycare after Gillian was born and Ms. Skoll continued to care for the children when Ms. Hum was at work.

[13] Ms. Hum terminated her nursing employment in 2001 shortly after the birth of Rebecca to remain at home on a full-time basis. The evidence is not clear on this point, but it is possible that Ms. Hum remained on the nursing registry, available for on-call work, until as late as 2008. Effectively, however, she terminated her employment as a registered nurse in 2001.

[14] The evidence supports the finding that Ms. Hum’s decision to terminate her employment as a nurse was accepted by both parties. It was Ms. Hum’s evidence that, given her responsibilities at home and the ongoing conflicts between herself and Ms. Skoll, she was not able to focus on her nursing responsibilities. It was also her evidence that she perceived Ms. Skoll to be relieved with her decision to terminate her employment because it freed her from certain family responsibilities.

[15] It was the evidence of Ms. Skoll that it was effectively the decision of Ms. Hum to terminate her employment and that she accepted it. Ms. Skoll had no recollection of ever having discussed with Ms. Hum her quitting work.

[16] As a result, for approximately 13 years, prior to the parties’ physical separation, Ms. Hum dedicated herself to the care of the home and the three children of the union. As recognised by Dr. Weinberger, in his assessment, she was the “historic primary caregiver” and the “stay-at-home parent” (page 16 of 22, Trial Record, tab 22). This was not disputed by the parties and is an unequivocal circumstance of this marriage.

[17] Ms. Skoll completed a first degree in electrical engineering and subsequently obtained a Master’s degree in electrical engineering, while also working at Carleton University, a job that Ms. Hum may have brought to the attention of Ms. Skoll. As can be seen from Ms. Skoll’s resume and as testified to by her, since commencing her working career she has held various positions and built up substantial experience with different companies in the developing, designing, programming and implementation of software.

[18] As a result of Ms. Skoll’s employment with one company, CADABRA, she acquired a number of shares through her employment from 1992 to 1993. The shares were eventually sold by Ms. Skoll, in about 2002, for approximately 1.2 million dollars. The funds were eventually invested in the joint names of the parties, after they consulted a financial advisor, and became the parties’ joint BMO InvestorLines. Ms. Skoll eventually began to manage these investments herself and to cash in the investments according to the family’s needs.

[19] Perhaps more importantly for the family, in March of 1999, Ms. Skoll became the founder and President of Roaring Penquin Software, Inc., described as an Ottawa-based Linux consulting firm. The company focused on the development of CanIt, an email security software system. While Ms. Skoll maintained other employment for a while, by 2002 the building up and operation of Roaring Penquin Software, Inc. very quickly became her main employment and the sole source of the family’s income. While embarking on this venture full-time entailed some financial risks for the family, Ms. Skoll testified that she assured her spouse that the financial support of the family would not be jeopardised.

[20] Early in their relationship and prior to their marriage, Ms. Skoll disclosed to Ms. Hum that she was a cross-dresser and engaged in presenting as a woman which eventually became a significant part of their sexual relationship and a unique challenge to their marriage. But, as the evidence shows, it was not the only one.

[21] It was the evidence of Ms. Skoll that from a very early age she has experienced gender dysphoria and the desire to live as a female. She felt obligated to share this with Ms. Hum prior to their marriage, which she did. Ms. Skoll did not deny that, prior to the marriage, she assured Ms. Hum that her desire and need to cross-dress would not interfere with their matrimonial relationship.

[22] Ms Hum provided substantial evidence concerning her many reservations to committing to a marriage with Ms. Skoll, which, based on her own evidence, she did not communicate openly and candidly with Ms. Skoll. This was consistent with Ms. Skoll’s evidence that she was not told, nor did she observe any discomfort on the part of Ms. Hum with respect to this aspect of her life. Regardless, Ms. Hum and Ms. Skoll were married. Both parties desired children and there is no question that both parties genuinely love their three children and have perceived themselves to be acting in their best interests.

[23] The parties attempted to make their marriage work but its multiple challenges proved to be beyond their joint abilities to succeed and continue in the marriage. The evidence of both parties, as well as the parenting assessment carried out by Dr. Weinberger (see Trial Record tab 22), post separation, reveals that there existed numerous and multiple factors contributing to matrimonial conflict, such as the inability to communicate candidly and openly, individual and conflicting perceptions of power imbalance, financial spending assumptions and who set those financial standards and expectations, the standard of home care, multiple disappointments and frustrations in their mutual sexual expectations, and their mutual general blindness to the reality of their matrimonial situation. There were some incidents of physical altercations between the parties.

[24] During the course of the evidence both parties expressed mutual criticism and recriminations of the other’s conduct during and after the marriage, as they perceived it. Inevitability of the final rupture of the marriage came in October of 2014. Some of these mutual allegations were being heard by the parties for the first time in the courtroom, which certainly confirms the observations of Dr. Weinberger that this couple had a profound difficulty with interpersonal communication.

[25] Various extended family members were called to give testimony to their observations of the couple over the years of the marriage. This evidence was not particularly helpful to the court. It is clear that neither party honestly shared with members of their respective families the true nature of their personal circumstances and their relational difficulties. Clearly, these family members were not in a position to know what reality the couple was living during the course of their marriage. At times, the evidence of these family members even conflicted with the testimony of the parties, such as the question of what help Ms. Hum gave to Ms. Skoll’s parents once they had moved to Ottawa. The one-sided focus and, at times venom, expressed by some extended family members was also singularly unhelpful to the court, and I might add, to the family as a whole.

[26] What is clear from the evidence is that during their period of cohabitation the couple took on defined roles, which crystallised even more once Ms. Hum terminated her nursing career and dedicated herself to the care of the home and the children.

[27] The evidence shows that once Ms. Hum terminated her nursing employment, Ms. Skoll, through her continued employment and eventually through the creation, building up and operation of her company, Roaring Penquin Software Inc., became the sole financial support of the family.

[28] The documentary history of the company’s incorporation, the changing shareholdings within the company over time can be found at exhibits 11 (tabs 14 to 23), 24 and 40. In brief, Ms. Skoll testified that initially she owned all of the shares of the company and was the only director. Over time, various employees were given shares in the company. At the separation date, both parties owned equal special class C shares (50,000) that the company could redeem at any time. In addition, Ms. Skoll also owned common shares in the company.

[29] Shortly after the creation of the Roaring Penquin Software Inc., when the company had an official payroll, Ms. Hum was given a salary from the company, a salary approximately equal to what Ms. Skoll gave herself. Ms. Hum was registered as an officer of the company. This arrangement continued during the marriage and after the separation until the end of 2016.

[30] It was not contested that Ms. Hum did not do any notable work in and for the company, other than the occasional assistance with cleaning and tidying. The payment of a salary was an income-splitting device, for income tax purposes, than compensation for work Ms. Hum performed for the company.

[31] It was the evidence of Ms. Skoll that she essentially determined what salary the parties would receive based on their family needs and what the company could bear. Over the years their salary was increased and they also had bonuses declared as another way of having the family access company resources.

[32] With respect to the care of the children during the marriage, the evidence showed that when she could and as needed, Ms. Skoll was engaged, together with Ms. Hum, in the daily care of the children, in transporting them to school and their various and multiple activities. It was a busy household with the children engaged in a multitude of activities.

[33] Despite the eventual substantial resources available to the family, beginning perhaps with the cashing in of the CADABRA shares in 2002 and also as a result of the gradual success of Roaring Penquin Software Inc., the family’s standard of living was never extravagant. The evidence supports the finding that they lived frugally and enjoyed a modest, middle class standard of living. The homes they purchased and lived in and the cars they drove were neither extravagant nor luxurious. The clothes the family wore were simple, to the point that some family members did not think the family had very much money because of it. The family took vacations, including international ones. The family did not lack for anything and the children were enrolled and participated in many cultural, educational and recreational activities. A number of the children’s activities were free, but some were also quite costly, such as multiple individual skating coaches. According to Ms. Skoll, what activities the children were involved in was essentially determined by the children’s wishes and never a source of dispute.

[34] It was Ms. Hum’s evidence that although she might have wanted a few other things as part of her standard of living, which she admitted she never communicated to Ms. Skoll, she accepted their frugal and modest living standard because that was what she thought Ms. Skoll wanted.

[35] Ms. Hum acknowledged that Ms. Skoll took the lead on the family expenses and the family’s financial planning in the present and for the future. Ms. Hum never questioned what Ms. Skoll did financially; she felt that Ms. Skoll was the more knowledgeable of the two in this area; and she relied and trusted her wholeheartedly as working in the interests of the family.

[36] Ms. Skoll testified that the couple never really ever discussed family finances or expenses. Both parties agreed that family finances and savings were not topics of dispute between them. Ms. Skoll included Ms. Hum in discussions with the financial advisor for the CADABRA shares investment. The investments and funds received from the sale of Ms. Skoll’s CADABRA shares were put into the joint name of the parties.

[37] Ms. Skoll testified that Ms. Hum was not involved in the family finances and left it all to her because she did not want to be involved. Ms. Skoll perceived that the couple agreed on the modest lifestyle the family enjoyed although she never imposed any limitations on Ms. Hum’s spending nor monitored her spending. In fact the evidence showed that Ms. Skoll suggested that Ms. Hum hire a housecleaner to assist her with the clutter in the home, but Ms. Hum refused this offer, insisting she continue to do the house cleaning for money reasons. It was Ms. Skoll’s evidence that she trusted Ms. Hum in her spending and was never given any reason throughout their relationship not to trust her.

[38] Based on all of the evidence, including evidence about the parties’ personal family histories and how they conducted their spending during the marriage, I must conclude that the standard of living the parties enjoyed throughout their cohabitation was a mutually accepted decision.

[39] Effectively, from the very beginning, the family’s finances were operated through a joint bank account, to which both parties had access. It was the evidence of Ms. Hum that her nursing salary went into the couple’s joint bank account as did Ms. Skoll’s salary. When both parties received a salary from Roaring Penquin Software Inc., their salaries also went into the joint bank account.

[40] Ms. Hum testified that she accessed the bank account for groceries, some household expenses, pet expenses and some personal expenses, such as yoga lessons. Ms. Skoll took care of paying everything else, including house and property costs, insurance costs, car expenses, vacation costs and children’s expenses and activities, from the same joint account. The parties had a joint credit card to which Ms. Hum had access but never used. Ms. Hum also had a personal credit card which she did not recall ever using. The evidence showed that the joint credit card was mainly used for Roaring Penquin Software Inc. expenses. Ms. Skoll also took care of the credit card payments, and, of course, any business payments.

[41] The parties were savers and the accumulation of savings became a significant aspect of the family’s standard of living. Surplus funds and earnings that were not needed for the family were either kept in the company, Roaring Penquin Software Inc. or distributed as dividends to the parties personally or to 1578040 Ontario Limited (the “Holding Company”) which was first incorporated in 2003. Both parties appeared on the shareholder’s register as equal owners (see exhibit #13, tabs 51 and 52). The Holding Company became the repository of the family’s main investment vehicle, the BMO Investor Line. According to Ms. Skoll, the Holding Company was created as a mechanism to pay dividends from Roaring Penquin Software Inc. on a tax-deferred basis. At the same time, the Skoll Family trust was created but was never used and had a zero balance at the end of the marriage.

[42] Ms. Hum testified that she understood that any extra money the family had was kept in Roaring Penquin Software Inc. and used for building up the company. Ms. Hum’s evidence indicated that over the years she was asked to sign documents relating to the business, had general discussions with Ms. Skoll concerning some affairs of the business, such as acquiring a new client or buying back employee shares. However, it was her evidence that she really had no knowledge of how the company was doing financially during the marriage nor at the end of the marriage. She testified that it was not really something she discussed her spouse.

[43] It was the evidence of Ms. Skoll that her need to cross-dress and present as a woman intensified over the years, despite her attempts to modify it from time to time. She testified that shortly after the death of her father, in May of 2013, she accepted that her transitioning to a female was inevitable and necessary for her overall wellbeing and mental health. It was the evidence of Ms. Skoll that this fact was something that Ms. Hum never fully accepted nor appreciated.

[44] Ms. Skoll sought her own personal counselling and therapy for her personal issues until she was able to eventually come to her decision to transition and to begin the medical process in March, 2014. Ms. Skoll now lives as a woman and has legally changed her name.

[45] It was not disputed on the evidence that Ms. Hum was never told by Ms. Skoll about her decision to transition to a woman until after the decision had been made by Ms. Skoll and her had begun the medical transition process.

[46] It was the position of Ms. Hum that throughout her marriage she attempted to support her spouse in every respect, to remain loyal to her throughout the marriage, to be what could be considered a “good wife”, which meant conforming and doing what she thought Ms. Skoll wanted in their personal sex life, their family life and their financial management and future planning. Even to the point of converting to Judaism, because Ms. Hum thought that that was what Ms. Skoll wanted.

[47] The parties’ evidence on why Ms. Hum converted to Judaism diverged substantially as to whether Ms. Skoll asked Ms. Hum to convert or as to whether her religious conversion was necessary, if their children were to be considered Jewish. It may indeed be another glaring example of this couple’s inability to communicate. Nonetheless, I think it fair to conclude that it is very unlikely that Ms. Hum would have converted to Judaism had she not married into Ms. Skoll’s Jewish family.

[48] As a couple, the parties, during their marriage, attempted to reach out and to engage the assistance of the transgender community in Ottawa through an organisation called Gender Mosaic. A number of persons who had contact with the couple, their children and extended family members at the Gender Mosaic meetings testified to their presence and their observations of them at those meetings.

[49] The parties also sought out joint marriage counselling. They sought out joint counselling on the issue of Ms. Skoll’s transition and need to transition. All of this was without success, leading to the final breakdown of the matrimonial relationship shortly after Ms. Skoll made the decision to transition from a male to a female.

[50] The evidence supports the finding that Ms. Hum did not agree with Ms. Skoll’s decision to transition and saw that decision as determinative of the final physical separation. To conclude that, on the evidence, in my view, is simplistic and ignores the profound dysfunction that this matrimonial relationship had sadly arrived at by the end of 2014.

[51] On October 7, 2014 the parties physically separated with Ms. Skoll leaving the matrimonial home to find other accommodation. After living with her mother for a short period of time, Ms. Skoll quickly found her own accommodation which permitted her to offer a secondary home for the children during her parenting time with them, which she immediately sought out on a relatively equal basis with their mother.

[52] Ms. Hum, after one night away from the matrimonial home, continued to live in the matrimonial home, caring for the children and has done so up to the present.

FACTUAL BACKGROUND POST-SEPARATION LEADING TO COMMENCEMENT OF LITIGATION

[53] Both parties leave this marriage fully convinced that by the end of the marriage they were victims of spousal abuse. Some terrible words had been exchanged between them and there is no question that both of them were at an emotional and psychological low when they separated.

[54] Ms. Hum testified to her shock and inability to concentrate after the separation. Dr. Weinberger, in his psychological testing of Ms. Hum, identified the high scoring on “indicies that evaluate the presence of features of depression and anxiety as well as the general sense of a person being in significant overall distress akin to trauma” (page 7 of 22, tab 22 of the Trial Record). When cross-examined on this part of Dr. Weinberger’s report, Ms. Skoll testified that she agreed that at the separation that was the way Ms. Hum was presenting and that it might have been difficult for Ms. Hum to make decisions regarding their separation at that time.

[55] Consistent with Dr. Weinberger’s recommendations (page 21 of 22, tab 22 of the Trial Record), Ms. Hum actively sought out counselling in many forms. One of Ms. Hum’s psychotherapists, Ms. Theresa Willoughby, testified to the counselling work she did with Ms. Hum for a number of years after the separation. She spoke of Ms. Hum’s difficulty in concentrating and focusing on issues, her personal anxiety and low self-esteem, lack of trust of others and her own opinions and difficulties establishing a support network in her life.

[56] Ms. Willoughby found Ms. Hum to be very engaged in her counselling treatment and open to learning coping strategies such as establishing communication boundaries with Ms. Skoll. When her time with Ms. Hum came to an end in August, 2018, when Ms. Willoughby moved on to new employment, Ms. Willoughby noticed an improvement in Ms. Hum’s overall well-being and ability to focus, although challenges remained, especially at stressful times for Ms. Hum, such as imminent court dates.

[57] Without minimising the effect the marriage breakup had on Ms. Skoll and the impact of her transitioning journey, the psychological testing carried out by Dr. Weinberger of her seems to indicate that Ms. Skoll was coping with the post-separation period in a much better way than Ms. Hum (pages 7 and 8 of 21 and 22, tab 22 of the Trial record). Despite this fact, Dr. Weinberger did not hesitate to recommend that Ms. Skoll, too, seek counselling for “self-improvement” (page 8 of 22 and page 21 of 22, tab 22 of the Trial Record). Ms. Skoll testified that she has not pursued this recommended counselling because she does not think she needs it.

[58] After their physical separation, the parties very quickly went into a high conflict mode, with the first significant area of conflict being what post-separation parenting arrangement would be in the best interests of their children. Dr. Weinberger has, in some detail, described in his parenting assessment, the dynamics of this conflict between the parties (X111. Analysis/Conclusions, page 16 of 22, tab 22 of the Trial Record).

[59] But conflict between the parties did not just arise from the parenting issues. Within days of their physical separation, Ms. Skoll returned to the matrimonial home, in the absence of Ms. Hum, to pick up some of her belongings, as well as to take photographs of their possessions, because, Ms. Skoll explained, she wanted to document their possessions, in case there was a dispute. She also wanted to document the cluttered state of the home to the detriment of Ms. Hum. Ms. Hum did delay in allowing Ms. Skoll to get her personal belongings from the home. The children were used to exchange items when they should not have been.

[60] With respect to the status quo of post-separation parenting, shortly after the separation, Ms. Skoll was caring for her children on an alternating weekend basis, in accordance with Ms. Hum’s wishes and contrary to Ms. Skoll’s wishes. Ms. Hum was hesitating to move to equal parenting until she could assess how Ms. Skoll was doing with her transition. Ms. Skoll saw this as Ms. Hum “stonewalling” on the issue of parenting.

[61] In approximately February or March of 2015, Ms. Skoll unilaterally imposed an equal parenting regime between the parties, alternating on a weekly basis, taking the position that this was in accordance with the children’s wishes (see exhibits #30 and 31). The equal parenting arrangement has continued to the present. As described in more detail below, happily, the issue of parenting has now been finally resolved amicably between the parties.

[62] With respect to the financial arrangement between the parties, post-separation, as she had done during the marriage, Ms. Skoll continued to control and manage the family finances out of the parties’ joint bank account. Ms. Skoll informed Ms. Hum that she would continue to deposit Ms. Hum’s Roaring Penquin Software Inc. salary, equal to her own, into the joint bank account, from which she, Ms. Skoll, would continue to pay all of the household and other family expenses. In this way, according to Ms. Skoll, the parties would share the family expenses on a 50-50 basis from their respective salaries. If their respective salaries were not sufficient to meet all of the expenses, then Ms. Skoll would increase the salaries of both of them, which, in fact occurred a number of times post separation (in 2015 and 2016 according to the income tax documents filed by both parties, see exhibits # 2 and 11 and the parties’ testimony, also exhibit #4 tab B3).

[63] According to Ms. Skoll, there was no notable change in the family’s finances and the children’s expenses after the separation. As she informed Ms. Hum, she would continue to monitor the balance in the couple’s joint bank account to ensure that enough funds were available for the household and family expenses and to deduct from the joint bank account to cover Ms. Hum’s share of the household and family bills. It was her intention to continue to manage the household and family finances in the same way she had always done for the purpose of causing the least amount of disruption to the family until a final resolution of all issues, amicably she hoped, could be reached.

[64] Ms. Skoll admitted that Ms. Hum asked her to pay spousal and child support. The evidence showed that this began as early as 2015. Ms. Skoll testified that she resisted this request until a comprehensive agreement on all issues could be reached by the parties, which, of course never occurred.

[65] Furthermore, Ms. Skoll had concerns about Ms. Hum’s ability to manage the household and family finances. By Ms. Hum’s own evidence on cross-examination, given her emotional and psychological condition immediately after the separation, it would appear that Ms. Skoll’s concerns may have been justified. Ms. Hum testified to having no idea what the expenses of the family household had been before separation. Ms. Hum testified to her feelings of stress and total lack of control in the absence of any knowledge about the family and household finances, past, present or future, the state of the family savings as well as the condition and viability of the main source of the family’s income, Roaring Penquin Software Inc. at the time of the separation. In fact, it was her evidence that once financial disclosure began to take place she was shocked at how high Ms. Skoll’s earnings were and how substantial the family savings were.

[66] Unfortunately, what Ms. Skoll thought would be a very workable post-separation financial arrangement along the lines of the pre-separation period, did not turn out to be so, and I agree with counsel for Ms. Skoll, that it certainly went on for far too long after the separation. The frequent communication and monitoring of the family finances that Ms. Skoll’s post-separation financial plan envisaged and, which seemed necessary to her, only aggravated the situation of the separating couple who were in a high conflict phase of their breakup.

[67] Ms. Skoll, in my view, quickly began to conflate parenting issues conflict with financial and property issues conflict and she did not hesitate to use the control she wielded to arrive at outcomes she desired in both these areas. As she testified, to the perception of Ms. Hum , Ms. Skoll’s many communications with her and their tone, only contributed to her ongoing stress and feelings of continuing lack of control in her life. Her evidence was that she frequently dealt with them by polite, non-committal responses or no responses.

[68] Objectively speaking, and regardless of the explanations given by Ms. Skoll, what definitely did not help, as can be identified from the frequent communications sent by Ms. Skoll to Ms. Hum during that period, was the disparaging, and at times, threatening and coercive tone of the communications. Dr. Weinberger, in his assessment of the parties, had occasion to examine some of these frequent e-mails. He referred to Ms. Skoll’s “strong approach” to Ms. Hum as “harsh and unacceptable” (page 18 of 22, tab 22 of the Trial Record).

[69] A fair sampling of those communications can be found in exhibit #4, tab B1 to tab B45, emails dating from December, 2014 to March, 2018, communications that began politely enough and became progressively toxic in nature over time. The communications not only demonstrate the detailed management of the family’s finances exercised by Ms. Skoll but also her control of the family finances and resources and her unilateral decision-making with respect to the family savings and resources post separation. Examples are found in the email of:

• January 15, 2015, exhibit #4, tab B3 – Ms. Skoll increases the respective salaries of the parties from Roaring Penquin Software Inc.;

• January 17, 2015, exhibit #4, tab B5 – Ms. Skoll terminated Ms. Hum’s access to what had been the joint family credit card, “given the lack of progress in developing a parenting plan”. It is interesting to note that, by her own evidence, Ms. Skoll , in the course of the marriage, had always trusted Ms. Hum with the joint credit card which she had never abused and, further, that she had always trusted Ms. Hum with whatever expenses she made for herself and the family. At another point in her evidence, Ms. Skoll reiterated that even after the separation she was not concerned about Ms. Hum’s spending.

• March 26, 2015, exhibit #4, tab B14 – upon being questioned by Ms. Hum, Ms. Skoll acknowledged her withdrawal of substantial amounts of money from the parties’ joint savings without notice and for her own use, followed by comment. “This is my money, after all”. (See also August 6, 2015, exhibit #4, tab 22 and November 19, 2015, exhibit #4, tab B33.).

• April 13, 2015, exhibit #4, tab B16 – commenting, in a rather derogatory way, on Ms. Hum’s choice of activities.

• November 30, 2015, exhibit #4, tab B34 – release of joint funds to Ms. Hum for having “cooperated”.

• January 15, 2016, exhibit #4, tab B36 – refusal to grant password so that Ms. Hum could withdraw funds from the joint Investor Line when Ms. Skoll was informed that she required funds relating to work that needed to be done on the matrimonial home. (I understand that the parties agree that, despite Ms. Skoll’s initial refusal to grant Ms. Hum access to this money, it was eventually transferred to her.)

• January 18, 2017, exhibit #4 tab B 41– derogatory comment about Ms. Hum’s unemployed status.

• March 28, 2018, exhibit #4, tab B 45 – announcement of the sale of Roaring Penquin Software Inc. after the fact.

[70] By mid-August of 2016, Ms. Hum finally made the decision to close down the parties’ joint bank account and open her own bank account to take charge of her personal expenses and her portion of the household and family expense demanded of her by Ms. Skoll and to prevent Ms Skoll from accessing her own funds for household or other family purposes as she had been doing since their separation (see exhibit #4, tab A6).

[71] By early January of 2015 both parties had retained counsel with whose help the parties were attempting to settle the most contentious issues between them. The lack of success in this endeavour led to Ms. Hum commencing her application in these proceedings in February of 2016 (tab 1 of the Trial Record), followed by Ms. Skoll’s Answer, filed in March of 2016.

[72] Once the legal proceedings were commenced, the parties appeared before the court a number of times to deal with interim matters relating to financial disclosure, property disposition and support. On June 18, 2016, on consent of the parties, Master Champagne ordered that both parties could withdraw the sum of $200,000 each for their personal use from the joint Investor Line Account 220-52299, with no further amounts to be taken out without the written consent of both parties or by court order. Effectively, no further amount has been withdrawn by either party since that time.

[73] Master Champagne’s order provided for other matters such as financial disclosure by Ms. Skoll, restrictions on the parties communications to parenting issues, and an order for Ms. Hum to have exclusive possession of the matrimonial home and to provide a current fair market value appraisal of the matrimonial home, with the cost of such appraisal to be shared equally by the parties (see tab 23 of the Trial Record).

[74] In early November 2016, the parties were headed to a contested motion on the issues of spousal and child support. The issues were resolved by way of the consent order of Justice James, dated November 15, 2016. Briefly the order provided as follows:

• child support for two children (Gillian and Rebecca) based on the Child Support Guidelines in the amount of $5,010 per month and based on Ms. Skoll’s gross income from all sources for 2015 in the sum of approximately $413,000 and Ms. Hum’s gross income to be used for the calculation of child support to be $0, to commence on December 1, 2016;

• section 7 expenses for three children (Elizabeth, Gillian and Rebecca) as defined pursuant to the Child Support Guidelines, on a pro-rata basis (determined by Ms. Skoll’s gross income less spousal support and Ms. Hum’s gross income plus spousal support received); parties were to confer and agree on their contribution to the said section 7 expenses prior to the expenses being undertaken;

• spousal support to Ms. Hum in the amount of $6,812 per month based on the same income for both parties as identified for the payment of child support;

• all of the child support, section 7 expenses, and spousal support ordered was without prejudice and any arrears claimed for these areas was to be left to the parties final agreement or a final order of the court;

• parenting provisions were also part of this order to maintain the status quo with respect to Rebecca sharing equal time, by way of alternating weeks;

• the order further included a caution to both parties to restrict their communications to child focussed issues of custody and access and not to make disparaging comments about the other; and

• there was to be no costs for the parties motion and cross-motions (see tab 24 of the

Trial Record).

[75] The interim order of Justice James has been in force since its making and it was not disputed that all spousal and child support payments are current.

[76] As one can see from other endorsements in the trial record, the trial of the matter was eventually to be heard in May of 2018 (tab 25, and 26 of the Trial Record). A request by Ms. Skoll for an adjournment of the trial, due to pending surgery and the fact that she had just sold her business, Roaring Penquin Software Inc., was refused in April of 2018 (tab 27 of the Trial Record). A joint request for an adjournment of the trial was granted in May of 2018 to these trial sittings (see tab 28 of the Trial Record).

[77] By the time the joint request for the adjournment of the May 2018 trial was granted, two notable events had taken place which ought to be mentioned here because of their relevance to the issues before this court.

[78] The first is that, on March 23, 2018, unbeknownst to Ms. Hum, the two major shareholders of Roaring Penquin Software Inc., namely, Ms. Skoll and the company’s Vice President of Sales, Mr.Bill White, sold their shares in Roaring Penquin Software Inc. to a Company called AppRiver LLC, under a very detailed and complex Share Purchase Agreement (Exhibit #11, tab 24). In addition, concurrent with the sale transaction, Ms. Skoll became an employee of the purchaser, AppRiver LLC, under an employment agreement (see Exhibit #12, tab 48).

[79] Ms. Hum received notice of the sale in an e-mail sent by Ms. Skoll, dated March 28, 2018 (exhibit # 4, tab B 45).

[80] Counsel for Ms. Hum received notice of this sale, along with a copy of the Share Purchase Agreement, dated March 23, 2018, by way of a letter from Ms. Skoll’s counsel dated March 29, 2018. In the letter Ms. Hum’s counsel was also informed that Ms. Skoll was now employed by AppRiver LLC. at an annual income $200,000. The letter further indicated that Ms. Skoll’s support obligations under the order of Mr. Justice James of 2016 should be adjusted accordingly (see exhibit #4 tab 18). No variation application of the existing support order was ever brought by Ms. Skoll. .

[81] The sale of Roaring Penquin Software Inc. shares to AppRiver LLC in March of 2018 had been preceded on June 20, 2017 (an approximate period of 9 months before) by Ms. Skoll’s unilateral decision and without notice to Ms. Hum, to redeem Ms. Hum’s Class C Special Shares in Roaring Penquin Software Inc. Ms. Skoll’s unilateral decisions terminated Ms. Hum’s right to receive dividends from the company as well as any other rights she may have had as a shareholder, including having to sign off on any pending sale of the company shares.

[82] Ms. Hum admitted to having received notice of the redemption of her shares directly from Mr. Ramonat, corporate solicitor for Roaring Penquin Software Inc. sometime in the summer of 2017 but did not make much effort to inform herself of the details of that redemption or to claim the redemption proceeds. She ultimately received $73,457.50 for her redeemed shares (see Exhibits # 35 and 38). There were some tax consequences to Ms. Hum as result of this redemption of shares.

[83] At the request of Ms. Hum’s counsel for an explanation as to why his client’s Class C Special Shares were being redeemed by Roaring Penquin Software Inc., in June of 2017, so close to the anticipated pending trial of the matters between the parties, the response received from Ms. Skoll’s counsel by way of letter, dated September, 21, 2017, was that it was “occurring for business purposes only to simplify the shareholder structure of the corporation” (see exhibit #39).

[84] As a result of Ms. Skoll selling Roaring Penquin Software Inc. in January 2019, an amended Application was served and filed by counsel for Ms. Hum, alleging, among other things, that Ms. Skoll had “intentionally or recklessly depleted her Net Family Property and corresponding Gross income by selling her business in March, 2018” (see Trial Record tab 2). Ms. Skoll’s amended Answer denying the allegation is found at tab 3 of the Trial Record.

[85] The second notable event was that by way of Minutes of Settlement, dated May 11, 2018, the parties resolved all of the parenting issues between them (see tab 29 of the Trial Record).

ISSUES, POSTION OF THE PARTIES, DISPOSITION

DIVORCE

[86] The grounds for the divorce are established on the evidence and are not contested by either party. The parties were married on August 4, 1991 and separated on October 7, 2014. The evidence establishes clearly that there is no possibility of reconciliation. Financial provision for the children and the custody of and access to the minor child of the union is concluded in this judgment. The grounds for the divorce are proven.

Disposition

[87] A divorce order is to issue to take effect 31 days from the release of this judgment.

CUSTODY AND ACCESS

[88] At the time of the trial only the youngest child, Rebecca, was a minor and so provision for the custody of and access to this child has to be made. At the commencement of these proceedings, the issues of custody and access were highly contested between the parties resulting in some unfortunate events involving the children. In providing a context for this high conflict, Dr. Weinberger observed the ongoing grief, uncertainty and fears of Ms. Hum felt as a result of Ms. Skoll’s decision to transition and the realities of the family break-up, as well as the upset and anger felt by Ms. Skoll as a result of how she perceived she was treated by Ms. Hum, all of which led to a significant difficulty in communication and collaboration between the parties (page 16 of 22, Trial Record, tab 22).

[89] More importantly, perhaps, Dr. Weinberger at page 17 of his assessment concluded that, “… the indicators from this assessment point to conflict between the parties as [the] being the fundamental stumbling block, not parenting capacity per se or issues of attachment.” In fact, Dr. Weinberg found that Rebecca was “meaningful attached” to both her parents and had a “genuine” preference to spend equal time with each parent (page 16 of 22, Trial Record, tab 22). Despite their own conflict and based on how the two parents acted in the past, when it came to decisions relating to the best interests of Rebecca, Dr. Weinberger concluded that “there would seem to be a thread of a workable foundation” for future co-parenting (page 18 of 22, Trial Record, tab 22).

[90] At the end of his assessment Dr. Weinberger recommended that both parties, continue or return to counselling for the reasons he states at paragraphs 7.2 and 7.3 at page 21 of 22 of his assessment (Trial Record, tab 22).

[91] Dr. Weinberger’s assessment was not tested in court and he was not called as a witness by either party. The issues of custody and access have now been resolved amicably by the parties by way of Minutes of Settlement Parenting, the details of which are found at tab 29 of the Trial Record.

[92] Briefly, the parties agreed that they would share joint custody of Rebecca with divided decision making. In the event that there was a disagreement between them regarding a decision to be made, that disagreement is to be resolved as follows: Ms. Hum is to have final decision making regarding the areas of education and mental health and Ms. Skoll, to have final decision making regarding the areas of activities, religion and dental. The Minutes of Settlement also contains much detail of how decisions, joint and individual, are to be made. The Minutes of Settlement also contains details of Rebecca’s shared residence with both her parents, which is to be on an equal and alternating basis every week. This residential arrangement for Rebecca is now in place.

[93] The parties’ agreement also provides for special occasion access for the summer, Chinese New Year, Victoria Day Weekend and August Civic holiday, school Christmas holidays, Easter, March break, Jewish holidays, Birthdays, Mother’s Day and Father’s Day and Canada Day, and other access. There are provisions for telephone access and travel with Rebecca within and outside Canada, the details of which are found in the parties’ agreement. There is also a clause providing for dispute resolution.

[94] Finally, and it is important to note, the parties have reached a partial agreement on costs in their Minutes of Settlement Parenting. The parties agreed in paragraph 22 of the agreement that “no costs shall be payable by either party to the other with regard to the negotiations and settlement of the issues of custody and access, or the preparation and execution of these Minutes of Settlement.”

Disposition

[95] That the parties, themselves, resolve the very important issues of custody and access in this matter is clearly in the best interests of Rebecca. The details of the parenting agreement is found to be in Rebecca’s best interests, given her age, her maturity as reflected in Dr. Weinberger’s report and her stated preference. With respect to the custody and access of and to the minor child Rebecca, an order will issue in accordance with the Minutes of Settlement Parenting signed by both parties and filed as tab 29 of the Trial Record.

DIVISION OF PROPERTY

[96] At the commencement of trial there were a number of outstanding property issues, involving not only questions of value but also beneficial ownership and disposition. I commend both of the parties and their counsel in resolving the substantial number of these issues during the course of the trial, which has led to the possibility of the parties presenting in evidence an agreed-upon Net Family Property Statement filed as exhibit #47 (see Addendum A to this Judgment).

[97] As part of the agreement reached by the parties in exhibit #47, and as reflected in that document, the disposition and division of the following specific assets are also agreed by the parties:

1. The parties agree that the matrimonial home is to be given a value of $510,000.

2. The parties also agree that Ms. Hum will retain possession and ownership of the matrimonial home and that Ms. Skoll will transfer her interest and title in the matrimonial home to Ms. Hum as part of the equalization of the Net Family Property and as reflected in Table 1: Value of Assets Owned on Valuation Date, Part 4(a) and that a transfer order should issue as part of the decision of this court. The transfer order is granted.

3. All of the general household items and vehicles are found to be divided in kind to the parties’ mutual satisfaction and in the values as reflected in exhibit #47, Table 1: Value of Assets Owned on Valuation Date, Part 4(b). Ms. Hum shall retain possession and ownership of the “Estelle” or gifted painting, whose possession was in dispute between the parties. There is also one computer, which may have belonged to Roaring Penquin Software, Inc. that Ms. Hum agrees to return to Ms. Skoll.

4. The parties are to equalise the balance of any joint bank and investment accounts, which are reflected in exhibit #47 and includes, BMO joint chequing accounts 8761 and 6814, BMO joint Investor Line #6416 and 2299 (13). Upon the equal division of the contents of the joint accounts they shall be closed. Otherwise, the parties are to retain any other bank account, savings RRSP, RSP, TFSA and GIC in their own names, as reflected in exhibit #47, Table 1: Value of Assets Owned on Valuation Day, Part 4(c).

5. Exhibit #47 indicates at Table 1: Value of Assets Owned on Valuation Day, Part 4(d) that there are two life insurance policies with cash surrender values. The first is a Manulife Joint Life Insurance policy #5527998, the parties have agreed to equalise the cash surrender value of that policy between them. The second is a Standard Life policy in the name of Ms. Skoll alone with the beneficiary named as Ms. Hum. The parties agree that there ought to be put in place a quantum of life insurance to secure the child and spousal support obligations arising from these proceedings. The issue remaining will be quantum and duration and the terms of maintaining the life insurance. The parties have agreed that this court need not adjudicate the quantum of life insurance each parent should secure for child and/or spousal support owing. Rather, the parties agree that once the final child and spousal support obligations are identified by this court, the parties shall jointly retain Mr. Guy Martel to quantify the amount of life insurance required to secure the obligation to pay support for each of the parties, including the duration for the same.

6. With respect to the value of the business interest in Roaring Penquin Software Inc., as part of the Equalisation of Net Family Property, the parties agreed to attribute to each of them, the value of their respective shareholding at the time of the separation, less disposition costs. The value of the parties’ respective shareholding, as reflected in Exhibit #47, Table 1:Value of Assets Owned on Valuation Date, Part 4(e) is the mid point value as found by Mr. Jean-Claude Desnoyers, a mutually-retained business evaluator (see Tab 18D, Schedule 10, of the Trial Record).

7. The parties also agreed to divide equally the holdings of their jointly held Holding Company No 1578040 Ontario Limited (3 joint bank accounts, 3 investment certificates), at the time of division as reflected in Exhibit #47 , Table 1: Value of Assets Owned on Valuation Date, Part 4(e). The parties further agreed that the equal division of the holdings of their jointly held Holding Company will be realised by a deposit into two holding companies, one in the name of Ms. Hum and one in the name of Ms. Skoll. The parties agreed to jointly retain Mr. Roger Ramonat to represent them and to realise this division. Subsequent to this division, No. 1578040 Ontario Limited will be closed. In effecting this division, it is fair to make the adjustment recommended by Mr. Desnoyers in his report found at tab 18H concerning the dividend paid out by Roaring Penquin Software Inc. on October 28, 2016 into the parties’ joint Holding Company, 1578040 Ontario, in the amount of $388,888.89 because this amount has also been taken into account when considering Ms. Skoll’s available income for that year (see also Exhibit #12, tab 50), hence such an adjustment should be made.

8. The parties also agreed to share the balance of the debt due on the joint BMO Mastercard credit card on the date of separation, as reflected in Exhibit #47, Table 2: Value of Debts and Liabilities on Valuation Date, Part 5.

9. Finally, both parties agreed that each party could claim the following excluded property: $38,000 claimed by Ms. Skoll for a scholarship awarded to her in 1990 and $1,000 claimed by Ms. Hum for gold jewellery gifted to her by her mother, both of which are reflected in exhibit #47.

Disposition

[98] The final order of the court shall incorporate the above-mentioned agreement of the parties.

CALCULATION OF EQUALISATION PAYMENT

[99] Based on the substantial agreement of the parties in presenting an agreed upon net family property statement, exhibit #47 calculates the equalisation payment required to be paid in order to equalise the parties’ net family property, pursuant to section 5(1) of the FLA. Consequently, Ms. Skoll is to pay Ms. Hum an equalisation payment of $72, 920.28. Upon payment of the equalisation payment both parties will leave this marriage with $1,519, 017.68 each of net family property.

[100] In addition to these resources, by the time the marriage came to an end, there were additional substantial funds in government sponsored RESP plans for their three children intended to cover the payment of the children’s post-secondary education. Elizabeth had most of her post-secondary education paid by her RESP plan. Gillian is now drawing on her RESP (#3881) to fund her current university education. The amount in Gillian’s RESP, as of January 2019 was approximately $50,000.

[101] Rebecca will also have access to an RESP, once she graduates from high school, to fund her post-secondary education. The balance in Rebecca’s RESP (#9393) as of January 2019 is approximately $80,000.

[102] The children’s RESP plans were built up by regular payments, like all other family expenses, being made from the family’s joint bank account. After the parties’ separation, as can be seen from the many e-mails exchanged between the parties post separation, payments into the children’s RESP were shared equally by the parties until approximately August 2016 when Ms. Hum closed the family’s joint bank account and opened her own bank account. Since that time the evidence showed that Ms. Skoll alone has been making these payments (see exhibit # 28 and tab 4 of Respondent’s Support Brief).

[103] With respect to the individual current financial circumstances of the parties, both parties have throughout the course of this litigation disclosed and filed various financial statements, all of which can be found in tabs 6 to 14 of the Trial record. The current financial statements of Ms. Hum and Ms. Skoll are found, respectively, at tab 6 (Applicant’s Financial Statement dated January 12, 2019) and tab 11 (Respondent’s Financial Statement dated January 16, 2019). In her statement of January 12, 2019, Ms. Hum declares a current net family property value of $1,228,747.12. In her statement of January 16, 2019, Ms. Skoll declares a current net family property value of $2,221,301.73.

[104] Both of these parties came to this union with very limited and modest means. There is no question, on the evidence, that Ms. Skoll’s talent for wise business decisions and investment management, the frugal standard of living adopted by both parties and the increasing and incremental success of Roaring Penquin Software Inc. over the years of the marriage all contributed to the accumulated wealth of this family at the time of the separation. One of the major reasons for the substantial difference in the parties’ current net family property value, as reflected in their respective January 2019 financial statements, is, of course, due to the substantial proceeds Ms. Skoll received upon the sale of her Roaring Penquin Software Inc. shares in March of 2018.

APPLICANT’S CLAIM FOR UNEQUAL DIVISION OF THE PARTIES’ NET FAMILY PROPERTY

[105] In the Amended Application, Ms. Hum claims an unequal division of the parties’ net family property in her favour, pursuant to section 5(6) of the FLA which reads as follows:

(6) The court may award a spouse an amount that is more or less than half the difference between the net family properties if the court is of the opinion that equalizing the net family properties would be unconscionable, having regard to,

(a) a spouse’s failure to disclose to the other spouse debts or other liabilities existing at the date of the marriage;

(b) the fact that debts or other liabilities claimed in reduction of a spouse’s net family property were incurred recklessly or in bad faith;

(c) the part of a spouse’s net family property that consists of gifts made by the other spouse;

(d) a spouse’s intentional or reckless depletion of his or her net family property;

(e) the fact that the amount a spouse would otherwise receive under subsection (1), (2) or (3) is disproportionately large in relation to a period of cohabitation that is less than five years;

(f) the fact that one spouse has incurred a disproportionately larger amount of debts or other liabilities than the other spouse for the support of the family;

(g) a written agreement between the spouses that is not a domestic contract; or

(h) any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of property. R.S.O. 1990, c. F.3, s. 5 (6).

[106] Of the list of multiple factors listed in the above section, two of these appear to be relevant to the facts of this case and the arguments advanced by Ms. Hum, namely S.5(6)(d) and (h).

[107] As a property claim, the grounds advanced for the unequal division of net family property, as described in paragraph 62 Schedule A of the Amended Application, in summary form, is the allegation that Ms. Skoll, without notice, intentionally or recklessly depleted her net family property and corresponding gross income by selling her business, Roaring Penquin Software Inc., in March 2018 and thereby significantly reducing her available gross income to the financial detriment of Ms. Hum and the children via a severe reduction in the availability of child and spousal support.

[108] In the alternative, if an unequal division of net family assets is not granted, Ms. Hum seeks an accounting of all family assets used by Ms. Skoll since the separation to date.

[109] At first reading, the allegation raised by Ms. Hum to justify her claim to an unequal division of the net family property appears to conflate property issues with support issues. I am mindful that those two issues are not to be conflated or confused and each issue must be determined on its own merits according to the guiding jurisprudence. It is inappropriate to effect a transfer of wealth between spouses under the pretence of a support award (see Deslauriers v. Pommainville 2017 ONSC 3162 para. 37 reference to Francis v. Baker [1999] 3 SCR 25, decision of Justice Laskin of the Ontario Court of Appeal).

[110] I am also mindful of the fact (which is not disputed), that the court ought to deal with the question of asset division and resources between spouses before considering the questions of child support and spousal support (see Greenglass v. Greenglass, 2010 ONCA 675).

[111] However, in the circumstances of this case, in order to fully appreciate the argument of the Ms. Hum for an unequal division of net family property, it is important to consider the value of Roaring Penquin Software Inc. no only as an asset to be divided between the parties, but also the earning potential that asset provided Ms. Skoll during the marriage, at the time of separation and after separation until its sale of March 2018.

[112] At the time of the separation both parties owned shares in Roaring Penquin Software Inc. Each of them owned 50,000 Special Class C shares and The David Skoll Family Trust owned 350 common shares. The David Skoll Family Trust shares were treated as owned by Ms. Skoll and this was not disputed. Mr. Bill White, the marketing Vice President of Roaring Penquin Software Inc. also owned 400 Class B shares of the company. At the time of the separation the other shareholder on the company books was 1578080 Ontario Limited, the parties’ Holding Company, which they owned equally and which owned 1500 Class A shares.

[113] As has already been alluded to, the parties jointly retained an expert business evaluator, Mr. Jean-Claude Desnoyers, to do the following three tasks:

(1) give an opinion of the fair market value of the parties’ shareholding in Roaring Penquin Software Inc. as of the separation date;

(2) give an opinion of the fair market value of the parties’ shareholding in the Holding Company, 1578040, Ontario Limited, at the date of separation; and

(3) give an opinion of the available income to Ms Skoll from Roaring Penquin Software Inc. between the years 2012 to 2018, inclusive.

[114] Mr. Desnoyers’ expert reports are found at tab 18 A to H inclusive of the Trial Record. In addition, Mr. Desnoyers was called as a witness at the trial and questioned by counsel for both parties.

[115] Mr Desnoyers’ expertise was not contested and he was duly qualified to provide the court with the above opinions. Furthermore, with respect to the fair market value of the parties’ shareholding in Roaring Penquin Software Inc. at the date of separation, Mr. Desnoyers’ opinion as to that value, was accepted by both parties as being $729,000. The parties agreement on this value is reflected in exhibit #47, the agreed upon joint net family property statement.

[116] As part of his calculations, Mr. Desnoyers also calculated (amended in the course of his oral testimony), the disposition costs and taxes (a total of $63,327) that would have to be deducted from the accepted fair market value of the company. These costs are also included in exhibit #47 ($6,282.96 for Ms. Hum’s shareholding in the company and $56,044.04 for Ms. Skoll’s shareholding in the company).

[117] In coming to his evaluation of Roaring Penquin Software Inc., Mr. Desnoyers noted that an important characteristic of the company was that it did not have a lot of debt and kept substantial retained earnings or cash in the company. For example, in 2014, the year of separation, the retained earnings (cumulative) were $$347,989; in 2015 they were $634,795; in 2016 they were $959,515; in 2017 they were $574,404; and in March 22, 2018 they were $215,673.

[118] Ms. Skoll testified that the savings or money kept in Roaring Penquin Software Inc., after business expenses, such as payroll and other business expenses were met, was essentially targeted for the family and the family’s needs and savings, such as the children’s RESPs and was used for those purposes.

[119] In coming to his opinion of the fair market value of the parties’ shareholding in Roaring Penquin Software Inc. at the time of separation, Mr. Desnoyers did not include the value of the shareholding (1500 Class A shares) owned by the parties’ Holding Company, 1578080, because those shares are considered in his valuation of 1578080 Ontario Limited. Because the parties have decided to divide equally the Holding Company by creating two equal Holding companies, it was the opinion of Mr. Desnoyers that the value of those shares is accounted for (see Tab 18D, schedule 10).

[120] With respect to the agreement reached by the parties to divide equally the fair market value of 1578040 Ontario Limited Inc. (inclusive of the increase in value due to returns on investments and dividends received from Roaring Penquin Software Inc. since the separation) on a tax free basis, Mr. Desnoyers made a suggestion about how to avoid double counting certain property because the dividends received by 1578040 Ontario Limited Inc. from Roaring Penquin Software Inc. from the separation date, October 7, 2014 to November 13, 2018 have also been considered in his assessment of the available income to Ms. Skoll.

[121] The evidence showed that there was only one instance of a dividend paid from Roaring Penquin Software Inc. to 1578040 Ontario Limited Inc. after the separation, an amount of $388,889 on October 28, 2016, when the retained earnings of Roaring Penquin Inc. were very high. Mr. Desnoyers suggested, that for the reasons given in his report and in his oral testimony, it should be treated, together with the disposition costs, as a “prepayment on the settlement of property”. For Ms. Hum this would be the amount of $157,500 (see tab 18 H of the Trial Record).

[122] The third part of Mr. Desnoyer’s expert opinion concerned the quantum of available income to Ms. Skoll between the years 2012 to 2018 from Roaring Penquin Software Inc. “Available income” was defined by Mr. Desnoyers as that income that Ms Skoll could take out of the company without impairing the operation of the business.

[123] I do not make reference to Ms. Skoll’s available income from Roaring Income Software Inc. at this point in the discussion to confuse support issues with property issues. I do so only to complete the factual context for Ms. Hum’s claim for an unequal division of the parties’ net family property.

[124] Mr. Desnoyers’ opinion of the available annual income to Ms. Skoll from the operation of her software company was the following:

2012 - $168,000

2013 - $218,000

2014 - $413,000

2015 - $529,000

2016 - $606,000 and projected $761,000 for 2017

2017 - $718,000 (a little lower than Mr. Desnoyers’ projection)

[125] In coming to the above calculations, Mr. Desnoyers testified that he was aware of the income splitting between Ms. Hum and Ms. Skoll that had gone on since the creation of the company for tax purposes until the support award in November 2016. Nonetheless, because Ms. Skoll effectively controlled the parties’ income that came from the business, he attributed all of the income to Ms. Skoll.

[126] On March 23, 2018 Ms. Skoll and Mr. White sold their shares in Roaring Penquin Software Inc. to AppRiver LLC. As a result, Ms. Skoll ended her ability to command the very high income available to her, as documented by Mr. Desnoyers above.

[127] Concurrent with the sale Ms. Skoll became an employee of AppRiver LLC under an employment contract that included an income of $200,000 per annum as well as some other benefits. Her employment with AppRiver LLC was short lived and ended in August, 2018. Shortly after, Ms. Skoll began working for Fidus, her current employer, earning a commencing annual salary of $115,000. At the time of the trial her annual salary was $120,000.

[128] With respect to the income available to Ms. Skoll for 2018, the year of the sale, Mr. Desnoyers provided a qualified projected income for her which is found in his report at tab 18H of the Trial Record. Mr. Desnoyers identified four sources of income for Ms. Skoll in that year, namely:

(a) Roaring Penquin Software Inc. employment (from January 1, 2018 to March 22, 2018), which amounted to $97,667;

(b) Roaring Penquin Software Inc. and Fidus employment (from March 23, 2018 to December, 2018) which, at a minimum, amounted to $142,000;

(c) actual dividends received from Roaring Penquin Software Inc. from January 1, 2018 to March 22, 2018 which were $343,000, possibly more;

(d) proceeds from the sale of his shares in Roaring Penquin Software Inc. with portions being received by her at different periods of time, namely $1,326,956 to be followed by other holdback amounts, $667,635 and other amounts unquantified to follow in 2019; and

(e) other investment income from the proceeds of sale and her other existing assets, such as 1578040 Ontario Limited Inc. but unquantified.

[129] Because of the unknown factors (t.b.d.) Mr. Desnoyers was not able to put a final figure on the income available to Ms. Skoll for the year 2018, but based on all of the above mentioned amounts, if accepted, would clearly have been very high.

[130] As can be seen from the company documents used by Mr. Desnoyers in arriving at his business evaluation and income availability opinions, the performance and profitability of Roaring Penquin Software Inc. was an indisputable success from the time of its creation, well past the separation date, until the sale of its shares in 2018

[131] It was the opinion of Mr. Desnoyers that certainly for the time period of his examination, 2012 to 2017, this was a company that was growing, and by leaps and bounds in certain years. In support of this conclusion, Mr. Desnoyers agreed that the growth of sales of the company from year to year was a good indicator of the company’s growth and viability. It is fair to conclude from this evidence that when the decision to sell the company was made at some time in late 2017, Roaring Penquin Software Inc. was at a peak performance in terms of sales.

[132] The company records revealed that the company sales had grown in the following way,

2012 - $862,845

2013 - $1,159,847

2014 - $1,511,691

2015 - $1,774,819

2016 - $2,117,435

2017 - $2,344,030

2018 (8 months) - $1,450,252

(See tab 18 A,B,C and F of the Trial Record and the financial documents for Roaring Penquin Software Inc at exhibits # 11 and 12.)

[133] Mr Desnoyers was not able to give an opinion as to whether Roaring Penquin Software Inc. continued to grow during 2018 because he did not have access to the comparable sales tables for the company as he did for the preceding years.

[134] When the shares of Roaring Penquin Software Inc. were sold in 2018, they sold for a value substantially greater than the value attributed to the company at the date of separation, approximately three years before. The evidence shows that the combined shares of Roaring Penquin Software Inc. were sold for $2.2 M. Based on her shareholding at the time of the sale (78% of the shares) Ms. Skoll’s share of that purchase price was approximately $1,716,000, subject to various holdback payments.

[135] The imperative to sell Roaring Penquin Software Inc. and the purpose and objective of the sale is in serious dispute between the parties. It was the position of Ms. Hum that the sale of the company in March of 2018 demonstrates the bad faith of Ms. Skoll in selling the company for the purpose of reducing her income and obligation to provide child and spousal support. Hence, it was a reckless depletion of the net family property and a substantial voluntary reduction in her earning capacity.

[136] Counsel for Ms. Hum argues that since the separation Ms. Skoll resisted paying support and insisted on controlling the family’s financial resources by way of income splitting from the company, where she continued to exercise full control over the quantum of income Ms. Hum and the family would have, what amounts would be withdrawn from the family savings and for what purpose, after the separation.

[137] Notice of the decision to sell and of the pending sale as the negotiations with AppRiver LLC came to a conclusion in the spring of 2018, was never communicated to Ms. Hum. Counsel for Ms. Hum submits that it was intentional on the part of Ms. Skoll to keep Ms. Hum “in the dark” about the sale. In addition, the true reason for the redemption of Ms. Hum’s Special Class C shares in June of 2017, explained as “occurring for business purposes only to simplify the shareholder structure of the corporation” (see exhibit #39), was also hidden from Ms. Hum and amounted to a misrepresentation of the true reason, namely to exclusively control the company to effect the sale.

[138] Counsel for Ms. Hum submits that it is not coincidental that the sale of the company was finalised (March 2018) just months after the temporary support order was granted by the court to Ms. Hum on consent (November 2017), something Ms. Skoll had been resisting since the separation. Furthermore, immediately after the sale of the company, even though Ms. Skoll was soon to access her proportional share of $2.2M from the sale, correspondence is being sent to Ms. Hum’s counsel, suggesting that the child and spousal support consent order ought to be varied according to Ms. Skoll’s new income of $200,000 annum.

[139] Ms Hum’s lawyer submits that the reasons given by Ms. Skoll for the sale are self-serving. There is, he argues, no independent evidence or expert evidence to show that the Roaring Penquin Software Inc.’s sales performance for 2018 and subsequent years was going to suffer or take a substantial downturn. All of the evidence regarding this anticipated event has come from Ms. Skoll herself or her employees and subordinates. This fact is also true, and must be examined in that light and, I have done so.

[140] Ms. Skoll did not deny that she purposely hid from Ms. Hum her decision to sell the company in 2017.

[141] Ms. Skoll also does not deny that she and Mr. White made the decision to seek a buyer for the company’s shares at the end of 2017 when the company was experiencing a peak sales performance. Ms. Skoll testified that at the time of the separation in October 2014, the company, Roaring Penquin Software Inc., had 10 employees and was profitable. It continued being profitable into 2017.

[142] Nonetheless, it was her evidence, that she was always thinking of an exit strategy for the company because she did not anticipate that the continued profitability of the company was sustainable over a long period. In fact, it was her evidence that she discussed this fact with Ms. Hum many times. As early as 2003 and 2004, according to Ms. Skoll, the sale of the company was being considered. It was considered again in 2008 and 2011 at which time she was considering partnering with another Ottawa company or possibly merging it with a company in Montreal. Ms. Hum had no memory of any discussions about the sale of the company.

[143] When questioned about why an exit strategy was considered necessary, given the success of the company, Ms. Skoll testified that based on her knowledge of the anti-spam software market and technological developments in the market, the profitability of the company would be relatively short lived. It was Ms. Skoll’s view that its sale prior to the company arriving at the “best before date” would maximise what the company could fetch on the open market. Her concern was to put the company on the market while its sales performance was at its peak, as it was in 2016 and 2017 and before the company’s revenues began to fall.

[144] Ms. Skoll described in some detail how the company’s anti-spam product did very well on the market in the early years of the business, particularly in the educational sector. Over time, however, the company began to suffer from market competition. It was Ms. Skoll’s evidence that in order to remain competitive, Roaring Penquin Software Inc. began offering different forms of products, such as outsourcing for larger companies and managing service providers. According to Ms. Skoll, because of these continuing efforts and adaptations by the company, there was tremendous growth in the company between 2008 and 2017 with a peak year in 2017.

[145] It was Ms. Skoll’s evidence that she monitored the company’s competition very carefully, and when the market lost competitors for one reason or another, her company would work very hard to identify and recruit the customers of the former competitors leaving the market. Furthermore, Ms. Skoll testified, the company continued to upgrade in order to keep their programs marketable and current. However, Ms. Skoll testified, the company was finding it harder and harder to compete with large software companies like Google and Microsoft.

[146] Ms. Skoll testified that, relying on data that she collected from her company’s sales performance, (software customer tracker) she observed the loss of customers and revenue in the immediate year preceding the sale by as much as 7%.

[147] In her cross-examination about this period in the business’ history, Ms. Skoll maintained that the increase in sales experienced in 2017 could not be expected to continue into the next year based on what she observed from her software customer tracker data. Ms. Skoll was adamant in her testimony that there was no way the company could have replicated the 2017 sales figures of the company in 2018 because of the overall loss of customers to the company’s competition.

[148] Mr. Bill White, the other principal shareholder of Roaring Penquin Software Inc. (holding 22% of the remaining shares when the company was sold) testified by video because he was out of the country at the time of the trial.

[149] Counsel for Ms. Hum put his objections on the record to permit Mr. White to testify by video. I ruled that he could so testify. I concluded that as someone who was working very closely and effectively managing the marketing side of Roaring Penquin Software Inc. from its creation to its final sale, he could provide helpful evidence to the court on this much contested issue. As a witness testifying via video, Mr. White was given appropriate cautions.

[150] Mr. White testified that he began to work with Ms. Skoll in Roaring Penquin Software Inc. in 2003. According to Mr White, it was “the best decision of his life”. Mr. White retired from the company in January of 2018, months before its sale to AppRiver LLC.

[151] Mr. White testified that his role in the company was to concentrate on the sales side of the business. Mr. White testified to the success of Ms. Skoll’s antispam product CanIt in the educational field when the company was first created.

[152] According to Mr. White and consistent with the testimony of Ms. Skoll, the company markets began to suffer from larger competitors. As a result, Mr. White testified, they had to adopt their service and ultimately products to a different kind of client need and market. They then came up with the “tiered internet provider” (ISP) product. According to Mr. White, they were able to do this between 2005 and 2010. This change was significant to the company’s continued success, for at least another two to five year window.

[153] After that period, however, according to Mr. White, the company again began to anticipate and experience falling sales because of larger market competition.

[154] According to Mr. White, the company’s response to this anticipated downturn in the market was to look for other opportunities to provide software service as space managed service providers (effectively outsourcing certain services as a subcontractor but under the name of the service provider). According to Mr. White, this last reorientation of the operation of the company permitted them to “pull a rabbit out of a hat” for the third time to keep the company going until 2015 and 2016.

[155] Mr. White testified that by 2016, because of software employed by Ms. Skoll to track their customers, the company was beginning to lose, again, a number of significant customers to other competitors and programs. He had many discussions with Ms. Skoll about this business development at the end of 2016 and into 2017. At that time, the evidence showed that the company had 12 employees and about $2M in sales.

[156] Mr. White testified that at that time, he, as Vice President of sales, was not personally confident that they could change the downturn trend they were seeing in their data about leaving customers again as they had done before. According to Mr. White, what contributed to the company’s growth over the years was the good marketing program for the sales that he directed and the superb technical support team that took good care of their clients. But, according to Mr. White, losses of customers were obvious and the sales people had to work very, very hard to get new business.

[157] It was also the evidence of Mr. White that, from a personal perspective, he was in his 60s and had begun to examine the desirability of retirement and selling his shares in the company which he planned for January, 2018. Mr. White commenced training another employee to take over from him as VP of sales.

[158] According to Mr. White in 2017 he and Ms. Skoll began to discuss a sales strategy which included the desirability of not only selling services but a solid customer base to which a prospective purchaser could sell other services. Mr.White confirmed in his evidence that a decision was made to approach Tequity to act as sales broker. Mr. White, in his evidence, also stressed the need for confidentiality as they entered into sales discussions with prospective buyers.

[159] According to Mr. White, once Tequity was retained by them, they began to receive offers of interest followed by discussions. It was only in November or December of 2017 that they began their serious discussions with AppRiver LLC.

[160] According to Mr. White, by January 2018 he had retired from the company, although he still owned his shares in the company and was very much involved with Ms. Skoll in the negotiations with AppRiver LLC for the sale of the company’s shares in obtaining a maximum price for the shares.

[161] It was Mr. White’s evidence that the offer made by AppRiver LLC was a fair one and he was quite happy with it. He and Ms. Skoll discussed it, examining all of the figures and decided to accept the offer.

[162] Mr. White had no memory of ever discussing with Ms. Skoll what effect the sale would have on Ms. Hum nor for that matter, was he aware that Ms. Hum had been a shareholder in the company. From his evidence, that Mr. White admired Ms. Skoll’s business acumen could not be disputed. It could also not be disputed from the evidence, that Ms. Skoll was involved with every aspect of the business and made all of the financial decisions concerning the company. Mr. White had no knowledge of the income splitting that went on between Ms. Skoll and Ms. Hum.

[163] With respect to declarations of dividends made by the company over the years, Mr. White testified that, as a shareholder during the annual examination of the company financial statements, he was usually involved in decisions to declare dividends to the company’s shareholders so as to have the right balance of cash in the company. Mr. White’s recollection was dividends were not declared in the early years of the company’s operation but began to be so declared some time after 2010.

[164] The evidence given by both Mr. White and Ms. Skoll in relation to their concerns about the sustainability of Roaring Penquin Software Inc.’s level of sales in an increasingly competitive market was confirmed by the testimony of another company employee called to testify at the trial. Mr. Mertz was employed by the company in 2015 as a support technician but also did some work in sales. He noted the loss of company customers to larger competitors and how hard they had to work to keep their clients and to find new ones in 2016 and 2017. Mr. Mertz testified that he had no fears for his employment in 2017 because the company sales were growing, but not as quickly as they had previously. A second witness, Mr. Faraz Vahabzadeh, was also called but had not worked in sales and did not seem to have any direct knowledge of the sales side of the business.

[165] Ms Skoll testified that she tried to make Ms. Hum aware of these business competition difficulties in an e-mail she sent to her, dated June 8, 2015, where Ms. Skoll also suggested to Ms. Hum that using $1M, based on a “bona-fide third-party arms-length transaction”, as the value of the company for resolution of some of their property issues (see exhibit #10) might be considered. It is to be noted, however, that in the same e-mail Ms. Skoll informs Ms. Hum that the reality is that Roaring Penquin Software Inc. has no real value because there is no one prepared to purchase them.

[166] As a result of what they saw as the new competition challenge on the horizon, it was the evidence of Ms. Skoll that she and Mr. White were of the same mind in November or December of 2016 to seek out a broker to connect them with potential buyers in the market. They retained a company called Tequity in February or March of 2017 to do this. This led to discussions and presentations with 5 or 6 companies. Ultimately, a deal was reached in March of 2018 as reflected in the Share Purchase Agreement, dated March 23, 2018, found at tab 24 of exhibit #11. According to Ms. Skoll, she received the offer of purchase from AppRiver LLC on February 13, 2018.

[167] Ms. Skoll testified that she and Mr. White received $2.2M for the sale of the Roaring Penquin Software Inc. shares. Most of the purchase price was received by them on closing minus certain holdback payments to follow, relating to employee severance obligations, non-disclosure security and performance bonuses for established revenue threshold. Upon the finalisation of the agreement, Tequity was paid as were the accountants and the lawyers. According to Ms. Skoll, she received $1.2M upon closing, inclusive of the holdback payments according to the schedule provided for in the agreement, some of which remain outstanding for possibly two years. Ms. Skoll testified that the money she received from the sale went into her personal investment account and makes up her current asset holdings, documented in her current Financial Statement.

[168] Ms. Skoll contests the submissions of Ms. Hum that the decision to sell Roaring Penquin Software Inc. was reckless and detrimental to her ability to support her family. Rather, it was her position that the sale was very complicated, and very well-thought out so as to maximise the marketability of the company shares and involved some very intense negotiations between himself, Mr. White and the purchaser.

[169] As far as Ms. Skoll is concerned, her ability to support her family is as great as it has ever been. Ms. Skoll reiterated in her testimony, that when she made the decision to sell her shares to AppRiver LLC, when she did, she did so with a view to maximise the financial return on the company as opposed to attempting to deny Ms. Hum a share or to minimise her share of the property. As a post-separation increase in the value of this asset owned solely by Ms. Skoll, Ms. Hum is not entitled automatically to share the increased value of the shares after the separation date.

[170] It is the position of Ms. Skoll that as the person who generated the wealth in this family, she feels strongly that she should have half of the net family assets and that support should be based on her actual and current salary with Fidus. Ms. Skoll acknowledged that the sale of Roaring Penquin Software Inc. in 2018 would have a major impact on Ms. Hum, but that as far as she was concerned, Ms. Hum would still have a lot of money to live on.

[171] It was the evidence of Ms. Skoll that in preparation for the sale of the company, Ms. Skoll paid substantial dividends from the company in 2014 and 2016. It was the evidence of Ms. Skoll that the company had substantial cash on hand and she did not want to leave it in the company as the sale plans and negotiations progressed (see exhibit #12, tab 47, page 10). Some dividends were paid directly into Ms. Skoll’s personal investment trading account. Others were paid into the parties’ joint Holding Company because it was cost efficient to do so. Because it went into the parties’ jointly held Holding Company, it is not disputed that the parties will share equally those funds. One of these dividends, $441,000 paid on February 26, 2018, was the source of the payment of $388,889 into the Holding Company on October 28, 2016). Ms. Skoll also paid herself personal dividends and began looking for a buyer.

[172] Part of this preparation to sell the company was the decision to redeem the outstanding shares owned by Ms. Hum in the company. Ms. Skoll understood that the company could unilaterally redeem the Special Class C shares of Ms. Hum without any obligation to give her notice of the intent to do so.

[173] When questioned in-chief as to why she did not inform Ms. Hum about the sale of the shares in the company until after the fact, Ms. Skoll indicated that she was bound in the negotiation discussions with AppRiver LLC by a non-disclosure and confidentiality clause.

[174] On cross-examination Ms. Skoll candidly testified that she also made the decision to redeem Ms. Hum’s shares because as a shareholder, Ms. Hum would have had to sign off on any potential sale and she feared that Ms. Hum would “derail” the negotiations for the sale. She did not want Ms. Hum to know about the pending sale until negotiations had been completed.

[175] It was the evidence of Ms. Skoll that her intention had been to only redeem the Special Class C shares belonging to Ms. Hum and not her own. However, a mistake was made by the solicitor for the company and all of the Special Class C shares, including her own were also redeemed (see exhibit #35). As a result, Ms. Skoll only received her redeemed amount for the Special Class C shares much later, on March 19, 2018 (see Exhibit #12 tab 47 page 10).

[176] The evidence shows that when the redemption of the company’s Special Class C shares took place in June of 2017, the parties had the benefit of the expert opinion of Mr. Desnoyers concerning the fair market value of the redeemed shares as of the separation date in October, 2014. Ms. Skoll testified that Mr. Desnoyers’ opinion as well as the opinion of the corporate counsel, Mr. Ramonat, were consistent with the redeemed value of the Special Class C Shares paid by the company to Ms. Hum and to herself , a total value $146,915 or $73, 457.50 each(see exhibit #35 and tab 18 D of the Trial Record).

[177] Based on all of the forgoing evidence, I cannot find as a fact that Ms. Skoll’s decision to sell Roaring Penquin Software Inc. when she did was done in bad faith and with malice towards Ms. Hum’s claims for support. The evidence showed that the company sold in March of 2018 at a substantially greater value than it was worth, as determined by Mr. Desnoyers, at the date of separation. On the evidence, the company was sold based on a well thought-out strategy devised and managed by Ms Skoll and Mr. White and successfully negotiated and executed by them to obtain the best market price for the shares. Nor can I conclude that the sale, in any way, diminished the value of property, to which Ms. Hum was entitled, in law, to share at the time of the separation. As an asset, the sale cannot be considered a reckless depletion of property either for Ms. Skoll or for Ms. Hum.

[178] In my view section 5(6)(d) has no application to the facts of this case.

[179] The second factor for consideration, on which Ms. Hum relies for her claim to an unequal division of net family properties, namely, Section 5(6)(h), “any other circumstance relating to the acquisition, disposition, preservation, maintenance, or improvement of property” is more nuanced and complex. Clearly, Ms. Skoll’s sale of her shareholding in Roaring Penquin Software Inc. in March of 2018 is a “disposition” of property within the meaning of Section of 5(6)(h) of the FLA. As a result all of the circumstances relating to that disposition need to be examined to determine if the equalisation of net family property in this case would be “unconscionable”.

[180] From the very early jurisprudence developed under Section 5(6) of the FLA it was accepted by the court that an equalisation of net family property was the norm. Only if such a result was found by the court to be “unconscionable”, could the court depart from that norm.

[181] In Skrj v. Skrj, 1986 CarswellOnt 276 at paragraph 5, Galligan J. observed:

Before dealing with the property issues, I want to make a very brief observation about the new regime of family law in Ontario. As I read the Family Law Act, 1986, it leaves the court with no discretion to decide spouses’ affairs in accordance with a particular court’s sense of fairness. Subject to a discretion if it finds unconscionability, under s. 5(6), the courts must decide the rights of separating spouses in strict compliance with the terms of the Act, even if, in an individual case, a judge may feel that the result does not appear fair according to that particular judge’s sense of fairness. I think the legislature has clearly expressed its intent to remove judicial discretion from property disputes between separating spouses.

[182] On the facts before him, Galligan J. awarded the wife an unequal division of the net family properties, finding that to do otherwise would have been unconscionable, where a husband appropriated for himself and his own use, post separation, jointly held funds, without permission of the wife. Galligan J. accounted for that unilateral appropriation of joint funds and awarded the wife an additional amount accordingly (see paragraph 21 of Skrj v. Skrj, supra).

[183] A similar approach was taken in the case of Hutchings v. Hutchings, 2001 CarswellOnt 2326. On the facts of this case the Court found that the husband had used, a number of times, family funds for his own personal purposes. The Court concluded that this behaviour on the part of the husband was “unconscionable” and compensated the wife accordingly with an unequal division of the net family property.

[184] Subsequent cases went on to establish that the test for determining whether the circumstances of a given case met the test of “unconscionability” was a high one, shocking conduct and not just what might be considered unfair or unreasonable.

[185] The above two cases dealt with fact situations in which fault based conduct determined the outcome. In a 2009 decision, the Ontario Court of Appeal had occasion to examine the parameters of a court’s discretion in awarding an unequal division of net family property pursuant to section 5(6) of the FLA in a set of circumstances which did not involve fault based conduct.

[186] In Serra v. Serra 2009 ONCA 105, 93 O.R. (3d) 161, a husband’s principal asset was his shareholdings in what had been a profitable textile business, valued in the millions of dollars at the time of the separation. By the time of the trial, the value of the shares had decreased significantly, through no fault of the husband, but rather, as a result of market-driven forces that created a significant down turn in the Canadian textile industry. In coming to the conclusion that it did, the Ontario Court of Appeal established the following principles.

[187] Firstly, it set out the steps to be followed by courts when Section 5(6) is engaged. It stated at paragraph 37:

The steps to be taken when s. 5(6) is engaged are well established. The court must first ascertain the net family property of each spouse by determining and valuing the property each owned on the valuation date (subject to the deductions and exemptions set out in s. 4). Next the court applies s. 5(1) and determines the equalization payment. Finally --- and before making an order under s. 5(1) – the court must decide whether the equalization of net family properties would be unconscionable under s. 5(6) having regard to the factors listed in paras 5(6)(a) through (h): see Rawluk v. Rawluk, 1990 CanLII 152 (SCC), [1990] 1 S.C.R. 70, [1990] S.C.J. No. 4, at pp. 93-94 S.C.R.; Berdette v. Berdette (1991), 1991 CanLII 7061 (ON CA), 3 O.R. (3d) 513, [1991] O.J. No. 788 (C.A.), at pp. 525-26 O.R.; Stone v. Stone (2001), 2001 CanLII 24110 (ON CA), 55 O.R. (3d) 491, [2001] O.J. No. 3282 (C.A.), at para. 39; LeVan v. LeVan (2006), 2006 CanLII 31020 (ON SC), 82 O.R. (3d) 1, [2006] O.J. No. 3584 (S.C.J.).

[188] I add here, that by agreeing to exhibit #47, the agreed upon net family property, the parties in this case have dealt with the first two steps of this direction.

[189] Secondly, the Court of Appeal confirmed the existing jurisprudence, that the test for “unconscionability” is a very high one. The Court of Appeal further stated that, whether the high test could be met would be determined by the specific circumstances of the case and which could include a consideration of post-separation date changes in the value of a spouse’s assets. At paragraphs 46 and 47 the Court of Appeal stated:

[46] In my opinion, a court may take into account a post-separation date change in the value of a spouse’s assets and the circumstances surrounding such a change, for purposes of determining under s. 5(6) of the Family Law Act whether equalising net family properties would be unconscionable. An order for an unequal division of net family properties is exceptional, however, and may only be made on such a basis (i) where the circumstances giving rise to the change in value relate (directly or indirectly) to the acquisition, disposition, preservation, maintenance or improvement of property (s. 5(6)(h), and (ii) where equalizing the net family property would be unconscionable, having regard to those circumstances (taken alone or in conjunction with other factors mentioned in s. 5(6)).

[47] In this regard, the threshold of “unconscionability” under s. 5(6) is exceptionally high. The jurisprudence is clear that the circumstances which are “unfair”, “harsh” or “unjust” alone do not meet the test. To cross the threshold, an equal division of net family properties in the circumstances must “shock the conscience of the court”: see Merklinger v. Merklinger (1992), 1992 CanLII 7539 (ON SC), 11 O.R. (3d) 233, [1992] O.J. No. 2201 (Gen. Div.), affd (1996), 1996 CanLII 642 (ON CA), 30 O.R. (3d) 575, [1996] O.J. No. 4080 (C.A.); Roseneck v. Gowling (2002), 2002 CanLII 45128 (ON CA), 62 O.R. (3d) 789, [2002] O.J. No. 4939 (C.A.); McDonald v. McDonald, 1988 CanLII 8635 (ON SC), [1988] O.J. No. 518, 11 R.F.L. (3d) 321 (H.C.J.); and LeVan (S.C.J.).

[190] At paragraph 49, the Court of Appeal repeated it did not follow that because the threshold was so exceptionally high, that factors to be taken into account in determining whether that threshold has been crossed “should not include post-separation changes in the value of the spouse’s assets and the circumstances surrounding those changes”.

[191] Furthermore, the Court recognised that the change could be both post-separation decreases as well as post-separation increases in property values. The specific facts of this case were, therefore, not ruled out by the Court of Appeal.

[192] Finally, the Court also concluded that the enumerated circumstances to be examined by the Court under Section 5(6) are not limited to “fault based conduct on the part of a spouse” in paragraphs 56, 57 and 58:

[56] Secondly, neither the purpose or object of the s. 5 equalization payment scheme, the s. 5(6) exception, nor the Act itself call for such an interpretation. The design of the legislation is to promote the goals of certainty, predictability and finality in the resolution of property matters following the breakdown of marriage. This, in turn, is founded on the central premise articulated in s. 5(7) that “inherent in the marital relationship there is equal contribution, whether financial or otherwise, by the spouses to the assumption of [their joint] responsibilities, entitling each spouse to the equalization of the net family properties, subject only to the equitable considerations set out in subsection (6)” (emphasis added).

[57] Thus, to ensure adherence to the policy choices made by the legislature, and reflected in s. 5(7) and the preamble of the Act, equalization of net family properties is the general rule. As with most rules, however, there are exceptions -- in this case, the high-threshold unconscionability provisions of s. 5(6). This exception is expressly contemplated by the caveat “subject only to the equitable considerations set out in subsection (6)” set out in s. 5(7). Judicial discretion with respect to equalization payments is therefore severely restricted, by statutory design, but is not eliminated altogether since there is discretion to order an unequal payment where “the court is of the opinion that equalizing the net family properties would be unconscionable”: see, for example, Skrlj v. Skrlj, supra, at p. 309 R. F. L

[58] There is no principled reason that I can see, given the language of the Act and its purpose or objects, to confine the word “unconscionable” in s. 5(6) only to circumstances arising from fault-based conduct on the part of one of the spouses. Although unconscionable conduct is obviously an appropriate consideration in determining whether equalizing the net family properties would be unconscionable, in my opinion the true target of the limited exception to the general rule is a situation that leads to an unconscionable result, whether that result flows form fault-based conduct or not (underlining mine).

[193] In Serra, supra, the Court of Appeal ultimately overturned the decision of the trial judge who refused to take into account the post-separation date change and the circumstances relating to that change in the value of Mr. Serra’s shareholding in his textile business and to order an unequal division of net family property. In coming to its final disposition, the Court of Appeal considered the following circumstances as relevant to its conclusion that to grant an equal division of assets would lead to an unconscionable result (underlining mine):

1. The marked downturn in the textile industry is a “circumstance relating to” (at least the “disposition, preservation [and] maintenance of Ajax Textiles, the shares of which were Mr. Serrra’ major asset within the meaning of s. 5(6)(h) (para 60)).

2. During the litigation, at the request of Ms. Serra, there had been issued a preservation order with respect to the business as a result of her trust claim to the business. As a result, the business could not be sold before the disposition of the matter before the court; the downturn in the textile business was province wide and not temporary; there were no buyers for the business and at trial Mr. Serra’s evidence was that the company’s liquidation value was zero by the time of the trial; it was a case of where the business could have been sold in a falling market to preserve at least some of its value (para 60).

3. There had been ordered significant interim support payments that could only be made if the textile business kept operating as a viable business (para. 66).

4. The fact that Mrs. Serra had other means and assets because she was leaving the marriage with a considerable amount of other assets (para 66).

[194] The real challenge for the Court of Appeal was how to craft a remedy to rectify the situation that they had determined would be unconscionable (paras. 68 to 75).

[195] The Serra, supra, decision is a significant decision and of guidance to trial courts because of the Appeal Court’s detailed examination of the wording and the operation of s. 5(6)(a) to (h) of the FLA. On must examine the facts of this case in light of that appellate jurisprudential guidance even though there are significant differences in the facts of this case compared to the facts before the Court of Appeal

[196] In light of the Serra, supra, decision, the question, of Ms. Hum’s claim to an unequal division of net family property, as a result of Ms. Skoll selling her shares in Roaring Penquin Software Inc. in March, 2018 at a profit, substantially greater than its valuation date value, can be stated in the following way:

After considering all of the circumstances giving rise to the substantial change or increase in value relating (directly or indirectly) to the disposition of Ms. Skoll’s shareholding in March, 2018, taken alone or in conjunction with other factors, would the equalisation of net family property in this case lead to an unconscionable result?

[197] The first thing to acknowledge is that the business asset in question, Roaring Penquin Software Inc., in this case is different from the textile business in Serra, supra, although, both companies depended on the market and their sales to survive. Instead of dealing with an asset that has substantially decreased in value between the time of valuation date and the trial (effectively its sale date in March, 2018) we are clearly dealing with an asset that has substantially increased in value. What is in play on the facts of this case is a claim to share in increased wealth instead of a claim to share a loss of wealth because of the operation of legislation dealing with the treatment of property upon marriage breakdown.

[198] On the evidence of this case, similar to the facts of Serra, supra, Roaring Penquin Software Inc., although not the only large asset of this couple, the company was the parties’ major asset, not only as an income generating vehicle but also as a savings vehicle for the family.

[199] The company provided the income for the principle earner in the family. The company was created, organised and operated by Ms. Skoll so as to give Ms. Hum a substantial salary, despite her lack of active involvement in the company work, at great savings and advantage to the family. According to the evidence, it was Ms. Skoll who essentially decided what income would be given to each of them.

[200] In addition, the company was created by Ms Skoll so as to have Ms Hum passively involved in the company as an officer of the corporation as well as a special class shareholder. According to the testimony of Ms. Skoll, the new special class shareholding schemes devised for the company in 2003 and again in 2007 (see exhibit #11, tabs 15 and 2016) were to permit the company to issue dividends without diluting ownership and control of the company. According to the evidence, it was Ms. Skoll who essentially decided when dividends or bonuses would be declared or issued by the company.

[201] Ms. Skoll was at times obligated to obtain the signature of Ms. Hum both as an officer of the company, at times, and as a shareholder of the company, for company shareholding transactions (see exhibits #11, tabs 17, 18,19 and 24). Although, it was the evidence of Ms. Skoll that any decision relating to a shareholding transaction or disposition was ultimately made by her. According to Ms. Skoll, whenever she presented Ms. Hum with company documents to sign, she generally explained to her the nature and purpose of the documents and gave her the opportunity to examine them before she signed them. Ms. Hum recalls signing a number of documents at Ms. Skoll’s request, which she did but without any real explanation or understanding of why she was signing. She signed because she trusted her spouse. She never received independent legal advice before signing any document for Ms. Skoll.

[202] What is clear from the above evidence, from a corporate point of view at least, as of the date of separation and until her special class C shares were redeemed unilaterally by Ms. Skoll, Ms Hum was entitled to notice and to sign off on any shareholding transaction and disposition of Roaring Penquin Software Inc., including its sale.

[203] During the marriage Roaring Penquin Software Inc. grew incrementally due to the expertise and good management of Ms. Skoll who also had an excellent employment team. No one can deny that she built up the company.

[204] Another notable circumstance relating to the disposition of the company was the fact that after the separation the company continued to grow substantially, again no doubt due to the expertise and good management of Ms. Skoll and her excellent employment team.

[205] When the decision to sell the company was made, as I have already found, it was not done recklessly but rather on the basis of a well thought-out strategy devised and managed by Ms Skoll and Mr. White. They must be given substantial credit for negotiating such a lucrative purchase price for the Roaring Penquin Software Inc. shares.

[206] Because the family’s standard of living did not substantially change over the years of the marriage, the increased wealth generated by the successful operation of the company essentially went into increasing the family’s savings, after their needs were met.

[207] The evidence shows that after the separation leading up to the sale, Roaring Penquin Software Inc. continued to be operated in the same way as it had during the marriage for almost 3 years. It was Ms. Skoll’s decision, post separation, to continue the income splitting between the parties from the company coffers instead of by way of a support order, which is what Ms. Hum wanted. Like during the marriage, Ms. Skoll essentially made the decision as to what salary each party would receive from the company. Ms. Skoll essentially made the decision as to when that salary would be increased as the family’s needs did so, in her perception. When support was finally ordered by James J. on November 16, 2016, effective on December 1, 2016, his order was based on a declared income of $413,000 to Ms. Skoll. Ms. Skoll, then, immediately increased her salary to that level of $413,322.25 (see 2017 personal income tax return for Ms. Skoll, tab 8, exhibit #11).

[208] Post separation Ms. Skoll also continued to determine the family’s level of savings from the company. She would determine what surplus money would be kept in the company as retained earnings and when those retained earnings would be taken out as dividends to herself or to the joint Holding Company or when there would be share redemptions.

[209] Ms. Skoll also determined where the surplus monies from the company went. Tab 50 of exhibit #12 is a summary, created by Ms. Skoll, of all of the dividends paid out of Roaring Penquin since the date of separation and prior to its sale. One can see from that list that between 2016 and 2018, Ms. Skoll received in dividends from the company a total of $552,568.61. Ms. Hum received her share redemption in the amount of $73,457.50 and 1578040 Ontario Limited received $388,888.89 which both parties will share equally, giving each of them roughly another $194,444.44, resulting in Ms. Skoll having received dividends totalling $747, 013.05 and Ms Hum a total of $267,501.94 in those years. (All of this, of course, is without considering the disposition costs each of parties would have to pay on these payment.)

[210] Ms. Skoll was cross-examined about the dividends she declared for herself from the company, post separation, and the list of dividends she created and filed in tab 50 of exhibit #12. When one compares the list of dividends enumerated in tab 50 of exhibit #12 with the dividends declared in Ms. Skoll’s income tax returns for the comparable years, it may be that the list created by Ms. Skoll in tab 50 of exhibit #12 is incorrect, showing less dividends than were actually identified in her income tax returns. When cross-examined as to where the declared dividends went, Ms. Skoll testified that they went into her personal investment accounts, her tax free savings account and her RRSPs, and that if she declared them she must have needed the money.

[211] When Ms. Hum’s Special Class C shares were redeemed by the unilateral decision of Ms. Skoll in June of 2017 without notice, in preparation for the sale of the company as explained by Ms. Skoll in her testimony, Ms. Hum lost any rights she may have had as a shareholder of the company as well as the right to notice of any pending sale of the company and which she continued to enjoy for almost three years after the separation (see exhibit #11 tab 15 and exhibit #24). This too is a circumstance relating to the disposition of the shares that needs to be considered.

[212] It was the evidence of Ms. Skoll that Ms. Hum was not entitled to be told of the pending sale of Roaring Penquin Software Inc. That may be the case in a corporate context. The evidence was very sparse on this point and this court need not decide the question of corporate law. Nonetheless, given the substantial significance this asset played in the accumulated wealth of this family, both as an income producing asset as well as a savings vehicle during the marriage and for a number of years after the separation, the absence of that notice must be examined primarily in a matrimonial context and not merely in a corporate context. It cannot be disputed that the obligation to disclose in family law matters is a recognised centrepiece of family law litigation.

[213] This is trite law but perhaps ought to be recalled here. In Roberts v. Roberts, 2015 ONCA 450 at para. 11, Benotta J. stated that the “most basic obligation in family law is the duty to disclose financial information. The requirement is immediate and ongoing” (underlining mine). Justice Benotto went on in some detail to explain why that was a basic governing principle in family law matters. This principle has been repeated again and again in the following cases: Gray v. Rizzi, 2016 ONCA 152, paras 31 and 32; Manchanda v. Thethi, 2016 ONCA 909, para. 13; Wouters v. Wouters, 2018 ONCA paras. 45 to 47; and, Sickinger v. Sickinger, 2018 ONCA 526 at paras. 35 to 37.

[214] The pending sale of Roaring Penquin Software Inc.’s remaining shareholding at the end of 2017 was a significant item of financial disclosure that ought to have been shared with Ms. Hum and her counsel when it was happening. The obligation to financially disclose in a matrimonial matter is ongoing. The positive decision made by Ms. Skoll to keep that financial disclosure from Ms. Hum and the less than complete and, perhaps even misleading by omission, explanation given to Ms. Hum’s counsel, when he asked for an explanation as to why Ms. Hum’s Special Class C shares were being redeemed by the company in June, 2017, so close to the imminent family law trial being awaited by the parties at that time, that is was “occurring for business purposes only to simplify the shareholder structure of the corporation.” (see exhibit #39), in my view, did not meet, even a modicum of the high standard of disclosure in the circumstances of this case mandated in family law litigation both by the Family Law Rules and the jurisprudence.

[215] It is to be noted here, too, because the parties’ jointly held Holding Company, 1578040 Ontario Limited, also owned Special Class A shares in Roaring Penquin Software Inc., the Holding Company too had to have shares redeemed before the sale to AppRiver LLC could be finalised. Although a joint owner of these Special Class A shares via her interest in the Holding Company, Ms. Hum was not given notice or any information of the redemption of those shares. It was the evidence of Ms. Skoll that as director of the Holding Company, only she and not Ms. Hum individually, was required to be given notice of the redemption of the Holding Company’s Special Class A Shares.

[216] I am cognisant of the reasons given by Ms. Skoll for not revealing this important financial fact, all of which could have been accommodated in other ways. I come to the conclusion that it was underhanded of Ms. Skoll not to disclose this pivotal piece of financial information to Ms. Hum and her counsel as it was happening, in the circumstances of this case. While on the facts, not immediately, it was to have a significant impact on future spousal and child support. It created a disadvantage to Ms. Hum with respect to a substantial asset in this family. Ms. Skoll and Ms. Hum were clearly in an adversarial position at that point in the litigation. Ms. Skoll was dealing with Ms. Hum’s corporate interests and rights without notice to her. It is an understatement to say that as a result of this absence of disclosure no one was looking out for Ms. Hum’s interests in this matter and in the unilateral actions of Ms. Skoll. The surprise sale also led to the amended Application in this case which clearly contributed to the delay in bringing this matter to trial.

[217] Other factors to take into account in this analysis is the fact that while Ms. Hum entered this union in rather humble circumstances, she will be leaving this marriage with net family assets worth a considerable amount, as her equal share of the net family property will be approximately $1.5 M. Of course, that amount will also be available to Ms. Skoll, in addition to the substantial proceeds she received from the disposition of her company shares in March of 2018.

[218] Unlike the situation of Ms. Serra in the case of Serra v. Serra, supra, it cannot be said that Ms. Hum has lead a life of relative luxury or had an extravagant lifestyle, despite the substantial resources available to this family over the years. Nonetheless, she has contributed to the accumulation of family wealth by joining Ms. Skoll in the savings mentality of this family. After the separation in 2014, the family resources available to her were closely determined and controlled for a period of nearly three years by Ms. Skoll. During the same time, Ms. Skoll took much more of the family resources for herself and her own purposes, by way of dividend payments from the company as well as other payments from the joint Investor Line, without Ms. Hum’s knowledge. I acknowledge that this imbalance was substantially accounted for.

[219] In the circumstances of this case and after considering all of the factors, as just recounted, I am of the opinion that equalizing the net family property would be unconscionable, having regard to firstly, the dramatic windfall Ms. Skoll realised by the sale of Roaring Penquin Software Inc., which leaves her with substantially more assets after the marriage, secondly, the timing of the sale and thirdly, the factors giving rise to it and surrounding it.

[220] I acknowledge that much the success of the sale had to do with Ms. Skoll’s own hard work and ability as a business owner and manager. Nonetheless, I come to this conclusion after considering all of the following circumstances surrounding the disposition of Roaring Penquin Software Inc.:

(a) the length of the marriage;

(b) the role played by each of them in the marriage;

(c) the financial sacrifices both parties made in the lifestyle they adopted for their family;

(d) the pivotal use of the company for both family income and family savings contributed to by both spouses;

(e) Ms. Hum’s role in the overall scheme of business organisation for family purposes; the continuation of that role, contrary to her own wishes, even after separation, directed by the unilateral decisions and control of Ms. Skoll;

(f) the lack of total transparency and honesty (vis-à-vis Ms. Hum) in the business transactions dealing with the company (redemption of shares and sale) and ultimately in the decision leading to the sale of the business; and

(g) the relative wealth and resources each party will be walking away with at the end of this marriage.

[221] Like the challenge before the Court of Appeal in Serra, supra, this Court is left with the question of what is the appropriate order to rectify the situation. The Court of Appeal pointed out in Serra, supra, that it cannot be a scientific exercise in determining where “unconscionability” starts and ends. As the Court of Appeal pointed out at para. 71 in Serra, supra:

… Once the threshold has been crossed, however, and the rare resort to judicial discretion under the Act is in play, the court should exercise its discretion as it normally does: by doing what is just, fair and equitable in the circumstances. Such an approach, in my opinion, is (a) true to the language of s. 5(6) itself; (b) reflective of the wording in s. 5(7) establishing that the presumed equal contribution of the spouses leading to the normal division of net family property is subject only to the “equitable “ considerations set out in s. 5(6); and (c) consistent with the call in the preamble of the Act for “the orderly and equitable settlement of the affairs of the spouses upon the breakdown of the partnership.

[222] Having regard to all of the circumstances and cognisant of the fact that the Court is exercising its discretion to attain fairness and equity between these parties, I have come to the conclusion that in addition to the equalisation payment the parties have agreed to in exhibit #47, of $72,920.28, Ms. Hum ought to receive from Ms. Skoll, an additional payment amounting to 25% of Ms. Skoll’s net proceeds from the sale of her shares in Roaring Penquin Software Inc. which she received on the closing of the deal, that is 25% of $1.2M less whatever amount of those net proceeds have already been accounted in exhibit #47, so as to avoid double counting, as explained below.

[223] In fixing the specific sum for this additional payment (the unequal division of net family property payment), it must be remembered that Ms. Hum will have already received part of the net proceeds from the sale of Roaring Penquin Software Inc., based on the value of the company on valuation date as found in Mr. Desnoyers’ expert report, in the calculation of the equalisation payment as found in exhibit #47. In that calculation, Ms. Skoll’s shareholding value was found to be $792,000 according to the appraisal of Mr. Desnoyers, which value both parties accepted.

[224] In order to prevent double counting, that amount must be deducted from Ms. Skoll’s $1.2M net proceeds that she received on the closing date of the sale and 25% calculated from the balance. Subject to having my arithmetic corrected by counsel, on my calculations (25% of ($1,200,000-$792,000) amounts to an additional payment(to the equalisation payment) of $102,000 payable by Ms. Skoll to Ms. Hum for a total payment, as an unequal division of net family property of $174,920.28 ($72,920.28 +$102,000= $174,920.28)

[225] I come to my conclusion for the following reasons. In my view, that proportion reasonably and fairly recognises the role Ms. Hum played in the creation, development and growth of that major family asset consistent with the circumstances of this case. It recognises that that role continued even after the separation for a little over 3 years after the separation. It also compensates her for any disadvantage she may have suffered by the unilateral actions of Ms. Skoll after the separation in the way she dealt with her spouse’s joint family assets, shares and rights in the company. At the same time, by leaving the bulk (75%) of the net purchase price exclusively to Ms. Skoll, this award also recognises that Ms. Skoll is and has always been the creative and operating force of the company. In my view, it is a fair, just and equitable disposition that recognises her ability in the creation of this family asset.

[226] I leave it to counsel, in consultation with their clients, to determine how this final amount is to be paid to Ms. Hum. Disposition costs and possibly tax consequences may need to be considered as well. It may be that professional consultation on how best to do this to the benefit of both parties may need to be undertaken. If any issues arise as a result of this order I can be spoken to.

[227] With respect to net property division, there are two other matters that need to be addressed. Firstly, counsel for Ms. Hum has made an argument that the net proceeds from the sale of Roaring Penquin Software Inc. ought to be added to Ms. Skoll’s income for 2018, the year of sale, for support purposes in that year (see also report of Mr. Desnoyers, tab 18 H of the Trial Record). I reject this argument. Ms. Hum, by way of the award of the unequal division of net family property, including the equalisation amount, will already have received, in my view, a fair share of those funds. For the balance, and being cognisant of avoiding double dipping, those will be considered when the court examines all of both parties’ financial resources, as it is obligated to do, when determining support issues.

[228] Secondly, the evidence showed that Ms. Skoll took sums of money from the parties’ joint Investor Line, post separation, without the knowledge of Ms. Hum. Between the time of the separation and the date the funds in the Investor Line account were frozen, by way of the order of Master Champagne, dated June 8, 2016, the evidence showed that Ms. Skoll had taken out from that account a total of $70,800 (exhibit #11).

[229] Ms. Skoll did not deny that she took out some of this money from the joint account for her own personal use. When she could not remember why she took out the money, it was her evidence that she must have needed the money. The evidence further showed that Ms. Hum was given an equal amount for $46,300 of this total amount, ($70,800), as an accounting of those funds. However, the evidence showed that she was not compensated for the balance of $24,500 (see Exhibit #13 tab E, F, and G). In fairness to Ms. Hum, she is owed and ought to receive from Ms. Skoll $24,500, in order to account for that balance. I again leave it to counsel as to how best to pay Ms. Hum this additional amount (see also Skrlj v. Skrlj, supra).

[230] Finally, there was some evidence indicating that Ms. Skoll authorised, post separation, a payment of approximately $10,000 to Ms. Hum from the joint Investor Line for the purpose of carrying out some repairs to the matrimonial home. I provide for no accounting of this amount, on the assumption that both parties benefited from the expenditure of these funds that would have gone into the final evaluation of the matrimonial home in the agreement reached by the parties in exhibit #47.

[231] After all of the above payments are accounted for pursuant to this order, the respective asset holdings of the parties at the end of the marriage, as reflected in their most current financial statements (tab 6 of the Trial Record for Ms. Hum and tab 11 of the Trial Record for Ms. Skoll) will be approximately as follows. Ms. Skoll will have approximately $2,021,881.45 ($2,221,301.73 - $24,500 - $174,920.28 = $2,021,881.45) in net family property and Ms. Hum will have approximately, $1,428,167.40 ($1,228,747.12 + $24,500 + $174,920.28 = 1,428,167.40).

Disposition

[232] To sum up, for all of the reasons mentioned above, there will be an order for an unequal division of net family property in the amount of $174,920.28 payable from Ms. Skoll to Ms. Hum. In addition, Ms. Skoll shall pay to Ms. Hum the sum of $24,500 for an accounting of joint assets used by Ms. Skoll, post separation, both of which will be incorporated into a final order.

SUPPORT

[233] Before deciding the questions of spousal support and child support, the preliminary issue of determination of income for both parties, must be resolved because this is a disputed issue raised by both parties.

Income of Ms. Skoll

Position of Ms. Skoll

[234] It is the position of Ms. Skoll that both spousal support and child support should be based simply on her current employment income of $120,000 per year which she earns as a Fidus employee. As an employee of Fidus, Ms. Skoll is also part of a profit sharing plan, but she had no knowledge of the details of the plan. In her financial statement filed at tab 11 of the Trial Record, Ms. Skoll has added the amount of $1,883 per month to her Fidus income as an estimated monthly interest income from her investment holdings, for a total income of $142,584 per annum. Based on the evidence, this additional $1,883 for investment income does not in any way reflect the true investment earnings Ms. Skoll receives on her total investments.

[235] Ms. Skoll’s monthly expenses, as recorded on her Financial Statement, shows that she continues to live well within her means and has a monthly surplus which goes into her savings.

[236] Regarding why she left AppRiver LLC to take on employment with Fidus for approximately $80,000 less income per annum, it was the evidence of Ms. Skoll that when she took on her employment with AppRiver LLC, she knew it would not last for a number of reasons. Firstly, her employment with that company at a salary of $200,000 per annum was part of the purchase price negotiation. That salary, according to Ms. Skoll was higher than the market rate for her job category which was essentially a software programmer even though she had the title of “project manager”.

[237] Secondly, the system and product advanced by AppRiver LLC after its purchase of Roaring Penquin Software Inc. was the Windows system, unlike the Linux system, that Ms. Skoll knew very well and with which she had developed the Roaring Penquin Software Inc. services and products. As a result, according to Ms. Skoll, she could only effectively operate in the Windows system as a junior programmer because of her limited knowledge of the system and hence, in the market place, going forward, she would only be able to command an inferior salary.

[238] Thirdly, AppRiver LLC, according to Ms. Skoll, did not keep its commitments to continue to invest in Roaring Penquin Software Inc.’s former products and to keep on certain former employees of Roaring Penquin Software Inc. As a result, remaining as an employee with AppRiver LLC became untenable. Ms. Skoll then began to look for other employment prospects.

[239] According to Ms. Skoll, her work at Fidus is based on a Linux system and includes working on imbedded products. She was hired as a senior imbedded programming officer, a position which is very compatible with her knowledge and skills set.

[240] In support of Ms. Skoll’s position that her current employment is a fair and reasonable one on which to base her support obligations, Mr. Cameron Adams-Webber was called as an expert witness in vocational evaluation to give an opinion on what kind of salary Ms. Skoll could expect to command in an open market compared to the employment she had in May of 2018.

[241] Mr. Adams-Webber’s expertise was not contested and he was permitted to given an opinion on the above question (see Exhibit #42). Mr. Adams-Webber interviewed Ms. Skoll by telephone in May 2018 when she was still under employment contract with AppRiver LLC and earning $200,000 per annum. After ascertaining from her position, title and what work she actually did and what she made, Mr. Adams-Webber did a market search into what he called “the prevailing income rates” for the following three positions or areas of activities that compared to Ms. Skoll’s employment and position as described by her to him. The employment titles and area of searches carried out by him, as he explained in his oral testimony and in his written report were:

• Director of IT field;

• Software Developers and Project Managers in the IT field; and

• Software Developer/project manager

[242] It was the testimony of Mr. Adams-Webber, that he chose those positions and job categories to research because of the information given to him by Ms. Skoll concerning the kind of employment she is qualified to do and could seek out in the local economy at the end of her employment contract with her current employer in March of 2019.

[243] Mr. Adams-Webber also had the benefit of Ms. Skoll’s CV in addition to his telephone conversation with her before he commenced his research (see Exhibit #22).

[244] The conclusions reached by Mr. Adams-Webber, with some amendments made during the course of his oral testimony, are found in his report, filed as tab 21 of the Trial Record. Mr. Adams-Webber also amended his written report to include current market data at the time of the trial.

[245] In summary, it was the opinion of Mr. Adams-Webber that, based on his research of the job title and the areas of work done by Ms. Skoll, her salary at that time was significantly higher than the national average annual income for positions likely to be comparable to hers by title, as IT team project Director or software development manager. According to Mr. Adams-Webber, he came to the same conclusion in his examination of the category of jobs entitled software developers, computer programmers and interactive software developers.

[246] Finally, Mr. Adams-Webber opined that Ms. Skoll could possibly earn about 18% more because of her knowledge of different computer programming language such as C, C++ and PHP.

[247] On cross-examination, Mr. Adams-Webber spoke to the limitations of his report, which is an examination of what current incomes can be expected by those who seek out comparable jobs to the one Ms. Skoll held in May of 2018 with AppRiver LLC. That was effectively the mandate given to him by Ms. Skoll and her counsel.

[248] According to Mr. Adams-Webber his report is not a “vocational assessment report” which would have been a more in depth examination of Ms. Skoll’s work history, skill set and transferrable skill set from one job to another, to determine what employment would match those features of Ms. Skoll’s employment potential as well as the salary that she could command as a result.

[249] In the context of carrying out a “vocational assessment report” on Ms. Skoll, according to Mr. Adams, the skills set that would be exercised by Ms. Skoll in running her own business, including directing and performing operations and marketing, managing human resources, and managing finances would have been relevant to examine. However, in the context of his limited report, and Ms. Skoll’s current employment, where she did not exercise many of the skill sets she would have used in the running of her own company, these skill sets were not part of Mr. Adams-Webber examination.

Position of Applicant

[250] With respect to what income should be imputed to Ms. Skoll, counsel for Ms. Hum argues that her current employment salary does not, at all, reflect Ms. Skoll’s true earning capacity. He argues that a much higher income should be imputed to Ms. Skoll for support purposes, along the lines of her previous earning capacity while running her own business.

[251] He relies on the evidence of Mr. Adams-Webber to argue that despite the job and remuneration Ms. Skoll is receiving currently for her work and that it is a reasonable salary for that work, it does not, in any way, accurately and completely reflect the true skills set and earning capacity of Ms. Skoll. In support of his argument, counsel for Ms. Hum points to the overwhelming success of Roaring Penquin Software Inc. and the extremely high income, essentially determined by her, the self-employment enterprise earned for her. The argument is effectively that, in her current employment, Ms. Skoll is underemployed and earning less than if she were self-employed.

[252] Counsel for Ms. Hum argues that if the court finds that Ms. Skoll is underemployed because of this, then the court can impute a higher income to her, as the court did in the case of Drygala v. Pauli, 2002 Carswell 3228. On the facts of that case, Mr. Pauli became a full-time student, instead of maintaining full-time employment.

[253] The court found that Mr. Pauli was intentionally underemployed, having chosen to earn less than he was capable of doing. The court found that Mr. Pauli was capable of working at least 50% of a normal week, while studying and imputed income to him accordingly for support purposes, including an order for retroactive support.

[254] The above case is certainly relevant for the general principles enunciated therein regarding the court’s jurisdiction to find that a payor spouse is “ underemployed” and to impute a higher and more appropriate income to him, accordingly, the facts of the Drygala v. Pauli, supra case are very different from the facts of the case at bar. Ms. Skoll is not pursuing non-paying activities, when she should be seeking employment and Ms. Skoll is employed on a full-time basis.

[255] Counsel for Ms. Hum argues Section 16 and 17 of the Federal Child Support Guidelines, and the jurisprudence arising from those sections. He submits that they permit the court to impute a much higher salary to Ms. Skoll, than her Fidus salary. He also argues that the court ought to do so in the circumstances of this case.

[256] Sections 16 of the Federal Child Support Guidelines establishes the general rule that a payor’s income for support purposes is determined by their line 150 declared on the payor’s personal income tax return. Sections 17 to 20 provide exceptions to the application of the general rule if the court is of the opinion that the application of the general rule “would not be the fairest determination of that income”. If the court comes to that opinion, then the court is able to determine an amount of income that is “fair and reasonable” in light of the particular circumstances the case.

[257] The circumstances specifically identified as worthy of this kind of exceptional determination of an amount of income that is “fair and reasonable” in the legislation are the following:

1. pattern of income over the last three years, fluctuation in income or receipt of a non-recurring amount during those years (s. 17(1));

2. non-recurring capital or business investments, so as to adjust the amount of loss (including related expenses and carrying charges and interest expenses to arrive at an appropriate amount in the view of the court (s. 17(2));

3. availability of pre-tax income of a corporation where a spouse is a shareholder, director or officer of corporation (s. 18 (1) and (2));

4. imputation of income in certain defined circumstances found in s. 19:

(a) “intentional under-employment or unemployment;

(b) exemption from federal or provincial income taxes;

(c) living outside Canada to tax advantage;

(d) diversion of income;

(e) property not reasonably used to generate income;

(f) non-compliance with legal obligation to disclose;

(g) unreasonable deductions from income;

(h) tax savings because of use of vehicles to obtain income such as dividends and cap gains; and

(i) income through being a beneficiary of a trust; and

5. residency or non-residency status effect on income (s. 20).

[258] Counsel for Ms. Hum relies on a number of cases where the court departed from the line 150 consideration of income for support purposes, both child support and spousal support, because, in the circumstances of the case, it was found not to be the “fairest determination of income”.

[259] In the case of Galea v. Galea, 2017 ONSC 6335, the court imputed to the payor husband a much greater income than his line 150 declared income. In summary, the reasons given by the court included the lack of financial disclosure and the use of corporate reorganisation by the payor to hide and shelter business income from the payee spouse.

[260] In the case of Gordon v. Guimont, 2016 ONSC 4569, Doyle J. accepted the expert’s report, written by Mr. Desnoyers, indicating that available corporate income was much higher than the payor’s declared income on his personal income tax returns. She then based the support award, both retroactive and ongoing, on the higher income as set out in Mr. Desnoyers’ expert report. At para. 32 Doyle J. observed:

33 The general principles stemming from the cases, Katarzynski v. Katarzynski, 2012 ONCJ 294 (Ont C.J); and Laurain v. Clarke, 2011 ONSC 7195, 16 R. F. L. (7th) 316 (Ont. S. C J. ) is that the court may impute income to a payor who has other sources of income available. These include untaxed business income used to pay the payor’s personal expenses, that can be “grossed up”, inheritances that could be available for support, untaxed business income, and pre-tax income of the corporation paid to a person with whom the corporation does not deal at arm’s length. A key observation is that the reasonable[ness] of an expense of the company is not measured by whether [it] is permissible to be deducted under the Income Tax Act.

[261] In the case of Bullock v. Bullock, 2003 CanLII 3433 (ON CA), 2003 CarswellOnt 3828, the payor husband, who had been a very successful consultant in the field of “process improvement and management” voluntarily retired from his business at age 62 because of a downturn in his business and alleging that he could not earn any income. The court concluded, after examining all of the circumstances of the case and without fixing a precise amount of imputed income to him, that he could earn at least $120,000 per annum. As a result, the court rejected the payor husband’s request for a variation of his ongoing spousal support obligations.

[262] Finally, counsel for Ms. Hum relies on the case of Riel v. Holland, 2003 CanLII 3433 (ON CA), 2003 CarswellOnt 3828, the facts of which, perhaps parallels the facts of the case at bar more than the other cases cited. On the facts of Riel v. Holland, supra, the Ontario Court of Appeal was asked to overturn the decision of a trial judge imputing a higher income than the payor father’s current employment income.

[263] The facts showed that Mr. Riel was an electrician by trade and had been operating as an independent electrical contractor through an incorporated company of which he was the sole shareholder (Dominion Electric). In 1998 his declared income was $147,250 and support was agreed to by the parties accordingly.

[264] Two years later, Mr. Riel ceased operating as an independent electrical contractor and took on a salaried position with an electrical company at $52,500 per year and immediately sought to reduce his support obligations. Mr. Riel argued at trial that, given the erratic nature of his self-employment and the substantial fluctuations experienced in his income over the last three years, he acted reasonably in taking on his current employment instead of continuing with his independent electrical contracting business.

[265] The trial judge rejected Mr. Riel’s position after examining all of the financial documents of the company, Dominion Electric. The trial judge concluded that on an objective basis, there was no evidence to show that the business had to be discontinued. In fact, the trial judge grossed up Mr. Riel’s income for the years in question, for the “real” income available to him because of the use of his company as a vehicle for paying personal expenses and effecting tax savings. The trial judge ordered retroactive support accordingly.

[266] Furthermore, the trial judge concluded that by having taken on his current employment at a substantially reduced income, Mr. Riel was “intentionally underemployed” within the meaning of s. 19(1) of the Guidelines. She then applied s. 17(1) and averaged the last three years of Mr Riel’s income to determine his ongoing obligation to pay child support based on an income of $188,000 per annum.

[267] MacPherson J. A. speaking for the Court of Appeal, upheld the decision of the trial judge, concluding that Mr. Riel’s voluntary decision to take on his salaried employment at a substantially reduced income than previously, fit precisely within the definition of s. 19(1)(a) of the Guidelines. She states at para. 23 of the decision:

23 I do not agree with these submissions. Riel’s explanation for his decision to take a salaried position with another company- lack of credit, difficulty financing jobs, bad debts, trouble finding big jobs due to lack of regular employees – belied by the strong financial results of Dominion Electric in 1998, 1999, and 2000. I agree with the appellant’s submission that “the numbers are not everything” in an “intentional underemployment” analysis. However, the numbers must certainly be an important part of the analysis. Here, Riel claims that he made an employment decision that he says reduced his income by more than half. He coupled that decision with an almost immediate attempt to seek a reduction by almost half in his child support payments. It seems to me that an employment decision that would lead to two children receiving $912 instead of $1732 per month needs to be justified in a compelling way. There was nothing in Riel’s conduct or testimony that came close to providing such a justification.

[268] Based on the evidence before the trial judge, the Court of Appeal also upheld the trial judge’s decision to gross-up Mr. Riel’s income for support purposes. The appeal was dismissed accordingly.

Disposition - Ms. Skoll’s Income

[269] A claim for spousal and child support is being advanced by Ms. Hum both retroactively and prospectively. I find it appropriate to consider the question of Ms. Skoll’s income, for support purposes in two stages. The first is from the point of view going forward from the date when Ms. Skoll sold her business, Roaring Penquin Software Inc. and became an employee, first for AppRiver LLC and then for Fidus, her current employer.

[270] I accept the submissions of counsel for Ms. Hum, that the mandate given to Mr. Adams-Webber, regarding Ms. Skoll’s employment was too restricted. A “vocational assessment report” would have been more helpful to the court. One must accept that Ms. Skoll is imminently qualified for her current position and employment responsibilities. In addition, based on the expert testimony of Mr. Adams-Webber, one must also accept that Ms. Skoll’s remuneration is a reasonable one for her current position category and for what she does.

[271] Nonetheless, given Ms. Skoll’s work history, her obvious abilities and talents in the software programming and IT programme development fields with which she was able to conceive, create, build up and maintain the operation of Roaring Penquin Software Inc. as an extremely successful and lucrative business demonstrates that she is capable of much more than simply software programming. The various former employees who were called to give evidence at the trial, testified to the expert management and leadership skills they observed in Ms. Skoll and the outstanding team spirit she inspired at the Roaring Penquin Software Inc. workplace. There is no question that Ms. Skoll likes to be in control of her work environment and her financial circumstances and so individual entrepreneurship would suit her very well.

[272] One would not be surprised to see Ms. Skoll at some time in the future embarking on another self-guided business enterprise that might prove itself to be as successful, if not more, as Roaring Penquin Software Inc. The evidence supports the finding that she is capable of doing that.

[273] I come to the conclusion, however, that Ms. Skoll’s historical financial success as an entrepreneur with Roaring Penquin Software Inc., and the increasingly substantial incomes she withdrew from the company, between 2012 to the time of its sale, does not provide enough of a basis or, to put it another way, enough of an evidentiary certainty on which to base Ms. Skoll’s income going forward. There is no evidence that Ms. Skoll intends to pursue another independent enterprise at this time, nor can the court act on the assumption that she will.

[274] Furthermore, I have found as a fact that the decision of Ms. Skoll and Mr. White to sell their shares in Roaring Penquin Software Inc. was based on a well thought-out strategy devised and managed by Ms Skoll and Mr. White and successfully negotiated and executed by them to obtain the best market price for the shares. I have ruled that it was not a reckless depletion of that asset. There was evidence to raise questions about the continued sustainability of the company over the long term. There was evidence to suggest that there were financial and economic reasons to try and sell the shares while sales in the company were at their peak. Having made these findings of fact, it would not be logical or fair to Ms. Skoll to treat her income going forward as if she was still operating Roaring Penquin Software Inc. Future income would become pure speculation. I find the facts of this case very different from those found in Riel v. Holland, supra, where the court could not find any evidentiary basis for Mr. Riel’s decision to stop operating his electrical business. In the event that Ms. Skoll tires of being an employee, and decides to embark on another independent enterprise, then, assuming Ms. Skoll continues to have support obligations, the court may always consider Ms. Skoll’s new financial circumstances, despite Ms. Skoll’s wish to have a finite and final disposition of the support issue.

[275] Accordingly, going forward from the date of the sale of the shares in March of 2018, Ms. Skoll’s base income, for support purposes, will be taken to be her employment income.

[276] However, since Ms. Skoll walks away from this marriage with notably more investment property, even after taking account of the unequal division of net family assets, her investment income must also be taken into account and added to her employment income to determine her real income for support purposes.

[277] To what extent Ms. Skoll’s investment income increases her employment income is far from clear on the evidence. A notional interest rate applied by the court may be the only fair way to fix an amount and add it to Ms. Skoll’s income. Presumably, and in fairness, a notional interest rate would also be applied to Ms. Hum’s assets for the purpose of determining to what extent she could contribute to her own support.

Disposition - retroactive support

[278] Prior to determining what investment income ought to be attributed to Ms. Skoll on her investment property for the purposes of support going forward, the question of retroactive support, both child and spousal support needs to be considered.

[279] Allowing for perhaps a brief period of adjustment after the separation, Ms. Skoll ought to have paid a reasonable amount of child and spousal support within a very short period after the separation. What is a reasonable amount? In my view, what would have been reasonable was the application of the Child Support Guidelines and the Spousal Support Advisory Guidelines as was done in the interim support award.

[280] Based on the evidence presented to this court, I am of the view that the income splitting instrument imposed by Ms. Skoll on Ms. Hum while it met, in the eyes of Ms. Skoll, the essentials of the family expenses, was totally inappropriate and unreasonable for the family’s new circumstances after the separation. It went on far too long, contrary to Ms. Hum’s wishes, as was conceded by Ms. Skoll’s counsel in her final arguments.

[281] It was disrespectful to Ms. Hum in the way it was carried out; it was unfair to Ms. Hum, in that during that whole period before the support order was granted in November, 2016, the evidence shows that Ms. Skoll was taking for her own use and to increase her personal assets, much more of the available family resources, while Ms. Hum was borrowing from her family to meet her personal needs and to assist their eldest child with her last year of education, when Ms. Skoll refused to contribute to Elizabeth’s last year of education because of their child parent conflict. Clearly, the communications that arose out of this method of funding the family post separation, also fuelled the parties’ high conflict which touched the other family law issues. Finally, since Ms. Hum did not do any work in the company especially after the separation, the income splitting was a questionable practise.

[282] For the purposes of determining whether Ms. Skoll owes Ms. Hum retroactive child and spousal support and if so what amount I would apply to the Child Support Guidelines and the Spousal Support Advisory Guidelines commencing January 1, 2015. Both counsel have provided DivorceMate calculations with that in mind in order to assist the court.

[283] In order to apply the Guidelines, for both spousal and child support, in order to determine what, if any, retroactive child and spousal support, Ms. Skoll ought to pay Ms. Hum, from January 2015 until the sale of Roaring Penquin Software Inc., it is necessary to fix Ms. Skoll’s income for the years 2015, 2016, 2017 and 2018.

[284] The fair fixing of Ms. Skoll’s income is quite complicated and not an easy exercise nor, can I add, can it be a precise one on the evidence. The decision has to be made on the best evidence available.

[285] As occurred during the marriage, after the separation, Ms. Skoll’s income continued to be a combination of employment income for herself and for Ms. Hum, dividends and capital gains and redemption of shares (Special Class C shares) to both parties.

[286] To further complicate things, periodically, the retained earnings in Roaring Penquin Software Inc. were paid out in dividends to Ms. Skoll personally, as well as payments to the jointly owned Holding Company, which the parties will share equally, as per their agreement. In addition, the retained earnings of Roaring Penquin Software Inc. were factored into the value of Roaring Penquin Software Inc. which was used for the calculation of equalisation payment, which will be paid to Ms. Hum in order to equalise the net family property as of the valuation date. This consideration is also relevant in the payment of the unequal division of net family assets ordered by this court.

[287] Consequently, in fairness to Ms. Skoll, it is important to ensure, to the extent it is possible to do so, that the Roaring Penquin Software Inc. retained earnings, as of valuation date, and the dividends paid into the jointly owned Holding company after separation are not double counted by also being added to Ms. Skoll’s income for the consideration of retroactive support purposes. I have attempted to take account of all of these concerns in my analysis of the evidence, to the extent possible.

[288] Below is a comparative chart of firstly, the available income to Ms. Skoll from Roaring Penquin Software Inc. as found by Mr. Desnoyers, which the parties accept, and secondly, the major income, along with their sources, declared by both Ms. Skoll and Ms. Hum on their income tax returns for the years 2012 to 2017. The salary declared by Ms. Hum is, of course, the salary given to her from Roaring Penquin Software Inc. (see tab 18 of the Trial Record; exhibit #11, tabs 2-8; and, exhibit # 2, tabs A-G).

Line 150, Income Tax Return

Line 150, Income Tax Return

Desnoyers Report

For Ms. Skoll

For Ms. Hum

2012 - $168,000

$63,090.50

• Salary: $47,096.37
• Dividends: $11,486.81
• Interest: $4,507.21

$46,257

• Salary: $45,000
• Interest: $1,257

2013 - $218,000

$71,243.83

• Salary: $47,125.80
• Dividends: $14,677.56
• Interest: $5,610.95
• Tax Capital Gains: $3,829.52

$45,000

• Salary: $45,000

2014 - $413,000

$84,895.26

• Salary: $55,639.16
• Dividends: $13,170.30
• Interest: $5,731.28
• Tax Capital Gains: $10,354.52

$53,566.65

• Salary: $53,566.65

2015 - $529,000

$110,263.27

• Salary: $82,814.54
• Dividends: $12,399.25
• Interest: $4,623.50
• Tax Capital Gains: $10,426.28

$78,295.10

• Salary: $78,200
• Interest: $95.10

2016 - $606,000

$223,124.67

• Salary: $203,528.33
• Dividends: $13,555.53
• Interest: $4,836.53
• Tax Capital Gains: $1,204.28

$80,424.23

• Salary: $69,300
• Support: $6,812
• RRSP: $4,312.23

2017 - $718,000

$669,063.55

• Salary: $410,322.25
• Dividends: $255,299.41
• Interest: $3,391.73

$196,631

• Dividends: $87,502.96
• Tax Capital Gains: $27,432.45
• Tax Supplement: $81,600

[289] As a preliminary comment, what is clear from the above presentation of the evidence is that during the years after the separation and before an interim support award was granted to Ms. Hum in November of 2016, Ms Skoll gave herself much more income, in the form of salary, dividends, interest and capital gains than she was giving Ms. Hum. Furthermore, contrary to the representations made by Ms. Skoll to Ms. Hum that they were receiving the same amount of money with which to pay 50% of the family expenses and as a justification for each paying 50% of the family expenses, it was far from the truth and the parties’ financial reality.

[290] A secondary comment is that when one examines the amount of money Ms. Skoll took out of her company in 2017 in order to prepare for its transfer and to not leave excess money in the company, to which she testified, the amount she was able to take out was very close to Mr. Desnoyers’ evaluation of available income in that year, which speaks to the accuracy of his available income evaluation.

[291] With respect to Ms. Skoll’s 2018 income, the evidence did not seem to identify an obvious and clear figure. There were no income tax returns for 2018 to rely on.

[292] Mr. Desnoyers in his income evaluation report for the year 2018 was only able to identify with certainty Ms. Skoll’s salary income based on his employment records with Roaring Penquin Software Inc., from January to March, and with Fidus, from March to December (without consideration of potential bonuses and RRSP benefits) in addition to dividends paid out to herself prior to the sale of Roaring Penquin Software Inc. (amount accounted to avoid double dipping) which amounted to an approximate total of salary income for that year of $ 299,655 (see Tab 18H of Trial Record ($239,667 + $59,988 = $299,655 )).

[293] Mr. Desnoyers also added for the year 2018, the appropriate (to avoid double counting) net proceeds, both received and to be received, of the sale of Roaring Penquin Software Inc. to Ms. Skoll’s income for support purposes. For reasons already stated, I reject that approach to income and consider those funds only from the point of view of what additional amount should be added to Ms. Skoll’s employment income because of the ongoing investment potential of those net proceeds to Ms. Skoll. In my view, that is the missing figure here but cannot be ignored and needs to be reasonably imputed based on all of the evidence.

[294] In the DivorceMate calculations for 2018 presented to the court by counsel for Ms. Skoll the annual income figure of $758,000 is used for Ms. Skoll’s income until the sale of Roaring Penquin Software Inc. Thereafter, only her employment income is used for support purposes, totally ignoring Ms. Skoll’s superior ability to earn investment income from the unshared proceeds of the sale of Roaring Penquin Software Inc. The only explanation I can find for that figure is that it was a projected income for the year 2017 from Roaring Penquin Software Inc., provided by Mr. Desnoyers before he had the actual figures for that year and finally determined the amount of $718,000 when he had the final figures.

[295] In the DivorceMate calculations for 2018, presented to the court by counsel for Ms. Hum the annual income figure of $977,290, as employment income is used for Ms. Skoll’s without identifying the source of that figure. That clearly is not Ms. Skoll’s employment income for that year.

Disposition- investment income imputed to Ms. Skoll

[296] Acknowledging once again, and as is clear from the evidence, the determination of investment income to be imputed to Ms. Skoll, cannot be a precise science, I have determined that a fair imputation of investment income to Ms. Skoll on the facts of this case is to impute an additional 26% of her annual employment income, commencing in the year 2018. The additional 26% of annual employment income and the annual employment of Ms. Skoll will be used for support purposes and the application of the Child Support Guidelines and the Spousal Support Advisory Guidelines for ongoing support.

[297] The rational and evidentiary basis for the additional 26% of annual employment income being added to Ms. Skoll’s annual income for support purposes is the following. An examination of the comparative chart above shows that, on average, between the years 2012 and 2017, Ms. Skoll increased her declared employment income by approximately 26% by way of investment income in the form of dividends, interest and capital gains. Given Ms. Skoll’s proven abilities at investment and her available investment resources, it is not unreasonable to assume that she would firstly, be able to and secondly, continue to do. If for some reason she cannot she will have the ability to show a material change by way of her financial disclosure from year to year. It is also possible that her investment income could be higher than 26% of her employment income permitting a higher investment income attribution to her. This possibility would be revealed in the annual financial disclosure.

[298] Based on the above, for purposes of support, for the year 2018 I find the calculation of Ms. Skoll’s income to be as follows:

1. 3 of 12 months at a salary of $758,000 from January to March 2018 (identified by Ms. Skoll in her support mate calculations) = $189,500 (3/12 x 758,000)

2. 6 of 12 months at a salary of $200,000 (Roaring Penquin Software Inc. salary from April to September, 2018) = $100,000 ( 6/12 x 200,000)

3. 3 of 12 months at salary of $115,000 (Fidus Employment from October to December, 2018) = $28,750 (3/12 x 115,000)

4. 1. • 2. • 3. (above) = $318,250 plus an additional 26% of $318,250= $82,745

[299] Based on the above reasoning and calculations, and subject to being corrected on my arithmetic, I find Ms. Skoll’s income for 2018 for support purposes to be $400,995 ($318,250 + $82,745).

[300] In summary for the purposes of determining what, if any, retroactive support, to January, 2015, Ms. Skoll may owe Ms. Hum I find the following to be the operative income of Ms. Skoll for the years indicated:

2015 - $529,000

2016 - $606,000

2017 - $669,063

2018 - $400,995

2019 - $151,200 ($120,000 + 26% of $120,000 = $31,200)

[301] Going forward, this method of determining Ms. Skoll’s income for support purposes from year to year shall continue until there is a material change of circumstances and the parties may otherwise agree or the court orders otherwise.

[302] There will also be an order for annual disclosure between the parties of their income tax returns and notices of assessment to be made by June 1 of every year commencing June 1, 2020, for so long as Ms. Skoll shall be obligated to pay support.

What income, if any should be imputed to Ms. Hum?

[303] In order to complete the support question equation, both retroactively and prospectively, it must be determined if an income should be imputed to Ms. Hum. As a preliminary matter, it was not disputed that Ms. Hum was entitled to spousal support. It was also not disputed that Ms. Hum’s entitlement to spousal support was based on both compensatory and non-compensatory grounds. Ms. Hum gave up a nursing career shortly after the last child was born in order to dedicate herself to the care of the children and the home and has been out of the work force for nearly 18 years. I would have to conclude that she has a strong non-compensatory spousal support claim. Given the role of the company in the accumulation of family wealth and Ms. Hum’s position in that scheme I also conclude that she has a strong compensatory spousal support claim.

Position of Ms. Skoll

[304] It is the position of Ms. Skoll that while she recognises Ms. Hum’s entitlement to spousal support, she should be expected to work in order to contribute to her own support. Counsel for Ms. Skoll submitted that it is acknowledged that Ms. Hum is unlikely to return to the profession of nursing at this point in her life and that it is unlikely that the court would consider imputing to her a full-time nursing salary.

[305] Nonetheless, counsel for Ms. Skoll argues it is not unreasonable that Ms. Hum should be expected to take on some employment where she would be able to earn a minimum wage level income, in the area of $28,000 per annum. In the DivorceMate calculations presented to the court for its assistance in the determination of the question of support from 2018 going forward, the annual employment income of $26,500 has been used as an imputed income to Ms. Hum.

[306] According to counsel for Ms. Skoll, there is no medical evidence before the court indicating that Ms. Hum cannot take on some employment. Furthermore, the children are of an age where Ms. Hum is absolutely free to seek out some type of employment.

[307] Accordingly, it is the position of Ms. Skoll that including some imputed investment income, based on the assets with which Ms. Hum is leaving the marriage, the court ought to impute to her a minimum wage salary of approximately $28,000 per annum.

Position of Ms. Hum

[308] It is the position of Ms. Hum that this marriage, its unique problems, the difficult separation and the post-separation events, has left her suffering from trauma, anxiety and depression, as was observed by Dr. Weinberger and Ms. Willoughby. It is acknowledged by Ms. Hum that with the help of the intensive counselling and other holistic medicine approaches she has engaged in since the separation, she is healing but continues to experience difficulties with anxiety and depression and the inability to concentrate. She sees her doctor, Dr. Zhao, regularly for physical and psychological reasons and has essentially a clean bill of physical health. For the time being she wishes to concentrate on her healing. According to Ms. Hum she is also engaging in the community through her volunteering activities.

[309] With respect to the question of Ms. Hum’s seeking employment in the in the work force, it was Ms. Hum’s evidence that she wishes to work but at the time of the trial is not sure what she could do or what she is capable of earning. She is certain she could not return to nursing because she does not think she has the ability to concentrate and remain on task for that kind of work. She doubted very much if she could earn $40,000 per annum, a figure suggested by Ms. Skoll in her pleadings.

[310] In the DivorceMate calculations presented by Ms. Hum’s counsel to the court as assistance to the court in the determination of the question of support, the annual employment income of $13,800 has been used as an imputed income to Ms. Hum for 2018 going forward. This recognises, possibly, Ms. Hum’s ability to maintain at least some part-time employment.

[311] After giving up her nursing career, Ms. Hum did do some volunteer work at her children’s school during the marriage. Since the separation she has done some volunteering, to the extent that she could, at a seniors’ home and community centre, teaching art and being available to help with the mobility of the seniors, in order, as she explained it, to test out the environment.

[312] With respect to focused employment searches, Ms. Hum testified that she has gone to the YMCA and has spoken to an employment counsellor. She has also explored courses at Algonquin College. There is no evidence that she has enrolled in any courses.

[313] It was the evidence of Ms. Hum that in early January 2018, just before the first trial was scheduled, she applied for employment at Loblaws, to work in their party event centre and child care centre, which would have been part-time work. She obtained an interview for this position but then lost her phone and the first trial was imminent so this opportunity did not go ahead because of the stress she was under. She had not asked what the salary for the Loblaws job was. There was no evidence of any other effort which Ms. Hum has made to find employment since the separation in 2014.

Disposition- Ms. Hum’s Income

[314] There is no question that Ms. Hum is entitled to compensatory and non-compensatory spousal support for all of the reasons and in order to meet all of the objectives enunciated in the well-known and often cited jurisprudence presented by both counsel. In particular, I refer to the cases of Moge v. Moge, 1992 CanLII 25 (SCC), 1992 CarswellMan 143 (SCC); Backlow v. Backlow, 1999 CanLII 715 (SCC), [1999] 1 SCR 420 (SCC); Toscano v. Toscano, 2015 ONSC 487; Fox v. Fox, 2017 ONSC 6509.

[315] Nonetheless, also arising from the above jurisprudence is the equally important principle that Ms. Hum is obligated to contribute to her own support to the extent possible in all of the circumstances of this marriage, which includes a consideration of her age, her education, historical work experience, her psychological fragility at the time of the separation, her demonstrable internal personal resources to seek healing, her healing post separation and the efforts expended by her to contribute to her own support. Counsel has described this marriage as a journey for both parties and clearly it has been.

[316] It is now nearly five years after the separation. On the evidence, Ms. Hum has accomplished substantial psychological healing. This family law trial is now behind her. Physically, the evidence is that she is well and in good health. Ms. Hum’s effort to find employment, or even to pursue appropriate retraining, as shown by the evidence, is recent. I cannot find that those efforts are either sustained or focused. Based on the jurisprudence, more can be expected of her. On the facts of this case, I conclude that it would not be unreasonable to impute, going forward, some employment income to her.

[317] In addition, Ms. Hum will leave this marriage with substantial assets from which, as was applied to Ms. Skoll, she will receive some investment income that can also be expected to contribute to her support. I acknowledge she may not have the experience and the same innate ability to maximise her investment income, as that of Ms. Skoll. Nonetheless, Ms. Hum is able to seek out professional assistance in this regard and will have the resources to do so (see Berta v. Berta, 2016 (ONSC 5723).

[318] With respect to Ms. Hum’s investment income potential, the following arises from the evidence and the disposition of the court regarding the unequal division of net family assets. Ms Hum will leave this marriage with approximately $1.4M. Part of her net family assets includes the value of the matrimonial home in which she continues to live and share on a half time basis with the remaining minor child of the marriage. It is her intention to continue living in the home once it is transferred to her in accordance with the parties’ agreement.

[319] It was the evidence of Ms. Hum that nearly all of the lump sum payments she received from the parties’ joint resources by agreement after the separation and before the commencement of this trial, as well as her shareholding redemption from Roaring Penquin Software Inc. that she received in the summer of 2017, she has had to use on her personal expenses, the children’s expenses and her substantial legal fees to pursue this litigation. At the time of the trial, her outstanding debts totalled approximately $115,000 as amended orally by Ms. Hum during her testimony. Her outstanding debts are made up of a combination of credit card debt, a bank line of credit debt, loans from family members, and income tax owed for 2018, as seen from her most current Financial Statement (see Trial Record, tab 10 page 9). Her anticipated retroactive support award will allow her to deal with her accumulated debts.

[320] Her current monthly expenses are found on page 4 of the Financial Statement and are approximately $14,600 per month, including the financial assistance she gives her eldest child, Elizabeth with the repayment of her student loan needed for her last year of university education. This assistance will soon come to an end. Ms. Hum’s proposed budget is found at page 12 of her Financial Statement and is $10,443.66 per month. This is the monthly sum Ms. Hum testified she needs to get healthy again.

[321] Taking into consideration all of the above evidence and cognisant of the case law establishing Ms. Hum’s obligation to contribute to her own support through employment and through her asset holdings, I agree with the submissions of Ms. Skoll’s counsel that it would not be unreasonable to impute to Ms. Hum, going forward, for both employment and investment income, a total annual income of $28,000 and I so order, to commence September 1, 2019. The delay in the application of this part of my order is to allow time for the parties to make the necessary asset transfers and divisions so that the total separation of property and individual planning for investment income can be made.

[322] For the years, 2015, 2016, 2017 and 2018, Ms. Hum’ income, for the purposes of calculating retroactive spousal support, will be taken to be the following, taken from her income tax returns for the years in question:

• 2015 - $78,295

• 2016 - $69,300

• 2017 - $115,030

• 2018 - $0

• 2019 January to August - $0

• 2019 September and ongoing - $28,000

Determination of Quantum of Child Support

[323] There was no dispute between the parties that child support should be ordered in accordance with the Child Support Guidelines. Now that the respective income of the parties have been found for the years 2015, 2016, 2017 and 2018 and going forward by the court, the quantum of child support, payable in accordance with the Child Support Guidelines and based on the number of children who were not away at school and drawing on their RESPs, can also be determined for those years and ought to be paid retroactively from January 1, 2015 to the present.

[324] Furthermore, it is not disputed between the parties that from the time of the separation until March 2015, Ms. Hum provided the primary residence for two of the children until March of 2015 when the parties began to equally share the parenting of the remaining dependent children. Consequently, it is ordered that from March 1, 2015 going forward to the present, child support ought to be paid on the basis of the parties’ shared parenting of the children, determined by setting off what the parent’s respective child support obligations would be in accordance with section 9 of the Child Support Guidelines and the number of children not being away at school.

Calculation of Spousal and Child Support and Adjustments

[325] For the reasons given above, I have found the respective incomes of the parties for the years in question and for support purposes to be the following:

Ms Skoll Ms Hum

2015 $529,000 $78,295

2016 $606,000 $69,300

2017 $718,000 $115,030

2018 $400,995 $0

2019 January to August $151, 200 $0

2019 September and $151,200 $28,000 ongoing

[326] Based on these findings, a final calculation of both spousal and child support can be made for those years. On the evidence, there is no reason not to apply the Spousal Support Advisory Guidelines, at the mid-level, to the facts of this case retroactively to January 1, 2015. The mid-level range takes into account the factor of savings, which has always been an significant element of this family’s standard of living (see Martin v. Martin 2006 CarswellOnt 4876 [2006] W. D. F. L. 3522).

[327] Both counsel have provided the court with their DivorceMate calculations in support of their positions on the question of spousal and child support. I indicated to counsel at the end of their submissions that once the necessary findings of fact were made in this case by the court, I would be asking them to provide the court, on a consensual basis, with the necessary DivorceMate calculations, using “with child support” formula, as is applicable to the facts, to determine the final amount of both the spousal support and child support that should have been payable for the years 2015, 2016, 2017 and 2018 and which will form part of the order of this court granting both retroactive spousal and child support for those years. The order for the payment of the retroactive spousal and child support will be included in the final order of this court. I ask both counsel to do the DivorceMate calculations in accordance with the findings made and if any issue arises, including how amounts are to be paid, I can be spoken to.

[328] In counsels’ calculations, some adjustments need to be made, in fairness, to Ms. Skoll, some of which have already been provide above. By taking account of Ms. Hum’s salary for the years in question, which essentially came from Ms. Skoll’s business, she is being given credit for those payments. After the order of James J. came into effect, on December 1, 2016, Ms. Skoll should be given credit for the amount of spousal and child support paid by her pursuant to that order for the years in question.

[329] There will be no time limit placed on Ms. Hum’s spousal support.

[330] Ms. Hum has to date been claiming the eligible dependent’s benefit for Rebecca. Commencing in the year 2019, this benefit can be alternated between the parties as permitted by CRA with Ms. Skoll claiming the benefit for 2019.

Section 7 Expenses from Separation to the Present

[331] Ms. Hum has made a claim for a retroactive reimbursement for Ms. Skoll’s proportional share of the children’s section 7 expenses from the date of the separation to the present. A chart of those expenses as calculated by Ms. Hum, by way of assistance to the court, was presented by counsel for Ms. Hum and incorporated into his submissions on this issue. Up to the end of 2018, pursuant to that chart and based on mid-range spousal support (Spousal Support Advisory Guidelines), the total amount claimed by Ms. Hum is $10,415.55. This includes the payment of such things as the children’s activities, medical, dental and orthodontal expenses for the children, some cell phone expenses, some RESP payments, before she stopped when she closed the joint bank account, Hebrew school, school hot lunches

[332] Ms. Skoll is not asking that there be an accounting of the parties’ respective payment of the children’s section 7 expenses from the date of the separation. Her counsel submitted that, given the evidence of how the parties essentially divided up the payment of the children’s section 7 expenses, no accounting ought to be provided for. Nonetheless, in the Respondent’s Support Brief, tab 4, Ms. Skoll has listed some $18,225.76 that she submits Ms. Hum owes her for her payments of such items as the expert reports of Mr. Desnoyers and Dr.Weinberger, for which both parties acknowledged equal financial responsibility, monthly payments into Rebecca’s RESP and cell phone expenses for both Gillian and Rebecca.

[333] After the separation Ms. Skoll insisted that such expenses be shared equally between the parties based on the equal salaries each was receiving from Roaring Penquin Software Inc., even though, as was seen earlier, in reality, Ms. Skoll had more resources available to her during that period of time. Ms. Skoll continued to insist on an equal sharing by the parties of the children’s section 7 expenses even after the order of James J. in November of 2016, whereby the unequivocal direction of the court was that the children’s section 7 expenses were to be shared proportionally to the parties’ income (see Trial Record, tab 24, para. 3).

[334] The parties further disagreed as to whether certain expenses relating to the children’s activities, such as Rebecca’s skating, should be included as a section 7 expense. With respect to the children’s activities, the evidence indicated that the parties never had a dispute about the children’s activities during the marriage. Ms. Hum’s evidence was that she registered the children in their activities and Ms. Skoll signed the cheques to pay for the activities. This evidence was not contested by Ms. Skoll who testified that during the marriage the children generally expressed which activities they wanted to participate in and then they were enrolled. Ms. Skoll’s reasoning that skating is only for fun, as the explanation for the position taken by her on the question of the children’s skating expense, is far from persuasive as a reason not to consider that activity as a section 7 expense on the facts of this case. This family has the resources.

[335] Much evidence was presented on how the parties divided up the payment of the children’s section 7 expenses from the date of the separation to the present, supported by endless e-mail communications that went on between the parties, sometimes down to the penny, which only seemed to fuel the conflict between them. It is difficult to determine from that evidence who paid what and what amount was paid definitively. In addition to that evidence, I have also examined the charts presented by both parties on the issue of accountability of the children’s section 7 expenses, mentioned earlier.

[336] After examining all of the above evidence, I am persuaded that no injustice would result to either party, if no order was made with respect to a retroactive accounting of the children’s section 7 expenses from the date of separation to the end of 2018. There will therefore be no such order.

[337] Going forward, and commencing January 1, 2019, Rebecca’s section 7 expenses, if any, and which will include the following:

(a) Rebecca’s skating activities and competition and equipment;

(b) Rebecca’s music activities and competitions;

(c) any of the children’s medical (including eye examination and eye wear), dental and orthodontic expenses not covered by any insurance plan;

(d) cellphones; and

(e) RESP monthly contributions

are to be shared on a pro rata basis, pursuant to the Child Support Guidelines, as was stipulated in the order of James J. dated November 16, 2017 para. 3, namely “… on a pro rata basis and the income of the parties shall be determined based upon Ms. Skoll’s gross income less spousal support paid and Ms. Hum’s gross income plus spousal support”. Both Ms. Skoll’s gross income and Ms. Hum’s gross income will be as found by this court.

[338] Ms. Skoll is to maintain her medical/health plan coverage for the children and Ms. Hum (as long as she remains eligible) as long as the medical/health plan is available through Ms. Skoll’s employment, and when such plan is no longer available, alternate coverage may be agreed to by the parties. If no agreement is reached then that may be considered a material change of circumstances.

SECURITY FOR SPOUSAL AND CHILD SUPPORT OBLIGATIONS

[339] I can find no evidentiary basis for awarding a lump sum payable by Ms. Skoll to Ms. Hum as security for the child and spousal support amounts payable under this judgment. Ms. Skoll has been paying the support ordered by the court since the order commenced and continues to do so. After this judgment is put into effect, the parties will be separate as to property.

[340] As mentioned above, the parties have agreed to provide life insurance as security for child and spousal support for so long as such support is payable. An order will issue in accordance with the parties agreement.

[341] Post-judgment interest is granted in favour of Ms. Hum. Counsel are to prepare the final order for my signature based on this judgment.

COSTS

[342] The last issue is costs. Once counsel have done the calculations, I have requested of them to complete this judgment, I shall incorporate those calculations into a final order drafted by counsel and issue it.

[343] Once that order is issued, Ms. Hum shall have two weeks from the date of the final order to serve and file her written submissions on costs, including any offers to settle made. Ms. Skoll shall have two weeks form that date to serve and file her written submission on costs, including any offers to settle. Ms. Hum shall then have one week from that date to serve and file a reply if deemed advisable.

Linhares de Sousa J.

Released: April 17, 2019

APPENDUM A

The agreed-upon Net Family Property Statement filed as exhibit #47

COURT FILE NO.: FC-16-288

DATE: 2019/04/17

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Norine Hum

Applicant

– and –

Dianne (David) Skoll

Respondent

REASONS FOR JUDGMENT

Linhares de Sousa J.

Released: April 17, 2019