



COURT OF APPEAL FOR ONTARIO

CITATION: Faiello v. Faiello, 2019 ONCA 710

DATE: 20190910

DOCKET: C63245 & C64550

Hoy A.C.J.O., Trotter and Jamal JJ.A.

BETWEEN

Robert Gerrard Anthony Faiello

Applicant (Appellant/
Respondent by way of cross-appeal)

and

Patricia Faiello (aka
    Patricia Greco)

Respondent (Respondent/
Appellant by way of cross-appeal)

Gary S. Joseph and Kristy A. Maurina, for the
    appellant/respondent by way of cross-appeal

Michael Freeman, for the respondent/appellant by way of
    cross-appeal

Heard: July 17, 2019

On appeal from the orders of Justice Sutherland of the
    Superior Court of Justice, dated December 16, 2016, with reasons reported at
    2016 ONSC 7950, October 13, 2017, with reasons reported at 2017 ONSC 6120, and
    July 17, 2018, with reasons reported at 2018 ONSC 4385.

Hoy A.C.J.O.:

A.

overview

[1]

This appeal and cross-appeal arise from a decision to award spousal
    support in the face of a support waiver in the parties Separation Agreement
    (the Agreement), but to honour the Agreements provisions in relation to
    property. The trial judge concluded that there was no basis to set aside the
    Agreement under s. 56(4) of the
Family Law Act
, R.S.O. 1990 c. F.3
    (FLA). Applying
Miglin v. Miglin
, 2003 SCC 24, [2003] 1 S.C.R. 303,
    however, he found that it was nevertheless appropriate to order some support
    payable to the father because the spousal support waiver did not substantially
    comply with the objectives of the
Divorce Act
, R.S.C. 1985, c. 3 (2nd
    Supp.), as amended (DA).

[2]

The father appeals from the trial judges order that the Agreements
    provisions in relation to property remain of full force and effect. The mother
    cross-appeals from his order awarding the father spousal support, arguing that
    the Agreement should be honoured in its entirety. The father also seeks leave
    to appeal from the trial judges order on costs.

[3]

For the reasons that follow, I would dismiss both the fathers appeal
    and the mothers cross-appeal and deny the father leave to appeal the trial
    judges order on costs.

B.

background

[4]

The parties separated on December 31, 2008, after an 18-year marriage
    and 26-year relationship, and executed the Agreement on January 21, 2009. A
    lawyer the father was involved in choosing drafted the Agreement, but the
    father did not receive independent legal advice.

[5]

Pursuant to the Agreement, the father was responsible for a
    significantly greater portion of the substantial debt accumulated by the
    parties during their marriage and released any interest in the matrimonial
    home. Because of this, the parties agreed the father would not be responsible
    for child support for their two children, now in their twenties (born in 1993
    and 1995), who continued to live in the matrimonial home with the mother.

[6]

By the time of separation, the parties had separate investment accounts.
    Under the Agreement, each retained his or her own investments.

[7]

The fathers investments had not performed well. Under the Agreement,
    the father assumed responsibility for debts the total of which exceeded his
    assets by over $500,000. The mother, on the other hand, had net assets worth
    over one million dollars, including the matrimonial home that she valued at
    $770,000 at the time of the Agreement.
[1]

[8]

Although historically, the parties had been self-supporting and the
    father had earned a significant income, his Investment Dealers Association of
    Canada registration was suspended and he was unemployed at the time the parties
    executed the Agreement. The parties released all rights to spousal support. The
    father also agreed to vacate the matrimonial home within 30 days.

[9]

Within a year of executing the Agreement, the father stopped paying the
    joint debts he had agreed to assume (lines of credit identified in the
    Agreement as in the amounts of $169,000, $49,000, and $128,000). The mother,
    who had already assumed the mortgage debt on the matrimonial home in the amount
    of $315,000 under the Agreement, assumed responsibility for these additional
    debts. In the result, the mother ended up assuming financial responsibility for
    both children and over half of the parties accumulated net debt at the date of
    separation.

[10]

The
    father never became gainfully re-employed. He ultimately settled his debt to
    the Bank of Montreal (BMO), indicated in the Agreement as being in the amount
    of $600,000, for $20,000.

[11]

Thereafter,
    on January 3, 2012, the father started an application challenging the validity
    of the Agreement and seeking an equalization payment. He later amended his
    application to also seek lump sum spousal support under s. 15.2 of the

DA.
    After a six-day trial, the trial judge concluded that there was no basis to set
    aside the Agreement under the FLA, but that the
Miglin
analysis
    justified an order under s. 15.2 of the DA for spousal support. He ordered the
    mother to pay the father lump sum spousal support in the amount of $143,933.

C.

issues

[12]

The
    appeal and cross-appeal raise the following issues:

1.

Did the trial judge err in not setting aside the Agreement in its
    entirety under s. 56(4) of the FLA?

2.

Did the trial judge err in ordering spousal support in the face of the
    spousal support waiver?

3.

If spousal support were warranted, did the trial judge err in
    calculating the amount of spousal support?

4.

Should the father be granted leave to appeal the trial judges costs    order?

[13]

Before
    turning to the issues raised by the parties, it is helpful to briefly set out
    the relevant legal context.

D.

the legal context

[14]

Where
    a married or formerly married spouse seeks spousal support in the face of a
    separation agreement waiving such support, either or both of two statutes may
    be engaged: the provincial FLA, which addresses domestic contracts as a
    provincial property and civil rights matter; and the federal DA, which confers
    authority on the court to award support as corollary relief to a divorce:
Myers
    v. Hawco
, 2005 NLCA 74, 252 Nfld & PEIR 121, at para. 15;
Zimmerman
    v. Shannon
, 2006 BCCA 499, 62 B.C.L.R. (4th) 255, at para. 36.

[15]

Where
    a spouse seeks to set aside provisions in a separation agreement regarding the
    spouses property, s. 56(4) of the FLA is engaged. Section 56(4) of the FLA
    provides that,

A court may, on application, set aside a domestic
    contract or a provision in it,

(a) if a party failed to disclose to the other
    significant assets, or significant debts or other liabilities, existing when
    the domestic contract was made;

(b) if a party did not understand the nature or
    consequences of the domestic contract; or

(c) otherwise in accordance with the law of
    contract.
[2]

[16]

The
    DA, for its part, does not confer authority to set aside agreements
per se
,
    but does confer authority to make spousal support orders as corollary relief to
    a divorce. Under s. 15.2 of the DA, as interpreted in
Miglin
, a valid
    separation agreement is but one factor to consider in determining whether the
    court should exercise its authority to award corollary spousal support:

15.2 (1) A court of competent jurisdiction may, on
    application by either or both spouses, make an order requiring a spouse to
    secure or pay, or to secure and pay, such lump sum or periodic sums, or such
    lump sum and periodic sums, as the court thinks reasonable for the support of
    the other spouse.



(4) In making an order under subsection (1) or an
    interim order under subsection (2), the court shall take into consideration the
    condition, means, needs and other circumstances of each spouse, including

(a)     the length of time the spouses cohabited;

(b)     the functions performed by each spouse
    during cohabitation; and

(c)     any order, agreement or arrangement
    relating to support of either spouse.

[17]

Section
    56(4) of the FLA deals with intrinsic flaws in the formation of a contract that
    nullify the apparent consent between the parties and invalidate the agreement,
    allowing a court to
set aside
the contract.
    Section 15.2 of the DA permits a court, looking at both the formation of the
    contract and all the circumstances at the time of the application, to
override
the support provisions of an agreement and
    order support contrary to the agreement:
see James
    McLeods annotation on
Murray v. Murray
(2003), 66 O.R. (3d) 540
    (S.C.) (W.L.), revd (2005) 79 O.R. (3d) 147 (C.A.).
[3]


[18]

In
    this case, since the father sought relief under both the FLA and the DA, the
    trial judge appropriately conducted both analyses.

[19]

While
    the trial judges analysis could perhaps have been conceptually clearer, as I
    will discuss in greater detail below, I see no reversible error in the trial
    judges application of the analyses to the facts of this case.

E.

Issue 1: Section 56(4) of the FLA

(1)

The trial judges reasons

[20]

In
    his application, the father invoked s. 56(4) of the FLA. Accordingly, the
    burden was on him to show that there were grounds to set aside the Agreement:
Doughtery
    v. Doughtery
, 2008 ONCA 302, 89 O.R. (3d) 760, at para. 11. Even if a
    party satisfies one of the criteria in s. 56(4), the contract is not
    automatically a nullity. The trial judge must still determine whether it is
    appropriate, in the circumstances, to set the contract aside:
LeVan v.
    LeVan
, 2008 ONCA 388, 90 O.R. (3d) 1, at para. 33.

[21]

As
    discussed below, the trial judge rejected the fathers arguments that the
    mother had failed to disclose significant assets, that the father did not
    understand the nature or consequences of the Agreement, and that the Agreement
    should be set aside under the law of contract as unconscionable. The trial
    judge also concluded that even if he had found that the father had satisfied
    one of the criteria in s. 56(4), he would not have exercised his discretion to
    set the Agreement aside.

[22]

The
    father was the sole debtor to BMO for approximately $600,000, secured by his
    stock portfolio with a then-net-worth of $100,000. The father brought his
    application only after he was able to settle that debt with BMO for $20,000.

[23]

The
    trial judge wrote, at 2016 ONSC 7950
[4]
(the 2016 decision), at para. 81:

This sequence of events, in the mind of this court, brings into
    doubt the equities of this court exercising its discretion in favour of the
    [father]. Again, it seems to this court that the [father] knew very well what
    he was doing and when to do it.

(2)

Analysis

[24]

In
    his appeal, the father argues that the trial judge made three errors in finding
    that the father had not satisfied any of the criteria in s. 56(4). As I will
    explain, I am not satisfied that the trial judge made any errors in so finding.
    As indicated above, the trial judge was clear that even if he had found that
    the father had satisfied one of the criteria in s. 56(4), he would not have
    exercised his discretion to set the Agreement aside. In all of the
    circumstances, that would have constituted a reasonable exercise of discretion.

(i)

Mothers failure to disclose significant assets

[25]

The
    first argument the father makes is that the trial judge made a palpable and
    overriding factual error in finding that the mother had not failed to disclose
    significant assets or debts to the father when the Agreement was made even
    though she did not include the value of her business (between $77,000 and
    $154,000) and her jewelry ($6,380) on her unsworn financial statement.

[26]

The
    trial judge accepted the mothers evidence that the parties sat down at the
    kitchen table and discussed how to complete their financial statements. The
    father was a trained accountant and investment advisor who did very well
    financially. The mother was a chartered accountant. The trial judge found that
    the father was aware of the mothers business, which was a flow through
    company that did not have significant assets or retained earnings and was used
    for income and tax advantages: 2016 decision, at para. 30. And he knew the
    mother had jewelry.

[27]

The
    trial judge wrote, at para. 29 of the 2016 decision:

I find that the [father] was aware of the financial information
    of the [mother]. He was aware of her assets and debts. He did not seek further
    information on the values because he made the decision, I find, that he did not
    require the values due to his knowledge.

[28]

Further,
    he found that the values of her business and of her jewelry were not
    sufficiently significant to warrant setting aside the Agreement.

[29]

In
    the result, he concluded that the father had not satisfied him that the mother
    failed to disclose significant assets when the Agreement was executed. I am not
    persuaded that there is any basis to interfere with the trial judges
    conclusion.

(ii)

Fathers understanding of the nature and of the consequences of the
    Agreement

[30]

Second,
    in his oral submissions, the father argues that the trial judge erred in law by
    failing to engage in the disjunctive analysis required by s. 56(4)(b) of the
    FLA to consider whether the father did not understand either the nature or the
    consequences of the Agreement. Rather, the father argues that the trial judge
    throughout his reasons refers to the nature and consequences of the Agreement,
    indicating that he treated nature and consequences as a single requirement
    and did not ascribe separate and distinct meaning to nature first, and
    consequences, second. Nature, he says, relates to a failure to understand
    the fundamental nature of the Agreement, whereas consequences relates to a
    failure to understand the effect or impact of the Agreement. He refers to
Grant-Hose
    v. Grant-Hose
(1991), 32 R.F.L. (3d) 26 (U.F.C.), at para. 34, for this
    proposition.

[31]

I
    reject this argument.

[32]

In
    his factum, the father, like the trial judge, uses conjunctive language. At
    para. 65 of his factum, he describes the test as whether [the father]
    understood the nature and consequences of the Agreement.

[33]

The
    fathers evidence, and his argument at trial, was that his mental or emotional
    state at the time he executed the Agreement was such that he could understand neither
    the nature nor the consequences of the Agreement. The trial judges focus was, therefore,
    appropriately on the fathers mental or emotional state at the time that he
    executed the Agreement. The trial judge was also alive to the different
    meanings inherent in the words nature and consequences. At para. 44 of the
    2016 decision, after acknowledging the fathers position, the trial judge
    wrote:

To determine if the applicant did not
    understand the nature and consequences of the Agreement, the court must examine
    the circumstances at the time of the execution of the Agreement to conclude
    whether or not the applicant understood the fundamental nature of the Agreement
    and the effect or impact of the terms of the Agreement.

[34]

In
    this paragraph, the trial judge
explicitly
articulates the very definitions the father now argues must be considered. The
    trial judges use of the phrase nature and consequences conjunctively was
    entirely understandable in articulating that he was not persuaded that the
    father failed to understand either of these.

[35]

I
    see no merit in the fathers argument on this point.

(iii)

Unconscionability of the Agreement

[36]

Finally,
    the father argues that, in concluding that the Agreement was not
    unconscionable, the trial judge failed to properly consider the lack of substantive
    (as opposed to procedural) integrity of the Agreement, as it related to the
    fathers rights under the relevant legislation.

[37]

Again,
    I am not persuaded that there is any basis for this court to interfere with the
    trial judges conclusion that the Agreement was not unconscionable.

[38]

The
    father does not take issue with the trial judges findings about the
    circumstances of the negotiation and execution of the Agreement, including
    that: the use of the lawyer to prepare the Agreement was the fathers idea; the
    father could have obtained independent legal advice had he so wished; and the
    mother did not prey upon the father or take advantage of him.

[39]

Moreover,
    contrary to the fathers submission, the trial judge considered the substantive
    effect of the Agreement on the parties rights to equalization under the FLA. He
    noted that, at first blush, the Agreement seemed improvident because the assets
    of the marriage stayed mainly with the mother while the father agreed to pay
    the parties joint debts (other than the mortgage) and his debt to BMO in the
    amount of $600,000: 2016 decision, at paras. 7072. He went on to observe that
    while the father did not receive spousal support, he received a significant
    benefit under the Agreement in the form of the release from any requirement to
    pay child support.
[5]
,
[6]


[40]

The
    trial judge then engaged in a contextual assessment of the circumstances. He
    considered that at the time the Agreement was executed, the father was being
    investigated by the Ontario Securities Commission, there was a possibility of
    claims against him from his clients, and he owed BMO $600,000. Further, the
    father testified that he wanted to protect the welfare, financial and
    otherwise, of his children: 2016 decision, at paras. 7274.

[41]

These
    considerations all pointed to an entirely rational decision to place assets in
    the mothers hands, where the parties children, rather than the fathers
    creditors, could benefit from them. The trial judge found, and the record
    supports that, in this way, the decision to give the parties most valuable
    assets to the mother ensured that both parties got exactly what they both
    wanted: 2016 decision, at para. 74.

[42]

The
    trial judge concluded that, in all these circumstances, the Agreement did not
    rise to the level of unconscionability.

[43]

That
    finding was supported by the record and I see no reason to interfere.

F.

ISSUE 2: SECTION 15.2 OF THE DA

(1)

The
Miglin
test

[44]

Miglin

articulates
    a two-stage inquiry in the face of an application for spousal support that is
    inconsistent with a pre-existing agreement between the parties. The first stage
    looks at the time the agreement was formed. The second considers all the
    circumstances at the time of the application.

[45]

At
    the first stage, the court must look at two things. First, it must consider "the
    circumstances in which the agreement was negotiated and executed to determine
    whether there is any reason to discount it":
Miglin
, at para. 80.
    Circumstances less than unconscionability may be relevant, but a court should
    not presume an imbalance of power.

[46]

Second,
    once satisfied that there is no reason to discount an agreement due to
    conditions under which it was negotiated, the court must then inquire whether the
    substance of the agreement substantially complies with the overall objectives
    of the DA. Here, the court must look at the agreement in its totality, bearing
    in mind that all aspects of the arrangement are inextricably linked and that
    the parties have a large discretion in establishing priorities and goals for
    themselves:
Miglin
, at para. 84. If the court is satisfied that the
    circumstances under which the agreement was negotiated were satisfactory and
    the agreement was in substantial compliance with the general objectives of the
    DA at the time of creation, the court should defer to the parties wishes and
    give the agreement great weight:
Miglin
, at para. 87.

[47]

The
    second stage of the inquiry focuses on the circumstances surrounding the
    agreement at the time of the application for spousal support. If, and only if,
    the circumstances at the time of the application represent a significant
    departure from the range of reasonable outcomes anticipated by the parties, in
    a manner that puts them at odds with the objectives of the DA, the court may be
    persuaded to give the agreement little weight:
Miglin
, at para. 91.

(2)

The trial judges reasons

[48]

In
    this case, the trial judge applied
Miglin
s two-stage inquiry.

[49]

As
    discussed above, he was persuaded that the circumstances under which the
    Agreement was negotiated and executed were satisfactory.

[50]

At
    the second step of the first inquiry under
Miglin
, however, he
    concluded that the release of spousal support did not substantially adhere to
    the factors and objectives of the DA: see 2016 decision, at para. 98.

[51]

The
    trial judge found that the father gave up his division of the assets
    accumulated during the 18-year marriage: 2016 decision, at para. 93. He did so
    willingly, but the waiver of spousal support did not comply with ss. (a), (c)
    and (d) of s. 15.2 (6) of the DA.

[52]

Those
    provisions provide as follows:

An order  that provides for the support of a spouse
    should

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



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

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

[53]

The
    trial judge found that the Agreement was predicated, to a certain extent, on
    the fathers confidence in achieving what was written on his unsworn financial
    statement at the time of the Agreement  Pay off all debts and achieve
    financial independence: 2016 decision, at para. 28.

[54]

The
    trial judge found that it was improbable that the father would be able to
    support himself without some support from the mother. Further, the trial judge
    found that the mother was well aware that the father did not have the financial
    means to pay the debts that he had agreed to pay. However, the mother did. She
    was making a substantial income and had retained the assets. The trial judge
    also found that the Agreement did not provide relief of economic hardship for
    the father or for the fathers ability to become self-sufficient. Given these
    circumstances, the Agreement did not substantially adhere to the factors and
    objectives of the DA.

[55]

The
    trial judge then turned to the second inquiry under
Miglin
and
    considered the circumstances at the time of the application. He found that
    there was a change in the circumstances of the parties from the time of the
    execution of the Agreement. The parties anticipated that the father would be
    able to become self-sufficient given his ability to earn income in the past. He
    had not become self-sufficient. In the trial judges view, neither party really
    considered the ramifications of the termination of the fathers career as an
    investment advisor at RBC Dominion Securities (RBCDS).

[56]

In
    the result, the trial judge found that, in addition to the Agreements lack of
    substantial adherence to the factors and objectives of the DA, the
    circumstances at the time of the application warranted overriding the fathers
    waiver of spousal support in the Agreement. He awarded the father a relatively
    modest lump sum amount of support.

(3)

The mothers position

[57]

The
    mother argues that the trial judge erred in law by failing to give due
    consideration to whether the fathers economic disadvantage actually arose from
    the marriage or its breakdown. She argues it arose from financial decisions
    (including borrowing money to fund his investments and engaging in trading
    activity that by his own admission was super-super-risky) and employment
    decisions he made before and after separation, and, had the trial judge
    properly considered whether the fathers economic hardship arose from the
    marriage or its breakdown, the trial judge would have found that the Agreement
    complied with ss. 15.2(a) and (c) and was in substantial compliance with the DA
    at the time of its creation.

[58]

The
    mother also argues that the trial judges finding that the Agreement did not
    promote economic self-sufficiency within a reasonable time was plainly wrong.
    As the father notes in his pleadings, RBCDS terminated his employment more than
    15 months before the parties entered into the Agreement. The father already had
    time to find employment. No period of transition was necessary. Further, the
    trial judge found that the father believed that his investments would come around
    and he did not need to work: 2017 decision, at para. 47. The mother argues that
    a provision for support would have encouraged him to continue to gamble on his
    financial future and diminished his incentive to become self-supporting.

[59]

Finally,
    the mother argues that there was no significant departure from the range of
    reasonable outcomes anticipated by the parties, as required by
Miglin
, at para. 91
, except that the mother had
    assumed more than $300,000 of joint debt that the father had agreed to pay. In
    essence, she argues that the trial judge failed to consider all of the
    circumstances surrounding the Agreement at the time of the application, as
Miglin
requires, at para. 64.

(4)

Analysis

[60]

I
    am not persuaded that there is a basis to interfere with the trial judges decision.
    He engaged in the appropriate two-stage inquiry under
Miglin
. It was
    open to him on this record to conclude that the spousal support waiver did not
    meet the objectives of ss. 15.2(6)(a) and (c) of the DA at the time it was
    made. It was also open to him to conclude that the circumstances at the time of
    the application departed significantly enough from the parties original
    intention to warrant a modest lump sum spousal support award.
[7]

[61]

As
    noted above, the fathers Investment Dealers Association of Canada registration
    was suspended, and he was unemployed at the time the parties entered into the
    Agreement. The Agreement required him to vacate the matrimonial home within 30
    days. As a result of the breakdown of the marriage, he lost a place to live,
    which had been provided to him at the mothers expense. The trial judges
    finding that the father suffered economic hardship as a result of the breakdown
    of the marriage is supported by the record.

[62]

At
    the time of the application, the father was still unemployed and did not yet
    have his own living space. He testified at trial that, since signing the
    Agreement, he spent time sleeping on the floor of a stock room, followed by
    living with his sister and then with his parents. The fathers actual income in
    the year prior to the commencement of his application was slightly less than
    $52,000, roughly $39,000 of which was income from RRSPs according to his 2011
    Income Tax Return. While he had reduced his debt to BMO from some $600,000 to
    only $20,000, that was significantly more than his income from sources other
    than RRSPs that year.

[63]

While
    it was open to the trial judge to attribute all these circumstances exclusively
    to the fathers own poor decisions and intentional under-employment, after
    hearing evidence from both parties, that was not his conclusion. Instead, the
    trial judge attributed some of this misfortune to the breakdown of the marriage
    and also viewed the fathers circumstances at the time of the application as a
    sufficient departure from what the parties had originally intended to warrant
    the award of some support.

[64]

It
    is not the role of this court to interfere with such fact-driven conclusions.

G.

ISSUE 3: CALCULATION OF SPOUSAL SUPPORT

(1)

The trial judges reasons

[65]

Having
    concluded that, under the
Miglin
test, the spousal support waiver
    should not be given much weight, the trial judge went on to consider whether
    and how much support to award. The trial judge found that the age of the
    parties, the fathers need for support, and the mothers means to pay support
    made it clear to him that the father was entitled to spousal support: 2016
    decision, at para. 112.

[66]

He
    concluded that, because the fathers claim for spousal support was not
    compensatory, a fair and reasonable period of transition to alleviate the
    economic disadvantage from the breakdown of the marriage and to encourage the
    father to complete his transition to self-sufficiency was a period of eight
    years: 2017 decision, at paras. 65, 66.

[67]

He
    accepted that the father would not have been able to make substantial income
    for the first three years after separation due to the lawsuits and the
    termination of his employment and did not impute any income to him for those
    years: 2017 decision, at paras. 69, 70. However, he concluded that, commencing
    January 1, 2011, the father was under-employed and should have been able to
    earn an income more in line with his education and experience: 2017 decision,
    at para. 71.

[68]

He
    imputed income to the father for the remaining five years of the eight-year
    period, having regard to the fathers age, his education, his work experience,
    his entrepreneurial spirit, his testimony that he believes his income will
    shortly be $150,000, and the mothers income: 2017 decision, at para. 72. He
    then calculated lump sum spousal support on a custodial payor basis, using
    the mid-point calculation of the
Spousal Support Advisory Guidelines
(SSAGs) for the first three years, and the low-point calculation for the
    remaining five years.

[69]

The
    trial judge rejected the mothers argument that in the calculation of lump sum
    spousal support she should be given credit for paying the lines of credit the
    father had agreed to be responsible for under the Agreement and had failed to
    pay.

[70]

The
    trial judge found that the father stopped paying the lines of credit in October
    2009 and the mother assumed responsibility for them in November 2009. In order
    to have a lower interest rate, she increased the mortgage on the former
    matrimonial home and paid the lines of credit: 2017 decision, at para. 87.

[71]

However,
    he found that the mothers claim against the father on these lines of credit
    was statute-barred: 2017 decision, at para. 91. The father had stopped paying
    the lines of credit in October 2009 and she had not claimed against the father
    for his failure to pay the lines of credit until she amended her Answer in June
    2013, after he amended his application. In addition, the trial judge found that
    given the lack of evidence on the amount owed at the time of the breach by the
    [father] or the amount the [mother] included in her mortgage, the court cannot
    determine the amount the [mother] seeks: 2017 decision, at para. 92.

[72]

The
    trial judge ordered the mother to pay the father a lump sum spousal support
    payment representing her obligation to pay spousal support to the father from
    the date of separation to December 31, 2015 in the amount of $143,933.

(2)

Positions of the parties

[73]

The
    mother argues that the trial judge erred by failing to decrease the award to
    reflect the mothers assumption of the joint debt that the father had agreed to
    pay; failing to consider the fathers delay in bringing his application;
    imputing too low an income to the father having regard to his reasonable
    earning capacity; and providing for too long a period of support.

[74]

The
    father argues that the trial judge erred in calculating support on a custodial
    payor basis, given that the trial judge accepted that the father had met his
    obligation to pay basic child support by waiving his claim for an equalization
    payment: 2017 decision, at paras. 35, 36.

[75]

He
    also argues that the trial judge made a clear error, at para. 23 of the 2017
    decision, in stating that his employment ended in 2007 and he was earning an
    income up to the date of separation. In fact, his employment ended in 2006, his
    severance package was paid to him in 2007, and his income in 2008 was only
    $4,788.95. He argues that this is an overriding error, because if the trial
    judge had appreciated that his dependency on the mother began a year before
    separation, he would (or should) have ordered a further year of spousal
    support.

(3)

Analysis

[76]

An
    appellate court is not entitled to overturn a support order simply because it
    would have made a different decision or balanced the factors differently:
Hickey
    v. Hickey
, [1999] 2 S.C.R. 518, at para. 12. In this case, I see no
    material error, serious misapprehension of the evidence, or error in law in the
    trial judges approach to determining the quantum of support that would permit
    this court to interfere with his decision. The trial judge was alive to the
    timing of the fathers application, and there is no basis to interfere with the
    amount of income he imputed to the father. I will comment briefly on three of
    the other arguments raised.

(i)

The debt issue

[77]

The
    mother argues that she does not seek a set-off against the amount of spousal
    support that the trial judge determined is appropriate. Rather, she argues that,
    in determining both entitlement and what amount of spousal support is
    appropriate, the trial judge should have considered that she assumed and paid
    the joint debt that, under the Agreement, the father had agreed to assume. She
    argues that the trial judge did not have the benefit of
Karlovic v.
    Karlovic
, 2018 ONSC 4233, 12 R.F.L. (8th) 325, which was decided after the
    trial judge released his decision. The mother says that
Karlovic
makes
    clear that the trial judge could, and should, have considered that she had
    assumed the debt in determining the quantum of support to which the father is
    entitled.

[78]

The
    parties assets and debts can be relevant to determining both the entitlement
    to, and to a certain extent the quantum of, spousal support. This is because,
    while the parties incomes are the relevant inputs in calculations under the
    SSAGs, the trial judge retains discretion in determining whether to award
    support at the low, mid, or high range of amounts suggested by the SSAGs, or in
    exceptional cases, even to justify departure from the ranges:
Halliwell v.
    Halliwell
, 2017 ONCA 349, 138 O.R. (3d) 671, at para. 110.

[79]

The
    mothers argument that her assumption of additional debt should have been
    explicitly accounted for entirely overlooks that she also walked away from the
    marriage with significantly greater assets than did the father, including a
    house that appreciated significantly. Since the assumption of debt could not be
    considered without also accounting for the mothers asset position, I do not
    see this as operating to the mothers overall advantage.

[80]

The
    trial judge knew the situation of the parties and his overall assessment
    attracts deference.

(ii)

Duration of the support obligation

[81]

The
    mother argues that the trial judge ordered support for too long a period; the
    father argues that the trial judge ordered support for too short a period. I am
    not persuaded that there is any basis to interfere with the trial judges
    discretion in ordering a period of support for eight years. In particular, I am
    not persuaded that the trial judges error in finding that the fathers
    dependency began after separation, as opposed to a year before separation, affected
    the duration of the support that he ordered.

(iii)

Calculation of support on a custodial payor basis

[82]

I
    reject the fathers argument that the trial judge erred in calculating the
    support he was entitled to using the custodial payor model. The trial judges
    choice of the custodial payor model correctly reflects that the payor mother
    was fully responsible for supporting the children. Her net disposable income,
    which the SSAGs, at the highest, strives to equalize, was reduced by her
    obligation to support both children. The fact that the trial judge found that
    the father had satisfied his obligation to pay his share of their childrens support
    by waiving his right to an equalization payment did not make the custodial
    payor model in any way inappropriate.

H.

ISSUE 4: COSTS

[83]

The
    trial judge ordered the father to pay $23,921.83 in costs, set off from the
    amount owed to him in spousal support. The fathers oral submissions on costs
    consisted of indicating that costs were not a significant issue. Considerable
    deference should be given to a trial judges discretion in awarding and fixing
    costs. Leave to appeal costs orders should be granted only in obvious cases
    where there are strong grounds upon which the court could find that the judge
    erred in exercising his discretion:
Carroll v. McEwen
, 2018 ONCA 902,
    143 O.R. (3d) 641, at para. 58.

[84]

This
    is not such a case. I see no basis to interfere with the trial judges order as
    to costs and would deny leave to appeal that order.

I.

disposition and costs

[85]

For
    these reasons, I would dismiss the appeal and cross-appeal and deny leave to
    appeal the award of costs below. In the circumstances, I would make no order as
    to costs of the appeal.

Released: AH SEP 10 2019

Alexandra Hoy A.C.J.O.

I agree G.T Trotter J.A.

I agree M. Jamal J.A.





[1]

See the fathers and mothers sworn financial statements
    prepared in connection with the fathers application. See also the fathers and
    the mothers unsworn financial statements prepared in connection with the
    Agreement, plus the values for the mothers jewelry and her business as found
    by the trial judge: 2016 decision, at para. 30.



[2]
Section 33(4) of the FLA, which was neither argued nor considered by the trial
    judge in this case, provides additional circumstances under which the court may
    set aside a provision for, or waiver of, support:  where the waiver leads to
    unconscionable circumstances, the waiver is by or on behalf of a dependant who
    qualifies for support out of a public allowance, or if there is a default in a
    payment under the contract at the time the application is made.



[3]

Available online:
https://nextcanada.westlaw.com/Document/I10b717d4b9d863f0e0440003ba0d6c6d/
    View/FullText.html?transitionType=UniqueDocItem&contextData=(sc.Search)&userEnteredCitation=66+O.R.+(3d)+540
.



[4]

A subsequent decision in 2017 determining the quantum of
    spousal support (2017 ONSC 6120) is also the subject of this appeal and will be
    referred to as the 2017 decision.



[5]
In the 2017 decision at para. 35, the trial judge found that the amount waived
    by the father included his obligation to pay basic child support.



[6]
Note that under
    the FLA, s. 56(1.1), the court may disregard any provision of a domestic
    contract pertaining to the matter where the provision is unreasonable having
    regard to the child support guidelines, as well as to any other provision
    relating to support of the child in the contract.



[7]
The trial judge subsequently concluded that the father had satisfied his
    obligation to pay child support by waiving his equalization payment: 2017
    decision, at paras. 34-35. That finding is not at issue in the appeal or
    cross-appeal.


