



COURT OF APPEAL FOR BRITISH COLUMBIA




Citation:



Hsieh v. Lui,









2017 BCCA 51




Date: 20170131

Docket: CA43084

Between:

Roque Hsiang Hwa
Hsieh

Appellant

(Claimant)

And

Christine Po Sing
Lui

Respondent

(Respondent)

And

Wai
Tsun Tom Lui in his capacity as litigation representative of
the Estate of Ting Sheung Lui, Deceased

Respondent

(Third
Party)






Before:



The Honourable Mr. Justice Frankel

The Honourable Mr. Justice Goepel

The Honourable Madam Justice Dickson




On appeal from:  An
order of the Supreme Court of British Columbia, dated August 14, 2015 (
Hsieh
v. Lui
, 2015 BCSC 1438, Vancouver Docket No. E104049).




Counsel for the Appellant:



P.R. Albi, Q.C.

S.L. Stepney





Counsel for the Respondents:



G.A. Lang





Place and Date of Hearing:



Vancouver, British
  Columbia

May 24, 2016





Place and Date of Judgment:



Vancouver, British
  Columbia

January 31, 2017











Written Reasons by:





The Honourable Madam Justice Dickson





Concurred in by:





The Honourable Mr. Justice Frankel

The Honourable Mr. Justice Goepel




Summary:

Mr. Hsieh appeals the
judges order respecting the quantum of spousal support based on several
alleged material errors, the validity of a mortgage in favour of the respondents
late father, and the finding that a nanny was a valid s. 7 expense under
the Guidelines.  Held: appeal allowed in part.  The judge did not err in
awarding Ms. Lui retroactive spousal support to the date of trial, failing
to consider the reapportionment of family property, determining the duration of
the award, or declining to impute income to Ms. Lui.  However, the judge
erred in calculating retroactive support based on Mr. Hsiehs 2015 income,
in finding the mortgage was valid and in holding the nanny was an appropriate
s. 7 expense.

Reasons for Judgment of the Honourable
Madam Justice Dickson:

Introduction

[1]

This appeal is primarily concerned with the determination of retroactive
and ongoing spousal support in a family law case involving a high-income
earner.  The validity of a mortgage and characterisation of a nanny expense are
also at issue.  The appellant, Roque Hsieh, appeals the trial judges final
order awarding retroactive and lump sum spousal support of $1,175,787 to the
respondent, Christine Lui, contending that she made several material errors
which resulted in an unduly high award.  He also appeals the judges order that
a mortgage Ms. Lui granted to her late father which was registered against
title to a family asset is valid and that the cost of a nanny was a s. 7
expense under the
Federal Child Support Guidelines
, SOR/97-175 [
Guidelines
].

[2]

For the reasons that follow, I would allow the appeal, in part.

Background

[3]

Mr. Hsieh is a chartered accountant.  Since the mid-1990s, he has
been employed by KPMG in Vancouver.  In 2008, he became a partner with KPMG,
specialising in tax accounting.  He was 48 years old at the time of the trial.

[4]

Ms. Lui holds a bachelor of commerce degree and worked for a few
years in the banking industry.  She left that employment, however, because
business was poor and clients were hard to find.  As a result of her familys
wealth and generosity, Ms. Lui had no financial need to earn employment
income and she has not engaged in paid work since she left her bank job in 1998. 
Rather, with Mr. Hsiehs consent and approval, she has been a full-time
homemaker.  She was 46 years old at the time of the trial.

[5]

Mr. Hsieh and Ms. Lui were married on June 30, 1996.  When Ms. Lui
left her bank job, she was a senior account manager earning an annual income of
approximately $50,000.  At the time, Mr. Hsieh was a junior accountant
earning an annual income in the range of $60,000 to $70,000.

[6]

Mr. Hsieh and Ms. Lui have one child, Olivia. She was 12 years
old at the time of the trial and in Grade 7.  Since Olivias birth in 2002, Ms. Lui
has been the primary caregiving parent.  She has always been assisted by a
nanny with her caregiving and household duties.

[7]

Throughout the marriage, Ms. Luis family made significant
financial contributions to the couple, covering most of their capital costs,
providing them with a vehicle and paying for Olivias private school
education.  Amongst other things, Ms. Luis late father, Ting Sheung Lui,
gave Ms. Lui $1.1 million in 2007 with instructions to earmark the funds
for Olivias education (Olivias Education Fund).

[8]

Mr. Hsieh and Ms. Lui kept their finances separate when they
were married.  Each retained their own income and each contributed jointly to
household expenses, insofar as that was required.  Given the contributions made
by Ms. Luis family, however, there were not many expenses left for the
parties to cover.  As a result, most of their shared expenses were for meals
and entertainment.

[9]

Following a two-year period of living separate and apart in the same
house, Mr. Hsieh and Ms. Lui separated on July 1, 2010.  Thereafter, Ms. Lui
and Olivia remained in the family home and Mr. Hsieh moved into a
condominium acquired for his use by a trust.  At the time of separation, Mr. Hsiehs
annual income was approximately $400,000.

[10]

On June 30, 2011, a declaration that the parties had no reasonable
prospect of reconciliation was made under s. 57 of the
Family Relations
Act
, R.S.B.C. 1996, c. 128 [
FRA
].  Mr. Hsieh and Ms. Lui
were divorced by the January 23, 2015 order of the trial judge.  At the time of
the trial, Mr. Hsiehs annual income was in the range of $590,000 to $640,000. 
Between the dates of separation and trial, Mr. Hsieh paid some child
support and no spousal support to Ms. Lui.

The Hornby Street Property

[11]

Mr. Hsieh and Ms. Lui did not cohabit before they were
married.  Immediately after they married, they moved into a condominium on
Hornby Street in Vancouver (the Hornby Street Property).  They lived together
in the Hornby Street Property until 2002, when, with Olivia, they moved into Ms. Luis
parents home.

[12]

The Hornby Street Property was purchased by Mr. Lui Sr. in 1993,
together with four other condominiums in the same building.  At the time of
purchase, he registered the Hornby Street Property in Ms. Luis name.  He
also registered another condominium in the joint names of Ms. Lui and her
sister, and the other three in the names of other family members.

[13]

The purchase of the Hornby Street Property was partially financed by an
institutional mortgage of $406,000, which was registered against title.  Mr. Lui
Sr. paid the property taxes and other payments associated with the Hornby
Street Property.  In April 1996, after considering tax and estate planning
issues, he also repaid the entire institutional mortgage debt.  As a result, on
May 2, 1996 the bank discharged the mortgage and the title became unencumbered.

[14]

On June 25, 1996, five days before she married Mr. Hsieh and at her
fathers request, Ms. Lui signed a $635,000 mortgage in favour of Mr. Lui
Sr. (the Mortgage).  The Mortgage was registered against title to the Hornby
Street Property.  At the same time, Ms. Lui signed an acknowledgment under
seal to the effect that historical advances she had received from Mr. Lui
Sr. were loans; however, she testified on discovery that her father did not, in
fact, loan any money to her between 1993 and May 1996.

[15]

Ms. Lui also testified that Mr. Lui Sr. did not advance any
money to her in relation to the Mortgage and she did not make any payments on
it.  She said that she signed the Mortgage because, without explanation, her
father asked her to do so. She acknowledged that, when she was not living
there, she received rental income from the Hornby Street Property.

[16]

According to Ms. Luis brother, Mr. Lui Sr. asked Ms. Lui
to sign the Mortgage because he was not comfortable with her holding clear
title to the Hornby Street Property given her impending marriage to Mr. Hsieh. 
In a letter dated June 28, 1996 regarding the Mortgage, solicitors for Mr. Lui
Sr. wrote:

Notwithstanding the execution by
the Borrower of the Acknowledgment Agreement (enclosed), the validity of the
Mortgage could be challenged if the monies paid by you in connection with the
Borrowers purchase of the Lands in June, 1993 were to be viewed by a court as
having been intended as a gift from you to the Borrower.

[17]

The appraised value of the Hornby Street Property was $965,000 in 2014.

The Churchill Street Property

[18]

In September 2002, a house on Churchill Street in Vancouver was
purchased for approximately $1.8 million with funds provided by Ms. Luis
uncle and registered in Ms. Luis name (the Churchill Street Property). 
In 2004, Mr. Hsieh, Ms. Lui and Olivia moved into the Churchill
Street Property and lived there together until Mr. Hsieh left in 2010.  As
with the Hornby Street Property, Mr. Lui Sr. paid the property taxes and
most other property-related costs.

[19]

The appraised value of the Churchill Street Property was $4.4 million in
2014.

The Trusts

[20]

Between 2005 and 2010, the families of Mr. Hsieh and Ms. Lui
set up trusts to enable their participation in an investment vehicle
established by one of Mr. Hsiehs clients (the Cutting Edge Trust).  Due
to Mr. Hsiehs position at KPMG and KPMGs independence rules, Mr. Hsieh
and Ms. Lui were unable to invest personally.  However, Ms. Luis
family set up the 106 LN Family Trust No. 1 in October 2005 (the Lui
Trust) and Mr. Hsiehs family set up the FRH Trust in September 2008 (the
Hsieh Trust).  Both trusts acquired an interest in the Cutting Edge Trust.

The Shangri-La Condo

[21]

In July 2010, the Hsieh Trust acquired the condominium in which Mr. Hsieh
has resided since the parties separated for approximately $3.1 million (the Shangri-La
Condo).  The acquisition was financed and Mr. Hsieh pays monthly carrying
costs of approximately $13,000.  These costs include a mortgage payment, strata
fees, property taxes and interest on loans.

[22]

As of the triggering date, the equity in the Shangri-La Condo was
$348,263.

Reasons for Judgment

[23]

The judge began her reasons by identifying the issues for determination
and those concerning which there was agreement.  The former included the
appropriate division of family debts and assets, the quantum of spousal support
payable to Ms. Lui, the validity of the Mortgage, and whether the cost of
a nanny is an appropriate shared expense under s. 7 of the
Guidelines
.

[24]

After reviewing some background facts, the judge dealt first with the
question of whether the cost of a nanny is an appropriate s. 7 expense. 
In finding that it is, she stated:

[25]      The parties agree that, effective February 1, 2015,
agreed upon s. 7 expenses shall be shared equally.  The only area in
dispute is the expense of employing a nanny/housekeeper.  This, Mr. Hsieh
says, is an inappropriate s. 7 expense, especially as Ms. Lui is not
employed.

[26]      Based on the family
circumstances which previously included a nanny, I conclude a nanny is an
appropriate expense to which Mr. Hsieh should be required to contribute.  Mr. Hsieh
argues the tasks are more in the nature of housekeeping than child care.  I do
not accept this argument.  The multitude of activities in which Olivia
continues to participate, along with past circumstances, supports the need for
a nanny and a finding to this effect.  While Mr. Hsieh has parenting time
on the weekends, Olivias activities continue throughout the week.

[25]

The judge turned next to the central issue at trial: the identification
of family debts and assets.  She noted at the outset that the division of
property should be determined before a support claim to permit assessment of
each partys means taking into account the property division, citing this Courts
decision in
Narayan v. Narayan
, 2006 BCCA 561, in support. She went on
to find the Hsieh Trust, the Lui Trust, the units in the Cutting Edge Trust held
by the Hsieh Trust and Olivias Education Fund were not family assets, although
she considered it troubling that Mr. Hsieh had no interest in the Hsieh
Trust and the Cutting Edge Trust due to KPMGs independence rules.  The judges
findings on the nature of these assets were not challenged on appeal.

[26]

The parties agreed that the Churchill Street Property and the Hornby
Street Property were family assets.  They also agreed that the Shangri-La Condo
was not a family asset, but that the equity and carrying costs should be
considered on the reapportionment issue.

[27]

The judge rejected Mr. Hsiehs assertion that the Shangri-La Condo
was subject to a $415,000 debt to his parents.  She also found that he had
structured his financial affairs such that it would appear he has few assets
and significant debt despite his high annual income.  She noted there was only
one conventional mortgage on the Shangri-La Condo of close to $1 million, and
concluded that the remaining debt should not weigh heavily in the
reapportionment analysis.

[28]

The judge ordered an equal division of family debts and assets except
with respect to the Churchill Street Property, which she reapportioned 70 per
cent in Ms. Luis favour.  In doing so, she stated:

[123]    Ms. Lui maintains,
however, the Churchill Street Property was purchased with a gift of $1.8
million from her uncle in Hong Kong.  The home was purchased in 2002 but was
left empty from 2002 to 2004.  It was not a family asset until the parties
moved in in 2004.  Ms. Lui says, therefore, the property was a family
asset only from 2004 to 2008, when the parties lived separate and apart in
their home, or 2010, when Mr. Hsieh left the home.

[29]

The judge went on to note Ms. Luis testimony that the parties had
lived separately in the house since 2008 and her assertion that she lost
employment opportunities due to her homemaker role while Mr. Hsieh built a
highly successful career.  In explaining her decision to reapportion the
Churchill Street Property, the judge summarised and adopted Ms. Luis
position:

[126]    Ms. Lui submits that the following factors
militate in favour of a substantial reapportionment in her favour: the duration
of the separation between the parties since 2008, or alternatively, since the
date of the physical separation in 2010 (s. 65(1)(b)); the fact that the
property was 100% funded by a gift from Ms. Luis uncle (s. 65(1)(d) and
s. 65(1)(f)); the fact that the property taxes were paid by Ms. Luis
father (s. 65(1)(d)); the fact that Ms. Lui suffered an economic disadvantage
from the role she assumed in the marriage with Mr. Hsiehs agreement (s.
65(1)(f)); and finally, Ms. Luis need to become and remain economically
self-sufficient and provide a primary residence for Olivia (s. 65(1)(e)).  She
submits that the reapportionment should be in the amount of 70% of the equity
in the Churchill Street Property with a compensation payment made to Mr. Hsieh
or, depending on the division of other assets, a set-off against assets
retained by Mr. Hsieh.

[127]    I agree, for the reasons
immediately set out above.  I will, however, deal with this as part of the
overall consideration of the division of assets.

[30]

The remaining issues of relevance for present purposes were the validity
of the Mortgage and the appropriate quantum of spousal support.  In addressing
the Mortgage issue, the judge found that Mr. Lui Sr. purchased the Hornby
Street Property in Ms. Luis name financed by a $197,080.79 loan from him
to her and a mortgage of $406,000 from the Hong Kong Bank of Canada (para. 90). 
She also noted that Mr. Lui Sr. repaid the Hong Kong Bank mortgage on
April 1, 1996, and that it was discharged on May 2, 1996 (para. 91).  She
noted further that Ms. Lui signed the Mortgage and sealed acknowledgment
on June 25, 1996 at her fathers request (para. 92).

[31]

Mr. Hsieh submitted that the Mortgage was a fiction intended to
protect the equity in the Hornby Street Property from a future claim by him. 
After summarising his arguments the judge rejected them, agreeing instead with Ms. Lui. 
In doing so, she noted that the Hornby Street Property was purchased three
years before the marriage, stated that a mortgage was always maintained on it
and interpreted Ms. Luis discovery testimony that she held the property
in trust for her father as an acknowledgment of Mr. Lui Sr.s interest in
the property.  She also noted that Mr. Hsiehs interest in the Hornby
Street Property did not arise under the
FRA
until well after the
Mortgage and sealed acknowledgment were signed in 1996.

[32]

The judge went on to find the Mortgage was valid.  She commented that Mr. Lui
Sr. conceivably took the Mortgage in return for having previously paid off
the institutional mortgage, which, she said, could amount to consideration,
although none was required in a contract under seal (paras. 99-100).  She
also noted that the
FRA
is a deferred community property regime and thus
Mr. Hsieh did not acquire an interest in the Hornby Street Property until
the triggering event on June 30, 2011.  However, she held:

[102]    As Ms. Lui says, by
this time, this was an encumbered gift.  While the initial mortgage was paid
off, that gift changed to an encumbered gift with the mortgage subsequently
placed on it at the request of Ms. Luis father.  The lawyers comments
concerning the validity of the mortgage have nothing to do with the
FRA
. 
While Mr. Hsieh says an encumbered gift is inherently contradictory, I do
not agree.  The gift is simply not as large as perhaps one would wish.

[33]

The judge also agreed with Ms. Lui on the appropriate quantum of
spousal support.  She noted that entitlement on compensatory grounds was
uncontentious and the parties agreed that she should make a lump sum spousal
support order.  After summarising their competing positions and conducting her
analysis, she set retroactive and lump sum spousal support at $1,175,787: the
order Ms. Lui sought based on DivorceMate calculations she presented.  In
particular, the $1,175,787 order represented the mid-range lump sum payment for
a 10.5 year period indicated by the
Spousal Support Advisory Guidelines
[
SSAG
]
with child formula.  This was based on Mr. Hsiehs 2015
Guidelines
income of $647,000 and Ms. Luis
Guidelines
income of $36,000.

[34]

In reaching her decision, the judge noted that the parties separated in
2010 and Ms. Lui received no spousal support following the separation (paras. 129,132). 
She also made findings regarding Mr. Hsiehs
Guidelines
income for
each year after separation, and referenced the objectives of spousal support
and the necessary factors for consideration.  The judge rejected Mr. Hsiehs
request that she impute income to Ms. Lui based on her previous level of
employment income and a proposed asset division, stating:

[142]    I do not find it reasonable to impute annual income
of $118,000 to Ms. Lui.  Ms. Lui ceased working in the bank in 1998
with the consent and approval of her husband. Since then, she has been
exclusively responsible for child care and household management, while Mr. Hsieh
has developed a very successful career.  Indeed, Mr. Hsieh may have
enjoyed career success without those responsibilities.  His
Guidelines
income has averaged $560,000 in the last three years.  There is no basis to
impute a higher income of Ms. Lui in the circumstances of this case at
this particular time.  Utilizing a previous salary may be helpful, but it is
evident circumstances have changed, including the health of Ms. Lui.  In
2007, Ms. Lui suffered from a serious ailment, had heart surgery, and took
some time to recover.  This is significant and should not be disregarded in
considering the appropriate lump sum.

[143]    Further, I note Mr. Hsieh agreed he would have
been both a trustee and beneficiary of the FRH Trust, if not for the
independence rules of KPMG.  In that case, it is likely those assets may well
have been family assets which Ms. Lui is not now able to claim and has
been disadvantaged as a result.



[150]    I conclude as follows:



14.  There will be an order for retroactive and lump sum
spousal support to Ms. Lui, pursuant to the
Spousal Support Advisory
Guidelines
in the mid-range, namely $1,175,787.

Issues on Appeal

[35]

Mr. Hsieh contends that the judge made several material errors in
determining the retroactive and lump sum spousal support award.  In particular,
he says she erred in awarding any retroactive support for the period up to the
trial date and, in any event, in calculating it based on the parties 2015
incomes.  He also says she erred in calculating the award based on a 14-year marriage
after finding that the parties separated in 2008, failing to impute income to Ms. Lui
and failing to account for the Churchill Street Property reapportionment in her
spousal support analysis.  He contends further that she erred in finding the
Mortgage was valid and in finding the cost of a nanny to be an appropriate
s. 7 expense under the
Guidelines
.

[36]

Ms. Lui responds that the spousal support award was based on an
individualized, fact-specific analysis which was justifiable on the law and the
evidence.  Accordingly, the judges spousal support award is entitled to
deference on appeal.  The same is true, she says, of the judges conclusion
that the Mortgage is valid and that the cost of a nanny is an appropriate
s. 7 expense.

[37]

The issues that emerge for determination are:

a)

Did the judge
err in making her award for retroactive and lump sum spousal support and, if
so, how and with what effect?

b)

Did the judge
err in finding the Mortgage was valid?

c)

Did the
judge err in finding the cost of a nanny is an appropriately shared s. 7
expense?

Discussion

Standard of Review

[38]

The standard of appellate review in family law matters is highly
deferential.  An appellant must show that there was a material error, a serious
misapprehension of the evidence, or an error in law for an appeal court to
intervene.  This high standard recognises the discretionary nature of the trial
judges task and the benefits of having heard directly from the parties.  It
also promotes finality and limits expense in family law litigation:
McKenzie
v. Perestrelo
, 2014 BCCA 161 at paras. 23-24, citing
Hickey v.
Hickey
, [1999] 2 S.C.R. 518 at para. 12 and
Van de Perre. v.
Edwards
, 2001 SCC 60 at paras. 14-15.

Did the judge err in making her award for retroactive and lump sum spousal
support and, if so, how and with what effect?

[39]

Mr. Hsieh submits that the judge found the parties separated in
2008, not 2010 as was admitted in the pleadings.  He grounds this submission in
her statements in paragraphs 123 and 126 quoted above regarding reapportionment
of the Churchill Street Property.  He goes on to submit that she reapportioned
the Churchill Street Property based on her finding of a 2008 separation but
awarded spousal support on the basis of a 2010 separation, thus unfairly
prolonging the duration period used for calculating spousal support under the
SSAG
. 
In addition, and in any event, he submits that the appropriate quantum of
retroactive spousal support for the period between separation and trial should
be $0 as Ms. Lui had exclusive use of the Churchill Street Property and,
unlike him, did not incur debt to maintain her standard of living.  Further,
and importantly, the judge erroneously used his 2015
Guidelines
income
of $647,000 to calculate retroactive spousal support for the preceding 4.5
years in which he actually earned considerably less.

[40]

Mr. Hsieh also submits that the judge erred in failing to consider
the Churchill Street Property reapportionment in her spousal support analysis. 
Had she done so, he says, she would have reduced the quantum significantly to
avoid double recovery, given the overlapping objectives of the two awards.  In
addition, she erred in failing to impute income to Ms. Lui, who is
well-educated and obliged to make reasonable efforts to become self-sufficient,
but chooses not to seek gainful employment.  All things considered, in his
submission, an appropriate lump sum spousal support award for the remaining
period of entitlement would be approximately $344,000.

[41]

I would not accede to any of these submissions but one.

[42]

As is apparent from paragraphs 123 and 126 of her reasons, the judge did
not base her reapportionment analysis on a definitive finding as to the
separation date, nor did she find that the parties separated in 2008 for any
other purpose.  Rather, she reapportioned the Churchill Street Property 70 per
cent in Ms. Luis favour because her uncle gifted it to her, her father
paid the taxes, she was economically disadvantaged by the marriage, she needed
to become self-sufficient and she needed to provide a primary residence for
Olivia.  These were all relevant considerations under s. 65 of the
FRA
,
which applied to the claim for reapportionment.  When summarising the
background facts the judge did say the parties separated in 2008, but also
noted that Mr. Hsieh left the family home in 2010 (para. 7).  As was
appropriate, she based her retroactive and lump sum spousal support analysis on
the admitted date of separation: July 1, 2010.

[43]

It is also apparent from the reasons, read as a whole, that the judge
was alive to the need to consider the reapportionment in making her spousal
support award, and that she did so.  For example, she cited this Courts
decision in
Narayan
in support of the proposition that a property
division claim should be determined before a spousal support claim to enable a
proper assessment of the parties means (para. 27).  She went on to
analyse the two claims in the proper order and referred repeatedly to the
parties means, Ms. Luis limited need and her retention of the Churchill
Street Property in the spousal support analysis (paras. 128-143).  She
also noted that Ms. Luis entitlement to support is compensatory, and
emphasized this Courts reminder in
Chutter v. Chutter
, 2008 BCCA 507, that
marriage is a joint endeavour and the longer it lasts, the stronger the
presumption of equal standards of living on dissolution (paras. 128, 140,
142).

[44]

Spousal support under the
Divorce Act
, R.S.C. 1985, c. 3
(2nd Supp.) [
DA
] is governed by s. 15.2.  The general objective of the
DA
with respect to compensatory support is to ensure that spouses are
compensated for economic hardship or disadvantages experienced as a result of a
marriage or its breakdown:
Hathaway v. Hathaway
, 2014 BCCA 310 at para. 52. 
The objectives of spousal support under s. 15.2 of the
DA
and
property division under s. 65 of the
FRA
overlap with respect to
economic self-sufficiency, thus posing a risk of double recovery where awards
are made under both sections.  However, it does not necessarily follow that entitlement
to spousal support will be diminished or extinguished by reason of a property
reapportionment, particularly where, as here, its conceptual basis is
predominantly compensatory:
Hathaway
at para. 71, citing
Bodine-Shah
v. Shah
, 2014 BCCA 191 at paras. 70-71.

[45]

The overall goal of an award in family law proceedings is to achieve an
equitable sharing of the consequences of marriage and its breakdown.  An
equitable division may be achieved by awarding spousal and child support, by dividing
property and assets, or by a combination of both:
Bodine-Shah
at para. 70. 
Each inquiry will be highly fact-specific:
Hathaway
at para. 72.

[46]

In my view, the judge engaged in the necessary fact-specific inquiry and
accounted for the Churchill Street Property reapportionment in making her
spousal support award.  I see no material error in law, principle or fact in
the judges decision on this point.

[47]

Further, I see no error in the judges decision not to impute income to Ms. Lui
for the period during which spousal support is payable.  A spouse is not
obliged to become self-sufficient following a marriage breakdown; rather, a
spouse is obliged to make reasonable efforts to achieve self-sufficiency.  If
such efforts are not made, a judge may reduce the amount of spousal support
awarded by imputing income to the unreasonably under-employed spouse:
Rogers
v. Rogers
, 1999 BCCA 238 at paras. 44-47, citing
Moge v. Moge
,
[1992] 3 S.C.R. 813.  A decision on whether to impute income is highly
discretionary and, as such, entitled to considerable appellate deference:
Marquez
v. Zapiola
, 2013 BCCA 433 at para. 36.

[48]

When a judge decides whether to impute income, the spouses capacity to
earn income given his or her age, education, health, work history, work
availability and retraining prospects should be considered.  The test for
imputing income for intentional under-employment or unemployment is one of
reasonableness, having regard to these factors:
Marquez
at para. 37. 
The judge undertook the necessary exercise, and fully reviewed Ms. Luis
background and circumstances.  She decided not to impute income to Ms. Lui
largely because she had been out of the workforce for 17 years and primarily responsible
for child care since Olivias birth (para. 142).  Her primary caregiving
responsibilities are ongoing.  In these circumstances, I see no basis upon
which the judges discretionary decision not to impute income to Ms. Lui
should be disturbed.

[49]

However, in my view the judge did err in awarding retroactive spousal
support based on Mr. Hsiehs current annual income.  Insofar as possible,
retroactive support is to be determined based on actual income earned in each
year for which it is due:
Tedham v. Tedham
, 2003 BCCA 600 at paras. 58,
71;
Cornelissen v. Cornelissen,
2003 BCCA 666 at paras. 35-42. 
Although I do not accept that the judge erred in awarding spousal support for
the pre-trial period, given that entitlement was compensatory and the parties
post-separation incomes differed significantly, I agree that she calculated the
retroactive portion of the spousal support award on an erroneous basis.

[50]

As previously noted, the judge made findings as to Mr. Hsiehs
Guidelines
income in each year following the parties 2010 separation (para. 132). 
She also described the $1,175,787 award as an order for retroactive and lump
sum spousal support (para. 150).  However, she relied on
SSAG
calculations
provided by Ms. Lui which produced the mid-range $1,175,787 figure awarded
based on attributing income of $647,000 to Mr. Hsieh and income of $36,000
to Ms. Lui for the entire 10.5-year duration period (the midpoint for a
14-year marriage).  In other words, the judge based both the 4.5-year
retroactive portion of the spousal support award and the remaining 6-year
future portion on the parties current
Guidelines
incomes.  In my view,
this was clearly wrong.

[51]

The parties asked the judge to make a lump sum award, and thus to
hypothesize regarding their likely future incomes.  Given that invitation and
the evidence concerning Mr. Hsiehs positive professional trajectory, it
was reasonable for her to use the $647,000 figure to determine the future
portion of the spousal support award, i.e., for the years 2015 to 2021 (paras. 134-135). 
However, it was unnecessary to hypothesize regarding past income and, as this Court
held in
Tedham
, it was incumbent on the judge to award retroactive
spousal support based on the parties actual incomes.  Accordingly, in my view
the retroactive portion of the spousal support award must be recalculated on
this basis for each year from July 1, 2010 to 2014 and reduced to the
cumulative extent of the difference.

Did the judge err in finding the Mortgage was valid?

[52]

Mr. Hsieh submits the judge erred in finding the Mortgage was valid
because, he says, a mortgage charge cannot exist where, as here, it does not
secure a debt.  He also submits that the Hornby Street Property could not be
transformed into an encumbered gift in June 1996, as the judge held, because
it had previously been fully gifted to Ms. Lui.  In support of his
submission, he emphasizes the constituent elements of a mortgage and a gift and
relates them to the evidence.  He further emphasizes errors on the evidence the
judge made and relied upon in finding the Mortgage valid.  For example, she
stated that a mortgage was always maintained on the Hornby Street Property,
which is inaccurate, and suggested that the participation of Mr. Lui Sr.s
estate in the litigation evidenced an obligation on Ms. Luis part under
the Mortgage, which it does not (paras. 96, 99).

[53]

In my view, Mr. Hsieh is correct.

[54]

A mortgage is an interest in property conferred by a borrower on a
lender to provide a fall-back if repayment obligations are not met: Bruce Ziff,
Principles of Property Law
, 6th ed. (Toronto: Carswell, 2014) at 437;
see also
Duncalm Resort Inc. v. Rendezvous Lodge Ltd.
(1998), 52
B.C.L.R. (3d) 64 (C.A.);
Chan v. Chan
, [1993] B.C.J. No. 442 (S.C.). 
In Walter M. Traub,
Falconbridge on Mortgages
, 5th ed. (Toronto: Thomson
Reuters Canada Limited, 2003) (loose-leaf updated 2016, release 22) at para. 1:40,
a mortgage is described as:

a conveyance of land as a
security for the payment of a debt or the discharge of some other obligation
for which it is given, the security being redeemable on the payment or
discharge of such debt or obligation.

[55]

Modern mortgages do not usually take effect by way of a land
conveyance.  Rather, they operate by way of security as a charge against title:
Zeligs Estate v. Janes
, 2016 BCCA 280 at 58;
Land Title Act
,
R.S.B.C. 1995, c. 250, s. 231.

[56]

A gift is a gratuitous transfer of property for which the donor expects
no remuneration.  By its nature, once a gift is given it cannot be revoked by
the donor:
V.J.F. v. S.K.W.
, 2016 BCCA 186 at para. 49.  The key
factor for consideration in identifying a gift is the actual intention of the
donor when the interest in the property is transferred:
Beaverstock v.
Beaverstock
, 2011 BCCA 413 at para. 9, citing
Pecore v. Pecore
,
2007 SCC 17.  A note signed after a gift was given cannot convert that which
was a gift into a loan or another form of disposition:
Phillips v. Phillips
,
2008 BCSC 1233 at para. 35, per Savage J., as he then was, citing
Locke
v. Locke
, 2000 BCSC 1300 at para. 25;
Cabezas v. Maxim
, 2016
BCCA 82 at paras 34, 41.

[57]

Ms. Luis unequivocal testimony was that Mr. Lui Sr. did not
loan any money to her between 1993, when the Hornby Street Property was
purchased, and May 2, 1996, when the institutional mortgage was discharged.  In
other words, despite the reference to historical advances in the signed
acknowledgment, in fact, there were none.  Nor did Mr. Lui Sr. advance any
money to Ms. Lui in relation to the Mortgage after it was executed or
require her to make any Mortgage payments.  Although the judge considered it conceivable
that Ms. Lui granted the Mortgage to Mr. Lui Sr. in exchange for his
previously repayment of the institutional mortgage (para. 99), she made no
finding in this regard and there was no such evidence.  The judge did not make
a finding as to Mr. Lui Sr.s actual intention when he acquired the Hornby
Street Property and registered title in Ms. Luis name or when he cleared
title by repaying the institutional mortgage on April 1, 1996.

[58]

According to Ms. Luis brother, Mr. Lui Sr. asked Ms. Lui
to grant the Mortgage on June 25, 1996 because he was not comfortable with
her holding clear title given her impending marriage, not because the Mortgage
secured repayment of a debt or other obligation.  In addition, after she
granted the Mortgage, it was Ms. Lui, not her father, who either received
the rental income or lived in the Hornby Street Property.  Further, Mr. Lui
Sr.s estate was added as a party to the litigation because the Mortgage was
being challenged, not as evidence of its validity.

[59]

Given all of the foregoing, in my view the judges implicit finding that
the Mortgage secured repayment of a debt or obligation was based on a
misapprehension of the evidence.  It was plain on the uncontroverted evidence
that it did not do so.  Accordingly, the judge erred in finding that the
Mortgage was a valid charge on the Hornby Street Property.  As it did not
secure repayment of a debt or obligation, it was not a valid mortgage.

[60]

In addition, although the judge did not expressly find that Mr. Lui
Sr. intended to transfer the beneficial interest in the Hornby Street Property
to Ms. Lui gratuitously, she did refer to the property as a gift, albeit
later encumbered by a Mortgage.  To the extent the judge implicitly concluded
that Mr. Lui Sr. intended to gift the equity in the Hornby Street Property
to Ms. Lui when he repaid the institutional mortgage, I consider her
statement at para. 102 to the effect that the gift changed to an
encumbered gift to be an error in law.  Once he gave it to Ms. Lui, Mr. Lui
Sr. could not revoke his gift of unencumbered title.

Did the judge err in finding the cost of a nanny is an appropriately shared
s. 7 expense?

[61]

Mr. Hsieh submits that the judge erred further in finding the cost
of a nanny is an appropriately shared expense under s. 7 of the
Guidelines
in the circumstances.  In support of his submission, he emphasizes the language
of s. 7(1)(a), which applies only to child care expenses incurred as a
result of the custodial parents employment, illness, disability or education
or training for employment.  Given that Ms. Lui is healthy, unemployed
and has no plans to study or become gainfully employed, he says there is no need
to incur a nanny expense on any of the enumerated bases.  Accordingly, he
contends, the judge erred in making the award under s. 7 of the
Guidelines
.

[62]

Ms. Lui responds that the s. 7 award is discretionary and entitled
to appellate deference.  In support of her submission, she emphasizes the fact
that Mr. Hsieh is a high-income earner and that s. 15.1(5) of the
DA
permits the court to depart from the applicable
Guidelines
where special
provisions are made for a childs benefit and application of the
Guidelines
would be inequitable.

[63]

I do not accept Ms. Luis submission.  The judge did not purport to
depart from the applicable
Guidelines
pursuant to s. 15.1(5) of the
DA
.  Rather, she found that the cost of a nanny is an appropriately
shared expense under s. 7 of the
Guidelines
.  In my view, she erred
in so finding.

[64]

Section 7 of the
Guidelines
provides:

7
(1) In a child support
order the court may, on either spouses request, provide for an amount to cover
all or any portion of the following expenses, which expenses may be estimated,
taking into account the necessity of the expense in relation to the childs
best interests and the reasonableness of the expense in relation to the means
of the spouses and those of the child and to the familys spending pattern prior
to the separation:

(a)
child care expenses incurred as a result of the custodial parents
employment, illness, disability or education or training for employment;

(b)
that portion of the medical and dental insurance premiums attributable
to the child;

(c)
health-related expenses that exceed insurance reimbursement by at least
$100 annually, including orthodontic treatment, professional counselling
provided by a psychologist, social worker, psychiatrist or any other person,
physiotherapy, occupational therapy, speech therapy and prescription drugs,
hearing aids, glasses and contact lenses;

(d)
extraordinary expenses for primary or secondary school education or for
any other educational programs that meet the childs particular needs;

(e)
expenses for post-secondary education; and

(f)
extraordinary
expenses for extracurricular activities.

[65]

An order for contribution to special and extraordinary s. 7
expenses is discretionary.  The court may order payment of an enumerated
expense taking into account its necessity relative to the childs best
interests and the reasonableness of the expense relative to the means of the
spouses and the familys pre-separation spending pattern:
Bodine-Shah
at
para. 66.  In cases involving high-income earners, expenses that may not be
considered reasonable for many people may, in context, be reasonable, so long
as the award does not enter the realm of wealth transfer rather than support:
Francis
v. Baker
, [1999] 3 S.C.R. 250;
Sirdevan v. Sirdevan
, 2010 ONSC 2375.

[66]

The judge considered it reasonable for Mr. Hsieh to share in the cost
of a nanny/housekeeper because the family circumstances previously included a
nanny and Olivia continued to engage in a multitude of activities.  In reaching
this conclusion, she rejected Mr. Hsiehs contention that the nannys
tasks were more in the nature of housekeeping than child care, but made no specific
findings as to the breakdown of her duties.  In particular, the judge made no
findings as to which of Olivias extracurricular activities involve the nannys
services or the nature of her current child care duties.  Nor did she identify
the subsection of s. 7 she considered applicable or the extent, if any, to
which Mr. Hsieh contributed to the nanny expense prior to the parties separation
(paras. 25-26).

[67]

In my view, the evidence does not support the conclusion that the cost
of the nanny/housekeeper is an expense within s. 7 of the
Guidelines
. 
There was simply no evidence that Ms. Lui incurs the nanny expense for
child care purposes
as a result
of her
employment,
illness, disability or education or training for employment (s. 7(1)(a)).  In
particular, as Mr. Hsieh points out, there was no evidence that Ms. Lui
suffers from an illness or disability and she does not work outside the home so
does not require child care for purposes of employment.  Nor can the
nanny/housekeepers services be characterized as extraordinary expenses for
extracurricular activities (s. 7(1)(f)).  In the circumstances, despite the
fact that Mr. Hsieh is a high-income earner and Ms. Lui was assisted by
a nanny prior to separation, in my view the judge erred in
awarding the
nanny cost as a shared expense under s. 7 of the
Guidelines
.

Conclusion

[68]

I would allow the appeal, in part, and vary the order below as follows:

1.

the
retroactive portion of the spousal support award in paragraph 12 of the order
is to be recalculated based on the parties
Guidelines
incomes for each
year from July 1, 2010 to 2014 and reduced to the cumulative extent of the
difference;

2.

Mr. Hsieh
shall be compensated by Ms. Lui for his 50 per cent interest in the Hornby
Street Property on the basis that the Mortgage referenced in paragraph 16 of
the order is not valid; and

3.

The cost
of Olivias nanny is not a special and extraordinary expense to be shared and
paragraph 9 of the order is accordingly deleted.

[69]

Mr. Hsieh was substantially successful on the appeal and is thus
entitled to costs.

The
Honourable Madam Justice Dickson

I AGREE:

The Honourable
Mr. Justice Frankel

I AGREE:

The Honourable
Mr. Justice Goepel


