2018 NLCA 36, 2018 NLCA 36

James William Wiscombe (appellant) v. Sandra Ruth Wiscombe (respondent) (16/126) Indexed As: Wiscombe v. Wiscombe 2018 NLCA 36 3 C.A.N.L.R. 43 Court of Appeal of Newfoundland and Labrador Harrington, Hoegg and O’Brien JJ.A. June 13, 2018

Summary: The parties were married for 30 years. When they separated, they entered into a consent order whereby Mr. Wiscombe agreed to pay Ms. Wiscombe $3,000 a month in spousal support. Since the original consent order, Mr. Wicombe had retired and no longer worked, although he had significant proceeds from the sale of his business and he had inherited a substantial sum. He filed an application for a review of the consent order and he was ordered to pay $6,344 per month. He appealed that determination on the grounds that Ms.

Wiscombe was not entitled to spousal support, and that in any event the judge erred in imputing $214,000 annual income to Mr. Wiscombe. Held: Appeal allowed in part, matter remitted to the Supreme Court to determine the income to be imputed, and the amount calculated for spousal support. Hoegg and O’Brien JJ.A. (Harrington J.A. concurring): A review order under

section 15.2 of the Divorce Act, RSC 1985, c. 3 (2nd Supp .) is different than a variation order under

section 17 of the Act . Judges may attach to

section 15.2 orders a condition pursuant to

section 15.2(3) of the Divorce Act , that entitles one or other or both of the parties to return to court for a reconsideration of a specified aspect of the original order when the judge does not think it appropriate that at the subsequent hearing one or other of the parties need show that a change in the condition, means, needs or other circumstances of either former spouse has occurred. Nonetheless, the Judge understood the parties to want a fulsome, unrestricted assessment of all aspects of spousal support including entitlement, quantum and duration and his approach was not challenged on appeal. Entitlement to spousal support is governed by

section 15.2 of the Divorce Act . Determining entitlement to spousal support begins with the recognition that marriage is a socio-economic partnership. The statutes and the case law suggest three conceptual bases for entitlement to spousal support: (1) compensatory, (2) contractual, and (3) non-compensatory. Determining entitlement to spousal support involves balancing the factors and goals of the legislation according to the facts and circumstances of each case, and making a decision which supports the policy considerations of the legislation as interpreted in the jurisprudence. In determining whether Ms.

Wiscombe was entitled to support, the Judge noted the affluent lifestyle the parties enjoyed during their marriage, and then reviewed their respective financial circumstances and lifestyles post-marriage. Although Mr. Wiscombe argued that Ms. Wiscombe was not entitled to spousal support because she has achieved self-sufficiency, a spouse who, after a marriage breakdown, secures a modest but nevertheless living wage or a salary comparable to what he or she was earning prior to the breakdown, cannot necessarily be said to have achieved self-sufficiency within the meaning of the legislation.

While her taxable income may approximate income she earned during the marriage while employed by the Wiscombe family insurance business, the truth of the matter is that both her and her husband’s salaries did not reflect the income they enjoyed while married because their lifestyle was enabled by her husband’s substantial draws from his director’s account. Ms. Wiscombe has suffered direct economic disadvantage as a result of the marriage breakdown and economic hardship in the larger socio-economic sense of having lost a comfortable way of life – which her husband continues to enjoy.

The Judge did not err by determining that Ms. Wiscombe was entitled to spousal support. The Judge imputed an annual income to Mr. Wiscombe of $214,000. Income for spousal support purposes should be determined on the same basis as income for child support purposes and the factors listed in section 19(1) of the Federal Child Support Guidelines may be instructive. Mr. Wiscombe’s decision to retire is effectively a decision to be unemployed. A decision to impute income is discretionary, but the quantum of income imputed must be supported by the evidence and the payor’s projected future income must be considered.

When imputing income based on intentional under-employment or unemployment, a court must consider what is reasonable in thecircumstances. The factors to be considered have been stated in a number of cases as: age, education, experience, skills, work history,work availability and health of the spouse. At issue is the reasonableness of Mr. Wiscombe’s decision to retire – or to be unemployed – and then claim he has no income to payspousal support and that he should not have to encroach on his capital to do so.

His capital is part of his “means” within the meaning ofsection 15.2 of the Act, and his position that his capital should not be used to pay spousal support is not sustainable. Mr. Wiscombe also argued a non-competition agreement he signed when the Wiscombe family insurance business was sold, preventedhim from working. The agreement was not tendered into evidence and in any event, Mr. Wiscombe cannot rely on a non-competitionagreement which he voluntarily entered into to justify his position that he could no longer engage in any type of work. The Judge appeared to find that Mr.

Wiscombe’s use of his property was unreasonable and also made extensive comments about Mr.Wiscombe’s affluent lifestyle and spending habits. The Judge’s commentary informs the conclusion that Mr. Wiscombe had assetsavailable and the ability to pay spousal support. However, while lifestyle and post-separation spending habits of one spouse may berelevant for those purposes and for determining entitlement to spousal support, they are not, in and of themselves, a basis for imputingincome unless lifestyle considerations suggest the income of the payor spouse must be higher than as reported.

While it would have been helpful for the Judge to give more detailed reasons about some aspects of his decision, in the overallcircumstances of this case, the Judge properly exercised his discretion to impute income to Mr. Wiscombe on these bases for thepurposes of spousal support. However, the Judge did err in determining the quantum of that support. The amount imputed by the Judge was based on past earningsfrom a specific source which ceased to exist by the time of the review hearing.

Imputing a quantum of income exclusively on historicalfactors which clearly no longer apply lacks the requisite evidentiary basis for imputing a quantum of income. Given the passage of time, it is appropriate to remit the matter to the Supreme Court of Newfoundland and Labrador wheredeterminations of Mr. Wiscombe’s income for the purposes of spousal support and the quantum of spousal support payable can be made.Both the amount of income imputed, and in turn the amount calculated for spousal support, must be reassessed. In the event there is adifference in favour of Mr. Wiscombe, Ms.

Wiscombe shall not be required to reimburse Mr. Wiscombe any amounts flowing from thenew decision. Retroactive spousal support is different than retroactive child support in that a child is presumed to be entitled to support from his or herparents from birth, whereas entitlement to spousal support is not presumed, but based on a highly discretionary balance of means andneeds. Mr. Wiscombe did not prosecute the appeal with diligence, and was not in need. There was no blameworthy conduct by Ms.Wiscombe with respect to the appeal, and she remained in need. Accordingly, to minimize financial prejudice to Ms.

Wiscombe and toachieve fairness between the parties Ms. Wiscombe is not required to reimburse Mr. Wiscombe any amount paid in spousal support inthe period of time between May 2015 and four months after the date of the filing of this judgment. The appeal was allowed in part and the matter remitted to the Supreme Court to determine the income to be imputed, and the amountcalculated for spousal support. Cases cited: Leskun v. Leskun, 2006 SCC 25, [2006] 1 S.C.R. 920 Moge v. Moge, (SCC), [1992] 3 S.C.R. 813 Bracklow v. Bracklow, (SCC), [1999] 1 S.C.R. 420 Beck v.

Beck, 2012 NLTD(F) 34, 329 Nfld. & P.E.I.R. 287 Chutter v. Chutter, 2008 BCCA 507, 86 B.C.L.R. (4th) 233 leave to appeal to SCC refused, [2009] 1 S.C.R. vi (note) Hall v. Hall, 2001 NFCA 11, 198 Nfld. & P.E.I.R. 17

Bergquist v. Bergquist, 2014 SKCA 20, 433 Sask. R. 173 Cey v. Teske, 2006 SKQB 315, 286 Sask. R. 221 Allaire v. Allaire (2003), (ON CA), 121 A.C.W.S. (3d) 504 (Ont. C.A.) Tedham v. Tedham, 2005 BCCA 502, 47 B.C.L.R. (4th) 254 Aquila v. Aquila, 2016 MBCA 33, 326 Man. R. (2d) 193 Reisman v. Reisman, 2014 ONCA 109, 118 O.R. (3d) 721 Hawco v. Myers, 2005 NLCA 74, 252 Nfld. & P.E.I.R. 121 Boland v. Boland, (NL SC), 2006 NLUFC 37, 259 Nfld. & P.E.I.R. 60 Drygala v. Pauli (2002), (ON CA), 61 O.R. (3d) 711, 219 D.L.R. (4th) 319 (C.A.) Marquez v. Zapiola, 2013 BCCA 433, 51 B.C.L.R. (5th) 55 Strang v.

Strang, (SCC), [1992] 2 S.C.R. 112 Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269 D.B.S. v. S.R.G., 2006 SCC 37, [2006] 2 S.C.R. 231 Wiscombe v. Wiscombe, 2017 NLCA 8 Counsel: Donald MacBeath Q.C., for the appellant; Sandra Burke Q.C., for the respondent. This appeal was heard on September 12, 2017 before Harrington, Hoegg and O’Brien JJ.A.

The following judgment was delivered on June 13, 2018 by Hoegg and O’Brien JJ.A. for the Court. ______________________________________________________________ Hoegg and O’Brien JJ.A.: INTRODUCTION [1] James Wiscombe appeals a 2015 order that he pay $6,344 per month in spousal support to Sandra Wiscombe (now SandraMartin), his former wife. The order was made pursuant to an application by Mr. Wiscombe to review a consent order for spousalsupport in the amount of $3,000 per month which had been in place since the parties settled their matrimonial property claims late in2011.

Provision for the review had been set out in the parties’ Consent Order filed on December 9, 2011. The provision reads: “That the quantum of spousal support shall be reviewed on or after April 2013. The review shall include… [Mr. Wiscombe’s] actualability to pay,… [Ms. Wiscombe’s] needs and ability to earn income, and the circumstances of the parties from the date of separationuntil the date of review” … BACKGROUND [2] Mr. Wiscombe and Ms. Martin were married for 30 years. They separated in January 2008 and divorced in March 2012. Theyhave two adult children. Mr.

Wiscombe worked in his family’s insurance business all of his married life, and Ms. Martin worked therefor almost all of her married life. Ms. Martin’s employment in the family’s insurance business ended five months after their separation. Mr. Wiscombe continued to work in the business until it was sold in 2014. He has remarried and Ms. Martin has repartnered. [3] When the parties separated in 2008, the Wiscombe insurance business was owned by Mr. Wiscombe, his father and his sister. In2010, Mr. Wiscombe’s father died, and his ownership interests were bequeathed to Mr. Wiscombe and his sister.

When the partiessettled their matrimonial property issues in December 2011, Ms. Martin relinquished any claim to the Wiscombe insurance business. [4] In February 2014, Mr. Wiscombe and his sister availed of an opportunity to sell the Wiscombe insurance business. Mr.Wiscombe’s share of the proceeds, net of liabilities and taxes, was approximately $1,270,000. Following Mr. Wiscombe senior’s death,Mr. Wiscombe inherited approximately $560,000 from his late father’s estate.

[ 5 ] Mr. Wiscombe was 52 years old when the parties separated and 58 years old when the business was sold. He has not worked since the sale of the business. At the time of the review hearing in 2015, he stated his plan was to retire. This Court was given to understand on appeal that Mr. Wiscombe remains retired. [ 6 ] Ms. Martin was 50 years old when she and her husband separated. She struggled financially after the separation and the loss of her employment. The Judge described Ms. Martin’s situation at paragraphs 65 to 67 of his judgment (2015 NLTD(G) 64): 65 Ms. Martin is fifty-seven years old now.

She separated from Mr. Wiscombe in January 2008. Mr. Wiscombe kept her on the Wiscombe’s Insurance payroll until June 2008 and then cut her off. She had no income from July 1, 2008 to October 9, 2008 when I ordered Mr. Wiscombe to pay her interim spousal support, retroactive to July 1, 2008. Mr. Wiscombe did not start to pay Ms. Martin regular spousal support benefits immediately after I ordered him to and it was some time as well before he paid the full retroactive amount of $18,635, even though I ordered Mr. Wiscombe to pay it by November 1, 2008. Ms.

Martin got her present job with the Government of Newfoundland and Labrador early in 2013; although she is, she says ruefully, only a temporary worker, filling a temporary position for now. 66 Ms. Martin’s life transformed calamitously when she separated from Mr. Wiscombe. She experienced uncertainty about her future and insecurity about her financial and material welfare that she had never known before; and it devastated her. Until then, Ms.

Martin had lived a privileged life, in which she wore fine clothes, ate at high-end restaurants, traveled and vacationed at will and treated herself to regular personal grooming. Ms. Martin had access to an array of recreational and service vehicles, she and Mr. Wiscombe lived in a fine home and they relaxed in season at remote and more accessible cottage properties. 67 Ms. Martin also had Mr. Wiscombe’s assurance that the largesse they enjoyed would continue unabated. … [ 7 ] At the time of the review hearing, Ms.

Martin was still working in a full-time temporary position as a Clerk III for the provincial government earning approximately $40,000 per year. This Court was not advised of any change in her work status at the appeal. [ 8 ] As noted above, Mr. Wiscombe’s application for review of the quantum of spousal support he was paying was made pursuant to the review provision in the Consent Order of December 9, 2011. A review order under

section 15.2 of the Divorce Act, RSC 1985, c. 3 (2nd Supp.) is distinctly different than a variation order under

section 17 of the Act , as Binnie J. explained in Leskun v. Leskun , 2006 SCC 25 , [2006] 1 S.C.R. 920 at para. 36 : [ 36] Review orders under s. 15.2 have a useful but very limited role. As the amicus curiae pointed out, one or both parties at the time of trial may not, as yet, have the economic wherewithal even to commence recovering from the disadvantages arising from the marriage and its breakdown. Common examples are the need to establish a new residence, start a program of education, train or upgrade skills, or obtain employment.

In such circumstances, judges may be tempted to attach to s. 15.2 orders a condition pursuant to s. 15.2(3) of the Divorce Act , that entitles one or other or both of the parties to return to court for a reconsideration of a specified aspect of the original order.

This will properly occur when the judge does not think it appropriate that at the subsequent hearing one or other of the parties need show that a change in the condition, means, needs or other circumstances of either former spouse has occurred, as required by s. 17(4.1) of the Divorce Act . [ 9 ] Despite the Consent Order specifically stating that it was only the quantum of spousal support to be reviewed, the Judge understood the parties to want a “fulsom, unrestricted assessment of all aspects of spousal support… including entitlement, quantum and duration” (paragraph 60).

Accordingly, the Judge decided entitlement as well as quantum, and his approach was not challenged on appeal. Issues [ 10 ] Awarding spousal support upon a marriage breakdown involves determining first entitlement, and if entitlement is established, the quantum of support and its duration. While an award can be made for a specific duration, it does not have to be, and if it is not, it remains subject to variation in appropriate circumstances. [ 11 ] The issues in this appeal are whether the Judge erred in determining that Ms.

Martin was entitled to spousal support, and if not, whether he erred in imputing $214,000 annual income to Mr. Wiscombe so as to provide the foundation for the spousal support he ordered. ENTITLEMENT TO SPOUSAL SUPPORT The Law [ 12 ] Entitlement to spousal support is governed by

section 15.2 of the Divorce Act . The considerations are set out in

section 15.2(4) :

(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.

[13] The objectives of a spousal support order are set out in

section 15.2(6):

(6) An order made under subsection (1) or an interim order under subsection (2) 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; (

b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above anyobligation 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) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time. [14] Determining entitlement to spousal support begins with the recognition that marriage is a socio-economic partnership, or as theSupreme Court of Canada put it in Moge v. Moge, (SCC), [1992] 3 S.C.R. 813 at 870, “a joint endeavour, and the longerthe relationship endures, the closer the economic union, the greater will be the presumptive claim to equal standards of living upon itsdissolution” (sources omitted). [15] A few years later in Bracklow v.

Bracklow, (SCC), [1999] 1 S.C.R. 420 at para. 49 McLachlin J. affirmed thatprinciple and summarized the bases for entitlement to spousal support: . . . the statutes and the case law suggest three conceptual bases for entitlement to spousal support: (1) compensatory, (2) contractual,and (3) non-compensatory. Marriage, as this Court held in Moge (at p. 870), is a “joint endeavour”, a socio-economic partnership. Thatis the starting position.

Support agreements are important (although not necessarily decisive), and so is the idea that spouses should becompensated on marriage breakdown for losses and hardships caused by the marriage. Indeed, a review of cases suggests that in mostcircumstances compensation now serves as the main reason for support. However, contract and compensation are not the only sourcesof a support obligation. The obligation may alternatively arise out of the marriage relationship itself.

Where a spouse achieveseconomic self-sufficiency on the basis of his or her own efforts, or on an award of compensatory support, the obligation founded on themarriage relationship itself lies dormant. But where need is established that is not met on a compensatory or contractual basis, thefundamental marital obligation may play a vital role. Absent negating factors, it is available, in appropriate circumstances, to providejust support. [16] In Beck v.

Beck, 2012 NLTD(F) 34, 329 Nfld. & P.E.I.R. 287, Cook J. described compensatory support orders as generallyrelating to compensation for foregone careers and missed opportunities which result from a spouse assuming a role in the marriage thatbenefits the marriage, rather than the spouse’s ability to generate his or her own income or increase his or her earning power (paragraph42). [17] Non-compensatory relief is more difficult to define.

Justice McLachlin addressed it at paragraph 41 of Bracklow: … Looking only at compensation, one merely asks what loss the marriage or marriage breakup caused that would not have been sufferedbut for the marriage.

But even where loss in this sense cannot be established, the breakup may cause economic hardship in a larger, non-compensatory sense. … [18] In Beck, Justice Cook put it this way at paragraph 49: Non-compensatory support looks not at loss of earning capacity but at the neutral obligations of the partners in a marriage, which exist asa consequence of the marriage relationship itself, and the needs of each spouse arising out of the economic hardship, if any, followingmarriage breakdown. [19] Non-compensatory support was also explained in Chutter v.

Chutter, 2008 BCCA 507, 86 B.C.L.R. (4th) 233 leave to appeal toSCC refused, [2009] 1 S.C.R. vi (note), at paras. 54 and 55: …Non-compensatory support is grounded in the “social obligation model” of marriage, in which marriage is seen as an interdependentunion. It embraces the idea that upon dissolution of a marriage, the primary burden of meeting the needs of the disadvantaged spousefalls on his or her former partner, rather than the state (Bracklow, at para. 23).

Non-compensatory support aims to narrow the gapbetween the needs and means of the spouses upon marital breakdown, and as such, it is often referred to as the “means and needs”approach to spousal support. The concept of “needs” in the context of non-compensatory spousal support goes beyond basic necessities of life and varies according tothe circumstances of the parties. As stated by Finch J.A. (as he then was) in Myers v. Myers (1995), (BC CA), 17R.F.L. (4th) 298, 65 B.C.A.C. 226, at para. 10: “Need” or “needs” are not absolute quantities.

They may vary according to the circumstances of the parties and the family unit as awhole. “Need” does not end when the spouse seeking support achieves a subsistence level of income or any level of income abovesubsistence. “Needs” is a flexible concept and is one of several considerations which a trial judge must take into account in decidingwhether any order for spousal support is warranted. [20] At paragraph 53 of Bracklow, Justice McLachlin explained that no one factor or goal respecting spousal support shoulddetermine the issue to the exclusion of other factors.

This was the approach taken by Cameron J.A. of this Court in Hall v. Hall, 2001NFCA 11, 198 Nfld. & P.E.I.R. 17 who, at paragraph 15, quoted from Bracklow: … “it is not a question of either one model or the other. It is rather a matter of applying the relevant factors and striking the balance thatbest achieves justice in the particular case before the court”…

[21] In short, determining entitlement to spousal support involves balancing the factors and goals of the legislation according to thefacts and circumstances of each case, and making a decision which supports the policy considerations of the legislation as interpreted inthe jurisprudence. The Judge’s Decision Respecting Entitlement [22] In determining whether Ms. Martin was entitled to support, the Judge noted the affluent lifestyle the parties enjoyed during theirmarriage, and then reviewed their respective financial circumstances and lifestyles post-marriage. He described Ms.

Martin’scircumstances as noted in paragraph 6 above. Regarding Mr. Wiscombe, the Judge stated: 33 Mr. Wiscombe also purchased a life insurance policy with an annual premium of $20,000 and he subscribes to a Blue Cross healthcare package on which he pays a monthly premium of $173.85, or $2,086.20 annually. He designated his present wife, Betty Abbott, asjoint owner and/or beneficiary of the funds he invested with London Life and Quadrus. 34 Mr. Wiscombe plans to retire and live off the income that the money he received from Intact will generate. Mr.

Wiscombe notesthat he signed a 5-year non-competition clause with Intact when they sold the business and the covenant applies throughout the Provinceof Newfoundland and Labrador. Mr. Wiscombe says he invested most of the sale proceeds with London Life and Quadrus, but agreesthat he withheld some of it to cover personal expenditures that he made in 2014, including: a new home to replace the house that he andMs. Martin occupied as their matrimonial home; several vehicles, e.g., a Toyota Tacoma pickup truck he bought from Wiscombe’sInsurance, a 2013 Toyota Camry, a 2009 Chevrolet Corvette and a motorcycle. Mr.

Wiscombe acknowledged that he also has otherrecreational vehicles, including a Chevrolet Camaro (bought in 2010), two skidoos, a SeaDoo, a boat, a side-by-side ATV (bought in2012 for $12,000 plus tax) and a floatplane. [23] The Judge also considered that Ms. Martin had contributed her RRSPs and an inheritance from her mother’s estate to repay herhusband’s director’s drawings which had become a serious concern. As well, he considered Ms. Martin’s assurances from her husbandthat the business would sustain them in their retirement (paragraph 71). [24] The Judge concluded that Ms.

Martin was entitled to spousal support, saying, at paragraphs 79 to 81: 79 Ms. Martin will never be able to provide of her own means the standard of living that she and Mr. Wiscombe enjoyed while theywere together and that he still enjoys; nor anything approximating it. She earns approximately $40,000 a year and is heavily in debt,whether to lending agencies, the Canada Revenue Agency, on credit cards and lines of credit. 80 Ms.

Martin’s claim for spousal support meets handily two of the objectives of review orders under s. 15.2(6) of the Divorce Act: torecognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown; and to relieve anyeconomic hardship of the spouses arising from the breakdown of the marriage. Ms. Martin is doing her best to achieve the other relevantobjective here – “in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time” – butit is an elusive goal and she requires Mr.

Wiscombe’s continued support in the meantime. 81 Overall, I am satisfied that Ms. Martin has shown on a balance of probabilities that she is entitled to spousal support. Analysis Respecting Entitlement [25] Ms. Martin’s employment was ended by Mr. Wiscombe as a direct result of the marriage breakdown, after she had beenemployed as a licensed insurance broker for many years in the Wiscombe insurance business. Due to her financial situation her ability toretrain was delayed. Once able, she retrained over a period of two years, and in 2013 secured the “temporary” employment she has now. She remains in debt. [26] Ms.

Martin’s situation was not unlike those of the plaintiffs in Bergquist v. Bergquist, 2014 SKCA 20, 433 Sask. R. 173 and Ceyv. Teske, 2006 SKQB 315, 286 Sask. R. 221. In Bergquist, the appellate court upheld the trial judge’s order that a wife who workedalongside her husband in his business, but who was not an equity partner, had suffered economic hardship in relation to the standard ofliving she enjoyed during the marriage and therefore was entitled to compensatory spousal support (paragraph 34).

A similar result onsimilar reasoning was found by the court in Cey, in that the wife who had lost her employment in the husband’s company upon thedissolution of the marriage was awarded compensatory spousal support (paragraph 59). [27] Mr. Wiscombe argues that Ms. Martin is not entitled to spousal support because she has achieved self-sufficiency, in that she isnow earning approximately the same salary that she earned at Wiscombe’s Insurance. [28] Self-sufficiency is one of the four objectives of spousal support listed in

section 15.2(6) of the Act. The legislative directive isthat it is to be promoted with a view to it being achieved within a reasonable period of time insofar as practicable. Self-sufficiency,however, “is not a free-standing concept” to be considered apart from the other legislative goals of spousal support.

In this regard it isstated at page 870 of Moge that the standard of living the parties enjoyed during marriage is a relevant consideration in any spousalsupport determination and, at page 882, that “the actual social and personal reality” of the effects of a marriage breakup inform theeconomic hardship being suffered. As well, Moge states at page 870 that “the longer the relationship endures, the closer the economicunion, the greater will be the presumptive claim to equal standards of living upon its dissolution”.

Moge also makes it clear that self-sufficiency, as only one of several objectives enumerated in spousal support legislation, does not take priority over any other objective. [29] A few years later the Ontario Court of Appeal expanded on the Moge reasoning, saying at paragraph 21 of Allaire v. Allaire(2003), (ON CA), 121 A.C.W.S. (3d) 504 (Ont. C.A.): Mr. Allaire submits that any disadvantages flowing from the marriage must defer to the fact that Ms. Allaire now earns a reasonableincome that makes her “self-sufficient”. This ignores the reality that self-sufficiency is not a free-standing concept.

It must be seen inthe context of the standard of living previously enjoyed by the parties. Where, as here, the economic consequences of the maritalrelationship were to permanently reduce Ms. Allaire’s income, it is inappropriate to consider Ms. Allaire’s annual income of $68,000 as

“sufficient” without considering whether Mr. Allaire can financially assist her to live a lifestyle closer to what they shared as a couple. [ 30 ] See also Tedham v. Tedham , 2005 BCCA 502 , 47 B.C.L.R. (4th) 254 , Aquila v. Aquila , 2016 MBCA 33 , 326 Man. R. (2d) 193 , and Reisman v.

Reisman , 2014 ONCA 109 , 118 O.R. (3d) 721 wherein the marriage lifestyles were considered to be relevant and important in determining entitlement to spousal support. [ 31 ] Accordingly a spouse who, after a marriage breakdown, secures a modest but nevertheless living wage or a salary comparable to what he or she was earning prior to the breakdown, cannot necessarily be said to have achieved self-sufficiency within the meaning of the legislation. [ 32 ] In this case, Ms.

Martin took firm steps towards self-sufficiency by retraining and subsequently securing employment, albeit in a temporary position, in a challenging rural economy. Despite these efforts, it is clear that her circumstances are unlikely to ever match the standard of living she enjoyed during her marriage.

While her taxable income may approximate the line 150 income she earned while employed by Wiscombe ’s insurance, the truth of the matter is that both her and her husband’s salaries did not reflect the income they enjoyed while married because their lifestyle was enabled by her husband’s substantial draws from his director’s account. While it does not necessarily follow from this state of affairs that spousal support must guarantee that Ms. Martin be put in the same financially secure position as her former husband ( Moge at page 870), it is hardly a fair basis on which to conclude that Ms.

Martin has achieved self-sufficiency within the meaning of the legislation as interpreted in the jurisprudence. [ 33 ] When the marriage dissolved, Ms. Martin was left vulnerable and financially dependent. She lost the affluent lifestyle and financial security which she enjoyed together with her husband during their 30 year marriage. The evidence was that Mr. Wiscombe was continuing to enjoy an affluent lifestyle while Ms. Martin was not. Her means are very modest in comparison to his, and she is in debt. Her husband’s assurance that they both would be taken care of in their golden years materialized for Mr.

Wiscombe but did not materialize for Ms. Martin. [ 34 ] Ms. Martin has suffered direct economic disadvantage as a result of the marriage breakdown and economic hardship in the larger socio-economic sense of having lost a comfortable way of life – which her husband continues to enjoy. These circumstances justify entitlement to spousal support to relieve, to some degree, Ms. Martin’s economic hardship and disadvantage suffered as a result of the breakdown of the marriage. [ 35 ] In the result, the Judge did not err by determining that Ms. Martin was entitled to spousal support from Mr.

Wiscombe. [ 36 ] A final comment on the subject of entitlement. While Mr. Wiscombe argued that Ms. Martin was not entitled to any spousal support in his factum, he did not seriously press the issue during the appeal hearing. His principal focus was on the quantum of spousal support that he was ordered to pay Ms. Martin, and that the Judge erred in imputing $214,000 annual income to him for the purposes of determining the amount of spousal support payable. IMPUTATION OF INCOME FOR SPOUSAL SUPPORT Introduction [ 37 ] Determining the quantum of spousal support involves first determining the incomes of the parties.

In this case, the Judge found that Ms. Martin’s income was $40,000 per year based on her employment salary since 2013. Determining Mr. Wiscombe’s income for the purposes of spousal support was more involved. Mr. Wiscombe had retired in 2014 when the Wiscombe insurance business was sold, and at the time of the review hearing in 2015 he was not earning any income from work. After considering the evidence, the Judge imputed an annual income to Mr. Wiscombe of $214,000, and on that basis awarded spousal support of $6,344 per month in accordance with the Spousal Support Advisory Guidelines (SSAG). [ 38 ] Mr.

Wiscombe argues that the Judge erred in imputing $214,000 in annual income to him and in using that income to calculate the spousal support award. The Law [ 39 ] The SSAG set out how spousal support is to be determined based on incomes. However, they do not set out how income is to be determined for the purposes of spousal support. In Hawco v.

Myers , 2005 NLCA 74 , 252 Nfld. & P.E.I.R. 121 , t his Court, like other Canadian appellate courts, concluded that income for spousal support purposes should be determined on the same basis as income for child support purposes, saying: [ 42 ] Imputing income for purposes of child support is authorized under …

section 19 of the Federal Child Support Guidelines . There is no specific provision regarding the imputing of income for purposes of spousal support. However, if income is imputed for purposes of determining child support, there is no basis in principle for using a different income to ascertain spousal support. ... [ 40 ] The Federal Child Support Guidelines (FCSG) provide for the imputation of income for the purposes of child support in certain circumstances. Section 19(1) sets out a list of non-exhaustive factors for consideration: The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include the following: (

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

b) the spouse is exempt from paying federal or provincial income tax;

(

c) the spouse lives in a country that has effective rates of income tax that are significantly lower than those in Canada; (

d) it appears that income has been diverted which would affect the level of child support to be determined under these Guidelines; (

e) the spouse’s property is not reasonably utilized to generate income; (

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

g) the spouse unreasonably deducts expenses from income; (

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

i) the spouse is a beneficiary under a trust and is or will be in receipt of income or other benefits from the trust. [41] In Hawco this Court stated that while a decision to impute income is discretionary, the quantum of income imputed must besupported by the evidence and the payor’s projected future income must be considered: [43] Whether income should be imputed is in the discretion of the trial judge. However, in exercising that discretion, relevant factorsand evidence must be considered. In assessing these factors, we agree with the view regarding projected future income expressed inHalley v.

Hannon (1998), (NL SC), 162 Nfld. & P.E.I.R. 315 (NLSCTD). Barry J. said: [13] Looking first at the future liability for child support, this must be determined by looking at the projected future income of thepaying spouse and not just the historical income. ... Information from the past assists the court in the estimation of future income.

Butthe amount of support payable must be determined by considering what the payor will earn, not what the payor has earned. (Emphasis added.) [42] The Hawco Court emphasized the need for evidence-based imputation of income at paragraph 58: We reiterate, it is not necessary for the trial judge to provide extensive reasons for his decision. However, it is important for the partiesto understand the basis on which he came to his conclusions, particularly where that foundation is not clear from the evidence.

In thiscase, the evidence raised sufficient questions to require a more explicit consideration by the trial judge. … [43] In Boland v. Boland, (NL SC), 2006 NLUFC 37, 259 Nfld. & P.E.I.R. 60, Dunn J. addressed issuesrespecting the imputation of income for the purposes of spousal support. In doing so, she noted at paragraph 41 the need for anevidentiary basis on which to impute income. [44] Similarly, the Ontario Court of Appeal in Drygala v. Pauli (2002), (ON CA), 61 O.R. (3d) 711, 219 D.L.R.(4th) 319 (C.A.) held that the amount of income imputed must be “grounded in the evidence”: [44]

Section 19 of the Guidelines is not an invitation to the court to arbitrarily select an amount as imputed income. There must be arational basis underlying the selection of any such figure. The amount selected as an exercise of the court's discretion must be groundedin the evidence. [45] The British Columbia Court of Appeal said the same in Marquez v. Zapiola, 2013 BCCA 433, 51 B.C.

L.R. (5th) 55 at para. 36: For the purposes of both child and spousal support, there is a broad judicial discretion to impute income to either or both spouses.However, the party seeking to have income imputed to the other spouse has the burden of establishing an evidentiary basis for such afinding. [46] As well, the need for an evidentiary basis on which to impute income is emphasized by authors Carol Rogerson and RollieThompson in the Spousal Support Advisory Guidelines: The Revised User’s Guide (Ottawa: Department of Justice, 2016) at page 19: Everyone wants to impute a higher income to the other spouse, either to increase or decrease spousal support.

Once we use income-basedadvisory guidelines, it is obvious that a higher income for the payor will move the range upwards, or a higher income for the recipientwill move the range downwards. Attempts to impute income have now become common, often with little evidentiary foundation. … There must be an evidentiary basis to attribute or impute income under s. 19(1). … [47] When under-employment or unemployment is the reason why income is sought to be imputed, the reasonableness of being underor unemployed becomes the issue.

This was the approach taken by the Ontario Court of Appeal in Drygala, in which the Court alsolisted factors for consideration in determining reasonableness: [45] When imputing income based on intentional under-employment or unemployment, a court must consider what is reasonable in thecircumstances. The factors to be considered have been stated in a number of cases as age, education, experience, skills and health of theparent. See, for example, Hanson, supra, and Cholodniuk v. Sears (2001), 2001 SKQB 97 , 14 R.F.L. (5th) 9, 204 Sask. R. 268(Q.B.).

I accept those factors as appropriate and relevant considerations and would add such matters as the availability of jobopportunities, the number of hours that could be worked in light of the parent's overall obligations including educational demands andthe hourly rate that the parent could reasonably be expected to obtain.

[48] The British Columbia Court of Appeal in Marquez took the same approach: [37] The test for imputing income for intentional under-employment or unemployment is one of reasonableness, having regard to theparties’ capacity to earn income in light of their age, education, health, work history and work availability.

A spouse’s capacity to earnincome will include that person’s ability to work or to be trained to work. … [49] We agree that the factors referenced in Boland and identified in Drygala and Marquez ought to be considered when determiningwhether income should be imputed to either or both the payor and the payee. [50] Mr. Wiscombe’s decision to retire is effectively a decision to be unemployed. Accordingly, it is also subject to a reasonablenessconsideration. The Judge’s Imputation of Income to Mr. Wiscombe [51] The Judge explained how he arrived at $214,000 as the income to be imputed to Mr.

Wiscombe: 86 Jeff Pardy, FCA estimated that Mr. Wiscombe drew around $1.3 million dollars from the business between its reorganization in1995 and its sale in 2014; or average annual drawings exceeding $65,000.00. I tabulated the income that Mr. Wiscombe reported for taxpurposes in the ten years before the Intact sale. I set out the annual amounts he reported for income tax purposes in a table earlier in thesereasons. I showed there that he reported a total of $1,489,303.16 during those years, or an average annual income of $148,930.32.

I addto that $65,000, which is the average annual, unreported drawings that Mr. Wiscombe had available to him between 1995 and 2014,mainly from Wiscombe’s Insurance. 87 I impute to Mr. Wiscombe’s an average annual income of $213,930.32 ($148,930.32 + $65,000), or $214,000, in round numbers. Icalculate a range of spousal support for Ms. Martin based on their respective annual incomes of $214,000 and $40,000, from a low of$5,438 a month to a high of $7,205 a month, with a mid-range amount of $6,344. … [52] At paragraphs 87 to 93, the Judge explained why: 87 … The parties, Mr.

Wiscombe in particular, may ask why I impute income to him because of his professed intention to retire andlive on the income that the proceeds he received from selling the insurance business to Intact generates. Let me explain. 88 Dunn, J. of this Court, set out in Boland v. Boland, (NL SC), 2006 NLUFC 37, some of the circumstances thatjustify imputing income to spouses, where income information offered is unreliable: “Courts have a broad discretion to impute income in a variety of situations where there is some basis in evidence to do so.

Income hasbeen imputed where: an individual is not properly utilizing his earning capacity or other resources; a self-employed person’s income doesnot equate to the income of a regularly employed person where it ought to do so; a payor has failed to make full disclosure resulting in afinding of lack of credibility affecting the Court’s assessment of that individual’s income and prospects for future income; lifestyleconsiderations suggest the income of the payor spouse must be higher than as reported; pre-tax corporate income suggests an individualcontrolling a company is in a position to draw a higher level of personal income for distribution; and where the spouse’s annual incomedoes not fairly reflect money available to him”. 89 Some of these factors apply here; as I will show. 90 There are several factors to consider here.

First of all, Ms. Martin says that Mr. Wiscombe chooses not to work. He says he signeda non-competition clause with Intact when it bought the insurance business so that he cannot work in the industry anywhere in theprovince. Ms. Martin acknowledges that Mr. Wiscombe could not work in the insurance industry but she says he worked as a businessexecutive for over thirty-five years and he has management and entrepreneurial skills that he could apply in other business sectors, notrelated to the insurance industry. 91 Moreover, Ms. Martin claims, Mr.

Wiscombe has a substantial seed fund from selling Wiscombe’s Insurance which he couldactively exploit and grow. For example, Ms. Martin says she considered developing tourist cabins in this area when she first separatedfrom Mr. Wiscombe but the lack of start-up capital prevented her from moving forward on it. 92 I agree, as Ms. Martin says, that Mr. Wiscombe is not using his talents or his money to his best advantage. He prefers to retire andlive a life of leisure that he will pay for with funds from selling the insurance business. Mr.

Wiscombe did not present a comprehensiveplan for managing his retirement funds and paying for the lifestyle he plans to follow other than to provide two annuity quotations(Exhibits # JWW5 & JWW6) from London Life. The quotations show that he will be guaranteed to receive $3,238.18 a month if heinvests $1,000,000 or $4,863.48 a month if he invests $1,500,000. 93 Mr.

Wiscombe said during his testimony that his general plan is to live on the interest his investments generate, but have access tothe capital if he wants to spend extraordinary amounts that the interest income will not cover; which sounds to me like the approach hefollowed with the regular income he received from Wiscombe’s Insurance and the extra draws that he made regularly against thebusiness’ cash reserves. (Emphasis added.) Analysis Respecting Imputation of Income to Mr. Wiscombe [53] An uncommon factor in the reasonableness assessment of Mr.

Wiscombe’s decision to retire relates to the non-competitionclause which he signed when the Wiscombe insurance business was sold. Mr. Wiscombe maintained at trial that the non-competition

clause prevented him from working. Ms. Martin argued that Mr. Wiscombe had significant business and managerial skills which hecould put to good use in another type of work. [54] The impact, if any, of a non-competition agreement on Mr. Wiscombe’s ability to work was a relevant factor in assessing thereasonableness of Mr. Wiscombe’s decision to retire. However, the agreement was not tendered into evidence, despite a commitment todo so, so details like the type of insurance work precluded by the agreement, its duration, and the geographical area to which it appliedwere and remain unknown.

Accordingly, the weight the Judge could accord it was limited. In any event, Mr. Wiscombe cannot rely ona non-competition agreement which he voluntarily entered into to justify his position that he could no longer engage in any type of work. [55] Ms. Martin submitted that Mr. Wiscombe’s decision to sell the insurance business might, in and of itself, be unreasonable, as itimpacted Mr. Wiscombe’s future income and thus his ability to pay spousal support. Mr.

Wiscombe’s position was that that he did notsolicit offers to sell the business, but rather that he made a reasonable business decision when an opportunity to sell arose. The evidencewas that a good opportunity to sell the business presented to Mr. Wiscombe and his sister and they availed of it. The Judge did not makea finding that Mr. Wiscombe’s decision to sell the business was unreasonable, but he did say that Mr.

Wiscombe’s position that heshould not have to encroach on his capital (including the proceeds of the sale of the business) to pay spousal support was unreasonable(paragraph 100). [56] There is no basis in the evidence for assuming that Mr. Wiscombe’s decision to sell the business was related to reducing ornegating a commitment to pay spousal support. There is also no evidence to support the proposition that selling the business wasunreasonable, although that is not the issue. The issue is the reasonableness of Mr.

Wiscombe’s decision to retire – or to be unemployed– and then claim he has no income to pay spousal support and that he should not have to encroach on his capital to do so. Just as incomecan be imputed in cases of unemployment or underemployment, income can be imputed to Mr. Wiscombe for voluntarily retiring wherethe result is intentional unemployment, as per section 19(1)(

a) of the FCSG. Mr. Wiscombe cannot rely on his voluntary retirement tojustify his position that he has no income for the purposes of spousal support or that his income for the purposes of spousal support islimited to the annual interest he received from investing the proceeds of his voluntary sale of the business. Moreover, endorsing suchreliance would permit Mr. Wiscombe to shield his assets from application of the law respecting spousal support. [57]

Section 15.2(4) of the Divorce Act states that a court shall consider the “condition, means, needs and other circumstances of eachspouse” when making an order for spousal support. Mr. Wiscombe’s means include the proceeds from the sale of his business and anyother capital assets he may have (see Strang v. Strang, (SCC), [1992] 2 S.C.R. 112 at 119 and Leskun at paras. 29 to32). Accordingly, Mr.

Wiscombe’s position that he has no income for the purposes of spousal support or that his income for thepurposes of spousal support is limited to the annual interest he receives from investing the proceeds of his voluntary sale of the businesscannot be sustained. [58] Regardless of the non-competition agreement, Mr. Wiscombe’s business skills learned in the insurance industry weretransferrable to other lines of work as Ms. Martin argued and as the Judge agreed. In this regard, the accountant for Wiscombe’sinsurance testified at trial that a reasonable salary for Mr.

Wiscombe in his previous position as a manager would have been $70,000 to$85,000 per annum. The Judge did not explicitly find that Mr. Wiscombe’s skills were transferrable or the extent to which that might beso, but it is implicit in the Judge’s decision that he found Mr. Wiscombe was voluntarily unemployed and not using his skills and talentsto his best advantage so as to provide him with income for the purposes of spousal support. [59] The Judge also found Mr. Wiscombe was not using his money to his best advantage, as noted in paragraph 52 above, and statedthat Mr.

Wiscombe’s general plan was “to live on the interest his investments generate, but have access to the capital if he wants tospend extraordinary amounts” (paragraph 93), which sounded to the Judge like the approach Mr. Wiscombe had followed while workingin the insurance business. [60] While the Judge did not give detailed reasons as to how or why Mr. Wiscombe’s use of his property was unreasonable so as towarrant the imputation of income, the Judge appeared to find that Mr. Wiscombe had not taken any meaningful steps to generate incomefrom the substantial assets available to him.

For example, the Judge noted at paragraph 92 that the only documents provided by Mr.Wiscombe relating to the use of his property to generate income were two quotes with respect to the possible, future purchase of anannuity: Mr. Wiscombe did not present a comprehensive plan for managing his retirement funds and paying for the lifestyle he plans to followother than to provide two annuity quotations (Exhibits #JWW5 & JWW6) from London Life. The quotations show that he will beguaranteed to receive $3,238.18 a month if he invests $1,000,000 or $4,863.48 a month if he invests $1,500,000.

There was no other evidence relating to Mr. Wiscombe’s use of his property to generate income. In these circumstances, the Judgeconcluded that imputation of income was justified. [61] The Judge also referenced Mr. Wiscombe’s affluent lifestyle and spending habits. In paragraphs 97, 99 and 100 of his decision,the Judge detailed some of Mr. Wiscombe’s spending habits and lifestyle under the heading “lifestyle considerations”: 97 During the same time, for example, Mr. Wiscombe also “loaned” his son, Andrew, about $380,000 to build a new home. Andrew,who is employed in the trades, could not get a mortgage, Mr.

Wiscombe says because he has title problems with the land he built hishouse on. Mr. Wiscombe was not confident when he testified before me that Andrew would ever repay the money to him. In themeantime, Mr. Wiscombe also spent about $300,000 since he separated from Ms. Martin on a new house for himself. He purchased Ms.Martin’s interest in their former matrimonial home when the parties settled their property claims and then tore the house down so hecould build the new house on the same site. . . . 99 Mr.

Wiscombe’s counsel alluded to his client’s lifestyle both before and after separation in his written submission. He noted thatMr. Wiscombe “...had his ‘toys’, as he enjoyed recreational activities, including boating, ski-dooing and flying an ultralight airplane”(Argument on Behalf of the Applicant, supra, para. 66). It is true that Mr. Wiscombe has a noteworthy collection of “toys”. They

included, when I heard this matter: a Toyota Tacoma pickup truck; a 2013 Toyota Camry sedan; a 2009 Chevrolet Corvette; a motorcycle; a Chevrolet Camaro (bought in 2010); two skidoos; a SeaDoo; a boat; a side-by-side ATV (bought in 2012 for $12,000 plus tax); and a floatplane. By contrast, Ms. Martin has a motorcycle she bought from her inheritance and a 2008 Honda Ridgeline pickup truck, sorely in need of repair. 100 I hasten to add here that Ms. Martin is not seeking, nor would I countenance it if she did, to redistribute the property they owned at separation by ordering Mr.

Wiscombe to pay unreasonable amounts of spousal support. The discussion simply highlights the money that Mr. Wiscombe has available to him and to note his priorities for how he spends it, other than to provide spousal support. He claims unreasonably that he cannot pay spousal support without encroaching on the capital of the funds he received from selling the insurance business; which he argues he should not have to do. … [ 62 ] The Judge’s extensive comments about Mr. Wiscombe’s affluent lifestyle and spending habits highlight the stark difference between Mr. Wiscombe’s means and those of Ms.

Martin, which difference is a valid consideration in determining entitlement to spousal support (as discussed above) in the context of a lengthy, affluent marriage. The Judge’s commentary also informs the conclusion that Mr. Wiscombe had assets available and the ability to pay spousal support.

However, while lifestyle and post-separation spending habits of one spouse may be relevant for those purposes, they are not, in and of themselves, a basis for imputing income unless “lifestyle considerations suggest the income of the payor spouse must be higher than as reported” ( Boland at paragraph 41 ), which is not the present situation. [ 63 ] In

summary, the Judge imputed income to Mr. Wiscombe because he was intentionally unemployed (section 19(1)(

a) of the FCSG) and because he was not reasonably utilizing his property to generate income (section 19(1)(

e) of the FCSG). In exercising his discretion to impute income, it would have been helpful had the Judge provided more detailed reasons for his finding that Mr. Wiscombe was intentionally unemployed, and that it was not reasonable for Mr. Wiscombe to retire from his employment and live on the proceeds of the sale of his business unless he was also prepared to support his former spouse from the proceeds of the sale or otherwise. It would also have been preferable for the Judge to have given further reasons for finding that Mr. Wiscombe was not utilizing his property to generate income.

Nevertheless, in the overall circumstances of this case, the Judge properly exercised his discretion to impute income to Mr. Wiscombe on these bases for the purposes of spousal support. Quantum of Support [ 64 ] As stated above, the Judge imputed an annual income of $214,000 to Mr. Wiscombe for the purpose of determining spousal support payable. We are of the view that the Judge erred in determining the amount of income to be imputed to Mr. Wiscombe. [ 65 ] The $214,000 the Judge imputed was based on the average amounts Mr.

Wiscombe took from Wiscombe’s insurance, in both salary and dividends, over the 10 year period (from 2004 to 2013) prior to the sale of the business, plus the average of his annual draws on his director’s account over the 20 year period from 1995 until 2014. These amounts were all based on past earnings from a specific source which ceased to exist by the time of the review hearing. The Judge did not appear to consider the fact that the business, which had provided all of Mr. Wiscombe’s income, was no more. Once it was sold in 2014, there was no possibility that Mr.

Wiscombe could earn further salary from it or take further draws from his director’s account. His past income stream was gone. [ 66 ] The Judge’s finding that Mr. Wiscombe’s spending was “profligate” during the marriage, in the period after the parties separated in 2008, and that it was continuing after the sale of the business, does not change the fact that there was no further income available to Mr. Wiscombe from the operation of the business. [ 67 ] The financial implications of the 2014 sale and the resulting impact on Mr.

Wiscombe ’s future income were relevant factors known to the parties and the Court at the time of the review hearing, and they should have been considered by the Judge in determining Mr. Wiscombe ’s income for future spousal support. In our view, imputing a quantum of income exclusively on historical factors which clearly no longer apply lacks the requisite evidentiary basis for imputing a quantum of income. Such an approach does not consider “what the payor will earn” or what income is available for spousal support ( Hawco at paragraph 43 ) . This is not to say that Mr.

Wiscombe’s past earnings were irrelevant to the quantum to be determined. However, such past income could not, on its own, be a reliable indicator of Mr. Wiscombe’s future income for the purposes of spousal support. [ 68 ] In these circumstances, and due to the passage of time since the support order under appeal was made, as well as the need for current financial information not available to this Court, it is appropriate to remit the matter to the Supreme Court of Newfoundland and Labrador where determinations of Mr.

Wiscombe’s income for the purposes of spousal support and the quantum of spousal support payable can be made by considering present information and what is likely to be the situation in the future. We emphasize that the amount of income imputed should be connected to the basis for spousal support insofar as the evidence permits; absent a connection, the amount imputed could be viewed as having been arbitrarily selected. In this regard, we refer to Drygala at paragraph 44 :

Section 19 of the Guidelines is not an invitation to the court to arbitrarily select an amount as imputed income. There must be a rational basis underlying the selection of any such figure. The amount selected as an exercise of the court's discretion must be grounded in the evidence. We also emphasize that to the extent that income generated from an annuity will be considered, details respecting the life of the annuity, whether it is indexed for inflation, whether it is guaranteed, whether payments will cease upon Mr.

Wiscombe’s death and if not who is the beneficiary, among other details, must be considered in the analysis. [ 69 ] There was also an issue regarding the means Mr. Wiscombe had available from the sale of the business and the inheritance from his father to generate or from which to impute income. The Judge found the amount was approximately $1.8 million net of taxes, while Mr. Wiscombe submitted on appeal that the amount was approximately $1.2 million net of taxes. It is unnecessary to resolve this issue at present as, whatever the amount, the funds are clearly “means” for the purposes of

section 15.2(4) of the Divorce Act ( see Leskun and Strang ) and the judge who hears the matter is entitled to consider them in deciding the amount of income to be imputed to Mr. Wiscombe, provided that there is a rational basis underlying the selection of any such figure.

Conclusion [ 70 ] In the result, the Judge did not err in determining that Ms. Martin was entitled to spousal support. Neither did he err in exercising his discretion to impute income to Mr. Wiscombe on the bases of sections 19(1)(

a) and (

e) of the FCSG. However, the Judge erred in imputing $214,000 in income to Mr. Wiscombe on the basis of historical income information only. Both the amount of income imputed, and in turn the amount calculated for spousal support, must be reassessed. [ 71 ] It is therefore appropriate to remit the matter to the Supreme Court of Newfoundland and Labrador to determine the amount of income to be imputed to Mr. Wiscombe for the purposes of determining the amount payable for spousal support. Effect of this Decision [ 72 ] The Court’s determination that the Judge erred by imputing $214,000 in income to Mr.

Wiscombe raises the issue of whether Ms. Martin ought to be required to reimburse Mr. Wiscombe for the difference, if any, between the amount of spousal support that was ordered by the Judge in the decision under appeal and the amount of spousal support that may be ordered from a new determination of quantum. In the event there is a difference in favour of Mr. Wiscombe, Ms. Martin shall not be required to reimburse Mr. Wiscombe any amounts flowing from the new decision. [ 73 ] In reaching this conclusion, we apply the principles respecting retroactive spousal support awards set out in Kerr v.

Baranow , 2011 SCC 10 , [2011] 1 S.C.R. 269 . In Kerr , Cromwell J. affirmed that the factors set out in D.B.S. v. S.R.G . , 2006 SCC 37 , [2006] 2 S.C.R. 231 respecting retroactive child support were relevant to spousal support, describing them as (1) the needs of the recipient, (2) the conduct of the payor, (3) the reason for delay in seeking support, and (4) any hardship the retroactive award may occasion on the payor spouse.

Although we acknowledge the difference between the payment of retroactive support that ought to have been paid and reimbursement of too much support paid, we are of the view that the principles referenced in Kerr and D.B.S. generally apply to this situation. [ 74 ] In Kerr , Justice Cromwell noted that retroactive spousal support is different than retroactive child support in that a child is presumed to be entitled to support from his or her parents from birth, whereas entitlement to spousal support is not presumed, but based on “a highly discretionary balance of means and needs” which takes place following a claim for support.

He also stated that “concerns about notice, delay and misconduct generally carry more weight in relation to claims for spousal support” than in claims for child support (paragraph 208). [ 75 ] In this case, Mr. Wiscombe’s appeal was heard in September 2017 – over two years after the trial judgment was rendered in May 2015. His appeal had been filed on June 1, 2015, but was not perfected, and a notice that it was deemed abandoned (under the former Court of Appeal rules) was sent. It then became necessary for Mr.

Wiscombe to apply for reinstatement of his appeal and for the Court to hold a hearing and decide the reinstatement issue before the appeal could be set to be heard. This accounts for considerable delay in hearing the appeal, for which Ms. Martin is not responsible, and during which time she continued to receive the quantum of spousal support under appeal. As well, reinstatement prejudiced Ms. Martin in the sense that she lost the real prospect that her claim for spousal support was essentially settled. In this regard, we refer to this Court’s judgment in Wiscombe v.

Wiscombe , 2017 NLCA 8 , wherein White J.A. stated: If Mr. Wiscombe prevails [on appeal], the Court can make an order to minimize financial prejudice to [Ms. Martin] and achieve fairness between the parties (paragraph 22). [ 76 ] While it appears from the record that Mr. Wiscombe was initially slow to realize his responsibility to pay spousal support to his former wife, including failing to pay interim support in a timely fashion when it was first ordered, there is no suggestion that he concealed or failed to disclose his assets. Ms. Martin, the potential payor of a “retroactive award” to reimburse Mr.

Wiscombe, is not guilty of any blameworthy conduct. As for the needs of Mr. Wiscombe as a potential recipient of such reimbursement, he has not been and is not in need. He chose to retire and by his own account is living the similar, comfortable life he always did. On the other hand, Ms. Martin remains in debt and economically disadvantaged as a result of the marriage breakdown. In our view, the circumstances of this case demonstrate that it would be a real hardship within the meaning of D.B.S. (paragraphs 114 to 116 ) for Ms. Martin to have to reimburse Mr.

Wiscombe should a new decision on quantum determine spousal support to be less than the $6,344 per month ordered by the Judge. [ 77 ] Accordingly, “to minimize financial prejudice to [Ms. Martin] and to achieve fairness between the parties” Ms. Martin is not required to reimburse Mr. Wiscombe any amount paid in spousal support in the period of time between May 2015 and four months after the date of the filing of this judgment. This four-month period should afford Mr.

Wiscombe the opportunity to apply for a rehearing of a determination of his income for the purposes of spousal support and the quantum of support to be ordered, and for both parties to organize their affairs accordingly. [ 78 ] Finally, we agree with the Judge’s suggestion that the parties should consider whether a lump sum payment might be made to settle the matter of spousal support, so that they might disentangle their affairs and move on with their separate lives. [ 79 ] The results of this appeal are mixed. Accordingly, we would make no order as to costs. Appeal allowed in part.