Court File and Parties
SUPERIOR COURT OF JUSTICE – ONTARIO
FAMILY COURT
RE: Jennifer Dee Ludwig, Applicant
AND:
Nils Ludwig, Respondent
BEFORE: T. PRICE J.
COUNSEL: Daniel Walker - Counsel for the Applicant
Respondent, in person
HEARD: February 28 and March 1, 2022
ENDORSEMENT
Correction Notice: The text of the original decision was amended on June 13, 2022, and the description of the correction is appended.
Background
1Jennifer Dee Ludwig, the Applicant (hereinafter, Ms. Ludwig) and Nils Ludwig, the Respondent (hereinafter, Mr. Ludwig) married on August 22, 2001 in Toronto. They separated on July 23, 2018 in Elgin County, Ontario. Over the course of their 17-year marriage, they had four children.
2Mr. Ludwig, a German citizen, is 43 years of age. Ms. Ludwig, a Canadian citizen, is 44 years of age. The children hold dual Canadian and German citizenship.
3In the period between the date of marriage and the date of separation, the parties lived primarily in Germany, except for a period in 2005 when they lived abroad in France and Canada while Mr. Ludwig pursued an advanced business degree.
4On August 3, 2017, intending to pursue a business opportunity - the purchase of a coffee roasting and coffee sales business - the parties relocated to Canada with their children. They purchased a home in Ontario. The acquisition of the business fell through. They considered other business possibilities, but none came to fruition. Mr. Ludwig was in Canada on a visitor’s visa and could not work. Prior strains in the marriage were amplified and, ultimately, they separated.
5On July 27, 2018, Ms. Ludwig commenced this application, in which she sought a divorce, corollary relief under the Divorce Act, including spousal and child support, as well as “custody” (now, decision-making responsibility), equalization of the parties’ net family properties, exclusive possession of the matrimonial home and its contents, and an order freezing assets pending the outcome of the litigation.
6On August 21, 2018, Mr. Ludwig brought an application pursuant to Article 12 of the Hague Convention (Convention on the Civil Aspects of International Child Abduction, Can. T.S. 1983 No. 35) for a finding that the children were being wrongfully retained in Canada by Ms. Ludwig and an order that they be returned to Germany. The application was heard by Justice D. Korpan. Pending the outcome of that application, Ms. Ludwig’s application was stayed.
7On January 4, 2019, Justice Korpan held that the children were not being wrongfully retained in Canada and as a result, dismissed Mr. Ludwig’s application. (Ludwig v. Ludwig, 2019 ONSC 50)
8Mr. Ludwig returned to Germany in January 2019. He also appealed Justice Korpan’s decision to the Court of Appeal. His appeal was dismissed in a decision dated August 3, 2019 (Ludwig v. Ludwig, 2019 ONCA 680).
9Mr. Ludwig then commenced a divorce proceeding in Germany on September 24, 2019.
10The stay of this proceeding which had earlier been put in place was lifted by order of Justice Tranquilli dated July 26, 2021. She also granted leave to Mr. Ludwig to serve and file an Answer.
11On September 13, 2021, Mr. Ludwig was granted leave by Justice Nicholson to serve and file his Answer without prejudice to his claim contesting the jurisdiction of an Ontario court to hear the application.
12Having secured that leave, Mr. Ludwig then served and filed his Answer. In it, he challenged the jurisdiction of an Ontario court to adjudicate the issues raised by Ms. Ludwig in her Application.
13The parties participated in case conferences thereafter, although it was consistently noted that Mr. Ludwig continued to contest the jurisdiction of an Ontario court to address the issues raised by Ms. Ludwig in her Application.
14On September 29, 2021, at one of those case conferences, when disclosure issues were to have been discussed, Mr. Ludwig and counsel for Ms. Ludwig focused their discussions on the issue of the court’s jurisdiction to adjudicate Ms. Ludwig’s claims.
15As a result, I adjourned the disclosure issue to October 27, 2021. I further ordered that, should Mr. Ludwig serve and file a motion within 60 days of October 27, 2021 challenging the court’s authority to make a disclosure order on the basis it lacked the jurisdiction to do so as an incident of its alleged general lack of jurisdiction, his obligation to comply with whatever disclosure order might be made on October 27, 2021 would be stayed pending the hearing of the jurisdictional challenge or further order of the court.
16On October 27, 2021, I made a comprehensive disclosure order. Mr. Ludwig was given 60 days to comply with the disclosure obligations, subject to the leave he had been previously granted to challenge the court’s jurisdiction within the same time frame.
17Mr. Ludwig’s motion challenging the Ontario court’s jurisdiction in these proceedings was served and filed within 60 days of October 27, 2021. As a result, his obligation to comply with the disclosure order made on that date has been stayed pending the hearing of his motion. Ms. Ludwig then served a cross-motion.
18I ordered that the motions be heard at the same time. Two days were set aside. The motions were heard on February 28 and March 1, 2022.
Nature of Motions
19In the two motions before the court, the parties seek a number of heads of relief.
20In the first, brought by Mr. Ludwig, he seeks to have the Applicant’s application issued on July 27, 2018, and all claims made therein, dismissed on the basis that this court lacks jurisdiction to adjudicate the claims. In the alternative, he requests an order that the proceeding be permanently stayed for the same reason.
21Specifically, Mr. Ludwig takes issue with the court’s jurisdiction:
a. to grant Ms. Ludwig a divorce and corollary relief under the Divorce Act (Issue #1(a)), and
b. to adjudicate property issues, parenting issues, spousal support, and child support under provincial legislation (Issues #1(b); #(1)(c)), submitting that those claims would better be asserted and adjudicated in the pending German proceeding.
22The second motion, brought by Ms. Ludwig, has two separate components. In the first, she seeks an order granting her leave to amend her application. This component of the motion includes:
a. a requested amendment to address Mr. Ludwig’s motion to dismiss her claims under the Divorce Act (Issue #2(a)(i)), and
b. requested amendments allowing for the addition of claims for decision-making responsibility (custody), spousal and child support under provincial legislation. (Issue #2(a)(ii))
23The second component of Ms. Ludwig’s motion requests that the court:
a. impute an income to Mr. Ludwig, and that he be ordered to pay interim child and spousal support based on that imputed income (Issue #2(b)(i)); and
b. order Mr. Ludwig to reimburse her “for all reasonable medical, dental, drug, health counselling and therapy treatment expenses” which are prescribed or recommended by a health care practitioner, and which are not otherwise covered by OHIP or health benefits plan (Issue #2(b)(ii)).
24Because some of the issues are linked, they will be addressed collectively.
Issue #1(a): Does the Superior Court have jurisdiction to adjudicate Ms. Ludwig’s claim for a divorce based on the facts alleged in the application?
25I find that the Superior Court does not have jurisdiction to adjudicate Ms. Ludwig’s claim for a divorce based on the facts alleged in her application.
Analysis
26Section 3(1) of the Divorce Act, as it read prior to July 1, 2020, granted jurisdiction to a court in a province to hear and determine a divorce proceeding “if either spouse has been ordinarily resident in the province for at least one year immediately preceding the commencement of the proceeding.”
27The undisputed facts here are that the parties, who had been residing in Germany since their marriage on August 22, 2001, first took up residence in Ontario on August 3, 2017, the date of their arrival from Germany with the intention of pursuing the coffee roasting business opportunity.
28Ms. Ludwig’s application was issued on July 27, 2018, a period of less than one year after the parties’ arrival in Ontario on August 3, 2017.
29For reasons that have not been explained, the “Family History” set out in the application indicates that Ms. Ludwig had been resident in Ontario since March 2017. She has conceded this statement was incorrect, and that she, like Mr. Ludwig, had been resident in Ontario only since August 3, 2017 when the application was issued.
30Ms. Ludwig deposed that she relied on the legal advice that she received from her former lawyer about the timing of the issuance of the application.
31In my view, the fact that Ms. Ludwig has brought a cross-motion seeking to amend her application is a tacit acknowledgement that the application, as constituted at the time of its issuance, did not meet the requirements of section 3(1) of the Divorce Act because neither party had been ordinarily resident in Ontario for at least one year prior to its issuance. Clearly, the application was issued about one week too early for the court to acquire jurisdiction under the Divorce Act.
32As Justice D.W. Wilson wrote in Quigley v. Wilmore, [2007] N.S.J. No. 426 at paragraph 5, “[t]he residency requirement of the Divorce Act is substantive and not procedural and cannot be waived, even by agreement of the parties. The court's jurisdiction to hear and determine a divorce proceeding is dependent on one spouse being ordinarily resident in” the province “for at least one year immediately preceding” the date of issuance of the application seeking the divorce.
33Similar conclusions were reached by Justice D.C. Shaw in Lajoie v. Woito, [2009] O.J. No. 151 (at para. 19) and by Justice S.R. Shore in Haroon v. Haroon, [2019] O.J. No. 518 (at para. 4).
34Consequently, as it is currently constituted, the Superior Court does not have jurisdiction to adjudicate Ms. Ludwig’s claim for a divorce.
Issue #2(a)(i): Should Ms. Ludwig be granted leave to amend her application to claim a divorce “based on jurisdiction acquired from and after August 4, 2018 which would amount to one year after the Applicant’s arrival in Canada”?
35The answer to the question posed is “no.”
36While this request constitutes one of the components of Ms. Ludwig’s cross-motion, it makes sense to address it at this point.
37Ms. Ludwig seeks to amend her application to claim the divorce and corollary relief under the Divorce Act that she sought in the application as originally constituted, but only on the basis of jurisdiction acquired after August 4, 2018, which would be one year and one day after the parties had arrived in Ontario.
38Family Law Rule 11(3) provides that, on receipt of a motion seeking leave to amend a pleading such as an application, “the court shall give permission to a party to amend” the pleading, “unless the amendment would disadvantage another party in a way for which costs or an adjournment could not compensate.”
39The difficulty that I have with the request made by Ms. Ludwig is that the application speaks from the date of its issuance. Even if I were to amend the application in the manner requested by Ms. Ludwig, what I would be doing is allowing her to claim, retrospectively, as of July 27, 2018, that, once August 4, 2018 arrives, the court will have jurisdiction to grant a divorce because Ms. Ludwig will have been in Canada for a period of at least one year once that date arrives.
40The problem with the requested amendment is that it does not circumvent the problem that section 3(1) of the Divorce Act presented to Ms. Ludwig when the Application was issued on July 27, 2018.
41Under that section, jurisdiction only arises if either spouse has been ordinarily resident in the province for at least one year “immediately preceding the commencement of the proceeding.”
42While the passage of time in this case established that Ms. Ludwig was ordinarily resident in Ontario on August 4, 2018, in other cases such residence might not be so easily established. For example, if I were to accede to the request of Ms. Ludwig, it would be possible for a person who had been resident in the province for one day to issue a claim for divorce and claim that, on a date one year hence, that person will have been ordinarily resident in the province for one year, and the court will then have jurisdiction. Such a claim would clearly be untenable. The person making such a claim, according to the wording of the Divorce Act, has to wait one year after his or her having taken up ordinary residence in Ontario before commencing the claim for divorce.
43It is relationship between the claimant’s length of ordinary residence in the province and the date of commencement of the proceeding that gives the Court jurisdiction to hear a divorce application. Neither element is variable.
44What Ms. Ludwig is really asking the court to do is change the date that the application was issued, from July 27, 2018 to August 4, 2018. I have been provided with no authority that I have jurisdiction to make such a change. I find that I do not.
45The Family Law Rules contain nothing akin to Rule 14.01(4) of the Rules of Civil Procedure, which provides that, “A party may rely on a fact that occurs after the commencement of a proceeding, even though the fact gives rise to a new claim or defence, and, if necessary, may move to amend an originating process or pleading to allege the fact.”
46Rule 14.01(4) was considered in Clarkson v. Lukovich (1986), 1986 2745 (ON SC), 54 O.R. (2d) 609. There, Justice Boland, while considering the submissions of the parties about the effect of this Rule, did not dispute the submissions of both counsel that the common law rule supplanted by Rule 14.01(4) “expressed the principle that a claim must be based on the facts as they existed at the commencement of the action.” (at page 3 of 6)
47While finding that Rule 14.01(4) “allows rights to be adjudicated that involve causes of action and defences that arise subsequent to the commencement of proceedings”, Justice Boland also held that the Rule “does not purport to eliminate defences. It does not take away rights once they have accrued.” (at page 4 of 6)
48At the date of commencement of this proceeding, neither party had been ordinarily resident in the province for a period of at least one year. In my view, without the benefit of a Rule such as Rule 14.01(4), one cannot plead post-issuance facts. I also have difficulty conceiving of them being permitted to plead, retrospectively, future possible facts which may never arise.
49Even if I had the jurisdiction to allow the amendment sought by Ms. Ludwig under a Rule akin to Rule 14.01(4) of the Rules of Civil Procedure, it is also clear that Mr. Ludwig had acquired the right to challenge the court’s jurisdiction as of the date of issuance of the application. The application of the principle set out in Rule 14.01(4) of the Rules of Civil Procedure, according to Clarkson v. Lukovich, would not deprive him of that right.
50Accordingly, I dismiss Ms. Ludwig’s motion to amend her claim as it pertains to seeking a divorce simpliciter, as I also dismiss her claim for a divorce in the application as originally constituted.
51Furthermore, given that the court does not have jurisdiction under the Divorce Act to grant a divorce to Ms. Ludwig, her claim for corollary relief (child support; spousal support) under the Divorce Act must also be dismissed. (Lajoie v. Woito, [2009] O.J. No. 151 (paras. 22, 40(3)); Haroon v. Haroon, [2019] O.J. No. 518 (paras. 4; 28(1)).
Issue #2(a)(ii): Should Ms. Ludwig be granted leave to amend her application to include claims for decision-making responsibility for the parties’ children under the Children’s Law Reform Act (CLRA), as well as spousal support and child support under the Family Law Act (FLA)?
52The answer to the question posed is “yes.”
53In her application as originally constituted, Ms. Ludwig did not advance claims for spousal support, child support or custody of the children of the marriage under Ontario legislation. She restricted her claims in these areas to relief corollary to her claim for a divorce under the Divorce Act.
54She did, however, advance property claims under the Family Law Act.
55Despite the fact that this proceeding commenced in July 2018, the parties are not far into it. The reasons for that situation include the initial dispute between them concerning the children’s habitual residence for the purposes of the application of the Hague Convention, the general delay in court proceedings caused by Covid-19, and an urgent motion by Ms. Ludwig which resulted in an interim order freezing Mr. Ludwig’s ability to dissipate the parties’ property and assets pending further order of the court.
56As noted, Mr. Ludwig commenced a proceeding for divorce in Germany on September 24, 2019. According to Ms. Ludwig, Mr. Ludwig’s claim for divorce did not include a claim for any corollary relief, a claim not denied by Mr. Ludwig.
57Until I ruled herein on Mr. Ludwig’s jurisdictional motion pertaining to the claims under the Divorce Act, Ms. Ludwig had claims before the court for “custody,” child support and spousal support, albeit all made under the Divorce Act. Knowing of those claims, Mr. Ludwig chose not to make similar claims in his German divorce proceeding. He did not make such claims, even if he held the view at the time that he commenced the German divorce proceeding that a Canadian court lacked jurisdiction under the Divorce Act to adjudicate those claims.
58Ms. Ludwig deposed to her belief that Mr. Ludwig’s failure to include claims for corollary relief was “strategic”, noting it to be her understanding that if the divorce is granted by the German court she will be prevented from seeking spousal support in Ontario, and to her lack of knowledge about whether the German court would take jurisdiction over the other issues, given the extent to which the Ontario court has dealt with them thus far.
59With the dismissal of Ms. Ludwig’s claims under the Divorce Act, and without the amendment sought by Ms. Ludwig, there would be no claim before this court respecting decision-making responsibility concerning the children of the marriage, nor would there be a claim respecting spousal or child support, despite the passage of nearly 4 years since the commencement of the proceeding.
60As has already been noted, Family Law Rule 11(3) requires the court to “give permission to a party to amend” a pleading, “unless the amendment would disadvantage another party in a way for which costs or an adjournment could not compensate.”
61The test for whether leave is granted for the amendments sought is that, if costs or an adjournment could compensate Mr. Ludwig for the attendant additional effort to be expended by him as a result of the amended pleading, the amendment must be granted.
62The primary objection raised by Mr. Ludwig to amendments being granted which might place issues before the Ontario court which are capable of adjudication in Ontario is that there are advantages to the German court adjudicating those issues. He outlined the alleged advantages in his affidavit.
63The alleged advantages raised by Mr. Ludwig might have been more persuasive had he raised in his pleadings in Germany any of the claims that he now asserts should be adjudicated in Germany.
64I do not discount the points cited by Mr. Ludwig but, in my view, many of them could be addressed by way of a costs order should leave for the amendment be granted and the trial proceed in Ontario.
65I also note that many of his points are more appropriately considered under the question of whether the Ontario court should decline to exercise jurisdiction (Issue #1(c)) in respect of claims which are otherwise properly before it. As such, they will be expanded upon and considered later in this endorsement, when that issue is reviewed.
66Although nearly 4 years have passed since the commencement of the proceeding, it is still early in the litigation process. Mr. Ludwig will have an opportunity to file an amended Answer if he so chooses.
67Further, despite the fact that he has not attorned to the jurisdiction of the Ontario court, Mr. Ludwig has participated in the proceedings to date. He may have done so to avoid having had orders made against him which did not consider his input in the event that it is found that this court has jurisdiction.
68Mr. Ludwig has had notice of Ms. Ludwig’s claims since July 2018, although they were made in the context of a pleading for corollary relief under the Divorce Act.
69Consequently, I find that any prejudice suffered by Mr. Ludwig as a result of the granting of leave to Ms. Ludwig to include claims relating to parenting issues, spousal support and child support under provincial legislation can be compensated for by an order for costs.
70Accordingly, leave will be granted to Ms. Ludwig to amend her pleadings to include the additional claims that she has made under Ontario provincial legislation as set out in her draft amended application, which is labeled as Exhibit “A” to her affidavit sworn January 5, 2022, not including relief claimed under the Divorce Act, which has already been denied.
Issue #1(b): Does the Superior Court have jurisdiction to adjudicate one or more of Ms. Ludwig’s claims related to decision-making responsibility under the CLRA and property, spousal support and child support under the FLA?
71Mr. Ludwig’s challenge to the Ontario Superior Court’s jurisdiction to hear and adjudicate the claims for which Ms. Ludwig has now been granted leave to amend her pleadings must still be addressed.
72I have concluded that, the answer to the question posed is “yes,” albeit subject to certain limitations that will apply to Ms. Ludwig’s claim for spousal support under the Family Law Act.
Parenting Issues/Decision-Making Responsibility
73In her amended application, Ms. Ludwig will be claiming decision-making responsibility with respect to the parties’ children. That claim will be made pursuant to the Children’s Law Reform Act (CLRA).
74Jurisdiction to make an order pertaining to decision-making responsibility under the CLRA arises under section 22(1). The court can exercise its jurisdiction if the child is habitually resident in Ontario at the commencement of the proceeding or, if the child is not habitually resident, he or she is present here, and certain other conditions are met.
75The court’s previous ruling adjudicating Mr. Ludwig’s claim under the Hague Concention turned on whether the children were “habitually resident” in Ontario when their alleged wrongful retention occurred.
76In her decision at first instance, Justice Korpan found that “the children were habitually resident in Canada immediately prior to September 2018.” Her decision was upheld by the Ontario Court of Appeal.
77Justice Korpan also found at paragraph 71 of her Reasons that, “there is no dispute that the children’s habitual residence was Germany when the family flew to Canada on August 3, 2017.”
78The question then becomes whether July 27, 2018, when Ms. Ludwig commenced her application, was during the period “immediately prior to September 2018,” the date by which Justice Korpan found that the children were habitually resident in Ontario.
79In reaching her conclusion about the children’s habitual residence “immediately prior to September, 2018”, Justice Korpan wrote:
[74] What was the children's habitual residence immediately prior to September 2018?
[75] The children's habitual residence is a question of fact. This case is unique and turns on its own facts.
[76] The children are the focus of the hybrid approach under which the court must look to all the relevant considerations. Parental intention and the children's views and preferences are among the relevant factors to be considered in the contextual approach, but neither is determinative.
[77] Before the family moved to Canada, the parents began negotiations to buy the coffee business in Port Stanley and purchased their home in Union. In Germany, before the move to Canada but after the closing of the Union home, the father asked in his text on June 27, 2017, "And are we still planning to come back(?!) ... ".
[78] In August 2017, when the family moved to Canada, the parents left the door open for a possible return to Germany. They left intact for September 2018 their German residency, car and rented home and the children's school registrations.
[79] When the family moved to Canada, the majority of their belongings and their most important possessions came with them.
[80] After the family's arrival in Canada and their move into the home in Union the father asked in his text on August 21, 2017, "Can you ... tell me hiw ling we will stay in Canada?" (sic)
[81] The parents spent approximately $200,000 to renovate their home and to purchase home furnishings, two luxury cars and landscaping equipment. They registered the children in their schools in St. Thomas and in extra-curricular activities.
[82] In October 2017, the father said in his text in reference to the purchase of the coffee business, "I don't want to lose this opportunity if we stay. I don't want it to tie us here if we want to go."
[83] In November 2017 the father met with school board officials to make sure that I. could be enrolled in advanced math for the 2018 -2019 school year.
[84] After the purchase of the coffee business fell through, but before the separation in March 2018, the father said in his text on December 3, 2017, "I need to know if we are staying in Canada past next summer or going back to Munich." When the mother answered that she would move back to Germany if he wanted to, he replied that he could stay in Union if she wanted to. Both parents were agreeable to living where the other wanted, be that Germany or Canada.
[85] All of the children spoke to their lawyer about "family meetings" that took place after the parents' separation when they were asked where they wanted to live.
[86] After the separation, the father signed, on June 21, 2018, the school form to register I. in an advanced class for the 2018 - 2019 school year.
[87] On July 23, 2018, after the mother told the father that she intended to remain in Canada with the children, the father said in his text that day "And yet I think the right decision is for all of us to go back. But cannot and don't want to force you."
[88] On July 24, 2018 the father told the mother in his text, "You should get the kids covered under OHIP as soon as possible", and in response to the mother then listing of all of the things that she needed to take care of, the father replied in his text, "I will not be in your way, but you can't seriously expect me to be your helper in this stupid plan."
[89] I find that the actions of the parents, and their text exchanges, have an ebb and flow, and a flexibility, as to when or whether the family would return to Germany or remain in Canada. I conclude that the parents were not certain when, or if, they would or should, return to Germany. This is not a case where I can find that the move to Canada was for a time-limited consensual stay with an expiry date.
[90] The children are school aged. The youngest child is 9 years old. The eldest child is 15 years old and is in high school. The children's lives expanded some time ago to outside the home to include social experiences with friends both at school and in the community.
[91] The children's family environment is similar whether viewed in the context of Germany or Canada. Each child, since birth, has lived with both parents and with his/her siblings in the same household. One difference is that in Canada the children have a close relationship with their extended maternal family which is not the case with their paternal family in Germany.
[92] The children's social environment is also similar whether viewed in the context of Germany or Canada. In Germany, the children have their home, their school, their friends, their extra-curricular activities and their extended paternal family whom they see infrequently. In Canada, they also have their home, their school, their friends and their extra-curricular activities. In Canada, they have, in addition, their extended maternal family whom they see frequently. All of the children spoke to their lawyer about their close relationship with their maternal extended family in Canada.
[93] the children's experiences in Germany are of longer duration than in Canada. However, the children are older and their experiences in Canada are more current and immediate and over an appreciable period of time ( almost 13 months immediately prior to September 2018). They have integrated into their schools in Canada and N., I. and D. are doing well in school.
[94] The children told their lawyer that their initial impression was that the family would return to Germany after a year. But the three elder children wish to remain in Canada. The youngest child wants to remain with his parents and his siblings.
[95] What was the focal point of the child's life - "the family and social environment in which its life has developed" - immediately prior to September 2018? Balancing all of the relevant factors, when I look to the entirety of the children's circumstances immediately prior to September 2018, I find that their lives were centered in Canada.
[96] For these reasons, I do not find that the children were habitually resident in Germany immediately prior to September 2018. I find that the children were habitually resident in Canada immediately prior to September 2018.
80At some point prior to September 1, 2018 the children became habitually resident in Ontario. The transition of the children’s habitual residence from Germany to Canada most likely occurred in a graduated manner, as they built a life in Canada. At paragraph 93 of her Reasons, Justice Korpan noted that, by September 1, 2018, the parties had been in Ontario for a period of “almost 13 months. The period between July 27, 2018 and September 1, 2018 – 35 days - represents approximately 9% of the time that the children had resided in Canada.
81I find that, when the application in this matter was commenced on July 27, 2018, the transition of the children’s habitual residence had progressed sufficiently that they were also, on July 27, 2018, habitually resident in Canada.
82Consequently, the legal foundation has been laid for the court to exercise its jurisdiction, pursuant to s. 22(1)(a) of the CLRA, to adjudicate decision-making responsibility.
83In the event that I am incorrect on that point, however, I also consider the effect of s. 22(1)(b) of the CLRA. The children were physically present in Ontario when the application was commenced. I have considered the other prerequisite factors under s. 22(1)(b) and, taking into account the factual findings of Justice Korpan and the evidence of the parties on this motion relating to the proceeding in Germany, I find that Ms. Ludwig has established those prerequisite factors on a balance of probabilities.
84Therefore, I also find that, even if the children were not habitually resident in Ontario on July 27, 2018, the Ontario Superior Court of Justice has the right to exercise its jurisdiction to make an order with respect to decision-making responsibility for the children pursuant to s. 22(1)(b) of the CLRA.
Jurisdiction to Address Claims for Corollary relief under the FLA
85The issue of the court’s jurisdiction to adjudicate claims for corollary relief under the Family Law Act in a circumstance where the Applicant could not establish a jurisdictional basis for proceeding with a claim for divorce was addressed by the Court of Appeal in Wang v. Lin, 2013 ONCA 33, [2013] O.J. No. 254.
86In that case, the motions judge had held that the court had no jurisdiction to entertain the applicant’s divorce action because she was not ordinarily resident in Ontario for at least one year immediately preceding the commencement of the proceeding. The motions judge also denied the Applicant’s claim for corollary relief under provincial legislation, holding that there was no real and substantial connection between the corollary relief claims and the province of Ontario. The children had been residing in China since August 2010. The Applicant commenced her claim in Ontario in April 2012.
87The Court of Appeal wrote the following with respect to the question of jurisdiction under the Family Law Act:
19 The FLA does not specifically address the question of jurisdiction simpliciter. Both parties take the position that given the absence of a statutory rule, the common law conflicts rule of Canadian private international law - the "real and substantial connection" test - determines whether jurisdiction exists in Ontario's courts.
20 As the Supreme Court recently explained in Club Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572, at para. 82, a real and substantial connection must "be established primarily on the basis of objective factors that connect the legal situation or the subject matter of the litigation with the forum." In order to bring greater clarity and predictability to the issue of when the court will assume jurisdiction, the Supreme Court identified a list of presumptive connecting factors for tort cases.1 A plaintiff must establish that one or more of those presumptive connecting factors exists; if she does, a rebuttable presumption of jurisdiction arises. As discussed below, the Supreme Court left open the possibility that over time courts may identify new factors which also presumptively entitle a court to assume jurisdiction.
46 Turning to whether Ontario has jurisdiction under the common law test that requires a real and substantial connection, I agree with the parties that, in the context of marriage breakdown, the presumptive connecting factors are necessarily different from those identified by the Supreme Court in Van Breda in the context of a tort case. The Supreme Court in Van Breda was clear that the list of presumptive factors it identified related to tort claims and issues associated with those claims, and that the list of presumptive connecting factors is not closed. At para. 91, the court directed that:
In identifying new presumptive factors, a court should look to connections that give rise to a relationship with the forum that is similar in nature to the ones which result from the listed factors. Relevant considerations include:
(a) Similarity of the connecting factor with the recognized connecting factors;
(b) Treatment of the connecting factor in the case law;
(c) Treatment of the connecting factor in statute law; and
(d) Treatment of the connecting factor in the private international law of other legal systems with shared commitment to order, fairness and comity.
47 While they differ in their view as to where, in this case, the "real home" or ordinary residence of the mother is, both parties submit that the location of the "real home" or "ordinary residence" should be a presumptive connecting factor. This in my view makes eminently good sense. Ordinary residence and habitual residence are the jurisdictional tests under the Divorce Act and the CLRA, respectively….(Bolding added)
88In Li v. Li, [2020] O.J. No. 3945, Justice E.L. Nakonechny was presented with a case in which the parties had obtained a divorce in China. In the proceedings in Ontario, the parties differed on whether the divorce granted in China was valid. Justice Nakonechny did not need to determine the validity of the Chinese divorce to address the issues before the court in Ontario, which included claims for corollary relief under provincial legislation. In addressing the factors to be considered in respect to whether there is a real and substantial connection between the subject matter of the litigation (claims for corollary relief under the Family Law Act) and Ontario, Justice Nakonechny wrote:
50 In Rubio v. Joslin, 2018 ONCJ 167, 7 R.F.L. (8th) 240, at para 41, O'Connell J., (referring to Muscutt v. Courcelles (2002), 2002 44957 (ON CA), 60 O.R. (3d) 20 (C.A.)), set out the factors the court must consider in determining whether there is a real and substantial connection which gives the court jurisdiction to hear a corollary relief claim under the FLA when there is a valid foreign divorce:
a. The connection between the forum and the Applicant's claim.
b. The connection between the forum and the Respondent.
c. Unfairness to the Respondent in assuming jurisdiction.
d. Unfairness to the Applicant in not assuming jurisdiction.
e. Involvement of other parties to the suit.
f. Whether the case is interprovincial or international.
89In this case, there is not a valid foreign divorce, but I do not see that as a reason to discount the factors set out by Justice Nakonechny.
90However, it must also be recalled that Mr. Ludwig has not attorned to the jurisdiction of the Ontario court. Such a situation existed in Mattar v. Elbarbary, [2019] O.J. No. 5127. In that case, Justice E.L. Nakonechny was presented with a situation where there was a valid foreign divorce, but no corollary issues had been addressed in the divorce proceeding. Justice Nakonechny wrote:
51 The Family Law Act does not speak to the issue of jurisdiction simpliciter. As the respondent is not present and has not attorned to in the jurisdiction of Ontario, whether this Court has jurisdiction to hear the Applicant's claims for corollary relief under the Family Law Act must be based on the third common law ground: a real and substantial connection: Wang v. Lin, 2013 ONCA 33, 29 R.F.L. (7th) 1 at paras. 18-22.
52 The burden is on the party asserting the court's jurisdiction. The test is met when a presumptive connecting factor is established that links the subject matter of the litigation to the forum. If none of the presumptive connecting factors apply, the court should not assume jurisdiction: Wang at para. 20, citing Club Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572 at paras. 82-94 and 100.
91Given the findings of the Court of Appeal in Wang v. Lin that:
a claimant raises a rebuttable presumption that jurisdiction arises if the claimant establishes at least one of the presumptive connecting facts between the legal situation or the subject matter of the litigation and the forum; and
“the location of the "real home" or "ordinary residence" should be a presumptive connecting factor” in family law cases,
and the holding of Justice Nakonechny in Mattar v. Elbarbary that the same test applies even when a party has not attorned to the Ontario court’s jurisdiction, I find that Ms. Ludwig has raised a rebuttable presumption that an Ontario court has jurisdiction to adjudicate her claims for spousal support, child support and property rights under the FLA because Ontario is the real home and ordinary residence of the Applicant and the children. Consequently, her claims under the FLA have a real and substantial connection to Ontario.
92However, in the interest of completeness, I consider the other factors referred to by Justice Nakonechny, as set out in Rubio v. Joslin, supra:
b. There is less of a connection between Mr. Ludwig and Ontario than there is between Ms. Ludwig and Ontario. Mr. Ludwig lived here for 2.5 years, the latter 1.5 of which related to his claim under the Hague Convention. He did, however, establish somewhat of a life in this province, and three of his children continue to reside here, having expressed the view to the Office of the Children’s Lawyer that they wished to remain in Canada.
c. It is less unfair to Mr. Ludwig, in my view, for the Ontario court to assume jurisdiction in circumstances where:
i. he did not commence his divorce proceeding until over one year after Ms. Ludwig had commenced her proceeding in Ontario,
ii. he did not make any claim for corollary relief in that litigation, and
iii. he has yet to move before the court in Germany to include any claim for corollary relief,
than it would be to Ms. Ludwig to deny her the right to have a court adjudicate her claim for corollary relief. As has already been noted, the claim for decision-making responsibility will be adjudicated in Ontario since the majority of the children reside here and wish to remain here, unless Mr. Ludwig’s forum non conveniens submission, to be addressed, infra, succeeds. Prima facie, however, I find that there is little unfairness to Mr. Ludwig in having the FLA claims adjudicated in Ontario.
d. In contrast to the previous factor, in my view it would be extremely unfair to Ms. Ludwig if the court were to reject, out of hand, her request to have the claims for corollary relief under the Family Law Act (other than, possibly, her claim for spousal support, infra) adjudicated in Ontario. They have not been raised in the proceedings in Germany, and she has elected to proceed with them in Ontario. As Justice D.C. Shaw wrote at paragraph 23 of the decision in Lajoie v. Woito, [2009] O.J. No. 151, “[The Applicant] chose to bring this action in Ontario. Her choice should be respected unless it is clear that another [jurisdiction] is a substantially more convenient forum.”
e. There are no other parties to the litigation.
f. The case is international. No submission was made on this issue, so I have no comment about it.
93None of these additional factors cause me to alter my finding that Ms. Ludwig has raised a rebuttable presumption that an Ontario court has jurisdiction to adjudicate her claims for spousal support, child support and property rights under the FLA.
94Since he did not address the rebuttable presumptive factor supporting jurisdiction in his submissions, I further find that Mr. Ludwig has not rebutted it.
95Accordingly, I find that the rebuttable presumption that the Ontario court has jurisdiction to address claims for corollary relief under the FLA has been established by Ms. Ludwig.
96That rebuttable presumption is, however, subject to my comments regarding spousal support, infra.
Child Support
97Given that the Superior Court has jurisdiction to adjudicate the issue of decision-making responsibility for the children, it follows that it also has jurisdiction to adjudicate issues of child support.
98A parent’s obligation to support their child is found in s. 31 of the Family Law Act. There is no reference in the legislation to the place of residence of the payor.
99The jurisdictional authority of the court to make an order for support arises from s. 33 of the FLA, which simply provides that the court may, on application, order a person to provide support for his or her dependents…”
100This jurisdiction was established by the Ontario Court of Appeal in Cheng v. Liu (2017), 2017 ONCA 104, 136 O.R.(3d) 172 where, although the court was addressing a situation where a foreign divorce had already been granted, but no orders for corollary relief had been granted, it wrote:
[52] Ontario courts have authority to award child support under s. 33 of the FLA. There is nothing in the legislation that restricts that authority in situations where a divorce order has been granted outside of Canada. The use of the FLA in circumstances where relief under the Divorce Act is unavailable does [page184] not engage the paramountcy doctrine, as there is no operational incompatibility between the federal and provincial statutes. To the contrary, the two statutes are operating harmoniously to ensure that a remedy for child support is available.
101If the court is not restricted from dealing with child support under the FLA in a circumstance where a foreign divorce has been granted, it stands to reason that the court would similarly not be restricted from dealing with child support under the FLA in a circumstance where a foreign divorce claim is pending but no claim for child support has been raised in that proceeding.
Property Claims
102In her amended application, Ms. Ludwig will be seeking exclusive possession of the matrimonial home and its contents, declarations that she has a beneficial interest by way of resulting or constructive trust in a number of Mr. Ludwig’s corporations, an order that Mr. Ludwig has been unjustly enriched, an accounting and, subject to the foregoing, equalization of net family properties.
103While one of its principal findings was related to post-divorce claims for spousal support under provincial legislation (discussed, infra), the Court of Appeal also held in Okmyansky v. Okmyansky, 2007 ONCA 427, [2007] O.J. No. 2298 that the obtaining of a foreign divorce by one party does not preclude the other from pursing a property claim in Ontario.
104Given also that “the location of the "real home" or "ordinary residence" is a presumptive connecting factor” for the establishment of a real and substantial connection between the subject matter of a claim and Ontario, I find that the evidence establishes that there is a real and substantial connection between Ms. Ludwig’s property claims and Ontario, since in the period prior to the parties’ separation, this was the location of their “real home” and their “ordinary residence” for that period, and it continues to be for Ms. Ludwig.
Effect of s. 15 of the Family Law Act
105The parties focused some of their submissions on s. 15 of the Family Law Act, which provides as follows:
- The property rights of spouses arising out of the marital relationship are governed by the internal law of the place where both spouses had their last common habitual residence or, if there is no place where the spouses had a common habitual residence, by the law of Ontario.
106As Justice Nachonechny wrote in Mattar v. Elbarbary, “s. 15 of the Family Law Act sets out the conflict of laws rule to be applied to property rights as between married persons. It says nothing about in what circumstances jurisdiction exists or should be exercised in Ontario…”
107This raises the question of the location of the parties’ “last common habitual residence” for determining which jurisdiction’s laws apply to the property claims.
Positions of the Parties
108Mr. Ludwig asserted that the last common habitual residence of the parties was Germany, so that German law should apply to the property claims. He argued that his stay in Canada “lacked the quality necessary” to render his residence here “habitual.”
109To support that submission, he highlighted the following facts.
110He asserted that his travel to Ontario in August 2017 was intended always to be temporary, and that the parties were to return to Germany by September 2018. He claimed that he never had the intention of staying in Ontario, since the parties had moved to Germany in August 2001 immediately following their marriage and had remained there until they came to Canada in August 2017. He noted that he returned to Germany for a period after he had been in Canada for six months, after which he returned. He indicated that he was never permitted to remain in Canada for more than six months and that he never had Canadian immigrant status. He pointed to his inability to become employed in Canada, and the fact that he was covered by German health insurance while here. He deposed that he maintained all of his ties to Germany and remained integrated in the German community where he and Ms. Ludwig had resided with the children. He pointed to the fact that he filed no tax returns in Canada, having filed them exclusively in Germany. Moreover, he had not applied for health insurance or a social insurance number in Canada.
111He also noted that, while retaining possession of three rooms in their residence and filling them with assorted personal belongings, the parties had sublet their home in Germany to tenants who were to vacate at the end of August 2018.
112While Ms. Ludwig conceded that ties were maintained with Germany, which she regarded as being a case of the parties keeping open their options in case their move to Canada did not work out, she asserted that Ontario was the parties’ “last common habitual residence.”
113She relied on the following indicia to support her claim.
114She and Mr. Ludwig purchased a residence in Ontario into which they moved when they arrived on August 3, 2017. She gave up her massage business and teacher training in Germany when she came to Canada. The parties arrived on a one-way plane ticket because they intended to remain in Canada. They opened a bank account at the local branch of the Royal Bank, into which Mr. Ludwig transferred a substantial sum of money. They purchased furniture, appliances, a digital cable television and mobile phones with local phone numbers. She obtained an Ontario driver’s license and health card, while Mr. Ludwig obtained an Ontario driver’s license, boating license and fishing license. The entire family registered with the local health clinic and secured a family dentist. They spent thousands of dollars on repairs to the family home. They purchased two vehicles. Mr. Ludwig cancelled her German magazine subscriptions. Mr. Ludwig befriended neighbours, with whom he would go for regular runs and bike rides. Mr. Ludwig played on a municipal soccer team. The parties became involved and attended social events.
115Mr. Ludwig replied that the acquisition of the residence in Ontario “was a bargain and the value would likely increase” so he agreed with the purchase of the home because it represented a “sound investment.” He indicated that the cars were purchased to keep the family mobile and noted that he also maintained a car in Germany. He noted that when the parties separated “all of [his] assets” other than the matrimonial home “were located in Germany.
Analysis re: s. 15 of the FLA
116Mr. Ludwig cited, in support of his position, the case of Pershadsingh v. Pershadsingh, 1987 4361 (ON SC), [1987] O.J. No. 641. He referred, specifically, to the following comment on “habitual residence” at pp. 144-5 of the text, “The Conflict of Laws, 10th ed” by Dicey and Morris, accepted by Justice Walsh, at paragraph 9 of the decision:
It is evident that "habitual residence" must be distinguishable from mere "residence". The adjective "habitual" indicates a quality of residence rather than its length.
117The quote cited by Mr. Ludwig continues as follows:
Although it has been said that habitual residence means "a regular physical presence which must endure for some time," it is submitted that the duration of residence, past or prospective, is only one of a number of relevant factors; there is no requirement that residence must have lasted for any particular minimum period.
118Thus, it appears that quality of residence may be more significant than duration.
119More significantly, however, Mr. Ludwig ignored the interpretation applied to the words “last common habitual residence” by Justice Walsh when he wrote that it meant, “the place where the spouses most recently lived together as husband and wife and participated together in everyday family life.”
120In her submissions, Ms. Ludwig also cited Pershadsingh v. Pershadsingh for Justice Walsh’s definition of “last common habitual residence,” claiming that it helped her to establish that the parties’ last common habitual residence was in Ontario.
121Ms. Ludwig also relied upon the decision of Justice T. Engelking in Zakhour v. Nayel, [2017] O.J. No. 1364, where Justice Engelking found that the parties had a last common habitual residence in Ontario based, in part, on them “staying together at [an] address, taking meals together with family and generally living their life as a couple in this jurisdiction,” despite the fact that the residence at which they were staying might not even have been habitable. Justice Engelking also found other evidence to support Ontario being the last common habitual residence, including the respondent filing income tax returns providing the residential address as his address and the lack of evidence that he actually was residing in Lebanon, where he claimed to be living. Justice Engelking concluded that the parties’ “life and plans were in Ottawa, Ontario.”
122While the parties are at odds over their “last common habitual residence,” neither referred to this comment noted by Justice Walsh in Pershadsingh v. Pershadsingh, again quoting from Dicey and Morris, The Conflict of Laws, 10th ed.:
In appropriate cases, it would seem that a person could be without any habitual residence; habitual residence in two or more places would also seem possible.
123It is clear on the facts that the parties had their last common residence in Canada. The question remains whether it was their last common “habitual” residence.”
124Justice Korpan addressed the issue of the parties, as opposed to their children’s, habitual residence at paragraph 89 of her Reasons, supra, when she concluded that “the parents were not certain when, or if, they would or should, return to Germany”, resulting in her finding that “[t]his is not a case where I can find that the move to Canada was for a time-limited consensual stay with an expiry date.”
125Based upon all of the foregoing, I find that the parties had a common habitual residence in Germany until such time as they left there. At some point, whether it was immediately upon their arrival in Canada or at some point thereafter, prior to their separation, they established a habitual residence in Canada because their activities in Canada demonstrate that Canada was “the place where [they]most recently lived together as husband and wife and participated together in everyday family life.”
126It may be that Mr. Ludwig also continued to maintain a habitual residence in Germany, as well, but it is also clear that, at some point, Ms. Ludwig abandoned that habitual residence and resolved that she would remain in Canada.
127In my view, Mr. Ludwig had established a common habitual residence with Ms. Ludwig in Canada which persisted beyond Ms. Ludwig’s abandonment of her habitual residence in Germany.
128Thus, I find that the parties’ “last common habitual residence” was in Canada, whether or not Mr. Ludwig also had a continuing “habitual residence” in Germany.
129As a result, I find that their property rights shall be determined, in accordance with section 15 of the Family Law Act, by the law of Ontario.
Spousal Support
130On this issue, the law is clear. Beginning with the decision of the Ontario Court of Appeal in Okmyansky v. Okmyansky , supra, where a foreign decree of divorce has been declared, no claim for spousal support can be made thereafter under either the Divorce Act or the Family Law Act.
131A similar result occurred in Nicholas v Nicholas, [1995] O.J. No. 28, appeal dismissed at [1996] O.J. No. 3543 and in Mattar v. Elbarbary, supra, at para. 46.
132Other courts of addressed the question of whether a claim for spousal support made under the Family Law Act before a divorce is granted by a foreign court can be pursued after the foreign divorce has been granted.
133This issue was addressed in Stefanou v. Stefanou, [2008] O.J. No. 531 where Justice T.P. Herman wrote:
60 The one fact that distinguishes the case at hand from the above two cases is that Ms. Stefanou's claim for spousal support was made before the divorce was granted in Greece. (Ms. Stefanou commenced her application in April, 2005 and the divorce order was granted in May, 2006.) This raises the question of whether the operative time for determining jurisdiction is when the application is first made or when a court hears and determines the claim. Ms. Stefanou submits that because she instituted her claim for support in Ontario prior to the Greek divorce order being granted, she should be able to pursue it. I note that Ms. Stefanou neither opposed Mr. Stefanou's application for divorce in Greece nor has she appealed the divorce order, although she was aware of both.
61 The case of Nicholas v. Nicholas, [1995] O.J. No. 28 (Ont. Gen. Div.) is similar to the case at hand in so far as the application for support was commenced prior to the granting of the divorce by a foreign court. In Nicholas, the husband commenced divorce proceedings in Trinidad in November, 1993. The wife initiated divorce proceedings in Ontario in December, 1993. The Trinidadian court granted a decree nisi in April, 1994. Smith J. concluded, at para. 35, that once the Trinidadian divorce was issued, the wife was no longer a spouse for the purposes of an application for spousal support under the Ontario Family Law Act. The issue of support therefore had to be dealt with by the Trinidadian court. The decision was affirmed on appeal ((1996), 1996 1240 (ON CA), 94 O.A.C. 21 (C.A.)), but the court did not deal specifically deal with the issue of the application having been commenced in Ontario prior to the granting of the divorce order by a foreign court.
62 I have not been asked to decide whether Ms. Stefanou has a valid support claim under Ontario law. I note, however, that the weight of the case law and the language of the Divorce Act and the Family Law Act suggest that she would have difficulty pursuing such a claim in Ontario.
134Similarly, in Deivasigamani, v. Arumugan, [2020] O.J. No. 1799, a case where the Applicant was seeking spousal support under the FLA while a proceeding for divorce was pending in India, Justice S. Shore held, at Paragraph 41, that “[u]ntil the divorce is granted in India, the Applicant is entitled to proceed with a claim for spousal support in Ontario. Once the divorce is granted, she will not be able to complete her claim in Ontario.”
135Justice Shore reached a seemingly contrary conclusion a year earlier in Haroon v. Haroon, supra, which was a case where the Applicant’s claim for divorce was dismissed on the basis that she had not been ordinarily resident in the province for one year prior to the issuance of her claim. Having made that decision, however, Justice S.R. Shore also held, at Paragraph 24, that “[g]iven that no divorce has been issued by another jurisdiction, the Applicant has the right to bring a support claim before this Court, under the Provincial legislation.”
136Justice Shore did not, however, address the question of whether a divorce granted in a foreign jurisdiction would have any effect on such a claim. One year later, however, in Deivasigamani, v. Arumugan, Justice Shore’s view about this issue was clear - the granting of the foreign divorce was fatal to the continuation of a claim for spousal support pursuant to the Family Law Act.
137Ms. Ludwig relies upon Haroon v. Haroon, but makes no mention of the decision in Deivasigamani, v. Arumugan. Given that the same judge decided both cases, I find that the decision, and the rationale underlying it, in Deivasigamani, v. Arumugan, is to be preferred.
138Ms. Ludwig also relies upon Lajoie v. Woito, supra, a case similar to this one in that the Applicant had not been ordinarily resident in Ontario for one year prior to the issuance of her claim seeking the divorce. Justice Shaw addressed the issue very briefly, writing:
22 This court does not have jurisdiction to hear the clam for divorce brought by Ms. Lajoie, nor the claims for divorce and for corollary relief under the Divorce Act brought by Mr. Woito. However, this does not mean that the court does not have jurisdiction to hear claims under the Family Law Act. As noted by Epstein J. in Hinter v. Hinter, [1996] O.J. No. 2601 (Gen. Div.), at para. 26, claims under the Family Law Act stand completely independent of the issue of jurisdiction under the Divorce Act.
139No mention was made of the Court of Appeal decision two years earlier in Okmyansky, and there is no indication of other cases having considered the decision in Hinter v. Hinter. It also appears that scant consideration has been given to the decision in Lajoie v. Woito, neither of which are binding upon me on this point, in any event.
140While Ms. Ludwig also submits that, on the basis that a real and substantial connection exists between the subject matter of the litigation (spousal support) and Ms. Ludwig’s residence in Ontario, I am bound by the decision of the Court of Appeal in Okmyansky v. Okmyansky, as I also prefer the rationale for not allowing the continuation of a pre-foreign divorce claim for spousal support to continue after the issuance of the foreign divorce order.
141Consequently, I find, as did Justice Shore in Deivasigamani, v. Arumugan, that Ms. Ludwig is entitled to proceed with a claim for spousal support in Ontario. Once the divorce is granted, however, she will not be able to complete her claim in Ontario.
Issue #1(c): If the Superior Court has jurisdiction in respect of any one or more of Ms. Ludwig’s claims under provincial legislation, is Germany, notwithstanding, the more appropriate forum for determining the issues in the case?
142The answer to the question posed is “no.”
143Notwithstanding having found that the Ontario Superior Court has jurisdiction in respect of spousal support, at least until a foreign divorce is granted, decision-making responsibility and parenting issues, child support and property claims, I must still address whether Ontario is the appropriate forum for those issues to be addressed.
144This issue was succinctly outlined by Justice E.L. Nakonechny in Li v. Li, supra, as follows:
52 Having found Ontario has jurisdiction, the court may decline to exercise jurisdiction if it is persuaded there is another forum that is "clearly more appropriate" for determining the issues in the case. The burden is on the Respondent to convince the court to decline jurisdiction: [Club Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572]
53 Both Van Breda and Muscutt2 set out factors the court should consider in determining whether another forum is clearly more appropriate. The factors include the location of the parties, key witnesses and evidence, any contractual terms governing applicable law or jurisdiction, avoidance of multiple cases, the applicable law and its weight in relation to the factual questions to be decided, geographical factors suggesting the natural forum and whether declining jurisdiction would deprive the applicant of a legitimate juridical advantage: Van Breda at para. 103 and 108-110; Muscutt, at para. 41.
Mr. Ludwig’s Position
145Mr. Ludwig claimed that this proceeding should be stayed and “transferred” for continuation and completion in Germany. I do not believe that I have authority to transfer a proceeding to another country, but it is clear that what he intends is that the issues between the parties should be litigated in Germany.
146He cited the following in support of his position:
a. all relevant documents pertaining to his income are filed with the tax authorities in Germany and are in German;
b. the German court is fully competent to deal with all of the issues, thus eliminating a multiplicity of proceedings;
c. having the matter proceed in Germany would “avoid problems related to the recognition and enforcement of judgments” and thus [the German court] would be in a position to dispose of the proceedings within a shorter timeframe than would occur in Canada;
d. the witnesses able to address the pre-separation parenting issues are located in Germany, particularly the parties’ “last four live-in nannies” who, he claims, would be “intimately familiar with our family dynamics until the end of 2016”;
e. key documentary evidence is located primarily in Germany, written in German. He referred specifically to bank accounts, tax documents and evidence pertaining to business interests and their values;
f. witnesses such as tax advisors and business valuators are located in Germany;
g. the cost of the proceedings would be “significantly lower in Germany” because there would be no need to translate documents, such as business valuations; and
h. legal fees in Germany “are also a lot cheaper.”
Ms. Ludwig’s Position
147Ms. Ludwig began by noting that Mr. Ludwig is now a resident of Spain, and that he no longer resides in Germany. According to her, Mr. Ludwig resides on a farm in the Canary Islands full-time, moving between there and a chalet in Austria. Ms. Ludwig asserted that Mr. Ludwig “maintains no residency or active address in Germany.” This has been the situation, according to Ms. Ludwig, since the beginning of 2021.
148Not only did Mr. Ludwig not deny these claims, he incidentally confirmed his residence in Spain through his affidavits, in which he indicated that he “lives in Tenerife, Spain.”
149Ms. Ludwig confirmed that Mr. Ludwig’s primary assets are in Germany, which will necessitate her hiring a valuator to deal with his business interests. She also claims that he has property, or at least investments in property, in Spain and Austria and that both parties will have to hire valuators no matter where the case is heard.
150She indicated that the proceeding in Ontario is much further advanced than that in Germany since disclosure orders have already been made, whereas no such order has yet been made in the German proceedings which, I was told, are on hold pending the release of this decision.
151Ms. Ludwig indicated that her counsel has communicated with several valuators, in both Ontario and Germany, who are experienced in conducting property valuations for matrimonial proceedings. She believes the translation costs would be manageable if Mr. Ludwig “cooperates with the process.” To that end, Ms. Ludwig has already had a number of Mr. Ludwig’s documents translated for use in connection with the interim support motion. She has also consulted with a “licensed German tax consultant” who provided an affidavit for the interim support motion and who, according to Ms. Ludwig, is prepared to testify at the trial and, if necessary, provide a written report.
152According to Ms. Ludwig, she, Mr. Ludwig, and her present counsel Mr. Walker all speak German. She also intends to retain a bilingual business valuator in Germany. She asserts that this person’s report could be delivered in either English or German, with translation, as necessary.
153She believes that the presence of witnesses in Europe would not present a problem, given the use of Zoom technology during the pandemic, obviating the need for the witnesses to come to Canada to testify.
154According to Ms. Ludwig, the counsel that she has retained in Germany to protect her interests in the pending divorce proceeding has informed her that court attendances in Germany must be in person, which would require her to travel to Germany for the purposes of all pretrial proceedings and for the trial. I have no other evidence to support this assertion.
155Ms. Ludwig claimed that having the matter heard in Germany would present Mr. Ludwig with a significant advantage because she has a limited income, which would make travel to Germany effectively cost prohibitive.
156In contrast, she asserts that Mr. Ludwig can, with leave, participate via Zoom.
157Ms. Ludwig further claimed that she suffered a double-sided long collapse a few years ago which, she asserts, places her at a higher risk with respect to Covid-19.
158She noted that three of the parties’ four children continue to reside with her in Canada. She is not certain whether the German court would assume jurisdiction over children who have not been present in Germany for over four years at this time.
159On the issue of whether or not she is actively seeking to become self-sufficient, since she will be living in Ontario she is of the view that an Ontario court would be better positioned to assess her efforts than a court in Germany.
160She also asserted that the proceedings would be set back substantially if required to continue in Germany because little has been done to date in the German court as it awaits the outcome of these proceedings before determining how it will proceed.
Analysis
161It seems reasonably clear that there will be, at the very least, a proceeding in Germany related to a divorce between the parties. The only possible exception would be if the German court were to decline jurisdiction over Mr. Ludwig’s divorce claim for some reason. I am unable to comment on the probability of such a decision being made.
162I am told that there is no claim for corollary relief in the pending German proceeding. No evidence has been presented to me to suggest that what I have been told is incorrect.
Documentary Evidence
163The parties agree that the documents related to Mr. Ludwig’s alleged business interests are all located in Europe and are, most likely, written in German. If the trial proceeds in Ontario, it appears that the only persons who might not understand the documents as written will be the trial judge and, if he retains a unilingual English-speaking counsel, Mr. Ludwig’s counsel. That lack of facility in two languages by at least one person will likely necessitate the translation of a sizable number of documents, probably at a substantial cost to the parties.
164The number of documents likely to be required to address Mr. Ludwig’s business interests, the value of his property and his income will likely far exceed the number of documents required to address the parties’ property interests in Canada.
165Therefore, on the issue of documentary evidence assembly and accessibility to the trial judge in a language he or she can understand, I find that the advantage is in favour of the matter proceeding in Germany.
Expert Witnesses
166There are, no doubt, German speaking expert witnesses who could testify if these matters were tried in Germany.
167It is also reasonable to assume that bilingual witnesses are available in Germany who can articulate in English the significance of any documents necessary to their evidence about business issues. On that point, I note that Ms. Ludwig was capable of retaining a German witness to assist her by providing affidavit evidence in connection with her claim for interim spousal and child support and the imputation of income to Mr. Ludwig, all of which will be discussed, infra. That affidavit is in English.
168Similarly, presumably for expert witnesses not yet retained, their facility in English will be a much more significant factor if the trial were held in Ontario than it would be if the matter were to proceed in Germany.
169I also note that translators are available in Ontario to assist the court, and unilingual participants, with translation of viva voce evidence.
170Consequently, on the issue of the language of any professional witnesses and the possible need for translation of their evidence, I find that there is no advantage in favour of either jurisdiction.
Attendance at Trial
171The experiences of the past two years have demonstrated clearly that trials can be conducted via Zoom. Many have been, quite successfully. Consequently, I discount the suggestion that there would be an advantage to having witnesses appear in person before the court in Germany over having them testify via Zoom before a court in Canada. On this issue, I also find that there is no advantage in favour of either jurisdiction.
Enforcement and Variation of a Foreign Support Order
172This issue was considered in Rubio v. Josselin, [2018] O.J. No. 1369, where Justice S. O'Connell wrote, in respect of a court order for support made in Colombia which is not a signatory to the Interjurisdictional Support Orders Act, 2002:
44 It is well settled law that a Canadian court cannot vary a corollary support order related to a valid foreign divorce under the terms of the Divorce Act. Neither can the court alter or vary the corollary support order of a foreign divorce under provincial legislation such as the Ontario Family Law Act. The only mechanism for so doing is set out under interjurisdictional support statutes. See Rothgiesser v. Rothgiesser (2000), 2000 1153 (ON CA), 46 O.R. (3d) 577 (Ont. C.A), and Okymansky v. Okymansky, 2007 ONCA 427, 86 O.R. (3d) 587.
45 In Ontario, a foreign child support order made under a foreign divorce should be altered or varied under the procedures set out under the Interjurisdictional Support Orders Act ("ISOA"). The ISOA permits the Ontario Court of Justice to change or vary support orders from any foreign reciprocating jurisdiction, including those support orders made corollary to a foreign divorce order or by a federally appointed judge. The level of the foreign court does not matter, so long as the procedural requirements of the ISOA are met. See Rothgiesser, supra, at paragraph 20.
46 However, in this case, the ISOA is not applicable. Colombia is not a reciprocating jurisdiction under that legislation. The mother therefore has no recourse to alter or vary the Colombian support order under the ISOA.
173Germany, like Colombia, is not signatory to the Interjurisdictional Support Orders Act, 2002. Consequently, if an order were to be made in Germany, it would have to be varied there. In my view, this speaks to the advantage available to Ms. Ludwig in obtaining a child support order in Ontario. She would not be required to invoke the jurisdiction of the foreign court for variations to any such order.
174Conversely, whether the order were to be made in Ontario or Germany, it would have to be enforced in Germany. Ms. Ludwig has counsel on retainer in Germany for the German litigation, so she could presumably retain counsel to enforce a property or monetary order in Germany.
175While Mr. Ludwig asserts that this is a factor in his favour, it may be that he would not welcome a more readily available enforcement process in Germany if he were to be found to owe an equalization payment to Ms. Ludwig.
176Thus, on this factor, the issue tends to favour Ms. Ludwig’s choice of Ontario in respect of varying any support order made, whereas it favours neither party in respect of enforcement of any order.
Claims Respecting the Children
177I acknowledge the legitimacy of questioning whether the German court would accept jurisdiction with respect to parenting issues. Three of the four children have not lived in Germany since August 2017. They have provided information to legal counsel appointed by the Office of the Children’s Lawyer, and while that information is now somewhat dated, at that time they wished to remain in Canada.
178The children are now aged 18 years 10 months, 17 years, 15 years 10 months and 12 years nine months. Clearly, all are able to articulate their position about where and with whom they wish to reside, and what arrangements they would wish to see with respect to parenting time for the parent with whom they would not be residing. Additionally, it may be helpful for the court to have an update report, or a Voice of the Child Report, at the time of trial for those children who will have not yet attained the age of 18 years at the time of trial.
179The three youngest children continue to reside in Ontario with Ms. Ludwig. The eldest child, who is over the age of eighteen, now resides with Mr. Ludwig in Spain. He is said to be struggling emotionally. At this time, it seems that he will remain with his father.
180I find that it would be preferable for the children’s views to be expressed to the court in the jurisdiction where they are residing. It is that court which is likely to be more attuned to the local social and educational milieu to which the children will be exposed. On this issue, I find that the advantage would be in favour of the matter proceeding in Ontario.
Legal Advantage/Disadvantage
181Other than questioning whether or not Ms. Ludwig would be able to assert her claim for decision-making responsibility in Germany, I have no information about whether or not she would otherwise be at a legal disadvantage if she were to be required to litigate the issues in this case in Germany. She made no such assertion in her materials, other than pertaining to the cost and inconvenience of having to regularly attend in Germany for pre-trial and trial procedures, neither of which falls under the heading of legal advantage or disadvantage.
182Similarly, Mr. Ludwig has not claimed that he would be at a legal disadvantage if he were to be required to litigate the issues in this case in Ontario.
183Consequently, the effect of a legal advantage or disadvantage cannot be determined.
Cost/Duration of Litigation
184Although Mr. Ludwig asserts that litigation would be less expensive in Germany, he produced no evidence to support that claim.
185Similarly, he produced no evidence to support his claim that the litigation would proceed more expeditiously in Germany. What can be said is that the proceeding in Ontario has moved forward thus far, albeit slowly.
186At present, the trial lists in Elgin County, where this matter was commenced and would be tried, are not substantially backlogged. Once this case reaches the stage of being ready for trial, it could be added to a trial list in reasonably short order, and the length of any delay thereafter would be governed by the urgency of the issues then remaining to be litigated, the length of the trial and the importance of other cases on the list.
187I also find that Mr. Ludwig’s claim that the matters should proceed in Germany is weakened by the fact that he is no longer resident there, having taken up residence in Spain in 2021.
Ms. Ludwig’s Claimed Health Issues
188The issue of Ms. Ludwig’s claim to health risk of attending a trial in Germany can best be responded to with the following quote taken from Stefanou v. Stefanou, supra:
73 I accept that it could be more stressful for Ms. Stefanou to pursue her claim in Greece, away from home, than in Ontario. However, in the absence of medical evidence, I am unable to assess the importance of Ms. Stefanou remaining in Ontario for a trial from the perspective of her health.
189Justice H. Smith (as she then was) considered the issue of forum non conveniens in Nicholas v. Nicholas, [1995] O.J. No. 28. In that case, the husband had instituted divorce proceedings in Trinidad and Tobago. The wife had commenced proceedings in Ontario seeking custody, child and spousal support and division of property. The parties had been married for 25 years and had four children who had been educated abroad under the mother’s care while the husband remained in Trinidad to maintain the family home and business. The wife and children had resided in Ontario since 1980, but the family had maintained its roots in Trinidad and planned to return there permanently once the children had completed their educations. The husband had applied to stay the Ontario action.
190Justice Smith held that the case should be tried in Trinidad.
191Justice Smith’s decision was upheld on appeal to the Court of Appeal (Nicholas v. Nicholas, [1996] O.J. No. 3543). The Court of Appeal noted Justice Smith’s findings that the parents appeared “to have few ties to Ontario apart from those arising from their children’s education,” that the husband’s business activities were centred in the Caribbean and that he was a non-resident of Canada for income tax purposes, while the family “typically spent Christmases at their home in Trinidad” as well as March breaks and summers. Their lives in Canada were said to be “socially rootless” while they “maintained an active social life in Trinidad.” All children intended to return to Trinidad. To that end of the parents were building a second home in Trinidad.
192When reaching her conclusion in the court of first instance, Justice Smith found that the “last common habitual residence” of the family was in Trinidad, so it was the jurisdiction which should determine property division. Having made that finding, Justice Smith wrote:
40 In addition, it seems to be most unsatisfactory to have the issues of divorce, child support, and alimony determined in one jurisdiction and property issues determined in another. The determination of property issues may well be a consideration in assessing support issues. The circumstances of this case suggest that these two issues are inextricably interwoven, given the lifestyle of the parties and the children, and the standard of living enjoyed. The determination of one of these issues will most definitely impact on the other. Common sense indicates that the only fair and expeditious way to solve all the issues arising from the breakdown of the marriage is to have one jurisdiction, namely Trinidad and Tobago, hear and determine all matters arising in this case.
193Looking at some of the factors identified by Justice Smith, Ms. Ludwig and the children cannot be said to be “socially rootless” in Ontario, and there are no plans for the three children in her care to return to Germany. The family has not been returning to Germany for summers or Christmas vacations. However, Mr. Ludwig’s taxes are paid elsewhere than Canada, and whatever business interests he has, if any, appear to be in Europe. At this point, however, it cannot be said whether other jurisdictions, apart from Spain and, perhaps, Austria, may also be involved.
194When I consider all of the factors in this case, it seems to be apparent that, unless the German court declines jurisdiction for the divorce, divorce and spousal support are likely to proceed in Germany.
195I have found that the parties had their “last common habitual residence” in Ontario, so that Ontario property law applies with respect to the parties’ property claims.
196I agree with Justice Smith that it is most unsatisfactory to have various issues tried in different jurisdictions. However, as matters stand, I have found that the issues relating to parenting and child support, as well as property issues, should be tried in Ontario.
197I also have noted that Mr. Ludwig made no claim in Germany with respect to parenting of the children, division of property, or the payment of support.
198I adopt Justice Smith’s view that, in this case, the property issues and child support are “inextricably interwoven.” In this case, the evidence is that three of the four children wish to remain in Ontario. Given the inextricable interweaving of parenting issues, child support and property, and based on Justice Smith’s reasoning in Nicholas v. Nicholas, I find that Ontario is the proper forum for those issues to be tried.
199To that I add that, if the German court were to decline jurisdiction over the divorce claimed by Mr. Ludwig, either party could commence a separate proceeding in Ontario for a divorce, to which would undoubtedly be added a claim for spousal support.
200There is, however, no obligation on the German court to cede jurisdiction to Ontario in respect of divorce and spousal support, and whether it might or not plays no role in my decision.
201If this case were solely about property and spousal support, I would likely find that the forum conveniens for those issues to be tried would be Germany.
202However, children are involved. If it comes down to a choice between having matters tried in Ontario because children resident here are involved, or having matters tried in Germany because the bulk of the property, consisting of Mr. Ludwig’s business interests, is centered there, I find that the issues directly relating to the children, including those “inextricably interwoven” with such issues, such as how property outcomes might affect child support, must take precedence over issues not connected with the children.
203Consequently, I find that Ontario is the proper forum in which to hold a trial about the matters over which the Ontario court has jurisdiction, meaning all claims but for those relating to divorce and spousal support under the Divorce Act. In respect of spousal support under the Family Law Act, Ontario is the proper forum only until such time, if any, as the German court grants a divorce in the proceeding commenced there by Mr. Ludwig.
Issue #2(b)(i): Should an income be imputed to Mr. Ludwig for interim support purposes? If so, in what amount?
204The answer to the first question is, “yes.” As for the second question, I am imputing an income to Mr. Ludwig for interim support purposes in the amount of $60,000.00 as of July 1, 2022. That will increase to $90,000 per annum as of October 1, 2022, to $120,000 as of January 1, 2023, to $150,000 as of April 1, 2023 and to $180,000.00 as of July 1, 2023.
Positions of the Parties
205Ms. Ludwig requested that I make an order for interim spousal support and interim child support based upon Mr. Ludwig having an imputed annual income of $1,241,000.
206Mr. Ludwig requested that I dismiss the motion for interim spousal and interim child support, as he claims that he is already paying more in child support than he would be required to pay under the Child Support Guidelines based upon his current salary. He made no mention of paying spousal support.
207Mr. Ludwig further took the position that, until the jurisdictional issues in this case are resolved, Ms. Ludwig’s motion for interim support should not proceed.
Background
208I had informed the parties some months before the motions were heard that all issues would be argued at the same time, and, if Mr. Ludwig’s challenge to the Ontario court’s jurisdiction succeeded, a ruling would be unnecessary on the issue of interim support.
209In light of that, Mr. Ludwig did present information in his affidavit about his income in the period between 2018 and February 2022. Ms. Ludwig presented substantial evidence about what she claims to have been Mr. Ludwig’s income prior to 2018 and, as noted, asked that I impute income to him for the period after 2017.
210As I have already noted, on October 27, 2021 I made an extensive financial and corporate documentary disclosure order against Mr. Ludwig. However, because he brought his motion challenging this court’s jurisdiction as a result of my order dated September 29, 2021, there is a stay on Mr. Ludwig’s obligation to provide that disclosure until, given my rulings herein, 60 days from the date that these Reasons are released.
211As a result, Ms. Ludwig was in a position of having to ask the court to impute an income to Mr. Ludwig without having had the benefit of the financial disclosure that he was ordered on October 27, 2021 to provide, whereas Mr. Ludwig elected to depose as to his income in the periods noted without having had to produce any supporting documents.
212Given the evidence of Mr. Ludwig, however, as to his income in the period after 2017, and contrasting his claimed income with his income for the period prior to 2018, as alleged by Ms. Ludwig, ($54,000.00 as opposed to an amount in excess of $1,000,000.00 per annum), it is obvious that this is a case where an argument with respect to the imputation of income to Mr. Ludwig must be considered.
Principles Concerning Interim Support Motions
213Since this is an interim motion for support, I am guided by the following principles which have been referred to in many cases, and which were articulated by Justice Gauthier in Charbonneau v. Charbonneau, 2004 47773 (ON SC), [2004] O.J. No. 5059 as follows:
15 Interim support is a short-term remedy meant to ensure that a dependant has sufficient means to maintain a reasonable lifestyle until trial. Because of the nature and purpose of an interim support order, the court does not conduct an in-depth analysis of entitlement, however, a claimant must establish a prima facie case.
16 At this stage, the court does not embark on a detailed examination of the merits of the case. Having said that, however, it is nonetheless clear that entitlement to support must be established before any order is made for support, be it interim or permanent. (case references omitted)
214Justice S. Sherr expanded on these principles in Samis (Guardian of) v. Samis, 2011 ONCJ 273, [2011] O.J. No. 2381, articulating the following expanded list of principles that apply to interim spousal support motions:
a. Interim support is to provide income for dependent spouses from the time the proceedings are instituted until trial.
b. The court need not conduct a complete inquiry into all aspects and details to determine what extent either party suffered economic advantage or disadvantage as a result of the relationship. That is to be left to the trial judge.
c. Interim support is a holding order to maintain the accustomed lifestyle if possible pending final disposition as long as the claimant is able to present a triable case for economic disadvantage.
d. Interim support is to be based on the parties' means and needs, assuming that a triable case exists. The merits of the case in its entirety must await a final hearing.
e. On interim support motions, needs and ability take on greater significance.
f. On interim motions, the need to achieve self-sufficiency is of less importance.
g. Interim support should be ordered within the range of the Spousal Support Advisory Guidelines, (Ottawa: Minister of Justice and Attorney General of Canada, July 2008), unless exceptional circumstances dictate otherwise.
h. Interim support should only be ordered where a prima facie case for entitlement has been set out.
Has Ms. Ludwig Made Out a Case for Interim Support?
215I find that she has.
216Having determined that Ms. Ludwig cannot proceed to claim corollary relief under the Divorce Act and having granted her leave to amend her pleadings to claim corollary relief, including spousal support, under the Family Law Act, it is to that legislation that I look to determine entitlement to, and factors to be considered when ordering, support. It provides as follows:
30 Every spouse has an obligation to provide support for himself or herself and for the other spouse, in accordance with need, to the extent that he or she is capable of doing so.
31 (1) Every parent has an obligation to provide support, to the extent that the parent is capable of doing so, for his or her unmarried child who,
(a) is a minor;
(b) is enrolled in a full-time program of education; or
(c) is unable by reason of illness, disability or other cause to withdraw from the charge of his or her parents.
(2) The obligation under subsection (1) does not extend to a child who is sixteen years of age or older and has withdrawn from parental control.
(7) An order for the support of a child should,
(a) recognize that each parent has an obligation to provide support for the child;
(b) apportion the obligation according to the child support guidelines.
33 (1) A court may, on application, order a person to provide support for his or her dependants and determine the amount of support.
34 (1) In an application under section 33, the court may make an interim or final order,
(a) requiring that an amount be paid periodically, whether annually or otherwise and whether for an indefinite or limited period, or until the happening of a specified event;
217There is no dispute between the parties that offset child support should be paid by Mr. Ludwig to Ms. Ludwig for the three children who continue to reside with her and by Ms. Ludwig to Mr. Ludwig for the eldest child residing with him but who, on the evidence, is unable to withdraw from his care at this time despite being over the age of eighteen.
218It is spousal support that appears to be in issue on this interim motion. section 33 of the Family Law Act continues with respect to spousal support, as follows:
(8) An order for the support of a spouse should,
(a) recognize the spouse’s contribution to the relationship and the economic consequences of the relationship for the spouse;
(b) share the economic burden of child support equitably;
(c) make fair provision to assist the spouse to become able to contribute to his or her own support; and
(d) relieve financial hardship, if this has not been done by orders under Parts I (Family Property) and II (Matrimonial Home).
219I find that, on her evidence, Ms. Ludwig has established, on a prima facie basis, that she has an entitlement to interim spousal support on both a compensatory and needs-based basis.
220According to her evidence, the parties had a traditional marriage. Prior to having children, Ms. Ludwig did work, but gave up her employment when she began to have children. They agreed that she would stay home to care for the children while Mr. Ludwig pursued his career. She followed Mr. Ludwig to France and Ontario from their home in Germany as he pursued his education. When he became employed as a business analyst after having obtained a Masters’ degree in Business Management, she took on the majority of the childcare duties while Mr. Ludwig worked long hours.
221She placed her own employment plans on hold during the marriage and, when she attempted to get back into the workforce after some years as a full-time caregiver, she deposed that she had to negotiate with Mr. Ludwig an arrangement which would have her home still with the children part of the time.
222As a result of the choices made, Ms. Ludwig indicates that she became financially dependent on Mr. Ludwig. According to her, he controlled the family finances. She lived on a budget set by him.
223Despite that, she provided evidence of the family’s extremely lavish lifestyle, all financed by Mr. Ludwig’s substantial income prior to 2017.
224Based on her evidence, it is readily apparent that Ms. Ludwig suffered an economic disadvantage, if not from the marriage itself then, certainly, from its breakdown.
225She produced her 2018, 2019 and 2020 notices of assessment, which show that, for those years, her income for tax purposes consisted primarily of social assistance payments. The parties had separated in July 2018.
226She has not been able to maintain the property tax payments on the matrimonial home, and tax arrears at January 2022 amounted to $18,546.09. Correspondence produced as part of her affidavit indicated that, on January 7, 2022, the property was to be placed in the hands of an outside corporation which would be charged by the municipality with the task of selling the property for tax arrears. She deposed that she had been able to assemble $5,602.25 to put towards the arrears which, if paid, would have retired the tax arrears for 2019 and part of 2020, thus staving off a tax sale.
227She further deposed that the children’s extracurricular activities have been put on hold because of her extremely limited income and the limited amount of child support she is receiving from Mr. Ludwig. She claims to have postponed obtaining glasses for herself despite the fact that she needs a new pair.
228According to Ms. Ludwig, the roof on the matrimonial home needs replacement. The estimate that she produced, however, was for the removal and replacement of cedar shakes at what seems to be an excessive cost. Notwithstanding, if the roof needs to be replaced, whatever the replacement product might consist of, it is a repair that ought not to be ignored.
229Ms. Ludwig’s financial statement sworn January 5, 2022 (although it also indicates the date of January 5, 2021) makes no mention of her tax arrears and indicates that she has little other debt. Her budget shows a monthly surplus, but it is predicated on the inclusion of some income that she hopes to receive, rather than what she is receiving.
230Mr. Ludwig did not address Ms. Ludwig’s entitlement to spousal support in his materials, other than to claim that she is living in “one of the most prestigious, mansion-like villas in the area”, and to suggest that, if Ms. Ludwig is in dire financial need, “the sale of the matrimonial home would be the simple, immediate, obvious and adequate answer to” that dire financial need.
231Mr. Ludwig’s response ignores the fact that the children need to live somewhere, and the fact that he would be entitled the 50% of the proceeds of sale of the matrimonial home as a joint owner. Furthermore, it is far too soon to suggest that the matrimonial home be disposed of to satisfy financial needs that could otherwise be addressed through a support order
Imputation of Income
232Both the Child Support Guidelines and the Spousal Support Advisory Guidelines require input information with respect to the incomes of the support payor. I therefore begin with a review of the parties’ evidence on this point.
Ms. Ludwig’s Evidence
233According to Ms. Ludwig, the income being currently reported by Mr. Ludwig, fluctuating between approximately, $36,000 and $54,000, is a gross under-representation of his earning capacity, and that he has resources worth far more than he claims available to him from which he can pay support.
234The parties married on August 22, 2001. At that time, Mr. Ludwig had only a high school education and was earning little money working part-time. Shortly after the parties married, Mr. Ludwig was accepted into a private business university in Germany called the European Business School. It was here that he earned his Master of Business Management degree.
235After obtaining his degree in 2006, Mr. Ludwig worked full-time as a business analyst for a company in Frankfurt. Ms. Ludwig claims that he also “engaged in lucrative investment strategies on a personal basis outside of what he has accomplished through his employment.” His starting salary was €55,000, with a signing bonus of €10,000.
236After approximately two years, Mr. Ludwig quit that employment and, in 2008, commenced new employment with Paragon Partners. His starting salary was said by Ms. Ludwig to be €120,000 which, she claimed, had increased each year such that, by 2016, it was €300,000. According to Ms. Ludwig, Mr. Ludwig also received yearly bonuses which started at €35,000 and ultimately increased to €75,000.
237In a contradictory statement, Ms. Ludwig also deposed that, during Mr. Ludwig’s employment with Paragon as an Investment Director, he had a fixed annual salary of €120,000 per year, which she estimated to be approximately equal to $170,000.
238She further deposed that she was of the belief that Mr. Ludwig, when hired by Paragon Partners, had signed, in addition to an employment contract, a “side letter” which entitled him to additional bonus income known as “carried interest,” which she believes to be common in the investment and business analysis industries. She does not believe the carried interest payments to be “one-off” payments, as claimed by Ms. Ludwig, and also believes that they are to be reported as income on annual tax returns.
239While he was working at Paragon, according to Ms. Ludwig, Mr. Ludwig was also investing funds both through Paragon and in private stocks. According to a chart prepared by her for the motion based on what are said to be 438 pages of bank records, Ms. Ludwig notes that deposits into the parties’ bank account were substantial, averaging €429,375, or $615,558.05, per year over eight years.
240Despite this information, Ms. Ludwig said that Mr. Ludwig never told her the actual amounts that he was earning from investment returns per year.
241In addition to his salary, Mr. Ludwig was said to have received bonuses or private equity fee arrangements, but he never disclosed the amount he received. According to Ms. Ludwig, based on her review of accounts, the bonuses in private fee equity arrangements likely amounted to an average of €437,500 per year.
242Ms. Ludwig asserted that Mr. Ludwig regularly withdrew large amounts of cash from their bank account, but she did not know what use was being made of the money. She believes, however, that he used the money to amass “considerable savings, continuous investment returns… and likely offshore accounts.”
243The parties lived a very lavish lifestyle consistent with a high income. They regularly purchased new vehicles and took regular trips to locations around the world. Mr. Ludwig presented her with a diamond wedding ring and a Harley-Davidson motorcycle. According to Ms. Ludwig, their fixed expenses in Germany amounted to $6,200.00 per month, not including childcare, entertainment, sports, clothing, groceries, cell phone, Amazon shopping, birthdays, Christmas gifts, and the like. The parties employed nannies between 2010 and 2016 who assisted Ms. Ludwig with childcare, cleaning, cooking and laundry.
244According to Ms. Ludwig, the parties looked into several joint business ventures together, and the costs associated with those, including flights and hotels, were run through Mr. Ludwig’s private company.
245As part of the disclosure requests made by Ms. Ludwig and ordered by the court, there are a number of corporate entities with which Mr. Ludwig is believed to be involved. Ms. Ludwig believes that he controls the majority of them. They may have retained earnings which could be considered as income. All of that remains to be disclosed.
246In May 2016, Mr. Ludwig’s employment with Paragon was terminated, effective August 31, 2016. The parties differ on the reason for the termination. Mr. Ludwig indicates that the job had burned him out due to the number of hours that he was required to work, and he sought and obtained a six-month sabbatical from his employer, from which he was to return to his former position. According to him, it was during the sabbatical that his employment was terminated.
247Ms. Ludwig, in contrast, claims that Mr. Ludwig resented the fact that he had not become a partner at Paragon in 2016, so he went on a paid sabbatical, during which he turned down a different position with the company and quit his job.
248Mr. Ludwig has produced a letter in German which neither party translated, but which he indicates confirms that he was fired from his position.
249The year following the termination of Mr. Ludwig’s employment, the parties moved to Canada, where they purchased the residence which became their matrimonial home. Mr. Ludwig attempted to purchase a coffee roasting company in Elgin County as a business venture, but the deal fell through. Shortly thereafter the parties separated. Mr. Ludwig returned to Germany in early 2019.
250According to Ms. Ludwig, in January 2020 Mr. Ludwig used marital assets to purchase a chalet in Austria for €1.6 million, cash. The purchase was alleged to have been made by a corporation under the control of Mr. Ludwig.
251Ms. Ludwig further asserts that, since the parties separated and Mr. Ludwig has returned to Europe, he has been “renting a large, expensive house, buying a luxury camper van and [engaging in] continuous travel.” According to her, Mr. Ludwig “purchased or rented” a luxury farm in La Palma Spain in 2021, where he resides with his current partner and their child.
252It is further alleged that he has been travelling to various parts of the world in an effort to learn more about the coffee business, a fact he allegedly admitted to their daughter in writing, produced as an exhibit to Ms. Ludwig’s affidavit. Unfortunately, the text messages are substantially in German and were not translated.
253To assist her for this motion, Ms. Ludwig retained Ms. Ulricke Breham, who reports that she is a tax consultant from Germany who has a number of years experience working, ultimately, as a senior manager in the tax department at KPMG in Nuremberg. Since January 1, 2018 she has been a partner in a corporation which provides advice about German tax matters.
254Having received and reviewed the 2014 to 2018 jointly filed income tax assessments of the parties, along with a request from counsel for Ms. Ludwig to review the assessment notices and provide an opinion about the parties’ gross incomes in that period, Ms. Breham undertook the task.
255She, however, qualified her reported findings by noting that she had not prepared the original tax returns, did not have access to any personal corporate or partnership files or documents which were the basis for the preparation of the returns, and assumed that the income listed has been determined in accordance with German tax law. She further noted that it was “beyond [her] knowledge whether the income was calculated correctly or declared properly. Additionally, she was “not in a position to say whether the income tax assessment notices include all taxable income by the parties and whether tax-exempt income may have been generated that is not apparent from the income tax assessment notices.” Lastly, she wanted to “point out” that she could not “assess whether the income tax assessments sent to [her] are the final income tax assessments in each case.”
256Subject to those qualifications, she determined that Mr. Ludwig’s income for the years 2014 through 2018 were as follows, which Ms. Ludwig converted to Canadian dollar equivalent amounts using the end of year exchange rates for each year:
2014 €254,527 $357,305
2015 €408,069 $613,286.90
2016 €860,740 $1,219,582.50
2017 €1,290,397 $1,890,431.60
2018 €48,123 $69,047.21
She made no comment on his income for any period after 2018.
257Ms. Ludwig asked me to average Mr. Ludwig’s income for the years 2015 2016 and 2017 and to impute an income to him equal to that averaged amount of $1,241,000.
Mr. Ludwig’s Evidence
258According to Mr. Ludwig, he does “not in any way have the capacity or the means to significantly increase the amount of support” which he already pays on a monthly basis. According to him, his gross income in 2021 was approximately $36,364, with his net income after taxes being approximately $27,273. These figures were both converted from Euro equivalent amounts.
259Mr. Ludwig indicated that, in 2020, his annual income was approximately $53,077.00. It is on that amount that he claimed that he has been paying child support of $1,290.00 per month since he resumed employment after returning to Germany in January 2019.
260He acknowledged reducing his child support payments in January 2022 to $814 per month, still based upon his 2020 income, but reflecting both a change in the Euro to dollar conversion rate at December 31, 2021 and the fact that he is now supporting the parties’ eldest child and is, therefore, only paying support for three children instead of four.
261He asserted that he only has $81,299 in the bank as of January 6, 2022 [converted from the Euro equivalent] and that he has no other assets that he can liquidate apart from his share in the matrimonial home.
262Mr. Ludwig claimed that, upon returning to Germany in 2019, he was unsuccessful at finding employment, so he pursued a start-up idea which he had to abandon because of Covid-19. As a result, he claims a negative income for 2019
263From January 2020 to February 2021, he was employed by Arrow Invest GmbH, administering its pension payments and liabilities, for an annual gross income of approximately €36,000 or $54,000 Canadian.
264As of March 2021, he continued to do the same work but on a freelance, self-employed basis. That presumably accounts for the reduction in his income, as he claims that the terms of his self-employment are “modified (reduced).”
265Mr. Ludwig denied earning an income from corporations controlled by him, claiming that his income is solely derived from “regular employment with third parties and from self-employed activities.” He was unclear what he meant by “self-employed activities.” Ms. Ludwig did produce evidence that he may be renting out his property in Spain to travellers, a fact that he did not deny.
266He claimed that, despite making every effort to reduce his expenses, they still surpass his income and that he is left with a deficit each month.
267According to Mr. Ludwig, his income reduced substantially from that attributed to him by Ms. Ludwig approximately 2½ years before the parties separated. This would align with the time that he left Paragon Partners.
268According to him, the change was driven by “unfortunate external circumstances, severe health issues and a joint decision by the applicant and myself to readjust our lives with the intention to run a very small owner-run business with little financial potential.”
269Mr. Ludwig deposed that, after losing his employment with Paragon on August 31, 2016, he was unemployed for a period, and was looking for other job opportunities in the investment industry. He said that, while some seemed initially promising, all fell through and would have required him to work as many hours as he had worked at Paragon, which he estimated to be between 70 and 100 hours per week.
270According to Mr. Ludwig, the coffee roasting venture in Canada was to be only the start of a similar project once the parties returned to Germany. He asserted that the parties were “conscious without any doubt that this would mean living off a fairly small income.” The business that they were looking to purchase was, according to Mr. Ludwig, losing money.
271He further deposed that the business that they were looking to purchase “was clearly in no way comparable to my previous employment.” It was, according to him, “the idea of living a simpler life with more time for the family” that attracted both him and Ms. Ludwig to the business.
272Upon returning to Germany in 2019, according to Mr. Ludwig, he sought professional help to deal with his separation from the children and allegations made by Ms. Ludwig. He deposed that he was left “feeling paralyzed, fatigued and in a state of shock” from having his daily life go from being centred around the children to not having them at in his life at all.
273He claimed that he has continued in psychotherapy on a weekly basis since. He further asserted that he has “struggled immensely to stabilize” himself and “redevelop the capacity to function, to find work and generate an income and a perspective going forward.” He credits the professional help he has received with enabling him to “have a normal daily routine, keep my anxiety under control and work again.”
274He acknowledged that, at the beginning of 2020, he had visited a number of coffee producers in Africa. He also intended to go to South America to establish business relationships, but Covid-19 interfered with that. As a result, he had to abandon the coffee roasting business “for the time being.” He did not indicate how he paid for the trips.
275He specifically denied the allegations made by Ms. Ludwig that he owns real property in Spain or Austria. The Austrian chalet mentioned by Ms. Ludwig was said to have been acquired by a company to which he provided professional services - one of his customers who was “an important and reliable source of income.” He denied ever having any control or shareholding in the entity which bought the chalet.
276In his affidavit sworn February 10, 2022, Mr. Ludwig asserted that his income in the years between 2015 and 2018 was “distorted by large amount of one-off, non-recurring income triggered by the actual sale of assets stemming from my former employment with an investment firm. This employment had already ended by that time.”
277He claimed that, if the court were to decide to take into consideration the period of his employment with Paragon, “it is necessary to determine the normalized, sustainable income during these years, rather than looking at figures distorted by one-off events without any forward-looking relevance.”
Law
278Section 19 of the Child Support Guidelines sets out some of the circumstances in which a court can impute income to a party. It provides as follows:
Imputing income
19(1) The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include the following:
a) 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;
b) the spouse is exempt from paying federal or provincial income tax;
c) the spouse lives in a country that has effective rates of income tax that are significantly lower than those in Canada;
d) it appears that income has been diverted which would affect the level of child support to be determined under these Guidelines;
e) the spouse's property is not reasonably utilized to generate income;
f) the spouse has failed to provide income information when under a legal obligation to do so;
g) the spouse unreasonably deducts expenses from income;
h) the spouse derives a significant portion of income from dividends, capital gains or other sources that are taxed at a lower rate than employment or business income or that are exempt from tax; and
i) the spouse is a beneficiary under a trust and is or will be in receipt of income or other benefits from the trust.
279The following extracts taken from the decision of Justice D. Chappel in McBennett v. Danis, 2021 ONSC 3610, [2021] O.J. No. 2796 encapsulate the law with respect to imputation of income.
303 The onus is on the party requesting the court to impute income pursuant to section 19(1) to establish an evidentiary basis for such a finding…
304 … Regardless of the basis upon which income is imputed, the amount of income that the court imputes to a party is a matter of discretion. In carrying out the exercise, the court must take into consideration the purposes of the Guidelines and must arrive at a figure that is reasonable based on the evidence before the court (Drygala v. Pauli (2002), 2002 41868 (ON CA), 61 O.R. (3d) 711 (Ont. C.A.), at para. 44…The process of imputing income is not an exact science, particularly when the evidence before the court is imprecise or incomplete (Valley v. Hay, 2019 ONCA 770 (C.A.), at para. 10). In Korman, at para 51, the Ontario Court of Appeal held that the court may impute income to a spouse in excess of their presumptive section 16 income where the imputed amount is supported by the evidence and is consistent with the Guidelines objectives of establishing fair support based on the financial means of the parties "in an objective manner that reduces conflict, ensures consistency and encourages resolution." The overall goal is to determine a figure that fairly reflects the parties' financial circumstances…
306 The Ontario Court of Appeal addressed the issue of imputation of income pursuant to section 19(1)(a) of the Guidelines on the basis of intentional unemployment or under-employment in Drygala and more recently in Lavie v. Lavie, 2018 ONCA 10 (C.A.). The following relevant principles derive from those decisions and other cases which have considered section 19(1)(a):
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 (Drygala; Lavie).
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 (Drygala; Lavie; Duffy, at para. 35).
A finding of deliberate under-employment or unemployment does not require evidence of bad faith or an attempt to evade support obligations (Drygala; Lavie; Duffy, at para. 35).
The use of the word "intentionally" in section 19(1)(a) highlights that the provision does not apply to situations that are beyond the party's control (Duffy, at para. 35).
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 well educated and skilled and has no compelling reasons for not working risks being found to be intentionally unemployed…
When a party experiences an involuntary or temporary loss of employment or self-employment for any reason, 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 (Lavrinenko v. Lavrinenko, 2014 ONSC 4097 (S.C.J.); Tillmanns). 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 options outside of the area of their expertise in order to avoid an imputation of income…
307 If the court determines that income should be imputed on the basis of a party's intentional under-employment or unemployment, it must then determine the appropriate level of income to impute to the party. In carrying out this task, the court must consider all of the evidence adduced by both parties and determine what is reasonable and fair having regard for the particular facts of the case and the circumstances of the family members… The onus on the party seeking to impute income does not extend to proving the appropriate quantification of the imputed amount... Relevant factors in quantifying the imputed income include the age, education, experience, skills and health of the party, their historical income when they were earning a higher income, their ability to resume an income commensurate with their past income, the availability of work and any other obligations which they may have…(some citations omitted)
280To these I would add the following:
a. Reducing one’s income for the purpose of improving family life does not rise to the level of a “requirement” for the purpose of section 19(1)(a). Accordingly, an agreement between spouses that they will live at a reduced income for the purpose of improving the quality of family life ends when they separate, after which each has an obligation to earn an income they are capable of earning. (Lavie v. Lavie, [2018] O.J. No. 90 at paras. 25-29 (C.A.))
b. A party who wishes to have [their] medical condition taken into account as a basis that [they] cannot work bears the onus to establish material disability. This goes beyond testifying that [they] suffer from depression and anxiety: [they] must establish that the extent of [their] condition disables [them] from work. This onus cannot ordinarily be discharged solely on the basis of the party's testimony. …[I]t is simply not sufficient for [the party making the claim] to testify that [they] cannot work. [The party] would need to produce medical records and expert evidence about [their] condition, prospects and treatment.(Geishardt v. Ahmed, [2017] O.J. No. 5026 at para. 36; Gobin v. Gobin, 2009 ONCJ 245, [2009] O.J. No. 2191 (O.C.J.) at para. 20)
c. In a case where there is to be an imputation of income which represents a substantial increase over that which being earned before the imputation, it is appropriate to implement the increase on a graduated basis. (Gobin v. Gobin, 2009 ONCJ 245, [2009] O.J. No. 2191 (O.C.J.) at paras. 26, 28; Geishardt v. Ahmed, [2017] O.J. No. 5026 at para. 174)
d. When imputing an income to a person who has, as a result of their own actions, suffered a drastic reduction in income, the court cannot ignore that drastic reduction when imputing income. (Burton v. Burton, 1994 7455 (ON SC), [1994] O.J. No. 2728]
Quantum of Spousal Support
281When considering the quantum of support to be paid by a party, child support is governed by the Child Support Guidelines. The court must also consider the Spousal Support Advisory Guidelines when considering spousal support.
282It must also have regard to the factors set out in section 33(9) of the Family Law Act, which provides as follows:
(9) In determining the amount and duration, if any, of support for a spouse or parent in relation to need, the court shall consider all the circumstances of the parties, including,
(a) the dependant’s and respondent’s current assets and means;
(b) the assets and means that the dependant and respondent are likely to have in the future;
(c) the dependant’s capacity to contribute to his or her own support;
(d) the respondent’s capacity to provide support;
(e) the dependant’s and respondent’s age and physical and mental health;
(f) the dependant’s needs, in determining which the court shall have regard to the accustomed standard of living while the parties resided together;
(g) the measures available for the dependant to become able to provide for his or her own support and the length of time and cost involved to enable the dependant to take those measures;
(h) any legal obligation of the respondent or dependant to provide support for another person;
(i) the desirability of the dependant or respondent remaining at home to care for a child;
(j) a contribution by the dependant to the realization of the respondent’s career potential;
(k) Repealed: 1997, c. 20, s. 3 (3).
(l) if the dependant is a spouse,
(i) the length of time the dependant and respondent cohabited,
(ii) the effect on the spouse’s earning capacity of the responsibilities assumed during cohabitation,
(iii) whether the spouse has undertaken the care of a child who is of the age of eighteen years or over and unable by reason of illness, disability or other cause to withdraw from the charge of his or her parents,
(iv) whether the spouse has undertaken to assist in the continuation of a program of education for a child eighteen years of age or over who is unable for that reason to withdraw from the charge of his or her parents,
(v) any housekeeping, child care or other domestic service performed by the spouse for the family, as if the spouse were devoting the time spent in performing that service in remunerative employment and were contributing the earnings to the family’s support,
(v.1) Repealed: 2005, c. 5, s. 27 (12).
(vi) the effect on the spouse’s earnings and career development of the responsibility of caring for a child; and
(m) any other legal right of the dependant to support, other than out of public money.
Analysis
283Ms. Ludwig bears the onus of establishing that I should impute income to Mr. Ludwig
284She argues that income should be imputed to Mr. Ludwig on two bases: that he is intentionally underemployed, and that he has failed to provide income information when under a legal obligation to do so.
285There is no doubt that Mr. Ludwig has not provided the income information that he was ordered to produce during the case conference held before me on October 27, 2021. However, as I have noted, because of my order made on September 29, 2021, that obligation will only become operative 60 days after the release of these reasons.
286I have, however, been provided with sufficient information to make a determination about whether income should be imputed to Mr. Ludwig on the alternate basis, which is that he is intentionally underemployed.
287I find that Ms. Ludwig has met her onus that an imputation of income should occur because I find that, at this time, Mr. Ludwig is clearly underemployed and that he has not advanced a reasonable explanation for that underemployment.
288I find Mr. Ludwig to be a man who is highly educated, holding an advanced business degree, with extensive experience in the world of business finance. At the present time, however, he appears to be content to allow his educational qualifications to languish. That is not a reasonable course of action, especially since his wife finds herself in financially difficult circumstances in Canada. Furthermore, regardless of his wife’s situation, he has an obligation to support his children to the extent that he is capable of doing so rather than to the extent that he feels like doing so.
289Mr. Ludwig has not provided any medical evidence that he cannot return to the higher-pressure environment of the financial world in which he used to work. In fact, he appears to have tested a return to such an environment when he began administering pension payments and liabilities at the job he held between January 2020 to February 2021 with Arrow Invest GmbH.
290He has, otherwise, produced no evidence of having sought employment for which he is more suitably educated and qualified. Nor has he claimed that such employment is currently unavailable to him.
291Ms. Ludwig must also provide me with an evidentiary basis for imputing income to Mr. Ludwig.
292Her request would have me impute a substantial income on Mr. Ludwig without me knowing anything about his current ability to earn an income in the financial services/business investment field. He was, on the evidence, out of that field for at least 4 years.
293Ms. Ludwig asked me to average Mr. Ludwig’s income for 2015, 2016 and 2017 when imputing an income to him at this time. Clearly, that is not contemplated by s. 17(1) of the Child Support Guidelines, upon which Ms. Ludwig relies. That section provides, in essence, that, in determining an amount that is considered by the court to be a fair and reasonable estimation of a person’s income in light of any pattern of income, fluctuation in income or receipt of a non-recurring amount, the court may have regard to the person’s income over the last three years. Clearly, 2015, 2016 and 2017 do not constitute “the last three years.”
294Ms. Ludwig relies on income information that was relevant until Mr. Ludwig’s employment with Paragon ended in circumstances about which I can make no finding at this time. She has also provided me with a number of different income scenarios for Mr. Ludwig. Many, however, seem to be based on assumptions about additional investment income and “carried interest” previously earned by or paid to Mr. Ludwig while with Paragon. At this point, however, she is unable to establish whether any such additional income continues to accrue to his benefit., or is available to him.
295Mr. Ludwig is, however, now under an obligation to produce substantial financial information to Ms. Ludwig. It may end up being the case that the income that I impute to Mr. Ludwig at this time will need to be revisited once the disclosed information is made available by him.
296What is clear, however, is that Mr. Ludwig can no longer rely upon the parties’ pre-separation joint intention to live a simpler life in North America as a basis for earning less income in Europe. Regardless of the fact that the decision made by the parties before they separated would have had them living in greatly reduced circumstances, and they were free to make that decision, that situation ended when they separated, and support obligations arose.
297Mr. Ludwig acknowledged that if the court is going to impute an income to him, it should do so based on the non-inflated amount that represented his previous base income. He requested that I consider those amounts in the period after he left Paragon. He does not provide a reason why I should ignore what he was capable of earning as a base salary at Paragon or some other similar business in Germany or elsewhere in Europe for which his education qualifies him as an employee.
298He holds an advanced degree and resides in a country which is part of the European Union. I have no evidence that suggests that his ability to earn an income appropriate to his education and experience can only be earned in Germany.
299Mr. Ludwig earned a substantial amount of money prior to 2017. While there is a dispute about whether he was responsible for the loss of his income with Paragon, there is some evidence which may support his contention that he was fired rather than having simply quit that job. However he departed, he claims that he took a substantial reduction in income and ability to earn such an income in the aftermath of his departure.
300Mr. Ludwig has claimed that he lost his employment at Paragon because he was not prepared to put in the considerable number of hours required of him in the job. He claims that he was burned out. Now that he has returned to Europe, he claims to be living a simpler life, one that he is equipped for as a result of counselling and therapy, which help him to overcome not just the devastation he claims to have felt as a result of his separation from his children but also the changes in his life wrought by his separation from Ms. Ludwig.
301One can only hope that his counselling and therapy have also addressed the stress and burnout that he felt working in his former employment. He has credited the therapy with helping him get back to work.
302Mr. Ludwig has re-partnered and has a new child. He wants to spend time with that child, and he is entitled to do so, within reason, given his circumstances. What he is not entitled to do, however, is impoverish his older children, depriving them of the support and lifestyle to which they are reasonably entitled, at the expense of his ability to earn an income for which he is qualified. He must rebalance his life and include employment for which he is more appropriately qualified and for which he will be paid more if he is to meet his financial obligations to his wife and children.
303I do, however, acknowledge that he has apparently not worked in the investment/business analysis industry for a number of years. It will likely take him some time to secure employment and work his way back to an income equivalent to the base income that he was earning at Paragon. That income, however, could be comprised of a base income and some form of bonus system, believed by Ms. Ludwig to be common in the financial services industry, a claim not denied by Mr. Ludwig. It is up to him how he earns the income necessary to support his family once I determine an amount to be imputed to him for support purposes.
304Mr. Ludwig has been separated from Ms. Ludwig since 2018 and has resided in Europe since early 2019. He has already had more than three years to secure a job which will provide his family and him with a more reasonable standard of living than that which he has elected to follow at this point. He has done little, it seems, to achieve that result.
305Because of the uncertainties of the investment income earned by Mr. Ludwig when at Paragon, I find that an appropriate level of annual income to impute to Mr. Ludwig on an interim basis is $180,000, which is slightly above the base salary that Ms. Ludwig said he had been earning throughout his employment with Paragon.
306I will also give him some time to achieve the imputed income by imputing interim amounts as income on which support is to be payable.
307Having considered all of the evidence, as well as having taken into account the factors set out in s. 33(9) of the Family Law Act, I am imputing the following incomes for the following periods to Mr. Ludwig on an interim basis:
July 1, 2022: $60,000.00
October 1, 2022: $90,000.00
January 1, 2023: $120,000.00
April 1, 2023: $150,000.00
July 1, 2023: $180,000.00
308These incomes amounts will generate the following support payments, based on DivorceMate calculations, with:
a. income inputs for Mr. Ludwig arising from employment, rather than such things as dividends,
b. Ms. Ludwig having three children in her care,
c. Mr. Ludwig having one child in his care (so. s. 9 of the CSGs applies), and
d. Ms. Ludwig having an income of $15,000.00. I used this amount, rather than the $30,000.00, that her counsel inserted into his Divorcemate examples because it is supported by the evidence that she is attempting to secure some employment, and in 2020 her income was less than $10,000.00, all from social assistance. No evidence was produced to support the use of $30,000.00 as income for Ms. Ludwig at this time.
309These inputs yield the following results:
Date Spousal Support Child Support
(Mr. to Ms.) Mr. to Ms. Ms. To Mr. Net (Mr. to Ms.)
July 1, 2022: Nil $1,192.00 $79.00 $1,113.00
Oct. 1, 2022: Nil $1,764.00 $79.00 $1,685.00
Jan. 1, 2023: Nil $2,235.00 $79.00 $2,156.00
April 1, 2023: $250.00 $2,698.00 $79.00 $2,619.00
July 1, 2023: $600.00 $3,136.00 $79.00 $3,057.00
Issue #2(b)(ii): Should I make an interim order that Mr. Ludwig reimburse Ms. Ludwig “for all reasonable medical, dental, drug, health counselling and therapy treatment expenses” which are prescribed or recommended by a health care practitioner, and which are not otherwise covered by OHIP or a health benefits plan?
310Little attention was given to this claim on the motions. I am, however, prepared to consider it as a claim by Ms. Ludwig for a s. 7 contribution by Mr. Ludwig to such expenses for the children only. The amounts to be paid by Mr. Ludwig shall be determined in accordance with s. 7 of the Child Support Guidelines.
Retroactivity
311Because Mr. Ludwig was unable to earn an income in Canada between the time of the parties’ separation in July 2017 and his return to Germany in January 2019, and because I do not have any information about what other sources of income were available to him from Germany during that period, I will not be making an order at this time for retroactive support for the period prior to January 2019. It will be an issue for trial.
312For the period between January 2019 and the present, it may well be that, following a trial, the trial judge will determine that Mr. Ludwig ought to have secured more remunerative employment earlier than the times that I have used for the purposes of this order. Any higher payments will be retroactive.
313However, Ms. Ludwig’s application was stayed pending Mr. Ludwig’s challenge under the Hague Convention until Justice Tranquilli lifted it on July 26, 2021. It was only then that Ms. Ludwig was able to advance her claim for interim support.
314As a result, my refusal at this point to retroactively award support, in practical terms, deprives Ms. Ludwig of the support that she would otherwise have received under the terms of my order for a period of approximately 10 months.
315While I appreciate that she has suffered financial hardship over that period, I am of the view that the totality of any arrears of support should be an issue upon which more complete evidence can be developed at trial.
Order
316Accordingly, I make the following order on a final basis:
The Ontario Superior Court of Justice (Family Court) does not have jurisdiction to adjudicate the Applicant’s claim for a divorce or corollary relief under the Divorce Act based on the facts as they are set out in her Application issued on July 27, 2018. All such claims are dismissed.
The Applicant’s request for leave to amend her Application to claim a divorce and corollary relief “based on jurisdiction acquired from and after August 4, 2018 which would amount to one year after the Applicant’s arrival in Canada” is dismissed.
The Respondent’s motion to dismiss the balance of the Applicant’s claims on the basis of a lack of jurisdiction is dismissed.
Leave is granted to the Applicant to amend her Application to include claims for decision-making responsibility for the parties’ children under the Children’s Law Reform Act, as well as spousal support, child support and property-related claims under the Family Law Act, all as set out in in the Applicant’s draft Amended Application, which is labeled as Exhibit “A” to her affidavit sworn January 5, 2022.
The Applicant shall serve the Respondent with a copy of her Amended Application within 30 days by email sent to nilsludwig@hotmail.com. Service shall be effective as of the day that the email is sent.
The Respondent shall file his Amended Answer within 30 days after the date that he receives the Amended Application sent in accordance with paragraph 5.
I also make the following orders on an interim basis, pending trial or any earlier order of the court:
- Commencing on the first day of July, 2022, and on the first day of each month thereafter, until further order of the court, but subject to paragraph 8 hereof:
a. the Respondent shall pay spousal support to the Applicant in amounts set out in the Table appended hereto, entitled “Schedule “A” to Reasons dated June 6, 2022”; and
b. the parties shall each pay child support to the other in amount set out in the column detailing their payment obligation in the Table appended hereto, entitled “Schedule “A” to Reasons dated June 6, 2022”, with the result that the Respondent shall pay net child in the amount set out in the column entitled “Net Child Support – Respondent to Applicant” in the Table appended hereto, entitled “Schedule “A” to Reasons dated June 6, 2022”.
In the event that, at any time during the currency of this order, the Respondent secures a final order of divorce from the court in Germany and provides proof of such order to the Applicant’s counsel, the Respondent shall cease paying spousal support on the first day of the next following month. At that time, and on the first day of each succeeding month, the Respondent shall pay to the Applicant only the net amount of child support in the amount set out in the column entitled “Net Child Support – Respondent to Applicant” in the Table appended hereto, entitled “Schedule “A” to Reasons dated June 6, 2022”.
Commencing July 1, 2022, the Respondent shall reimburse the Applicant for all medical, dental, drug, health counselling and therapy treatment expenses incurred by the Applicant on behalf of the children which are prescribed or recommended by a health care practitioner, and which are not otherwise covered by OHIP or a health benefits plan, in accordance with s. 7 of the Child Support Guidelines. The Applicant shall provide a receipt for the expense to the Respondent, together with her calculation of the amount that he owes in accordance with this paragraph of the order.
Order to include the necessary clauses respecting collection of support by the Director, FRO.
The parties may make costs submission, in writing, within 30 days. They shall be typed in Times New Roman, 12-point font, spaced at 1.5, and shall not exceed five pages. Counsel for the Applicant shall also provide a draft Bill of Costs and
advise of the amount that he invoiced his client in connection with each of the
motions, broken out per motion. Submissions shall be sent to the Trial Coordinator at St. Thomas.
Justice T. Price
Date: June 6, 2022
COURT FILE NO.: FC-FS149/18
DATE: 2022/06/06
Schedule “A”
to Reasons dated June 6, 2022
| Date | Respondent’s Imputed Income | Spousal Support Payable by Respondent | Child Support – Respondent to Applicant | Child Support – Applicant to Respondent | Net Child Support – Respondent to Applicant |
|---|---|---|---|---|---|
| July 1, 2022 | $60,000.00 | Nil | $1,192.00 | $79.00 | $1,130.00 |
| Oct. 1, 2022 | $90,000.00 | Nil | $1,764.00 | $79.00 | $1,685.00 |
| Jan. 1, 2023 | $120,000.00 | Nil | $2,235.00 | $79.00 | $2,156.00 |
| Apr. 1, 2023 | $150,000.00 | $250.00 | $2,698.00 | $79.00 | $2,619.00 |
| July 1, 2023 | $180,000.00 | $600.00 | $3,136.00 | $79.00 | $3,057.00 |
Appendix
Explanation of Correction to Decision:
In Paragraph 131, the second reference (a repetition of the first) to the decision in Nicholas v. Nicholas, [1995] O.J. No. 28 has been deleted.
Footnotes
- In a tort case, those factors are: (a) the defendant is domiciled or resident in the province; (b) the defendant carried on business in the province; (c) the tort was committed in the province; and (d) a contract connected with the dispute was made in the province: see Van Breda, at para. 90.
- Muscutt v. Courcelles (2002), 2002 44957 (ON CA), 60 O.R. (3d) 20 (C.A.)