A.A.O. Petitioner - v. -, 2023 SKKB 175

REDACTED VERSION KING’S BENCH FOR SASKATCHEWAN Citation: 2023 SKKB 175 Date: 2023 08 18 Docket: DIV-RG-00058-2019 Judicial Centre: Regina, Family Law Division ___________________________________________________________________________ BETWEEN: A.A.O. Petitioner - and - O.A.A. Respondent Counsel: Madlin M. Lucyk for the petitioner Kendra L. Jacobs and Rani L. Grewal for the respondent ___________________________________________________________________________ JUDGMENT R.S. SMITH J.

August 18, 2023 ___________________________________________________________________________ NOTE: Pseudonyms have been used throughout this redacted version of the judgment. [ 1 ] The petitioner, A.A.O. [pseudonym: Anna], and the respondent, O.A.A. [pseudonym: Larry], were married on January 30, 2009, in Ireland. They are the parents of two children, namely, M. (12 years) and S. (8½ years). The parties formally separated in October 2018. [ 2 ] To their respective credit, the parties have been able to resolve almost all the issues that arise upon a relationship ending.

The primary point of contention is where to set Larry’s income under the Federal Child Support Guidelines , SOR/97-175 [ Guidelines ], which impacts the debate surrounding child support and spousal support. [ 3 ] Larry is a psychiatrist, receiving income from the Saskatchewan Health Authority, and employs two closely held corporations in his practice. Each of the parties produces an expert witness, a certified professional accountant, to decipher all the numbers and testify as to their conclusion as to where Larry’s Guidelines income should be set. The record will note that reasonable accountants can disagree.

Background [ 4 ] The parties are from Nigeria, although Anna was born in the United Kingdom and then moved to Nigeria with her parents as a child. Anna returned to London as a teenager to pursue her education. [ 5 ] The parties originally met in 2003, although they did not start dating until 2005. They did not live together until they were married in 2009. [ 6 ] Both parties are well credentialed. Anna (43 years old) has a degree in Chemical Engineering, with a master’s degree in Petroleum Engineering and, in her engineering practice, has a specialty in Reservoir Engineering.

In England and Europe, she was a practising engineer for ten years. In her career, her star rose quickly and shone brightly. She was very well paid until she came to Canada in 2014. [ 7 ] Larry (48 years old) is a medical doctor specializing in psychiatry. Prior to 2014, he held various positions throughout England. However, what he wanted was a full-time position in London or nearby where Anna was working and attending to the children. [ 8 ] Larry’s goal seemed elusive so he investigated immigrating to Canada.

He determined that he could create a practice in Regina and, in due course, receive his fellowship, which would allow him to relocate anywhere in Canada. [ 9 ] Anna testified that employment issues for Larry were such that she understood why he wanted to move to

Canada. Regina did not initially appear to be attractive to her, but it was agreed with Larry that once he obtained his fellowship, they would relocate to Calgary, which is a more amenable locale for a chemical engineer. [ 10 ] In Regina, Larry’s practice thrived, and Anna focused on raising the children. In 2017, Anna testified that Larry advised her that he had changed his mind and did not want to move to Alberta. His practice was flourishing in Regina, and he saw no need to change. [ 11 ] Larry recalled that conversation somewhat differently.

He said Anna was in Calgary, visiting friends and looking around the city. She returned to Regina and advised Larry that her first impression of Calgary was negative and as he was doing so well in Regina, it would be satisfactory if they stayed. Suffice it to say, Anna denied that conversation took place. [ 12 ] Anna averred that she was angry about Larry’s declaration that he had changed his mind about moving to Alberta.

She testified that she never would have agreed to move to Regina unless it was a brief transition on the way to Alberta. [ 13 ] Anna laments that the problem she faces now is that her engineering skillset is stale. In order to obtain membership in the Alberta Engineering Association, she must work for a professional engineer for one year. Notwithstanding considerable efforts, she has been unable to get that one-year job.

She has even offered to work for free, to no avail. [ 14 ] In the absence of a one-year work experience with a professional engineer, Anna is unable to get her professional engineering certification [P.Eng.]. [ 15 ] In 2017, Anna thought she could create a business using her engineering skills. Specifically, Anna began creating foods for people with restricted diets, like diabetics and the obese. She incorporated Prester Foods Inc. for that purpose. She has applied for a patent relating to a specialized dough formula. [ 16 ] Unfortunately, Prester Foods Inc. has not prospered.

Since its creation, it has not made any money and has yet to produce a product for sale. Anna advised that the last time she applied for a job in Saskatchewan was 2018. [ 17 ] Over time, the fabric of the parties’ relationship began to fray. They separated in 2018. Shortly after separation, Larry began paying Anna $8,500.00 per month.

It was not pursuant to an agreement or a court order, but rather his sense of what she needed for herself and the children. [ 18 ] Anna never voiced any objection to that amount until December 2019 when she retained counsel, seeking an order, inter alia , for spousal support and child support. [ 19 ] A decision ( A.A.O. v O.A.A. , 2020 SKQB 248 ) was rendered in September 2020 which directed Larry to pay Anna $7,740.37 per month in child support commencing January 1, 2020, and $7,500.00 per month in spousal support commencing January 1, 2020. [ 20 ] A continuing debate between the parties over where Larry’s Guidelines income should be set led Anna to seek further support in an application that went before Brown J. in 2022 ( A.A.O. v O.A.A. (18 November 2022) Saskatoon, DIV-RG-00058-2019 (Sask KB)). [ 21 ] Brown J. concluded that Larry should pay additional funds between the date of his fiat and the trial date.

His fiat of November 18, 2022, provided, in part: [6] Therefore, pending further order of the court, Dr. [O.A.A.] is to make an additional payment of $2,500 on the 31st of each month, beginning in November, which will be in addition to his current support payments and which will not be characterized at this time. [7] These $2,500 additional monthly payments will be without prejudice to the findings of the trial judge and, if it is found at trial there has been an underpayment by Dr. [O.A.A.], the amount will be credited towards his obligation to retire such underpayment.

If it is ultimately found that there is an overpayment by Dr. [O.A.A.], then these amounts will be credited as prepayment of upcoming support owed to Ms. [A.A.O.]. It will be the trial judge whom makes the ultimate calculation of any support owing and who will factor in this monthly additional amount to the ultimate bottom line. [ 22 ] As stated, the parties addressed parenting and matrimonial property maturely. Anna received a property settlement from Larry in the amount of $140,507.06. In addition, she obtained title to a residential lot in Spruce Creek (Regina) (Exhibit R-1, Tab 11).

When that title was issued, the property was valued at $250,000. [ 23 ] The primary question to be determined is where to set Larry’s Guidelines income. To his credit, Larry agrees that wherever his Guidelines income is set, he will pay child support in accordance with the full table of the Guidelines .

He does that knowing that any payor, who earns over $150,000 per annum, may engage in a debate over the appropriateness of full table child support, in the face of big number income. [ 24 ] The amount of Guidelines income is also pivotal in the debate over spousal support and where to place it in the range as presented in Carol Rogerson & Rollie Thompson, Spousal Support Advisory Guidelines ([Ottawa]: Department of Justice, 2008) [ SSAG ]. [ 25 ] The parties differ sharply on the issue of the term of spousal support.

Anna says that the move to Regina, and the subsequent resiling by Larry of going to Calgary, has essentially ruined her career. She seeks indefinite spousal support. [ 26 ] Larry replies that the marriage was only nine years in length, and he has been paying substantial spousal and child support since October 2018. He asks the court to fix an end date for his spousal support obligations.

Expert Evidence [ 27 ] Anna called Mr. Frank Hounjet, C.P.A., C.A., C.B.V., and Larry relied on the evidence of Suzanne C. Loomer, M.Acc., C.P.A. C.A., F.C.B.V. Each of them was assigned the same task by each counsel, namely, identify the Guidelines income Larry has available for the purposes of spousal support and child support. [ 28 ] Larry employs two corporations in this business, Black River Holdings Ltd. and Langela Medical P.C. Inc. [ 29 ] Both accountants were aware of the direction in the Guidelines addressing where a spouse is a shareholder, director or officer of a corporation. Specifically, they considered ss. 18(1) and (2), which are worthwhile to reproduce: 18

(1) Where a spouse is a shareholder, director or officer of a corporation and the court is of the opinion that the amount of the spouse’s annual income as determined under

section 16 does not fairly reflect all the money available to the spouse for the payment of child support, the court may consider the situations described in

section 17 and determine the spouse’s annual income to include (

a) all or part of the pre-tax income of the corporation, and of any corporation that is related to that corporation, for the most recent taxation year; or (

b) an amount commensurate with the services that the spouse provides to the corporation, provided that the amount does not exceed the corporation’s pre-tax income.

(2) In determining the pre-tax income of a corporation for the purposes of subsection (1), all amounts paid by the corporation as salaries, wages or management fees, or other payments or benefits, to or on behalf of persons with whom the corporation does not deal at arm’s length must be added to the pre-tax income, unless the spouse establishes that the payments were reasonable in the circumstances. [ 30 ] Each of the accountants provided excellent, detailed reports thoroughly outlining their reasoning process in coming to their conclusions.

Each accountant was asked to give an estimate available for spousal and child support for the years 2016 through 2021. [ 31 ] Mr. Hounjet’s conclusions are as follows: (

a) Calculation of income for support purposes: 31-Dec-21 31-Dec-20 31-Dec-19 31-Dec-18 31-Dec-17 31-Dec-16 Average Total Cash Income – reported on personal tax return 378,499 348,304 255,956 433,370 313,118 284,000 335,541 Less: Dividend income from Langela Medical P.C. Inc. - - - - - (100,000) (16,667) Add: Corporate income available for the shareholder – Black River Holdings Ltd. 138,866 792 59,329 (4,053) (57,378) - 22,926 Corporate income available for the shareholder – Langela Medical P.C.

Inc. 665,980 201,364 487,786 360,842 634,111 641,228 498,552 Total Income of [Larry] Available for Support Purposes 1,183,344 550,459 803,071 790,160 889,851 825,228 840,352 [ 32 ] Ms. Loomer’s conclusion is as set out below: 2016 2017 2018 2019 2020 2021 3-Year Average Line 150 income from tax return 301,000 313.119 433.38- 255.056 348,304 364,518 322.026 Adjustments

Schedule III adjustments (17,000) - - - - 13,981 4,660

Section 18 adjustments Attribution of corporate pre-tax income 337,861 372,237 373,206 283,772 49,778 311,516 215,022 Personal expenses 88,757 80,647 116,957 72,622 75,586 77,690 75,299

Section 19 adjustments

Tax gross-up on taxable dividends received 15,557 - - - - - - Guideline income before the following 726,174 766,002 923,533 612,350 473,668 767,705 617,908 19(1)(

h) Income tax gross-up on

Section 28 personal expense adjustment 81,929 73,701 105,808 65,706 68,387 70,291 68,128 Guideline Income 808,103 839,703 1,029,351 678,056 542,055 837,996 686,036 [ 33 ] It is clear that the methodology employed by each of the accountants was very similar. To the extent there are differences, it is as a result of adjustments made after assembling the gross numbers for Larry and each of the two companies. [ 34 ] Mr. Hounjet’s report was prepared first and then it was reviewed by Ms. Loomer and her associates. At page 9 of her report, she outlines the difference in adjustments made between the two analyses: Critique of Other Expert’s Report [by Ms. Loomer] 21. … [O]ur approach to calculating

Section 18 and 19 adjustments was different from that undertaken by the Virtus Group, although many of the same adjustments were made, just in a different way. For example, the Virtus Group added back personal expenses to corporate pre-tax income and then determined the amount of income to attribute under Section 18(1). KPMG considered personal expenses as a separate adjustment and added an income tax gross-up pursuant to

section 19. 22. To assist the Trier of Fact, we have summarized the key areas of difference by issue, as shown in the table below:

a) KPMG removed one-time gains on the disposition of investment portfolios that are no longer held in Langela Medical P.C. Inc. (the PC) and Black River Holdings Ltd. (Black River) because the 2021 gains were non-recurring. We understand the investment portfolios were moved into personal crypto-currency holdings and a portion was used to pay a matrimonial settlement to [Anna]. The purpose of a Guideline Income calculation is to use historical financial information to set future expectations of Guideline Income to assist the Trier of Fact in settling amounts for support payments.

Including the 2021 gain on dispositions would be income that will not be reoccurring in the future and could set Guideline Income higher than reasonably achievable by [Larry] in the future. We left the investment income other than the 2021 gains as part of [Larry’s] income because his personal investments may generate similar income in the future. As a result of this adjustment, KPMG’s conclusion was lower than the Virtus Group’s by $260,671 in 2021 and in aggregate, over the entire period.

b) We did not make the timing adjustment that Virtus Group made to [Larry’s] T4 income to align it with when the income was earned by the corporation. We reflected [Larry’s] T4 income in the year it was reported on his personal tax return. …

c) KPMG deducted the debt repayment made by the Companies to third parties, other than for the debt owing on a vehicle driven by [Larry], whereas the Virtus Group did not deduct debt repayment obligations in calculating available corporate income.

d) KPMG deducted actual capital expenditures incurred by the Companies whereas the Virtus Group deducted an assumed annual amount. The Virtus Group deducted an amount of $2,000 per year as sustaining capital reinvestment in Black River while KPMG considered the actual capital expenditures, net of financing proceeds received in PC. KPMG’s conclusion was lower by $22,000 (net) in aggregate over the entire period as a result of this difference.

e) KPMG deducted the gain on disposal of assets as a non-recurring amount[.]

f) KPMG deducted amounts received on a CEBA loan that are non-recurring. The Virtus Group did not remove CEBA loan income that is non-recurring. KPMG’s conclusion was lower by $20,000 in aggregate over the entire period as a result of this difference.

g) The Virtus Group did not adjust pre-tax income for the 2014 Porsche that was traded in for a 2017 Porsche lease. There was a reduction in the lease payment made by [Larry] on the personal lease in 2017 as a result of the corporate asset traded in, which is a personal benefit to him. We included this benefit in Guideline Income. In 2016, 2017, and 2018 [Larry] received benefits resulting from principal, interest, and trade-in payments on this 2014 Porsche used for personal purposes from the PC. The Virtus Group did not factor these payments in as personal in nature in arriving at their conclusions.

KPMG’s conclusion was higher by $74,546 in aggregate over the entire period as a result of this difference.

h) KPMG deducted actual personal expenses incurred by [Larry] based on our scope of review, rather than an assumed amount of personal expenses that the Virtus Group did. … Overall, the personal expenses that KPMG deducted were lower than that assumed by the Virtus Group in an aggregate amount of $35,385 over the 6-year period, comprised of differences related to: vehicle expense ($12,118), travel expenses ($12,727) and telephone ($10,540).

i) We did not attribute more than 100% of pre-tax income in any given year, but there was one year where the add back of amortization in 2017 resulted in an income amount greater than reported pre-tax income by $3,517. We did not attribute this excess amount but the Virtus Group did.

j) and

k) KPMG grossed up the personal expenses deducted in the corporation for taxes to arrive at an equivalent salary to net the amount paid, whereas the Virtus Group did not make this adjustment. Similarly, we grossed up the dividends paid in 2016 for the tax benefit pursuant to

Section 19. The aggregate adjustment over the 6-year period was an increase to [Larry’s] income of $465,832 and $14,445 respectively. …

[ 35 ] Each of the accountants presented as credible, reliable and reasonable in their efforts to assist the court. [ 36 ] Upon consideration, I conclude that Ms. Loomer’s report with its three-year average of $686,036 is reflective of a methodology, particularly with respect to adjustments, that I am most comfortable with. While Mr. Hounjet was articulate and reasonable in explaining the adjustments he made, I am of the view that his report reflects an unnecessarily aggressive approach. [ 37 ] At trial, the corporate returns for 2022 were not available.

Therefore, both expert reports stopped their analysis at 2021. [ 38 ] Counsel for the respondent, in their brief, provided their calculations for 2022 based on the respondent’s personal income tax return and the now complete financial statements of his two corporations. They postulate Larry’s Guidelines income for spousal and child support in 2022 as follows: Line 150 income $429,167 Combined available corporate pre-tax income 357,062 Total Guidelines income $786,229 It should be noted that counsel for the respondent advised that they followed Ms.

Loomer’s methodology in calculating the amount available for child support and spousal support. [ 39 ] I am of the view that the parties should operate on a three-year average as is specifically contemplated in the Guidelines . Therefore, the three-year average is, employing the most recent numbers: 2020 $ 542,055 2021 837,996 2022 786,229 $2,166,280 divide by 3 $ 722,093 (rounded) [ 40 ] Therefore, for the purposes of spousal and child support, I determine Larry has $722,093 available. I direct the parties, in addressing the issue of Guidelines income in the future, to employ a three-year average protocol.

I believe employing a three-year average leads to the fairest result between the parties. [ 41 ] When the parties are determining the income from the two corporate entities for the purpose of adding up Larry’s income available for spousal and child support, they should ensure that the level of income they employ is not greater than that corporation’s pre-tax income.

This will ensure they comply with the strictures imposed by the Court of Appeal in Bear v Thompson , 2014 SKCA 111 , 378 DLR (4th) 649 . [ 42 ] Hopefully, the parties will be able to reach agreement every year as to how that income is calculated, and the significant cost of an accountant’s report will not be necessary. I leave it to them. [ 43 ] I acknowledge that counsel for the petitioner did not have a chance to reply or respond to the respondent’s lawyer’s calculations for 2022.

If counsel for the petitioner is of the view that the respondent’s calculations contain a material error and the income should be set at a higher number than $786,229 for 2022, then I will remain seized with that debate. If it is an issue, the petitioner’s counsel can bring a notice of application to be returnable before me at a time and place set by me for resolution of that issue. Retroactive Award [ 44 ] Anna makes the case that she should receive a retroactive award of spousal support and child support. There is no question the Court has the authority to make such an award.

The question is, should it? [ 45 ] Anna sums up her argument, starting at paragraph 132 of her brief: 132. [Larry] certain has the ability to pay retroactive support and [Anna] respectfully submits that he should do so. [Anna] needs the support. [Anna’s] annual expenses are as set out in her sworn Financial Statement (at Trial Exhibit C45). 133.

As to her need, it is clear, and is why the Court ordered significant spousal support to [Anna] on an interim basis when [Larry’s] income was approximately half of what it is now. [Anna] abandoned her own professional career with all of its advantages to follow [Larry] to Regina, Saskatchewan, where she had no income, no connections, and no job prospects. [Anna] used her own credit and savings to assist [Larry] in his job application and relocation, which have resulted in a very high earning career for [Larry]. 134.

Without support, [Anna] would be required to deplete capital or savings in order to meet her needs. Courts have been clear that a recipient of spousal support is not expected to have to deplete capital and savings to pay for ongoing living expenses, as the payor is able to pay ongoing expenses from income. (See: Bradley v Bradley , 2005 SKCA 53 ; Carriere v Carriere , 2004 SKQB 519 ). 135. As to the conduct of the payor, [Larry] was of course well aware that he had been almost the sole source of financial support to [Anna] for many years. He knew she had no income.

When the matter came before the Court on an interim basis, [Larry] understated his income and has been paying support based upon an income figure significantly below his actual earning.

136. In Savoy v Savoy , 2015 SKQB 131 [,] the court determined that it was appropriate to award retroactive support when the interim support order was granted based on a lower income than what the Payor was actually paying. The court awarded retroactive payments to be made over a period of time in satisfaction of the payor’s obligation, even while finding no misconduct of the payor. 137. The Trial demonstrated that [Larry’s] actual means and ability to pay spousal support were substantially higher than what was before the Chambers Judge in making an order for support.

If the Court had been information on the financial resources available to [Larry] throughout the years since separation, the Court would have utilized the most accurate information and support figures would look different. [ 46 ] Anna is not shy in her calculations. She posits in her brief that Larry’s cumulative retroactive debt for spousal support and child support is $897,406.

She suggests the court should order 100 monthly installments of $8,974.00 until the retroactive obligation is satisfied. [ 47 ] Not surprisingly, Larry takes umbrage with Anna’s demand for a substantial retroactive award of spousal and child support. In his brief, starting at paragraph 143, he makes the case: 143. Whether or not the Court should order retroactive child support was addressed in the D.B.S. case [2006 SCC 37 , [2006] 2 SCR 231] as well where the Court stated: 95 It will not always be appropriate for a retroactive award to be ordered.

Retroactive awards will not always resonate with the purposes behind the child support regime; this will be so where the child would get no discernible benefit from the award . Retroactive awards may also cause hardship to a payor parent in ways that a prospective award would not.

In short, while a free-standing obligation to support one’s children must be recognized, it will not always be appropriate for a court to enforce this obligation once the relevant time period has passed. (emphasis added) 96 Unlike prospective awards, retroactive awards can impair the delicate balance between certainty and flexibility in this area of the law. As situations evolve, fairness demands that obligations change to meet them. Yet, when obligations appear to be settled, fairness also demands that they not be gratuitously disrupted. Prospective and retroactive awards are thus very different in this regard.

Prospective awards serve to define a new and predictable status quo ; retroactive awards serve to supplant it. 97 Lest I be interpreted as discouraging retroactive awards, I also want to emphasize that they need not be seen as exceptional. It cannot only be exceptional that children are returned the support they were rightly due. Retroactive awards may result in unpredictability, but this unpredictability is often justified by the fact that the payor parent chose to bring that unpredictability upon him/herself.

A retroactive award can always be avoided by appropriate action at the time the obligation to pay the increased amounts of support first arose. 98 Before canvassing the myriad of factors that a court should consider before ordering a retroactive child support award, I also want to mention that these factors are not meant to apply to circumstances where arrears have accumulated. In such situations, the payor parent cannot argue that the amounts claimed disrupt his/her interest in certainty and predictability; to the contrary, in the case of arrears, certainty and predictability militate in the opposite direction.

There is no analogy that can be made to the present cases. 99 I will now proceed to discuss the factors that a court should consider before awarding retroactive child support. None of these factors is decisive. For instance, it is entirely conceivable that retroactive support could be ordered where a payor parent engages in no blameworthy conduct. Thus, the British Columbia Court of Appeal has ordered retroactive support where an interim support award was based on incorrect financial information, even though the initial underestimate was honestly made: see Tedham v.

Tedham (2003), 20 B.C.L.R. (4th) 56, 2003 BCCA 600 . At all times, a court should strive for a holistic view of the matter and decide each case on the basis of its particular factual matrix. (emphasis added) [Emphasis added by counsel] 144. The four factors to be considered in determining whether to order retroactive child support include: a. Whether there was a reasonable excuse for why the claimant did not purse [ sic ] child support or increased child support earlier; b. The conduct of the payor parent, including whether the payor behaved in a blameworthy manner in relation to child support; c.

Consideration of the past and present circumstances of the child, and the extent to which they may benefit from a retroactive award; and d. Any hardship that may be occasioned by a retroactive order. 145. In her paper titled “Retroactive Child Support: Ready, Set….. Juggle!”, for the National Judicial Family Law Conference from February 2018 (see Tab 17), Deborah Chappel notes there are specific considerations regarding claims for retroactive increase of support where there was a previous court order but the quantum subsequently becomes inadequate. At page 6, Ms.

Chappel notes that these considerations include: • The payor’s interest in certainty and predictability is the most compelling where they have been following the terms of a court order • A payor parent who diligently pays child support in an amount that has been ordered by the court must be presumed to have fulfilled their support obligation towards their child (this supports a case against retroactive adjustment) • However a payor cannot rely blindly on the order • The existence of the order does not absolve the payor of the responsibility of continually ensuring that the child is receiving an

appropriate amount of support • As the circumstances underlying the original order change, the value of the order in defining the payor’s obligations and their reasonable expectations necessary diminishes • Accordingly, the court has a discretion to vary an existing order retroactively where the payor parent is found to be deficient in their support obligation • Payor parents should not have the impression that child support orders are set in stone • Payors must appreciate that an order for child support is based on a “specific snapshot of circumstances which existed at the time the order was made” (at para. 64) and that the order is subject to variation if the facts upon which it is based change, so that the amount is no longer appropriate • “the certainty offered by a court does not absolve parents of their responsibility to continually ensure that their children receive the appropriate amount of support” (at para. 64) • This principle applies in this situation even if the order does not provide for automatic annual income disclosure, or regular variation or review 146.

Turning to the four factors considered by the Supreme Court in D.B.S. and their application to this matter before the Court, we submit that there is no retroactive support owing by [Larry] to [Anna] for [M.] and [S.]. [ 48 ] Shortly after the parties separated, Larry on his own, commenced, on a best guess basis, paying $8,500.00 a month for spousal and child support.

This was the uncontroversial norm until Anna brought her application for increased spousal and child support in December 2019. [ 49 ] As a result of two court decisions, Larry has paid to Anna, since 2019 to the end of April 2023, the sum of $701,100. Of that, only $300,000 has been taxable. In addition to that, Larry paid lease payments on the Buick that Anna drove.

Anna has no debt except for the mortgage on her home and a car loan. [ 50 ] When Anna bought her new home (notwithstanding she was unemployed, the bank did not require her to obtain a co-signer for the mortgage) and invested approximately $59,000 into basement renovations. She has also taken a holiday to Dubai ($6,000 to $7,000) and London ($3,000 to $4,000). [ 51 ] To recount the above is not to say that Anna has, in any way, misspent money or been extravagant in her spending. It simply points out that she has had considerable money to spend.

It cannot be said that her claim for a retroactive award has any underpinnings of deprivation or that she and the children have suffered from a lack of funds. [ 52 ] In addition, there is the property settlement in excess of $140,000, and Anna’s ownership of a residential lot valued at $250,000 and mortgage-free. [ 53 ] Considering the evidence, there are no underlying facts that create an appetite for the court to order the significant retroactive award sought by Anna nor, in fact, any retroactive award at all.

In my view, a retroactive award would simply amount to a transfer of capital, and that is inappropriate in the face of the parties having completed the family property settlement. Accordingly, I decline Anna’s invitation to award retroactive spousal and child support. Child Support [ 54 ] Having determined that Larry’s Guidelines income is $722,093 and ascribing a nominal $40,000 income to Anna, the ChildView calculations respecting child support ( ChildView , Version 2023.1.0) are: Larry Anna Child support $9,017.00

Section 7 expenses 94.75% 5.25% [ 55 ] With respect to s. 7 expenses, I determine it is appropriate to take into account the substantial child support and spousal support that Anna receives. Therefore, I direct that the parties should share any s. 7 expenses in a ratio of: Larry, 70%; and Anna, 30%. [ 56 ] Child support of $9,017.00 per month should be paid by Larry to Anna commencing June 1, 2023, until further order of the court or agreement between the parties. [ 57 ] Current s. 7 expenses should be shared by the parties in the ratio identified (70% / 30%).

There should be no new s. 7 activities requiring contribution after June 1, 2023, unless there is agreement between the parties respecting the activities or a court order authorizing same. [ 58 ] For as long as there is child support and/or spousal support payable, the parties should exchange copies of their respective income tax returns (including the two corporate returns of Black River Holdings Ltd. and Langela Medical P.C. Inc. by May 30 (for personal returns) and within 30 days of the corporate returns being prepared, commencing May 30, 2023.

Spousal Support [ 59 ] To his credit, Larry concedes that Anna is entitled to and should receive spousal support. As always, the devil is in the details. There are two aspects to spousal support which must be determined. Firstly, the level of spousal support and, secondly,

how long is it to be paid. Both parties agree that spousal support, in this case, has elements of compensatory and noncompensatoryaspects. In my view, compensatory weighs very heavily in my analysis. [60] Anna requests indefinite spousal support. She grounds that request on the fact that she gave up her career for thefamily and, specifically, for Larry to obtain his fellowship in Canada. Her career is dormant, and her skillset is stale.

She argues thatlevel of sacrifice grounds her reasonable request for indefinite support. [61] Larry petitions the court that spousal support be defined for a specific period of time. Larry complains that Annahas been less than diligent in her efforts towards self-sufficiency. [62] The Supreme Court of Canada dealt with compensatory spousal support in Moge v Moge, (SCC), [1992] 3 SCR 813 [Moge]. In Moge, the Supreme Court held that while self-sufficiency is a relevant consideration when makingor varying a support order, “it does not deserve unwarranted pre-eminence” (Moge at 861).

Moreover, the Court, at page 861, elucidatedthe following: … In cases where relatively few advantages have been conferred or disadvantages incurred, transitional support allowing for full andunimpaired reintegration back into the labour force might be all that is required to afford sufficient compensation. However, in manycases a former spouse will continue to suffer the economic disadvantages of the marriage and its dissolution while the other spouse reapsits economic advantages.

In such cases, compensatory spousal support would require long-term support or an alternative settlementwhich provides an equivalent degree of assistance in light of all of the objectives of the Act. … [63] Justice Brown reviewed compensatory spousal support and the need to promote self-sufficiency in Stephens vStephens, 2019 SKQB 114 [Stephens].

There, Brown J. reiterated the comments made by Laing J. in Bergquist v Bergquist, 2012 SKQB354, 403 Sask R 302 [Bergquist], that self-sufficiency must be put into context and examined through the lens of the same standard ofliving the parties enjoyed during the marriage (Stephens at para 236, citing Bergquist at para 35).

Moreover, Wilkinson J. elucidated inJanzen v Christianson, 2015 SKQB 193, 478 Sask R 163 [Janzen], that “a spouse is expected to make reasonable efforts to achievefinancial independence from the other spouse within a reasonable period of time so long as their prospects are not impaired by specialconsiderations arising from the recipient’s role as primary caregiver” (Stephens at para 238, citing Janzen at para 28). [64] Ultimately, in Stephens, Brown J. determined that the respondent wife was entitled to spousal support given thatthe parties were in a relationship of over 25 years, they had a very comfortable lifestyle, and she was on the path towards self-sufficiency(Stephens at paras 241-246).

Moreover, because the couples’ adult children were self-sufficient and the respondent had been employedthroughout her lifetime, the Court held that she had the ability to become entirely self-sufficient (Stephens at para 246). [65] As demonstrated by Megaw J. in Bast v Bast, 2021 SKQB 254 [Bast], the ability of one spouse to becomeself-sufficient should be determined giving regard to factors such as “the parties’ present and potential incomes, their standard of livingduring the marriage, the efficacy of any suggested steps to increase a party’s means, the parties’ likely post-separation circumstances...the duration of their cohabitation and any other relevant factors” (Bast at para 86, citing Julien D.

Payne & Marilyn A. Payne, CanadianFamily Law, 7th ed (Toronto: Irwin Law Inc., 2017) at 255). Moreover, the Court reiterated the following findings from CanadianFamily Law: [54] Self-sufficiency is often more attainable in short-term marriages, particularly ones without children, where the lower-incomespouse has not become entrenched in a particular lifestyle, or compromised career aspirations.

In such circumstances, the lower-incomespouse is expected either to have the tools to become financially independent or to adjust his or her standard of living. [55] In contrast, in most long-term marriages, particularly in traditional long-term ones, the parties' merger of economic lifestylescreates a joint standard of living that the lower-income spouse cannot hope to replicate, but upon which he or she has become dependent.In such circumstances, the spousal support analysis typically will not give priority to self-sufficiency because it is an objective thatsimply cannot be attained. [66] In her brief, Anna makes the following argument for indefinite support: 122.

The Court of Appeal in Russell v Russell (1999), (SK CA), 180 Sask R 196 (CA), at paragraph 129 states,“Where marriages create economic dependence, time limited support should not be awarded...” 123. In Messer v. Messer (1997), (SK CA), 141 Sask. R. 163, the Saskatchewan Court of Appeal held it is notappropriate to make an order for time limited support, in a situation where the husband earns substantially more than the wife, and whereit has been a long-term marriage. 124. In Fehr v.

Fehr, 2005 SKQB 222 the Court stated: [52] I have concluded that the petitioner is entitled to spousal support based upon both the compensatory and non-compensatoryfoundations for support. She has been economically disadvantaged by the roles the parties assumed during the marriage. She hasdemonstrated a need for support and the respondent has the capacity to pay. The spousal support order should provide a fair andequitable distribution of resources to ameliorate to the extent possible the economic consequences of marriage breakdown.

As stated byL’Heureux-Dube J. in Moge at p. 870: Although the doctrine of spousal support which focuses on equitable sharing does not guarantee to either party the standard of livingenjoyed during the marriage, this standard is far from irrelevant to support entitlement (See: Mullin v. Mullin (1991), (PE SCAD), 37 R.F.L. (3d) 142 (P.E.I. sec. App. Div.), and Linton v. Linton, (1990), I O.R. (3d) 1 (Ont. C.A.)).

Furthermore, greatdisparities in the standard of living that would be experienced by spouses in the absence of support are often a revealing indication of theeconomic disadvantages inherent in the role assumed by one party. As marriage should be regarded as a joint endeavour, the longer therelationship endures, the closer the economic union, the greater will be the presumptive claim to equal standards of living upon itsdissolution (see: Rogerson, “Judicial

Interpretation of the Spousal and Child Support Provisions of the Divorce Act, 1985 (Part I)”

(1990-91), 7 C.F.L.Q. 155 at pp. 174-75. [53] Presently the respondent is paying interim spousal support of $1,500 per month. It is this amount that the petitioner is requestingbe continued. According to ChildView, Version 2005.1.0, by Evan K. Chan & Barry R. Gardiner, and premised on the petitioner earning$10,300 annually, this would provide the petitioner with a net monthly cash projection of $1,911 and the respondent with $2,654. Shewill have 41.87 percent of the total cash resources and he will have 58.13 percent.

The net monthly cost to the respondent will be $975. [54] I have concluded that this is an appropriate amount of support. It will provide an equitable sharing of resources and will alloweach of the parties to maintain a reasonable standard of living. Although it does not achieve precisely equal standards of living, it doesrecognize that the means of the petitioner are indirectly enhanced by her current living arrangement, whereas the respondent does nothave that benefit.

It also recognizes that the petitioner may, in the future, chose to increase the amount of time that she works. [55] As to duration, it must be borne in mind that there is not only a noncompensatory aspect to this award, but also a compensatoryaspect arising from the pattern of dependency created during cohabitation and the resultant economic disadvantage following themarriage breakdown. The Court of Appeal for this province held in Russell v. Russell (1999), (SK CA), 180 Sask.

R.196 (C.A.) at para. 129 that “[w]here marriages create economic dependence, time limited support should not be awarded.” This, coupledwith the present limitations on the petitioner’s ability to attain economic self-sufficiency, lead to the conclusion that a fixed term supportorder is inappropriate. [56] Accordingly, there will be no date set for the termination of this order. Either party may, however, request a review of both thequantum and duration of this order on or after January l, 2009. At that time the petitioner will have been receiving spousal support for aperiod of five years.

This does not preclude either party from earlier applying to vary should there be a change in circumstances ascontemplated by s. 17 of the Act. 125. In Bodnerek [sic] v Bodnarek, 2017 SKQB 180, Justice Megaw also recognized that indefinite spousal support can be awardedwhen a party left secure and stable employment for the sake of the family and then could not find employment using their particular skillset even though the spousal relationship only lasted 11 years. In this case, [Anna] did exactly that and the relationship is of similarduration. 126.

The Court of Appeal in Schimelfenig v Schimelfenig, 2014, SKCA 77 overturned a trial judge’s finding that a recipient of spousalsupport was not entitled to compensatory support. The Court of Appeal performed a detailed analysis of the foundations forcompensatory support in paragraphs 29 through 38 of that decision and lengthened the duration of support for the recipient. 127.

As to duration of spousal support, [Anna] has economic dependence on [Larry] as a result of the marriage, and her adopting ahomemaker role, allowing [Larry] the ability to begin a family while living where he needed to in order to devote his time, energy andefforts towards his education and practice, As soon as [Anna] resigned from her professional engineering position and relocated toRegina, Saskatchewan, she became entirely financially dependent upon [Larry]. 128. There should not be any fixed time limit on support.

Support can be subject to variation upon a material change of circumstances ofeither party as provided for in

section 17 of the Divorce Act, 1985. Establishing any end date for support at this time would involve totalspeculation as to what [Anna’s] circumstances may be at that end date. 129. Considering the evidence in this case, [Anna’s] entitlement is established. The support must be indefinite in nature and set at thehigh end of the SSAG range due to her strong compensatory claim.

She sacrificed and gave up a lucrative career in the United Kingdomto relocate for [Larry’s] career, all the while raising the parties’ children on her own and then as a primary caregiver while [Larry] built asuccessful career. [67] Larry replies in his brief: 138. Applying the above cases to this situation, there is a clear distinction in that, even after the lengthy marriages in those cases, thecourts still imposed a clear, positive obligation on the recipient to take appropriate steps towards achieving her own self-sufficiency.

Incomparison, [Anna’s] obligation to become self-sufficient would be significantly greater, given that this was only a nine year marriage.In this situation, [Anna] is a young, healthy and extremely well-educated professional who has deliberately chosen to take absolutely nosteps to improve her situation. While she made many efforts to claim that her failing business will lead to great results, the nature of hertestimony was more akin to Cey v. Teske [2006 SKQB 315, 286 Sask R 221] where the recipient sat back and asserted that the payormust support her, or Schoff v.

Schoff [2020 SKQB 290] where the recipient made a decision not to work. As with those cases [Anna] isfree to choose not to work, but she cannot at the same time expect [Larry] to provide indefinite support, particularly after a relativelyshort marriage. As was the case in CAR v. DRR [2022 SKKB 218], [Anna] had an obligation to create a work plan and to follow itthrough and she has utterly failed to do any such thing in the four years since the parties separated. 139.

Based on [Anna’s] decision to remain out of the workforce and her refusal to take steps to retrain and work towardsself-sufficiency, [Larry] submits that [Anna’s] spousal support should be time-limited as an incentive to her. He proposes that the spousalsupport would continue at $2987 per month commencing July 1, 2023 and continuing until after the payment on December 1, ,2027,which is seven years of spousal support payments. [68] With all of the above in mind, I am required to determine spousal support quantum and the duration of payment.

Quantum [69] Counsel for the respondent argues that for the purpose of dealing with spousal support, I should employ thenotional ceiling of $350,000 for Larry’s Guidelines income. They make a case for that starting at paragraph 127 of the respondent’sbrief: 127. In the Revised User’s Guide to the Spousal Support Advisory Guidelines at

chapter 11, Professors Rogerson and Thompson

discuss the issue of a “ceiling”, where the payor’s income is above $250,000. At pages 56-57, the professors state: There are some clear principles enunciated in the case law, even if the actual outcomes are discretionary and sometimes conflicting. In J.E.H. v. P.L.H. , 2014 BCCA 310 , leave to appeal to SCC refused [2014] S.C.C.A.

No. 412, there is a careful review of the law for cases above the ceiling, where some of these principles are stated. • The formulas for amount are no longer presumptive once the payor’s income exceeds the “ceiling”. • The ceiling is not an absolute or hard “cap”, as spousal support can and usually does increase for payor incomes above $350,000. • The formulas are not to be applied automatically above the ceiling, although the formulas may provide an appropriate method of determining spousal support in an individual case, depending on the facts. • Above the ceiling, spousal support cases require an individualized, fact-specific analysis.

It is not an error, however, to fix an amount in the SSAG range, as was done in J.E.H. v. P.L.H. , above. Evidence and argument are required. • Where the payor’s income is not too far above the ceiling, the formula ranges will often be used to determine the amount of spousal support, with outcomes falling in the low-to-mid range for amount. How far is “not too far above” is still not clear.

Somewhere between $500,000 and $700,000, it seems. • Once the payor’s income is “far” above the ceiling, then the amount of support ordered will usually be below the low end of the SSAG range, but SSAG ranges are still calculated and sometimes the outcome will fall within the SSAG range. In light of these principles, it is critical that counsel do SSAG calculations even in high income cases.

It is wise to calculate the ranges for alternative income levels: for the $360,000 ceiling (as a minimum) and for the full income (as a maximum), as well as for a range of intermediate incomes (to assist the court in triangulating an outcome). For a good example of such alternative calculations, see Saunders v. Saunders , 2014 ONSC 2459 . A number of the reported high income decisions involve interim or temporary support awards. Interim outcomes are more likely to fall within the formula range, as the goal in the interim period is to maintain the financial status quo: Cork v. Cork , 2013 ONSC 2788 .

In some of these cases, the estimate of the payor’s income will be low, pushing the amount higher in the range to adjust: Saunders v Saunders , above; Loesch v. Walji , 2008 BCCA 214 . [ 70 ] Respectfully, I reject the argument of the respondent on this point. Firstly, $350,000 is not as high a ceiling as it once was. Secondly, this is a situation where there is considerable money available to the family unit, including the respondent and his new partner and their two children. [ 71 ] Artificially lowering the respondent’s income for the SSAG calculation is not appropriate.

I understand counsel for the respondent are making an argument that when considering all that is being paid for child support, a robotic application of SSAG can lead to a manifest unfairness. In my view, that may be addressed by reviewing the SSAG calculation and then determining where in the continuum or beyond the figure for spousal support should be set. [ 72 ] Also, in using SSAG , it is necessary to set Anna’s income. Again, there is a divergence between counsel. The petitioner argues that for the purposes of the SSAG calculation, I should ascribe $90,000 to Anna.

I assume that is because that is roughly what she receives from Larry. Respectfully, I regard it as anomalous to employ the amount she receives as spousal support for the purposes of using SSAG to calculate what she should receive for spousal support. [ 73 ] Counsel for the respondent takes the position that she could be working as an engineer or something near that and that she should be imputed with an income of $120,000. Respectfully, that is unreasonable and bears no relationship to reality. The petitioner has been attempting to find work.

She has simply been unsuccessful. [ 74 ] I acknowledge that Anna is 43 years of age, well educated and quite capable of working at something. However, she has been unsuccessful in her efforts to find employment with a professional engineer. In addition, she has been primarily caring for both children.

Under those circumstances, I would only impute a modest $40,000 per annum for the SSAG calculations. [ 75 ] Therefore, using Larry’s income of $722,093 and Anna’s as $40,000 with the notation that the years of cohabitation are nine, SSAG suggests a range of monthly spousal support of $14,398 to $17,639. [ 76 ] SSAG also suggests that spousal support should be in effect for a minimum duration of 4.5 years and a maximum of 9 years.

It is worth noting that Larry has already been paying spousal support for roughly five years. [ 77 ] In setting spousal support, it is appropriate for the court to bear in mind that Larry has willingly agreed to pay full Guidelines support for his two children. This sum ($9,017 per month) is not inconsiderable and is non-tax deductible. [ 78 ] Counsel for Larry invites me to rise above the forest and view the big picture to take into account what Anna will receive in child support and the capital that she has acquired in the course of the marriage settlement. There is no suggestion that Anna faces dire need.

However, she did enjoy a high-end lifestyle while living with Larry and is entitled to carry on in a similar fashion. [ 79 ] Taking into account the significant monthly child support obligation and the property settlement received by Anna, in my view, an award slightly below the SSAG range is appropriate and yet will still result in fairness for both parties. [ 80 ] There is no perfect number. There is simply the need to determine a number based on the evidence and the considerations in play between the parties.

On balance, I conclude that a monthly spousal support payment in the amount of $11,000.00 is appropriate. That payment is to commence June 1, 2023, and monthly thereafter until a change arises by agreement between the parties

or an order of the court. [ 81 ] Since Brown J.’s decision of December 2022, Larry has been paying $2,500.00 a month over and above the initial court order, and it was left to me to determine how it should be characterized. [ 82 ] Given the above, the $2,500.00 should be characterized as spousal support. Therefore, it will be income in the hands of Anna and tax deductible by Larry. If there is any dispute as to the recharacterization of the $2,500.00 per month or if an adjustment is necessary to be made, I will remain seized of it.

If there is such a dispute, the parties should contact the Local Registrar to set a conference call to deal with the issues. Duration of Spousal Support [ 83 ] This is the most problematic aspect of their case. Anna did give everything for her family, including her prosperous career.

The circumstances are such that it has proved very difficult for her to obtain a P.Eng. accreditation in Alberta or Saskatchewan. [ 84 ] While Anna has attempted to generate income through Prester Foods Inc., the reality is, employing a clear-eyed view of its history, the enterprise has more of the badges of a hobby rather than a business. [ 85 ] I accept that Anna faces something of an uphill climb. She has given up much for her family and, specifically, for Larry. She says she feels betrayed.

That is a strong sentiment, but it is not without cause. [ 86 ] Notwithstanding the above, it would clearly be unfair, unreasonable and, more to the point, legally incorrect to burden Larry with an indefinite spousal award as a result of nine years of cohabitation/marriage. [ 87 ] I respectfully remind Anna that she has an obligation to seek self-sufficiency. Decision [ 88 ] Larry has already been paying reasonable spousal support for a period of roughly five years.

To order spousal support for a further four years would fit the maximum nine years suggested under SSAG . [ 89 ] Anna’s sacrifice for Larry’s career and the benefit of the children should not be underappreciated. In my view, the spousal support award should be in excess of the nine years suggested in SSAG . [ 90 ] Therefore, I conclude that spousal support should be paid for a further seven years, calculated from June 1, 2023. Hopefully, within the next seven years, Anna can take steps to resume her engineering career or discover a new direction that is both fulfilling and profitable.

Costs [ 91 ] Counsel has advised that there has been an exchange of offers to settle. Therefore, I will make no order as to costs. If after receipt of my judgment either party is of the view that a costs application is appropriate, they should contact the Local Registrar and arrangements will be made for the purposes of argument. J. R.S. SMITH