



COURT OF APPEAL FOR ONTARIO

CITATION: Gonsalves v. Scrymgeour, 2017 ONCA 630

DATE: 20170802

DOCKET: C63005

Sharpe, Lauwers and Roberts JJ.A.

BETWEEN

Prudence Gonsalves

Applicant
(Respondent in Appeal)

and

Steven Scrymgeour

Respondent
(Appellant)

Alex Finlayson, for the appellant

Elliott Birnboim and Faye Yao, for the respondent

Heard: July 19, 2017

On appeal from the judgments of Justice B. T. Glustein of
    the Superior Court of Justice, dated October 27, 2016, with reasons reported at
    2016 ONSC 6659, and dated February 22, 2017, with reasons reported at 2017 ONSC
    1034, and on motion for leave to appeal the costs order of Justice B. T. Glustein,
    dated May 1, 2017, with reasons reported at 2017 ONSC 2651.

Roberts J.A.:

[1]

The
    parties were never married but lived together in a conjugal relationship for over
    16 years. They have three children, one of whom requires ongoing financial
    child support. The appeal and cross-appeal challenge the trial judges
    determinations in relation to the issues of spousal and child support, and the
    division of the value of the family home as an asset of a joint family venture.

[2]

After
    14 days of trial and further written submissions, the trial judge granted
    judgment in favour of the respondent, determining as follows:

(i)

that there was a joint family
    venture and that the respondent was entitled to $595,530 as her share of the
    value of the family home;

(ii)

that $150,000 should be imputed
    to the appellant as annual income for the purposes of calculating spousal and
    child support and that the respondent is entitled to retroactive and future
    spousal and child support;

(iii)

that the appellant pay costs fixed
    in the amount of $280,000.

A.

Appeal

(1)

Property issues

[3]

The
    appellant does not challenge the trial judges finding that there was a joint
    family venture. However, he submits that the trial judge misapplied the test
    for unjust enrichment under a joint family venture and therefore erred in awarding
    anything on account of the respondents property claims because she did not
    contribute to the generation of wealth in the joint family venture; rather, she
    should be ordered to repay the appellant $130,000.

[4]

In
    the alternative, the appellant contends that the trial judge erred in granting
    the respondent about 50 per cent of the value of the family home because the respondents
    share should have been limited to her contributions, which the appellant
    calculated to be approximately 12 per cent of the value of the family home. Moreover,
    he submits, the value of the family home should have been assessed as of the
    date of the separation, rather than the date of trial.

[5]

Finally,
    the appellant maintains that the trial judge erred in failing to deduct the
    deposit paid by the appellant and the outstanding balance of the mortgage on
    the family home.

[6]

With
    the exception of the deduction of the outstanding mortgage on the family home, to
    which I return later in these reasons, I would reject the appellants
    submissions. All of those submissions depend on this court setting aside the trial
    judges findings of fact. Absent overriding and palpable error or error of law,
    this court cannot interfere. I see no such error here.

[7]

In
    considering the respondents property claim, the trial judge correctly framed
    his analysis, following the leading decision of
Kerr v. Baranow
, 2011
    SCC 10, [2011] 1 S.C.R. 269. As the trial judge noted, Cromwell J., writing for
    the unanimous court in
Kerr
, at para. 81, stated that a claim for
    unjust enrichment arises when the parties have been engaged in a joint family
    venture and there is a clear link between the claimants contributions to the
    joint venture and the accumulation of wealth.

[8]

The
    trial judge concluded that, on the facts of this case, there was both a disproportionate
    accumulation of assets by the appellant, linked to the respondents
    contributions to the parties joint family venture, and a corresponding
    deprivation and absence of juristic reason for the appellants disproportionate
    accumulation of assets.

[9]

The
    trial judges conclusions are grounded in his detailed factual findings about the
    parties respective monetary and non-pecuniary contributions to their joint
    family venture. In his very thorough examination of the evidence, the trial
    judge carefully examined the respective benefits received and efforts
    maintained by each party. It was open to him to weigh the factual circumstances
    of this case as he did. The trial judges findings of the parties respective
    contributions and their expectations that the family home would be shared as an
    asset of their joint family venture flow from his factual analysis. I see no
    error in either the trial judges findings or treatment of these issues.

[10]

The thrust of the
    appellants argument is that the trial judge erred in not giving more weight to
    the financial support provided by the appellant over the course of the parties
    relationship. The appellants position runs directly contrary to the approach
    mandated in
Kerr
and other cases: namely, that the courts
    consideration of the parties respective contributions and entitlement to a
    share in their joint family venture should not amount to a bookkeeping exercise
    but instead must take account of all contributions, both pecuniary and
    non-pecuniary:
Kerr
, at paras. 57-58.

[11]

I turn finally to the
    issue of whether the trial judge erred in failing to deduct the outstanding
    mortgage on the family home from its assessed value in his calculation of the
    respondents monetary remedy. In my view, he did.

[12]

The trial judge
    accepted the evidence of the appellant and his brother that the balance of the
    mortgage is outstanding and is required to be paid upon sale of the family
    home. Given these findings, it was not then open to the trial judge to ignore
    the ongoing liability for which the appellant would be solely responsible
    following the sharing of the value of the family home. That the mortgage was
    not satisfied during the course of the parties relationship meant that they
    both benefitted from the availability of the funds from the familys disposable
    income which otherwise would have been depleted to pay off the mortgage debt.

[13]

As a result, I would
    deduct the amount of $137,060 from the net value of the family home of
    $1,191,060, resulting in the amount of $1,054,000, of which the respondents
    share is $527,000 (rather than the $595,530 awarded by the trial judge).

(2)

Imputation of income and support issues

[14]

The appellant does not
    take issue with the retroactive support ordered by the trial judge. However, he
    submits that the trial judge erred in imputing a total of $150,000 of annual
    income to him for the purposes of calculating future spousal and child support.
    Specifically, while he does not challenge the trial judges imputation of
    employment income, the appellant maintains that the trial judge erroneously
    included three anomalies in the respondents income which would not be repeated
    in following years: a one-time dividend of $50,000 paid in 2013; a capital gain
    of $34,975.76 paid in 2014; and a dividend of $17,434 paid from retained
    earnings in 2015. The appellant submits that a reasonable rate of return of 3
    per cent on his investments of $442,805.68 ought to be imputed to him and that
    the imputed investment amount should be $13,284.17, which, added to the $98,000
    calculation of employment income, amounts to $111,284.17.

[15]

I would not give
    effect to these submissions.

[16]

For the appellants
    investment income, the trial judge calculated the average of the appellants
    investment income from all sources for the three-year period from 2013 to 2015
    and arrived at a figure of $52,000. He then added this $52,000 to the
    appellants employment income of $98,000, to arrive at a total of $150,000 as
    the appellants annual imputed income. It is clear from his reasons that the
    trial judge did not accept that the appellants investment income was anomalous
    or non-recurring.  Instead, the trial judge found that after 2012, the
    appellant received regular income from dividends and capital gains:  $81,000
    in 2013; $43,000 in 2014; and $34,000 in 2015; and that the appellants brother
    has paid dividends from time to time to the appellant and his siblings from
    GHL, the holding company established by their father to hold investments.  In
    my view, these findings were open to the trial judge and there is no basis to
    interfere with them.

B.

Cross-appeal

[17]

The respondent submits
    that the trial judge erred by not imputing additional income to the appellant
    in relation to the following:

(i)  his
    inheritance from his fathers estate that he donated to the University of
    Toronto to create a scholarship;

(ii)  the
    value of the appellants shares in GHL.

[18]

The appellant inherited
    approximately $1.3 million from his father. The trial judge found that in
    accordance with their fathers wishes, which were not enshrined in his will,
    the appellant and his brother had pledged their inheritances totalling about $2.6
    million to establish a scholarship at the University of Toronto.

[19]

To
    create a legally valid gift, there must be (1) an intention to make a gift on
    the part of the donor, without consideration or expectation of remuneration,
    (2) an acceptance of the gift by the donee and (3) a sufficient act of delivery
    or transfer of the property to complete the transaction:
McNamee v.
    McNamee
, 2011 ONCA 533, 106 O.R. (3d) 401, at para. 24. Here, the appellant
    had given his full share of the inheritance to his brother for the purpose of donating
    the entire inheritance in accordance with their fathers wishes. The
    appellants brother was to receive the entire tax benefit of the donation. At
    the date of the trial, the appellants brother had donated approximately $1.6
    million. A further $500,000 was to be donated in 2016; and the final $500,000
    was to be donated by December 31, 2017.

[20]

The respondent
    effectively asserts that the appellant was required to retain his inheritance from
    his father in order to pay additional spousal and child support based on the
    income generated from investing this inheritance. There is no evidence that the
    appellant had access to any income or other benefits produced from that
    inheritance. The trial judge accepted that the appellant had gifted his share
    of his inheritance to his brother in good faith for the purpose of making a
    donation to honour their fathers wishes and memory. He did not see these
    circumstances as justifying imputing any additional income to the appellant. This
    finding is entitled to deference, absent error of law or palpable or overriding
    error.  I see no such error here.

[21]

As for the
    appellants interest in GHL, the trial judge found that the appellant does not
    have access to GHLs assets nor the ability to require the sale of his share or
    the declaration of dividends. Again, these were findings that were available to
    the trial judge on the evidentiary record before him.  I see no error in his
    findings that would permit appellate intervention.

[22]

The trial judge
    correctly recognized that the appellant had received, and would continue to
    receive, dividends and other income benefits from GHL. For that reason, he included
    the supposedly one-time dividends and other benefits that the appellant
    received from GHL in order to calculate the average income that should be
    imputed to the appellant. To impute further income from the same assets would
    amount to double-counting.

[23]

Accordingly, I would
    dismiss the cross-appeal.

C.

Leave to appeal costs

[24]

While not pressed in
    oral argument, the appellant seeks leave to appeal the costs order dated May 1,
    2017. I see no basis on which to grant leave.

[25]

The trial judge found
    that the respondent had obtained a more favourable result at trial than her
    offer to settle and was entitled to full recovery costs from the date of her offer
    in accordance with the provisions of r. 18(14) of the
Family Law Rules
.

[26]

The trial judge
    reviewed the factors enumerated under r. 24(11) of the
Family Law Rules
.
    In particular, the trial judge found that the appellants pre-trial conduct in
    failing to pay spousal support and opposing an order that their youngest son
    move back in with the respondent notwithstanding the recommendation of the
    Office of the Childrens Lawyer, was unreasonable. He also found that the
    parties respective costs were comparable.

[27]

Based on all of the
    circumstances, the trial judge awarded the respondent costs in the amount of
    $280,000, which represented a significant reduction of the $376,540.32 in costs
    claimed by the respondent.

[28]

I see no error in the
    trial judges cost award and would not interfere.

D.

Disposition

[29]

For these reasons, I
    would allow the appeal with respect to the recalculation of the respondents
    share of the family home, and dismiss the cross-appeal and motion for leave to
    appeal the costs order.

[30]

I would amend the first
    paragraph of the trial judges October 27, 2016 order to read as follows:  The
    Respondent shall pay to the Applicant the amount of $527,000.

[31]

As for costs of the
    appeal, the parties agreed that $50,000 on a substantial indemnity basis and
    $35,000 on a partial indemnity basis would be appropriate.

[32]

In my proposed
    disposition, the appellant would achieve modest success on a narrow issue that
    took up little time at trial and on appeal: namely, the $68,530 reduction in
    the amount payable to the respondent as her share of the value of the family
    home. I agree with the respondents submissions that this outcome ought not to
    affect the costs disposition at trial nor justify an award of costs to the
    appellant on appeal.

[33]

The appellant
    submitted an offer to settle with respect to the appeal.  While it is open to this
    court to consider offers to settle, having reviewed the appellants offer, in my
    view it represents little compromise and has no relevance given the outcome of the
    appeal or the cross-appeal.

[34]

While in my proposed
    disposition, the respondent would prevail on many issues on the appeal, her
    cross-appeal would be dismissed.

[35]

Given the mixed
    success, I would make no order as to the costs of the appeal.

Released: August 2, 2017

L.B. Roberts J.A.

I agree Robert J.
    Sharpe J.A.

I agree P. Lauwers
    J.A.


