Spadacini-Kelava v. Kelava, 2020 ONSC 7907

COURT FILE NO.: 15/37882

DATE: 2020-12-17

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: JOELLE SPADACINI-KELAVA, Applicant

AND:

DAVID GEORGE KELAVA, Respondent

BEFORE: Kurz J.

COUNSEL: Aaron Franks and Martha McCarthy for the Applicant

Harold Niman and Donna Wowk for the Respondent

HEARD: In writing

ENDORSEMENT

Introduction

[1] In my endorsement of September 16, 2020, 2020 ONSC 5561, I decided the parenting appeal issues raised by each party. I dismissed the appeal of the Applicant (“Joelle”) regarding the arbitrator's award requiring the return of the parties’ children, D and C, to the GTA. I also dismissed David's appeal of the arbitrator's award regarding parenting arrangements when the children return to Ontario. I stated that I would hold a hearing to determine how to implement the award for the return of the children to Ontario. The hearing was to follow a telephone/Zoom conference call with counsel to discuss the process for that hearing and to answer my questions regarding issue estoppel and title to the matrimonial home. I reserved the balance of this appeal, which concerns financial issues and costs.

[2] Counsel have informed me that the parties have worked out arrangements for the return of Joelle and the children to Ontario. On December 8, 2020 I made an order for the payment of an advance against equalization to Joelle of $150,000 to assist in that process.

[3] Other than as set out below, the background to this matter can be found in my earlier appeal decision.

Financial Issues and Supplementary Submissions in Answer to my Questions

[4] The financial issues in the balance of this appeal are:

1. Did the arbitrator err in his calculation of David’s equalization payment to Joelle (including his finding regarding title to the matrimonial home)?

2. Did the arbitrator err in his calculation of David’s income for support purposes?

3. Did the arbitrator err in his calculation of David’s spousal support obligations to Joelle?

4. Did the arbitrator err in calculating David’s retroactive s. 7 special and extraordinary child support expenses?

[5] I have now had the opportunity to review the additional submissions that I have requested from counsel regarding estoppel and its application to David’s registered title to the matrimonial home (also described in this decision as “the home”). In my request for additional submissions, I asked counsel:

1. Were Joelle’s appeal assertions of the application of the doctrines of proprietary estoppel and issue estoppel argument raised before the arbitrator?

2. If not, what are the consequences in regard to the arguments that she raises on those issues in this appeal?

3. Assuming that this court is entitled to consider the application of the doctrine of proprietary estoppel on this appeal, what evidence was called before the arbitrator that supports the claim to its application?

4. Is a consent order or award subject to the doctrine of issue estoppel?

5. Is the answer different if the consent is based on mutual mistake?

6. If the court may entertain the issue estoppel argument, what are the consequences of the terms of the consent award of March 5, 2019, requiring:

• David to consent to the sale of the matrimonial home;

• Joelle to have an equal say in the selection of a listing agent for the sale of the home;

• Both parties to sign the listing agreement;

• David to pay the costs of any minor repairs or staging, up front, “… to be reimbursed for 50% from Joelle’s half of the net sale proceeds of the sale of the home.” [Emphasis added]

7. If the court were to accept the application of the principle of issue estoppel in the facts of this case, what would be the legal basis for awarding the relief claimed by Joelle? I ask that question in light of the facts that:

a. While the Mamo award of March 5, 2019 refers to “Joelle’s half of the net sale proceeds of the sale of the home”, it does not specifically direct that Joelle is entitled to 50% of the net sale proceeds of the home.

b. There was no claim before the arbitrator for rectification of title to the matrimonial home;

c. Joelle had withdrawn her claim to unequal division of net family property some three months before the commencement of the hearing.

d. With the arbitrator refusing to entertain David’s claim to an unequal division of the parties’ net family properties, Joelle raised no unequal division argument of her own before the arbitrator;

e. There was no trust claim regarding the matrimonial home before the arbitrator and in any event, the arbitration agreement stated that “[a]ll property issues shall be determined in accordance with the provisions of the Family Law Act. R.S.O. 1990, C.F.3, as amended”; and

f. David never moved before the arbitrator to set aside the order for sale, despite the claim that it arose from a mutual mistake.

[6] After reviewing counsel’s submissions, I had additional questions, which I raised with counsel by way of a conference call and endorsement of November 30, 2020. They concerned:

1. Whether Joelle will be proceeding with a motion for an advance against equalization;

2. Confusion regarding the arbitration calculation of David’s income for support purposes and the position that David was taking in that regard;

3. Responsibility for an invoice from Victory Verbatim Services regarding transcripts for this appeal; and

4. Whether the term, estoppel, had been mentioned during the arbitration hearing.

[7] I have now received the parties’ supplemental submissions as well.

[8] Counsel have advised me that they do not need to make oral submissions to supplement their written ones unless I need to hear from them. I am content that the written submissions that I have received to date, including the supplementary submissions that I have requested, allow me to determine the financial issues in this appeal.

Standard of Review

[9] I set out the standard of review for this appeal in paras. 31-35 of my appeal endorsement on parenting issues. I add that, as the Supreme Court of Canada and the Ontario Court of Appeal have noted, the standard of review on support issues is “highly deferential” (Nettleton v. Nettleton, 2020 ONCA 753, at para. 29). Further, “[a]ppellate courts should not interfere with support orders unless the reasons ‘disclose an error in principle, a significant misapprehension of the evidence or unless the award is clearly wrong’” (Nettleton v. Nettleton, citing Hickey v. Hickey, 1999 691 (SCC), [1999] 2 S.C.R. 518, at paras. 11-12).

Issue No. 1: Did the Arbitrator Err in his Calculation of David’s Equalization Payment to Joelle (Including his Finding Regarding Title to the Matrimonial Home)?

[10] Each party raises sub-issues regarding the arbitrator’s calculation of David’s equalization payment to Joelle. Those issues are:

1. Did the arbitrator err in his treatment of the property described below as “Bowood” as a date of marriage deduction rather than an exclusion?

2. Did the arbitrator err by declining to treat the property described below as “Jarvis” as a date of marriage deduction?

3. Did the arbitrator err by declining to consider David’s claim for unequal division of net family property?

4. Did the arbitrator err in allowing David to claim sole ownership of the matrimonial home?

5. Did the arbitrator err in valuing the matrimonial home based on non-expert evidence?

6. Did the arbitrator err in reducing David’s claimed notional costs of disposition of the matrimonial home?

7. Did the arbitrator err in granting Joelle pre-judgment interest on the equalization payment notwithstanding David’s claims that Joelle delayed the hearing of the arbitration?

8. Did the arbitrator err in deferring David’s payment of the equalization payment by 80 days?

[11] As set out below, some of those issues are moot in light of my findings regarding estoppel and Joelle’s interest in the matrimonial home.

Background to Equalization/Property Issues

[12] Two years before the parties married, David’s mother died. Her will bequeathed the residue of her estate to David. That will set out that the residue would be paid or transferred to David on the fifth anniversary of her death, provided that he was alive.

[13] That residue included two Toronto properties owned by David’s mother at her death (collectively “the properties”) The properties are: 298 Jarvis Street (“Jarvis”) and 93 Bowood Avenue (“Bowood”). Three years after the parties married, the will’s five-year term expired, and the properties were transferred into David’s name.

[14] On the parties’ valuation date (“V-day”), i.e. their date of separation, David still owned Bowood but had sold Jarvis. At the time of the arbitration, Bowood was rented out and its profits formed part of David’s income.

David’s Position re Bowood

[15] At the arbitration, David argued that Bowood should be excluded from the calculation of his net family property (“NFP”). He asserted that Bowood is a gift received during the marriage rather than a date of marriage deduction. He took that position because he did not receive title to Bowood until after the parties married.

[16] The arbitrator disagreed, treating it as a date of marriage deduction rather than an exclusion. He found that on the date of marriage, both the Jarvis and Bowood properties fit within the broad definition of the term, property, set out at s. 4 of the Family Law Act, R.S.O. 1990, c. F.3 (“FLA”). That definition specifically includes contingent interests.

[17] While David’s interest in Bowood on the date of marriage was contingent, the arbitrator applied no discount. He allowed David the full value of Bowood as a date of marriage deduction. Joelle does not question the absence of a discount to that date of marriage valuation. But David appeals the arbitrator’s finding that Bowood be treated as a deduction rather than an exclusion.

[18] At the arbitration hearing, the parties agreed that the proper value of Bowood on the date of marriage was $390,000 and that its V-Day value was $1,115,000.

David’s Position re Jarvis

[19] David sold Jarvis during the marriage. He directed the proceeds of that sale, along with $120,000 from Joelle’s savings, towards the purchase price of the matrimonial home.

[20] David chose not to list the date of marriage value of Jarvis as a deduction on his arbitration NFP statement. Through counsel, he explained that his choice was consistent with his position in regard to Bowood (i.e. that it is an exclusion not a deduction). Accordingly, the arbitrator did not give him the deduction that his counsel explicitly rejected. Nonetheless, he now appeals that aspect of the arbitrator’s award, if he is not allowed the Bowood exclusion.

Title to the Matrimonial Home

[21] A further property wrinkle raised at the arbitration dealt with title to the matrimonial home. Until shortly before the arbitration, the parties each believed that its title was registered in their joint names. David swore four pre-arbitration financial statements, between July 24, 2015 and January 23, 2019, asserting that title was held jointly. Joelle swore at least two financial statements of her own to similar effect. Until about two days before the arbitration began, their NFP statements reflected that understanding as well.

[22] In fact, the parties formally agreed to an arbitration award requiring that the matrimonial home be sold. That award, dated March 5, 2019, was made in the context of Joelle’s motion for partition and sale of the home. The arbitrator ordered on consent that “David shall consent to the sale of the matrimonial home…”. While that agreement and award were premised on the understanding that the home was jointly owned, the award makes no direct mention of title to the home. However, the award offers a clear if indirect indication of Joelle’s half-interest in the home, including a reference to “Joelle’s half of the net sale proceeds of the sale of the home.”

[23] It turns out that both parties were mistaken about title. The matrimonial home was always registered in David’s sole name. I am unaware of any evidence that explains this discrepancy or how title came to be in David’s sole name in light of Joelle’s contributions at the time of its purchase. Both parties assert that they were under the same mistaken understanding about legal title until about 39 days prior to the first day of the arbitration. Nonetheless, Joelle says David first communicated his insistence that he is entitled to treat the matrimonial home as his sole property on the weekend just before the arbitration began.

[24] This issue is one of great financial consequence to the parties. If both legal and equitable title rests in David’s sole name, he is entitled to all of the significant increase in its value since V-Day.

[25] The true nature of title to the home was discovered on or about May 24, 2019, during a routine title check required to remortgage the matrimonial home. Joelle required funds to finance her legal fees. According to the arbitrator’s awards of March 5 and April 9, 2020, each party was entitled to $150,000 from the refinancing. Title had to be searched in order to secure the loan against the home.

[26] In his June 17, 2019 financial statement, delivered about two weeks before the arbitration hearing began, David first described the matrimonial home as his sole property. This change was not highlighted when the updated financial statement was delivered in anticipation of the July 3 arbitration commencement date. Joelle asserts that David first communicated his changed position regarding her interest in the matrimonial home when he delivered his updated NFP statement for the arbitration on June 30, 2019. That occurred two days prior to the commencement of the arbitration hearing, during a long weekend. The NFP statement offered the first clear articulation of David’s position that the home should be treated as his alone and that he did not have to share its post-separation increase in value with Joelle.

[27] Joelle states that she lacked time to investigate David’s new position and was unable to request an adjournment to do so. That is because the July 2, 2019 arbitration commencement date was marked peremptory by the arbitrator on April 9, 2019. That was a term of an endorsement granting Joelle an adjournment of an earlier hearing date because of her finances and the late delivery of Dr. Bukowski’s report. The arbitration had to go forward because the central issues were mobility and parenting arrangements for the children.

[28] The arbitrator considered two arguments that would prevent him from treating the matrimonial home as if it were solely David’s property. First, the arbitrator rejected Joelle’s argument that David’s previous references to joint title were admissions, which required leave to withdraw. The arbitrator found that David’s previous joint title descriptions were “information” rather than admissions. David was obliged under the Family Law Rules, O. Reg. 114/99, (“FLR”) to correct any errors in any information in his financial and NFP statements. The arbitrator found that David did so in his June 17, 2019 financial statement and his last NFP statement. Thus, David’s previous and erroneous description of title to the matrimonial home does not amount to a binding admission that Joelle owned a 50% interest in the home.

[29] Second, the arbitrator considered whether David was estopped from denying that the home was jointly owned. However he only did so from the perspective of estoppel by conduct (a form of equitable estoppel). He found that the test for that form of estoppel was not met. However, having considered that one form of estoppel, he did not consider whether any other forms of estoppel may apply to the facts of this case. As I state below, his failure to consider the application of issue estoppel and/or res judicata as well as promissory estoppel was an extricable error of law within an issue of mixed fact and law.

Arbitrator’s Ruling on the V-Day Value of the Matrimonial Home

[30] The arbitrator estimated that the V-day value of the matrimonial home was $900,000. He found that the home’s value had increased to $1.4 million as of June 17, 2019, the date of David’s last financial statement. The only evidence to support those values was the un-sworn email of a non-expert realtor, opining on the home’s V-day value and listings that set out five comparable properties. That email went into evidence on consent. In arriving at V-Day figure, the arbitrator relied on the comparable listings rather than the opinion of the realtor.

[31] The issue of the V-day value of the home is only relevant if David is its sole legal and equitable owner. If Joelle has an equal interest, the value is irrelevant as half of its value will go on each party’s side of their NFP statement. But based on the arbitrator’s figures, the title issue is worth about $250,500 for each party (i.e. ½ of the $500,000 difference between the two values), less any notional costs of disposition, based on the post-separation increase in the value of the home.

Arbitrator’s Ruling on David’s Claim to Unequal Division

[32] The arbitrator refused to consider David’s claim to an unequal division of the parties’ net family properties. The arbitrator denied David’s request even though he was aware that in Frick v. Frick, 2016 ONCA 799, 132 O.R. (3d) 321, at para. 40, the Court of Appeal for Ontario found that such a claim need not be specifically pleaded. He did so because he felt that David had made his claim for an unequal division of the parties’ net family properties so close to the date of the arbitration that Joelle lacked sufficient notice to respond to it. He added that Joelle had previously withdrawn her own claim to an unequal division.

[33] Despite the arbitrator’s refusal to consider David’s unequal division claim, Joelle’s counsel attempted to raise her own unequal division argument during the course of her final submissions. She pointed to what she saw as the unconscionability of allowing David to claim the entirety of the interest in the matrimonial home despite Joelle’s contributions and David’s previous statements. The arbitrator refused to consider the claim for the same reason that he refused to consider David’s claim.

1. Did the Arbitrator Err in his Treatment of Bowood as a Date of Marriage Deduction Rather than an Exclusion?

[34] David challenges the arbitrator’s treatment of Bowood. He argues that it was a gift from his mother, received three years after marriage, rather than a contingent asset which he brought into the marriage. Accordingly, it should be treated as an exclusion from his NFP calculation rather than a date of marriage deduction as a contingent asset.

[35] The starting analytical point for this issue, as the arbitrator recognized, is the following definition of the term, property, set out at section 4(1) of the Family Law Act:

“property” means 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,

[Emphasis added]

[36] The arbitrator explained that David was not only a beneficiary of his mother’s will, he was a co-trustee (along with his mother’s lawyer) of her estate. Under para. 3(e)(ii) of the will, the two trustees had the right, between the death of David’s mother and the five year anniversary of that date, “to pay to my said son [David] such amount or amounts out of the residue of my estate as my Trustees in their uncontrolled discretion consider advisable.” This clause granted David, in conjunction with the lawyer, “a power of appointment exercisable in favour of himself …”. That is an element of the definition of property under s. 4.

[37] The arbitrator referred to the broad interpretation of the term, property, in Brinkos v. Brinkos (1989), 1989 4266 (ON CA), 69 O.R. (2d) 225 (C.A.). There, Carthy J.A., writing for the court, stated at para. 8, that “[t]he opening language of s. 4(1) is plain, direct and broad, firmly embracing a present interest in future income from the trust corpus.” Carthy J.A. went on to adopt the following statement regarding the contingent status of a future interest in property from the decision of MacKinnon L.J. of the U.K. Court of Appeal in Re Legh's Settlement Trusts, [1938] Ch. 39 (C.A.), at p. 52:

But a future interest is contingent if the person to whom it is limited remains uncertain until the cessation of the previous interest.

[38] In determining whether to treat the inheritance as a gift or a contingent asset, the arbitrator stated that one must look to David’s entitlement under the will, within the context of the s. 4(1) definition of property.

[39] The arbitrator analysed the legal issue of gift vs. inheritance as follows:

The essential difference between an intervivos gift, and an inheritance once the testator dies, is that in the first instance, the donor has the opportunity to change her mind and prevent the transfer of the subject matter of the gift at any time, until the transfer actually takes place. In the circumstances relating to an entitlement under a Will the donor sets out the conditions under which the transfer is to take place and those conditions are fixed and non-variable once the testator dies and, as such, the principle that a gift transaction is not complete until actual title is transferred does not apply in the context of an inheritance under the circumstances of this case.

[40] The arbitrator also found that as David was both sole beneficiary and co-trustee of his mother’s estate, his other co-trustee would not likely have objected to David’s request that he receive an early transfer of his interest in Bowood.

[41] David failed to demonstrate that such a finding was not available to the arbitrator on the law or facts. I see no error on the arbitrator’s analysis of the issue and dismiss this ground of appeal.

2. Did the Arbitrator Err by Declining to Treat Jarvis as a Date of Marriage Deduction?

[42] David argues that if Bowood is to be treated as a date of marriage deduction, so too should Jarvis. He argues that he received the two properties at the same time and in the same manner, as part of the residue of his mother’s estate. The sole difference is that he sold Jarvis before V-Day. His counsel argues in one of his facta that “[i]t is inherently unfair and inconsistent not to grant David a date of marriage deduction for Jarvis.”

[43] That argument is a compelling one but for one factor. David never asked for the deduction. In fact, he explicitly renounced it.

[44] David never cited Jarvis in any NFP statement or financial statement. In her responding factum, Joelle pointed out that he never mentioned Jarvis prior to the arbitration hearing.

[45] Equally important, David explicitly renounced any claim to a deduction for Jarvis. That point is clearly expressed in the July 9, 2019 arbitration transcript. When David’s counsel attempted to introduce the transfer documents for Jarvis, Joelle’s counsel, Ms. McCarthy, objected. Her objection was to any reliance on the documents to support “some additional change to the net family property statement.” Ms. McCarthy stated that her objection was not to the accuracy of the document but that she was taken by surprise by its existence.

[46] In response, David’s counsel, Mr. Niman, stated that the documents were placed into evidence to demonstrate:

…the fact that he also inherited this property… during the marriage and sold it… and then the proceeds went into the home. That’s it. When my friend says that it’s part of the NFP, we are not claiming that it is part of the NFP for the same reason that we are saying that the property on Bowood is an exclusion and not a date of marriage. It’s a symmetrical position… I can’t remember when he gets this gift of this property under the will, and that he then used the proceeds and I’ll describe what he did with the proceeds. It wasn’t when they were separated, so its not in the financial statement.

[47] The arbitrator attempted to clarify whether it was being claimed as a deduction, to which Mr. Niman responded in the negative. The exchange, which also involved Ms. McCarthy, went as follows:

THE ARBITRATOR: Is it being claimed as a deduction?

MR. NIMAN: No it’s not. That’s the point.

THE ARBITRATOR: Okay. So, it’s neither an exclusion nor a deduction?

MR. NIMAN: Nor another borrower or lender be.

MS. McCARTHY: Okay. Wait. So, if it is found to be not an exclusion…

MR. NIMAN: It can’t be an exclusion.

MS. McCARTHY: …in the…great. It’s not claimed as an exclusion, agreed. It’s also not claimed in any alternative, in any way that Mr. Mamo may decide this as a marriage date deduction. If it is, that’s waived. Is that the position? Because if it’s not then…

[48] At that point, Mr. Niman gave an answer that was not fully responsive to Ms. McCarthy’s direct question. Counsel engaged in further discussion. Ultimately the arbitrator intervened to clarify as follows:

THE ARBITRATOR: Okay. I’ve said it’s [i.e. Jarvis transfer] admitted. Now could you…one counsel answer my question as to whether this property on Jarvis Street is being claimed as an exclusion?

MR. NIMAN: It’s not in our net family property statement.

THE ARBITRATOR: Okay. So the answer is no?

MR. NIMAN: It is not in our net family property statement. It is consistent with the position that we are taking on Bowood.

THE ARBITRATOR: And it’s not being used…claimed as a deduction?

MR. NIMAN: I’m not going to keep telling you the same thing. We have not claimed it as a deduction.

THE ARBITRATOR: It’s a yes or no answer.

MR. NIMAN: We have not claimed it as a deduction.

THE ARBITRATOR: Okay.

MR. NIMAN: We never have.

[49] Mr. Niman could not have been more definitive. Later in his testimony, David adopted his counsel’s position regarding Jarvis. David and his counsel clearly made a tactical decision not to claim a date of marriage deduction on Jarvis as part of their argument in favour of the exclusion of Bowood. In fact, they never even claimed a deduction for the date of marriage value of Jarvis as an alternative claim. Nor did they offer the arbitrator any evidence of Jarvis’ date of marriage value. That being the case, how could the arbitrator have offered him a deduction for its date of marriage value?

[50] Having explicitly waived or abandoned any claim to a deduction regarding Jarvis, David cannot complain that the arbitrator took him at his word. This ground of appeal is dismissed.

3. Did the Arbitrator Err in Declining to Consider David’s Claim for Unequal Division of Net Family Property?

[51] At the commencement of the arbitration hearing, David attempted to introduce an alternate claim, for an unequal division of the parties’ NFP’s in his favour under s. 5(6) of the Family Law Act. That claim would be advanced only if David was not entitled to an exclusion of the value of Bowood. David did not say exactly what unequal division he was seeking and arguably he was not required to do so.

[52] Mr. Niman argued before the arbitrator that one need not plead an unequal division to make a claim for it. That claim forms part of a s. 5(1) equalization claim (Frick v. Frick, above, at para. 34). One need only clearly raise the issue prior to the hearing. Provided that notice is given to the other spouse so that he or she has a fair opportunity to meet the case, s. 5(6) does not need to be specifically pleaded (Frick v. Frick, at para. 40).

[53] Mr. Niman further argued that the issue should be determined once the equalization payment is calculated. In this case, no new facts need to be determined. The claim simply arises out of facts already proven. It is simply a legal argument as to the effect of those facts.

[54] Ms. McCarthy objected to the s. 5(6) request. She argued that she would be prejudiced by the late notice of the s. 5(6) claim, which was contained in a letter of June 29, 2019. That date is the Saturday of the long weekend prior to the Tuesday July 2, 2019 commencement date of the arbitration. Ms. McCarthy argues that she may have conducted her February 2019 questioning differently had she been aware of the claim.

[55] Further, the arbitrator required the parties, in advance of the hearing, to put in writing the relief they were seeking. David’s notice of March 2019 made no reference to that claim. In fact, he wrote “…I am content that there be an equalization of net family property…” Ms. McCarthy added that Joelle would not have withdrawn her own claim for an unequal division, set out in her Application (based on the alleged financial consequences of David’s sexual conduct) had she been aware of David’s newfound claim. She argued that if the door were to be opened to David’s unequal division claim, Joelle should be able to do the same. Ms. McCarthy openly questioned whether she may wish to reinstate her client’s s. 5(6) claim if David is allowed to proceed with his claim. In her final submissions, Ms. McCarthy attempted to do just that, without success.

[56] In refusing to consider David’s s. 5(6) claim, the arbitrator acknowledged that, as Benotto J.A. stated at para. 34 of Frick v. Frick, the issue need not be formally pleaded. At the hearing, the arbitrator gave brief oral reasons for his decision, which rested on four, somewhat overlapping grounds:

1. While the same facts are relied upon for the exclusion/deduction and unequal division issues, that does not allow for new claims on those facts without advance notice.

2. Notice of David’s claim came very late, on a long weekend, just three days before the hearing commenced.

3. As a result, Joelle did not have advance notice of the case that she had to meet. In fact, David’s notice contradicted the written position he had taken in accord with the arbitrator’s direction; that he was content with an equalization of the parties’ net family property. That “pleading” had not been amended or withdrawn.

4. Joelle had previously withdrawn her own s. 5(6) claim under circumstances unknown to the arbitrator but which may have been based on David’s position on equalization.

[57] In his award, the arbitrator added a statutory ground to his ruling, under the Arbitration Act’s requirement of procedural fairness, writing:

Section 19 (2) of the Arbitration Act provides that “Each party shall be given an opportunity to present a case and to respond to the other parties’ cases.” The implementation of this mandatory precept of fundamental justice requires that the notice given of a claim be well in advance of the hearing, especially when the hearing was set to be peremptory on both sides as a result of earlier postponements.

[58] The arbitrator’s decision was a discretionary one and thus generally entitled to deference unless he based the exercise of his discretion on an improper consideration.

[59] Here, David has a point in that, as set out above and in Frick v. Frick, he does not need to plead relief under s. 5(6). Further, FLR r. 11(3) presumptively allows for amendments of pleadings subject to disadvantage that cannot be remedied by costs. It reads as follows:

AMENDING APPLICATION OR ANSWER WITH COURT’S PERMISSION

(3) On motion, the court shall give permission to a party to amend an application, answer or reply, unless the amendment would disadvantage another party in a way for which costs or an adjournment could not compensate.

[60] It is also true that what Quinn J. referred to in Stefureak v. Chambers, 2005 16090 (Ont. S.C.), at paras. 12-21 as “Hail Mary” mid-trial pleading amendments may be allowed. But that permissiveness comes with two caveats. First, there can be no surprise or prejudice that could not be compensated for in costs. Second, the amendments must not add to the length and expense of the trial.

[61] In Stefureak, the court allowed a parent to change his position on custody from joint to his sole custody, even though it was close to the end of a 20-day trial. Of course, as set out in my earlier appeal decision in this matter, the court is not necessarily bound by either party’s parenting decision when determining a child’s best interests: Richardson v. Richardson, 2019 ONCA 983, 35 R.F.L. (8th) 265, at para. 26.

[62] Thus, it was open to the arbitrator to have allowed David to seek an unequal division. But the right to make that claim is not automatic. For example, in Burke v. Burke, 2017 ONSC 4046, a party made a late amendment request to seek occupation rent. That party not only made the request late in the day, they also failed to give timely disclosure. For that reason, Woollcombe J. refused the request, writing at paras. 186-189:

187 While I do not think that the law forecloses consideration of the issue because it was not pleaded (Frick v. Frick, 2016 ONCA 799 at paras. 34-40; Stelco at para. 4), the late timing of the claim is far from ideal.

189 Given my views about the respondent’s unwillingness to make timely disclosure as required under the Rules, his deception about the RCA Trust, and his inexcusable delay in even making a claim for occupation rent, I decline to order the applicant to pay occupation rent: Rebiere v. Rebiere, 2015 ONSC 1324.

[63] In Lerus v. Vilgrain, 2020 ONCJ 77, at paras. 318-331, the court refused an amendment because it would have forced the parties to effectively begin litigation all over again.

[64] Here, the court will not interfere with the arbitrator’s exercise of his discretion to refuse to entertain the last-minute request for an unequal division for the following reasons:

1. The notice that David offered was given very late, on the Saturday of a long weekend before the Tuesday beginning of the hearing. Under r. 3 regarding the computation of time, it was the equivalent of notice on the day the arbitration commenced. Admittedly, that is not as late as the mid-trial notice in Stefureak. But that case dealt with parenting. Further, David offered no reason for his tardiness.

2. Not only was the notice late but it was contrary to the clear position that David took in favour of equalization in the months prior to the commencement of the arbitration. Joelle prepared for the hearing based on that written statement.

3. Joelle could have requested further disclosure related to the issue had it been raised earlier.

4. An adjournment was not available to resolve any prejudice. The hearing was peremptory in large measure to ensure that the parenting issues, which had been litigated since 2015, could be determined without further delay. The arbitrator made that point in his endorsement of April 9, 2019 when granting the adjournment to a peremptory date. He wrote that “…it is imperative that the matter proceed expeditiously towards a determination so as to enable permanency planning for C and D.”

5. Had David been allowed to raise his s. 5(6) argument, so too would Joelle. Her contingent notice (i.e. that she would raise the issue if David was allowed to do so) would have effectively come on the same day as his, the first day of the hearing. That would likely have lengthened the hearing even further. In his April 25, 2019 endorsement, the arbitrator set out that there was already a restriction on the number of days available to each party to present their case. The timing of the hearing was important because of the need to expeditiously decide the parenting issues. To ensure compliance with the available hearing times and no delay, the hearing was to be a “stop-watch trial”, with a chess-clock system. In other words, each party was to be held to very strict time limits to ensure that the arbitration was completed in the time that had been booked for it.

6. A review of the transcript of the argument on the first date of the hearing demonstrates that both sets of counsel showed themselves quite capable of arguing at length about any aspect of the case. Adding both parties’ s. 5(6) arguments may well have exceeded the time allotted to the arbitration.

[65] I raise one final point that goes to the interests of justice in not allowing the claim. Even if David were allowed to argue in favour of an unequal division, it is unlikely that he would have succeeded in the claim. He does not rely on any of the enumerated circumstances for unconscionability set out in s. 5(6). Rather, the only unconscionable circumstance that he mentions in his argument is the basket clause at s. 5(6)(h): “any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of the property.”

[66] The essence of his argument is that the application of a pre-marriage deduction rather than an exclusion for Bowood reaches the high bar of unconscionability. In other words, the application of the Family Law Act’s ordinary equalization scheme to a contingent asset that he brought into the marriage would be more than "unfair", "harsh" or "unjust". It would “shock the conscience of the court”: Serra v. Serra, 2009 ONCA 105, 93 O.R. (3d) 161, at para. 47. That is an exceptionally weak reed on which to rest so heavy a claim.

[67] For the reasons set out above, I dismiss this ground of appeal.

4. Did the Arbitrator Err in Allowing David to Claim Sole Ownership of the Matrimonial Home?

[68] As set out above, until about 39 days prior to the commencement of the hearing, both David and Joelle understood that they jointly owned the matrimonial home. They had already dealt with the home in this proceeding based on that incorrect understanding. They agreed to an award for the sale of the home in a manner that allowed Joelle’s equal participation and which referred to her 50% share of the proceeds of sale. However, the parties learned on or about May 24, 2019 that the home was always legally registered in David’s sole name.

[69] As the arbitrator rhetorically asked, why did neither party search title during the first three years of the litigation?

[70] Joelle points out that the parties operated as if the matrimonial home were a joint asset throughout their relationship. That approach to the home continued until days immediately prior to the start of the arbitration. In particular:

1. Although he placed title to the home in his sole name, David led Joelle to believe that she shared joint title to the property;

2. Joelle contributed about $120,000 of her own savings to the purchase of the matrimonial home;

3. Joelle co-signed the mortgage on the home as a joint borrower;

4. David’s first four financial statements referred to the matrimonial home as jointly owned;

5. Joelle’s financial statements also referred to the property in the same manner;

6. During his cross-examination during the hearing, David admitted that he and Joelle believed until recently that the matrimonial home was jointly owned;

7. David did not mention his claim regarding the matrimonial home in his March 4, 2019 list of relief requested during the arbitration. Nor did he amend that list;

8. David consented to the arbitrator’s March 5, 2019 award. That award required him to consent to the sale of the matrimonial home and pay the costs of preparing it for sale. That payment was subject to a 50% reimbursement “from Joelle’s half of the net sale proceeds of the sale of the home.” As set out below, the award had other terms which implicitly assumed Joelle’s joint title to the home;

9. The home was then listed for sale in accord with the award. Nonetheless, at some point prior to the arbitration hearing, David withdrew the home from the market; and

10. At no time after he discovered the true state of title to the home did David appeal or move to set aside the March 5, 2019 award for its sale.

[71] On July 17, 2019, David swore his fifth financial statement in this proceeding and the first one in which he referred to his sole ownership of the matrimonial home. He did nothing to bring that changed reference to Joelle’s attention when he served his financial statement.

[72] On Sunday June 30, 2019, David first served an NFP statement in which he asserted that he will be treating the home as his sole asset. Only then, Joelle says, did she become aware of that changed position and the issues that it raised. As with David’s notice of his unequal division claim, this statement was effectively served on the date that the arbitration began, July 2, 2019.

[73] Joelle argues that this late notice of David’s position change was unfair to her as she was taken by surprise. She points out that the hearing date was peremptory on both sides, leaving her, she said, with no ability to deal with the issue or consider her options. She describes it as “trial by ambush”. Of course, she was aware of the true state of title by May 24, 2019.

[74] Joelle did not request an adjournment of the financial aspects of the arbitration in light of the late disclosure of title to the matrimonial home. Nor did she attempt to re-assert her claim to an unequal division until the arbitration was underway, at which time it was too late. Instead, she made a two-pronged argument to the arbitrator.

[75] First, Joelle argued that David had made an admission in his first four financial statements that the matrimonial home was jointly owned. Accordingly, he could not withdraw that admission without leave. He had not sought that leave and thus was bound by the admission. Second, Joelle argued that David was estopped from claiming that he solely owns the matrimonial home for equalization purposes. As stated above, the arbitrator rejected both arguments.

Statements in David’s Financial and NFP Statements were not Admissions

[76] Joelle asserts that the statements in David’s first four financial statements (and earlier NFP statement), that the matrimonial home was jointly owned, amounted to an admission of that alleged fact. But in his last financial and NFP statements, David was attempting to withdraw that admission without consent or leave. As stated in my earlier appeal decision, under r. 22(5) of the Family Law Rules, “[a]n admission that a fact is true… contained in a document served in the case... may be withdrawn only with the other party’s consent or with the court’s permission.”

[77] Since she never consented to the alleged amendment, Joelle looks to the three-part test for the withdrawal of an admission of fact, which she says he failed to meet. That test was originally set out in Antipas v. Coroneos (1988), 1988 10348 (ON SC), 29 C.C.L.I. 161 (Ont. H.C.) and later adopted by the Court of Appeal for Ontario in Szelazek Investments Ltd. v. Orzech (1996), 44 C.P.C. (3d) 102 and again in 147619 Canada Inc. v. Chartrand, 2006 15624 (Ont. C.A.), as follows:

1. The proposed amendments must raise a triable issue.

2. The party seeking to withdraw the admission must demonstrate a reasonable explanation for the admissions; for example, that it was inadvertent or resulted from wrong instructions; and

3. The withdrawal will not result in any prejudice that cannot be compensated for by costs.

[78] While he considered the same three-part test, the arbitrator cited a different case, Aqua Pools Ltd. v Hanna, 2019 ONSC 850, 97 C.L.R. (4th) 245, at para. 54, which adopted the Antipas test for that proposition.

[79] David denies that the entries in his earlier financial statements and NFP statement were admissions. But to the extent that the court finds otherwise, David says that they were inadvertent. Joelle counters that the onus of explaining his alleged inadvertence rests on David: Sepiashvili v. Sepiashvili, [2001] O.J. No. 3692, at paras. 15 and 18; 147619 Canada Inc. v. Chartrand, at para. 3.

[80] Joelle adds that at the end of the day, she cannot be compensated in costs for the withdrawal of the admission. The value of the matrimonial home increased by about $500,000 between V-Day and David’s July 17, 2019 financial statement.

[81] The arbitrator rejected Joelle’s arguments, finding that David’s statements in his financial statements were not admissions. Referring to r. 13, the arbitrator pointed out that the contents of a sworn financial statement are described in the FLR as “information”, as opposed to admissions.

[82] Further, r. 13(12) requires the ongoing updating of information in financial statements. That process must occur before any case conference, motion, settlement conference or trial. Nothing in the subrule refers to the requirement of leave to amend any of the contents of a prior financial statement. Nor does the subrule differentiate between issues of current circumstances, such as income and expenses, and title to property. All are subject to the updating requirement without leave.

[83] In addition, under r. 13(15) there is an affirmative duty to correct and update documents filed under r. 13 (i.e. financial statements and NFP statements). The subrule reads:

DUTY TO CORRECT, UPDATE DOCUMENTS

(15) As soon as a party discovers that a document that he or she has served under this rule is incorrect, incomplete or out of date, the party shall serve on the other party, and, if applicable, file, a corrected, updated or new document, as the circumstances require.

[Emphasis added]

[84] The arbitrator found that David’s final financial and NFP statements met his obligation under r. 13(15).

[85] I agree with the arbitrator’s analysis of the FLR’s treatment of the contents of sworn financial statements and NFP statements as information rather than admissions. I add that that approach makes sense within the context of the disclosure scheme of the FLR.

[87] Disclosure is the lifeblood of family law. Its absence has been described as the “cancer of family law”: Leskun v. Leskun, 2006 SCC 25, [2006] 1 S.C.R. 920, at para. 34; Leitch v. Novac, 2020 ONCA 257, 150 O.R. (3d) 587, at para. 44; Cunha v. Cunha (1994), 1994 3195 (BC SC), 99 B.C.L.R. (2d) 93 (S.C.), at para. 9. It is an illness that “metastasizes and impacts all participants in the family law process”: Leitch v. Novac, at para. 44. The FLR and previous court rulings encourage disclosure with both the positive obligations set out above and the stick of adverse consequences that may be imposed on the non-disclosing party. If previously ordered disclosure has not been produced, those consequences may range from the imposition of costs to the striking of a particular pleading or document. They can also include the narrowing of the parameters of the subsequent trial in light of that striking out: r. 1(8), 1(8.4), Mullin v. Sherlock, 2018 ONCA 1063, 19 R.F.L. (8th) 1, at paras. 44-47. In appropriate cases, that could lead to an uncontested trial: r. 1(8.4)(4).

[88] Thus the FLR encourage ongoing disclosure throughout the litigation process. Lacking a requirement of leave to change financial information, they make the updating process straightforward and easily achievable. While that approach makes it easier to be less than careful in filling out a sworn financial statement, the FLR also give parties the tools to verify the figures contained in the disclosure. Those tools broadly include:

1. the circumstantial guarantee of truth that comes from having to swear a financial statement;

2. the right to documentary financial disclosure regarding both income and assets (r. 13(3.1) - (3.4), (5.0.1));

3. the requirement of service of a certificate of financial disclosure (r. 13(5.0.2));

4. the right to demand and move for necessary additional financial disclosure (r. 13(11));

5. the duty to address omissions in financial disclosure (r. 13(16)) and the concomitant right to obtain an order for documentary production if that omission is not addressed (r. 13(17));

6. The requirement to serve an affidavit listing every relevant document that is in the party’s control or available to them on request, and to produce copies of those documents if not already produced under r. 13, above (r. 19(1)). That requirement applies as well to any documents mentioned in a party’s application, answer, reply, notice of motion or affidavit (r.19(2)-(3)). That obligation is ongoing. An omission in the affidavit or documentary production must be immediately corrected (r. 19(8));

7. A party’s disclosure obligations may be enforced through an order that is broad enough to cover documents controlled directly or indirectly by the party or by another corporation that the party controls directly or indirectly (r. 13(6) and (7)). In some instances it may be extended to a document in the control of a third party (r. 19(11));

8. The right, with consent or leave, to orally question the other party (r. 20(4)). The questioning party may require the other party to bring to the questioning, any document or thing that is relevant to an issue in the case that is in their control or available to them on request (r. 20(16));

9. Even within the scope of questioning, the party questioned has a duty to immediately correct or update any incorrect, incomplete, or no longer complete answers or information given (r.20(21));

10. No leave is required to make such a correction. But that does not mean that there are no consequences for a failure to provide accurate information when it is available. Some of those consequences are described above. Others include an order that a document favourable to the non-disclosing party may not be used at trial without the court’s permission (r.19(10)(b)); and

11. An alternative order may disentitle the non-disclosing party from their own right to receive disclosure until they follow the relevant rule or court order (r.19(10)(c)).

[89] Further, a party can be confronted at trial about any prior inconsistent statement in a previous financial or NFP statement. This confrontation could be highly relevant to that party’s credibility at trial.

[90] The arbitrator found that even if David’s references to joint title to the matrimonial home were an admission, they were not intentionally so. He did not intend his statement to be "…an unambiguous deliberate concession to the opposing party", per Kabutangana v. Coachman Insurance Co., 2017 ONSC 1594, at para. 23.

[91] I find that the arbitrator’s analysis regarding any admissions under the FLR in David’s financial and NFP statements shows no error of principle. That being said, the arbitrator’s finding does not conclude any consideration of the contents of those documents in the context of estoppel, which I will deal with next.

Estoppel Arguments

[92] On this appeal, Joelle raises two forms of estoppel, issue estoppel (which is part of the broader principle of res judicata) and proprietary estoppel. Neither form of estoppel was considered by the arbitrator. However, from the record before me, it does not appear that Joelle’s counsel cited a specific form of estoppel to the arbitrator. David’s counsel raises the question of whether she even mentioned the term, estoppel, to the arbitrator. David’s counsel asserts that she never did so, while Ms. McCarthy is adamant that she did. There is no transcript of counsel’s final arguments to the arbitrator.

[93] The arbitrator clearly believed that Ms. McCarthy raised the estoppel issue. He wrote at para. 330:

Joelle’s position is that both parties were distinctly under the impression that the house was jointly owned, and that David is now estopped from asserting otherwise.

[94] But the only form of estoppel that the arbitrator explicitly considered was estoppel by conduct, a form of equitable estoppel.

[95] The arbitrator referred to the three elements of estoppel by conduct in his decision:

a. Conduct amounting to a representation intended to induce a course of conduct on the part of the person to whom the representation is made;

b. An act or omission resulting from the representation by the person to whom the representation is made; and

c. Detrimental reliance on the conduct.

[96] The arbitrator found that David’s prior statements about title to the matrimonial home in his previous financial statements were not intended to induce a course of conduct by Joelle or an alteration of the legal relations between the parties. That is because title to the matrimonial home was not in issue during the parties’ litigation until just before the hearing began. Instead, the references to joint title in David’s financial statements were simply based on a mistake made by each party. In light of the error shared by both parties, the arbitrator found that the test for estoppel by conduct was not met.

[97] I take no issue with the arbitrator’s finding regarding estoppel by conduct. While David provided no proof of the grounds for his error, his prior statements were assertions of what both parties believed at the time to be true. The entries in his previous statements were not intended to induce any change in Joelle’s conduct.

[98] But having considered the narrow test for one form of estoppel, the arbitrator did not consider other forms that were available based on the record before him. Primarily, he failed to consider, whether the principles of issue estoppel and res judicata (of which issue estoppel is one element) apply to David’s changed position regarding title to the matrimonial home. That question is particularly apropos in light of the arbitrator’s own March 5, 2019 consent award requiring the sale of the matrimonial home

[99] To be fair, while the principle of estoppel was clearly within the sights of the arbitrator, Joelle’s counsel did not refer to either issue estoppel or res judicata in any of her submissions. Nor was promissory estoppel, another form of estoppel first raised on this appeal, cited below. However, Joelle‘s counsel clearly raised the propriety of David’s denial of Joelle’s joint interest in the home, whether through the withdrawal of an admission or on an equitable basis. The arbitrator understood that those arguments implicitly raised the question of estoppel.

[100] In order to analyse the application of the estoppel principles that Joelle has raised in this appeal, I look to the scope of those principles, consider the right to raise new issues on appeal, and then apply those principles to this case. I deal first with issue estoppel and res judicata before considering proprietary estoppel.

[101] In considering those principles, for reasons set out below, I find that it is appropriate and just to consider the estoppel issues in this appeal. I further find that the arbitrator made an extricable error of law in a question of mixed fact and law in failing to consider and apply the principles of issue estoppel and res judicata to his March 5, 2019 award. If I am wrong regarding issue estoppel and res judicata, I find that the test of proprietary estoppel is nonetheless met in this case.

Issue Estoppel and Res Judicata

[102] The scope of the principle of res judicata, which prevents the re-litigation of issues previously and finally decided, was set out over 150 years ago in the leading British case of Henderson v. Henderson (1843), 3 Hare 100, 67 E.R. 313 at 319 (Ch.). In that decision, which was adopted into Canadian law by our Supreme Court (see, for example, Maynard v Maynard, 1950 3 (SCC), [1951] S.C.R. 346; Grandview v. Doering, 1975 16 (SCC), [1976] 2 S.C.R. 621), Vice-Chancellor Wigram stated at p. 115:

I believe I state the rule of the Court correctly when I say that, where a given matter becomes the subject of litigation in, and of adjudication by, a court of competent jurisdiction the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward only because they have from negligence, inadvertence or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.

(as cited in Grandview v. Doering, at p. 634)

[103] The breadth of the principle of issue estoppel and its relationship to res judicata is set out by Laskin J.A., writing for the Court of Appeal for Ontario in Minott v. O'Shanter Development Co. (1999), 1999 3686 (ON CA), 42 O.R. (3d) 321 (C.A.), at paras. 16-17, as follows:

16 I will first discuss the general principles underlying issue estoppel and then apply them to this case. Issue estoppel prevents the relitigation of an issue that a court or tribunal has decided in a previous proceeding. In this sense issue estoppel forms part of the broader principle of res judicata. Res judicata itself is a form of estoppel and embraces both cause of action estoppel and issue estoppel. Cause of action estoppel prevents a party from relitigating a claim that was decided or could have been raised in an earlier proceeding…. Issue estoppel is narrower than cause of action estoppel. It prevents a party from relitigating an issue already decided in an earlier proceeding, even if the causes of action in the two proceedings differ.

17 The overall goal of the doctrine of res judicata, and therefore of both cause of action estoppel and issue estoppel, is judicial finality. "The doctrine prevents an encore, and reflects the law's refusal to tolerate needless litigation."

[Footnotes omitted]

[104] The rationale for the application of the principle of issue estoppel was pithily described by Binnie J., writing for the Supreme Court of Canada in Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 S.C.R. 460, at para. 18, as follows:

18 The law rightly seeks a finality to litigation. To advance that objective, it requires litigants to put their best foot forward to establish the truth of their allegations when first called upon to do so. A litigant, to use the vernacular, is only entitled to one bite at the cherry.

[105] The three-part test for the application of issue estoppel was adopted by the majority of the Supreme Court of Canada in Angle v. Minister of National Revenue, 1974 168 (SCC), [1975] 2 S.C.R. 248, at p. 254. The Angle test was originally set out in the decision of Lord Guest of the British House of Lords in Carl Zeiss Stiftung v. Rayner & Keeler Ltd. (No. 2), [1967] 1 A.C. 853, at p. 935, as:

(1) that the same question has been decided;

(2) that the judicial decision which is said to create the estoppel was final; and,

(3) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies....

(See also Danyluk v. Ainsworth Technologies Inc., at para 25.)

[106] The nine following additional principles, derived from further authorities, are relevant to the consideration of issue estoppel in this case:

1. The issue out of which the estoppel is said to arise must have been "’fundamental” to the decision arrived at in the earlier proceedings (Angle v. Minister of National Revenue, at pp. 255, 265-66).

2. The breadth of issue estoppel “…extends to the material facts and the conclusions of law or of mixed fact and law (‘the questions’) that were necessarily (even if not explicitly) determined in the earlier proceedings” (Danyluk v. Ainsworth Technologies Inc., at para. 24).

3. Issue estoppel encompasses “issues which, although not expressly raised in the previous case, are necessarily assumed in it or negatived by it” (Allen v. Morrison (2006), 2006 7283 (ON SC), 139 C.R.R. (2d) 324 (Ont. S.C.), at para. 21, citing Sopinka, Lederman and Bryant, The Law of Evidence in Canada, 2nd ed. (Toronto: Butterworths, 1999), at p. 1084-85)).

4. Issue estoppel applies with equal effect to consent judgments (R. v. Dieckmann, 2017 ONCA 575, 355 C.C.C. (3d) 216, at para. 35, citing Hardy Lumber Co. v. Pickerel River Improvement Co. (1898), 1898 16 (SCC), 29 S.C.R. 211; and Re Ontario Sugar Co. (1911), 24 O.L.R. 332 (C.A.), leave to appeal refused, (1911), 1911 8 (SCC), 44 S.C.R. 659; Sekerbank T.A.S. v Arslan, 2016 SKCA 77, 480 Sask. R. 235, at para. 100).

5. “The issue that is estopped may be an unstated premise underlying the consent to judgment where that premise is a prerequisite to the conclusion reached by the parties in the consent” (Sekerbank T.A.S. v Arslan, at para. 100, citing Donald L. Lange, The Doctrine of Res Judicata in Canada, 3d ed (Toronto: LexisNexis, 2010), at p. 359)).

6. The court has the discretion to refuse to apply issue estoppel when to do so would cause unfairness or work an injustice (Minott v. O'Shanter Development Co., at para 49; Danyluk, at para. 33). In doing so, the court "should stand back and, taking into account the entirety of the circumstances, consider whether application of issue estoppel in the particular case would work an injustice" (Danyluk, at para. 80).

7. But that discretion must be “very limited in application” (General Motors Canada Ltd. v. Naken, 1983 19 (SCC), [1983] 1 S.C.R. 72, at p. 101, speaking of the discretion regarding res judicata).

8. When a party claims that newly discovered facts or materials, create special circumstances that overcome the application of issue estoppel, the court will look to the exercise of due diligence. The person seeking to relitigate an issue must demonstrate that the new fact or materials could not have been ascertained by the exercise of reasonable diligence at the time of the first action. (Grandview v. Doering, at pp. 626, 635-39; Minott v. O'Shanter Development Co., at para. 51).

9. Issue estoppel applies to decisions of arbitrators and administrative tribunals (Sopinka, Lederman and Bryant, The Law of Evidence in Canada, 5th ed., (Toronto: Butterworths, 2018) at p. 1416, para. 19.70; Minott v. O'Shanter Development Co., at para. 18; Rasanen v. Rosemount Instruments Ltd. (1994), 1994 608 (ON CA), 17 O.R. (3d) 267 (C.A.)). As Abella J.A., as she then was, wrote for the court in Rasanen v. Rosemount Instruments Ltd., at para. 37:

[T]he policy objectives underlying issue estoppel, such as avoiding duplicative litigation, inconsistent results, undue costs, and inconclusive proceedings, are enhanced in appropriate circumstances by acknowledging as binding the integrity of tribunal decisions.

10. Issue estoppel can even apply to interlocutory orders in the same proceeding. In Earley-Kendall v. Sirard, 2007 ONCA 468, 225 O.A.C. 246, McFarland J.A., writing for the court, adopted this statement by E. Macdonald J. in Ward v. Dana G. Colson Management Ltd. (1994), 24 C.P.C. (3d) 211 (Ont. Gen. Div.) at 218, aff’d. [1994] O.J. No. 2792 (C.A.):

A decision in an interlocutory application is binding on the parties, at least with respect to other proceedings in the same action. I agree with the submission that the general principle is that it is not open for the court, in a case of the same question arising between the same parties, to review a previous decision not open to appeal. If the decision was wrong, it ought to have been appealed within the appropriate time-frames. This principle is not affected by the fact that the first decision was pronounced in the course of the same action. See Diamond v. Western Realty Co., 1924 2 (SCC), [1924] S.C.R. 308.

Proprietary Estoppel

[107] Joelle also raises the application of proprietary estoppel to the facts of this case. In Clarke v. Johnson, 2014 ONCA 237, 371 D.L.R. (4th) 618, at paras. 41-42, the Court of Appeal for Ontario described proprietary estoppel as an equitable doctrine that has its origin in Ontario law as early as 1886, in Ramsden v. Dyson and Thornton (1866), L.R. 1 H.L. 129. It has been repeatedly accepted in Canada.

[108] The court adopted this definition of the principle from Anne Warner La Forest, Anger & Honsberger Law of Real Property, 3d ed., loose leaf (Toronto: Thomson Reuters, 2013), where the author describes proprietary estoppel at p. 28-3:

The doctrine of estoppel by encouragement or acquiescence, or proprietary estoppel, is a means by which property rights may be affected or created, and it is invoked in situations where there is want of consideration or of writing.

[109] In Cowper-Smith v. Morgan, 2017 SCC 61, [2017] 2 S.C.R. 754, the Supreme Court of Canada described proprietary estoppel as a principle of equity. It arises when a person is harmed because they did or refrained from doing something in reasonable reliance on the promise of another that the person will enjoy a right or benefit over property. The representation may be express or implied. Proprietary estoppel protects the person’s reasonable reliance in order to avoid the “unfairness or injustice that would result… if the other were permitted to break her word and insist on her strict legal rights” (at paras. 15-16).

[110] As McLachlin C.J. wrote for the majority at para. 15 of Cowper-Smith:

When the party responsible for the representation or assurance possesses an interest in the property sufficient to fulfill the claimant's expectation, proprietary estoppel may give effect to the equity by making the representation or assurance binding.

[111] That the underlying assumption, whether of fact or law, arises from misrepresentation or mistake makes no difference to the application of the principle. The person making the representation will not be allowed to go back on their statement if it will be unfair or unjust to do so. The court may give the remedy that equity demands (Cowper-Smith, at para. 16, citing the decision of Lord Denning M.R. in Amalgamated Investment & Property Co. (In Liquidation) v. Texas Commerce International Bank Ltd., [1982] 1 Q.B. 84 (C.A.), at p. 122).

[112] The three-part test for the application of proprietary estoppel is:

1. A representation or assurance is made to the claimant, on the basis of which the claimant believes that s/he will enjoy some right or benefit over property;

2. The claimant relies on that expectation by doing or refraining from doing something, and his reliance is reasonable in all of the circumstances; and

3. The claimant suffers a detriment as a result of his/her reasonable reliance, such that it would be unfair or unjust for the party responsible for the representation or assurance to go back on their word.

(Cowper-Smith, at paras. 15 and 64)

[113] In Clarke v. Johnson, decided three years before Cowper-Smith, the Court of Appeal for Ontario set the level of the third prong of the test at unconscionability. That is, did the owner of the land seek “to take unconscionable advantage of the claimant by denying him the right or benefit which he expected to receive”? (Clarke, at para. 52). But as set out above, the Supreme Court of Canada looked only to unfairness or unjustness.

[114] Nonetheless, the court in Clarke v. Johnson emphasised the discretionary nature of the application of proprietary estoppel as not involving hard and fast rules, adopting at para. 53 this quote from Oliver J. of the Chancery Division of the U.K. High Court in Taylor Fashions Ltd. v. Liverpool Victoria Trustees Co. Ltd., [1981] 1 All E.R. 897 (Ch. D), at p. 913:

I am not at all convinced that it is desirable or possible to lay down hard and fast rules which seek to dictate, in every combination of circumstances, the considerations which will persuade the court that a departure by the acquiescing party from the previously supposed state of law or fact is so unconscionable that a court of equity will interfere. Nor, in my judgment, do the authorities support so inflexible an approach.

[115] If an equity arises regarding this form of estoppel, the court has a broad discretion to fashion an appropriate remedy (Clarke, at para. 52).

Issues First Raised on Appeal

[116] David argues that both of the claims to estoppel raised by Joelle in this appeal were not raised below and should not be considered in this appeal.

[117] In Quan v. Cusson, 2009 SCC 62, [2009] 3 S.C.R. 712, McLachlin C.J., writing for the majority of the Supreme Court of Canada, described the rule against allowing new issues to be raised on appeal and its exceptions as follows:

36 The general rule, applied by the Court of Appeal, is that a new issue may not be raised on appeal. However, the authorities shed light on the circumstances in which appellate courts should make an exception to the rule. In Lamb v. Kincaid (1907), 1907 38 (SCC), 38 S.C.R. 516, at p. 539, Duff J. (as he then was) observed:

A court of appeal, I think, should not give effect to such a point taken for the first time in appeal, unless it be clear that, had the question been raised at the proper time, no further light could have been thrown upon it.

37 Further guidance as to the appropriate test is provided by Wasauksing First Nation v. Wasausink Lands Inc. (2004), 2004 15484 (ON CA), 184 O.A.C. 84, relied on by Sharpe J.A. below. There, the Ontario Court of Appeal explained the circumstances in which an exception will be made to the rule:

An appellate court may depart from this ordinary rule and entertain a new issue where the interests of justice require it and where the court has a sufficient evidentiary record and findings of fact to do so. [para. 102]

[118] In Kaiman v. Graham, 2009 ONCA 77, 245 O.A.C. 130, Weiler J.A. explained the rationale for the rule at para. 18. She wrote: “it is unfair to spring a new argument upon a party at the hearing of an appeal in circumstances in which evidence might have been led at trial if it had been known that the matter would be an issue on appeal”.

[119] In considering whether to allow a party to argue a new issue on appeal, the court must be persuaded that:

1. The court has before it all facts necessary to address the point, as fully as if it were raised at trial;

2. Or that the new issue is one of pure law;

3. In exercising the court’s discretion, it would be in the interests of justice as it applies to all parties to allow the new argument to be made on appeal.

(Kaiman v. Graham, at para. 18)

Application of the Principles Cited Above to the Facts of this Case

It is Appropriate to Consider the Estoppel Issues Raised by Joelle on Appeal

[120] David’s key argument against the appellate consideration of Joelle’s estoppel claims is that Joelle had time in advance of the hearing to amend her pleadings. She could have made a claim related to an equitable interest in the home or for an unequal division of the parties’ net family properties. Yet she failed to do so. Further, he says that it is unfair to be faced with the estoppel issue now rather than at the hearing. I have considered those and all of the other arguments that David has raised in each of his factums and written submissions.

[121] I find that it is appropriate to consider the estoppel issues raised by Joelle in this appeal for four reasons. First, the principle of estoppel was before the arbitrator, both directly and by implication. He considered one form of estoppel, equitable estoppel, in his award. He also considered whether David should be allowed to withdraw his “admission” that Joelle is a joint owner of the home. While his decision on that issue was based on his analysis of the FLR’s treatment of entries in sworn financial statements and NFP statements, he was also asked to consider the equities of allowing David to resile from his earlier position.

[122] Second, I have not been made aware of any relevant facts regarding the estoppel issues that were not before the arbitrator. Thus, I am in no worse a position than the arbitrator to consider the estoppel issues that Joelle raises in this appeal.

[123] Third, consideration of issue estoppel and res judicata and their applicable to the facts of this case represents an extricable question of law. In Earley-Kendall v. Sirard, 2007 ONCA 468, 42 C.P.C. (6th) 50, the Court of Appeal for Ontario allowed the appellant to argue the application of issue estoppel to the facts before it (there had been a prior order refusing to adjourn the matter for a trial in order to conduct a defence medical before a second motion was brought for a defence medical). The court explained, at para. 50, that it agreed to do so for two reasons:

[O]ne, there is a full record before this court in relation to the issue; and two, the issue raised is one of law and the respondent has had a full opportunity to address the issue both in its factum and in oral argument.

[124] Fourth, I find that the interests of justice factor favours Joelle’s position. She should have the opportunity to raise estoppel issues that speak to the fairness and equity of the process below and her right to an equal share of the home she and David had for years considered to be a joint asset. Absent consideration of the estoppel principles cited above, Joelle was denied the opportunity to effectively contest David’s recently changed position regarding her interest in the home.

Issue Estoppel and Res Judicata Apply to the March 5, 2019 Award

[125] In considering the application of the principles of res judicata and issue estoppel, I find that the consent award of the arbitrator of March 5, 2019 resolves the issue of title to the matrimonial home and is binding on David. The arbitrator’s failure to make that finding at the arbitration hearing is an extricable error of law within a question of mixed fact and law.

[126] In making that finding, I rely on the following factors:

1. The very fact that an award for the sale of the home was made upon Joelle’s motion for partition and sale is an implicit recognition of Joelle’s joint interest in the home, whether legal or equitable. Under s. 2(1) of the Partition Act, R.S.O. 1990, c. P.4, “[a]ll joint tenants, tenants in common… mortgagees… and all parties interested in, to or out of, any land in Ontario, may be compelled to make or suffer partition or sale of the land, or any part thereof, whether the estate is legal and equitable or equitable only.” Under s. 3(1) of the Partition Act, “any person interested in land in Ontario…” may bring such an application. As Joelle’s claim to the sale of the home was as a joint tenant, the March 5, 2019 award implicitly recognized that interest.

2. An order for partition and sale of a matrimonial home is a final one because it finally disposes of the issue of whether the matrimonial home should be sold (Laurignano v. Laurignano, 2009 ONCA 241, 65 R.F.L. (6th) 15, at para. 2);

3. The March 5, 2019 award remains in effect. David has neither appealed nor moved to set it aside;

4. Information about the true state of title to the home would have been available to David at the time of the March 5, 2019 award through the exercise of due diligence. It was available at any time through the Ontario government’s on-line Teranet system. In fact, it is reasonable to infer that David must have known the true state of title at one time. I say that because he would have signed the transfer documents giving him sole title to the home. He likely would also have received a solicitor’s reporting letter that sets out the state of title to the home.

5. Beyond the granting of the award itself, a clear underlying premise of the March 5, 2019 award for the sale of the matrimonial home was the understanding that it was jointly owned. In particular:

i. Joelle’s right to participate in the selection of the listing agent;

ii. Her obligation to sign the listing agreement within 15 days;

iii. Her implicit equal right to have a say in the sale price;

iv. David’s obligation to pay the costs of minor repairs or staging up front, subject to Joelle’s obligation to repay David for 50% of the price “from Joelle’s half of the proceeds of sale”. [Emphasis added] That provision implicitly recognized that Joelle would be entitled to half of the proceeds of sale of the home.

v. Each party’s right to later argue about reapportionment of the costs related to cleaning or major repairs that David is required to pay to bring the home to a fit standard of sale;

vi. The fact that about $13,000 in arrears of property taxes and mortgage payments on the home were ordered to be paid from the parties’ joint line of credit, if the bank would permit them to do (subject to reapportionment). This meant that Joelle was, at least at first instance, jointly responsible for those expenses.

6. Joelle was prejudiced by the late notice of David’s position that he was entitled to full legal and equitable title to the home. His previous representations and the positions he assumed throughout the litigation (including the contents of his previous financial and NFP statements) assured her that she would share in the home’s full value. That finding is not obviated by the arbitrator’s ruling on whether David’s representations in his financial and NFP statements amounted to admissions under the FLR.

7. Joelle may have learned of the true state of title to the home about 39 days before the hearing began. But until June 30, 2019, she did not know that David would take advantage of the newly discovered title detail to deny her right to share in the full value of the home. Only with the delivery of his last NFP statement on the weekend before the arbitration commenced did David make his new position clear.

8. David argues that he need not have said anything explicit about that change of position. His position was always in favour of an equalization of net family property. That hadn’t changed. This argument is not only factually untrue (he made an 11^th hour request for an unequal division of the parties’ NFP), it is misleading. The equalization that David sought until he delivered his last NFP statement was premised on an equal sharing of the value of the matrimonial home. His new position was based on his sole title. As a deadpan Buster Keaton once stated while standing next to a full-grown elephant: “elephant, what elephant?”.

9. With the service of David’s new NFP statement, Joelle was left with little to no time to devise a legal response. She had no time to make further enquiries or last-minute amendments to her claims before the arbitrator. She had no opportunity to request a further adjournment because the hearing was marked peremptory. The arbitrator’s ruling on David’s last-minute request to claim an unequal division demonstrates the unlikelihood of requesting a last-minute pleading amendment in any event.

10. While David complains about the time that Joelle had available to change her arbitration pleadings, he neglects to mention one important fact. He had an equal period of time to move to set aside or appeal the award for the sale of the home. Had he done so earlier or at all, Joelle would have been alerted to his changed position. Until then, he had told her nothing to indicate that, despite her contributions to the home, he would be claiming 100% of its value, including its post-separation increase in value.

11. In fact, David entered the arbitration in breach of the March 5, 2019 award, having withdrawn the home from the sales market.

[127] I must also consider the equities of the situation in determining whether I should exercise my discretion to apply issue estoppel and res judicata on the facts of this case. I find that the equities strongly support Joelle‘s position in that:

1. Joelle contributed $120,000 to the purchase price of the home. It can reasonably be inferred that she did so based on the understanding that she would be a joint owner of the home.

2. That point is reinforced by the fact that she was a full party to the mortgage; not as a guarantor but as a co-borrower of the mortgage funds.

3. It should be recalled that s. 14 of the Family Law Act applies the presumption of resulting trust to questions of ownership between spouses, particularly to transfers without consideration.

4. Even now, Joelle’s ability to borrow money for her new home when she returns to Ontario in accord with my previous endorsement is likely compromised. She remains jointly liable for a mortgage on a home she does not own.

5. When Joelle moved for partition and sale of the matrimonial home so that she could access her share of its equity, he consented.

6. As set out above, at the time that the arbitration hearing began, David was in breach of the March 5, 2019 award in that he withdrew the home from the market. In other words, his hands were less than clean.

Common Mistake Does not Obviate the Application of Issue Estoppel and Res Judicata

[128] In considering the application of issue estoppel and res judicata, I have also considered the fact that David’s consent to the March 5, 2019 award arose out of an error that both parties shared. As Joelle’s counsel pointed out, that error is a form of common rather than mutual mistake (as I had erroneously described it in my previous endorsement).

[129] In Ron Ghitter Property Consultants Ltd. v. Beaver Lumber Co., 2003 ABCA 221, 17 Alta. L.R. (4th) 243, the Alberta Court of Appeal explained the taxonomy of those legal mistakes and their implications as follows:

12 There are three types of mistake: common, mutual and unilateral: see Cheshire, Fifoot & Furmston, Law of Contract, supra at 252-53 for a summary of each. Common mistake occurs when the parties make the same mistake. For example, one party contracts to sell a vase to another when unbeknown to both, the vase was destroyed and no longer exists. Mutual mistake occurs when both parties are mistaken, but their mistakes are different. In this event, the parties misunderstand each other and are, to use the vernacular, "not on the same page". Unilateral mistake involves only one of the parties operating under a mistake. If the other party is not aware of the one party's erroneous belief, then the case is one of mutual mistake but if the other party knows of it, of unilateral mistake. What adds to the confusion is that the distinction between mutual and common mistake is sometimes blurred when courts use the two terms interchangeably.

13 The presence or absence of an agreement is one of the foundational differences amongst the three types of mistake. With common mistake, the agreement is acknowledged. What remains to be determined is whether the mistake was so fundamental as to render the agreement void or unenforceable on some basis. But in the case of a mutual or unilateral mistake, the existence of an agreement is rejected.

[130] In determining whether a party is entitled to resile from an agreement entered into by common mistake, there is a fault element. That point is made in Zavarella v. Zavarella, 2013 ONCA 720, 40 R.F.L. (7th) 352, where at para. 59, Gillese J.A, writing for herself and Strathy J.A., as he then was, stated that “to engage the equitable doctrine of common mistake, [the party seeking to rely on the mistake to be relieved of their contractual obligation] would have to have shown that it was not at fault.” (citing Miller Paving Ltd. v. B. Gottardo Construction Ltd., 2007 ONCA 422, 86 O.R. (3d) 161).

[131] In Zavarella, both parties agreed on how to deal with a vehicle for equalization purposes as part of a larger agreement. They agreed that the wife owned a car valued at $10,000 on the date of marriage and calculated the equalization payment based on that deduction. But both parties were wrong about title to that vehicle. It was leased. Their error was, as Gillese J.A. put it, “sheer inadvertence” (at para. 53). At trial, the husband persuaded the trial judge to revisit the issue of the date of marriage value of the automobile in order to change the parties’ larger agreement. But that decision was reversed on appeal because the husband was unable to show that the mistake as to ownership was not his fault. In fact, each party was at fault. As a result, the husband could not avail himself of the doctrine of common mistake.

[132] Here, the error as to title to the matrimonial home was a common mistake and it went to the root of the agreement. But it was David’s fault, at least as much as that of Joelle. I say “at least as much” for two reasons. First, both parties could have, as the arbitrator pointed out, searched title at any point in the litigation. Second, as stated above, it was clearly David who signed the documents that called for him to have full title to the home despite Joelle‘s $120,000 contribution to the purchase price and her placement on the mortgage. Joelle’s error in failing to search title earlier does not relieve David of his share of fault in failing to confirm title to the home before agreeing to the award for its sale.

[133] For all of those reasons, I find that David is estopped through the application of issue estoppel and res judicata, from denying that Joelle has a joint and equal share of the matrimonial home, whether legal or equitable. Because of my order for partition and sale below, it is not necessary to deal with the issue of legal vs. equitable title. While title can be corrected by rectification, that is not necessary here. I am instead declaring that Joelle holds joint title to the home and ordering that it be sold, with the net proceeds being equally divided, subject to adjustments.

Promissory Estoppel Applies in the Alternative

[134] Because of my finding regarding issue estoppel and res judicata, it is not strictly necessary for me to consider the application of proprietary estoppel to the facts of this case. However, if I am wrong about issue estoppel and res judicata, I find that the test for proprietary estoppel is made out. The reasons that I may consider issue estoppel and res judicata in this appeal apply equally to proprietary estoppel.

[135] The three-part test for the application of proprietary estoppel is made out here because:

1. David made numerous representations and/or assurances to Joelle both before and after these proceedings commenced, which led her to believe that she enjoyed joint title to the matrimonial home;

2. She relied on those representations and/or assurances. She contributed $120,000 to the purchase price of the home. She took on an equal share of its mortgage and the line of credit registered against it. She agreed to be bound by an award that made her liable for a share of the home expenses even though she was residing in Indiana. While there is no direct evidence that Joelle took those steps based on those representations and/or assurances, no other evidence explains why she would do so. The inference of reliance is the only reasonable one on the facts of this case. Further, she took no steps, at least until the arbitration hearing, to seek rectification of title or an equitable interest in the home or an unequal division of the properties based on the title issue.

3. Joelle suffered a detriment as a result of her reliance on David’s representations. They included the procedural problems that she experienced at the hearing in asserting her interest in the home. Substantively, her detriment includes a loss of a half-share of the increase in value of the home since V-Day (or about $250,000), assuming joint and several liability for the mortgage on the home, and assuming joint liability for various home expenses, including taxes.

Further, her reliance was reasonable in the circumstances. While the financial statements that David swore and the NFP statements that he signed may not have been admissions under the FLR, they did offer representations and assurances to her. The number of times that he did so makes her reliance all the more reasonable. Further, Joelle had no reason to believe that her husband had deliberately or inadvertently misdescribed to her the contents and effect of the title documents that he had signed.

[136] Accordingly, it would be unfair or unjust for the party responsible for the representations and/or assurances set out above to go back on their word.

[137] It is not necessary to apply the principles of proprietary estoppel to the facts of this case because of my application of issue estoppel and res judicata. But if I am wrong in that regard, I would apply proprietary estoppel to the facts of this case to prevent David from denying Joelle’s joint interest in the home.

Remedy Arising out of Issue Estoppel and Res Judicata

[138] In Cowper-Smith v. Morgan, McLachlin C.J. stated for the majority at para. 46 that once proprietary estoppel is established, the court has considerable discretion in crafting a remedy that suits the circumstances. Since issue estoppel and res judicata refer to previous judicial findings and even remedies, the breadth of remedies is likely more limited for those forms of estoppel than promissory estoppel. They should generally be limited to the remedies applied at first instance. Here I will attempt to fashion an appropriate remedy in the circumstances that adheres to the intent of the previous March 5, 2019 award but ensures that it is fully carried out.

[139] Under s. 10 of the Family Law Act, I may make a declaration as to title to the home (s. 10(1)(a)) and may order that it be partitioned or sold for the purposes of realizing each party’s interests in it (s. 10(1)(c)). I choose to do just that. I declare that Joelle holds joint title to the matrimonial home. It is not necessary to rectify title because of the remaining terms of my order.

[140] Although a final award for the sale of the home remains in place, it has not been carried out. Accordingly, I order the parties to sell the home upon the terms set out on the March 5, 2019 award other than as set out below. Joelle is entitled to an equal, 50% share of the net proceeds of sale of the home, after adjustments. The home shall be listed for sale by March 1, 2021.

5. Did the Arbitrator Err in Valuing the Matrimonial Home based on Non- Expert Evidence?

6. Did the Arbitrator Err in Reducing David’s Claimed Notional Costs of Disposition of the Matrimonial Home?

[141] The parties’ arguments regarding the arbitrator’s method for valuing the matrimonial home and the notional costs of its disposition are moot in light of my declaration and order regarding the matrimonial home, above. Accordingly, it is unnecessary for me to answer the questions raised regarding those findings.

7. Did the Arbitrator Err in Awarding Pre-Judgment Interest on the Equalization Payment to Joelle without Considering Evidence of her Alleged Intentional Delays?

[142] David challenges the arbitrator’s decision to award Joelle pre-judgment interest. David complains that Joelle’s delays in the arbitration process should disentitle her to that interest. Here, he refers only to his own evidence regarding that delay. He characterizes previous dates for mediation, a hearing date that was proposed in which Ms. McCarthy was not available, and requests by Joelle to adjourn the hearing in November 2018, and then April 9, 2019.

[143] The only award brought to my attention regarding any adjournment request by Joelle was one from April 9, 2019. Then, the arbitrator allowed one final adjournment of the arbitration hearing. He referred to the fact that Dr. Butkowski’s report had been released less than two weeks earlier, giving Joelle little time to respond. Further, Joelle was experiencing problems raising the funds to pay her lawyers for the arbitration (which were in the process of being resolved). That was an issue having to do with the interests of justice. That adjournment turned out to last less than three months. The arbitrator made no comment about any impropriety of that adjournment request or any previous ones. He did not assign blame to either party for this or any other adjournment.

[144] The determination of pre-judgment interest under s. 128 of the Courts of Justice Act, R.S.O. 1990, c. C.43 (“CJA”), is a discretionary one (s. 130(1)). The court may disallow interest, allow interest at a rate higher or lower than the ordinary statutory rate, and may allow it for a period other than ordinarily provided under CJA s. 128. The factors to be relied upon in the exercise of the court’s discretion are set out in CJA s. 130(2) as follows:

130 (2) For the purpose of subsection (1), the court shall take into account,

(a) changes in market interest rates;

(b) the circumstances of the case;

(c) the fact that an advance payment was made;

(d) the circumstances of medical disclosure by the plaintiff;

(e) the amount claimed and the amount recovered in the proceeding;

(f) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding; and

(g) any other relevant consideration.

[145] The purpose of prejudgment interest is compensatory, not punitive (Novakovic v. Kapusniak, 2008 ONCA 381, 52 R.F.L. (6th) 9, at para. 42).

[146] As a general rule, the payor spouse is required to pay prejudgment interest on an equalization payment owing to the payee spouse (Finch v. Finch, 2018 ONSC 5575, at para. 49). Exceptions arise “where, for various reasons, the payor spouse cannot realize on the asset giving rise to the equalization payment until after the trial, does not have the use of it prior to trial, the asset generates no income, and the payor spouse has not delayed the case being brought to trial” (Fielding v. Fielding, 2015 ONCA 901, 129 O.R. (3d) 65, at para. 43, citing Burgess v. Burgess (1995), 1995 8950 (ON CA), 24 O.R. (3d) 547 (C.A.), at para. 26; both decisions cited in Finch v. Finch, at para. 49).

[147] Here, the arbitrator made no finding of undue delay in his consideration of pre-judgment interest. He was aware that much of the delay in this proceeding related to the assessment and the mid-assessment mediation. Further, it was not the fault of the parties that Dr. Butkowski delayed resuming the assessment after the mediation ended.

[148] In addition, as the arbitrator found, most of the equalization payment arises from David’s ownership of real estate. While my order changes David’s interest in the matrimonial home from the one found by the arbitrator, David did still own Bowood. He received rental payments for that property. Further, my order reduces David’s equalization payment substantially because the matrimonial home is no longer included in the calculation of an equalization payment. The pre-judgment interest rate imposed by the arbitrator was a very modest 1% per annum.

[149] For all of those reasons, I see no error in the arbitrator’s assessment of the issue and no reason to interfere with the exercise of his discretion.

8. Did the Arbitrator Err in Granting an 80-Day Deferral in the Payment of the Equalization payment?

[150] Joelle challenges the arbitrator’s decision to require that the equalization payment and interest be paid 80 days later or by December 1, 2019. She argues that the payment should not have been deferred, even for 80 days, because neither party requested that result. She further argues that there was no reason for the arbitrator to delay the payment of her equalization payment. He did so without offering a reason for that delay. While his decision was a discretionary one, his failure to explain at all the grounds for his exercise of discretion means that it is not entitled to appellate deference (R. v. Sheppard, 2002 SCC 26, [2002] 1 S.C.R. 869, at paras. 15, 22, 24 and Gauthier v Gauthier, 2019 ONCA 722, 32 R.F.L. (8th) 37, at para. 2). That absence may in itself require the overturning of the decision unless the trial record as a whole permits effective appellate review (R. v. Sliwka, 2017 ONCA 426, 138 O.R. (3d) 473, at paras. 24-25).

[151] Here, the issue is moot. The December 1, 2019 period for the payment is long past. The payment was stayed in any event by this appeal. Further, this decision will have a significant impact on the amount of the equalization payment. There is no need to comment further on this sub-issue.

Issue No. 2: Did the Arbitrator Err in his Calculation of David’s Income for Support Purposes?

[152] David says that the arbitrator used the wrong annual income figure, $185,000, to calculate his current child and spousal support obligations (i.e. from 2018 onward). David argues that the arbitrator improperly added a $44,287 corporate debt to the calculation of his personal income. David asks that the arbitrator’s income figure for 2018, $185,000 per year, be reduced.

[153] As set out below, David has not been consistent in setting out the proper figure that he says I should adopt. Throughout the arbitration hearing and until very recently in this appeal, he asked that his 2018 income for support purposes be set at $177,000. That is the figure arrived at by the jointly retained business valuators, Duff & Phelps. That is the relief he explicitly seeks in his notice of appeal. However in a response to my question to counsel, he now says that I should adopt an annual figure of $140,713. He now argues that the arbitrator made a math error in addition to the error of adding the corporate debt to his income.

[154] Joelle says that the arbitrator made no error in the calculation of David’s income. Thus, the $185,000 figure is correct.

[155] David has three sources of income. First, he is the president of the United Brotherhood of Retail Food, Industrial and Services Trades (“UBRFIST). UBRFIST pays him a salary of approximately $85,000 per year. Second, David earns rental income from Bowood. Third, he has a 90% interest in a numbered company that has a 100% interest in a corporation called Future Focus. Future Focus is a dental insurance provider for UBRFIST’s health insurance provider and other organizations.

[156] While the arbitrator found that David’s income for support purposes was $185,000 per year, the method by which he calculated that figure is not entirely clear.

[157] The parties retained the certified business valuators, Timothy Martin and Jason Silver of the accounting firm, Duff & Phelps, to determine David’s income from 2015-2018. Mr. Martin testified as an expert witness at the arbitration. The chart below, taken from the arbitrator’s award, sets out the Duff & Phelps calculations:

Year	2015	2016	2017	2018 Est
Line 150 total income	$79,846	$88,357	$86,777	$84,760
Schedule III Adjustments
Actual amount of capital gains	Nil	$40	Nil	Nil
Less taxable amount of capital gains		($20)
Less annual union dues	($360)	($360)	($360)	($360)
Less carrying charges and interest expenses	Nil	($129)	($194)	nil
Capital cost allowance on real property		$684
Adjustments under s.19(1)(h)
Gross up on capital gain		$15
Adjustments under s.18(2)
Discretionary expenses	$22,893	$18,330	$23,950	$21,724
Adjustments under s.19(1)(g)
Gross up on discretionary expenses	$17,561	$14,061	$18,372	$16,664
Income for support purposes before the attribution of pretax corporate income	$119,940	$120,938	$128,545	$122,788
Attribution of pretax corporate income pursuant to s.18. Future Focus Dental Plans Ltd.		$18,900		$54,200
Income for support purposes (rounded)	$120,000	$140,000	$129,000	$177,000

[158] At the arbitration, both parties accepted the Duff & Phelps 2018 figure, with one caveat. That is the issue of a $44,287 debt owed by Future Focus to Shansel Investments (“Shansel”), a corporation described as doing consulting work for Future Focus. Shansel appears to be controlled by the man from whom David purchased his interest in Future Focus. The same debt is shown in Future Focus’ books each year between 2015-2018 and was never paid. Joelle asked that it be added to David’s income each year. David challenged that extra $44,287 income imputation.

[159] In his award, the arbitrator accepted the Duff & Phelps figures. He refused to add the $44,287 figure for any years before 2018. But for 2018 he did say that he would add the debt figure to the Duff & Phelps calculation of David’s income. Yet he arrived at a total annual figure of $185,000, which is only $8,000 higher than the Duff & Phelps calculation.

[160] The arbitrator says that he added the $44,287 corporate debt to Shansel because of an answer that Mr. Martin gave to a hypothetical question during Mr. Martin’s cross-examination by Joelle’s counsel.

[161] Ms. McCarthy asked the expert to consider a hypothetical scenario not found in the Martin/Silver report. She asked Mr. Martin whether the $44,287 Shansel debt would be added to David’s 2018 income if Shansel were not recognized as an existing current liability. Ms. Wowk, co-counsel for David, objected to the question as lacking any foundation in the evidence. The arbitrator allowed the question. He stated that he was simply considering the calculation at that point. He would deal with its propriety following submissions. Mr. Martin agreed to Ms. McCarthy’s calculation without accepting her hypothetical premise. In fact, Ms. McCarthy did not question Mr. Martin about the propriety of her supposition.

[162] In re-examination, Mr. Martin was asked about Ms. McCarthy’s hypothetical scenario. He explained that certified business valuators sometimes offer potential scenarios when the issue is really not the accounting but whether the law would look at a set of facts in a certain way. He offered the example of “double dipping” (i.e. attributing income to a source that has already been subject to equalization). However in the case of Future Focus, his answer was definitive. Based on his analysis of the company, the $44,287 was “not available to Mr. Kelava during the period under review” [Emphasis added].

[163] I note that Ms. McCarthy never cross-examined David about the Shansel debt. Thus, the only evidence available to the arbitrator on the issue of the income attribution of that debt was the fact that it was on the Future Focus books from 2015 onward. Ms. McCarthy’s question was not evidence.

[164] Nonetheless, after quoting the hypothetical and Mr. Martin’s cross-examination answer cited above, the arbitrator simply accepted Ms. McCarthy’s premise without any meaningful explanation. He simply stated at para. 447: “[b]ased on the evidence, therefore, David’s income as determined by Duff & Phelps should be increased by the sum of $44,287.”

[165] That being said, the arbitrator did not actually increase the Duff & Phelps $177,000 figure by the $44,287 figure he said that he would add to David’s income for support. Had he done so, he would have found that David’s income for 2018 was $221,287. Instead he arrived at the figure of $185,000. After accepting that the $44,287 corporate debt should be added to David’s income, the arbitrator explained his calculations as follows:

447 ...It is to be noted, however, that David’s income before the attribution of pretax corporate income, as calculated by Duff & Phelps, has been consistently in the sum of approximately $122,000 annually. The increase in that figure in the years 2016 and 2018 is as a result of the pretax corporate income relating to Future Focus and, most notably, the estimate in the 2018 income is based on pretax income attribution of $54,200 when in the three years prior to that it was zero for 2015 and 2017 and the sum of $18,900 in 2016.

448 I have no hesitation in finding that a calculation made under s.16 of the Child Support Guidelines is not the fairest determination of David’s income if we simply look at the estimate for 2018 given the fluctuation in income over the last three years. In addition to invoking the provisions of s.17(1) of the Guidelines, I believe that it is also appropriate to consider, under s.18(1), that the inclusion of the totality of the pretax corporate income from Future Focus under s.18 has to consider the lack of previous available pretax corporate income in 2015 and 2017 as well as the fact that in 2016 it was only $18,900.

449 Balancing the foregoing factors, therefore, and adding the amount of $44,287 with respect to the “debt” owing to Shansel investments, as discussed above, I find that a fair determination of David’s current income is $185,000.

[166] I must confess that I do not understand the arbitrator’s reasoning as set out above. It is not clear how he came to an unstated figure of $140,713, to which he appears to have added $44,287 to reach the $185,000 figure. Other than the narrative above, he does not offer a clear mathematical calculation. Judging from their submissions, I cannot say that counsel better understand the arbitrator’s rationale or calculations.

[167] David always objected to the addition of the $44,287 figure to his income both at the arbitration and in this appeal. But at the arbitration and through much of this appeal, he did not adopt the income figure he now advocates. In his notice of appeal, first two facta and supplementary written submission filed in this appeal, he argued that the proper figure should be the Duff & Phelps $177,000 amount. That is the same position that he advocated at the arbitration hearing as well. As the arbitrator wrote at para. 430 of his award:

David accepts the Duff & Phelps’ calculation of his income for support purposes, without agreeing that he actually did have such funds available to him to spend.

[168] When I recently questioned counsel about the discrepancy in Mr. Mamo’s calculations and invited supplementary written submissions, David’s counsel indicated that David erred in the position that he has advocated throughout this and the last proceeding. What he now means to say is that the correct calculation should be $185,000 - $44,287, or $140,713.

[169] David may try to argue that he too got his arithmetic wrong. But he does not say why he changed his mind about the correctness of the Duff & Phelps figure, which he had adopted throughout the hearing and until recently, the appeal. The Duff and Phelps number does not include the $44,287 corporate debt. Thus it is not at all clear why David wants to deduct it from the figure that he has supported for about two years.

[170] As set out above, Joelle has consistently argued that the arbitrator’s attribution of the Shansel debt for 2018 was proper.

The Arbitrator’s Calculations of David’s 2018 Income was Confusing

[171] There were two main problems with the arbitrator’s determination of David’s 2018 income. First and simply put, the arbitrator’s calculation is confusing. The arbitrator arrived at the $185,000 figure without clearly explaining how he got to it or offering some actual calculation to explain it. Having discussed some factors that he would consider, including the past treatment of pre-tax income of Future Focus, he suddenly arrived at a conclusory figure of $185,000. Since that figure included the Shansel loan figure of $44,287, his calculation must have been based on a figure of $140,713. But I still do not know how he arrived at that number. Having heard yet again from the parties I am no closer to understand his reasoning in that regard.

[172] The arbitrator was required to clearly explain his reasoning and his calculations.

In R. v. Sheppard, the Supreme Court of Canada wrote of the duty of trial judges to give reasoned reasons for their decisions. In R. v. D. (S.) (2004), 2004 31872 (ON CA), 187 O.A.C. 19 (C.A.), Laskin J.A. further explained the rationale for the duty to give reasons, at paras. 24-25:

24 In Sheppard, Binnie J. gave three reasons why trial judges have a duty to give adequate explanations for their findings: judges have an obligation to the public to explain their decisions; judges have an obligation to accused persons to tell them why they were convicted; and judges have an obligation to counsel and appeal courts to make appellate review of their decisions meaningful.

25 To these reasons I add L’Heureux Dubé J.’s wise observation in Baker v. Canada (Minister of Citizenship & Immigration), 1999 699 (SCC), [1999] 2 S.C.R. 817 (S.C.C.) at para. 39: “The process of writing reasons for decision by itself may be a guarantee of a better decision.” This observation is reflected in the well-known phrase “sometimes it just won’t write”. In some cases a judge’s first instincts about a case, even a judge’s initial credibility assessments, may not stand up to a reasoned analysis. Putting pen to paper - articulating the “path” to one’s findings - may disclose a flaw in one’s reasoning. In this sense, writing reasoned reasons is a safeguard against both wrongful convictions and acquittals.

[173] That does not mean that a decision is automatically overturned in the face of inadequate reasons. Rather, as Laskin J.A. pointed out, in the absence of proper reasons, the court must adopt a functional approach to determine whether evidence exists in the absence of proper reasons, to support the trial judge’s conclusions. Put another way, as Bastarache J. wrote for the Supreme Court of Canada in Van de Perre v. Edwards, 2001 SCC 60, [2001] 2 S.C.R. 1014, at para. 15:

If there is an indication that the trial judge did not consider relevant factors or evidence, this might indicate that he did not properly weigh all of the factors. In such a case, an appellate court may review the evidence proffered at trial to determine if the trial judge ignored or misdirected himself with respect to relevant evidence.

[174] Here, reviewing the award, I cannot say that Mamo J. considered all of the relevant factors because he did not clearly set out his calculations. Nor is it explicit why he ignored Duff & Phelp’s $177,000 figure for 2017, when David accepted it and Joelle did the same, subject to the issue of the $44,287 corporate debt. I cannot defer to that calculation.

The Arbitrator Based his Decision on a Hypothetical that was Rejected by the Sole Expert

[175] Second, the arbitrator failed to come to terms with the issue of whether to accept the premise of Ms. McCarthy’s hypothetical. He did not mention that Mr. Martin rejected it. The arbitrator gave no reason for accepting the presumption and rejecting the expert’s response. He failed to consider, as David’s counsel points out, that there was no actual evidence before him that would lead him to make that finding.

[176] Of course, the arbitrator was not bound to accept the evidence of the sole expert at the hearing. That is the case even though Mr. Martin offered the only evidence regarding the attribution of Future Focus’ unpaid debt to Shamel as income to David. But if the arbitrator was going to reject or ignore Mr. Martin’s explanation for why that debt should not be attributed as income to David, he was required to give reasons for doing so. As Nicholson J. wrote in Christakos v. De Caires, 2016 ONSC 702, at para. 57:

[T]he court is not bound to rely on uncontradicted expert evidence, but rather, where such evidence is very compelling and fundamentally relevant to the crux of the issues, reasons should be given for rejecting such evidence.

(see also Ganges Kangro Properties Ltd. v. Shepard, 2015 BCCA 522, 51 C.L.R. (4th) 1, at para. 51, cited in Christakos v. De Caires, at para. 56).

[177] The arbitrator’s failure to give reasons for the rejection of the expert’s evidence regarding the Shansel corporate debt represents an error of law. Looking independently at the evidence at the appellate level, I cannot find sufficient reasons to support his decision regarding David’s 2018 income. It must be set aside.

[178] In considering all of the above, including each party’s acceptance of the $177,000 Duff & Phelps figure as the starting point, as well as David’s acceptance of it until recently, I find that it is the proper income figure to attribute to David for 2018 onward.

[179] I note that David recently attempted to file an affidavit offering new evidence about the Shansel debt. He did not seek either Joelle’s consent or leave to do so. I find that it is inadmissible and I have not considered it in reaching my conclusions above.

Issue No. 3: Did the Arbitrator Err in his Calculation of David’s Spousal Support Obligations to Joelle?

[180] The arbitrator ordered that David pay Joelle periodic spousal support of $1,269 per month, commencing August 1, 2019 and continuing indefinitely. David was to be given credit for any support payment made beyond his child support obligation since August 1, 2019.

[181] Other than the calculation of his income for support purposes, David challenges two further elements of the arbitrator‘s spousal support award:

1. what he describes as the calculation of his spousal support obligations without consideration for his obligations under s. 7 of the Child Support Guidelines (the “CSG”),

2. the award of indefinite term support.

1. The Arbitrator’s Calculation of Spousal Support without reference to s. 7 expenses

[182] David argues that the arbitrator made the “common” mistake of calculating his spousal support obligations to Joelle without considering his obligation to pay s. 7 special and extraordinary expenses to Joelle.

[183] In their Revised User’s Guide (“RUG”) to the Spousal Support Advisory Guidelines (“SSAG”), professors and authors Carol Rogerson and Rollie Thompson list the most common errors that they found for SSAG users. Among those errors is the failure to consider s. 7 obligations. The authors write:

Section 7 expenses must be taken into account under the with child support formula. This continues to be the single most common and most significant mistake under the SSAG. The failure to consider s. 7 contributions will inevitably lead to the payor paying too much spousal support, possibly way too much if the s. 7 expenses are substantial. (p. 4)

By definition, any payment of s. 7 expenses will reduce the range for amounts of spousal support. (p. 32)

However accomplished, the s. 7 expenses must be recognized and factored into the SSAG analysis. They cannot just be ignored. (p. 32)

[Emphasis in original.]

[184] David cites two cases to buttress his argument. In R.D.L. v. M.P.L., 2018 ABQB 152, 11 R.F.L. (8th) 236, at para. 4, Mah J. cites the comments of the authors of the SSAG as follows:

Professors Rogerson and Thompson are quite insistent in their 2016 User's Guide to the SSAG that it is error not to factor in s 7 expenses in some way in the spousal support formula. They suggest a "practical adjustment" in the very least.

[185] In Anderson v. Anderson, 2018 BCSC 928, at paras. 48-49, G.C. Weatherill J. found that the failure to consider the SSAG calculation was an “error in law”. He wrote:

48 My own DivorceMate calculations are attached as Schedule "A" to these reasons for judgment. They show a mid-range Guideline spousal support amount payable by the appellant of $212 per month if s. 7 expenses are not considered, and $138 per month if the s. 7 expenses ordered by the trial judge in the amount of $420 per month are considered.

49 No basis was provided by the trial judge for her departure from the Spousal Support Advisory Guidelines. Indeed, it appears that she may simply have made a mistake. Moreover, she did not consider whether the $420 per month she ordered the appellant to pay in s. 7 expenses should be taken into consideration. In my view, the law requires that they should have been.

[186] I have two responses to David’s argument. First, while the SSAG are the starting point in every consideration of spousal support and often the end point as well, it does not have the status of law. That is why the “A” in SSAG stands for “Advisory”. As Lang J.A. wrote for Court of Appeal for Ontario in Fisher v. Fisher, 2008 ONCA 11, 47 R.F.L. (6th) 235, at para. 95, the SSAG “are neither legislated nor binding; they are only advisory. The parties, their lawyers and the courts are not required to employ them.”

[187] Further, as Lang J.A. added, the SSAG do not apply to every case:

96 They will not help in atypical cases…. Importantly, in all cases, the reasonableness of an award produced by the Guidelines must be balanced in light of the circumstances of the individual case, including the particular financial history of the parties during the marriage and their likely future circumstances.

101 [D]ue consideration [must] be given to the parties' individual circumstances.

[Citations omitted].

[188] Second, my review of the arbitrator’s award shows that his methodology did not ignore s. 7 expenses. Rather, he took them into consideration in light of the unique circumstances of this atypical case.

[189] In light of his parenting award requiring Joelle to return to a new environment in Ontario with the children, the arbitrator found that accurately calculating s. 7 expenses in advance “is an impossible task”.

[190] For that reason, the arbitrator simply set out an alternate manner of calculating spousal support. That calculation considered s. 7 expenses even though the arbitrator could not enumerate them. As he wrote at para. 518:

[C]hild support takes priority over spousal support and, as such, the appropriate way of calculating periodic spousal support is to follow a calculation with respect to the table amount of child support as well as the parties’ respective contributions towards s.7 expenses.

[Emphasis added].

[191] The arbitrator considered David’s s. 7 obligations in two ways. To start, he allocated the percentages by which each party was responsible for s. 7 expenses, based on their incomes. Thus, he calculated spousal support without considering in advance the quantum of future s. 7 expenses moving forward. He did calculate those expenses retroactively.

[192] Then, the arbitrator looked to “the practical application of s.15.2(1) of the Divorce Act, which requires the court to make an award that is reasonable for the support of the other spouse.” The arbitrator began this process by looking to each party’s net disposable income (“NDI”). Those NDI figures are relevant to the Divorcemate calculation of spousal support under the SSAG. The arbitrator calculated each party’s NDI before the payment of (the uncertain) s. 7 expenses.

[193] The arbitrator then used the SSAG range to find a reasonable spousal support amount. Since Joelle had both a compensatory and non-compensatory claim, it was open to the arbitrator to order support in the high-range. Instead, he ordered that David pay support at the mid-range. In doing so, he accounted for the difficulty in determining s. 7 expenses. As he wrote at para. 524:

[A] reasonable award for spousal support, in the circumstances, is for David to pay at the midrange given that his 43.7% of the net disposable income available to him, at that level of spousal support, will be reduced further once he pays his 66% of the children’s significant s.7 expenses.

[194] In short, the arbitrator was aware of both the need to consider David’s obligations under s. 7 and the difficulty of calculating those obligations at the time of the award. He made a discretionary decision that resulted in a spousal support award at a lower end of the range than it would likely have been had he included the s. 7 expenses. David offers no alternative calculation in his materials.

[195] I find that the arbitrator’s exercise of discretion regarding the consideration of s. 7 expenses was within the scope of options available to him on both the law and the facts. His decision is entitled to deference. I would not interfere with it.

2. The Arbitrator’s Grant of Indefinite Term Spousal Support to Joelle

[196] David challenges the arbitrator’s finding that spousal support should be paid on an indefinite basis. He points out that that the parties’ fifteen year marriage and twenty-two month pre-marriage cohabitation could not be considered a long-term relationship under the SSAG. David points to a Divorcemate SSAG calculation, which calls for the duration of spousal support to be between 7.5 – 15 years.

[197] The jurisdiction for a court to order the payment of spousal support is found in the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) (“DA”), at s. 15.2 (1). It allows the court to order periodic and/or lump sum payments as the court thinks reasonable for the support of the other spouse. Under the DA s. 15.2 (3), the spousal support order may be made for definite or indefinite periods, or until a specified event occurs. The court may also impose "...terms, conditions or restrictions in connection with the order as it thinks fit and just".

[198] The DA s. 15.2 (4) requires the court to "...take into consideration the condition, means, needs and other circumstances of each spouse." The factors that the court must consider include:

(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.

[199] Under the DA s. 15.2 (6), an interim or final spousal support order should meet the following objectives:

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.

[200] As the Supreme Court of Canada stated in Moge v. Moge, 1992 25 (SCC), [1992] 3 S.C.R. 813, at p. 852, all four of the potentially overlapping objectives must be taken into account. None, including self-sufficiency, is paramount or should be given priority to the others. This approach recognizes the great diversity of marriages. It allows the court to take a case by case approach to the determination of spousal support.

[201] The goal of the application of these four objectives is to achieve an equitable sharing of the economic consequences of marriage or marriage breakdown. There is no guarantee that the spouses will share an equal standard of marriage after its dissolution. However, the longer the relationship and the closer the economic union, the greater will be a spouse's presumptive claim to equal standards of living upon dissolution (Moge, at p. 870).

[202] In the RUG, Professors Rogerson and Willis look to the SSAG with child formula, which applies in this case. They write: “[m]ost initial [with child] orders are ‘indefinite (duration not specified)’. Where time limits are set, they tend to be generous, as they should be in light of the strongly compensatory claims”: (p. 43).

[203] The SSAG gave special consideration to support for custodial parents of children with special needs such as C, and to a lesser extent, D. That consideration would apply even more when a parent is raising two special needs children. At para. 12.10, the authors write about duration in those circumstances by stating:

A child with special needs can obviously affect the ability of the primary parent to obtain employment, whether part-time or full-time. This may require that the duration of support be extended beyond the length of the marriage or beyond the last child finishing high school, the two possible maximum time limits under the with child support formula.

[204] The authors add that the quantum of support is affected by an added compensatory quantum of support. They write at para. 12.10:

Again, a special needs child will often mean that the primary parent cannot work as much, perhaps not even part-time, and thus the amount of spousal support will be increased because of the recipient’s lower income, an adjustment that can be accommodated by the with child support formula. But even then, there may be a need to go above the upper end of the range, to leave an even larger percentage of the family’s net disposable income in the hands of the primary parent, above the typical maxima of 54 per cent (1 child) or 58 per cent (2 children) or even 61 per cent (3 children). In these cases, spousal support awards go beyond the usual compensatory rationale under the with child support formula, to reflect a larger component of supplementing the children’s household standard of living. The table amount of child support and section 7 expenses for the special needs child may not fully reflect all the costs imposed upon the recipient spouse’s household by that child.

[205] In Fisher v. Fisher, Lang J.A. wrote of the “symbiotic relationship between amount and duration” under the SSAG, at para. 109. She quotes from the comment at para. 7.5.1 of the SSAG that they “are interrelated parts of the formula -- they are a package deal.” In other words an increase in one may necessarily require a decrease in the other. Or a decrease in one may require an increase in the other.

[206] Here, Joelle’s non-compensatory claim arises from a medium-range relationship of almost 17 years: 22 months cohabitation and an approximately 15-year marriage. That figure is just over three years below the high-end range of a relationship (SSAG ch. 7.5). Both before and particularly after Joelle moved to Indiana, there was what the Court of Appeal for Ontario described as “an economic merger of their interests” (Cassidy v. McNeil, 2010 ONCA 218, 99 O.R. (3d) 81, at para. 69).

[207] Joelle’s compensatory claim arises from the roles that the parties assumed during their relationship. Those roles very much included Joelle’s care for C and move to Indiana for C’s benefit.

[208] While Joelle is unemployed, UBRFIST currently pays her a stipend of $62,400 per year as “compassionate leave” payments. With other benefits from her former employment at UBRFIST, Joelle’s annual income for support purposes is $72,401.81 per year. This money would not be available to David if and when those payments end.

[209] After a careful review of the relevant authorities, the arbitrator found:

515. Although Joelle has continued to be paid during the last five and a half years [by David’s union] she has been in reality out of the work force. This consequence of the move to Indiana was known in 2014 when the move took place, not only because Joelle did not have the necessary VISA [sic] to be able to work in the United States, but also because her care of two children, one with very special needs, was her full time occupation.

516. The agreed upon roles during the later part of the marriage, which continued after the marriage breakdown resulted in adverse economic circumstances for Joelle and continue to do so. Realistically, Joelle cannot go back to her old job once she returns to Canada, given the animosity and acrimony between her and David, who is the Founder and President of the Union she worked for.

[210] The compensatory aspect of Joelle’s spousal support entitlement will continue indefinitely and for as long as she is the primary caretaker of C. It is clear in the evidence that that child will remain dependant for the rest of her life.

[211] The arbitrator recognized that the quantum of support that he granted to Joelle, in light of the limited amount of money available to this family in light of the children’s expenses, did not offer full recompense to Joelle for her compensatory claim. But the children’s entitlement to support takes priority over Joelle’s entitlement to spousal support (DA, s. 15.3). So the arbitrator did something that the court in Fisher had signaled that he should do in light of the “package deal”: he increased the duration to make up for the lower quantum despite the level of Joelle’s compensatory claim.

[212] In sum, I would not reverse the arbitrator’s discretionary spousal support award. It contains no error of principle. I give no effect to that argument.

Issue No. 4: Did the Arbitrator Err in Calculating David’s Retroactive s. 7 Special and Extraordinary Child Support Expenses?

[213] David challenges what he calls the arbitrator’s “arbitrary” award of $19,800 in retroactive s. 7 expenses. He argues that the determination was really just a saw-off between his calculation of $10,129.91 and Joelle’s calculation of $29,378.24. In doing so, David argues, the arbitrator failed to respond to the issues between the parties.

[214] As the arbitrator pointed out, there were numerous issues between the parties regarding s. 7 expenses, particularly:

a. what constitutes a s.7 expense:

b. whether BACA payments for the years 2015 to 2017 were reimbursed to David by IA Financial Group;

c. whether Joelle has made certain contribution towards D’s tuition;

d. contribution towards school supplies by David;

e. the payment of insurance premiums by Joelle;

f. whether there has been reimbursement for medical expenses relating to D and C; and

g. whether cellphone expenses for D constitute s.7 expense.

[215] In the absence of clear reasons, David asks the court to simply find that the arbitrator’s conclusion is not entitled to deference. Thus, he asserts, this court should simply accept his figure, although why that one and not Joelle’s number is something that he does not explain.

[216] Joelle’s response is essentially that the calculation was a difficult and discretionary one. The arbitrator’s decision is entitled to deference.

[217] I agree with David that the arbitrator did not attempt to come to terms with all of those issues. Nor did he offer clear reasons for his decision. he wrote:

453. Although substantial documentation has been filed by both sides with respect to this issue, paperwork alone does not clarify some of the differences.

454. Having examined all of the documentation and the evidence before me, I fix the retroactive reimbursement amount with respect to s.7 expenses owing by David to Joelle in the sum of $19,800 which amount shall be paid by December 1, 2019.

[218] It is certainly plausible that the arbitrator split the difference between the two figures. Their mid-way point is $19,754.08, which rounded up to the nearest hundred dollars is the arbitrator’s $19,800 figure. He almost certainly did so because the cost of actually determining the issue would likely have approached the money in issue.

[219] I am not in a position to independently determine how much money, in addition to $10,129.91, David owes to Joelle for s. 7 expenses. Accordingly, and reluctantly because of the expenses involved, I order that David shall immediately pay Joelle $10,129.91 towards the payment of s. 7 arrears. The issue of how much, if any, over $10,129.91 David owes to Joelle must return before the arbitrator for a decision. It is to be hoped that the parties will be able to do so in the most proportionate and cost efficient manner possible.

Order

[220] In conclusion, I dismiss both parties’ appeals other than as set out below:

1. I set aside the arbitrator’s ruling that David is the sole owner of the matrimonial home;

2. I declare that Joelle is a joint, 50% owner of the matrimonial home.

3. I order that the matrimonial home shall be listed for sale by March 1, 2021. If the parties are unable to agree on an agent, conveyancing lawyer or terms of the sale, they may appear before me to argue those terms.

4. Joelle is entitled to 50% of the net proceeds of sale of the matrimonial home, subject to adjustments regarding equalization, arrears of support, and debts each party may owe to the other. Again, if they are unable to do so, they may appear before me to argue those terms.

5. I set aside the arbitrator’s finding that David’s income for support purposes for 2018 is $185,000. I find that his income for that year is $177,000.

6. The equalization payment determined by the arbitrator shall be recalculated in accord with this decision.

7. If either party seeks to recalculate the quantum of periodic support calculated by the arbitrator in light of my ruling regarding David’s 2018 income, they may file a submission of no more than five pages, plus any applicable Divorcemate calculations within 30 days of the release of these reasons. The other party may respond within a further 30 days. If I receive no submissions within that 30 day period, I will assume that the parties do not wish to engage in such a recalculation exercise.

8. David shall immediately pay Joelle $10,129.91 towards the payment of s. 7 arrears.

9. The issue of how much, if any, over $10,129.91 David owes to Joelle towards the payment of s. 7 arrears is remitted to the arbitrator for a decision.

Costs

[221] The results of this appeal are divided, both with regard to parenting and financial issues.

[222] If the parties are unable to resolve the issue of costs both in this court and below, they shall arrange a date to appear before me to argue those issues. Before they do so, each party shall submit their costs submissions of up to five pages, plus bill(s) of costs and offers to settle at least 14 days prior to their attendance before me. The parties need not include the authorities upon which they rely so long as they are found in the commonly referenced reporting services (i.e. LexisNexis Quicklaw, or WestlawNext) and the relevant paragraph references are included.

[223] If the parties have not arranged a date to speak to costs by January 10, 2021, I will assume that they have resolved those issues.

“Marvin Kurz J.”

Electronic signature of Justice Marvin Kurz,

Original will be placed in court file

Date: December 17, 2020