Fournier v. Labranche, 2019 ONSC 4651

COURT FILE NO.: FC-12-2338-1

DATE: 2019/08/29

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Line Fournier

Applicant

– and –

Marc Labranche

Respondent

Counsel:

Carol Craig, Counsel for the Applicant

Michelle Blais, Counsel for the Respondent

HEARD: January 28 – February 6, 2019

AMENDED REASONS FOR JUDGMENT

The text of the original judgment was amended on August 29, 2019 and the description of the amendment is appended

Justice Engelking

1This is a case about what child support is payable by Ms. Fournier to Mr. Labranche and over what period. In March of 2017, Ms. Fournier filed a Motion to Change the Final Order of Justice MacLean dated December 20, 2013. In it she seeks to have the child support payable by her for the parties’ daughter, Tye Fournier-Labranche, born September 2, 2011, reduced effective January 1, 2016. In the original proceedings in 2012-13, Ms. Fournier was the Respondent, however, this proceeding was commenced with Ms. Fournier noted as the Applicant in the style of cause, and continued in that manner without ever having been corrected. Thus, although Ms. Fournier ought to properly be the Respondent, I have maintained her as the Applicant in these reasons to be consistent with the current style of cause adopted by the parties.

2Subsequent to Ms. Fournier filing her Motion to Change, Mr. Labranche filed his Response to Motion to Change, in which he sought a readjustment of child support for the years 2014 and 2015, as well as ongoing support from January 1, 2016 forward. In November of 2017, Mr. Labranche filed an Amended Response to Motion to Change. He now seeks a readjustment of child support for the years of 2013, 2014 and 2015, as well as ongoing support from 2016 forward.

3This case is essentially about two issues. The first is whether Tye is entitled to a retroactive adjustment of child support for 2013, 2014 and 2015. The parties agree that the support payable by Ms. Fournier for 2016 and onwards will require an adjustment, however, they do not agree on what that adjustment should be. The second issue, therefore, for all years for which entitlement to a retroactive adjustment may exist and for ongoing support, is what Ms. Fournier’s available income for support purposes is.

4For the reasons that follow, I find there should be no retroactive adjustment for 2013, 2014 and 2015. Commencing January 1, 2016, child support payable by Ms. Fournier to Mr. Labranche shall be varied in accordance with her income as set out in paragraph 88 below.

Background Facts

5Ms. Fournier is a dentist by profession. In 2008, she purchased her first dental clinic in Deep River, Ontario, under the corporate name of Line Fournier Dentistry Professional Corporation (“Line DPC”). She, her father, Roch Fournier and her mother, Jacqueline Johnson, were each 1/3 shareholders in her dental corporation. Ms. Fournier, however, was the sole director and voting shareholder.

6In 2009, Ms. Fournier purchased her second dental clinic in Pembroke, Ontario under the corporate name of L. Fournier Dentistry Professional Corporation (“LDPC”). Again, she, her father and her mother were each 1/3 shareholders in the corporation and she was the sole director and voting shareholder.

7In 2010, Ms. Fournier purchased, in partnership with another dentist, a clinic in Ottawa under the corporate name of Tran Fournier Dentistry Professional Corporation, later to become Dr. Line Marie Fournier Dentistry Professional Corporation (“LMFDPC”). She, her father and her mother were each 1/3 shareholders in her 50% interest in the Ottawa clinic, and she was the sole director and voting shareholder in her interest in the clinic.

8The parties met in or about June of 2010 and commenced a relationship. At the time that they met, Ms. Fournier already owned her three dental clinics. Mr. Labranche was (and still is) a firefighter with the City of Ottawa Fire Services, and was also working part-time as a paramedic with the County of Lanark, Leeds and Grenville. Ms. Fournier was then living in a condominium that she owned in the Preston Street neighbourhood, and Mr. Labranche was living in a townhome he owned in Nepean. Mr. Labranche sold his home and moved for a period of time into Ms. Fournier’s condo prior to them purchasing a home together at 296 Citiplace Drive in Mr. Labranche’s former neighbourhood in Nepean. The purchase was a new build and the parties moved in together in or about May of 2011. Notwithstanding that Mr. Labranche had sold his previous home, he did not use any of the proceeds of the home to contribute to the down payment on their new home. Rather, he purchased a new vehicle. Ms. Fournier made a down payment of about $70,000 and the parties took a mortgage of $272,890 on the home. Nevertheless, they owned the property jointly, and the deed and the mortgage were in both of their names.

9By the time they moved in together, Ms. Fournier was pregnant with their child, Tye, who was born in September of 2011. The evidence of both Ms. Fournier and Mr. Labranche was that prior to Tye’s birth, Ms. Fournier was working very hard. Indeed, she was running three dental practices in three different cities, as well as working as a dentist in each of them at different times. Ms. Fournier testified that she took three months of maternity leave, and then tried to work only a few days a week after she went back to work in January of 2012. Mr. Labranche testified that between his shift work, her few days a week, and some care giving from either Ms. Fournier’s parents or his mother, they managed to look after Tye.

10Towards the end of her pregnancy, Ms. Fournier’s partner in the Ottawa clinic decided to return to Montreal. She and the related shareholders that owed her 50% interest in the clinic redeemed their shares, which left Ms. Fournier, Mr. Fournier and Ms. Johnson each with a one third interest in the corporation. Ms. Fournier remained the only voting shareholder and sole director of the corporation.

11In May of 2012, Ms. Fournier and Mr. Labranche bought a cottage at 158 Chemin Zurenski, Val des Monts, Quebec. Ms. Fournier testified that the price of the cottage was more than she had anticipated paying, but it was the only one they agreed on after viewing many. Again, Mr. Labranche contributed no money to the down payment, but was a joint owner of the property with Ms. Fournier, and was named on the deed and the mortgage. Mr. Labranche took a paternity leave of three months from his work as a fire fighter during the summer of 2012, and he spent a great deal of time at the cottage with Tye over that period. However, Mr. Labranche testified to being increasingly unhappy with the amount of time Ms. Fournier spent working as opposed to as a family. He first talked about separating in or about July of 2012, and on September 3, 2012, he announced to Ms. Fournier that the relationship was over, though the couple continued to live separate and apart in the Citiplace home. Ms. Fournier began to spend most of her time at the cottage property or she would sometimes stay in the home she had near the dental practice in Deep River. When they were living apart, the couple began to exercise a shared parenting regime on a 2/2/5 schedule with Tye.

12On September 25, 2012, only three weeks after separation, Mr. Labranche commenced the application which would ultimately result in the Final Order of December 20, 2013. In between, Ms. Fournier continued to run her three dental practices in Pembroke, Deep River and Ottawa, and to parent Tye half time.

Minutes of Settlement and December 20, 2013 Order

13Mr. Labranche’s application was scheduled to go to trial in the fall of 2013. In anticipation of the trial, both Mr. Labranche and Ms. Fournier had retained experts to determine Ms. Fournier’s available income for child support purposes. Mr. Labranche retained Mr. J.C. Desnoyers, who produced an expert report dated September 4, 2013 (in actual fact, he had produced three about which I will speak more later). Ms. Fournier retained Mr. Steve Pittman, who produced a report dated August 20, 2013. On October 31, 2013, the parties entered into Minutes of Settlement.

14Those Minutes of Settlement were incorporated into a Final Order of Justice McLean dated December 18, 2013. The Order provided for Tye to be in the care of each parent on a “week on week off basis” with Ms. Fournier’s week commencing December 6, 2013. The Order made other provisions with respect to parenting time, including dealing with the issue of share holidays. It also provided at paragraph 12 that the parties were to “forthwith retain Katheryn d’Artois to mediate, any outstanding secondary parenting issues between them that have not been addressed above including, but not limited to” a list of eleven items. One of the items was “g. changes in the parenting schedule in the event that the schedule set (sic) as set out above becomes unworkable due to changes in either parent’s work schedule”.

15The Order additionally provided that Ms. Fournier would transfer her 50% interest in 296 Citiplace Drive (the family home) to Mr. Labranche and Mr. Labranche would transfer his 50% interest in 158 Chemin Zurenski, Val des Mont (the cottage) to Ms. Fournier.

16With respect to the issue of child support, the Order provided as follows:

CHILD SUPPORT

22. Pursuant to sections 9 and 4 of the Guidelines, commencing on November 1, 2013 and on the first of every month thereafter, the Respondent mother shall pay child support to the Applicant father in the amount of $4,054.00 for their daughter, Tye Jordan Labranche, born September 2, 2011, using the set off method under the Guidelines based on the parties’ incomes ($625,000 for the Respondent and $80,000 for the Applicant).

23. The Respondent mother will make a lump sum payment of $10,000 to the Applicant as an adjustment to child support for the period predating November 1, 2013. This amount shall be paid by November 30, 2013.

24. There shall be an annual exchange of financial disclosure between the parties on or before July 1 of each year commencing July 1, 2014. Effective August 1^st of every year commencing in 2014, there may be an annual review and adjustment of the child support arrangements.

25. The parties shall contribute to any of Tye’s special and extraordinary expenses pursuant to section 7 of the Guidelines. There are no special or extraordinary expenses presently being incurred for Tye.

17There were additional provisions under the title of “Child Support” having to do with child care costs and life insurance which are not particularly relevant to the issues in dispute. With respect to the issue of a material change in circumstances, the Final Order provided:

MATERIAL CHANGE IN CIRCUMSTANCES

30. The parenting and child support provision herein are variable in the event of a material change in circumstances of either party or Tye. A material change in circumstances may be foreseen or unforeseen, foreseeable or unforeseeable.

31. A material change in circumstances may or may not include a reduction in the Respondent mother’s income as a result of the sale of one or more of her dental practices in Ottawa, Deep River or Pembroke.

Subsequent Events

18Shortly after the separation agreement was entered into, Ms. Fournier bought an older home at 382 Roosevelt Avenue in the Westboro neighbourhood of Ottawa, into which she and Tye moved (for the periods Tye was in her care). Ms. Fournier later decided with a friend to tear down the house and build a duplex in its place, one half of which would be owned by her and the other half by her friend. Construction of this home was underway at the time of the trial, and pending its completion, Ms. Fournier was living part-time at the Val des Mont cottage and part-time at the home of her boyfriend, Patrick Akeson, which is within walking distance to Tye’s school. Ms. Fournier pays Mr. Akeson $1,500 per month in rent for her and Tye.

19At the end of 2013, Ms. Fournier and her mother had a dispute over her mother wanting to redeem her shares in the corporations, even though, according to Ms. Fournier, she, her mother and her father had previously had a verbal agreement that they would all sell the shares of the corporations at the same time. As described by Ms. Fournier, lawyers were involved and a settlement was reached, the terms of which are confidential, but which involved her paying money to her mother. Indeed, as part of his portrayal of Ms. Fournier being overly litigious, Mr. Labranche referred to Ms. Fournier being involved in litigation with her mother. As a result of the settlement, Ms. Fournier became a two thirds shareholder in her corporations and her father remained a one third shareholder.

20In the spring of 2014, the parties went to mediation/arbitration with Katheryn d’Artois to discuss a number of the parenting issues as per paragraph 12 of the Final Order. This resulted in a Consent Arbitration Award dated May 7, 2014, an Interim Arbitration Award dated September 11, 2014, and a costs award dated October 23, 2014. In September of 2014, Tye started daycare at the Montessori in Westboro.

21In May of 2014, Ms. Fournier was advised that the fulltime dentist in her Pembroke dental office was leaving practice effective July of 2014. In the September arbitration, Ms. Fournier was seeking, among other things, a change in the parenting schedule to a 2/2/5/5 rather than a week on week off. This request was to specifically permit Ms. Fournier to attend to her Pembroke dental clinic at least two days of every week, because she was finding it to be very challenging to find a replacement dentist for that practice. While Ms. d’Artois decided certain issues in the September award, final arbitration of a change to the parenting schedule was deferred to January of 2015.

22Also in 2014, Ms. Fournier had to move her Ottawa dental practice to a new location at 1596 Bank Street.

23In the spring of 2015, Ms. Fournier was having trouble keeping up with the demands of her dental practices, and she withdrew her request to alter the parenting schedule and made the decision to sell her Deep River and Pembroke clinics.

24In September of 2015, Tye started to attend Broadview Elementary School, also situated in Westboro. The parenting schedule continued to be week on week off.

25On October 5, 2015, Ms. Fournier sold her Deep River and Pembroke dental practices to a corporate purchaser, DCC¹ group. At the same time, Ms. Fournier transferred her interest in the home out of which the Pembroke clinic operated, which was owned by 2223317 Ontario Inc., to her father, Roch Fournier, who then entered into a lease with DCC Group to continue operating the clinic in that premises.

26Ms. Fournier continued to own her dental practice in Ottawa (LMFDPC), a house in Deep River (in which she had sometimes stayed when she worked in Deep River) and a holding company, known as Fournier Holdings Corporation (in which she and each of her parents also originally had a one third interest).

27Ms. Fournier started to experience mental health challenges during these years, including anxiety and depression, and by September of 2016, she had been approved for disability insurance, effective September 9, 2016, but payable commencing December 8, 2016.² Ms. Fournier’s primary source of income thus became disability payments, and she continued to be in receipt of same at the time of trial. In late August of 2016, Ms. Fournier met with Mr. Labranche to discuss a change to her child support payments, but they were unable to come to any agreement. Ms. Fournier then, ultimately, brought her motion to change.

Retroactive Adjustment

28Mr. Labranche relies upon the decision of Justice Chappel in the case of Laramie v. Laramie³ in support of his position that this court has the discretion to make an order for support for any period prior to the order, which he submits includes the period prior to the previous order. In Laramie, reference is made to the Supreme Court of Canada cases of S. (D.B.)⁴ and Kerr v. Baranow⁵ and the principles to be applied to a claim covering a period before a final order. In paragraph 50, they are outlined to include that the starting point in each case of a claim for retroactive support is to analyse the applicable legislation that applies to the case “to determine if it establishes parameters or guidelines regarding retroactive claims”, that it is both parent’s responsibility to ensure that the payor parent is satisfying his or her obligation, and that the goal is to ensure that children “benefit from the support they are owed when they are owed it.”⁶

29The applicable legislation in this case is the Family Law Act.⁷ Section 33(1) of the Act provides that a court may order a person to provide support to a dependant and determine the amount of such support. Section 33(7) sets out the purposes of an order for support of a child to be (a) to recognize that each parent has an obligation to support the child and (b) that the obligation should be apportioned pursuant to the child support guidelines.⁸ Section 33(11) provides that a court shall make an order for the support of a child in accordance with the guidelines, unless such award is pursuant to section 33(14) and (15) of the Act and reasonable arrangements have been made for the support of the child taking into consideration the guidelines. Finally, section 34(1) (f) of the FLA provides that the court may make an interim or final order “requiring that support be paid in respect of any period before the date of the order.”

30The applicable legislation, therefore, establishes the parameters for making the order being requested. However, as is noted in Laramie, “even if entitlement is established, retroactive child support is ultimately a matter of judicial discretion.”⁹

S. (D.B.) Factors

31At paragraph 52 of Laramie, Justice Chappel indicates that:

52. The court in S. (D.B.) ultimately adopted a highly discretionary approach to retroactive child support claims, and outlined the following general factors which judges should consider in determining the issue of entitlement to retroactive relief:

53. Whether there was a reasonable excuse for why the claimant did not pursue child support or increased child support earlier;

54. The conduct of the payor parent, including whether the payor behaved in a blameworthy manner in relation to child support;

55. Consideration of the present circumstances of the child, and the extent to which they may benefit from a retroactive award; and

56. Any hardship that may be occasioned by a retroactive order.

Reasonable Excuse for Delay

32With respect to the issue of reasonable excuse for delay, Mr. Labranche argues that he had no reason to believe that Ms. Fournier’s income was significantly higher in 2013 and subsequent years than he had thought at the time of the parties’ negotiations. He indicated that he did not, in fact, understand that to be the case until Mr. Desnoyers did his first report for this round of litigation in 2017. This, he argued, was because Ms. Fournier did not provide him with any disclosure with respect to her income from the time the Minutes of Settlement were entered into until well into these proceedings, this notwithstanding the requirement for an exchange of financial disclosure pursuant to paragraph 24 of the Final Order of Justice McLean.

33Mr. Labranche argued, additionally, that he did not have the emotional or financial wherewithal to either request disclosure or seek to adjust child support prior to Ms. Fournier raising the issue in August of 2016. His “reasonable excuse” in this regard is that he essentially suffered from litigation fatigue and that Ms. Fournier had far greater financial resources with which to wear him down.

34In this regard, Mr. Labranche attempted to portray or characterize Ms. Fournier as exceedingly litigious. The evidence, however, did not particularly support this characterization. First, it was Mr. Labranche who commenced the original application in 2012, and he did so within weeks of separation. His pleadings may, in fact, have even been drafted prior to separation. Second, Mr. Labranche bought the first motion in the litigation, and sought to and did amend his Application to seek an order of sole custody of Tye. Third, the parties’ Minutes of Settlement of October 30, 2013, which were incorporated into the Final Order of December 2013 contained a non-exhaustive list of no less than 11 items for which Ms. d’Artois was to be “immediately retained” for mediation, or arbitration if necessary. Ms. d’Artois was so retained in January of 2014. While it is true that Ms. Fournier wanted to change the parenting schedule, given the Minutes and the Order, she cannot, in my view, be held exclusively responsible for the use of Ms. d’Artois. Fourth, in her Costs Award of October 23, 2014, Ms. d’Artois was satisfied that Ms. Fournier bought forward only issues dealing with Tye’s needs and best interests, but found Mr. Labranche’s submissions “very concerning” due to personal attacks on Ms. Fournier which they contained and to which she had to respond. Finally, when Ms. Fournier approached Mr. Labranche in August of 2016 to inquire if they could discuss a reduction (or even suspension, if his evidence is to be believed) of her child support payments due to her income having been reduced, his answer was an emphatic “no.”¹⁰ This approach ultimately led to Ms. Fournier filing her Motion to Change in March of 2017, although when she did so, her then counsel also signalled to Mr. Labranche that Ms. Fournier remained amenable to resolving the matter through negotiation, notwithstanding the commencement of proceedings. While Mr. Labranche may have his own very good reasons for pursuing or not pursuing litigation, his attempt to portray Ms. Fournier as the litigious one is, in my view, deeply flawed.

35Mr. Labranche’s reasonable excuse of not knowing of significant changes in Ms. Fournier’s income until several years later, moreover, is only reasonable if the court accepts that there was a very significant change in Ms. Fournier’s income for the years 2013 to 2015, which for reasons which will be discussed later, I do not. Regardless, Mr. Labranche did not request disclosure of income documentation from Ms. Fournier in June of 2014, June of 2015 or June of 2016. As I have indicated above, he only did so in September of 2016, after Ms. Fournier broached him about her 2016 decrease of income. Even then, when his counsel portrayed Ms. Fournier as failing to respond to her adequately and failing to provide proper disclosure in the fall of 2016 and spring of 2017, Mr. Labranche did not bring his own Motion to Change. Only after Ms. Fournier brought her Motion to Change, did Mr. Labranche file a response seeking retroactive relief. It is hard to comprehend why Mr. Labranche did not take any steps to pursue retroactive adjustments to child support if he believed Tye was entitled to them, particularly as it relates to 2015.

Conduct of the Payor Parent

36Mr. Labranche similarly attempted to portray Ms. Fournier as having engaged in blameworthy conduct. He did so primarily by pointing to her having been late with some payments to the Family Responsibility Office, and having consequently accrued some interest as a result. He also pointed to Ms. Fournier’s failure to provide him financial disclosure pursuant to the 2013 court order, and failure to advise him in a timely manner about the sale of her Pembroke and Deep River clinics. Finally, Mr. Labranche appeared at times in the trial to suggest that Ms. Fournier was purposefully attempting to shirk her child support obligations by reducing her hours of work and income earning potential.

37Again, the evidence led before me did not particularly support this portrayal. Ms. Fournier was more than able to explain her situation with FRO. Her evidence was that she contacted FRO shortly after the order was registered, and was advised there would be no problem so long as she made the child support payment within the month that it was due. Ms. Fournier testified that she made her payments thereafter for every month, but not always at the beginning of the month. Mr. Labranche testified that Ms. Fournier was “almost always” late making payments, and that he would call FRO after a few days grace and then FRO would call Ms. Fournier. Ms. Fournier’s file with FRO was filed as an exhibit in the trial and it supports Ms. Fournier’s version of events. In it, there is no indication of FRO either receiving calls from Mr. Labranche or in turn consistently calling Ms. Fournier about late payments. Rather, Ms. Fournier indicated that she was at one point contacted by FRO and informed that Mr. Labranche was insisting on being paid interest for her “late payments”. In response, Ms. Fournier complained to FRO, stating that she had been making payments as per the advice she received from FRO itself. There is a record of a phone call with Ms. Fournier on July 21, 2015, wherein the following is noted:

Tct sp at (613) xxx-xxxx who wanted to speak with a mgr regarding interest claimed by sr for defaulted payments when she called FRO to ensure she was doing everything right and she was apparently told that as long as pymnts are received with the 30 + 5 days it would be okay. Sp said sr is really difficult and will make her look bad in court. I explained to sp that if an income source is sending the pymnts, that’s FRO’s policy. However, when a payor pays directly the funds need to be applied on the day the support is due… (Emphasis added).

38Although Ms. Fournier was not happy with FRO, she paid the $137.61 in interest that had accrued, and shortly after this conversation rectified her practice to ensure that the payments were made on the first of the month. The accrual of interest thereafter ceased to be a problem.

39With respect to the issue of financial disclosure, Ms. Fournier testified, and Mr. Labranche agreed, that neither party had provided financial disclosure to the other as per paragraph 24 of the December 18, 2013 court order. Ms. Fournier indicated that she was not asked by Mr. Labranche for financial disclosure. She, moreover, testified that she had an honestly held belief that she was fulfilling her support obligations. Ms. Fournier indicated that while the parties settled on her income being $625,000 for support purposes for 2013, she had never paid herself anything near that amount as a salary. Indeed, a review of her Notices of Assessment set out Ms. Fournier’s Line 150 incomes for the years 2009 to 2012 as follows:

• $100,000 for 2009;

• $144,000 for 2010;

• $192,200 for 2011; and,

• $354,333 for 2012.

40Ms. Fournier testified that the 2012 increase in her income was related to the purchase of the cottage property; she had to pay herself more that year to be able to afford to buy the cottage. Based her own expert’s opinion (as well as Mr. Labranche’s in this regard), she did not expect that her income for 2013 would be much different than that for 2012. Notwithstanding that the income she paid herself was much lower, Ms. Fournier nevertheless agreed to pay support for 2013 based on annual income for her of $625,000 and for Mr. Labranche of $70,000. The Notice of Reassessment that Ms. Fournier received for 2013 evinced her Line 150 income to be $330,800. In 2014, it was $344,498. It was not, therefore, based on blameworthy conduct, or an effort to hide something from Mr. Labranche that she did not provide disclosure to him of her previous year’s income by July of 2014 and 2015. It was based on her honest belief that she was fulfilling her obligations and because he neither asked nor provided his own financial disclosure to her.

41With respect to her 2015 and 2016 incomes, Ms. Fournier testified that she requested to meet with Mr. Labranche at Starbucks in August of 2016 precisely because she wanted to explain to him what she had been going through, and the fact that she had ultimately had to sell her Pembroke and Deep River clinics. Ms. Fournier testified that because the support she had been paying since November 1, 2013 was premised on receiving income from three clinics, she wanted to discuss with Mr. Labranche the possibility of reducing her child support payments to be more in keeping with her Line 150 income now that she only had one clinic. She had, by that time, also filed her application for disability. Mr. Labranche sent Ms. Fournier a text message the day following their meeting, in which he stated that he did not want to change the existing court order and that he expected her to follow it.

42Despite that Ms. Fournier informed Mr. Labranche in person on August 25, 2016 of the sale of her two clinics in 2015 (which the December 2013 order contemplated), and despite that Ms. Fournier’s counsel then broached his counsel by letter dated September 6, 2016¹¹, Mr. Labranche continued to carry that theme of Ms. Fournier failing to provide adequate disclosure to him, or failing to do so in a timely manner, in a blameworthy way into the 2017 round of litigation.

43Again, however, her evidence, and that of her expert psychologist, Dr. Tammi Ricci, more than amply satisfied the court that Ms. Fournier was not deliberately failing to fulfill Mr. Labranche’s demands. Ms. Fournier testified that she was faced with a lot of challenges from the time Tye was born. Prior to her birth, Ms. Fournier was rotating among her three clinics, but spending more time in Pembroke and Deep River than she was at the Ottawa clinic as her then partner was doing more of the management of the latter. During the latter part of her pregnancy, however, Dr. Tran informed Ms. Fournier that she wanted to return to Montreal. Ms. Fournier, therefore, took over the management of the Ottawa clinic as well right before Tye was born. She was able to take only three months off for maternity leave before returning to work by January of 2012. She then spent time between the three clinics, but was not working fulltime for a period of time.

44Things got much more difficult for Ms. Fournier when the parenting schedule changed to week on/week off and she lost a dentist in the Pembroke clinic in July of 2014. As discussed above, Ms. Fournier sought to change the schedule through Ms. d’Artois back to a 2/2/5/5. Ms. Fournier’s objective was to ensure that she would be able to consistently spend two days a week (the two she would not have Tye in her care) at the Pembroke and Deep River clinics. However, Mr. Labranche was either unwilling or unable to accommodate such a change. In 2014, Ms. Fournier also had to move her Ottawa clinic to a new location, which was an expensive and cumbersome exercise.

45By the time Ms. Fournier sold her Deep River and Pembroke clinics in the fall of 2015, she described herself as “burnt out, physically and emotionally at the end of my rope”. Her plan at that time was to take a few months off for a physical and mental break, and then start up full tilt at the Ottawa clinic in January of 2016. However, although she had previously arranged for a manager at that clinic, she soon discovered many problems there which included unpaid insurance and a loss of 75% of the staff over a three month period, and which did not allow her to take the much needed break she wanted. Ms. Fournier ended up working to try and fix those problems. She found, however, that although she had very successfully managed three clinics in the past, she was no longer capable of effectively managing even one. By 2016, Ms. Fournier was having trouble sleeping, suffering from depression and was having panic attacks, including in the car on her way to work and even at work. She attempted to mask her problems and carry on, but it was becoming less and less possible. In 2016, Ms. Fournier’s doctors and psychologist were recommending the she reduce her hours of work. As I have indicated above, Ms. Fournier applied to be off on disability, which was approved in March of 2018, to be effective as of September of 2016. It is now recommended by her treatment providers that Ms. Fournier be off of work completely for eight to twelve months. It is Ms. Fournier’s plan to sell her Ottawa clinic, be off for a year as recommended by her doctors and then to get a salaried job as an associate dentist.

46Ms. Fournier testified that she delayed raising the issue of reducing her support payments with Mr. Labranche until August of 2016 because she knew that it would turn into another legal battle, and she didn’t feel equipped to deal with it. Ms. Fournier testified that throughout the process, she did her best to provide whatever financial disclosure was requested, but that it seemed to her that each time she provided it, more was asked for. It was also never an easy task to produce the requested disclosure as she had to hunt through storage and track down things for several years of operation. Ms. Fournier indicated that she struggled getting through all of the requests as some days it was all she could do to get out of bed. She tried, additionally, to save whatever reserves of energy she had for Tye. Nevertheless, on March 17, 2017, at the same time that she filed her Motion to Change, Ms. Fournier served a Certificate of Financial Disclosure on Mr. Labranche which provided that she had disclosed all of her income tax returns from 2013 through 2016, her Notices of Assessment/Reassessment from 2013 through 2015, the Share Purchase Agreement for her Pembroke and Deep River clinics from October 5, 2015 and financial statements for all of her corporations from 2014 through 2016. Ms. Fournier testified that she thought she had given all that was necessary for Mr. Labranche’s expert to produce a report. However, requests for additional disclosure continued to be made. In some cases, her counsel disputed them as being far reaching, and in others they required extensive efforts on her part to obtain and provide. Ms. Fournier testified that she never intended to delay the proceedings; she simply was (and is) not functioning at a level that makes any of it easy.

Dr. Ricci

47The psychologist Ms. Fournier retained in 2018 to do a psycho-vocational assessment also testified. Dr. Tammi Ricci was qualified as an expert in clinical psychology, and specifically to provide her opinion on Ms. Fournier’s employability and any cognitive or psychological barriers to same. Dr. Ricci provided two expert reports in this matter, the first dated April 30, 2018¹² and the second dated November 29, 2018.¹³

48Dr. Ricci reported that Ms. Fournier started to experience mental health issues in 2012 and noted that her then psychologist, Dr. Maddeaux, diagnosed her with an adjustment disorder in May of 2013, and asked her to reduce her work hours at that time. At page 22 of her April 30, 2018 report, Dr. Ricci indicated that Ms. Fournier “presents with the following DSM-5 diagnosis: major depressive disorder with anxious distress, severe.” (Emphasis original). Dr. Ricci testified that when she saw Ms. Fournier in November 2018, her symptoms were worse than when she had completed her report in April of 2018. In her opinion, Ms. Fournier presented as very depressed; she was overwhelmed by life in general and not functioning adequately in any area. The impact of this on Ms. Fournier was compounded by the fact that she was a very high achiever, and that she was experiencing her lack of capacity, particularly when she gave up working as a dentist in the spring of 2018, as a failure and a loss. Dr. Ricci testified that when one has a major depressive disorder, one’s ability to focus mentally is much reduced. She indicated that this would very much be the case for Ms. Fournier, including in the area of responding to disclosure requests. She described Ms. Fournier as sad and tearful during her interviews. Dr. Ricci indicated that Ms. Fournier did not want to be involved in litigation, and that it would have been much easier on her mental health if she was not. The impact of the litigation was very stressful for her. The presentation of Ms. Fournier described by Dr. Ricci was also witnessed by the court; she presented as sad, subdued, fatigued and, at times, very teary.

49I accept Dr. Ricci’s expert opinion that Ms. Fournier was (and is) dealing with significant mental health challenges from 2012 onwards which were (and are) impacting her ability to function cognitively, and I find that any delay in or inability to respond to Mr. Labranche’s numerous requests for financial disclosure, even those which made their way into court orders, were not the result of blameworthy conduct on the part of Ms. Fournier.

50I also find that Ms. Fournier’s reduction in work or income was not voluntary. She clearly suffers from a major depressive disorder which impacts her ability to earn income, and for which her disability claim has been approved. On the contrary, I find it unfortunate that due to her circumstances, Ms. Fournier had not been able to extricate herself completely from the business of running the Ottawa clinic up to the time of trial. What she really needs is an opportunity to regain her health with time away from those pursuits.

Present Circumstances of the Child

51Tye’s circumstances appear to have stayed much the same, not only from the date of separation, but from prior to the separation (i.e. during the relationship) to the present. As I have indicated above, Mr. Labranche took possession of the Citiplace Drive property and Ms. Fournier took possession of the family cottage. Although Ms. Fournier is currently building a new home on her Westboro lot, Tye would have actually experienced less favourable living conditions with Ms. Fournier when she first took possession of 382 Roosevelt Avenue, it being an older home that required significant work.

52When Tye stays with Ms. Fournier at Mr. Akeson’s home, she has a smaller bedroom than at Mr. Labranche’s home, which is furnished essentially with IKEA furniture. Tye’s bedroom at the cottage was described as similar to that at Mr. Akeson’s home. With respect to where Tye will live with Ms. Fournier once the new home is finished, Ms. Fournier described it as being very much like the home Tye currently lives in with Mr. Labranche, which also was a new build when the couple moved into it together. Ms. Fournier’s Roosevelt home will be a two story, open concept duplex with three bedrooms, two and one half bathrooms and a garage. Ms. Fournier indicated that unlike 296 Citiplace Drive, her new home will not have a basement theatre room with a projection screen or a hot tub in the garage.

53Ms. Fournier described both her and Mr. Labranche’s lifestyle as a couple and her own lifestyle as “pretty average” or “normal”. She stated that she does not eat out much, and that Tye is a picky eater so when they do it is at Swiss Chalet, for pizza or at a cantina on the way to the cottage. Ms. Fournier indicated that she shops at ordinary stores for Tye’s clothing, such as Winner’s, H & M, Zulilly, Aubainerie or Marshalls. While she sometimes travels with Tye, her father will often pay for the trips, or a pleasure trip will be tacked on to a business trip to make it more economical. Ms. Fournier indicated that although Tye takes skiing and plays soccer, she does not buy new equipment for her because she grows out of it too quickly. She indicated that she grew up with used equipment and she does the same for Tye. Ms. Fournier also described the types of birthday or Christmas presents she gets for Tye, none of which were extravagant. Indeed, Ms. Fournier presented a summary of direct expenses for Tye for 2018, along with receipts, which totalled $4,133 for the year. She did the same for 2017 and they totaled $3,337. Ms. Fournier also presented a Children’s Budget dated December 18, 2018 in which she estimated her total monthly children’s expenses to be $5, 457.77, inclusive of child support of $4,054.

54Mr. Labranche’s submits that for Tye to experience a similar lifestyle with him as with Ms. Fournier, he would need to be in a position to buy a home in Westboro comparable to that which Ms. Fournier is building and to buy a cottage at which Tye can spend time with him. I am not convinced that comparable styles of living relate to the address at which one lives, so much as it does to the manner of living and comfort afforded by same. Nor am I convinced that meeting Tye’s needs necessitates the purchase of a cottage by Mr. Labranche. The evidence demonstrates that Tye’s standard of living with Ms. Fournier in Mr. Akeson’s home, or soon to be in Ms. Fournier’s new home, is comparable to that which she experiences in Mr. Labranche’s home, and indeed comparable to that which she has always experienced. I received no evidence that Tye was wanting for anything in the years 2013 to 2015, or that her needs were not being met in both households. I do not find that her current circumstances necessitate a retroactive lump sum award.

Hardship

55On paper, Ms. Fournier appears to have the means to pay a retroactive order. However, her circumstances have changed, as described above, and will continue to change in accordance with her ability (or inability) to work. To what degree a retroactive reward has the potential to be a hardship for her would depend on in what amount such a reward would be. Additionally, a lump sum retroactive award would require Ms. Fournier to encroach on her own future security, as, unlike Mr. Labranche, she has neither a pension nor sick pay. Indeed, Ms. Fournier has had to purchase the private medical insurance upon which she now depends.

The Expert Reports

56For the 2017 round of litigation, Mr. Labranche again retained Mr. Desnoyers to provide an expert opinion with respect to Ms. Fournier’s available income for support purposes. Mr. Desnoyers produced four reports dated September 22, 2017, April 30, 2018, October 30, 2018 and January 10, 2019 respectively. His findings with respect to Ms. Fournier’s available income for the years in question in each are set out below:

Desnoyers Report of September 22, 2017

• 2013 - $1,229,000

• 2014 - $1,108,000

• 2015 - $2,635,000

• 2016 - $90,000

Desnoyers Report of April 30, 2018

• 2013 – $1,229,000

• 2014 - $1,108,000

• 2015 - $2,635,000

• 2016 - $282,000

Desnoyers Report of October 30, 2018

• 2013 - $1,229,000

• 2014 - $1,108,000

• 2015 - $2,635,000

• 2016 - $288,000

Desnoyers Report of January 10, 2019

• 2013 - $1,228,000

• 2014 - $1,107,000

• 2015 - $4,828,000

• 2016 - $288,000

• 2017 - $408,000

• 2018 - $363,000

57The significant difference between Mr. Desnoyers’ 2015 income figures in his first three reports and that in his last, is that in the January 2019 report, Mr. Desnoyers includes the capital gain paid to Mr. Roch Fournier as a one-third shareholder in Ms. Fournier’s corporations in the income available to Ms. Fournier.

58Ms. Fournier retained Mr. Rick Evans to provide an expert opinion with respect to her available income for support purposes, and Mr. Evans produced three reports dated September 10, 2018, November 12, 2018 and January 14, 2019 respectively. The second report was a “Limited Critique Report” of SME’s reports, and one in which he adjusted the 2016 and 2017 incomes. The latter report was with respect to Ms. Fournier’s 2018 income only. Mr. Evans conclusions are set out below:

Evans Report of September 10, 2018

• 2013 - $634,000

• 2014 - $865,000

• 2015 - $564,000

• 2016 - $151,000

• 2017 - $266,000

Evans Report of November 12, 2018

• 2016 - $158,000

• 2017 - $315,000

Evans Report of January 14, 2019

• 2018 - $272,000

59The major differences between the experts’ reports are that Mr. Desnoyers included the balance sheets for Fournier Holdings Corporation into his analysis of corporate income available to Ms. Fournier for 2013 and 2014 and Mr. Evans did not. Second, Mr. Desnoyers included the entire capital gain resulting from the October 2015 sale of the Pembroke and Deep River clinics, including $700,000 paid for goodwill as well as that portion paid to Mr. Fournier, in his calculation of income available for support purposes, while Mr. Evans did not. Third, Mr. Desnoyers has calculated 100% of the pre-tax corporate income as being available for support purposes and Mr. Evans has not. Fourth, Mr. Desnoyers added back fiscal 2016 year-end accruals to Ms. Fournier’s income and Mr. Evans did not. Finally, Mr. Desnoyers and Mr. Evans applied different tax rates to the gross up of Ms. Fournier’s disability payments.

60On the whole, I accept the expert opinion of Mr. Evans.

Fournier Holdings

61With respect to the issue of Fournier Holdings, in his January 14, 2019 report, Mr. Evans wrote in item #32 on page 9:

It is our understanding that this company was established to “purify” L. Fournier Dentistry Professional Corporation (“LFDPC”/”Pembroke”) and Line Fournier Dentistry Professional Corporation (“LineFDPC”/”Deep River”) to allow them to qualify for the Capital Gains Exemption, should either or both company’s [sic] be sold. The Purification of the company is done to extract out non-operating assets (excess/redundant assets) to meet the Income Tax Act test where 90% of the assets owned by a company on the date of sale are used in active business. This was also done to help “creditor proof” the dental practices.

62In the fiscal year 2013, approximately $1.175 million in excess cash from earnings accumulated prior to 2013 was transferred from LFDPC and LineFDPC to Fournier Holdings. In his calculations of available corporate income in 2013 and 2014, Mr. Desnoyers has included all of the assets contained in Fournier Holdings.

63Mr. Evans strongly disagreed with this approach taken by Mr. Desnoyers. His view was that the transfer of $1.175 million to Fournier Holdings in 2013 was a transfer of excess cash from the operating companies to the holding company, because it was not required for the operation of the businesses. That Ms. Fournier was able to transfer it meant that the clinics were doing well, and that there were no concerns for short term liabilities in the operating companies. Both Mr. Evans and Mr. Desnoyers recognized that it was a prudent thing to do for tax planning purposes, and it was certainly what Ms. Fournier was advised by her financial/tax advisors to do. The excess cash Ms. Fournier transferred in 2013 was as asset (capital) that was put into another investment vehicle, the holding company. Mr. Desnoyers’ opinion was that it nevertheless ought still to be available to the shareholders. In Mr. Evans view, to include it as available income would be to change its character from one of capital (an asset) to one of income. It is, in his view, Ms. Fournier’s wealth, her asset (to which Mr. Labranche has no entitlement), and does not form part of her income.

64With this latter position, I agree. Mr. Labranche asks the court to create a legal fiction based on what he believes Ms. Fournier could or should have done with her capital assets in 2013. Ms. Fournier, however, acted on the recommendations of her corporate, legal and accounting advisors in transferring her capital assets to Fournier Holdings. To do as Mr. Labranche asks would be to completely change the character of those capital assets.

65As Mr. Evans put it, Fournier Holdings was created for the purposes of “repositioning Ms. Fournier’s personal wealth” (not her income). The excess cash that Ms. Fournier transferred to Fournier Holdings in 2013 consisted of her accumulated assets from 2008 to 2013, resulting from her hard work and effective management of three clinics. She could have just as easily transferred it into a different investment vehicle which would indisputably show it to be an asset (from which income might perhaps flow, but an asset nonetheless). She could have used some or all of it to pay herself, which would have rendered it income for support purposes. She could have left it in the operating companies as retained earnings, which would have rendered it included in either of the experts’ methods for calculating available corporate income for support purposes.¹⁴ For very good reasons having to do with the preservation of her own (and Mr. Fournier’s) wealth (tax planning/capital gains exemptions), she did not do any of those things. Rather she “invested it” in Fournier Holdings. As such, unlike money that is in the operating businesses, it should not form part of the “corporate income” available for support purposes.

Capital Gains in 2015

66On October 5, 2015, Ms. Fournier and her father, Roch Fournier, sold their shares in the Pembroke and Deep River Clinics to DCC. By all accounts, the transaction was extremely complex. Neither Mr. Desnoyers nor Mr. Evans were sure that they understood the agreement in full or why the sale was structured as it was. The end result of it was as follows:

• On October 6, 2015 Line Fournier Dentistry Professional Corporation received a payment of $700,000, which it then transferred by way of a dividend of $699,999 to Fournier Holdings;

• On October 9, 2015, Ms. Fournier received a payment of $1,475,036.58;

• On March 11, 2016 Ms. Fournier received a payment of $38,222.00;

• On June 27, 2016, Ms. Fournier received a payment of $45,805.62;

• On October 6, 2016, Ms. Fournier received a capital dividend of $350,000;

• On October 9, 2015, Mr. Fournier received a payment of $737,518.29;

• On March 11, 2016, Mr. Fournier received a payment of $19,111.00; and,

• On June 27, 2016, Mr. Fournier received a payment of $22,902.81.

67The total received by Ms. Fournier personally was $1,909,065.00. The total received by Mr. Fournier personally was $779,532.10. As indicated, an additional $700,000, thought to be the purchase of Line Fournier’s goodwill, was paid to LFDPC and redistributed to Fournier Holdings. Ms. Fournier then also received an additional $183,238 as a final settlement payment after adjustments on June 3, 2016. The end result for Ms. Fournier would thus be $2,092,303.

68Mr. Desnoyers has included the entire capital gain from the sale of the two clinics in 2015 in his calculation of the corporate income available for support purposes. In his first three reports, Mr. Desnoyers included Ms. Fournier’s share of the capital gain, concluding that her total income available for support purposes in 2015 was $2,635,000. However, in his report of January 10, 2019, Mr. Desnoyers included not only Ms. Fournier’s 2/3’s share of the capital gain, but also added back Mr. Fournier’s 1/3 share, concluding that Ms. Fournier’s available income for support purposes for 2015 was $4,828,000.

69Mr. Evans’ approach to Ms. Fournier’s capital gain in 2015 was that it was a one-time capital transaction which was not income. Although it was included in her Line 150 income in her 2015 Income Tax Return, Mr. Evans removed it for the purpose of determining income for support purposes. It was his view that it was a non-recurring capital gain that did not form part of Ms. Fournier’s income.

70Ms. Fournier testified that she was worried about her earning potential after the sale, and on the advice of her financial planners, she used the proceeds of the sale, in part, to secure her future by paying off the mortgages on her cottage and her Roosevelt properties in full. She testified, moreover, that from the time she purchased the clinics, her plan had always been to transfer any assets from their sale into a retirement plan.

71Mr. Evans, additionally, did not include any of Mr. Fournier’s capital gain from 2015 in Ms. Fournier’s available income for support purposes. He considered Mr. Fournier to be a bona fide shareholder in Ms. Fournier’s corporations, with corresponding rights.

72Again, I accept Mr. Evans’ opinion. First, it is in keeping with the cases of Ewing v. Ewing¹⁵ and McNeil v. McNeil¹⁶ from the Courts of Appeal of Alberta and New Brunswick respectively. In McNeil, the question of law was raised as to whether a capital gain of $1,383,750 should have been included in the father’s 2005 income for the purpose of determining child support. At paragraph 1, Robertson J.A. stated: “Having regard to the Federal Child Support Guidelines, SOR/97-175, and the jurisprudence, the answer is “no”. The general understanding is that such “non-recurring” gains are excluded from income.”¹⁷

73The courts in both cases referred to Section 17(1) of the Guidelines, which provides:

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

74In McNeil, Robertson J.A. found that the gain (which was the result of exercising employee stock options) fell “within the category of “a non-recurring amount” as provided for under s. 17(1) of the Guidelines.”¹⁸ Robertson J.A. found further at paragraph 14:

14…, the facts of the present case support the common sense understanding that the inclusion of the capital gain in calculating the father’s 2005 income must surely exceed the needs of the children. Correlatively, the inclusion would surely result in a transfer of wealth to the mother or provide her with additional lump sum spousal support. In any event, it is readily apparent that the inclusion of the $1.3 million capital gain in the father’s income for 2005 would not be the fairest way of fixing his annual income in accordance with s. 17. The gain is a non-recurring amount that did not generate disposable income from which child support could be paid. (Emphasis added).

75In Ewing, the Alberta Court of Appeal found at paragraph 32 that courts need to be alert to “the nature of any non-recurring gain and whether it is derived from the sale of capital.”¹⁹ In paragraphs 33 and 34, the Court states:

33Thus, the nature of the sale of a capital asset, or other extraordinary gain or fluctuation in income, should always be considered when determining fair income. Frequently the fairest method of income may be to exclude the gain. On the other hand, where a non-recurring gain is in the nature of an employment bonus, in the sense that it is truly income for work done, its inclusion in section 16 income may not make that method of calculation unfair. The sale of stock options as part of annual compensation may be such an example.

34In addition to considering the nature of the non-recurring gain, or fluctuation of income, it is also important to consider the purpose of support orders when deciding whether a section 16 calculation of income if fair. Support orders are directed at ensuring that, to the extent possible, that children enjoy the same standard of living they would have experienced if the marriage had not broken down. Thus, when determining a fair and reasonable income, the day-to-day standard of living the family would have enjoyed, had it remained intact, is relevant. A court might want to consider whether a specific non-recurring gain would have resulted in a change in lifestyle of a particular family, had it remained intact. For instance, if the family’s standard of living is high to begin with, the unusual gain may not affect the family’s standard of living at all but may simply be seen as a means of providing security for future years. Thus, notwithstanding a large gain, a section 16 calculation which includes the gain might not be the fairest method of calculation.

76In paragraph 35, the Court lists nine non-exhaustive matters the court might consider in determining a fair calculation of income. They are:

(1) Is the non-recurring gain or fluctuation actually in the nature of a bonus or other incentive payment akin to income for work done for that year? In the case of Ms. Fournier, it is not.

(2) Is the non-recurring gain a sale of assets that formed the basis of the payor’s income? In Ms. Fournier’s case, the assets did form the basis for much of her income as the Pembroke and Deep River clinics were doing better than the Ottawa clinic at the time. As in Ewing, Ms. Fournier’s income would be projected to decrease substantially after the sale.²⁰

(3) Will the capital generated from a sale provide a sources of income in the future? In Ms. Fournier’s case it will not, but for any income she derives from investment of the capital, which investment income did and will continue to form part of her income for support purposes.

(4) Are the non-recurring gains received at an age when they constitute the payor’s retirement fund, or partial retirement fund, such that it may not be fair to consider the whole amount, or any of it, as income for support purposes? In Ms. Fournier’s case, it does come at an age and stage where non-recurring gains constitute her retirement fund, partially by being invested into removing any remaining mortgages on her properties and partially by being otherwise invested, given that she has no other pension plan or security.

(5) Is the payor in the business of buying and selling capital assets year after year such that those amounts, while the sale of capital, are in actuality more in the nature of income? In Ms. Fournier’s case, she is not in such a business.

(6) Is the inclusion of the amount necessary to provide proper child support in all circumstances? In Ms. Fournier’s case, it is not. As I indicated in paragraphs 51 through 54 above, Tye’s needs have been more than amply met in both households. Her standard of living in each is comparable, and the evidence does not support that her lifestyle while in the care of Ms. Fourner is extravagant. Indeed, the money Ms. Fournier expended directly on Tye for the entire year in 2017 and 2018 was respectively slightly less and slightly more than she currently pays to Mr. Labranche for one month of child support.

(7) Is the increase in income due to the sale of assets which have already been divided between the spouses, so that including them as income might be akin to redistributing what has already been shared? In Ms. Fournier’s case, it is not, as no assets beyond the jointly held properties were divided between the spouses, nor did Mr. Labranche have entitlement to any of Ms. Fournier’s assets.

(8) Did the non-recurring gain even generate cash, or was it merely the result of a restructuring go capital for tax or other legitimate business reasons? In Ms. Fournier’s case, it did generate cash, but the cash has been invested or is being held for future security purposes.

(9) Does the inclusion of the amount result in wealth distribution as opposed to proper support for children? In Ms. Fournier’s case, it does, in my view, amount to wealth distribution as opposed to proper support for Tye.

77Taking all of the enumerated factors into consideration, I find that Ms. Fournier’s non-recurring gain in 2015 resulting from the sale of her clinics should be excluded from her income for support purposes.

78Although it may not be necessary to opine on the issue, had I found the Ms. Fournier’s non-recurring gain was to be included in her income, I still would not have found that Mr. Fournier’s non-recurring gain in 2015 ought to have been included in the available income to Ms. Fournier for support purposes. My reasons for this are twofold. First, in his August 30, 2013 report on Ms. Fournier’s income available for support purposes, Mr. Pittman indicated at page 2:

While Dr. Fournier holds all the votes and has discretionary control over the declaration of dividends, the corporate lawyer advises us that if she were to distribute all of the income of the corporation to herself to the exclusion of the other shareholders, she could face an oppression action since her parents own two-thirds of the shares.

79Second, Mr. Pittman’s words came to fruition at the end of 2013, when Ms. Fournier faced “an oppression action” from her mother, Ms. Johnson, the result of which was a payment of an unknown sum made to Ms. Johnson by Ms. Fournier.

80Mr. Roch Fournier has been a 1/3 shareholder in all of Ms. Fournier’s corporations since their inception, and I have no concrete evidence to conclude that he is not a bona fide shareholder, as was presumed by Mr. Evans. Ms. Fournier is, in my view, at as much risk of “an oppression action” from Mr. Fournier as she was from Ms. Johnson. According to Ms. Fournier, Mr. Fournier has, moreover, contributed to the operation of the corporations over the years, even to the extent of taking over 2223317 Ontario Inc.²¹, the corporation which owns the property in Pembroke out of which the dental clinic is run. Mr. Labranche attempted to suggest that Ms. Fournier selling her interest in that company to Mr. Fournier for consideration of $1.00 at the same time as the 2015 transaction with DCC Inc. was an attempt on her part to either somehow hide assets or divert income in a non-arm’s length manner. However, it was very clear in Ms. Fournier’s testimony that, having sold the clinic and given her state of health, she could not bear the thought of managing the tenant/landlord relationship with DCC, which Mr. Fournier was prepared to do, as well as assuming the responsibility for the debt (mortgage) owed by 2223317. I find that there was nothing nefarious in this arrangement between Ms. Fournier and Mr. Fournier; on the contrary, it appeared to me to be what a good business partner would do, given Ms. Fournier’s struggles at the time.

Pre-tax corporate income available

81With respect to the issue of the percentage of pre-tax corporate income available for support purposes, Mr. Desnoyers and Mr. Evans used two different methods for coming to a determination. Mr. Desnoyers used a “debt-equity analysis” and Mr. Evans used a “working capital analysis”.

82In a debt-equity analysis, a company’s total debt is divided by its total equity. The average Mr. Desnoyers used for the dental profession was a 2 to 1 ratio, meaning that at the end of day the company can have two times as much debt as it does equity. Mr. Desnoyers’ calculations using this formula resulted in 100% of the corporate income being available for support purposes. Mr. Desnoyers’ findings were partly premised on the inclusion of Fournier Holdings in the calculation, but he testified that even when the holding company is taken out, the dental practice(s) had a good debt to equity ratio and the percentage would still be 100%. Mr. Desnoyers demonstrated that if 100% of the corporate income was available for support purposes year after year from 2013 to 2017, without including Fournier Holdings, Ms. Fournier’s dental practice would have a cash balance as of November 30, 2017 of -$886,684. Mr. Desnoyers felt that this was within an acceptable range for a dental practice.

83Mr. Evans, on the other hand, felt very strongly that a certain amount of money has to be kept in a company to keep it running. While Mr. Desnoyers was of the view that Ms. Fournier could borrow money to cover shortages, Mr. Evans testified that a bank will loan long term on receivables, fixed assets and inventory, and that dental practices typically have no inventory and few receivables. In his view, no bank would loan money to a dentist for the purpose of paying herself. Even if, as Mr. Desnoyers opines, the assets of Fournier Holdings are “available to the shareholders”, it is likely that any money flowing from Fournier Holdings to the clinic to cover shortfalls would be in the form of a loan, which would eventually need to be repaid to the holding company (or to the lenders, Ms. Fournier and Mr. Fournier). Mr. Evans was of the view that if 100% of the corporate income was withdrawn, there would not be sufficient working capital left in the corporations.

84Mr. Evans employed a working capital analysis (as did Mr. Pittman in 2013), in which one looks at the cash available within the operating companies and whether there are any upcoming situations that would require significant cash outflow, or a ratio based on current assets divided by current liabilities. Mr. Evans reviewed his database, which revealed a 1.2 to 1 ratio of working capital for a typical dental practice. He adjusted it up to a 1.4 to 1 ratio because, inter alia, Dr. Fournier had been on disability for a number of years when he did his calculations. Mr. Evans indicated that it was his practice to always use a working capital analysis, and that he did not believe a debt to equity analysis was appropriate. He concluded that without including Fournier Holdings in the corporate income available, which he does not, as outlined above, “there would not be enough cash in the dental practices to pay out 100% of the pre-tax corporate income as calculated by SME.”²²

85Again, I accept Mr. Evans’ opinion, and explanation of the reasons for same. It seems to me a matter of simple logic that some portion of corporate income must always be available to the corporation. Indeed, Ms. Fournier testified that the advice she had always received was to have at least three months’ worth of payroll available in the operating companies at any given time. Dr. Fournier kept money in the businesses to run the businesses, and, unlike a debt to equity ratio, a working capital analysis permits that there always be “sufficient working capital left in the corporations”. I, therefore, adopt Mr. Evans’ conclusions as to the percentage of corporate income that is available to Ms. Fournier for support purposes.

2016 Year-End Accruals

86Mr. Desnoyers added a number of year-end accruals back into Ms. Fournier’s 2016 income, whereas Mr. Evans did not. Mr. Evans explained it thus: “If Dr. Fournier were to shut down on November 30 (her fiscal year-end), would she have to write cheques for these expenses.” If the answer to that question is yes, then the accruals should not be added back in to Ms. Fournier’s income. Mr. Desnoyers did not challenge the legitimacy of the expenses, however, he added $178,000 back into Ms. Fournier’s income for 2016. Mr. Evans did not believe that to be correct, in that the accruals were in relation to actual liabilities Ms. Fournier had. I agree with the latter approach; if Ms. Fournier had an actual obligation to “write cheques” for the amount of the accruals, they could not form part of her income.

Tax Treatment of Ms. Fournier’s Disability Payments

87Because Ms. Fournier’s disability income is tax free, both Mr. Desnoyers and Mr. Evans grossed it up for tax to reflect the sum she would have to make to net the amounts actually payable for 2016 forward. However, they applied different tax rates in so doing. Mr. Desnoyers applied her marginal tax rate, while Mr. Evans applied an “effective tax rate”, stating that in his view this was a fairer way of doing it as each source of income is taxed at the same rate. Mr. Labranche was able to demonstrate through the provision of DivorceMate calculations for 2017 and 2018 that Ms. Fournier’s marginal tax rate would be applied to her disability income. Ms. Fournier’s disability income is, in essence, income replacement, and as income to her, I am of the view that her marginal tax rate, the rate she is otherwise expected to apply to income, would equally apply in this case.

Conclusion

88For the reasons set out above, I find as follows:

(1) Ms. Fournier’s income for child support purposes for 2013 is $634,000;

(2) Ms. Fournier’s income for child support purposes for 2014 is $865,000;

(3) Ms. Fournier’s income for child support purposes for 2015 is $564,000;

(4) Ms. Fournier’s income for child support purposes for 2016 consists of her total adjusted Line 150 income of $57,900, her available corporate income of $81,980, and her disability payments of $9,991. Ms. Fournier’s marginal tax rate should be applied to her 2016 disability payments to gross them up for tax;

(5) Ms. Fournier’s income for child support purposes for 2017 consists of her total adjusted Line 150 income of $82,131, her available corporate income of $22,271, and her disability payments of $119,890. Ms. Fournier’s marginal tax rate should be applied to her 2017 disability payments to gross them up for tax;

(6) Ms. Fournier’s income for child support purposes for 2018 consists of her dividend of $24,000, her interest and investment income of $7,131, her available corporate income of $20,700, and her disability payments of $132,048. Ms. Fournier’s marginal tax rate should be applied to her 2018 disability payments to gross them up for tax.

89Based on my above findings with respect to Ms. Fournier’s income for the years in question, I find that there is no entitlement to a retroactive adjustment of child support for 2013, 2014 and 2015. The primary reason for my finding is that there was no material change in circumstances to December 31, 2015, such that the Order of December 18, 2013 should be varied.

90As Mackinnon J. pointed out in paragraph 16 of Gibson v. Gibson, 2002 CarswellOnt 1647, with reference to Justice Sopinka in B. (G.) c. G. (L), 1995 CanLII 65 (SCC), [1995] 3 S.C.R. 370 (S.C.C.) at paragraph 73:

In deciding whether the conditions for variation exist, it is common ground that the change must be a material change of circumstances. This means a change, such that, if known at the time, would likely have resulted in different terms. The corollary to this is that if the matter which is relied on as constituting a change was known at the relevant time it cannot be relied on a the basis for a variation.

91As I have indicated above, both parties retained experts to determine Ms. Fournier’s income for support purposes prior to entering into the Minutes of Settlement dated October 31, 2013, which were then incorporated into the Final Order of Justice McLean dated December 18, 2013.

92Mr. Labranche retained Mr. Desnoyers, who first prepared a report dated August 8, 2013²³, in which he concluded that Ms. Fournier’s available income for 2013 was $1,243,000.

93Mr. Desnoyers then received certain updating information and provided another report dated August 28, 2013²⁴, in which he found Ms. Fournier’s available income to be almost identical to his August 8, 2013 report.

94Ms. Fournier retained Mr. Steve Pittman to determine her available income, and also to comment on the August 8, 2013 report of Mr. Desnoyers. In his report dated August 30, 2013²⁵, Mr. Pittman determined Ms. Fournier’s income for a full allocation to be $894,000 for 2013. For a one third allocation, he determined Ms. Fournier’s available income to be for 2013 to be $405,000.

95On September 4, 2013, Mr. Desnoyers provided a third report²⁶, this one containing adjustments emanating from some information contained in the August 30, 2013 Pittman report, in which he found Ms. Fournier’s available income for 2013 to be $926,000.

96Both Mr. Desnoyers and Mr. Pittman’s reports were done prior to the fiscal year end of Ms. Fournier’s corporations, which was November 30, 2013. Both worked from the assumption that Ms. Fournier’s 2013 income would be similar to her 2012.

97In the end, Ms. Fournier and Mr. Labranche settled on Ms. Fournier’s income for support purposes being $625,000, or falling between the one third allotment identified by Mr. Pittman of $405,000 and the $926,000 ultimately identified by Mr. Desnoyers. In the absence of the year end documents for 2013, both knew that the 2013 sums were projected sums. Knowing this to be the case, they nevertheless resolved the matter as set out in paragraph 17 above.

98The incomes that I have determined to be available for Ms. Fournier for support purposes for 2013, 2014 and 2015 are within the very same range that was discussed by the parties, who negotiated a solution in good faith in which they made, in the language of Section 33 of the FLA “reasonable arrangements” for the support of Tye. Indeed, some of Mr. Desnoyers’ 2013 projections were higher than those in his 2017 reports for 2013.

99Additionally, the sale of one or more of Ms. Fournier’s clinics was known at the time of the negotiations and the order, and as such it could not have been relied upon as the basis for a variation in any event. Interestingly, the potential material change contemplated by paragraph 31 of the Final Order was a reduction of income to Ms. Fournier resulting from the potential sale of one or more of her clinics; it was not that her capital from such a sale would constitute income. Mr. Labranche did not, moreover, in my view, have a reasonable excuse for his delay in seeking an adjustment of support prior to the spring of 2017, nor did Ms. Fournier engage in any blameworthy conduct in relation thereto. Finally, Tye’s circumstances do not merit a review of child support prior to January 1, 2016.

100The real material change came about in this case, not only because of the contemplated reduction in her income commiserate with selling two clinics, but as a result of Ms. Fournier’s failing mental health, and her application and approval for disability. She became utterly incapable of managing three clinics, and ultimately of managing and even working at one. As a result, her income has reduced significantly from that which she agreed to in October of 2013. There shall therefore be an Order that effective January 1, 2016, Ms. Fournier’s child support payments will be varied in accordance with her income as set out in paragraph 88 above.

101In their Minutes of Settlement, the parties employed a set off method for support based on their shared parenting regime and Section 9 of the Federal Child Support Guidelines, and I see no basis to interfere with that. The parties are to compute the monthly child support payable by Ms. Fournier to Mr. Labranche from January 1, 2016 as per my findings set out above, and a draft order approved as to form and content can be submitted to me for review and signature. If there are any difficulties in agreeing on the amounts payable, an appearance before me can be arranged through trial coordination.

Costs

102Failing agreement as to the liability for costs of this trial by September 30, 2019, counsel will make written submissions of no more than three pages, along with copies of their bills of costs and offers to settle, to me at intervals of 10 days from that date and I will make an order.

Justice Engelking

Released: August 29, 2019

APPENDIX

On August 29, 2019, the following sub-paragraphs were amended:

88(4) Ms. Fournier’s adjusted Line 150 income of $82,131, has been replaced with $57,900.

88(6) Ms. Fournier’s available corporate income of $20,700 has been added.

Footnotes

1. 1Dental Corporation of Canada Inc.
2. 2Letter March 23, 2018 to Ms. Fournier from Canada Life, Trial Exhibit #21
3. 32018 ONSC 4740, 2018 CarswellOnt 13078
4. 4Supra
5. 52011 SCC 10(S.C.C.)
6. 6Laramie, supra, para. 50
7. 7R.S.O. 1990, c.F.3, as am.
8. 8Federal Child Support Guidelines, SOR/97-175, as am.
9. 9Laramie, supra, para. 50
10. 10This is notwithstanding the December 18, 2013 contemplating that a reduction in Ms. Fournier’s salary based on the sale of her clinics may constitute a material change.
11. 11Letter from J. Audet to M. Blais dated September 6, 2016
12. 12Trial Exhibit #77
13. 13Trial Exhibit #78
14. 14Had she done the latter, however, the purchase price of the clinics in 2015 would have to have been much higher to account for it.
15. 152009 ABCA 227
16. 162013 NBCA 65
17. 17Ibid., paragraph 1
18. 18Ibid., paragraph 6
19. 19Ewing, supra, paragraph 32
20. 20Ewing, supra, at paragraph 35: “Here, the exceptional income for these years was due, primarily, to the sale of business assets which had been the source of the father’s income in previous years. These fluctuations in income were non-recurring and the gains were not extra employment income. In fact, the father’s income was projected to decrease substantially after the sale.”
21. 212223317 Ontario Inc. is a real estate investment holding company which owns the building from which the Pembroke clinic is operated. It does not carry on any other business.
22. 22McCay Duff report dated November 12, 2018, paragraph 13. b., page 3
23. 23SNE Business Appraisers Inc., August 8, 2013, Trial Exhibit #105
24. 24SME Business Appraisers Inc., August 28, 2013, Trial Exhibit #106
25. 25Raymond Chabot Grant Thornton, August 30, 2013, Trial Exhibit #58
26. 26SME Business Appraisers Inc., September 4, 2013, Trial Exhibit #99