COURT FILE NO.: FS-17-415899

DATE: 20220321

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

S.C.

Applicant

– and –

C.C.

Respondent

-and-

Resilience Capital Inc.

Respondent

Karen McArthur, for the Applicant

Jaret N. Moldaver and Jesse Rosenberg, for the Respondent C.C.

Andrew McCoomb and Elana Friedman for the Respondent Resilience Capital Inc.

HEARD: February 1, 2, 3, 4, 5, 10, 16, 17, 18, 19, 24, March 2 (TMC only), March 3 (TMC only), April 21, May 3 (TMC only), 25, 26, 27, 28, 31, June 1, 2, 3, 4, 7, 8, 9, 10, 11, 14, 15, 16, 17, 18, 24, September 10, October 12, 14, November 1, 30, 2021

S. M. O’BRIEN, J.

Overview 3 Issues and Brief Conclusions 5 A. Parenting Issues 5 B. Financial Issues 6 Parenting Time 8 A. Position of the Parties 8 B. Principles regarding Parenting Time 9 C. Application of Principles 10 i. Credibility regarding Use of Alcohol 11 ii. Admissibility of Evidence Arising from Detention and Arrest 13 iii. Primary Caregiver 13 iv. Risks Caused by S.C.’s Alcohol Use 19 v. Children’s Views and Preferences 22 vi. C.C.’s Home is a Stable Happy Environment 23 vii. Allegation of Sexual Assault 24 viii. V.C. ’s Parenting Time 24 ix. Alcohol Monitoring 25 Decision-Making 25 Allegations of Breaches of Court Orders 29 A. Preservation Order 30 i. Transfer/Sale/Disposition of Assets Covered by the Preservation Order 30 ii. Using More than the Amount Permitted for Personal Expenses 31 iii. Further Context: Transactions Not Covered by the Preservation Order 32 B. Allegations of Incomplete or Misleading Disclosure 33 i. Errors in Financial Statements 33 ii. Allegations of Failure to Produce Documents 34 iii. Allegations regarding 2019 Business Interests 35 S.C.’s Claim against Resilience Capital 36 A. Positions of the Parties 36 B. December 21, 2006 Advance 37 C. September 2, 2010 and November 9, 2011 Advances 38 D. December 14, 2012 Advance 40 Equalization Payment 41 A. Minor Discrepancies – Date of Marriage and Date of Separation 42 B. Family Trust 43 C. Date of Marriage Value of TSMS 44 i. Multiple of Revenue Factor 45 ii. Notional Disposition Costs 48 D. Date of Separation Value of TSMS 49 E. Conclusion on Equalization Payment 50 The Gibson Home 50 Child Support 54 A. July 2014 to 2016 55 C. June 2019 to Date 56 C.C.’s Income for Support Purposes 56 A. Legal Principles 57 B. Attribution of Corporate Income 59 i. Crescent Road Gain 59 ii. TrackTik Gain 60 iii. Consulting Income 60 C. Personal Expenses 61 D. Dividends 66 E. Calculation of Income 66 S.C.’s Income 66 A. Legal Principles 67 B. Application of Legal Principles 68 Spousal Support 71 A. Legal Principles 71 B. Entitlement 72 C. Quantum and Duration 75 D. Retroactive Support 77 Section 7 Expenses 78 A. Positions of the Parties 78 B. Legal Principles 79 C. Application of the Legal Principles 81 i. Nannies 81 ii. Private School Expenses 82 iii. Activities/Extracurriculars/Camps 82 Post-Separation Adjustments 83 Costs 85 Disposition 86

Overview

[1] The Applicant S.C. and Respondent C.C. were married on July 21, 2006 and separated on July 1, 2014. The Applicant subsequently initiated this Application for divorce. In these Reasons for Judgment, I will refer to these parties as S.C. and C.C. They have three children: V.C., born in 2007; J.C., born in 2008; and G.W.C. born in 2011, whom I will refer to collectively as “the children.”

[2] S.C. is currently 49 years old and C.C. is 45. They first met in 2005 in Markham. They each owned homes in the same neighbourhood and met while walking their dogs. At the time, S.C. was the manager of a technical writing team at IBM. C.C. owned and ran his own company, Total Security Management Systems (“TSMS”), whose core business was providing security officers to banks.

[3] There are significant parenting and financial issues in dispute between the parties. With respect to parenting, the parties disagree on the parenting schedule and decision-making responsibility. Much of their dispute on these issues focuses on S.C.’s use of alcohol. Although the parties have different narratives with respect to S.C.’s alcohol use, it is common ground that starting in approximately 2010 or 2011, she began, on some occasions, to consume alcohol excessively. This sometimes occurred during the day when the children were in her care. She attended two residential treatment programs for her alcohol use — first in the summer of 2012 and subsequently in June of 2014. The parties separated on her completion of the second residential treatment program on July 1, 2014.

[4] Because so much time elapsed between the date of separation and this trial, the issues relating to S.C.’s drinking (and other parenting issues) have evolved since separation. For example, in 2016, as a result of an incident with S.C.’s drinking, the parties agreed that S.C. would submit alcohol monitoring results before and during her parenting time. These conditions were relaxed gradually over time and by late 2018, C.C. consented to removing the alcohol monitoring requirement.

[5] Then, on June 12, 2019, S.C. was arrested for impaired driving when she pulled out of her garage into her laneway with G.W.C. in the backseat. The charges were subsequently dismissed at a blended voir dire. Following this event, the parties agreed on terms of parenting time that initially included supervised access for S.C. several days a week, together with alcohol monitoring. The schedule evolved over time to the current schedule, whereby the children reside with S.C. 5 out of 14 nights, with alcohol monitoring continuing before and during her parenting time.

[6] On the financial issues, the parties have widely divergent views on whether an equalization payment is owed, and with respect to C.C.’s income for support purposes. The primary dispute with respect to equalization relates to the value of TSMS. C.C. owned TSMS on the date of marriage but sold it in 2013, before separation. There is a significant dispute as to the value of TSMS on the date of marriage, which impacts whether C.C. owes S.C. an equalization payment.

[7] C.C.’s income is complicated, as in addition to being the CEO of Avante Logixx (“Avante”), a publicly traded security company, he now oversees a group of inter-related companies. He is the owner or majority shareholder of most or all the companies. The parties also established a family trust, which was intended to be used in part to pay for certain expenses for the children, such as their private school expenses. Both parties have included the value of the trust in calculating the value of C.C.’s property on the date of separation. They also both included interest from the trust in calculating C.C.’s income post-separation.

[8] In addition to the issues surrounding C.C.’s income, the parties dispute whether income should be imputed to S.C. post-separation given that she did not start working full-time until late 2020, more than six years after the date of separation.

[9] Further, because this Application was started several years after separation, with the trial commencing over six years after separation, there are significant issues related to post-separation adjustments. The parties both claim retroactive child support from the other. The parties agree S.C. has an entitlement to spousal support but disagree on the quantum and duration of support. As a result of his calculations for support and post-separation adjustments, C.C. claims he is entitled to significant repayments from S.C. S.C. disputes this and also claims that C.C. is in breach of a preservation order from July 2018, for which she seeks to have his financial pleadings struck.

[10] The parties also have a dispute related to the purchase of a home post-separation. In March 2015, the parties purchased a house in which S.C. would reside, or that might be used for the whole family if the parties reconciled. The house was located on Gibson Avenue in Toronto (“the Gibson home”). The house was put in the names of both S.C. and C.C. C.C. advanced the funds for the purchase of the house, but there is a dispute about the source of those funds. S.C. claims that she is a 50% owner of the home, whereas C.C. submits that S.C. holds her half of the home in trust for him on the basis of a purchase money resulting trust.

[11] While the bulk of the issues in this litigation are between S.C. and C.C., S.C. also has brought claims against C.C.’s current company, Resilience Capital Inc. (“Resilience Capital”), which is the successor to TSMS. S.C. initially commenced these family law proceedings against C.C. alone. However, at the outset of the trial, C.C. brought a motion to amend his Answer to include a limitation period defence with respect to four loans S.C. alleged she had made to C.C. for the benefit of TSMS. I granted the motion and subsequently permitted S.C. to amend her Reply. I then allowed S.C.’s motion to add Resilience Capital as a Respondent on the basis of her claim that either C.C. or Resilience Capital owed her for her loans to TSMS.

[12] These are my Reasons for Judgment in relation to S.C.’s claims against C.C. and Resilience Capital, as well as C.C.’s claims against S.C.

Issues and Brief Conclusions

A. Parenting Issues

[13] The parenting issues I must determine are:

a. What parenting schedule is in the best interests of the children?

b. What decision-making order is in the best interests of the children?

[14] For the reasons that follow, I have concluded that the current parenting schedule is in the best interests of the children. This means that the children will continue to reside primarily with C.C., with S.C. having parenting time 5 out of 14 days. Specifically, the children will reside with S.C. every second week from Thursday to Monday. This schedule has been in place already since approximately March 2020. However, as further discussed below, I do not expect V.C. to attend parenting time with S.C. until they have attended at least three counselling sessions together, or such other amount of time as the counsellor recommends. I also find that S.C. should continue to use a breath testing device for alcohol monitoring before and during her parenting time.

[15] With respect to decision-making, I conclude that the parties shall have joint decision- making with respect to all issues, except the issue of counselling for the children. C.C. shall have sole decision-making with respect to counselling for the children.

B. Financial Issues

[16] The financial issues I must determine are:

a. Has C.C. breached the preservation order in this matter? Has he also failed to comply with disclosure obligations and breached other court orders such that his financial pleadings should be struck?

b. Is S.C. entitled to repayment with respect to advances made to C.C. and/or Resilience Capital?

c. Does C.C. owe S.C. an equalization payment and, if so, in what amount? Related to this, what was the value of TSMS on the date of marriage? What was the value of Total Security Management (“TSM”), the U.S. division of TSMS, which continued to exist after the sale of most of TSMS’s assets, on the date of separation?

d. Does S.C. hold her half of the Gibson home in trust for C.C. on the basis of a purchase money resulting trust?

e. For what retroactive periods does either party owe the other child support?

f. What is C.C.’s income for support purposes for the period 2014 to date?

g. What is S.C.’s income for support purposes for the period 2014 to date?

h. What is the appropriate quantum and duration for C.C. to pay spousal support to S.C.?

i. What amounts are owed for s. 7 expenses?

j. What post-separation adjustments are owed?

[17] Briefly, I conclude as follows: With respect to the preservation order, I find that C.C. technically breached the order, but his breaches did not reduce his net worth and did not put any equalization payment owed to S.C. in jeopardy. I find that his financial pleadings should not be struck.

[18] With respect to the advances to C.C. and/or Resilience Capital, I conclude that S.C. made three loans to TSMS, not four, as she alleges. All these loans were repaid with interest. One loan flowed through the family trust and was repaid to the family trust, of which S.C. was a beneficiary. I find that C.C. and Resilience Capital were not unjustly enriched as a result of these advances. S.C. claims that the funds for the final loan originated in the proceeds of sale from the parties’ matrimonial home and that C.C. misappropriated the funds and fraudulently misrepresented that the funds would be used to purchase a new home. S.C. has not made out misappropriation or fraudulent misrepresentation. Regardless, I find that, although C.C. advanced the funds for the purchase of the Gibson home, his intention was that the home would be jointly held because he notionally was using the parties’ joint funds (even though the funds he advanced cannot be traced directly to the proceeds of the sale of their matrimonial home). Therefore, I find that S.C. has an ongoing joint ownership interest in the Gibson home.

[19] Turning to equalization, I accept the approach taken by S.C.’s expert in valuing TSMS on the date of marriage (slightly adjusted) and his approach to valuing TSM on the date of separation. This results in a lower value for TSMS on the date of marriage and in an equalization payment of almost $900,000 owing to S.C.

[20] With respect to the Gibson home, I do not find that S.C. holds her half of the property in trust for C.C. based on a purchase money resulting trust. However, the parties are joint owners, and I order the partition and sale of the property.

[21] With respect to child support, I find that each party owed support to the other for different time periods. However, no support was owed immediately post-separation for the period of 2014 to 2016. Although the children resided primarily with C.C. during this time, the parties’ lives remained intertwined and they continued to discuss reconciliation. S.C. did not have notice that she would be required to refund C.C. for his support of her during this period. For the period 2016 to June 2019, C.C. owed child support to S.C. The parties shared parenting time equally and C.C. had a substantially higher income than S.C. From June 2019 to date, S.C. owed child support to C.C., as the children resided with her less than 40% of the time.

[22] On the issue of C.C.’s income, I have arrived at calculations for each year from 2014 to 2021. The income I have determined for each year generally falls somewhere between the incomes proposed by the experts of each party. For the period 2014 to 2019, it ranges from a low of just over $650,000 to a high of just over $865,000 depending on the year. For 2020 and 2021, I have fixed his income as $772,463, which is an average of the previous three years. With respect to S.C.’s income, I have imputed income to her of $70,000 starting in 2017 until 2021, when I find her annual income to be $91,411.

[23] On the question of spousal support, I find that S.C. is entitled to a mid-level of spousal support for a period of ten years from the date of separation. However, for a period following separation, I do not specifically calculate the amounts owed, nor potential post-separation adjustments and s. 7 expenses, for the purposes of a potential repayment to C.C. C.C. deserves credit for making the good and wise decision to support S.C. during this period, without court order or agreement to do so. However, he is not entitled to repayment. S.C. remained financially dependent on C.C., the parties were actively discussing reconciliation, and S.C. did not have notice of an obligation to repay during this period. I also find that S.C. owes C.C. over $65,000 for retroactive s. 7 expenses. Finally, C.C. is entitled to post-separation adjustments starting from September 2017, which is the month of the support motion S.C. brought, by which time it was clear that C.C. was no longer paying support voluntarily and without expectation of repayment. In view of the retroactive child support C.C. owed, S.C. only owes him a repayment of $11,347.75 for post-separation adjustments.

Parenting Time

A. Position of the Parties

[24] S.C. submits that the parties should have equal parenting time with the children. She submits that she has been the children’s primary caregiver for most of their lives, having given up her career to become a full-time mother. She further submits that prior to the incident on June 12, 2019, the parties successfully shared equal parenting time for over two years.

[25] S.C. states that, to the extent C.C. argues that she poses a safety threat, there is no reason the children would be less safe during, for example, 6 days out of 14 with her rather than 5 days. She submits that C.C.’s position on parenting time has historically fluctuated to suit his needs and that the current schedule, by which she has less than 40% of the time with the children, is designed to circumvent child support obligations.

[26] S.C. also submits that she has addressed the root cause of her problems with alcohol and that C.C.’s focus on her alcohol use is outdated. However, she submits that since the incident of June 12, 2019, C.C. has taken advantage of her arrest to alienate the children from her and “drive a wedge” in their relationship.

[27] C.C. submits that it is in the children’s best interest to maintain the current parenting schedule, under which the children reside primarily with him, and which requires S.C. to undergo alcohol testing 24 hours prior to her parenting time and three times a day during her parenting time.

[28] He submits that the children are thriving under the current schedule. They are happy and doing well in school and with their peers. They have a close relationship with his current partner and her children.

[29] His position is that S.C. abuses alcohol and that she is in denial about her problem. He notes a number of historical occasions when her use of alcohol put the children in harm’s way. He emphasizes that on each of the post-separation occasions when this occurred, she had equal parenting time. On each occasion where this occurred prior to separation, he was not present.

[30] He also relies on a Voice of the Child report, in which the children expressed the view that they would prefer to continue with the current schedule. V.C. ’s position, as further discussed below, is more nuanced in that she indicated she was content with the current schedule so long as she and S.C. attended counselling together. This has not occurred.

B. Principles regarding Parenting Time

[31] Subsection 16(1) of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), directs the Court to take into consideration “only the best interests of the child of the marriage in making a parenting order.” Subsection 16(3) sets out a number of factors that the court must consider in carrying out a best interests analysis. In considering those factors, the Court is required by virtue of s. 16(2) to “give primary consideration to the child’s physical, emotional and psychological safety, security and well-being.” The primary consideration articulated in s. 16(2) recognizes that there may in some cases be conflicts in attempting to weigh the enumerated best interests criteria. The clear direction in the statute is that any such difficulties in carrying out the analysis should be resolved in favour of ensuring that the child’s physical, emotional and psychological safety, security and well-being are promoted: McBennett v. Danis, 2021 ONSC 3610, at para. 82.

[32] The factors set out in s. 16(3) are the following:

a. The child’s needs, given the child’s age and stage of development, such as the child’s need for stability;

b. The nature and strength of the child’s relationship with each spouse, each of the child’s siblings and grandparents and any other person who plays an important role in the child’s life;

c. Each spouse’s willingness to support the development and maintenance of the child’s relationship with the other spouse;

d. The history of care of the child;

e. The child’s views and preferences, giving due weight to the child’s age and maturity, unless they cannot be ascertained;

f. The child’s cultural, linguistic, religious and spiritual upbringing and heritage, including Indigenous upbringing and heritage;

g. Any plans for the child’s care;

h. The ability and willingness of each person in respect of whom the order would apply to care for and meet the needs of the child;

i. The ability and willingness of each person in respect of whom the order would apply to communicate and cooperate, in particular with one another, on matters affecting the child;

j. Any family violence and its impact on, among other things,

i. The ability and willingness of any person who engaged in the family violence to care for and meet the needs of the child, and

ii. The appropriateness of making an order that would require persons in respect of whom the order would apply to cooperate on issues affecting the child; and

k. Any civil or criminal proceeding, order, condition, or measure that is relevant to the safety, security and well-being of the child.

[33] Subsection 16(5) addresses the relevance of a person’s past conduct in carrying out the best interests analysis. It provides that in determining the best interests of the child, the court “shall not take into consideration the past conduct of any person unless the conduct is relevant to the exercise of parenting time, decision-making responsibility or contact with the child under a contact order.”

[34] Subsection 16(6) must also be considered in determining the appropriate allocation of parenting time. It recognizes that children should have as much time with each parent as is consistent with their best interests. The subsection does not create a presumption in favour of equal time or maximum time with each parent. Rather, the overriding test is the children’s best interests and the paramount consideration set out in s. 16(2) of the child’s physical, emotional and psychological safety, security, and well-being: McBennett, at para. 89.

C. Application of Principles

[35] In applying these principles, I find that the current parenting schedule, including an ongoing requirement for S.C. to undergo periodic alcohol testing using a breathalyzer device, is in the best interests of the children. However, in the case of V.C., her parenting time with S.C. will only be required to resume, if it has not already, once she has attended three counselling sessions with S.C., or such other amount as the counsellor recommends, with the counselling sessions to continue once the parenting time resumes.

[36] In arriving at this conclusion, I rely on the following findings, each of which is further discussed below: (i) while S.C. was the children’s primary caregiver when they were very young, she has not been the primary caregiver for some time; (ii) the children continue to be at risk from S.C.’s alcohol use, particularly when she has increased parenting time; (iii) the children’s preference is to continue with the current parenting schedule; and (iv) the children have a happy, stable home environment with C.C. They love S.C. very much but feel less at ease in her home.

[37] Before turning to these findings, I emphasize that it is clear both S.C. and C.C. adore their children. S.C. has struggled with alcohol in a manner that has interfered with her parenting but, aside from that interference, she is a loving and devoted mother. Her children love her deeply. V.C. has a more complicated relationship with S.C. at the moment because of incidents involving S.C.’s use of alcohol. I believe V.C. still has a strong desire to be close to her mother, and I hope both parents will continue to work toward a process to repair that relationship. C.C. is dedicated to the children and has suffered from S.C.’s alcohol use and its effect on the family. He has worked very hard to protect the children’s safety and to create a stable, loving environment for them.

[38] There are also two preliminary points to address before turning to my findings with respect to the parenting schedule. The first is my assessment of the parties’ credibility on the issue of S.C.’s alcohol use. The second is the admissibility of evidence from S.C.’s detention and arrest on June 12, 2019.

i. Credibility regarding Use of Alcohol

[39] In order to reach my findings on parenting time, it is necessary to make findings of credibility with respect to one of the central issues, which is S.C.’s use of alcohol.

[40] Neither party called a medical expert or other addiction specialist to testify at the trial, although C.C. did put into evidence some medical records from S.C.’s residential treatment for alcohol use. Because of this, I have no expert opinion evidence to assist with diagnosing and describing the nature or cause of S.C.’s mental health condition. Therefore, my references to S.C.’s alcohol consumption are not intended to use precise terminology nor to reflect any medical conclusions.

[41] C.C. placed significant emphasis on S.C.’s use of alcohol in his evidence and submissions on the parenting issues. S.C. acknowledges that she previously used alcohol excessively on some occasions but submits that this was in the past. She submits that she has discovered the root of her mental health condition, which is anxiety. She states that she now has tools to address her anxiety, and therefore does not abuse alcohol.

[42] Although S.C. acknowledges some prior incidents in which she consumed excessive alcohol, I find C.C. to be more credible regarding the details of these incidents, as well regarding incidents in which S.C. denies having consumed alcohol.

[43] Assessing credibility is not a science. It is difficult to articulate with precision the complex intermingling of impressions that emerge after watching and listening to witnesses and attempting to reconcile the various versions of events: R. v. Gagnon, 2006 SCC 17, [2006] 1 S.C.R. 621, at para. 20; R. v. R.E.M., 2008 SCC 51, [2008] 3 S.C.R. 3, at para. 48. A judge is not required to believe or disbelieve a witness’s testimony in its entirety. On the contrary, the judge may accept none, all, or part of a witness’s evidence: Kinsella v. Mills, 2020 ONSC 4785, at para. 69.

[44] Some of the factors a court may consider in assessing credibility and that I consider relevant here are the following:

a. Were there inconsistencies and weaknesses in the witness’s evidence, including internal inconsistencies or evidence of prior inconsistent statements?

b. Were there inconsistencies between the witness’s evidence and that of other credible witnesses?

c. Was the evidence provided in a candid and straightforward manner, or was the witness evasive, strategic, hesitant, or biased?

d. Where appropriate, was the witness capable of making an admission against interest, or were they self-serving?

Kinsella, at para. 69.

[45] In applying these factors, I find C.C. to be more credible on issues related to S.C.’s use of alcohol for the following reasons:

a. Although S.C. acknowledged some of the incidents in which she consumed excessive alcohol, she did so reluctantly. She was reluctant and/or evasive in addressing specific details of the incidents. She generally did not address the incidents in her examination- in-chief. When asked about them on cross-examination, she often said she did not remember details, or she said words to the effect of “I’ve admitted this already.”

b. Further, when S.C. did describe any of the incidents, she tended to downplay their severity, even when the details that emerged showed significant intoxication that in some situations put the children at risk. For example, when discussing the incident described below where V.C. had an allergic reaction to nuts, S.C. first said that she had been drinking, but did not recall if it was in excess, then later said she had been intoxicated. When discussing the incident where she attended her support group intoxicated, she only stated that she went to the group to reach out for support. On cross-examination, it emerged that the group’s counsellor had contacted C.C. that night because of her concern about S.C.’s condition when she arrived at the group. The counsellor urged C.C. to come home from his trip immediately and recommended residential treatment for S.C.

c. S.C.’s evidence at the trial also erred on the side of downplaying her consumption of alcohol compared to prior statements. For example, regarding the incident on October 13, 2016, described below, when she intended to drive V.C. to an appointment in the morning, despite drinking in the middle of the night, S.C. stated at trial that she had drunk “about four glasses of wine.” At her questioning, she said that she did not know how many drinks she had consumed “but definitely four or five, maybe more.” Similarly, at her questioning, S.C. admitted that on June 12, 2019, the date on which she was arrested, her consumption of alcohol put the children in jeopardy. At the trial, she denied this.

d. S.C. was not candid about her use of alcohol in another appearance before this court. In May 2019, C.C. brought an urgent motion seeking alcohol testing and supervised access. In her affidavit on that motion, S.C. stated that she had been “sober for nearly three years.” S.C. did not explain her interpretation of the word “sober” and specifically did not advise the court that in fact she had been drinking on occasion in moderation. At trial, she explained the statement in her affidavit on the basis that she considered “sober” to have a different meaning than “abstinent,” even though she knew Alcoholic Anonymous, which she had attended for a number of years, defines “sober” as complete abstinence. In the same affidavit, she stated definitively that there were “six occasions on which [she] consumed too much alcohol over the last nine years.” Meanwhile, at the trial, she acknowledged that there had been more than six incidents.

e. In some situations, S.C.’s denial or minimization of alcohol consumption is not consistent with statements from V.C. that I have allowed into evidence. V.C. learned at a very young age to be concerned when her mother had been drinking. She had a pattern of contacting C.C. in these situations. I have allowed into evidence statements made by V.C. to the Children’s Aid Society (“CAS”) worker and Voice of the Child assessor, as well as a text message she wrote to C.C.’s partner on June 12, 2019 to alert her that S.C. has been drinking and was planning to drive G.W.C. to soccer. These statements are not consistent with S.C.’s version of events.

[46] By contrast, I found C.C.’s version of these incidents to be internally consistent and not challenged by prior inconsistent statements. He also did not exaggerate. His evidence corresponded with other evidence related to particular incidents, such as from V.C., or it corresponded with the evidence that S.C. ultimately conceded on cross-examination. I did not find his credibility on this issue to be seriously challenged on cross-examination in any respect.

ii. Admissibility of Evidence Arising from Detention and Arrest

[47] At the trial, C.C. sought to admit evidence arising from S.C.’s detention and arrest on June 12, 2019 as relevant to S.C.’s use of alcohol in the context of parenting. This included her first breath reading, which formed part of the evidence in the transcript of her blended voir dire. It also included evidence from the videotape of her detention and arrest, captured from the police cruiser and at the police station. I did not allow evidence of the breath reading on the basis of s. 320.36 of the Criminal Code, R.S.C. 1985, c. C-46, which prohibits the use of readings from breath tests except in specified circumstances. With respect to the videotape evidence, I allowed it into evidence on a preliminary basis, subject to arguments S.C. might subsequently make pursuant to s. 24(2) of the Canadian Charter of Rights and Freedoms. At the point in the trial when the evidence was introduced, C.C.’s counsel had committed to calling as witnesses the police officers who attended at S.C.’s home and who took the breath readings at the station. S.C.’s counsel would have had the opportunity to cross-examine these witnesses and I was of the view that S.C. could make her s. 24(2) arguments as part of closing submissions.

[48] Ultimately, C.C. did not call the police officers as witnesses. This precluded S.C.’s ability to cross-examine them according to the procedure agreed-upon. C.C.’s counsel advised in closing submissions that he no longer sought to have this evidence admitted. Therefore, all evidence arising from the transcript on the blended voir dire, as well as in the police video tape, is excluded and shall not be considered.

iii. Primary Caregiver

[49] Turning to my parenting findings, I find that S.C. was the children’s primary caregiver when they were very young. At the time the parties met, S.C. was working full-time and had a promising career at IBM. After V.C. ’s birth in 2007, she took a one-year pregnancy leave. When she returned to work in May 2008, she was already pregnant with J.C. She worked for six months before J.C.’s birth, then took another pregnancy leave, followed by a personal leave. When she became pregnant with G.W.C., she ultimately decided not to return to work.

[50] S.C. cared for the girls full-time from the time they were born, other than her return to work for six months. At some point after G.W.C. was born, the parties hired a live-in caregiver. From July 2011 to December 2012, S.C. worked two days a week at C.C.’s business, TSMS, on a technology project. Overall, however, S.C. was primarily responsible for caring for the children in all respects, including feeding, dressing, and bathing them, taking them to school or activities and to medical appointments, and putting them to bed at night.

[51] At this time, C.C. was working long hours to build his business and was frequently working, travelling, or socializing for work. When he was home, he assisted with the children, but S.C. was the children’s primary caregiver.

[52] When the family moved to Toronto in 2012, S.C. was experiencing increased difficulty with her use of alcohol. Over time, this caused disruptions in her role as primary caregiver, which ultimately led to the current situation, in which the children have resided primarily with C.C. since the incident of June 12, 2019.

[53] The parties have different accounts of when S.C.’s excessive consumption of alcohol began. Although the precise timing is not important for the purposes of this decision, for the reasons set out above, I accept C.C.’s version of events.

[54] S.C. claims that she began using alcohol on occasion to cope with anxiety and that her anxiety began after the conception of G.W.C., which she states resulted from non-consensual intercourse with C.C. I will address this allegation, which C.C. strongly denies, in further detail below. For now, I find that S.C.’s use of alcohol to cope with anxiety began prior to G.W.C.’s conception.

[55] I accept C.C.’s evidence as to the start of S.C.’s excessive alcohol use. He first became concerned about S.C.’s drinking sometime after J.C. was born, likely in approximately 2009. It started when he was away on business trips and would call home. He heard a different tone and rhythm in S.C.’s voice. She would acknowledge having had something to drink. This escalated to an incident when he called home and she was intoxicated. He subsequently convinced her to attend an Alcoholics’ Anonymous (“AA”) meeting in Newmarket, but she did not continue attending AA meetings.

[56] S.C. generally did not drink alcohol during her pregnancy with G.W.C., but after his birth she began a pattern of isolated binge drinking when C.C. was not around. He would on some occasions arrive home from work to find her intoxicated. There was some reference at the trial to S.C. suffering from post-partum depression during this period. I do not know whether she was formally diagnosed with this condition.

[57] After the parties moved to Toronto in 2012, there were a number of incidents during which S.C. used alcohol to excess when the children were in her care, in some cases endangering the children’s safety. S.C. acknowledges these incidents, though she submits that they are in the past and do not reflect her current use of alcohol or capacity to parent. Because of these incidents, and even though S.C. continued for some period in the role of the children’s primary caregiver, she ultimately did not retain that role.

[58] These incidents, as well as their aftermath and S.C.’s ongoing struggle with alcohol use, explain S.C.’s shift away from the role of primary caregiver. They are also relevant to my other findings regarding parenting time, especially my finding that the children continue to be at risk from S.C.’s alcohol use. The initial incidents, prior to her first residential treatment program, are as follows:

a. One day in 2012, when the parties were renting a home on an interim basis before moving into their more permanent rental accommodation in the Rosedale neighbourhood of Toronto, C.C. arrived home from work to find V.C. ’s face swollen. S.C. was home with the children and a caregiver, and she had become intoxicated. Meanwhile, V.C., then about five years old, had helped herself to a piece of cake that had nuts in it. V.C. had an allergy to nuts, which had caused the facial swelling. When he arrived home, C.C. rushed V.C. to the hospital for treatment.

b. One afternoon in 2013, S.C. was found unconscious by the police at the intersection of Yonge Street and Wellesley Street in downtown Toronto. She had purchased alcohol at the nearby LCBO. G.W.C. was with the parties’ caregiver, but S.C. was supposed to pick up the girls from school. The school called C.C. when nobody arrived to collect the girls. C.C. then arranged for their caregiver to go to the school.

c. On another day, in approximately the spring of 2013, S.C. consumed alcohol on her way home from a downtown walk-in medical appointment with the children. S.C. purchased vodka in the HBC shopping centre at Yonge Street and Bloor Street, a busy downtown intersection, and she drank some of the vodka in the washroom of the centre. She then walked home with the three children. When she arrived home, she had lost her key to the front door. She knocked on the neighbour’s door to stay there until a locksmith could arrive. C.C. was out of town, but the neighbour contacted him to report that S.C. and the children were locked out of the home and that S.C. was intoxicated. C.C. returned home from the retreat he was attending to care for the children.

[59] Following this third incident, S.C. agreed to attend for treatment at Homewood Health Centre. C.C. arranged S.C.’s expedited admittance through a contact. S.C. attended a residential treatment program at Homewood for approximately 30 days in July 2013. The documents admitted into evidence from S.C.’s Homewood stay refer to a provisional diagnosis of “alcohol dependence.” S.C.’s discharge form from Homewood also refers to her condition as “alcohol dependence.” In a questionnaire, S.C. indicated that she considered herself to be an alcoholic and referred to her “alcohol abuse.”

[60] During this period, when S.C. was struggling with her alcohol use, she continued to be the children’s primary caregiver. She was at home with the children, with the assistance of a caregiver. She took the children to school and to most medical and dental appointments. She planned their birthday parties and other special occasions. Again, C.C. was involved when he was home, but S.C. was at home with the children on a full-time basis.

[61] That said, over time, and due to S.C.’s struggles with alcohol, C.C. began to take on a more significant role in terms of being responsible for and protecting the children. He needed to check in frequently and have arrangements in place to ensure they would be safe. He started to become the parent providing more emotional support and stability to the children.

[62] Unfortunately, S.C. recommenced drinking sometime after her discharge from Homewood. In December 2013, she became intoxicated during J.C.’s birthday party at Great Wolf Lodge. S.C.’s evidence is that she was drinking at this party only after the children had gone to bed.

[63] In early January 2014, C.C. also discovered S.C. inebriated at home. He then took the children on a trip to Whistler without S.C. He expressed to S.C. that he wanted to separate. Upon his return from Whistler, S.C. presented him with a “sobriety plan,” by which she would attend out-patient treatment and support groups.

[64] In the spring of 2014, C.C. left to attend a program at Harvard Business School for a planned period of 30 days. S.C. remained at home in Toronto to care for the children with the assistance of a caregiver. In addition, C.C. arranged for S.C.’s mother to move into the parties’ home to ensure comprehensive coverage because of concerns about S.C.’s capacity to safely care for the children. On the Monday of the final week, S.C.’s mother had to leave early. S.C. was home alone with the children for two hours after her mother left and before the caregiver arrived. She became intoxicated. V.C., who had just turned seven years-old at the time, contacted C.C. to alert him that something was wrong with her mother. On the Facetime call, C.C. was able to see that S.C. was passed out on the couch. By then, the parties’ caregiver had arrived. C.C. called a close friend, who immediately went to the house.

[65] With this arrangement, C.C. remained in Boston. However, on Thursday evening of the same week, S.C. attended a support group meeting inebriated. C.C. received a call from the counsellor leading the group to advise that he should come home. He arrived home the following morning and that day S.C. was admitted for a second residential treatment program of approximately 30 – 35 days at the GreeneStone Centre for Recovery in Muskoka.

[66] While S.C. was at GreeneStone, C.C. made the decision to separate from her. He made arrangements to rent an apartment for her in the Manulife building near the family’s home. The parties’ date of separation, July 1, 2014, represents the date of S.C.’s discharge from GreenStone.

[67] After separation, C.C.’s involvement increased, although S.C. remained significantly involved with the children’s day-to-day lives. When S.C. moved into the apartment, she continued to attend frequently at the matrimonial home during the day, often picking up the children from school, helping with dinner and homework, and putting them to bed at night before returning to the apartment. C.C. made an effort to be out of the home when she was there so that she would have time with the children.

[68] Still, the children ultimately were residing most of the time at C.C.’s residence. By that time, he had sold TSMS and was travelling less frequently. S.C. also had commitments of her own. She was attending aftercare treatment, including counselling appointments, a women’s aftercare group, and AA meetings. She also began working on developing a technology application to help patients in recovery.

[69] In 2015, C.C. purchased the Gibson home for S.C. The details of this purchase are discussed further below. The home was 400 metres from the home where C.C. continued to reside with the children. S.C. arranged for some renovations on the Gibson home. Once the house was organized and ready for the children, in January 2016, the parties started a 50/50 parenting schedule. Since January 2016, now almost six years ago, the children have resided with C.C. 50% or more of the time.

[70] During the period from the parties’ separation until 2016, S.C.’s recovery was going well. She was fully participating in the recovery program, including regularly attending AA meetings, having a sponsor, and becoming a speaker. She acknowledged being an alcoholic.

[71] However, at some point in 2016, this changed. She stopped attending AA meetings. Then another incident occurred that raised concerns about the children’s safety. Following this incident, the parenting schedule remained 50/50 but with conditions to monitor S.C.’s alcohol use. C.C. continued to take on the role of protecting the children.

[72] Specifically, on October 13, 2016, S.C. awoke in the middle of the night experiencing a panic attack. She had a number of glasses of wine in a short period of time to calm herself. The children were not with her, but in the morning, the caregiver employed by C.C. brought V.C. to S.C.’s house because S.C. was supposed to take V.C. to a medical appointment. V.C. called C.C. to tell him S.C. had her “funny face” and was about to drive her in the car. C.C. then rushed to S.C.’s house.

[73] At the time, the parties had agreed on a protocol whereby if there was a concern S.C. had been drinking, C.C. could contact S.C.’s addiction specialist, who could request that S.C. take a video breathalyzer. As C.C. could not reach the addiction specialist on his way to S.C.’s house, he asked her to take a video breathalyzer, which she did. Her reading was .04 or .05 just after 10:30 a.m.

[74] Following this incident, the parties continued with a 50/50 shared parenting schedule, but with S.C. submitting to alcohol monitoring through a SCRAM device, initially before and during her parenting time. From 2016 to 2018, this schedule continued, although the frequency of the SCRAM monitoring gradually decreased. As there had been no incidents for approximately two years, in approximately October or November 2018, C.C. consented to remove the testing requirement. Although C.C. was not aware of it at the time, in approximately the summer of 2017, S.C. began drinking wine on occasion socially.

[75] Two more incidents occurred that finally resulted in a significant impact to S.C.’s parenting time and role. In May 2019, S.C. attended a mother-daughter event with J.C. and V.C. at their school. C.C. was on his driveway and observed S.C. walking by his house with J.C. and a friend on their way home from the event. He walked over to see them and observed that S.C. was impaired. S.C. denies that she consumed any alcohol that day but, for the reasons set out above with respect to credibility, I accept C.C.’s version of events. In addition, with respect to this specific occasion, V.C. later reported to the CAS worker (after the CAS was contacted following the June 12, 2019 incident) that S.C. was intoxicated at this event. She told the CAS worker that her mother was “dancing funny” and that some of her friends noticed her mother was “acting weird.”

[76] Following this incident, C.C. brought an emergency motion seeking that S.C.’s parenting time be supervised and seeking that she be required to undergo alcohol monitoring. S.C. denied having consumed alcohol and C.C. ultimately was unsuccessful on the motion. This was the motion in which S.C. advised the court that she had been “sober” for three years.

[77] The next and final incident occurred on June 12, 2019. On this afternoon, S.C. was home with the three children. There is a dispute about how much she drank that day, but V.C. sent a text to C.C.’s partner alerting her that S.C. had been drinking and would be leaving to drive G.W.C. to soccer. C.C. was at a business meeting north of Toronto but got into the car to rush downtown. He also contacted a police officer friend to ask for assistance because of his concern about S.C. driving G.W.C. The friend made arrangements for two officers to attend at S.C.’s house and wait in her back lane. When she pulled out of her garage into her back lane, they asked her to take a breath test. They subsequently arrested her and brought her to the police station.

[78] The charges against S.C. later were dismissed, at the invitation of the Crown, at a blended voir dire. Proper procedure had not been followed with respect to the initial screening breath test. In addition, although there was no specific finding of this at the blended voir dire, Crown counsel’s affidavit on the Wagg motion before me stated that the evidence “strongly suggest[ed]” that S.C.’s s. 10(b) rights were violated.

[79] Following this incident, C.C. initiated an emergency case conference. On June 18, 2019, Horkins J. ordered that the children were to reside primarily with C.C., with S.C. to have supervised access, as provided by C.C. By consent order dated October 7, 2019, it was agreed that S.C. would have supervised access on Tuesdays and Thursdays for three hours and alternating Sundays from 9 am to 3 pm. She was required to submit to treatment for alcohol issues and comply with SCRAM testing prior to and during her parenting time.

[80] Since the June 12, 2019 incident, C.C. has been the children’s primary caregiver. S.C. continued to have supervised access following the October 7, 2019 order for several months. The parties then had a dispute as to whether S.C. needed to prove 90 days of abstinence through daily alcohol tests or only through the SCRAM tests required to be implemented for her parenting time. As a result of this dispute, C.C. denied S.C. parenting time when she did not have supervision arranged and she ultimately brought a motion. Diamond J. found that S.C. was only required to prove her abstinence through the SCRAM tests related to her parenting time, and she was entitled to unsupervised access.

[81] In approximately March 2020, the parties came to an agreement for parenting time similar to the current schedule. The children began residing with S.C. 5 out of 14 days with continued SCRAM monitoring. Her time increased to almost 50% the summer of 2020 but returned to 5 out of 14 days in the fall of 2020. She states that she did not bring a motion to increase the parenting time to 50/50 because of the difficulty of obtaining a motion date due to COVID restrictions and because the parties were attempting mediation.

[82] My conclusion that C.C. has become the children’s primary caregiver is not based only on the fact that for more than two years the children have resided primarily with him and for several years before that the parenting time was 50/50. I also consider C.C.’s role in the children’s lives. It is apparent that the period following June 12, 2019, with S.C.’s limited and only supervised parenting time, was very difficult for the children. They missed her tremendously and it forced a drastic adjustment. But I find that C.C. was protecting the children and justified in his actions. The result of all of this is not only that the children have been primarily residing with C.C. for some time, but also that he has become the primary stabilizing force and emotional support in their lives.

iv. Risks Caused by S.C.’s Alcohol Use

[83] I conclude that S.C.’s susceptibility to the excessive consumption of alcohol continues to be a factor that weighs in favour of the children residing primarily with C.C. In coming to this conclusion, I keep at the forefront the requirement that I give primary consideration to the children’s physical, emotional, and psychological safety, security, and well-being in determining their best interests.

[84] S.C. submits that C.C.’s concern about her alcohol use is outdated. She denies having abused alcohol since 2016 and states that she now has learned her fundamental problem is anxiety. According to S.C., she has developed strategies for managing her anxiety and does not require alcohol to cope. She points to the fact that she has tested negative for all the SCRAM monitoring tests. She also relies on three Ethyl Glucuronide (ETG) hair tests that cover the period August 21, 2018 to January 9, 2020.

[85] This does not convince me that the children no longer face risk from S.C.’s drinking. I do not accept that she has not been intoxicated since 2016. As set out above, I find that she was intoxicated in May 2019 at the mother-daughter school event. I accept the evidence of C.C. and V.C. described above as to her intoxication.

[86] Although at C.C.’s motion following this incident, Diamond J. concluded that C.C. had not met his onus to justify modifying the parenting schedule and terms, with the passage of time and having had several days of testimony from each of S.C. and C.C., I am in a better position to determine that S.C. was intoxicated that day. In addition to my credibility findings described above and my reliance on V.C. ’s statement to the CAS worker, which was not available to Diamond J., I have reason to question the reliability of the doctor’s report relied upon by S.C. S.C. relied on a doctor’s report at the motion for the conclusion that she had not “abused alcohol” within the past four weeks.

[87] Within days of the motion, on May 27, 2019, the doctor who provided the report entered into an undertaking with the College of Physicians and Surgeons of Ontario in relation to concerns that he had failed to meet the standard of care; that he exhibited a lack of knowledge, skill, and judgment; and that his care placed patients at a potential risk of harm. The doctor resigned from the College effective May 7, 2020, meaning that he is no longer licensed to practice medicine in Ontario. Although his resignation was not tied specifically to his opinion in this case, it raises questions about the reliability of that opinion, particularly when he did not testify before me and was not subject to cross-examination on the opinion.

[88] In addition, when it came time for Diamond J. to award costs of the motion, he found that S.C.’s credibility had been called into question by the incident of June 12, 2019. He stated that C.C. could not be faulted for seeking relief by urgent motion in May. He therefore did not award any costs of the motion. In fairness to S.C., at the time of the costs submissions, the criminal charges had been laid and were not yet withdrawn. Regardless, without any consideration of the criminal charges or any police evidence, I find below that S.C. was consuming alcohol in excess on June 12, 2019.

[89] Specifically, I do not accept S.C.’s evidence regarding her consumption of alcohol that day. S.C. states that she felt a panic attack coming on that afternoon and drank one glass of wine. However, S.C.’s pattern on other occasions to cope with panic attacks was to drink several glasses of wine or other alcohol, not a single glass. In addition, V.C. was sufficiently concerned to send what she described as a “funny face elert [sic]” to C.C.’s partner. She told C.C.’s partner the following by text message: “It’s her usual funny face. Not in the morning only [the] after noon, her voice and don’t [want] to be weird [sic] but her smell.” V.C. also subsequently told the CAS worker that she had needed to get G.W.C. ready for soccer and wake her mother up that day. She stated that she knew her mother had been drinking and should not be driving. The clinician who prepared the Voice of the Child Report, Marcie Goldhar, also testified that V.C. told her S.C. had been drinking and passed out. V.C. realized it was almost time for S.C. to drive G.W.C. to soccer.

[90] Further, at her questioning, S.C. acknowledged that her drinking that day had put the children in jeopardy. At the trial before me, S.C. resiled from this statement, saying that she previously had believed the breath reading taken by the police but subsequently found out it was unreliable. I do not accept this changed position. Regardless of the breath reading, S.C. knew how much alcohol she consumed on the day in question and, if it had been one glass of wine, she would not have said she put the children in jeopardy. The more likely explanation is that at the questioning she acknowledged she had consumed too much alcohol but now is using the outcome of the criminal charges to revise her position.

[91] June 12, 2019 is the last day on which there is evidence that S.C. was intoxicated. That was over two years ago. Nonetheless, I find that there is an ongoing concern that S.C. will consume excessive alcohol when caring for the children for several reasons.

[92] First, S.C. has in the past gone for lengthy periods without an alcohol-related incident and then a serious incident has occurred. For example, the incident in October 2016 occurred when, to C.C.’s knowledge, there had been no incidents since before the parties’ separation in July 2014. Similarly, well over two years after the October 2016 incident, and after C.C. eventually agreed to lifting the SCRAM monitoring, the May 2019 and June 12, 2019 incidents occurred.

[93] Second, S.C.’s explanation for why she has resolved her alcohol issues is not convincing. She states that she now realizes that the root of her problem is anxiety. She says she was diagnosed with generalized anxiety disorder and panic attacks in July 2019 and received counselling for the anxiety. I have not received any medical evidence to substantiate the position that her primary or only diagnosis is anxiety. In any event, in her evidence, S.C. connected alcohol use to anxiety and panic attacks since the first instances of intoxication. Further, she is not currently continuing with any counselling for anxiety nor is she taking any medication to assist with her anxiety.

[94] I also note that her explanation is at odds with the medical documentation I have from Homewood, which uses a provisional diagnosis of alcoholism. Her explanation is also at odds with her previous point of view when she was in treatment for and in recovery from alcoholism. For example, in an essay she sent to C.C. in May 2016, she talked about her gratitude for the change brought about by her recovery, stating, for example: “I now wholeheartedly believe that my disease of alcoholism was the best thing that ever happened to me.”

[95] In spite of this past acknowledgment of alcoholism, S.C. is not currently pursuing any alcohol recovery program, but she is drinking, at least in moderation. She acknowledges drinking socially with her partner.

[96] I have considered S.C.’s evidence that she completed ETG tests, which, she says, show that she has not been using alcohol. No expert was called to explain these tests to me. In addition, I do not know whether a single type of test would be sufficient to provide fulsome information about S.C.’s current alcohol use and/or risk of abusing alcohol in the future. It would have been helpful to have testimony from a specialist who had treated S.C. with respect to her alcohol use. In any event, even if the ETG tests do show that S.C. has not abused alcohol for the period tested, as set out above, she has previously gone for long periods without issue and then a significant incident affecting the children has occurred.

[97] In short, I conclude that S.C.’s propensity to abuse alcohol continues to be a risk to the physical safety, security, and well-being of the children. There remains a serious concern about the children’s physical safety, given, for example, the incident of June 12, 2019 during which S.C. intended to drive G.W.C. after having become intoxicated.

[98] The incidents affecting the children also have impacted the children’s psychological and emotional safety, security, and well-being. V.C. ’s text message to C.C.’s partner on June 12, 2019 is heartbreaking. It reveals V.C. ’s struggle on the one hand not to harm her relationship with her mother, but on the other hand to protect her siblings. She had recently turned twelve at the time. She wrote:

I love my mom so much and I had a lot of thought and was a little bit nervous what will happen when I do this and I probably know that daddy will take us away from her and I don’t want that to happen because my mom is one of the best people alive today and I love her with all my heart and I understand she may not like me if she knows I did this but I thought it is safer for us, and to help her. I just wanted to let you know but I really didn’t want to do this but to take responsibility on behalf of all of us encased [sic] the other kids don’t understand and my mom doesn’t understand. Please do not take her away from us after this is sent.

[99] V.C. also told the CAS worker that she felt like the parent and did not ever want to be put in the situation where she had to make that type of decision again. She told Ms. Goldhar that she would like to spend most of her time at her father’s house because she feels safe there. According to Ms. Goldhar, V.C. “fears that her mother may start drinking again as she has stopped before and started again in the past.” V.C. also expressed to Ms. Goldhar that she felt “a lot of stress and anxiety” when it comes to her mom. Because she is the oldest, she feels it is her responsibility to notice when her mom is unwell and she and her siblings are not safe.

[100] The other two children also expressed concerns for their safety with S.C. After the June 12, 2019 incident, the CAS worker reported that all the children described the incident as very scary. In the Voice of the Child Report, Ms. Goldhar quoted J.C. as saying that she did not like the idea of being at S.C.’s house without V.C. because “V.C. keeps her safe and it would be boring without her.” Also, “it would be too much responsibility.”

[101] G.W.C. reported to Ms. Goldhar that he loves his mom but has trouble trusting her. He believes that V.C. saved his life. Ms. Goldhar stated: “all three children spoke of feeling safe at their father’s home and expressed gratitude for the love and security he provides.”

[102] V.C. is still only 14 years old. She should not be put in a position of being responsible for her own and her siblings’ safety while in their mother’s care. Further, given the history, it is damaging and no doubt upsetting for the children to see their mother intoxicated, even if their safety is not at risk. Therefore, their best interests require a parenting order that takes all reasonable measures to avoid this occurring, while still balancing the importance of maintaining meaningful time with their mother, whom they love very much.

[103] In response to S.C.’s submission that there is no reason 5 days out of 14 with her would be safer than, for example, 6 days, I agree that I am not able to pinpoint a difference between 5 and 6 days. However, all, or almost all, the incidents described at trial in which S.C. became intoxicated with the children in her care occurred when C.C. was not present (prior to separation) or during S.C.’s parenting time when the parties were sharing parenting time equally (after separation). It is likely, as C.C. submits, that S.C. experiences more stress when she is responsible for the children for extended periods. The incidents also occurred when there was no alcohol monitoring in place. Meanwhile, the current schedule and terms are working well. There have been no incidents since they have been in place. The children are safe and, as I describe next, prefer this schedule.

v. Children’s Views and Preferences

[104] In her report dated December 7, 2020 (shortly before the commencement of this trial), Ms. Goldhar reported that the children all expressed their desire to continue the current parenting schedule — that is, residing with S.C. for 5 out of 14 days.

[105] V.C. reported that she did not want an equal parenting schedule and wanted the current schedule in place, as long as she and her mother could attend counselling together. Ms. Goldhar encouraged V.C. to share her feelings about counselling with her mother and arranged a meeting for this to occur. At the meeting, S.C. did not agree to counselling on the basis that she was concerned the counselling records could be ordered disclosed as part of the court process. According to Ms. Goldhar, to describe V.C. as “disappointed” by this response from S.C. would be an understatement. V.C. felt shut down and rejected by S.C. I discuss V.C. ’s situation as it evolved over the course of the trial further below.

[106] J.C. told Ms. Goldhar consistently on the four occasions she met with her that she “likes [the schedule] the way it is.” She did not elaborate on this other than to say that she “really likes [her] step-mom” and that she is “really happy with the way things are now.” As set out above, J.C. also stated that she did not like the idea of being at S.C.’s house without V.C. because V.C. keeps her safe, it would be boring, and it would be too much responsibility.

[107] G.W.C. also reported that he liked the current schedule. When asked about how much time he spends with his mother and his father, he said, “I love it how it is. It is perfect. I have always wanted to spend time with my mom and my dad. I know it’s not 50/50 but it is enough time with my mom that I can have fun.” He also expressed that he loves his mom and loves spending time with her, but he would prefer less time with her partner. According to Ms. Goldhar, G.W.C. stated that he did not like S.C.’s partner because he says negative things about C.C. S.C. disputed this but I accept that G.W.C. does not like spending time with her partner.

[108] I accept that Ms. Goldhar’s report reflects the children’s true views and preferences. Ms. Goldhar emphasized in her evidence that there was “tremendous” consistency in the children’s evidence from one interview to the next. She also expressed the opinion that their views were independent. They each had their own reasons for preferring the current schedule. They also had a relaxed demeanour that suggested their expressed views were independent and that they were not being influenced by either parent or by another family member.

[109] I do not find any support for S.C.’s allegation that C.C. has alienated the children. When questioned about this, Ms. Goldhar stated that she considered the situation “quite the opposite.” There was no hint that C.C. had coached the children. The children did not say anything negative about S.C. other than expressing some lack of trust based on lived experience. Indeed, the evidence from Ms. Goldhar’s interviews with the children, was that S.C. had tried to influence the children to request a 50/50 parenting schedule.

[110] I also do not accept that the schedule requested by C.C. is simply for his convenience or so that he is not required to pay child support. For the period 2016 to June 2019, after S.C. moved into the Gibson home and until the date of her arrest, C.C. agreed to a 50/50 schedule, for which I will be ordering child support be paid. Moreover, since the current schedule has been in place, the children reside with S.C. less than 40% of the time, but S.C. has not paid child support and C.C. has not sought to enforce child support from her (although he does seek it retroactively at this trial).

[111] Overall, I conclude that the children, independently and consistently, have expressed the view that they would like to continue the current schedule. The only exception to this is V.C. , who is only content with the current schedule if she and S.C. attend counselling together.

vi. C.C.’s Home is a Stable Happy Environment

[112] I find that the environment for the children in C.C.’s home is overall stable and happy. C.C. lives with a partner who has two children of her own. He describes their household as a loving family unit, where they co-parent, and the children view each other as siblings.

[113] His evidence is consistent with statements made by the children to Ms. Goldhar. For example, Ms. Goldhar reported that G.W.C. stated, “my dad is the best dad I could ever have and hope for, he has never missed a hockey or soccer game, he’s always there for me.” According to Ms. Goldhar, all three children spoke about feeling safe at their father’s home and expressed their gratitude for the love and security he provides. They also spoke about their close and loving relationship with C.C.’s partner and her children. Ms. Goldhar observed the children’s interactions with C.C.’s partner’s children, finding that the children had a close relationship with one another.

[114] Although the children love S.C., they do not feel entirely at ease at her home. As stated above, G.W.C. expressed to Ms. Goldhar that he loves his mom but has trouble trusting her. He believes that V.C. saved his life in June 2019. Ms. Goldhar noted that the June 2019 incident impacted his ability to feel safe with S.C. As set out above, J.C. also expressed a concern about safety in S.C.’s home, saying that V.C. kept her safe there. V.C. herself has experienced tremendous stress in S.C.’s home because of her feeling of responsibility for keeping herself and her siblings safe. G.W.C. also has expressed a dislike for S.C.’s partner, saying he wants to spend less time with him.

vii. Allegation of Sexual Assault

[115] Before concluding with respect to the factors on parenting time, I will address S.C.’s allegation of sexual assault against C.C. This allegation could be relevant to a consideration of family violence, as provided by s. 16(3)(j) of the Divorce Act, as well as the reference to past conduct in s. 16(5).

[116] Although S.C. made the allegation, in her evidence before me, she did not describe what she says occurred in any detail. C.C. strongly denies the allegation that the intercourse was non- consensual. He also points out that S.C. only reported the allegation to the police in 2019, shortly after she was arrested for impaired driving. She never pursued criminal charges.

[117] With only a bald allegation and no detailed evidence, it is impossible for me to determine what occurred on the night in question. S.C. therefore has not proven on a balance of probabilities that a sexual assault occurred. Regardless, I do not find this allegation relevant to a determination of the current best interests of the children. The night in question occurred approximately 11 years ago. There is no allegation of any violence before or after that time and no allegation of any violence having impacted the children. Indeed, while putting some emphasis on this point in the evidence of the trial, S.C. did not tie this incident to her parenting submissions. I conclude from the evidence at trial that C.C. has been a loving and supportive father who is completely dedicated to his children and who supports his children’s relationship with S.C. The allegation of sexual assault does not have any bearing on the best interests of the children today.

viii. V.C. ’s Parenting Time

[118] This trial started in February 2021 and was completed in November 2021. During the summer of 2021, V.C. stopped attending her parenting time with S.C. C.C. testified that he encouraged V.C. to see her mother, but that V.C. refused to do so. He testified that in mid-July, S.C. and V.C. met at a coffee shop and V.C. was extremely upset after the meeting.

[119] Shortly before this trial broke for the summer, at my encouragement, the parties attempted to agree to terms on which V.C. and S.C. would participate in a “closed” counselling process, in which the counselling records could not be disclosed as part of this court proceeding. They were not able to reach agreement on terms. Therefore, by the conclusion of closing submissions in November, they still were not engaged in counselling.

[120] S.C. submits that C.C.’s failure to deliver V.C. for her parenting time is an example of his breach of a court order (she makes other allegations of breaches of court orders, discussed below). I disagree with this characterization. V.C. is 14 years-old, an age at which it starts to become increasingly difficult to force her to do something against her wishes. As C.C. stated, he was not prepared to physically force her into a car. More importantly, the evidence in this trial has revealed that V.C. is mature for her age, has insight into the issues between her and S.C., and has been deeply hurt by the situation. Ms. Goldhar testified that V.C. felt rejected by S.C.’s refusal to engage in counselling and specifically stated that there was no evidence of alienation. In these circumstances, I do not consider C.C. to be in breach of the existing parenting arrangement. Further, it is critical for counselling between S.C. and V.C. to start as soon as possible. Given the hurt V.C. has endured, I do not expect V.C. to attend parenting time with S.C. until counselling has started between them. Therefore, with respect to V.C. in particular, she is not required to attend parenting time with S.C. until they have attended at least three counselling sessions together, or such other amount of time as the counsellor recommends.

[121] The parties may provide me proposed terms for a draft order addressing counselling within 30 days. If they continue to be unable to agree on the terms of counselling, within 30 days, they may each provide me with a proposed paragraph with specific terms. Based on those proposals, I will include terms for counselling between V.C. and S.C. in my final order.

ix. Alcohol Monitoring

[122] In addition to ordering the current parenting schedule to continue, given my conclusion that S.C.’s susceptibility to excessive use of alcohol remains an ongoing risk to the children, I am ordering ongoing alcohol monitoring. I did not receive any detailed submissions about the terms of that monitoring. I have reviewed C.C.’s draft order and accept its proposed terms as set out at paras. 2(a) to (g). Briefly, those terms require S.C. to abstain from consuming alcohol during the period 24 hours preceding her parenting time and during her parenting time. She is required to undergo alcohol testing using the SCRAM system, once during the 24 hours preceding her parenting time and once during each day of her parenting time. In addition, C.C. on reasonable grounds and in good faith may request in writing that S.C. submit to one further SCRAM test during her parenting time. He can make this request a maximum of ten times per calendar year. S.C.’s parenting time shall be immediately suspended if she tests positive, refuses a test, or fails to provide a test when required. Also, S.C. is prohibited from operating a motor vehicle while under the influence of alcohol and is required to install a breath lock ignition device on her vehicle if and when she acquires a vehicle.

Decision-Making

[123] C.C. seeks an order for sole decision-making on major issues affecting the children, meaning health care, education, and religion. In the alternative, he seeks joint decision-making with a caveat to allow him to revisit this determination should there be issues with S.C.’s mental health.

[124] S.C. seeks joint decision-making, which has been in place since an interim order of Moore J. in 2017. She submits that the parties have been able to agree on major decisions since that time, including the children’s schools and obtaining orthodontic braces for the girls.

[125] An order for decision-making is a “parenting order” for the purposes of the Divorce Act. As set out above, in making an order for decision-making, the court shall take into account only the best interests of the child.

[126] Section 16.3 of the Divorce Act provides that the court may allocate decision-making responsibility in respect of a child, or any aspect of that responsibility, to either spouse, to both spouses, to another person authorized to seek a parenting order, or to any combination of those persons. This gives the court a wide discretion to craft a tailor-made decision-making framework that supports and promotes the best interests of the child before the court, taking into consideration the unique facts of each case.

[127] In order to grant joint decision-making in some or all areas, there must be some evidence before the court that, despite their differences, the parties are able to communicate effectively in the areas under consideration for the sake of the child: Kaplanis v. Kaplanis (2005), 2005 CanLII 1625 (ON CA), 249 D.L.R. (4th) 620 (Ont. C.A.), at para. 11. The fact that there is some evidence of communication and cooperation does not, however, dictate in and of itself that joint decision-making should be ordered. The trial judge must carefully assess in each case whether the parties’ ability to cooperate and communicate about issues relating to the child is sufficiently functional to support an order for joint decision-making: Berman v. Berman, 2017 ONCA 905, at para. 5; McBennett, at para. 97. The court is not required to apply a standard of perfection in assessing the parties’ ability to cooperate and communicate with each other on matters relating to the children: McBennett, at para. 97.

[128] In some cases, the parties are clearly able to cooperate and jointly support the best interests of the child in some areas of decision-making but have a pattern of conflict and lack of collaboration in other specified areas. In these circumstances, the most appropriate outcome may be a hybrid type of decision-making structure that provides for joint decision-making in the areas that have never been problematic but that allocates the remaining areas to each party for sole decision-making: McBennett, at para. 97.

[129] In my view, the parties have been able to effectively make major decisions affecting the children since their separation. The children have continued at their existing schools and I am not aware of any disputes about which schools they should attend nor which programs or courses within the school they should pursue. The parties agreed on orthodontic treatment for the girls and have generally agreed on activities for the children, though with some disputes.

[130] C.C. submits that S.C. does not act in the best interests of the children in that she prioritizes financial issues over the children’s interests. He provides the example of S.C. not agreeing to the children’s camp one summer. That single example does not persuade me that joint decision- making is not appropriate. It occurred at a time when C.C. was in fact in breach of the preservation order in place to preserve property, although, as I explain below, he was not depleting his net worth. S.C. was concerned about whether there were sufficient funds to pay for an expensive overnight camp. This single example does not demonstrate that S.C. is incapable of acting in the children’s best interests, nor that the parties are not able to communicate or agree with respect to the children’s activities.

[131] The only health care decision I am aware of about which there has been a dispute was when C.C. sought counselling for the children after the June 12, 2019 incident with S.C.’s knowledge but without her consent. Other than for counselling, the parties have been able to cooperate on major decisions. Although S.C.’s use of alcohol has impacted her parenting time with the children, I am not aware that it has had any impact on her ability to make decisions. Despite seeking sole decision-making, C.C. did not point in his submissions to any inability to communicate between the parties other than the camp issue. Both parents love the children and attempt to make decisions in their best interests.

[132] Counselling for the children, which likely would raise and engage in the question of S.C.’s alcohol use, is a thorny issue. S.C. raised the concern that C.C. proceeded with counselling without her consent after the June 12, 2019 incident. More recently, when I encouraged the parties to enter into an agreement for closed counselling between S.C. and V.C., S.C. led evidence to demonstrate that the parties had not been able to come to an agreement. She led evidence of what she considered to be C.C.’s unreasonable conditions for the counselling to proceed. I have reviewed the correspondence and do not agree that C.C.’s conditions were unreasonable. Regardless, it is clear that counselling raises very sensitive issues between the parties, which makes cooperation between them extremely challenging. Further, given S.C.’s view that her use of alcohol is no longer problematic and given what I consider to be her lack of insight into the risks caused by her use of alcohol, I am concerned about her ability to exercise appropriate judgment with respect to counselling.

[133] I find on the evidence that C.C. has shown insight into protecting the children’s emotional and psychological well-being, and into the potential impact on the children of S.C.’s alcohol use. Therefore, I find that C.C. should have sole decision-making over any counselling for the children. In my view, this will facilitate counselling for the children in appropriate circumstances and gives primary consideration to the children’s emotional and psychological safety, security, and well- being. I am aware that this does not resolve the question of the terms on which V.C. and S.C. might attend counselling, in that S.C. nonetheless will need to consent to terms on her own behalf. However, C.C. will have authority to make decisions with respect to V.C. ’s participation.

[134] Therefore, the parties will have joint decision-making on all issues other than counselling for the children. C.C. will have sole decision-making with respect to counselling for the children.

Financial Issues – Preliminary Point

[135] Before turning to the financial issues identified above, it is important to state at the outset that S.C. has not met her onus of satisfying the court she is entitled to any remedies in respect to numerous peripheral financial issues she raised during trial or at the conclusion of trial. I agree overall with C.C.’s submission that S.C.’s approach to a number of peripheral financial issues in this trial involved speculation and fishing expeditions, rather than positions firmly grounded in the evidence and for which C.C. was given notice before trial. This was unfortunate, as it detracted time and attention from the serious and complex financial issues that were central to this trial.

[136] Two obvious examples of this arose during oral closing submissions. The first was during the submissions of S.C.’s counsel with respect to C.C.’s income. Counsel proposed for the first time to add certain capital dividends into C.C.’s income that neither party’s expert had included in their calculations, in spite of having completed between them nine income reports. This issue at no point arose in the evidence of the trial and was not the subject of cross-examination. I therefore did not accept argument on this point.

[137] A second example, during closing submissions, was S.C.’s submission that she should be entitled to an unequal division of net family property. She did not provide fulsome oral submissions on this point and in her almost 300 pages of written closing submissions, I was not able to find any analysis on this point, nor any reference to s. 5(6) of the Family Law Act, R.S.O. 1990, c. F.3 (“FLA”). In any event, I find below that S.C. is entitled to an equalization payment of almost $900,000. S.C. has not demonstrated that an equalization of net family properties would be unconscionable, nor that any of the factors set out in s. 5(6) of the FLA apply.

[138] A similar approach was seen throughout the trial. S.C.’s counsel made ongoing disclosure requests during the trial, although she had not identified outstanding disclosure before the trial commenced and had not brought any disclosure motions. When C.C. or Resilience Capital provided new documents she requested, she then questioned them on the documents. I found this questioning typically to be peripherally relevant, distracting the trial from the primary issues. It also, on some occasions, was not understandable without the assistance of expert evidence.

[139] For example, S.C. alleged in closing submissions that C.C. had overstated the value of his businesses in 2019. I address this point in more detail below in the section with respect to alleged non-disclosure and breaches of court orders, where I find there was insufficient evidence and no expert evidence to make this finding.

[140] In another example, S.C. included an unspecified allegation in her amended Reply, which was filed midway through the trial, that C.C. had breached “fiduciary duties, duties of trust, duties of good faith and fair dealing, and other duties in law” owed to her. She claimed an accounting of his activities and, if necessary, an equitable tracing order. However, C.C. was not named as a Respondent in this Application in his capacity as a trustee of the family trust, nor were any other trustees named. In the years of litigation prior to trial, there had never been a request for an accounting or tracing order. Further, C.C. had no practical notice of any of the specific allegations, which were being explored for the first time during his cross-examination relating to these points. In view of these failings, these allegations are dismissed.

[141] In short, I agree with C.C.’s submission that S.C. was engaged in part in a fishing expedition throughout the trial, searching for evidence to support new claims and causes of action against him. In Kinsella, at para. 176, Chappel J. underscored a party’s obligation to identify any deficiencies in disclosure before trial. In addition, she noted at para. 239 the importance of a party being notified of allegations in advance, so they are not left in the position of trying to explain complex matters in intricate detail unexpectedly during cross-examination at trial. The failure to raise complex financial issues prior to trial leads to a lack of notice and procedural fairness for the respondent: see Kinsella, at paras. 239, 305, 314. Here, I am not aware of any instance in which the issues referred to above were addressed prior to trial with disclosure requests, expert evidence, or other notice. S.C. has not met her onus of demonstrating her entitlement to remedies in respect of these allegations.

Allegations of Breaches of Court Orders

[142] S.C. claims that C.C. breached a preservation order granted by McWatt J. (as she then was) on July 13, 2018 (the “Preservation Order” or the “Order”) and that he otherwise has a long- standing history of non-disclosure and other breaches of court orders. She accordingly submits that C.C. should not have standing before this court and his financial pleadings should be struck.

[143] I agree with S.C. that C.C. technically breached the Preservation Order, although his breaches had a neutral effect on his net worth. He also made two significant errors on his financial statement that were only discovered on the eve of trial. These errors left S.C. without accurate information during negotiations and well into trial preparation. However, I do not agree that he has a pattern of non-disclosure or breach of other court orders. I also do not agree that his financial pleadings should be struck as a remedy for the breach of the Order and financial errors.

[144] Rule 1(8) of the Family Law Rules, O. Reg. 114/99 gives the court discretion to make an order it considers necessary for a just determination where a person fails to obey an order. It provides:

1(8) If a person fails to obey an order in a case or a related case, the court may deal with the failure by making an order that it considers necessary for a just determination of the matter, including

(a) An order for costs;

(b) An order dismissing a claim;

(c) An order striking out any application, answer, notice of motion, motion to change, response to motion to change, financial statement, affidavit, or any other document filed by a party;

(d) An order that all or part of a document that was required to be provided but was not, may not be used in the case;

(e) If the failure to obey was by a party, an order that the party is not entitled to any further order from the court unless the court orders otherwise;

(f) An order postponing the trial or any other step in the case; and

(g) On motion, a contempt order.

[145] The test governing the exercise of discretion to strike a party’s pleadings is as follows:

(1) Is there a triggering event?

(2) Is it appropriate to strike the pleadings in the circumstances of the case?

(3) Are there other remedies in lieu of striking pleadings that might suffice? See Van v. Palombi, 2017 ONSC 2492, at paras. 30 – 31.

[146] In order to address the first part of the test, whether there has been a triggering event, I turn now to S.C.’s allegations that C.C. breached the Preservation Order, as well as other court orders, and also failed in his disclosure obligations.

A. Preservation Order

[147] I find that there are two ways in which C.C. breached the Preservation Order. The first is that he transferred, sold, or disposed of assets specifically covered by the Order. The second is that he used more than the after-tax salary of $250,000 plus $20,000 specifically carved out for his personal use. I also note that he engaged in transactions of assets that were not specifically covered by the Order because they were not explicitly disclosed to McWatt J.

[148] That said, through all of this, C.C. did not diminish his net worth. Therefore, although he did technically breach the Preservation Order essentially by moving money around, he preserved his overall net worth such that S.C.’s potential entitlement to an equalization payment was not jeopardized.

i. Transfer/Sale/Disposition of Assets Covered by the Preservation Order

[149] C.C. has admitted to certain transactions that I find were in technical violation of the order of McWatt J., but which did not reduce his overall net worth.

[150] The pertinent part of the Preservation Order prevents C.C. from engaging in transactions to move or sell the property of two companies, Resilience Capital and Resilience Security Partners LP. It states that C.C. “shall be restrained from selling, dissipating, encumbering, disposing of, transferring or otherwise alienating the following property except with consent from the Applicant pending further court order: (a) Resilience Capital and Resilience Security Partners LP…”. In addition, the Order defines the funds available for C.C.’s use as follows: “Notwithstanding the foregoing, the Respondent shall have access to the use of the after tax of his salary of $250,000 per year plus $20,000 per month.”

[151] Following the issuance of the Preservation Order, C.C. undertook transactions that involved the movement of funds and assets from Resilience Capital and Resilience Security Partners LP. I find these transfers of funds to be breaches of the Order, but the breaches were technical in that they occurred in the ordinary course of business and had a neutral effect on C.C.’s net worth.

[152] First, on September 26, 2018, two months after the Preservation Order was issued, C.C.’s company, Resilience Security Partners LP (“RSP LP”) transferred or sold $500,000 worth of units. The proceeds from this sale were used to repay a margin account C.C. had at Cannacord Genuity Corp. (“Cannacord”). The shares were part of a subscription agreement from April 2018. C.C. states that at the time of the Preservation Order, the shares were being held “in trust” for Catalyst Capital (“Catalyst”) and that RSP LP had a $500,000 receivable from Catalyst. On September 26, 2018, Catalyst funded its subscription for the $500,000 units in RSP LP. RSP LP then transferred the $500,000 payment to him, which he used to repay his Cannacord margin account.

[153] There is no documentation to support that the units were being held “in trust” for Catalyst. On balance, I find this to be a transfer of funds from RSP LP, which was specifically named in the Preservation Order. However, this transfer did not in any event reduce C.C.’s net worth because the payment was used to reduce his debt.

[154] Second, on November 19, 2018, C.C. transferred $456,000 from Resilience Capital to Peleton Innovations Inc. (“Peleton”), a company he wholly owned. This loan was owing and repayment was contemplated at the time of the Preservation Order. Nonetheless, it was a transfer of funds from Resilience Capital, which was specifically named in the Preservation Order and therefore was contrary to that Order. However, it had a net neutral effect and did not put at risk any entitlement S.C. may have to an equalization payment.

[155] Third, on October 31, 2018 Resilience Capital paid a capital dividend to C.C. of $2.5M. These funds were then used to reduce the balance due from C.C.’s shareholder loan account by the same amount. The purpose of this transaction was to reduce C.C.’s tax liability on his shareholder loan. Because Resilience Capital, which was named in the Preservation Order, paid the capital dividend to C.C., the transaction was in breach of the Order. However, the transaction had a positive impact on C.C.’s overall net worth, as it limited his tax liability.

[156] Although these transactions only breached the Preservation Order in a technical manner, C.C. had options to avoid these breaches. For example, pursuant to the terms of the Order, C.C. could have sought S.C.’s consent to the transactions. He also could have sought to have the Order varied to permit transactions in the ordinary course of business. C.C. was well aware of this, as, in February 2019, he wrote to S.C. seeking to “loosen” the Preservation Order to permit him to conduct transactions in the ordinary course of business and to pay his legal and professional fees. S.C. responded that she would consider agreeing to this on the condition that C.C. provided proof of compliance. However, there was no further follow up after that response.

[157] Therefore, while technical, I consider these transactions to constitute breaches of the Order.

ii. Using More than the Amount Permitted for Personal Expenses

[158] As set out above, the Preservation Order provided that C.C. was to have access to the after- tax amount of his $250,000 salary plus $20,000 per month. C.C. submits that his understanding was that this term of the Order was “permissive” in nature. He also states that it was clear from his financial statement before McWatt J. that these amounts were not sufficient to cover his monthly expenses. He agrees that he spent more than these amounts but stated this was necessary to cover the expenses of the children.

[159] It is abundantly clear that the Preservation Order’s reference to the amounts for his spending meant that C.C. was limited to spending these amounts. It would be nonsensical in the context of a preservation order to include a “permissive” or minimum amount available for C.C. to spend. C.C.’s disagreement with the amounts in the Order does not justify his breaches.

[160] That said, C.C. funded the additional spending with (1) his increased salary, which rose to $375,000 per year effective October 1, 2018; and (2) a tax refund. Further, his most recent financial statement shows an increase in his net worth over time. Again, the evidence does not support that any entitlement S.C. had was at risk.

iii. Further Context: Transactions Not Covered by the Preservation Order

[161] In addition to engaging in transactions that directly breached the Preservation Order, C.C. engaged in a number of transactions involving entities not listed in the Order. Although I cannot find that these transactions breached the express terms of the Order, they form part of the relevant context.

[162] S.C. submits that these additional entities were not listed in the Preservation Order because they were not disclosed to McWatt J. Specifically, they involved subsidiary companies that were not listed on his financial statement at the time of the motion. C.C. submits that all these subsidiaries were disclosed to S.C. via his date of marriage and date of separation expert valuation reports, which had been delivered to S.C. by the date of the motion. Nonetheless, I do not understand C.C.’s submission to be that he or his counsel brought these entities directly to McWatt J.’s attention. Presumably, if she was aware of them, she would have included them in her Preservation Order so as to ensure he did not dissipate any of his assets.

[163] I do not consider the transactions not expressly covered by the Preservation Order to constitute a “triggering event” as set out in the r. 1(8) test, since the entities were not specifically named. Still, r. 1(8) orders are discretionary, and I consider these transactions to be part of the relevant context. The transactions are as follows:

• On October 31, 2018, Crescent Road Holdings Inc. (“Crescent”), a company in which C.C.’s company 1394340 Ontario Inc. (“139”) held an 80% interest, sold its 34% interest in HighCom Global Security Inc. (“HighCom”) for over $850,000 to a third party. C.C. does not dispute this transaction but states it was not covered by the Preservation Order. He also explains the funds were used in part to pay taxes. 139 then used the remainder of its 80% portion of the funds to reinvest in Peleton and Resilience Special Partners. I am not aware of any evidence to suggest that this transaction dissipated C.C.’s assets or reduced his net worth.

• On October 26, 2018, 139 advanced a $50,000 loan to RSPNDR, a wholly owned subsidiary of Peleton. Again, this was an inter-company transfer to address short-term cash requirements. It did not result in a realized loss.

• A third transaction identified by S.C. did not occur after the Preservation Order and, therefore, does not raise any concerns. Specifically, S.C. alleges that C.C. decreased his interests in various companies from 2016 to 2018. He owned 100% of both 3i Partners and XpressChek in 2016 but in 2017 his ownership in both decreased to 50%. However, this predated the Preservation Order, which was issued in July 2018. His ownership decreased because options had been issued to an arm’s length employee due to the terms of an employment contract. In any event, the employee was subsequently terminated and was required to return his equity in both companies such that in 2020 C.C. regained 100% ownership in both companies.

[164] Overall, S.C. has not shown a dissipation of assets, even with respect to the assets not covered by the Preservation Order. What is clear is that there was significant transfer of funds between companies that were difficult to track and understand, and this movement of funds raised concern for S.C.

B. Allegations of Incomplete or Misleading Disclosure

[165] S.C. has made numerous allegations that C.C. failed to disclose information or disclosed inaccurate information. There is no dispute that C.C. made two errors in his financial statements that were uncovered shortly before trial, which are discussed below. The remainder of S.C.’s allegations focus primarily on alleged failures of disclosure and what she considers to be inaccurate overstatement of C.C.’s business interests in 2019. Other than the errors in the financial statements, I do not find these allegations to have been substantiated.

i. Errors in Financial Statements

[166] C.C. revised his financial statements in two ways shortly before trial. These errors changed the financial picture, although, according to his calculations, they did not have any substantive impact, as his net family property remained at nil. However, given S.C.’s view that his date of marriage (“DOM”) deductions were much lower than he claims, they might have impacted her view of the benefits of proceeding to trial. I note that she nonetheless did proceed to trial, although it is impossible to know how the changed information might have impacted her settlement position if she had known about it well before the eve of trial.

[167] The first revision arose because of an error in C.C.’s date of separation (“DOS”) personal bank account balances. C.C.’s bookkeeper, who had assisted with preparing his financial statements, had used an incorrect separation date for one bank account. This meant that an account which had not been opened until after separation was counted as being open during the marriage. The amount in the account was approximately $2,200,000. This amount was deposited in the account after the DOS. It arose from a capital dividend that he received from Resilience Capital post-separation. Including the amount in his net family property resulted in a double counting of the capital dividend, as C.C.’s expert, Wayne Rudson, already had taken the capital dividend into account when calculating the value of Resilience Capital as at the DOS.

[168] The second error arose because C.C. had incorrectly noted in his financial statements that he had a personal Toronto Dominion Bank line of credit in the amount of $1,000,000 as at the DOM. This was instead a business line of credit that had been taken into account by Mr. Rudson when calculating the value of TSMS as at the DOM.

[169] The total impact of these errors was a reduction of his net family property on the DOS of over $3 million (though, on his calculation, there was no change to the nil NFP).

[170] I accept that these errors were inadvertent. Indeed, C.C. submits that these errors show his good faith efforts to provide accurate financial information, even to his detriment. Until he discovered the errors shortly before trial, they resulted in an inflation of his net worth on DOS. Still, the information regarding C.C.’s finances was in his control and not in S.C.’s control. She relied on him to provide accurate information in his sworn statements. It is difficult to know how these errors impacted S.C.’s actual position with respect to proceeding to trial, but they did not assist her in accurately assessing her position.

ii. Allegations of Failure to Produce Documents

[171] Throughout the trial, S.C. made repeated requests for the production of additional documents from C.C. and Resilience Capital. She now alleges C.C. has a history of non-disclosure and that various documents were only received mid-trial. In my view, C.C. met his disclosure obligations. The documents produced mid-trial were in response to new requests and had marginal relevance to the claims against C.C. To the extent the new documents related to the claims against Resilience Capital, it was only added as a party mid-trial.

[172] I do not accept S.C.’s narrative that C.C. persistently withheld information and failed in his disclosure obligations. In the course of the litigation leading up to trial, he produced eight separate briefs of disclosure, totaling thousands of pages. He also produced seven expert reports addressing the value of his business interests on the DOM and the DOS, as well as his income over five years. According to C.C., S.C. made 588 disclosure requests, which became wholly disproportionate. He gave an example of being required to incur $1,500 to obtain a Rogers cell phone running account statement, which was 1500 pages long. I do not know the alleged relevance of this document, but I was not taken to a running Rogers account statement during trial. Although S.C. now alleges C.C. was in breach of disclosure obligations, she did not bring a disclosure motion prior to trial, nor did she identify a list of outstanding disclosure at the outset of trial.

[173] In her written closing submissions, S.C. provided examples of documents related to her loans to TSMS that were received during the trial. This list does not support a pattern of non- disclosure. The documents were produced as a result of requests from S.C. during the trial. The requests were not made prior to trial, nor were they pursued via a disclosure motion. When they were requested, C.C. and/or Resilience Capital provided them.

[174] In addition, most of these documents were of limited importance to the trial. They include, for example, a TSMS unanimous shareholder agreement from October 2012. This agreement did not provide any information to assist in analyzing S.C.’s loans. They also include documents related to loans during the same time frame as S.C.’s loans, but between TSMS and other creditors. As further detailed below, these other loans do not shed light on the terms of the loans between S.C. and TSMS. Finally, there were a number of documents related to promissory notes and other transactions involving the family trust. These documents assisted in tracing the movement of funds into or out of the trust, a process that I found to have been of limited use to the issues I needed to decide. In the result, these documents tended to complicate the trial while distracting from the central issues.

[175] S.C. also submitted in closing that C.C. had failed to disclose significant evidence of shares he owned in HighCom in 2017, even to his own expert. The ownership of these shares was purportedly “discovered” by S.C.’s counsel in December 2020. S.C. was involved in this litigation for many years before this point was raised. When presented with this new allegation at trial, C.C. explained that this was a distressed business in the United States for which the value of the shares was negligible. In any event, he explained that these shares were accounted for in the transactions reviewed by his expert. Without expert evidence, nor anything further to support her allegations, S.C. has not demonstrated that these shares were not disclosed or that they held additional value not taken into account in the existing valuations.

iii. Allegations regarding 2019 Business Interests

[176] S.C. alleges that C.C. overstated the value of his business interests in 2019. As set out above, I find these claims to be peripheral to the issues at trial. The parties separated five years prior to this financial year, in 2014. To the extent C.C. overstated the value of his business interests in 2019, this would only be relevant if there was a concern that he had insufficient assets to pay an equalization payment owed to S.C. As I have said, the evidence, including the evidence from S.C.’s expert Mr. Weinstein, does not demonstrate a dissipation of assets following the Preservation Order. Indeed, Mr. Weinstein’s own opinion on income shows a pattern of C.C.’s income increasing post-separation for the period 2014 to 2018, in part because of the sale of assets that were then re-invested.

[177] In any event, neither party has provided any expert evidence on the appropriate current value for C.C.’s businesses. I am unable to question the values set out in C.C.’s financial statement on the minimal evidence provided. S.C. has failed to demonstrate C.C. has inflated his assets.

C. Allegations regarding Breach of Support Obligations

[178] S.C. also has made allegations that C.C. has breached support obligations owed to her. I accept there were some late payments in certain instances but do not agree that there was an overall pattern of failure to pay of the sort that would attract sanction. From 2015 to the start of trial, C.C. claims over $900,000 in post-separation adjustments, including over $340,000 in undifferentiated support payments. I do not accept every item he has claimed as a post-separation adjustment (as discussed further below). However, it is clear he has made significant ongoing payments, including undifferentiated support of $5,000 per month, paying for S.C.’s car and cell phone, and making all mortgage and property tax payments on the Gibson home in which S.C. resides.

D. Rule 1(8) Analysis

[179] Applying my findings above to the test for striking pleadings under r. 1(8), I find, at the first step, that there is a triggering event, in that C.C. did breach the Preservation Order. He could have sought S.C.’s consent or a variation of the Order to permit transactions in the ordinary course of business. I do not find the remainder of the allegations to constitute breaches of court orders. I also do not consider it appropriate to strike his pleadings in the circumstances of this case. The striking of pleadings and resulting denial of trial participation should only be done in exceptional circumstances where no other remedy would suffice: Van, at para. 35. Here, I have found C.C.’s breaches to be technical in that he carried on transactions in the ordinary course of business and maintained his net worth. He did not put any equalization payment owed to S.C. in jeopardy. This is far from an appropriate circumstance to strike C.C.’s pleadings.

[180] On the third part of the test, whether there are any remedies in lieu of striking pleadings that might suffice, I consider it appropriate to consider these breaches of the Order, as well as the errors in C.C.’s financial statements (which while not a breach are still relevant to costs), when I determine costs at the completion of the trial. The breaches likely contributed to S.C.’s stress and increased her costs as she tried to track and understand complex financial transactions that were not within her knowledge and control. It is not clear whether the errors in the financial statements would have changed S.C.’s settlement position, particularly given that she continued to proceed to trial after having received the revisions. Still, this was information in C.C.’s control and that he had a duty to provide in an accurate manner. The sudden, significant, change just before trial would have increased S.C.’s costs at least in a small amount in understanding and responding to the change. If she had known of the change earlier, it may have impacted her settlement position at an earlier date, when she had not already prepared for trial.

[181] Although these factors will be considered following trial and after receiving the parties’ costs submissions if they are not able to reach an agreement on costs, I emphasize that I also will be taking into account a number of other factors, including factors related to the conduct of the trial and, of course, the outcome, in determining costs.

S.C.’s Claim against Resilience Capital

[182] S.C. claims repayment of loans made to C.C. or Resilience Capital during the period 2006 to 2012. I agree with C.C. and Resilience Capital that the advances she made were repaid. As a result, I do not need to determine whether the claim against Resilience Capital is statute-barred as submitted by the Respondents.

[183] S.C. alleges that she advanced $669,000 to TSMS between 2006 and 2012 as follows: a. $300,000 on December 21, 2006; b. $150,000 on September 2, 2010; c. $119,000 on November 9, 2011; and d. $100,000 on December 14, 2012.

A. Positions of the Parties

[184] S.C. submits that, in total, she loaned C.C. roughly her life’s savings. She states that she believed she was loaning the money to TSMS because it was experiencing cash flow problems. According to S.C., she was not financially savvy at the time. She understood C.C. to be a wealthy man who was sophisticated in dealing with financial issues and she left the family finances to him. She submits that she was not repaid the funds advanced in December 2006. With respect to the subsequent three advances, although she was repaid, C.C. was unjustly enriched at her expense.

[185] Resilience Capital and C.C. both submit that the first advance of $300,000 was not a loan, but instead S.C.’s contribution to the home the parties were having custom built. They submit that the other three loans to TSMS were repaid in November 2013 after TSMS sold all its assets to GardaWorld (“Garda”), another company in the security business.

B. December 21, 2006 Advance

[186] I conclude that S.C.’s advance of $300,000 in December 2006 did not constitute a loan to TSMS. S.C. claims that, at the time, C.C. asked her to loan money to TSMS because it was experiencing cash flow problems. She states that she provided a $300,000 bank draft to TSMS’s Chief Financial Officer as a loan and expected to be repaid for that amount.

[187] I do not find this account to be credible. The parties were in the process of purchasing a home that would be custom built in the Angus Glen neighbourhood of Markham. As set out above, prior to their marriage, both S.C. and C.C. had owned homes in Markham. C.C.’s evidence is that the new home, with a purchase price of $1,850,000 was funded through: (a) the proceeds of sale of C.C.’s home, which were approximately $585,000; (b) C.C.’s personal line of credit; and (c) the proceeds of sale from S.C.’s home, which were approximately $300,000.

[188] The timing of S.C.’s bank draft fits with the timing of the home purchase. That is, the parties ultimately provided a deposit for the new home on January 7, 2007. In other words, S.C. provided her bank draft just before the holidays and the parties purchased the home shortly after the holidays. C.C. explained that the reason the bank draft was made to TSMS was that the deposit would be paid from his shareholder’s loan account. This is consistent with the evidence throughout the trial and discussed further below that C.C. regularly used his shareholder loan account for personal expenses. I note that if S.C.’s bank draft was not used for the purchase of the home, S.C. would not have been making any initial financial contribution to the home.

[189] I have considered S.C.’s testimony that she was not financially savvy. At various times during her evidence, she emphasized that she was a busy mother of three children. She trusted C.C. and left the finances to him. In her closing submissions, she stated that “it became apparent” during the trial that C.C. used at least a portion of her funds (over $200,000) towards the Angus Glen home. I do not accept that she was naïve to the point of not understanding that she was contributing over $200,000 to the parties’ home. I also accept C.C.’s evidence that the full $300,000 was used toward the purchase of the home — not only the down payment, but also toward moving and other expenses related to the new home.

[190] S.C. had a business degree, was working at IBM as a technical writer, and had written an early text on e-commerce. She also showed herself at trial to be careful and detail-oriented in her discussion of much of the complex financial evidence. Even if she has become more financially literate since that time, she was detail-oriented in all her evidence. Therefore, even if she was not as financially savvy as C.C., and left many of the financial decisions to him, I do not accept that she was not aware of how her funds were being used.

[191] In addition, although S.C. claims the advance was a loan, there is no loan documentation to support this position. The absence of documentation is unlike the subsequent advances to TSMS, which formed part of larger transactions with other lenders, and for which there is supporting documentation, though mostly related to the other lenders. Further, when TSMS’s assets were sold to Garda in 2013 and S.C.’s documented loans to TSMS were repaid, there is no evidence that she requested or inquired about repayment of amounts she now claims to have loaned in 2006. The sale of the company’s assets would have been the obvious time to be repaid.

[192] Most importantly, S.C. admitted in writing to having an investment in the Angus Glen home. In email correspondence with counsel who was providing independent legal advice on a draft marriage contract in 2008, S.C. referred to an amendment to the draft contract regarding “her investment in the primary home, which [she had] reviewed and approved …”. On cross- examination, S.C. acknowledged that this must be a reference to an investment in Angus Glen. She otherwise had no explanation for the statement.

[193] I also note that title to the Angus Glen home was in S.C.’s name. When the home was sold in 2012, after payment of the line of credit and all other amounts due, the proceeds from the sale ($683,782.44) were paid to S.C. personally. The parties may have had other reasons for arranging their affairs in this manner but, together with the statement in the October 2008 email, this arrangement is consistent with the notion that S.C. was one of the investors in the home.

C. September 2, 2010 and November 9, 2011 Advances

[194] There is no dispute that S.C.’s September 2, 2010 and November 9, 2011 advances to TSMS were loans. S.C. submits that TSMS and C.C. were unjustly enriched at her expense. Therefore, although she was repaid for the loans, she claims she is entitled to additional compensation.

[195] To establish unjust enrichment, S.C. must show: (a) C.C. or Resilience Capital was enriched; (b) S.C. was correspondingly deprived; and (c) the absence of a juristic reason for the enrichment: Garland v. Consumers’ Gas Co, 2004 SCC 25, [2004] 1 S.C.R. 629, at para. 30. S.C. has not established these criteria.

[196] I do not accept that C.C. or Resilience Capital was enriched. Shortly before September 2, 2010, S.C. agreed to loan $150,000 to TSMS. TSMS was experiencing financial challenges and had exhausted its ability to borrow from traditional banks and its then-lender, Callidus Capital Corporation (“Callidus”). To access more capital, TSMS entered into an agreement with another asset-based lender, Royal Capital Management, which used Black Ice Management (“Black Ice”) to fund the credit facility. However, TSMS needed an injection of capital to bridge the refinancing. S.C. testified that C.C. asked her to assist with the capital injection, whereas C.C. testified that S.C. was aware of the financial situation and offered to assist. Regardless, on September 2, 2010, S.C. arranged for a bank wire of $150,000 to be transferred to TSMS.

[197] S.C. made the second loan in late 2011, after TSMS had defaulted on a credit agreement with Black Ice. Black Ice agreed to a forbearance agreement, conditional on TSMS securing additional injections of capital from other sources. To assist, on November 9, 2011, S.C. advanced $119,000 to TSMS.

[198] There was no deprivation, as S.C. was paid back for both advances, with interest. By January 2013, S.C. had received cash interest payments of $19,034.14. Then, when TSMS sold its main assets to Garda in November 2013, TSMS paid S.C. $304,008.84, which included the $269,000 principal plus additional interest. On C.C.’s calculation, S.C. was repaid at an interest rate of approximately 15%. C.C.’s evidence, which I accept, is that S.C. was paid interest on the same basis as he typically received interest from TSMS under his shareholder loan account.

[199] Having earned this interest, I do not consider S.C. to have suffered a deprivation. S.C. submits that C.C. was unjustly enriched and that she suffered a deprivation when she considers the entire financial outcome of the marriage. She submits that she invested her life’s savings to save C.C.’s business from foreclosure and did not receive a good return on this investment. She also notes that she did not receive the same return on her investment as other investors. She specifically considers it unfair that C.C. ultimately earned a much larger equity payout upon the sale of TSMS’ assets compared to the return she received on her advances.

[200] Although other third-party investors did earn higher interest rates, and, in some cases warrants, those were the terms agreed-upon. Not only did S.C. and C.C. not specifically agree to any interest nor negotiate to obtain warrants on her advances, but in September 2010 S.C. agreed to subordinate her loan to Callidus’ loan.

[201] S.C. initially denied that she signed the documents related to this transaction, stating that C.C. must have signed on her behalf. She further stated that she received independent legal advice on the transaction only after C.C. signed all the documents on her behalf.

[202] Even if this is the case, S.C. does not deny that she received independent legal advice on the transaction. She attended the meeting with the lawyer, who certified to her understanding of the documents. She acknowledges that, even if she did not sign the certificate of independent legal advice herself initially, she initialed the date change on the document. She acknowledges that she understood the documents and was in agreement with the subordination of her loan. In other words, S.C. knew that her status was not the same as that of other investors. Instead, she was being treated in the same manner as C.C. was treated with respect to his shareholder loans.

[203] With respect to S.C.’s overall argument that C.C. obtained a much better return on his investment than she did, this argument is difficult to understand. The sale of TSMS’s assets occurred in late 2013, before the July 1, 2014 date of separation. Any wealth C.C. earned was either used for the family’s expenses or subject to equalization on the date of separation. I conclude below that S.C. is entitled to an equalization payment of almost $900,000. I also conclude that some of her funds were notionally used to purchase the parties’ Gibson home and that she continues to hold a 50% interest in that home.

[204] I do not need to consider the requirement that there be no juristic reason, given that S.C. did not suffer a deprivation. In any event, S.C. entered into an agreement for the loan of funds without a specified interest rate and received the return of the amounts loaned, as well as interest in an amount that matched C.C.’s shareholder loan account. The existence of a contract constitutes a juristic reason: Garland, at para. 44; Goddard v. Hambleton, 2005 NSCA 124, 237 N.S.R. (2d) 1, at para. 12. Overall, there was no unjust enrichment.

D. December 14, 2012 Advance

[205] There is also no dispute that S.C.’s December 14, 2012 advance was a loan. This advance differs from the other two in that it flowed through the parties’ family trust, the C.C. Family Trust (the “Family Trust”).

[206] By way of background, the Family Trust was created on September 25, 2012 as part of an estate freeze. The settlor of the Trust was an arm’s length party, Richard Bradlow, and the original trustees were C.C., S.C., and a friend, Kevin Hooper, though C.C. was entitled to change the trustees at his discretion. The Trust’s beneficiaries were C.C., S.C., the three children, and S.C.’s mother. The trustees, at their discretion, were entitled to pay or transfer any amount of income or capital to one or more of the beneficiaries. The trustees also had the power to exclude one or more of the beneficiaries from the payments or transfers.

[207] In the fall of 2012, TSMS entered into an amended and restated credit agreement with Black Ice, which required further injections of capital, including $750,000 from the Family Trust on closing and a further $250,000 from the Family Trust within 30 days of closing.

[208] S.C. contributed $100,000 to the second advance, which ultimately was in the amount of $225,000. On December 14, 2012, she advanced $100,000 to the parties’ joint chequing account. C.C. then transferred $225,000, including S.C.’s $100,000, from the joint chequing account to TSMS on behalf of the Family Trust.

[209] In November 2013, upon the sale of TSMS’s assets to Garda, TSMS repaid $109,179 to the Family Trust in repayment of S.C.’s loan. In other words, the Family Trust received over $9,000 of interest for the loan. At that time, TSMS also repaid the $750,000 loaned from the Family Trust (via a promissory note to C.C.) with interest.

[210] S.C. was a trustee and beneficiary of the Family Trust. Of the funds repaid to the Trust, US $390,000 was used for a membership in Exclusive Resorts Club, which allowed the family to travel to various resorts. The Trust was also used to pay the children’s private school fees. Finally, both S.C. and C.C. received payments from the trust of $44,180.64 in 2013.

[211] S.C. submits that C.C. misrepresented the true reasons for the sale of the Angus Glen home, which was to raise money for his business. She submits that, instead, he led her to believe that the funds would be used to purchase a home in Rosedale. She claims that he misappropriated the Angus Glen sale proceeds, in the amount of $750,000, to save his business and then repaid the funds to the Family Trust, primarily to benefit himself.

[212] S.C. has not shown that C.C. misappropriated the funds. First, as a trustee of the Family Trust, she was involved in all the transactions that involved loaning funds to the Trust and the Trust being repaid. As a trustee, she signed a direction dated October 4, 2012 authorizing the loan from the Trust to TSMS in the amount of $750,000 and acknowledging that the loan of $750,000 to the Trust was from C.C. Further, she signed a resolution dated November 19, 2013 in which she agreed the Trust wished to repay C.C. in the amount of $410,358, and that the Trust directed those funds to be paid as US $390,000 for the purchase of the Exclusive Resorts Club membership.

[213] In other words, S.C. knew about the use of the funds and agreed to them. To the extent she did not know exactly which funds were being used for what purpose, she has not shown misappropriation or a fraudulent misrepresentation by C.C. Her evidence regarding using the funds to purchase a home in Rosedale was only that the parties had discussed doing so, although they also agreed they would first rent a home in Toronto and then consider buying at the right time. She did not provide evidence of any specific misrepresentation by C.C. that the funds would be used to purchase a home, nor that C.C. made such a representation knowing it to be or reckless as to whether it was untrue, nor that she acted on the basis of such a representation, as required by the test for fraud: Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 87.

[214] That said, as discussed further below, I do find that the parties ultimately agreed that the approximate amount of the funds from the Angus Glen sale would be used to purchase the Gibson home. The specific funds from the sale of Angus Glen are not traceable to the Gibson home, but the parties agreed the funds from the Angus Glen sale would be invested in a home. Because the home is held in joint title and C.C. intended for S.C. to be a 50% owner of the home, I find below that S.C. owns half of the Gibson home.

[215] With respect to S.C.’s additional claims regarding C.C.’s actions as trustee of the Family Trust, as set out above, these are dismissed for failing to name any trustee and for lack of procedural fairness.

[216] In summary, S.C. was repaid for her loan with interest through the Family Trust, of which she was a trustee and beneficiary. I do not find a basis for her claim of unjust enrichment, nor for her claims that C.C. engaged in fraudulent misrepresentation and misappropriated funds from her using the Family Trust.

Equalization Payment

[217] C.C.’s position is that his net family property decreased over the course of the marriage such that he does not owe S.C. an equalization payment. C.C.’s net family property (“NFP”) statement calculates his DOS property to be valued at $9,693,991.58, whereas he calculates the value of his property on the DOM to be $13,360,874.26. S.C. claims an equalization payment owed to her of $1,590,174.14. She calculates the value of C.C.’s DOS property to be $12,454,001.17 and the value of his DOM property to be $6,464,693.81.[^1]

[^1]: I note that S.C.’s numbers take into account a significant figure representing the unpaid loans she considers C.C. to owe her, which I have concluded have been repaid. The total amount for which she seeks repayment including the equalization payment and the alleged unpaid loans plus interest is $6,558,362.14.

[218] Shortly before they were married, on July 10, 2006, the parties entered into an agreement, which I will refer to as the Standstill Agreement or Agreement. The purpose of the Standstill Agreement was to protect each party’s listed property in the event of a breakdown in the first six months of marriage. The Agreement expired on January 15, 2007. The Agreement appended schedules listing the property owned by each party, with estimated values. As further discussed below, I do not accept the values in the Standstill Agreement for C.C.’s business interests, in the absence of any explanation as to how the values were arrived at and in the face of expert evidence on this issue. However, I do rely on the values in the Standstill Agreement for other assets and liabilities as the best or, in some cases, only evidence available to me.

[219] With respect to the value of C.C.’s business interests on DOM and DOS, overall, I accept much of the expert evidence provided by S.C.’s expert, although with adjustments. Most importantly, I calculate the DOM value of TSMS to be significantly lower than claimed by C.C. Taking into account all my findings discussed below, I conclude that S.C. is owed an equalization payment of $882,115.16.

A. Minor Discrepancies – Date of Marriage and Date of Separation

[220] The most significant disagreement between the parties regarding the DOM value of assets is the value of TSMS, which I will turn to in a moment. There are also discrepancies regarding other items of lesser value, most of which either were not directly addressed in the evidence and submissions or were addressed in a cursory manner. I will deal with these first. Before turning to the major issue regarding the value of TSMS, I will also address the treatment of the Family Trust.

[221] Starting with the DOS values, C.C. has included values for his wine cellar and art, which S.C. did not include in her NFP statement. However, she did not cross-examine on nor provide any evidence to dispute C.C.’s values. Therefore, I accept C.C.’s values for these items.

[222] I also accept C.C.’s values for S.C.’s jewellery. S.C. has provided evidence of a number of items of jewellery that she owns but that are in C.C.’s safety deposit box. She valued her jewellery on the DOM in the Standstill Agreement as worth $75,000. C.C. does not dispute that the items in the safe deposit box belong to S.C. He values her total jewellery as of the DOS as $152,200. In the absence of other evidence, I accept these values.

[223] There is a specific dispute with respect to two watches that C.C. owned on the DOM and gave to S.C. to wear, although he states he never intended them to be permanent gifts. S.C. submits that these watches were gifted to her. The parties agreed in their evidence that C.C. had links removed from the wristbands of both watches to fit S.C.’s wrist. Given the alteration of the watches to fit S.C., on a balance of probabilities, I find that these watches were gifted to her. However, as they were gifted by C.C., they must be equalized. I was not able to locate any specific values for these watches in the evidence. C.C. stated that before altering the gold Vacheron watch to fit S.C., he was hoping to sell it for approximately $30,000. His evidence was also that the other, Cartier, watch was less formal and “more sporty.” Without further information, I find it reasonable to estimate the value of the sportier watch at half the value of the formal watch. Therefore, the Cartier watch will be valued at $15,000. In total, $45,000 will be attributed to S.C. for the value of the watches on the DOS and she shall be entitled to keep them. The remainder of C.C.’s estimated values for art and jewellery on the DOS remains attributable to him.

[224] There are values for C.C.’s bank accounts in S.C.’s NFP statement that do not match C.C.’s values for the same asset. C.C. provided statements to substantiate his values and S.C. did not. Therefore, I accept C.C.’s values. The values for S.C.’s bank accounts are almost identical in both NFP statements, subject to rounding errors. I will use S.C.’s values.

[225] The parties did not address the minor discrepancies with respect to DOS liabilities in their evidence. I accept C.C.’s numbers as they match his sworn financial statement, whereas there is no evidence in support of S.C.’s numbers. S.C. includes a debt of less than $5,000 for her credit card but that debt is not included in her financial statement, so I do not include it.

[226] With respect to the DOM, the values for S.C.’s property are almost the same, except that C.C. has included $75,000 for jewellery owned by S.C. and $12,000 for her car. S.C. has not included these values in her financial statement and NFP statement. However, C.C. relies on the Standstill Agreement, in which S.C. listed both of these values. In the absence of other evidence, I accept these values. In addition, with respect to S.C.’s bank accounts, although the numbers are close in both parties’ statements, C.C. has provided specific support for his numbers in his notes, whereas S.C. provided a global number without explanation. C.C.’s numbers also correspond with the bank statements filed at Exhibit 55. Therefore, I accept C.C.’s numbers.

[227] I also note that with respect to S.C.’s investments on DOM, there is a small discrepancy between the parties with respect to one of her bank accounts (RBC Chequing *6015). Neither party’s number corresponds exactly with the bank statement for the DOM at Exhibit 55, but as I have the direct evidence, I use that number.

[228] With respect to C.C.’s assets on the DOM, except the value of TSMS, the parties either agree on the values or, to the extent there is a discrepancy, C.C. uses the value from the Standstill Agreement. In the absence of other evidence, I accept these values. I also include the loan due to C.C. from TSMS of $652,000, which both experts agreed-upon in their DOM valuations of TSMS.

[229] With respect to DOM liabilities, the differences are that S.C. lists C.C.’s TD line of credit as having $1,000,000, when I find, as C.C. explained, that this was an error and duplication. I accept C.C.’s value for this line of credit of $340,000, which was the amount listed in the Standstill Agreement. I also include the disposition costs for property as calculated by C.C., as he has set out the way in which he arrived at his value, which was a commission of 5%, plus HST plus legal fees of $2,000. I have no way to determine how S.C. arrived at her costs, which exceed these amounts for the same land values.

B. Family Trust

[230] With respect to the Family Trust, although unorthodox, there seems to be acquiescence by both parties that the assets of the trust should be equalized as at the DOS. In closing submissions, S.C. raised concerns that she did not realize until trial that she had contributed funds to the Trust. I have dealt with this above in finding that she signed directions and resolutions with respect to the funds that were contributed to the Trust, advanced to TSMS, then paid back to the Trust. I have also found that S.C.’s funds were in part notionally used to purchase the Gibson home, even if the specific funds were used for the children’s private school fees and the Exclusive Resorts membership. Because I have found that the parties intended the funds from the Angus Glen property to be used for the Gibson home, S.C. is a half owner of that property.

[231] Regardless of whether one or both parties contributed funds to the Trust, both parties’ experts included values for the Family Trust in their valuation of C.C.’s DOS business interests. S.C. also included the total value her expert had calculated for C.C.’s business interests, including the value of the Trust, on C.C.’s side of the ledger in order to calculate the parties’ net family property. I note that if S.C. had included some of the value of the Trust on her side of the ledger, the result would have been the same after equalization. I also note that both parties’ experts calculated C.C.’s income post-separation to include interest earned by the Trust. The parties then calculated support payments owing by C.C. using these income amounts.

[232] In spite of this unorthodox manner of treating the Trust, in view of the acquiescence of both parties, I calculate the equalization payment to include the value of the Trust.

C. Date of Marriage Value of TSMS

[233] The most significant area of disagreement in calculating C.C.’s net family property relates to the value of TSMS on the DOM. Both parties called experts in forensic accounting to provide opinions. These experts were both highly qualified, with years of experience in valuing corporate interests. The experts agreed that, although C.C. owned several companies on the DOM, the only company with any value was TSMS. Using a multiple of revenue valuation approach, the expert retained by S.C., Peter Weinstein, was of the view that TSMS’s value on the date of marriage was approximately $6,700,000. The expert retained by C.C., Wayne Rudson, was of the view that TSMS’s value was approximately $13,280,000.

[234] C.C. also relies on the Standstill Agreement, in which, just before the DOM, he estimated the value of TSMS to be $15,000,000. I do not put any weight on this number. There is no documentation or explanation as to how C.C. arrived at this estimated value, nor is there evidence that he disclosed supporting documentation to S.C. at the time of the Agreement. The Agreement provided instead that each had made “preliminary disclosure” to the other regarding their property, assets, and liabilities, which I take to mean that C.C. subjectively estimated the value of the business. Indeed, in Mr. Rudson’s valuation of C.C.’s DOM assets, he did not place any reliance on the values in this Agreement given that there was no evidence to support them. One example of the dramatic unreliability of the values in this Agreement is the value listed for TSM Inc. C.C. listed its value in the Agreement as $4,000,000, whereas the experts for both parties found that this company had a nil value on the DOM.

[235] Before turning to the comparison of the multiple of revenue valuations for TSMS, I note that I do not accept the second approach, the multiple of income valuation, provided by Mr. Weinstein. Using this approach, Mr. Weinstein valued TSMS at $4,900,000. According to Mr. Weinstein, a multiple of income approach is generally preferred to a multiple of revenue approach because typically companies are bought and sold based on the income they generate, not based on their revenue. Mr. Rudson disagreed. However, even if Mr. Weinstein was right, the problem in this case, as he acknowledged, was that it was difficult to accurately determine TSMS’s income. As a privately run business, C.C. was able to charge personal expenses through the business. In order to accurately determine income (as if a third party were running the business), it would be necessary to exclude the personal expenses. It was known that C.C. paid for significant personal expenses through the company, but there were no detailed accounting records to permit an accurate normalization of income. As a result, although Mr. Weinstein performed a multiple of income valuation using the best information available, he acknowledged that the income-based approach was significantly limited in the circumstances.

i. Multiple of Revenue Factor

[236] Turning to a valuation of TSMS using a multiple of revenue approach, there are two primary differences between the opinions of the experts. The biggest difference relates to the multiple of revenue factor. This is the factor by which the company’s revenue is multiplied to reach the estimated value. It indicates the rate at which investors are capitalizing revenue at any given time. It is arrived at by looking at sales of other comparable businesses and calculating the amount at which they were sold as compared to their revenue. In arriving at a multiple of revenue factor, the expert also considers factors specific to the particular company (here, TSMS) and exercises their professional judgment to arrive at what they consider to be an appropriate factor in all the circumstances.

[237] In this case, after examining what he considered to be comparable sales and the relevant factors specific to TSMS, Mr. Weinstein concluded that .30 was an appropriate multiple of revenue factor for TSMS (meaning that the estimated value would be 30% of revenue). Meanwhile, Mr. Rudson examined a different range of sales and factors specific to TSMS and arrived at a multiple of revenue of .55 (meaning that the estimated value would be 55% of revenue).

[238] I conclude that the appropriate multiple of revenue to apply in this case is .35. I generally accept the approach adopted by Mr. Weinstein. The reason Mr. Weinstein and Mr. Rudson arrived at different multiples of revenue is largely because they examined a different selection of transactions. Mr. Weinstein took into account the two transactions relating to companies he considered the most similar to TSMS. Mr. Rudson, on the other hand, took into account a broader range of transactions, 23 in total.

[239] I agree with Mr. Weinstein that the approach adopted by Mr. Rudson is too imprecise and not sufficiently tied to TSMS’s business. The two transactions selected by Mr. Weinstein were the sale of Intertec Security Ltd. for $4.9M, at an approximate multiple of .30 and the sale of Ontario Guard Services Inc. for $3.7M at an approximate multiple of .26. These companies both provided guarding services and were both located in Ontario. They were both purchased by Garda, the company that ultimately purchased TSMS in 2013. Mr. Weinstein also considered these companies comparable because their approximate revenue was in the same range as the revenue of TSMS, although lower. In Mr. Weinstein’s view, the multiple of revenue factor tends to increase for larger companies with higher revenues because they are considered to have less risk. Here, the experts agreed that TSMS’s revenue was approximately $28.3M.

[240] Mr. Weinstein also made note of the sale of Rentokil Initial PLC for $60M at a multiple of .46. He did not consider this transaction to be directly comparable but provided it for information purposes. Rentokil also provided guarding services in Ontario and was purchased by Garda. However, Mr. Weinstein did not consider it comparable because it was a much larger company, with an approximate revenue of $131M.

[241] Mr. Weinstein further took into account both positive and negative factors related to TSMS. The positive factors were as follows: TSMS’s revenue was growing (by 39% in the year of marriage, 2006); there was significant acquisition activity around the marriage date and C.C. had frequent discussions with individuals potentially interested in acquiring TSMS; and most of the revenue was derived from large and stable financial institution clients. The negative factors were as follows: for the three years prior to the date of marriage, TSMS generated modest earnings or incurred losses; TSMS was dependent on two large customers; C.C. was deducting significant personal expenses from the company, which could make it difficult for a potential purchaser to assess the adjusted income and could decrease its value; and the company’s net tangible assets were nominal and it had a working capital deficit. After considering the three transactions, as well as these factors, Mr. Weinstein arrived at a range for the appropriate multiplier of .25 to .35. If required to select a single number, he would pick .30, which was slightly higher than the .28 average of the two transactions he considered most comparable.

[242] Although Mr. Rudson analyzed many more transactions, I consider these to be overall less comparable to the more narrow and specific transactions examined by Mr. Weinstein. For example, of the 23 transactions Mr. Rudson considered, only 9 of these transactions took place in Canada. Nine were in the United States and the remainder were in the United Kingdom, Spain, and Turkey. Because of different regulatory environments, it is not necessarily expected that a company’s profitability in different countries, especially outside North America, would be comparable.

[243] In addition, many of the companies Mr. Rudson used as comparables had markedly different businesses from TSMS. While TSMS’s primary business was providing on-site uniformed guard services, the companies Mr. Rudson used as comparables included a much wider range of security-related businesses. For example, Mr. Rudson considered as comparable a business providing forensic accounting and fraud investigations, a business providing security software and electronic security systems, a business managing medical information, and a business providing medical alert emergency response services. These businesses are fundamentally different from the armed guard services provided by TSMS. Meanwhile, TSMS was not a unique business. It had a specific type of service also provided by other companies that were available to be used as comparables.

[244] I note that Mr. Rudson did not accept Mr. Weinstein’s proposition that in all circumstances higher revenues reduce risk. There may be reasons why a small company would trade at a higher multiple, such as its innovation or technical superiority. At the same time, Mr. Rudson put significant emphasis on TSMS’s growing revenue as a positive factor, stating that potential buyers are interested in purchasing revenue. I conclude from the evidence of both experts that, in general, larger companies with more revenue are more appealing, less risky, and trade at higher multiples, subject to the individual circumstances applicable to any given transaction.

[245] Mr. Rudson’s view was that reviewing as many comparable transactions in the security industry as possible, including those that took place in other countries, those engaged in different areas of the security business, and those for larger companies, reduced the subjectivity of choosing only a small number of comparable transactions. It also reduced the danger that the very specific transactions used would be given outsized weight when no comparable is perfect.

[246] I am mindful of the risk that Mr. Weinstein used so few comparables that the results are skewed by the very specific circumstances of the businesses and transactions chosen. However, there are a number of reasons why I consider Mr. Weinstein’s results reliable. First, although he did not directly add the multiple of the Rentokil transaction into his calculation, he did use it as a third piece of data representing a Canadian transaction in the security guarding services business. I would put even more emphasis on this transaction and, as discussed below, fully incorporate it into the calculation. If the Rentokil transaction is included in the calculation, the multiple of revenue average for the three transactions would be 0.34.

[247] Second, Mr. Weinstein provided charts of a wider range of transactions to test his results. He took the multiple of revenue averages of companies from Mr. Rudson’s collection that were similar in size to TSMS. These companies had the wider range of services Mr. Rudson considered and were not all located in Canada. Their size ranged from an approximate revenue of $14M to $43M. The average multiple in this group was .33.

[248] Mr. Weinstein also considered companies in Mr. Rudson’s collection that were acquired by Garda in the 2005 to 2006 time frame. This is the company that ultimately acquired TSMS. The multiple of revenue average in this group was .37.

[249] Finally, I take into account the fact that TSMS ultimately was acquired by Garda in early 2013 at a multiple of .5. Both experts agreed that this information, which occurred after the valuation date, could not be used to arrive at the value of the company in 2006. They also agreed that hindsight can be used to test the reasonableness of conclusions or the accuracy of assumptions. Here, Mr. Rudson was of the view that the actual revenue multiple of .5 in 2013 supported his proposed revenue multiple of .55 in 2006.

[250] In my view, it does the opposite. In its 2012 financial statements, TSMS had revenue of $53.9M, almost double the revenue of $28.4M that it had in 2006. It also had less dependence on its top two customers. In 2006, 63% of its revenue was derived from its top two customers, whereas in 2012, 33% of its revenue was derived from its three largest customers. In 2012, its revenue sources (guard services vs. other services) were also somewhat more diversified. In other words, in 2012 there were several factors that would suggest a higher revenue multiple than in 2006. The 2013 transaction confirms to me that the 2006 transaction should assume a revenue multiple below .5. It confirms to me that Mr. Rudson’s revenue multiple of .55 is not reasonable.

[251] While I consider Mr. Weinstein’s results to be reliable overall, I would use the high end and not the midpoint of the range chosen by Mr. Weinstein (i.e., .35 rather than .30). In choosing a different number, I note that Mr. Weinstein acknowledged in his evidence that choosing the midpoint of the range was not precise and that another number within the range could be used. I use the high end of the range for two reasons. First, when the Rentokil transaction is included, the multiple increases to .34. I recognize that Mr. Weinstein excluded the Rentokil transaction because it is a company with significantly higher revenue. However, the other two companies used both had lower revenues than TSMS. None of these companies is a perfect comparable but including Rentokil somewhat balances the smaller sizes of the other two comparables used.

[252] I also use the high end of Mr. Weinstein’s range because I am persuaded by Mr. Rudson as to the importance of TSMS’s growth. In Mr. Rudson’s opinion, a critical factor affecting the value of TSMS on the DOM was the fact that it had had substantial revenue growth in the two years prior (from $17.9M in 2004 to $28.4M in 2006). Mr. Weinstein did not disagree that increasing growth was important and included TSMS’s growth in 2006 as a positive factor. Nonetheless, Mr. Weinstein did not appear to put particular emphasis or weight on this factor as compared to other factors. I accept Mr. Rudson’s more detailed explanation as to why growth is so important. Specifically, as explained by Mr. Rudson, many purchasers are primarily interested in revenue. They may be able to incorporate the new business into their own cost structure, and, therefore, the most significant value of the target company often is in the new revenue stream, particularly when that revenue stream is growing. While Mr. Weinstein included growth as a positive factor, he only considered the growth of the 2006 year, and not the significant growth since 2004. He also did not seem to put strong emphasis on this factor. For both reasons, I would apply the high end of Mr. Weinstein’s range, that is .35, as the multiple of revenue factor.

[253] With respect to C.C.’s argument that the transactions used by Mr. Weinstein are not comparable, in his examination, C.C. was asked questions related to his knowledge of these companies, that is, Intertech, Ontario Guard, and Rentokil. I do not put any weight on this evidence. C.C. provided his assessment of these companies and the reasons he considered them different from TSMS. In my view, this was an opinion based on specialized knowledge and experience. Needless to say, C.C. cannot be qualified to provide independent expert evidence in this proceeding, given his status as a party. Further, this information was not provided to S.C. and Mr. Weinstein in advance of Mr. Weinstein’s testimony, so as to permit him to respond to it in a comprehensive manner. In any event, I have already addressed above why I am satisfied Mr. Weinstein’s findings are not skewed by the specific companies he chose as comparables.

[254] C.C. also submits that Mr. Weinstein’s approach is limited because he did not meet with C.C. or his accounting staff, nor did he attempt to do so. I am not persuaded that meeting with C.C. or his staff was important. Mr. Rudson was required to disclose the information he relied on from C.C. in arriving at his conclusions. Therefore, Mr. Weinstein had access to all that information. Mr. Rudson has not pointed to any particular piece of information he considered important and that Mr. Weinstein did not consider, although of course Mr. Weinstein put more or less weight on different factors.

ii. Notional Disposition Costs

[255] The second difference between the two experts relates to the present value factor used for notional disposition costs. The present value factor of the notional disposition costs on the sale of the company will vary depending on how far into the future the company is likely to be sold. Mr. Weinstein applied a present value factor of 65%, which represented an assumption that the company was likely to be sold in 10 to 15 years. Mr. Rudson applied a present value factor of 48%, which represented his assumption that TSMS would be sold in 20 to 25 years.

[256] I find Mr. Weinstein’s assumption to be more reasonable in all the circumstances. Even at the DOM, C.C. had been in discussions with potential buyers for TSMS. Mr. Rudson noted in his evidence that a positive factor in valuing TSMS was the significant acquisition activity in the industry, with C.C. having had frequent discussions with individuals who were potentially interested purchasers of TSMS. In addition, to test the reasonableness of the 10 to 15 years assumption, we know that C.C. in fact sold TSMS in 2013, less than 10 years later. Accordingly, I find the notional disposition costs calculated assuming a sale in 10 to 15 years to be more reasonable than those calculated assuming a sale in 20 to 25 years.

[257] Although Mr. Weinstein chose a multiple of .30 rather than .35, given that he provided .35 as the high end of his range, he helpfully provided the calculation using .35 for the court’s information. Based on these calculations, including the disposition costs of 65%, the value for TSMS on the DOM is $7,220,000.

D. Date of Separation Value of TSMS

[258] The parties put much less emphasis in their evidence and submissions on the DOS value of business interests, largely because the differences between the two experts were much less significant. Mr. Weinstein valued C.C.’s business interests on the DOS at approximately $8,912,000 (including the Trust and loans receivable), while Mr. Rudson concluded their value was approximately $8,835,000. The differences between the experts related to three issues: (1) tax adjustments following the sale of TSMS in 2013; (2) whether TSM should be valued based on its book value or based on a multiple of revenue approach; and (3) the notional disposition costs.

[259] With respect to the tax issue, Mr. Weinstein’s evidence was that he discovered what he considered to be an error in Mr. Rudson’s report. Specifically, although TSMS was sold in 2013, the tax liability for the sale was deducted on Resilience’s 2014 financial statements. Mr. Rudson deducted 50% of the taxes, given that the separation date was July 1, 2014. However, Mr. Weinstein states that since the liability was incurred in 2013, the full amount should have been deducted. In addition, Resilience was entitled to a tax benefit from carrying back its operating loss in 2014 up to the DOS. Carrying this loss back resulted in recovering income taxes, with the total adjustment increasing C.C.’s interest in Resilience by $517,000. Since the overall impact of these adjustments was to increase the value of C.C.’s interest in Resilience at the DOS, this adjustment was to S.C.’s disadvantage. Mr. Rudson did not address this proposed correction in any detail in his evidence. Given the absence of any dispute with it, I accept Mr. Weinstein’s correction as accurate.

[260] The second issue relates to the appropriate valuation method for TSM, which was the US division of TSMS and continued operating after the sale of most of TSMS’s assets to Garda. Mr. Weinstein used the multiple of revenue approach to value TSM, whereas Mr. Rudson used TSM’s book value. Both experts spent very little time on this issue. I conclude that the best method to use for the purpose of this matter is the multiple of revenue approach. Mr. Rudson testified that the book value approach should be used because TSM was generating losses each year. In his opinion, its value therefore was best reflected in the value of its assets. However, as with TSMS, it was difficult to normalize TSM’s earnings because of the likelihood that personal or discretionary expenses were being charged to the company. In addition, TSM did have sales of more than $8M for the previous two years. As set out above, Mr. Rudson has taken the view that purchasers are often specifically interested in revenue because they can integrate incremental revenue into their own cost structure. The most important reason for which I will use the capitalized revenue approach is that it is consistent with the approach used to value TSMS on the DOM and therefore is most likely to provide a fair comparison between business interests on the two dates.

[261] The last issue is the notional disposition costs. For the same reasons set out above with respect to the DOM disposition, I find the range of 10 to 15 years chosen by Mr. Weinstein to be more appropriate. Mr. Rudson remarked that the reason TSM continued to operate was to enable an earnout to be paid from the sale of TSMS. He overall did not strongly dispute that 10 to 15 years was the more appropriate choice.

[262] Therefore, I find the appropriate value of C.C.’s business interests on the DOS, including the trust and loans receivable, to be $8,912,000, as calculated by Mr. Weinstein.

E. Conclusion on Equalization Payment

[263] I have attached as Schedule A my net family property statement using all the values agreed-upon or addressed above. I calculate C.C. to owe an equalization payment to S.C. of $882,115.16.

The Gibson Home

[264] More than eight months after their separation, on March 6, 2015, the parties purchased a new home on Gibson Avenue in Toronto. In the months leading up to the purchase, S.C. had been living in the Manulife apartment. There had been discussions between the parties of a potential reconciliation, but the home was bought for S.C. to move into so in any event she would have a more comfortable home for the children during her parenting time.

[265] Although the parties hold the home as joint tenants, C.C. submits that S.C. holds her half of the property in trust for him based on a purchase money resulting trust. The home was purchased for $1.895M. The parties obtained a mortgage in the amount of $1.295M. C.C. has shown that he paid the deposit of $150,000 and the balance due on closing of $585,721.52 from his sole account. In addition, C.C. made and continues to make all the mortgage payments on the home. He also pays for the property taxes and property insurance.

[266] A resulting trust arises when title to property is in one party’s name but that party, because they are a fiduciary or gave no value for the property, is under an obligation to return it to the original title owner: Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, at para. 20. A purchase money resulting trust can occur where a person advances a contribution to the purchase price of property or to the mortgage but does not take title: Andrade v. Andrade, 2016 ONCA 368, 131 O.R. (3d) 532, at paras. 57 – 58.

[267] Typically, where property is acquired with one person’s money and title is put in the name of another, there is a presumption of a resulting trust: Andrade, at para. 59. Section 14 of the FLA preserves that presumption in questions of ownership of property between spouses, subject to certain exceptions. One such exception is where the property is held by the spouses as joint tenants, in which case there is a rebuttable presumption in favour of joint tenancy. The relevant part of s. 14 provides:

14. The rule of law applying a presumption of a resulting trust shall be applied in questions of the ownership of property between spouses, as if they were not married, except that,

(a) the fact that property is held in the name of spouses as joint tenants is proof, in the absence of evidence to the contrary, that the spouses are intended to own the property as joint tenants;

[268] C.C. submits that the presumption of resulting trust should apply in this case given that the parties had been separated for many months at the time the property was purchased. He also submits that the question is the intention of the transferor at the time the property is acquired. In this case, he claims he put the property in the parties’ names jointly because it acted as security for any financial obligations he potentially owed to S.C. arising from their separation.

[269] I disagree that a presumption of resulting trust applies in this case. “Spouse” is specifically defined in the FLA as either of two persons who are married to each other. The parties in this case remained married. They made this purchase within the first year after separation and, at the time, were discussing reconciliation.

[270] In any event, even if I am wrong and the presumption of resulting trust applies in C.C.’s favour, I find that S.C. has rebutted that presumption.

[271] Specifically, I conclude that the parties both understood that the funds used for the purchase of the home were roughly those arising from the sale of the Angus Glen property. During this litigation, C.C. undertook a tracing exercise with respect to those funds. They are not traceable directly to the funds used for the Gibson home. Instead, as described above, they formed part of a loan to the Family Trust, which then loaned them to TSMS. TSMS repaid the loan with interest to the Trust, and the Trust then used the funds for various purposes, as approved by the trustees, including to purchase the Exclusive Resorts Club membership.

[272] Still, I find that both parties understood the approximate amount of the funds from the sale of Angus Glen were used to purchase the Gibson home. The proceeds from the sale of Angus Glen were $683,000, plus roughly $80,000 for furniture in the home that was purchased by the buyer, for a total amount of approximately $763,000. Meanwhile, the funds paid into the Gibson home were the $150,000 down payment plus the closing amount of $585,721.52 for a total of $735,721.52. The parties also agreed that S.C. would have a budget of $20,000 to renovate the home. In other words, the total amount of funds invested in the Gibson home is very close to the total funds received from the sale of Angus Glen.

[273] Further, as discussed above, S.C. testified that the parties had discussed using these funds to purchase a home in Rosedale. The Gibson home is located in or immediately outside of Rosedale. The parties never purchased a home in Rosedale before separation.

[274] Most importantly, C.C.’s intention at the time of transferring the funds for the purchase of the home was for S.C. to be a joint legal and beneficial owner because he considered her to have contributed more or less equally to the purchase of the home. While I find that the parties both understood S.C.’s funds had been used to contribute to the purchase of the home, the key point for the purpose of the resulting trust analysis is C.C.’s intention at the time of the transfer. Common intention is not the issue: “The intention of the grantor or contributor alone counts, as the point of the resulting trust is that the claimant is asking for his or her own property back”: Andrade, at para. 62.

[275] During the course of this litigation, C.C. testified repeatedly under oath both to his understanding that S.C.’s funds had contributed to the purchase of the home and to his intention that the home be jointly owned.

[276] For example, in his affidavit dated September 14, 2017, sworn in the context of S.C.’s motion for support, C.C. expressly stated that some of the funds used to purchase the home were S.C.’s:

[T]he Applicant/Mother alleges…that I “kept” the net proceeds from the sale of the matrimonial home in July 2012. Some of the Applicant/Mother’s funds went into the purchase of ** Gibson Avenue, Toronto, for which she will be compensated when this property is sold.

[277] C.C. attached as an exhibit to his affidavit a chart, which he stated “traced” the funds from the proceeds of Angus Glen into the purchase of the Gibson home.

[278] C.C. also stated in this affidavit that he and S.C. were joint owners of the property, specifically noting that he was entitled to half of its value:

The Applicant/Mother and I are joint owners of ** Gibson Avenue. The Applicant/Mother’s own evidence in her financial statement is that this property is worth more than $2,000,000 of which I am entitled to half. [Emphasis added.]

[279] In his affidavit dated July 6, 2018, sworn in the context of the preservation motion, C.C. made various statements throughout the affidavit, all of which reflected his initial intention that the property was jointly-owned:

In 2015 (after our separation), the Applicant and I jointly purchased a property located at ** Gibson Avenue, Toronto.

The Applicant and I are joint owners of ** Gibson Avenue, Toronto.

The Applicant seeks to restrain my 50% interest in ** Gibson Avenue. [Emphasis added.]

[280] Moreover, in the following statement, C.C. specifically adverted to purchasing the home jointly in part because of the possibility of reconciliation:

Immediately after the Applicant and I separated, we attempted over a period of approximately two years to see if we could salvage our marriage. This is one of the reasons why we purchased ** Gibson jointly even though we never resided in it together.

[281] Throughout this litigation, S.C. has expressed some confusion as to whose funds were used to purchase the Gibson home. Her original understanding was that she had contributed to the purchase of the home with the funds from the sale of Angus Glen. As the litigation progressed and it became clear the funds from Angus Glen were not directly traceable to the Gibson home purchase, she became less certain as to which specific funds were used. I do not find that her uncertainty undermines the fundamental point that the parties both understood she had contributed to the purchase of the home from the proceeds of the sale of Angus Glen, even if the precise funds from that sale are not traceable to the purchase. More importantly, her uncertainty does not undermine C.C.’s intention that S.C. would be a half owner of the home, even though the funds technically came from him and were not directly traceable to the Angus Glen proceeds.

[282] With respect to C.C.’s payment of the mortgage and other expenses, these will be accounted for in my consideration of the post-separation adjustments.

[283] During oral closing submissions, on my questioning, C.C. indicated he was seeking an order for partition and sale of the Gibson home. This claim was included in his Answer, as well as in his draft Order filed at the outset of trial. However, it did not arise in closing submissions until I asked about it and was not included in C.C.’s written closing submissions.

[284] C.C. is prima facie entitled to an order for partition and sale. A property owner who holds a joint interest in property has a prima facie right to sale pursuant to s. 2 of the Partition Act, R.S.O. 1990, c. P. 4. Subsection 3(1) of the Partition Act permits a person with an interest in land to bring an action for sale under the direction of the court. To avoid the sale, the party opposing it must provide evidence of malicious, vexatious, or oppressive conduct on the part of the requesting spouse: Silva v. Silva (1990), 1990 CanLII 6718 (ON CA), 1 O.R. (3d) 436 (C.A,), Latcham v. Latcham, 2002 CanLII 44960 (Ont. C.A.), at para. 2. Here, S.C. has not submitted nor provided evidence that C.C.’s conduct has been malicious, vexatious, or oppressive

[285] In oral closing submissions, S.C.’s counsel did request a vesting order pursuant to s. 100 of the Courts of Justice Act, R.S.O. 1990, c. C.43. However, she did not make submissions as to why a vesting order would be appropriate in the circumstances of this case. I have found above that, while C.C. breached the Preservation Order, his breaches were technical in that he maintained his net worth. He also has made substantial payments post-separation for support and post- separation adjustments. Therefore, S.C. has not substantiated a basis for a vesting order in this case. Even though not formally pleaded I dismiss that claim.

[286] While I order the partition and sale of the property, I delay the sale until after my order for costs in this matter. I do this because it was not a point emphasized in closing submissions or that seemed to have any urgency. This will allow S.C. to be fully apprised of her financial situation in order to determine whether she is in a position to purchase the property, should she wish to do so. Therefore, the property shall be sold, with the sale to occur after my costs order. If they are not able to reach agreement, the parties will be entitled to make requests in their costs submissions regarding the specific timing and other terms of the sale.

Child Support

[287] Since separation, the children have lived either primarily with C.C. or equally with both parties. C.C. seeks retroactive child support from S.C. for the periods the children lived primarily with him. S.C. seeks retroactive child support from C.C. for the periods the children lived equally with both parties. In this section of my decision, I set out entitlement to retroactive child support, addressing these various periods of time. The calculations for retroactive support themselves are performed below when I calculate the parties’ incomes and take into account the other retroactive amounts owed for spousal support, s. 7 expenses, and post-separation adjustments.

[288] Pursuant to s. 3 of the Federal Child Support Guidelines, SOR/97-175 (the “Guidelines”), the presumptive rule is that child support is to be paid in accordance with the table amount. This provision applies to certain periods post-separation when the children resided primarily with C.C., and, therefore, S.C. would have owed table child support.

[289] Section 9 of the Guidelines addresses the situation where each parent exercises not less than 40% of parenting time with a child over the course of a year. This provision is relevant to periods post-separation where the children resided equally with both parties. Section 9 provides:

9. If each spouse exercises not less than 40% of parenting time with a child over the course of a year, the amount of the child support order must be determined taking into account

a. the amounts set out in the applicable tables for each of the spouses;

b. the increased costs of shared parenting time arrangements; and

c. the conditions, means, needs and other circumstances of each spouse and of any child for whom support is sought.

[290] For the purposes of the support calculations, the children resided as follows:

Time Period	Children Resided
2014 (for the period post-separation) to 2016	Primarily with C.C.
2016 to May 2019	Equally with the parties
June 2019 to present	Primarily with C.C.

[291] For the periods during which the children lived with the parties equally, C.C. would owe child support to S.C., given his greater income. Neither party has suggested that, taking into account the factors set out in s.9, the amount payable should be anything other than the set-off table amount. In calculating the retroactive amounts, both parties have used the set-off table amounts for the periods the children lived with them equally. Therefore, I will take that approach as well.

[292] I now address child support entitlement for each of the time frames set out above.

A. July 2014 to 2016

[293] Although C.C. claims retroactive child support from S.C. for the period when the children resided primarily with him from the date of separation until 2016, I do not award him child support for this period.

[294] In considering whether to award C.C. retroactive child support for this period, I take into account the principles governing retroactive child support, as set out in D.B.S. v. S.R.G., 2006 SCC 37, [2006] 2 S.C.R. 231, and repeated and endorsed in Michel v. Graydon, 2020 SCC 24, 449 D.L.R. (4th) 147, at para. 10. Specifically, the Supreme Court of Canada has emphasized that child support is not exceptional relief. Child support should, as much as possible, provide children with the same standard of living enjoyed when the parents were together. In determining whether to make a retroactive award, the payor parent’s interest in certainty in his/her obligations must be balanced with the need for fairness and flexibility. A court should consider whether the recipient parent’s delay in seeking retroactive support was reasonable in the circumstances, the conduct of the payor parent, the circumstances of the child, and the hardship the retroactive award might entail.

[295] There are several factors that weigh against ordering S.C. to pay support for this period. First, and most importantly in the circumstances of this case is the principle of certainty. S.C. did not have notice that she was expected to pay support. When she returned from her second residential treatment program, C.C. advised her of the separation and that he had arranged an apartment for her. He wisely and consistently paid the rent for the apartment and many of her other expenses, while also arranging for Resilience Capital to start paying her a salary. This was the right thing to do in support of his spouse, who had recently arrived home from residential treatment, and in support of the mother of his three children. C.C. deserves recognition for conducting himself in an appropriate manner. However, S.C. did not choose the apartment, nor were her expenses paid on a budget that was necessarily fitting for a claim of child support against her, nor, as I will discuss below, spousal support at a level C.C. now claims.

[296] Related to this, the parties’ lives remained intertwined. S.C. went to the matrimonial home for at least a portion of the day on an almost daily basis. She bought groceries for the family and paid for expenses for the family dog. She continued to make arrangements for the upkeep of the matrimonial home. And, importantly, the parties were discussing reconciliation. They took several trips together and participated together in family outings and meals. Indeed, part of the reason the Gibson home was purchased notionally using joint funds and with the parties jointly on title was because of the potential of reconciliation. It was either going to be a home for S.C., with the children during her parenting time, or it was ultimately going to be a home for the whole family should the parties reconcile. The evidence at trial was that it was not until the summer of 2016 that the parties made the final decision not to reconcile. S.C. initiated this Application in February 2017.

[297] Meanwhile, in terms of their lifestyle, the children did not suffer. C.C. maintained the same standard of living as previously. This is not a situation in which a payor parent defaulted on child support to the detriment of the children. Rather, it is a situation of the financially dependant spouse not now being penalized unexpectedly after-the-fact.

[298] Therefore, for the period 2014 to 2016, when the children resided primarily with C.C., I find that the fair outcome in the circumstances of this case, as described in D.B.S., at para. 6, is not to award retroactive child support.

B. 2016 to May 2019

[299] For the period 2016 to May 2019, the children lived equally with both parties. Pursuant to s. 9 of the Guidelines, C.C. owed set-off child support to S.C. It was clear to C.C. that S.C. was seeking support from him and he does not dispute that he owes her retroactive set-off child support for this period. Only the quantum, based on the incomes of both parties, which I address below, is in dispute.

C. June 2019 to Date

[300] For the period from June 2019 to date, it is straightforward that S.C. owed child support to C.C., as the children resided with S.C. less than 40% of the time. Although C.C. never initiated a motion seeking child support from S.C., his Answer filed February 2020 pleads that child support is owed to him. Further, S.C. initiated a support motion in September 2017 at which time it was clear the parties were not in agreement as to C.C.’s income and the appropriate support amounts. Nicholson J. ordered C.C. to make uncharacterized payments of $5,000 per month on a without prejudice basis. I find that, as of that motion, S.C. had notice of C.C.’s position that he did not agree with the amounts he was paying her and would be seeking to revisit those amounts. S.C. was at liberty to budget accordingly. Therefore, in calculating the total retroactive support below, I take into account table child support owed by S.C. to C.C. for the period June 2019 onward.

[301] I now turn to the other contentious issues relevant to child support, being the parties’ incomes and s. 7 expenses.

C.C.’s Income for Support Purposes

[302] The parties have widely different views on C.C.’s income for support purposes. Both experts provided evidence addressing C.C.’s income in 2014 through 2019. For 2019, Mr. Weinstein provided a critique of Mr. Rudson’s report and evidence but did not provide a final independent view of his own.

[303] In Mr. Rudson’s opinion, C.C.’s income for support purposes over 2014-2019 was as follows:

Year	Income
2014	$506,000
2015	$588,000
2016	$447,000
2017	$381,000
2018	$633,000
2019	a range of $553,000 to $751,000

[304] Mr. Weinstein provided a range of potential income levels for C.C. over this period depending on the court’s conclusions on various issues. His high end for each year was as follows:

Year	Income
2014	$943,000
2015	$971,000
2016	$1,047,000
2017	$1,241,000
2018	$1,791,000
2019	unknown

[305] C.C. earns a salary as the CEO of Avante. He also oversees direct and indirect investments in security related businesses for what he describes as the “Resilience group” of companies. He owns or has owned the vast majority or all the shares in several companies, including Resilience Capital, 139, Peleton, and Crescent. He also directs the Family Trust, which owns most of the common shares in Resilience Capital. Each of the companies then owns or holds interests in other companies. As set out above, both experts included the interest earned by the Trust post-separation in C.C.’s income.

[306] The main areas of disagreement between the parties in calculating C.C.’s income relate to two issues: (1) the degree to which corporate income should be attributed to C.C. and (2) the amount of personal expenses C.C. has charged to his corporations. Personal expenses charged to the corporation should be added to C.C.’s income. Therefore, the higher the personal expenses, the greater C.C.’s income. I will also address a minor discrepancy in the amount of dividends C.C. received from 139 in 2017. Overall, I conclude that C.C.’s income ranged during the years under review from a low of just over $650,000 in 2018 to a high of just over $865,000 in 2019. For 2020 and 2021, I take an average of his income from the last three years.

A. Legal Principles

[307] Section 16 of the Guidelines sets out the presumption that a spouse’s annual income for child support purposes shall be determined from the sources of income set out in Revenue Canada’s T1 General tax return form (“T1 income”). Sections 17 – 20 provide exceptions to this general rule: Punzo v. Punzo, 2016 ONCA 957, at para. 19. Sections 17 and 18 are particularly relevant to determining C.C.’s income.

[308] Pursuant to s. 17, if the court is of the opinion that the determination of a spouse’s annual income under s.16 would not be the fairest determination of income, the court may have regard to the spouse’s income over the last three years and determine an amount that is fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non-recurring amount during those years. Section 17 does not require the court to average the income of the last three years. Instead, it directs the court to set a fair and reasonable amount, taking into consideration the last three years’ income and any patterns of income, fluctuations in income, and non-recurring gains: Punzo, at para. 24; Ewing v. Ewing, 2009 ABCA 227, at paras. 22, 37, and 39.

[309] Section 18 provides that where a spouse is a shareholder, director, or officer of a corporation and the court is of the opinion that the amount of the spouse’s annual income as determined under s. 16 does not fairly reflect all the money available to the spouse for the payment of child support, the court may consider the situations described in s. 17 and determine the spouse’s annual income to include:

(a) All or part of the pre-tax income of the corporation, and of any corporation that is related to that corporation, for the most recent taxation year; or

(b) An amount commensurate with the services that the spouse provides to the corporation, provided that the amount does not exceed the corporation’s pre- tax income.

[310] In addition, with respect to personal expenses, s. 19(1) authorizes a court to impute income to a spouse in appropriate circumstances, including where “the spouse unreasonably deducts expenses from income:” Guidelines, s. 19(1)(g).

[311] The court has a discretion to determine whether the s. 16 income is fair, having regard to non-recurring gains and patterns of income. In exercising that discretion, the following is a list of factors found in the case law, which can be applied to the circumstances of this case:

• To what extent is the availability of pre-tax corporate income restricted by the ownership structure?

• What restrictions on availability are imposed by the nature of the corporation’s business including the amount of capital equipment required, the nature of the industry in which the company operates, the outlook in terms of expansion or contraction, the level of debt as well as any banking or financing restrictions?

• Historical trends and practices of the corporation.

• Will the capital generated from a sale provide a source of income for the future?

• Is the payor in the business of buying and selling capital assets year after year such that those amounts, while the sale of capital, are in actuality more in the nature of income?

• Did the non-recurring gain even generate cash, or was it merely the result of a restructuring of capital for tax or other legitimate business reasons?

• Does the inclusion of the amount result in wealth distribution as opposed to proper support for the children?

See Koester v. Koester, 2003 CanLII 2150 (Ont. S.C.), at paras. 33 – 34; Turk v. Turk, 2008 CanLII 3420 (Ont. S.C.), at para. 35; Ewing, at para. 35.

[312] There is no dispute in this case that using C.C.’s T1 income would not be the fairest determination of his income. The experts retained by both parties have added other amounts to his income, including dividends, interest earned by the Family Trust, and personal expenses.

B. Attribution of Corporate Income

[313] In Mr. Weinstein’s view, the court may determine that two capital gains, as well as consulting fees earned by C.C.’s companies, should be considered as income for the purposes of support. The first was a gain of $852,328 earned by Crescent in 2018. The second capital gain was in the amount of $995,319 generated by 139 in 2019. Finally, from 2016 to 2018, Resilience Capital earned consulting fees that, in Mr. Weinstein’s opinion, could be attributed to C.C.

i. Crescent Road Gain

[314] I conclude that the Crescent capital gain should not be attributed to C.C. as income. As mentioned above in the discussion about the Preservation Order, in 2018, Crescent Road sold its 34% interest in HighCom. Mr. Weinstein was of the view that $1,067,862 from this gain could be attributed to C.C., calculated as his 80% share of the Crescent gain, grossed up to reflect the tax rate for employment income instead of the lower tax rate for a capital gain. S.C. submits that Crescent is a holding company, whose only source of income is from investing in other companies. Therefore, she submits it is reasonable to consider the gain as income.

[315] Applying the factors listed above weighs in favour of not attributing this gain to C.C. as income. There is no dispute that C.C. had control over the use of the funds. This factor could weigh in favour of treating the gain as income. On the other hand, looking at historical patterns, I am not aware of prior evidence of Crescent earning a gain and Mr. Weinstein acknowledges this gain could be treated as non-recurring. Part of the gain (approximately $270,000) was used to pay accounts receivable and taxes owing, while the remainder was distributed to the two shareholders, one of which was 139. This company then reinvested the proceeds in other companies in the Resilience group, namely Resilience Special Partners and Peleton.

[316] I find the payment of the existing debts and the investment into other companies within the group to be transactions in the ordinary course of business and generally consistent with the historical pattern in the Resilience group of companies. I am not aware of evidence that shows a pattern of prior sales to essentially generate gains to be used as income. Instead, the discussion above with respect to the Preservation Order demonstrates that it was in the ordinary course of business for the Resilience group companies to move funds, often from one company to another, to maximize value. The Preservation Order discussion provides prior examples of moving funds to pay loans or reduce debt.

[317] Further, the use of the funds in this case was in the ordinary course because it involved replacing one investment with another in the same industry. Crescent traded one investment in the security industry, its investment in HighCom, for another investment in the security industry in Peleton.

[318] With respect to S.C.’s submission that Crescent’s only source of income was through investments, C.C. received substantial income, on top of his salary, that became available because of his work overseeing the Resilience Group. Both experts agree he received some dividend income, as well as interest earned by the Family Trust that should be attributed to him. Further, in my discussion below, I attribute a significant amount of income to him as evidenced by the personal expenses he has flowed through Resilience. In other words, a significant way in which C.C. was paid for his work with respect to these private investments was through the payment of substantial personal expenses that amounted to several hundred thousand dollars of income, almost half of his total income in some of the years under review.

[319] Finally, with respect to this gain in particular, while I do not attribute the funds to C.C. as income, I do attribute some of the consulting fees Resilience earned from HighCom to C.C. for his services in consulting and briefly acting as CEO, which is discussed further below. Therefore, his work in actualizing this gain is reflected in consulting fees.

ii. TrackTik Gain

[320] I have come to the same conclusion with respect to the second capital gain, except for a portion of the capital generated that clearly was used for discretionary expenses. This gain in the amount of $995,319 was generated in 2019 by 139’s sale of TrackTik. C.C. used $662,177 of the gain to repay a shareholder loan that 139 owed to him. He then used the cash to purchase preference shares in Peleton. Peleton used the funds in part to fund its own operating losses and loaned $650,000 to RSPNDR, a wholly owned subsidiary, to fund its operating losses. TrackTik and Peleton were both in the Resilience group of companies. I find this investment to be in the ordinary course of business.

[321] However, the other portion of this gain, totaling $198,132, was used for discretionary expenses, specifically, to buy art and a boat. C.C. acknowledged in cross-examination that the boat was a personal expense. Although he says the art is hung in his corporate office, Mr. Rudson acknowledged this was a potentially personal expense. I agree, as it was completely discretionary. There is no real suggestion that it was made in the ordinary course of business. Mr. Weinstein has noted that this portion of the gain should be grossed up to reflect the taxation of employment income rather than the taxation of a capital gain. This results in a total addition to C.C.’s income of $312,132 in 2019.

iii. Consulting Income

[322] Mr. Weinstein considered consulting fees earned by Resilience Capital as potential income to C.C. On November 14, 2016, Resilience Capital secured a consulting contract with BlastGard, later rebranded to HighCom, for annual consulting fees of $250,000 USD. C.C. claimed none of the income from this contract should be attributed to him, as he was not involved in the daily fulfillment of the agreement. Rather, according to C.C., two other employees performed the day- to-day work. He was the engagement manager, who facilitated the deal between the parties, but, he states, he did not receive any income from this agreement.

[323] In my view, a portion of the funds from this agreement should be attributed to C.C. C.C. is listed as the engagement manager on the contract, with no other employees specifically identified as being involved. As engagement manager, C.C. was to supervise the provision of services and be the principal contact. Further, the contract was for a fixed fee per year and not contingent on billable time.

[324] I also note that C.C. became the CEO of HighCom from the end of June 2017 to mid- January 2018. He was not compensated for his role as CEO. At his questioning, C.C. gave answers to suggest that he was paid for his services to HighCom by fees for consulting services paid to Resilience Capital. At trial, he said that instead of being paid for his service, he realized value when the “appreciation of the value of the company was realized.” I take this to refer to the sale of Crescent’s interest in HighCom, which I have not attributed to him as income given the use of the funds. Given that the capital gain has not been attributed as income and given that C.C. otherwise performed CEO services without compensation, I consider a portion of the fees for this contract to be attributable to him.

[325] I also accept that two employees performed specific consulting services under this contract. Without further information, I am not able to estimate with any precision the amount of fees to attribute to C.C. Since he was the CEO who was otherwise uncompensated, but who ultimately realized a gain of over $850,000 for Crescent, I allocate 50% of the fees from each year of the contract to him. The total fees under the contract were as follows: $106,000 in 2016; $431,000 in 2017; and $41,000 in 2018.

C. Personal Expenses

[326] Mr. Weinstein treated a higher number of C.C.’s expenses as personal. He took two approaches to determining which expenses should be treated as personal. The first relied on S.C.’s review of corporate credit card statements and expense reports from part of 2015 and 2016. S.C. identified specific expenses she considered personal based on her knowledge of specific locations and events, as well as her knowledge of C.C.’s habits and lifestyle.[^2] Mr. Weinstein’s methodology was to treat the identified expenses as personal, and to assume that 50% of the remaining expenses were also personal. He then annualized the expenses treated as personal for 2015 and 2016 and took an average of those expenses to apply to the years for which he did not have detailed documentation.

[^2]: C.C. explained that there were no expense reports prepared from 2017 forward. This was because following the sale of TSMS, he no longer had accountability to stakeholders. In addition, by the end of 2016, he no longer had an executive assistant to prepare the reports.

[327] Mr. Weinstein’s second approach was to review the Resilience detailed general ledgers for expenses that appeared personal but were deducted from income, such as meals and entertainment, travel, and vehicle and to add back 50% of those expenses.

[328] Mr. Rudson’s approach was to rely on C.C. to identify personal expenses that were deducted from corporate income. He relied on the corporate financial information schedules provided by C.C. and his office. He did not review detailed general ledgers, credit card statements, or expense reports. Based on the schedules he was provided, he attributed only cell phone expenses, vehicle expenses, nanny salaries, and legal and professional fees as personal expenses.

[329] I find Mr. Rudson’s approach to understate C.C.’s personal expenses. I accept Mr. Weinstein’s first approach, which relies on more specific and detailed information than his second approach, although I adjust Mr. Weinstein’s first approach. As further detailed below, Mr. Weinstein’s approach is admittedly imprecise, but it incorporates more detailed information than the approach of Mr. Rudson. In reviewing Mr. Weinstein’s more detailed information, it is evident that Mr. Rudson did not account for all C.C.’s personal expenses. Indeed, C.C. has admitted to certain personal expenses that were not disclosed to Mr. Rudson. For example, in cross- examination, he admitted that he regularly charged mid-week family dinners as a business expense. He also charged laundry and dry-cleaning bills, estimated at $2,000 per month, to Resilience Capital. Further, these admissions are entirely consistent with what we know about C.C.’s expensing habits. Specifically, when undertaking the valuation of TSMS at the DOM, both experts noted that substantial personal expenses had been charged to the business. That was a primary weakness of the multiple of income approach.

[330] C.C. submits that Mr. Weinstein treated too many expenses as personal. In Mr. Rudson’s opinion, Mr. Weinstein did not use an appropriate methodology to identify personal expenses. He takes issue with: (1) receiving information from S.C., while not speaking directly with C.C. and his accounting staff; and (2) arbitrarily extrapolating from a limited number of credit card statements to a much larger time frame.

[331] Mr. Rudson’s first criticism is that Mr. Weinstein obtained information from S.C. as to which expenses were personal. Specifically, Mr. Weinstein received C.C.’s expense reports and corporate credit card statements for part of 2015 and 2016. S.C. reviewed these statements and provided commentary on expenses she believed were personal. I do not consider this to have been an inappropriate methodology. There is no question that S.C.’s view of which expenses were potentially personal should not be treated as determinative. However, S.C. provided specific rationales for why she considered certain expenses to be personal. This was based on her knowledge of C.C.’s activities and, in some cases, she had direct involvement in the event or transaction leading to the expense. These included, for example,

• monthly parking expenses for S.C.’s apartment in the Manulife building;

• ski apparel purchases at the ski club where C.C. skied with the children;

• restaurant charges for G.W.C.’s and J.C.’s birthday dinners;

• restaurant charges for Mother’s Day brunch with S.C. and the children;

• Four Seasons hotel and restaurant charges when S.C. and the children attended C.C.’s graduation celebrations in Boston;

• Holt Renfrew Café lunch with S.C., V.C., and J.C. on the last day of school in June, including Uber charges to travel there and back; and

• legal fees for C.C.’s counsel.

[332] In total, Mr. Weinstein identified 388 credit card expenses, totaling $204,940, representing potential personal expenses deducted from Resilience’s income in 2015 and 2016.

[333] The relevance of S.C.’s information is reflected in the fact that, as a result of that information, Mr. Rudson revised his own report to include some of the expenses as personal. Specifically, Mr. Rudson reviewed Mr. Weinstein’s report and prepared an addendum responding report. In this report, Mr. Rudson chose a sample of 43 expenses from the 388 identified by Mr. Weinstein and responded to them with C.C.’s input. The 43 expenses were composed of every identified expense greater than $1,500 plus every 75th expense of the less than $1500 expenses, which amounted to 5 additional expenses.

[334] Mr. Rudson acknowledged that $3,500 per year in expenses that S.C. identified were properly characterized as personal, which grossed up to an additional $7,000 of pre-tax income for the years 2014 to 2018. He also concluded that 22 of the 43 sampled expenses were a combination of business and personal, for a total of $84,000 of further expenses. However, he declined to include these additional expenses in his calculations of income.

[335] Meanwhile, Mr. Weinstein took into account the additional information provided by Mr. Rudson. As a result of this further information, such as that some of the identified expenses had been charged to C.C.’s shareholder loan account or paid for personally by C.C., Mr. Weinstein revised his estimated personal expenses. I calculate the total revised expenses identified as personal for 2015 and 2016 to be $156,460.

[336] I find Mr. Weinstein’s approach in relying on S.C.’s input and then incorporating further information provided by Mr. Rudson to be preferable to Mr. Rudson’s more inexact approach. Mr. Rudson chose to use a sampling approach, presumably to avoid the time and cost of reviewing all 388 expenses identified by Mr. Weinstein as personal. However, to the extent C.C. had information to explain why the expenses were not personal, he could have provided it for all the expenses identified but chose not to do so.

[337] I am not troubled by Mr. Rudson’s criticism of Mr. Weinstein for failing to meet with C.C. or his accounting staff to review the information. The most pertinent information the accounting staff could have provided would have related to how the corporation ultimately treated the expense — for example, if it was ultimately paid for personally by C.C. or charged to C.C.’s shareholder loan account. But Mr. Rudson provided this information in his responding report, and Mr. Weinstein then accepted and took it into account. I am not aware of any inaccuracies that ultimately resulted.

[338] The same rationale applies to speaking with C.C. C.C.’s explanations were provided to Mr. Rudson, who conveyed these to Mr. Weinstein. Further, neither party’s explanations for the expenses are entirely conclusory. Although C.C.’s perspectives are helpful, I do not accept that all the expenses he identifies as business should be treated as such. Similarly, S.C.’s information is helpful but not necessarily conclusive. Still, at the end of the day, it was open to C.C. to provide responses to all the expenses alleged to be personal, though he chose to respond to only a sample.

[339] Although I generally accept Mr. Weinstein’s methodology, I agree that some of the expenses S.C. identified, and to which Mr. Rudson responded, are unclear. Some examples of these expenses that potentially had both a business and personal component are as follows:

• Plane tickets to France for C.C. and his partner to meet with Daniel Daviau, the CEO of Cannacord. C.C. states he worked with Cannacord to evaluate investment opportunities regarding Alarm Force and Avante. However, Mr. Daviau resides in Toronto.

• Similarly, a charge of $6,987 for a dinner in Miami with Mr. Daviau and others.

• Plane tickets to Bermuda to meet with Danny Guy, CIO of Salida Capital Corp. C.C. advises that Mr. Guy was a potential investor in Resilience Equity Partners. I am not aware of any evidence of a resulting investment.

• A charge of $15,288 for C.C.’s 40th birthday party. C.C. advises that 19 couples were invited and that he had a business relationship with 17 of the 19 couples.

• A charge of $60 at the Esso gas station in Barrie. C.C. regularly frequented Ms. Oliver’s cottage in Muskoka.

[340] Reviewing these expenses as a whole and recognizing that it is impossible to precisely define the amount that should be considered business versus personal, I conclude that, on balance, approximately 75% of the credit card and expense report expenses identified by Mr. Weinstein should be treated as personal. There is a potential business component to many of them, in part because C.C. significantly intertwined his business and personal lives. Therefore, almost any social event could be considered business-related. Still, there is a strong personal component to most of the expenses. For example, his partner and/or children were often included, and he would travel to vacation destinations for business meetings that could have occurred in Toronto. Therefore, I would reduce Mr. Weinstein’s total $156,460 in personal expenses by 25% to $117,345.

[341] Mr. Rudson’s second major critique of Mr. Weinstein’s approach was that Mr. Weinstein extrapolated from incomplete evidence regarding the nature of the expenses, as well as incomplete expense accounts and credit card statements. On the first point, S.C. was only able to identify some of the expenses as appearing to be personal. The remainder of the expenses were unknown. Mr. Weinstein estimated that 50% of these other expenses could be personal. He reasoned that Resilience had limited revenue from 2014 to 2016 and sold most of its operating assets in 2013.

[342] In addition, because Mr. Weinstein only received credit card charges and expense accounts from C.C. for part of 2015 and 2016, he annualized his results for the rest of those years. For the years 2014, 2017, and 2018, he included the average of the personal expenses estimated for 2015 and 2016, which totaled $218,000. For 2018, he estimated half this amount ($109,000) because Resilience’s total expenses decreased significantly in 2018.

[343] I accept Mr. Weinstein’s annualization of his findings for 2015 and 2016 and his averaging the results from those years to the other years. This approach is imprecise, but it is the most fulsome of the approaches provided in the context of the limited detailed information available. Relying only on C.C.’s input as to which expenses would be personal in each year is insufficient. C.C.’s detailed response to the expenses identified by S.C. show that Mr. Rudson’s approach failed to capture expenses ultimately agreed to be personal. It also failed to capture expenses with a component of both business and personal, which I have concluded should be treated as 75% personal.

[344] With respect to Mr. Weinstein’s identification of half of the other expenses as personal, in the absence of any more precise approach, I find this to be reasonable. As set out above, we know C.C. charged substantial personal expenses to the company and we know he significantly intertwined his business and personal lives. Further, Resilience Capital was a holding company, which paid limited direct income to C.C. Finally, as discussed above, a substantial source of C.C.’s income for his work with respect to the Resilience group of companies was through funding his living expenses.

[345] To calculate C.C.’s personal expenses, therefore, I use Mr. Weinstein’s first approach but accept only 75% of the expenses specifically identified as personal. However, for 2018, Mr. Weinstein has made a significant adjustment to account for the lower expenses. Mr. Rudson and Mr. Weinstein’s numbers are very similar ($235,000 including gross-up compared to $225,000 including gross-up). For this year, I will therefore take the middle of the two experts’ numbers, which is $230,000. Finally, Mr. Weinstein prepared only a critique report rather than his own assessment for 2019. Accordingly, for 2019 I use the expenses identified by Mr. Rudson. In the absence of other information, Mr. Weinstein has employed these amounts in his summary charts as a low estimate of C.C.’s expenses for that year. Therefore, adjusting Mr. Weinstein’s calculations as found in Exhibit 108, my calculations are as follows:

Year	Calculation
2014	The average of the numbers from 2015-2016 is $185,054.
2015	Mr. Weinstein identified $81,927 as personal. I calculate 75% of this amount to be $61,445. Fifty percent of the remaining expenses totals $55,388. Adding these amounts together comes to $116,833, which is annualized to $195,111.
2016	Mr. Weinstein identified $74,533 as personal. I calculate 75% of this amount to be $55,900. Fifty percent of the remaining expenses totals $48,889. Adding these amounts together comes to $104,789, which is annualized to $174,997.
2017	The average of the numbers from 2015-2016 is $185,054.
2018	$230,000
2019	$153,000

D. Dividends

[346] Mr. Weinstein and Mr. Rudson agreed that C.C. received dividends of $85,000 from 139 in 2017. Mr. Rudson grossed this amount up by 17% to $99,450. However, I accept Mr. Weinstein’s explanation (which was to S.C.’s detriment) with respect to the tax treatment of these payments. Specifically, the amount of the dividends need not be grossed up because the dividends exceeded the corporate pre-tax income earned by 139 and therefore can be treated as a distribution of capital.

E. Calculation of Income

[347] As I have, on balance, accepted Mr. Weinstein’s approach to calculating C.C.’s income but with adjustments, I attach as Schedule B my calculations, using Mr. Weinstein’s summary as found in Exhibit 110 and his tax rates for gross-up of personal expenses found in Exhibit 108, with adjustments in accordance with these Reasons. My conclusions for each year are as follows:

Year	Amount
2014	$733,661
2015	$735,588
2016	$683,581
2017	$799,723
2018	$652,500
2019	$865,167
2020	$772,463
2021	$772,463

[348] For 2020 and 2021, there are no expert reports. Although pursuant to s. 17 of the Guidelines, I am not required to average the last three years of income, I consider it the appropriate approach in this case. In each of the last three years for which expert income reports are provided, C.C. has earned some income through gains or consulting fees in addition to his T1 income. This is a sufficient pattern to expect he will earn some income in addition to his T1 income and his charging of personal expenses for 2020 and 2021. Therefore, for those two years I used the average of 2017, 2018, and 2019, which calculates to $772,463.

S.C.’s Income

[349] C.C. seeks an order imputing income of $70,000 to S.C. since 2015 and $91,411 starting in 2020. He also seeks reimbursement for what he considers to be his overpayment of child and spousal support post-separation and for various other post-separation credits or reimbursements. He seeks this, in part, on the basis that S.C. should be imputed income in varying amounts since separation.

[350] I do not find that S.C. should be imputed any income currently, although I agree that her current income is $91,411. I do find that she should be imputed income for some prior years.

A. Legal Principles

[351] Section 19 of the Guidelines authorizes the court to impute such income to a spouse as it considers appropriate in the circumstances. These circumstances include, under s.19(1)(a), where “the spouse is intentionally under-employed or unemployed, other than where the under- employment or unemployment is required by the needs of a child of the marriage or any child under the age of majority or by the reasonable educational or health needs of the spouse.”

[352] In the recent case of McBennett, Chappel J. derived principles from cases that have considered s. 19(1)(a). She summarized these principles as follows at para. 306:

1. Section 19(1)(a) reflects the principle that there is a duty on the part of parties in a support case to maintain or actively seek out reasonable income-earning opportunities that will maximize their earning potential so as to meet the needs of their dependants.

2. A party is intentionally under-employed within the meaning of this section if they earn less than they are capable of earning having regard for all of the circumstances. The party is intentionally unemployed when they choose not to work when capable of earning an income.

3. A finding of deliberate under-employment or unemployment does not require evidence of bad faith or an attempt to evade support obligations.

4. The use of the word “intentionally” in s. 19(1)(a) highlights that the provision does not apply to situations that are beyond the party’s control.

5. In determining whether a party is intentionally under-employed or unemployed, the court should consider the party’s capacity to earn income in light of their age, education, health, work history, the availability of work that is within the scope of the party’s capabilities and the amount of income that the party could reasonably earn if they worked to capacity. A party who is educated and skilled and has no compelling reasons for not working risks being found to be intentionally unemployed.

6. A self-induced lack of income or reduction of income with no realistic prospect of future financial advancement may constitute grounds to impute income to a party. Accordingly, the court may find the party to be intentionally under-employed or unemployed and impute income where the party has persisted in un-remunerative income-earning activities, or where they have pursued unrealistic or unproductive career aspirations.

7. The court may also impute income to a party under s. 19(1)(a) if the party ceases their employment or other income-earning activities for selfish or bad-faith reasons, or if they engage in reckless behaviour which affects their income-earning capacity.

8. When a party experiences an involuntary or temporary loss of employment or self-employment for any reasons, such as dismissal or health-related causes, they may be given a “grace period” to investigate options and seek out income-earning opportunities in their field at a comparable rate of remuneration before income will be imputed to them. However, if they have been unable to secure comparable employment within a reasonable time frame, they will be expected to search for and accept other less remunerative opportunities or