



COURT OF APPEAL
    FOR ONTARIO

CITATION: Slongo v. Slongo, 2017 ONCA 272

DATE: 20170403

DOCKET: C60425

Simmons, LaForme and Pardu JJA.

BETWEEN

Pamela Louise Slongo

Applicant (Appellant)

and

Christopher Ronald Slongo

Respondent (Respondent)

Paul C. Buttigieg and Robert A. Fernandes, for the
    appellant

Herschel I. Fogelman and Erin L. Chaiton-Murray, for the
    respondent

Heard: September 28, 2016

On appeal from the order of Justice Gordon D. Lemon of
    the Superior Court of Justice, dated March 31, 2015, with reasons reported at
    2015 ONSC 2093, 59 R.F.L. (7th) 52.

Simmons
    J.A.:

A.

Introduction

[1]

The issues on appeal relate to orders made on a change motion
    brought by the wife after the husband accepted an early retirement package from
    his employer.

[2]

The first issue concerns whether the motion judge erred in
    terminating the child support payable for the parties youngest child.

[3]

The second issue concerns whether the motion judge erred in
    determining the additional spousal support payable to the wife based on the
    husbands increased income due to receiving an early pension payout.

[4]

The parties married in 1984 and separated in 2007, after almost
    23 years of marital cohabitation. They have three children, born in January
    1987, June 1989 and January 1992, respectively. The marriage was a traditional
    marriage, in which the wife stopped working shortly before the first child was
    born and thereafter remained in the home to care for the children and manage
    the household.

[5]

In June 2008, the parties entered into a separation agreement.
    Among other things, the separation agreement provided that the husband would
    pay child support to the wife until one of certain specified events occurred
    with respect to any of the children.

[6]

The separation agreement also provided that the husband would pay
    spousal support to the wife, subject to variation based on a material change in
    circumstances, which could include an increase in the husbands income beyond
    $145,000, a change in the number of children being supported or the husbands cessation
    of employment prior to age 65.

[7]

In August 2012, at the age of 53, the husband accepted an early
    retirement package from his employer under which he resigned from his
    employment and elected to receive the commuted value of his pension, totaling
    $1,943,000.07 including interest,
[1]
payable in six instalments on September 1st of each year commencing September
    1, 2012. The monies were paid partly as taxable income ($1,296,167.01, payable
    in six instalments) and partly into a locked-in retirement account (LIRA)
    ($646,833.06, payable in six instalments). Soon after his resignation, the husband
    began working as a consultant for his former employer, billing his time out at
    $115 to $125 per hour.

[8]

The husband terminated child support payments for the youngest
    child effective December 1, 2012. As of that date, the child was 20 years old,
    had completed her full-time studies in early childhood education and was one
    credit short of obtaining a certificate in that program. The child subsequently
    re-took the credit and obtained her certificate in May 2013.

[9]

The change motion was launched in April 2013, heard in October
    2014 and February 2015 and determined on March 31, 2015.

[10]

In his reasons, the motion judge found that the parties youngest
    child was not entitled to support under the separation agreement after December
    1, 2012 as the child was by then over the age of 18 years and had ceased
    full-time attendance at an educational institution  one of the triggering
    events for termination under the separation agreement. The motion judge went on
    to conclude that the child was no longer a child of the marriage within the
    meaning of the
Divorce Act
, R.S.C. 1985, c. 3, (2nd Supp.), as she was
    over the age of majority and not unable to obtain the necessaries of life. He
    therefore dismissed the wifes claim for retroactive and ongoing child support
    as of January 1, 2013.

[11]

As for spousal support, the motion judge accepted that there had
    been a material change in circumstances based on the husbands early
    retirement, his increased income and the change in the number of children
    entitled to support. He noted that this was not a case involving proposed
    double-dipping from assets that had already been part of an equalization process
[2]
and that one of the issues he had to determine was the extent to which the
    early pension payout had already been equalized. The motion judge found that
    the capital value of the portion of the husbands pension payout that had not
    previously been subject to equalization amounted to $575,470 after-tax. However,
    he concluded that the wife was entitled to claim against only one half of that
    amount for purposes of spousal support, which he added to the husbands income,
    which he calculated as $57,000 after-tax annually (less an unspecified
    deduction for pre-marriage service), payable over five years.

[12]

Although the motion judge found that the husbands total annual
    income, including $57,500
[3]
on account of his early pension payout, produced a range, under the
Spousal
    Support Advisory Guidelines
[4]
(Guidelines), of roughly $6,000 to $8,000 per month for 2012 and 2013, the
    motion judge chose not to award Guidelines support. Instead, he increased the
    spousal support payable to the wife under the separation agreement by $2,350
    per month, for a total of $5,000 per month, commencing September 1, 2012.

[13]

In the motion judges view, while the wife had contributed to the
    husbands ability to receive the income at issue, there was also an element of
    luck involved in the husbands employers decision to make the early pension
    payout available. Moreover, the motion judge found that the wife had mismanaged
    her finances and that her expenses of approximately $88,000 per year were unreasonable.

[14]

For the reasons that follow, I would dismiss the appeal as it
    relates to child support but allow the appeal as it relates to spousal support.

B.

The Child Support Issue

[15]

The wife submits that the motion judge erred in determining that
    the youngest child no longer qualified for child support under the separation
    agreement as of January 1, 2013 or, in the alternative, that she was no longer
    a child of the marriage within the meaning of the
Divorce Act
. She
    asks for an order that the husband pay retroactive child support for the period
    January 1, 2013 to May 1, 2013 based on the husbands taxable income for 2013
    plus the $57,000 imputed to the husband by the motion judge.

[16]

The wife contends that, under the terms of the separation
    agreement, the husband was obliged to continue supporting the child until the
    child obtained one post-secondary degree. In the alternative, she argues that,
    because the child remained dependent on the wife, the motion judge erred in
    finding that the child no longer qualified as a child of the marriage under the
Divorce Act
.

[17]

I would not accept these submissions.

[18]

The relevant portions of paragraph 12 of the separation agreement
    read as follows:

12. The parties agree that
the Husbands
    obligation to pay child support to the Wife shall continue until one of the
    following occurs
with respect to any of the Children:



b.
the Child becomes 18 years of age and
    ceases to be in full-time attendance (except for school vacations) at an
    educational institution
;

c.
the
    Child obtains one post-secondary educational degree or diploma or turns twenty-three
    years of age, whichever occurs first
. In the event that the Child turns
    23 years of age and has not yet completed her undergraduate degree or diploma,
    then the child support shall continue until the end of that year, provided that
    the Child is carrying a full course load;



f. the Child dies;
or

g. the Child ceases to be a
    child of the marriage as defined in the
Divorce Act
or the
Guidelines
.
    [Emphasis added.]

[19]

The wife asserts that the terms of this provision should be
    interpreted broadly to benefit the parties children. As paragraph 12(c) does
    not stipulate that a child is required to be in full-time attendance at an
    educational institution, she maintains that the husband was not entitled to
    terminate support for the youngest child so long as the child was pursuing a
    post-secondary degree (including a certificate) and had not yet reached the age
    of 23.

[20]

I disagree. Each of the sub-paragraphs in paragraph 12 is a
    triggering event that stipulates conditions under which the husband can
    terminate child support. The sub-paragraphs do not require the husband to
    continue paying child support where one of the sub-paragraphs has been
    triggered just because all of the conditions of another sub-paragraph have not
    been fulfilled. Sub-paragraph 12(b) is clear. It permitted the husband to
    terminate child support for the youngest child once she had attained the age of
    18 years and ceased full time attendance at an educational institution. The
    fact that the child had not yet obtained a post-secondary educational degree or
    diploma or attained the age of 23 years as required to trigger sub-paragraph
    12(c) was irrelevant to the triggering event upon which the husband relied.

[21]

As for the motion judges finding that the child was no longer a
    child of the marriage within the meaning the
Divorce Act
, the motion
    judge relied on the fact that the child completed her full-time studies in
    December 2012 and that between January and May 2013 she was re-taking only one
    credit. Subsequently, the child remained at home to assist her mother and
    grandmother and also began an online program of continuing education in equine
    studies. Although not in the form of an affidavit, there was material before
    the motion judge suggesting the child was working part-time as a stable hand
    while pursuing her online studies. However, there was no indication of what the
    child was earning.

[22]

While acknowledging that the child remained dependent on her
    mother, in the motion judges view, she was capable of earning an income and
    was not unable to obtain the necessaries of life.

[23]

The motion judges finding that the child is no longer a child of
    the marriage within the meaning of the
Divorce Act
is a finding of mixed
    fact and law. As such, it is entitled to deference in this court:
Housen v.
    Nikolaisen
, 2002 SCC 33,
[2002] 2 SCR 235,
at paras. 8, 10 and 36
. The wife has not demonstrated
    any error in principle or palpable and overriding error in this finding. Nor is
    it clearly wrong. I can see no basis on which to interfere with it.

C.

The Spousal Support Issue

[24]

The wife submits that the motion
    judge erred
in declining to apply the Guidelines when determining the
    quantum of spousal support and that, in any event,
h
aving regard to all the circumstances of the case, the quantum of
    spousal support ordered by the motion judge is clearly wrong.

[25]

For reasons that I will explain, I conclude that the motion judge
    erred in his approach to the spousal support issue in this case. Before
    examining the motion judges approach, I will set out some additional background
    relating to the parties, their arrangements on separation and their positions
    before the motion judge. As I conclude that the motion judge misstated the
    parties positions, I will set them out in some detail.

(1)

Background

(a)

The parties

[26]

The husband was 48 years old at separation, the wife was 46.

[27]

Throughout the marriage, the husband was employed as a nuclear
    safety specialist, initially with Ontario Hydro, and later with two successor
    companies, first, Ontario Power Generation Inc., and second, Nuclear Safety
    Solutions Ltd. He began his employment with Ontario Hydro on October 18, 1982.
    However, his pension service (i.e. credited service for the purpose of the
    pension calculation) commenced on June 1, 1984, shortly before the parties marriage,
    on October 13, 1984

[28]

Prior to the birth of the first child, the wife worked as a clerical
    support worker at Ontario Hydro from 1982 to 1986. As already noted, following
    the birth of their first child, she remained in the home to care for the
    children and attend to household tasks. Following the separation, she obtained
    part-time employment as a cosmetician at various pharmacies.

[29]

Over the years following the separation, the wife experienced
    various health problems. However, in determining the spousal support issue the
    motion judge stated, the wife appears to be doing the best she can to obtain
    income given her job experience, health and age. She still has a significant
    need for spousal support.

(b)

The separation
    agreement: property and equalization

[30]

The separation agreement required that the husband pay to the
    wife an equalization payment of $127,336.39. A handwritten provision stipulated
    that the equalization payment was largely as a result of the Husbands equalizing
    his pension based on a pension valuation prepared by Mel Norton and a pension
    value of $268,133.

[31]

The separation agreement also indicated that the parties jointly
    owned matrimonial home had been sold for $1,000,000 and that the net proceeds of
    sale, in the amount of $220,684.13, would be paid to the wife, partly on
    account of the equalization payment.

(c)

The separation
    agreement: child support

[32]

The separation agreement required that the husband pay the wife
    $1,760 per month on account of child support for two children based on an
    agreed annual income of $130,000 for the husband and zero dollars for the wife.
    The separation agreement disclosed that the husband had earned the following
    amounts from 2003 to 2007 and that he estimated he would earn approximately
    $120,000 in 2008:

·

2003 - $117,176

·

2004 - $140,381

·

2005 - $146,710

·

2006 - $141,774

·

2007 - $142,000.

(d)

The separation agreement: spousal support

[33]

The separation agreement required that the husband pay to the
    wife $2,000 per month on account of spousal support commencing July 1, 2008,
    and, in addition, pay her monthly car lease in the amount of $369.99. On the expiry
    of the car lease in October 2010, the husband was to pay, as lump sum spousal
    support, $10,579.70 to pay out the lease.
[5]

(e)

The separation
    agreement: ongoing disclosure and variation

[34]

Paragraph 16 of the separation agreement requires the parties to
    exchange financial disclosure annually and to readjust the child and spousal
    support payable to try and avoid the cost of an unnecessary court application.

[35]

Paragraphs 19 to 25 of the separation agreement address variation
    based on a material change in circumstances. Paragraph 20 stipulates that
    either party may seek a change in child or spousal support in the event of a
    material change in circumstances.

[36]

Paragraph 21 specifies that a material change may be foreseen,
    unforeseen, foreseeable or unforeseeable and that it may include certain
    specified events such as retirement at the normal retirement of 65 and a
    change in the number of children entitled to receive support under the
    agreement.

[37]

Paragraph 21 also stipulates that a material change shall be
    deemed to exclude the wife earning business or employment income of up to
    $30,000 per calendar year or the husband earning up to $145,000 per calendar
    year.

[38]

Significantly, paragraph 21 acknowledges that the husbands
    cessation of employment prior to age 65 may constitute a material change in
    circumstances. Paragraph 21(a) states:

21. A material change in the condition, means, needs or other
    circumstances of the parties or Children may be foreseen, unforeseen,
    foreseeable or unforeseeable, and may include:

(a) a material change in either partys financial position.
The parties acknowledge and agree that at the present time, the
    Husband is intending to continue to work at Nuclear Safety Solutions Ltd. until
    he turns age 65 (i.e. August 1, 2024), notwithstanding he will be eligible to
    retire early from Nuclear Safety Solutions Ltd. on an unreduced pension
    effective on and after August 1, 2012. For the purposes of determining if a
    change
in the quantum of periodic spousal support payable by the Husband
    to the Wife from and after August 1, 2012 to August 1, 2024
is warranted
pursuant to paragraph 17 above,
the parties acknowledge
and agree
that the Husbands cessation of employment
    prior to age 65 may constitute a material change in circumstances
.
    [Emphasis added.]

(f)

The separation agreement: release of pension rights

[39]

Paragraph 33 of the separation agreement provides that, [e]xcept
    as otherwise provided in this agreement  neither the Husband nor the Wife
    shall be entitled to share or to receive any benefits  in respect of, any
    pension of the other

[40]

Paragraph 34 stipulates that each party is entitled to sue the
    other for pension benefits received contrary to the terms of the separation
    agreement.

[41]

The full text of paragraphs 33 and 34 are set out in Appendix A
    to these reasons

(g)

Prior amendments to the support provisions of the separation agreement

[42]

The parties agreed to amend the support payable under the
    separation agreement in 2009 and 2011.

[43]

By consent order dated September 15, 2009, child support was
    increased to $2,000 per month and spousal support was increased by $500 per
    month, plus $150 per month upon the parties divorce to replace the medical
    benefits formerly available to the wife.

[44]

By consent order dated November 28, 2011, the previous $500 per
    month increase in spousal support was continued,
[6]
such that the total monthly spousal support payable, including the replacement
    payment for medical benefits, remained at $2,650.

(h)

The husbands early
    retirement

[45]

On August 24, 2012, the husband resigned from his longstanding
    employment and accepted an early retirement package under which he was to
    receive the commuted value of his pension as calculated by his employer,
    payable in six instalments on September 1st of each year, commencing September
    1, 2012. As indicated above, the husband began performing consulting work for
    his former employer soon after retiring. The details of the husbands pension
    payout are set out below:


(i)

The
    wifes change motion

[46]

The wifes change motion was issued on April 9, 2013. In addition
    to child support, the wife requested that the November 28, 2011 spousal support
    order be terminated effective December 31, 2011 and asked for an order for lump
    sum compensatory spousal support  in a fair and equitable portion from the
    [husbands] employment pension payout, that he received in or about August
    2012.

[47]

In a further notice of motion returnable December 11, 2013 and
    brought in the same proceeding, among other things, the wife requested:

·

a final order varying the September 15, 2009 order and the
    November 28, 2011 order such that periodic spousal support of $7,469 per month
[7]
be paid commencing January 1, 2014;

·

a final order fixing spousal support arrears in the following
    amounts for the following years: i) 2011  $6,984; ii) 2012  $31,464; iii) 2013
     $57,828;

·

a final order imputing income to the husband of $49,865.56
    between 2012 and 2024 and $43,220.33 beginning in 2025 representing the
    portion of the Husbands fully indexed annual pension earned during marital
    cohabitation which was not captured in the 2008 equalization settlement.

(j)

The expert evidence on the change motion concerning the husbands
    pension

[48]

The 2007 pension valuation prepared by Mel Norton, which was
    referred to in the separation agreement, formed part of the record on the
    change motion. It included a summary setting out the present value of the
    husbands pension asset acquired during marriage based on two different
    potential retirement dates, namely:

·

August 1, 2012, the earliest date on which the husband could
    retire and receive an unreduced pension (the early retirement date), and

·

August 1, 2024, the husbands age 65 retirement date.

[49]

Assuming a tax rate of 25.8%, the after-tax value of the pension
    asset that was acquired during marriage was $589,205 based on the early
    retirement date  and $268,133 based on age 65 retirement.
[8]

[50]

Both parties led additional expert evidence on the change motion
    relating to the husbands pension.

[51]

On consent of the parties, the husbands experts reports, prepared
    by DSW Actuarial Services Inc. (DSW), consisting of a report and a
    supplementary report, were simply filed as exhibits; the wifes experts report,
    prepared by Mr. Norton
[9]
(the husbands expert for the 2007 pension valuation), was filed as an exhibit
    and Mr. Norton also testified before the motion judge.

[52]

DSWs reports responded to a question from counsel about why the
    value of the husbands pension had increased from the value assumed for
    equalization purposes as at the date of separation. The reports did not provide
    a specific valuation of the portion of the husbands pension payout that had
    not been subject to equalization.

[53]

Rather, the reports explained that a number of factors affected the
    change in value  and that the value attached to a particular factor could
    change depending on the order of calculation. The author attached an appendix to
    his second report attributing a specific value to each factor, which he opined
    represent[ed] a reasonable estimate of the effect of each factor. However, he
    cautioned that the appendix was not the only possible illustration of the
    effect of each factor.

[54]

The salient portions of the appendix to the second report are as
    follows:

Reconciliation of Change in Value since the Date of
    Separation

After Tax Amount
September 23, 2007          $268,133

Pre-tax Amount
$361,365

Retirement Age Earlier than Assumed          $433,000

Passage of Time                                           $215,000

Pre-Marriage and Post Separation Service          $253,000

Change in Interest Rates                                        $267,000

Change in the Mortality Assumption             $227,000

Post-Retirement Survivor Benefits               $184,000

Miscellaneous
-$57,969

Pre-tax Amount August 24, 2012

$1,882,396
[10]

Approximate After-Tax Amount                 $1,200,000

[55]

The report prepared by the wifes expert, Mr. Norton was directed
    at assist[ing] in the determination of the portion of [the husbands pension
    plan entitlements] that had been equalized, and the portion  that had not been
    equalized.

[56]

In his report, Mr. Norton re-valued the husbands pension
    entitlement replacing the previous assumptions about retirement date and
    pension amount with the known date and amounts
[11]
.
    In the result, he arrived at  a value of $843,603 (the 2012 valuation)  as
    compared to his 2007 valuation of $268,133. In his opinion, this meant that the
    ratio of $268,133 divided by $843,603 - or 31.78% - of the commuted value of
    the pension had been equalized, whereas 68.22% of the commuted value of the
    pension had not been equalized.
[12]


[57]

In his report, Mr. Norton expressed the view that a better
    approach to the matter might be to deem the husband to be receiving the early
    pension payout in the form of an annual lifetime income stream. 68.22% of this
    amount could then be treated as available for spousal support. In that case,
    the unequalized portion of the husbands pension payments would total
    $49,865.56 prior to August 1, 2024, and $43,220.33 thereafter.

[58]

In his report, Mr. Norton explained that his 2012 valuation
    included amounts for retirement date earlier than assumed and for
    pre-marriage and post-separation service, but effectively left unchanged the
    assumptions from 2007 about mortality, interest and tax.

[59]

Concerning the appendix to DSWs second report, Mr. Norton opined
    that the figures attributable to each factor only applied if you did the
    calculations in the order in which DSW set out the factors. If you did the
    calculations in a different order, the number attributable to each factor, but
    not the total, would change. Moreover, because retirement age earlier than
    assumed was the first factor in DSWs ordering, the value attributed to that
    factor would never decrease if the ordering changed  rather, it would only
    become larger. In Mr. Nortons view, no particular order is correct.

[60]

The crux of Mr. Nortons valuation conclusion is set out in
    Appendix B to these reasons.

(k)

Procedural history of the wifes change motion

[61]

The change motion was heard initially on October 21 and 22, 2014.
    Following the October 21-22, 2014 hearing, the motion judge issued an
    endorsement on November 26, 2014 indicating he was satisfied that there had
    been a material change in circumstances such that spousal support should be
    varied and that the claim for child support should be dismissed. However, he
    indicated that he was left with certain questions concerning the expert
    evidence.

[62]

In particular, the motion judge felt unable, without further
    assistance, to determine what ordering of the factors in the appendix to DSWs
    second report would be best in this case. He was also uncertain whether to
    accept the percentage difference between equalized and unequalized amounts as
    set out in Mr. Nortons report. The motion judge indicated that he had not yet
    made a decision about whether the Guidelines should apply, but noted that the
    parties had not made submissions concerning mean-and-needs based support. Accordingly,
    he asked whether he should receive further expert evidence, and requested
    submissions on what the spousal support should be if the Guidelines did not
    apply.

[63]

The change motion hearing resumed on February 13, 2015. On that
    date, among other things, the motion judge accepted the wifes counsels
    submissions that he should not receive further evidence from the experts. The
    motion judge refused the wifes request to file a further affidavit indicating
    she had lost her job. He went on to receive further submissions from counsel
    concerning a means-and-needs approach to support.

(l)

The
    husbands circumstances at the time of the change motion

[64]

The motion judge found that the husband had re-partnered at the
    time of the change motion and that his new spouses annual income as a
    part-time nurse was approximately $80,000. He also found that, in 2012, the
    husbands income from employment was $123,047, his net professional income was
    $43,728 and his line 150 income was $859,919
[13]
,
    and that, in 2013, the husbands net professional income was $176,868 and his
    line 150 income was 329,106.

(m)

The wifes circumstances at the time of the change motion

[65]

The motion judge found that the wife earned approximately $27,000
    in 2012; approximately $25,000 in 2013; and that her May 2014 financial
    statement reflected earnings of less than $600 per month. The wife had not re-partnered
    and, as indicated above, was apparently experiencing certain health problems.

[66]

The wife also had financial problems. Following the separation, she
    purchased a two-storey, four-bedroom house for $442,000. To finance the house,
    she used her equalization payment and also obtained a mortgage for $287,300 at
    an interest rate of prime less 0.6%. In May 2012 she obtained a new mortgage
    from the Royal Bank under which she could borrow up to $350,000 at a rate of
    prime plus 7%. She had two lines of credit totaling almost $100,000, credit
    card debts totaling over $10,000 and unpaid income and property taxes of
    approximately $10,000. Despite these issues, her financial statement indicated
    she had ten cats and five dogs costing approximately $755 per month to
    maintain.

(n)

The parties
    positions on the change motion

(i)

Submissions at the conclusion of the October 21-22, 2014 hearing

[67]

In oral submissions at the conclusion of the October 21-22, 2014
    hearing, the wifes counsel sought support at the high end of the Guidelines
    range based on Mr. Nortons alternate proposal, namely that $49,865.56 per year
    should be imputed to the husband on account of unequalized pension income prior
    to August 1, 2024, and $43,220.33 per year thereafter.

[68]

The husbands counsel acknowledged that two of the factors as
    identified in the appendix to the second DSW report could be considered on the
    motion to change spousal support, namely, increases in pension value due to
    pre- and post-separation service and retirement age earlier than assumed.

[69]

The husbands counsel asked that the value of the unequalized
    portion of the pension be fixed at $469,500: one-half of the increased value of
    the pension attributable to early retirement in the appendix to the second DSW
    report ($433,000 ÷ 2 = $216,500) plus the increase in value of the pension due
    to post-separation service ($253,000). The husbands counsel requested that this
    sum of $469,500 be added to the husbands income, spread over five years, for a
    total of $93,900 per year.

[70]

However, the husbands counsel also submitted that this was an
    appropriate case for lump sum support. Using the $93,900 figure, he submitted a
    Guidelines calculation based on a with child support formula, which produced
    a lump sum support range of $116,711 to $173,805, subject to a credit for
    $25,000, paid in advance, after-tax.

(ii)

Submissions
    on the February 13, 2015 hearing

[71]

During the February 13, 2015 hearing, the motion judge reiterated
    that he was not yet persuaded that he should apply the Guidelines to determine
    support and requested submissions with respect to spousal support without
    reference to the Guidelines.

[72]

The wife claimed monthly expenses of approximately $88,000.
    Having regard to those expenses, her counsel advanced what he termed three
    scenarios. The first two scenarios addressed support for 2013 to 2017 and characterized
    the husbands pension income differently in each. The first two scenarios also addressed
    two different splits of the parties net disposable incomes (NDI). Both of
    these scenarios were premised on the wife having an annual income of $6,770. The
    third scenario addressed child and spousal support for 2012.

[73]

The first scenario was premised on the husbands total taxable
    income for 2013 ($329,480), which excluded amounts transferred to the LIRA. Based
    on a 50/50 NDI split, the first scenario yielded Guidelines monthly support of
    $13,862; based on a 52/48
[14]
NDI split, the first scenario yielded Guidelines monthly support of $13,141.

[74]

In her second scenario, the wife relied on Mr. Nortons alternate
    characterization of the unequalized portion of the pension, under which he
    imputed $49,866 into the husbands income until 2024 and $43,220.33 from 2025
    onwards on account of the unequalized portion of the pension. Adding the
    $49,866 unequalized portion of the pension to the husbands other income
    sources of $194,548 resulted in a total 2014 income of $244,414. Based on a
    50/50 NDI split, the second scenario yielded Guidelines monthly support of
    $10,284; based on a 52/48 NDI split, the second scenario yielded Guidelines
    monthly support of $9,755.

[75]

As I have said, the third scenario addressed child and spousal
    support for 2012 and reflected the $688,139 that the husband received from his
    employer upon retirement. The husbands total income for 2012 was thus $855,919
    as per his T1 tax statement (which excluded amounts transferred to a LIRA).
    Under this scenario, spousal support ranged from $13,299 to $14,894 per month.
    However, the wifes counsel acknowledged that although the husband received a lump
    sum of $688,139 cash pension payout in 2012, only $49,866 (i.e. the imputed unequalized
    pension income on which the wife relied) ought to be considered for the
    purposes of spousal support since a portion of the pension had already been
    equalized. On this calculation, the husbands income in 2012 totalled $218,903
    and spousal support ranged from $2,955 to $3,392.

[76]

Prior to reviewing the scenarios, the wifes counsel submitted
    that spousal support should be fixed at approximately $13,000 per month
    commencing January 1, 2013, subject to a credit for amounts paid by the husband,
    including a $25,000 advance paid in December 2013, plus 2012 arrears.

[77]

The husbands counsel submitted that the wifes budget of
    approximately $7,500 per month was excessive and should be reduced to $4,800
    per month, including notional income taxes. He reiterated his previous
    submissions that the only portions of the husbands pension payments that
    should be included in the husbands income for the purposes of determining
    support were: i) the increased pension amount attributable to post-separation
    service; and ii) one-half of the increased pension amount attributable to early
    retirement. He argued that the wife had bargained away her share of the
    increased pension amount attributable to early retirement when she agreed to an
    equalization based on an age 65 retirement valuation.

[78]

Although it does not form part of the appeal record, it appears
    that the husband submitted a Guidelines support calculation based on:

·

the husbands income consisting of: i) the increased pension
    amount attributable to post-separation service under the DSW report divided by
    five; ii) half of the increased pension amount attributable to early retirement
    under the DSW report divided by five;

·

the wifes income consisting of $31,800 ($2,650 per month in existing
    spousal support and assuming no other employment income on the wifes part).

[79]

This calculation apparently produced what the husbands counsel
    submitted was a Guidelines range for increased spousal support of between $1,397
    and $1,863 per month. In the end, the husbands counsel acknowledged that his
    client could pay increased spousal support at the high end of this range. He
    submitted that to the extent this left any shortfall in the wifes budget, she
    should be able to contribute that amount.

(2)

Section 17(7)
    of the
Divorce Act

[80]

Section 17 (7) of the
Divorce Act
addresses the factors
    to be considered on a change motion relating to spousal support:

17 (7) a variation order varying a spousal support
    order should:

(a) recognize any economic advantages or
    disadvantages to the former spouses arising from the marriage or its breakdown;

(b) apportion between the former spouses any
    financial consequences arising from the care of any child of the marriage over
    and above any obligation for the support of any child of the marriage;

(c) relieve any economic hardship of the former
    spouses arising from the breakdown of the marriage; and

(d) in so far as practicable, promote the economic
    self-sufficiency of each former spouse within a reasonable time.

(3)

The Guidelines

[81]

The final version of the Guidelines was published in July 2008.
    As described in their Executive Summary, they were developed to bring more
    certainty and predictability to the determination of spousal support under the
    federal
Divorce Act
. The Guidelines have not been formally enacted by
    any level of government. They are, however, a very valuable tool for assessing
    a reasonable range of spousal support and should not be departed from lightly.

(4)

The Motion Judges
    Reasons

[82]

The motion judge divided his analysis of the spousal support
    issue into four sections.

[83]

In the first section, the motion judge analyzed whether the
    husbands early retirement brought about a material change in circumstances
    that would allow for a variation of the existing support order and the
    separation agreement. He concluded that under the separation agreement, as
    confirmed by the consent court orders, the following matters could amount to a
    material change in circumstances and that all had occurred: the husbands early
    retirement; an increase in the husbands income; and a change in the number of
    children entitled to child support.

[84]

In the second section, the motion judge analyzed to what extent
    the pension payout had already been equalized.

[85]

In the motion judges view, the wife had relied on an unequalized
    pension value of $575,470: $843,603, the after-tax value in the 2012 valuation,
    minus $268,133, the after-tax value in the 2007 valuation. The husband had
    submitted that, at most, the unequalized value was $321,072
[15]
:
    the difference between the two after-tax pension values referred to in Mr.
    Nortons 2007 valuation, namely, $589,205 (the after-tax value based on the early
    retirement date) minus $268,133 (the after-tax value based on the age 65
    retirement date).

[86]

The motion judge concluded that he could not rely on the DSW
    valuation because it was too subjective and uncertain. Although he had concerns
    about Mr. Nortons opinion, he concluded that he could accept it, subject to
    making a deduction for pre-marriage service, which he found had been four and
    one-half months. The motion judge concluded that the unequalized value of the
    husbands pension equated to $57,000 after-tax over five years, after deducting
    an amount for pre-marriage service:

It must be kept in mind that, to the extent that the pension
    has increased in value, [the wife] is only entitled to claim against half of
    it. If the full value that we now have had been added to [the husbands] net
    family property at separation, [the wife] would only get a credit for half of
    it.

And finally, the increased amount is being paid out over five
    years. So the amount to vary spousal support over those years becomes less
    significant.



Result

I find that the value of the unequalized portion of [the
    husbands] pension is $575,470 after-tax or $57,000 annually over five years,
    after deducting an amount for pre-marriage service.

[87]

In the third section, the motion judge analyzed to what extent he
    should rely on the Guidelines if the wifes spousal support was to be varied.
    After referring to this courts caution in
Gray v. Gray
, 2014 ONCA
    659, 122 O.R. (3d) 337, at para. 45 about apply[ing] the [Guidelines]
    wholesale where complicating factors exist, such as variations based on
    post-separation increases in a payors income, the motion judge concluded, at
    para. 106, that:

While the
Guidelines
may be useful in this case as a
    check, for the reasons that follow, I am not persuaded that that they should be
    applied as a simple matter of arithmetic.

[88]

In the fourth section, the motion judge analyzed the extent to
    which the wifes spousal support should be varied.

[89]

In reaching a conclusion he reviewed a number of considerations: the
    circumstances of both parties; the positions of the parties; various legal
    principles including s. 17(7) of the
Divorce Act
; the Guidelines
    factors that could result in high end spousal support; and principles from
    various authorities including,
Cymbalisty v. Cymbalisty
, 2003 MBCA 138,
    180 Man. R. (2d) 112;
Marinangelli v. Marinangelli
, [2003] 66 O.R.
    (3d) 40 (C.A.);
Thompson v. Thompson
, 2013 ONSC 5500, [2013] O.J. No.
    4001;
Putsai v. Putsai
, 2014 ONCA 422, 319 O.A.C. 403;

Gray v.
    Gray
and
Boston v. Boston
, 2001 SCC 43, [2001] 2 S.C.R. 413.

[90]

Although the motion judge found that, if $57,500 were added to
    the husbands annual income, the Guidelines would produce a range for spousal
    support of between $6,000 and $8,000 per month, he concluded that two factors
    in particular made the underlying assumptions of the [Guidelines] less
    helpful.

[91]

Those factors were, first, the fact that there was some element
    of luck unrelated to the wifes contributions to the husbands career inherent
    in the husbands opportunity to obtain the early pension payout. But for the
    opportunity to retire early, the husband may have continued to work as
    anticipated in the separation agreement. In the motion judges view, the
    husbands early pension payout should not be an opportunity for the court to
    revisit [the wifes] financial decisions after separation.

[92]

The second factor was that the wife had been mismanaging her
    affairs since separation and had been unreasonable with her expenses.

[93]

The motion judge then turned to the factors identified in s. 17
    (7) of the
Divorce Act
. While acknowledging the wifes contribution to
    the husbands professional success, the motion judge could not see any
    continuing factor relating to the care of the children other than to the
    extent that [the wife] took care of the children to allow [the husbands]
    success. Further, the motion judge concluded that the economic hardship the
    wife was suffering did not arise from the breakdown of the marriage but, rather,
    from her mismanagement of the equalization payment in 2008. In his view, [e]ffectively
    requiring [the husband] to pay [the wifes] debts would not promote economic
    self-sufficiency.

[94]

The motion judge found that the wifes debt load could be paid
    off by downsizing both with respect to her house and her desire to support
    those around her and that, [w]ith that, I am confident that spousal support
    of $5,000.00 per month as of September 1, 2012 would provide the appropriate
    support going forward.

[95]

In the result, the motion judge held that for the years 2012
    through 2017, the parties could impute the sum of $57,000 annually to the
    husbands income and that the husband should pay spousal support to the wife in
    the amount of $5,000 per month commencing September 1, 2012.

(5)

The Wifes
    Position on Appeal

[96]

The wife raises two main issues on
    appeal in relation to spousal support. First, she submits that the motion judge
    erred
in declining to apply the Guidelines when determining the quantum
    of spousal support. Second, she argues that, in any event,
h
aving regard to all the circumstances of the
    case, the quantum of spousal support ordered by the motion judge is clearly
    wrong.

[97]

In support of these arguments, the wife contends that the motion
    judge erred in failing to recognize that the wife was crossing over from the
    with child formula to the without child formula and therefore that the
    support she was receiving under the separation agreement was significantly
    lower than the support to which she would otherwise have been entitled.

[98]

The wife also argues that the motion judge placed undue emphasis
    on her post-separation financial decisions and, in particular, her decision to
    acquire a permanent residence for herself and the children using the proceeds
    of equalization payment.

[99]

Finally the wife argues that the motion judge gave insufficient
    consideration to the wifes inability to support herself arising from the
    marriage, its breakdown and her medical situation.

(6)

The Husbands
    Position on Appeal

[100]

Relying on

Gray v. Gray
and
Beninger v.
    Beninger

(2007), 47 R.F.L. (6th) 11 (B.C.C.A.), the husband submits
    that motion judge did not err in taking a cautious approach to the use of the
    Guidelines on a change motion and in finding that they should [not] be applied
    as a simple matter of arithmetic.

[101]

Further, the husband argues that the motion judge correctly
    applied the factors set out in s. 17(7) of the
Divorce Act
, which he
    found limited the wifes claim for spousal support, including that:

·

the wife had been mismanaging her affairs and had not been
    reasonable with her expenses;

·

there were no continuing financial consequences or expenses
    relating to the obligation to care for children of the marriage;

·

the wifes economic hardship arose from her mismanagement of the
    equalization payment rather than the breakdown of the marriage;

·

requiring the husband to effectively pay the wifes
    post-separation debts would not promote economic self-sufficiency; and

·

at least some of the husbands post-separation increase in income
    resulted from luck unrelated to the wifes contributions to the husbands career.

[102]

The husband submits that there is no basis on which to interfere
    with the motion judges discretionary decision relating to the quantum of
    spousal support.

(7)

Standard of
    Review

[103]

The standard of review on support issues is highly deferential.
    Appellate courts should not interfere with support orders unless the reasons
    disclose an error in principle, a significant misapprehension of the evidence,
    or unless the award is clearly wrong:
Hickey v. Hickey
, [1999] 2
    S.C.R. 518, at paras. 11-12.

(8)

Analysis

[104]

I would allow the appeal of the spousal support award. In my
    view, the motion judge erred in principle in his approach and arrived at an
    amount that was clearly wrong. I say this for two main reasons.

(a)

Erroneous Departure from the Guidelines

[105]

As already mentioned, the Guidelines, while not binding, should
    not be lightly departed from. This is in large part because, without them, it
    is very difficult to establish a principled basis for arriving at a figure for spousal
    support. In my view, the motion judge erred in departing from the Guidelines
    for the reasons he did: namely, the good luck associated with the husbands
    early pension pay-out opportunity (at para. 140) and his finding that the wife
    was mismanaging her affairs (at para.150).

[106]

In the face of a very strong compensatory basis for entitlement
    to support, as well as an income increase arising from the very same job that
    the husband occupied throughout the 23-year-long traditional marriage, there
    was simply no reason to conclude that the underlying assumptions of the SSAGs
    [were now] less helpful (para.151).

[107]

The wife was a stay-at-home mother in an approximately 23-year
    marriage. The husband does not dispute that his career flourished, at least in part,
    because the wife assumed responsibility for child care and household
    management. A significant amount of the unequalized portion of the early
    pension payout was earned while the parties cohabited. Post-separation earnings
    were achieved at the level at which they were, at least in part, because of the
    wifes contribution to the husbands career. The wife did not argue for a
Boston
    v. Boston
exception to permit double dipping at this time. In these
    circumstances, the good fortune involved in the early pension payout should
    accrue, at least to some extent, to both parties, particularly where, as here,
    the parties agreed they would share post-separation changes in income.

[108]

As for the wifes expenses, before turning to his analysis of the
    unequalized portion of the pension issue, the motion judge cited
Boston v. Boston
for the proposition that where a pension is equalized by way of a lump sum
    payment, the payee is under an obligation to use those assets in an
    income-producing way  to create an pension to provide for her future.

[109]

However,
Boston
does not require the payee spouse to
    immediately invest the equalization assets. Instead, she must use them to
    generate income by the time the pension-holding spouse retires: see
Boston
at para. 54. In this case, the wife had no opportunity to comply with this
    requirement because the husband opted for early retirement. In any event,
    however, to the extent that the motion judge relied on the proposition he
    stated in assessing the reasonableness of the wifes choice to purchase a
    four-bedroom house with her share of the equalization payment to provide a home
    for herself and the children before the husbands pension came into pay, he
    misstated the principle enunciated in
Boston
.

[110]

Moreover, given the length of the marriage, her role in it and
    her age, the wife is entitled to spousal support on a level commensurate with
    the standard of living the parties enjoyed during the marriage. As chronicled
    in the separation agreement, while cohabiting, the parties lived in a house
    that sold for one million dollars. It was not unreasonable for the wife to
    purchase a home that would accommodate her and the children before the pension
    came into pay.

[111]

In my view, whether viewed cumulatively or in isolation, the good
    fortune involved in the husband receiving an early pension payout and the
    wifes financial decisions did not justify the motion judge in departing from
    the ranges of Guidelines support he was considering.

(b)

Misunderstanding of the Guidelines Ranges when using them as his Check

[112]

Having, in my view, decided in error that the wife should receive
    support below the lowest range suggested by the Guidelines, the motion judge
    still used the Guidelines as a check on his own figures (para.106). In so
    doing, however, he significantly misapprehended the numbers that the Guidelines
    would generate in this case. In this way, he not only erred in deciding that
    the wife should receive support below the lowest Guidelines range, he then
    calculated a Guidelines number that was itself far too low. This compounded the
    initial error and led him to accept a means and needs formulation for the
    spousal support award that was far too low and clearly wrong.

[113]

In calculating the Guidelines support amount that would serve as
    his check, the motion judge made at least two significant errors.

[114]

First, he erred in overlooking the fact that this is a cross-over
    case. Given that the motion judge terminated child support, spousal support had
    to be determined using the without child support formula under the
    Guidelines, rather than the with child support formula. Inherent in that
    change is a recognition that the spousal support the wife was receiving under
    the with child support formula was
lower
than the support to which
    she would have been entitled under the without child support formula. Thus,
    even without the increase in income due to the unequalized pension payout, the
    spousal support to which the wife was entitled was higher in any event. This
    was due at least in part to the fact that this was a cross-over case. (The
    husbands income had also increased.) In any event, the motion judge did not
    advert to the fact that it was a cross-over case.

[115]

Without that acknowledgment, the starting point from which the
    motion judge assessed the wifes spousal support entitlement was too low: see
    Guidelines at c.14.5.

[116]

Second, based on the record that is before us, it appears that
    the motion judge significantly misapprehended the parties positions on the
    Guidelines inputs.

[117]

On the question of how much of the pension payout had already
    been equalized, the motion judge said that the wifes position was that support
    should be based on an unequalized pension value of $575,470 (the after-tax
    value of $843,603 in 2012 minus the after-tax value of $268,133 in 2007). He
    also said that the husbands position was that, at most, the unequalized value
    of the pension was $321,072
[16]
(the difference between the after-tax early retirement option and the after-tax
    age 65 retirement option, as valued in 2007). Neither statement is correct.

[118]

Neither the wife nor Mr. Norton relied on $575,470 as the
    unequalized value of the early pension payout that should be used to determine
    the quantum of spousal support. Rather, Mr. Norton developed a ratio as his
    primary assessment of the unequalized value of the pension and posited, as an
    alternative, the amounts of the pre-tax annual payments that would have
    represented the unequalized value of the pension had the husband elected to
    receive his pension. The wife relied on those pre-tax alternative values to
    make her Guidelines submissions.

[119]

The husband advocated a maximum pre-tax value of $469,500 as the
    unequalized portion of the pension.
[17]
He calculated this figure using pre-tax values from the appendix to the second
    DSW report: one-half of the additional value attributable to early retirement
    plus the value of post-retirement service.
Ultimately,
    the motion judge chose not to rely on the DSW report. Moreover, he rejected the
    husbands argument that the wife had given up her claim to half of the added
    value attributable to early-retirement based on the terms of the contract. In
    this regard, the motion judge noted that while both early retirement date and
    age 65 valuations existed when the separation agreement was negotiated, the
    separation agreement preserved early retirement as a potential material change
    in circumstances.

[120]

No one suggested the approach that the motion judge took: namely
    to use after-tax values of a capital asset to calculate the income available
    for spousal support. And since the Guidelines generate spousal support ranges
    based on pre-tax income, it is difficult to see how the motion judge could then
    have appropriately used the Guidelines as a check on his own figures.

[121]

In the result, in my view, taking account of the parties actual
    submissions, at a minimum, the motion judge erred in using after-tax income
    inputs to assess the available income for support purposes given the
    Guidelines use of pre-tax inputs to generate their ranges and his stated goal
    of using the Guidelines as a check. He also erred in dividing the result by
    five when the payout involved six payments payable in six calendar years.

[122]

In oral submissions, the panel also raised with counsel the
    propriety of dividing the unequalized value of the pension in half when
    assessing the husbands means available for spousal support.
[18]
In my view, this was yet another error in principle. As husbands counsel indicated
    before the motion judge  this was not a re-do of the property settlement. It
    was a change motion addressing spousal support following several material
    changes in circumstances: a change in the number of children entitled to
    support; an early pension pay-out; and an increase in the husbands income in
    absolute terms when he changed his status to that of a consultant. Dividing the
    value of the pension payout in half is a clear error and cannot be permitted to
    stand.

[123]

Based on the foregoing reasons, I would allow the appeal and set
    aside the motion judges order relating to spousal support.

(9)

Remedy

[124]

I have found that the motion judges reasons reveal reversible
    error. Under these circumstances, a new hearing on the issue of the quantum of
    spousal support could be ordered. However, before the motion judge, both
    parties indicated they wished to avoid the expense of the trial of an issue. On
    appeal, the wife requested that this court make a final support award. In the
    circumstances, rather than ordering a new hearing, I would address the issue of
    what spousal support order should be made.

[125]

It is undisputed that the wife is entitled to continuing support.
    Accordingly, the first question is the husbands means. A related question is
    how to avoid double recovery in relation to the early pension payout.

[126]

As previously noted at footnote 2 of these
    reasons, in
Boston v. Boston
, at para. 64, the
    Supreme Court observed that [t]
o avoid double recovery [in awarding
    spousal support], the court should, where practicable, focus on that portion of
    the payor's income and assets that have not been part of the equalization or
    division of matrimonial assets. In
Boston
, such income and assets
    included the portion of the husbands pension income derived from contributions
    made after the date of separation: see
Boston v. Boston
, [1999] O.J.
    No. 5655 (G.D.) at para. 6; and
Boston v. Boston
, [2001] 2 S.C.R. 413,
    at paras. 18 and 64.

[127]

In this case, the parties disagree about which components of the now-known
    commuted value of the husbands pension should be treated as not having been
    part of the equalization. At a minimum,
Boston
makes clear that
    increases in pension income attributable to pre-marriage and post-marriage service
    are potentially available for support (i.e., there is no question that they were
    not part of the  equalization).  Further, in this case, the parties separation
    agreement made any increase attributable to early retirement potentially available
    for support.  Whether increases attributable to factors such as passage of time
    (there is now less time to accumulate the capital necessary to pay the pension),
    changes in interest rates, a change in the mortality assumption and the
    inclusion of a post-retirement survival benefit should also be treated as
    available for support is less clear.

[128]

Neither party submitted any authorities to address that
    question.  The DSW reports did not opine on the issue. Mr. Nortons approach assumes
    that increases due to such factors are potentially available for support
    without explanation. Where the court intends to avoid double dipping, the legal
    issues as to how the pension income should be apportioned to accomplish this
    are best left to another case where the issue is more fully addressed by the
    parties and the court below.

[129]

Nonetheless, in all the circumstances, I would rely on Mr.
    Nortons opinion for the purposes of this case. There is no evidence or
    authority demonstrating that his approach is clearly wrong. Further, as noted, the
    parties separation agreement demonstrates an intention to revisit the issue of
    support in the event the husband opted for early retirement. That intention
    supports the conclusion that increases in the husbands income upon early
    retirement, following equalization of net family property based on a later
    retirement date, should not necessarily be excluded from the monies available
    for support purposes.

[130]

I would not, however, adopt Mr. Nortons proposed alternative
    approach of deeming Mr. Slongo to be in receipt of a fully-indexed annual
    pension. Section 6 of the Guidelines provides that the starting point for
    determining income for spousal support purposes is the definition of income
    under the Federal Child Support Guidelines. Sections 15 to 20 and Schedule III
    of the Federal Child Support Guidelines, SOR/97-175 prescribe the method for
    determining a spouses income. Section 16 specifically says that the sources of
    income set out under the heading Total income in the Canada Revenue Agencys
    T1 General form (line 150 income) are the starting point for determining a
    spouses annual income.  There is no provision in either set of Guidelines for
    alternative notional approaches.  This makes sense for the purposes of both clarity
    and fairness.  A clear starting point for income values is desirable.  Moreover,
    deeming the husband to have a secure indexed pension when he does not is
    potentially unfair.  Unless the parties consent to Mr. Nortons proposed
    alternative approach, in my view, the support order should be based on the
    reality of the income stream available to the husband for support purposes.

[131]

Accordingly, to calculate the husbands income for support
    purposes, I would deduct from his line 150 income for each year 31.78% of the
    pension payout (or eventually of the LIRA payout) he receives in that year.

[132]

As the only years for which we have the husbands income figures
    are 2012 and 2013, I will calculate his income and award support for those
    years only:

2012

Line 150 income                                                                $855,919

Less 31.78% of cash pension payout ($688,139):            $218,691

Income for support purposes                                            $637,
    228

2013

Line 150 income                                                                $329,106

Less 31.78% of cash pension payout ($134,931):            $
    42,881

Income for support purposes                                            $286,225

[133]

The husbands 2012 income yields a Guidelines range for monthly
    spousal support of between $17,544 and $23,392 (using the wifes income as
    found by the trial judge - $27,000). His 2013 income yields a range of $$7,510
    to $9,796 (using the wifes income as found by the trial judge - $25,000).

[134]

The next issue is setting the level of support. On
    the one hand, the wife has a strong compensatory claim and should on that basis
    share significantly in the husbands post-separation increase. At the same
    time, both the existence of the separation agreement and its terms are relevant
    factors when a party seeks a change:
Hickey
,
    at para. 27. Here, the spousal support initially established in the 2008 separation
    agreement was in the low to mid-range of the Guidelines and the parties own
    bargain should be considered.
[19]
I also recognize that the Guidelines provide at s. 11.1 that after the payors
    gross income reaches the ceiling of $350,000, the formulas can no longer be
    applied automatically.  At the same time, the Guidelines make clear that
    $350,000 is also not a cap and that spousal support can and often will
    increase for income above that ceiling.   Given the lump-sum nature of this
    pension payout, intended to compensate the husband for what would otherwise
    have been smaller annual payments, it seems appropriate here for the wife to
    benefit from the application of the formula to the full amount.

[135]

Taking account of all of the circumstances,
I
    would now award support to the wife close to the mid-range Guidelines amount.

[136]

Accordingly, I would award monthly spousal support to the wife in
    the following amounts for the following years: 2012 - $20,000 per month; 2013 -
    $8,500 per month. From 2014 forward, the parties should continue with the
    approach set out in paragraphs 131-133.

D.

Disposition

[137]

Based on the foregoing reasons, I would dismiss the wifes appeal
    relating to child support, allow her appeal concerning spousal support, set
    aside the motion judges order concerning spousal support and substitute an
    order as outlined above in these reasons.

[138]

I would award costs of the appeal to the wife in the amount of
    $12,000 on a partial indemnity scale inclusive of disbursements and applicable
    taxes. This is somewhat less than the agreed upon amount of $15,000 because
    success was divided. If the parties are unable to agree on costs in the court
    below, they may make brief written submissions, the wifes to be filed within
    30 days of the release of these reasons, the husbands within 30 days
    thereafter.

Released:

HSL                                                   Janet
    Simmons J.A.

APR -3 2017                                     I agree
    H.S. LaForme J.A.

I
    agree G. Pardu J.A.


Appendix A

Separation Agreement Provisions

PENSIONS

33. Except as otherwise provided in this agreement,
    and notwithstanding any designation to the contrary which may pre-date this
    agreement, neither the Husband nor the Wife shall be entitled to share or to
    receive any benefits of any kind from, and each party expressly waives all
    rights to bring any claim, including any claim for a division, in respect of,
    any pension of the other, or any other company pension plans, deferred profit sharing
    plans, registered retirement savings plans and registered home ownership plans,
    except that the survivor may receive survivors benefits (if any) if a deceased
    has not remarried and is not living in a common law relationship at death, and
    has not designated another beneficiary.

RECOVERY

34. To the extent that either party should claim and
    receive any pension benefit contrary to the provisions and intent of this
    agreement that will constitute a breach of this agreement, the amount of that
    benefit will constitute a debt owing by that party to the other for which the
    other party may sue and this paragraph may be raised as a complete answer to
    any defence raised by the receiving party to that action.


Appendix B

Extract
    from Mr. Nortons report

The ratio of $263,133 [
sic
,

268,133]
)
[20]
divided by $843,603 (
i.e., 31.19%

[
sic
, 31.78%])
    represents the portion of the commuted value payments that had been equalized.
    As such, consistent with my understanding of the principles established by the
    Supreme Court of Canada in
Boston vs Boston
that generally precludes
    double dipping, when considering the issue of post-retirement spousal
    support, 31.19% [
sic
, 31.78%] of the commuted value amounts should be
    disregarded, having been equalized, and the complement, 68.81% [
sic
,
    68.22%] of the commuted value amounts, having not been equalized, could still
    be considered as income for post-retirement spousal support purposes.

Perhaps a better approach is to simply deem [the husband] to be
    receiving his [pension] entitlements in the form of lifetime income, namely a
    fully-indexed
annual
pension of $72,468.48 prior to
    August 1, 2024 and a fully-indexed
annual
pension
    of $62,811.12 from August 1, 2024 onward. Of these fully-indexed annual
    amounts, 68.81% or $49,865.56 prior to August 1, 2024 and $43,220.33 thereafter
    would be deemed income to [the husband] for purposes of considering on-going
    lifetime spousal support. [Emphasis in original].





[1]

Based on the pension statement the husband received from his employer,
    it appears that the immediate settlement commuted value of the pension was
    $1,882,396.14.



[2]

At paragraph 64 of
Boston v. Boston
, [2001] S.C.R. 413, the court observed that
[t]o avoid
    double recovery, the court should, where practicable, focus on that portion of
    the payor's income and assets that have not been part of the equalization or
    division of matrimonial assets. In
Boston
, the Supreme Court also
    used the shorthand terminology of previously equalized  assets. This was
    presumably a short-hand used for convenience despite the fact that under
    Ontarios family law legislation, which was also in play in that case, it is
    the
value
of the net family properties of the parties, and not the
    assets themselves, that is equalized. In these reasons, I will do the same.



[3]

The motion judge calculated the figure at $57,000 at para. 101
    of his reasons but referred to $57,500 at para. 141 when addressing
the
Spousal
    Support Advisory Guidelines
calculation. At para. 161 of his reasons, he
    said the parties could impute $57,000 to the husbands income for the years
    2012 to 2017.



[4]
(Ottawa: Department of Justice Canada, 2008).



[5]

Based on the husbands agreed income of $130,000, $2,369.99
    per month is just below the low-end Guidelines support range. However, the
    subsequent lump sum payment would change this placement. The Guidelines ranges
    based on $130,000 income for the payor, $0 income for the payee and $1,760 per
    month child support are: $2,432 (low), $2,811 (mid) and $3,212 (high).



[6]
In his reasons, the motion judge noted that he did not have the
    husband's income figure for 2009. However, the motion judge also noted that in
    2010, the husband earned $149,803.93 and that in 2011 he earned $151,429.40.



[7]

The $7,469 figure was high end Guidelines support based on a
    with child support formula and premised on the husband having imputed income
    in 2013 of $49,866 in addition to annual income of $219,130, and the wife
    having annual income of $24,000.



[8]
The summary referred to the present value of an annual pension of $43,706.09,
    payable from retirement for life. The total value pre-tax was $785,668 based on
    the early retirement date (which included a supplemental pension of $6,896.03
    per year, payable from retirement until age 65, valued at $61,318) and $367,241
    based on age 65 retirement. The net value of the pension asset at marriage
    was $9,581 based on the early retirement date and $4,360 based on age 65
    retirement.



[9]
The report was issued in the name J.M. Norton Consulting Inc., but Mr. Norton
    was the author.



[10]

This amount corresponds with the pre-tax immediate
    settlement amount in the pension statement the husband received from his
    employer.



[11]

In his report, Mr. Norton explained that had the husband
    elected to take his pension, his lifetime normal-form pension was
$5,234.26
    per month plus a bridging supplement of $804.78 per month to age 65.



[12]

In his report, in calculating this ratio, Mr. Norton
    mistakenly referred to the 2007 value as $263,133 yielding a ratio of 31.19%.



[13]
The finding at para.124 that the husbands line 150 total income was $859,919
    was likely a typographical error.  I have accepted the figure in the husbands
    T1 general 2012 Income Tax and Benefit Return in the record which shows a total
    income of $855,918.84.



[14]

The wife asserted that the 2008 separation agreement was
    premised on a 52/48 NDI split.



[15]

The motion judges reasons say $321,720, but this is an
    obvious typographical error.



[16]

As previously stated, the motion judge referred to a figure of
    $321,720, which is a typographical error.



[17]
In the husbands original factums filed on the change motion, dated April 7,
    2014 and May 28, 2014 respectively, the husband advocated the position
    enunciated by the motion judge. However, the change motion was finally heard
    several months later, in October 2014 and February 2015, and the husband did
    not adopt his factum position in his oral submissions before the motion judge.



[18]
Given that the motion judges calculations were not obvious on their face, the
    panel was only able to raise this issue during the course of the appeal
    hearing.



[19]
The spousal support initially established in the 2008 separation
    agreement of $2,369 per month was facially below the low-end Guidelines range:
    $2,432 based on the husbands agreed annual income of $130,000. However, taking
    account of the provision for lump sum support to pay out the wifes car loan, I
    conclude the overall support was in at least the low-end Guidelines range.



[20]

It is undisputed that this number is a typographical error and
    should be $268,133 and that the resulting ratio should be 31.78%.


