



COURT OF APPEAL FOR ONTARIO

CITATION: Elmgreen v. Elmgreen, 2016 ONCA 849

DATE: 20161114

DOCKET: C59879

Cronk, Rouleau and Huscroft JJ.A.

BETWEEN

Constance Marie Georgette Larouche Elmgreen

Applicant

(Appellant/Respondent
    by way of cross-appeal)

and

Jens Peter Elmgreen

Respondent

(Respondent/Appellant
    by way of cross-appeal)

James R. Webster, for the appellant/respondent by way of
    cross-appeal

Jens Peter Elmgreen, acting in person

Heard: September 22, 2016

On appeal from the judgment of Justice Lydia M. Olah of
    the Superior Court of Justice, dated April 9, 2015.

Cronk J.A.:

Introduction

[1]

This is the latest proceeding in lengthy litigation arising from the
    breakdown of the parties marriage in 2004.  Two matters are now before this
    court:

(1)

an
    appeal by the appellant, Constance Marie Georgette Larouche Elmgreen (the
    Wife), from those parts of the summary judgment granted in favour of the
    respondent, Jens Peter Elmgreen (the Husband), on April 9, 2015, varying the existing
    spousal support arrangements between the parties established by the consent
    order of Magda J. of the Superior Court of Justice, dated October 24, 2005 (the
    Consent Order); and

(2)

a
    cross-appeal by the Husband from those parts of the summary judgment: i)
    dismissing his motion to set aside or rescind the Consent Order; and ii)
    setting aside a domestic contract between the parties dated July 16, 1985 (the
    Marriage Contract) and, in the alternative, declaring that the Husband is
    estopped from asserting a claim that the Marriage Contract governs the parties
    post-separation rights and obligations.

[2]

For the reasons that follow, I would allow the appeal, require the Husband
    to pay spousal support indefinitely in the amounts set out in these reasons,
    and dismiss the cross-appeal.

Background in Brief

A.       Marriage

[3]

The Wife met the Husband in 1983 while she was living and working as a
    barmaid in her home province of Quebec.  The parties married on July 17, 1985,
    after cohabiting for approximately one year.  At the time of the marriage, the
    Wife was 24 years old, had little facility in the English language, limited
    workplace skills, and a grade 10 education.  The Husband was 42 years of age. 
    On the motion judge's findings, he was a worldly, multilingual aviator who was then
    employed as a commercial pilot.

[4]

After the marriage, the parties resided in Cameron, Ontario.  They had one
    child, a daughter born on January 15, 1991, who is now 25 years of age.  Child
    support is not in issue in these proceedings.

[5]

The Wife was a full-time homemaker throughout the marriage.  Apart from
    a brief period in 2003 when she worked on a nearby highway construction
    project, the Wife did not work outside the home after marriage.  The Husband
    worked as a commercial pilot until the spring of 1996, when he lost his pilots
    licence.  After losing his licence, he received disability insurance payments
    and, at age 60, retirement pension income.

B.      Marriage Contract

[6]

The parties entered into the Marriage Contract on July 16, 1985, the day
    before their wedding.  It is a two-page document consisting of eight
    paragraphs.  It contains the following provisions concerning spousal support:

4.     Further,
    the parties acknowledge that there is to be no provisions [
sic
] for
    support for either party and further both parties accept this provision in lieu
    of any statutory rights provided.

5.     Further
    provided that in the event of separation or divorce after 15 years, the wife shall
    be entitled to 25% of the husbands net income by way of support in addition to
    an equal division of the assets acquired during the time of the marriage. 
    Further, the wife elects to accept this provision in lieu of any statutory
    rights provided.

6.     Further,
    the provision for support is to terminate should the wife remarry or live with
    another man.

[7]

The Marriage Contract contemplated that the parties would receive
    independent legal advice regarding the agreement.  Paragraph 8 reads:

The parties hereto further agree that they will have been given
    independent legal advice in connection with the making of this agreement and in
    connection with the terms agreed upon between the parties as of the date of the
    signing hereof.

C.      Separation and Settlement

[8]

The parties separated in January or February 2004, after almost 20 years
    of marriage.  The Wife was then 43 years old, while the Husband was 60 years
    old.

[9]

On October 14, 2005, the Husband offered to settle the parties
    post-separation financial and property issues, the Wife accepted his offer, and
    the accepted offer was incorporated in Minutes of Settlement and approved by
    the court under the Consent Order.  At the time of the settlement, both parties
    were represented by counsel.

[10]

As I will discuss, the Husband challenges the enforceability of the
    Consent Order on the basis that he allegedly did not sign the Minutes of
    Settlement and, on instructions by him to his lawyer, his offer to settle was
    to be held in abeyance pending resolution of his claims that the Wife and her
    lawyer had engaged in improper conduct.

[11]

I will return to this challenge when addressing the issues raised in the
    cross-appeal.  At this point, I note that the Consent Order had its origins in
    the Husbands October 14, 2005 offer to settle, as accepted by the Wife and
    incorporated into the Minutes of Settlement.  In his offer to settle, the
    Husband offered to pay the Wife an equalization payment in the sum of $185,000
    and monthly spousal support in the amount of $2,200 commencing October 1, 2005.
    The support payments were subject to a material change in circumstances and
    review after five years.  The Consent Order mirrored these terms regarding
    spousal support.

[12]

Within days of his offer to settle, the Husband took issue with the
    settlement and the services provided to him by his lawyer.  Nevertheless, he paid
    the equalization payment and, for a period of about eight years, the monthly
    spousal support contemplated by the Consent Order.

D.      Litigation

[13]

After the settlement, the Husband twice sued his matrimonial lawyer for
    alleged negligence and breach of fiduciary duty, leading to protracted
    litigation between them.  Following a three-week trial in the Superior Court of
    Justice in May and June 2011, his first action against his former solicitor was
    dismissed.  The Husband appealed to this court.  That appeal and the Husbands subsequent
    application for leave to appeal to the Supreme Court of Canada were both
    dismissed:
Elmgreen v. Evans
, 2013 ONCA 624, leave to appeal refused,
    [2013] S.C.C.A. No. 480.

[14]

About three years later, in March 2014, the Husband commenced a second negligence
    action against his former solicitor.  In December 2014, on a motion for summary
    judgment by the solicitor, the second action was also dismissed.  The Husbands
    appeal to this court from that dismissal was in turn dismissed:
Elmgreen v.
    Evans
, 2016 ONCA 682.

[15]

In the meantime, in August 2009 and while his first action against his
    former solicitor was in progress, the Husband moved in the Superior Court for
    an order rescinding the Consent Order, determining the validity of the Marriage
    Contract, and requiring the Wife to provide full financial disclosure.  The court
    addressed the issue of financial disclosure and deferred the balance of the motion
    pending the determination of the Husbands action against his former solicitor.

[16]

On October 22, 2014, the Husband moved in the Superior Court for summary
    judgment concerning the issues raised in his outstanding August 2009 motion,
    including an order rescinding or setting aside the Consent Order, among other
    relief.  In his materials in support of his motion, the Husband also sought an order
    varying the spousal support provisions of the Consent Order based on a material
    change in circumstances.

E.       Parties Financial Circumstances at Date of
    Separation

[17]

According to the motion judges reasons, the parties conceded at the
    hearing of the motion that, as of the date of separation, the Husbands annual
    income consisted of pension income in the amount of $80,000 and the Wifes income
    was $5,000.  Before this court, the Wife disputes the annual income attributed
    to the Husband, claiming that his actual income was approximately $97,000 when
    they separated.

[18]

At or about the date of the parties separation, the Wife began to
    cohabit with Robert J. Moore, a beef cattle farmer who lived on a neighbouring
    farm.  Mr. Moore had limited income and had paid an equalization payment to his
    own wife, from whom he had recently separated, in the approximate amount of
    $102,000 by mortgaging his matrimonial home and farmland.  On cohabitation, the
    Wife and Mr. Moore shared their respective incomes and expenses, ran Mr.
    Moores farm and raised horses together.  They were still cohabiting on this
    basis ten years later, at the time of the hearing before the motion judge.

[19]

In late 2007, the Wife obtained minimum wage employment at a local Tim
    Hortons restaurant.  Her annual income from employment in the years 2010 to 2013
    ranged from approximately $17,580 to $22,750.

[20]

Commencing in 2010, the Wife began a horse boarding business at the farm
    she shares with Mr. Moore.  The Wife maintained that this business was designed
    to assist the parties daughter, by providing a business she could run. This effort
    to assist the daughter failed. However, as I will detail later in these
    reasons, it required the Wife to report her income and expenses related to the
    horse boarding business for income tax purposes.

F.       Motion Judges Decision

[21]

The motion judge treated the Husbands 2009 and 2014 motions as a
    combined motion for summary judgment.  She granted partial judgment in his
    favour, by reducing his spousal support obligation retroactively and
    terminating spousal support as of a set future date.  Specifically, the motion
    judge granted the following relief:

1)

Effective

November

1,

2010,
    the Husbands monthly spousal support obligation was reduced from the sum of
    $2,200 per month to $1,422 per month;

2)

Effective November 1, 2011 and continuing until October 1, 2016, the
    Husbands monthly spousal support obligation was further reduced to $1,219 per
    month; and

3)

Effective

November

1,

2016,
    the Husbands spousal support obligation was terminated.

[22]

In granting this relief, the motion judge imputed annual income to the
    Wife in the amount of $30,000 and annual income to the Husband in the amount of
    $80,000.  The effect of her decision was that, as of the date of her ruling, the
    Wife owed the Husband an approximate $15,000 overpayment of spousal support
    and, effective November 1, 2016, the Husband was relieved of any further
    obligation to pay spousal support.

[23]

The motion judge denied the remaining relief sought by the Husband.  She
    declined to set aside the Consent Order and held, in effect, that the Marriage
    Contract is unenforceable and does not govern the parties post-separation
    rights and obligations.

Issues

[24]

There are two main issues on the appeal:

(1)

Did
    the motion judge err by retroactively reducing the Husbands spousal support
    obligation and terminating it entirely, effective November 1, 2016?

(2)

If
    the answer to (1) is yes, what is the appropriate remedy in the
    circumstances?

[25]

There is one issue on the cross-appeal:

(1)

Did
    the motion judge err by refusing to rescind or set aside the Consent Order and by
    holding that the Marriage Contract does not govern the post-separation rights
    and obligations of the parties?

Analysis

A.       Appeal

[26]

The Wife attacks the motion judges support ruling on multiple grounds. 
    In my view, it is unnecessary for the disposition of this appeal to consider
    all the grounds advanced by the Wife.  I am satisfied that, in imputing annual
    income to the Wife and Mr. Moore, the motion judge misinterpreted the contents
    of their income tax returns.  She relied on her misapprehension of their returns
    to anchor her support ruling.  Moreover, she provided no clear notice to the
    parties of her concerns regarding the returns, or of her intention to impute
    income to the Wife and Mr. Moore in reliance on those concerns.  Finally, she
    also failed to factor changes in the Husbands annual income into her spousal
    support analysis. In light of these errors, I conclude that her spousal support
    ruling is fatally flawed.

(1)      Income Imputation to the Wife and Mr. Moore

[27]

The Husband argued before the motion judge that, because he had paid
    spousal support to the Wife for a lengthy period, he should be relieved of the
    obligation to pay any further spousal support.  In the alternative, he sought a
    reduction in his monthly spousal support payments based on a material change in
    circumstances.

[28]

In order to determine whether the Husband had established a change in
    circumstances sufficient to warrant variation of his spousal support obligation,
    the motion judge undertook a detailed review of the Wifes income tax returns
    and those of Mr. Moore for the years 2004 to 2013.  Based on this review, she held,
    at pp. 31-32, that:

1)

the Wife and Mr. Moore had been a fiscal team since 2004;

2)

they had reduced their incomes from their horse and farming operations
    as reported in their annual tax filings by claiming personal expenses as
    deductions, the full value of which should be included in their respective
    incomes for support purposes;

3)

they had been living on a combined income greater than that reported by
    them for income tax purposes, utilizing the spousal support paid by the Husband
    to support their joint lifestyle; and

4)

the Wife had used her equalization payment from the Husband to fund
    renovations to the home she shared with Mr. Moore, to pay off Mr. Moores home mortgage,
    and by writing off the interest on that mortgage against her own income, as
    well as that of Mr. Moore.

[29]

The motion judge concluded that a change in circumstances had occurred
    after the date of the Consent Order by reason of the manner in which the Wife
    and Mr. Moore had structured their financial and living arrangements, as
    described above.  Further, in the motion judges view, this change was material
    because the Wifes income had increased from $5,000 (date of separation income)
    to $17,000 - $21,200 (income in years following separation), her capital asset
    position had improved and her relationship with Mr. Moore had proven to be long-term
    and founded on the joint sharing of incomes and expenses.

[30]

The motion judge therefore held that this was an appropriate case in
    which to apply a step down approach to spousal support, that is, a gradual
    reduction in the quantum of spousal support payments, leading to a final
    termination of the Husbands spousal support obligation.

[31]

I accept that, on the evidence before the motion judge, a material change
    in the parties circumstances did occur after the date of the Consent Order. 
    In particular, as I have already said, the Wife commenced steady employment at
    a Tim Hortons restaurant in late 2007.  Based on her 2013 income tax return,
    her employment income in 2013 approximated $22,750.  The Wifes overall
    circumstances had also improved since separation as she had acquired an
    interest in the property she shares with Mr. Moore and she had been enjoying the
    benefits of income and expenses pooled with those of Mr. Moore.

[32]

That said, I agree with the Wifes submission that the motion judge
    erred in her interpretation and use of the Wifes and Mr. Moores income tax
    returns, leading her to further err in her calculation of the annual incomes to
    be imputed to the Wife and Mr. Moore for spousal support purposes.

[33]

Based on her review of the Wifes and Mr. Moores income tax returns, the
    motion judge concluded that they had understated their respective annual
    incomes by claiming personal expenses as deductions against their horse
    boarding and farm income, the full value of which should be imputed to them as
    income for spousal support purposes.  The motion judge held that annual income
    in the amount of $30,000 should be imputed to the Wife for each of the years
    2010 to 2013 and annual income should be imputed to Mr. Moore for the same
    years, in sums ranging from $30,000 (2010) to $41,000 (2013).

[34]

The difficulty with this approach in this case is that it rested on the
    motion judges misinterpretation of the contents of the Wifes and Mr. Moores
    income tax returns.  The following examples will suffice to make this point.

[35]

When considering the Wifes income for 2010, the motion judge stated, at
    p. 30:

In 2010, [the Wifes] employment income was $17,579.37.  Her
    Employment Insurance income was $1,176, and she received $26,400 in spousal
    support.  She also had a farm income in excess of $12,000.  I did not use that
    $12,000 as farm income, however I did take a look at her deductions.  She deducted
    from her farm income $4,708.65, which I deemed to be a personal expense; she
    deducted $843.86; she deducted $2,483.79; she deducted $602.24; she also
    deducted $7,430.80.  So I would impute her income outside of the employment
    income and Employment Insurance to be $30,000.

[36]

The motion judge provided no explanation for her finding that the Wife had
    a farm income in excess of $12,000 in 2010.  With respect, this was an error. 
    This amount is not reflected in the Wifes 2010 income tax return, which discloses
    gross farm income of $4,169.32. Further, no explanation for the source of this
    figure was provided to this court.  I appreciate that the motion judge
    indicated that she did not use that $12,000 as farm income.  Nonetheless, her
    finding reflects an erroneous interpretation of the Wifes 2010 income tax
    return.

[37]

The flaws in the motion judges interpretation of the Wifes 2010 income
    tax return do not end there.  The motion judge indicated that she considered
    the Wifes claimed deductions in taxation year 2010 and listed several
    deductions that, in her view, constituted personal, rather than business
    expenses.

[38]

While it is not entirely clear from her reasons, it appears that the
    motion judge added the total value of these deductions, in the aggregate sum of
    $16,069.34, to the Wifes employment income and employment insurance
    ($18,755.37) and rounded the resulting figure to impute aggregate annual income
    to the Wife for 2010 in the amount of $30,000.  In other words, she imputed $11,244.63
    in business income to the Wife, although her reported
gross
business income was only $4,169.32.  That the motion judge proceeded in this
    fashion is confirmed by her comments, at p. 27 of her reasons:

So that the litigants understand, I took the Income Tax
    Returns, I put in whatever income was reflected, I looked at the expenses, and
    identified what I perceived to be personal expenses, including any depreciation
    costs, which were paper deductions, and added them to income. If I did not
    understand wholly whether it was a personal or not personal expense, I did not
    include it as a personal expense.

[39]

The difficulty with this approach, among others, is that it produced an
    adjusted, imputed income for the Wife from her horse boarding and farm businesses
    that greatly exceeded her gross reported income from these sources.

[40]

Moreover, the motion judge stated that she imputed $30,000 of income to
    the Wife 
outside
of [her] employment income and
    Employment Insurance (emphasis added). This suggests that the $30,000 imputed
    income was in addition to the Wifes employment income and employment insurance
    for the year 2010.

[41]

With respect, this makes no sense. The total value of the deductions
    identified by the motion judge as personal expenses was $16,069.34, not
    $30,000. The Wifes 2010 income tax return does not reflect $30,000 in income
    outside of [her] employment income and Employment Insurance.

[42]

The motion judge further found that the Wife had deducted $7,430.80 from
    her farm income in 2010 on account of personal expenses.  This, too, was an
    error.  The Wifes 2010 income tax return reveals that this sum was not claimed
    as a deduction at all.  Rather, it was treated as a personal benefit to be
    offset against the Wifes business losses, thereby
reducing
the Wifes
    claimed losses from her horse boarding and farm operations by the same amount ($7,430.80).
    In other words, it was an amount included, rather than excluded, from taxable
    income.

[43]

Similar errors are also evident in the motion judges interpretation of
    the Wifes income tax returns for 2011 to 2013.  For example, the motion judge
    held that the Wife had claimed the following personal expenses as deductions
    against her business income: i) in 2011, the sum of $9,704.86; and ii) in 2012,
    the sums of $7,902.53 and $5,535.27.  The motion judge notionally added these
    amounts, or at least part of them, to the Wifes reported income and used the
    resulting notional annual income figure to impute income to the Wife, in each
    year, in the sum of $30,000.  With respect, in so doing, the motion judge again
    erred.

[44]

A proper reading of the relevant tax returns reveals that the amounts in
    question were not deductions on account of personal expenses: i) the $9,704.86
    claimed on the Wifes 2011 return and the $7,902.53 claimed on her 2012 return
    were deductions for capital cost allowance in respect of the Wifes horse
    boarding and farm businesses; and ii) the $5,535.27 cited by the motion judge
    in respect of the Wifes 2012 tax return
[1]
was not a claimed deduction but, rather, an inclusion in income from the Wifes
    businesses, which reduced her reported business losses from $20,354.27 to
    $14,999.

[45]

The motion judges reasons with respect to taxation year 2013 give rise
    to an additional concern.  For that year, the motion judge noted that the
    Wifes farm income was $5,400 and that [s]he had deductions from income to
    reduce that amount.  For that reason, I would impute her income at $30,000.

[46]

However, the motion judge provided no explanation of the nature or
    amount of the deductions from income to which she referred, or of the basis for
    imputing income to the Wife in the sum of $30,000 for 2013.

[47]

Similar errors are also evident in the motion judges consideration of
    Mr. Moores income tax returns, in relation to deductions from business income claimed
    by him in taxation years 2004 to 2013, and in the motion judges resulting calculations
    of the income to be imputed to him for those years.

[48]

The motions judges spousal support ruling rested on her imputation of
    annual incomes to the Wife and Mr. Moore and her core finding that they
    under-declared their annual incomes  at least for spousal support purposes 
    by claiming personal expenses as deductions from their business income.  The
    motion judges errors in interpreting the couples income tax returns, described
    above, fatally tainted her spousal support analysis. On this ground alone, the
    motion judges spousal support ruling cannot stand.

(2)      Hearing Fairness

[49]

Apart from the flawed calculations detailed above, the motion judges consideration
    and use of the Wifes and Mr. Moores income tax returns is troubling for a
    second reason.

[50]

The Husband did not specifically request the motion judge to impute
    income to either the Wife or Mr. Moore based on adjustments to their reported
    finances and income, as disclosed in their income tax returns.  Nor was any
    expert evidence called by either party regarding the proper interpretation of their
    returns.  The motion judges review of the returns was largely undertaken after
    the conclusion of argument on the motion, while her decision was under
    reserve.  Consequently, her interpretation of the returns and the nature of the
    specific deductions claimed and incomes reported was first disclosed to the
    parties in her reasons.

[51]

The parties, therefore, had no meaningful opportunity to address the
    motion judges concerns regarding the returns, especially her views about the
    nature and import of the claimed deductions, or to call evidence or make
    submissions on the proper interpretation of the returns in light of those concerns. 
    As a result, in my view, hearing fairness was thereby compromised.

(3)      Husbands Imputed Income

[52]

I consider it appropriate to comment on two additional aspects of the
    motion judges spousal support analysis.  First, the record indicates that the
    Husbands total annual income in the years 2010 to 2013 was as follows: 2010 -
    $103,692; 2011  $102,864; 2012  $104,441; and 2013  $104,633.  The husband
    did not contest these figures at the appeal hearing.

[53]

As I have said, the motion judge imputed $80,000 annual income to the
    Husband as of the date of separation, a figure challenged by the Wife. That
    challenge aside, it is clear that the Husbands income increased in the years
    following separation (2004: total gross income of $82,148; 2013: total gross
    income of $104,633).

[54]

Yet, the motion judge held, at pp. 25-26 and 33, that the Husbands
    annual pension income after separation did not increase significantly  apart
    from one year  except for annual indexing of his pension entitlement.  She
    further held that any increases in his pension income should not be used under
    the federal Spousal Support Advisory Guidelines (the SSAGs) to calculate an
    appropriate amount of spousal support.

[55]

The basis for these holdings is far from clear. The fact is that, by
    2013, the Husbands annual income had increased by about 27 percent since the
    date of separation. Even assuming that $30,000 annual income should be imputed
    to the Wife for spousal support purposes, given that this was a lengthy,
    traditional marriage, the differential in the Wifes and the Husbands
    post-separation incomes, based on increases in the Husbands income, should not
    be disregarded entirely.

[56]

Second, and relatedly, it is noteworthy that nowhere in her reasons does
    the motion judge address whether the Wife is entitled to compensatory support
    in accordance with the principles set out in
Moge v. Moge
, [1992] 3
    S.C.R. 813 and related cases, in addition or in the alternative to
    non-compensatory support.  Based on the length of the marriage and the evidence
    of the roles assumed by the parties during marriage, this, too, was a relevant
    and proper consideration.  It was not taken into account here.

(4)      Conclusion on Motion Judges Spousal Support Ruling

[57]

In all these circumstances, the motion judges spousal support ruling is
    unsustainable.  It is therefore open to this court to evaluate afresh the
    Husbands request for a change in his spousal support obligation.  Since that
    evaluation turns in part on the determination of the issues raised by the Husband
    on his cross-appeal, I will next consider those issues.

B.      Cross-appeal

[58]

At the conclusion of oral argument, this court dismissed the
    cross-appeal, with reasons to follow.  These are those reasons.

(1)

Consent Order

[59]

The motion judge considered her authority to set aside a consent order
    and addressed the grounds advanced by the Husband in support of his contention
    that the Consent Order should be set aside or rescinded.  She provided clear
    and cogent reasons for her refusal to do so.  I agree with her decision on this
    issue and her reasoning.  In particular, the following considerations
    overwhelmingly support the motion judges dismissal of the Husbands request to
    rescind or set aside the Consent Order.

[60]

First, the record does not support the Husbands contention that he did
    not consent to the settlement or that he did not intend to implement it.  The
    impugned court order was made on consent pursuant to a written settlement
    reached by the parties on October 14, 2005.  The Husband did not seek to appeal
    the Consent Order, which would have required leave of the court:
Courts of
    Justice Act
, R.S.O. 1990, c. C.43, s. 133.  Instead, years after the date
    of the Consent Order, he sought to have it set aside or rescinded on the basis that
    he did not sign the Minutes of Settlement and that his signature on the Minutes
    was forged or otherwise fraudulently affixed without his consent or knowledge.

[61]

However, the Husband advanced the same claim to anchor his actions against
    his former solicitor.  Those actions were dismissed, as were his appeals
    therefrom, without any finding of fraud, forgery, breach of fiduciary duty or negligence
    against his solicitor in relation to the Minutes of Settlement and any of the
    other settlement documents.

[62]

Further, and in any event, the Husband admits that he signed his October
    14, 2005 offer to settle, which the Wife accepted.  Both the Minutes of
    Settlement and the Consent Order contain identical terms relating to spousal
    support as those detailed in the offer to settle.  Although the Husband argues
    that he instructed his solicitor to hold the offer in abeyance, the record
    indicates that those instructions were communicated after the date of the
    Consent Order.

[63]

The record also includes a document entitled Acknowledgement, dated October
    14, 2005, which bears the Husbands signature.  In that document, the Husband
    stated:

I fully understand that by signing the Offer to Settle and
    following Minutes of Settlement that this matter will be finalized and there is
    no recourse for me to undo the Minutes of Settlement.

.

I am advising this Honourable Court that I am signing the Offer
    to Settle fully understanding its contents, and I have signed the Offer to
    Settle of my own free will without threat or promise.

[64]

The latter statement provides information directly to the court.  It
    therefore appears that a copy of the Acknowledgement may have been filed with
    the Superior Court in support of the Consent Order.  Regardless, apart from the
    Husbands bald assertions, there was no evidence before the motion judge, and
    there is none before this court, that the Husband did not sign the
    Acknowledgement or that it was the product of fraud or forgery.

[65]

The Husbands execution of the offer to settle and the Acknowledgement is
    wholly inconsistent with any assertion that he did not consent to or understand
    the import and legal consequences of his offer to settle and the settlement
    that followed.  The Minutes of Settlement and the Consent Order simply reflect
    the terms of the Husbands offer to settle, as confirmed in the
    Acknowledgement.  And, I again emphasize, the Husbands negligence actions
    against his former solicitor were dismissed without any finding of impropriety
    against the solicitor in relation to the settlement.  Nor has there been any judicial
    finding of any impropriety by the Wife concerning the settlement.

[66]

Second, the Husbands unsuccessful negligence suits against his former
    solicitor were premised on the validity and enforceability of the offer to
    settle and the Minutes of Settlement, as approved by the court in the Consent
    Order.  The motion judge put it this way, at p. 12 of her reasons:

Given the [Husbands] choice of action to pursue the negligence
    against the [Husbands] counsel, the [Husband] implicitly acknowledged the
    validity of the [settlement] agreement which was the basis of the [Consent
    Order].  The
sine qua non
of the negligence action was the valid
    existence of the agreement and order.

[67]

Similarly, the Husbands actions in paying the equalization payment and the
    monthly spousal support payments contemplated under the offer to settle, the
    Minutes of Settlement and the Consent Order undercut his challenge to the
    validity of the settlement, including the Consent Order.

[68]

In light of these considerations, it is my view that the motion judge
    was fully justified in refusing to set aside or rescind the Consent Order.  There
    was simply no established basis upon which to do so.  That said, the Husband
    remained free to attempt to change the spousal support arrangements effected by
    the Consent Order.  Indeed, that is part of what he hoped to achieve, and did
    achieve, on the motion before the motion judge.

[69]

Finally, I note, as observed by the motion judge, that the Husband
    delayed at least four years (and, arguably, nine years) from the date of the
    Consent Order before actively pursuing steps to set it aside.  His delay in
    seeking to do so strongly militated against granting the relief he belatedly
    sought before the motion judge regarding the Consent Order.

(2)

Marriage Contract

[70]

I reach the same conclusion concerning the motion judges ruling about the
    enforceability of the Marriage Contract.  Here, too, in my view, there was
    ample justification for denying the relief sought by the Husband.

[71]

The Husbands October 14, 2005 settlement offer, by which he offered to
    pay monthly support to the Wife in the sum of $2,200, was inconsistent with the
    terms of the Marriage Contract regarding spousal support.  The Husbands offer,
    once accepted, overtook any prior inconsistent agreement between the parties
    concerning spousal support.  On this basis alone, this ground of appeal fails.

[72]

But there is more.  Having considered the terms of the Marriage Contract
    and the parties positions and circumstances at the time of its execution, the
    motion judge held that it was highly unlikely that the Marriage Contract
    would have governed the parties as of the date of their separation because it
    would have been set aside under the provisions of the
Family Law Act
,
    R.S.O. 1990, c. F.3 and the common law.  I agree.

[73]

Several factors compel this conclusion.  On the motion judges
    uncontested findings, at pp. 13-15 of her reasons:

1)

no
    financial disclosure by the Husband appears to have taken place prior to
    formation of the Marriage Contract;

2)

there is
    no evidence that the Wife received independent legal advice regarding the
    Marriage Contract; indeed, there was evidence to the contrary before the motion
    judge;

3)

no
    financial statements or certificates of independent legal advice are referenced
    in or attached to the Marriage Contract;

4)

at the
    time of execution of the Marriage Contract, an imbalance of power existed
    between the parties, to the detriment of the Wife, created by the pending
    marriage and the lack of appreciation of the legal implications of the domestic
    contract;

5)

the Wife
    did not have an extensive opportunity to review the contents of the Marriage
    Contract or to fully understand its terms and implications prior to its
    execution;

6)

the Wife
    had no input into the drafting of the Marriage Contract, which was prepared by
    the Husbands Ontario solicitor solely on the Husbands  instructions; and

7)

the Wifes
    facility in English in 1985 and the extent of her formal education (grade 10)
    were both limited.

[74]

These key findings, which are not attacked by the Husband before this
    court, were open to the motion judge on the evidentiary record before her.  In
    light of them, I see no error in the motion judges holding that the Marriage
    Contract does not govern the parties post-separation rights and obligations.  In
    light of the factors set out above, I think it is inconceivable that this Marriage
    Contract, aptly described by the motion judge at p. 15 of her reasons as a
    kitchen table agreement, would survive scrutiny under the
Family Law Act
.

C.      Remedy

[75]

The errors in the motion judges spousal support analysis, described
    above, constitute errors in principle and reflect a significant misapprehension
    of some of the key evidence. Accordingly, they displace the usual deference to
    be accorded by a reviewing court to a motion judges discretionary spousal
    support ruling:
Hickey v. Hickey
, [1999] 2 S.C.R. 518, at para. 11.
    The issues, therefore, are what spousal support should be paid by the Husband
    to the Wife, if any, and for how long. In my view, the record before this court
    is sufficient to permit a determination of these issues, without the need to
    order a new trial with attendant delay and additional costs. I did not
    understand the parties to suggest otherwise.

[76]

I have already concluded that the motion judge was correct to hold that,
    on the evidence, a material change in circumstances occurred in this case after
    the date of the Consent Order. That change in circumstances, in my view,
    warrants a variation in the Husbands spousal support obligation on a
    retroactive and prospective basis.  However, I am not persuaded that this is a
    proper case for termination of spousal support.

[77]

The Wifes income from employment is modest. She has worked at Tim
    Hortons since late 2007, at minimum wage and without benefits. She has limited
    education and marketable skills and, on the state of the evidentiary record, no
    reasonable prospects for securing higher paying employment. To the contrary,
    the evidence indicates that she continues to experience medical difficulties
    following surgery on her wrist, which has confined her to light duties at her
    place of employment. Her ability to work indefinitely, even at minimum wage, is
    therefore uncertain and her health appears somewhat precarious.

[78]

Mr. Moores annual income is also modest. He is a beef farmer who drives
    a school bus part-time to supplement his income. This employment yields
    approximately $8-10,000 gross income per year.  His income tax returns for 2004
    to 2013 reveal gross annual incomes ranging from $16,820 (2004) to $2,242
    (2013).

[79]

Even assuming that some of the deductions claimed by the Wife and
    Mr. Moore on their income tax returns could properly be characterized as
    relating to personal expenses for spousal support purposes, the couples annual
    combined income remains modest.

[80]

In contrast, based on his reported 2013 annual income, the Husbands
    current retirement pension income approximates at least $105,000 per year. This
    level of income, which is considerably higher than that of the Wife, is
    sufficient to afford a comfortable, but certainly not a lavish, lifestyle.  It
    establishes the Husbands ability to pay ongoing spousal support.

[81]

The record reveals the following approximate incomes for the parties and
    Mr. Moore in the years 2008 to 2013:





Wifes employment-related Income

Wifes Net Income* after Farm Profit/Loss

Husbands Net Income

Mr. Moores Net Income



2008

$22,611



$101,667

$203



2009

18,330



103,922

401



2010

18,755

16,902

103,692

3,897



2011

20,477

11,752

102,864

13,003



2012

19,082

10,333

104,441

18,491



2013

22,751

13,928

104,633

2,062



*Excluding spousal support payments

[82]

Given the differential between the Husbands net income in 2013
    ($104,633) and the Wifes net income for the same year ($13,928), it is clear
    that some spousal support is required. A comparison of the Wifes net income
    from all sources in 2013, together with that of Mr. Moore, with the Husbands
    net income for the same year yields the same conclusion.

[83]

The SSAGs provide useful guidance in this regard.  Based on the incomes
    set out above (without any deduction on account of the Wifes business losses),
    the SSAGs suggest the following range for monthly spousal support in the years
    after the Wife commenced employment at Tim Hortons:





Low End

Mid-Range

High End



2008

$1,976

$2,036

$2,635



2009

2,140

2,496

2,853



2010

2,123

2,477

2,831



2011

2,060

2,403

2,746



2012

2,134

2,490

2,845



2013

2,047

2,388

2,729



[84]

The Wife acknowledges that some variation in the Husbands spousal
    support payments is warranted in all the circumstances, on both a partially
    retroactive and prospective basis. She proposes the following changes:

(1)

October 2005 to October 1, 2010: $2,200 per month, as paid by the
    Husband

(2)

November 1, 2010 to October 1, 2012: 1,900 per month

(3)

November 1, 2012 to October 1, 2014: $1,750 per month

(4)

November 1, 2014 for an indefinite period: $1,600 per month

[85]

The Husband does not specifically attack this proposal, nor has he put
    forward an alternative proposal, should the appeal otherwise be allowed.

[86]

I regard the Wifes variation proposal as both reasonable and
    appropriate.  First, with the exception of the proposed monthly support amount
    for the period October 2005 to October 2010, the amounts proposed by her are
    well below the low end of monthly support payments set out in the SSAGs for the
    relevant years, based on the continuing differential between the Wifes and the
    Husbands annual incomes.  These lower support amounts reflect a partial
    sharing of the Husbands post-separation income increases and are appropriate
    given the Wifes re-partnering.  Second, the Wifes proposal contemplates spousal
    support on both a compensatory and non-compensatory basis.  This is also appropriate
    on the facts of this case.  Third, at the appeal hearing, neither party
    suggested any change to the quantum of the pre-October 2010 monthly spousal
    support.  Instead, they supported the motion judges ruling that spousal
    support should continue at the $2,200 per month level until October 2010.

[87]

In all these circumstances, I would fix the Husbands spousal support
    obligation as follows:

(1)

October 2005 to October 1, 2010: $2,200 per month

(2)

November 1, 2010 to October 1, 2012: $1,900 per month

(3)

November 1, 2012 to October 1, 2014: $1,750 per month

(4)

November 1, 2014 for an indefinite period: $1,600 per month

[88]

I would also direct that the variation in spousal support from November
    1, 2014 onwards is subject to review in the future as a result of any further
    material change or changes in the parties circumstances.

Disposition

[89]

For the reasons given, I would allow the appeal, set aside paragraph
    four of the judgment below and substitute in its stead spousal support terms in
    accordance with paragraphs 87 and 88 of these reasons. I would leave it to the
    parties to recalculate the state of accounts between them, based on the adjusted
    spousal support terms set out in these reasons. I would also dismiss the
    cross-appeal.

[90]

On my proposed disposition of the appeal and cross-appeal, the Wife has
    been wholly successful.  She is therefore entitled to her costs of the appeal
    and cross-appeal, as well as those of the motion before the motion judge.  I
    would fix the costs of all three proceedings in the total amount of $32,500,
    inclusive of disbursements and all applicable taxes.

Released:

PR                                           E.A.
    Cronk J.A.

NOV 14 2016                          I
    agree Paul Rouleau J.A.

I
    agree Grant Huscroft J.A.





[1]
The amount cited by the motion judge appears to be a typographical error.  The
    actual amount stipulated in the Wifes 2012 tax return is $5,355.27.


