COURT FILE NO.: FS-18-0259-00 DATE: 2020 04 30

ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

JANICE MAI PFAFF Applicant Fareen L. Jamal, for the Applicant

• and -

REINHARD (RON) HERMANN PFAFF Respondent No One Present, for the Respondent

HEARD: December 18, 2019, at Brampton

REASONS FOR JUDGMENT Dennison J.

INTRODUCTION

[1] Ms. Pfaff and Mr. Pfaff married in 1979. On October 20, 2017, the parties separated after 38 years of marriage. At the time of separation, Ms. Pfaff was 61 years of age and Mr. Pfaff was 66 years of age.

[2] The parties had a successful life together. They have three adult children: Karl Pfaff, born April 14, 1983; Colin Pfaff, born April 1, 1986; and Alexander Pfaff, born December 9, 1990.

[3] Throughout the marriage, Mr. Pfaff was a self-employed denturist and had a successful practice. Ms. Pfaff worked part-time as a dental hygienist. At the time of separation, Mr. Pfaff owned two denture offices, one located on Bloor Street in Toronto and one in Burlington. By the time of the uncontested trial, only the Burlington location was operating. Their son currently runs the practice. Ms. Pfaff does not know if her son purchased the business from Mr. Pfaff.

[4] The family led a comfortable life and acquired a number of assets over their marriage. Their net family property is approximately 8.4 million dollars. Ms. Pfaff owns a property on Bloor Street. Mr. Pfaff owns a property on New Street in Burlington and a rental property on Macdonell Avenue in Toronto. They jointly own a home and a cottage. In addition, Mr. Pfaff acquired approximately 40 motor vehicles, including rare cars, motorcycles, boats and snowmobiles. There is also a sizeable joint investment account. Ms. Pfaff does not know what other investments Mr. Pfaff may have in his own name.

[5] Unfortunately, Mr. Pfaff has refused to discuss the dissolution of the marriage and refused to participate in the legal proceedings. This has created significant difficulties for Ms. Pfaff in determining the value of Mr. Pfaff’s assets and what income he earns. Ms. Pfaff incurred considerable costs in trying to obtain valuations of the properties and vehicles that Mr. Pfaff owns.

ISSUES

[6] The following issues have to be determined on this uncontested trial:

i. Should there be an equalization payment to Ms. Pfaff? ii. What income should be attributed to Mr. Pfaff? iii. Is Ms. Pfaff entitled to spousal support? iv. If so, what quantum of spousal support is appropriate? v. Is a lump sum spousal support payment appropriate? vi. Should the Canadian Pension Plan credits be divided?

PROCEDURAL HISTORY

[7] On October 5, 2018, Ms. Pfaff filed her Application for divorce, spousal support and an equalization payment.

[8] Mr. Pfaff did not file an Answer. He has repeatedly evaded service and returned material that was served on him. He has not filed any material with the court.

[9] On July 25, 2019, this matter proceeded before me as an uncontested trial. On September 11, 2019, I made an endorsement that Ms. Pfaff provide additional evidence to the court for the uncontested trial. I found that many of the assets were not properly valuated and therefore I could not determine the issue of equalization.

[10] I also ordered that Mr. Pfaff be served with my September 11, 2019 endorsement and any materials that Ms. Pfaff wished to rely on at the continuation of the uncontested trial. The purpose of requiring that Mr. Pfaff be served was to ensure that Mr. Pfaff knew this matter was proceeding and to provide him with an opportunity to try to participate. Mr. Pfaff was properly served with my endorsement and the materials for the uncontested trial.

[11] On December 18, 2019, Ms. Pfaff provided additional evidence for the uncontested trial. She also brought a motion returnable on the same date to permit her to sell the matrimonial home, the cottage and the Bloor Street property. She also sought interim spousal support.

[12] After hearing submissions on the motion, I ordered the following:

1. Service of any further materials filed in this matter was hereby dispensed with.

2. The Applicant, Janice Mae Pfaff, shall list and sell the following properties without the necessity of obtaining the Respondent’s consent:

   i) 1855 Sevenoaks Drive, Mississauga, Ontario; ii) 19 Walkers Lane, Keswick, Ontario; and iii) 4206 Bloor Street West, Toronto, Ontario.

3. On the sale of the above-referenced properties, one half of the net proceeds of sale after payment of real estate fees, encumbrances, property taxes owing, legal fees, and related expenses shall be released to the Applicant, Janice Mae Pfaff.

4. Any outstanding liens, encumbrances or utility bills that are in the Respondent’s name are to be deducted from the Respondent’s share of the net proceeds of the sale of either the 1855 Sevenoaks Drive or 19 Walker Lane property.

5. The Respondent shall pay to the Applicant the sum of $13,905.58 to reimburse her for the cost of the appraisals of his property on New Street. This payment shall be made from the Respondent’s share of the net proceeds of sale of either the 1855 Sevenoaks Drive or 19 Walker Lane property.

6. If the Respondent fails to remove his vehicles and other possessions from the above-referenced properties, the Applicant may rent a storage unit, the cost of which shall be paid from the Respondent’s share of the net proceeds of sale of either the 1855 Sevenoaks Drive or 19 Walker Lane property.

7. The Applicant shall be permitted to tow the Respondent’s vehicles to a storage unit to permit the sale of these three properties. The costs for towing are to be paid from the Respondent’s share of the net proceeds of sale of either the 1855 Sevenoaks Drive or 19 Walker Lane property.

8. The balance of the Respondent’s net proceeds of sale from any of the three properties are to be held in trust by the solicitor acting on the sale of the property, pending a final order in the trial of this matter.

9. A copy of my order is to be sent by regular mail to the Respondent at 123 Macdonell Avenue, Toronto and 3027 New Street, Burlington.

10. One half of the TD Bank investment account MP 2612 is to be immediately released to the Applicant, Ms. Pfaff.

11. The divorce shall be severed from the corollary relief and shall proceed on an immediate and uncontested basis upon the clearance certificate being provided to Justice Dennison.

[13] I also concluded the uncontested trial. The evidence on the trial consisted of several affidavits that contained numerous attachments. After hearing submissions from Ms. Pfaff’s counsel, I reserved my decision on the uncontested trial.

[14] On February 20, 2020, I received the clearance certificate. I granted the order for the divorce on February 26, 2020.

PRELIMINARY MATTER: IS IT APPROPRIATE TO PROCEED WITH The UNCONTESTED TRIAL?

[15] I am satisfied that it was appropriate to proceed with an uncontested trial.

[16] Ms. Pfaff filed her Application and Financial Statement on October 5, 2018. It was properly served on Mr. Pfaff. Mr. Pfaff failed to file an Answer to Ms. Pfaff’s Application. He has been repeatedly served with material in this matter and has refused to participate.

[17] As a result of Mr. Pfaff failing to file an Answer to Ms. Pfaff’s application, Mr. Pfaff is not entitled to further notice of the steps in this case. He is not entitled to participate in the case in any way, and the court may deal with the case in his absence. A date may also be set for an uncontested trial: Family Law Rules, rr. 1(8.4), 10(5).

[18] Despite Mr. Pfaff’s failure to file an Answer, the courts repeatedly attempted to notify him of the proceedings so that he could bring a motion and seek to participate in the trial proceedings.

[19] In my September 11, 2019 endorsement, I ordered that Ms. Pfaff serve Mr. Pfaff with my endorsement and any additional material that Ms. Pfaff wished to rely on at the continuation of the uncontested trial.

[20] Attempts were made to serve Mr. Pfaff with my September endorsement at 1855 Sevenoaks Drive on September 11 and 17, 2019, and on October 10 and 11, 2019. Their son answered the door on the last occasion and advised that Mr. Pfaff was not home. Efforts were also made to contact Mr. Pfaff via telephone on October 11, 2019. He did not return the call.

[21] Ms. Pfaff also attempted to serve Mr. Pfaff with motion materials and the further evidence that she wished to rely on at the continuation of the uncontested trial. Both matters were returnable on December 18, 2019. The process server attended at 1855 Sevenoaks Drive in Mississauga on December 10, 2019. A male resident was present. He advised that Mr. Pfaff was in Florida to avoid the court process. The process server left the documents at the residence. Mr. Pfaff was also emailed the material at rhpfaff1@gmail.com on the same date.

[22] Ms. Pfaff’s son received two postcards from Mr. Pfaff. One appears to have been sent from South Dakota on October 18, 2019 and the other appears to have been sent from Victoria, British Columbia on November 19, 2019.

[23] The Sunday before the court proceedings were to be heard, Mr. Pfaff returned the materials that were couriered to 1855 Sevenoaks Drive to Ms. Pfaff. He left the materials on the windshield of Ms. Pfaff’s vehicle along with a note. The note stated that she should stop being distracted and focus on what matters, which is their son Alex. He stated that he was “no longer capable and able”.

[24] Repeated efforts were made to engage Mr. Pfaff in the litigation process. He demonstrated his clear desire to have nothing to do with the legal proceedings. It was therefore appropriate to proceed with this matter as an uncontested trial.

ISSUE #1: SHOULD THERE BE AN EQUALIZATION PAYMENT TO MS. PFAFF?

[25] The parties owned considerable property at the time of separation. The value of the properties must be ascertained before the issue of any equalization payment can be determined. Initially, I was not satisfied that proper valuations had been done on certain properties. I was also not satisfied that proper valuations had been done on the vehicles.

[26] Ms. Pfaff had proper valuations done on three properties. These valuations were attached to her affidavit dated December 9, 2019. I am satisfied that Ms. Pfaff has proven the value of the properties as of the date of separation as set out below.

1855 Sevenoaks Drive, Mississauga

[27] This property was purchased in 1987, during the marriage. It was the matrimonial home. The value of the residence is approximately $1,400,000.00. There are outstanding property taxes owing of approximately $17,000.00. There is also a lien on this property to the Minister of National Revenue in the amount of $145,316.00 dated 2018/03/01. This lien arose after the date of separation, and therefore I am not satisfied that this lien was owed during the course of the marriage. Mr. Pfaff is not permitted to deduct this amount from his net property value.

10 Walkers Lane, Keswick

[28] Mr. and Ms. Pfaff also owned a cottage in Keswick, Ontario. This property was purchased in 1984, during their marriage. The estimated value of this property is $1,400,000.00. There is approximately $12,000.00 owing in outstanding property taxes.

4206 Bloor Street West, Toronto

[29] The appraisal value for this property at the date of separation is $875,000.00. There is approximately $3,200.00 in outstanding property taxes owing.

[30] The title for this property is in Ms. Pfaff’s name. She submits that this property should be treated as joint property because she and Mr. Pfaff purchased it on July 23, 1980, shortly after their marriage. At the time, they intended to live in the property and Mr. Pfaff intended to operate his denture clinic from the home. She stated that they were concerned that if the property was in Mr. Pfaff’s name, in whole or part, it would be vulnerable to potential creditors.

[31] I am not prepared to treat this property as being jointly owned for the purpose of calculating equalization for the following reasons. First, Ms. Pfaff did not plead that Mr. Pfaff had a constructive or resulting trust in this property or that the property should be treated as jointly owned. Second, this property does not meet the definition of a matrimonial home as set out in s. 18 of the Family Law Act, R.S.O. 1990, c. F.3. The parties resided in this residence for a few years when they were first married and then moved to a different residence. They did not reside in this residence at the time of separation.

123 Macdonnell Avenue, Toronto

[32] Mr. Pfaff purchased this property in 1977, a few years before the parties married, for $2.00. The appraisal places the value of the property between $900,000.00 and $1,000,000.00. For the purpose of the Net Property Statement, Ms. Pfaff listed its value at $950,000.00. This amount is appropriate given the property valuation. There are no encumbrances on this property.

3027 & 3029 New Street, Burlington

[33] Mr. Pfaff owns this commercial property in Burlington. It consists of four commercial rental units. One of the units houses the Roseland Denture Clinic. That is Mr. Pfaff’s clinic, although it appears their son now operates the clinic. The valuation of the property as of the date of separation is $925,000.00. In Ms. Pfaff’s Net Property Statement, it is listed slightly higher at $1,000,000.00 because Ms. Pfaff had not yet received the appraisal value at the date of separation.

[34] The property was purchased for $225,000.00 in 1987 in the names of Mr. Pfaff and his parents, Adele and Fred Pfaff. Each held a one-third share. Adele Pfaff died in 1994 and Fred Pfaff died in 2016. Mr. Pfaff has two sisters who are twins. Ms. Pfaff states that she believes Mr. Pfaff’s parent’s wills have been probated. Ms. Pfaff submits that she believes it was the intention that Mr. Pfaff retain this property. Mr. Pfaff has taken no steps to transfer the title of this property to his name. There is no indication that anyone other than Mr. Pfaff has claimed an interest in the property.

[35] I am satisfied that in the circumstances, the full value of this property should be attributed to Mr. Pfaff for the purpose of calculating the Net Family Property given that he has done nothing to change the ownership to anyone else since his parents died.

The Denture Clinics

[36] Mr. Pfaff’s refusal to participate in the proceedings prohibited Ms. Pfaff from attributing a value to the Denture Clinic businesses for the purpose of determining the Net Family Property. She was unable to obtain any information about the business. She did not know if Mr. Pfaff still owned the denture clinic in Burlington or sold it to her son.

Valuation of Vehicles

[37] Mr. Pfaff appears to own a number of vehicles. A valuator personally inspected approximately 40 vehicles. There were cars, motorcycles, scooters, watercrafts and snowmobiles. The total value of all the vehicles is $402,500.00. I am satisfied that the vehicles are owned by Mr. Pfaff given that the vehicles were personally inspected at various properties owned by the Pfaffs and based on the other documentation that Ms. Pfaff provided for many of the vehicles, such as ownership or bills of purchase and sale.

[38] Two vehicles were not personally inspected but were also valuated. One was the 2001 Damon Daybreak Motorhome and the other was a 2000 Porsche. I am satisfied that although these two vehicles were not personally inspected, it is appropriate that the value of the vehicles be attributed to Mr. Pfaff because Ms. Pfaff provided ownership papers that showed that Mr. Pfaff was the owner of the vehicles.

Investments

[39] Mr. and Ms. Pfaff also have a number of banking investments. Ms. Pfaff stated that she does not know all of Mr. Pfaff’s investments because he was secretive. There is a joint investment account that is valued at approximately $1,400,000.00. Ms. Pfaff provided documentation with respect to the investment accounts as set out in the Net Family Property Statement that is attached to the affidavit of Ananta Ramoutar dated June 11, 2019.

Analysis

[40] Mr. and Ms. Pfaff have net property valued at approximately 8.4 million dollars. Ms. Pfaff’s counsel prepared two Net Family Property Statements. For the reasons set out above I accept the calculations made in the second statement, which lists the Bloor Street property as Ms. Pfaff’s property. However, one change needs to be made to that statement because it lists the value of the New Street, Burlington property as $1,000,000.00. It should be listed as having a value of $925,000.00 at the time of separation based on the valuation that was filed with the court.

[41] With that adjustment, based on my calculations, Mr. Pfaff owes Ms. Pfaff an equalization payment of $504,175.95.

ISSUE #2: IS MS. PFAFF ENTITLED TO SPOUSAL SUPPORT?

[42] Ms. Pfaff seeks spousal support in a lump sum payment in the amount of $1,444,000.00 based on an income of $200,000.00 attributed to Mr. Pfaff. She submits that a lump sum payment is appropriate because Mr. Pfaff is self-employed and has refused to participate in the court process.

Relevant Facts

[43] Mr. and Ms. Pfaff were married for over 38 years. Prior to marriage, Ms. Pfaff worked full-time as a dental hygienist. She continued to work full-time until their first child was born in 1983. After that, she worked two days a week throughout the rest of the marriage.

[44] She stated that she was the parent who took care of the children’s appointments and meetings with teachers. One of their children has a disability, which was why she did not return to the workforce on a full-time basis when the children were young.

[45] Ms. Pfaff currently works part-time as a self-employed dental hygienist. Her income, as stated in line 150 of her tax returns, is as follows:

2015: $46,842.00 2016: $49,447.00 2017: $43,963.00 2018: $45,000.00 (estimate)

[46] Ms. Pfaff stated that throughout the marriage, Mr. Pfaff was the primary income earner. She believes he earned at least $200,000.00 annually through most of their marriage. Ms. Pfaff notes in her May 16, 2019 affidavit that Mr. Pfaff’s 2014 tax assessment listed his income as $221,773.00.

[47] Prior to the hearing in December 2019, Ms. Pfaff came into possession of Mr. Pfaff’s more recent tax assessments. These tax assessments were all issued on November 12, 2019, after Ms. Pfaff had attempted to obtain Mr. Pfaff’s tax assessments from the Canada Revenue Agency (“CRA”). Mr. Pfaff’s income listed in his tax assessments is as follows:

2015: $99,998.00 2016: $99,998.00 2017: $99,999.00 2018: $100,372.00

[48] Ms. Pfaff also believes that Mr. Pfaff collects rental income from the property he owns in Toronto as well as for the commercial units he owns in Burlington. She has no information as to what that income is. She admits that she does not know if he claimed this income in his tax returns but suspects that he did not.

(a) What income should be attributable to Mr. Pfaff?

[49] Before determining whether Ms. Pfaff is entitled to spousal support, I must determine the appropriate income to attribute to Mr. Pfaff.

[50] The Federal Child Support Guidelines, SOR/97-175 permits the court to determine the proper income for ordering child support. These Guidelines may also be applied in determining income for the purpose of spousal support: Mason v. Mason, 2016 ONCA 725, at paras. 50-51.

[51] Section 16 of the Guidelines provides that the starting point for the determination of annual income is set out in line 150 of the spouse’s tax returns. The court may also rely on other factors to determine income. For example, s. 17 of the Guidelines provides that the court can consider the spouse’s income over the past three years to determine what would be the fairest determination of income. This section is commonly relied upon where the spouse’s income fluctuates. In addition, the court may impute income to the spouse pursuant to s. 19 of the Guidelines.

[52] I do not accept Ms. Pfaff’s submission that the appropriate income to attribute to Mr. Pfaff for the purpose of calculating spousal support is $221,733.00. There is no indication that Mr. Pfaff earns the $221,733.00 that he made in 2014 when he was 62 years of age. He is now 68 years old.

[53] Mr. Pfaff’s recent tax returns reflect a reduced income of approximately $100,000.00 annually for the past four years. Counsel submits that little weight should be placed on these assessments given that they were provided after counsel for Ms. Pfaff contacted the CRA to obtain Mr. Pfaff’s tax statements. I do not agree that little weight should be given to these assessments. Mr. Pfaff is now six years older and it does not appear that he operates either denture clinic. The fact that he is no longer operating the denture clinics likely resulted in the significant decrease in earnings. This does not appear to be a situation where Mr. Pfaff is intentionally under employed but rather a reflection of the fact that he retired.

[54] I am satisfied that the proper amount of income to use to determine the quantum of spousal support is $103,372.00. This is the amount indicated on Mr. Pfaff’s T1 Assessment for 2018. I also find that it is speculative to presume that Mr. Pfaff did not claim the rent from his properties on his tax returns as suggested by Ms. Pfaff. There is no evidence with respect to what rent Mr. Pfaff receives from the rental units. I am therefore unable to impute any additional income to Mr. Pfaff.

[55] I am also of the view that it is appropriate to attribute an income of $45,000.00 to Ms. Pfaff. This is the income she anticipated earning in 2018 and it is within the range of what she has earned in the past three years.

(b) Is Ms. Pfaff entitled to Spousal Support

[56] Section 15(4) and 15(6) of the Divorce Act, R.S.C., 1985, c. 3 (2nd Supp.) sets out the following factors and objectives related to spousal support:

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

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

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

(a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown; (b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage; (c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and (d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.

[57] The court is to consider all the statutory objectives set out in the Divorce Act. No single objective is paramount. Trial judges have a considerable discretion to determine the weight that should be placed on each factor in the particular circumstances of the case: Miglin v. Miglin, 2003 SCC 24, [2003] 1 S.C.R. 303, at para. 40; Bracklow v. Bracklow, [1999] 1 S.C.R. 420.

[58] There are three grounds for entitlement to spousal support, i) compensatory support which primarily relates the first two objectives of the Divorce Act; ii) non compensatory support, which primarily relates to the third and fourth objectives, and; iii) contractual support: Bracklow at paras. 15, 41,42, 44.

[59] Ms. Pfaff focused her claim for support on compensatory support. The Court of Appeal for Ontario explained the purpose of compensatory spousal support in Roseneck v. Gowling (2002), 62 O.R. (3d) 789 (C.A.), at para. 61:

Compensatory support is intended to compensate a spouse upon the breakdown of a marriage for contributions made to the marriage, such as sacrifices made for a spouse's career and loss of economic opportunity sustained as a consequence of raising children. This is particularly applicable where a property division is insufficient to achieve this result: see Moge, supra, at pp. 843-849 S.C.R. Where a spouse has the capacity to be self-sufficient but the spouse's ability to enjoy the same standard of living as during the marriage has been negatively impacted as a result of the marriage breakdown, compensatory support helps to ensure that the economic impact of this breakdown is equitably shared.

See also Bracklow at paras. 24, 39 & 42 BCCA

[60] It is my view that Ms. Pfaff is entitled to compensatory spousal support because of the career sacrifices she made during the marriage in order to raise the children and the losses she suffered as a result of the breakdown of the marriage that she would not have otherwise suffered.

[61] This was a marriage of 38 years. Ms. Pfaff met Mr. Pfaff when she was 17 years old and he was 21. She was married when she was 23. Before they married, she worked full-time as a dental hygienist.

[62] The marriage was fairly traditional. Ms. Pfaff was the primary caregiver to the children. While she continued to work as a dental hygienist during the marriage, this was on a part-time basis. Even when the children were older, she continued to work as a dental hygienist on a part-time basis. Ms. Pfaff’s career throughout the marriage took a back seat to Mr. Pfaff’s career. This enabled him to grow and develop very successful denture clinics that operated for some time out of two offices in Toronto and Burlington. The various assets the parties accumulated during their marriage demonstrate the success of Mr. Pfaff’s businesses.

[63] I also find that Ms. Pfaff has suffered economic hardship as a result of the breakdown of the marriage. Given the length of the marriage there is a presumptive claim to equal standards of living upon its dissolution: Moge v. Moge, [1992] 3 S.C.R. 813, at para. 84.

[64] Based on the parties’ tax assessments, Ms. Pfaff earns less than half of what Mr. Pfaff earned. She clearly has suffered economic hardship as a result of the breakdown of the marriage.

[65] Ms. Pfaff currently earns approximately $45,000.00 working part-time as a dental hygienist. Her living expenses are listed as $70,000.00 in her Financial Statement. This includes $1,818.98 per month on mortgage payments, which is $21,827.76 annually.

[66] It is difficult to contrast how Mr. Pfaff is living because he did not provide any financial disclosure in these proceedings. However, based on his tax assessments he has earned approximately $100,000.00 annually for the past four years.

[67] I recognize that Ms. Pfaff is to receive a significant sum of money in the form of an equalization payment. I do not find that this sum of money adequately addresses the objectives of spousal support set out in the Divorce Act. It does not adequately take into account the advantages provided to Mr. Pfaff during the marriage and the disadvantage Ms. Pfaff suffered as a result of the marriage and its breakdown: Chutter v. Chutter, 2008 BCCA 507, at paras. 80-82.

[68] In considering the issue of spousal support, I have also considered the importance of promoting self-sufficiency. The issue is not whether Ms. Pfaff can meet basic expenses, rather it relates to her ability to support a reasonable standard of living assessed in relation to the economic partnership the parties enjoyed when married and what she can reasonably anticipate after the separation: Fisher v. Fisher, 2008 ONCA 11, at para. 53. Ms. Pfaff is now 64 years old. Since separation, she has continued to work part-time to support herself and has made some efforts to be self-sufficient, however the standard of living that she is able to have based on her own income is significantly lower than the standard of living she had during the marriage.

[69] In all of the circumstances, I find that Ms. Pfaff is entitled to spousal support.

ISSUE #3: What Quantum of Spousal Support is Appropriate?

[70] The next issue to determine is the quantum of spousal support that should be payable. Based on the Spousal Support Advisory Guidelines, and based on Mr. Pfaff’s income of $103,372.00 and Ms. Pfaff’s income of $45,000.00, Ms. Pfaff would be entitled to monthly spousal support in the following amounts based on the Divorcemate calculations filed by Ms. Pfaff’s counsel dated December 9, 2019:

• $1,730.00 per month at the low range;
• $2,019.00 per month at the mid range; and
• $2,275.00 per month at the high range.

[71] Ms. Pfaff would also be entitled to spousal support for an indefinite period of time, subject to review or a variance given the duration in the marriage.

[72] In the alternative, Ms. Pfaff would be entitled to a lump sum payment of spousal support in the following amounts, subject to tax adjustments:

• $316,113.00 at the low range;
• $369,785.00 at the mid range; and
• $415,665.00 at the high range.

[73] For the reasons stated above in determining Ms. Pfaff’s entitlement to spousal support, I am satisfied that spousal support in the mid to high range is appropriate. Ms. Pfaff has a strong compensatory claim. This was a lengthy marriage where Ms. Pfaff gave up economic opportunities during the course of the marriage that assisted Mr. Pfaff’s successful career. While she has made some efforts to be self-sufficient, she has suffered economic hardship as a result of the breakdown of the marriage and is unable to achieve the same standard of living that she had during the marriage. I have also considered that Ms. Pfaff has significant assets and will receive a significant equalization payment such that she does not require support at the highest level. I have also considered Mr. Pfaff’s ability to pay based on his income as well as his various assets.

ISSUE #4: IS A LUMP SUM SPOUSAL SUPPORT PAYMENT APPROPRIATE?

[74] The next issue to be determined is whether it is appropriate to order that spousal support be paid as a lump sum payment as opposed to monthly support payments.

[75] A lump sum order for spousal support is not limited to “very unusual circumstances”. A trial judge has considerable discretion in determining whether to make a lump sum order for spousal support: Davis v. Crawford, 2011 ONCA 294, at para. 70. I am satisfied that in the circumstances of this case, a lump sum payment is appropriate for the following reasons.

[76] First, there is evidence that Mr. Pfaff has the ability to pay such an award. Mr. Pfaff owns considerable assets valued at over $4 million dollars. The award could be paid from the proceeds from the sale of one of the three properties that Ms. Pfaff has been permitted to sell or from the investment account that contains approximately $700,000.00. Therefore, a lump sum payment would not result in significant hardship to Mr. Pfaff, nor is this simply an attempt to redistribute the assets between the parties.

[77] Second, I have no confidence that Mr. Pfaff would pay monthly spousal support payments given that he has refused to participate in any way in the court proceedings. Mr. Pfaff has been repeatedly served with court materials in these proceedings and has never responded. I have no confidence that he would respond now. This is not a situation where Ms. Pfaff could ask Mr. Pfaff’s employer to garnish his wages to obtain her monthly spousal support payments. Mr. Pfaff is self-employed and likely deriving income from the rental units he owns.

[78] Finally, I am of the view that a clean break between the parties is appropriate. Mr. Pfaff does not want the marriage to end, while Ms. Pfaff does. Requiring monthly support payments maintains a link between the parties that does not appear to be in the best interests of either party.

[79] I am satisfied that a lump sum payment for spousal support should be made to Ms. Pfaff in the amount of $400,000.00. This is in the mid to high range according to the SSAG that was filed by Ms. Pfaff dated December 9, 2019. This amount of spousal support is appropriate because it reflects the duration of the marriage, the need for compensatory support, the assets that the parties have and the need to promote self-sufficiency.

ISSUE #5: SHOULD THE CANADIAN PENSION PLAN CREDITS BE DIVIDED?

[80] On the December 2019 motion, Ms. Pfaff also sought an order for the Canadian Pension Plan credits accumulated during the marriage to be divided equally. There is no need to make such an order because if Ms. Pfaff makes an application, the law requires that they be divided equally.

FINAL ORDER

[81] For the reasons above, it is ordered that:

1. The Respondent, Reinhard (Ron) Hermann Pfaff, shall make an equalization payment to the Applicant, Janet Mai Pfaff, in the amount of $504,175.95. If there are any mathematical errors in my calculation, Ms. Pfaff’s counsel is to notify the court within five days and provide the calculation that counsel says is correct.

2. The Respondent, Reinhard (Ron) Hermann Pfaff, is to pay the Applicant, Janet Mai Pfaff, a lump sum spousal support award in the amount of $400,000.00.

3. The lump sum spousal support and equalization payments are to first be paid out of any of the proceeds that are held in trust for the Respondent, Reinhard (Ron) Hermann Pfaff from the sale of the three properties that I ordered the Applicant, Janet Mai Pfaff, could sell. If there are insufficient funds to make the payments, the remainder of the payments is to be paid out of Reinhard (Ron) Hermann Pfaff’s half share of the TD Bank investment account MP 2612.

4. Once the equalization payment, the lump sum spousal support payment, and cost orders are paid to the Applicant, Janet Mai Pfaff, any funds that are still held in trust from the sale of the properties are to be released to the Respondent, Reinhard (Ron) Hermann Pfaff.

5. The Respondent’s approval as to form and content of this order is dispensed with.

6. Any amounts in default should bear post-judgment interest in accordance with s. 129 of the Courts of Justice Act, R.S.O., 1990, c. C. 43.

COSTS

[82] Ms. Pfaff seeks costs on a substantial indemnity basis in the amount of $44,784.61 however, this amount needs to be reduced by $13,904.58 because it includes a disbursement cost that I previously ordered Mr. Pfaff to pay. Therefore, the amount sought is $30,880.03. The costs sought include the appearances before me in July 2019 and December 2019. It includes $24,698.80 in legal fees, plus disbursements.

[83] In Mattina v. Mattina, 2018 ONCA 867, the Court of Appeal for Ontario confirmed that modern costs rules are designed to foster: i) partial indemnification of the cost of litigation for the successful litigants; ii) encouragement of settlement between parties; and iii) deterrence and sanctioning of inappropriate behaviour by litigants: para. 10.

[84] The overall objective in determining costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case: Boucher v. Public Accountants Council of Ontario, [2004] O.J. No. 2634 (C.A.), at para. 24.

[85] There are three issues in determining costs: entitlement, scale and quantum.

[86] With respect to entitlement, there is a presumption that the successful party will obtain costs. Ms. Pfaff was successful at trial. She was awarded an equalization payment and spousal support in a lump sum payment. She is therefore presumed to be entitled to costs.

[87] With respect to scale, there are limited circumstances in which the court will contemplate granting costs on a higher scale than partial indemnity. Such circumstances include where the other party has behaved unreasonably, acted in bad faith or has beat an offer to settle: Family Law Rules, rr. 24(4), 24(8), 8(14). In considering the scale of costs I have considered that Mr. Pfaff failed to participate in these proceedings, despite repeatedly been served with material. This created unnecessary work and expense for Ms. Pfaff, as she had to demonstrate the value of the property at issue.

[88] Finally, with respect to the quantum of costs, I have reviewed the Bill of Costs provided by Ms. Pfaff’s counsel. It sets out the lawyer’s hourly rate, who completed what task, and the time spent on each task. The rates, assignments and time spent on the tasks appear to be reasonable. A significant amount of time was spent on this file in gathering all the necessary evidence and compiling it in an affidavit format.

[89] In all of the circumstances, I am satisfied that it is appropriate to order Mr. Pfaff to pay costs to Ms. Pfaff in the amount of $29,000.00.

[90] The costs are to first be paid out of any of the proceeds that are held in trust for the Respondent, Reinhard (Ron) Hermann Pfaff from the sale of the three properties that I ordered that the Applicant, Janet Mai Pfaff, could sell. If there are insufficient funds to cover the cost order, the remainder of the costs is to be paid out of Reinhard (Ron) Hermann Pfaff’s half share of the TD Bank investment account MP 2612.

Dennison J.

Released: April 30, 2020