Docket: CACV2096 P.M. Appellant (Petitioner) - v. -, 2012 SKCA 55

THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2012 SKCA 55 Date: 20120517 Between: Docket: CACV2096 P.M. Appellant (Petitioner) - and - S.M. Respondent (Respondent) Coram: Richards, Ottenbreit and Caldwell JJ.A. Counsel: Fred C. Zinkhan for the Appellant James J. Vogel and Joanne C. Moser for the Respondent Appeal:

From: 2011 SKQB 126 Heard: March 16, 2012 Disposition: Appeal allowed in part Written Reasons: May 17, 2012 By: The Honourable Mr. Justice Richards In Concurrence: The Honourable Mr. Justice Ottenbreit The Honourable Mr. Justice Caldwell Richards J.A. I. Introduction [ 1 ] P. and S.M. were married for 29 years prior to their separation. Both enjoy successful careers. They raised three children. [ 2 ] Mr. M. petitioned for divorce. A trial was conducted to resolve issues relating to the division of family property, spousal support and the funding of some of the children’s post-secondary education.

The trial judge’s decision generally favoured Ms. M.’s positions on these issues. [ 3 ] Mr. M. now appeals from the trial decision. He submits the trial judge made errors in relation to (

a) both retroactive and ongoing spousal support, (

b) the valuation of certain business and pension assets, and (

c) support for the children’s post-secondary education. [ 4 ] I respectfully conclude, for the reasons set out below, that the trial judge should not have awarded Ms. M. retroactive spousal support and that changes must be made to the amount and duration of the ongoing support awarded to her. The trial judge also overlooked a point in calculating Ms. M.’s share of education costs. However, in all other respects, her decision should be sustained. II. Some Basic Facts [ 5 ] The M. (whom, for the sake of clarity, I will refer to as “P.” and “S.” in the balance of these reasons) met in university.

They graduated in 1978. S. began working as a teacher, her chosen career, and P. took up retail sales. In 1982, P. became a commercial real estate broker. He has enjoyed success in that field and his income is now many multiples of S.’s income. At the time of the trial, P. was 56 and S. was 54. Both are in good health. [ 6 ] As noted, P. and S. have three children: L. (born in 1984), E. (born in 1987) and A. (born in 1989). S. took maternity leaves from teaching after each child was born. She started working part-time after L.’s birth and did not return to full-time employment until 1997.

This caused her to lose some contributory service in relation to her pension. [ 7 ] P. was involved with the children as they grew up. He did not work nights or weekends. He attended the children’s activities. Both he and S. helped with homework. S. indicates that she would never say P. was anything other than a good father. [ 8 ] P. and S. lived in R.. In 2005, they began constructing a home in R. Beach. Their plan was to use it as a retirement residence. The R.

Beach home was valued, on agreement, at $950,000. [ 9 ] During the course of their marriage, P. kept financial matters to himself and he and S. did not discuss P.’s earnings. They agreed that P. was responsible for the financial management of the household.

[ 10 ] P. and S. separated in the fall of 2007. P. lived at R. Beach and S. lived at their home in the city. In June of 2008, S. moved to R. Beach and P. returned to their house in R.. That latter property was ultimately sold for $350,000. P. has since purchased a cottage at R. Beach and a home in R.. S. continues to live in the R. Beach house. [ 11 ] P. and S. agreed that neither of them had brought assets into the marriage. They also agreed that the family property should be divided equally.

However, they disagreed about the valuation of S.’s pension and P.’s business assets, about the extent of S.’s entitlement to spousal support and about their respective obligations in relation to some of the costs of their children’s post-secondary education. III. The Trial Decision [ 12 ] The key features of the trial decision relevant to this appeal were as follows: (

a) S. was awarded retroactive spousal support of $7,000 per month from September of 2007 to January of 2009, payable in a lump sum of $94,925. (

b) S.’s pension was valued as of the date of the application for divorce ($458,010) rather than as of the date of the trial ($698,868). (

c) P.’s interest in Koyl Commercial Real Estate (“Koyl”) was valued at $825,000. (

d) S. was awarded ongoing spousal support of $8,000 per month until December 31, 2019 and $3,000 per month thereafter. (

e) S. was held to be responsible for her proportionate share of $54,852 spent by P. on tuition for L. and E.. IV. Analysis [ 13 ] P. argues that the trial judge made a number of errors in her decision. I will address each of his submissions in turn. A. Retroactive Spousal Support [ 14 ] P.’s first argument is that the trial judge erred in awarding S. retroactive spousal support. He makes three points in this regard: (

a) the question of retroactive support had been considered and rejected in the context of S.’s application for interim support and was, therefore, res judicata , (

b) the trial judge failed to make a tax adjustment to the amount of the lump sum retroactive award, and (

c) the trial judge did not apply the proper principles when determining whether retroactive support should be ordered. [ 15 ] I will deal first with the submission that the issue of retroactive support had been resolved against S. and was res judicata . This argument is rooted in a fiat of Wilson J. dealing with an application by S. for interim support. It was issued on July 6, 2009. In the fiat, Wilson J. noted, at para. 33, that S. was seeking support both on an ongoing basis and retroactively.

She resolved the issue of retroactive support by writing as follows: [33] The wife seeks support on an ongoing basis as well as retroactively. In light of the fact that the husband did not pay any monthly support since January, 2009, it is appropriate that the spousal support payments commence February 1, 2009.

I order that the husband pay to the wife the sum of $7,000 per month commencing February 1, 2009, and continuing on the first day of each and every month thereafter until further order, or agreement of the parties. [ 16 ] In my view, this decision cannot be read as operating to deny S. the right to seek retroactive support for the time period before February of 2009. Wilson J.’s order was made with a view to providing S. with interim relief. Thus, by its very nature, it was not intended to stand as a final disposition of questions relating to P.’s spousal support obligations.

It does not engage the doctrine of res judicata . [ 17 ] Similarly, I am not persuaded that the trial judge made a reviewable error by deciding not to adjust the size of P.’s lump sum payment for retroactive support so as to take account of income tax considerations.

Those considerations are that, because P. was ordered to address retroactive support by way of a lump sum payment, as opposed to periodic payments over time, the payment will not be tax deductible in his hands or be taxable in S.’s. [ 18 ] The central problem with this aspect of P.’s argument is that, as he and S. both agree, the trial judge was under no obligation to make a tax adjustment. In light of the applicable standard of review, I am not persuaded that the trial judge’s approach is open to being modified by this Court.

[19] I turn, therefore, to the third of P.’s arguments about retroactive spousal support.

His point here is that the trial judge did notapproach the issue using the proper principles and, on a related note, simply failed to appreciate or give proper effect to the relevantfacts. [20] In explaining her decision with respect to retroactive spousal support, the trial judge summarized some of the relevant evidence andthe arguments and then ordered support at the rate of $7,000 per month for the 17 months between the date of separation and the datewhen Wilson J. had ordered that retroactive payments should begin, i.e. she ordered retroactive support for the period running fromSeptember of 2007 to January of 2009.

The trial judge wrote as follows: [111] I accept that the $3,000.00 paid from December, 2008 to January, 2009 is relative to spousal support, as well as the $17,471.00(less $210.00 paid for P.'s Yacht Club membership) paid towards the upkeep of the R. Beach property and the $3,604.00 mistakenlytaken by S. from P.'s line of credit, for a total of $24,075.00. The remainder of the monies were paid pursuant to an interim division offamily property. Spousal support in the amount of $7,000.00 for the 17 months between September, 2007 and January, 2009 less$24,075.00 is $94,925.00.

I agree with S. that she was entitled to spousal support from the date of separation for the reasons previouslygiven. Retroactive spousal support is ordered in the amount of $94,925.00. [21] I agree with P. that, in proceeding as she did, the trial judge did not apply the proper principles. She explained her conclusion onlyby way of referring to “the reasons previously given.” I take this to be a reference to her reasons for ordering spousal support on anongoing basis. The problem with this line of thinking is that retroactive spousal support is not awarded on the same footing as ongoingsupport.

Thus, as a result of this oversight, it is necessary to identify the applicable principles and then take a fresh look at S.’sentitlements. [22] The governing authority on this point is Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269. In that case, Cromwell J. explainedthat, where (as here) the payor spouse complains that support could have been pursued earlier, two foundational interests are in play. The first concerns the need to give the payor spouse some certainty with respect to his or her obligations. The second concerns providingincentives for the payee spouse to advance his or her claims promptly.

Referring to MacKinnon v. MacKinnon (2005), (ON CA), 75 O.R. (3d) 175 (C.A.) at para. 24, Cromwell J. also noted that the date of the initiation of proceedings for spousalsupport is the “usual commencement date” for such support to begin, absent a reason not to make the order effective as of that date. [23] Cromwell J. explained that the factors relevant to an award of retroactive spousal support are (

a) the needs of the recipient, (

b) theconduct of the payor, (

c) the reason for the delay in seeking support, and (

d) any hardship found by the payor spouse if an order shouldbe made. He said this: [207] While D.B.S. was concerned with child as opposed to spousal support, I agree with the Court of Appeal that similarconsiderations to those set out in the context of child support are also relevant to deciding the suitability of a "retroactive" award ofspousal support. Specifically, these factors are the needs of the recipient, the conduct of the payor, the reason for the delay in seekingsupport and any hardship the retroactive award may occasion on the payor spouse.

However, in spousal support cases, these factors mustbe considered and weighed in light of the different legal principles and objectives that underpin spousal as compared with child support. Iwill mention some of those differences briefly, although certainly not exhaustively. [208] …[T]here is no presumptive entitlement to spousal support and, unlike child support, the spouse is in general not under any legalobligation to look out for the separated spouse's legal interests. Thus, concerns about notice, delay and misconduct generally carry moreweight in relation to claims for spousal support: see, e.g., M. L.

Gordon, "Blame Over: Retroactive Child and Spousal Support in thePost-Guideline Era" (2004-2005), 23 C.F.L.Q. 243, at pp. 281 and 291-92. [emphasis added] [24] With that background, I turn to the circumstances of this case. The first factor to be taken into account is the “needs of therecipient.” This consideration involves S.’s needs both at the time the support allegedly should have been paid and at present. This wasexplained by Cromwell J. in Kerr v. Baranow in these terms: [212] …"A [spouse] who underwent hardship in the past may be compensated for this unfortunate circumstance through a retroactiveaward.

On the other hand, the argument for retroactive [spousal] support will be less convincing where the [spouse] already enjoyed allthe advantages (s)he would have received [from that support]". … [25] Here, the evidence was that P. and S. had a pre-separation lifestyle which was modest but very comfortable. They lived in a 1,500square foot bungalow, bought used cars, had a cottage, and took winter vacations which, given their combined incomes, were notextravagant. There is no evidence that S.’s lifestyle declined after the separation. She lived in their R. home and then, in the summer of2008, moved to the new R.

Beach home which P. had vacated in her favour. She continued to earn her teacher’s salary of some $70,000per year and also received various other sums: $58,000 in July of 2008, being one-half of P.’s bank account; $165,000 in August of

2009, being one-half of the proceeds from the sale of the family home; $3,604 from P.’s line of credit in February of 2009; $1,500 from P. in December of 2008 and again in January of 2009. As well, P. paid for all of the utilities and taxes on the R. Beach home through to September of 2009. As a result, it is difficult to see how S.’s needs were not met during the period from September of 2007 to January of 2009. Further, there is no suggestion that, at present, her needs are not being met. [ 26 ] Next, I turn to the “conduct of the payor” factor.

The conduct in issue here must be connected to P.’s support obligations including, as explained in Kerr v. Baranow at para. 212 , such things as the concealment of assets or the failure to make appropriate disclosure. No such considerations are at play here, at least in relation to the time period relevant to retroactive support. P. voluntarily divided his bank account with S., vacated the R. Beach home, paid the utility costs, upkeep and taxes for the R.

Beach home and responded positively to the only two requests S. made for money. [ 27 ] The third factor to be considered with respect to retroactive spousal support is “the reason for the delay in seeking support.” In dealing with this point, it is necessary to remember the relevant timeline: (

a) P. and S. separated in September of 2007, (

b) P. served a petition for divorce and property statement on May 24, 2008, (

c) S. did not file any materials until on or about March 3, 2009 at which time she brought an application for interim spousal support and filed her own property statement. Her notice of motion did not seek retroactive support but, as noted above, on July 6, 2009, Wilson J. granted such support retroactive to February 1 of that year. As a result, it is clear that the idea of retroactive spousal support was a live one as of that date. S. ’s Answer and Counter-Petition, dated September 21, 2009, made no express reference to retroactive spousal support.

Significantly, there was apparently no mention of retroactive spousal support until the last day of the trial when S.’s counsel raised it in his closing submissions. [ 28 ] It can be seen, therefore, that S. waited at least 18 months after she and P. had separated before applying for support. She explains this by saying that, notwithstanding the separation, she had hoped to reconcile with P.. She also says that, for at least part of that period, she and P. were involved in the Collaborative Law process and that, as a consequence, it would not have been appropriate to commence proceedings seeking support.

However, the record concerning all of this is extremely thin and contains no reference to any relevant dates. [ 29 ] The fourth and final factor to be considered in relation to retroactive spousal support is the question of whether the award will occasion any “hardship” for P., the payor spouse. The root issue here is whether, by fashioning an award with respect to what the payor spouse should have paid in the past, as opposed to what he or she can presently afford, that spouse will suffer a disruption in his or her financial situation.

Given the level of P.’s income and the size of his asset base relative to the amount of money ($94,925) involved in the order for retroactive support, this is not a meaningful consideration in this case. [ 30 ] Taking all of the four relevant factors into account, my view is that an award of retroactive spousal support is not warranted on the facts of this case. S. suffered no hardship during the period running from September of 2007 to February of 2009 and she advanced her claim for support for the time prior to February of 2009 only during argument in the closing minutes of the trial.

In combination, these two considerations tip the balance against her on this issue. As Cromwell J. observed in Kerr v. Baranow , at para. 212 , “the argument for retroactive [spousal] support will be less convincing where the [spouse] already enjoyed all the advantages (s)he would have received [from that support].” B. The Tax Implications of Selling the Koyl Shares [ 31 ] P.’s next argument is that the trial judge erred by failing to take income tax considerations into account when she valued his interest in Koyl. [ 32 ] The facts giving rise to this issue are straightforward.

P. initially purchased an interest in Koyl in 1986. He bought a further interest in 1996 and thereby brought his stake in the company up to 23 percent. [ 33 ] In his evidence in chief, P. explained that Gavin Koyl had retired in 2008 and that, as part of the work done on his withdrawal from the business, Koyl had been valued with the assistance of Meyers Norris Penny.

P. testified that his interest had been determined to be worth $592,474. [ 34 ] However, on cross examination, P. revealed for the first time that, in January of 2010, he had entered into an agreement with Garth Frederickson, another Koyl shareholder, whereby he had borrowed $825,000 from Mr. Frederickson at an interest rate of six percent. The loan had been secured by his Koyl shares and it was repayable in three years. By virtue of a voting trust arrangement in favour of Mr. Frederickson, P. testified that he will not be involved in the operations of Koyl during this time period.

Significantly, P.’s shares are to transfer to Mr. Frederickson in January of 2013 and he will receive no dividends in the interim.

[ 35 ] All of this apparently came as a surprise to P.’s own expert, Wayne Paproski of Meyers Norris Penny. Mr. Paproski had prepared a report valuing Koyl at $2,349,127 and P.’s pro-rata share of the company at $554,872. At trial, Mr. Paproski added another $75,000 to that total to compensate for an error in his original calculation. In cross examination, he acknowledged that, if he had known of the sale of P.’s shares to Mr. Frederickson, that fact would definitely have been considered in his valuation.

He testified that a third party sale is the best evidence of value. [ 36 ] The trial judge saw the transaction between P. and Mr. Frederickson as a sale of P.’s interest in Koyl. (This characterization is not challenged.) As a result, she valued P.’s stake in the company at $825,000 less the interest he will have to pay over the life of the three- year loan.

She did not make any adjustments for income tax and explained her reasoning on this point as follows: [43] Both experts agree that the $825,000.00 sale price is a strong indicator of value for Koyl and had they known of the $825,000.00 sale at the time they were preparing their valuation of Koyl Commercial, it would have greatly influenced their valuation of the company.

A large reason for this matter proceeding to trial was the difference in opinion between the experts regarding the valuation of Koyl Commercial Real Estate. [44] … P. has not provided any explanation why he essentially hid this transaction from S. and her counsel. As a consequence, certain matters could not be properly canvassed at this trial, the most important being the true disposition costs of Koyl in 2014. In my view, P. has to bear the consequences of his actions and I am not prepared to speculate as to what the disposition costs might be.

It is not sufficient to say that he would be subject to a certain tax rate or that there would be a certain adjusted cost base. There are many other potential considerations, such as capital losses that he could apply the disposition against, that cannot now be properly examined. [45] I am prepared to accept $825,000.00 as the value of Koyl Commercial Real Estate less 6% interest over three years which I accept will be $150,000.00 putting the value of Koyl for the purposes of this litigation at $675,000.00.

It is not appropriate to reduce the value of the company by the foregone management fees as these fees would be foregone in a sale in any event. [ 37 ] I am not persuaded by P.’s argument that the trial judge erred when she declined to adjust the value of his interest in Koyl for income tax. The judge correctly pointed out that, because the fact of the sale of the Koyl shares came out only during the course of P.’s cross examination, no expert evidence was available in relation to key aspects of his income tax liability arising from the sale.

The most important consideration in all of this was the lack of an adequate evidentiary record concerning the adjusted cost base of his shares. Thus, for example, while Brian Turnquist, an accountant, did offer some evidence about P.’s possible tax liability, he specifically said that he was offering his comments on the assumption the shares had a zero cost base. Mr.

Turnquist further qualified his evidence by saying this: And on that assumption, if there’s no capital losses, if you’re looking at, you know, a maximum amount that would be taxable would be half of $825,000, which without a calculator would be $412,500. Barring any other income tax planning or the like because again I’m not privy with Mr. M.’s taxation situation either. Evidence hasn’t been put forth to me what that would be or the like, so I’m giving you a hypothetical based on that. [ 38 ] The bottom line in all of this is quite clear.

If P. wanted to argue that the value of his Koyl shares should be reduced because of income tax considerations, he should have led the evidence necessary to make such an argument possible. He did not do this and, as a result, I see no error in the approach taken by the trial judge. C. The Valuation of S. ’s Pension [ 39 ] P. also argues that the trial judge erred in valuing S.’s pension as of the date proceedings were commenced rather than as of the date of the trial. [ 40 ] S.’s pension is a defined benefit plan.

As explained at trial by Douglas Volk of the Saskatchewan Teachers’ Superannuation Commission, her annual pension entitlement will be calculated on the basis of the following formula: 2 percent x contributory service (to a maximum of 35 years) x average salary of five highest earning years. The commuted value of her pension was $458,010, as of the date the divorce application was issued (March of 2008). The commuted value as of the date of the trial (October of 2010) was $698,868. Mr.

Volk explained that these values represented the cost of purchasing annuities that would generate the future income stream represented by S.’s pension entitlements. [ 41 ] P. contends that the bulk of the increase in the value of S.’s pension between the date of the petition and the date of the trial should have been seen as having been caused by “market forces,” rather than by any contribution made by S.. As a result, he says the valuation should have been made as of the date of trial.

He bases this argument on the fact that, in the 2008-2010 time period, S. contributed an estimated $14,520.18 to her pension, an amount said to have been matched by her employer. These two amounts ($29,040.36 in total) represent only about 12 percent of the increase in the value of the pension between the date of petition and the date of trial. The other 88 percent, according to P., was due to “market forces.”

[42] I am not persuaded by this argument. First and most fundamentally, S. participates in a defined benefit plan. The amount of hercontributions bears no necessary relationship to her entitlements under the plan. As noted, she will receive, annually, a pension of 2percent x contributory service x average salary of her five highest earning years. She is not in a situation where, as under a definedcontribution plan, her benefits will be tied to the contributions made by her and her employer.

In other words, the amount she paid intoher plan between 2008 and 2010 is effectively irrelevant to the value of her pension. [43] Second, of course, between 2008 and 2010 there were changes in the variables which drove the value of S.’s pension. Her salaryincreased during this period with the result that the average of her five highest earning years increased. Further, her total years ofcontributory service increased. Both of these developments would self-evidently elevate the commuted value of her pension byincreasing the level of her future income stream.

However, there was no evidence of any sort before the trial judge about the amount ofthe increase in the value of her pension which could be attributed to these two factors. [44] It seems to me that, in significant part, P.’s argument with respect to pension valuation reduces to the idea that interest rates fellbetween 2008 and 2010 and, therefore, different discount rates must have been used to determine the commuted value of S.’s pension inthe calculations made in those two years.

The idea, I suppose, is that the change in the discount rate is entirely fortuitous and, inconsequence, akin to a change in value occasioned by “market forces.” Unfortunately for P., there is not much that can be said about thisline of argument. Given the state of the record, it was not possible for the trial judge to come to grips with it and it is not possible for thisCourt to do so either.

As counsel acknowledged, there was simply no evidence on this point and, as a result, there is no factualfoundation on which any such argument (even assuming it has merit) can be constructed. [45] I conclude that the trial judge made no reviewable error in the valuation of S.’s pension. D. The Amount and Duration of Spousal Support [46] P.’s next set of arguments concerns the amount and duration of the spousal support he was ordered to provide S.. As will berecalled, the trial judge concluded that he should pay $8,000 per month to December 31, 2019 and then, thereafter, $3,000 per month onan ongoing basis.

P. raises a number of arguments about this aspect of the trial judge’s decision. Broadly speaking, he says (

a) the$8,000 per month amount is too high, (

b) the trial judge’s choice of December 31, 2019 as a date for reducing support obligations to$3,000 per month is arbitrary, and (

c) the trial judge erred in requiring him to support S. on a permanent or ongoing basis. [47] The factors which guide the making of support orders are set out in the Divorce Act.

Section 15.2(4) says a court contemplating anorder of this sort is to consider the conditions, means and needs and other circumstances of each spouse:

(4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration thecondition, 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. [48] The objectives of spousal support orders are explained in s. 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 aboveany obligation for the support of any child of the marriage; (

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

d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time. [49] The proper

interpretation and application of these provisions has been explored by the Supreme Court of Canada in a variety ofcases. See, for example: Moge v. Moge, (SCC), [1992] 3 S.C.R. 813 and Bracklow v. Bracklow, (SCC), [1999] 1 S.C.R. 420.

[ 50 ] Before turning to the analysis necessary to deal with P.’s arguments, it is perhaps useful to briefly revisit the reasoning of the trial judge on this issue. She began the relevant part of her reasons by considering P. and S.’s conditions, means and circumstances, the length of time they co-habitated and the functions each performed during the marriage.

The essence of her analysis is found at paras. 97- 101 of her reasons, under the heading “Decision on Spousal Support.” It is apparent that she was significantly concerned about the fact that, if P.’s income continues at its present level, he and S. will be in different post-divorce financial situations. She wrote as follows at para. 98 of her decision: [98] The family retirement plan involved both P. and S. dabbling, in other words retaining some of their employment income, after retirement at approximately the age of 60.

I accept that S. will retire as soon as she can, at full pension, and P. may start to slow down in his early 60’s. Whatever he does, the evidence suggests that it will be his choice rather than circumstances beyond his control, that dictate his income. S., on the other hand, is limited in her earnings. Consequently, the standards of living in each household will be quite different.

P.’s will continue as it was during the marriage whereas S. will enjoy far less affluence. [emphasis added] [ 51 ] The trial judge then went on to accept that S.’s career had not been significantly disrupted by child-rearing during the course of the marriage. However, she said this was only one of many considerations in determining spousal support payable after the dissolution of a long-term relationship. In this regard, she referred to L’Heureux-Dubé J.’s comment in Moge v.

Moge , supra , at p. 870, to the effect that “…the longer the relationship endures, the closer the economic union, the greater will be the presumptive claim to equal standards of living upon its dissolution.” [ 52 ] After canvassing these matters, the trial judge set out her bottom-line conclusion by explaining as follows: [100] Without spousal support, based on their incomes of $431,000.00 and $72,549.00, P. and S. would receive 83.12% and 16.88% respectively of the available cash resources.

With the current order of $7,000.00 monthly in spousal support, the division of cash resources is 67.19% and 32.8% respectively. If spousal support were set at $8,000.00 monthly, the division of available resources would be 65.03% and 34.97%. In my view, this is an equitable sharing of resources, given the length of the marriage, and the roles P. and S. assumed during the marriage. It will also allow both S. and P. to maintain the lifestyle they enjoyed during their long-term marriage. [101] P. will pay $8,000.00 spousal support until December 31, 2019.

Thereafter, spousal support will be set at $3,000.00 monthly. [emphasis added] [ 53 ] To put this result in context, I will begin by considering the evidence concerning the work and retirement plans of P. and S.. P. testified that, before their separation, he and S. had talked about “retiring to R. Beach and perhaps travelling a little bit.” He said they had thought this might happen “when [S.’s] pension maxed out” and that S. might work as a substitute teacher after her retirement.

P. also indicated he had discussed with S. the idea that he would work full-time until he was 60 and that he would then “dabble,” i.e. work something less than full-time. Later in his evidence, P. said that he would like the option of retiring at age 60: “That’s--that’s been my goal.” In reference to his work, he said, “[A]s long as I can do it, I’ll do it” and explained this by saying that he thought being a real estate broker is akin to being an NFL quarterback. One day he would wake up and not be able to do his job anymore.

P. also referred to some issues with depression in 2001 and implied these sorts of health concerns might stand between him and his work. [ 54 ] S. testified that, prior to separating, she and P. had talked about retirement at R. Beach and had said they would live there and travel and enjoy their family.

S. also indicated that she had thought she would be retiring at about age 55 but that, in light of the separation, she would be working at least “a couple more years for sure.” Later in her evidence, she reiterated that she had believed that she would retire “by the time I was 55 for sure.” She testified that P. had said he loved his work and “would continue working in some manner, in some way, like dabble…for a long time.

He had no real set plans for retirement.” [ 55 ] As indicated above, having considered this testimony, the trial judge concluded that P.’s concerns about health and declining energy levels were not “realistic.” She then went on to accept that S. would retire as soon as she could at full pension and, importantly, found that P. would likely start to slow down in his early 60’s. [ 56 ] However, as noted, the trial judge nonetheless ordered that P. pay S. $8,000 per month through to the end of 2019, a point in time when P. will be 65.

She did this notwithstanding her findings about P.’s plans for future work and retirement. All of this is complicated to some extent because the trial judge did not explain why she selected the end of 2019 as the date when P.’s obligations were to step down from $8,000 per month to $3,000 per month. P. suggests she used a point corresponding with his 65th birthday, an “arbitrary” choice in his view. S. speculates that the 2019 date was chosen because, in June of that year, she will have reached her maximum 35 years of contributory pension service. [ 57 ] S.’s explanation is not entirely satisfactory.

If the 2019 date was intended to coordinate with the time when she could maximize her pension entitlements, it overlooks the fact that, in her evidence, S. did not suggest she would work until her entitlements were maximized. Further, it overlooks the fact that she reaches that date in June of 2019, rather than in December. Taking all of this into

account, the best explanation for the 2019 date is the one offered by P.. It is consistent with the trial judge’s root point that P.’s incomeis high and that, if he slows down or chooses to earn less, it will be by his own choice. Accordingly, it seems to me that the 2019 datemust be seen as a proxy for a “normal” retirement date for P.. [58] This feeds into the aspect of the trial judge’s decision which requires P., beginning in January of 2020, to pay S. $3,000 per monthin spousal support on an ongoing basis. The trial judge offered no explanation as to how that level of support was selected.

Presumably,she must have concluded that, by the end of 2019, P.’s income will have led him to accumulate a capital base which, in addition tomeeting his own retirement needs, will also allow him to support S. at the rate of $3,000 per month.

However, even assuming this to bethe basis of the order, its logic very directly depends on P.’s situation with respect to retirement or “slowing down.” In other words, byrequiring P. to support S. on an ongoing basis, this aspect of the support order also pushes P. in the direction of having to maximize hisincome to age 65, or later. [59] In my respectful view, all of this highlights the central problem with the trial judge’s decision as it pertains to spousal support goingforward. It ties P.’s support obligations to what he can earn, not to what it is likely that he will earn.

This is a case where a payor spousehas reasonable plans for retirement and where those plans existed pre-separation. This is also a case where, significantly, the payeespouse has a $950,000 home, secure employment, a $72,000 per annum salary and an indexed pension. In these circumstances, asupport order should not effectively force P., the payor spouse, to maximize his income to age 65 and thereby oblige him to work pastthe date on which he had reasonably expected to retire.

If S. was unable to work or to support herself, or if it could be shown that P.’splans for retirement or “slowing down” reflected a bad faith attempt to avoid supporting S., the situation might be different. But there isno suggestion here of any such motivation. [60] P.’s concerns about the trial judge’s spousal support decision are compounded by his worry that he will never be able to vary theorder even if, in keeping with his plans, he decides to retire or work less and his income falls as a result.

This, of course, is because thevariation of a support order will be granted only if there is a “material change of circumstances.” In Willick v. Willick, (SCC), [1994] 3 S.C.R. 670, this concept was defined as follows, at p. 688: In deciding whether the conditions for variation exist, it is common ground that the change must be a material change ofcircumstances. This means a change, such that, if known at the time, would likely have resulted in different terms.

The corollary to thisis that if the matter which is relied on as constituting a change was known at the relevant time it cannot be relied on as the basis forvariation. … [61] Thus, given the wording of the trial judgment, particularly at para. 98, P. may be forgiven for being concerned that he is lockedinto the payment regime prescribed by the trial judge regardless of what happens to his actual income in light of a good-faith decision toretire or scale back at work.

In other words, the trial judge expressly contemplated this prospect but made the support ordernotwithstanding it and, as a consequence, it is not easy to see how a decision by P. to retire or work less would fit within the Willicksense of “material change of circumstance.” [62] I am, of course, aware of the governing standard of review in relation to spousal support orders. This Court is not entitled to simplyre-make the decision of the trial judge concerning such support.

Rather, as indicated by the Supreme Court of Canada in Hickey v.Hickey, (SCC), [1999] 2 S.C.R. 518 at para. 11, it may intervene only if the reasons of the trial judge disclose an errorin principle, a significant misapprehension of the evidence or unless the decision of the trial judge is clearly wrong. What, then, is to bemade of the situation at hand? [63] In my view, and in the circumstances of this case, the trial judge did make a reviewable error, an error of principle, by ordering P. topay spousal support on the basis of his income earning potential rather than on the basis of his likely actual earnings.

Accordingly, thisCourt is obliged to intervene. P. should be freed from the situation where he is locked into prescribed support obligations even if heretires or “scales back” in good faith. This goal can be best accomplished by an order which puts a time limit on P.’s support obligationsand allows for the issue to be re-visited when his retirement situation is clearer. In light of the evidence, the appropriate time to reassessthe situation is December 31, 2014, the date roughly corresponding with P.’s 60th birthday. [64] In Leskun v.

Leskun, 2006 SCC 25, [2006] 1 S.C.R. 920, the Supreme Court provided helpful guidance with respect to the use oforders of this kind. It cautioned against their liberal employment and indicated that, insofar as possible, courts should resolve thecontroversies between litigants by way of permanent orders.

But, the Court also recognized that review orders play a useful role becausethey entitle parties to return to court for reconsideration of support obligations without having to show a material change of circumstance.As a result, time-limited awards of support can be properly employed when the future involves genuine and material uncertainty. This, itseems to me, is the situation here. [65] What then is the appropriate level of support payable to S. during the period leading up to the end of 2014? P. accepts that she is

entitled to some support but says $8,000 per month is too much. He queries why S. would need $168,000 per year (her $72,000 salary plus $96,000 in spousal support) to maintain the lifestyle she enjoyed prior to their separation. P.’s position on this point is not without merit but, in the end, I am not persuaded that (given the applicable standard of review) the $8,000 per month figure amounts to a reviewable error in relation to the period running to the end of 2014.

The trial judge, in the exercise of her discretion, elected to emphasize the length of P. and S.’s relationship and to stress the notion, expressed in Moge v. Moge , that in longer term marriages there will be a more convincing claim to equal standards of living upon dissolution of the relationship. Especially with respect to the years immediately following the breakdown of P. and S.’s long-term relationship, this was an approach which was open to the trial judge. S. is in transition, not just in her relationship with P. but also in terms of completing landscape work on the R.

Beach house and so forth. [ 66 ] Accordingly, I conclude that P.’s obligation to pay $8,000 per month in spousal support should remain in place, but only until December 31, 2014. He will have then just turned 60 and his plans to retire or to scale back work in his “early 60’s” should have come into focus. At that time, the Court of Queen’s Bench, if requested to do so by S., will be in a position to take a fresh and more informed look at the amount (if any) of spousal support S. should be paid on a go-forward basis.

The judge who makes any such assessment will obviously consider all of the relevant factors and will not be constrained by the assessment of the situation made by the trial judge in these proceedings. E. Contributions to the Children’s Tuition [ 67 ] P.’s final argument is that the trial judge erred in determining the size of S.’s obligations in relation to funding the children’s university tuition. [ 68 ] At trial, P. contended that S. should reimburse one-half of certain costs he had paid for the children’s education.

This consisted of $51,165 of tuition for L., $3,687 of tuition for E. and $43,836 lost on the re-sale of a condominium he bought for A. when she attended the University of Victoria. The trial judge accepted that P. and S. had agreed to support their children while they pursued their first degrees and that, as a result, S. was responsible for her pro rata share of the relevant tuition costs. She rejected P.’s argument that S. pay for losses on the condominium because S. was not a party to the decision to buy it.

In calculating S.’s proportionate share of the $54,852 of tuition fees, the trial judge considered her annual income less spousal support. She did so in purported reliance on

Schedule III of the Federal Child Support Guidelines . On this footing, she determined S.’s obligation to be $9,324.84. [ 69 ] P. argues that the trial judge made an error in her calculations. Specifically, he points out that

Schedule III of the Guidelines does not state that, for purposes of determining an amount under s. 7, spousal support is to be deducted from the payee spouse’s income. Rather, it says such payments are to be deducted from the payor spouse’s income. As a result, on P.’s calculation, the trial judge should have found S.’s proportionate share of the tuition expenses to be $17,004.12 rather than $9,324.84. [ 70 ] S. does not dispute the suggestion that the trial judge made an error and she takes no issue with P.’s calculations concerning her proper share of the tuition costs.

She says the trial judge lacked jurisdiction to make an order respecting tuition because P.’s pleadings did not put such expenditures in issue. She also says that her liability in relation to this point arises only from a good faith gesture on her part to support her children and that, given the overall size of the assets involved in these proceedings, the Court should not trouble itself with an error in the range of only $8,000. [ 71 ] I have some sympathy for S.’s position but conclude that ultimately P. must prevail on this point. Several considerations inform my assessment in this regard.

First, S. did not cross-appeal on the question of whether the trial judge had jurisdiction to deal with tuition fees. Second, she has not pointed to any way in which she was prejudiced by P.’s failure to expressly flag this question in his pleadings. Third, questions of jurisdiction aside, S. does not suggest that the decision concerning tuition costs was somehow wrong in principle.

Thus, given that the trial judge’s mistake was in the nature of a calculation error, it seems appropriate to do the arithmetic correctly and require S. to pay her proper share of the tuition fees. [ 72 ] In short, I see no basis in principle for denying P’s argument on this issue. V. Conclusion [ 73 ] P.’s appeal is allowed to the extent of (

a) setting aside the award of $94,925 to S. for retroactive spousal support, (

b) varying the award for ongoing spousal support so that it provides he is to pay support in the amount of $8,000 per month to December 31, 2014 with a proviso that, at that time, the issue of his ongoing support obligations (if any) may be reviewed at S.’s initiative, and (

c) increasing S.’s obligation in relation to the children’s tuition fees from $9,324.84 to $17,004.12. [ 74 ] P. and S. have each had mixed success with respect to the outcome of this appeal. As a result, there will be no order as to costs.

[ 74 ] P. and S. have each had mixed success with respect to the outcome of this appeal. As a result, there will be no order as to costs. DATED at the City of R., in the Province of Saskatchewan, this 17 th day of May, A.D. 2012. “Richards J.A.” _____________________ Richards J.A. I concur “Ottenbreit J.A.” ___________________ Ottenbreit J.A. I concur “Caldwell J.A.” _____________________ Caldwell J.A.