Court File and Parties
Court File No.: FS-13-78828-00 Date: 2023 06 22
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
Katherine Ann Mullin, Applicant
Robert M. Halpern, Jessica Brown, and Victoria Bell Varro, counsel for the Applicant
- and -
John Sherlock, Respondent
Heather Hansen and Justin Lee, counsel for the Respondent
HEARD: in person at Brampton, Ontario
REASONS FOR JUDGMENT
Bloom, J.
I. INTRODUCTION
[1] The trial in this matter related to the following claims by the Applicant: (1) a claim for $3,000,000 in monetary damages; this claim is based on unjust enrichment, quantified on a joint family venture basis for the period commencing with the start of cohabitation of the parties in November of 2000, until the date of marriage, September 8, 2012; (2) an order that neither party owes the other an equalization payment for the period from the date of marriage to valuation date, being the date of separation, June 28, 2013; (3) a lump sum payment of spousal support, which consists of a retroactive adjustment for the period from June 28, 2013 to November 30, 2022 of $320,817 and a prospective payment for the period from December 1, 2022 until February 28, 2026 of $249,639, for a total of $570,456; and (4) prejudgment interest under s. 128(1) of the Courts of Justice Act.
[2] As a consequence of the decision of the Court of Appeal in Mullin v. Sherlock, 2018 ONCA 1063 the participation rights of the Respondent at trial were limited. The evidence adduced at trial included documentary evidence. Additionally, it included the testimony of the Applicant and the testimony of her expert, Jeffrey Feldman, who gave expert opinion evidence relating to the Respondent’s income for support purposes and the value of the Respondent’s business interests. Further, the Respondent adduced the testimony of his expert, Eli Plonka, who gave expert opinion evidence limited to an analytic critique of Mr. Feldman’s evidence regarding the value of GS Medical Packaging Inc. (hereinafter “GS Medical”).
[3] In these reasons I will set out the undisputed facts, the arguments of the parties as crystallized in oral argument which took place after the delivery of written submissions, the governing principles, and my analysis, which includes findings of fact and an application of the governing principles to the facts.
II. UNDISPUTED FACTS
[4] The Applicant was born Mach 19, 1965. The Respondent was born August 1, 1953.
[5] They began cohabiting in November of 2000.
[6] They have no children.
[7] The Applicant started to work at GS Medical in the fall of 2000 when the Respondent owned 50% of the company through another entity. He acquired the remainiing 50% in the period 2004 to 2005.
[8] The parties were married on September 8, 2012. They separated on June 28, 2013.
[9] The Applicant is currently unemployed. She takes care of her father on a full time basis.
III. ARGUMENTS OF THE PARTIES
A. Arguments of the Applicant
(i) The Claim for Unjust Enrichment
[10] The Applicant submits that the relief she is seeking for unjust enrichment and spousal support is based on her best estimates of the Respondent’s assets, liabilities, and income at relevant times; and that where there are gaps in the evidence due to the Respondent’s failure to produce adequate disclosure, the Court should draw an adverse inference based on that failure.
[11] The Applicant seeks $3,000,000 in monetary damages for unjust enrichment, quantified on a joint family venture basis, for the period commencing with the start of cohabitation by the parties in November of 2000 until the date of their marriage, September 8, 2012.
[12] The Applicant argues that a monetary award is appropriate for the unjust enrichment; and should be calculated on the basis of a share of the assets of the joint family venture proportionate to her contribution to their accumulation.
[13] She contends that the Respondent received a benefit, because she contributed substantially to the growth of GS Medical; and was pimarily responsible for maintaining the parties” properties located in Oakville, Ontario and Key West, Florida, as well as for other aspects of the family life of the parties.
[14] Further, she argues that she suffered a corresponding deprivation, because soon after the parties began dating in 2000 she gave up her work in architecture to devote herself full time to assist the Respondent in GS Medical; she was not paid for her work in GS Medical commensurate with the value of that work; and she made those sacrifices at the Respondent’s behest based on his assurance that she was investing in their joint retirement.
[15] The Applicant submits that there was no juristic reason for the deprivation that she suffered.
[16] She asserts that a monetary remedy rather than a proprietary remedy is appropriate for the unjust enrichment, given the uncertainty concerning the value of the Respondent’s interest in GS Medical.
[17] In making her claim for unjust enrichment the Applicant asks this Court to bear in mind that GS Medical is only one component of the Respondent’s wealth, that it is only one of 5 companies which he owns, and that she does not know the value of any of his companies. She further submits that he is responsible in law for her lack of knowledge, since he has breached his duty of financial disclosure; that she has done the best she can do to quantify her claim for unjust enrichment, given her lack of knowledge of his worth; and that the Court should draw adverse inferences in favour of her claim from his lack of disclosure.
(ii) No Order as to Equalization
[18] The Applicant submits that as a result of the decision of the Court of Appeal in this matter cited previously, the Respondent is unable to make a claim for an equalization payment. Moreover, she does not make one of her own.
(iii) The Claim for Lump Sum Spousal Support
[19] The Applicant relies on the agreement of the parties that any order for spousal support will be in the form of a lump sum.
[20] She seeks an order for a one time lump sum payment of $570,456, consisting of $320,817 in respect of retroactive spousal support for the period June 28, 2013 to November 30, 2022 and $249,639 for prospective spousal support from December 1, 2022 to February 28, 2026. She submits that her calculations of the lump sum give credit to the Respondent for support payments he has made, and are calculations made on a net of tax basis.
[21] The Applicant asserts that the parties cohabited from November of 2000 until June of 2013, and were married on September 8, 2012; that she was 35 when the cohabitation commenced, and 48 when the parties separated; and that she is now 57.
[22] The Applicant submits that during cohabitation and marriage she took on a disproportionate share of the homemaking duties so that the Respondent could focus on business; and that during cohabitation and marriage they had a luxurious lifestyle.
[23] She submits that she underwent during their cohabitation fertilization treatments which adversely affected her mental and physical health.
[24] She argues that during marriage and cohabitation the Respondent was the primary income earner, and that they supported their lifestyle from his income and from funds from his business interests. She contends that she has a strong claim for spousal support on a compensatory basis to compensate her for the economic disadvantage she suffered during the relationship; she asserts that she completely sacrificed her career in architecture to devote all of her time to the growth and success of GS Medical and the joint home life of the parties.
[25] She contends that she is currently unemployed and earns income of approximately $2400 monthly from her investments. She argues that she is not currently able to work, since she is living with her father in her childhood home, while she takes care of him full time; he is 84 years old and suffering from cancer.
[26] She submits that she has not worked in the field of architecture, in which she was trained, for over 20 years, and is not currently qualified to practice in that profession.
[27] The Applicant alleges that the income of the Respondent is $675,000 annually, being the average of his income over 2013, 2014, and 2015 as calculated by Mr. Feldman.
[28] She asks for an adverse inference against the Respondent on issues where he has not produced income disclosure for the years 2016 to the present.
[29] The Applicant seeks prejudgment interest under s. 128(1) of the Courts of Justice Act.
B. Arguments of the Respondent
(i) The Claim for Unjust Enrichment
[30] The Respondent submits that the Applicant has failed to meet her burden of proof to establish unjust enrichment.
[31] He submits that a joint family venture may form the basis of an unjust enrichment; that to obtain an award for unjust enrichment arising from a joint family venture, the Applicant must first demonstrate that a joint family venture existed, and then show that there was a substantial link between her contribution to the joint family venture and the accumulation of wealth or assets.
[32] He further submits that the determination of whether there was a joint family venture is a question of fact; and that the key considerations in determining whether a joint family venture existed are the mutual effort of the parties, the economic integration of the parties’ finances, the actual intent of the parties, and the priority of the family.
[33] The Respondent submits that a finding of unjust enrichment requires proof of enrichment of one party, corrresponding deprivation of the other, and an absence of a juristic reason for the enrichment and deprivation.
[34] He submits that to determine the remedy for the unjust enrichment the court must consider whether monetary damages are adequate, having regard to the existence of bars to recovery of monetary damages and special ties of the party, seeking a remedy, to the property in issue; and that, additionally, if monetary damages are adequate, the court must determine whether they should be quantified on a fee for service i.e. value received, basis, or value survived basis.The Respondent submits that the value survived basis is used when it is impossible to compensate the claimant for their contribution on a fee for service basis; that the value survived approach is normally used where the claimant’s contribution resulted in wealth creation, and it would be unfair to deprive them of the wealth accumulation which they helped create; and that the value survived method provides the claimant a monetary remedy quantified on the basis of the value of their proportionate share of the wealth created.
[35] The Respondent submits that the burden of proof on the Applicant is the same at this trial where the Respondent has had limited participation rights, as it would be at a trial where his rights were not limited.
[36] He submits that the evidence of the Applicant regarding her compensation at GS Medical was neither reliable nor credible; for example, he argues that her reliability and credibility were undermined, because she misrepresented in her curriculum vitae that she had graduated from the University of Waterloo with a bachelor’s degree in architecture.
[37] He contends that she was a salaried employee at GS Medical and received a salary for every year between 2001 and 2011.
[38] The Respondent argues that there was no joint family venture in the case at bar. Rather, when the Applicant performed minor roles in the business interests he operated, she was compensated for time and effort. He also states that her work at GS Medical was consistent with her job description, or time-limited and capable of being quantified.
[39] The Respondent contends that cases where a joint family venture has been proven as between married persons are exceedingly rare.
[40] The Respondent submits that the Applicant’s expert, Mr. Feldman, testified that the principal scope limitation of his work relative to quantifying the value of GS Medical was a lack of an equipment appraisal for GS Medical, but that the Applicant never asked the Respondent for such an appraisal.
[41] The Respondent argues that, the far from proving that there was a terrible inequity which justified her claim for unjust enrichment, the Applicant entered the relationship with virtually no assets and left with a 50% share of the Florida and Canadian homes, substantial cash, and chattels and art valued at a substantial amount. He argues that, even if her claim is proven, the remedy is a monetary one quantified as the compensation she did not receive for her work at GS Medical. He emphasizes that she did not build GS Medical, but rather was a salaried employee.
[42] The Respondent responds to the Applicant’s contentions of non-compliance with his duties of financial disclosure by his argument that the Applicant had a positive duty to ask for this disclosure, especially after the judicial limitation of his participation rights for non-disclosure; instead, contends the Respondent, she did not do so. In particular, she did not ask for an appraisal and related information regarding the equipment of GS Medical.
(ii) The Claim for Lump Sum Spousal Support
[43] The Respondent argues that the Applicant’s claim for spousal support on a compensatory basis is weak for a number of reasons. First, the parties cohabited for only 12 and one half years, from November of 2000 until June of 2013. Second, the Respondent was 60 on the date of separation, while the Applicant was much younger, 48. Third, there were no children of the relationship. Fourth, the Applicant’s career was not compromised by the relationship with the Respondent; during their relationship she worked full time at GS Medical and was paid for that work. In sum he argues that her claim for compensatory spousal support is weak, because she was not disadvantaged in her career by her contributions to their family unit.
[44] The Respondent also argues that the Applicant’s claim to non-compensatory spousal support is weak.
[45] The Respondent submits that the Applicant has an obligation to become self-sufficient; that she is clearly employable; and that she is currently choosing not to earn income and become self-sufficient.
[46] The Respondent submits that, because his income for spousal support purposes exceeds $350,000 yearly, being his date of separation income of $450,000, the Spousal Support Advisory Guidelines formulas do not presumptively govern the amount and duration of spousal support he is to pay; rather, an award of spousal support is largely discretionary in these circumstances. Relevant factors in the exercise of the discretion include the history of the financial circumtances of the parties during the marriage and their likely future circumstances.
[47] The Respondent argues that I should impute yearly income of between $40,000 to $50,000 to the Applicant for support purposes.
[48] The Respondent submits that any potential entitlement of the Applicant to spousal support has already been satisfied or overpaid.
IV. GOVERNING PRINCIPLES
A. Unjust Enrichment
(i) General Principles
[49] In Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269 at paras. 36 to 45 Justice Cromwell for the Supreme Court of Canada set out the principles of unjust enrichment, and, in particular, their application in the context of a joint familly venture.
[50] First, the claimant must demonstrate that they gave the other party a benefit which can be restored in specie or by money.
[51] Second, that benefit must be shown by the claimant to be have subjected them to a corresponding deprivation. Such a deprivation has been held to include the unpaid provision of services, domestic or otherwise, or labour.
[52] Third, the benefit and corresponding detriment must be shown to have taken place without a juristic reason. A juristic reason can include one of the established categories such as a contract or disposition of law. However, there is a second type of juristic reason. It is based on justice, and looks to the reasonable expectation of the parties and public policy considerations. If there is no juristic reason fitting within an established category, the claimant has made out a rebuttable case of absence of a juristic reason; the other party then has a de facto burden to show why the enrichment should be retained, i.e. to show the existence of the second type of juristic reason.
(ii) Joint Family Venture
[53] In Kerr v. Baranow, supra at paras. 87 to 99, Justice Cromwell for the Court discussed the determination of whether there was a joint family venture in the context of a claim for unjust enrichment.
[54] He held that whether there was a joint family venture is a question of fact. Moreover, he stated that in making that determination a court must consider all of the relevant circumstances. Those include whether the parties worked collaboratively towards common goals such as by pooling of effort and team work, whether they integrated their economic efforts such as by operating a family business together, whether the parties actually intended to share in the wealth they jointly created as shown by their express words or as inferred from their conduct or other circumstances, and whether a party has made financial sacrifices for the sake of the family unit.
(iii) Remedy
[55] In Martin v. Sansome, 2014 ONCA 14 at paras. 48 to 52, A.C.J.O. Hoy for the Court set out the principles applicable to the issue of remedy for unjust enrichment in a case of a joint family venture.
[56] First, a monetary award, rather than a proprietary award such as a constructive trust, will be appropriate, unless a monetary remedy will be insufficient to address the unjust enrichment given the presence of bars to recovery, or special ties to the property that cannot be remedied monetarily.
[57] Second, where a monetary remedy is appropriate, it is to be calculated as the value of the share of the joint family venture wealth created as a result of the claimant’s contributions. In Kerr v. Baranow, supra at para. 102 Justice Cromwell discussed the proper approach to this task:
102 The answer is fairly straightforward when the essence of the unjust enrichment claim is that one party has emerged from the relationship with a disproportionate share of assets accumulated through their joint efforts. These are the cases of a joint family venture in which the mutual efforts of the parties have resulted in an accumulation of wealth. The remedy is a share of that wealth [page321] proportionate to the claimant's contributions. Once the claimant has established his or her contribution to a joint family venture, and a link between that contribution and the accumulation of wealth, the respective contributions of the parties are taken into account in determining the claimant's proportionate share. While determining the proportionate contributions of the parties is not an exact science, it generally does not call for a minute examination of the give and take of daily life. It calls, rather, for the reasoned exercise of judgment in light of all of the evidence.
B. Spousal Support
(i) Applicable Statutory Provisions
[58] s. 15.2 of the Divorce Act provides:
Spousal Support Orders
Spousal support order
15.2 (1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse.
Interim order
(2) Where an application is made under subsection (1), the court may, on application by either or both spouses, make an interim order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse, pending the determination of the application under subsection (1).
Terms and conditions
(3) The court may make an order under subsection (1) or an interim order under subsection (2) for a definite or indefinite period or until a specified event occurs, and may impose terms, conditions or restrictions in connection with the order as it thinks fit and just.
Factors
(4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including
(a) the length of time the spouses cohabited;
(b) the functions performed by each spouse during cohabitation; and
(c) any order, agreement or arrangement relating to support of either spouse.
Spousal misconduct
(5) In making an order under subsection (1) or an interim order under subsection (2), the court shall not take into consideration any misconduct of a spouse in relation to the marriage.
Objectives of spousal support order
(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should
(a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;
(b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;
(c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and
(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.
[59] S. 19 of the Federal Child Support Guidelines addresses the imputation of income for support purposes:
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.
Reasonableness of expenses
(2) For the purpose of paragraph (1)(g), the reasonableness of an expense deduction is not solely governed by whether the deduction is permitted under the Income Tax Act.
(ii) Principles Explained
[60] The Spousal Support Advisory Guidelines: The Revised User’s Guide April 2016 prepared by Professor Carol Rogerson and Professor Rollie Thompson provides guidance on a number of issues before me. I intend to quote relevant passages form that document, since they summarize applicable principles.
[61] At pages 5 to 6 the issue of entitlement is discussed:
(a) The principles of entitlement
Compensatory claims are based either on the recipient’s economic loss or disadvantage as a result of the roles adopted during the marriage or on the recipient’s conferral of an economic benefit on the payor without adequate compensation.
Common markers of compensatory claims include: being home with children full-time or part-time, being a “secondary earner”, having primary care of children after separation, moving for the payor’s career, supporting the payor’s education or training; and working primarily in a family business. Some lawyers and judges erroneously think that any long marriage gives rise to compensatory support, but the Ontario Court of Appeal decision in Fisher, above, makes clear that this is incorrect. Compensatory support is to be distinguished from noncompensatory support (see below), which is based upon economic interdependency and loss of the marital standard of living.
Non-compensatory claims involve claims based on need. “Need” can mean an inability to meet basic needs, but it has also generally been interpreted to cover a significant decline in standard of living from the marital standard. Non-compensatory support reflects the economic interdependency that develops as a result of a shared life, including significant elements of reliance and expectation, summed up in the phrase “merger over time”.
Common markers of non-compensatory claims include: the length of the relationship, the drop in standard of living for the claimant after separation, and economic hardship experienced by the claimant.
[62] At page 19 the imputation of income is addressed:
There must be an evidentiary basis to attribute or impute income under s. 19(1). Where a spouse is not employed, but should be working part-time or full-time under s. 19(1)(a), it is straightforward to impute a minimum wage income, as a court can take judicial notice of the minimum wage in the jurisdiction. To prove that a spouse could earn more than the minimum, evidence will be needed. The case law under s. 19(1)(a) will be helpful, e.g. Drygala v. Pauli (2002), 61 O.R. (3d) 711 (Ont.C.A.).
[63] At page 24 the Without Child Support Formula is discussed:
7 The Without Child Support Formula (SSAG Chapter 7)
In cases where there are no dependent children, the without child support formula applies. This formula covers a wide range of fact situations: marriages of every length—short, medium and long—in which there were no children; and long marriages where the children are now adults.
This formula relies heavily upon length of the relationship to determine both the amount and duration of support. Both amount and duration increase with the length of the relationship. This formula is constructed around the concept of merger over time which offers a useful tool for implementing the mix of compensatory and non-compensatory support objectives in cases where there are no dependent children.
[64] Although the parties have agreed that, if spousal support is appropriate, it should be ordered as a lump sum, it is helpful to set out guidance in this area provided by the Ontario Court of Appeal in Davis v. Crawford, 2011 ONCA 294, [2011] O.J. No. 1719 at paras. 51 to 76 (Ont. C.A.):
(3) The Principles for Awarding Lump Sum Spousal Support
51 We reject the appellant's submission that Mannarino should be treated as restricting a court's ability to award lump sum spousal support to situations "where there is a real risk that periodic payments would not be made" or to other limited and "very unusual circumstances". To the extent that Mannarino has been interpreted in that way, in our view, that interpretation is incorrect.
52 Both the Family Law Act, R.S.O. 1990, c. F.3 and the Divorce Act (1985, c. 3 (2nd Supp.)) contain provisions conferring a broad discretion on judges to make an award of periodic or lump sum spousal support, or to make an award comprising both forms of support.
53 Sections 34(1) (a) and (b) of the Family Law Act provide as follows:
- (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; [and] (b) requiring that a lump sum be paid or held in trust. [Emphasis added.]
54 Section 15.2(1) of the Divorce Act reads as follows:
15.2 (1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse. [Emphasis added.]
55 Both Acts include sections addressing the purposes of an order for spousal support and the factors to be taken into account in making such an award: see Appendix 'A'.
56 Specifically, s. 33(8) the Family Law Act provides that the purposes of spousal support are to:
(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).
57 None of these sections contains restrictions of the type set out in Mannarino.
58 Had Parliament or the Legislature intended that the discretion to make an award of lump sum spousal support to a married or an unmarried spouse be as highly constrained as the appellant argues is prescribed in Mannarino, those bodies surely would have said so. Moreover, we can find nothing in the legislative history relating to either Act, or to predecessor Acts, suggesting such an intention.
59 However, the spousal support provisions in both Acts and the jurisprudence interpreting those provisions (including Mannarino and its progeny) do provide considerable guidance concerning the factors that should be considered in determining whether an award of lump sum spousal support is appropriate in any particular case.
60 It is well accepted - and undisputed - that a lump sum award should not be made in the guise of support for the purpose of redistributing assets: Mannarino; Willemze-Davidson v. Davidson (1997), 98 O.A.C. 335 (C.A.), at para. 32. Moreover, the governing legislation does not recognize redistribution of assets as one of the purposes of a spousal support award.
61 That said, a lump sum order can be made to "relieve [against] financial hardship, if this has not been done by orders under Parts I (Family Property) and II (Matrimonial Home)": Family Law Act, s. 33(8)(d).
62 In any event, the purpose of an award must always be distinguished from its effect. Any lump sum award that is made will have the effect of transferring assets from one spouse to the other. The real question in any particular case is the underlying purpose of the order: Willemze-Davidson at para. 32.
63 Similarly, it is well accepted that an important consideration in determining whether to make a lump sum spousal support award is whether the payor has the ability to make a lump sum payment without undermining the payor's future self-sufficiency.
64 Under s. 33(9) of the Family Law Act, "[i]n determining the amount and duration, if any, of support for a spouse ... in relation to need, the court shall consider" among other things:
(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;
(d) the respondent's capacity to provide support. [Emphasis added.]
65 These statutory provisions make it clear that ability to pay is an important consideration in making an award of spousal support, including lump sum spousal support.
66 Most importantly, a court considering an award of lump sum spousal support must weigh the perceived advantages of making a lump sum award in the particular case against any presenting disadvantages of making such an order.
67 The advantages of making such an award will be highly variable and case-specific. They can include but are not limited to: terminating ongoing contact or ties between the spouses for any number of reasons (for example: short-term marriage; domestic violence; second marriage with no children, etc.); providing capital to meet an immediate need on the part of a dependant spouse; ensuring adequate support will be paid in circumstances where there is a real risk of non-payment of periodic support, a lack of proper financial disclosure or where the payor has the ability to pay lump sum but not periodic support; and satisfying immediately an award of retroactive spousal support.
68 Similarly, the disadvantages of such an award can include: the real possibility that the means and needs of the parties will change over time, leading to the need for a variation; the fact that the parties will be effectively deprived of the right to apply for a variation of the lump sum award; and the difficulties inherent in calculating an appropriate award of lump sum spousal support where lump sum support is awarded in place of ongoing indefinite periodic support.
69 In the end, it is for the presiding judge to consider the factors relevant to making a spousal support award on the facts of the particular case and to exercise his or her discretion in determining whether a lump sum award is appropriate and the appropriate quantum of such an award.
70 As we have said, we do not endorse the submission that lump sum spousal support awards must be limited to "very unusual circumstances" as a matter of principle. Nonetheless, we agree that most spousal support orders will be in the form of periodic payments. To a large extent, this is for four very practical reasons.
75 Irrespective of whether the proposed support is periodic or lump sum, it is incumbent upon counsel to provide the judge deciding the matter with submissions concerning the basis for awarding and the method of calculating the proposed support, together with a range of possible outcomes. Further, it is highly desirable that a judge making a lump sum award provide a clear explanation of both the basis for exercising the discretion to award lump sum support and the rationale for arriving at a particular figure. Clear presentations by counsel and explanations by trial judges will make such an award more transparent and enhance the appearance of justice. Over time, this approach will undoubtedly foster greater consistency and predictability in the result.
76 As part of this approach, where an award of lump sum spousal support is made as a substitute for an award of periodic support, it is preferable that, with the benefit of submissions from counsel, the judge consider whether the amount awarded is in keeping with the Spousal Support Advisory Guidelines (Ottawa, Department of Justice, 2008) (the "Guidelines"). If it is not, some reasons should be provided for why the Guidelines do not provide an appropriate result: Fisher v. Fisher (2008), 2008 ONCA 11, 88 O.R. (3d) 241 (C.A.), at para. 103.
[65] The Revised User’s Guide at page 20 discusses some aspects of calculation of income that are of assistance in a case such as the one at bar where there are difficulties in calculation of the income of the parties:
(d) Using alternative incomes, to estimate ranges
In some circumstances, it may be difficult to ascertain the precise income of a payor or a recipient. There may be uncertainty about income, or difficult judgments in imputing income, or inadequate evidence at the interim stage. One way to solve this common problem is to estimate different ranges for amount, based upon alternative income hypotheses. Usually there will be some overlap in the ranges, which can help in choosing a specific amount. The B.C. Court of Appeal accepted this approach in upholding the variation decision in Beninger v. Beninger, 2009 BCCA 458. In a case above the ceiling, the trial judge had considered ranges for incomes of $366,400 and $416,400, thanks to an uncertain bonus for the payor, and then opted for an amount at the low end of the higher-income range, which fell in the middle of the lower-income range. For an excellent example of this approach, in a high-income interim support case, see Saunders v. Saunders, 2014 ONSC 2459. For other interim examples, see Kozek v. Kozek, 2009 BCSC 1745 (Master), affirmed on appeal 2009 BCSC 1663 (dividend income); Muzaffar v. Mohsin, [2009] O.J. No. 4005 (S.C.J.) (husband self-employed) and Stork v. Stork, 2015 ONSC 312 One other example would be those cases where a court debates whether to impute income to a support recipient, or how much, in a “self-sufficiency” case. In the same fashion as for the payor, alternative incomes will usually generate overlapping ranges. Where the income disparity is great, there will be considerable overlap, often simplifying the outcome, as was the case in Teja v. Dhanda, 2009 BCCA 198 (trial judge considered ranges for wife’s incomes of $25,000 and zero). See also P.D.E. v. A.J.E., 2009 BCSC 1712 (wife underemployed, ranges determined for incomes of $20,000, $40,000 and $50,000, terminating step-down order made).
[66] The Revised User’s Guide at page 52 speaks to the tax issues which arise in the calculation of a lump sum award:
When converting periodic support to a lump sum remember to discount for tax! The lump sum award is neither taxable for the recipient nor deductible for the payor, unlike periodic support payments. The SSAG ranges are based upon the premise that periodic support is deductible by the payor and taxable in the hands of the recipient. When the SSAG ranges for amount and duration are used to calculate the lump sum amount, the global amount must then be reduced to reflect the different tax status of a lump sum award: see Samoilova v. Mahnic, 2014 ABCA 65. Although this point would seem obvious, it is missed often enough to be worth mentioning. The five cases cited above as good examples of converting a periodic award into a lump sum (Robinson, Stannett v. Green, Soschin v. Tabatchnik, G.G. v. M.A., and Vanos) all include the discount for tax. Similar issues can arise with respect to lump sum retroactive awards (see ”Retroactive Spousal Support” below).
The next question is what tax rate to use in discounting or adjusting the SSAG global amount. The same issue arises with respect to lump sum retroactive awards and much of the case law has arisen in that context. In cases where no evidence is led, some courts will fix, somewhat arbitrarily, a notional discount rate, for example 30%; see Bastarache v. Bastarache, 2012 NBQB 75 and Chalifoux v. Chalifoux 2008 ABCA 70. However, in P. (B.). v. T. (A.), 2014 NBCA 51 the New Brunswick Court of Appeal rejected this practice and required that the tax discount be based on evidence. In cases where there is evidence, and the payor and recipient have different tax rates, there is an issue of what rate to use. Computer software programs may assist in this calculation. DivorceMate, for example, offers a lump sum calculator in its software that provides discounted values for recipient and payor tax rates. A balance between the respective tax positions of the payor and recipient is necessary, most often the mid-point between the two positions (which is the common approach if software calculations are used). In some cases, it may be appropriate to edge more towards the tax position of one or the other spouse, e.g. toward the recipient where little or no tax would be payable on a periodic award or toward the payor where the periodic amounts press up against the limits of ability to pay. For a review of cases dealing with this issue see Robinson (BCCA, above).
[67] That discussion is further developed at page 110 of The Revised User’s Guide:
(c) Tax issues
Retroactive spousal support is paid in the form of a lump sum. Ordinarily, lump sum spousal support is neither deductible to the payor, nor taxable in the hands of the recipient. This means that any calculation of periodic spousal support, or increased support, must be discounted or netted down to arrive at an after-tax amount. For cases where this discounting is discussed, see Hume v. Tomlinson, 2015 ONSC 843; Samoilova v Mahnic, 2014 ABCA 65 (retroactive lump sum support 2004-08 calculated using mid-point SSAG, initially no adjustment for tax, subsequently discounted by 30%; appeal dismissed; the discount rate the judge chose was an average of the parties' respective marginal tax rates and was reasonable, based on the evidence); Robinson v. Robinson, 2012 BCCA 497; and Patton ‐ Casse v. Casse, 2011 ONSC 6182 (supplementary reasons to 2011 ONSC 4424) (balance between respective tax positions of parties necessary). See also the discussion of discounting lump sums arrived at in restructuring prospective support under “Restructuring”, above. There is now an additional method of resolving these tax issues in the case of retroactive support. In 2013, the Tax Court ruled in James v. Canada, 2013 TCC 164, that a large lump sum retroactive top-up payment ordered by the B.C. Court of Appeal could be deducted by the husband. The Canada Revenue Agency has now accepted the policy underlying this decision, in its Income Tax Folio S1-F3-C3, which was updated effective March 5, 2015 (these Folios replace the older Interpretation Bulletins, in this case IT-530R). The payor is permitted to deduct the lump sum payment where it can be identified that:
the lump sum payment represents amounts payable periodically that were due after the date of the order or written agreement that had fallen into arrears, or
the lump sum amount is paid pursuant to a court order that establishes a clear obligation to pay retroactive periodic maintenance for a specified period prior to the date of the court order.
In these cases, the recipient who must pay tax can complete Form T1198 (Statement of Qualifying Retroactive Lump-Sum Payment) and CRA will adjust the recipient’s relevant prior year taxes, to reduce the impact of the one-time payment. At the time of any settlement or order, it will be necessary to make an estimate of the tax implications for both parties, if this option is chosen. For a judicial reference to this tax method, see Frank v. Linn, 2014 SKCA 87. B512
[68] Finally, The Revised User’s Guide at pages 56 to 57 provides a helpful explanation of the problems relating to situations where the income of the payor of spousal support is over $350,000:
There are some clear principles enunciated in the case law, even if the actual outcomes are discretionary and sometimes conflicting. In J.E.H. v. P.L.H., 2014 BCCA 310, leave to appeal to SCC refused [2014] S.C.C.A. No. 412, there is a careful review of the law for cases above the ceiling, where some of these principles are stated.
The formulas for amount are no longer presumptive once the payor’s income exceeds the “ceiling”.
The ceiling is not an absolute or hard “cap”, as spousal support can and usually does increase for payor incomes above $350,000.
The formulas are not to be applied automatically above the ceiling, although the formulas may provide an appropriate method of determining spousal support in an individual case, depending on the facts.
Above the ceiling, spousal support cases require an individualized, fact-specific analysis. It is not an error, however, to fix an amount in the SSAG range, as was done in J.E.H. v. P.L.H., above. Evidence and argument are required.
Where the payor’s income is not too far above the ceiling, the formula ranges will often be used to determine the amount of spousal support, with outcomes falling in the low-tomid [sic] range for amount. How far is “not too far above” is still not clear. Somewhere between $500,000 and $700,000, it seems.
Once the payor’s income is “far” above the ceiling, then the amount of support ordered will usually be below the low end of the SSAG range, but SSAG ranges are still calculated and sometimes the outcome will fall within the SSAG range.
In light of these principles, it is critical that counsel do SSAG calculations even in high income cases. It is wise to calculate the ranges for alternative income levels: for the $350,000 ceiling (as a minimum) and for the full income (as a maximum), as well as for a range of intermediate incomes (to assist the court in triangulating an outcome). For a good example of such alternative calculations, see Saunders v. Saunders, 2014 ONSC 2459.
C. Prejudgment Interest
[69] Prejudgment interest is governed by s. 128 of the Courts of Justice Act which provides:
Prejudgment interest
128 (1) A person who is entitled to an order for the payment of money is entitled to claim and have included in the order an award of interest thereon at the prejudgment interest rate, calculated from the date the cause of action arose to the date of the order. R.S.O. 1990, c. C.43, s. 128 (1).
Exception for non-pecuniary loss on personal injury
(2) Despite subsection (1), the rate of interest on damages for non-pecuniary loss in an action for personal injury shall be the rate determined by the rules of court made under clause 66 (2) (w). R.S.O. 1990, c. C.43, s. 128 (2); 1994, c. 12, s. 44.
Special damages
(3) If the order includes an amount for past pecuniary loss, the interest calculated under subsection (1) shall be calculated on the total past pecuniary loss at the end of each six-month period and at the date of the order.
Exclusion
(4) Interest shall not be awarded under subsection (1),
(a) on exemplary or punitive damages;
(b) on interest accruing under this section;
(c) on an award of costs in the proceeding;
(d) on that part of the order that represents pecuniary loss arising after the date of the order and that is identified by a finding of the court;
(e) with respect to the amount of any advance payment that has been made towards settlement of the claim, for the period after the advance payment has been made;
(f) where the order is made on consent, except by consent of the debtor; or
(g) where interest is payable by a right other than under this section. R.S.O. 1990, c. C.43, s. 128 (3, 4).
V. ANALYSIS
[70] I intend now to address the claims before me. To do so I will make findings of fact and apply to them the governing principles set out above. In making the findings of fact I have considered all of the evidence, as well as the written and oral submissions of the parties. In applying the governing principles I have considered the written submissions of the parties as clarified and elaborated in oral argument. In that connection as regards the spousal support issue I will explain how I arrived at my conclusions, and in doing so will reference the detailed analyses provided by counsel which were very helpful, and for which I am very grateful.
A. The Claim for Unjust Enrichment
(i) The Unjust Enrichment Claim Could be Brought Despite the Marriage
[71] In the case at bar neither party invokes the equalization provisions of the FLA. The Respondent’s answer has been struck and, therefore, no such claim could be made by him. The Applicant makes no such claim, and cites as the reason the lack of financial disclosure by the Respondent. Justice Pepall speaking for the Ontario Court of Appeal in Mullin v. Sherlock, 2018 ONCA 1063 at para. 51 in substance accepted that position of the Applicant:
In my view, the motion judge properly concluded that the husband had failed to comply with his April 3, 2017 order. Although the husband provided the affidavit required by paragraph five of that order, he did not answer all of the undertakings and refusals ordered to be answered and, although the opportunity for further questioning of the appellant was available, the wife was not required to resort to further questioning of the husband to obtain those answers. In having recourse to Rule 1(8), the motion judge assessed whether the non-disclosure was relevant and determined that it was. The information ordered was required to assist in establishing spousal support and the wife’s equalization of net family property claim. The motion judge was familiar with the complexity of the case and the disclosure made, but found that the husband had repeatedly breached court orders for disclosure and had done so willfully in a deliberate attempt to frustrate the wife’s efforts to establish her claims.
[72] In Martin v. Sansome, 2014 ONCA 14, 118 O.R. (3d) 522 (Ont. C.A.) at paras. 46 to 67 Associate Chief Justice Hoy for the Court held that, while usually the equalization provisions of the FLA are the appropriate remedy for unjust enrichment in the case of a married couple, there may be situations “where monetary damages for unjust enrichment arising out of marriage cannot be adequately addressed by the equalization provisions of the FLA.” I accept that the case before me is such a case for the reasons put forward by the Applicant and accepted by the Court of Appeal as set out above. I am comforted in that conclusion by the fact that the Respondent argued only that rarely has the concept of joint family venture been applied to married spouses, not that the concept cannot be so applied.
(ii) There was Unjust Enrichment in the Context of a Joint Family Venture
a. Facts Relating to the Relationship Between the Parties
[73] The Applicant’s evidence was logical, internally consistent, and coherent. The Respondent rightly, however, pointed out in argument that she admitted in cross-examination to the misrepresentation in her resume prepared in 2013 that she had a Bachelor of Architecture degree. That admission was not made readily by the Applicant. The Applicant from time to time did not easily disclose a full answer in cross-examination.
[74] However, the logic, internal consistency, and coherence of her evidence persuaded me that it was both reliable and credible. I have accepted it to make the findings of fact to which I have applied the governing legal principles, regarding her claim of unjust enrichment. I will now set out those findings of fact.
[75] The parties started living together in November of 2000 when the Applicant was 35 and the Respondent was 47. They married on September 8, 2012, and separated on June 28, 2013 when the Applicant was 48 and the Respondent was 50; they had lived together twelve and one half years. There were no children from their relationship.
[76] During cohabitation the Applicant’s salary was used for household expenses and personal effects, while the Respondent’s salary and the business, GS Medical, funded the rest of their lifestyle. The parties lived comfortably in that manner with no limits on her spending.
[77] She started to work for the business shortly after they started to date. She was hired by the Respondent in September of 2000 to plan the new manufacturing facility for GS Medical, a medical packaging company. This plant was in operation in January of 2001 in Mississauga; it was larger than the earlier facility. She had flown with the Respondent to Denver to measure and assess equipment; then she had with him located a new facility. She did the drawings for it, and worked with tradesmen to set up services.
[78] She became purchasing manager of the company, being paid a salary but working without a contract. She did the design work for GS Medical; and at one time or other was its purchasing manager, plant manager, operations and production manager, a director, and worked in sales.
[79] The Applicant had attended the University of Waterloo to study architecture in 1994, but did not graduate. She tried to pay off a student loan, and subsequently declared bankruptcy.
[80] In the period 1996 to 2000 she did architectural work on a freelance or contract basis, but was not a licensed architect.
[81] Her work for GS Medical took up all of her time commencing in January of 2001; and, consequently, she gave up her architectural work.
[82] The Respondent had owned 50% of GS Medical in 2000 when they met. The company then occupied approximately 5000 square feet. When they separated it occupied 50,000 square feet. In 2000 it had 5 employees and two owners. At the date of separation it had 25 employees.
[83] At the date of separation the Respondent owned 100% of the company; he had acquired the other 50% during cohabitation in approximately 2004 or 2005.
[84] GS Medical moved a second time in 2009. The Applicant helped with selection of the new location. She drew up the layout of the building, arranged for the work by the trades, and set up the running of the equipment.
[85] In her work in the purchasing area, she travelled often, including to China.
[86] In 2009 at the request of the Respondent she went to the plant to assist the plant manager; she became the plant manager in 2010. She ran the plant on a day to day basis.
[87] Her salary as purchasing manager in 2009 was $76,000; it was reduced to $58,000 in 2010 despite the fact that her duties included being full-time plant manager, and the salary of the plant manager who had left was $130,000. The reduction in salary was agreed by to by her and the Respondent for the purpose of assisting the business by allowing the hiring of more employees. She and the Respondent agreed that the salary reduction was a good investment in their future retirement, since it was building the business.
[88] Her salary was further reduced in 2011. She was laid off by her husband on September 9, 2011 from her jobs as plant manager and purchasing manager. Notwithstanding being laid off, she worked until December of 2011 full time for GS Medical at the plant and office, and received no salary.
[89] She received no salary during the period September 9, 2011 to May 2, 2013.
[90] In 2013 she received no salary with an exception to be stated shortly. She was executing special projects, including travelling to China. As noted she received salary in 2013 from May 2, 2013 until separation and after separation until August 2, 2013.
[91] In 2013 the GS Medical business was starting to do well; and it did well in 2013. By the date of separation the GS Medical sales had dramatically increased, and the business was healthy.
[92] The Applicant and the Respondent had dedicated their time and resources to rebuild the business after the bank of the company had sent in a receiver on March 25, 2010 and shut the plant. The plant manager had left, and she became the plant manager when the company re-opened.
[93] She and the Respondent discussed their retirment frequently. They did not pursue investment or pensions. He told her that they were building the GS Medical business as a funding mechanism for their retirement; they would sell it to fund a retirement for themselves in their accustomed lifestyle, or would finance their lifestyle in retirement by arranging for someone to operate the business while they drew funds from it.
[94] The parties took out a million dollar loan secured by their jointly owned matrimonial home in Mississauga; and used most of the monies to finance GS Medical. They also used the insurance proceeds from a fire at their home in March of 2004 to fund GS Medical.
[95] The financial priority of both parties was GS Medical. The business of the company was the constant focus of their lives.
[96] The parties discussed their future together during cohabitation. She was the sole beneficiary under the Respondent’s will. She was designated as his attorney under a power of attorney for personal care and under a power of attorney for property.
[97] June 28, 2013 was their separation date. She stopped working at GS Medical shortly after separation. She received no severance package except for the payments already noted during the period May 2 to August 2, 2013.
[98] During cohabitation she looked after the household; and was the trip planner and cook. She was also responsible for the maintenance of the house, including hiring trades for repairs, and for care of their dogs. She prepared for the couple’s dinner parties; planned their many sailing-related trips; and prepared their sailboats for competition.
[99] She ran the house so that the Respondent could devote himself to the GS Medical business.
[100] Their matrimonial home was in Mississauga; they lived their together from 2002 to 2013. She lived their separately until it was sold in February of 2018. It burned down in March of 2004; it was rebuilt and they moved in again in September of 2005.
[101] It was registered when first purchased only in the Respondent’s name; in September of 2008 it was registered in both parties’ names.
[102] When it was sold, the equity in the house was $1.7 million. The sale closed in February of 2018. She kept its contents. The Respondent has some items acquired during cohabitation such as some art from the plant and some sailing gear.
[103] They owned in joing tenancy during cohabitation a condominium in Florida. The Respondent took its contents, including art. She did keep her personal effects from it.
[104] She had declared bankruptcy in 1997. Prior to meeting the Respondent, she was doing contract work in architecture, but was not employed full time. She did not own a home and had some savings. She also had an RSP with approximately $40,000 in it. She had no other investments. She had a net-worth of about $40,000.
[105] On September 8, 2012 when they married, she owned 50% of the matrimonial home and 50% of the Florida condominium; both of these properties had been acquired during the parties’ relationship and placed in joint tenancy. She did not make the downpayment on the matrimonial home.
[106] In 2001 she was paid a salary for her work with GS Medical as purchasing manager; the Respondent told her that she could not be paid a full salary, because his partner in the company would not like it.
[107] She misrepresented in her curriculum vitae that she had a bachelor of architecture degree.
[108] In working at GS Medical she did not at any time approve the company’s financial statements, nor did she hire employees at the management level.
[109] She stopped working as the plant manager and purchasing manager at the end of December of 2011. She was not in the plant on a daily basis in 2012. She was there for special projects such as doing inventory; she was not there much more than 20 hours. The Respondent did not want either of them constantly there; he wanted the plant to run without their being there together.
[110] The business of GS Medical was healthy in 2012.
[111] The Applicant was not able to pursue her architect’s license while she worked at GS Medical.
[112] The total value of household goods in the matrimonial home and the Florida condominium was approximately $150,000 at the date of separation; and the total value of the art in both properties was approximately $180,000 at that time. The Applicant got the vast majority of goods and art at the matrimonial home. The Respondent never disclosed what he retrieved of the contents of the matrimonial home, plant, or Florida condominium or from anywhere else.
b. The Value of GS Medical
[113] I have determined the value of the Respondent’s interest in GS Medical as at the date of marriage to be $6,000,000. I will explain my reasons.
[114] As already noted the Court of Appeal in Mullin v. Sherlock, 2018 ONCA 1063 found that the lack of financial disclosure by the Respondent justified the limitation of his participation rights in the trial.
[115] In my view it also bore upon my determination of the issue of the value of his interest in GS Medical at the date of marriage.
[116] I accepted and applied the following reasoning from the decision of Justice Kiteley in Meade v. Meade, [2002] O.J. No. 3155 (Ont. Sup. Ct.) at para. 81:
Where disclosure is inadequate and inferences are to be drawn, they should be favourable to the spouse who is confronted with the challenge of making sense out of financial disclosure, and against the spouse whose records are so inadequate or whose response to the obligation to produce is so unhelpful that cumbersome calculations and intensive and costly investigations or examinations are necessary.
[117] It is undisputed that the Respondent initially owned 50% of the equity in GS Medical, and acquired the other 50% in the period 2004 to 2005.
[118] The Applicant adduced expert opinion evidence from Jeffrey Feldman as to the value of the Respondent’s interest in GS Medical. That evidence attributed a fair market value as at the date of marriage and the date of separation of between $819,000 and $826,000 with a midpoint of $823,000. That opinion was subject to qualifications based on lack of information. The evidentiary weight of Mr. Feldman’s opinion was further weakened by the evidence of Eli Plonka, an expert called by the Respondent to critique the evidence of Mr. Feldman.
[119] I find that the Applicant was substantially hindered by the improper lack of financial disclosure from the Respondent from adducing expert opinion evidence of the value of his interest in GS Medical at the dates of commencement of their relationship, marriage, and separation.
[120] However, the Applicant did adduce two statements signed by the Respondent which addressed the issue under discussion. One was a mortgage application dated February 6, 2012 to First Capital Group; it cited the net worth of his business as $6,000,000. The second was a signed mortgage application to First State Bank of the Florida Keys dated April 26, 2013 which cited the value of his business as $6,200,000.
[121] Despite the Respondent’s contention that this type of document is unreliable as to the value of his business interests, I apply the principles set out by Justice Kiteley, and infer from the two statements of the Respondent that the value of his interest in GS Medical as of the date of marriage was $6,000,000.
c. Application of the Law to the Facts
[122] I have concluded that the Applicant has discharged her onus to prove the existence of an unjust enrichment of the Respondent on a joint family venture basis. I shall now explain my reasons for that conclusion.
[123] I find that the Applicant conferred on the Respondent a benefit. She worked constantly in the GS Medical business commencing in January of 2001 until the end of 2012. In 2012 she still did special projects for the business. She agreed with the Respondent to a salary reduction so that the business could hire more employees. From September 9, 2011 until December of 2011 she worked full time and received no salary.
[124] Additionally, the Applicant ran the household of the parties so that the Respondent could devote himself to the business. She cooked; was responsible for the maintenance of their home; took care of their dogs; planned their many sailing-related trips; and prepared their sailboats for competition.
[125] The Applicant suffered a deprivation corresponding to the benefit conferred on the Respondent. She gave up her architectural career once she commenced working full time at GS Medical. She provided underpaid and unpaid labour to GS Medical; and performed unpaid domestic services for the parties.
[126] There was no juristic reason for the benefit conferred on the Respondent and the deprivation suffered by the Applicant.
[127] Moreover, I find that the unjust enrichment of the Respondent by the Applicant took place in the context of a joint family venture. The parties acted in accorance with their agreement that they would dedicate their efforts to building the GS Medical business, which would finance their retirement by its sale or operation. The Applicant sacrificed her career in architecture and dedicated approximately a decade to realizing the goals she and the Respondent shared.
(iii) Remedy
[128] I find that a monetary remedy is appropriate for the unjust enrichment in the case before me. There is no evidence of bars to recovery of a monetary award or of special ties of the Applicant to GS Medical.
[129] I find that the quantum of the monetary award to be paid by the Respondent to the Applicant is 50% of the $6,000,000 value of his interest in GS Medical, being $3,000,000. In my view the contribution of the parties was equal in creating that $6,000,000 value. The Applicant carried out various duties, both domestic and non-domestic, reviewed above in contributing to the wealth created in GS Medical.
[130] The fact that the parties shared other assets does not detract from my conclusion. Indeed, the full circumstances of the acquisition, value, and distribution of those assets were not before me in this proceeding.
B. The Claim for Spousal Support
(i) The Facts related to the Relationship of the Parties
[131] I rely upon the undisputed facts set out above and the facts already found in the context of the claim for unjust enrichment.
[132] Further, I rely upon the findings of reliability and crediblity already made in relation to the Applicant’s evidence to make further findings of fact related to the claim for spousal support based on her evidence. I will now set out those additional findings.
[133] The Applicant was born on March 19, 1965. During cohabitation the parties had a privileged lifestyle. They owned jointly a large, 5400 square foot home in Port Credit and a condominium townhouse in Key West Florida. Their life centred around sailing; they competed internationally in sailing, and spent approximately $100,000 annually to do so.
[134] They also golfed. In that connection they spent $100,000 on a club membership, and paid annual dues of $10,000 to $15,000. They also travelled extensively to golf.
[135] They fished, hiring guides for that purpose.
[136] They owned exotic vehicles and two expensive dogs.
[137] The Applicant took horseback riding lessons.
[138] They travelled for pleasure and patronized expensive restaurants.
[139] She had a large book collection.
[140] They purchased art from artists they followed.
[141] The Applicant is in good health, and is the unpaid caregiver for her father with whom she lives; she has no other employment. She admits that her income should be found to be $30,000 annually from 2023 forward, while the Respondent argues that she should be imputed an annual income of $40,000 to $50,000 yearly.
[142] In the absence of a developed evidentiary record on the point, having regard to the Applicant’s admission, and by taking judicial notice of the current minimum wage in Ontario of $15.50 per hour, I impute an annual income to the Applicant of $30,000 from 2023 forward.
(ii) The Income of the Respondent
[143] The uncontested evidence of Mr. Feldman was that the Respondent’s income for spousal support purposes for 2013 was $748,000, for 2014 was $616,000, and for 2015 was $661,000; I accept that evidence. In view of the lack of financial disclosure by the Respondent regarding his income and applying the legal principles outlined above in that regard, I accept the the Applicant’s position that the average of the incomes for 2013 to 2015 given in evidence by Mr. Feldman, namely $675,000, is to be used as the Respondent’s income for the future spousal support calculaton.
(iii) The Application of the Law to the Facts
a. A Lump Sum Award is Warranted, if Spousal Support is Ordered
[144] The parties agree that any spousal support order which I make should be a lump sum award. Futher, applying the principles set out above, I agree that, if spousal support is ordered, a lump sum award is justified. That justification includes the fact that the Respondent has demonstrated himself unwilling to give appropriate financial disclosure, and the circumstance that this high conflict proceeding requires that the likelihood of continued litigation should be minimized by a lump sum award.
b. The Respondent is entitled to spousal support
[145] Applyling the principles set out above, I find that the Applicant is entitled to spousal support on both a compensatory and non-compensatory basis.
[146] As to the former, the Applicant while being paid for work at GS Medical, gave up her career in architecture to assist in the joint family venture in the manner I have already described.
[147] As to the basis of a non-compensatory claim, I find that the Applicant without spousal support would clearly give up the luxurious standard of living she shared with the Respondent.
c. Amount of the Award of Spousal Support
[148] In determining the amount of a lump sum award for spousal support, I have had regard to the principles set out above. In particular I have had regard to the fact that the Respondent’s income is above the ceiling for the Spousal Support Advisory Guidelines and the discretion I have in this cirumstance, as well as the issue of the tax consequences to the parties of my order.
[149] I have considered the multiple sets of calculations provided by the parties based on different incomes ascribed to the parties; these calculations were provided to assist me in my own calculations in view of the complexity of the matter, including the fact that the Respondent’s income is above the ceiling in the Guidelines.
[150] The parties agree that a sum of $399,584.50 net of tax was paid by the Respondent as spousal support. This agreement was made on the footing (a) that the Applicant is to take into her 2022 income for tax purposes the whole amount Justice Petersen on December 7, 2021 ordered be paid by the Respondent to the Applicant as lump sums retroactively and prospectively; and (b) that the sums will be deductible by the Respondent for income tax purposes.
[151] The Applicant seeks a lump sum award of $570,456.00 calculated on the basis that retroactive spousal support net of tax was owing for the period July 1, 2013 to November 30, 2022 in the amount of $720,401.50; prospective spousal support net of tax is due for the period December 1, 2022 to February 28, 2026 in the amount of $249,639.00; and the Respondent is to be credited with the payment of the agreed sum of $399,584.50. The Applicant contends that the $570,456.00 is the lump sum due net of tax.
[152] The Applicant’s calculations use the annual income figures of the Respondent as accepted by me and stated above, and annual income figures of the Applicant uncontested by the Respondent except where I have imputed income to the Applicant.
[153] The Applicant in her calculation of a lump sum uses a duration figure of spousal support of 12 years and 8 months for periodic support. Her software calcultions give a range of duration of periodic support of 6.25 to 12.5 years.
[154] The Respondent’s lump sum support calculations were based on a duration of periodic payments of 9 years and 4 months. The Respondent’s calculations used various income scenarios based on imputed income to the Applicant of $30,000 to $50,000 annually and various income amounts for the Respondent.
[155] In my view, in the circumstances of the base at bar and having particular regard to the 12.5 years of cohabitation, I find that a period of 10 years is the appropriate one for periodic payments on which to base a lump sum.
[156] I also accept the Applicant’s annual income figures for the parties as set out and explained above; further, I accept the Applicant’s support calculations based on those figures subject to the modification of the prospective support payment based on my view of what an appropriate duration would have been for periodic payments. The Applicant’s support calculations, subject to that modification, were based on the evidence, had due regard to the exceeding of the Guidelines ceiling and to the Guidelines, and were fair and reasonable in all of the circumstances of the case. The Respondent’s support calculations were not as compellingly achored in the evidence of the income of the parties.
[157] I, therefore, accept the Applicant’s calculations of the lump sum due to the Applicant from the Respondent with the one modification stated. To reiterate, in view of the reduction in what a periodic payment term would be from 12 years and 8 months to 10 years, the amount of the payment for prospective spousal support should cover only the period December 1, 2022 to June 30, 2023 and would be $44,807 net of tax using the Applicant’s calculations. The amount of the lump sum that I order paid by the Respondent to the Applicant is, therefore, $365,624.00 net of tax. At the risk of repitition the figure is reached as follows:
Retroactive Spousal Support net of tax for the period July 1, 2013 to November 30, 22 in the sum of $720,401.50 due to the Applicant
Prospective Spousal Support net of tax for the period December 1, 2022 to June 30, 2023 in the sum of $44,807.00 due to the Applicant
Spousal Support net of tax already paid by the Respondent $399,584.50
Amount Owed as lump sum by Respondent net of tax to the Applicant $365,624.00.
VI. DETAILS OF ORDER MADE
[158] As requested by the Applicant, I award prejudgment interest on the sums awarded for unjust enrichment and spousal support at the published rate as provided for in sections 127and 128 of the Courts of Justice Act. No argument was made by either party as to use of my discretion under s. 130 of the act.
[159] Neither party has made a claim for equalization; and I make no order for equalization.
[160] I shall now make orders respecting the payment of funds; they are made as a result of my orders in relation to the claims subject of the trial.
[161] I order: (1) that Spottswood Spottswood Spottswood & Sterling disburse to the Applicant $642,802.00 CAD being held in trust for her; (2) that Spottswood Spottswood Spottswood & Sterling disburse to the Applicant $642,802.00 CAD held in trust for the Respondent; (3) that Robins Appleby disburse to the Applicant $102,618.00 CAD held in trust for the Respondent; and (4) that the Respondent pay the balance of monies required by my orders respecting unjust enrichment, spousal support, and interest by certified cheque or bank draft payable to the the Applicant and to be delivered to the Applicant’s solicitor within 15 days.
[162] I grant the Application for divorce. The formal order shall issue in the normal way upon the parties fililng a draft approved as to form and content; this order is to take effect 31 days after being made. The parties were married on September 8, 2012 in Orangeville, Ontario.
VII. COSTS
[163] I shall receive written submisisons as to costs of no more than 5 pages, excluding a bill of costs. The Applicant shall serve and file her submissions within 3 weeks; the Respondent shall serve and file his submissions within 3 weeks of service of the Applicant’s submissions; and there shall be no reply.
Bloom, J.
Released: June 22, 2023