Mancini v. Phelan, 2012 ABQB 536

Court of Queen ’ s Bench of Alberta Citation: Mancini v. Phelan, 2012 ABQB 536 Date: 20120830 Docket: 4801 144730 Registry: Calgary Between: Camillo Mancini Plaintiff/Defendant by Counterclaim - and - Patricia Ann Phelan Defendant/Plaintiff by Counterclaim _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice G.H. Poelman _______________________________________________________ I. Introduction................................................................................................................ Page: 3 II.

History of Relationship............................................................................................... Page: 3 III. Division of Matrimonial Property................................................................................ Page: 6 A. General Principles........................................................................................... Page: 6

B. Property Owned by Parties.............................................................................. Page: 6 1.

Summary of Assets and Values........................................................... Page: 6 2. Values of Assets.................................................................................. Page: 8 3. Determination of Matrimonial Home Value........................................ Page: 8 C. Exempt Property........................................................................................... Page: 10 1. Introduction...................................................................................... Page: 10 2.

RRSPs............................................................................................... Page: 11 3. Mr. Mancini ’ s Inheritance................................................................. Page: 14 D. Property Presumed to be Equally Distributed................................................ Page: 16 1. Introduction...................................................................................... Page: 16 2. ScotiaMcLeod GRSPs....................................................................... Page: 17 3.

Current Bank Accounts..................................................................... Page: 18 4. Investor ’ s Group RESP...................................................................... Page: 18 E. Line of Credit Debt....................................................................................... Page: 18 F. In Specie Distribution.................................................................................... Page: 20 G. Final Distribution.......................................................................................... Page: 21 IV.

Spousal Support........................................................................................................ Page: 21 A. Introduction.................................................................................................. Page: 21 B. Payments from Separation to Trial................................................................ Page: 21 C. Entitlement.................................................................................................... Page: 23 D. Considerations in Determining Amount of Spousal Support......................... Page: 26 1.

Introduction...................................................................................... Page: 26 2. Mr. Mancini ’ s Income....................................................................... Page: 27 3. Ms. Mancini ’ s Income....................................................................... Page: 29 4. Determination of Amount of Support................................................ Page: 32 5. Calculations...................................................................................... Page: 35 (

a) Spousal Guidelines................................................................ Page: 35 (

b) Shortfall in Spousal Support: 2009 through 2011.................. Page: 36 (

c) Form of Payment................................................................... Page: 37 (

d) Adjustments for Tax Effect................................................... Page: 37 (

e) Spousal Support for 2012...................................................... Page: 38 (

f) Summary of Spousal Support Obligations............................. Page: 40 V. Relationship between Retroactive Support Orders and Property Division................. Page: 40 VI. Occupation Rent....................................................................................................... Page: 43

VII. Conclusions and

Summary........................................................................................ Page: 43 I. Introduction [ 1 ] Mr. and Ms. Mancini separated in March 2009, after 34 years of marriage. Their two children are in their twenties and live independently of their parents.

Therefore, the only issues left to be resolved concern matrimonial property, spousal support and whether either party owes the other occupation rent for their time in the matrimonial home after separation. [ 2 ] The matrimonial property issues relate primarily to valuation of the matrimonial home and claims that some property is exempt from distribution. The parties agree that some retroactive spousal support (in addition to what Mr. Mancini has paid since separation) is owing, but disagree on the amount. Likewise, they disagree on the amount of continuing spousal support.

Much of the difference relates to what income should be imputed to Ms. Mancini, who has not returned to the workplace in a full-time capacity. [ 3 ] As is usual with concurrent findings on distribution of matrimonial property and retroactive spousal support, it is necessary to ensure that the combined relief does not result in overpayment to the recipient of spousal support. [ 4 ] The statement of claim named the defendant “Patricia Ann Phelan,” but her last name was then, and remains, “Mancini.” I therefore use that name in these reasons for judgment. II.

History of Relationship [ 5 ] The parties were married on June 21, 1975 in Montreal. They lived there while Mr. Mancini attended McGill University, first studying science but eventually graduating with an engineering degree. Ms. Mancini was employed as secretary to the Dean of Science at McGill. It was a senior position, with important administrative and organizational aspects. [ 6 ] In 1979, they moved to Edmonton where Mr. Mancini obtained his first full-time position as an engineer with Imperial Oil. Ms.

Mancini took several jobs in Edmonton, ultimately settling on a secretarial position with a company now named Suncor. Again, it was an important position, with significant responsibilities. [ 7 ] The Mancinis moved again in 1981 when Mr. Mancini was transferred to Calgary by Imperial Oil. Ms. Mancini found employment with a company founded by engineers with whom she had worked at Suncor in Edmonton. Her position was similar to earlier ones she had held, with significant administrative responsibilities. [ 8 ] Ms.

Mancini continued working until May 1, 1982, when she took leave shortly before the birth of their first child, Jennifer. Five years later, their second child, James, was born. Ms. Mancini stayed at home to care for the children and assumed the duties of running the household. [ 9 ] During these days with a young family, Mr. Mancini’s work obligations often kept him away from home. He worked long hours, and often was away from Calgary on lengthy business trips. As a result, Ms. Mancini had the primary, and often effectively the sole, responsibility for the children and the household. [ 10 ] Mr.

Mancini transferred with Imperial Oil to New Jersey in 1991. Once again, the demands of his position were heavy and he often travelled away from home. In 1993 they returned to Calgary, where they purchased a residence in Woodbine. The Woodbine home

remained their matrimonial home until separation, and is now occupied by Mr. Mancini and a friend. [ 11 ] The Mancinis enjoyed their time in New Jersey, but the return to Calgary was difficult. First, there was the disruption and additional work (much of which fell on Ms. Mancini) of two moves in two years. Second, Mr. Mancini’s position with Imperial Oil on his return to Calgary was not satisfactory, and he became clinically depressed, for which he was given leave for a period of time. During this stage, he often withdrew from the company of Ms. Mancini and the children. [ 12 ] Mr.

Mancini lost his job at Imperial Oil in 1996. To earn income, he established a personal consulting company, through which he worked for a number of clients. That continued until he obtained full-time employment with AMEC in 2005, a position he still holds. [ 13 ] In the early 1990s, Ms. Mancini worked at a store in a shopping mall on Thursday evenings and Saturday afternoons. It generated little income, partly because she paid her daughter to babysit her son while she was out. Around 1994 or 1995, she began working at a quilting store.

She has continued part-time work of that nature since then, although with a year or two interruption in the late 1990s when the store for which she worked went out of business. [ 14 ] Her current employment is at a store named Rumpled Quilt Skins, and she has worked there for several years. The pay and hours are minimal, however. If she works in a retail capacity “on the floor”, she is paid $10.00 per hour. Occasionally, she teaches courses to customers interested in learning how to quilt, for which she is paid $15.00 per hour. [ 15 ] When Mr.

Mancini’s consulting business was established, there was some initial experimentation with employing Ms. Mancini. However, it quickly became apparent that she lacked sufficient computer skills. She registered in a course, but did not pursue it because Mr. Mancini told her she would not learn anything he could not teach her. For whatever reason, that did not occur. [ 16 ] In the early 2000s, Ms. Mancini’s parents and single brother moved to Calgary. Her mother died in 2002, after which her father began living with her brother. Ms. Mancini’s father, Gordon Phelan, gave Ms.

Mancini cash gifts from time to time, which eventually totalled $150,000.00. Some of this was spent on her quilting hobby or other discretionary matters, but much of it was used to purchase registered retirement savings plans ​ some in her name, and some in Mr. Mancini’s. [ 17 ] The parties separated effective March 15, 2009, with Mr. Mancini moving into a different bedroom in the Woodbine home.

He left the Woodbine home on May 1, 2009, renting an apartment. [ 18 ] The parties paid for most of their daughter’s general and education degrees, which she obtained (before separation) from the University of Lethbridge, and for their son’s political science degree obtained (before separation) from the University of Ottawa. Their daughter’s first job was in Okotoks, where a townhouse was purchased to enable her to live close by the school. It was registered in the joint names of Mr. Mancini and his daughter. Their daughter lived in the Okotoks townhouse for only about six months. Thereafter it was rented. Mr.

Mancini lived in it from February 2010 until November 2010, when he moved with his friend into the Woodbine home. The townhouse was later sold, with the proceeds remaining in a trust account. [ 19 ] Both parties experienced significant personal problems since their separation. In January 2010, Ms. Mancini’s brother unexpectedly passed away. As he had lived with their elderly father, Ms. Mancini took over the responsibilities of assisting her father. At trial, Mr. Phelan was 89 years old, still in relatively good health but frail and unable to be left alone for more than several hours. [ 20 ] Mr.

Phelan purchased a villa in Okotoks in late 2009, and registered it jointly with his daughter, although Ms. Mancini claims it is intended that she would be the sole beneficial owner. Mr. Phelan moved into the villa in March 2010, and Ms. Mancini joined him in May 2010. [ 21 ] In August 2010, Ms. Mancini began suffering from Guillaine-Barre Syndrome, which significantly incapacitated her until the early part of 2011. She is now recovered.

[ 22 ] In early January 2012, Mr. Mancini suffered from the sudden onset of Miller-Fisher Syndrome, which his doctor described in a letter as “an antibody-mediated immune neuropathy.” As a result, for the foreseeable future he is unable to resume his duties at AMEC, and receives long-term disability benefits under an insurance policy. He has been advised that the prognosis for full recovery is excellent, but it will require considerable time and physical rehabilitation. [ 23 ] At the time of trial, Ms. Mancini continued to reside with her father at their Okotoks villa, and Mr.

Mancini continued to reside with his friend in the Woodbine home. III. Division of Matrimonial Property A. General Principles [ 24 ] The Matrimonial Property Act [1] establishes three categories of matrimonial property that may be distributed between the spouses: exempt ( section 7(2) ); divisible on a “just and equitable” basis (section 7(3)); and divisible on a presumption of equal shares between the parties (section 7(4)). [ 25 ] The Court of Appeal set out an analytical framework for division of property in Hodgson v. Hodgson [2] , helpfully summarized by Hughes J. in Warwoda v.

Warwoda [3] as involving the following steps: i. determine the property owned by the spouses at the date of trial; ii. ddetermine the property that is exempt from distribution under s. 7(2) or that can be traced to s. 7(2) property; iii. determine what property falls under subsection 7(3) and distribute that property in a manner that is just and equitable taking into account the factors in s. 8; and iv. divide the remaining assets equally, unless it would be unjust and inequitable to do so upon considering the factors enumerated in

section 8. That is the approach I will follow in this case. B. Property Owned by Parties 1.

Summary of Assets and Values I summarize below, in chart form, my findings on the total assets of the parties and their value at date of trial. Description Real Estate (net of debt) Value Source of Value 1. Woodbine Home $437,000.00 Trial Judgment 2. Okotoks Townhouse $ 12,798.00 Trial Judgment

Vehicles (net of debt) 3. Ms. Mancini’s vehicle $ 13,200.00

Schedule (Ex. 11) 4. Mr. Mancini’s vehicle $ 6,000.00

Schedule (Ex. 11) Mr. Mancini ’s Investments 5. BMO RSP $240,191.00

Schedule (Ex. 11) 6. BMO LIRA $203,513.00

Schedule (Ex. 11) 7. Scotia McLeod GRSP $ 80,179.00

Schedule (Ex. 11) 8. Investors Group RESP $ 3,192.00

Schedule (Ex. 11) 9. Scotiabank No. 635 $ 21,436.00

Schedule (Ex. 11) 10. Scotiabank No. 740 $ 13,042.00

Schedule (Ex. 11) Ms. Mancini ’s Investments 11. Scotiabank No. 021 (spousal) $ 22,238.00

Schedule (Ex. 11) 12. Scotiabank No. 029 (spousal) $ 68,591.00

Schedule (Ex. 11) 13. Scotiabank No. 823 $ 22,154.00

Schedule (Ex. 11) 14. BMO RSP (spousal) $140,836.00

Schedule (Ex. 11) 15. Scotia McLeod GRSP $ 43,615.00

Schedule (Ex. 11) 16. Investors Group RSP $ 26,294.00

Schedule (Ex. 11) Mr. Mancini ’s Bank Account s 17. RBC Chequing No. 490 $ 28,680.00

Schedule (Ex. 11) 18. Scotia Moneymaster $ 860.00

Schedule (Ex. 11) 19. RBC No. 961 $ 1,358.00

Schedule (Ex. 11) Ms. Mancini ’s Bank Account s

24. Scotia Money Master $ 92.00

Schedule (Ex. 11) 25. Scotia Plus $ 6,131.00

Schedule (Ex. 11) 26. Scotiabank TFSA $ 581.00

Schedule (Ex. 11) [ 26 ] This list does not include the Okotoks villa occupied by Ms. Mancini and her father since 2010. The title shows them as joint owners, although Ms. Mancini claims they intend her to be the sole beneficial owner. Mr. Mancini makes no claim to a part of this asset. [ 27 ] Nor does the list include the amounts Ms. Mancini alleges she owes to her father as debts. She makes no claim that Mr. Mancini should share liability for these amounts. [ 28 ] Finally, the list does not include Mr. Mancini’s indebtedness to RBC under a line of credit, in the amount of $40,539.00. He argues that Ms.

Mancini should bear an equal part of this liability as a matrimonial debt, an argument I will address presently. While it was incurred after separation, it represents the cost of funding their son’s post-graduate education at the London School of Economics from August 2009 until June 2010. 2. Values of Assets [ 29 ] In many instances, the parties agreed through counsel on the value to be attributed to the asset. Those instances are indicated by “Schedule (Ex. 11)” under the “Source of Value” column of the chart. [ 30 ] In other instances, where indicated by “Trial Judgment”, I have made a finding on value.

In all cases but one, that finding is based upon undisputed documentary evidence or submissions during argument. The exception is the value of the matrimonial home located in the Woodbine area of Calgary. 3. Determination of Matrimonial Home Value [ 31 ] The parties presented two competing appraisals on the value of the matrimonial home. For Mr. Mancini, Price Aspinall Appraisals found market value to be $595,000.00 as of November 4, 2011. Benchmark Real Estate Appraisals submitted a fair market value opinion of $640,000.00, as of December 5, 2011, on behalf of Ms. Mancini.

It is not disputed that the mortgage debt is $203,000.00, an amount which must be deducted from market value. [ 32 ] There is no method for determining market value of a residential property with exactitude, without a sale process. Both expert witnesses referred a number of times in their testimony to the fact that appraisals depend upon a high degree of judgment and are not an exact science. In argument on behalf of Mr. Mancini, it was submitted that the property appraisal process is subjective. [ 33 ] The appraisal conducted on behalf of Mr.

Mancini by Price Aspinall Appraisals was prepared by Jenny Folkard, a candidate appraiser. It was also signed by Janet Aspinall as “supervisory appraiser.” It was initially intended that Ms. Folkard testify as an expert witness. However, shortly before trial, it was determined that Ms. Aspinall should testify because Ms. Folkard did not have the qualifications required for critiquing the opinion of another appraiser. [ 34 ] The Price Aspinall appraisal was completed on November 14, 2011, with an effective date of November 4, 2011. Ms.

Aspinall did not view the property until a week or two before trial, when she made an inspection, according to her testimony, because she wanted to be “comfortable in testifying.” She could not remember any particular involvement in the initial appraisal report, and could not

remember if she made any changes to Ms. Folkard’s appraisal before signing it. [ 35 ] Ms. Aspinall testified that viewing property is an important part of its appraisal. Indeed, that must be so because of the undisputed importance of judgment in determining value, and the fact that much depends on assessing the features of the subject property in comparison with properties found to be comparable. [ 36 ] In my view, viewing a property shortly before giving testimony to support an appraisal done more than half a year before is no substitute for a viewing done as part of the initial appraisal.

A latter-day inspection is unlikely to be a true basis for determining value, including the selection of proper comparables. Instead, it becomes (as it did here) a basis for defending work already done by a colleague. In my view, it is not likely that Ms. Aspinall would have taken exactly the same approach or arrived at exactly the same conclusion as Ms. Folkard if she had done the appraisal herself ​ and yet, that is the implication, if not the express purpose, of her testimony. [ 37 ] Part of Ms.

Aspinall’s testimony seemed directed at the acceptability of averaging competing appraisals, or taking some other value between the opposing numbers. This approach was also suggested on behalf of Mr. Mancini during argument. Ms. Aspinall explained that relocation companies often take such an approach when setting a home’s value in the face of two or more appraisals. [ 38 ] In many cases, given the imprecise and judgmental nature of appraisals, there may be merit to such an approach. However, it assumes two equally-valid appraisals. In my view, that does not reflect what is before me.

In the absence of agreement, a trial court’s value determination is based on expert testimony with reports submitted as foundation and explanation of the testimony. In this case, only one of the experts testified as to an opinion based on his own work. Ms. Aspinall’s testimony, in my view, was a retrospective justification of the work of another, more junior appraiser. At best, her testimony may suggest that Ms. Folkard’s approach and conclusion were reasonable. In my view, Ms. Folkard’s report and Ms.

Aspinall’s testimony should be given less weight in the absence of serious questions about the competing testimony of an appraiser who conducted all aspects of the evaluation. [ 39 ] The appraisal of Benchmark Real Estate Appraisals was prepared by Randall J. Stegemann, and he also gave expert testimony on behalf of Ms. Mancini. Much of Ms. Aspinall’s testimony on behalf of Mr. Mancini was a critique of Mr. Stegemann’s appraisal.

She criticized the fact that he made adjustments for the times at which the comparables on which he relied had been sold, and the fact that he referred to both Woodbine data and Calgary-wide data when making those adjustments. She also criticized the extensive explanatory material in Mr. Stegemann’s report ​ some of it general (which she referred to as “filler”) and some detailed explanations of how he used data to make adjustments to sales prices of comparables before using them in his market value assessment. [ 40 ] Ms. Aspinall acknowledged some mistakes in Ms.

Folkard’s appraisal, although she said none affected the conclusion; but pointed out no mistakes in Mr. Stegemann’s work. Her criticisms were limited to differences in approach, in my view. In essence, she considered Mr. Stegemann’s approach too reliant on finely-tuned adjustments, rather than using a more broad-based judgmental approach. [ 41 ] None of Ms. Aspinall’s testimony, in my view, undermines the validity of Mr. Stegemann’s opinion. In fact, even Ms. Aspinall did not go so far as to express an opinion that Mr. Stegemann’s valuation should be disregarded. I prefer the evidence of Mr.

Stegemann, because of his thorough evaluation, including his transparent and thorough use of data; and the fact that his opinion was based on personal investigation and analysis at all stages of the process ​ which, given the importance of judgment, is a critical factor. I therefore accept Mr. Stegemann’s opinion of the value of the property being $640,000.00, as of November 4, 2011. [ 42 ] It remains to determine whether the value of $640,000.00 should be used for value at date of trial.

Both expert witnesses expressed the view that real estate prices in Calgary seemed to be increasing as of date of trial, although Ms. Aspinall agreed with this proposition much more reluctantly. However, Mr. Stegemann did not express an opinion on market value as of date of trial. Even with the careful analysis in his appraisal report, he found that the comparables gave a value range of $621,000.00 to $664,000.00, and he chose the higher end of the value range because of his view of how the subject property compared to the comparable properties he used.

In my view, there are no compelling reasons to substitute a different figure for market value as of date of trial. Doing so would impose my arbitrary determination as a supplement to a considered expert opinion showing value as of November 4, 2011. [ 43 ] I therefore find that, for purposes of determining the matrimonial property issues before me, the Woodbine property should be valued at $640,000.00 as of date of trial. After deducting the mortgage debt of $203,000.00, it has a resulting net value of $437,000.00.

C. Exempt Property 1. Introduction [ 44 ] Section 7(2) of the Matrimonial Property Act provides that certain property or its value as of a certain date is exempt from distribution between the spouses. There are two categories of property that might be exempt in this case, namely funds in registered retirement savings plans (RRSPs) that were purchased with gifts from Ms. Mancini’s father, and property value or reduced debt attributable to $52,000.00 Mr. Mancini received when his mother passed away. With respect to the latter, it was conceded in argument on behalf of Mr.

Mancini that any exemption was lost, but that concession was premised on the exemptions claimed by Ms. Mancini also no longer applying. 2. RRSPs [ 45 ] The evidence clearly established that Ms. Mancini received a series of cash gifts from her father, Gordon Phelan, by means of direct deposits into a bank account in her sole name. Some of these funds were used to help fund her quilting hobby, but most were used to purchase RRSPs. [ 46 ] The RRSPs purchased with Mr. Phelan’s gifts of money to his daughter are, according to the evidence, as follows: Account No. Named Account Owner Current Amount Plan Type 21 Ms.

Mancini $22,238.00 Spousal 823 Ms. Mancini $22,154.00 Non-Spousal 29 Ms. Mancini $68,591.00 Spousal 635 Mr. Mancini $21,436.00 (Possibly Spousal) 740 Mr. Mancini $13,042.00 (Possibly Spousal) Mr. Mancini equivocated on the source of funds used to purchase the last RRSP listed above. Ultimately, he said he did not know, and had no documents to contradict Ms. Mancini’s assertion that it also came from a cash gift from Mr. Phelan. I accept Ms.

Mancini’s evidence on this point, as it is based on a careful reconstruction of when the gifts were received and the RRSPs purchased. [ 47 ] As is commonly understood, and was explained by Dean Gallimore, an expert witness called on Mr. Mancini’s behalf, RRSPs have two main tax-saving benefits. First, the contributor may deduct the contribution from taxable income in the year the contribution was made. Second, increase in value or income from RRSP investments are not taxed before the funds are withdrawn. [ 48 ] For two of the three RRSPs for which Ms. Mancini is account owner, the documents designated Mr.

Mancini as the “contributing spouse.” Thus, he could claim a deduction from taxable income for the amount of the contribution. The owner of the

account is Ms. Mancini. The evidence from both Mr. Mancini and Ms. Mancini is that, notwithstanding the contributing spouse designation, the source of the funds for both RRSPs were cash gifts received by Ms. Mancini from her father. [ 49 ] For at least one of the RRSPs for which Mr. Mancini is named as account owner, Ms. Mancini was named the contributing spouse. [ 50 ] Mr. Gallimore testified that in his opinion, as a chartered accountant, when Mr. Mancini is named as contributing spouse there cannot be an exemption. Acting as contributing spouse means Mr.

Mancini must have had access to the funds in order to make the contribution, and thus no tracing is possible. Thus, in his opinion only non-spousal RRSPs in Ms. Mancini’s name, purchased from gifted funds, might qualify as exempt. [ 51 ] In addition, it is argued on Mr. Mancini’s behalf that all of the RRSPs must be shared equally because they were established as part of a “family retirement plan” in which the spouses cooperated to minimize the ultimate tax burden at retirement. [ 52 ] Neither party testified that they expressly agreed to any joint retirement planning.

That is not surprising: probably, few families make express agreements about such matters. The essence of the evidence here was, from Mr. Mancini, that the arrangements were “part of our retirement plan;” Ms. Mancini referred to the arrangements as part of their plan for “tax splitting,” the details of which she left to Mr. Mancini to arrange. [ 53 ] The evidence establishes that the five RRSPs listed above were purchased with exempt funds within the meaning of section 7(2) , namely gifts to Ms. Mancini from her father. The question is whether the principles of tracing justify Ms.

Mancini’s claim for exemption from distribution of all or a portion of the current RRSPs. She takes the position that those on which she is named as owner are entirely exempt, and those on which Mr. Mancini is named as owner are partially exempt. [ 54 ] Ms. Mancini replaced the funds gifted by her father with RRSPs acquired from Scotiabank. In at least some cases, the original funds were held in the form of a guaranteed investment certificate. In Harrower v. Harrower [4] and Roenisch v.

Roenisch [5] it was held that originally-exempt property can be traced to replacement property, the exemption can be maintained if there is some basis for finding that exempt assets were the source of the disputed assets. The same test was recently expressed as a “burden to demonstrate a fair connection between the exempt property and the replacement property.” [6] [ 55 ] In my view, the tracing principles applied in matrimonial property authorities clearly justify Ms. Mancini’s claim to maintaining her exemption for the three RRSPs in her name.

On the evidence, there was not even a co-mingling of the funds with other accounts. Naming Mr. Mancini as a contributing spouse on a bank form does not change the substance of these simple transactions: a gift from Mr. Phelan by deposit into Ms. Mancini’s bank account, and a transfer by Ms. Mancini from her bank account into an RRSP. [ 56 ] The nebulous evidence about retirement planning is, in my view, insufficient to establish a gift to Mr. Mancini of any part of the originally-exempt funds. Retirement planning might be one reason for keeping the funds in Ms.

Mancini’s name, but an equally valid reason would be that she intended to retain her own property. Further, some tax planning was accomplished by the mere fact of enabling Mr. Mancini to claim an immediate tax deduction for those cases where he was named as contributing spouse. [ 57 ] For the three RRSPs in Ms. Mancini’s name, it remains to consider whether a difference in value between the original asset and its current value should be distributed. If so the manner of doing so should be “just and equitable” as provided for under section 7(3) of the Matrimonial Property Act .

Neither party addressed this point in evidence or in their submissions. [ 58 ] It is difficult to extract from the evidence the increase in value specifically attributable to these three RRSPs since their acquisition. In any event, in my view, when considering the factors in

section 8, the increase in value should not form part of the property to be distributed. As in Mazurenko v. Mazurenko [7] these RRSPs never came into the matrimonial regime and were not used for any family purpose other than giving Mr. Mancini a tax deduction. Furthermore, as in Chalifoux v. Chalifoux [8] , on my findings Mr. Mancini made no contribution, financial or otherwise, to the acquisition or increased value of this property.

[ 59 ] Different considerations arise for the two RRSPs acquired with gifted funds that were put into Mr. Mancini’s name. There was some evidence from Mr. Gallimore that Ms. Mancini was shown as contributing spouse on at least one of these, but that is not evident from the current records and cannot be determined from the testimony of the parties. Again, as with the other RRSPs, I find that the two RRSPs in Mr. Mancini’s name were purchased entirely from funds gifted by Mr. Phelan to his daughter. [ 60 ] The evidence does not expressly explain why these two RRSPs, from Ms. Mancini’s exempt funds, were put in Mr.

Mancini’s name. I am thus left to determine ownership of these RRSPs based on inferences from the evidence and applicable principles of law. [ 61 ] In the case of gratuitous transfers of property (which is the case here, as there is no evidence of consideration), courts of equity developed two basic presumptions. In general, it was presumed that the transferor intended to create a resulting trust in his or her favour, rather than make an outright gift.

However, when property was transferred by a husband to his wife, or from a father to a child, there was a presumption of “advancement,” or gift. [9] Section 36(1) of the Matrimonial Property Act sets aside the presumption of advancement for transactions between spouses, but only in respect of property acquired before or after the marriage, which is placed or taken in the names of both spouses as joint owners. The RRSPs in Mr.

Mancini’s name do not involve property acquired before or after the marriage or property placed in the spouses’ joint names, and therefore the doctrine of presumption of advancement does not apply in either law or equity. Instead, a resulting trust is to be presumed unless there is evidence of an intention to made the transfer a gift. [ 62 ] I infer from the limited evidence that a gift was intended. In my view, placing these RRSPs in Mr. Mancini’s name reflected an attempt by the parties to balance their RRSP holdings.

It would be consistent with that purpose for each of the parties to own separate RRSPs, rather than that all of their RRSPs be owned jointly, as would be the effect of Mr. Mancini’s argument. [ 63 ] Ms. Mancini argues that she retains 50 percent of her original exemption on the funds used to purchase Mr. Mancini’s RRSPs, relying on the principles of Jackson v. Jackson [10] and Harrower v.

Harrower . [11] However, those cases stand for the proposition that “a gift to a spouse of a joint interest removes that joint interest from the category of exempt property.” [12] In those cases, 50 percent of the jointly-owned property remained exempt on distribution of matrimonial property, and the other 50 percent remained available for distribution on a “just and equitable” basis, falling within the category of “property acquired by a spouse by gift from the other spouse”: section 7 (3) (d). As I have found, in this case the purchase of the two RRSPs in Mr.

Mancini’s name was a gift, and thus their entire amounts fall within the category of a gift from one spouse to another to be distributed in a just and equitable manner, having regard to the factors set out in

section 8. [ 64 ] In my view, the RRSPs in Mr. Mancini’s name should be divided equally between the parties. I take into account my finding that Mr. Mancini was to have some benefit from these funds. It is a significant factor under

section 8, when determining what is just and equitable, that the funds were contributed entirely by Ms. Mancini. 3. Mr. Mancini ’s Inheritance [ 65 ] The last asset over which a claim for exemption is made is the amount of $52,000.00 Mr. Mancini received upon his mother’s death. The testimony of Mr. Mancini and his sister, Candida Mancini, was that when their mother became ill, she established an account over which her son and daughter had signing authority. It was used to fund her living expenses. When she passed away, the balance of $104,000.00 was divided between Mr. Mancini and his sister.

There is no evidence of a will or of a formal probate or administration process. [ 66 ] Ms. Mancini testified (based on hearing her husband’s part of a telephone conversation with his sister) that when Mr. Mancini took the $52,000.00, it was all the money in the account except for a few thousand dollars left for flowers, and that his sister was upset at his conduct. In my view, there is no foundation for Ms. Mancini’s belief. The testimony of Mr. Mancini’s sister, given in rebuttal, corroborated Mr. Mancini’s testimony. Thus, there is no reason to doubt Mr.

Mancini’s testimony on this point. [ 67 ] I therefore conclude that Mr. Mancini received the amount of $52,000.00 as a form of inheritance. Its original value is therefore exempt from distribution pursuant to section 7(2) (b). There is no testimony or record of when the funds were received. I infer

from the fact that Mr. Mancini’s mother died on June 15, 2004, that the funds were received sometime during the latter half of 2004. [ 68 ] Mr. Mancini originally claimed an exemption based upon the fact that the funds were used in a renovation of the Woodbine home and thus contributed to its value or reduced the amount of additional mortgage debt required to pay for the renovations. [ 69 ] The evidence is unclear on when the renovations were carried out. I infer from the testimony of both parties that the work was done primarily in 2005 and 2006.

Costs of approximately $300,000.00 were incurred. [ 70 ] The $52,000.00 Mr. Mancini received after his mother’s death was deposited into a joint “family” account at RBC. That account was used for a variety of purposes, including depositing tax refunds and other sources of income, and was used to pay virtually all of the family’s expenses. [ 71 ] Understandably, Mr. Mancini was unable to show what happened to the $52,000.00 deposited to the joint account. There is no basis to determine exactly what portion, if any, of the $52,000.00 was used for renovation expenses at any particular time.

Likewise, no specific correlation can be made between receipt of the $52,000.00 and the increased mortgage indebtedness. In fact, there is no evidence before me of when the mortgage debt was increased, and how the amount was calculated (although I infer from Mr. Mancini’s undated spreadsheet that he either planned to, or did, obtain additional bank financing in two stages, of $175,000.00 and $100,000.00). Finally, there is no evidence to show what, if any, contribution the funds received by Mr. Mancini from his mother made to the renovations, or to the increased value of the Woodbine home. [ 72 ] Mr.

Mancini has the onus of establishing that the exemption applying to the original receipt of $52,000.00 was maintained after it became co-mingled with joint funds and was used for other purposes. [13] In particular, while the tests for tracing matrimonial property are less strict than the usual equitable principles [14] , there must still be evidence to establish some basis for connecting a portion of exempt funds to other matrimonial property. [15] Here, there is no basis in the evidence to find any particular part of the $52,000.00 gift was used to fund renovations, to reduce debt, or to increase the value of the property.

The funds were co-mingled with other family income, expenditures and assets in a way that would make the finding of a continued exemption, in whole or part, pure speculation. [ 73 ] I therefore find that the exemption for the $52,000.00 originally received as inheritance from Mr. Mancini’s mother has been lost. D. Property Presumed to be Equally Distributed 1.

Introduction [ 74 ] Other than the property for which I have found an exemption, or over which there is no dispute, all other property owned by the parties falls into the category of divisible property with respect to which there is a presumption of equal division, pursuant to section 7(4) of the Matrimonial Property Act . However, that provision allows the court to depart from an equal distribution of property where it would not be “just and equitable” to do so, taking into account matters set out in

section 8. [ 75 ] In this case, the parties argue (for different reasons) that there should not be an equal distribution of the following: (

a) the ScotiaMcLeod Group Retirement Savings Plans; (

b) the current bank accounts of both parties; and (

c) Investors Group RESP.

[ 76 ] Before considering the parties’ arguments for an unequal distribution, it is well to remember that the legislation presumes an equal distribution of all property owned by the spouses (jointly or individually) except for particular types of property for which other treatment is prescribed. Normally, the presumption of equality should govern the distribution, with the only exception being where doing so would be unjust or inequitable. [16] 2. ScotiaMcLeod GRSPs [ 77 ] The GRSPs arose in the context of Mr. Mancini’s employment at AMEC, which began in 2005.

Annual contributions were made of 9 percent of his salary, 4 percent by Mr. Mancini and 5 percent by his employer. The contributions were divided equally between a plan for each of Mr. Mancini and Ms. Mancini. [ 78 ] In May 2010, Mr. Mancini instructed the plan managers to direct all further contributions to his personal plan. He testified that there was a delay in implementing these instructions, so that contributions to Ms. Mancini’s plan continued for some time. They were later reversed, with the result that Ms. Mancini discovered a large withdrawal of $8,000.00 from her plan. [ 79 ] Mr.

Mancini argues that neither party’s GRSP is divisible. His argument would have the same effect as dividing them equally until the point at which contributions to Ms. Mancini’s plan ended. The basis for Mr. Mancini’s argument, as I understand it, is that the difference in value between the two plans is largely the result of contributions to Mr. Mancini’s plan after the parties separated. [ 80 ] Whether property was acquired after separation is one factor that may be considered, among many others set out in

section 8 of the Act, when considering whether a distribution of property is just and equitable. Most of the other factors in

section 8 would not support a different treatment for the GRSPs. For example, there is nothing about the parties’ respective contributions to the marriage and family, the income, earning capacity, liabilities, obligations, and resources of each of them at various times, or the duration of the marriage that would weigh in favour of not equally dividing the GRSPs. Further, each factor in

section 8 must be considered in light of the overall presumption in

section 7 that (with few exceptions) all property owned by both parties at trial should be distributed equally. [ 81 ] There is no legal justification for removing the two GRSPs from property equally divided. It is arguable that a distinction might be made for post-separation assets. However, the date Mr. Mancini proposes for separate treatment comes from his arbitrary selection of May 2010 (about a year after separation), or later when withdrawal from Ms.

Mancini’s plan of contributions was made. [ 82 ] Cases in which post-separation assets are treated separately typically involve lengthy periods between separation and trial [17] and cases where the parties’ financial relationship has been completely severed. [18] Neither of those situations obtains for these parties. [ 83 ] In the result, I am convinced that an equal division of both parties’ GRSPs would be just and equitable, taking into account all of the matters set out in

section 8 as applied to the evidence. Thus, they will form part of the property to be equally divided. 3. Current Bank Accounts [ 84 ] Mr. Mancini argues that there should be no division of the bank accounts held by each party as of trial. Most of the contention presumably arises because of Mr. Mancini’s RBC chequing account, the agreed value of which is $28,680.00 at trial. It contains his most recent income tax refunds. The next largest account is one held by Ms. Mancini for $6,131.00. [ 85 ] As noted above, the parties have not completely severed their financial affairs.

They closely intermingled most of their assets and funds throughout their long-term marriage. There remains a financial relationship between them because of Mr. Mancini’s continued support obligations and their mutual responsibilities for maintaining joint assets. Mr. Mancini’s tax refunds come from his employment income and expenditures on matrimonial property, both of which are connected to Ms. Mancini’s contributions to the marriage and the family.

[ 86 ] In my view, there is no basis for departing from the usual presumption of an equal division of all of these bank accounts. 4. Investor ’s Group RESP [ 87 ] The sum of $3,921.00 remains in the fund that was set up for James’ education. There was little evidence about the remaining amount. Mr. Mancini simply said he was holding it because it might have to go to the government, or to fund some left-over expenses for James. He referred to a potential tax liability. [ 88 ] James’ education has been well funded. There is no credible evidence before me of an imminent tax liability.

I find no reason to depart from the usual presumption of an equal division of this fund. E. Line of Credit Debt [ 89 ] The Matrimonial Property Act does not specifically provide for the distribution of debt. It is often a part of the distribution process because debt charged to an asset affects the net value available for distribution, and

section 8 specifically provides that each spouse’s liability at the time of marriage and at the time of trial are matters to be taken into account in making a distribution under

section 7. [19] However, in my view, there is no presumption that one party’s debt, not specifically incurred in respect to a matrimonial asset for which there is a presumed equal distribution, should be divided equally. [ 90 ] Mr. Mancini submits that his indebtedness to the RBC of $40,539.00 under his line of credit should be borne equally by the parties. Ms. Mancini argues that she should have no responsibility for it, because it was nearly all incurred after separation, and was used primarily to fund James’ education, a matter in which she had no role. [ 91 ] The RBC statements confirm Ms.

Mancini’s evidence that, apart from approximately $1,000.00, the entire indebtedness arose after the parties’ separation in the spring of 2009. Further, the current indebtedness closely corresponds with the total amount Mr. Mancini paid to cover James’ one-year living and education expenses at the London School of Economics in London, $42,000.00. [ 92 ] Mr.

Mancini testified that he used a variety of sources for funding James’ education: primarily the Investor’s Group RESP of about $11,800.00 and the funds deposited to his Scotiabank Money Master Savings account (established for an AMEC program to facilitate employee savings and to hold proceeds from sales of shares under an employee share purchase plan).

However, the line of credit, he said, was often used to pay the education costs until funds from these other sources were available, at which time the line of credit was paid down. [ 93 ] Because the line of credit was used for James’ education and the current debt is very close to what Mr. Mancini spent for that purpose, it serves as an acceptable proxy for the cost of James’ education. However, Ms.

Mancini submits that she had no responsibility to contribute to these expenses, and should not now share liability for them. [ 94 ] The evidence of both parties establishes that there were no discussions between them about funding James’ masters degree at LSE (after completion of a four-year degree at the University of Ottawa). Mr.

Mancini said that during the parties’ marriage, they considered the provision of a good education as their “legacy” to their children. [ 95 ] Jennifer’s education (five years at the University of Lethbridge, completed before the parties separated) was mostly funded by her parents at a total cost calculated by Mr. Mancini of $112,000.00. He included in that amount the purchase of a car for Jennifer at a cost of $22,000.00. Mr.

Mancini said he believed paying for an additional year of James’ education at LSE was proper, in order to equalize contributions to both children (although James’ total education cost for both degrees was about $130,000 .00 – well over what was paid for Jennifer, even without deducting the car purchase for her education costs).

[ 96 ] Ms. Mancini testified that James told her, before he left for London, that he had sufficient funds to pay his expenses, when taking into account his scholarships, student loans, the RESP fund and employment income. That evidence must be treated with caution, given its second-hand nature, but Mr. Mancini gave no evidence that James needed funding to attend LSE. There is no dispute that Ms. Mancini was never consulted about funding James’ education, and was not aware of a need. [ 97 ] In my view, Ms. Mancini has no responsibility for any of the post-separation payments Mr.

Mancini made for James’ education in London. The evidence falls far short of a fixed plan before separation to pay all expenses of an overseas education for a son who could have paid his own way. Even if such a plan existed, the intervening separation, with its attendant financial disruption and additional expenses, would at least call for reconsideration of that plan. Mr. Mancini had a right to be generous with his own funds, but it is no part of generosity to unilaterally spend another’s. [ 98 ] It is useful to also consider what might have occurred if Mr. Mancini had asked Ms.

Mancini to contribute to these costs before they were incurred. On a court application, it is unlikely that James would have been found to have remained a “child of the marriage” for child support purposes under the Divorce Act . Even if he were found to be a “child of the marriage” for the purpose of paying extraordinary expenses, Ms. Mancini’s share would likely have been a small proportion of the expenses, calculated under

section 7 of the Federal Child Support Guidelines (“ Child Guidelines ”) [20] . [ 99 ] For these reasons, I find that Mr. Mancini’s line of credit debt remains his sole responsibility. I do not consider it as a factor in his favour in determining the distribution of property between these parties. F. In Specie Distribution [ 100 ] There are no disputes about who takes which assets.

To avoid unnecessary misunderstandings, I direct that each party shall take the vehicle assigned to them on the list of assets provided during argument, and be liable for any remaining indebtedness directly related to that vehicle. [ 101 ] Mr. Mancini must give notice in writing to Ms. Mancini within 30 days of this judgment whether he elects to take ownership of the Woodbine home at a cost (for distribution purposes) of one half the net value I have found ($218,500, or half of $437,000.00), failing which the property must be listed for sale and the net sale proceeds divided equally between the parties. If Mr.

Mancini elects not to purchase the home as above within 30 days, he will not have the right to do so in the future for any value, except upon agreement with Ms. Mancini. G. Final Distribution [ 102 ] The total value of the parties’ assets as set out above, without the three exempt RRSPs in Ms. Mancini’s name, is $1,278,998.00. As I found that all assets should be distributed equally, each party’s share of the total value would be $639,499.00. [ 103 ] If Mr. Mancini retains ownership of the Woodbine home, Ms. Mancini will be entitled to receive a significant equalization payment.

However, I defer the final adjustment between the parties arising from the distribution of matrimonial property until I consider spousal support. IV. Spousal Support A. Introduction [ 104 ] As I will address in more detail later, spousal support is a statutory remedy. The statutory provisions, particularly the factors and objectives to be addressed, necessarily involve much judicial discretion. That is particularly so in this case, given the unusual circumstances existing for each party.

[ 105 ] Mr. Mancini, to his credit, does not dispute that he owes more spousal support than has been paid. Unfortunately, one of the disagreements between the parties is what amount should be credited as past spousal support. It is therefore the first order of business to determine what was paid. [ 106 ] I will then turn to a variety of considerations relevant to determining proper spousal support for the period between separation and trial, and what should be paid on a continuing basis. Involved in these determinations is imputing income for Ms.

Mancini, making adjustments for tax consequences (because the retroactive payments will not be deductible, and because Mr. Mancini now receives non- taxable income) and considering the effect of large amounts Ms. Mancini has received from her father, characterized as loans. B. Payments from Separation to Trial [ 107 ] After leaving the matrimonial home in May 2009, Mr. Mancini began paying Ms. Mancini $1,200.00 a month as spousal support. Those payments continued to the time of trial. [ 108 ] In addition, Mr.

Mancini paid other expenses directly, and claims them as a credit against his obligation for retroactive spousal support. A June 29, 2010 order of this court, granted on consent, declared spousal support payments to have been made as follows: (a) $4,601.00 per month from May 1, 2009 to December 1, 2009, for a total of $36,808.00; and (b) $4, 823.00 per month from January 1, 2010 to June 1, 2010, for a total of $28,938.00.

The order further provided that the foregoing spousal support “shall be without prejudice to any party arguing on a de novo basis as to what the quantum of spousal support from July 1, 2010 should be.” [ 109 ] While the parties remain at liberty to argue the proper amount of support payments, they have chosen how to characterize payments made to third parties and reduced that to the form of a court order. I will not revisit that characterization. [ 110 ] Counsel for Ms.

Mancini followed that approach in her calculations of support paid for the period covered by the order, except that she did not include contributions made to Ms. Mancini’s GRSP. Whatever arguments there might once have been to support that approach, it is inconsistent with the consent order. [ 111 ] The consent order does not apply to payments after June 2010. Disputes between the parties resulted in there being a cessation of payments for four months, after which they were restored by court order, together with full back payment and costs, in favour of Ms. Mancini.

The parties still argue over who was responsible for this episode. It is not necessary for me to make findings on that point. [ 112 ] To address the claim for retroactive spousal support, I must first determine what payments were made. For the period from May 2009 through June 2010, in my view it is simply a matter of applying the terms of the consent order. For payments after June 2010, I will include the same payments to third parties as were included in the consent order. Generally, that includes expenditures regarding the Woodbine home, the Okotoks townhouse, and Ms.

Mancini’s car loan and insurance. [ 113 ] This general approach is qualified by the following: Woodbine home: Ms. Mancini moved out in August 2010. Payments in respect of that home can not be considered as part of her living expenses (and therefore spousal support) thereafter. (I recognize that Mr. Mancini did not move in until November 2010, and he argues that he made a contribution to the maintenance of matrimonial property for the benefit of both parties throughout. In my view, that is not an answer to a claim for spousal support.)

Okotoks townhouse : It is questionable that these expenses, legitimate as they were to maintain a matrimonial asset, would normally be considered spousal support. However, that is how the parties and the consent court order treated them. The townhouse was sold in June 2011, so those expenses ended then. Hyundai loan and insurance : Mr. Mancini paid out the loan for Ms. Mancini’s Hyundai in 2010, and he discontinued insurance payments then as well. GRSP: Mr. Mancini ended his contributions to Ms.

Mancini’s plan in May 2010. [ 114 ] The following summarizes my findings on the spousal support payments made from May 2009 to June 2012: Total Monthly 2009 (May to December) $ 36,808.00 $ 4,601.00 2010 (January to June) $ 28,938.00 $ 4,823.00 2010 (July to December) a $ 16,535.00 $ 2,756.00 2011 b $ 19,863.00 $ 1,655.00 2012 (January to June) c $ 8,292.00 $ 1,382.00 [ 115 ] The following explanatory notes give the basis for some of the calculations implicit in these numbers: (

a) For the second half of 2010, I have included two months of expenses for the Woodbine home (calculations based on annual expenses of $16,212.00), reflecting the fact that Ms. Mancini moved out in August. I have prorated the Okotoks townhouse, Hyundai and health insurance expenses over this six-month period. Also included, of course, are the “base” or direct monthly payments of $1,200.00 made to Ms. Mancini directly. (

b) In 2011, the support payments comprise only the base payments of $1,200.00, Okotoks townhouse expenses and health plan expenses. (

c) The 2012 payments comprised the base monthly payments plus health plan costs. C. Entitlement [ 116 ] Mr. Mancini agrees that Ms. Mancini was entitled to spousal support when they separated, and that her entitlement continues. [ 117 ] As noted above, spousal support is a statutory remedy, which may be granted pursuant to

section 15.2 of the Divorce Act .

Section 15.2(4) requires that when making a spousal support order, "the court shall take into consideration the condition, means, needs, and other circumstances of each spouse." Specific factors to consider include length of co-habitation, functions performed during

co-habitation, and any order or agreement relating to spousal support. [ 118 ]

Section 15.2(6) provides that the objectives of a support order should: (

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

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

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

d) insofar as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time. [ 119 ] The Supreme Court of Canada held that there are three conceptual grounds for entitlement to spousal support: compensatory, contractual and non-compensatory. The parties agree that Ms. Mancini’s entitlement is based on the compensatory model. Moge v. Moge [21] remains the leading decision for spousal support on the compensatory model. The Court of Appeal recently considered and applied the Moge principles in Shields v.

Shields [22] . [ 120 ] Moge articulated a number of principles that remain normative in spousal support cases. For purposes relevant to this case, they may be summarized as follows: (

a) The support provisions of the Divorce Act “are intended to deal with the economic consequences, for both parties, of the marriage or its breakdown.” While emotional and social benefits of marriage may be important, they are not easily quantified in economic terms and are not within the purview of spousal support law. (

b) The equitable distribution of the financial benefits of the “economic unit” of marriage can be achieved through spousal and child support, division of property and assets, or a combination of these. The absence of accumulated assets may require support payments in order to effect an equitable distribution of resources. However, fair distribution “involves the development of parameters with which to assess the respective advantages and disadvantages of the spouses as a result of their roles in the marriage, as the starting point in determining the degree of support to be awarded,” rather than a minute and detailed accounting. (

c) The four objectives set out in

section 15.2(6) must all be considered. No single objective is paramount, and the fact that one of the objectives (such as economic self-sufficiency) may have been obtained does not necessarily dispose of the matter. Further, as the provision makes clear, there are cases in which the objective of self-sufficiency cannot realistically be achieved. Collectively, “the four objectives set out in the Act can be viewed as an attempt to achieve an equitable sharing of the economic consequences of marriage or marriage breakdown.” (

d) There are a non-exclusive number of compensable advantages and disadvantages envisaged by the Divorce Act . Where there are children of the marriage, financial consequences “extend beyond the simple loss of future earning power or losses directly related to the care of children.” Also to be considered are loss of seniority, missed promotions, and the demands of continuing childcare responsibilities after marriage dissolution.

While not determinative, comparison of a spouse’s post-separation standard of living with the one enjoyed during the marriage and the one enjoyed by the former spouse may be “a revealing indication of the economic disadvantages inherent in the role assumed by one party.” [ 121 ] The need for a balanced application of the factors and objectives in

section 15.2 of the Divorce Act was emphasized in Shields . The parties had been separated for eight years after a fifteen-year marriage. Both children were living independently and both spouses were working full time. The court summarized the proper approach as follows: The Divorce Act dictates that the amount and duration of spousal support shall be determined taking into consideration the condition, means, needs and other circumstances of each spouse.

While the recognition of any economic advantage or disadvantage arising from the marriage or its breakdown remains an overall objective to be considered by the court, that objective cannot dictate a result which guarantees that the payee spouse must support the other spouse ad infinitum. The Divorce Act does not require that spouses' incomes be equalized to alleviate economic disadvantage arising out of the roles adopted by the parties in the marriage. Instead, the amount of support should be determined by the factors set out in the Divorce Act and interpreted in Moge .

According to Moge , a judge is required to consider the parties’ circumstances, including the duration of the marriage, their ages, their incomes and prospective incomes, the effects of property equalization, the stages of their careers, the marital standard of living, participation in household responsibilities, childcare obligations, and the parties’ reasonable standard of living expectations. [23] D. Considerations in Determining Amount of Spousal Support 1.

Introduction [ 122 ] As the Divorce Act and the authorities make clear, there are a wide range of matters to take into account when determining a just amount for spousal support. In addition to the usual factors identified in the Divorce Act , the first challenge in this case is identifying and making necessary adjustments to each party’s income. [ 123 ] For Mr.

Mancini, there is a dispute over whether his “total” or “employment” income from his income tax returns should be used; and for his income in 2012 and the foreseeable future, there are changes from salary, to short term disability, to long-term disability; and finally, there is the question of what adjustments should be made for the fact that his current income is non-taxable, and therefore there is no income against which to deduct spousal support payments. [ 124 ] Determining Ms. Mancini’s income is complicated by the fact that she has chosen not to return to the workplace to a significant degree.

However, she acknowledges that income should be imputed to her as part of determining spousal support. Therefore, despite the absence of recent employment information and very little evidence on possible prospects, it is necessary to set the amount and timing of Ms. Mancini’s income on a notional basis. [ 125 ] As for many trial findings, precision is not possible in this case, but that does not avoid the need to make findings from the available evidence.

Furthermore, spousal support determinations always involve discretionary findings on the basis of what is fair and reasonable as between the parties in their circumstances.

To the extent the Spousal Support Advisory Guidelines (“ Spousal Guidelines ”), prepared by Carol Rogerson and Rollie Thompson [24] are used, they recognize that the importance of exact findings on income are less essential for spousal support than child support, because the Spousal Guidelines generate ranges rather than specific amounts. [25] [ 126 ] The definition of income under the Child Guidelines is the starting point for determination of income under the Spousal Guidelines as well, although there may sometimes be distinctive income issues that arise under the Spousal Guidelines .

Section 16 of the Child Guidelines provides that a spouse’s annual income will be determined using the sources of income set out under the heading “total income” on the standard income tax return form issued by Canada Revenue Agency (identified on the tax form as “line 150"), although a number of adjustments and departures from the use of the “total income” figure are expressly contemplated. 2. Mr. Mancini ’s Income [ 127 ] The parties disagree on how to determine Mr. Mancini’s income. Mr.

Mancini argues that the proper figure should be the “total income line 150” on his income tax returns, as follows: 2009: $254,664.00 2010: $217,974.00 2011: $209,318.00 [ 128 ] Ms. Mancini argues that the proper amounts are the “employment income” or “line 101” figures, as follows: 2009: $262,170.00

2010: $233,111.00 2011: $218,288.00 [ 129 ] The difference between the two figures is almost entirely the result of losses Mr. Mancini claimed for the Okotoks townhouse, which for most of the relevant periods was a rental property. [ 130 ] Mr. Mancini was questioned about some of the rental expenses, with the implicit suggestion that they were notional rather than actual expenses. He stated that he incurred all of the expenses claimed, and there is no reason to disbelieve that testimony. [ 131 ] However, many of the expenses have been claimed and credited to Mr. Mancini as spousal support paid to Ms.

Mancini, as discussed above. In addition, Mr. Mancini receives half of the proceeds of the property’s sale (modest though they are). [ 132 ] Therefore, in my view, Mr. Mancini’s employment, or “line 101", income should be used for the purpose of calculating spousal support. As stated above, the amounts are $262,170.00 (2009), $233,111.00 (2010), and $218,288.00 (2011). [ 133 ] Determining Mr. Mancini’s income for 2012 involves many complications.

Some of my determinations are imprecise because the evidence does not always contain exact figures for specific periods, it was necessary to consider together several sources of income, calculated over different periods, and some income is taxable while some is not. [ 134 ] I have divided Mr. Mancini’s 2012 income into two six-month periods, the first ending June 30 (effectively the end of trial) and the second encompassing the post-trial period commencing July 1. [ 135 ] From January 1 to February 3 , Mr. Mancini earned $4,090.55 per week, his AMEC salary based on the exhibits.

Over five weeks, that amount totals $20,455.75, all of which is taxable. [ 136 ] Mr. Mancini’s illness began on January 7, but he was initially placed on a 28-day waiting period before short-term disability began. There is no evidence to suggest that Mr. Mancini was not paid his full salary during this time, and it is common for employers to continue salary during a waiting period. I therefore infer from the limited evidence before me that Mr. Mancini continued to receive salary until his short-term disability benefits began. [ 137 ] From February 4 to May 5 , Mr.

Mancini received taxable short-term disability benefits of $3,068.00 per week. Over 13 weeks, his total short-term disability benefits were therefore $39,884.00. [ 138 ] From May 6 to June 30 , Mr. Mancini received non-taxable long-term disability benefits of $10,174.93 per month. This period covers about one week less than two months, and I therefore determine his long-term disability income to be $20,000.00 for this period.

There is no evidence on the exact amount; two months would be $20,350.00. [ 139 ] However, as long-term disability benefits are non-taxable, I consider it reasonable to use the figure of $28,600.00 as roughly equivalent taxable income for this short period. That amount, taxed at 30 percent, would generate net income of approximately $20,000.00. [ 140 ] The rounded total of the foregoing amounts, namely $20,455.75, $39,884.00 and $28,600.00, is $88,940.00. The annualized equivalent would be $177,880.00. [ 141 ] The best evidence of Mr.

Mancini’s health prospects is a January 26, 2012 report from his neurologist stating that “while the prognosis for full recovery from Miller Fisher Syndrome is excellent, his is a severe case and will require considerable time and physical

rehabilitation to recover.” From this, I find it reasonable to conclude that Mr. Mancini’s income is likely to be his non-taxable monthly long-term disability benefit of $10,174.93, or about $122,000.00 per year (the figure used by both parties), for most if not all of the full 24-month period under this portion of his insurance coverage. [ 142 ] Using the Spousal Guidelines, and grossing up cash receipts of $122,000.00 per year to its pre-tax income equivalent generates $177,908.00. That calculation is not in dispute.

Remarkably, the grossed-up taxable income equivalent of $122,000.00 is very close to the total I calculated for Mr. Mancini’s income for the first six months of 2012, which was $177,880.00. For convenience, therefore, I use the figure of $177,908.00 on an annualized basis for generating the Spousal Guidelines suggested payments for all of 2012 and ongoing support. 3. Ms. Mancini ’s Income [ 143 ] Ms. Mancini’s income as disclosed on her income tax returns is of little use in determining her income for spousal support purposes.

It is complicated by the inclusion of support payments deemed to include payments to third parties and withdrawals of amounts from her GRSP that were initially deposited by Mr. Mancini and then reversed on his instructions ​ which apparently resulted in her having the withdrawn amounts taken into income for tax purposes. [ 144 ] Her employment income has, however, been nominal throughout.

Her part-time work at Rumpled Quilt Skins pays $10.00 per hour when she “works the floor” or $15.00 per hour when she teaches a quilting class. [ 145 ] From the material in the agreed exhibits, without taking into account the additional income in her reassessments which are under appeal, I find that her income was as follows: 2009 $5,447.00 2010 $2,969.00 2011 $4,000.00 2012 $4,000.00 (estimated) [ 146 ] I conclude from the evidence that Ms. Mancini’s work at Rumpled Quilt Skins has been largely in the nature of a hobby. It does not generate any meaningful income in addition to the expenses of her hobby.

She acknowledges, through counsel, that the income is not representative of her potential. [ 147 ] I take into account how Ms. Mancini’s circumstances changed over the years at issue. The separation occurred in mid 2009. Before then, there was no need for her to seek more remunerative employment. Both parties testified to some conversations about work she might do in the latter stage of their marriage, but I find that there was no agreement to do so, nor did Mr. Mancini demand that she return to work in any serious way.

Their mutual attempt to have her work as an assistant for his consulting business after he was laid off at Imperial Oil, and before taking employment at AMEC, was limited and not pursued because of her lack of computer skills. [ 148 ] Following separation, in late 2009 Ms. Mancini was attempting to move into her new villa-style condominium in Okotoks. Thefts of appliances and a fire delayed the possession date. In January, 2010, her brother died unexpectedly. She looked after funeral arrangements and was left with the responsibility of caring for her father, who had lived with her brother.

She helped her father move into the new villa in March 2010, and moved in with him in June of that year. [ 149 ] Ms. Mancini said she could not increase her work in 2010 because of the time required for the collaborative law process in which the parties were engaged. In addition, in 2010 she was faced with a series of personal difficulties: health problems that hospitalized her and led to a diagnosis of Guillain-Barr​ Syndrome. This was followed by a severe bout of shingles in early 2011, but by the spring of 2011 she was able to return to work on a limited basis.

She testified that she is now almost fully recovered.

[ 150 ] The only available evidence on ability to work is that of Ms. Mancini. Neither her father, her work colleagues or any medical professionals testified. From the evidence, I find that there were legitimate reasons for her delayed return to more remunerative employment in 2009, 2010 and early 2011. Those reasons included her health, her brother’s death and the need to assist her father in becoming settled in a new home.

Further, it is reasonable to expect someone who was absent from work for many years to require time to upgrade skills and secure suitable employment. [ 151 ] By mid 2011, there had been ample time to deal with these matters. Ms. Mancini chose not to return to more remunerative work, and has apparently chosen not to do so for the foreseeable future. She has instead chosen to live with her father and provide him with nearly full-time companionship and assisted living. [ 152 ] Mr. Phelan, according to the evidence, could afford to pay for whatever assistance he may need or desire.

He has often given financial assistance and gifts to Ms. Mancini, and while there is no evidence of his assets, he inherited nearly $900,000.00 from his son in 2010. [ 153 ] Ms. Mancini nevertheless volunteered to give her time to her father. That is commendable. However, this requires income to be imputed to her for purposes of determining spousal support.

Section 15.2(6) of the Divorce Act requires that a spousal support order promote the economic self-sufficiency of each spouse within a reasonable time, insofar as practical. Thus, a spousal support order in this case should take into account what progress Ms. Mancini might make towards economic self-sufficiency if she chose to do so, although the authorities recognize that this is only one factor and full self- sufficiency is not always achievable. [26] In other words, the Divorce Act requires that Mr. Mancini’s spousal support obligations be credited with income Ms.

Mancini could earn if she pursued the objectives of the Divorce Act . He is not required to pay for his former spouse deciding to assist her father, at least where that cannot be shown to be necessary. Ms. Mancini acknowledged, through counsel, this need for imputing income. [ 154 ] Unfortunately, on the evidence it is very difficult to determine what income should be imputed. Since leaving her career as an executive assistant in 1982, Ms. Mancini has not been on a path that would make forecasting very reliable. [ 155 ] Mr.

Mancini adduced expert evidence from Britney Didier on the provision of care for seniors such as Mr. Phelan, apparently to value the “services” Ms. Mancini provides. A live-in service would cost about $89,100.00 per year. In argument, Mr. Mancini’s counsel suggested an arbitrary reduction to $60,000.00 (with no reasons for that specific figure) to use as Ms. Mancini’s imputed income. [ 156 ] I do not find a caregiver scenario helpful. Ms. Mancini has never been a caregiver and is unlikely to pursue such a career.

Further, the expert evidence only addresses what a caregiver agency charges, not what its employees earn. Evidence of the value of a caregiver might be relevant to whether Mr. Phelan could afford such services, thus establishing whether he is dependent upon assistance from his family. However, it has never been suggested that Ms. Mancini must care for her father because he is destitute. Rather, she recognizes that income must be imputed to her because of her decision. [ 157 ] As an alternative approach, Ms.

Mancini suggested through counsel a deemed income of $35,000.00, based on $18.00 per hour, 8 hours per day, 5 days per week and 48 weeks per year (generating $34,560.00). She points out that using the same working schedule, Ms. Mancini would have to earn $31.00 per hour for an annual income of $60,000.00 (31 x 8 x 5 x 48 = $59,520.00) suggested by Mr. Mancini. [ 158 ] Over the past number of years, since she re-entered the workplace before separation, Ms. Mancini’s hourly wage has never exceeded $15.00 ​ and the amount of teaching she can do for that amount is very limited.

However, working part time in a quilting store does not, in my view, represent her true economic potential. [ 159 ] The record of Ms. Mancini’s employment before May 1982 shows that her best potential is a senior support role in business or perhaps government, making use of her administrative and organizational aptitudes. There is no evidence before me of salary ranges or work availability in those fields. Nevertheless, as part of the overall discretionary task of setting the proper amount of support payments, it is necessary to make a finding of Ms.

Mancini’s potential to make progress towards self-sufficiency, even if in this case that finding is of a notional contribution. In my view, income should be imputed at $35,000.00 per year, as submitted on behalf of Ms. Mancini, from July 2011 until June 2012. I will impute the figure of $40,000.00 for the period commencing July 2012. In determining retroactive support, her income for the period before July 2011 will be the amounts actually earned, as stated earlier.

[ 160 ] The reasons for my findings of Ms. Mancini’s actual and imputed income may be summarized as follows: (

a) It has been only three years since the parties’ separation. During that interval, Ms. Mancini had to adjust to her new form of life, overcome health difficulties, deal with her brother’s sudden death, and establish her father in a new home. My findings assume that over this period she could, if she chose, have begun to prepare herself for more remunerative employment and to enter the workplace in that capacity. (

b) Ms. Mancini’s proposed form of calculation for imputed income is, in my view, a reasonable approach based on Ms. Mancini’s aptitudes while taking into account her long absence from work as an executive assistant. An increase to $40,000.00 is also reasonable, in my view, because of the likelihood that a full- time job will provide compensation for a 52-week year (including paid vacation time) and some modest increase in hourly wage may be expected. 4. Determination of Amount of Support [ 161 ] As stated above, the amount of support must be determined according to the factors and objectives set out in

section 15.2 of the Divorce Act . The individual factors

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