COURT FILE NO.: FS-20-16980

DATE: 20210624

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Christopher Russell Rankin, Applicant

AND:

Anne Catherine Rankin, Respondent

BEFORE: Kiteley J.

COUNSEL: Harold Niman and Richard Niman, counsel for the Applicant

Christopher Burrison and Sydney Bunting, counsel for the Respondent

HEARD: April 29, 2021

ENDORSEMENT

[1] This was a motion by the Respondent for an order for temporary spousal support and temporary child support, and an order for security.

Background

[2] The parties began cohabiting in November 1990 (according to the Respondent) or September 1991 (according to the Applicant). They were married on July 22, 1995. They have two children: ERR born June 3, 2000 and SDR born October 5, 2005.

[3] In 2017, the husband told the wife some significant alarming personal information. The spouses were involved in marriage counselling to address the situation, but they separated on July 30, 2019.

[4] The husband was 48 years old at the separation and is now 50 years old. He is employed at a private equity firm in Toronto.

[5] The wife was 53 years old at the separation and is now 55 years old. She is self-employed as a musician and a cello teacher.

The Term Sheet

[6] In the context of the marriage counselling following the Applicant’s disclosure in about September 2017, the Applicant raised the prospect of negotiating a post-nuptial agreement. The Respondent acquiesced. The Applicant produced a document he called a term sheet of over 30 pages. It covers these topics: a one page term sheet summarizing conclusions on specific points including scope, support payments being non-compensatory, annual payments (rather than monthly), and lengthy explanatory notes that described the two purposes of the post-nuptial agreement, an analysis of the Respondent’s compensatory v non-compensatory claims, retirement plans for each of the spouses, annual payments, cohabitation, US Tax Adjustments, retirement, Claim 1 and Claim 2, the Claim Implications, and calculations. Attached to the term sheet is a letter dated March 24, 2019 “to our respective lawyers” signed by the Applicant and the Respondent that includes the following:

We are seeking your help in finalizing a postnuptial agreement that would be legally valid and enforceable in the event we were to separate. . . . As we understand the process, to create a legally valid and enforceable contract each one of us will require independent legal advice. We understand there will be an extensive financial disclosure process. As a first step, Anne or Chris, as the case may be, asks you to first consider the attached term sheet and explanatory notes so that we can identify any issues and talk about your willingness to work on a situation that falls well outside of the basic SSAG formulas.

[7] Neither party took the position that there was any settlement privilege attached to the term sheet.

[8] I note these aspects of the document. The covering letter dated March 24, 2019 makes it clear that the parties had not reached an agreement.

[9] Although the Applicant had introduced it as a post-nuptial agreement, there were references to the fact that it might become a separation agreement, should they separate.

[10] There are frequent references to the parties having “agreed” or the Respondent having “agreed”. In particular, the term sheet indicates that the Respondent agreed that she does not have a claim for compensatory spousal support. I note however that on page 21 of the document, this note appears: “Finally, there is a substantial issue of whether this is compensatory or non-compensatory” and then goes on to refer to the impact on retirement depending on which form of spousal support governed.

[11] The term sheet was prepared by the Applicant. There is no evidence that the Respondent contributed to it. The document reflects the Applicant’s in-depth knowledge of the Spousal Support Advisory Guidelines including reference to s. 12.h of the SSAG Update and the interrelationship between property and spousal support. In various subjects, the Applicant has made reference to case names to illustrate a point.

[12] The term sheet contains an explanation that there were two purposes of the agreement, the second of which was to “agree on the economic consequences of certain transgressions that happened during our marriage”. That issue is addressed in detail in pages 23 to 29 of the term sheet. Those documents are in the public domain as is this decision. Given the sensitivity of that evidence, I will not provide further details. When necessary, I will refer to Claim 1 and Claim 2.

The Separation on July 30, 2019 to June 2020

[13] In her affidavit sworn April 19, 2021, the Respondent deposed that, on July 30, 2019, when the Applicant revealed more alarming personal information (Claim 2), she immediately ended the marriage and made plans to leave the matrimonial home. The younger son SDR was then 13. She wanted to ensure that he would have a home with his father and with his mother. The Respondent purchased a condominium in the neighbourhood of the matrimonial home for $1,150,000.

[14] The Applicant facilitated the purchase by agreeing that the Respondent could draw $1,250,000 from the joint line of credit registered against title to the matrimonial home. The Respondent quickly closed on the Agreement of Purchase and Sale. In September, she moved in for a few weeks but returned to the matrimonial home in November when renovations started. She resided briefly in the matrimonial home but has lived in her condominium since late 2019.

[15] Given the disclosure by the Applicant of the alarming information and the separation on July 30, 2019, the Respondent’s immediate purchase of the condominium which the Applicant facilitated was a reasonable decision by both of them and accounts for the email that the Respondent sent acknowledging how hard the Applicant had worked during the marriage and that his hard work had resulted in her being well taken care of, even after the separation. Unfortunately, the Applicant’s good will did not last long.

[16] The Applicant took the position that the term sheet, which had been created as the basis of a post-nuptial agreement, constituted the terms of a separation agreement. His lawyer sent a draft separation agreement to the Respondent’s lawyer that incorporated the relevant provisions from the term sheet.

[17] On November 24, 2019 the Respondent informed the Applicant that she would not sign the draft separation agreement. According to the Respondent, the Applicant was furious, and threatened her, so she left the matrimonial home.

[18] That was a turning point. The flexibility and accommodations that the Applicant had made stopped. In her email dated December 9, 2019 the Respondent asked if he had received his bonus yet because she had financial pressures. He responded quickly by indicating that since she had rejected the draft separation agreement, he would not provide any further funds. He wrote the following:

. . . you have three viable sources of funds to cover your expenses: (1) the $1.3-$1.4 million in advances that I provided to you in August and September, (2) the $1+ million that you have in marketable securities, and (3) the ability to earn employment income. Given the substantial drop in my employment income, which happened through no fault of my own, your earning ability has become much more important.

[19] That evening, after the email exchange, the Respondent withdrew $250,000 from the TD joint line of credit. When she refused to return it, the Applicant immediately withdrew $530,000 from their two lines of credit, effectively draining them both. The Applicant froze her Rogers account, restricted her telephone and internet access, and cancelled their joint visa. He changed the locks at the matrimonial home. He demanded she pay one-half of a tax preparation bill in the total amount of approximately $13,000. In an email exchange dated December 17, 2019, he wrote that “following the HELOC event”, [i.e. as a result of her withdrawal of $250,000] he would not pay expenses such as the tax preparation bill.

[20] In an email dated December 20, 2019, the Applicant demanded that she pay her share of significant private school fees for SDR which he suggested provisionally was 37.5%.

[21] In an email dated December 20, 2019, the Applicant threatened to take her to small claims court when $164.06 of pre-authorized expenses were charged to the Applicant’s visa.

[22] In an email dated December 21, 2019, the Applicant wrote that the C&C 41 “sailing yacht” (which was in her name but was used by the children) was her responsibility, including sale. He wrote that his income had fallen, and he only had “visibility on $100,000 of employment income for 2020”. As a result, he would not buy the boat, as had been contemplated in the pre-nuptial agreement and he would no longer pay any of the operating expenses.

[23] The Respondent’s lawyer sent a letter dated January 16, 2020 with respect to tuition and sale of the home. Her lawyer pointed out that if the Applicant wanted to list the matrimonial home, then the Respondent would co-operate. In that letter her lawyer asked for confirmation that the Applicant would pay the tuition registration fee in the amount of $2000 which was due February 19 and pointed out that the Respondent is “without support from” the Applicant. Her lawyer also noted that if the Applicant would not commit to paying the tuition registration fee, would not commit to the child returning to the private school in September 2020 and would not acknowledge the Respondent’s support entitlement, then a four way meeting was not the appropriate forum for narrowing the issues.

[24] In a letter dated March 2, 2020, the Applicant’s lawyer responded with respect to the matrimonial home as follows:

. . . Regarding the sale of the home, my client was told by his bank they will not give him a mortgage or HELOC without a signed Separation Agreement or divorce order. He is therefore not in a position to sell the house in the absence of a separation agreement, because his capital position is insufficient to maintain the marital standard of living without access to credit. That said, he is keen to negotiate a Separation Agreement promptly.

[25] Because the home has not been sold, interest continues to accumulate on the advances for purchase of her condominium, on the advance that she took on December 9 and the advances that the Applicant took on December 10.

[26] Since January 2020, the younger son has been living alternate weeks with each parent.

[27] The husband issued the Application on June 26, 2020. The Answer and Claim was filed July 29, 2020. The Reply was filed September 18, 2020. The parties attended a case conference on September 18, 2020 and a mediation on January 15, 2021.

[28] In his Application, the Applicant took the position that (a) the Respondent had agreed to the provisions of the term sheet but she had “resiled from it”, leaving him with no choice but to start proceedings and that (b) the Respondent was not entitled to compensatory support.

[29] The Applicant’s insistence that the Respondent had resiled from the agreement has caused this to be a more controversial motion than the circumstances warrant. The uncontradicted evidence is that the term sheet did not constitute an agreement. There was no agreement from which she could resile,

Motion by the Respondent

[30] The Respondent is asking for an order for temporary child support with respect to SDR commencing January 1, 2020 to the trial in the amount of $3000 per month. She is also asking for an order for temporary spousal support as follows:

(a) $23,900 each month from and including August 1, 2019 to and including December 31, 2019 paid in a net amount of $62,090 since the periodic amounts are no longer taxable/deductible;

(b) $13,750 each month from and including January 1, 2020 to and including December 31, 2020; and

(c) $9,500 each month commencing on January 1, 2021 and continuing until trial.

[31] The Respondent has also asked for security for support, but counsel advised at the outset of the hearing that that issue had been resolved and would be incorporated into a consent order.

[32] In his confirmation form filed April 26, 2021, the Applicant asked for an order adjourning the motion to allow for questioning of the parties, but that request was not pursued at the hearing.

[33] The position of the Applicant is summarized in paragraph 3 of his affidavit sworn April 23, 2021:

I do not dispute that prospective interim child and spousal support is appropriate pending trial. I do not, however, agree with the calculations prepared by Anne in her material on this motion. On a without prejudice interim basis, I suggest the following arrangement for child and spousal support:

(a) My income is $433,000 and Anne’s income is imputed at $68,000;

(b) Child support based on these incomes is $2,703 per month;

(c) Reasonable, agreed upon section 7 expenses to be paid 100% by me; and

(d) Spousal support at the mid-point of the SSAG range in the amount of $2,955 per month, to be satisfied by me paying the monthly HELOC payments which relate almost entirely to Anne’s post-separation draws, in the amount of $3,682.

The legal framework for motions for temporary spousal support

[34] This is a motion pursuant to s. 15.2 of the Divorce Act. Pursuant to s. 15.2(4), the court is required to take into consideration the condition, means, needs and other circumstances of each spouse, including the length of time the spouses cohabited; the functions performed by each spouse during cohabitation, and any order, agreement or arrangement relating to support of either spouse. The third factor does not apply here.

[35] Pursuant to s. 15.2(6), a support order should recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown; apportion between the spouses any financial consequences arising from the care of a child of the marriage over and above any obligation for the support of any child of the marriage; relieve any economic hardship of the spouses arising from the breakdown of the marriage; and in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.

[36] The Respondent asserts a claim based on the compensatory model and the needs based model.

[37] Each party refers to some of the case law that has accumulated in the context of applying those mandatory and permissive provisions of the Divorce Act. The Respondent refers to the decision in Nifco v. Nifco [2018 ONSC 2603] at paragraph 22 which states as follows:

(a) The support applicant’s needs and the other spouse’s ability to pay assume greater significance.

(b) The support order should be sufficient to allow the support applicant to continue living at the same standard of living enjoyed prior to separation if the payor’s ability to pay warrants it.

(c) The court does not embark on an in-depth analysis of the parties’ circumstances which is better left to trial. The court achieves rough justice at best.

(d) The courts should not unduly emphasize any one of the statutory considerations above others.

(e) The need to achieve economic self-sufficiency is often of less significance.

(f) Interim support should only be ordered where it can be said a prima facie case for entitlement has been made out.

(g) Where there is a need to resolve contested issues of fact, especially those connected with a threshold issue, such as entitlement, it becomes less advisable to order interim support.

[38] In paragraph 75 of his statement of law, the Applicant noted that the importance of the statutory factors varies from case to case and he refers to a similar framework decided in the case of Driscoll v. Driscoll [2009 66373 ONSC at para. 14]

Analysis: Respondent’s claim for temporary spousal and child support

A. Entitlement to Spousal Support

[39] In his statement of law, the Applicant, in effect, focuses on the permissive criteria in s. 15.2(6). He takes the position that the Respondent has not established a prima facie claim for compensatory support. He asserts that she did not suffer a disadvantage arising from the roles taken during marriage and, in fact, enjoyed a considerable financial benefit from the marriage. He also asserts that she did not forgo career paths or opportunities for the benefit of the family. He insists that he suffered a disadvantage from the marriage by the refusal of the Respondent to be more productive in earning income. The Applicant is critical of the Respondent for what he considers her refusal to agree to career options that he had to forego.

[40] The Applicant also asserts that the Respondent has not established need for support because her bank accounts have increased by close to $50,000 since separation, she has accessed over $1.57 million in joint funds, she lives in a mortgage-free property, has more than $1.2 million in her bank accounts, the Applicant is paying almost 100% of SDR’s expenses, the Respondent’s day to day expenses during the weeks SDR is living with her are minimal, the Applicant has made payments exceeding $127,000 on her behalf and to her benefit, she is capable of supporting herself on earnings and on investments which will increase when the equalization payment is made, and she has excluded assets.

[41] Although in his statement of law, the Applicant takes the position that the Respondent has not established entitlement to support on either basis, he has, in effect, acquiesced to her entitlement on a needs basis. He has provided SSAG calculations and, as indicated in paragraph 3 of his affidavit quoted above, on the basis of his assumptions, he is required to make a modest payment of temporary spousal support but he asserts that it should be allocated to payment of interest on the line of credit.

[42] In my view, these are the uncontroverted facts that are key to the Respondent’s claim for spousal support. The relationship started in November 1990 (according to the Respondent) or in September 1991 (according to the Applicant in his form 13.1 sworn April 26, 2021). The relationship ended on July 30, 2019. Regardless of the difference between them as to the start date, a relationship of 28 or 29 years is a “long marriage”. The Respondent was 53 at the time of separation and is 55 now. The Respondent’s line 150/15000 income in 2018 was $38,856; in 2019, it was $13,678, and in 2020, it was $15,461. The Respondent has not earned more than $7,000 in self-employment income in the last 20 years. The Respondent’s ability to increase her income from professional pursuits is hampered by COVID19. The Applicant has been the breadwinner throughout the marriage. Any income of the Respondent was insignificant. The Applicant has supported the children (in their expensive educational and extra-curricular activities), and supported the family in their comfortable standard of living. The Respondent is dependent on the Applicant for support.

[43] In the term sheet, the Applicant noted that “there is no question that our children benefitted emotionally from having Anne as a stay-at-home mother rather than having a nanny raise our children”. Furthermore, while the Applicant criticized the Respondent for what he said was her refusal to increase her earnings for most of the marriage and his insistence that it was “abundantly clear that [her private business] was not successful, at the expense of pursuing remunerative employment”, he did not respond to the Respondent’s evidence as to the contents of a letter he wrote to the Respondent in the summer of 1991 in which he described in detail his expectation that he wanted “a housewife”. In his own handwriting, which he did not contradict, he made it clear that it was a condition of the marriage that the Respondent play the role of housewife. She said she accepted that role and married him on that basis, which he did not contradict. Also, while he strongly disagreed with the claim for compensatory spousal support, he acknowledged in the term sheet that it was a “substantial issue”. In his document, the Applicant has acknowledged the functions that the Respondent performed during the relationship which give rise to a claim for spousal support.

[44] In addition to those uncontroverted facts, I consider the evidence as to standard of living which includes the following. The matrimonial home is valued at $3 to $4 million. Each spouse has significant investments. In 2016 and 2017, his line 101 income was over $1 million. The children have been encouraged to excel in sailing and skiing and both have been financially supported in those skills. The children have attended private school.

[45] On the basis of limited income from her profession as a musician and from her investments, the Respondent cannot provide a standard of living for herself that is close to the standard of living that she enjoyed during the marriage and that the Applicant clearly continues to enjoy. The Respondent has managed up to this point because she has used the $250,000 that she drew on the line of credit, she sold the C&C 41 for $60,000 and she has depleted capital to the extent of $260,000.

[46] The trial judge will have the opportunity to conduct a detailed examination of the evidence, including the assertion that the Applicant has been disadvantaged by the marriage. At this interim stage, the court is not required to review the entire record, resolve the conflicts in the evidence, and allocate the claim as compensatory or needs based. At trial, whether the court finds that the support recipient has established need and compensation may affect the amount and duration of spousal support. That is not the case in this interim motion. Based on the application of the mandatory criteria in s. 15.2(4), the evidence is clear that the Respondent has established prima facie entitlement to spousal support.

[47] In his evidence and submissions, the Applicant relies on the report and analysis done by Ms. Mann in the context of the post-nuptial agreement. I accept the evidence of the Respondent in paragraph 30 of her April 26 affidavit as to the circumstances under which that work was done, and particularly in the shadow of Claim 1. For purposes of this motion, I do not consider it relevant.

B. Entitlement to child support

[48] ERR is 21 years old and is wonderfully situated in his education and career. Support for him is not an issue at this time.

[49] SDR will be 16 in October. He is now in grade 10 and will advance to grade 11 in September 2021. He too is doing well in his academics and in his extra-curricular activities, some of which are expensive. Since January 2020, he has lived alternate weeks with each parent. The Respondent has a claim for child support table amount and s. 7 expenses.

[50] The Applicant concedes that the Respondent is entitled to child support for SDR.

C. Income of the Respondent

[51] As indicated above, the actual line 150/15000 income of the Respondent, including investment income and professional income is as follows: 2018: $38,856; 2019: $13,678; 2020: $15,461. For purposes of this motion for temporary child and spousal support, the Respondent takes the position that her income for 2020 and 2021 and ongoing until trial is $15,461. She pointed out that her professional income for 2020 and ongoing has been negatively impacted by COVID19.

[52] The Applicant takes the position that the court should impute income to the Respondent of no less than $68,000 per annum, relating to her underemployment and investment income. He relies on the analyses prepared by Ms. Mann, the financial advisor. As indicated above, I do not consider that evidence to be relevant.

[53] The Applicant relies on many cases in support of his request that the court impute income to the Respondent. Most of the decisions were following a trial or an appeal and are not relevant. Those that relate to imputing income on a motion for temporary support are as follows. In Rothschild v. Rothschild [2019 ONSC 568], the payor had provided an income report which the motion judge accepted. In Johnson v. Johnson [2012 CarswellOnt 8411] the payor had quit his job earning $64,000 and was employed as a car salesman with estimated earnings of $20,000. The motion judge imputed the amount of $44,500 which was the midpoint between those two. In Chaudhry v. Meh [2019 ONSC 7065] Akbarali J. dealt with the income of the payor. At paragraphs 22 to 24, she expressed her concerns about embarking on a full analysis and instead assumed that the data reported by the payor’s experts and the rate of return on his net equity was correct. In Gonsalves v. Scrymgeour [2017 ONSC 1034] Glustein J. indicated at paragraph 12 that income was imputed to the payor and to the recipient based on an earlier order to which counsel did not refer.

[54] On a motion for temporary support the task of imputing income to the support recipient requires an in-depth analysis as to ability to earn more in professional income or in investment income. It is contrary to the expectations on a motion for temporary support for the court to undertake that analysis.

[55] For purposes of this motion for temporary child and spousal support, I find that the income of the Respondent is as indicated in paragraph 51 above.

D. Income of the Applicant

[56] The Applicant takes the position that his annual income for purposes of this motion for temporary support is $433,000.

[57] The Applicant retained Duff & Phelps to prepare an income report. The report is dated December 18, 2020 and was served on January 6, 2021, in the week preceding the mediation. The expert was asked to provide a report on the Applicant’s income for 2017, 2018 and 2019. Table 2 of the report lists the components of income for support purposes. It refers to Scenario 1 including all sources of income as follows: 2017: $1,407,000; 2018: $1,571,000; 2019: $957,000. In 2017, the Applicant retired from his employment at a financial institution which led to additional amounts being paid including on account of deferred stock. In Table 2, Scenario 2, the expert reduced those income amounts by potentially non-recurring sources of income. For 2017, the expert said that the bottom line was “not representative”. For 2018 it was $679,000 and in 2019 it was $589,000.

[58] The Applicant does not accept that the amount of $589,000 should be attributed to him. In paragraph 43 of his affidavit, he said that his income for those years is not indicative of his income in 2020 and 2021 and should not form the basis of his interim support obligation. In paragraph 44, he said that his income is highly variable. After leaving the financial institution in 2017, he began working with what he referred to as a promising start-up business. He received a commitment of compensation that was less than what he had earned at the financial institution and has become less than the commitment, through no fault of his. He was guaranteed cash compensation in the amount of $600,000 for the first 12 months. He was paid $725,000. In late 2019, he learned that the employer had lost its major client and that eliminated all monthly recurring revenue for the firm. He was also told in late 2019 that the employer could only guarantee his $200,000 base salary for six months ending June 2020. In 2019, he received $445,000. In paragraph 49, he said that his employer had “pivoted and adopted a new revenue model” and as a result, in 2020 he was paid $500,000.

[59] The Applicant provided a letter from his employer dated March 1, 2021 indicating that it was in response to the Applicant’s request to provide “our expectations for your total compensation for the calendar year 2021”. The Managing Partner confirmed that the Applicant’s current annual salary was $250,000. He also wrote that “Market conditions can change but our current estimate for your 2021 total compensation is between $250,000 and $375,000”.

[60] In paragraph 52 he deposed that he expected his employment income in 2021 would be $313,000. In paragraph 53, the Applicant deposed that for purposes of this motion, his income should be $433,000.

[61] The Applicant disclosed his 2020 income tax return on April 8. He served his form 13.1 financial statement sworn April 23, 2021 after the Respondent filed her reply affidavit dated April 23, 2021 so she has not had an opportunity to provide input. No explanation was provided for the delay in serving the form 13.1 financial statement which is required for purposes of a motion such as this. On page 2 of his form 13.1 the Applicant said that his line 150 income for 2020 was $518,731.

[62] In his form 13.1 he showed his current income as follows:

Employment income base salary $250,000 annualized

$20,833

Commissions, tips and bonus ($252,601) based on 2020 and 2021 may be significantly lower

$21,050

Interest and investment income (based on 2020 amount)

$ 1,269

Total

$43,152 monthly; $517,835 annually

[63] The Applicant has also listed his expenses which total $51,713 per month and $620,561 annually. He has noted “TBD” with respect to his US income tax to which reference will be made below.

[64] The Respondent accepts Scenario 2 from the expert’s report for 2019 with one exception and one qualification. The exception is that, missing from his income of $589,000 in Scenario 2 is $10,520 in employment income in 2019 that was omitted from the report and therefore his 2019 Guideline income should be $599,500. The qualification is that if the deferred stock is not included in income, it should be included in net family property and equalized. The Applicant did not respond to the missing income and he disagreed with the Respondent on the deferred stock. As indicated below, I do not accept the Respondent’s submission that temporary spousal support should commence in 2019 and, for that reason, I need not resolve that conflict.

[65] In paragraph 69 of her affidavit, the Respondent pointed out that the Applicant’s line 15000 income for 2020 was $518,731. She made certain modest adjustments, and, subject to investigating those amounts further, she took the position that the Applicant’s 2020 Guideline income for 2020 is $508,000.

[66] Based on the evidence in his affidavit and in his form 13.1, I note the following. The letter dated March 1, 2021 from the Applicant’s employer estimated total compensation between $250,000 and $375,000. Yet he has estimated annual income in the amount of $517,835 which exceeds his employer’s estimate by $200,000. Furthermore, he intends to spend $620,561. I understand the Applicant’s evidence that since he retired from the financial institution in 2017, his income has been uncertain. However, to accept and rely on his conservative estimate of $433,000 is neither reasonable nor fair to the Respondent. I accept and rely on the submission of the Respondent that, for purposes of 2020 and ongoing to trial, the Applicant’s income is $508,000 which is consistent with his estimated income in his form 13.1 and far less than his budget.

E. Calculation of Child Support table amount and s.7 expenses

[67] In paragraph 75 to 85 of her affidavit sworn April 19, 2021, the Respondent provided detailed evidence as to the expenses she has incurred for SDR and her calculation of the table amount and the s.7 expenses.

[68] As indicated in paragraph 3 of his affidavit, quoted above in paragraph 33, the Applicant will accept responsibility for all s. 7 expenses. Later in his material, he caps those at $75,000. He deposed that he would do that because of the uncertainty caused but the cross border income tax issues to which reference is made below.

[69] In paragraph 4 of her reply affidavit sworn April 26, 2020 the Respondent indicated that she continued to rely on her earlier affidavit and pointed out that the Applicant had not refuted that evidence.

[70] It is ironic that, after unreasonably demanding that the Respondent contribute significantly to SDR’s tuition and related expenses, that he now is willing to pay all of them.

[71] In any event, I accept the Respondent’s calculation for 2020 at CaseLines page B325 and B326 and for 2021 at pages B328 and B329 with the assumptions reflected. Having accepted the Respondent’s submission as to the Applicant’s income, I accept her calculation that the Applicant is required to pay $3000 per month, on the assumptions reflected on those pages.

F. Retroactive Child and Spousal Support

[72] The parties rely on many decisions in support of and in opposition to the request for retroactive support.

[73] I agree with the Applicant’s submission that retroactive orders are not made as a matter of course. However as those cases make clear, the issue of retroactivity is case specific.

[74] The situation between August 1, 2019 and the end of December 2019 was in a state of flux. SDR lived primarily with the Applicant in the matrimonial home. Once the renovations were completed, SDR began living with his mother for 50% of the time. The Applicant’s demand that the Respondent contribute so extensively to the s.7 expenses of SDR, particularly when he refused to provide the Respondent with spousal support, was unreasonable. In my view, it is reasonable to order retroactive child support commencing January 1, 2020.

[75] In the case of retroactive spousal support, different considerations apply. Between August 1, 2019 and November 2019, the Respondent still considered that the matrimonial home was her residence. She stopped when the Applicant changed the locks. Until the renovations were completed and she began living there full time, the Respondent did not incur all of the accommodation expenses identified in her budget. The Respondent made reasonable requests for financial assistance which the Applicant refused notwithstanding his significant year end bonus. The Respondent can assert a claim for retroactive spousal support for the period between August 1, 2019 and December 2019 at trial.

[76] It was in late 2019 that the Applicant changed his approach to spousal support. While the Respondent did not make a request for a specific amount of spousal support, the communications between the lawyers make it clear that she was seeking financial assistance from the Applicant. There is a basis for ordering retroactive spousal support commencing January 2020.

[77] However, while the Respondent made an indirect request for spousal support in her lawyer’s letter dated March 2, 2020, she did not make a formal request for spousal support until she filed her Answer and Claim on July 29, 2020. After the pleadings were exchanged, the parties attended a case conference which is required before a motion can be brought. And they participated in mediation in January. I accept the evidence of the Respondent that the date of April 29, 2021 for the hearing of this motion was the earliest date available to the court and to the Applicant’s counsel. Based on those circumstances, I am satisfied that the Applicant should pay retroactive spousal support commencing August 1, 2020.

G. Income tax implications

[78] In paragraphs 54 to 56 of his affidavit, the Applicant pointed out that he and the Respondent are dual Canadian and U.S. citizens. Periodic spousal support payments are not tax deductible for U.S. taxpayers. He pointed out that if he deducts periodic spousal support from his Canadian taxable income, if that resulted in him paying less in Canadian tax than he would have paid in U.S. tax, he will be required to pay the difference in U.S. tax. At paragraph 55 he provided an example of how that might work.

[79] At paragraph 56, he noted that the SSAG’s do not account for cross-border taxation issues and, as a result, there are “unintended outcomes”. He deposed that, to minimize the negative impact of those tax implications, he proposed to pay 100% of the s.7 expenses capped at $75,000 which would minimize the after tax dollars that the Respondent needs to pay out of her earnings and the support she receives, and will also offset his overpayment given his inability to deduct spousal support payments from his U.S. taxable income.

[80] In paragraph 28 of her reply affidavit, the Respondent deposed that she will cooperate to register the support order with the Canada Revenue Agency, therefore permitting the Applicant to promptly adjust his source deductions through his employment.

[81] Both parties rely on the decision in Bedzow v. Weisleder [2020 ONSC 6363] in which the support recipient was a U.S. resident. In my view, the conclusion reached by Akbarali J. in paragraphs 113-114 applies. While the Court has jurisdiction to adjust spousal support to consider the impact of the cross-border taxation provisions, I decline to do so for these reasons. First, the Respondent has agreed to co-operate to allow the Applicant to adjust his source deductions. Second, the impact will require expert evidence. Third, while the Applicant has raised it as an issue, he has provided his own SSAG calculation without taking it into account.

H. Expenses paid by Applicant on behalf of Respondent

[82] The Applicant asserts that he has paid expenses in the amount of $127,155 on behalf of the Respondent. In paragraph 6 of his affidavit sworn April 23, 2021, the Applicant provided a table of expenses for interest on the line of credit, home improvement, property tax, “yacht” expenses, computer purchases, other expenses and home insurance. In 2019, the total is $53,117, in 2020, the total is $60,213 and in 2021 it is $13,825 as of the date of the affidavit. The total for all three periods is $127,155.

[83] In paragraph 7 he deposed that “going forward and on the assumption that I will commence paying periodic interim support, either the HELOC payments ought to be deducted from my spousal support obligation, or the Respondent must be ordered to pay those amounts herself. Otherwise, the Respondent will collect support while living mortgage free at [his] sole expense”.

[84] Of those expenses, $82,152 is on account of HELOC interest. I have not made an order that the spousal support commences prior to August 2020. The maximum amount of the interest expense that might be relevant is 4/12 of $49,839 in 2020 and $10,872 to April, 2021.

[85] I am not persuaded that the Applicant should be permitted a set-off for interest payments since August 2020 and until trial. As indicated above, the parties amicably agreed that the Respondent could draw on the line of credit so that the Applicant could expeditiously and reasonably obtain alternate accommodation. In March 2020, the Respondent asked the Applicant to list the house for sale so that the lines of credit could be paid off. The Applicant refused. In June, in his Application, the Applicant asked for an order for sale of the matrimonial home. In her Answer and Claim in July 2020, the Respondent agreed. The Respondent asked again in March 2021. There is no reason to delay the sale of the matrimonial home when there is agreement. As a result, it is not reasonable for the Applicant to ask for an order that the amount of spousal support should be reduced on account of ongoing indebtedness that is being incurred because he will not sell the home.

[86] The table in paragraph 6 of his affidavit includes home improvements in 2019, property taxes and home insurance in 2019, 2020 and 2021. As indicated above, I do not consider the expenses incurred before August 2020. In any event, the Applicant changed the locks in December 2019. The Respondent has made a claim for occupation rent. If her claim is successful at trial, those ongoing expenses for property taxes, home insurance and home improvements will be addressed.

[87] The remaining categories of the expenses are for the “yacht”, computer purchases and other expenses. As indicated above, the C&C 41 has been primarily used by SDR. I see no reason to consider those expenses at this time.

[88] Unlike the authorities to which the Applicant refers, this is not a case where the court should allow the Applicant to offset expenses he is making, 50% of which are apparently on the Respondent’s behalf, against temporary spousal support. The detailed analysis of those expenditures will be done at the trial.

I. SSAG calculations

[89] In paragraph 2(e) of his statement of law, the Applicant raised the issue that, since his income exceeds $350,000, the SSAG’s might not apply. However, he has prepared his own SSAG calculations from which I infer that, at least for purposes of this motion for temporary support, he concedes that the court should apply the Guidelines.

[90] I have accepted the position taken by the Respondent as to the income of the Applicant for 2020 and 2021. I have accepted her submission as to the retroactive start date for child support, but I have not accepted her submission as to start date for spousal support.

[91] The Respondent has attached calculations to her affidavit and to her factum. I refer to those attached to her factum at CaseLines pages B325 to B326 for 2020 and B328 to B329 for 2021.

[92] At page B325 for 2020, the Respondent provided a range of spousal support in the amount of $12,930 to $14,090 to $15,258. In her submissions she has asked for an order in the amount of $13,750. I cannot find an explanation for that amount. At page B328, the range of spousal support is $8,187 to $9,236 to $10,295. The Respondent asks for an order for $9,500 again, without an explanation. Often the court uses the midpoint of the range. However, in view of the substantial capital that both parties have, in my view, it is fair to the parties to order the low end of the range. That results in the Respondent not receiving 50% of the NDI which I consider reasonable.

[93] Once an order for support is made, the court is required to make a Support Deduction Order. I expect that counsel will review with their clients the advantages and disadvantages of having payments made through the Family Responsibility Office and directly.

Costs

[94] The Respondent has been successful in obtaining an order for temporary spousal support and temporary child support and an order for retroactive child support. She was not successful in her request for an order that payments be retroactive to August 2019 for spousal support. The Respondent has achieved greater “success” than the Applicant and pursuant to rule 24(1), she is presumptively entitled to costs. I encourage the parties to agree on the cost consequences of this motion.

Next Steps

[95] Based on the material, I expect that the parties will agree on questioning. Since an order is required, I encourage the parties to agree on the terms including an agreement as to duration of the questioning. If so, they could submit a consent draft order.

[96] Any expenditure or claim that I have not incorporated into this order will be dealt with by the trial judge.

TEMPORARY ORDER TO GO AS FOLLOWS:

[97] For purposes of this temporary order, the annual income of the Applicant is $508,000 and the annual income of the Respondent is $15,461.

[98] Commencing January 1, 2020 and continuing until decision after the trial, the Applicant shall pay to the Respondent temporary child support in the amount of $3000 per month on the assumptions contained in the calculation at CaseLines pages B325-326.

[99] Commencing August 1, 2020 to and including December 1, 2020 the Applicant shall pay to the Respondent temporary spousal support in the amount of $12,930 per month on the assumptions contained in the calculation at CaseLines pages B325-326.

[100] Commencing January 1, 2021 and continuing until decision after the trial, the Applicant shall pay to the Respondent temporary spousal support in the amount of $8,187 per month on the assumptions contained in the calculation at CaseLines pages B328-329.

[101] The Applicant shall pay the arrears of temporary child support and arrears of temporary spousal support no later than August 6, 2021.

[102] The payments referred to above are without prejudice to the Applicant and the Respondent taking the position at trial to decrease or increase, as the case may be, the amount of temporary spousal and child support and the date of commencement of the payments.

[103] Support Deduction Order to issue.

[104] Unless by July 5, 2021 the parties agree as to costs, then each shall make written submissions as to costs not exceeding 3 pages plus costs outline plus offer(s) to settle, if any, on this timetable:

(a) the Respondent by July 12, 2021;

(b) the Applicant by July 19, 2021;

(c) reply by the Respondent, if any, by July 26, 2021

provided that neither party may ask for an extension of those dates.

[105] This order takes effect immediately and without the order being signed and entered.

[106] Counsel for the Respondent shall immediately prepare a draft order incorporating paragraphs 97 to 105 (that includes a calculation of the arrears) for review by the Applicant. If counsel for the Applicant does not approve the draft order within 7 business days, counsel for the Respondent shall serve a form 14B motion for signing of the order and send it through the Acting Trial Co-ordinator to my attention for signing.

[107] Counsel for the Respondent shall immediately prepare a draft Support Deduction Order and Support Deduction Information Sheet. If counsel for the Applicant does not approve the draft order within 7 business days, counsel for the Respondent shall serve a form 14B motion for signing of the order and send it through the Acting Trial Co-ordinator to my attention for signing.

[108] No later than July 12, 2021, counsel may forward an approved draft order for security to my attention with the formal orders referred to in paragraphs 106 and 107.

Kiteley J.

Date: June 24, 2021