



COURT OF APPEAL FOR ONTARIO

CITATION:
    Fraser v. Fraser, 2013 ONCA 715

DATE: 20131125

DOCKET: C56145

Simmons, Hoy and Strathy JJ.A.

BETWEEN

Julia Fraser

Applicant (Respondent)

and

David Fraser

Respondent (Appellant)

Stephen Grant and Sarah Young, for the appellant

Melanie Manchee, for the respondent

Heard: May 13, 2013

On appeal from the order of Justice Lorna Lee Snowie of
    the Superior Court of Justice, dated February 1, 2012, with reasons reported at
    2012 ONSC 685.

Simmons
    J.A.:

A.

overview

[1]

The appellant father appeals from an order requiring that he pay lump
    sum child support to the respondent mother. The issues on appeal concern the
    motion judges findings that the father, who had been experiencing mental
    health problems, was capable of returning to work and of earning an income
    equal to the amounts of capital the motion judge found he had been spending
    annually.

[2]

After several years of litigation, the father and the mother resolved various
    issues in matrimonial proceedings between them by way of a consent order dated
    May 7, 2007.

[3]

Prior to the consent order, the father began experiencing mental health
    problems and his licence to practise psychiatry was suspended. Among other
    things, the consent order:

i)

terminated the fathers obligation to pay child support under an interim
    order;

ii)

fixed the fathers child support obligation for the period from January
    1, 2007 to September 1, 2007 at nil; and

iii)

established
    a mechanism for reviewing the fathers child support obligations in the future.

[4]

Importantly, the consent order required that the father place $200,000 from
    his share of the proceeds of sale of the matrimonial home in trust and provided
    that those funds would be returned to him if he satisfied his child support
    obligations between September 1, 2007 and September 1, 2010. If the father did
    not satisfy his child support obligations, the mother could apply for payments
    from the funds held in trust as child support.

[5]

As of September 1, 2010, the fathers licence to practice medicine had
    not been reinstated. However, during the period between January 1, 2008 and January
    1, 2012, he received monies totalling about $800,000  consisting of some capital;
    some income (including RRSP income); the proceeds of a motor vehicle accident
    settlement, and CPP disability payments. The father did not disclose these
    receipts to the mother and paid no child support during this period.

[6]

On a motion by the father for the return of the $200,000 placed in trust,
    the motion judge concluded that the father had not satisfied his child support
    obligations between September 1, 2007 and September 1, 2010.

[7]

Although the motion judge accepted that the father had an illness, she
    was not satisfied he is totally disabled and the victim of his illness.
    Instead, the motion judge found that the father had chosen not to follow any
    active treatment plan and she accepted the mothers submission that the father
    could have gotten better.

[8]

Taking account of the fathers long history of failing to pay support
    orders, the motion judge concluded that a lump sum award of child support was
    appropriate.

[9]

In addition, after noting that the father had chosen to live off capital
    of about $80,000 per year, the motion judge found that he could probably return
    to work and earn at least that amount. Holding that the $80,000 figure should
    be grossed up for income tax, she imputed to the father a before tax income of $118,000.
    Based on her estimate that child support arrears and future child support using
    that income would exceed $200,000 by a significant amount, the motion judge
    awarded the balance
[1]
of the trust fund to the mother and dismissed all other claims for relief.

[10]

The
    father raises two main issues on appeal:

i)

Did the motion judge err by artificially conflating capital with income
    for child support purposes?

ii)

Did the motion judge err by imputing employment income to the father
    when he is under a disability and cannot work?

[11]

In
    relation to the first issue, the father submits that, in stating that the
    father had chosen to live off capital of about $80,000 per year, the motion
    judge failed to distinguish between income and capital and improperly imputed
    income to him based largely on his capital expenditures.

[12]

I
    agree that in calculating the figure of $80,000 per year, the motion judge
    failed to distinguish between income and capital receipts.
[2]
I also agree that it is not generally appropriate to impute income to a spouse for
    child support purposes on the basis of the spouses expenditure of
    non-recurring capital receipts that are not treated as income for income tax
    purposes.
[3]


[13]

That
    said, I do not consider the motion judges reference to the father living off
    capital of $80,000 per year as being determinative of the appeal. As I read the
    motion judges reasons, she imputed an $80,000 annual income to the father, not
    because she found he had been living on capital of $80,000 per year and treated
    his capital as the equivalent of income, but rather because she found he could
    get better, return to work and earn an annual after tax income of at least
    $80,000. The fathers second issue addresses these core findings. I will
    therefore focus on the fathers second issue.

[14]

For
    the reasons that follow, I conclude that the motion judge erred in rejecting,
    without giving reasons, the fathers medical evidence concerning the nature of
    his illness and its impact on his ability to work. Further, on my review of the
    record, it does not support the motion judges findings that the father could
    get better, return to work and generate an after tax income of at least $80,000
    per year and that he failed to follow an active treatment plan.

[15]

These
    conclusions raise the following additional issues: i) what is the fathers annual
    income for child support purposes?;  ii) is the father entitled to the return
    of the balance of the funds held in trust?; and iii) what are the fathers retroactive
    and ongoing child support obligations?

[16]

In
    the result, I would set aside the motion judges order and award past and
    future child support based on income figures I have determined for the father. Given
    that funds are being held in trust to satisfy child support payments, I would
    not make an order for lump sum ongoing child support. Instead, I would direct
    that the ongoing child support payments I have calculated be made on an annual
    basis from the trust fund. I would also direct that the father make ongoing
    disclosure to the mother of his health situation and his income.

B.

background

(1)

The Parties

[17]

The
    parties were married in 1994 and separated in 2002. They have two children, a
    daughter born in 1995 (now 18 years old) and a son born in 1998 (now 15 years
    old).

[18]

According
    to the motion judge, prior to the separation, the parties enjoyed a lavish
    lifestyle. They lived in a two million dollar home and the children attended
    private school. The father was a successful psychiatrist earning more than
    $300,000 per year.
[4]


[19]

Following
    the separation, the children continued to live with their mother. At least by
    the time of the consent order, the mother was operating a lighting store. In
    2011, she purchased a home for $678,000 that is subject to a $200,000 mortgage.
    Apart from this, the record contains little information about the mothers
    current financial situation.
[5]

[20]

The
    father has since remarried. Until about mid to late 2011, he lived in a home
    registered in his new wifes name that was purchased for $391,000 in 2008 with
    his money. Since about mid to late 2011, the father has lived, at least
    intermittently, in a long-term care facility. I will say more about the
    fathers current financial situation later in these reasons.

(2)

The Consent Order

[21]

As
    the fathers motion for the return of the monies held in trust was made
    pursuant to the consent order, I will review the relevant provisions of the
    order in some detail.

[22]

Paragraph
    10 of the consent order terminated the fathers support obligation under an interim
    order, acknowledged his inability to work and stipulated that he would have no
    obligation to pay support from January 1, 2007, to August 31, 2007:

10. THIS COURT ORDERS AND ADJUDGES THAT the [fathers]
    obligation to pay interim child support pursuant to paragraphs 8, 11 and 12 of
    the Interim Order of Van Melle, J., dated February 26, 2003, is terminated.
    Arrears are hereby fixed at $0.00 as any amounts owing are satisfied with the
    payment to the [mother] in paragraph 13(c) of this Order. The [father] is
    currently unable to work and his current child support obligation for the
    period January 1, 2007 to August 31, 2007, is therefore nil.

[23]

Paragraphs
    11 and 13 of the consent order required a solicitor to hold $200,000 from the
    fathers share of the proceeds of sale of the matrimonial home in trust; to
    invest the funds in short term interest bearing securities; and to pay any
    interest to the father. The funds were not to be disbursed without the written
    consent of both parties or further court order, except in the event of the
    fathers death  in which case the funds were to be paid to the mother as a
    fund for the future support of the children.

[24]

Paragraph
    11 of the consent order also specified that the father would be entitled to the
    return of the $200,000 if he satisfied his child support obligations between
    September 1, 2007 and September 1, 2010  but that the mother could apply for
    payments from the fund on account of child support if he did not:

If the [father], after three years, has met his child support
    obligations from September 1, 2007 to September 1, 2010, and is then meeting
    his reasonable child support obligations, such funds, or the balance then
    remaining, shall be returned to him. In the interim, if the [father] has failed
    to meet his reasonable child support obligations, the [mother] may apply to the
    Court for an Order directing payment of such funds, at any time, for child
    support to cover any period following September 1, 2007, or costs awarded to
    her in any future litigation with the [father]. After September 1, 2010, if any
    part of the fund remains in trust, the [mother] may apply to the Court for an
    Order directing payment of such funds, at any time, for child support, or costs
    awarded to her in any future litigation with [the father] relating to the fund.
    In the event of a dispute in regard to the release of such funds, either party
    may apply to the Court for directions

[25]

Paragraph
    12 of the consent order is important because it creates a review mechanism for
    the fathers child support obligations after September 1, 2007 and specifies
    the parties disclosure obligations:

12. THIS COURT ORDERS AND ADJUDGES THAT at any time after
    September 1, 2007, and once per year thereafter, either party may request in
    writing to review the child support arrangements, including the table amount
    and amounts then incurred for extraordinary expenses. Within 30 days of the
    making of such request and upon receipt of such a request, the party shall
    disclose the documents required in Section 21 of the
Child Support Guidelines
,
    information about the amount incurred for the extraordinary expenses for the
    previous period, current information about the childrens extraordinary
    expenses and any other information needed to review child support. The
    [fathers] disclosure obligation will include a year to date summary, to the
    then most recent month end, of his OHIP billings as well as all other income.
    The [mothers] disclosure obligation will include production of Watts Current
    Inc. Financial Statements to the most recent fiscal year end, and evidence of
    revenue and expenses since the most recent fiscal year end Financial Statement.
    The parties will thereafter attempt to resolve the issue but if they are
    unable, either party is at liberty to bring a Motion before the Court for the
    determination of child support.

(3)

Monies Received by the Father following the Consent Order

[26]

The
    motion that resulted in the award of lump sum child support was heard in late
    January 2012. As I have said, between January 2008 and January 2012, the father
    received monies totalling about $800,000, consisting of the following:

2008

·

$6,505  interest income

·

-$6,334  self-employment income
[6]

·

$1343  social assistance payments

·

$152,946 RRSP income

·

$299,608  proceeds of sale of portion of wine collection
[7]

2009

·

$6,000  interest income

·

$512.03  net professional income
[8]

·

$42,167  proceeds of sale of portion of wine collection

2010

·

$400  interest income

·

-$8,911.44  net professional income

·

$25,052.10  CPPD benefits
[9]

·

$269,441.08  proceeds of settlement of a 2005 motor vehicle
    accident claim received in August 2010

2011

·

$1600  estimated interest income
[10]

·

$12,264  CPP benefits
[11]

2012
    Estimated (as of January 2012)

·

$1600  estimated interest income

·

$1,022.23  monthly CPPD benefits.

[27]

The
    father disclosed his RRSP income, interest income, professional income and CPP
    disability benefits in his initial affidavit filed in support of his motion for
    payment of the trust funds. He did not disclose the monies received from the
    sale of his wine collection or the settlement proceeds from his 2005 motor
    vehicle accident until pressed by the mother for additional information.

[28]

A
    schedule attached to the consent order indicates that the fathers wine
    collection was valued at $512,075 at the time of the consent order.

[29]

The
    father claims that the settlement proceeds for his 2005 motor vehicle accident
    relate exclusively to pain and suffering. However, the record does not include
    any information from his counsel in that proceeding or any other material to
    verify the fathers claim.

(4)

The Evidence Concerning the Fathers Illness

[30]

The
    evidence concerning the fathers illness is contained in a series of affidavits
    sworn by the father, the mother and the fathers new wife, in support of the
    relief sought in this motion, as well as the exhibits to those affidavits. The
    exhibits consist primarily of a series of medical reports and progress notes
    authored by the fathers psychiatrist. It is not clear on what basis these
    reports and progress notes were admitted into evidence. However, no issue was
    raised on appeal concerning the propriety of their admission and, in their
    submissions, both parties relied on their contents.

[31]

That
    said, the reports and progress notes include some statements and opinions that
    appear to be based at least in part on self-reports by the father and reports
    by his new wife; in some instances they also include hearsay statements from
    other doctors. I will return to these issues later. For the moment, suffice it
    to say that the hearsay character of some of the underlying material may affect
    the weight to be given to some of the statements and opinions expressed.

(a)

The
    fathers initial affidavit

[32]

In
    his initial affidavit sworn May 3, 2011, the father asserted that he was unable
    to work due to his mental health condition. He attached to his affidavit a
    handwritten letter dated October 6, 2010 from Dr. Kofi Ofosu
[12]
,
    whom he described as his psychiatrist. In the October 6, 2010 letter, Dr. Ofosu
    said that the father had been under his care at a hospital since July 29, 2010;
    that the father suffers from bipolar disorder; and that the father will not be
    able to return to his work as a psychiatrist for the foreseeable future.

(b)

The
    mothers responding affidavit

[33]

The
    mother filed a responding affidavit sworn May 18, 2011. She stated that, prior
    to the consent order the father had been under treatment from at least five
    different psychiatrists with a focus on treatment from Dr. Hoffman of
    Sunnybrook Hospital. She noted that the fathers material does not mention Dr.
    Hoffman and does not disclose what course of treatment, if any, the father had
    been following. She expressed the view that [m]any patients with bipolar
    disorder are able to lead normal lives, and work productively, by following a
    prescribed medication regime. She observed that the fathers material did not
    disclose his proposed treatment plan nor indicate whether he was following it.

(c)

The
    fathers second affidavit

[34]

In
    a further affidavit sworn May 20, 2011, the father said Dr. Ofosu had been
    his treating psychiatrist. He also stated that he was in hospital during a
    four-month period, between June and October 2010,
[13]
where he was an in-patient. After being released from hospital, the father
    returned to the care of Dr. Turner. The father said that, except when he was an
    in-patient in hospital, Dr. Turner had been his treating psychiatrist since
    2007; that Dr. Turner had provided an extensive report to the court in 2007;
    and that he (the father) was seeking an update of Dr. Turners report.

[35]

The
    father attached to his May 20, 2011 affidavit a medical report form Dr. Turner
    completed on November 5, 2009 to support the fathers application for CPP
    disability payments. Portions of the photocopied form are illegible, but the
    diagnosis section reads as follows:

Diagnosis

Mood disorder NOS [Not Otherwise Specified], depressed

ADHD [Attention deficit hyperactivity disorder] Adult type

Marital Separation

Concussions 2005, 1991
[14]

In the CPP medical report form, Dr. Turner
    indicated that the father had 15 to 20 hospital admissions between 2007 and
    2009 for depression and suicidal thoughts. He described the fathers treatment
    as: [p]sychotherapy monthly and [m]eds supervision. Under prognosis, he
    stated: poor, appears to be chronically and severely depressed at times, has
    cognitive problems, ADHD symptoms. He set out relevant physical findings and
    functional limitations as follows:

1. Depression, hopeless, despondency (Mood Dis.) mood
    lability, irritability, thought disorder.

2.   Disorganized, scattered (ADHD)

3. Mild organic brain symptoms (concussion).

(d)

The
    disclosure brief attached to the fathers new wifes affidavit

(i)

Dr. Turners Summary Report

[36]

Following
    an order made on May 26, 2011 requiring, among other things, that all medical
    reports from Dr. Turner be produced, the fathers new wife
[15]
delivered an affidavit sworn January 11, 2012, attaching a disclosure brief as
    an exhibit. The disclosure brief included a Summary Report from Dr. Turner
    dated December 9, 2011.

[37]

In
    his Summary Report, Dr. Turner stated that the father had been a patient under
    his care since he first saw the father in the emergency room of a hospital on
    January 5, 2007 (which was a few months prior to the May 2007 consent order).
    The father presented in an agitated state with suicidal ideation, symptoms of
    depression and emotional upset. He was initially admitted to the in-patient
    psychiatric unit of the hospital. Following the fathers discharge from the
    hospital, Dr. Turner continued to see him as an office patient on what Dr.
    Turner described as regular intervals  however, Dr. Turner also noted that the
    father had had numerous emergency room visits and several hospitalizations in the
    interim.

[38]

Dr.
    Turners key opinions as set out in his Summary Report are as follows:

·

despite adequate and reasonable psychiatric treatment and
    improvement with regards to his support system the fathers psychiatric
    condition, his mental state, his personal functioning and his cognitive
    functioning has not  significantly improved since  January 2007;

·

the father has become unable to function in organizing his daily
    routines, he continues to have significant psychiatric symptoms, he appears
    to have cognitive decline and is unable to function in his regular daily
    routines to the extent that now he is residing in a nursing home;

·

the specific areas where the father had continued difficulty in
    functioning were:

o

mood disorder 
    alternating with periods of depression (which led the father to negotiate with
    funeral homes and present himself in hospital emergency rooms all over the
    province), the father was agitated, energized, restless, irritable and appeared
    to have unrealistic and grandiose plans;

o

attention
    deficit disorder symptoms  the father tended to be disjointed and ruminative
    in his thinking, and he had difficulty in sustained concentration and attention
    in ordinary conversation and in treatment sessions; and

o

cognitive
    impairment.

·

the Summary Reports diagnosis by reference to DSM categories
    reads as follows:

Axis I   Mood Disorder NOS [Not Otherwise Specified]                depressive
    features

Axis II  Exclude Personality Disorder

ADHD Traits

Axis III  Organic Brain Impairment

Ischemic Heart Disease

Axis IV Psychosocial Stressors severe related to   disease factors,
    marital, profession and financial          difficulties

Axis V         GAF 4550 current
[16]

[39]

As
    an appendix to his Summary Report, Dr. Turner attached relevant documents
    from what Dr. Turner described as the fathers complex and lengthy file.
    These documents related primarily to Dr. Turners dealings with the father
    between January 2007 and December 2011 and included several consultation and
    medical legal reports prepared by Dr. Turner as well as Dr. Turners progress
    notes detailing the fathers 45 visits to Dr. Turners office between January
    18, 2007
[17]
and December 9, 2011.


[40]

My
    review of Dr. Turners progress notes and reports reveals that Dr. Turners
    assessment of the nature of the fathers illness evolved somewhat over time and
    that, while he was cautiously optimistic at some points concerning the fathers
    chances for improvement, he eventually concluded that any significant
    improvement was unlikely:

·

in a January 2007 Consultation Report, Dr. Turner described the
    father as suffering from an adjustment disorder with depressive features
    relating to the fathers marital, professional and financial problems;

·

in an April 2007 Medical-Legal Report, Dr. Turner described the
    father as persistently and seriously depressed, beyond that of an adjustment
    reaction;

·

by September 2007, Dr. Turner was describing the father as having
    Major Depression, marked severity  in particular, Dr. Turner noted that at
    their August 20, 2007 session, the father had more severe psychiatric symptoms
     including depression and suicidal thoughts and difficulty in attention and
    concentration  and in addition the father appeared to be developing cognitive
    difficulties, impairment of memory and inappropriateness;

·

on November 29, 2007, while saying that the father had been
    co-operative with prescribed psychiatric treatments and was improving, Dr.
    Turner described the father as suffering from: moderate to severe psychiatric
    symptoms that caused significant anxiety and distress, and at times contributes
    to inappropriate behaviours, particularly when he becomes depressed and
    suicidal. Dr. Turner continued to diagnose the father with Major Depression,
    marked severity and described prior diagnoses of Bipolar Mood disorder and
    Narcissistic Personality Disorder as deferred;

·

in a December 12, 2007 progress note, Dr. Turner said:

[The father] remains chronically para-suicidal. There is a
    risk that he may complete suicide, which remains chronic and unchanged from before.
    I do not think much else can be done other than being as supportive as possible
    and optimizing his various medications  and continuing to see him as regularly
    as possible. There is no value in repeated certification and involuntary
    commitments. This may be harmful in increasing his sense of being a victim and
    be traumatizing him further;

·

in a December 31, 2007 Consultation Report, Dr. Turner again
    described the father as suffering from an Adjustment reaction, depressed
    features along with ADHD  post traumatic stress disorder;

·

in June 2008, Dr. Turner noted that although the father had been
    somewhat more stable in the last six months, his psychiatric condition was
    reemerging and that he presented with similar clinical symptoms of depression,
    hopelessness, suicidality and thought disorder as had been present in the
    past. Dr. Turner identified a treatment plan impasse as between himself and a
    psychologist the father had been seeing and noted that the father would have to
    decide what plan he wanted to go with as he could not continue with both
    practitioners in the circumstances. Following this visit, Dr. Turner did not
    see the father again until March 2009, at which time the father resumed his
    visits to Dr. Turner;

·

Dr. Turners eventual conclusion that the father was unlikely to
    improve is best summed up in the following excerpts from a follow-up letter
    dated December 30, 2009 responding to questions from Canada Pension Plan
    Disability (CPPD) Benefits concerning Dr. Turners earlier, November 5, 2009,
    report to CPPD:

When I saw [the father] originally in the emergency department
     he was in an acute state of distress with unstable symptoms of depression and
    episodic suicidal plans and gestures. Since that time I have continued to
    follow [the father] for regular follow up visits in my office. At the time of
    this writing he has continued to experience unstable mood symptoms particularly
    episodes of depression, despondency and expressed suicidal ideation. He has
    been tried on various mood stabilizers, antidepressants and mood stimulants

Current mental status examination indicated the presence of
    unstable mood symptoms as noted above. He has somewhat reduced energy. His
    concentration and attention was rated as very poor. He was inconsistent in
    giving his history, has difficulty in understanding complex issues, and has the
    tendency to perseverate and repeat himself He gets periods of partial mood
    elevation in conjunction with poor judgment and impulsive behaviours including
    inappropriate spending if given the opportunity.

I understand that [the father] has not been working sometime
    prior to my first contact with him in January of 2007. His medical license has
    been under suspension for the same period of time. At one point there was the
    question of whether he could potentially be reinstated but given the
    continuation of his current symptoms I do not see any chance of that happening
    at this time.

[The father] self reported that he is doing some counselling
    with clients at his current wifes office, which helps him to feel better about
    himself but is limited to a few hours each week. Notwithstanding that, I do
    think that [the father] is clearly totally disabled from his former profession
    and from any competitive alternative employment related to the severity of his
    continuing psychiatric symptoms and cognitive symptoms. I do not foresee any
    significant improvement in his psychiatric symptoms given my experience with
    his treatment over the last 3 years.

I am continuing to follow [the father] as an outpatient in my
    office. He has generally been very compliant with his attendance at the office

·

subsequent progress notes include the following observations by
    Dr. Turner:

April 30, 2010  [the father] continues to present as somewhat
    agitated. At times his conversation appeared slightly bizarre, disjointed and
    inappropriate  It is not clear to me  whether [his] lack of insight and
    inappropriateness is representative of fairly severe attention deficit symptoms
     and he may have some degree of thought disorder related to bipolar features,
    or alternatively that this is representative of a developing organic brain
    syndrome;

January 7, 2011: [the father] remains unchanged essentially
    with some mood lability, talking inappropriately of events past particularly
    owing $18,000 a month to the FRO, some suicidal thoughts, planning for his
    funeral and getting ready to organize his funeral plots and arrangements

April 15, 2011: [the father] overall continues to show
    significant thought disorder, thought disorganization and inappropriateness 
    He continues to be very stressed out. He has had frequent hospital visits and
    his overall functional rating is GAF of 50 or less  Certainly I cannot see
    [the father] ever returning to work at present with what appears to be a
    somewhat deteriorating course

June 10, 2011: In the office [the father] continues to show
    significant thought disorganization and inappropriateness  At this time I see
    no chance of [the father] working either in his original profession as a
    psychiatrist or in any other profession because I continue to have serious
    concerns about his prognosis due to his deteriorating clinical course
    currently.

[41]

Dr.
    Turners reports also note that, following a ten-day hospitalization in January
    2010, the father was in a residential placement for an unspecified period,
    until a decision was reached on how to best manage the fathers current
    situation.
[18]
They also suggest, based on the fathers self-reporting, that subsequently, in
    July 2010, the father was hospitalized for about four months. It was this
    hospitalization that led to Dr. Ofosus handwritten report. However, as I have
    noted in a footnote above, the OHIP records suggest a two-month hospitalization
    from June to early August 2010. According to Dr. Turners progress notes, after
    the father returned home from hospital, his new wife arranged for him to be
    supervised while she was working either through attendance at a seniors centre
    or by a hired supervisor. In his July 29, 2011 progress note, Dr. Turner
    expressed concern about whether the father was developing a degree of dementia.

[42]

Subsequently,
    in his August 29, 2011 progress note, Dr. Turner noted that the father had been
    on a respite placement for five days and was to go to a similar placement for a
    further five days. He described the fathers mental state as having worsened
    overall compared to when he first saw the father in January 2007. He said,
    [c]ertainly there has been an increase in his bizarreness, his obsessive
    ruminations and disorganization of thought. He requires frequent supervision of
    his activities of daily living now. In a September 2, 2011 progress note, Dr.
    Turner noted that the father was asked to leave the respite program because he
    was too agitated and restless and required more supervision than the program could
    provide.

[43]

Dr.
    Turners final progress note in the record is dated December 9, 2011. In it, he
    states that the father was continuing in respite treatment on a semi-permanent
    basis. He described the father as having delusional preoccupation and a
    tendency to be disjointed and tangential in his conversation.

(ii)

Discharge
    summaries

[44]

The
    attachments to Dr. Turners Summary Report also include two discharge summaries
    from other psychiatrists relating to hospital visits by the father. I set these
    out in detail because the motion judge relied heavily on their contents.

[45]

The
    first discharge summary was prepared by Dr. Gagan Gaind. It is dated May 21,
    2007, and relates to a hospitalization from May 8, 2007, to May 16, 2007. Dr.
    Gaind discharge diagnosis was:

Axis I: malingering

Axis II: narcissistic personality disorder

[46]

In
    his report, Dr. Gaind explained that his diagnosis of malingering arose from
    the circumstances around the fathers admission to hospital. Prior to being
    admitted to the hospital, the father was apparently charged with mischief for
    pulling a fire alarm at a hotel. After he was charged, he apparently told the
    police that he had been mugged in a garage and that he had injected himself
    with potassium chloride earlier in the day. In Dr. Gainds view, the father
    pulled the fire alarm because he was angry with the hotel staff and concocted
    these stories in order to be taken for a psychiatric assessment rather than
    jail. In his view, that conduct fulfilled the criteria for malingering.

[47]

Dr.
    Gaind also described the fathers narcissistic personality disorder as being
    severe and a problem that would make it difficult for him to get any help:

Everything that [hospital staff] observed  pointed very much
    to a severe narcissistic personality disorder who had decompensated
    increasingly since his marriage broke up five years ago. It was clear that in
    many ways he is the architect of his own misfortune in the various things he
    has done and the lies he has told lead him to greater and greater ruin. It was
    also clear that he had a great deal of difficulty engaging in any meaningful
    therapy with anyone and was simply going from person to person until perhaps he
    hears what he wants to hear  However, the larger picture does suggest a
    narcissistic personality disorder in quite an advanced stage of decompensation.
    Whether he has bipolar disorder type I or type II or attention deficit
    disorder, I cannot say for sure, but my general impression would be that his
    personality disorder explains his behaviours. Unfortunately, this personality
    includes a very marked tendency towards lying and exaggeration, and this will
    make it very difficult for [the father] to get any meaningful help.

[48]

The
    second discharge summary was prepared by Dr. Janet Patterson. It is dated July
    20, 2011, and relates to a hospitalization on June 30, 2011. Dr. Patterson also
    diagnosed the father on Axis I as malingering and on Axis II as narcissistic
    personality disorder. Following an interview [with the father] that was quite
    difficult to sort out, Dr. Patterson spoke to the fathers new wife who
    explained that the father called the police and told them he tried to kill
    himself because she had gotten angry with him. Concerning the fathers mental
    status, Dr. Patterson said, there is no current suicidal ideation or evidence
    of mood disorder or psychosis.

[49]

Dr.
    Turners progress notes include a reference to one other hospital discharge
    summary, but that summary was not included as one of the attachments to his
    Summary Report. The discharge summary relates to a hospitalization from January
    10 to 20, 2010. In a progress note dated February 5, 2010, Dr. Turner describes
    the discharge summary as follows:

I did review the extensive report produced by Dr. Adam and she
    did not really have any new findings. She did comment on his inconsistency of
    presentation, felt him to be possibly malingering and have behavioural and
    personality disorder features. She did not identify any of the underlying
    possible mood disorder features or ADHD features.

[50]

The
    motion judge relied on excerpts from some of these discharge summaries
    indicating that the father is a malingerer and a compulsive liar, as well as
    medical records indicating that the father had consulted with multiple
    psychiatrists, to reach her conclusion that the father could return to work.
    However, in doing so, the motion judge did not refer to the indications in the
    material that these characteristics were part of the fathers illness, nor did
    she consider that no report contained an opinion indicating that the father
    could return to work. I will return to these issues in the analysis section of
    these reasons.

C.

the motion judges reasons

[51]

In
    reaching her conclusion that the father should pay the balance of the trust
    fund to the mother as lump sum child support, the motion judge took account of
    several factors:

·

the father had a history of non-payment of child support both in
    relation to his two children of this marriage and a child of a prior marriage;

·

the father had been using capital as opposed to income to support
    his lifestyle since 2007 but had not paid any child support or s. 7 expenses
    for the benefit of the two children during that period;

·

the father failed to meet his child support obligations between
    September 1, 2007 and September 1, 2010;

·

although the father had an illness, he had been diagnosed as malingering,
    as having a narcissistic  personality and as a habitual liar;

·

the father had made repeated false statements that he was paying
    $18,000 per month in child support;

·

rather than following an active treatment plan as he had been
    expected to do at the time of the consent order, the father had chosen not to
    do so  instead, he chose to doctor-shop. In this regard, the motion judge
    noted that, as a psychiatrist, the father knew the system and that he had
    consulted 209 different doctors between April 2004 and June 2011.

[52]

In
    the following key passages of her reasons the motion judge concluded that the
    father could get better and that he was capable of earning an income equal to
    what he had been spending in capital, which would translate into a before-tax
    income of $118,000 per year:

I am satisfied that [the father] has an illness. I am not
    satisfied that he is totally disabled and the victim of his illness.

The respondent father is a chronic liar. His doctors have
    diagnosed him as a habitual liar. (See the medical reports dated August 20,
    2007 December 30, 2007; August 7, 2009, April 30, 2010 and January 7, 2011.)
[19]
He makes repeated false statements such as:

he pays $18,000/month child
    support to FRO

his father and uncles all
    committed suicide

the judge ordered $400,000.00 held
    in trust in case he killed himself

He has been diagnosed as:

(1) malingering

(2) dramatic

(3) a narcissistic personality

(4) having a propensity towards
    lying disorder.



Dr. Gaind, M.D., described [the father] in 2007 as the
    architect of his own misfortunes:

It was clear that in many ways, he is the architect of his
    own misfortune and the various things he has done and the lies he has told lead
    him to greater and greater ruin. It is also clear that he had a great deal of
    difficulty engaging in any meaningful therapy with anyone and was simply going
    from person to person until perhaps he hears what he wants to hear

(from the report of Dr. Gaind, M.D., dated May 17, 2007).

The [fathers] diagnosis on discharge was:

Axis I: malingering

Axis II: narcissistic personality
    disorder

It is clear from the evidence that the respondent father has
    chosen not to follow any active treatment plan. He has gone from place to
    place to doctor shop.

As a psychiatrist, [the father] knows the system. The
    evidence before this court shows that [the father] saw 209
different
doctors from April 2004 to June 2011 (OHIP
    records) in various locations all across southern Ontario.

Is he ill? Yes, he is ill.

Is he able to get better? I agree with [the wifes] counsel
    that on the balance of probabilities [the father] could get better except he
    has chosen to focus on not paying child support and, as a result, his illness
    has taken on a life of its own. He has gone to extraordinary lengths to avoid
    paying child support to [the mother].

This is an exceptional case. For all of the above reasons, I am
    content to impute income to [the father] in the amount of $80,000.00 This is a
    far cry from the $300,000.00  $600,000.00 that he claims that he earned prior
    to the separation. The $80,000 (before taxes) is the approximate amount of
    capital that he has chosen to live on. I believe that if the respondent father
    would accept his responsibility to pay child support he could probably (balance
    of) return to work and earn at least $80,000.00/year. This amount then must be
    grossed up for tax  being approximately $118,000.00/year.

[53]

Using
    an annual income of $118,000, the motion judge went on to estimate the fathers
    total past and future child support obligation at $281,370 calculated as
    follows:

·

$97,534 on account of child support arrears from August 2007 to
    January 2012;

·

$133,836 on account of future child support (the children were 16
    and 13 years of age at the time of the motion. The motion judge assumed five
    additional years of child support for two children, and three additional years
    of child support for one child);

·

$60,000 on account of the fathers share of post-secondary
    education expenses.

[54]

After
    noting that her estimate of $281,370 provided nothing for retroactive s. 7
    expenses, the motion judge concluded that a lump sum award for child support
    equivalent to the balance of the trust fund would be appropriate.

D.

Relevant statutory provisions

[55]

The
    issues on appeal relate to the quantum of child support payable by the father.
    Under s. 15.1(3) of the
Divorce Act
, R.S.C. 1985, c. 3 (2nd Supp.), a
    court making an order for child support shall do so in accordance with the
    applicable guidelines. Because the father and the mother obtained a divorce,
    and because no order has been made under s. 2(5) of the
Divorce Act
designating Ontario as a province in which the provincial child support
    guidelines apply, the
Federal Child Support Guidelines
, S.O.R./97-175,
    are the applicable guidelines within the meaning of s. 1 of the
Divorce Act
.

[56]

Section
    3 of the
Guidelines
creates a presumptive rule that, unless otherwise
    provided, the amount of support payable for a child is to be determined based
    on the income of the spouse against whom the order is sought.

[57]

Income
    is defined in s. 2 of the
Guidelines
as meaning the annual income
    determined under sections 15 to 20. Sections 15, 16, 17 and 19 of the

Guidelines
are relevant to the calculation of the fathers income in the circumstances of
    this case.

[58]

Section
    15 of the
Guidelines
provides that, subject to any written agreement
    between the parties, a spouses annual income is determined in accordance with
    sections 16 to 20 of the
Guidelines
.

[59]

Section
    16 establishes the basic rule that a spouses income should be determined based
    on the spouses Total Income on line 150 of the T1 General tax return:

16.
Calculation
    of annual income
 Subject to sections 17 to 20, a spouses
    annual income is determined using the sources of income set out under the
    heading Total income in the T1 General form issued by the Canada Revenue
    Agency and is adjusted in accordance with Schedule III.

[60]

Under
    s. 17, if a court is of the opinion that s. 16 would not provide the fairest
    determination of a spouses annual income, the court may have regard to the 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.

[61]

Section
    19 provides that the court may impute to a spouse such amount of income  as
    it considers appropriate and provides a non-exhaustive list of such
    circumstances. The relevant portions of s. 19 read as follows:

19.(1)
Imputing
    Income
 The court may impute such amount of income to a spouse
    as it considers appropriate in the circumstances, which circumstances include,

(a) the spouse is intentionally
    under-employed or unemployed, other than where the under-employment or
    unemployment is required by the needs of any child or by the reasonable
    educational or health needs of the spouse;



(e) the spouses property is not
    reasonably utilized to generate income;

(f) the spouse has failed to
    provide income information when under a legal obligation to do so;



(h) the spouse derives a
    significant portion of income from dividends, capital gains or other sources
    that are taxed at a lower rate than employment or business income or that are
    exempt from tax.

E.

Analysis

(1)

The
    motion judges reasons

[62]

In
    her endorsement, the motion judge accepted that the father had an illness. She did
    not specify what illness and did not explain the chain of reasoning that led to
    her finding that he could get better, return to work and generate an after tax
    income of $80,000 per year. On my reading of her reasons, these findings appear
    to be based on the evidence that the father had been diagnosed as a habitual
    liar, as a malingerer and as having a narcissistic personality disorder along
    with her conclusion that the father failed to follow an  active treatment
    plan. In addition, she relied on findings that the father had intentionally
    evaded child support obligations in the past, that he was focused on not paying
    child support and that he had chosen to live off capital at the rate of about
    $80,000 per year.

[63]

Assuming
    that was her chain of reasoning, in my view, the motion judge made two errors.
    The first error was rejecting, without giving reasons, the fathers medical
    evidence concerning the nature of his illness and its impact on his ability to
    work. The second error was making findings  that the father could get better,
    return to work and earn an after tax income of $80,000 per year, and that he failed
    to follow an active treatment plan  that are not supported by the record.

[64]

The
    motion judges errors require that this court set aside both her rejection of
    the fathers medical evidence, and her central findings: that the father could
    get better, return to work and earn an after tax income of $80,000 and that he
    failed to follow an active treatment plan. However, because of the costs that
    would be involved in remitting this matter to the Superior Court, I consider
    this to be an appropriate case in which to make the necessary findings to
    dispose of this matter on the merits.

(a) The
    motion judge failed to give reasons for rejecting Dr. Turners medical evidence
    concerning the nature of the fathers illness and its impact on the fathers
    ability to return to work

[65]

In
    characterizing the fathers illness as essentially malingering and narcissistic
    personality disorder and in holding that the father could get better and return
    to work, the motion judge implicitly rejected Dr. Turners evidence opining
    that the fathers illness is of a broader character and that, because of this
    illness, the father is disabled from working as a psychiatrist or at any form
    of competitive alternative employment. In doing so, the motion judge relied on
    evidence that was either dated or that was of a very limited character  and
    she did so without explaining why. In the circumstances of this case, in my
    view, the motion judges failure to give reasons for rejecting these aspects of
    Dr. Turners evidence constitutes reversible error.

[66]

In
    her reasons, the motion judge relied heavily on Dr. Gainds discharge summary,
    which is dated May 21, 2007, and which relates to a hospitalization earlier
    that month. Given that the motion was heard in early 2012, Dr. Gainds evidence
    was significantly dated. Moreover, subsequent reports by Dr. Turner describe
    the diagnoses of narcissistic personality disorder and possible bi-polar
    disorder referred to by Dr. Gaind as deferred and proffer alternate diagnoses
     including Mood Disorder [Not Otherwise Specified] and ADHD Traits.

[67]

The
    motion judges conclusions about the nature of the fathers illness are also
    consistent with evidence provided in discharge summaries prepared by Dr. Adam
    and Dr. Patterson. However, the evidence provided by these discharge summaries
    was of a limited character. In one of his progress notes, Dr. Turner gave a
    very brief account of Dr. Adams 2010 discharge summary without reproducing it.
    Dr. Pattersons discharge summary related to a one-day hospitalization.

[68]

In
    contrast to the evidence relied on by the motion judge, Dr. Turners evidence
    provides far more extensive and detailed observations of the course of the
    fathers illness.

[69]

Although
    Dr. Turners opinions and progress notes are premised, to a certain extent, on
    self-reports by the father and reports by his new wife, Dr. Turners reports
    and progress notes also include Dr. Turners observations of the fathers state
    of mind over a lengthy course of treatment. Dr. Turners first-hand
    observations support his conclusions that the father does and has suffered from
    a psychiatric illness for a considerable period of time and that, despite Dr.
    Turners efforts, the fathers condition had not improved.

[70]

Given
    the nature of Dr. Turners evidence  evidence arising from first hand observations
    made over a lengthy period of time  in contrast to the nature of the evidence
    relied on by the motion judge  significantly dated evidence and evidence of a
    limited character  no obvious explanation arises from the record for rejecting
    the evidence of Dr. Turner and relying instead on the evidence of Drs. Gaind,
    Adam and Patterson. If the motion judge had a basis for rejecting the evidence
    provided by Dr. Turners ongoing observations, in my view, it was necessary
    that she state it.

[71]

However,
    even if the motion judges failure to give reasons for rejecting Dr. Turners
    evidence does not constitute reversible error, on my review of the record, it
    contains no evidence capable of supporting the motion judges finding, premised
    on her more limited characterization of the fathers illness, that the father
    could get better, return to work and generate an annual after tax income of
    $80,000. I will turn to that issue in the next section.

(b) The motion
    judge made findings that are not supported by the record

(i)

No
    evidence that the father could get better, return to work and generate an after
    tax income of $80,000 per year

[72]

Assuming,
    as the motion judge seems to have found, that the fathers illness is
    restricted to malingering and narcissistic personality disorder, the motion
    judge referred to no medical evidence that would support her finding that the
    father could get better and return to a form of work that would allow him to
    generate an after tax annual income of $80,000  a level of income that implies
    some level of professional or equivalent competency. On my review of the
    record, there is no such evidence.

[73]

The
    only evidence that addressed the severity of and prognosis for this limited
    understanding of the fathers illness is Dr. Gainds evidence. Even his
    evidence does not support the motion judges conclusion that the father could
    get better and return to a form of work that could generate an after tax annual
    income of $80,000.

[74]

Dr.
    Gaind explained his diagnosis of malingering in terms of the fathers concocting
    a story about a suicide attempt to avoid the consequences of pulling a hotel
    fire alarm. However, he described the fathers narcissistic personality
    disorder as severe and also described the father as having decompensated
    increasingly in the past five years since his marriage broke up.

[75]

Dr.
    Gaind also noted that persons with a narcissistic personality have a very
    marked tendency towards lying and exaggeration and said this will make it
    very difficult for [the father] to get any meaningful help.

[76]

Significantly,
    Dr. Gaind gave no opinion concerning whether and how the fathers condition
    might improve, concerning how long that might take  and if the fathers
    condition did improve, concerning the likelihood that the father could return
    to significant gainful employment.

[77]

As
    I have said, in contrast to the evidence of Dr. Gaind, Dr. Turners evidence
    suggests that the fathers illness is of a broader scope. Moreover, he did not
    foresee the father getting better. In particular, in a letter dated December
    30, 2009, Dr. Turner reached the conclusion that the father was:

[C]learly totally disabled from his former profession and from
    any competitive alternate employment related to the severity of his continuing
    psychiatric symptoms and cognitive symptoms. I do not foresee any significant
    improvement in his psychiatric symptoms

[78]

The
    premise of the consent order was that the father was disabled by his illness
    from practising psychiatry. However one characterizes the fathers illness, the
    record contains no medical evidence to support a finding that it was likely
    that he could get better and return to work as a psychiatrist or in a
    competitive alternative field of employment.

[79]

Similarly,
    the record contains no medical evidence to support a finding that the fathers
    condition was likely to improve such that he could return to any identifiable
    form of employment that would generate an annual after tax income of $80,000.

[80]

The
    motion judge did not specify what she meant by get[ting] better. If she meant
    simply that the fathers condition was likely to improve enough that he could
    work in some lesser, but still well-paying, form of employment, again the
    record does not support this finding. As I have said, there was simply no
    evidence that the fathers condition was likely to improve.

[81]

Moreover,
    the motion judge failed to refer to any specific evidence that would support
    her finding that the father could earn an annual after tax income of $80,000 if
    his condition did improve to some extent.

[82]

Contrary
    to the motion judges finding, the fact that the father chose to spend, on
    average, $80,000 per year, does not support a finding that he could generate an
    after tax income equivalent to that amount.

[83]

Although
    s. 19 of the
Guidelines
provides the court with a broad discretion to
    impute income, in
Drygala v. Pauli
(2002), 61 O.R. (3d) 711 (C.A.), at
    para. 44, this court confirmed that a rational basis must exist for the amount
    that is chosen:

Section 19 of the Guidelines is not an invitation to the court
    to arbitrarily select an amount as imputed income. There must be a rational
    basis underlying the selection of any such figure. The amount selected as an
    exercise of the courts discretion must be grounded in the evidence.

[84]

Had
    there been some basis for concluding that the fathers condition was likely to
    improve, in my view, the motion judge erred in failing to identify a proper
    basis for imputing to him an annual after tax income of $80,000.

(ii)

Finding that the
    father failed to follow an active treatment plan is not supported by the record

[85]

In
    finding that the father had chosen not to follow an active treatment plan,
    the motion judge relied on the fact that he had doctor-shop[ped] and that he
    saw 209 different doctors between April 2004 and June 2011.

[86]

This
    reasoning ignores, or rejects without explanation, important elements of the
    evidence:

·

it ignores the fact that the relevant time period is January 2007
    to December 2011;

·

it ignores or rejects the fact that Dr. Turner accepted the
    fathers many visits to emergency departments as an element of his illness
    without explaining the basis for this rejection;

·

it ignores the fact that, when not in hospital between January
    2007 to December 2011, the father saw Dr. Turner on 45 occasions  a course of
    visits and hospitalizations that Dr. Turner described as constituting adequate
    and reasonable psychiatric treatment.

[87]

In
    any event, even if the evidence supported a finding that the father failed to
    follow an active treatment plan, there was no evidence demonstrating on a
    balance of probabilities that the father would have recovered had he done so.
    As I have said, Dr. Gaind did not give that evidence; nor is any such evidence
    to be found in Dr. Pattersons discharge summary or in Dr. Turners account of
    Dr. Adams discharge summary. Dr. Turners evidence is explicitly to the
    contrary.

[88]

In
    her affidavit, the mother relies on the fathers alleged failure to follow
    through with treatment with Dr. Hoffman, which she understood he was receiving
    at the time of the consent order.

[89]

OHIP
    records forming part of the record disclose that the father saw Dr. Hoffman
    about once a month between January and September 2007  and that the father did
    not see Dr. Hoffman after that. In the light of the fact that Dr. Turners
    treatment of the appellant as described in his November 2009 report to CPP was
    monthly psychotherapy, I am unable to understand how the fathers termination
    of monthly psychotherapy with Dr. Hoffman could support a finding that the
    father failed to follow an active treatment plan.
[20]

[90]

For
    all of the foregoing reasons, I conclude that the motion judge made a palpable
    and overriding error in holding that the father could have gotten better,
    returned to work commencing in August 2007, and earned an after tax income of
    $80,000 per year. It follows that the motion judge also erred in holding that
    the fathers annual income for child support purposes is $118,000. I would set
    these findings aside.

(2)

What is the fathers annual income for child support purposes?

[91]

The
    father submits that he is totally disabled by his illness from working and
    that, apart from his annual CPP disability payments totalling $12,266 per year,
    he has had essentially no income for child support purposes since January 2007.

[92]

In
    particular, the father submits that his 2008 RRSP income should not be treated
    as income for child support purposes and that all the proceeds of the motor
    vehicle accident settlement he received were on account of pain and suffering
    and therefore are not income for child support purposes. In addition, the
    father relies on the fact that the motion judge made no finding that his  property
    has not been reasonably used to generate income that would justify imputing
    income to the father under s. 19(1)(e) of the
Guidelines
.

[93]

I
    would not accept these submissions. For reasons that I will explain, I conclude
    that the fathers 2008 RRSP income should be treated as income for child
    support purposes. Further, while I consider that it would be open to this court
    to treat some portion of the proceeds of the fathers motor vehicle accident
    settlement as income for child support purposes and to impute some modest employment
    income to him based on underemployment, I conclude that the better course is to
    impute income to the father under s. 19(1)(e) of the
Guidelines
.

(a)

The fathers RRSP
    income

[94]

The
    father submits that the motion judge treated his 2008 RRSP income as capital and
    not as income because, when imputing income to him, she described his 2008 RRSP
    income as part of the capital he chose to live on. Relying on s. 17 of the
Guidelines
and
P.(J.M.) v. K.(T.L.)
, [2008] W.D.F.L. 2803 (Ont. S.C.), the
    father contends that the motion judges characterization is correct and that
    his 2008 RRSP income should not be treated as income for child support purposes.

[95]

In
P.(J.M.) v. K.(T.L
.), the trial judge expressed the view that the
    treatment of RRSP receipts as income for child support purposes is
    discretionary under the express terms of the [
Guidelines
]. The trial
    judge in
P.(J.M.)

also said that if the RRSP has been subject
    to equalization, that will be an important factor militating against inclusion
    of the receipts in calculating income for child support purposes.

[96]

In
    this case, the father relies on his assertion that his RRSPs were equalized as
    part of the settlement effected by the consent order, as well as the fact that
    the RRSP withdrawal was a non-recurring event and was used to assist in the
    purchase of a home to argue that it should not be treated as income for child
    support purposes.

[97]

I
    would not accept these submissions. Subject to ss. 17-20 of the
Guidelines
,
    s. 16 provides that a spouses annual income for child support purposes is
    determined using the sources of income set out under the heading Total income
    on the T1 tax form. RRSP income is included as part of Total income on the T1
    tax form. Accordingly, subject to ss. 17-20 of the
Guidelines
, RRSP
    income received in a particular year is presumptively part of a spouses income
    for child support purposes.

[98]

Section
    17 of the
Guidelines
permits a court to depart from the income
    determination made under s. 16 where it is satisfied that would not be the
    fairest determination of income. In such a case, the court may have regard to
    the 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.

[99]

To
    begin with, I am not persuaded that the father has demonstrated that treating
    his RRSP withdrawal as income would not lead to the fairest determination of 
    income.

[100]

In
Stevens
    v. Boulerice
, [1999] O.J. No. 1568, 49 R.F.L. (4th) 425 (S.C.), Aitken J. declined
    for two reasons to exclude RRSP withdrawals from income simply because the RRSP
    had been the subject of an equalization calculation.

[101]

First, she noted
    that s. 16 of the
Guidelines
requires that RRSP withdrawals be
    included as income for child support purposes. Further, Schedule III to the
Guidelines
,
    which provides some special rules for adjustments to income for child support
    purposes in certain cases, does not make any special provision for RRSP
    income.

[102]

Second, Aitken
    J. observed that the equalization was a matter between the parents while the
    issue before her was a question of child support. She could see no reason why
    an available source of income to fund child support should be excluded because
    of dealings between the parents. The child support was not being paid to
    increase the mothers lifestyle.

[103]

I find this
    reasoning persuasive. The clear wording of the
Guidelines
includes
    RRSP withdrawals as income and no special exception for RRSP withdrawals has
    been provided in Schedule III. Although I would acknowledge the possibility
    that the facts of a particular equalization could in theory reach the threshold
    of unfairness, I have no evidence about the specifics of the equalization
    calculation that occurred in this case and cannot so conclude.

[104]

Similarly, I do
    not consider the fact that the father may have used some or all of the RRSP on
    account of his house purchase as a factor creating unfairness in terms of
    characterizing the RRSP. Particularly in circumstances where he was not
    working, the fathers first obligation was to ensure that his children were
    properly supported. The fact that the father  chose instead to buy a four
    bedroom house should not deprive his children of an available source of child
    support.

[105]

Finally, I am of
    the opinion, that some of the early cases relied on by the trial judge in
P.(J.M.)
    v. K.(T.L.)
, at para. 161, which adopted the view that non-recurring
    withdrawals from RRSPs should essentially be automatically excluded from income
    for child support purposes, have been superseded by amendments to s. 17
[21]
and by subsequent case law such as
Stevens v. Boulerice
.

[106]

In any event,
    the fathers material does not disclose his income for the three years
    preceding 2008  the year that he reported $152,946 in RRSP income. Absent such
    disclosure, I cannot perform the steps required under s. 17. If the father
    wished to invoke s. 17 of the
Guidelines
, he should have made proper
    disclosure.

[107]

Based on the
    foregoing reasons, I would hold that the fathers 2008 RRSP income is income
    for that year for child support purposes.

(b)

The proceeds of the motor vehicle
    accident settlement  and imputing income

[108]

As I have said,
    in my view, it would be open to this court to treat a portion of the proceeds
    of the motor vehicle accident settlement the father received as income for
    child support purposes and to impute a modest amount of employment income to
    the father based on undermployment. Nonetheless, I conclude that the better
    course is to impute income to the father under s. 19(1)(e) of the
Guidelines
.

(i)

The Proceeds of the Motor Vehicle Accident Settlement

[109]

In August 2010,
    the father received $269,441.08 to settle his claim for damages arising from a
    2005 motor vehicle accident. The father maintains that the entire amount of the
    award was for pain and suffering and thus he did not report any portion of the
    settlement proceeds as lost income for income tax purposes.
[22]
For the same reason, he submits that none of the settlement proceeds should be
    treated as income for child support purposes. In that regard, he relies on
Rivard
    v. Hankiewicz
, 2007 ONCJ 180, 38 R.F.L. (6th) 189, at paras. 32-33, which
    he submits stands for the proposition that only the portion of personal injury
    settlement funds attributable to lost income will be treated as income for
    child support purposes.

[110]

I do not find
    these submissions persuasive. As I have said, the father provided no documentary
    evidence, and no evidence from his counsel in the personal injury action, to
    support his claim that the entire amount of the settlement proceeds represents
    damages for pain and suffering. Although I consider it possible that a
    settlement was reached without allocating amounts to specific heads of damages,
    I find it unlikely that the father received such a significant settlement
    without any portion of it being attributable to past or future loss of income. If
    the father contends that
Rivard v. Hankiewicz
stands for the
    proposition that only funds specifically designated in a settlement as being on
    account of wage loss should be treated as income for child support purposes, I
    reject that proposition. In addition to the case cited in
Rivard v. Hankiewicz
that the father relies on, that decision also refers to cases in which courts
    treated all or a portion of settlement proceeds as being attributable to lost
    income even though no specific allocation of the damages had been made.

[111]

That said,
    because of the fathers failure to make proper disclosure, any allocation of
    the settlement proceeds made by this court would be entirely arbitrary. Moreover,
    the parties provided us with no authorities concerning the tax treatment of
    motor vehicle accident settlement proceeds. As noted in footnote 22, our
    research suggests that no portion of such proceeds is taxable and, accordingly,
    that any amounts we might attribute to past or future income loss should be
    grossed up in the fathers hands for income tax. However, we have not had the
    benefit of submissions from the parties concerning this issue.

(ii)

Imputing Income to the Father

[112]

Although I have concluded that the motion judge made a palpable and
    overriding error in holding that the father could get better, return to work
    and earn an after tax income of $80,000 per year
, that is not to say
    that the father should not have attempted to maintain gainful employment of
    some kind.

[113]

While the record
    makes it clear that the father could not work as a medical doctor or in any capacity
    likely to generate an after tax annual income of $80,000, in my opinion, it
    does not support a finding that the father could not have engaged in some form
    of employment sufficient to generate at least a minimum wage on at least a
    part-time basis at least until he began living in the retirement home.

[114]

In
    that regard, I note that Dr. Turner never gives an opinion that the father
    could not work at some form of minimally demanding employment. Particularly
    where child support is at issue, any assertion that a parent is totally
    disabled and unable to generate any income should be supported by cogent
    medical evidence.

[115]

That said, taking account of the fathers mental health problems and
    frequent hospitalizations, I am unable to identify anything that the father
    might have done to generate an income other than to work at some form of
    minimum wage, likely part-time, type of employment  and even in that form of
    employment, the father may well have had difficulty maintaining a job.

[116]

Taking account of the fathers lack of disclosure concerning the
    details of his motor vehicle accident settlement, the absence of submissions
    concerning the income tax consequences arising from that settlement, and the
    difficulties inherent in imputing income to the father due to underemployment
    in the unique circumstances of this case, it seems to me that the better course
    is to impute income to the father under s. 19(1)(e) of the
Guidelines
.

[117]

Section 19(1)(e) of the
Guidelines
permits a court to impute income to a spouse where the spouses property is not
    reasonably utilized to generate income. As I have said, in this case, the
    father received monies, consisting of both capital and income, in excess of
    $800,000 during the period between September 1, 2007 and September 1, 2010.
    Having regard to the fathers obligations to support his children and his
    inability to continue to work at employment that would generate a significant
    income when he had done so in the past, I consider it unreasonable that he
    would not have invested some significant portion of those receipts to generate
    income that could be used in part to help support his children.

[118]

In all the circumstances, I find that it was unreasonable for the
    father not to have invested at least the sale proceeds from his wine collection
    and the proceeds of his motor vehicle accident settlement to generate an
    income. These amounts ultimately total $611,216. No evidence was led concerning
    reasonable prevailing rates of return. I would therefore impute investment
    income on that sum at the modest rate of 3% per year.

(3)

Calculation of Child Support Obligations

[119]

I have set out below my calculation of the fathers child support
    obligations for the period from September 1, 2007 to December 31, 2013.

[120]

For the year 2008, the fathers income for child support purposes is
    over $150,000.  Section 4 of the
Guidelines

provides
    that where a payors income is over $150,000 the child support payable will be
    the table amount for $150,000 plus the table percentage (1.16% in 2008) of any
    income over $150,000 unless the court considers the total yielded  inappropriate.
    If the court finds the total inappropriate, the court may order the table
    amount on the first $150,000, plus the amount the court considers appropriate
    in respect of the balance of the payors income, having regard to the
    childrens condition, means needs and other circumstances as well as the
    financial ability of each spouse to contribute to support.

[121]

In
Francis v. Baker
, [1999] 3 S.C.R.
    250,  the Supreme Court concluded that the word inappropriate in section 4(b)
    of the
Guidelines
does not mean inadequate;
    it bears its ordinary dictionary meaning of unsuitable or inadvisable.

[122]

On the facts of this case, I am not persuaded that it is inappropriate
    to require that the father pay the table amount on his 2008 income. Because of
    the fathers illness, the children are in need of whatever support the father
    can provide for them. In that year, the father had the income to pay the total
    table amount. Moreover, there are funds in trust to secure the payment.

[123]

I calculate the fathers annual income and annual child support
    obligations from September 2007 to December 2013 as follows:

2007

Annual Income

$3000  interest income on the $200,000 trust fund
[23]

$3000  Total Income for child support purposes

Child Support Obligation

$0  2007 Total Child Support Obligation

2008

Annual Income

$152,946  RRSP Income

$976.72  CPP disability income

$6,505  Other interest income

$8,988.24  Imputed interest on capital [$299,608 from
    wine sale]

$169,415.96  Total Income for child support purposes

Child Support Obligation

$2,217.22 per month  for 2 children Jan. to Dec. 2008

$26,606.64  2008 Total Child Support Obligation

2009

Annual Income

$12,013.68  CPP disability benefits

$6,000  Other interest income

$13,621.26  Imputed interest on capital [$341,775 January-July
    from wine    sale, $611,216.08 from August-Dec for wine sale and motor vehicle  accident
    settlement]

$31,634.94  Total Income for child support purposes

Child Support Obligation

$466 per month  for 2 children Jan. to Dec. 2009

$5,592  2009 Total Child Support Obligation

2010

Annual Income

$12,061.68  CPP disability benefits

$400  Other interest income

$18,336.48  Imputed interest on capital [$611,216.08]

$30,798.16  Total Income for child support purposes

Child Support Obligation

$454 per month  for 2 children Jan. to Dec. 2010

$5,448  2010 Total Child Support Obligation

2011

Annual Income

$12,264  CPP disability benefits

$400  Estimated other interest income

$18,336.48  Imputed interest on capital [$611,216.08]

$31,000.48  Total Income for child support purposes

Child Support Obligation

$457 per month  for 2 children Jan. to Dec. 2011

$5,484  2011 Total Child Support Obligation

2012

Annual Income

$12,264  CPP disability benefits

$400  Estimated interest income

$18,336.48  Imputed interest on capital [$611,216.08]

$31,000.48  Total Income for child support purposes

Child Support Obligation

$452 per month  for 2 children Jan. to Dec. 2012

$5,424  2012 Total Child Support Obligation

2013

Annual Income

$12,264  CPP disability benefits

$400  Estimated other interest income

$18,336.48  imputed interest on capital [$611,216.08]

$31,000.48  Total Income for child support purposes

Child Support Obligation

$452 per month  for 2 children Jan. to Dec. 2013

$5,424  2013 Total Child Support Obligation

[124]

Based on the foregoing calculations, the fathers accumulated child
    support obligations total $53,978.64. As I have said, some payments have
    already been made to the mother from the trust fund. I leave it to counsel to
    calculate the balance now owing to her together with any interest on arrears
    that may be owing.

[125]

In accordance with the consent order, the mother will also be
    entitled to be paid from the trust fund any costs of this appeal and of the
    proceeding below, which may be awarded to her.

(4)

Is the Father Entitled to the Return of the
    Balance of the Trust Fund?

[126]

The fathers position is that he is entitled to the return of the
    balance of the trust fund upon payment of any amounts owing for child support
    to date.

[127]

I would not accept the fathers position. On my reading of the
    consent order, it is clear that the father was entitled to the return of the
    balance of the trust fund prior to the expiry of his child support obligations
    only if he satisfied those obligations between September 1, 2007 and September
    1, 2010. He did not do so. In these circumstances, the consent order provides
    that the mother is entitled to 
an Order directing payment of such funds
    [as are remaining in trust], at any time, for child support, or costs awarded
    to her in any future litigation with the [father].

F.

Conclusion

[128]

Based on the foregoing reasons, I would allow the appeal in part, set
    aside the motion judges order and substitute an order:

i)

requiring that the accumulated arrears of child
    support plus interest be paid to the mother from the trust fund forthwith;

ii)

requiring that the father continue to pay child support
    and contribute to s. 7 expenses for each of the two children so long as each
    child remains a child within the meaning of the
Divorce Act
;

iii)

directing that the mother shall be entitled to receive an annual
    payment of the estimated annual amount of such support and s. 7 expenses on the
    first day of January of each year. Subject to further order or the agreement of
    the parties, the estimated amount of support and s. 7 expenses and
    extraordinary expenses shall be based on the father having an annual income of
    $
31,000.48
provided that this figure shall be adjusted
    upward if the father resumes gainful employment or his reported income from
    other sources increases;

iv)

directing that the father provide the mother with a copy of his
    annual income tax return each year within 10 days of filing it and a copy of
    his notice of assessment within 10 days of receipt; and

v)

directing that the father provide the mother with a medical report
    from his treating psychiatrist on or before the 1st of February each year so
    long as either child remains a child of the marriage setting out the
    psychiatrists opinion concerning the fathers ability to work.

[129]

Although I would
    allow the appeal in part, I would award costs of the appeal to the mother. The
    father sought an order that the balance of the trust fund be paid to him and a
    further order that he pay no support in addition to the funds already paid. He
    was not successful in obtaining either order. I would award costs of the appeal
    to the mother fixed in the amount of $20,000 inclusive of disbursements and
    applicable taxes. I would not alter the award of costs to the mother made by
    the motion judge. I would order that both costs awards be paid from the trust
    fund forthwith following the expiry of the period for applying for leave to
    appeal from this decision.

Released:

NOV 25 2013                          J. Simmons
    J.A.

GS                                         I agree
    Alexandra Hoy J.A.

I
    agree G.R. Strathy J.A.





[1]

Some payments have been made to the mother from the $200,000
    trust fund. In an order dated May 26, 2011, van Rensburg J. ordered the father
    to pay child support and costs totaling $9,385 from the trust fund ($4,385 on
    account of support and $5,000 on account of costs). In an endorsement dated
    December 27, 2012, Rosenberg J.A. ordered the father to direct that $50,000 be
    released to the mother from the trust fund in accordance with the fathers
    agreement to do so.



[2]

Contrary to the fathers submissions, I am not persuaded that
    the motion judge relied on the fact that the father was living off capital to
    impute income to him. However, I do agree that she relied on the amount the
    father was spending as a basis for determining how much he could earn. Although
    I do not consider that this was a proper basis for assessing the amount the
    father could earn, the fact that the motion judge failed to distinguish between
    income and capital resulted in her grossing up for income tax amounts on which
    the father had already paid income tax to calculate what he could earn.



[3]

This is because the
Federal Child Support
    Guidelines
, S.O.R./97-175, which govern child support,
    provide that subject to certain exceptions, child support is determined based
    on a payor spouses income as determined using the sources of income on the T1
    tax form. Although s. 19 of the

Guidelines
gives the court discretion to impute such amount of income to a
    spouse  as it considers appropriate and provides a non-exhaustive list of
    appropriate circumstances, nothing in the
Guidelines
suggests that expenditures of capital in the form of non-recurring
    capital receipts that are not treated as income for income tax purposes to
    support a spouses lifestyle is such a circumstance. On the contrary, s.
    19(1)(e), which permits a court to impute income where a spouses property is
    not utilized reasonably to generate income suggests the contrary.



[4]

The motion judge also suggests that the father may have been
    earning as much as $600,000 per year in some years. I see no documentary
    evidence in the record to support any of these figures.



[5]

In the May 26, 2011 order, van Rensberg J. ordered that the
    mothers materials responding to the fathers motion for payment out under the
    consent order should be treated as the mothers own application for payment out
    without the need to commence a separate application. Apart from requiring an
    accounting of the childrens CPP benefits received as a result of the fathers
    application for CPP disability benefits, the May 26, 2011 order did not require
    financial disclosure by the mother.



[6]

The father continued to maintain an office after his license
    to practise psychiatry was suspended.



[7]

The father acknowledges receiving $341,775 on account of the
    proceeds of sale of his rare wine collection. At para. 11 of her reasons, the
    motion judge said the father received about $340,000 for the sale of his rare
    wine collection in 2008. Affidavits filed by and on behalf of the father say
    the proceeds were received in 2008 and 2009 but the particulars set out do not
    add up to as much as $341,775. The documents attached to the affidavits
    indicate that the proceeds may have been received between 2006 and 2010 but do
    not include an accounting for the full amount of $341,775. In the
    circumstances, I have simply allocated the total acknowledged proceeds of
    $341,775 between 2008 and 2009 on the basis of statements in the affidavit
    material indicating $299,608 was received in 2008 and additional monies in
    2009.



[8]

Although his license to practice remained suspended, the
    father attempted to do some private counseling work in 2009 and 2010.



[9]

This figure includes retroactive benefits to December 2008,
    allocated as follows: December 2008 $976.72; 2009 $12,013.68; 2010  $12,061.68.



[10]

The fathers 2011 income tax return was not included in the
    record for the January 2012 motion. This figure is based on interest income
    figures for 2012 disclosed in a joint financial statement dated January 11,
    2012 filed by the father and his wife.



[11]

This figure is based on the CPP income disclosed in the
    January 2012 financial statement.



[12]

In his initial affidavit, the father described Dr. Ofosu as
    Dr. Obsu, which is a plausible interpretation of the signature on the
    exhibit. OHIP records filed as part of the record do not show a Dr. Obsu as one
    of the fathers treatment providers. In a subsequent affidavit, the father
    describes his in-hospital treating psychiatrist as Dr. Ofosu, a person who is
    identified as one of the fathers treatment providers in the OHIP records.



[13]

On my review of the OHIP records filed as part of the record,
    they support a hospital stay from about June 5, 2010 through to about August 3,
    2010. Although they show many consultations for psychiatric care during that
    period, they show only one consultation with Dr. Ofosu  on July 17, 2010.



[14]

Dr. Turners progress notes, which are filed as part of the
    record, refer to the father having been involved in motor vehicle accidents in
    1991 and 2005. They also refer to a heart attack in 2005.



[15]

In an affidavit dated January 11, 2012, the fathers new wife
    deposes that she obtained a power of attorney from the father on July 8, 2008.
    According to the affidavit, the father appointed his new wife as his Attorney
    for Property in accordance with the
Substitute Decisions Act
,
S.O.

1992, c. 30. She deposed that
    because of her husband (the fathers) mental health issues, she had been
    assisting in the management of his financial affairs.



[16]

Under Global Assessment of Functioning (GAF) Scale, the DSM-IV
    states: 50 Serious symptoms (e.g. suicidal ideation, severe obsessional
    rituals, frequent shoplifting) OR any serious impairment in social,
    occupational or school functioning (e.g. no friends, unable to keep a job).



[17]

In his January 18, 2007 progress report, Dr. Turner explained
    that the father was released from the hospital inpatient psychiatry unit
    against medical advice.



[18]

Based on Dr. Turners Progress Reports, the father had
    returned home by April 30, 2010.



[19]

These medical reports are all progress notes authored by Dr.
    Turner. Although Dr. Turner gives examples of the father making statements that
    are untrue in these progress notes, he does not diagnose the father as a
    habitual liar in any of them.



[20]

In a progress note dated January 26, 2007, Dr. Turner says:

[The father] had
    initially not been clear as to whether he wanted me to continue with at least
    the medication aspect of his care and had met with Dr. Brian Hoffman earlier
    this week. I had made it clear to [the father] that I would be able to manage
    his psychiatric medication but not necessarily all other aspects, which
    included psychotherapy, and some of the medical/legal component of his care.
    Therefore today, I have advised him, and he has agreed that I would continue
    with his medication treatments and he would continue to see Dr. Hoffman at the
    usual monthly intervals. Dr. Hoffman was planning to be away over the next
    month and there was going to be a hiatus in the continuing care, which was a
    concern for [the father].

In his discharge
    summary dated May 21, 2007, Dr. Gaind notes that he attempted to contact both
    Dr. Turner and Dr. Hoffman but was successful in speaking only to Dr. Hoffman.
    Dr. Gaind says Dr. Hoffman advised him that the father was no longer planning
    to return to Dr. Hoffman although Dr. Hoffman was willing to have him back.
    This aspect of Dr. Gainds report is clearly hearsay.

As I have said, the
    OHIP records indicate that the father continued to see Dr. Hoffman until
    September 2007. Further, Dr. Turners progress notes and CPP report demonstrate
    that Dr. Turner provided the father with ongoing psychotherapy.



[21]

In 1997, s. 17 read as follows:

17(1) Pattern of income  Where the court is of the opinion that the
    determination of a spouses annual income from a source of income under section
    16 would not provide the fairest determination of the annual income from that
    source, the court may determine the annual income from that source

(c) Where the spouse has received a non-recurring amount in any of
    the three most recent taxation years, to be such portion of the amount as the
    court considers appropriate, if any.

Section 17 was amended to the version currently in force by S.O.R./2000-337,
    s. 4 on November 1, 2000.



[22]

We were not provided with any evidence or submissions
    concerning the treatment, for income tax purposes, of the proceeds of a
    settlement arising from a motor vehicle. Based on our review of the issue,
    except to the extent that such funds can reasonably be considered to be income
    from employment and not an award of damages, no portion of such a settlement
    would be taxable: see Canada Revenue Agency, Interpretation Bulletin IT-365,
    Damages, settlements, and similar receipts (January 1, 1995).



[23]
From 2007-2009, the fathers income included approximately $6000/year in
    interest earned on the $200,000 held in trust. These numbers were reported by
    the fathers new wife in an exhibit in her affidavit. He also reported these
    amounts in his tax returns. Beginning in 2010, however, based on a Financial
    Statement, it seems that the interest he earned on the trust funds dropped
    dramatically. He has since only earned approximately $400/year in interest.


