



COURT OF APPEAL FOR ONTARIO

CITATION: Emmerson v. Emmerson, 2017 ONCA 917

DATE: 20171128

DOCKET: C62085

Epstein, Hourigan and Paciocco JJ.A.

BETWEEN

Tammy Emmerson

Applicant (Appellant)

and

Troy Emmerson

Respondent (Respondent)

Tammy Emmerson, acting in person

Ashley McInnis, for the respondent

Heard: June 23, 2017

On appeal from the judgment of Justice Richard T. Bennett
    of the Superior Court of Justice, dated March 31, 2016.

Epstein J.A.:


OVERVIEW

[1]

This appeal addresses financial issues arising from marital breakdown.

[2]

On January 12, 2010, the appellant Tammy Emmerson entered into a
    separation agreement with her then-husband, the respondent Troy Emmerson.  Five
    years later, the appellant commenced an action to set aside the separation
    agreement, on the basis of the respondents material non-disclosure.  She also
    sought orders awarding her spousal support, increased child support, and
    equalization of the respondents undisclosed assets.

[3]

The trial judge set aside the separation agreement through an order
    dated March 31, 2016.  Upon setting aside the agreement, the trial judge made a
    number of orders pertaining to division of assets and child and spousal
    support.  The respondents book of business (the Book) was valued at $120,000
    and determined to be his only asset for equalization purposes.  The trial judge
    also increased the amount of the respondents monthly child support
    obligations, finding his income to be greater than the amount he had claimed in
    his evidence at trial.  The appellants claim for spousal support was denied.

[4]

In this appeal, the appellant challenges three aspects of the trial
    judges decision: 1) the valuation of the Book; 2) the finding that she is not
    entitled to spousal support; and 3) the quantification of the respondents
    income for the purposes of child support (and spousal support, should her
    argument on that front succeed).

[5]

In support of her second and third grounds of appeal, the appellant has
    brought a motion asking this court to admit fresh evidence.  The proposed
    evidence falls into two categories  an update of the respondents commission
    earnings for 2014 and 2015, and photographs that the appellant says demonstrate
    the disparity in the parties lifestyles, post-separation.  For reasons
    provided below, I would admit only the fresh evidence of the respondents updated
    income.

[6]

On the main grounds of appeal, I have concluded that the trial judge
    erred in his assessment of the respondents income for child support purposes,
    and in dismissing the appellants claim for spousal support.  I would increase
    the amount of child support arrears, adjust ongoing child support and award
    ongoing spousal support for a period of ten years from the date of separation. 
    In all other respects, I would dismiss the appeal.

BACKGROUND

[7]

A brief summary of the facts is set out here.  I provide additional
    facts where necessary when discussing the decision below and the parties'
    submissions.

[8]

The parties began cohabiting on February 1, 1992, and were married on
    October 1, 1999.  They have one child, Nathan, born March 5, 2001.  The parties
    separated on September 1, 2009, but, for a time, continued to reside together
    in the former matrimonial home.  The parties entered into a separation
    agreement on January 12, 2010.

[9]

When negotiations over the agreement began in September 2009, the
    respondent was employed by Money Concepts as a financial planner.  By early
    November 2009, he decided to leave Money Concepts
[1]
and move to Investment Planning Council (IPC).  About a year later, the
    respondent moved from IPC to World Source Financial Management
    ("WSFM").  He worked in financial planning at these various
    companies, and was paid commissions through numbered companies.

[10]

By
    January 12, 2010, when the separation agreement was signed, the respondent had
    moved out of the matrimonial home.  The appellant remained in the home pending
    the completion of its sale in March, 2010.  She then stayed in rental
    accommodations until the respondent purchased, in his own name, a residence at
    172 Churchland Drive for her and Nathan to live in.  The respondent advanced
    the $30,000 down payment for the property and made most of the mortgage
    payments.  When he sold this home, the respondent received net proceeds of sale
    in excess of $83,000.

[11]

Nathan
    primarily resided with his mother following separation, except for a 13 month
    period between March, 2013 and April, 2014 when the parties shared joint
    custody.  In May 2012, the respondent was ordered to start making monthly child
    support payments of $546 based on presumed annual income of $60,000.  The
    respondent was also ordered to pay retroactive child support for the months of
    March and April, 2012.

[12]

On
    July 26, 2011, the appellant initiated these proceedings in which she applied to
    have the separation agreement set aside pursuant to s. 56(4) of the
Family
    Law Act
, R.S.O. 1990, c. F.3 (the 
FLA
").  The appellant
    claimed that the respondent had failed to disclose the existence of a
    significant asset  the Book  and sought an equalization payment based on her
    valuation of this asset.  The appellant also alleged that the respondent had
    materially misrepresented his income.  She sought retroactive and ongoing child
    and spousal support, based on adjusted income figures.

[13]

The
    respondent sought an order upholding the validity of the separation agreement.  He
    argued that he did not own the Book at the time he signed the separation
    agreement and that he had not misrepresented his income.  He opposed the
    appellants request for spousal support and increased child support.

DECISION BELOW

[14]

The
    following is a summary only of the relevant portions of the trial judges
    reasons for setting aside the separation agreement.  I discuss the balance of
    the trial judges reasons within my analysis of each ground of appeal raised
    before this court.

[15]

On
    the question of whether the separation agreement should be set aside, the trial
    judge applied the two-part test from
Levan v. Levan
, 2008 ONCA 388, 90
    O.R. (3d) 1.  In the circumstances of this case, the trial judge had to
    determine whether there was non-disclosure of a significant asset, and if so, whether
    it was appropriate to set aside the domestic contract.

[16]

The
    trial judge first considered whether there had been non-disclosure of a
    significant asset.  It was not disputed that the separation agreement was negotiated
    on the assumption that the respondent did not own the Book.  At trial, the
    appellant submitted the respondent did, in fact, own the Book at the relevant
    time and had failed to disclose that fact.

[17]

The
    trial judge agreed.  He based this conclusion on the respondents having
    received a $120,000 transition allowance when he moved from Money Concepts to
    IPC.  The trial judge reasoned that IPC would not have been willing to pay a
    transition allowance if the respondent was not planning to bring clients with
    him.  The respondent had not disclosed this transition allowance while
    negotiating the separation agreement.  In fact, he took steps to hide it by
    directing mail to his parents' address and having IPC deposit the initial
    installment of the allowance into his parents' bank account.

[18]

Based
    on a review of the parties financial information and the respondents conduct
    during negotiations, the trial judge concluded that the nondisclosure of the
    Book constituted nondisclosure of a significant asset, sufficiently serious to
    justify setting aside the separation agreement.

[19]

The
    trial judge made further orders relating to equalization payments and child and
    spousal support obligations.  As each of those orders is the subject of a
    discrete ground of appeal, I will discuss the balance of the trial judges
    reasons within my analysis of the submissions advanced by the parties before
    this court.

ANALYSIS

Issues and Standard of Review

[20]

The appellant submits that the trial judge erred
    in :

(a) determining the equalization payments owing to her based on a
    flawed assessment of the Books value;

(b) quantifying the respondents income for child support purposes;
    and

(c) dismissing her claim for spousal support.

[21]

On points of law, the trial judges decision is
    reviewable on a standard of correctness.  Any factual determinations must be
    reviewed on a reasonableness standard.

[22]

Spousal support decisions attract significant
    deference.  This is informed by both the discretion involved in making support
    orders and the importance of finality in family law litigation.  An appeal
    court should only intervene where there is a material error, a serious
    misapprehension of the evidence, or an error in law.  It is not entitled to
    overturn a support order simply because it would have made a different decision
    or balanced the factors differently:
Hickey v. Hickey
, [1999] 2 S.C.R. 518, at para. 12.


A.

Did the trial judge err in valuing the Book?

(1)

The trial judges
    reasons

[23]

The
    trial judge determined the equalization payments owed to the appellant based solely
    on his appraisal of the Books value.  He found that the respondent had no
    other assets affecting his net family property.

[24]

The appellant called an expert who had been retained to value
    the Book.  The expert testified that he had not obtained sufficient disclosure
    from the respondent to value the Book.  The appellant therefore sought to
    tender material from the internet to provide the court with a method for
    assessing the Books value.

[25]

The
    appellants independent internet research indicated three methods for valuing a
    financial practice.  She advocated for the recurring revenue approach.  Under
    this approach, the Books value would be equal to the gross commissions paid to
    the respondent from the businesses in the Book, multiplied by a factor of 2-3.5.
     This approach was also employed in a share purchase agreement that assessed
    the value of a buyout of the respondents shares in a numbered company.  The
    share purchase agreement referred to that methodology as standard industry
    practice.

[26]

The
    trial judge did not accept appellants proposed method.  Instead, he held that
    the $120,000 transition allowance from IPC was the best evidence of the value
    of the Book at the date of separation.  While acknowledging that it would have
    been open to him to accept an alternate approach to valuing the Book, the trial
    judge was persuaded that IPCs willingness to pay $120,000 for the respondent
    to transfer his assets under management to them provided probative,
    contemporaneous evidence of the Books value.  Given that the respondent did
    not declare the transition allowance as income on his tax returns, the trial
    judge valued the Book at $120,000 at the time of separation, without any
    deduction for income taxes.

[27]

As
    the Book was the only asset that affected the respondents net family property,
    the trial judge ordered the respondent to make an equalization payment of
    $60,000 with pre-judgment interest from September 1, 2009.

(2)

The parties
    submissions

[28]

The
    appellant submits that the trial judge erred in determining that the $120,000
    transition allowance was the best evidence of the value of the Book.  She
    argues that the transition allowance has no relation to the Books value as the
    respondent received the transition allowance while continuing to own the Book.  Moreover,
    given that the respondents lack of disclosure prevented her expert from
    valuing the Book, the appellant submits the trial judges approach effectively rewards
    the respondent for his subversive behaviour.

[29]

The appellant contends that the internet research she proffered at
    trial provides an alternate approach to determining the Books value.  She
asks
    for an order that the Book be valued at between $408,666.66 and $715,166.66
    (being 2 to 3.5 times the average gross dealer commission listed in the
    contemporaneous IPC agreement).

[30]

The
    respondent argues that the trial judge was correct to reject the internet
    material the appellant proffered.  The transition allowance provided the best
    and only available evidence the of Books value, particularly as the payment
    was made contemporaneously with the negotiation of the separation agreement.

(3)

Analysis

[31]

I
    would not give effect to this ground of appeal.

[32]

The
    trial judge gave fair consideration to the appellants proposed alternative
    valuation approach.  At paras. 255-256 of his reasons, he acknowledged that a
    share purchase agreement to which the appellant was a party employed the
    commission earnings approach outlined in the appellants internet research.  Based
    on that evidence, the trial judge acknowledged that it certainly would have
    been open to this court to find that the value of the [Book] at the date of
    separation was far higher than the $120,000 transition allowance that [the
    respondent] received.

[33]

The
    trial judge, however, chose to rely on the transition allowance as the fairest
    available assessment of value.  In my view, this was a reasonable choice.  The
    trial judge received no independent evidence as to the reliability of the
    appellants internet research or the assumptions on which it was based.  While
    the share purchase agreement provided some corroboration for the appellants
    suggested valuation, the trial judge determined it did not provide sufficient

support to establish the commission multiplier approach as the best marker
    of value.  This conclusion is entitled to deference.


B.

Did the trial judge err in determining the respondents income for child
    support purposes?

(1)

The trial judges reasons

[34]

To
    assess the appellants claims for increased retroactive and prospective child
    support, the trial judge had to first determine the respondents income from
    2009-2014.

The Respondents Income (2009-2014)

[35]

When
    negotiating the separation agreement in the fall of 2009, the respondent
    informed the appellant that his income was $48,000.  However, the respondents
    income tax returns and notices of assessment/reassessment showed that he had
    represented the following incomes to the Canada Revenue Agency (CRA) from
    2006 to 2009: 2006 - $161,548. 53, 2007 - $154,683, 2008 - $90,153, 2009 -
    $86,141.

[36]

The
    trial judge found that the appellants representation of income to the CRA was
    the best evidence of his 2009 income.  In his view, it defied logic that the
    respondent would have overstated his income to the CRA.  Accordingly, the
    respondents statements to the appellant as to his 2009 income amounted to
    material misrepresentations.  When the respondent filed his 2009 income tax return,
    he would have known that his income was far higher than what he represented to
    the appellant in January 2010.

[37]

The trial judge found that the respondents
    representations to the appellant and to the court about his income level from
    2010 to 2014 were similarly unhelpful.

[38]

At trial, the respondent disclosed
    post-separation income from his notices of assessment/reassessment, as follows:
    2010 - $42,310, 2011 - $46,048, 2012 - $36,568, 2013 - $62,968, and 2014 - $59,695.
     The trial judge found, however, that the respondents income tax returns and
    notices of assessment/reassessment for these years did not in any way
    disclose his real income.

[39]

Instead, the trial judge concluded that the
    commissions paid to the respondent by IPC  and later, WSFM  provided the best
    indication of his post-separation income.  Those commissions were deposited in
    the bank accounts of two numbered companies incorporated by the respondent and
    his partners Michael Kidman and Greg Merkley: 1793803 Ontario Ltd. (179) and 1862065
    Ontario Inc. (186).

[40]

The respondent incorporated 179 when he joined
    IPC with Kidman and Merkley. Commissions owing to three parties would be paid
    by IPC into 179s bank accounts.  The respondent had his own account into which
    his commissions were deposited (the 179 Individual Account).  There was also
    an operating account out of which joint overhead expenses were paid (the 179
    Joint Account).

[41]

About a year after starting work at IPC, the
    respondent transitioned to WSFM.  He received a further transition allowance.  WSFM
    deposited commissions into the 179 bank accounts in the same manner as IPC.

[42]

In 2012, Kidman and Merkley incorporated 186.  The
    respondent directed WSFM to pay his commissions into his 186 accounts.  After
    incorporating 186, Kidman and Merkley entered into an agreement to purchase the
    respondents shares of 179.  The alleged purchase price was $187,000, to be
    paid in equal instalments of $37,400 commencing on May 8, 2012.  At trial, the
    respondent took the position that he was merely an employee of 186, receiving a
    salary of $40,000 a year, plus 25% of the commissions realized on any
    "new" business.

[43]

The trial judge found that 186 had been
    incorporated for no reason other than the litigation and that the respondent was
    not merely an employee of the company.  He concluded that the commissions paid
    by WSFM to the respondent that were deposited into his 179 Individual Account
    (or later, his 186 account), were the best evidence of his real income.  Other
    "joint" commissions the respondent earned were deposited by WSFM into
    the 179 Joint Account (and in all likelihood, the trial judge found, into a
    similar type of account with 186).  The trial judge concluded that these joint
    deposits were the respondents contributions to the joint operating expenses or
    overhead of 179 and 186.  The trial judge therefore excluded these deposits
    from the respondents imputed income.

[44]

Disclosure obtained by the appellant prior to
    trial revealed that the respondent received the following commissions in his 179
    Individual Account (and later, his account with 186): 2010 - $170,600, 2011 -
    $165,239, 2012 - $163,166, 2013 - $173,274, 2014 (January to August) - $156,315.

[45]

The trial judge, however made two further
    adjustments to these commission earnings figures to determine the respondents
    income for child support purposes.

[46]

First, the trial judge deducted 15% from the
    respondents commission earnings from 2010-2014, on the basis that the
    respondent was essentially a commission salesman and entitled to deduct some business
    expenses from his earned commissions.  In round numbers, the respondent was
    found to have the following income in the years 2010 to 2014: 2010 - $145,000, 2011
    -$140,500, 2012 - $138,700, 2013 - $147,000, 2014 - $132,800.

[47]

Second, the trial judge calculated the
    respondents child support obligations for any given year using an
average
of 85% of his last three years of imputed income.  In the trial judges view, to
    simply base child support obligations on the respondents previous years
    income would invite the respondent to continue to thwart the appellants
    attempts to obtain disclosure and reasonable child support based on that
    disclosure.

[48]

Relying on this approach, the trial judge turned
    to determining the respondents child support obligations from 2010 to 2015.

The Respondents Child
    Support Obligations (2010-2015)

[49]

The
    trial judge determined no child support was owing for 2010 and 2011, as a
    result of financial assistance the respondent provided to the appellant during
    those years.  Following separation, the respondent provided money to the
    appellant on an
ad hoc
basis.  As previously indicated, he purchased a
    home for the appellant and Nathan and made mortgage payments on that property. 
    On the basis of these payments, the trial judge concluded that any retroactive
    claim for support should date back only to May 1, 2012.  That date roughly coincided
    with the commencement of the temporary monthly child support order of $546,
    pursuant to the 2009 separation agreement.

[50]

As
    the court did not have evidence of the respondents total commission income for
    2009, his 2012 income for child support purposes was the average of his 2009
    income of $86,141 (as stated in his tax return) and 85% of commission earned in
    2010 and 2011.  This gave rise to an obligation to pay monthly child support of
    $1,060 for the eight months in which child support was due in 2012 (May to
    December).

[51]

For
    2013, the respondents income for child support purposes was 85% of the average
    of his 2010, 2011 and 2012 commissions, resulting in $1200 a month in child
    support.  However, for 10 months during this period, Nathan was sharing time
    between his parents, equally.  Accordingly, the trial judge set-off child
    support payable by the appellant, based on her 2012 income of $56,120.

[52]

For
    2014, the respondents income for child support purposes was 85% of the average
    of his 2011, 2012 and 2013 commissions, resulting in $1,203 per month in child
    support.  However, four months of joint custody had to be set-off, based on the
    appellants 2013 income of $58,575.

[53]

For
    2015, the respondents income for child support purposes was 85% of the average
    of his 2012, 2013 and 2014 commissions, resulting in $1,188 per month in child
    support.  The trial judges assessment of the respondents 2014 commission
    earnings was based on figures from January to August.

[54]

As
    the court did not yet have evidence of 2015 commissions, child support
    obligations for 2016 were ordered to continue based on the 2015 figure, at
    $1,188 per month, until further disclosure was provided in accordance with the
    trial judges decision.

[55]

The
    following is the total of child support arrears found to be owing from 2012 - 2015:
    2012 - $4,112, 2013 - $2,748, 2014 - $5,760, 2015 - $7,704, 2016 (to March) -
    $1,926.  These calculations yielded arrears totalling $22,250.

[56]

Ongoing
    support was ordered to be paid in accordance with the above-noted three-year
    income averaging formula.

(2)

The parties
    submissions

[57]

The
    parties do not contest the trial judges decision to award retroactive child
    support, or his decision to use the respondents commission earnings from IPC
    and WSFM as the best evidence of his income for child support purposes from
    2010 to 2014.

[58]

The
    appellant, however, raises several other issues about how the trial judge
    calculated the respondents income for support purposes from 2010-2015.  Two of
    those objections apply to all six of those years.  I will address those at the
    outset.

[59]

First,
    the appellant submits the trial judge erred in applying a 15% business
    expenses reduction to the respondents commission earnings.  The trial judge
    had already excluded from the respondents income commissions deposited into
    the 179 and 186 Joint Accounts, on the basis that such funds were used primarily
    for business expenses and overhead costs.  Yet the trial judge further reduced
    the respondents income for support purposes by a further 15%, on the basis
    that he was a commission salesperson who "may" have incurred other,
    undisclosed business expenses.

[60]

The
    respondent urges deference to the trial judges finding that some expenses
    should be legitimately deducted from the commissions earned.

(3)

Analysis

[61]

I agree with the appellants position.
In my view, the trial
    judge erred in deducting business expenses given the lack of evidence from the
    respondent on this point, coupled with the trial judges finding that the
    lions share

of
the
    [respondents]s business expenses were paid through [179].  The burden of
    proof for the deductions rested with the respondent.  The trial judge accounted
    for the respondents business expenses by declining to impute income based on
    the commission earnings deposited into the Joint Accounts.  Any further
    deductions, in my view, needed to be supported by evidence.  They were not.

[62]

The
    appellants second, broad objection to the trial judges income calculations
    relates to his decision to average the respondents income for the three
    previous years in relation to the year in which support was owing.  The trial
    judges stated purpose for doing so was to protect the appellant from
    non-disclosure.  However, given the steady increase in the respondent's income,
    the appellant submits this averaging in fact reduced the respondents support
    obligations and rewarded him for non-disclosure.

[63]

I agree with the appellant on this issue as
    well.  The trial judge provides no explanation of the averaging approach and
    instead simply states at para. 276 that it is reasonable to base the
    respondents child support obligations on the average of 85% of his last three
    years commission income.

[64]

Section 17(1) of the
Child Support
    Guidelines
, O. Reg. 391/97  permits the court to look at
    the spouses income over the last three years in the following circumstances:

17(1) If the court is of the opinion that the
    determination of a parents or spouses annual income under section 16 would
    not be the fairest determination of that income, the court may have regard to
    the parents or spouses income over the last three years and determine an
    amount that is fair and reasonable in light of any pattern of income,
    fluctuation in income or receipt of a non-recurring amount during those years.

[65]

At the same time, as this court stated in
Mason
    v. Mason
, 2016 ONCA 725, 132 O.R. (3d) 641, at para. 138,
    the Guidelines rely on the more recent past to predict the near future and do
    not adopt average as a default methodology.

[66]

In my view, it was an error for the trial judge
    to use a three-year average of income without providing a satisfactory
    explanation of how the use of each years income would be unfair to either party. 
    The trial judge, moreover, was not predicting future income for the purpose of
    ordering support, but determining support arrears.  In this context, the trial
    judges averaging approach was not logically connected to his stated objective:
    to protect the appellant from the effects of the respondents non-disclosure

[67]

I would therefore base the child support amounts
    owing for the years 2010-2014 on the income findings for each year as set out
    above, but without applying a 15% deduction for business expenses.

[68]

With that general approach in mind, I now turn
    to the appellants more specific objections to the trial judges child support
    calculations from 2010-2014.

2010

[69]

The
    appellant submits the trial judge erred in determining that no child support
    was owing for 2010.  She points to two errors in his reasons.

[70]

First,
    the appellant argues the trial judge failed to consider the evidence that, in
    exchange for the respondents financial assistance in 2010, the appellant
    transferred to him her locked-in RRSP, worth approximately $45,000.  The
    appellant claims this transfer occurred because of the respondents misrepresentations,
    as he provided assistance under the guise of "loans" rather than
    paying the equalization and support to which the appellant was entitled.  The
    reality, the appellant claims, is that the respondent paid no child support for
    2010, and also fraudulently obtained a significant income-producing asset.

[71]

Second,
    the appellant submits the trial judge erred by failing to calculate what the
    respondents child support obligations should have been for 2010.  Accordingly,
    he was unable to determine if the respondents support obligations would have
    exceeded the financial assistance he provided that year.  Relatedly, the trial
    judge failed to consider whether the 2009 transition payment from IPC of
    $120,000 should be added to the respondents 2009 income.  Had that transition
    allowance been added, the respondents child support obligations may well have
    exceeded any financial assistance he provided.

[72]

The
    respondent submits the trial judges determination of income is entitled to
    deference.  The respondent also contends that the 2009 IPC transition payments
    should not be added to the respondents income.  The respondent points out that
    the IPC transition allowance was found to be an asset as of the date of
    separation, and ordered equalized between the parties.  Accordingly, adding
    this sum into his income would be double recovery.

[73]

Except
    on the issue of the IPC transition allowance, I am in substantial agreement
    with the appellants position.

[74]

The trial judge made no reference to or findings
    regarding the appellants argument that the respondents financial assistance
    was provided as consideration for the appellants transferring her locked-in
    RRSP.  This was, in my view, an error, given the evidence at trial supporting
    the appellants position.  The appellant points to an email from the respondent
    that refers to the RRSP transfer as a swap, a CRA form confirming the RRSP
    transfer, evidence of the transfer from the appellants 2010 financial
    statements, evidence of the RRSP in the respondents accounts, as of December
    31, 2012, valued at $48,999.01, and evidence of the RRSPs value from the
    appellants financial statements, valued at $45,000 as of June 1, 2010.

[75]

This evidence supports the appellants claim that the respondents
    financial assistance was in fact in direct consideration for the RRSP
    transfer and should not be treated as in lieu of child support.  The trial
    judge erred by failing to address this issue in his reasons.

[76]

I would accordingly award the appellant retroactive
    child support for 2010.  In my view, the amount of those obligations should be
    calculated based on the respondents imputed income for 2009 as found by the
    trial judge; namely, $86, 141.
[2]

[77]

I would not add the respondents 2009 transition allowance from IPC
    to that figure.  I agree with the respondent that since that transition
    allowance was accounted for in valuing the Book as part of the net family property
    calculation and equalization payment, to count it as income as well would
    amount to double-dipping:
Boston v. Boston
,
    2001 SCC 43, [2001] 2 S.C.R. 413, at paras. 63-64.

[78]

The
    appellant also submits that the respondents reported 2009 income of $86,141 included
    deductions that should be added back, including capital cost allowance on a
    personal vehicle, as well as other personal expenses.  I disagree, and see no
    basis to interfere with the trial judges determination of the appropriate
    measure of the respondents income for 2009.

2011

[79]

The appellant takes issue with two, related
    aspects of the trial judges decision not to award any child support for 2011.

[80]

First, the appellant submits that the trial
    judge
failed to explicitly determine if the respondents child support
    obligations for 2011 exceeded any financial assistance he provided to the
    appellant that year.  Second, he failed to consider whether a transition
    payment from WSFM, totalling $147, 576, should be added to the respondents
    2010 imputed income.

[81]

The respondent submits that,
as the 2009
    IPC transition allowance was already deemed to be property, it would be unjust
    to characterize the WSFM transition allowance as income.

[82]

In my view, the trial judge erred by failing to
    calculate the respondents child support obligations for 2011.  He was
    therefore unable to assess if those obligations exceeded the amount of
    financial assistance provided by the respondent that year.  This omission is
    made more significant given my further conclusion that the trial judge should
    also have added to the respondents 2010 imputed income the first installment
    of the transition payment the respondent received from WSFM.
[3]
That payment of $72,000 did
    not factor into the trial judges calculation of the Books value, or his
    determination of equalization payments. It does not raise the same double
    dipping concerns as the IPC transition allowance.

[83]

As a result of these errors, this court is not
    in a position to assess if the amount of child support owed to the appellant in
    2011 exceeds the financial assistance provided by the respondent (through
    mortgage payments) in that year.  The record before this court, unfortunately,
    does not indicate the precise amount that the respondent contributed to the
    mortgage payments on the house.

[84]

I therefore reluctantly order that the issue of
    2011 child support arrears be remitted to the Superior Court for determination
    on the following basis.  The appellant is entitled to child support on the
    basis of imputed income of $242,600 (the respondents 2010 commission earnings of
    $170,600, along with the first installment of a transition allowance from WSFM,
    totaling $72,000) less the total amount of mortgage payments made by the
    respondent in 2011 for the property where the appellant and Nathan resided.

[85]

That said, I strongly urge the parties to reach
    an out-of-court agreement on this issue.

2012-2014

[86]

The respondent received the second installment
    of his transition payment from WSFM, totaling $75,576.25, in April 2011.  For
    the reasons provided above, I would add that figure to the respondents imputed
    income for 2011.  His 2012 child support obligations should be adjusted
    accordingly.

[87]

Subject to my above comments regarding averaging
    and deductions for business expenses, I see no other error in the trial judges
    calculation of child support arrears owing during this period.  The trial judge
    calculated total arrears based on the difference between the amount that the
    respondent was obliged to pay based on his imputed income, less the amount the
    respondent had actually paid during this time pursuant to the temporary child
    support order.  The trial judge also properly took into account the periods of
    time during which Nathan was spending equal time with both parents.

2015

[88]

The appellant submits the trial judge calculated
    the respondents child support obligations for 2015 on the basis of an
    incomplete record.  The evidence at trial about the respondents 2014
    commission earnings only included information from January to August of that
    year.

[89]

To supplement the trial record, the appellant
    has brought a motion for fresh evidence that discloses, among other things, the
    respondents commission earnings for all of 2014.  I would admit the evidence
    of the respondents 2014 commission earnings.  It provides the proper measure
    of the respondents 2015 child support obligations.  The respondent does not
    oppose its admission.  I would therefore vary the trial judges child support
    calculations for 2015 based on the appellants fresh evidence of the respondents
    2014 commission earnings.

2016

[90]

For prospective child support beginning in 2016,
    the trial judge noted at para. 299 that [s]ince the court does not have any
    evidence as to [the respondents] 2015 commission income, his child support
    obligations for 2016 will continue at $1,188 per month until further disclosure
    is made according to this decision.

[91]

The appellant seeks to introduce new evidence of
    the respondents commission earnings for 2015.  The respondent initially
    objected to the admission of this evidence as it did not exist in its entirety
    at the time of the trial, which concluded on November 30, 2015.  In additional
    submissions provided on appeal, however, the respondent accepted that this
    court should determine his child support obligations for 2016.

[92]

Accordingly, for efficiency, I agree with both parties that this
    court should determine the respondents 2016 child support obligations based on
    the appellants fresh evidence of the respondents commission earnings in 2015.
     I would therefore award the appellant child support for 2016 - based on
    imputed income of $218,499.45  less the amounts the respondent should already
    have paid in child support for that year pursuant to the order under appeal.  This
    ruling is made without prejudice to the appellants ability to bring a motion
    to change if the respondent has not, in fact, fulfilled those obligations for
    2016.


C.

Did the trial judge err in his disposition of spousal support?

(1)

The trial judges reasons

[93]

In the five years preceding the separation, the
    appellants income from her employment as a court reporter was in the range of
    $40,000 to $60,000 a year.  The respondents income during that time ranged
    from $86,000 to $154,000.

[94]

Five years following their separation, the
    appellants financial statements indicated total annual income of $66,383, less
    than her total yearly expenses of $72, 981.  The respondents commission
    earnings from WSFM for 2015 totaled $218,499, compared to reported yearly
    expenses at the beginning of this litigation of $69,060.

[95]

At trial, the appellant submitted she was
    entitled to spousal support.  The trial judge disagreed, for the following
    reasons:

a) during
    the marriage the parties were both gainfully employed outside the house;

b) during
    the marriage, both parties shared responsibility for caring for Nathan.  The
    trial judge found that the appellants childcare or other marital
    responsibilities did not adversely affect her employment opportunities;

c) even if
    the appellant had been prevented from earning more income by the respondents failure
    to fund her education, this did not create entitlement to spousal support; and

d) the
    fact that during cohabitation the respondents income may have been
    significantly higher than the appellants did not create entitlement either.

(2)


The
    parties submissions

[96]

The
    appellant argues that the trial judge, in dismissing her claim for spousal
    support, failed to consider any of the objectives found in s. 15.2(6) of the
Divorce
    Act
, R.S.C., 1985, c. 3 (2nd Supp.).  Further, the trial judge failed to
    make any findings of fact in relation to the evidence of the "conditions,
    means, needs and other circumstances" of the parties, as required by s.
    15.2(4).  Accordingly, there are no findings upon which deference is due.

[97]

The appellant further submits that the failure to pay proper
    equalization and support upon separation is a relevant circumstance for
    consideration in relation to spousal support.  The consequences of that misconduct
    are also relevant.
The appellant
    submits that, in reliance on the respondents serial misrepresentations, she put
    her career aspirations on hold with the result that her standard of living post-separation
    has been significantly depressed.
The appellant also
    claims that the respondents failure to disclose his actual income after
    separation prevented her from staying in the matrimonial home, resulting in
    significant financial hardship for several years post-separation.

[98]

The
    respondent submits that the standard of review on all matters relating to
    support is highly deferential.  In determining that the appellant had failed to
    surpass the threshold of entitlement to spousal support, the trial judge
    specifically cited s. 15 of the
Divorce Act
, as well as this courts
    seminal decision in
Fisher v. Fisher
, 2008 ONCA 11, 2008 ONCA 11, 88
    O.R. (3d) 241.  The record fully supported all his findings.

[99]

In
    terms of compensatory support, the respondent submits that Ontario
    jurisprudence clearly demonstrates that all long-term marriages do not give
    rise to such an entitlement.  The purpose of compensatory support is to share
    the economic advantages and disadvantages that accrued on account of the
    marriage and its subsequent breakdown.  The evidence at trial, and recent case
    law, fully supports the trial judges finding that the appellant had no
    entitlement to compensatory support (i.e. both parties were employed, and the
    appellants marital responsibilities did not adversely affect her employment).

[100]

Regarding
    non-compensatory spousal support, the Supreme Court has been clear that
    marriage
per se
does not entitle a spouse to support.  Based on the
    evidence, the trial judge concluded that this was the kind of marriage alluded
    to in
Moge v. Moge
, [1992] 3 S.C.R. 813, in which no support would be
    called for following the breakdown of the marriage.  He also correctly noted
    that disparity of income does not by itself create an entitlement to spousal
    support.

[101]

The respondent
    also notes that the appellant continues to enjoy a standard of living commensurate
    to that which she was accustomed to during the marriage.  The fact that child
    support was awarded retroactively addresses any need the appellant alleges to
    have experienced following the separation.

(3)


Analysis

[102]

Under the
Divorce Act
, the factors
    to consider in making a spousal support order include (a) the length of time
    spouses cohabited; and (b) the functions performed by each spouse.  The
    objectives of spousal support set out in s.15.2(6) are to:

(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.

[103]

Entitlement is a threshold question:
Bracklow v.
    Bracklow
,

[1999] 1 S.C.R. 420, at para. 49.  It can be compensatory,
    non-compensatory or some combination thereof.

[104]

I would not interfere with the trial judges decision to dismiss the
    appellants claim for compensatory spousal support.  Where he erred, in my
    view, is in his failure to consider any basis for non-compensatory support.

[105]

According to the
Spousal Support Advisory Guidelines, The
    Revised Users Guide
(Ottawa: Department of Justice,
    2016) [SSAGs], at ch. 4, [c]ommon 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

[106]

In my view, the
    trial judge erred in failing to consider in his analysis of spousal support the
    respondents misrepresentations concerning his income and the impact they had
    on the appellant during the marriage and after it came to an end.

[107]

The respondents
    deceit of the appellant in relation to his income was a significant feature
    that adversely affected the appellants economic prospects post-separation.  The
    economic disadvantage arising out of this deception shows itself in the
    evidence at trial that demonstrated the economic hardship experienced by the
    appellant and the disparity in the parties standard of living after this
    lengthy relationship had come to an end.

[108]

The trial judge
    made no findings of fact concerning the respondents misrepresentations in
    relation to the parties economic interdependence, the marital and post-marital
    standards of living and, most significantly, the financial impact on the
    appellant of the respondents chronic misrepresentations as to his income.  In
    the result, contrary to the edict in
Moge
, at pp. 866-867, the economic
    impact of the marriage and its termination were not equitably shared between
    the parties.

[109]

During their
    lengthy relationship, the appellant took a full-time salaried position as a
    court reporter, allowing the respondent to focus on building his network of
    contacts.  As his income increased, and as the trial judges reasons indicate,
    he deceived and withheld information from the appellant.  The respondent had to
    forgo any educational upgrading, as she believed her continued employment
    income was essential to the family.

[110]

The trial judge
    found that the possibility of lost employment opportunities did not, by itself,
    create an entitlement to spousal support.  However, the trial judge was bound
    to consider this evidence in combination with the other impacts of the
    respondents misrepresentations to the appellant.  The evidence supports the
    finding that had the respondent not misrepresented his income and assets, and instead,
    as of separation, provided the support and equalization ultimately found owing,
    the appellant would have had the funds to purchase and remain in the
    matrimonial home, or to provide a down payment on another suitable home.  As a
    consequence of the respondents behaviour, her financial circumstances have
    been significantly impacted.

[111]

The economic
    disadvantage to the appellant was further exacerbated by the respondents
    conduct when, rather than providing full disclosure post-separation, he
    provided financial assistance in the guise of "loans", and later sought
    repayment through a transfer of the entire amount of the appellants locked-in
    RRSP.  At the time of the "loans" and subsequent RRSP transfer, the
    appellant had no knowledge that equalization and more generous support was
    owing her.  The transaction would not have been necessary if full disclosure had
    been made.  As a result, the appellants financial security upon retirement has
    been comprised.  The respondent, by contrast, was in a position to contribute
    $22,000 to his own RRSP less than five months after separation, as well as
    purchase two homes with significant down payments.  During litigation, he sold
    both of these properties for a significant profit.

[112]

In my view, an
    award of spousal support would be appropriate in the circumstances.

[113]

I note, however,
    that in my analysis of spousal support I have not relied on the photographs of
    the parties homes tendered by the appellant as proposed fresh evidence of
    disparity in their standards of living.  In my view, the photographs should not
    be admitted.  No evidence has been offered to give the photographs any context
    to support an assessment of their credibility and relevance.  They do not meet
    the requirements for admission of fresh evidence set out in
R. v. Palmer
,
    [1980] 1 S.C.R. 759, at p. 775;
Virc. v. Blair
, 2017 ONCA 394, at
    para. 52.

[114]

Nonetheless, I would give effect to this ground of appeal.  I would
    award the appellant retroactive and ongoing time-limited spousal support on a
    non-compensatory basis at the low-end of the SSAGs for 10 years from the date
    of separation.  From 2010-2016 the appellant is entitled to $192,514 in spousal
    support.
[4]
From 2017 to 2020, the respondent is to pay the appellant spousal support in
    the amount of $2,672 per month.

DISPOSITION

[115]

I would allow
    the appeal in part.  I would vary child support and order the respondent to pay
    spousal support, as indicated above.

[116]

If the parties
    are unable to resolve the respondents 2011 child support arrears, notwithstanding
    my strong urging that they do so, I would remit the determination of that issue
    to the Superior Court to be calculated in accordance with paragraph 84 of these
    reasons.  The appeal is otherwise dismissed.

[117]

Paragraphs 7-9 of
    the trial judges order are to be replaced with:

[7] The respondent
    shall pay to the applicant child support arrears in the amount of $88,302 up to
    and including December 31, 2016, subject to the final determination of the
    respondents 2011 child support arrears.

[8] Based
    on the finding that the respondents 2015 income for child support purposes is
    $218,499, the respondent shall pay ongoing child support for the child of the
    marriage, Nathan Cole Roy Emmerson, born March 5, 2001, in the amount of $1,770
    per month, commencing January 1, 2017.

[9] The respondent
    shall pay to the applicant spousal support arrears in the amount of $192,514

up to and including December 31, 2016. From 2017 to 2020, the respondent is
    to pay the applicant spousal support in the amount of $2,672

per month,
    commencing January 1, 2017.

[118]

In my view, the
    results of this appeal have been equally divided between the parties.  I would
    make no order as to costs.

Released: GE November 28, 2017

Gloria Epstein J.A.

I agree. C.W. Hourigan J.A.

I agree. David M. Paciocco J.A.


APPENDIX A

Child Support Arrears (CSG)



Year

Appellants Income

Respondents Income

Child Support  Paid By The Respondent For The Year

Total Arrears



2010

$86,142

$60,984

0

$9,252



2011

$242,600

$56,754

0

$23,592*



2012

$240,815

$51,586

$4,368

$19,068



2013**

$163,167

$56,120

$6,552

$4,678



2014***

$173,275

$58,575

$6,552

$8,540



2015

$235,352

$59,592

$6,552

$16,188



2016

$218,499

$59,592

$14,256

$6,984



*
less the
    total amount of mortgage payments made by the respondent in 2011 for the
    property where the appellant and Nathan resided.

**taking into account 10 months of shared
    custody.

***taking into account 4 months of shared
    custody.

Total Child Support Arrears:
$88,302

Spousal Support Arrears (SSAG)



Year

Total Arrears For the Year*



2010

0



2011

$41,076



2012

$42,888



2013

$19,098



2014

$19,900



2015

$37,488



2016

$32,064



Total Spousal Support Arrears:
$192,514

*calculated using the income figures for
    child support purposes.





[1]
The respondent was employed by Diamond Tree, which
    operated Money Concepts. For the purposes of his decision, the trial judge
    referred to the respondents employer at that time as Money Concepts. I will do
    the same.



[2]
My final calculations regarding child support are
    included in an Appendix A to these reasons.



[3]
The appellant asks for the full amount of the payment
    ($147, 576) to be added to the respondents 2010 income. However, the record
    makes clear that the respondent received this transition payment in two
    installments  one in December 2010, and the other in April 2011. I see no
    reason to add the full amount of the payment to the respondents 2010 income.



[4]

See Appendix A.


