P.M. v S.M., 2019 SKCA 111

Court of Appeal for Saskatchewan Docket: CACV3183 Citation: P.M. v S.M. , 2019 SKCA 111 Date: 2019-10-31 Between: P.M. Appellant (Petitioner) And S.M. Respondent (Respondent) Before: Jackson, Ottenbreit and Schwann JJ.A. Disposition: Appeal allowed in part Written reasons by: The Honourable Madam Justice Jackson In concurrence: The Honourable Mr. Justice Ottenbreit The Honourable Madam Justice Schwann On Appeal From: 2018 SKQB 10 Appeal Heard: November 19, 2018 Counsel: Virgil Thomson for the Appellant James Vogel, Q.C., and Joanne Moser, Q.C., for the Respondent Jackson J.A. 1.

Introduction [ 1 ] This is an appeal from a decision ordering PM to pay spousal support in the monthly amount of $8,000 to SM, until October of 2019, and directing a review of that decision in June of 2019 (see P.M. v S.M. , 2018 SKQB 10 [ 2018 Chambers Decision ]). The significant issue raised by this appeal concerns when it is appropriate to use post-trial capital to fund spousal support. [ 2 ] For the reasons that follow, I would allow the appeal in part by setting aside the decision providing for further review. In all other respects, the appeal is dismissed.

The effect of my decision is to bring the spousal payments to an end as of October 1, 2019. 2. Judicial History [ 3 ] The parties have an extensive litigation history that, for the purposes of this appeal, begins with P.M. v. S.M. , 2011 SKQB 126 , 370 Sask R 196 [ Trial Decision ].

From that decision, it is sufficient to note that the trial judge ordered PM to pay $8,000 per month from March 1, 2011, until December 31, 2019, based on an annual earning capacity of $431,000, and thereafter to pay indefinite support in the amount of $3,000 per month. [ 4 ] On appeal from the Trial Decision , this Court did not disturb the trial judge’s conclusion that SM was entitled to spousal support or her order fixing support at $8,000 per month ( M. v M. , 2012 SKCA 55 , 393 Sask R 229 [ 2012 CA-Decision ]).

However, the Court did end spousal support payments effective December 31, 2014, with an option for SM to request further spousal support at that time. The Court based its decision on the uncertainty of PM’s retirement plans, which would be brought into focus in December of 2014 – shortly after PM would turn 60. SM would turn 60 in 2017. [ 5 ] PM stopped paying spousal support on December 31, 2014. SM then applied for continued spousal support on February 12, 2015. After several adjournments, the matter was heard by Smith J.

He issued his decision on September 21, 2015 ( P.M. v S.M. , 2015 SKQB 292 , 483 Sask R 86 [ September 2015 Decision ]. In

summary form, Smith J. determined the following: (

a) SM continued to be entitled to spousal support; (

b) applying a three-year average, PM’s income was $863,000, which would “yield a monthly range of spousal support between $24,000 and $32,000” (at para 29), if the Spousal Support Advisory Guidelines (Carol Rogerson & Rollie Thompson, Spousal Support Advisory Guidelines , ([Ottawa]: Department of Justice, 2008) [ SSAG ]) were to be applied; (

c) the SSAG “are not an appropriate tool in this case” (at para 30); (

d) based on PM’s own evidence, in 2014, his income was $478,302; (e) “the significant discrepancy between the incomes of the parties, and considering it in the context of a 29-year marriage, clearly leads to the conclusion that continued spousal support is warranted” (at para 32); (f) “fairness between the parties is served” by ordering PM to pay SM the same amount that the trial judge ordered, namely, $8,000 per month, from August 1, 2015, until further order of the court (at para 34); and

(

g) PM was ordered to pay $40,000 in arrears, representing $8,000 per month from March 1, 2015, to July 1, 2015, and $3000 in costs. [ 6 ] Going forward, and setting up the next stage of judicial oversight, the September 2015 Decision allowed either party to request a viva voce hearing in Chambers: [35] In the event either party is aggrieved with my analysis and concludes that a more precise understanding of [PM’s] income would have led to a better result then, in that circumstance, either party may apply to the registrar for a viva voce hearing before me on the twin issues of the petitioner’s precise income and thus an adjustment to the spousal support award herein. (Emphasis added) [ 7 ] PM applied for a viva voce hearing, where he adduced evidence that permitted Smith J. to conclude the following ( P.M. v S.M. (16 February 2016) Regina, Div 118 of 2008 (Sask QB) [ February 2016 Decision ]): (

a) PM’s income for 2015 was $232,320 ; (

b) PM was no longer a real estate broker and co-owner of a major enterprise, rather he was then “an employee, although he acts as managing director of the Regina office of a national corporation” and, as such, “[h]is compensation is based on real estate commissions he personally transacts, and in addition, he is eligible for a bonus on the volume of the income at the Regina branch” (at para 10). [ 8 ] Based on the 2015 evidence alone, Smith J. observed that a material change had occurred because income of $232,320 would not “ground monthly spousal support of $8,000” (at para 15).

On the other hand, Smith J. also noted “the petitioner’s income can fluctuate considerably from year to year” in which circumstance “it is appropriate for the Court to use averages” which would “underpin continuing spousal support of $8,000 per month” (at para 17). Unable to determine the matter going forward based on the 2015 information alone, Smith J. adjourned the matter for one year, specifically to Family Chambers on February 15, 2017. In doing so, he wrote, “I leave it to the Chambers judge on that date as to whether an adjustment of spousal support is warranted” (at para 19).

PM was ordered to pay $8,000 per month until a further order of the court, plus costs fixed at $2,000. [ 9 ] At this third hearing, which resulted in the decision under appeal, PM argued that spousal support should be reduced to $3,500 per month retroactive to March 1, 2015, and all obligations terminated as of January 2017. The Chambers judge on this occasion reached the same decision as Smith J., which is that SM continued to be entitled to spousal support. She found “compensatory and non- compensatory reasons” to support entitlement ( 2018 Chambers Decision , at para 49).

She relied on past determinations on this point made by the trial judge and Smith J., and her own assessment of s. 15.2(4) and s. 15.2(6) of the Divorce Act , RSC 1985, c 3 (2d Supp) ( 2018 Chambers Decision ): [13] The trial judge rejected [PM’s] argument against [SM’s] entitlement , as do I, based on this Court’s assessment in September 2015 and more specifically, pursuant to ss. 15.2(4) and (6) of the Divorce Act … . [14] These factors in s. 15.2(4) are to be considered in the context of the objectives identified in s. 15.2(6) .

No single objective is paramount. [15] In this Court’s September 2015 Decision, entitlement was recognized . At para. 32 of that decision, the following was observed: [32] In my view, the significant discrepancy between the incomes of the parties, and considering it in the context of a 29-year marriage, clearly leads to the conclusion that continued spousal support is warranted.

The petitioner’s assertion that the respondent has not proved entitlement does not withstand the scrutiny of a rational review. [16] Also contained in the September 2015 Decision was the observation that facts contained in the Trial Decision were germane.

I agree … . (Emphasis added) [ 10 ] She cited paragraphs 68, 69 and 89 of the Trial Judgment , wherein the trial judge recounted the evidence pointing to PM’s career coming first and how SM was happy with her life choices “until she realized that her decision to put caring for her children ahead of caring for her career left her with the lower paying job to support herself” ( Trial Judgment at para 89). [ 11 ] The Chambers judge then proceeded to consider closely the factors in s. 15.2(4) of the Divorce Act under the following headings: (

a) length of cohabitation and functions performed; and (

b) condition, means, needs and other circumstances. [ 12 ] With respect to length of cohabitation and functions performed, the Chambers judge reached the same conclusion as the trial judge as to the nature of PM’s and SM’s marriage: (

a) it was a long-term marriage; (

b) SM worked part-time so as to permit her to care for the parties’ three children; (

c) time and energy for SM’s career were reduced by responsibilities at home and she made sacrifices that had an effect on her earning ability;

(

d) PM’s career took priority; and (

e) the parties’ combined income resulted in a particularly comfortable lifestyle that involved property ownership, savings andvacation travel. [13] As to SM’s means and other circumstances, the Chambers judge noted that SM retired early, thus reducing her annual salaryfrom $80,700 to a pension of $51,000. She immediately imputed income of $80,700 to SM, to which SM agreed. [14] On this occasion, SM also challenged PM’s decision to retire. The Chambers judge, however, held that PM had dischargedthe onus upon him of demonstrating (

a) his decision to retire when he did was contemplated by the parties when they were still together;and (

b) he was not motivated by ill will in making that decision (at para 41). [15] In her review of the s. 15.2(6) factors, the Chambers judge made these findings: (

a) SM is not self-sufficient; (

b) SM has beendisadvantaged by the marriage and its breakdown and has suffered economic hardship; and (

c) she should not be required to encroachupon her capital. Her concluding paragraphs on this point are as follows: [47] The trial judge concluded that the division of family property did not address the hardship experienced by [SM] arising from thebreakdown of the marriage. This was apparent by the award of spousal support. That finding was not challenged during the appeal. Itcannot be revisited now. … [49] As the trial judge concluded, the Court of Appeal simply accepted and the first reviewing judge confirmed, [SM] is entitled tospousal support. I agree.

As noted, such entitlement arises for compensatory and non-compensatory reasons. (Emphasis added) [16] In the context of assessing PM’s means to pay, the Chambers judge found that the total amount of PM’s income in 2015 was$376,090, rather than the $232,320 that Smith J. had found.

She then noted that the evidence showed that PM’s income for 2016 showedhis income to be $211,257 but, if she were to apply a three-year average for 2014–2016, PM’s income would be $355,216 as of 2016. [17] With those findings, she held as follows: [59] This average income establishes [PM’s] ability to continue providing spousal support payments to [SM] in the monthly amount of$8,000.00. Further, the income [PM] has earned between 2011 to 2016 is significant and considerably greater than the $431,000.00annual income upon which the monthly spousal support award of $8,000.00 was based after trial.

While [PM] submits this income isnow an investment which will fund his retirement, [PM] chooses to overlook the fact that this was first income from a career that [SM]supported. As [SM] argues (noted in para. 51 of this decision) she should benefit from this income which so greatly exceeded [PM’s]$431,000.00 annual income as at 2011 because of her contributions to the success of his career.

Again, I agree with her position andaccept that spousal support payments of $8,000.00 per month should continue up to and include October 2019 as [SM] has suggested. (Emphasis added) [18] The Chambers judge, however, was uncertain as to PM’s ability to pay $8,000 per month beyond 2019. Projections had beenprovided to her on behalf of PM that did not proceed beyond 2018. She found that it was unclear whether PM would be able to continuespousal support beyond October 2019. As such, she ordered a review to take place in the summer of 2019. 3.

Standard of Review [19] When a court of appeal reviews a spousal support order, the court is governed by the standard of review enunciated byL’Heureux-Dubé J. for the Court in Hickey v. Hickey, (SCC), [1999] 2 SCR 518 [Hickey]: [11] Our Court has often emphasized the rule that appeal courts should not overturn support orders unless the reasons disclose an error inprinciple, a significant misapprehension of the evidence, or unless the award is clearly wrong. These principles were stated by MordenJ.A. of the Ontario Court of Appeal in Harrington v.

Harrington (1981), (ON CA), 33 O.R. (2d) 150, at p. 154, andapproved by the majority of this Court in Pelech v. Pelech, (SCC), [1987] 1 S.C.R. 801, per Wilson J.; in Moge v. Moge, (SCC), [1992] 3 S.C.R. 813, per L’Heureux-Dubé J.; and in Willick v. Willick, (SCC), [1994] 3 S.C.R.670, at p. 691, per Sopinka J., and at pp. 743–44, per L’Heureux-Dubé J. [12] There are strong reasons for the significant deference that must be given to trial judges in relation to support orders.

This standard ofappellate review recognizes that the discretion involved in making a support order is best exercised by the judge who has heard theparties directly. It avoids giving parties an incentive to appeal judgments and incur added expenses in the hope that the appeal court willhave a different appreciation of the relevant factors and evidence. This approach promotes finality in family law litigation and recognizesthe importance of the appreciation of the facts by the trial judge.

Though an appeal court must intervene when there is a material error, aserious misapprehension of the evidence, or an error in law, it is not entitled to overturn a support order simply because it would havemade a different decision or balanced the factors differently. (Emphasis added) 4. Issues

[ 20 ] In written argument, PM has put forward 23 sub-grounds of appeal, which he has organized around six main points: 1. What is the scope of this appeal? 2. Did the Lower Court Judge err in her determination that ongoing spousal support should be paid on the basis of income earned by [PM] from 2011–2015? 3. Did the Lower Court Judge err in her determination of [PM’s] past income? 4. Did the Lower Court Judge err in her determination that [SM] had an entitlement to spousal support? 5. Did the Lower Court Judge err in ordering that spousal support be reviewable in October of 2019? 6.

What spousal support order should be made? [ 21 ] PM’s overall position with respect to spousal support is that there is no basis in law for the payment of support for the whole of the period from March 1, 2015, to October 1, 2019 – or indeed any of this period. He states the Chambers judge was conducting the review ordered by this Court such that all issues were on the table, including whether SM had a continuing claim to any support.

Even if the Chambers judge was not required to consider the question of entitlement afresh, he argues that she made a number of errors in ordering the payment of support from past income or capital without proof of a present ability to pay otherwise than out of his capital. He also asserts that the Chambers judge erred with respect to the calculation of what he had earned in 2014 and 2015 and as to his total income earned for the years from 2015 to 2019. [ 22 ] With respect to entitlement, PM has positioned this issue after the questions pertaining to the calculation of his income.

In my respectful view, this issue is directly connected to the question of the scope of the matter before the Chambers judge and whether she was considering the matter afresh or whether she was bound by Smith J.’s determination of entitlement.

Therefore, I will consider the question of entitlement as part of the question of scope. [ 23 ] While I understand why PM has ordered his issues in the way he has, it seems to me that in order to address his issues as comprehensibly as possible, while at the same time considering the standard of appellate review articulated in Hickey , it is necessary to restate them and consider them in the following order: (

a) W hat is the scope of this appeal? (

b) Did the Chambers judge miscalculate PM’s past or present income? (

c) Did the Chambers judge err in principle by ordering spousal support for the whole or any part of the period from March 1, 2015, to October 1, 2019? (

d) Do the calculation errors amount to a significant misapprehension of the evidence justifying appellate intervention? (

e) Did the Chambers judge err in principle by ordering a review? 5. Analysis A. What is the scope of this appeal? [ 24 ] Underlying this issue is the determination of who conducted the review ordered by this Court in its 2012 CA-Decision : Smith J. or the Chambers judge? [ 25 ] If it is the Chambers judge, then all support issues, including the question of entitlement, are properly before this Court. If not, then this Court must decide whether the September 2015 Decision can be considered an interim decision (i.e., interim to the 2018 Chambers Decision ). [ 26 ] Resolution of this issue has consequences for these other issues: (

a) Was the Chambers judge required to revisit the question of entitlement? (

b) If not, is the question of entitlement before this Court? (

c) Who bore the burden of persuasion before the Chambers judge? [ 27 ] PM submits that the Chambers judge was obligated to conduct the review directed by this Court in its 2012 CA-Decision . For him, the Chambers judge was required to commence the matter anew – and not just pick up from where Smith J. left off. According to this argument, the Chambers judge was required by law or by the terms of this Court’s decision to consider afresh whether SM continued to be entitled on a compensatory or non-compensatory basis to spousal support after December 2014.

Failing that, PM submits that Smith J.’s decision was an interim decision and that only the decision of the Chambers judge is the final decision – leaving all issues of entitlement for review by this Court, including the order directing the payment of support for 2015. [ 28 ] For her part, SM submits that the starting point for this appeal is the September 2015 Decision where Smith J. – not the Court of Appeal – set the terms of the matter before the Chambers judge.

According to SM, Smith J. had already decided – in a final decision that was not appealed (i.e., the September 2015 Decision ) – that SM continues to be entitled to non-compensatory support. Thus, that issue and the question of support, at least for 2015, were off the table by the time the Chambers judge heard the matter in 2017.

[29] In my view, the September 2015 Decision of Smith J. is a final decision on the question of entitlement and the question of2015 support. I say this for two reasons. First, it was he who set the parameters for the evidence that would be available to determinewhether SM continued to be entitled to spousal support. PM applied to Smith J. for an order allowing him to cross-examine SM. JusticeSmith refused the order: Petitioner’s Application to Examine the Respondent on her Affidavit [5] The petitioner has applied for an order allowing his counsel to examine the respondent on her affidavit.

That application is dismissed. [6] There is nothing complex or even nuanced about the respondent’s position. She is a retired teacher earning approximately $50,000 ayear. I concede she did retire a number of years early, and I also concede she does live in a large house.

I conclude, however, the onlyreason the petitioner wants to examine her on her affidavit is to harangue her for retiring early and living in a larger house than necessary. [30] In other words, there would be no new evidence for the Chambers judge to consider, which is a particularly important pointgiven that PM’s challenge to entitlement was primarily that SM was no longer entitled to receive support having received an equaldivision of property and significant spousal support since 2009, i.e., any claim to compensatory support had been exhausted. [31] Second, Smith J. made it clear that the only matter left on the table was the question of the amount of spousal support for2016 and on: [18] Having said that, the petitioner’s business model has changed, and his retirement plans, prima facie, do not seem unreasonable.

Hewas accurate in predicting a drop in income in 2015, and if he is accurate again for 2016, that may well ground the conclusion of apermanent material change and thus an adjustment to spousal support. [19] Accordingly, I adjourn this matter to Family Chambers on Wednesday, February 15, 2017, at 10:00 a.m. By that time, I expect thatthe petitioner will have in hand his income for the 2016 calendar year.

I leave it to the Chambers judge on that date as to whether anadjustment of spousal support is warranted. [32] Thus, in my view, the Chambers judge need not have considered whether SM continued to be entitled to spousal support.Justice Smith had already answered that question. This means that if the Chambers judge erred by finding entitlement on the basis ofcompensatory support, it is an error of no consequence. Justice Smith had already found entitlement on a non-compensatory basis – andhe did so in the context of a final order.

Thus, this Court lacks the jurisdiction to reconsider the issue anew. [33] It also means that whoever sought to vary the September 15 Decision bore, at least, the burden of persuasion that Smith J.’sorder of indefinite support should be varied. In the 2012 CA-Decision, this Court intended that SM would make the request for a review– in which case, a Chambers judge would not be bound by the trial judge’s findings: [66] Accordingly, I conclude that [PM’s] obligation to pay $8,000 per month in spousal support should remain in place, but only untilDecember 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 comeinto focus. At that time, the Court of Queen’s Bench, if requested to do so by [SM], will be in a position to take a fresh and moreinformed look at the amount (if any) of spousal support [SM] should be paid on a go-forward basis.

The judge who makes any suchassessment will obviously consider all of the relevant factors and will not be constrained by the assessment of the situation made by thetrial judge in these proceedings. (Emphasis added) [34] In my view, however, this proposition was fully understood and enunciated by Smith J. – “At this juncture I am not bound bythe entitlement analysis engaged in by the trial judge.

As per the direction of the Court of Appeal, I am to look at the matter afresh todetermine a fair and just result on a go-forward basis” (emphasis added, September 2015 Decision at para 28). [35] And then, Smith J. proceeded to do just that, but he found little had changed since SM had been granted indefinite support in2009 when the trial occurred: [31] The reality is, little has changed since trial. At trial [PM’s] income was found to be $431,000. Based on [PM’s] evidence, in 2014 itwas $478,302. Of course, [SM] would argue that it is considerably more than that.

As for [SM], she has retired, albeit a few years early,and has an income of $50,000.

This is less than she had at trial. [36] Justice Smith then went on to find entitlement on non-compensatory grounds: [32] In my view, the significant discrepancy between the incomes of the parties, and considering it in the context of a 29-year marriage,clearly leads to the conclusion that continued spousal support is warranted. [PM’s] assertion that [SM] has not proved entitlement doesnot withstand the scrutiny of a rational review. [33] I reflect on the words of L’Heureux-Dube J. in Moge v Moge, (SCC), [1992] 3 SCR 813, “the longer therelationship endures, the closer the economic union, the greater will be the presumptive claim to equal standards ...”.

In this instance toinsist on equal standards of cash flow would operate as an unfairness to the petitioner and a windfall to the respondent, nonetheless, it iscompletely appropriate to order spousal support so as to augment the respondent’s $50,000 pension. [37] The point, however, is that when the Chambers judge came to consider the matter in 2017, PM now bore the burden ofpersuading the Chambers judge that his means could not sustain the order of Smith J. requiring him to pay indefinite support. [38] The Chambers judge understood this point very well (2018 Chambers Decision): [8] In Kletzel v Kletzel, 2005 SKQB 174, 16 RFL (6th) 137, Sandomirsky J. explained the difference between a review and a variation

application as follows: [7] This application falls into a category of cases however, in which the parties had incorporated a review mechanism which is time sensitive and event sensitive. While the language of the separation agreement and judgment does not say that a future review will be conducted pursuant to s. 15.2 or s. 17 of the Divorce Act , R.S.C. 1985, c. 3 (2nd Supp .), the relevance of the review mechanism entitles either of the petitioner or respondent to a review of spousal support triggered by any one of a number of express conditions precedent, including an annual review.

The first step or threshold is not applicable to this application in the circumstances. However, that does not mean that a substantial change is not required upon the merits. Even at the second stage examination, the parties must demonstrate that something is different such that the previous order is obsolete and an adjustment is required in light of the totality of circumstances as well as the evidence of change. Thus the triggering events identified in s. 2(

b) of the judgment and

Article 5 of the Interspousal Contract and Separation Agreement create the entitlement to a review but those instances are not of themselves the factual basis upon which to vary the support order. Both the petitioner and respondent’s counsel were on common ground in this respect. They depart and are adverse as to whether the totality of the facts and circumstances including evidence related to change should lead to a variation. [9] Thus a review does not require a threshold finding of a change in circumstances.

One must instead look to, as in this instance, a court order which identifies a period of time that must pass, an event that must occur or a condition that must exist before a review can take place. Having found such a condition, event or passage of time, the court may embark upon a consideration of the issue and determine whether the evidence supports a modification of the earlier order .

Consideration of the issue involves an assessment as to whether there was some type of meaningful change in light of the totality of the circumstances which encompass the parties’ present situation as well as relevant previous circumstances (see Morck v Morck , 2013 BCCA 186 at para 24 , 44 BCLR (5th) 235). … [58] It is P.M.’s onus to demonstrate a diminished ability to pay spousal support to S.M. such that spousal support payments must be reduced or cease altogether. (Emphasis added) [ 39 ] While Leskun v Leskun , 2006 SCC 25 at para 15 , [2006] 1 SCR 920 [ Leskun ], makes it clear that a review required under a s. 15.2 order under the Divorce Act imposes no onus to demonstrate changed circumstances, both parties on this appeal accepted that PM was required to persuade the Chambers judge that Smith J.’s order of indefinite support should be set aside or varied on the basis of PM’s actual income. [ 40 ] In

summary then, the only overarching issues properly before this Court are whether the Chambers judge erred (

a) by ordering support from January 1, 2016, until October 1, 2019, and (

b) by ordering a further review. B. Did the Chambers judge miscalculate PM’s past or present income? 1. Background [ 41 ] PM identifies a number of sub-issues that he says compel appellate intervention. In order to assess these issues, it is necessary, first, to review the background to PM’s claims pertaining to the parties’ financial positions and, second, to review the 2018 Chambers Decision pertaining to the spousal support order in greater depth. a. Background to the parties’ financial situation [ 42 ] In 1986, PM purchased an interest in the company he worked for, Koyl Commercial Real Estate [Koyl].

In 1996, Koyl’s ownership structure was restated with PM owning 23% of the company. In 2004, he purchased a 10% interest in NAI Denro Property Management [NAI Denro], a property management company. In 2008, PM also owned a 17% interest in NAI Commercial Real Estate [NAI Commercial]. He operated as a broker through this company. PM filed an application for divorce in March of 2008. [ 43 ] In January 2009, PM purchased another 17% interest in NAI Commercial, resulting in a 1/3 ownership share of the company.

In July of 2009, PM purchased an additional interest in NAI Denro, resulting in his controlling 1/3 of that company’s shares. In 2010, PM set up Leaward Shelter Corp. [Leaward Shelter], with some of the shares owned by a family trust called P. [M.] Family Trust (of which PM is the sole trustee) [Family Trust], to retain earnings.

This was a tax planning vehicle, acting as a further retirement savings measure, wherein excess earnings were retained in the corporation and reinvested rather than paid out as income. [ 44 ] Property was divided at trial with PM primarily retaining the income generating assets in the form of shares in the various corporations. SM retained the non-income generating assets in the form of the family home.

Both had significant retirement saving assets which were split, with SM retaining her defined benefits plan and some RRSP funds, and PM retaining his RRSP. [ 45 ] In regard to Koyl, in 2008, the majority partner decided to retire, resulting in a restructuring agreement that was completed in December 2009. In January 2010, PM executed a promissory note and a voting trust agreement for the purpose of obtaining an $850,000 loan from his remaining partner at Koyl.

This transaction only came to light during cross-examination at trial and had a significant impact on the determination of the value of Koyl’s shares at trial. Since PM did not disclose this transaction prior to trial, an evaluation of the tax implications was not presented to the trial judge. Because of this, the trial judge was “not prepared to speculate as to what the disposition costs might be” (at para 44).

The Trial Decision , on this point, was upheld on appeal (see 2012 CA-Decision at paras 31–38). [ 46 ] In 2012, PM sold his interest in NAI Denro, and in 2013 he increased his ownership in NAI Commercial (now called P.M. Holdings) to 100%, before selling its business assets in February of 2014 to Colliers Commercial Realty Inc. [CIR]. The sale to CIR included a condition that PM work for CIR for a three-year term, concluding at the end of January 2017. In December 2014, PM gave his notice to CIR advising that he would not be working past the contract expiration date.

As previously indicated, he brought all spousal

support payments to an end in December 2014. [ 47 ] In the interim, SM took early retirement in June 2014 and continued to reside in her home in Regina Beach. From her pension, she receives payments of approximately $50,000 per annum. SM will continue to receive these payments for the rest of her life and these payments are indexed to account for inflation. [ 48 ] The parties both filed documents with Smith J., indicating their financial positions. PM submitted a report completed by Virtus Group, dated March 31, 2015 [2015 Virtus Report].

This report outlines PM’s income earned until 2014 and projects his income moving forward. It is essential to understanding PM’s income, as his corporate structure makes a true depiction of his income difficult to discern based on his tax returns alone. A careful review of this report is necessary as it excludes certain increases in net worth, such as investment income from PM’s RRSP assets, which were divided at trial, and other expenses, such as payments to children through the Family Trust. The 2015 Virtus Report primarily assists in understanding PM’s circumstances.

Two supplementary Virtus Reports were dated January 11, 2016, and January 17, 2017. [ 49 ] Before completing his three-year employment contract with CIR, PM gave notice of retirement at the end of 2014 and ceased working as a commercial real estate broker upon the completion of his 2016 affairs. This is evidenced by an affidavit sworn by PM’s employer on January 23, 2017. The two supplemental Virtus reports project PM’s income into 2017 and 2018.

In 2017 it was anticipated that he would have trailing income from his employment with CIR; and then, in 2018, his only income would be passive income earned from investments held by Leaward Shelter. These reports do not factor in continued spousal support, which would require the liquidation of capital, thereby reducing the return. However, as noted, they also do not include income earned from PM’s RRSP as this was property divided at trial. b.

Basis for Chambers judge’s decision to order continued support to October 1, 2019 [ 50 ] The Chambers judge accepted SM’s calculation of PM’s total income as $3,667,319 for the years 2011 to 2015 (at paras 26 and 51).

The basis of this number appears to have been derived from submissions made to the Chambers judge by SM in her written submissions: Year Earnings 2011 $595,627 2012 $614,579 2013 $1,046,184 2014 $1,034,839 2015 $376,090 Total: $3,667,319 [ 51 ] The 2018 Chambers Decision summarized SM’s arguments regarding support until October 1, 2019: The Basis of S.M.’S Request for Continued Support at the Current Quantum [50] S.M. argues that P.M. has never paid her close to the Carol Rogerson & Rollie Thompson, Spousal Support Advisory Guidelines , ([Ottawa]: Department of Justice, 2008) [ SSAG ] level and that the $8,000.00 monthly spousal support payment is equivalent to about one third of the low end of the SSAG amount.

Because of this, S.M. argues, P.M. ought to continue $8,000.00 monthly payments through October 2019, a date which is 8.5 years subsequent to the Trial Decision . [51] The trial judge found P.M.’s income to be $431,670.33 based on a three-year average. P.M. earned $3,667,319.00 from the date of the Trial Decision to the review date, which is considerably more than the income he attested he would earn in the years following the conclusion of the trial. S.M. argues that she should benefit from that increased income.

As such, income of $3,667,319.00 divided by $431,670.33 is approximately 8.5, which represents 8.5 years of averaged income of $431,670.33 between March 2011 ( Trial Decision date) and October 2019. During all of that period of time, S.M. argues, she should receive $8,000.00 per month. [ 52 ] The Chambers judge then went on to say, “S.M.’s position, outlined above, regarding continued spousal support at the current amount for a period of time is a compelling one” (at para 52). She reiterated her understanding of the evidence being a total income from 2011 and 2015, amounting to $3,667,319 (at para 53).

She found this to be income earned after the division of property and thus available for support purposes (at para 54). [ 53 ] The ultimate basis for her decision to order support is contained in these paragraphs: [58] It is P.M.’s onus to demonstrate a diminished ability to pay spousal support to S.M. such that spousal support payments must be reduced or cease altogether.

While I accept P.M. has retired in good faith and that his income has diminished, the average of P.M.’s income in 2014 ($478,302.00), 2015 ($376,090.00), and 2016 ($211,257.00) is $355,216.00. [59] This average income establishes P.M.’s ability to continue providing spousal support payments to S.M. in the monthly amount of $8,000.00. Further, the income P.M. has earned between 2011 to 2016 is significant and considerably greater than the $431,000.00 annual income upon which the monthly spousal support award of $8,000.00 was based after trial .

While P.M. submits this income is now an investment which will fund his retirement, P.M. chooses to overlook the fact that this was first income from a career that S.M. supported. As S.M. argues (noted in para. 51 of this decision) she should benefit from this income which so greatly exceeded P.M.’s $431,000.00 annual income as at 2011 because of her contributions to the success of his career.

Again, I agree with her position and accept that spousal support payments of $8,000.00 per month should continue up to and include October 2019 as S.M. has suggested. [60] The Court of Appeal was concerned that P.M. would be forced to continue working beyond what had been planned in order to continue providing S.M. with the spousal support she is entitled to receive. A continued order for support at the current spousal support amount for a short period of time will not cause P.M. to modify any of his plans , given that he has the capital to comfortably continue

providing such support. Despite an imputation of S.M.’s income for a time, S.M. still experiences economic disadvantage due to the marriage and its breakdown as well as economic hardship arising from the breakdown of the marriage. Financial assistance is required. (Emphasis added) [ 54 ] From this, I conclude that the Chambers judge justified the continuation of support on two bases: (

a) the average of PM’s income from 2014 to 2016 would sustain a continued award; (

b) his income from 2011 to 2016 is significant and considerably greater than what the trial judge had anticipated. [ 55 ] With this by way of background, it is now possible to consider PM’s issues which are directed to illustrating how the Chambers judge arrived at a decision to continue support in error. He made these propositions challenging the 2018 Chambers Decision : (

a) the Chambers judge miscalculated his 2015 income in determining the worth of his overall assets; (

b) the Chambers judge miscalculated the amount received by way of income for the years 2011 to 2015; and (

c) the Chambers judge erred in principle with respect to how she treated the projections of his income for 2018 and 2019. 2. Calculation of 2015 income [ 56 ] Justice Smith found, following a viva voce hearing, that PM’s income in 2015 was $232,320 ( February 2016 Decision ); however, the Chambers judge found the 2015 income was $376,090, based on attributing income from Leaward Shelter and P.M.

Holdings ( 2018 Chambers Decision ): [25] Identifying the figure of $232,320.00 as P.M.’s 2015 income, it appears that the initial reviewing judge considered only P.M.’s personal income for 2015 and did not include income from Leaward ($21,016.00) and P.M. Holdings Inc. ($122,801.00), income S.M. argues ought to be considered as part of P.M.’s 2015 income. This is an argument with which I agree given that P.M. is the sole shareholder in Leaward and P.M. Holdings Inc.

The total amount of P.M.’s income in 2015 is $376,090.00. [ 57 ] I agree with PM that the Chambers judge appears to have miscalculated his 2015 income. The Chambers judge’s figure of $376,090 for 2015 includes a $133,488 earnout that was proceeds of the sale of NAI Commercial (the business assets of P.M. Holdings), and thereby engages the double dipping principle described by the Supreme Court in Boston v Boston , 2001 SCC 43 , [2001] 2 SCR 413 [ Boston ].

This is so because when the family property was divided in 2011, PM retained his shares in NAI Commercial in exchange for SM retaining other capital assets (namely the Regina Beach home). Since separation, PM increased his share in NAI Commercial (P.M. Holdings) from 17% to 1/3 in 2009, then 100% in 2013, until it was sold in 2014. This asset is either derived from assets received from property equalization or they are capital assets, not income, as they convert property from shares into cash, without generating any new cash.

Further, the figure of $376,090 does not account for a gross up for tax purposes and double counts a $5,000 influx of cash in Leaward Shelter, which was subsequently paid out as a dividend. Indeed, SM does not seriously contest that the Chambers judge erred in her calculation of the 2015 income. [ 58 ] On the hearing of the appeal, PM stated that the proper amount should be $250,624 – which includes an added back pay-out to the parties’ children. [ 59 ] The effect of this error, on the overall result, will be considered later in these reasons. 3.

Calculation of PM’s income from 2011–2015 [ 60 ] With respect to the amount PM earned between 2011–2015, I also agree with PM that it is unclear how the Chambers judge reached the number of $3,667,319. In order to arrive at this number, as PM points out, half of the $764,499, which forms part of the 2014 figure, is included in PM’s line 150 income, despite this amount being the deferred proceeds from the sale of Koyl.

If so, this income appears to offend the double dipping principle articulated in Boston , as the proceeds from the sale of Koyl reduced PM’s share of the family property, since they would then be counted again when the proceeds were realized. It also includes a $29,676 increase in the cash surrender value of an insurance policy in the income of Leaward Shelter, which should not be included as it merely constituted a catch up of income related to prior periods. Finally, it includes the sale proceeds of the business assets of P.M. Holdings as income of P.M. Holdings.

This represents proceeds from the sale of NAI Commercial, which, once again, constitutes, at least partially, double dipping. [ 61 ] As with the preceding issue, the effect of this error, on the overall result, will be considered later in these reasons. 4. Statement of what constituted income for 2017 and 2018 [ 62 ] The Chambers judge treated PM’s income for 2017 and 2018 in the following manner: [28] A January 11, 2017, report prepared by Mr.

Neil Weber with the Virtus Group projected P.M.’s 2017 income to be $173,223.00 which includes $120,000.00 in commission income, $6,500.00 for professional fees and investment income. [29] That same Virtus Group Report also contains a 2018 projected income for P.M. of $70,126.00. [30] S.M.’s expert, Bruce Willis with KPMG, commented on the Virtus Report, noting that subsequent to the Trial Decision until July 2015, P.M. was able to accumulate $1,516,621.00 in retained earnings in Leaward.

Further, he noted that the 2017 and 2018 income projection did not reflect any distribution of accumulated capital of the funds in Leaward, nor did it reflect any income for retirement sources such as RRSPs. Finally, Mr. Willis observed that because P.M. is the controlling shareholder of Leaward, he could supplement

his personal income by drawing dividends from Leaward. [31] While there certainly appears to be a decrease in P.M.’s income due to the change in P.M.’s work status, I do not accept the accuracy of the 2017 and 2018 Virtus projections given what has been excluded from the projection analysis. In particular, Mr. Weber was clearly instructed not to consider any reduction of P.M.’s capital. That is not a reasonable position to take given P.M.’s significant accumulation of capital which includes not only the retained earnings in Leaward, but also RRSPs in excess of $971,000.00 and a TFSA in excess of $53,000.00.

It is also an unreasonable position because while P.M. does not believe he must draw down that capital, he has no difficulty suggesting that S.M. ought to do precisely that. P.M. insists that S.M. draw on her pension, one of two main assets, in order to live. (Emphasis added) [ 63 ] Although the retained earnings in Leaward Shelter are relevant to determining spousal support, they are capital, not income ( Potzus v Potzus , 2017 SKCA 15 at para 92 , [2017] 7 WWR 296). The return on investment of this capital is income, as it is only this amount that represents new value being created.

The Virtus projections are a valid determination of income. They do not account for a liquidation of capital, which is not income, having been already counted in prior years. Based on this, the retained earnings should not be considered under income; instead, they should be considered when looking at PM’s capital, an issue to which I will return later in these reasons. 5.

Restatement of PM’s income [ 64 ] When PM’s income for 2011 to 2015 is recalibrated, using his numbers, the picture is as follows: Year Income 2011 $595,627 2012 $614,579 2013 $1,046,184 2014 $478,302 2015 $250,624 Total: $2,985,316 [ 65 ] Based on the agreed-upon numbers used by both parties, PM’s income for 2016 was $211,257. His projected income for 2017 was $173,233, with approximately $120,000 coming from commission income from his business dealings.

His projected income, which would come entirely from his investments for 2018 and 2019, was $70,126 for each year. [ 66 ] It is to these numbers that PM’s arguments must be addressed. C. Did the Chambers judge err in principle by ordering spousal support for the whole or any part of the period from March 1, 2015, to October 1, 2019? [ 67 ] PM’s first position, apart from any consideration of accounting issues, is that no support should have been ordered whatsoever with respect to any of the years from 2015 to 2019.

SM asserts that, regardless of any errors made with respect to the calculation of income, the proper application of the standard of appellate review in relation to spousal support orders means that this Court should not intervene. [ 68 ] As a preliminary point, it must be understood that Smith J.’s September 2015 Decision ordered PM to pay indefinite spousal support of $8,000 per month. As indicated earlier, this was a final order fixing spousal support until such time as a further order were to be made.

As such, any grounds of appeal that I am about to consider do not affect spousal support paid from March 1, 2015, until the date of Smith J.’s February 2016 Decision. [ 69 ] With respect to the balance of the spousal support order in the 2018 Chambers Decision, PM makes a number of discrete arguments: (

a) the Chambers judge’s order had the effect of granting retroactive support, when none was claimed; (

b) the Chambers judge averaged past income when there was no evidence of a present ability to pay; (

c) the Chambers judge averaged corporate income contrary to this court’s decision in Thompson v Bear , 2014 SKCA 111 , 378 DLR (4th) 649 [ Bear ]; and (

d) the Chambers judge ordered the distribution of capital, when it was not appropriate to do so. [ 70 ] I will now turn to address these issues. 1. Did the Chambers judge err by ordering retroactive support when none was claimed? [ 71 ] PM submits that the Chambers judge erred by basing the continued payment of spousal support on income earned by PM from 2011–2015.

Relying on Babich v Bacbich , 2015 SKQB 22 , 466 Sask R 259, he states she should have used current income, which he says would support a much lower order, and that the effect of her decision is “effectively to hold” that SM should have received more spousal support from 2011–2015 than she was entitled to receive and to award retroactive support, which SM had not placed in issue. [ 72 ] In my view, the Chambers judge did not order retroactive support in the sense in which that phrase is defined. She did not

order that PM pay more support for the years 2011–2015 because he had earned more than had been anticipated. She was conducting thereview that Smith J. had directed, which was to determine whether the indefinite order of spousal support should continue – havingregard for PM’s 2016 income. To be sure, the present and future source of that ongoing obligation was his past earnings that he hadtaken into capital, but that is different than ordering the payment of past support on a retroactive basis.

The Chambers judge orderedpresent support based on PM’s means to pay from investment income derived from capital assets acquired post-trial: “The SupremeCourt of Canada in Strang v Strang, (SCC), [1992] 2 SCR 112 defined the term ‘means’ to include all pecuniaryresources, capital assets, income from employment or earning capacity. ‘Means’ also includes investment income from capital assets(Lane v Lane, 2012 ABCA 2).

As noted, P.M.’s capital assets accumulated after trial are significant” (2018 Chambers Decision atpara 55). [73] Thus, I conclude she did not make an order based on retroactive support when none was claimed. 2. Did the Chambers judge err by averaging PM’s income, even though he had retired? [74] PM submits that the Chambers judge averaged income as a means of sustaining an award of spousal support for the years2016, 2017, 2018 and 2019.

I agree with PM that it would be an error for the Chambers judge to have used an average of his income for2014, 2015 and 2016 to ground the payment of support for the years 2017, 2018 and 2019, but this is only one of the reasons given bythe Chambers judge to support a continuing award until October 1, 2019.

The other is the extent of his earnings from 2011 to 2016,which I will consider later in these reasons. [75] Further, in fairness to the Chambers judge, she was responding to the February 2016 Decision, wherein Smith J., too, thoughtthat spousal support would be payable at least until 2016 on the basis of averaging past income over a four-year period that captured the2013 income: “As can be seen, [PM’s] income can fluctuate considerably from year to year. In that circumstance it is appropriate for theCourt to use averages. The average for the three years, 2013, 2014 and 2015, is $585,602.

The average for the four years, 2012, 2013,2014 and 2015, is $592,846. Both those totals underpin continuing spousal support of $8,000 per month” (at para 17). Using this samemodel would ground spousal support for 2017 as well. [76] Justice Smith then left the matter to the next judge to determine the effect of the actual amount PM earned in 2016 on hisfuture ability to pay. 3.

Did the Chambers judge err by imputing income from PM’s corporations that is greater thantheir present incomes? [77] In his factum, PM submits that he is being “imputed an income from his corporations that is greater than the corporations’present incomes, which is contrary to the Court of Appeal decision in Bear v Thomson, 2014 SKCA 111” (at para 30).

In Bear, KlebucJ.A. (as he then was) held that s. 18(1) of the Federal Child Support Guidelines, SOR/97-175, is not intended to allow for an averagingof a corporation’s pre-tax income if the imputed income would exceed the corporation’s current pre-tax income (at para 75). JusticeBrown in J.K. v K.R, 2017 SKQB 245, 98 RFL (7th) 290, made the same point: [34] … The court is limited to attributing to a party the pre-tax income of corporations they control from the most recent taxation year. Itis not appropriate to average the previous three years.

The limited rule requires attention be paid to the most recent taxation year as theupper end amount for consideration. [78] In my view, however, Bear has no application in this case. This

interpretation of s. 18 was largely justified based on theconcern that averaging corporate income and imputing income in excess of the most recent year’s income could negatively affect thirdparties to whom the corporation owes obligations (see Bear at para 72). As well, it may require the corporation to liquidate capitalassets, putting the entire venture’s viability at risk (at para 73). Those principles are not at play here. The Chamber judge was notimputing Leaward Shelter’s income to PM. Leaward Shelter is not an active business venture.

It is a holding company used to store PM’scapital assets derived from the income received during the period from 2011–2015. The Chambers judge was merely acknowledging thatPM has substantial capital assets in Leaward Shelter that could be used to pay a spousal support order. The real issue is the Chambersjudge’s use of capital that was accumulated from post-trial income to pay spousal support. 4.

Did the Chambers judge err by ordering the payment of spousal support from capital? [79] PM submits as his final argument that including his 2011–2015 income in any assessment of spousal support constitutes “asecondary property division”. He argues that SM has already benefitted from those years by having received $461,000 in spousal supportduring this period. He says to allow her ongoing support on income received during these years is “double dipping”.

He says that, as aresult of the order of the Chambers judge, “it is absolutely clear that [PM] has been required to liquidate assets to pay spousal support”(at para 46). He acknowledges that it is not double recovery if the after-acquired asset generates income sufficient to pay the spousalsupport, but he says that is not the case here.

For my part, the issues stemming from these submissions are central to this appeal. [80] Since PM’s income from 2015 to 2019 is considerably less than what would be necessary to pay an award of $8,000, spousalsupport must come from his capital invested in Leaward Shelter during the years 2011 to 2015. To repeat, this is his income that isderived otherwise than from previously divided assets during the period from 2015 to 2019: Year Income2015 $250,6242016 $211,2572017(projected)[1]$173,2332018 (projected) $70,1262019 (projected) $70,126 Total:$775,366

[81] The issue is whether, in light of this lower income, the Chambers judge erred in principle by maintaining spousal support of$8,000 per month until October of 2019. [82] Quite clearly, the Chambers judge knew that her order would have to be funded from after-acquired capital. I say this becausethe primary capital base considered as a source for spousal support was the retained earnings in Leaward Shelter, which, in 2015 (asnoted by SM’s expert), was $1,516,621 (2018 Chambers Decision at para 30).

Importantly, the Chambers judge held as follows: [42] … although P.M. ought not be forced to continue to pursue an income past a reasonable retirement date, the income earned, andwealth accumulated, between the Trial Decision and his retirement cannot be ignored for the purposes of spousal support given thatP.M.’s post-separation income resulted from contribution made by S.M. prior to their separation. That is, because P.M.’s career wasmade a priority during the parties’ marriage and because P.M. was able to achieve the financial success he has because of thatopportunity.

Further, P.M.’s accumulation of wealth was not subject to property division or an equalized asset. (Emphasis added) [83] Moreover, when ordering support, the Chambers judge stated, “Because this is income earned after the division of property,this is not a situation where S.M. is benefitting twice from P.M.’s earned income nor is it a situation where the income is subject to asecond property division” (at para 54). [84] In his factum, PM submits that the Court should not look to his after-acquired capital for the purpose of determining spousalsupport because to do so “does not comply with the judicial tests for when this may be done” (at para 35).

He agrees that Leskunprovides the Court with the discretion to consider a payor spouse’s after-acquired capital assets in considering the spouse’s means to payspousal support, but he submits Leskun is distinguishable on its facts and has been little followed. [85] PM states, unlike the husband in Leskun, he has been forthright with the Court regarding his future prospects and there is noevidence he has been attempting to reduce his income for the purposes of defeating SM’s claim.

He says that SM has sufficient assets,including her million dollar home, RRSP’s worth $141,500 and support from March 1, 2011 (the date of the Trial Decision untilDecember 1, 2014) in the amount of $368,000 before tax ($8,000 x 46 months). [86] With respect to how Leskun has been interpreted, PM notes one case, McCulloch v McCulloch, 2013 ABQB 177 [McCulloch](aff’d 2013 ABCA 298 [CA-McCulloch], leave to appeal to the SCC refused, ), which he states is also distinguishablebecause the husband had restructured his affairs “with the intention of demonstrating minimal income for support purposes…” (appellantfactum at para 42).

In commenting on McCulloch, PM drew the Court’s attention to an observation by the Alberta Court of Appeal madein an earlier decision pertaining to the same parties (McCulloch v McCulloch, 2011 ABCA 193 at para 28) to the effect that there was noevidence that the husband would have to liquidate assets divided at trial to pay ongoing support. However, the Alberta Court of Appealdid not find double recovery in its 2011 decision where income that was used to fund ongoing support “is earned from income saved orinvested post-divorce” (at para 30).

Further, in its 2013 decision, the Court of Appeal sustained an award of indefinite spousal support of$9,000 per month derived, in part, from “other valuable assets with significant potential earning capacity” (CA-McCulloch at para 12). [87] While there are few decisions directly on point, the Supreme Court has consistently held that assets not previously divided canbe used to fund spousal support.

Boston, a divided decision of the Supreme Court, expressed concern about double recovery or doubledipping from previously divided or equalized assets but, nonetheless, permitted access to “the portion of the pension that was earnedfollowing the date of separation and not included in the equalization of net family property” (at para 64). The majority of the Court alsocommented that “double recovery cannot always be avoided” (at para 65).

In Rimmer v Adshead, 2012 SKQB 500, 408 Sask R 210,Barrington-Foote J. (as he then was), after summarizing the principles, noted there is “no simple rule against double dipping” (atpara 27). [88] In my view, the decision of the Chambers judge does not contravene the principle against double dipping outlined by theSupreme Court in Boston. In that case, the Court was dealing with pension assets that had already been divided at trial in a propertydistribution.

Here, the income retained in Leaward had been obtained post trial and has never been subjected to property distribution(with the exception of some proceeds of the sale of business assets in P.M. Holdings, Koyl, or NAI Denro). The Supreme Courtaddressed this scenario in Boston: “To avoid double recovery, the court should, where practicable, focus on that portion of the payor’sincome and assets that have not been part of the equalization or division of matrimonial assets when the payee spouse’s continuing needfor support is shown” (emphasis added, at para 64).

This is what the Chambers judge did in this case: focus on that part of PM’s incomeand assets that had not been divided at trial in circumstances where a prior judge, Smith J., had already determined that there was acontinuing need for support. [89] Apart from any issue of double recovery, PM submits the Chambers judge erred in principle by dividing these post-trial assetsby means of continued spousal support.

Clearly, Leskun permits access to assets not previously divided to fund spousal support: [29] There is no support in the case law or in logic for the proposition that the Chambers judge was wrong to take into account theappellant’s capital assets acquired after the marital break-up. In Strang v. Strang, (SCC), [1992] 2 S.C.R. 112, the Courtstated that the traditional understanding of the word “means” includes, “all pecuniary resources, capital assets, income from employmentor earning capacity, and other sources from which the person receives gains or benefits” (p. 119). J. D. Payne and M. A.

Payne elaborateas follows: The word means includes all pecuniary resources, capital assets, income from employment or earning capacity, and any other sourcefrom which gains or benefits are received, together with, in certain circumstances, money that a person does not have in possession butthat is available to such person. (Canadian Family Law (2001), at p. 195) …

[32] If a court could not take into consideration after-acquired capital assets in considering a spousal support order it would create apotential injustice.

A spouse could (as is alleged here) shield his or her true worth to avoid paying support, even though his or herfinancial situation is significantly better than that of the other spouse. (Italic emphasis in original, underline emphasis added) [90] On this point, L’Heureux-Dubé J.’s comments made in Moge (at 870–871) continue to be relevant: In short, in the proper exercise of their discretion, courts must be alert to a wide variety of factors and decisions made in the familyinterest during the marriage which have the effect of disadvantaging one spouse or benefitting the other upon its dissolution.

In my view,this is what the Act mandates, no more, no less. Such determination demands a complex and, in many cases, a difficult analysis. The same, of course, might be said of the evaluation ofdamages in contract or in tort. However, this complexity does not excuse judges from hearing relevant evidence nor from fully applyingthe law.

There are no easy recipes nor are there neat compartments on which to rely, as families and family relationships are not simple.But there are few matters more important before the courts, given the repercussions on the future of the parties themselves and inparticular, their children. (Emphasis added) See also Linn v Frank, 2014 SKCA 87 at para 85, [2014] 10 WWR 215 [Frank]. [91] Further, Julien D. Payne and Marilyn A.

Payne, Canadian Family Law, 7th ed (Toronto: Irwin Law, 2017) [Payne], notes thefollowing (at 251): A financially dependent wife who is incapable of achieving economic self-sufficiency will not be expected to erode her capital assets tosupport herself while her former spouse continues to build a retirement nest egg and preserve his asset base. Conversely, a husband withinsufficient income to pay spousal support is not obliged to erode his capital assets for the purpose of paying spousal support where theoverall means of both spouses are relatively comparable.

In the final analysis, whether one or both spouses are required to use theircapital for the purposes of supporting themselves or their (former) spouse will depend on the facts of the particular case. As is pointedout in Moge v Moge, (SCC), [1992] 3 SCR 813, the overarching principle of the Divorce Act is to provide an equitabledistribution of the economic consequences of the marriage and its breakdown.

This may require either spouse to draw on their capital tosupport themselves or their former partner. (Citations omitted, emphasis added) [92] The law seems fairly clear that income is the first consideration when determining the ability to sustain spousal support, notcapital. Property division is traditionally dealt with upon dissolution of the marriage, with any property received post trial not beingsubject to division: see the definition of family property in s. 2(1) of The Family Property Act, SS 1997, c F-6.3.

It would seem counter tothe purpose of limiting the definition of family property in this way if the assets received post trial could be distributed in monthlyinstalments as a matter of common course. [93] Ultimately, based on my review of the jurisprudence, courts should look first to income but, if the income of the payor isinsufficient to satisfy the payee’s entitlement to spousal support, courts can then look at least to post-separation assets as a potentialsource to satisfy the payee’s entitlement (Boston at para 64, Leskun at para 29, Strang at 119 and McCulloch at para 91).

Thedetermination in any given case is a fact-specific discretionary exercise based on all the circumstances. [94] The distinguishing feature of this case is that, following the trial decision – which dealt with incomes up to August 2010 only– PM’s income skyrocketed, outlined as follows (based on the revised valuations): Year Income2011 $595,6272012 $614,5792013 $1,046,1842014 $478,302Total:$2,734,692 [95] The income in 2013 vastly exceeded any income the couple had during the marriage, and the income, in general, greatlyexceeded the income of the couple during the marriage, except for the last couple years from 2005 onward (as noted in S.M. v P.M. (6July 2009) Regina, Div No 118 of 2008 (Sask QB) at para 14). [96] The Trial Decision fixed a spousal award of $8,000 a month, commencing 2011 and continuing until 2019, which was basedon a three-year income average for 2007–2009, resulting in a yearly average income of $431,000.

This Court sustained that awardcalculated in that manner. [97] When this Court brought SM’s support to an end as of 2014, it did so on the basis that PM would be winding down his affairsand moving into retirement. Instead, PM earned $2,734,692 in the years 2011 to 2014, or $1,010,892 more than the trial judge hadanticipated he would earn ($2,734,692 less ($431,000 x 4) = $1,010,692). [98] It is against this backdrop that PM’s claim he is entitled to be relieved of the obligation of paying $8,000 per month fromMarch 1, 2015, until October 1, 2019, must be judged.

While the Chambers judge erred by settling upon $3,667,319 as the income figurefor 2011 through to 2015, she did not err in determining that PM had significantly increased his cash assets from that anticipated by the

trial judge by more than $1 million. [ 99 ] As is so often the case in spousal support cases where income is derived from complex commercial transactions, this case, too, became preoccupied with determining PM’s past income. Determining income is the linchpin in determining the quantum of spousal support. It informs not only the ability to pay, it also places parameters around the needs of the payee, as a means of indicating the marital standard of living ( Payne at 255), as well as compensatory aspects arising from contributions of the payee to the development of that income stream.

But, in this case, the larger picture, which looks not only at income received post-trial but also at what has been done with that income, tells a different story. [ 100 ] I conclude that the Chambers judge did not err by ordering spousal support from capital acquired after trial given her findings about its origin in the parties’ marriage. D.

Do the calculation errors amount to a significant misapprehension of the evidence justifying appellate intervention? [ 101 ] To sum up, I have concluded that the Chambers judge erred with respect to her calculation of income, but she did not err by ordering support payable from capital. This, then, becomes the question, what is the effect of her conclusion that PM earned $3,667,319 from 2011 to 2015 when he earned, in fact, $2,985,316 during that period? [ 102 ] At this point, it is important to reiterate that the Chambers judge was reviewing the order of Smith J., who had made an indefinite order of support.

SM conceded in the application before the Chambers judge that PM’s application should be allowed and indefinite support should be brought to an end on October 1, 2019. This would amount to eight years and seven months of support from March 1, 2011, to October 1, 2019 – minus the two months during which no support had been ordered ( September 2015 Decision ) – meaning 8.5 years’ duration of support. [ 103 ] To justify 8.5 years of support, SM took her estimate of PM’s earnings from 2011 to 2015, i.e., $3,667,319, and divided that number by $431,000.

She used the figure of $431,000 because that was the amount that the trial judge had used to determine indefinite support at the monthly rate of $8,000. This mathematical division results in 8.5 years of support. [ 104 ] SM’s second argument to justify 8.5 years of support at the rate of $8,000 per month was that she had never been paid what she would have been entitled to if the SSAG had been applied.

In response to this argument, the Chambers judge wrote the following: [64] Though Frank had not yet been decided when the Trial Decision was rendered, that decision was, in fact Frank compliant despite the fact that the trial judge did not settle on a figure that was in the SSAG range. In paras. 79–90, the parties’ needs, means and other conditions were assessed. In paras. 91–96, the SSAG , Moge and Bracklow formed part of the analysis. [65] Further, in the September 2015 Decision , post- Frank , the reviewing judge was invited to adopt a figure resulting from adherence to the SSAG.

At para. 30, the court responded to that position: [30] Counsel for the petitioner claims it would be a manifest reviewable error of law to adhere to the SSAG in this situation. The respondent has received a considerable amount of capital by reason of a trial judgment. I agree that the SSAG are not an appropriate tool in this case. [66] Thus the Frank analysis had been undertaken by the trial judge and adverted to by the reviewing judge.

The result in both instances was that spousal support for S.M. was not derived from the range offered by the SSAG . (Emphasis added) [ 105 ] In this Court, SM seeks to sustain the Chambers judge’s decision to order support on two footings. First, she says that the accounting errors are irrelevant in the face of a standard of review that focusses on the result and not on individual reasons for each individual finding on the way to the order for support.

She submits that, in light of the income earned during the period from 2011 to 2017, it is not possible for this Court to say that the decision of the Chambers judge is clearly wrong. [ 106 ] Her second basis for sustaining the 2018 Chambers Decision , and, again, the submission put to the Chambers judge, is that PM has never paid what he would have been required to pay if the SSAG calculations had been applied.

To now reduce her award on the basis of a miscalculation of PM’s income would be unfair and would not respect the standard of review. [ 107 ] Assessing these arguments requires this Court to consider how the standard of review applies in the circumstances of this case. Clearly, the standard is one of considerable deference.

To reiterate, as the Supreme Court stated in Hickey , support orders should not be overturned “unless the reasons disclose an error in principle, a significant misapprehension of the evidence, or unless the award is clearly wrong” (at para 11). [ 108 ] In the context of a 29-year marriage with children, an award of indefinite support would not be clearly wrong. Indeed, SSAG recommends that spousal support in such circumstances should be of indefinite duration.

Here, where the parties have had such disparate earning capacities, it could hardly be said that an award of support for 8.5 years after trial is clearly wrong – even having regard for the fact that spousal support was paid for some part of the period from 2007 until trial. [ 109 ] However, the following question must be considered: Do the accounting errors made in relation to the 2011 to 2015 income count as a significant or serious misapprehension of evidence that would justify intervention by this Court, having regard for the standard of review?

In my view, they do not. [ 110 ] First, what we are talking about is an error that is measured in months. SM’s model presented to the Chambers judge was based on earnings from 2011 to 2015 ($2,985,316). But, in her analysis, the Chambers judge included the 2016 values (see para 59), which

increased PM’s income to $3,196,573 ($2,985,316 plus $211,257). Using the total of the 2011 to 2016 incomes, i.e., $3,196,573, and dividing that total by $431,760.33 (the annual income assumed by the trial judge), generates a support number of 89 months.

In contrast, if one uses the total earnings available for spousal support from 2011 to 2017, i.e., $3,369,796, and divides that income by $431,670.33, it generates a support number of approximately 92 months. [ 111 ] Taking into account the results of all the proceedings, spousal support was envisioned to have a duration of 8.5 years or 102 months (i.e., March 1, 2011, to October 1, 2019, minus two months). This results in 10 months of support that would not be funded (102 months minus 92 months), as calculated by the model suggested to the Chambers judge by SM.

As mentioned, an error that is measured in months. [ 112 ] Second, another way of assessing the significance of the accounting errors is to weigh what occurred here with what the trial judge had anticipated. The Trial Decision fixed spousal support with the following commentary: [100] … If spousal support were set at $8,000.00 monthly, the division of available resources would be 65.03% and 34.97% [respectively of the available cash resources]. In my view, this is an equitable sharing of resources, given the length of the marriage, and the roles P.M. and S.M. assumed during the marriage.

It will also allow both S.M. and P.M. to maintain the lifestyle they enjoyed during their long-term marriage. [ 113 ] Adding together what PM earned in each of the years 2011 through to, and including, 2015, i.e., $2,985,316, plus $80,000 per year for five years attributed to SM, yields $3,385,316. From the date of trial until October 1, 2019 (minus the two months when PM was not required to pay spousal support), he will have paid $816,000 in spousal support. This is approximately the model envisaged by the trial judge. Indeed, it is less: as 34.97% of $3,385,316 equals $1,183,845.

If PM’s 2016 and 2017 income are added ($211,257 and $173,233 respectively), the total of his earnings would be 3,769,806 and, adding SM’s imputed income of $400,000 ($8,000 multiplied by five years), results in $3,849,806, 34.97% of which would be $1,346,277.16. It also must be remembered that, since this is being paid by way of spousal support, all payments made by PM are tax-deductible in his hands and tax payable in hers. [ 114 ] This is not meant as a perfect calculation as it does not factor in income tax and other concerns.

Further, in imputing income to SM, I have done so for the whole of the period, including after the parties had contemplated she would retire. This imputation of income includes pension payments from her defined benefit pension plan, which was divided at trial, but does not include PM’s pension assets that he received at trial. Nonetheless, these calculations roughly demonstrate that an $80,000 pre-tax error does not constitute a serious or significant misapprehension in the circumstances of this case.

While it is true that this Court brought spousal support to an end in December of 2014, thereby compelling SM to apply for a review, the Court was not aware that PM was in the process of amassing income that would exceed the trial judge’s projected income by over $1 million. [ 115 ] Finally, I think SSAG is an important reference point to determine the significance of the accounting errors in this case.

A family law decision, fixing the payment of support at a certain rate and for a certain duration, is a mix of many individual decisions favouring one party or the other, but always striving for an equitable division. In this case, for example, the trial judge concluded that spousal support should not be based on SSAG . Neither Smith J. nor the Chambers judge found it to be appropriate to assess spousal support on the basis of SSAG , but that does not preclude this Court from using SSAG as a means to determine whether or not to intervene – or, if it were to intervene, in determining what the support should be.

Quite clearly, if the trial judge had imposed even the low-range of the SSAG , SM would have received more than what she did, in fact, receive: SSAG Ranges (Yearly) Year PM’s Income SM’s Income High Mid Low 2011 $565,627 $80,000 $ 242,808 $212,460 $ 182,112 2012 $614,579 $80,000 $ 267,288 $233,880 $ 200,472 2013 $1,046,184 $80,000 $ 483096 $422,700 $ 362,316 2014 $478,302 $80,000 $ 199,152 $174,252 $ 149,364 2015 $250,624 $80,000 $ 85,308 $74,652 $ 63,984 2016 $211,257 $80,000 $ 72,876 $63,768 $ 54,660 2017 $173,233 $80,000 $ 46,620 $40,788 $ 34,968 Totals: $ 1,397,148 $ 1,222,500 $ 1,047,876 Thus, if spousal support were to be paid from March 1, 2011, to October 1, 2019, the result would be an award (pre-tax) of $1,047,876 – and this, as mentioned above, would be the low-range of the SSAG . [ 116 ] In this case, it is quite clear that spousal support was never paid in accordance with SSAG .

While this Court cannot now impose such an order without an error being first found, it is a highly relevant circumstance that, under SSAG , support would have been of an indefinite duration and potentially at a higher rate than $8,000 per month. [ 117 ] In such circumstances, for this Court to intervene to reduce the award by less than one year or, in other words, by $80,000 in pre-tax income, would clearly not give effect to the Supreme Court’s clear direction to appellate courts to accord significant deference to first instance decisions in family law matters. [ 118 ] In conclusion, I find no basis to interfere with the decision of the Chambers judge continuing spousal support for the period that she was entitled to review, i.e., from January 1, 2016, until October 1, 2019, but terminating it thereafter in accordance with SM’s acquiescence to do so.

E. Did the Chambers judge err in principle by ordering a review? [ 119 ] The law on review orders, such as the one ordered in the 2012 CA-Decision , was considered by the Supreme Court in Leskun . Review orders should not be the norm. Instead, courts should endeavour to “resolve the controversies before them and make an order which is permanent subject only to change under s. 17 on proof of a change of circumstances” ( Leskun at para 39 ). A review order should

only be used when there is a “genuine and material uncertainty”, where its use is “essential” (paras 37 and 39). Review orders allow the parties to bring an application without having to demonstrate a material change in circumstances; as such, the issue should be tightly circumscribed or it “will inevitably be seen by one or other of the parties as an invitation simply to reargue their case” (at para 39). [ 120 ] The cautionary words of Leskun have been applied by this Court in D.B.B. v D. M.

B. , 2017 SKCA 59 at paras 98–99 ; Kosolofski v Kosolofski , 2016 SKCA 106 at para 74 , 402 DLR (4th) 423 (including this Court’s decision in this very case, 2012 CA-Decision at para 64); and, recently, in Kassian v Kassian , 2019 SKCA 101 at para 122 . [ 121 ] Subsequent to Leskun , the Ontario Court of Appeal stated the following in Fisher v Fisher , 2008 ONCA 11 , 70, 288 DLR (4th) 513, an oft cited decision: [63] A review allows an application for support without the need to prove the material change in circumstances required in a s. 17 variation application.

Unless the review is restricted to a specific issue , it is generally equivalent to an initial application for support and necessitates a complete rehearing of every issue from entitlement to quantum. Thus, a review, particularly one relatively proximate to the time of the originating order, causes unnecessary and significant expense for the parties, not only emotionally, but also financially. … [70] Review orders in effect turn an initial order into a long-term interim order made after trial. Accordingly, they should be the exception, not the norm.

They are appropriate when a specified uncertainty about a party’s circumstances at the time of trial will beco

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