Court File and Parties

OSHAWA COURT FILE NO.: FC-16-116-00

DATE: 20200117

AMENDED DATE: 20200124

AMENDED AMENDED DATE: 20200206

ONTARIO

SUPERIOR COURT OF JUSTICE

FAMILY COURT

BETWEEN:

JOHN JOSEPH LEFEBRE Applicant

– and –

BARBARA LEFEBRE Respondent

COUNSEL: C. Baker, for the Applicant G. Joseph & K. Younie, for the Respondent

HEARD: November 29, 30, December 3, 4, 5, 6, 2018 and May 13, 14, 15, 16, 17, 2019

AMENDED DECISION

The text of the original decision has been corrected on January 24, 2020 and February 6, 2020 the description is attached.

L. E. FRYER, J

I. Introduction

[1] This trial that spanned eleven days over two trial sittings dealt with the resolution of the parties’ financial issues after 11 years of marriage. The length of this trial and the number of issues in dispute between the parties is emblematic of the conflict between them.

[2] The Applicant, John Joseph Lefebre (“John”) and the Respondent, Barbara Lefebre (“Barbie”) were both married before and each have children from their first relationship. Not long after they married, they sought to blend their two families. This process resulted in acrimonious and expensive litigation with John’s ex-wife, Doris McLean (“Doris”) in which Barbie was intimately involved. The litigation with Doris was brought to an end through a mediated settlement pursuant to which John paid Doris $500,000 in settlement of his past and future support obligations. While this settlement brought peace to the family at the time, it has been at the root of one of the more significant disputed issues in this case. Barbie asserts that this sum constitutes a date of marriage liability for John in the equalization of net family property calculation or alternatively that it should ground her claim for an unequal division of net family property.

[3] This mediated settlement was timely. John had started to work as a self-employed contractor for Reinsurance Group of America (“RGA”) which is a large, global insurance company. At the time of the mediation, John’s income had already increased significantly from the time of his separation with Doris and it continued to increase up to the time of his separation from Barbie. After the separation, John was advised by RGA that he could no longer continue in a contract position but would need to become an employee. The extent to which this change in the structure of John’s employment relationship with RGA has impacted his income is a further area of disagreement.

[4] When the parties met, Barbie was running her own business as a CPR trainer. Not long after the marriage, she transitioned out of this business to focus on supporting John in his work for RGA which included extensive international travel. She continued in this role for much of the marriage.

[5] Barbie has not worked since the separation as she claims to suffer from a host of medical and psychological issues. She has generated rental income from the cottage in South River, Ontario that was transferred to her by John as an advance on equalization, but she has not had any other independent source of income. Barbie is seeking lump sum spousal support from John.

[6] Barbie alleged that John was abusive to her during the marriage and he either caused or exacerbated some of her medical and/or psychological problems. Barbie had brought a tort claim against John, but this was withdrawn prior to trial. The costs associated with this claim prior to its withdrawal remain to be determined.

[7] Credibility was an important factor in this high conflict case. John and Barbie colluded to deceive Doris in the earlier litigation and mediation. Unsurprisingly, they each accused the other of deceit and dishonesty in this case – not without some foundation.

II. Background

[8] John is currently 63 years old and Barbie is now 55.

[9] John was married to Doris on June 3, 1988, they separated on February 20, 2000 and they divorced on November 29, 2002.

[10] John and Doris have two children: Lauren Lefebre (born May 24, 1990) and Taylor Lefebre (born February 17, 1992).

[11] Barbie has been married twice before. Barbie divorced her first husband Ron Laschowski on October 31, 1996. Barbie and Ron Laschowski have four children: Grant Laschowski (born January 17, 1988), Brock Laschowski (born December 25, 1989), Katelyn (Katie) Laschowski (born April 14, 1991), and Victoria Laschowski (born April 23, 1993). Victoria has been identified with some developmental delays and is still a dependent.

[12] Barbie re-married in 1998 and divorced her second husband in 2000.

[13] John and Barbie met in November 2003. John was living in Toronto. John had his children in his care roughly half of the time. Barbie was living in St. Catharines. She had her children in her care roughly half of the time.

[14] As their relationship progressed, John started to spend more time with Barbie at her home in St. Catharines when he did not have his children in his care. Eventually John purchased a condominium in Toronto so that he could honour the terms of his shared parenting agreement with Doris which required him to maintain a residence in Toronto.

[15] Just before the marriage, John purchased what later became the parties’ matrimonial home on Royal Henley Boulevard in St. Catharines (“the Royal Henley property”) on June 4, 2004. The parties moved in together around this time.

[16] John and Barbie were married on June 25, 2004. John was 48 years old and Barbie was 40 years old.

[17] After the marriage, John continued to live part of the time in Toronto to maintain the shared custody arrangement for his children. He would return to St. Catherine’s on weekends and commute in when his children were not in his care on weekdays

[18] Barbie’s children continued to live part of the time with her and part of the time with their father.

[19] John had been in practice as a medical doctor for some time in different capacities. He started consulting for the insurance industry part time around 2005. By 2006 John was phasing out his clinical practice in favour of working full time for RGA.

[20] The litigation between John and Doris that had started shortly after their separation, ramped up after John’s marriage to Barbie. In November 2007, after much litigation, John and Doris opted to attend closed mediation with an experienced mediator. They were successful in resolving the outstanding issues and as a result of the settlement, John paid Doris $200,000 in cash and $300,000 by RRSP rollover in settlement of all outstanding issues between them, including prospective spousal support.

[21] Lauren and Taylor had come to live with John and Barbie earlier that year and as part of the settlement with Doris, John assumed all financial obligations for the children. Taylor lived with John and Barbie for about one year thereafter and Lauren lived with them for about three years while she attended university.

[22] By the Spring of 2008 John was able to work from home and he no longer needed to commute to Toronto.

[23] For many years before the marriage, Barbie had her own business called Life Beat Niagara providing CPR training to various corporations and individuals. As John’s income continued to steadily increase, Barbie assumed the care of the children. Later Barbie took on a greater role assisting John in his work for RGA including accompanying him on his many business trips that took the couple away from home as much as 3 months of the year. Barbie eventually wound down the active part of her CPR training business.

[24] Later in the marriage, around 2013 Barbie told John that she no longer wished to join him on work travel due to her various health concerns. The parties had a brief separation around that same time.

[25] As part of their bid to improve their relationship, in 2014 the parties purchased a cottage property in South River for $165,000. Over the next year they invested significant funds to build a 6,000 square foot log cabin and various out-buildings.

[26] John and Barbie’s relationship did not improve, and they separated on July 26, 2015.

[27] The conflict commenced almost immediately. Each of them wanted “exclusive possession” of the Royal Henley property. Barbie also wanted to retain the cottage. Ultimately, John transferred his interest in the cottage to Barbie as an advance on the financial settlement. Barbie remained living in the Royal Henley property until it sold in September 2016. The proceeds of sale of approximately $413,000 remain in trust with the parties’ real estate lawyer.

[28] After the separation, John made some ad hoc payments to Barbie for financial support. On March 30, 2017 the parties consented to the temporary order of Hughes J. in which John is to pay Barbie $12,750 per month for spousal support. That order has remained in force.

[29] John unilaterally reduced the amount of the spousal support payments in September 2017 as he said that his income had been reduced due to a change in his contract with RGA. The arrears of spousal support that accrued over the next few months were ultimately garnished by the Family Responsibility Office from the joint net proceeds of sale of the matrimonial home.

[30] On July 24, 2018 John entered into an employment contract with RGA that took effect in 2019.

[31] John and Barbie were divorced on December 21, 2016.

III. Credibility

[32] In Baker-Warren v. Denault, 2009 NSSC 59, 277 N.S.R. (2d) 271 Forgeron J. summarizes the principles applicable to the assessment of credibility as follows starting at paragraph 18:

…. credibility assessment is not a science. It is not always possible to "articulate with precision the complex intermingling of impressions that emerge after watching and listening to witnesses and attempting to reconcile the various versions of events:" R. v. Gagnon 2006 SCC 17, para. 20. I further note that "assessing credibility is a difficult and delicate matter that does not always lend itself to precise and complete verbalization:" R. v. R.E.M. 2008 SCC 51, para. 49.

19. With these caveats in mind, the following are some of the factors which were balanced when the court assessed credibility:

a)What were the inconsistencies and weaknesses in the witness' evidence, which include internal inconsistencies, prior inconsistent statements, inconsistencies between the witness' testimony, and the documentary evidence, and the testimony of other witnesses: Re: Novak Estate, 2008 NSSC 283(S.C.);

b)Did the witness have an interest in the outcome or was he/she personally connected to either party;

c)Did the witness have a motive to deceive;

d)Did the witness have the ability to observe the factual matters about which he/she testified;

e) Did the witness have a sufficient power of recollection to provide the court with an accurate account;

f)Is the testimony in harmony with the preponderance of probabilities which a practical and informed person would find reasonable given the particular place and conditions: Faryna v. Chorney 1951 CanLII 252 (BC CA), [1952] 2 D.L.R. 354;

g)Was there an internal consistency and logical flow to the evidence;

h)Was the evidence provided in a candid and straight forward manner, or was the witness evasive, strategic, hesitant, or biased; and

i)Where appropriate, was the witness capable of making an admission against interest, or was the witness self-serving?

[33] In the case before me, concerns were raised with respect to each parties’ credibility from the outset.

[34] John readily admitted that he had sworn a false Financial Statement in the litigation with his ex-wife, Doris McLean. For example, in that prior litigation with Doris, John swore under oath that he owed Barbie $130,000. Similarly, at that time, John did not disclose to Doris that he was income splitting with Barbie and that he had arranged with RGA to pay a significant part of his income directly to Barbie. Then, when questioned by Barbie’s lawyer in the present litigation prior to trial, he insisted that he had in fact produced the contract between RGA and Barbie in the mediation with Doris. John later admitted that this latter statement was also false.

[35] Barbie strove to present herself as somewhat scattered, unsophisticated and controlled by John. That was not my impression of her based on the evidence and based on my observations of her. Barbie’s own description of her work running her own business and later supporting John in his work bely the suggestion that she is unsophisticated and without business savvy. As the evidence unfolded, it became apparent that Barbie is also a strong-willed person who is prepared to stand up for herself and to protect her own interests and those of her family. Barbie was an active participant in the arrangements to deceive Doris. During the trial she sought to control the narrative during questioning and became vocally aggrieved when I ruled against her on an evidentiary point.

[36] I found that both Barbie and John were particularly ready to craft a self-serving narrative unhinged from the truth.

[37] There is no principle of law that requires a trier of fact to believe or disbelieve a witness's testimony in its entirety. On the contrary, a trier may believe none, part or all of a witness's evidence, and may attach different weight to different parts of a witness's evidence: Baker-Warren citing R. v. D.R., 1996 CanLII 207 (SCC), [1996] 2 S.C.R. 291 at 93 and R. v. J.H., 2005 CanLII 253 (ON CA), 192 C.C.C. (3d) 480, supra.

[38] I cannot say in this case that I found one of the parties generally more credible than the other. I have had to assess the evidence on an issue by issue basis and will make reference to my findings with respect to credibility as necessary therein.

[39] The challenges with each party’s credibility meant that documentary evidence was that much more important. In this respect John was forthcoming with financial disclosure and, with some exceptions, honoured his obligations under the Family Law Rules, O. Reg. 114/99 by producing disclosure in a timely fashion. The same cannot be said for Barbie.

[40] In the case of Fielding v. Fielding, 2015 ONCA 901, 129 O.R. (3d) 65 the Court of Appeal at paragraph 64 reiterated that:

The most basic obligation in family law is the duty to disclose financial information. This requirement should be automatic. It is immediate and ongoing. Failure to abide by this fundamental principle impedes the progress of the action, causes delay and generally acts to the disadvantage of the opposite party. It also impacts the administration of justice. Unnecessary judicial time is spent and the final adjudication is stalled.

[41] Barbie may not be as good with document management as John, but she had experienced lawyers assisting her throughout. Despite numerous requests by John for disclosure and for answers to undertakings, Barbie still had significant disclosure outstanding at the time of the trial. Barbie tended to blame others for her failure to comply with her disclosure obligations including former counsel or John himself.

[42] I adopt the principle set out by Kiteley J. in Meade v. Meade, 2002 CanLII 2806 (ON SC), [2002] 31 R.F.L. (5th) 88 at para. 81:

Where disclosure is inadequate and inferences are to be drawn, they should be favourable to the spouse who is confronted with the challenge of making sense out of financial disclosure, and against the spouse whose records are so inadequate or whose response to the obligation to produce is so unhelpful that cumbersome calculations and intensive and costly investigations or examinations are necessary .

IV. Analysis

[43] The two primary issues to be determined are the division of net family property and spousal support, in that order.

1. Division of Net Family Property

[44] There were numerous disputed issues in relation to the determination of the equalization of net family property, including whether or not John should record a date of marriage liability – a negative deduction - for the settlement funds paid to Doris.

[45] The definition of “net family property” in the Family Law Act, R.S.O. 1990 c. F.3 (“FLA”) is as follows:

“net family property” means the value of all the property, except property described in subsection (2), that a spouse owns on the valuation date, after deducting,

(a) the spouse’s debts and other liabilities, and

(b) the value of property, other than a matrimonial home, that the spouse owned on the date of the marriage, after deducting the spouse’s debts and other liabilities, other than debts or liabilities related directly to the acquisition or significant improvement of a matrimonial home, calculated as of the date of the marriage;

[46] Under the FLA, s. 4(1) “property” is defined to mean:

…any interest, present or future, vested or contingent, in real or personal property and includes,

(a) property over which a spouse has, alone or in conjunction with another person, a power of appointment exercisable in favour of himself or herself,

(b) property disposed of by a spouse but over which the spouse has, alone or in conjunction with another person, a power to revoke the disposition or a power to consume or dispose of the property, and

(c) in the case of a spouse’s rights under a pension plan, the imputed value, for family law purposes, of the spouse’s interest in the plan, as determined in accordance with section 10.1, for the period beginning with the date of the marriage and ending on the valuation date;

[47] The FLA does not set out a similar definition for “debts or liabilities” except to say that they include contingent tax liabilities in relation to property: FLA, s. 4(1.1)

[48] The onus of proving a deduction or an exclusion is on the person claiming it: s. 4(3) of the FLA.

(a) Date of Marriage Deduction for John’s Debt to Doris

[49] Barbie’s position is that the sum of $500,000 should be reflected as a debt on date of marriage for John. Even though the mediated settlement from which this sum derives was not concluded until several years after her marriage to John, Barbie argues that the payments made were in satisfaction of an obligation that pre-dated and still existed on the date of marriage.

[50] It is important to understand the background leading up to the mediated settlement. The mediation between John and Doris was closed but both waived privilege and gave evidence with respect to the mediation at the trial.

[51] Shortly after John and Doris separated in February 2000, they engaged in litigation.

[52] On June 13, 2002 they entered into Interim Minutes of Settlement (“2002 Interim Minutes”) pursuant to which John was to pay Doris temporary spousal support of $2,300 per month and temporary child support of $2,905 per month. The support was based on John having a projected income of $260,000 and Doris having an income of $45,000. John was required to retroactively increase support if his income exceeded $260,000, such that his combined child and spousal support obligation would result in an equal division of net disposable income between him and Doris. The quantum of child and spousal support was subject to review and variation after September 1, 2002.

[53] John and Doris later executed a Partial Separation Agreement on November 8, 2002 (“Property Settlement”) in which they settled the issue of the division of net family property on a final basis including all of the usual releases.

[54] At the time of John and Barbie’s marriage in 2004, it appears that there was still no final agreement or court order between John and Doris with respect to parenting and support. John continued to pay temporary support pursuant to the 2002 Interim Minutes.

[55] John and Doris’ relationship grew increasingly strained following John’s marriage to Barbie. The litigation continued. John and Doris attended 7 case conferences between October 2004 and May 2005 alone. The case management judge commented on the acrimony and high conflict between them. The arrangements for the Lefebre children were in flux and continued to be the subject of litigation.

[56] Their case was set for trial by the time John and Doris decided to try mediation. They retained an experienced mediator and attended the mediation in November 2007. By this time the financial landscape had changed since the time of the 2002 Interim Minutes. John’s income had increased from an estimated $260,000 to $400,000 or more. Doris on the other hand had been struggling with alcohol abuse and was unemployed when the parties entered mediation. The evidence was unclear as to whether John had adjusted his support obligations in accordance with the terms of the 2002 Interim Minutes or otherwise.

[57] Although the mediation was closed, both John and Doris waived privilege.

[58] John was represented by Yolanta Lewis at the time of the mediation and she gave evidence at this trial. I found her to be frank and forthright. She too found John’s file with Doris one of the most acrimonious she had ever been involved in.

[59] On the day of the mediation, John and Doris spent the day negotiating with the assistance of the mediator. Barbie attended with John and was an active participant.

[60] John and Doris ultimately reached a resolution of their outstanding issues in principle. After much wordsmith wrangling, they executed a further Separation Agreement dated December 20, 2007 (“Mediated Agreement”) the relevant terms of which are as follows:

Paragraph 7.1: [John] shall pay to [Doris] by no later than 2:00 pm on Friday December 21, 2007, a lump sum payment of $200,000….

Paragraph 7.2: The lump sum payment referred to in at subparagraph 7.1 above is being made in full and final satisfaction of all of [Doris]’s claims in relation to spousal support, both retroactively and on a going forward basis, as well as her claims for retroactive child support and arrears of child support (both base guideline and pursuant to section seven of the Child Support Guidelines)

Paragraph 10.1: The parties acknowledge that as a result of the financial disclosure that has been made and the as a consequence of ongoing negotiations, these have resulted in an agreement that [John] shall pay to [Doris] an additional THREE HUNDRED THOUSAND DOLLARS ($300,000) in full and final satisfaction of her claims to an equalization of the parties’ net family properties pursuant to Part I of the Family Law Act. Once this payment has been made in full, [John] will have fully satisfied his obligations to [Doris] in relation to the said equalization payment, including interest thereon.

Paragraph 10.2: The $300,000 payment referred to at subparagraph 10.1 above shall be made via a tax free roll over of funds from [John]’s RRSP into [Doris]’s RRSP as soon as possible in cash or near cash.

[61] The Mediated Agreement also required Doris to transfer $40,000 in RESPs to John to pay for the children’s education. John was required to bear all of the children’s expenses after the date of the agreement without further contribution by Doris.

(i) Was the lump sum payment a reasonably foreseeable on the date of marriage?

[62] Barbie acknowledges that a spousal support obligation would not normally be thought of as a date of marriage debt. I have reproduced her position as set out in her written submissions:

… [John]’s entire obligation to Doris was quantified as a lump sum. This is very different than periodic, ongoing payments. This spousal support obligation was the result of the Husband’s first marriage, which obviously entirely pre-dates his relationship with [Barbie]….

[63] I accept that if John owed a lump sum support payment to Doris on the date of marriage that should be reflected as a date of marriage liability. However, although John had a support obligation, he did not owe Doris a lump sum on that date.

[64] The fact that the lump sum payment later made to Doris might have been made in satisfaction of obligations related to John’s first marriage does not in of itself re-characterize it as a liability that existed on the date of his marriage to Barbie: see Cosentino v. Cosentino, 2015 ONSC 271, 55 R.F.L. (7th) 117 at para. 38.

[65] Barbie relies generally upon the Court of Appeal’s decision in Greenglass v. Greenglass, 2010 ONCA 675, 276 O.A.C. 62 in support of her position. In that case the court held that:

26…,the difficulty in valuing assets and liabilities, particularly contingent liabilities, is often noted. What is clear, however, is that contingent liabilities are to be taken into account as long as they are reasonably foreseeable. See Leslie v. Leslie (1987), 1987 CanLII 8321 (ON SC), 9 R.F.L. (3d) 82 (Ont. H.C.); Nicol v. Nicol (1989), 1989 CanLII 8825 (ON SC), 21 R.F.L. (3d) 236 (Ont. H.C.); Crutchfield v. Crutchfield (1987), 1987 CanLII 8303 (ON SC), 10 R.F.L. (3d) 247 (Ont. H.C.); and Drysdale v. Drysdale (1994), 1994 CanLII 7453 (ON SC), 9 R.F.L. (4th) 20 (Ont. U.F.C.).

27 In determining the present value of a contingent liability, courts have looked at what was reasonably foreseeable on the valuation date: Johnston v. Johnston, 2000 CanLII 14718 [2000 CarswellOnt 944 (Ont. C.A.)], leave to appeal to S.C.C. refused [2000] S.C.C.A. No. 234 (S.C.C.). In Drysdale, at paras. 14-17, Beckett J. noted that where courts have found no or a very low risk that a guarantee would be called at the valuation date, the value of the contingent liability has been determined to be nil. However, in Drysdale it was found that there was a real possibility that the guarantee would be called upon, though the amount could not be predicted with any certainty. Finding it unrealistic to value the liability at either zero or the full amount of $200,000, Beckett J. valued the liability at 50 percent of the amount in question: see also Salamon v. Salamon, [1997] O.J. No. 852 (Ont. Gen. Div.). This approach was approved by this Court in Cade v. Rotstein (2004), 2004 CanLII 24269 (ON CA), 181 O.A.C. 226 (Ont. C.A.).

[66] It was reasonably foreseeable that John would continue to have a periodic support obligation to Doris. He and Doris had been married for 12 years and the children, Lauren and Taylor were 12 and 10 respectively at the time of separation and he had been the main breadwinner during the marriage among other things. I do not however find that it was reasonably foreseeable that on the date of marriage his marriage to Barbie, John would owe Doris a crystallized lump sum payment in the amount of $500,000 or otherwise.

[67] There was no evidence that a lump sum payment was in the minds of John or Doris on the date of John’s marriage to Barbie or even upon entering the mediation three years later. This issue was not identified by John and Doris from the list of possible issues in the mediator’s retainer agreement. The possibility of a lump sum appears to have been raised for the first time by the mediator himself.

[68] John’s lawyer, Yolanta Lewis, felt there were many benefits to a lump sum settlement. Ms. Lewis confirmed that John and Barbie were worried about John’s exposure to pay increased support given the increase in his income and the decrease in Doris’ income. John had outstanding costs orders against him. Ms. Lewis also felt that John had exposure to pay for part of the cost for Doris’ chartered business valuator and there were concerns about the impact of John’s failure to produce disclosure on his case should it not settle.

[69] Ms. Lewis’ advice to John was based on what he told her of his financial situation. She and Doris did not know about John’s arrangement with RGA to pay Barbie’s company, Life Beat Niagara, a portion of his income - at some point as much as 40%. This arrangement only came to an end in 2013 when Barbie started to worry that her ex-husband would pursue her for child support.

[70] Many of these conditions and circumstances that made a lump sum settlement appropriate in November 2007 arose after the date of John’s marriage to Barbie and/or were not reasonably foreseeable on the date of marriage.

[71] A lump sum payment to Doris was not in contemplation, let alone reasonably foreseeable, as a liability on the date of John’s marriage to Barbie. The fact that the lump sum payment made to Doris was in satisfaction of obligations connected to John’s marriage to Doris does not in and of itself make it a date of marriage liability.

(ii) Is the $300,000, referred to as a property settlement, a date of marriage liability for John?

[72] Barbie argues in the alternative that as the separation agreement between John and Doris clearly states that the $300,000 RRSP rollover was on account of further equalization of net family property and the equalization obligation crystallized upon John and Doris’ separation, this was a date of marriage liability.

[73] John maintained that the agreement with Doris was worded this way simply to facilitate an RRSP rollover to satisfy a global support settlement.

[74] This issue was the subject of a voir dire during the trial as Barbie argued that the Separation Agreement signed by John and Doris was not ambiguous on its face and therefore John should not be permitted to introduce extrinsic or parol evidence in relation to its interpretation. For oral reasons given during the trial, I permitted the evidence. In so doing, I referred, among other authorities, to the Court of Appeal’s decision in MacDougall v. MacDougall, 2005 CanLII 44676 (ON CA), 262 D.L.R. (4th) 120 at para. 22: “…the court should favour an interpretation that promotes the reasonable expectations of the parties and that provides a sensible result in the family law context.”

[75] Ms. Lewis confirmed that the primary issue for the mediation in 2007 was parenting but that child and spousal support were also on the table. She was clear that property division was not in issue as that had already been settled between John and Doris some years earlier. The suggestion to describe part of the settlement as property division originated with the mediator, as John did not have ready cash to pay the total being proposed.

[76] Doris confirmed in her evidence that she and John had fully settled the issue of the equalization of property in 2002 and that the only reason the agreement made reference to further equalization was so that the parties could take advantage of the tax-free rollover of the RRSP. While Doris clearly harboured animosity toward Barbie, she delivered her evidence in a matter of fact manner, without exaggeration, and I found her to be a credible witness.

[77] Barbie herself does not dispute the reason for the RRSP rollover but she argues that John cannot take advantage of the tax rules by calling what was otherwise a lump sum spousal support payment an equalization of property and then take the reverse position in this litigation[^1]. I note that neither John (and by extension Barbie) nor Doris were prejudiced by the arrangement.

[78] The objective in determining the equalization of net family property is to ascertain, based on all of the evidence, the value of each party’s assets and debts as they stood on the date of marriage and the date of separation.

[79] In Cosentino, Perkins J. confirmed at para 30 that:

The general intention of the net family property equalization scheme of the FLA is “that each [spouse] will share equally in the monetary product of the marriage”: Brinkos v. Brinkos, 1989 CanLII 4266 (ON CA), [1989] O.J. No. 1140 (Ont. C.A.), at para 3. The meaning of “property” in “net family property” must be interpreted in accordance with this general intent: Lowe, above, at paras 11-17.

I would suggest that the same is true in terms of how “debts and liabilities” are interpreted.

[80] In Zavarella v. Zavarella, 2013 ONCA 720, 117 O.R. (3d) 641, in addressing the apparent conflict between its findings with respect to Mrs. Zavarella’s debts under the FLA and the approach under the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 the Court of Appeal held at para. 41:

This approach to the valuation of the Debt is to be understood in the appropriate legislative context, namely, the equalization scheme in the FLA. How the Debt is treated, when being considered for the purposes of the BIA, is a different question, to be resolved by reference to the applicable BIA provisions.

[81] In a similar vein, in Korman v. Korman, 2015 ONCA 578 at para. 38 citing Nussbaum v. Nussbaum, (2004) 2004 CanLII 23086 (ON SC), 9 R.F.L. (6th) 455 (Ont. S.C.), the Court of Appeal held that putting title to a property in the name of another even with the specific intention to evade creditors does not mean that there is an implied intention to deprive oneself of beneficial ownership; the intention of the parties is still a question of fact to be determined on all of the evidence. See also Holtby v. Draper, 2017 ONCA 932.

[82] The objective of the equalization provisions in ss. 4 and 5 of the FLA is to ensure that spouses share in the net monetary product of the marriage. The evidence must be viewed primarily in that context and to hold one party to a contrary position taken vis a vis a third, unrelated party may not serve that legislative purpose. In my view, this will be particularly true when the spouses acted in concert and with full knowledge of the representations made to the third party.

[83] Throughout the marriage Barbie took an active role in the family’s financial decisions. She was an active participant in the mediation process with Doris and in the drafting of the settlement itself. She did not dispute that, despite the stated terms of the Mediated Agreement, the $300,000 RRSP rollover was not to satisfy an outstanding equalization payment owed to Doris but to satisfy other claims including spousal support. These terms were favourable to the family as John was not required to liquidate RRSPs and pay tax at the highest marginal rate nor to borrow additional funds to pay Doris.

[84] I do not find that this part of the settlement payment was made on account of equalization payment owed to Doris and it did not constitute a liability that existed on the date of John’s marriage to Barbie on that basis.

(iii) Is a periodic support obligation a “liability” for the purpose of the division of net family property?

[85] Barbie does not explicitly state that the present value of John’s periodic support obligation should be considered as a date of marriage liability. However, this is implicit in her position which hinges on the fact that John later discharged this obligation through a lump sum payment and for this reason I have analysed the issue below.

[86] The issue of whether the present value of a periodic support obligation can form a liability for the purposes of the division of net family property was canvassed thoroughly in Kilmer Estate v. Kilmer, [1999] O.J. No. 5532 (Ont. S.C.).

[87] In Kilmer Estate, Heeney J. noted from the outset the far-reaching and potentially negative effects of a finding that a child support obligation was a liability on the date of marriage stating that he had “no doubt that the draftspersons of the Family Law Act did not have this exercise in mind when the legislation was drafted”: Kilmer Estate at para. 94.

[88] Heeney J. held at para. 100:

In my opinion, to calculate a liability as of the date of marriage, the simple question to be asked is this: what does the debtor owe as of that date? This is certainly how our courts have traditionally approached debts and liabilities in calculating net family property. Consider, for example, a bank loan. To calculate the amount of that debt as of the date of marriage, we take the outstanding principal as of the last regular monthly payment prior to the marriage, and add interest on a daily basis to the date of marriage. Nothing is added for interest that accrues after the date of marriage, because the debtor does not owe that future interest yet.

[89] In order to be construed as a liability there must be some “corpus” or pool of debt that existed on the date of marriage. In the case of a periodic child support obligation, Heeney J. found that there was no such “corpus”: Kilmer Estate at para. 108. The court distinguished the case of a periodic support obligation from one where there is a fixed obligation that is to be paid in future instalments as was the case in Martin v. Martin, (1988) 1988 CanLII 8611 (ON SC), 17 R.F.L. (3d) 78 (Ont. H.C.J.) referred to at para. 109 of Kilmer Estate.

[90] Heeney J. summarized his findings at para. 111 as follows:

In the case at bar, though, there was no defined corpus of debt that existed on the date of marriage. All financial obligations imposed on the Husband by virtue of the separation agreement had been fully satisfied as at the date of his second marriage. If he were asked what he "owed" under that agreement as at the date of his second marriage, he would be quite entitled to say that he owed nothing. While obligations did arise on a monthly basis thereafter during the course of the second marriage, they were future obligations only. Since they did not arise out of a pool of identifiable debt that actually existed on the date of marriage, it is inappropriate to consider the present value of those payments as a debt or liability existing on the date of marriage.

[91] The same conclusion was reached in two subsequent cases.

[92] In Fox v. Fox, 2006 CarswellOnt 3808, [2007] W.D.F.L. 236 the wife argued that the husband’s child support obligation that he had paid during their marriage as a lump sum along with legal costs, should be reflected as a date of marriage liability for him. Karakatsanis J. as she then was held simply at para. 72:

While I accept that Walter had an ongoing obligation to pay child support at the time of marriage, I do not accept that it should be calculated as a liability with the effect of reducing his assets on marriage. It was no doubt an expense that Walter was obligated to pay; however, there are many other ongoing expenses that a spouse may be obligated to pay, such as rent or future income tax that are not deducted as liabilities against existing assets at the date of marriage.

[93] In McGoey v. McGoey, 2003 CarswellOnt 3994 (Ont. S.C.), Low J. also rejected “the contention that all child support payments to be made to the petitioner's first wife after the date of the marriage was a debt owing at the date of the marriage. Child support accrues from month to month”: at para. 13.

[94] Barbie suggests that these cases can be distinguished as they involved child support which is the right of the child. Although Heeney J. also objected to the characterization of the child as a “liability”, the focus of his analysis was whether a periodic obligation should be construed as a liability for the division of net family property: see para. 95. In all three decisions, the court found that future periodic payments do not constitute a date of marriage liability. There is nothing that suggests that this principle could not apply to a periodic spousal support obligation.

[95] There are two components to Heeney’ J.’s rejection of the periodic support obligation as a debt or liability. One is that that the periodic payments were a future obligation and therefore not caught by the less expansive definition of “debts and liabilities” in the FLA. In Greenglass however the Court of Appeal allowed a deduction for future legal fees on the basis that it was a future contingent liability that was reasonably foreseeable.

[96] However, Heeney J. also focused on the fact that the periodic obligation was not a pool of identifiable debt that existed on the date of marriage. In my view, this distinguishes the case of a periodic support obligation from the principle in Greenglass. This is illustrated by the fact that the cases referred to by the Court of Appeal in Greenglass involved a determined debt obligation and an inquiry into whether the debt should be discounted depending on the likelihood of re-payment. Many of the cases referred to involve a loan guarantee.

[97] Even though there is a “future looking” component to a periodic support obligation, it accrues or comes due periodically. If, for example, the support recipient died on the date in question the periodic obligation would cease. The situation would be different if the support recipient was owed a lump sum – even one that was to be paid in instalments as was the case in Martin, referred to in Kilmer Estate. In that situation, the lump sum would remain due to the recipient’s estate.

[98] Furthermore, the periodic support obligation is inherently tied to the income of the payor and in many cases to the income of the recipient.

[99] In Lowe v. Lowe, 2006 CanLII 804 (ON CA), [2006] 78 O.R. (3d) 760 (Ont. C.A.) the Court of Appeal was called upon to determine if a disability pension was income or property, the former being potentially subject to equalization and the latter not. Sharpe J.A. adopted the trial judge’s analysis as follows:

Future disability benefits to be paid following the valuation date fall outside the concept of net family property for many reasons. They are paid due to an on-going personal characteristic or condition of a spouse, namely that spouse’s state of health and impairment. Entitlement must be earned each day after the valuation date through the disability continuing. In that sense the rights are created on a very current basis, they are not created in advance of the period for which they relate. Entitlement has not gelled as of the valuation date; there is no accumulation of benefits as of that date. Disability benefits are not payable to a spouse due to the joint contributions of both spouses in one form or other to the marriage partnership. Disability benefits are intended to replace income on an on-going basis, as and when the need for such an income replacement arises; they are not intended to be a form of savings available regardless of what the future holds. They exist to support the person who cannot work, and that person’s dependents. They are of the same nature as the income that the person would earn, if not disabled. Just as we do not consider that a person owns on the valuation date his or her future employment or self-employment income not yet earned or the ability to earn that income, we should not consider that a person owns on the valuation date his or her future disability payments not yet earned or the inability to earn an income with the concomitant entitlement to receive the disability benefits. We should treat those future disability benefits just as we treat future employment insurance benefits, social assistance benefits, student loans, payments from health care insurance plans and the like. These are all potential income sources that are payable if certain conditions exist. All of these potential income sources following the valuation date will be relevant to the issue of support, just as the earned income of the parties will be relevant to the issue of support: at para. 17 [my emphasis added]

[100] In examining the case law relating to whether a future income stream constituted property to be equalized, McDermot J. held at para. 35 of Dunham v. Dunham, 2012 ONSC 2338 that in the case where income is derived from personal services:

….the property is incapable of valuation, as the value of future personal services, or the replacement thereof through disability benefits, is unknown due to the personal nature of these services. Moreover, the personal nature of the asset, if it is indeed an asset, makes it plain that to equalize such an asset does not advance the intention of the legislation, which is to equalize assets accumulated throughout the marriage; the right to this type of income is in futuro and based upon future work and services, and not an asset accumulated throughout the marriage.

[101] This same analysis could be extrapolated to the determination of whether the present value of a periodic child or spousal support obligation is a debt or liability for the purposes of the equalization of property calculation. The payment of child and spousal support is akin to a sharing of income between the support payor and the support recipient. It is, generally speaking, tied to the future work and services of the payor and thus does not gel or accumulate as of the date of marriage or as of the date of separation.

[102] In Kilmer Estate, which was decided 20 years ago, Heeney J. expressed concern about the far-reaching implications of finding that a periodic child support obligation could be construed as a liability under s. 4 of the FLA. The passage of time has only heightened these concerns.

[103] If a periodic support obligation was construed as a liability, it would require evidence – likely from an actuary or a similar expert – as to the present value of the obligation on the relevant date: see Virc v. Blair, 2016 ONSC 49 aff’d at 2017 ONCA 394. The court would be required to consider the reasonably foreseeable contingencies applicable to the obligation which could necessarily include answers to the following questions:

• What are the future income prospects of both parties?
• Has either party re-partnered or anticipate re-partnering?
• Does either party have any health issues?
• How long is the child expected to be a dependent?
• Is a change in the child’s residence foreseeable?
• What are a child’s prospects for post-secondary education?

The list goes on.

[104] Even with the assistance of the Child Support Guidelines and the Spousal Support Advisory Guidelines, the variety of factors that could impact the calculation would require the judge to make numerous discretionary assessments and translate those assessments into numerical discounts. These variables can only inject ambiguity and uncertainty into the division of net family property calculation.

[105] Issues with respect to equalization and support can already take an immense amount of time and resources for the parties before the court. If the analysis was opened up with respect to the support entitlement or obligation in relation to a previous spouse and/or child, it is not hard to imagine the commensurate increase in the length and breadth of litigation. Furthermore, these arguments could open the door to fresh litigation with the ex-spouse who may be called upon to give evidence.

[106] As the family court is faced with increasing numbers of self-represented litigants, many of whom are in their second relationship, the prospect for these parties, most of whom will not be able to afford expert evidence, and for judges required to undertake this kind of analysis, is daunting.

[107] Barbie herself acknowledges that a periodic support obligation is not typically treated as a liability on either date of marriage or date of separation. She suggests that the reason for advancing this claim now is because she was prejudiced by the payment to Doris that Barbie claims was unreasonably large. This argument is more appropriately made under the ambit of s. 5(6) of the FLA and this will be discussed further below.

[108] Even if I were to find that the present value of John’s support obligation was a debt on the date of marriage, I am unable to reasonably determine the present value of John’s future support obligations on the date marriage having regard to the lack of expert evidence and the multitude of contingencies.

[109] For all of these reasons I do not find that John has a date of marriage debt to Doris other than for arrears of support which are addressed below.

(iv) Support Due on Date of Marriage

[110] John acknowledges that there was a contingent debt owing to Doris for the adjusted child support on the date of marriage totaling $16,883.52. Barbie suggests that the number is $17,400. John provided calculations to back up his number and I accept it.

(b) Other Equalization Issues

(i) Household contents

a. Date of Separation

[111] John’s position in his Comparative Net Family Property Statement (“CNFP”) is that he retained household contents valued at $2,500 and Barbie retained the majority of the contents of both the cottage and the Royal Henley property valued at a total of $50,000.

[112] Barbie’s position is that John abandoned the Royal Henley property. He refused to deal with the contents and told her she could do what she liked with them. The auctioneer that she hired to value the contents of Royal Henley put the total value at $1,650. Barbie states that she sold the majority of the contents of Royal Henley for $900 and this is the number reflected on her CNFP.

[113] For reasons explored in greater detail below, I do not find that John abandoned the Royal Henley property, nor do I find that he did not expect to participate in the division of contents of this property. For example, one year after the separation, on August 23, 2016, Rowsell J. ordered on consent that: “the parties shall exchange complete lists of the contents of the home and cottage and what each party wants from the other with respect to the division of these contents.” John complied with this order; Barbie did not.

[114] In terms of the value of the household contents, John points to the fact that in her Financial Statement sworn March 10, 2016, Barbie swore that the contents were worth $100,000 (to be divided in specie) although in her next sworn Financial Statement sworn December 9, 2016 Barbie estimated the value of household contents at $900.

[115] In 2014, there was a flood in the basement of the Royal Henley home. The parties received $21,330.11 for just some of the contents that were damaged. John suggests that one can extrapolate from this figure to arrive at a value for the contents closer to Barbie’s first estimate.

[116] Just prior to the sale of the Royal Henley property, John was given the opportunity to attend at the home to pick up various items. Barbie’s good friend, Jim Wells, was present when John came to the home. Mr. Wells gave his evidence in an impartial and direct fashion and I prefer it to the evidence of either John or Barbie on this point. He stated that when John came to the home, he had full access to the contents, and it was open to him to take whatever he wished; he was not aware of John having any complaints about the process.

[117] Barbie admitted in pre-trial questioning that she could not remember what John had taken from the home and she did not prepare a list of contents at that time.

[118] Barbie received $900 from an auctioneer for certain contents that she proposes go on her side of the balance sheet. Aside from this amount, based on the evidence, I am unable to determine who may have retained a greater share of the household contents of the Royal Henley property nor what the value of those contents might be.

[119] For the purposes of the division of net family property, it shall be assumed that the contents of Royal Henley were divided equally between them but for the amount Barbie received from the auctioneer which will go on her side of the balance sheet.

[120] In the agreement wherein John transferred his interest in the cottage to Barbie, the contents of the cottage were explicitly excluded. John prepared a list of the contents of the cottage but uncharacteristically did not ascribe a value to any of the items. There is insufficient evidence for me to make any finding with respect to this issue.

[121] John owned an Audi A8 on the date of separation that he valued at $62,500. Barbie suggested that the value was $65,475. The evidence produced by John suggested that the car was worth less than even the amount that he claimed, and I therefore accept his number.

b. Date of Marriage

[122] John initially advanced a claim for a deduction for various furnishings that he owned on the date of marriage, but he abandoned that claim in his submissions as he acknowledged that he did not prove the claim.

[123] John sought a deduction for a 1999 Volvo S80 car valued at $22,617.32. The loan against the Volvo was for the same amount. John did not produce independent evidence of his Volvo on date of marriage other than his loan agreement. On a balance of probabilities, I find that the value of the car was equivalent to the value of the loan.

[124] Barbie’s position is that she had household contents valued at $55,000 on date of marriage. Barbie introduced little or no evidence in support of this claim and she did not discharge the burden of proof.

(ii) Sailboat – Ownership

[125] The issue with respect to this sailboat is not about value and but about who is the owner of this asset.

[126] According to Barbie she purchased the boat for John as part of a renewal of vows and he is the owner of the boat. John’s position is that they own it jointly. Neither party produced a bill of sale, registration or other documents to evidence ownership.

[127] John said they paid for the boat by cheque drawn on a joint chequing account, but he did not produce a copy of the cheque. John prepared an HST return reflecting this boat as being jointly owned but he did this unilaterally after the date of separation.

[128] In her evidence at trial Barbie initially denied that the boat was jointly owned but later stated she was not sure, and she might have been mixed up. In her Financial Statement sworn October 24, 2017 Barbie showed the boat as being jointly owned. She acknowledged in cross-examination that she did this as she thought she had an interest in the boat.

[129] I find that the sailboat is jointly owned. In the absence of evidence as to its market value on the date of separation, I have used John’s estimate of value ($9,800) as opposed to Barbie’s estimate of value ($15,000); the impact on the equalization of net family property is nil.

[130] The parties agree that on the date of separation there was HST due and payable in relation to the sailboat in the amount of $1,404.00. As John paid this sum after the date of separation, he is entitled to be reimbursed by Barbie for her share.

(iii) Barbie’s Diamond Ring & Earrings

[131] John stated that he purchased a wedding ring for Barbie after the date of marriage; he claimed that he purchased the ring at Costco for $28,250.

[132] Barbie did not produce any evidence with respect to the value of the ring. She admitted in questioning that they paid $28,000 for the ring but she made no reference to it in her Financial Statement or her CNFP. She said that she “gave it to a guy who was working for me for work that he did” but did not provide other details.

[133] John asserted that Barbie also had diamond earrings that he purchased for her from Costco for $3,955.00 ($3,500 plus HST).

[134] Both purchases were made under Barbie’s Costco membership. During pre-trial questioning Barbie acknowledged that she had earrings purchased at Costco and admitted the values put to her by John. She undertook to obtain a statement from Costco that would provide evidence of both of these purchases and might assist with the value, but she did not fulfill that undertaking. At trial, she vehemently denied purchasing earrings and claimed she got mixed up during questioning.

[135] I have drawn an adverse inference from Barbie’s failure to produce evidence with respect to the value of her ring as well as the existence of her earrings, the values of which she undertook to produce, and which would have been easy for her to obtain from Costco. In the absence of such evidence, I accept John’s evidence with respect to the value of both.

(iv) Value of Barbie’s Gluskin Sheff Account (Life Beat Niagara)

[136] Barbie produced a statement dated June 30, 2015 for this account. John who also had investments with this firm had provided statements for July 31, 2015 as being closer to the date of separation. He suggested that Barbie’s investments had increased between June 30, 2015 and the date of separation which was July 26, 2015.

[137] Barbie was asked by John several times to produce an account statement for this account for the month ending July 31, 2015 and she undertook in questioning to provide the document. She never produced this document. At trial, she stated that she thought John “had everything”.

[138] John initially estimated the value of Barbie’s account at $132,111 but suggested a compromise figure of $131,000. Barbie did not produce the July 31 statement for this account and instead relied upon the balance in her account as of June 30, 2015 being $130,077.

[139] I draw an adverse inference from Barbie’s failure to produce the necessary disclosure and, I accept John’s compromise position with respect to the balance in this account.

(v) Value of Dr. J. Holdings Inc. on Date of Separation

[140] Dr. J. Holdings Inc. is the corporate vehicle through which John funneled his income from RGA. The corporation in turn paid John. There was no evidence to support this company having a further function.

[141] 2113990 Ontario Inc. (Life Beat Niagara) was the corporation through which Barbie had provided CPR training services.

[142] Neither party obtained a valuation of their corporations by a chartered business valuator. In their CNFP, they both ignored the corporate structure and instead referred to the various assets and debts as being individually held. This was a practical choice given the relatively simple nature of both of the corporations.

[143] However, despite this seeming agreement, Barbie argued that $359,738 in retained earnings should be included as an asset on John’s side of the balance sheet in the absence of an independent expert valuation. Barbie’s position is an obvious double counting and Gordon Stewart, who prepared the books for both parties, confirmed that if the corporation’s assets were already included in the calculation it would be a duplication to also include the retained earnings which is simply the delta between assets and liabilities. I am not prepared to assign a further value to John’s corporation.

[144] In submissions, John did not seek to attribute a value to Life Beat Niagara for the equalization of property calculation.

(vi) Account Receivable due to Dr. J. Holdings on Date of Marriage and Date of Separation

a. Date of Marriage

[145] John claimed a deduction on the date of marriage for an outstanding invoice due to Dr. J. Holdings from MDS Executive Health and Revios totaling $25,291.71. This amount represents his gross revenue without deduction of expenses or adjustment for taxes.

[146] This court in Cosentino held that a real estate commission, earned prior to separation but paid after separation, constituted property within the definition of the FLA. These unpaid invoices representing payment due to John for work done are analogous to the real estate commission referred to in Cosentino.

[147] As confirmed in Cosentino income tax associated with the payment needs to be deducted. John was evasive when cross-examined as to whether expenses and income tax should be deducted from the receivable. Unlike his more meticulous approach to issues favourable to him, John claimed that he was unable to come up with evidence of his expenses and they would be minimal in any event. Incredibly, John also claimed not to understand that tax might need to be deducted from the amount. John acknowledged in cross-examination that he would have been at the top marginal rate of income tax.

[148] John bears the burden of proving his date of marriage assets. This includes an obligation to fairly value the asset: see Virc v. Blair, 2017 ONCA 394 at para. 59. There was ample evidence to suggest that John was consistently aggressive in writing off expenses against income to reduce tax payable. Taking this into consideration, along with the income tax rate of 24% that parties agreed would apply to John’s corporate assets, I have reduced this date of marriage deduction by 50% to: $12,645.86.

b. Date of Separation

[149] Barbie argued that if John is entitled to a date of marriage deduction for unpaid invoices, he must also reflect a similar date of separation asset. She stated that John was owed $30,000 from RGA on the date of separation.

[150] John’s position was that as Barbie led no evidence it should be removed from the calculation. Again, he bears the onus of proving both his assets and debts and he adduced no evidence to address this issue once it was raised by Barbie.

[151] As of the date of separation, John was operating under the Consulting Agreement executed with RGA on February 7, 2013. Paragraph 5.1 of the contract provided that John would be paid $12,875 plus HST weekly. Paragraph 5.3 provides that John will invoice the company bi-weekly in arrears and that he would be reimbursed no more than ten days later.

[152] The bank statement for Dr. J. Holdings Inc. for the period July 2, 2015 to September 16, 2015 shows payments being made every two weeks of just under $30,000. There were several deposits in the amount of $29,971.00, one of which was made on July 22, 2015. On a balance of probabilities, I find that this represents payment of John’s bi-weekly invoice for the preceding two-week period. The next payment of the same amount was paid on August 5, 2015. As the contract provides that the company has 10 days within which to reimburse John this would mean that the whole payment made on August 5, 2015 had been earned and was due to John as of the date of separation.

[153] Although John did not address this issue at all, I have applied the same discount for expenses and income tax as was used for the date of marriage deduction and for the same reasons.

[154] A net asset of $14,985.50 shall be reflected on date of separation on John’s side of the balance sheet

(vii) John’s Aventura Visa points – 1,060,310 – Value

[155] John had 1,060,310 in Aventura Visa loyalty points on date of separation. He puts the value of the points at $10,603 or the cash value of $1 per $100 points. He was not challenged on this evidence.

[156] Barbie puts the value of the points at $40,000 based on value of flights that could be booked. She did not provide further details.

[157] I prefer John’s evidence as being more representative of the value.

(viii) Horses & Tack

[158] Two horses were purchased during the marriage for Barbie to ride. In her CNFP Barbie accepts John’s position that the horses were worth $7,500 on date of separation but asserts that they were jointly owned. John’s evidence is that the horses were purchased for Barbie’s benefit and “registered” to Barbie.

[159] The horses were stabled at the cottage. After the parties separated Barbie gave away or sold the horses without first seeking John’s consent which suggests that she had control over them. Barbie did not adduce any evidence with respect to who ended up with the horses or if any money changed hands for them.

[160] On a balance of probabilities, I find that Barbie is the owner of the horses.

[161] John claims that Barbie also had various riding equipment, including three saddles. He put the value at $3,750 but did not adduce any evidence in support of this amount. In questioning, Barbie undertook to produce a statement regarding the value of the riding equipment. At the time of trial, she had not produced any disclosure in relation to the value of this equipment but stated in her evidence that all the equipment was used and of minimal value. While it was Barbie’s obligation to produce some evidence to assist the court, I accept her description of the equipment. I find it more reasonable to take the mid-point between each party’s position on this issue.

(ix) Canada Stays Credit

[162] Barbie used the Canada Stays website to market and facilitate rentals of the cottage. She paid for advertising and admitted in questioning prior to trial, that she had this credit on the date of separation and that she used it after this date. However, her position is that as there are no refunds available, it is not an asset.

[163] I find that the credit of $1,073.50 falls within the broad definition of property under the FLA.

(x) Dr. J. Holdings HST Reassessment for 2014

[164] John seeks a deduction for the amount of HST owing for 2014 in the amount of $14,142.91 as set out in the Notice of (Re)Assessment from Canada Revenue Agency dated September 5, 2015. It was not clear if Barbie agreed to this deduction; she did not include it in her CNFP but did not address this issue in her written submissions.

[165] The Notice of (Re)Assessment states that John was to have made four instalment payments of $3,368.03 in 2014 that he failed to make. The total of $14,142.91 included interest had accrued to September 4, 2015. There was nothing to suggest that this amount was levied by Canada Revenue Agency (“CRA”) due to disallowing a claim or for some other reason that might not have been foreseeable on the date of separation. The evidence supported the fact that this amount was simply unpaid by John and therefore was a debt on the date of separation.

(xi) John’s Personal Income Tax Debt on Date of Separation

[166] John argued that a larger proportion of his overall income tax debt for 2015 should be reflected as owing on the date of separation as he had withdrawn the majority of the funds from Dr. J. Holdings Inc. prior to the date of separation in order to fund the building of the cottage and he used his line of credit to support himself thereafter. He asserts that relative to when the funds were brought into income, an associated tax liability of $46,336.50 existed on date of separation over and above the instalment payments made.

[167] Barbie argues that his income tax liability should be treated the same way as various other liabilities with the total annual amount being simply prorated to the date of separation. She also suggests that the liability over and above the instalment payments is not due until the following year.

[168] John acknowledged that on a prorated basis, as of the date of separation, he owed approximately $57,375 and he had made instalment payments of $43,000 leaving a balance due on this formula of just over $13,000. Barbie asserts that the number is $13,693.65.

[169] Prorating is often a good shorthand measure to determine income tax liability when a parties’ income remains relatively steady throughout the year. However, the court must make a realistic determination of the value of the debt in order to properly calculate each party’s net family property: see Zavarella at para. 39. John’s position is a more accurate calculation of this liability as of the date of separation.

(xii) Alberta LTD investment – Tax Liability re Forced Redemption

[170] John claims a deduction for a contingent debt of $50,350.53 related to his RRSP investment in 554308 Alberta LTD held in his MD Management RRSP that was determined by CRA to be “offside”. The CRA review related to the income tax years 2011 - 2014.

[171] John’s deduction claim was comprised of the following:

1. Taxes associated with the forced redemption of $88,622.54 in RRSPs in 2016: $39,880.14
2. Payment made to CRA by Alberta LTD-A deducted from his investment: $4,005.01
3. Increase in the value of his investment between DOS and February 28, 2017 that was forfeited to CRA to make up the shortfall from the 2011 and 2012 tax reassessments: $6,465.38

[172] Barbie’s position was simply that there was no evidence that this debt was reasonably foreseeable on the date of separation.

[173] John bears the burden of establishing that this was a liability on the date of separation.

[174] CRA had notified John and other investors in 2013 that they were taking issue with the investment. According to the letter from CRA dated November 10, 2016, upon being notified in 2013 that the RRSP investment was prohibited, the investors had filed an election which allowed them to benefit from certain transitional provisions, namely that the investments “will not be subject to the 100% advantage tax, but instead will be included in the annuitant’s regular income” while they continued to fight the ruling.

[175] I find that the potential amount of the debt was also known on the date of separation. By electing to take advantage of the transitional benefits, John and the other investors knew that if they were unsuccessful, they would be required to bring the total of their RRSP investment into income, but they would be spared the 100% advantage tax.

[176] John admitted that he and the other investors, along with Deloitte, were fighting the CRA ruling at the time of separation and they were still hoping to win. It was not until later in 2016 that the issue was resolved in favour of CRA and he was forced to redeem the prohibited investment. When asked what discount might be applied to this debt to reflect the uncertainty of the CRA position on the date of separation, John was evasive and purported not to understand the question.

[177] As of the date of separation, I find it was equally likely as unlikely that John would be forced to redeem the prohibited RRSP investment and therefore a discount rate of 50% shall be applied.

[178] The largest part of John’s claim is the tax that was withheld upon the redemption according to his 2016 T4RSP slip. As John’s income for 2015 was substantially similar to his income in 2016, I find that the amount withheld upon the redemption is sufficiently representative of that part of the liability that would have existed on the date of separation subject to discounting for contingencies.

[179] The other components of the claim, being the amounts forfeited, were not clearly made out based on the evidence and John did not discharge the burden of proof in this respect. John also admitted in cross-examination that $6,000 of the amount paid to CRA was actually fees and fines that had accrued after the date of separation. Even if John had proven these amounts, an offset of at least $6,000 should likely be applied.

[180] The total amount of the contingent tax liability for the Alberta LTD investment is $19,940.07, being 50% of the income tax liability associated with the prohibited investment as of the date of separation.

(xiii) Disposition Costs on John’s MD Management RRSP

[181] This issue is directly related to the foregoing one.

[182] The reference to liabilities in the definition of “net family property” includes “any applicable contingent tax liabilities in respect of the property”: FLA s. 4(1.1).

[183] The parties agreed upon the rate to be applied to John’s registered funds for disposition costs or contingent tax of 27.5%. However, based on my finding above, a higher rate of disposition costs was associated with the funds that John was forced to cash in as he incurred the liability at a time when his income tax rate was higher than it was estimated to be on retirement.

[184] John calculated the disposition costs on his MD Management fund by deducting the tax withheld on the total redemption on his RRSP ($50,350.53) from the balance in the RRSP account itself. It was not clear why he did this as opposed to adjusting the amount of disposition costs, although the financial result was favourable to him.

[185] In order to avoid double counting, I have deducted the RRSPs that John was forced to cash in, discounted by 50% ($44,311.27) to which the higher income contingent tax rate applied. The lower agreed upon tax rate of 27.5% is applied to the balance of John’s MD Management RRSPs of $610,290.67. The total contingent taxes on the RRSP is therefore $167,829.93.

(xiv) Dr. J. Holdings – Tax Reassessment

[186] John claims a date of separation liability of $2,672.67 in relation to a tax re-assessment issued by CRA on May 8, 2017, in relation to the corporation year ending July 31, 2014, less a refund issued March 28, 2018 in relation to the same year.

[187] The reassessment was based on a number of different factors. John did not provide evidence as to why debt was reasonably foreseeable on the date of separation and he has not satisfied the evidentiary burden for this liability.

(xv) Barbie’s Claim that Parties each owe her Children $100,000

[188] This issue does not affect the equalization of net family property but was included in Barbie’s CNFP. Barbie asserts that she and John each owe $100,000 to her children.

[189] Barbie introduced no documentary evidence and little or no other evidence in support of this claim. Barbie’s children were not parties to the proceeding and did not give evidence with respect to this issue.

[190] John actually provided more clarity than Barbie. He suggested that early on in the marriage he was incurring high expenses related to his children Lauren and Taylor including private school fees. He and Barbie had discussed making some kind of gift to Barbie’s children so that all the children were treated equally. However, nothing was formalized and, in any event, later in the marriage, they spent more money on Barbie’s children including helping them pay back their OSAP loans.

[191] In a Financial Statement sworn on November 6, 2007 for the mediation with Doris, John claimed that he owed Barbie a personal loan of $130,000. He admitted in the trial before me that this was a lie. Barbie seemed conflicted as to what her position should be with respect to this issue. She suggested that she did not know that John had made reference to the debt in that sworn Financial Statement. She then said that she was aware that John had lied on this Financial Statement. Later she said that in fact John did owe her that and more. The evidence did not support the existence of this debt and, in any event, Barbie is not advancing a claim for funds owed to her by John.

[192] I do not find that there was a debt owed to Barbie’s children by the parties on the date of separation or otherwise.

(xvi) Capital Gains Tax and Property Tax re Cottage

[193] Barbie seeks a deduction on the date of separation for accrued capital gains tax on the cottage in the amount of $77,329.17.

[194] It was not clear why Barbie was advancing this claim. As the cottage was jointly owned on the date of separation, this liability should be properly reflected as a joint obligation and would have no impact on equalization in this case. Furthermore, the agreement pursuant to which John transferred his interest in the cottage to Barbie specifies that she is assuming the capital gains tax liability.

[195] Even if I found that the capital gains tax affected the financial resolution between the parties, Barbie did not produce calculations to substantiate her number. The parties’ accountant Gordon Stewart was asked about this and queried whether there would be any capital gains tax as of the date of separation as any gain would be reduced by the large amounts spent on building the cottage.

[196] Barbie also asserted that there were cottage property taxes owing by the parties jointly on date of separation in the amount of $5,811.04. She did not introduce evidence to substantiate this. Much as with the capital gains tax liability, this would not impact equalization.

(xvii) John’s Date of Marriage Deduction for Deposit on Toronto Condominium

[197] John’s corporation, Dr. J. Holdings Inc. purchased a condominium in Toronto that closed on September 9, 2004. John is seeking a date of marriage deduction for the deposit of $6,000 that he says was paid on June 11, 2004.

[198] Barbie does not dispute that John’s corporation had made a deposit to the condominium prior to the date of marriage and Barbie did not provide an explanation either in her trial evidence or in her submissions why this deduction should be disallowed.

[199] The evidence supports John’s claim for this deduction.

(xviii) Barbie’s Date of Marriage Deduction for Proceeds of Springbank Property

[200] Barbie seeks a date of marriage deduction for the sum of $77,329 in proceeds of sale that she says she had on the date of marriage.

[201] Barbie had transferred the Springbank property to her parents several years before she and John married. She was very evasive in her evidence at trial as to why she would do this. Barbie made an assignment in bankruptcy in 2002. Barbie acknowledged that although John’s lawyer had asked for documents relating to her bankruptcy, she had not produced them.

[202] Barbie’s parents sold the Springbank property just prior to John and Barbie’s marriage. Barbie produced the front of a bank draft made payable to her in her maiden name for $77,329.17 dated June 8, 2004. Barbie produced no other documentation to demonstrate where the money went between that time and the date of marriage two weeks later.

[203] In Jacobs v. Jacobs, 2011 ONSC 2699, Nolan J. provides a good summary of the burden of proof with respect to deductions:

43 The nature of the evidence required when one party is claiming a deduction or an exclusion is significant. The onus of proof is on the person claiming the deduction or the exclusion as set out in section 4(3) of the Family Law Act, RSO 1990, c F-3. The rules regarding the evidence are further elaborated by often-cited case law. In Traversy v. Glover (2006), 2006 CanLII 24130 (ON SC), 30 R.F.L. (6th) 372 (Ont. S.C.J.) the court held that the onus of proof in a marriage deduction request includes “proof that the property existed at the date of marriage and of its value. The court may estimate value, if ownership is clearly established, and only limited evidence of value is possible” [Emphasis added]. While attempts to obtain proof of the value may be considered by the court, the court in Traversy seemed to require proof of such attempts to get the necessary evidence rather than just relying on the claimant’s testimony and memory.

45 Similarly in Bilas v. Bilas (1994), 1994 CanLII 18163 (ON SC), 3 R.F.L. (4th) 354 (Ont. Gen. Div.) the court attributed no value to a cottage which the husband brought into the marriage and sold during the marriage since he failed to offer any reliable evidence of his financial contentions regarding the value of the cottage. The court determined that the husband understood the importance of obtaining documentary evidence to support a claim, however, he made no effort to do so.

46 This approach was followed in Belgiorgio v. Belgiorgio (2000), 2000 CanLII 22733 (ON SC), 10 R.F.L. (5th) 239 (Ont. S.C.J.), affm’d (2001), 2001 CanLII 32756 (ON CA), 23 R.F.L. (5th) 74 (Ont. C.A.) where, similarly, a husband failed to obtain documentary proof to substantiate his claim.

[204] I found Barbie’s evidence (or lack thereof) strikingly vague and cavalier given the apparent importance of the claim and in contrast to other issues for which she seemed to have much better recall.

[205] Barbie devoted very little time to this issue in her evidence in chief. She was unable to say where the money was on the date of marriage even without documentary backup. She did not produce the back of the bank draft that might have shown where the funds had been deposited. She stated that she thought she might have given the money to John for investments or expenses but, she was not sure. She said that she and John did not really talk about it.

[206] In an earlier Financial Statement sworn March 10, 2016, Barbie did not mention this sum as a date of marriage asset at all.

[207] Barbie did not describe her efforts to find documentation to support her contention that this large sum of money existed on the date of marriage and went into the family pot. Barbie did not suggest that there were outstanding requests for disclosure from John that might have helped prove her point that she had given the money to him. Barbie did not call either of her parents to give evidence to confirm that Barbie did not return the money to them.

[208] John recalled that Barbie did get some money but thought she had paid off debts with it.

[209] The burden of proof lies with Barbie and she has not met the burden of proving that she had this sum of money on the date of marriage.

(xix) John’s Date of Marriage Bank Accounts

a. National Bank Account # 09-171-28

[210] John claims a deduction on date of marriage for the balance in Dr. J. Holdings Inc. account at the National Bank in the amount of $5,595.38. Barbie says that the amount is $86.31.

[211] On June 22, 2004 John had $8,595.36 in this account. On June 21, 2004 he wrote a cheque payable to himself personally in the amount of $5,500 that was cashed on June 23, 2004 – two days before the wedding. John suggested that the balance of $8,595.36 was already net of this cheque but a review of the bank statement contradicts this. On June 24, 2004 John wrote a further cheque for $3,000 to pay his Visa #...9011 which he acknowledges should be deducted.

[212] The balance in this account on the date of marriage was therefore $95.36.

b. CIBC Account # 75-03814

[213] John’s position is that he had $2,734.57 in this account on the date of marriage. Barbie claims that the amount is $1,875.32. Barbie did not explain how she arrived at her number. The account statement substantiates John’s claim for this deduction.

(xx) Property Tax Deposit Account for Royal Henley on Date of Marriage

[214] John seeks a deduction for the balance in his property tax account for the Royal Henley property. Barbie does not disagree with his number but suggests that it was a joint asset. As John was the sole owner of the property on the date of marriage, this shall be reflected as his date of marriage deduction.

(xxi) John’s Income Tax Refund on Date of Marriage

[215] John seeks a deduction for an income tax refund that he says was due to Dr. J. Holdings Inc. on the date of marriage in the amount of $2,101.14. Barbie does not make reference to this claim in her CNFP.

[216] The year end for Dr. J. Holdings Inc. is July 31. John produced a corporate Notice of Assessment indicating that he was owed a tax refund of $2,101.014 for the tax year ended July 31, 2014.

[217] As the parties married one month prior to the year end, I have pro-rated the amount of the refund: $2,101.14 x 11/12 = $1,926.05.

(xxii) Barbie’s Personal Injury Settlement Proceeds on Date of Marriage

[218] Barbie stated that she was in a car accident in 1998, six years prior to marrying John. She says that she received $32,000 after the date of marriage. Barbie had taken the position during much of the litigation that the proceeds should be excluded pursuant to s. 4(2) of the FLA however she modified her position to seek a date of marriage deduction at trial.

[219] Barbie did not produce any evidence in support of her claim until very late in the trial when she was being re-examined by her lawyer. She produced for the first time an agreement dated July 5, 2006 wherein $49,655 was to be paid for her benefit in full satisfaction of “all claims, interest, costs, disbursements and GST”. After deduction of lawyer’s fees, Barbie received $31,537.50.

[220] John’s position is that at best the funds paid to Barbie could be excluded property but that as she is unable to trace the proceeds to an existing asset, it has no impact on equalization. He also takes issue with the fact that the settlement does not sufficiently break down the allocation of the claims and that part of the settlement could have been attributed to the post-marriage period.

[221] In Belgiorgio v. Belgiorgio, 2000 CanLII 22733 (ON SC), 10 R.F.L. (5th) 239 (Ont. S. C.) the court stated:

8 Counsel for Mr. Belgiorgio cites the cases of Mittler v. Mittler (1988), 1988 CanLII 8645 (ON SC), 17 R.F.L. (3d) 113 (Ont. H.C.), and Yee v. Yee (1990), 1990 CanLII 12298 (ON CA), 25 R.F.L. (3d) 366 (Ont. C.A.), as authority for the submission that a cause of action which arises prior to marriage may be considered “property” under s. 4(1) of the Family Law Act. I agree with this submission: a cause of action arising before marriage may be considered a form of “property” under s. 4(1), and therefore may be deductible from a spouse’s net family property. However, s. 4(3) of the Family Law Act clearly places the burden of proving such a deduction, as well as its value, on the claiming party.

[222] It is possible that settlement funds received after the date of marriage could be construed as a date of marriage asset or as excluded property depending on the nature of the claim from which the settlement arose. Barbie’s late delivery of this documentation prevented John and his lawyer from asking for further disclosure to determine what part of the settlement could have been attributed to the post-marriage period.

[223] Barbie was no longer asserting that the settlement funds constituted excluded property and she led no clear evidence of tracing. However, I find that Barbie has discharged the burden of demonstrating that at least part of the settlement constitutes a date of marriage asset. The wording of the settlement does not assist but the settlement is relatively modest and was made six years after the accident. I find that it is appropriate to discount the amount claimed by 25% to reflect the possibility that some of the settlement could have been attributed to the post-marriage period of two years.

[224] Barbie shall have a date of marriage deduction of $23,653.13.

(xxiii) Contingent Tax applicable to Dr. J. Holdings on Date of Marriage

[225] The parties agreed to a tax rate of 24% applicable to funds held by Dr. J. Holdings Inc. with Gluskin Sheff.

[226] John had two accounts with Gluskin Sheff through Dr. J. Holdings. One account had a balance of $141,459.78 on date of marriage and the other had a balance of $74,773.54. John acknowledged that there should be a date of marriage deduction for disposition costs with respect to the first fund but not the second “because it was not a registered fund”. This position suggested that the first of the two funds was an RRSP but not the second. However, the documents produced for these investments make no reference to either of the funds being registered. Under cross-examination John admitted that he had no RRSPs with Gluskin Sheff and that the agreed upon rate of disposition costs was related to the tax to be incurred when the funds were taken out of the corporation.

[227] The agreed upon rate for disposition costs shall be applied to both funds resulting in disposition costs on date of marriage of $45,408.99.

(xxiv) John’s CIBC Visa on Date of Marriage

a. Account #....5243

[228] Barbie did not explain why she included a higher number for this account. I accept John’s calculations taken from the credit card statement for the period from June 9 to July 8, 2004. The deduction for this visa is $5,827.64.

b. Account #...2010

[229] With respect to this account, John sought to deduct a charge for furniture for the matrimonial home and a charge paid to a dentist on behalf of Barbie. The parties were just about to marry and build a life together when these expenses were incurred. John did not suggest that Barbie owed him this money nor would I so find. The full value of John’s visa debt shall be included: $27,625.51.

(xx5) Barbie’s Personal Debts on Date of Marriage

[230] Barbie acknowledged that she had borrowed money from her ex-boyfriend Amos Adetyi.

[231] She admitted that she owed him “a couple of thousand” before the marriage and thinks it was paid back after marriage. She was evasive in cross-examination and stated that she could not remember when she borrowed the money or paid it back. In pre-trial questioning she admitted that she had paid Mr. Adetyi $3,000 at some time.

[232] Barbie could easily have called Mr. Adetyi as a witness or possibly obtained an affidavit from him to assist and I draw an adverse inference from her failure to do so.

[233] I find that this debt to Amos Adetyi is a debt on the date of marriage.

(xxvi) Miscellaneous Differences in CNFP

[234] Barbie included a reference to money that John owed her for the proceeds of a car that was used by her but owned by him. She does not include a corresponding debt on John’s side of the balance sheet. There was little or no evidence to support this claim and I have not allowed it.

(c) Summary of Equalization Calculation

[235] Due to the numerous disputed items, I have reproduced the Net Family Property statement in full but for some accounts with minor balances and some other joint items that were not disputed. Items that were agreed to are marked with a “*”.

[236] John owes Barbie the sum of $40,344.38 for the equalization of net family property.

(d) Barbie’s Unequal Division Claim

[237] Barbie submits that if the court does not reflect John’s settlement payment to Doris as a date of marriage liability then there should be an unequal division of net family property to account for the full amount of $500,000 paid to Doris.

[238] Section 5(6) of the FLA provides that the court may award a spouse an amount that is more or less than half the difference between the net family properties if the court is of the opinion that equalizing the net family properties would be unconscionable, having regard to certain conditions.

[239] It is not enough that the circumstances fit into one of the enumerated grounds under s. 5(6) of the FLA. The court must also find that to equalize the parties’ net family property would be unconscionable having regard to one or more of the grounds.

[240] The Ontario Court of Appeal in Serra v. Serra, 2009 ONCA 105, 93 O.R. (3d) 161, at para. 47 held:

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

[241] The Court of Appeal in Serra, at para. 48 also cited the comments of Backhouse J. in LeVan v. LeVan [cite omitted]:

"Unconscionability" is a much more difficult test to meet than "fairness" and as a result, the courts have only minimal discretion to order anything other than an equal division of family property. Unconscionable conduct has been defined as, among other things, conduct that is harsh and shocking to the conscience, repugnant to anyone's sense of justice, or shocking to the conscience of the court.

[242] In order to invoke s. 5(6) of the FLA it is not necessary to find that one party has acted unconscionably, only that the result of the equalization of net family property would be unconscionable: Serra at para. 58 and Ward v. Ward, 2012 ONCA 462, 111 O.R. (3d) 81 at para. 27.

[243] If the court finds that the test for unconscionability has been met, the court can make an appropriate award, adjusting the equalization payment in an amount not to exceed the payor’s net family property: Von Czieslik v. Ayuso, 2007 ONCA 305, 86 O.R. (3d) 88 at para. 58.

[244] Barbie is relying on two of the enumerated grounds of s. 5(6) of the FLA:

s. 5(6)(f): the fact that one spouse has incurred a disproportionately larger amount of debts or other liabilities than the other spouse for the support of the family.

s. 5(6)(h): any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of property.

[245] In her submissions Barbie also states that s. 5(6) of the FLA also permits an unequal division of net family property if equalizing the net family properties would be unconscionable having regard to the “grossly disparate contributions to the family unit”. Barbie referred the court to the case of Panchalingham v. Pathmalingham 2013 ONSC 4284. In that case the wife had incurred debts prior to the separation, which would be equalized in the normal course. However, she had been dilatory in servicing these debts and the bank had moved to sell the matrimonial home where the husband and their children were living. The wife had not contributed to the carrying costs on the home and was not paying any child support. The court found that s. 5(6)(f) of the FLA was engaged as the husband had incurred a disproportionate amount of the family debt, including the financial obligations for the children following separation. The court held that it can consider grossly disproportionate contributions, financial and otherwise, in the post-separation period. This case is distinguishable on its facts and does not assist Barbie.

[246] Barbie did not assert that she had financed the payment to Doris. She relied on the fact that the payment came out of family funds and, to that extent, was borne in part by her. Barbie also argued that John overpaid.

[247] For the reasons that follow, I do not find that the payment was disproportionately large relative to what John’s obligation to Doris could have been during his marriage to Barbie.

[248] Firstly, John did not pay Doris $500,000 as stated by Barbie. He paid $200,000 cash and $300,000 by RRSP rollover; the amount rolled over would need to be discounted for the associated income tax liability. If John had been required to liquidate RRSP’s in order to make the payment, given his income in 2006, he would have been paying tax around the highest marginal rate. In addition, John has acknowledged a date of marriage liability for the contingent child support arrears he might have owed to Doris up to the date of separation. Those arrears were subsumed in the settlement payment and would not be in addition to them, as submitted by Barbie.

[249] Secondly, the settlement payment was in satisfaction of retroactive child and spousal support, arrears of support as well as future spousal support. A significant amount of the settlement could have been attributed to retroactive child and spousal support for the period between the date of John’s marriage to Barbie and the date of the mediation as this is when his income increased significantly. Absent a settlement, these payments would have come out of John and Barbie’s family pot in the normal course.

[250] By way of illustration, according to her mediation brief Doris was seeking retroactive and/or adjusted child and spousal support of almost $120,000 based on the significant increases in John’s income. John’s lawyer, Yolanta Lewis, confirmed that John’s potential exposure for such support was a concern for him and Barbie.

[251] Thirdly, the settlement payment also discharged John’s future spousal support obligations. According to Barbie, John’s spousal support obligation should have been coming to an end, as he and Doris had been married for less than twelve years and he had already paid spousal support for eight years. However, according to John, he and Doris cohabited for four years prior to marriage which would have increased the possible duration under the SSAG. Barbie also suggested that John may not have had to share his post-separation increase in earnings with Doris. Much of this is highly speculative. However, the evidence before the court suggests that John could have had significant exposure to Doris for spousal support in the years ahead. This was particularly the case as Lauren was 17 at the time of the mediation and Taylor was 15, so child support was not going to be a mitigating factor for too much longer. Doris likely had a compensatory spousal support claim which could entitle her to participate, to some degree, in John’s post-separation income increase which was substantial. At the time of the mediation, Doris was not working at all which would have been of further concern to John, his lawyer, and to Barbie.

[252] Doris was required to transfer $40,000 in RESPs to John but otherwise John assumed all of the financial obligations for the children. Even allowing for this fact, the amount paid to Doris is not disproportionately large when compared to John’s potential exposure to make retroactive and prospective support payments to Doris, all of which would have been paid from the family coffers on a periodic basis. Had John not paid a lump sum to Doris, he may very well have paid the equivalent or more to her on a monthly basis during the marriage to Barbie.

[253] Barbie suggests that any role that she played in the negotiations leading up to the mediated settlement are irrelevant. I do not agree. Many of the factors referred to under s. 5(6) of the FLA relate to circumstances wherein one spouse, unilaterally takes steps that negatively impact the family’s finances or where circumstances detract from the model of the couple as a financial team. This was not the case here.

[254] Yolanta Lewis described Barbie and John as being very much a team in the litigation with Doris. Barbie was an “active participant” who went to the meetings, attended at court, and drafted e-mails on John’s behalf. Barbie tried to suggest that she was only interested in the issues concerning the children and that she did not take part in the financial negotiations during the mediation process. This was contradicted by the evidence. I find that Barbie was intimately involved in the financial negotiations as well, even if she was not in the same room as Doris due to the animosity between them.

[255] There was little or no evidence to suggest that Barbie did not support John’s decision to make the settlement payment to Doris at that time. Barbie admitted that the settlement stopped the hemorrhaging of legal fees and brought much needed peace to the family.

[256] Barbie also suggested that she qualified for an unequal division under s. 5(6)(h): any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of property. However, she did not elaborate as to how this provision might apply and I do not find that it does.

[257] In summary, Barbie has not demonstrated that either of the suggested grounds under s. 5(6)(f) or s. 5(6)(h) of the FLA have been engaged. It is therefore not strictly necessary to determine if the equalization payment would be unconscionable.

[258] I appreciate why Barbie feels that it is unfair that John is not required to deduct his support obligations to Doris on the date of marriage, particularly when those obligations were crystallized and paid during his marriage to Barbie. However, s. 5(6) of the FLA is designed to deal with those limited situations that “shock the conscience of the court” and for various reasons this is not one of those situations.

[259] Generally speaking, it is not necessary for the court to examine the spouses’ respective contributions to household management, child care and financial provision or to undertake a post-mortem examination of the minutiae of the sharing of responsibilities to determine if equalizing the spouses’ net family properties would be unconscionable: Brett v. Brett (1999), 1999 CanLII 3711 (ON CA), 44 O.R. (3d) 61 (C.A).

[260] In broad terms, Barbie and her children benefited from John’s increase in income and the financial stability provided by John generally. John in turn benefited from Barbie’s support of his children during those periods when Lauren and Taylor lived with them and he benefited from Barbie’s support of his work with RGA among other things.

[261] However, John also had legal and financial obligations to Doris and it was not possible or reasonable, as Barbie seemed to suggest, to isolate the financial benefits of her marriage to John from these liabilities. The evidence on balance suggested that had the settlement not been reached, John could have paid the same, if not more, to Doris, not to mention what he likely would have paid his lawyer had the litigation continued in the same vein.

[262] In Ward the Court of Appeal cited Conway v. Conway, 2005 CanLII 14136 (ON SC), [2005] 16 R.F.L. (6th) 23(Ont. S.C.) at para. 31 in which the court denied the wife’s claim for an unequal division finding that:

The parties did conduct their financial and family affairs as an economic partnership. Each contributed in different ways. All financial resources, income and inheritances, were used for the family. In result, the evidence cannot support a finding of unconscionability.

[263] The same is true for John and Barbie. They acted as a financial team throughout the marriage. The decision to settle the case with Doris was made by John and Barbie together having regard to both the financial and emotional interests of the family. In all these respects, the equalization calculation reflects the principles set out in s. 5(7) of the FLA and is not unconscionable.

2. Spousal Support

[264] Barbie is seeking spousal support on a compensatory basis, to be paid as a lump sum, calculated over a prospective period of ten years. She also advanced a claim for retroactive spousal support for the period from the date of separation to January 1, 2017.

[265] John acknowledges that he has a spousal support obligation but suggests that it is limited to non-compensatory support as this was Barbie’s third marriage, they had no children together and he financially supported Barbie’s children including funding post-secondary education. John is opposed to paying a lump sum to satisfy the support obligation.

[266] John is also seeking a retroactive adjustment to spousal support for the period from the date of separation to date, as he believes that as his income has declined, he has over-paid spousal support.

[267] The first step in the assessment of spousal support is to determine each party’s income and, as per Halliwell v. Halliwell, 2017 ONCA 349, 138 O.R. (3d) 671 at para. 90, the:

(a) starting point for determining income under the SSAGs is the definition of income under the Federal Child Support Guidelines (SSAGs, s. 3.3.2). Those guidelines and the CSGs are virtually identical: see Mason v. Mason, 2016 ONCA 725, 132 O.R. (3d) 641 (Ont. C.A.), at para. 53.

John’s Income

[268] In December 2005 John started consulting for RGA on a part-time basis through his solely owned corporation Dr. J. Holdings Inc and later in 2008 he started to consult full time for RGA.

[269] John made it a practice to income split with others to reduce his income tax. Before he met Barbie, John income split with his parents. Later, John arranged for RGA to pay as much as 40% of his consulting income directly to Barbie’s company Life Beat Niagara. This arrangement stopped when Barbie grew concerned that her ex-spouse Ron Laschowski would advance a claim against her for child support.

[270] John conceded that he also exaggerated his business expenses in order to minimize income tax. For example, in the period after separation he wrote off rent paid to his sister and other office rent, even though he had no separate premises. He also wrote off $47,000 in travel expenses even though he was fully reimbursed for these expenses by RGA.

[271] Barbie asserts that John’s income for the entire period in question should be deemed to be $685,000, being his income as of the date of separation. Barbie seeks to impute an income to John due to his failure to properly value his income.

[272] Pursuant to s. 19(1) of the Federal Child Support Guidelines, SOR/97-175 (“FCSG”): “the court may impute such amount of income to a spouse as it considers appropriate in the circumstances”. The circumstances at are outlined in that section but are not exhaustive and do “not circumscribe the court’s general discretion to impute income in other situations where it considers it appropriate to so”: Thompson v. Thompson, 2013 ONSC 5500 at para. 95.

[273] The onus is on the party seeking to impute an income to establish the evidentiary foundation: Berta v. Berta, 2015 ONCA 918, 128 O.R. (3d) 730 at para. 63.

[274] Once “an inference or prima facie case of income imputation is made out by the [party seeking to impute], the onus must shift to the [other party] to justify and provide some clarity as to what his or her income actually is”: Lo v. Lo, 2011 ONSC 7663, 15 R.F.L. (7th) 344 at para. 57.

[275] In determining the appropriate amount of income to impute, the court must consider:

what is reasonable in the circumstances. The factors to be considered have been stated in a number of cases as age, education, experience, skills and health of the parent… [and] the availability of job opportunities, the number of hours that could be worked… [citations omitted].

Drygala v. Pauli, 2002 CanLII 41868 (ON CA), [2002] 61 O.R. (3d) 711(Ont. C.A.) at para. 45.

[276] In Kirkey v. VanTurnhout, 2018 ONSC 527, the court summarized some of the further principles applicable to an imputation of income:

34 Regardless of the basis upon which income is imputed, the amount of income that the court imputes to a party is a matter of discretion. The only limitation on the discretion of the court in this regard is that there must be some basis in the evidence for the amount that the court has chosen to impute: Thompson v. Thompson 2013 ONSC 5500, [2013 CarswellOnt 12392 (Ont. S.C.J.)], supra, at para 96; Korwin v. Potworowski, 2007 CarswellOnt 6852 (Ont. C.A.), Corcios v. Burgos, supra, at para. 40. The court may decide not to impute income where the payor establishes the reasonableness of his or her decision or his or her situation: Cole v. Freiwald, supra, at para. 122.

35 A factor to take into consideration in arriving at an amount of income to be imputed is evidence of a spouse’s previous income as was done by the Court of Appeal decision of Lawson v. Lawson (2006), 2006 CanLII 26573 (ON CA), 81 O.R. (3d) 321 (Ont. C.A.), at para. 38: Pey v. Pey, supra, at para. 94.

[277] John acknowledged that his income tax return did not fairly reflect his income for the purpose of support as he unreasonably deducts expenses from income: s. 19(1)(g) FCSG. He proposed to impute a certain level of income to himself to address the income splitting and inappropriate expenses, although not to the level sought by Barbie.

[278] Barbie suggested that an income should be imputed to John at the date of separation level due to his failure to obtain an income analysis.

[279] John bears the burden of justifying and providing clarity with respect to his income. It would have been helpful to have an income analysis particularly to deal with the period before John became an employee. Not having the benefit of this expert evidence, I analyzed John’s income for each year, as he proposed without regard for the corporate structure. Where John failed to provide sufficient evidence to support his position, I have drawn an adverse inference and imputed an income accordingly.

(i) John’s 2015 Income

[280] John and RGA entered into a Consulting Agreement on February 7, 2013. The contract provided that RGA would pay Dr. J. Holdings $12,875 weekly or $669,500 annually and in addition would reimburse for any travel and other business expenses. The consulting fees were based on the expectation that John would work 2400 hours per year. This was the agreement that was still in effect when the parties separated in 2015. John also held investments in Dr. J. Holdings from which he derived an income.

[281] John’s evidence was that his income in 2015 was $680,000[^2].

[282] John had gross revenue of $773,945 for the year ending July 31, 2015, which included $63,549 in income from a limited partner fund.

[283] John’s Line 150 on his personal Notice of Assessment for 2015 was only $275,988.

[284] Barbie’s position with respect to John’s 2015 income was very similar. Therefore, I have used 2015 as a baseline for comparison to future years to determine an appropriate income to impute.

[285] I accept John’s position with respect to the imputation of income for this year and find that his income was $680,000.

(ii) John’s 2016 Income

[286] John continued to work as a contractor for RGA in 2016 under the same contract but suggested that his income declined to $645,000 in 2016.

[287] In the corporate year ending July 31, 2016, Dr. J. Holdings had gross revenue of $714,441 of which $22,638 was income from a limited partner fund, $2,205 in interest income and the remainder for “research billings”.

[288] John’s Line 150 income on his personal income tax return for 2016 was higher at $401,774.

[289] As there was no explanation provided by John as to why his income should have dropped when he was working under the same contract with presumably similar expenses, I find that his income for 2016 is also deemed to be $680,000.

(iii) John’s 2017 Income

[290] John’s position is that his income for this year is $645,000.

[291] In June 2017 John’s consulting agreement with RGA was modified.

[292] Peter Barrett took over from John’s previous boss Neil Wilkinson. Mr. Barrett testified that the company wanted to move John away from the contract position to an employment contract. In his e-mail to John dated May 5, 2017 setting out the new proposal, Mr. Barrett stated that he wanted to reduce John’s working hours from 10 hours per day to 7.5 hours per day.

[293] Days later, despite knowing that his income was apparently going to be reduced, John consented to an order dated May 9, 2017 to pay Barbie temporary spousal support in the amount of $12,750 per month based on an income of $689,598 (“Temporary Support Order”).

[294] On June 23, 2017 John’s new agreement with RGA was formalized. John moved from supporting the Europe and Middle East office to the Global Support Team. According to the contract, John’s weekly compensation was reduced to $10,609 weekly or $551,668 annually based on the expectation that John would work reduced hours. The reduction in compensation took effect September 5, 2017 at which time John unilaterally reduced Barbie’s spousal support.

[295] John stated that his contract was modified because RGA felt that he was overpaid and was billing too many hours. In an e-mail dated August 23, 2018, that appears to have been sent at John’s request, Mr. Barrett explained that John’s working hours had been reduced so that he would be “more closely aligned” with RGA’s full time associates but that “in the future [RGA] can give [John] greater security”.

[296] Dr. J. Holdings had gross revenue of $741,657 for the corporate year ending July 31, 2017 of which $689,598 was from research billings.

[297] John’s Line 150 income on his 2017 personal income tax return was $320,075.

[298] I find that for the first eight months of the year, John’s annualized income remained unchanged at $680,000. I accept that his income from RGA dropped effective September 5, 2017. For the remaining four months of the year, I find that his annualized income was $580,000. This reduced income for the latter part of the year reflects that some of his reasonable and appropriate business expenses may have also dropped and also reflects that he had investment and other income that was not affected by the change in his contract.

[299] John’s imputed income for 2017 is $647,000.

(iv) John’s Income in 2018

[300] John stated that his total income in 2018 was $551,000.

[301] Dr. J. Holdings had gross revenue of $649,297 of which $591,993 was from research billings for the year ending July 31, 2018. The research billings appear in line with John’s amended contract. His investment income appears roughly consistent with the previous year.

[302] John’s Line 150 income on his 2018 personal income tax return was $320,572.

[303] I find that John’s imputed income for 2018 shall be $580,000 for the same reasons as set out above for the latter part of 2017.

(v) John’s Income in 2019

[304] John’s income changed again in 2019 when John became an employee of RGA.

[305] In his evidence, Peter Barrett emphasized that it was a priority for RGA to move John to an employment contract as opposed to him continuing as a contractor. It appears that a significant reason for the change was to bring the arrangement into compliance with CRA requirements relating to contractors.

[306] In an internal e-mail exchange (that did not include John) dated September 20, 2017 Peter Barrett stated that he was testing the waters with John becoming an employee. Mr. Barrett stated that as part of the compensation restructuring: “his monthly take home pay would reduce, but his total package would not change, albeit for some parts he would have to wait for the ABP and others to wait for the stock qualifying period”. In a later internal e-mail dated January 24, 2018 Peter Barrett confirmed that the company wanted to ensure it retained John and that they would need to come up with comparable remuneration terms in order to do that.

[307] On April 4, 2018 Peter Barrett made a proposal to John. Mr. Barrett stated that John was not “impressed, saying it was substantially less than he expected”. Peter Barrett described John as a skilled negotiator, and it was clear that he was trying to work with John to come up with an acceptable contract.

[308] Ultimately on July 24, 2018 John entered into the employment contract with RGA that took effect January 2, 2019.

[309] John’s position is described as Vice-President, Medical Director. The contract provides John with various types of remuneration. He is entitled to a base salary of $326,000 based on a work week of 37.5 hours. He is also entitled to be paid for overtime. He is eligible to receive a bonus of between 0% and 50% of his salary with a target of 25%. According to the 2019 Total Rewards Summary produced by RGA for John and dated January 2, 2019, the total value of John’s remuneration assuming a 25% bonus and excluding the Supplemental Executive Retirement Plan (SERP) benefit is $513,863. This total remuneration includes $22,000 in non-taxable benefits.

[310] John produced a document entitled “SERP for Executive Employees of RGA Canada – Projection of Pension Benefits” that put the estimated value of the SERP at $3,900 per month payable for ten years, assuming a projected retirement age of 65.

[311] John’s proposal is to pay spousal support calculated using his base salary of $326,000 plus his taxable and non-taxable benefits. If and when he receives a bonus, he will top up Barbie’s support at that time. He does not propose to include any of the SERP.

[312] Peter Barrett also gave evidence with respect to John’s new contract. I found him forthright and credible. He confirmed that John was a valuable member of the team and he had attempted to accommodate John’s remuneration expectations as much as reasonably possible through this new contract. This was consistent with the internal e-mails referred to above. He indicated that there was a potential with the bonus and the stock plan to earn close to what John was making before.

[313] Barbie suggested that John deliberately delayed the effective date of this new contract so that the bonus would not be paid before the conclusion of the trial. Peter Barrett confirmed that John had requested to delay the contract as the remuneration under the employee contract was not “an exact match” to what he had been earning as a contractor, but it was as near as they could get. Had John started under the contract in September 2018, he would have qualified for a bonus to be paid the following Spring and that bonus would have been visible to Barbie and to the court. Peter Barrett thought that typically the bonus exceeded the 25% target although it was rarely as high as the 50% maximum.

[314] In my view, to adopt John’s approach of setting spousal support based on his base salary and topping support up if and when he receives a bonus is a recipe for conflict and further expensive litigation. This is a case wherein it is appropriate to impute an income based on the evidence available.

[315] Although there are a number of variables in his employment contract, John is financially savvy and would have negotiated for the best contract possible. It was clear that RGA valued John and that Peter Barrett was prepared to accommodate him to the limits permitted. I find that the employment contract is designed to provide John with substantially, although not precisely, the same income as he was earning in 2018, albeit in a different form.

[316] The best evidence with respect to John’s income for 2019 is taken from RGA’s Summary of his employment contract. I decline to include the SERP at this time as he is not currently entitled to receive it, and I did not have sufficient evidence to put an income value to it. John’s non-taxable employment benefits are to be included and grossed-up.

[317] I find that John’s income for 2019 and prospectively is $539,209.

(b) Barbie’s Income

[318] When Barbie and John met, Barbie had been involved in CPR training for about 30 years and she was running what she described as a successful business called Life Beat Niagara that provided CPR training for corporations and individuals. Barbie was a public service trainer, WHMIS trainer, and Heart and Stroke trainer. Barbie’s evidence was that she charged up to $350/hour for this work.

[319] In 2006 Barbie incorporated Life Beat Niagara in part to facilitate the income splitting arrangement with RGA that was referred to earlier.

[320] After John and Barbie married, Barbie started to devote more time to assisting John in his consulting work with RGA, including accompanying him on business travel and as a consequence, her CPR training business started to wind down. Barbie closed her office premises in or around 2007 and by about 2012, she had ceased doing any CPR training work.

[321] Since the parties separated in July 2015, Barbie has not worked, and she has not actively looked for work.

[322] John seeks to impute an income to Barbie of $65,000 comprised of imputed employment income and net rental income.

[323] Barbie’s position is that she is unable to work as she suffers from multiple illnesses. While she acknowledges having various skills including project management, presentation and administrative skills, her position is that she could not translate these skills into employment even if she was healthy. Barbie’s position is that she cannot rent out the cottage while at the same time maintaining other employment. Barbie submits that if the court does not accept that her health prohibits her from working, an income of no more than $30,000 should be imputed to her.

[324] Barbie’s claim that she has various medical conditions that prevent her from working has been a significant issue and a subject of some contention throughout the litigation. Much if not all of Barbie’s position with respect to the imputation of income and her entitlement to spousal support hinges on her position that she is essentially disabled and unable to work. Under the circumstances, one would have expected Barbie to give lengthy and detailed evidence with respect to these medical issues, particularly as she had little independent medical evidence to rely upon. Instead, I found her evidence rather general and somewhat lacking in detail, particularly when contrasted with her detailed recall with respect to issues regarding John’s income for example.

[325] Barbie gave the following evidence at the trial:

• She and John went to Dr. Bell (a psychologist) because she had PTSD but really the purpose for seeing Dr. Bell was “because John was abusive…more for his issues”
• She feels really sick; every day she thinks she is going to die.
• She has had an issue with extreme fatigue all her life. She might have an iron deficiency.
• She thought she might have celiac disease but was not formally diagnosed.
• She was prescribed medication for depression but did not take it; she denied suffering from depression.
• She has always had a bad back.

[326] Barbie has some hearing impairment but did not suggest that this was a restriction on her ability to work.

[327] Barbie’s evidence on the topic of her health was often highly inconsistent. She claimed that she had been sick for “many years” yet, based on her own evidence, it is apparent that she functioned at a high level during the parties’ marriage, running her CPR business initially, managing a busy household of up to 7 children, assisting John with various aspects of his business, and travelling with John on business for large periods of time. Barbie suggested that she had been sexually abused by her father and physically abused by her mother and brothers all when she was a child and that she had long standing issues related to the abuse. However, she then stated that her issues only started after her marriage to John. Barbie admitted that John had tried to help her find doctors to try to figure out what was going on and then contradicted herself by saying that John stood in the way of her seeking independent medical advice.

[328] In questioning prior to trial, Barbie admitted that she had not received advice from doctors that she had a health condition that interfered with her ability to work or go to school and that she had not asked her doctors to opine on this.

[329] Barbie’s general physician gave evidence. Dr. Portnoi had just taken Barbie on as a patient in November 2018, days prior to the trial. Dr. Portnoi confirmed that Barbie reported many various symptoms, but he was not yet able to diagnose anything specific.

[330] Barbie also submitted a Sleep Analysis Report dated January 31, 2017 that ruled out narcolepsy and fatigue. The report did not suggest that Barbie had an issue that might interfere with her ability to work.

[331] Barbie did not call her psychologist, Dr. Bell, to give evidence although she advised that she had recently asked Dr. Bell to assist her in preparing an application for CPP disability.

[332] Barbie suggests that the sheer number of engagements with medical professionals evident from her OHIP summary among other things supports her contention that she suffers from a “myriad of medical conditions”.

[333] In some cases, the extrinsic evidence overwhelmingly supports a finding that a person is unable to work due to a medical or psychiatric condition even absent expert evidence. Due to these same impediments, some people are simply without the wherewithal to present expert evidence, yet the court may still reach conclusions with respect to an inability to work based on other evidence. This is not the case here.

[334] Although I give this less weight, Barbie’s presentation through several days of trial did not support her contention. She appeared each day as alert and very engaged with her counsel as to the progress of the case. She was particularly attentive to evidence that she felt hurt John’s case.

[335] It was incumbent upon Barbie to produce further, preferably expert, evidence to support her contention that she is unable to work. She has had the benefit of being represented by a number of experienced family lawyers who could have assisted her in mustering this evidence. I draw an adverse inference from her failure to produce such evidence.

[336] Barbie acknowledged that she has a number of marketable skills. She has considerable experience in CPR training and, she did not suggest that her skills were out of date nor did she adduce evidence to suggest why she could not return to that line of work.

[337] Barbie admitted that she is street smart and a relatively sophisticated person. John supported this assessment in his evidence as did the parties’ accountant, Gordon Stewart, and Barbie’s friend Jim Wells who gave evidence on her behalf.

[338] Barbie described in some detail the work that she did for John. She indicated that “she was negotiating contracts from the first day of their relationship” and John confirmed that he wanted to have Barbie review his contracts as she was able to spot issues that he might have missed. In another example, Barbie described how she attended a meeting with John and his former boss Neil Wilkinson when a dispute arose so that “[they] could smooth out the relationships”.

[339] Barbie was responsible for many of John’s travel arrangements for the overseas conferences. She was very involved in preparing John’s presentations. She reviewed information from various studies as well as information from John to produce professional slides. When she and John reached the conference venue, she liaised with the audio-visual team to ensure that the presentation would run smoothly. As John was presenting, Barbie would be assessing his delivery to ensure that his message was accurately received by the audience. John confirmed that Barbie’s work was invaluable.

[340] Barbie managed renovations to the matrimonial home in St. Catharines, the condominium in Toronto, and an investment property that the parties owned at one time. She also acted as the project manager for the construction of the 6000 square foot cottage in South River that she now owns.

[341] Barbie stated that she has no intention of working again and that John makes way too much money.

[342] John has made out a prima facie case to impute an income to Barbie on the basis that she is intentionally unemployed pursuant to s. 19(1)(a) of the FCSG.

[343] Barbie could not provide the court with an acceptable answer as to why she could not parlay these skills with an employer.

[344] In my view Barbie has a variety of different skills that she could draw upon to earn an income.

[345] I am unable to extrapolate from the income paid to Barbie by RGA and/or John during the marriage from her administrative support work. This is because it was not disputed that the income paid to Barbie was in reality income splitting and not necessarily a market value income for the work done.

[346] Barbie’s evidence was that when she was working as a CPR trainer prior to the marriage, she was being paid $350/hour. She confirmed that she could still revive her certifications except perhaps that of a pediatric trainer. Even if she only worked 2-3 hours per week, she could earn more in this field than full time minimum wage. Based on her more recent skills acquired and/or honed while working for John, she could earn at least that working full time as an administrative assistant.

[347] I find that Barbie could earn a modest employment income of $30,000 per year.

[348] John has also made out a prima facie case to impute an income to Barbie on the basis that she is not reasonably utilizing her property to generate income pursuant to s. 19(1)(e) of the FCSG.

[349] After the separation, John sold his interest in the South River cottage to Barbie as an advance on equalization. Barbie immediately started to market the cottage on various websites, including AirBnB, VRBO and Canada Stays. When Barbie realized that John had included printouts from the rental websites in his trial book of documents, she took the cottage off the site or marked it as unavailable.

[350] John made a number of requests for details of Barbie’s rental income and expenses, which documents were not produced at all or were produced after the commencement of trial. For example, during cross-examination Barbie said that she had records for every rental of the cottage. When asked why she had not produced them, she blamed her lawyers. The same was true for her rental expenses which John had been requesting in writing for some time and which were only produced after the commencement of the trial - this despite the fact that Barbie had provided all of these documents to her accountant in order to prepare her income tax return and could easily have made a duplicate for John and his lawyer well prior to the trial.

[351] Barbie now claims that she is unable to rent out the cottage as the horse barn is falling down and she does not have a property manager.

[352] Barbie also belatedly admitted that she is the owner of a church in Newfoundland that she was renovating along with her boyfriend. She has made a number of trips to Newfoundland in the past year or so. It is not clear why she purchased the church or if it is capable of generating an income.

[353] Before this matter went to trial, Barbie actively marketed the South River cottage and generated reasonably significant rental income. Even if Barbie’s health issues are accepted at face value it is difficult to find that she could not generate some rental income from this property.

[354] I do not accept that Barbie is unable to generate an income from the cottage property while at the same time maintaining some form of employment. Barbie suggested that her boyfriend had acted as a property manager and now that they have separated, she can no longer rent out the cottage without help. She did not explain why she could not hire a local property manager to assist.

[355] Barbie made modest rental income in 2016. In 2017 and 2018, she was able to generate significant gross rental income at a time when she was in full blown litigation with John and, according to her, suffering from multiple illnesses. It appears that Barbie only stopped marketing the cottage on various rental websites when she realized the John was going to introduce the evidence at trial.

[356] In 2017 Barbie had $40,000 in gross rental income. Her biggest expense was $38,000 that she admitted was paid to her boyfriend for work she could not describe in any meaningful detail. Barbie could not explain what work he had done for her on the cottage and she confirmed that there was no invoice from him. Barbie denied that she was income splitting. The other expenses for insurance, advertising, and utilities are much more modest totaling approximately $11,000.

[357] In 2018 Barbie had $32,400 in gross business income. She claimed an expense of $34,265 under cost of goods sold for “subcontracts”. She did not provide an explanation for that expense and it is similar to what she paid her boyfriend the year before. She incurred expenses for insurance, repairs and maintenance and utilities totaling approximately $16,000.

[358] In both years Barbie wrote off motor vehicle expenses and in 2018 she wrote off an expense for meals and entertainment.

[359] Barbie asserted that the cost of insurance is going to increase significantly as her insurer requires her to have hotel insurance, but she did not produce any independent evidence to verify this.

[360] I find that a reasonable amount of net rental income to impute to Barbie in relation to the cottage is $15,000. This is still less than what her income tax returns suggest she could generate based on her gross rental income for 2017 and 2018 and also allows for the possibility that Barbie may need to pay a reasonable fee to a third party property manager or maintenance person.

[361] Based on all of the evidence, I find that a rational and reasonable amount of income to impute to Barbie is $45,000 for 2018 forward. That is comprised of $30,000 in employment income and $15,000 in net rental income from her cottage.

[362] As John is seeking credit for an overpayment of spousal support retroactive, I shall make separate findings with respect to the income to be used for Barbie for each applicable year.

[363] I decline to impute any income to Barbie for 2015 or 2016. During this period, the parties’ residential arrangements were in a state of flux. Barbie was primarily responsible for readying the matrimonial home for sale. While John was able to maintain his employment obligations throughout this period, not without some difficulty, I do not find it unreasonable that Barbie was not actively searching for work during this period.

[364] The cottage was not transferred to Barbie until September 2016, so I impute no rental income for either 2015 or 2016.

[365] By 2017, it is was reasonable to expect Barbie to seek employment. For the same reasons outline above but allowing for the fact that she would be re-entering the work force, I find that Barbie could have earned at least $20,000 in employment income in that year. I have imputed the same amount of rental income for the cottage for this year as well. The total imputed income for 2017 shall be $35,000.

(c) Entitlement & Duration

[366] The Divorce Act, R.S.C., 1985, c. 3 (2nd Supp.) provides as follows:

Spousal support order

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

Factors

(4) In making an order under subsection (1) … 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.

Spousal misconduct

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

Objectives of spousal support order

(6) An order made under subsection (1) … 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.

[367] These factors, as set out in the Divorce Act, form part of the analysis of what the basis for entitlement to spousal support ought to be. The nature of entitlement in turn impacts the determination of quantum and duration of any spousal support award.

[368] In Thompson, Chappel J. sets out a comprehensive overview of the law of entitlement to spousal support:

2. General Principles Respecting Entitlement

i. Overview of the Grounds For Entitlement

[53] …This issue is important to the determination of quantum and duration of spousal support, and also to the question of whether the Respondent should be able to benefit from any post-separation increases in the Applicant's income.

[54] The Supreme Court of Canada articulated the fundamental principles respecting entitlement to spousal support in the cases of Moge v. Moge and Bracklow v. Bracklow. In Moge v. Moge, the court summarized the overall goal of spousal support as being to ensure an equitable sharing of the economic consequences for both parties of the marriage or its breakdown. However, it also emphasized that the entire burden of these consequences should not necessarily fall on the shoulders of one party. The Supreme Court held in both Moge v. Moge and Bracklow v. Bracklow that entitlement to spousal support must be determined in accordance with the terms of the governing legislation, but that the issue should be considered keeping in mind the following three conceptual models upon which entitlement to spousal support may arise: (1) compensatory support, which primarily relates to the first two objectives of the Act; (2) non-compensatory support, which primarily relates to the third and fourth objectives; and (3) contractual support. As the British Columbia Court of Appeal emphasized in Chutter v. Chutter, the court is not required to apply one conceptual model of entitlement over the other. In many cases, entitlement may be established on more than one ground.

ii. Compensatory Support

[55] The compensatory basis for spousal support entitlement recognizes that upon marriage breakdown, there should be an equitable distribution between the parties of the economic consequences of the marriage. The objective of a compensatory award is to provide some degree of compensation for the sacrifices and contributions which a spouse made during the marriage, for economic losses which they experienced and may continue to experience as a result of the marriage, as well as the benefits which the other spouse has received as a result of these sacrifices and contributions. A compensatory award recognizes that such sacrifices, contributions and benefits conferred often lead to interdependency between the spouses and merger of their economic lives.

[56] Compensatory support claims arise most typically in situations where one spouse has suffered economic disadvantage and contributed to the other spouse’s income earning potential as a result of assuming primary responsibility for child care and/or home management obligations. However, a compensatory claim can also be founded on other forms of contribution to the other party’s career, such as supporting the family while the other party obtained or upgraded their education,selling assets or a business for the benefit of the family unit,or assisting a party in establishing and operating a business that is the source of that party’s income.

[57] In considering whether a compensatory claim exists, the court must undertake a broad and expansive analysis of advantages and disadvantages which each party experienced throughout the relationship as a result of the marital union. In some situations, a compensatory claim may be defeated or weakened by the fact that disadvantage suffered by the claimant spouse is offset by disadvantage of a different type experienced by the other spouse.

[58] A compensatory claim for spousal support may be established even where the recipient spouse is employed and reasonably self-supporting at the time of the parties’ separation. This situation can arise where, despite that spouse’s ability to meet their own needs, their financial advancement has been impaired as a result of subordinating their career to that of the other spouse, or from adopting a less lucrative career path in order to accommodate the needs of the family.

iii. Non-Compensatory Support

[59] Spousal support entitlement can also arise on a non-compensatory basis, as a result of the needs of a spouse. The Supreme Court of Canada discussed this basis of entitlement in Bracklow v. Bracklow. It emphasized in that case that a spouse may be obliged to pay support based on the other spouse’s economic need alone, even if that need does not arise as a result of the roles adopted or sacrifices made during the marriage. Rowles, J.A. of the British Columbia Court of Appeal summarized the general concepts underlying this basis of entitlement in Chutter v. Chutteras follows:

Non-compensatory support is grounded in the “social obligation model” of marriage, in which marriage is seen as an interdependent union. It embraces the idea that upon dissolution of a marriage, the primary burden of meeting the needs of the disadvantaged spouse falls on his or her former partner, rather than the state (Bracklow, at para. 23). Non-compensatory support aims to narrow the gap between the needs and means of the spouses upon marital breakdown, and as such, it is often referred to as the “means and needs” approach to spousal support. [citations omitted]

[369] In Taylor v. Taylor, 2004 CanLII 42952 (ON SC), 2004 10 R.F.L. (6th) 202 at para 96, Quinn J. summarized that:

Compensatory support may be awarded to redress specific, quantifiable economic disadvantages, consequences or hardships or it may be used to remedy non-specific losses of this nature that cannot be calculated with precision.

(i) Compensatory Support

[370] John’s position is that Barbie does not have a compensatory foundation for spousal support and that the support obligation should be set at the mid-range and time limited to no more than eight years after the date of separation.

[371] John and Barbie were married for 11 years. They did not cohabit for any significant period prior to marriage.

[372] Barbie is now 55 years old and John is 63.

[373] When John and Barbie married, Barbie had more limited financial resources than John but by all accounts, she was running a reasonably successful business as a CPR trainer.

[374] Not long after she and John married, she assumed a greater role assisting John with his work. Barbie was responsible for organizing John’s business travel. Later in the marriage, Barbie accompanied John on most of his business trips which took them away from home for up to three months of the year. John wanted Barbie to join him as it was an opportunity for them to spend time together seeing the world. John and Barbie were away travelling up to 80 days out of the year between 2007 and 2014.

[375] Barbie was also very involved in John’s litigation with Doris as she supported John’s goal of having the children come to live with them full time. I found Barbie’s evidence on the topic of the children and their wellbeing heartfelt and credible. John agreed that Barbie was a good mother and that Lauren and Taylor had a warm relationship with her. When Lauren and Taylor were approximately 16 and 14 respectively, they came to live with John and Barbie in St. Catharines. Lauren lived full time with John and Barbie for three years while she attended university in St. Catharines and Taylor lived with them full time for one year. His children’s move to St. Catharines and Barbie’s assistance with their care would have freed up time for John to devote to his career.

[376] As a result of these commitments, Barbie had less time to devote to her CPR training business. By 2012, she had given up her business premises and wound down her business. It was clear from the evidence that the parties were content to prioritize John’s career during their marriage.

[377] Barbie suggested that her contributions to John’s work accounted for up to half of his income. While Barbie’s contributions should not be minimized, I find that it was still John’s skill and extensive experience as a physician combined with his own diligence that primarily led to his career advancement and commensurate increase in income.

[378] In the case of John and Barbie’s marriage however, the advantages and disadvantages did not flow all one way.

[379] Barbie came into the marriage with little or no assets; she had declared bankruptcy in 2002. She was not receiving support from either of her previous two husbands. John provided Barbie with a comfortable lifestyle. Barbie’s four children lived with them half of the time for much of the marriage. Barbie’s ex-husband, the children’s father paid little or no child support for them. John assumed the primary financial burden for Barbie’s children for many years.

[380] The parties assisted all of the children with their post-secondary education expenses including re-paying OSAP loans. Grant did a five-year post-secondary program. Brock did a degree in kinesiology at University of Toronto, Katie pursued a teaching degree and went to Teacher’s College at Brock. Lauren obtained a university degree and Taylor obtained a five-year engineering degree.

[381] Barbie’s daughter Victoria is developmentally delayed. The parties paid for private school and tutoring for her.

[382] While Barbie gave up her career in order to support John’s business, this decision is not irreversible. As indicated above, Barbie could revive her career as a CPR trainer. This aspect of the economic disadvantage arising out of the marriage is lessened.

[383] In my view Barbie also acquired new skills working with John on his medical presentations and she can utilize those skills to mitigate some of the economic impact of the termination of the marriage.

[384] Barbie has suffered some economic loss as a result of the role played during the marriage although the loss is non-specific and not capable of precise quantification. I also find that John derived a benefit from Barbie’s support during the marriage although not to the degree that Barbie suggests. In my view, John’s career would likely have been on the same general trajectory with or without Barbie’s assistance.

[385] Barbie has established that she has a modest compensatory claim for support.

(ii) Needs Based Support

[386] Barbie is in need of support for a period of time in order to relieve the economic hardship arising from the breakdown of the marriage.

[387] Section 15.2(6)(d) of the Divorce Act, lists as one of the four objectives that an award of spousal support:

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

[388] Barbie suggests that self-sufficiency is not a reasonable goal for her. In submissions she relies on Leskun v. Leskun, 2006 SCC 25, [2006] 1 S.C.R. 920 and states that the inability to become self-sufficient subsequent to and despite making reasonable efforts at doing so may just be a “regrettable fact of life”. Although, as stated in Leskun, Barbie does not have a “duty” to become self-sufficient, she has made little or no effort to contribute to her support.

[389] Barbie at 55 is 8 years younger than John. I am mindful that at this age, it is more difficult to re-enter the work force. However, my views about Barbie’s ability to contribute to her own support are reflected in my findings with respect to the imputation of income to her. Barbie has a variety of marketable skills and it is expected that she would make reasonable efforts to contribute to her own support to a greater degree in the future. Barbie also presents as very resourceful and hardworking when she sets her sights on a goal.

[390] John on the other hand is nearing, if not at, an age where he will be entitled to retire. John appeared to enjoy his work and the income that he can generate from it. While he may delay retirement for some years, ultimately, he will do so, and his income will likely decline. This will impact his obligation to pay support to Barbie.

(iii) Quantum and Duration of Support

[391] In Cassidy v. McNeil, 2010 ONCA 218, 99 O.R. (3d) 81 the court noted at para. 70 that:

SSAG presumptions regarding duration and age simply reflect case law awarding indefinite support in long-term marriages where dependency on lifestyle is established and recognize that a spouse's age at separation is relevant to the person's ability to become self-supporting.

[392] The SSAG calculations produced by both parties confirm that the suggested duration for support is not indefinite but between 5.5 and 11 years from the date of separation.

[393] The Spousal Support Advisory Guidelines (“SSAG”) produce a range of support of between $6,795 in the low range to $9,060 at the high range based on my findings with respect to the current income of each party.

[394] Barbie seeks to equalize the parties’ net disposable income. In Fisher v. Fisher, 2008 ONCA 11, 88 O.R. (3d) 241, the Court of Appeal endorsed the use of the SSAG and suggested that if an award is made outside of the range, the trial judge should set out his or her reasons for the deviation. In this case, I do not find it necessary or appropriate to deviate from the SSAG range.

[395] As I have already stated, although there are compensatory components to Barbie’s claim, this was not a twenty-plus year marriage wherein one spouse cared for the parties’ children from birth. When John’s children came to live with him and Barbie, they were older. Taylor only lived with them for one year and while Lauren was there longer, she was attending university.

[396] John had been practising as a physician for many years prior to meeting and marrying Barbie. He had also run a number of businesses in the medical field. In that respect, his career was reasonably well established. His increased work for RGA and commensurate increase in income coincided with rather than being attributable to the parties’ marriage. Although Barbie provided significant support to John, the success of his business is primarily due to his efforts.

[397] Barbie will be sharing in the financial fruits of the relationship. While the equalization payment is relatively modest, Barbie is retaining the parties’ cottage that was valued at almost $500,000. Barbie is exiting the marriage in a better financial position than when she entered it and she has a reasonable nest egg that she can draw upon in the future.

[398] In her Financial Statement sworn May 13, 2019, Barbie’s monthly budget is approximately $15,000 per month, not including income tax on the spousal support. In her budget, Barbie included expenses associated with the cottage including repairs and maintenance of $1,500 per month ($18,000 per year). These were already taken into account in the calculation of net rental income. Barbie also claims $800 per month ($9,600 per year) for school expenses for “Brock/Grant”. Brock is now 27 and Grant is 28 years old; it is not reasonable to consider an education expense for them at this age.

[399] Barbie advised that Grant is living with her and working full time. She indicated that Grant contributes to the household expenses, but she could not say to what extent.

[400] John’s budget taken from his Financial Statement sworn April 27, 2018 is over $22,000 per month, not including income tax and spousal support paid to Barbie. John’s budget includes $12,000 per year for vacations and a healthy contribution to savings. John also pays $5,000 per month toward his debts.

[401] John’s income is over the $350,000 income threshold referred to in the SSAG; this is not a cap but rather allows the court to consider if the full application of the SSAG is appropriate. In this case I find that it is. Barbie is receiving an equalization payment, but it is not so large as to warrant a consideration of support based other than on the SSAG range.

[402] John shall continue to pay Barbie spousal support at the high end of the SSAG range and support shall be paid for a total duration of 8 years from the date of separation. The “front end loading” of John’s support obligation should provide Barbie with some extra financial security over the shorter term while giving both parties some form of finality in order to put an end to their acrimonious post-separation relationship.

[403] This structure of support addresses and balances both the economic disadvantages and the economic advantages to each party arising out of the marriage. This award of support is designed to address Barbie’s compensatory claim for spousal support and to address her needs-based claim for a reasonable period of time.

(d) Form of Payment: Lump Sum or Periodic

[404] Barbie wishes to be paid a lump sum for spousal support. She suggested that the duration for spousal support should be ten years. I have found that 8 years is a more appropriate duration. As John has paid for 4.5 years already, this would leave 3.5 more years of the support obligation.

[405] In Davis v. Crawford, 2011 ONCA 294, 106 O.R. (3d) 221 the Court of Appeal summarized the principles applicable to a lump sum spousal support award as follows:

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

61 That said, a lump sum order can be made to “relieve [against] financial hardship, if this has not been done by orders under Parts I (Family Property) and II (Matrimonial Home)”: Family Law Act, s. 33(8)(d).

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

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

[406] In this case the purpose of the lump sum is not to re-distribute property. Barbie is leaving the marriage with significant assets including the cottage. The lump sum is not strictly necessary to relieve against financial hardship; a periodic support obligation could do much the same thing in this case.

[407] With respect to John’s ability to pay a lump sum, John already has a credit due to him from Barbie for the transfer of the cottage of approximately $210,000 net of the equalization payment. In addition, his share of the net sale proceeds from the sale of Royal Henley ($221,500) are also available to fund a lump sum payment.

[408] Furthermore, this payment would not compromise John’s financial future. According to John’s Financial Statement sworn November 11, 2018, his bank accounts and savings have increased from $1,341,663 on the date of separation to $1,961,741 on the date the Financial Statement was sworn. John’s debts have decreased from $1,158,610 to $739,798. Most of the debt reduction was attributable to a secured line of credit in the amount of $400,000 being paid when the Royal Henley property was sold. Despite funding this lengthy litigation and paying Barbie spousal support, John has still been able to significantly increase his net worth.

[409] In my view John is well able to pay a lump sum to satisfy his spousal support obligations and still be left with significant assets and importantly an ability to earn a good income for a few more years in order to grow his asset base further.

[410] When considering an award of lump sum spousal support, the court must weigh the perceived advantages of making a lump sum award in the particular case against any presenting disadvantages of making such an order: Davis at para. 66.

[411] The concern with any lump sum payment is that it forecloses the possibility of a future review or variation. It does not allow the court to fine tune the award to allow for unforeseen future events. I have determined that spousal support would be paid only for a total period of eight years having regard to the length of the relationship and the age of each party among other things. As the period of prospective spousal support is relatively short, this somewhat reduces the range of possible contingencies.

[412] In this case however, the primary objective of a lump sum support payment is to bring an end to the acrimonious litigation between the parties. The cessation of conflict is a factor that other courts have considered: Oliver v. Oliver, 2018 ONSC 712 at paras. 116-117.

[413] John and Barbie have a history of engaging in high conflict litigation marked by deceit. The evidence that the court received regarding the case with Doris highlighted this and I observed nothing too different in the case before me. Each party has witnessed the other lying to his or her ex-spouse and unsurprisingly feels that he or she is now being lied to.

[414] A party’s history of hiding income and/or failing to pay support can also be factors for the court to consider in favour of a lump sum award: Anderson v. McWatt, 2015 ONSC 3784 at para. 162.

[415] John has demonstrated that he is prepared to go to great lengths to shield and artificially supress his income for support and to act unilaterally if he felt he was overpaying. He arranged for RGA to pay Barbie up to 40% of his income to hid it from Doris. In this case I find that he deliberately delayed entering into the contract with RGA with the result that his bonus would not be visible until after the trial. When John disagreed with the temporary spousal support order that he had consented to, he simply reduced the payment to suit himself. Finally, when FRO started enforcement, the funds were paid from joint sale proceeds even though he had funds available in his professional corporation.

[416] John’s proposal was to pay spousal support to Barbie calculated on his base salary and then top-her up if and when he received any other income. This proposal underscores the concerns that the court has with John’s willingness to comply with a future support order in that it leaves the door open for John to manipulate his income and would simply be a recipe for further litigation.

[417] Barbie too has been difficult and uncooperative. She has been represented by a number of different lawyers. Barbie ramped up the litigation by advancing a tort claim against John which she later withdrew. Barbie did not produce basic disclosure in a timely fashion, and she failed to comply with her undertakings given during questioning. Barbie relied heavily on her medical issues as a foundation for her spousal support claim but failed to provide sufficient evidence to substantiate her claims.

[418] John and Barbie were unable to agree on even the most basic issues. They became entrenched over even relatively low dollar value items as the lengthy list of equalization issues set out above highlights. Despite the efforts of their able counsel to narrow the issues, both parties seem to have been unable to see the forest for the trees.

[419] If I were to order periodic spousal support, there is a high probability that either John or Barbie would commence a Motion to Change in short order and there is real likelihood that they would pay their lawyers more to fight the Motion to Change than the support variation would warrant.

[420] In this case I find that there is also sufficient certainty to make a lump sum an appropriate vehicle for the payment of support.

[421] John will be almost 67 years old by the end of the eight-year period that I have deemed appropriate. There was no evidence to suggest that John is other than in good health. John said that he “felt he would retire in his sixties” but said very little else about his retirement plans. John clearly enjoys his job very much and enjoys the remuneration that comes with it. His boss, Peter Barrett, confirmed that there was no discussion about retirement when they were negotiating the employment contract and RGA has no mandatory retirement age. I find it more probable than not that John will work for at least another four years.

[422] John has been a valued member of the RGA team for 14 years. Mr. Barrett made it clear that they were bending over backwards to ensure that John’s contract was as rich as they could make it and substantially similar to John’s income as a contractor. I have found that John’s income had remained reasonably steady for the past few years and the nature of his work is not such that it would lead to significant income fluctuations.

[423] The calculations assume that John will receive a bonus of 25% per year whereas he may be paid more (up to 50%) or less. The calculations do not include John’s SERP which does not vest for five years but to which he will likely be entitled. However, I find that this is an acceptable offset against various other contingencies that may result in John’s income being lower than estimated for the calculation.

[424] The calculations are also based on Barbie earning only a very modest income from renting her cottage and from employment. I have found that Barbie is capable of contributing to her own support to a great degree than the amount imputed. Barbie is also younger than John and has several more years to earn a higher income.

[425] I have also considered the fact that despite her alleged health challenges, Barbie was able to work in various capacities during the marriage. It is likely that at the end of this litigation, the reduction in associated stress can only benefit Barbie’s health.

[426] Lastly and importantly, Barbie was the one who is seeking the lump sum and she has presumably done a cost benefit analysis.

[427] A lump sum payment obviously cannot consider every contingency, but I find in this case that bringing an end to the conflict and litigation between John and Barbie weighs heavily against these uncertainties.

[428] John shall pay Barbie a lump sum of $197,788 representing the mid-point between his after-tax cost and Barbie’s after-tax benefit of spousal support based on a high-range monthly support of $9,060 per month for a further 3.5 years.

(e) Retroactive Spousal Support, Post-Separation Credits & Tax Adjustments

[429] Each party asked the court to re-calculate spousal support retroactive to the date of separation.

[430] To the extent that the claim relates to the period after pleadings were issued, this is not technically retroactive spousal support but rather a calculation of prospective support with the benefit of more accurate information with respect to each party’s income: MacKinnon v. MacKinnon, 2005 CanLII 13191 (ON CA), [2005] 75 O.R. (3d) 175 (Ont. C.A), at paras. 17-29; Vitagliano v. Di Stavolo, 2001 CanLII 28202 (ON SC), [2001] 17 R.F.L. (5th) 194 (Ont. S.C), at paras. 116-129.

[431] The following table illustrates the SSAG range based on my findings of each parties’ income for the relevant year for the purpose of this determination.

Year	John’s Income	Barbie’s Income	SSAG Low	SSAG Mid	SSAG High
2015	$680,000	$0	$9,350	$10,908	$12,467
2016	$680,000	$0	$9,350	$10,908	$12,467
2017	$647,000	$35,000	$8,415	$9,818	$11,220
2018	$580,000	$45,000	$7,356	$8,582	$9,808

(i) Payments Made by John to Barbie after the Date of Separation

[432] John did not pay Barbie a regular monthly sum immediately upon separation. He did however pay various amounts to her for which he seeks credit. He tracked these amounts in a detailed spreadsheet. These payments total $101,690.94 and cover the period from the date of separation to early 2017.

[433] John provided evidence of these various payments to Barbie’s counsel on June 2, 2017 with back-up for the entries on a USB key that followed. Barbie failed to answer her undertaking given during questioning to advise as to her position with respect to these payments. Although she was in possession of these various calculations and documents for almost two years prior to the trial, Barbie did not challenge them other than to say that many of the payments claimed were for contractors working on the matrimonial home and the cottage after the date of separation. She did not identify for the court which payments were objectionable or suggest an alternative figure in her closing submissions. I therefore accept John’s calculations with respect to payments made on her behalf during this period.

[434] In addition to the ad hoc payments made on Barbie’s behalf, between March 12, 2016 and September 1, 2016, John made periodic e-transfers to Barbie totaling $34,000 however these payments were not made pursuant to a court order or agreement. John seeks income tax relief for these payments which are not included in the total referred to above which option may no longer be open to him. I have opted to apply them to the after-tax amount for simplicity.

[435] John paid spousal support of $18,000 for the three-month period between October 2016 to December 2016 pursuant to the order of Timms J. dated December 15, 2016 for which he received tax relief.

[436] Commencing January 1, 2017 John was required to pay spousal support in the amount of $12,750 per month pursuant to Hughes J.’s temporary order made on consent.

[437] Toward the end of September 2017, John unilaterally reduced spousal support as he felt he was overpaying based on his income that had declined. The Family Responsibility Office had reached the point of threatening to take his drivers’ license and his passport. The FRO garnished the outstanding arrears of $31,000 from the net sale proceeds. In effect, John only paid 50% of the outstanding amount as the balance came from Barbie’s share of the proceeds.

(ii) Barbie’s Retroactive Support Entitlement

[438] My findings with respect to Barbie’s support entitlement being at the higher end of the SSAG range apply equally to the retroactive claim. The retroactive support is also part of the front loading of the support obligation that I deem appropriate in this case. However, there must be an adjustment to reflect the living arrangements for the year or so following the separation.

[439] There was significant disagreement about the issue of who would live where. Each party led a lot of evidence about this issue and it was clear that it was a longstanding hot button.

[440] Barbie suggested that John did not want to live in either the Royal Henley home or the cottage. I find the opposite to be true: John had asked Barbie to allow him to live in the Royal Henley property particularly as he was working from home much of the time. She was not prepared to permit that, and she wanted the option of staying at both the matrimonial home and the cottage from time to time. Given the acrimony between the parties and given Barbie’s allegations that John had been abusive to her throughout the marriage, it was not unreasonable for John to seek alternate accommodation. As a result, Barbie had de facto exclusive possession of both the home in St. Catharines and the cottage for the majority of the time leading up to September 2016 when the Royal Henley property sold, and the cottage was transferred to her.

[441] Barbie did assume responsibility for some improvements to the Royal Henley home and for maintaining it until it sold. However, she also had the benefit of rent-free accommodation during that time. In addition, Barbie had her friend Jim Wells and his roommate Todd staying at the home; they did not pay rent but helped her with various repairs to the home.

[442] For the period of time that Barbie had de facto exclusive possession of Royal Henley and the cottage, John’s spousal support obligation shall be in the mid-range SSAG to reflect the fact that Barbie was not required to pay for alternate accommodation. After, Royal Henley sold and the cottage was transferred to Barbie, John’s spousal support obligation shall be based on high range SSAG for the reasons set out above.

[443] Schedule “B” sets out the support calculations for this retroactive period. The spreadsheet sets out the amount that I found that John should have paid Barbie for this retroactive period. I have calculated the after-tax value of the overpayment or underpayment in order to apply the ad hoc payments made by John to Barbie as well as periodic payments that he made without an agreement or court order.

[444] In my view, John should have paid more reasonable periodic spousal support to Barbie prior to 2017. By making ad hoc payments, he also exercised a degree of control over Barbie’s income. If he had voluntarily paid period support, he would have had the benefit of a full tax deduction for the payments. He should not now benefit from using his after-tax cost of the retroactive support or even the mid-point between his cost and Barbie’s after-tax benefit. For these reasons, I have adopted Barbie’s after-tax benefit of the spousal support payments for the whole period in question when determining how to apply the various payments John made to her.

[445] The reconciliation of spousal support for the whole period up to January 1, 2020 leaves John with an after-tax credit of $85,354.

3. Post-Separation Adjustments

(a) Barbie’s Claim for Royal Henley & Cottage Expenses

[446] Barbie is seeking reimbursement for repairs and various related expenses incurred by her while she was in possession of the Royal Henley Property and the cottage.

[447] Pursuant to the order of Timms J. dated December 15, 2016 John was to “respond to reimbursement request of [Barbie] for improvements to the former matrimonial home, incurred for sale purposes, by January 5, 2017”.

[448] Barbie’s evidence in this area was very unclear. At first Barbie said she paid between $80,000 and $90,000 for improvements to the Royal Henley residence. Later she said that the expenses were around $60,000 to $80,000 for the Royal Henley residence and the cottage together. In submissions the number increased to $100,000.

[449] Even when questioned by her own lawyer she admitted she could not give a straight answer as to what expenses she incurred after the date of separation. At one point, Barbie said she paid expenses from her investment account and later acknowledged that some of the expenses were paid from joint funds. Many of the documents that Barbie produced were poorly copied and/or did not illustrate the expense being claimed. With respect to this issue, John spent more issue going to each receipt and providing his position than did Barbie.

[450] Barbie’s claims included $11,000 in cash allegedly paid to her mother for work done on the home as well as other cash payments to her friends who were living rent free in the home at the time. Barbie was not able to even identify the cash withdrawals associated with the payments and she did not call her mother as a witness.

[451] Some of the expenses claimed by Barbie were in relation to the cottage.

[452] Barbie suggested that John should also reimburse her for expenses incurred to improve the cottage after the date of separation but before she decided to purchase it. The agreement pursuant to which John transferred his interest to Barbie is comprehensive and makes no reference to outstanding reimbursements. Presumably if Barbie unilaterally made “great improvements” to the cottage as she submits, this was factored into the sale price that she paid to John.

[453] John agrees to pay Barbie $5,301.85 being his 50% share of expenses he agrees she incurred to make improvements to the matrimonial home to ready it for sale. That amount is reasonable having regard to the evidence such as it was, and I am prepared to order accordingly.

V. ORDER

[454] John shall pay to Barbie the sum of $40,344.38 in satisfaction of the equalization of net family property.

[455] John shall pay to Barbie the sum of $5,301.85 to reimburse her for expenses incurred re sale of Royal Henley.

[456] John is entitled to a credit of $250,560.90 for his share of the cottage that was transferred to Barbie as an advance on equalization per the parties’ agreement.

[457] Barbie shall pay to John the sum of $702 for 50% of the HST that John paid on the jointly owned sailboat.

[458] Barbie shall pay to John the net amount of $205,616.67 as a result of the payments referred to above: ($40,344.38 (equalization) + $5,301.85 (expense reimbursement) - $250,560.90 (advance on equalization for cottage) – $702 (50% of HST on sailboat)).

[459] John shall forthwith pay to Barbie the sum of $112,434 being lump sum spousal support of $197,788 less $85,354 due to John for his over-payment of spousal support from the date of separation to January 1, 2020.

[460] John shall deliver his written submissions with respect to costs on or before February 14, 2020. Barbie shall deliver her written submissions with respect to costs on or before March 6, 2020. John shall deliver any reply submissions on or before March 17, 2020. All submissions shall be filed at the filing office and e-mailed to: [] Durham.SCJ@ontario.ca to the attention of Karen Hamilton.

JUSTICE L.E. FRYER

AMENDED RELEASE DATE: January 24, 2020

Amendments have been made to paragraphs 428 and 459.

AMENDED AMENDED RELEASE DATE: February 6, 2020

Amendment has been made to beginning of paragraph 430

NOTE:

Schedules were omitted from the reported version of the decision due to the publisher's formatting limitations.

[^1]: The parties seemed to agree that Canada Revenue Agency regulations only permitted the RRSP rollover to be made in satisfaction of a property settlement. However, I did not have any evidence to support that fact. Ultimately, it was not necessary for me to make a finding with respect to this issue and I have not done so.

[^2]: This was the number that John gave for his income in oral evidence. In the SSAG calculations included with his submissions, he proposed to deduct employment expenses. Given John’s approach to his evidence wherein he was scrupulous with those financial details favourable to him, I find that his estimate of income given in his oral testimony is more representative of his true position.