COURT FILE NO.: FS-21-0081-00
DATE: 2022 11 04
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
THU (ABBEY) LE
Appellant
- and -
TRUNG-SON NGUYEN
Respondent
Stephen P. Kirby, for the Appellant
Robert Fernandes and Michael Miculinic, for the Respondent
HEARD: May 10, 2022
REASONS FOR JUDGMENT
Fowler Byrne J.
[1] The Appellant Thu (Abbey) Le appeals the arbitral awards of Mr. Marty Klein (“the Arbitrator”).
[2] The Appeal Record was comprised of approximately 13,000 pages, with a Compendium of approximately 8,000 pages. An adjournment was required for more comprehensive Compendiums to be filed in order for this Justice to be directed to the relevant evidence in the record.
I. Background
[3] Abbey and the Respondent Trung-Son Nguyen (“Sonny”) were married on August 2, 1997, after cohabitating for two years. They separated on November 16, 2015. There are two children of the marriage: A., who is now 24 years old, and M., who is now 20 years old.
[4] The Arbitrator was appointed pursuant to a Family Mediation-Arbitration Agreement the parties signed on November 7, 2018, and January 2, 2019 (“the Agreement”). The parties specifically waived s.35 of the Arbitration Act, 1991, S.O. 1991, c. 17 so that the Arbitrator could act both as a mediator and then as an arbitrator. The mediation failed. Accordingly, the Arbitrator conducted an arbitration on May 3 to 7, 13, 14, and 20, 2021. He was asked to arbitrate on the issues as set out in the Agreement, which dealt with property, spousal support, and child support. On August 4, 2021, he released his substantive reasons, followed by an addendum on August 12, 2021, and a correction on September 6, 2021 (collectively, “the Decision”). On September 12, 2021, the Arbitrator released his costs decision (the “Costs Decision”).
[5] In accordance with the Agreement, the parties agreed that they were entitled to appeal questions of law as well as questions of mixed law and fact.
II. Issues
[6] As set out in the Amended Notice of Appeal, the following issues must be determined:
a) What is the appropriate standard of review?
b) With respect to property issues:
Did the Arbitrator err by relying on hindsight in his determination of the property issues between the parties?
Did the Arbitrator err in failing to consider the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B in his analysis of the funds advanced to Vy Truong Trinh?
c) With respect to income and support:
Did the Arbitrator err in law by determining spousal support prior to determining the issues of equalization and property, resulting in the Arbitrator failing to consider the equalization payment Abbey owed Sonny when he calculated a proper spousal support award?
Did the Arbitrator err in law by failing to provide adequate reasons for the level of income imputed to Sonny in his calculations?
Did the Arbitrator err in law by failing to provide reasons for departing from the Spousal Support Advisory Guidelines (“SSAG’s”) and failing to advert to or apply the “Rule of 65”?
In making an award for lump sum spousal support, did the Arbitrator err in law by failing to consider the compensatory elements and calculating a lump sum spousal support based on an 11-year duration, notwithstanding the Appellant’s entitlement to indefinite support?
d) With respect to jurisdiction:
Did the Arbitrator exceed his jurisdiction by requiring the parties to retain an accountant and prepare amended tax filings?
Did the Arbitrator exceed his jurisdiction by directing the parties to retain the Respondent’s litigation expert for that purpose?
Did the Arbitrator improperly defer his exclusive jurisdiction to determine the issues enumerated in the parties’ Mediation-Arbitration to a third-party expert?
e) With respect to all issues:
Did the Arbitrator apply a higher degree of scrutiny to the Appellant’s evidence than that proffered by the Respondent?
Did the Arbitrator err in law by engaging in impermissible conjecture and speculation by drawing inferences that did not flow logically and reasonably from established facts?
Did the Arbitrator commit palpable and overriding errors, draw inferences that were clearly wrong, unreasonable, and not reasonably supported by the evidence, and fail to consider relevant evidence when determining the issues under appeal?
f) With respect to the costs award:
Should Abbey be granted leave to appeal the costs award of September 12, 2021?
If so:
1 Did the Arbitrator err in finding that the Respondent was more successful with respect to costs?
2 Did the Arbitrator err in failing to consider the reasonableness of the parties as contemplated by rule 24(4) and (5) of the Family Law Rules, O. Reg. 114/99 under Courts of Justice Act, R.S.O. 1990, c. C.43 (“FLR”)?
3 Did the Arbitrator err in failing to consider the factors set out in rule 24(12) of the FLR?
[7] The Appellant seeks an Order correcting these errors and replacing same with the correct orders, considering the proper law and the facts presented at the arbitration.
III. Analysis
A. Standard of Review
[8] Family arbitrations, arbitration agreements and arbitration awards are governed by the FLR, the Arbitration Act, and s.59.1 of the Family Law Act, R.S.O. 1990, c. F.3 (“FLA”).
[9] If the arbitration agreement so provides, a party may appeal an award to the court on a question of law, on a question of fact, or on a question of mixed fact and law: ss.45(2) and 45(3), Arbitration Act. In this case, s.20 of the Agreement permits appeals only on questions of law and questions of mixed fact and law.
[10] The question of the standard of review with respect to arbitration awards has recently received judicial attention.
[11] In Wastech Services Ltd. v. Greater Vancouver Sewerage and Drainage District, 2021 SCC 7, the Supreme Court of Canada (“SCC”) indicated that it has held that the standard of review applicable in appeals under s.31 of the Arbitration Act of British Columbia is reasonableness, unless the question is one that would attract the correctness standard, such as constitutional questions or those questions of law that are of central importance to the legal system as a whole and outside the adjudicator’s expertise. The SCC also referred to its earlier decision of Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, which addressed the standard of review that the court should apply when reviewing the merits of an administrative decision. While the majority in Wastech declined to opine on the impact of Vavilov on the standard of review principles articulated in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 and Teal Cedar Products Ltd. v. British Columbia, 2017 SCC 32 (which dealt with the appeal of commercial arbitration awards), the minority opinion of Justices Côté, Brown and Rowe JJ. elected to do so.
[12] In their reasons, the minority Justices in Wastech confirmed the SSC’s decision in Vavilov that the appellate standards of review identified in Housen v. Nikolaisen, 2002 SCC 33 applied to statutory rights of appeal from administrative decisions: para. 118.
[13] The minority Justices continued in Wastech:
[119] There are important differences between commercial arbitration and administrative decision‑making [citation omitted]. Those differences do not, however, affect the standard of review where the legislature has provided for a statutory right of appeal. Appellate standards of review apply as a matter of statutory interpretation. As this Court explained in Vavilov, “a legislative choice to enact a statutory right of appeal signals an intention to ascribe an appellate role to reviewing courts” (para. 39)….
[120] Factors that justify deference to the arbitrator, notably respect for the parties’ decision in favour of alternative dispute resolution and selection of an appropriate decision‑maker, are not relevant to this interpretive exercise. What matters are the words chosen by the legislature, and giving effect to the intention incorporated within those words. Thus, where a statute provides for an “appeal” from an arbitration award, the standards in Housen apply. To this extent, Vavilov has displaced the reasoning in Sattva and Teal Cedar. Concluding otherwise would undermine the coherence of Vavilov and the principles expressed therein.
[14] I adopt the reasons of the minority in Wastech on this issue. The right of appeal of a family arbitral award is clearly set out in the FLA and the Arbitration Act. The standard of reasonableness does not apply. Accordingly, the standard of review applicable in appeals from the decision of an arbitrator is governed by Housen.
[15] On questions of law, the standard is correctness. On questions of fact, the standard is palpable and overriding error. A palpable and overriding error is where a finding of fact is clearly wrong, unreasonable, or unsupported by the evidence and the error affected the result of the motion or trial. This applies whether there is direct proof of the fact in issue or indirect proof of facts from which the fact in issue has been inferred: H.L. v. Canada (Attorney General), 2005 SCC 25, [2005] 1 S.C.R. 401, at paras. 53-56. Absent such a finding, deference is given to the trier of fact who was able to observe witnesses and hear the evidence firsthand: Housen, at para. 10, 102.
[16] On questions of mixed fact and law, there is a spectrum. Where there is an extricable legal principle, the standard of review is correctness, but with respect to the application of the correct legal principles to the evidence, the standard is palpable and overriding error: Gebremariam v. Gebregiorgis, 2017 ONSC 2000 (Div. Ct), at para 4; Housen at paras. 26-36.
[17] On appeal, the appellate court may order a new trial but is also free to make its own order and replace the trial judge’s opinion with its own: Housen at para. 8.
B. Property
a. Reliance on Hindsight
[18] I find the Arbitrator’s use of hindsight reasoning in this case to be appropriate. This ground of appeal must fail.
[19] This issue is raised in relation to the Arbitrator’s finding on the value of Sonny’s interest in a property located at 848 Eaglemount Crescent, Mississauga, Ontario (“Eaglemount”). During the marriage, Eaglemount was purchased by Sonny and his four brothers for their parents. Approximately three years prior to separation, Eaglemount was transferred to 7863489 Canada Ltd. for $350,000. Sonny and his brothers were guarantors of the mortgage on this property for $250,000. The mortgage was renewed again and was to expire in December 2015.
[20] On November 30, 2015, approximately two weeks after the date of separation, Sonny sold his one-fifth interest in the corporation for $12,630, as per the Share Purchase Agreement. Eaglemount was sold in 2019 for approximately $717,000.
[21] Sonny provided an appraisal of Eaglemount as an exhibit in his trial affidavit, which valued Eaglemount as of the date of separation at a range of $440,000 to $480,000. He calculated that after the encumbrances, real estate fees, and the net tax effect of a sale, his one-fifth interest would only be worth $8,977.50.
[22] The Arbitrator made a finding of fact that Sonny and his brothers held the property as bare trustees for their parents, who physically resided there. The Arbitrator fixed Sonny’s interest in the corporation (being his investment at $12,630 plus some interest) at a total of $13,000.
[23] Abbey alleges that the Arbitrator improperly relied on hindsight and subsequent events to come to this value. She claims the appropriate value of $50,000.
[24] I disagree with Abbey’s position. It is appropriate for the court to rely on hindsight evidence, but only in certain circumstances.
[25] In Best v. Best, 1997 CanLII 576 (ON CA), [1997] O.J. No. 4007 (Ont. C.A.), the court grappled with the evaluation of a party’s pension which depended on when that party retired. The husband had not retired as of the date of trial and the trial decision. The court stated that post valuation date facts can sometimes be relevant in determining such things as a retirement date assumption. If subsequent events could reasonably be contemplated on the valuation date, these events may be relevant since the issue to be determined is the probable age of retirement as contemplated by the pension plan holder on the date of valuation. Facts that were unknown to, or not within the contemplation of the pension holder on the valuation date are not relevant: Best at paras. 20-21. Given that the eventual retirement age was neither known nor contemplated at the time of the trial, hindsight evidence was not permitted.
[26] At the SCC, this finding was upheld with respect to the use of hindsight evidence, but the SCC opined that a different result may have prevailed had the parties chosen a different method of pension valuation: 1999 CanLII 700 (SCC), [1999] S.C.J. No. 40 (QL) at paras. 104-105.
[27] This limited use of hindsight evidence was further supported in MB v. SBB, 2018 ONSC 4893. In that case, McGee J. reviewed the caselaw and concluded that the court is generally reluctant to rely on hindsight evidence unless a subsequent change was reasonably foreseeable. She states at para. 302:
One is to rely exclusively on information available at the time of valuation (whether date of marriage or date of separation), but that information may include realistic outcomes of future events already in the process of unfolding.
[28] Based on the foregoing, hindsight evidence cannot be used to establish an actual value on the date of separation unless there are facts that are known or within the contemplation of the party on the date of separation, which facts are born out by future events.
[29] In this case, I find the Arbitrator’s use of hindsight reasoning appropriate. Firstly, the value given by the Arbitrator was for a sale that took place only two weeks after the separation. Secondly, the sale coincided with the renewal of the mortgage, which was known to Sonny on the date of separation. Finally, given the valuation of Eaglemount, the value given appears to fall within a reasonable range.
[30] Accordingly, this ground of appeal must fail.
b. Application of Limitations Act
[31] It is undisputed that Abbey advanced the sum of $94,000 to their friend Vy Truong Trinh (“Trinh”). $24,658 USD was advanced in 2000 and a further $64,000 CDN was advanced in 2001.
[32] The Arbitrator found that Abbey expected to be paid back these funds. Accordingly, he included these funds as a receivable on Abbey’s net family property statement. In his Addendum, the Arbitrator clarified that Abbey was solely entitled to the funds paid back by Trinh. Despite the late date of the advance of these funds, he makes no mention of the limitation period and the fact that Abbey would have no recourse against Trinh in the event she was not repaid.
[33] Abbey takes exception to the inclusion of this receivable, as the Arbitrator’s application of the Limitations Act was inconsistent with another historic money transfer. During the arbitration, Sonny argued that he was entitled to include in the net family property statement this debt to Ben Nguyen (“Ben”), who advanced monies to the parties in March 2005. Sonny argued that despite the passing of a limitation period, he is morally obligated to pay back Ben, who was a friend and a Buddhist Monk. Abbey’s evidence was that Ben is not interested in repayment.
[34] In the end, the Arbitrator found that due to the Limitations Act, Ben would have no recourse if he ever wished repayment. Even if the Arbitrator was to accept that a demand of a guarantor may extend the limitation, relying on Bank of Nova Scotia v. Williamson, 2009 ONCA 754, it did not apply here as no demand was ever made. Accordingly, this debt was not included on Sonny’s side of the net family property statement.
[35] With respect to the Trinh debt, Abbey does not claim in her trial affidavits that these are monies which she expects to be repaid. Abbey did not address this apparent receivable in her written closing submissions. Nor can I find in the evidence any discussion of significance about debt. Sonny indicated in his trial affidavit that this debt existed and that any right of recovery should be shared equally between them. In Sonny’s closing, he simply indicated that the monies were advanced and were not yet paid back.
[36] I have reviewed the various financial statements sworn by the parties, as included in Sonny’s Document Brief. They range in date from November 2015 to September 2018. Neither party claimed this receivable on their financial statement.
[37] It is uncontested that Abbey transferred $94,000 to Trinh with the expectation of being repaid. It appears uncontested that she was not repaid. It is also uncontested that this advance occurred long after the Limitations Act expired. Clearly this is an unenforceable debt, just as Sonny’s loan from Ben was. It should be excluded as a receivable from Abbey’s side of the net family property statement. Given the Arbitrators’ finding that the money was transferred from Abbey to Trinh, I would not disturb the Addendum dated August 12, 2021.
C. Income and Support
a. Was Spousal Support Determined Prior to Property Issues?
[38] In his Reasons, the Arbitrator stated, at paragraph 3.8, that he addresses each of the issues in separate sections, but that they are in no order of priority or importance. Nonetheless, in paragraph 13.1, the Arbitrator states, “Having dealt with the financial support for Abbey and for the children, the next important issue to determine, surrounds the division of property.”
[39] The Arbitrator’s approach is an error in law. When determining support under s.15.2(4) of the Divorce Act, R.S.C., 1985, c. 3 (2nd Supp.), the court is to look at the party’s means, which includes all pecuniary assets. The amount of equalization to which a party is entitled, and the impact of any income-generating potential associated with the assets retained by the parties, will affect a support analysis: Greenglass v. Greenglass, 2010 ONCA 675 at paras. 40-42; Leskun v. Leskun, 2006 SCC 25 at para. 29.
[40] Accordingly, issues of property should be determined first. It also eliminates the risk that a payee’s ability to become economically independent is considered twice: Hartshorne v. Hartshorne, 2004 SCC 22 at para. 56. Sonny concedes this error but submits that it was “an error of form rather than of substance” and had no impact on the trial’s outcome.
[41] I have determined that Abbey’s loan to Trinh should be excluded from the net family property statement. Accordingly, Abbey’s equalization payment to Sonny is reduced from $136,010.63 to $89,010.63. Having determined that change, I should now examine whether this equalization should be considered when determining the parties’ needs and means for spousal support purposes.
[42] I agree with Sonny that this error has no impact on the result. First, I have no evidence of what income could be earned on this sum. Secondly, even if a conservative interest rate of two percent (2%) was imposed, it would have an insignificant effect. Finally, while Sonny is entitled to the equalization payment, he will not actually receive it due to the other set offs being imposed.
[43] Accordingly, while this ground of appeal is successful, it has no impact on the final award.
b. Were Adequate Reasons Given for Imputed Income?
[44] The Court of Appeal for Ontario has recently provided guidance with respect to inadequacy of reasons as a ground of appeal. In Ferguson v. Ferguson, 2022 ONCA 543, Harvison Young J.A. stated at para. 46 that the inadequacy of reasons does not provide a free-standing right of appeal. The appellant must show not only a deficiency in the reasons, but that the deficiency caused prejudice to the exercise of the right to appeal: Ferguson at para. 46, relying on R. v. W.O., 2020 ONCA 392, aff’d in 2021 SCC 8.
[45] In every case, the question to be determined is whether the reasons provide for meaningful appellate review of the correctness of the judge’s decision, bearing in mind the primary objective in r.2(3) of the FLR that emphasizes saving expense and time and dealing with cases in a manner that is appropriate to its importance and complexity: Ferguson at paras. 47-48. I find that this test also applies when reviewing the reasons, or lack thereof, of an arbitrator’s decision.
[46] In this case, Abbey sought a finding that Sonny’s income be imputed at $160,000 per year. Sonny argued that there is no basis for this imputation. Although he earned between $121,000 to $138,000 annually from 2013 to 2018, he lost his job in 2019, for cause, and he made up for lost income by withdrawing from his RRSP. His 2020 income of $65,000 was given to Sonny by his brother, for whom he worked.
[47] The Arbitrator did review Sonny’s income but in light of his desire to order a lump sum. To calculate this sum, he attached DivorceMate calculations which set Sonny’s income at $121,346, which was the income earned by Sonny in 2016, immediately after separation, and set a lump equivalent to 11 years. As a result, it can be inferred that the Arbitrator imputed this same income, namely $121,346, to Sonny until 2027.
[48] This income was lower than what Sonny earned until 2018. In 2017, Sonny declared an income of $124,831. In 2018, he declared an income of $138,606. After that, the imposition of a lump sum equivalent to 11 years resulted in an imputation of income of $121,346 from 2019 onwards.
[49] In his decision, the Arbitrator gave the following explanation for setting Sonny’s income at $121,346 for 11 years for the purposes of setting his lump sum:
9.8 Where I am having difficulty, is Sonny’s evidence that he is now earning an annual salary of $65,000, working for his brother. (I’m not sure if this is in Canadian or US funds.) Oddly enough though, and for no real explanation given, Sonny (at the time of the Arbitration) had yet to have been paid a penny for his work. Moreover, he did not produce any evidence showing any particulars with respect to the contractual relationship with his brother. Sonny maintains that he has been unable to return to Canada due to the COVID-19 pandemic, which I find very odd, considering that air traffic has been moving between Canada and the United States. Something does not add up here.
9.9 It appears from the evidence in this matter that over the years, even since he was in his late teenage years, Sonny has always been able to amass a significant amount of money due to, I assume, his ingenuity, expertise and knowledge in the computer world/field. With Sonny having been dismissed with cause from his last employment in June 2019, (the cause of which is a whole other story which we are not dealing with in this Arbitration), notwithstanding his past credentials and what appears to be extreme knowledge and talent (if I can use those words), I would think that he’s going to have some major challenges in being re-employed in the marketplace.
9.10 Abbey is asking this Tribunal to impute an income on Sonny of $160,000. I really think that is far too high. I have not considered imputing a higher income on Sonny, as it is my intention (as explained below) that a lump-sum spousal support Award be made, effective separation in November 2015.
[50] He then went on to use Sonny’s income as of 2016 to set the lump sum amount.
[51] While brief, these reasons are sufficient to allow appellant review, as required by Ferguson. He made findings of Sonny’s prior financial success due to his ingenuity, expertise, and knowledge of a particular field. He found that Sonny had “extreme knowledge and talent”. He also noted, though, that due to Sonny’s dismissal from his previous job, he may have trouble being reemployed. He also rejected the finding that Sonny is only capable of earning $65,000 and raised the possibility that this was in US dollars. The Arbitrator doubted Sonny’s claim that he was unable to return to Canada. He also found that Sonny did not provide any evidence of his efforts to find a better job. The sum imputed - $121,346 – was not randomly selected but referred to actual income earned in the past. These findings show no palpable and overriding error. These are all findings of fact that are entitled to deference with respect to his imputation of income from 2019 onwards. It is also sufficient to allow for meaningful appellate review.
[52] Accordingly, adequate reasons were provided for the imputation of income for Sonny from 2019 and this ground of appeal must fail.
c. Departure from SSAG’s and Rule of 65
[53] Abbey argues that the Arbitrator erred in law by failing to provide reasons for departing from the SSAG’s and failing to advert to or apply the “Rule of 65.” Abbey asks that the lump sum spousal support award be set aside and that she be entitled to indefinite spousal support at a rate of $4,000 per month.
[54] Appeal courts emphasize the rule that they should not overturn support orders unless the reasons disclose an error in principle, a significant misapprehension on the evidence, or unless the award is clearly wrong. This recognizes that the discretion involved in making a support order is best exercised by the judge who has heard the parties directly. It promotes finality and recognizes the importance of the appreciation of the facts by the trial judge: Hickey v. Hickey, 1999 CanLII 691 (SCC), [1999] 2 S.C.R. 518, at para. 12.
[55] That being said, the SSAG’s are the presumptive starting point for awarding support. They are not binding but should not be lightly departed from. Any departure from them requires adequate explanation: Slongo v. Slongo, 2017 ONCA 272 at para. 105; McKinnon v. McKinnon, 2018 ONCA 596 at para. 24.
[56] The SSAG’s suggest that where the recipient’s age plus the duration of the relationship is greater than 65, an indefinite award of spousal support is appropriate: Djekic v. Zai, 2015 ONCA 25 at para. 9; Climans v. Latner, 2020 ONCA 554 at para. 3. This is referred to as the “Rule of 65”.
[57] For support to terminate, there must be a realistic prospect of the spouse being able to become self-sufficient. Promoting self-sufficiency cannot be the only consideration that determines the duration of a support order. The court also has to take into account the recipient spouse's age, skills, education, opportunities for retraining and, importantly, her realistic prospects of being able to find a job that enables her to become self-sufficient: Reisman v. Reisman, 2014 ONCA 109, 118 O.R. (3d) 721, at para. 28. This was recently reiterated in McGuire v. Bator, 2022 ONCA 431 at para. 29.
[58] I have reviewed the reasons of the Arbitrator in this regard. In his reasons, he considers the SSAG’s and the law with respect to the appropriateness of a lump sum award. His review of the SSAG’s, though, does not consider the appropriateness of a monthly payment if an indefinite award is granted, only a lump sum.
[59] The Arbitrator clearly believes it would be best for these individuals have a clean break. He reviewed the case of Davis v. Crawford, 2011 ONCA 294 and the various factors it set out when deciding to award a lump sum. That includes such factors as:
• ongoing conflict,
• the ability of the payor to make a lump sum payment, and
• the length of the marriage.
[60] While the Arbitrator’s consideration of the appropriateness of a lump sum payment is thorough, he provides insufficient reasons for moving away from the periodic and indefinite support model, other than the desire to end the dispute between the parties. More importantly, he provides no explanation for why he considered a duration of 11 years to be appropriate when making his award.
[61] For that reason, I find that the Arbitrator has provided insufficient reasons for departing from periodic support, and more importantly has provided no reasons for a finite award. Thus, I must allow Abbey’s appeal on that ground and substitute an appropriate order. I will substitute it for the more appropriate monthly and indefinite support order.
d. Should Lump Sum Spousal Support be Ordered?
[62] For the reasons set out above, the lump sum award will be set aside.
e. What is an Appropriate Spousal Support Order?
[63] To determine an appropriate order, I must determine the parties’ income from the evidence on the record.
[64] I have evidence of Sonny’s actual income from 2016 to 2018, to which the Arbitrator imputed nothing further. I will use Sonny’s income for these years. I have already outlined why I accept the Arbitrator’s findings on Sonny’s income from 2019 onwards. Accordingly, for the purposes of indefinite support, I defer to the Arbitrator’s finding that the appropriate income to impute to Sonny is $121,346 from 2019 onwards.
[65] With respect to Abbey’s income, the Arbitrator did impute income to her of $30,000. Contrary to Abbey’s position, the Arbitrator set out clearly his reasons for imputing an income of $30,000 to her. While he did not find that she was intentionally underemployed, he relied on other facts, such as her past earnings, experience, education, and various skills. He also factored in her lack of childcare responsibilities and the lack of evidence on her efforts to find employment. He also relied on her decision to change careers in May 2021.
[66] Section 19(1) of the Child Support Guidelines, O. Reg. 391/97, under FLA states that the court may impute an income to a party as it considers it “appropriate in the circumstances”; circumstances include various factors, like intentional underemployment. The factors listed in para. 19 are not exhaustive and do not circumscribe the court’s general discretion to impute income in other situations where it considers it appropriate to do so. The other situations need not be analogous to the circumstances listed in s.19 to provide a foundation for imputing income: Thompson v. Thompson, 2013 ONSC 5500 at para. 95; Lefebre v. Lefebre, 2020 ONSC 311 at para. 272.
[67] The Arbitrator made no palpable and overriding error with respect to Abbey’s income. I will, therefore, defer to the Arbitrator’s imputation of income to Abbey.
[68] The Arbitrator also made a finding that the mid-range was appropriate. I see no reason to interfere with that. I have also used a “without child” formula given that child support appears to have been finally determined in the Decision.
[69] Accordingly, the DivorceMate calculations found at Schedule “A” show the arrears owing to be as follows:
| Year | Monthly Amount | Yearly Total |
|---|---|---|
| 2016 | $2,731.00 | $32,772.00 |
| 2017 | $2,835.00 | $34,020.00 |
| 2018 | $3,247.00 | $38,964.00 |
| 2019 | $2,731.00 | $32,772.00 |
| 2020 | $2,731.00 | $32,772.00 |
| 2021 | $2,731.00 | $32,772.00 |
| Subtotal: | $204,072.00 | |
| Less rec'd | $72,000.00 | |
| Total: | $132,072.00 |
[70] Ongoing spousal support, as of January 1, 2022, should be $2,731 per month.
D. Exceeding Authority and Jurisdiction
[71] In the Amended Amended Notice of Appeal, Abbey outlines three ways in which she submits the Arbitrator exceeded his jurisdiction. However, in that same Notice of Appeal, Abbey does not seek any specific relief. In her submissions, Abbey argues that this award should be set aside.
a. Ordering the Parties to Refile their Tax Returns
[72] The Agreement does not grant jurisdiction to the Arbitrator to order the parties to refile their tax returns. His reasoning is understandable, given the need to understand the tax consequences of the sale of 468-476 Main Street East, Hamilton (“Hamilton”). Had the matter resolved by way of a mediation, this would be an appropriate part of the settlement.
[73] Sonny is content that this order remain in place and wishes to have this tax issue finalized. He acknowledges that the Arbitrator had no inherent jurisdiction to make this order, but claims Abbey agreed to the process, either implicitly or explicitly, and cannot resile from it now. He relies on Petersoo v. Petersoo, 2019 ONCA 624 to support the principle that a party cannot stay silent, participate in a proceeding without objection, wait to see what the ruling was, and then claim procedural unfairness when the decision is made against her: paras. 44-47.
[74] The Decision states clearly that a great deal of time was spent on trying to sort out the tax consequences of the sale of Hamilton. I infer that this includes both the mediation and the arbitration. Despite the presence of at least 3 experts, no resolution could be reached. The Arbitrator recognized that the parties could “let sleeping dogs lie,” but decided, instead, to order that the parties make a voluntary T2 disclosure find out what the actual tax consequences were.
[75] After reviewing the written closing submissions of Abbey, I disagree that she was agreeable to the experts “fixing” this issue. Even if she considered it in the mediation, or even the arbitration, the Arbitrator was clearly cognizant that he had a choice to make between two positions. In the end, the Arbitrator did not choose the position of Abbey, which was to do nothing, but instead ordered that the party refile their returns and ordered that some money be set aside for 3 years, in the event they are audited.
[76] I agree with Abbey that the Arbitrator had no jurisdiction to order the parties to refile the applicable tax return. These provisions should be set aside.
b. Ordering the Parties to Retain the Respondent’s Litigation Expert
[77] I assume, to keep the matter fair, the Arbitrator ordered – for the purposes of refiling their tax returns to deal with the sale of Hamilton – that they use Sonny’s tax solicitor and Abbey’s accountant to prepare and file T2 amendments to their tax filings. The Arbitrator further states that if these parties are unwilling, other professionals shall be retained.
[78] Given my ruling on the jurisdiction of the Arbitrator, I do not need to consider this issue.
c. Deferring his Jurisdiction to a Third Party Expert
[79] Abbey is unclear as to what expert she is referring to. Ass part of the Agreement, at paragraphs 5.1 and 5.2, the parties agreed to retain the services of Jo-Anne Fiore, BA, CFP, RRC, FDS, Acc.FM of Smart Split Divorce Solutions, to help the parties reach a resolution. Accordingly, the participation of Ms. Fiore was not improper. Given that I have agreed that Dale Barrett and Kyanh Do cannot be ordered to do the necessary tax work, it is unnecessary to address their role.
E. Miscellaneous Grounds
[80] Abbey submitted that Arbitrator applied a higher degree of scrutiny to the Appellant’s evidence than that proffered by the Respondent. For example, the learned Arbitrator granted Sonny’s for a date of marriage deduction of $253,000 in alleged savings, notwithstanding the lack of documentary evidence in support of that claim and the fact that Sonny allegedly was found to have engaged in deceptive conduct and forgery with respect to other issues.
[81] It is the role of the Arbitrator, or any trier of fact, to make these determinations, and they are entitled to the appropriate deference.
[82] With respect to the general allegations that the Arbitrator erred in law by engaging in impermissible conjecture and speculation by drawing inferences that did not flow logically and reasonably from established facts, that he committed palpable and overriding errors, and that he failed to consider relevant evidence when determining the issues under appeal, no specifics were alleged. Accordingly, these grounds of appeal will not succeed.
F. Costs
[83] On September 12, 2021, the Arbitrator released his costs decision, ordering Abbey to pay to Sonny his costs of the arbitration in the sum of $50,000 within 30 days.
[84] Given that the final decision has changed, new submissions need to be made by the parties.
[85] With respect to the costs of this appeal, the parties advised that if this appeal was granted or rejected in whole, they agree that the correct amount of costs to be awarded was $10,000. If the appeal was only partly allowed, they wished the opportunity to make submissions. Given Abbey’s partial success, this is appropriate in these circumstances.
IV. Conclusion
[86] For the foregoing reasons, I allow this appeal in part, and make the following orders:
a) Paragraph 5 of the award of the Arbitrator is set aside, and the following shall be substituted:
5a. Sonny shall pay retroactive spousal support to Abbey in the sum of $132,072.00 for the period of January 1, 2016, to and including December 31, 2021;
5b. Commencing January 1, 2022, and for every month thereafter, Sonny shall pay child support to Abbey in the sum of $2,731, based on his imputed income of $121,246 and her imputed income of $30,000;
b) Paragraph 6 of the award is varied to state:
Abbey shall pay to Sonny an equalization payment in the amount of $89,011, and payable from Abbey’s share of the net proceeds of sale as set out in paragraph 9 below.
c) Paragraph 8 of the award is set aside;
d) The charts set out in paragraph 9 of the award shall be varied in accordance with Schedule B, attached hereto;
e) Given the partial success of this appeal, the parties are invited to try to resolve the issue of costs as between themselves. If they are unable to, they are to serve and file written costs submissions on the Arbitration, limited to 3 pages each, double spaced and single sided, with costs outline, plus an additional 2 pages on the Appeal, with the same size restrictions, both on or before November 22, 2022; the other party shall serve and file their responding submissions, with the same size restrictions, on or before December 13, 2022; and
f) The remainder of the appeal is dismissed.
Fowler Byrne J.
Released: November 4, 2022
Schedule “A”
Schedule “B”
With respect to Abbey's 1/2 Share of the Proceeds
| Payment | Section in Reasons | Paragraph in Award | Amount |
|---|---|---|---|
| Payment to Sonny for arrears in Table support | 11.3 | 1 | -$24,208 |
| Payment to Sonny for retroactive section 7 expenses | 11.11 | 2 | -$10,000 |
| Payment from Sonny for Retroactive Spousal support | appeal | 5a | $132,072.00 |
| Payment to Sonny for Equalization Payment | 13 | 6 | -$89,011 |
| Payment to Sonny for Post-Separation Credits | 22 | 7 | -$15,960 |
| Both Parties: holdback from Hamilton Tax issues | 18.22 | 8 | nil |
| Subtotal: | -$7,107 | ||
| Costs: | TBD | ||
| Total: | TBD |
With respect to Sonny's 1/2 Share of the Proceeds
| Payment | Section in Reasons | Paragraph in Award | Amount |
|---|---|---|---|
| Payment from Abbey in Table support | 11.3 | 1 | $24,208 |
| Payment from Abbey for retroactive section 7 expenses | 11.11 | 2 | $10,000 |
| Payment to Abbey for Retroactive Spousal support | appeal | 5a | -$132,072.00 |
| Payment from Abbey for Equalization Payment | 13 | 6 | $89,011 |
| Payment from Abbey for Post-Separation Credits | 22 | 7 | $15,960 |
| Both Parties: holdback from Hamilton Tax issues | 18.22 | 8 | nil |
| Subtotal: | $7,107 | ||
| Costs: | TBD | ||
| Total: | TBD |
COURT FILE NO.: FS-21-0081-00
DATE: 2022 11 04
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Stephen P. Kirby, for THU (ABBEY) LE
Appellant
- and -
Robert Fernandes and Michael Miculinic, for TRUNG-SON NGUYEN
Respondent
REASONS FOR JUDGMENT
Fowler Byrne J.
Released: November 4, 2022