Walker v Walker, 2019 SKCA 96

Court of Appeal for Saskatchewan Docket: CACV3113 Citation: Walker v Walker , 2019 SKCA 96 Date: 2019-09-20 Between: Darcy Edward Walker Appellant/Respondent on Cross-Appeal (Petitioner) And Becky Marie Walker Respondent/Appellant on Cross-Appeal (Respondent) Before: Ottenbreit, Whitmore and Schwann JJ.A. Disposition: Appeal allowed in part; cross-appeal allowed. Written reasons by: The Honourable Mr. Justice Whitmore In concurrence: The Honourable Mr.

Justice Ottenbreit The Honourable Madam Justice Schwann On Appeal From: 2017 SKQB 195 , Regina Appeal Heard: September 19, 2018 Counsel: Bradley Hunter, Q.C., for the Appellant Patrick Loran for the Respondent Whitmore J.A. I. Introduction [ 1 ] In this appeal, Darcy Walker takes issue with the trial judge’s valuation of family property ( Walker v Walker , 2017 SKQB 195 [ Trial Decision ]) and also challenges the trial judge’s determination of his income, which, in turn, he says affects the spousal and child support calculations made by the trial judge.

In her cross-appeal, Becky Walker contests the trial judge’s finding that she was entitled to spousal support for a limited duration of seven years and seeks indefinite spousal support. I would allow Mr. Walker’s cross- appeal in part only with respect to the valuation of family property, and I would allow Ms. Walker’s cross-appeal with respect to the duration of spousal support. My reasons for so doing follow. II. Background [ 2 ] The parties were married in October of 1994 and have two children, one born in 1996, the other in 1998. The parties separated in 2013. At the time of trial, Mr.

Walker worked in the oil fields in Saskatchewan, Ms. Walker worked at various part-time administrative positions, the elder child attended university in Calgary, and the younger child attended university in Ontario. [ 3 ] In the course of his work, Mr. Walker developed a business relationship with Postell Energy Co. Ltd. [Postell], a privately-owned oil and gas production company, and was hired by Postell as a battery operator in 1991. He remains employed by Postell . Mr.

Walker’s employment with Postell required significant amounts of driving to observe and maintain that company’s oil assets across the province. [ 4 ] In addition to his employment with Postell, Mr. Walker formed Safari Servicing Ltd. [Safari], an oil rig servicing company, and Outback Energy Ltd. [Outback], a holding company for oil wells in Saskatchewan. Mr. Walker is a 50% shareholder in each corporation. Ms. Walker is a 50% shareholder in Outback. The other shareholder in Safari is a company owned by Jeff Scott, the President and CEO of Postell. III.

The Trial Decision [ 5 ] The trial judge dealt with the valuation and division of family property and determined the parties’ respective incomes for the calculation of child and spousal support. He dealt first with the question of family property in which the contentious issues were the valuation of Safari and Outback. [ 6 ] Mr. Walker and Mr. Scott created Safari to perform oil rig service work for Postell which had, until then, contracted out its service work. As a result, Mr.

Walker was able to earn extra income and Postell was able to reduce its costs and have one of its own people perform its service requirements. Safari typically employed approximately four employees, excluding Ms. Walker (she worked as a bookkeeper for Safari). [ 7 ] Safari’s principal source of income was from Postell and Mr. Walker filed as evidence financial statements for the prior eight years for Safari. Ms. Walker relied on a formal appraisal report prepared by Mr. Gervais (a chartered business valuator) as opinion evidence with respect to the valuation of Safari. Mr. Walker relied on a critique of Mr.

Gervais’s report prepared by Mr. Doran (a chartered accountant), a property appraisal by Mr. Pelzer, and an opinion about the valuation of Safari’s building and lands presented by Mr. Lackey, a realtor who was qualified as an expert witness at trial.

[8] The trial judge did not accept Mr. Gervais’s recommendation that Safari should be valued as a going concern. He foundMr. Gervais’s report ignored the evidence that suggested Safari’s success depended on its relationship with Postell. The trial judgevalued Safari as of 2017, the date of trial, in accordance with The Family Property Act, SS 1997, c F-6.3, which rendered Mr. Gervais’sreport somewhat less relevant as it established a value as of March 2014. Instead, the trial judge preferred Mr. Doran’s estimate of value,which was based on an adjusted net asset valuation rounded to $675,000.

The trial judge went into extensive detail of the evidencepresented by the parties, but as the ultimate valuation by the trial judge is not in dispute, except to the extent outlined below, it is notnecessary to delve into the evidence in great detail to determine the issues before me. [9] As to the value of Outback, the trial judge considered the following: (

a) the wells in which Outback had an interest; (

b) Outback’s prior six years of financial statements; (

c) a report prepared by Mr. Gervais; (

d) the opinion of an expert witness (a mechanical engineer) at trial, who had prepared an estimate of the cost of abandoning andcontaining wells for Mr. Walker in 2015; (

e) an assessment conducted by an environmental scientist on the expected cost to remediate Outback’s wells; and (

f) the evidence of Outback’s accountant. The trial judge determined the value of Outback to be negative $161,031. As the parties had equal interests in Outback, and as thenegative value arose as a result of certain contingent liabilities, the trial judge did not include the negative value of Outback indetermining family property. In the event any of these liabilities would be incurred in the future, the trial judge reasoned that as 50%shareholders the parties would share those costs equally. [10] The trial judge accepted Ms. Walker’s valuation for other miscellaneous assets. In the end, assuming Ms.

Walker was toreceive the net sale proceeds from the family home, and Mr. Walker was to retain his 50% interest in Safari, Mr. Walker was required tomake a payment of $108,827 to Ms. Walker to achieve an equal distribution of property for each party. [11] Turning to the parties’ income, the trial judge determined Mr. Walker’s income for 2013 to be $164,500, for 2014 to be$170,200, and for 2015 to be $188,200. He determined Ms. Walker’s income to be $66,573 for 2013, $48,000 for 2014, and $58,286 for2015.

Based on those findings, the trial judge calculated child support payments for each party (as per the Federal Child SupportGuidelines, SOR/97-175 [Guidelines]) and determined that Ms. Walker should receive spousal support for a fixed term of seven years. [12] From this decision, Mr. Walker appeals, claiming certain errors in the calculation of his income and in the valuation of certainassets. Ms. Walker cross-appeals on the duration of the spousal support, alleging she should receive indefinite support. IV.

Jurisdiction and standard of review [13] The jurisdiction for this appeal is found in the Divorce Act, RSC 1985, c 3 (2d Supp), at s. 21 [Divorce Act]; The FamilyProperty Act at s. 55; The Queen’s Bench Act, 1998, SS 1998, c Q-1.01, at s. 101; and The Court of Appeal Act, 2000, SS 2000, c C-42.1,at s. 7. [14] The standard of review regarding spousal and child support is a deferential one, as outlined by this Court in D.B.B. v D.M.B.,2017 SKCA 59 [D.B.B.]: [48] Under family law legislation, a trial judge’s exercise of discretion in making spousal and child support orders is entitled toconsiderable deference.

As a result, “appeal courts should not overturn support orders unless the reasons disclose an error in principle, asignificant misapprehension of the evidence, or unless the award is clearly wrong” (Hickey v Hickey, (SCC), [1999] 2SCR 518 at 525 [Hickey]). [15] The standard of review with respect to the division of family property is also deferential, again as outlined in D.B.B.: [172] This Court has afforded deference to a trial judge in family property division decisions as [The Family Property Act] givessignificant discretion in determining valuation and what is a fair and equitable division: “An appeal court should only interfere if the trialjudge has abused his or her discretion by erring in principle, disregarding a material matter of fact, or failing to act judicially, or if theresult is so plainly wrong as to amount to an injustice …” (Ackerman v Ackerman, 2014 SKCA 137 at para 23, [2015] 6 WWR626 [Ackerman]).

V. Issues [16] The issues raised by the parties can be summarized as follows: (

a) Did the trial judge err in principle in the imputation of income to Mr. Walker; (

i) by intending to apply s. 18 of the Guidelines but failing to do so? (ii) by applying s. 19 of the Guidelines instead of s. 18?

(iii) by making an error in his application of s. 19 of the Guidelines ? (

b) Did the trial judge err by misapprehending the evidence in imputing income to Mr. Walker? (

c) Did the trial judge err in the valuation of Safari; (

d) Did the trial judge err in the valuation of Outback? (

e) Did the trial judge err by failing to explain why he departed from the Spousal Support Advisory Guidelines by limiting spousal support to seven years? VI. Analysis A. Did the trial judge err in principle in the imputation of income to Mr. Walker? 1. Did the trial judge err by intending to apply s. 18 of the Guidelines but failing to do so? [ 17 ] The central issue at trial was whether all or part of Safari’s and/or Outback’s pre-tax income should be imputed to Mr. Walker for support purposes. Mr. Walker contends the trial judge intended to apply s. 18 of the Guidelines to the evidence but, in the end, forgot to do so.

Section 18 of the Guidelines provides as follows: Shareholder, director or officer 18

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

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

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

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

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

(2) In determining the pre-tax income of a corporation for the purposes of subsection (1), all amounts paid by the corporation as salaries, wages or management fees, or other payments or benefits, to or on behalf of persons with whom the corporation does not deal at arm’s length must be added to the pre-tax income, unless the spouse establishes that the payments were reasonable in the circumstances. [ 18 ] Mr.

Walker submits the trial judge calculated Safari’s pre-tax income in contemplation of using s. 18 of the Guidelines , but then stopped short of completing the balance of the s. 18 analysis or reaching any conclusion under that provision. [ 19 ] With respect, this argument misapprehends how the trial judge dealt with the imputation of income issue. While a great deal of corporate financial information was led at trial, Ms. Walker’s counsel sidestepped s. 18 of the Guidelines in oral argument, urging the trial judge to deal with imputation of income to Mr. Walker under s. 19 instead.

The trial judge both understood and adopted Ms. Walker’s proposed approach. In the Trial Decision , he wrote: [138] The issue with respect to s. 18 should be addressed in tandem with s. 19. I say this because the closing argument on behalf of [Ms. Walker] acknowledged the existence of s. 18 issues, but went on to urge the court to impute income to [Mr. Walker] under s. 19 , and effectively ignore s. 18 . While I understand the reason for [Ms.

Walker] taking such a position, and recognize the overlap between the two provisions, I will make findings on the application of s. 18 , which may be helpful in the event an appeal is taken from this judgment. [ 20 ] In the event of a potential appeal, the trial judge went on to identify the pre-tax income for Safari and Outback, recognizing that the “task is not straightforward” (at para 139). He made a number of findings in this regard: (

a) Safari’s financial statements did not provide an accurate and complete reflection of the company’s pre-tax income; (

b) Mr. Walker had inappropriately accessed Safari’s coffers to cover personal expenses on a number of occasions; (

c) Mr. Walker’s practice of misappropriation was “deliberate and obvious” (at para 140); and (

d) Mr. Walker and Mr. Scott had inappropriately accessed monies from Safari in the past to cover personal expenses. [ 21 ] In the end, the trial judge found the evidence clearly supported the conclusion that Safari’s pre-tax income was greater than what was otherwise shown in its financial statements but, on the evidence before him, he was unable “to identify a specific amount that could be added to Safari’s pre-tax income” (at para 141).

In spite of the paucity of evidence, the trial judge, somewhat arbitrarily, added $90,000 to Safari’s pre-tax income, stating: “I think it is reasonable to estimate the increase, for the fiscal year ending 2014, at between $75,000 and $115,000. Taking the median of this range, $90,000, I find that it is fair and reasonable to add this amount to Safari’s pre- tax income, as described in its financial statement for that year” (at para 142). [ 22 ] On the urging of Ms. Walker (and for the reasons reproduced below), the trial judge imputed additional income to Mr. Walker

pursuant to s. 19 and not s. 18 of the Guidelines : [149] In the end, I find that, despite some evidence that would justify an imputation of income under s. 18 , the better approach in this case is to impute income under s. 19 , as was proposed by [Ms. Walker]. While I accept [Ms. Walker’s] methodology in this respect, I do not accept all the numbers she proposes in determining [Mr. Walker’s] income. [ 23 ] This was a deliberate choice on the part of the trial judge and not a mere oversight.

It is clear the trial judge did not intend to apply s. 18 , but made findings in relation to it only to give context in the event of an appeal. [ 24 ] There is no merit to this argument. 2. Did the trial judge err in principle in the imputation of income to Mr. Walker by applying s. 19 of the Guidelines instead of s. 18? [ 25 ] Next, Mr. Walker argues the trial judge erred by resorting to s. 19 of the Guidelines instead of s. 18 to impute income, and further by relying on a “non-enumerated factor” under s. 19 of the Guidelines (at para 133). In his factum, Mr.

Walker suggests the approach taken by the trial judge was “unexplainable and unjustified”. [ 26 ] It is unclear from Mr. Walker’s argument if he is alleging an error in law or insufficiency of reasons. I will address each in turn. [ 27 ] To the extent Mr. Walker argues the trial judge’s decision to utilize s. 19 was “unjustified”, I take him to suggest this decision amounted to an error of law. More specifically, Mr.

Walker appears to be challenging whether s. 19 is available where the payer is a shareholder of a corporation. [ 28 ] As a starting point, I am satisfied the trial judge correctly set out the law in relation to the imputation of income in paragraphs 125–134 of his decision. He began by noting that, with regard to s. 18 of the Guidelines , a court may include all or part of a corporation’s pre-tax income in the spouse’s annual income where the spouse is a shareholder, director, or officer of a corporation.

The s. 18 analysis requires a court to first determine the amount of a corporation’s pre-tax income that would be available.

In determining the pre-tax income of a corporation, a court must include all amounts paid by the corporation as salaries, wages or management fees, or other payments to or on behalf of persons with whom the corporation does not deal at arm’s-length—unless the shareholding spouse can establish that the payments were reasonable in the circumstances ( Olchowecki v Olchowecki , 2005 SKQB 144 , 267 Sask R 83 [ Olchowecki ]; R.E.G. v T.W.J.G., 2011 SKQB 269 , 376 Sask R 1 (aff’d 2013 SKCA 34 ); Goett v Goett , 2013 ABCA 216 , 33 RFL (7th) 301 [ Goett ]; and Nesbitt v Nesbitt , 2001 MBCA 113 , [2001] 8 WWR 635).

When a payer operates through a corporation, the Guidelines permit the corporate veil to be lifted if a court is satisfied the income determined under s. 18 of the Guidelines does not fairly represent the amount available for child support purposes. [ 29 ] The trial judge went on to discuss s. 19 of the Guidelines .

Section 19 also confers judicial discretion to impute income to a payer where the income stated on the tax return does not truly represent the income available for child support purposes.

Section 19 provides: Imputing income 19

(1) The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include the following: (

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

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

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

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

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

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

g) the spouse unreasonably deducts expenses from income; (

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

i) the spouse is a beneficiary under a trust and is or will be in receipt of income or other benefits from the trust. (Emphasis added) [ 30 ] The concern is whether s. 19 of the Guidelines can be used instead of s. 18 to impute income from a corporation to the payer spouse. It appears that the trial judge thought that it was more appropriate to impute the personal benefit that Mr. Walker received from the corporation under s. 19 rather than attribute the corporation’s income to Mr.

Walker’s income under s. 18 . [ 31 ] Appellate courts across the country have interpreted s. 18 and s. 19 as provisions that work in tandem: “The sections are inextricably linked, designed to work in tandem, and are not mutually exclusive means of ascertaining that income” ( Goett at para 18 )

and “the discretion provided for in s. 18 is a mechanism available to determine a fair amount of income for the purpose of paying child support. It does not exist in isolation from the other provisions and is specifically utilized in imputing income for the purpose of s. 19 ” ( Goett at para 20 ). An important distinction between these provisions is that s. 18 allows for the piercing of the corporate veil and the attribution of some or all of a corporation’s pre-tax income to a payer for child support purposes. Because a company is a distinct legal entity, this provision is necessary to provide a mechanism for doing that.

Section 19 , on the other hand, allows income to be imputed to a payer as a result of action the payer has taken. It does not allow for the piercing of the corporate veil. [ 32 ] In Goett , the Chambers judge had found that the purpose of the corporation was to divert income and avoid payment of child support and therefore s. 19 (

d) of the Guidelines applied (at para 19). However, the Chambers judge failed to consider what amount of pre-tax income from the corporation should be available for the payment of child support under s. 18, which the Alberta Court of Appeal found to be an error (at para 20). The Court went on to say: [20] ... In circumstances such as the case at bar, where it has been established that the pay or is the de facto shareholder or remains the controlling mind of a corporation, there is no basis to decline to consider the methodology of determining income in s 18 or the jurisprudence under that

section that guides the exercise of discretion. Where a payor has transferred shares to a non-arms length party to avoid the payment of child support, a purposive

interpretation of the guidelines and the discretion afforded under them, particularly s 19, permits a s 18 analysis to be undertaken by piercing the corporate veil.

To interpret the guidelines otherwise is to allow the payor to avoid his or her obligations by employing a corporate structure, potentially creating fraudulent conveyances, and deprive the children of the support to which they are reasonably entitled. [ 33 ] In my reading of Goett, I see the Alberta Court of Appeal as saying that the trial judge was not wrong to impute the corporation’s income under s. 19 ; the error occurred when the trial judge imputed the corporation’s income without determining “what amount of the pre-tax income from the corporation ought to be available for the payment of child support under s. 18” (at para 20).

This is the analysis that, in the Trial Decision, the trial judge engaged in throughout paragraphs 139–144. Unlike Goett, the trial judge did consider s. 18 and the amount of pre-tax income. However, it was noted in the Trial Decision that there was a lack of evidence presented to the court on the corporation’s expenses (at para 144) and therefore it was hard to determine the amount that ought to be available for the payment of child support. [ 34 ] In Gosse v Sorensen-Gosse , 2011 NLCA 58 at paras 115–116 , 12 RFL (7th) 1 [ Gosse ], the Court in obiter dealt with a similar situation.

There, under s. 19 , the trial judge had imputed as income part of the amount paid in legal fees and vehicle and cell phone expenses by a company that was owned by one of the spouses.

The Court of Appeal stated: “While the principle that would justify imputing such income is fairly obvious, the use of guideline 19 seems somewhat circuitous” (at para 115). [ 35 ] In Gosse , the Court of Appeal then went on to say: [116] Where the expenses involved were expenses paid directly by the wholly owned corporation, it would seem more appropriate to treat them as adjustments to the pre-tax corporate income of the corporation, SSDL, as was done by the British Columbia Court of Appeal in Reis v. Bucholtz [2010 BCCA 115 , 3 BCLR (5th) 71] .

Even though there might be no difference in the net effect, on the determination of income for Guidelines purposes, it seems somewhat indirect to treat the accounting for vehicle or cell phone expenses by the wholly owned corporation as an unreasonable deduction from Ms. Sorensen’s income. However, as the matter was not in issue between the parties, and the end result is the same in any event, these comments are obiter. (Emphasis added) [ 36 ] Similarly, I would say that the decision of the trial judge to impute Mr. Walker’s personal expenses paid by Safari to Mr.

Walker as income represents an indirect, but not incorrect, method of imputation. [ 37 ] The trial judge stated there was evidence that would support an imputation of income under s. 18 (at para 149); however, the trial judge was not presented with much evidence on the reasonableness of the corporation’s expenses (at para 144). Instead of determining the proportion of the pre-tax income that should be attributed to Mr. Walker, the trial judge decided to impute the portion that was used by Mr. Walker for personal expenses.

This seems like a roundabout route to come to the same conclusion but may have occurred because of the lack of evidence available to the trial judge on Safari’s pre-tax income and the reasonableness of the corporation’s expenses. [ 38 ] In spite of the approach taken by the trial judge, I am not persuaded the result would have been any different had he correctly utilized s. 18—in fact, it arguably could have resulted in Mr. Walker’s income for support purposes being assessed even higher.

As noted above, the trial judge determined Safari’s pre-tax corporate income should be increased by $90,000, but having done so, and without expressly ruling on the point, he declined to attribute any portion of that amount as additional income to Mr. Walker. The trial judge was then obliged to go on and consider whether, pursuant to s. 18(2), the other payments and benefits Mr. Walker received from Safari should be added to Safari’s pre-tax income.

This he did not do, but instead relied on s. 19 to impute income under s. 19 . [ 39 ] True, had he undertaken his analysis under s. 18(2), the trial judge would have had to go on to consider whether, on the evidence before him, all or a portion of the pre-tax income was required by the corporation for legitimate and ongoing business purposes. An examination of the Trial Decision leads me to conclude no such evidence was offered by Mr. Walker. In any event, the fact Safari was willingly covering the cost of the various personal benefits that accrued to Mr.

Walker undermines any argument that Safari required the money for other legitimate business purposes. [ 40 ] This decision should not be taken as a carte blanche to avoid the operation of s. 18. While the trial judge expressed concern that the evidence presented to him was not sufficient to enable him to properly evaluate the reasonableness of Safari’s expenses, it is rare that trial judges have all the evidence necessary to properly calculate pre-tax income. Here, however, the trial judge exercised his discretion to employ s. 19 on the basis that Mr.

Walker had taken money from Safari without accounting for it as wages, dividends, or a shareholder loan. He had, in effect, received income he did not declare. Under these particular circumstances, I see no error in proceeding under s. 19 of the Guidelines .

[ 41 ] Mr. Walker goes on to argue that even if the use of s. 19 was open to the trial judge, he erred by relying on a non-enumerated factor under that

section to impute income. This argument invites this Court to ignore the plain language of s. 19 and depart from existing jurisprudence. [ 42 ] The opening language of s. 19 permits a court to impute income to a spouse “as it considers appropriate in the circumstances, which circumstances include the following….” (emphasis added). The

section goes on to list examples of circumstances that might warrant the imputation of income to a spouse. It is well accepted that inclusive lists signaled by the word “include” are non-exhaustive. Accordingly, the plain language of s. 19 does not bear an

interpretation that would prevent non-enumerated factors from being considered by a trial judge. [ 43 ] Furthermore, s. 19 has been interpreted by appellate courts across the country to include (but not be restricted to) the enumerated situations identified in s. 19(1)(a–i). In other words, the s. 19 list is not exclusive: for example, see Bak v Dobell , 2007 ONCA 304 , 281 DLR (4th) 494; Ouellette v Ouellette , 2012 BCCA 145 , 16 RFL (7th) 39; Simpson v Bettenson , 2014 ABCA 21 , 38 RFL (7th) 1; Chiasson v Doucet , 2014 NBCA 49 , 422 NBR (2d) 304; and Korman v Korman , 2015 ONCA 578 , 387 DLR (4th) 579.

Although the issue has not been given extensive treatment in this province, the Saskatchewan Court of Queen’s Bench appears to have adopted a similar approach: see Olchowecki ; and Algner v Algner , 2008 SKQB 132 , [2008] 10 WWR 509. [ 44 ] The circumstances when s. 19 may be expanded beyond the enumerated list and whether those circumstances must be analogous to the enumerated provisions in s. 19(1)(a–

i) has yet to be definitively dealt with by this Court. Respectfully, to the extent Mr. Walker is taken to argue the trial judge erred by relying on s. 19 to impute income to him, even though the circumstances presented by his situation did not fall squarely within one of the enumerated sections, I decline to deal with it. This argument does not appear to have been made at trial and, apart from a bald, unsupported assertion about the law, Mr. Walker’s argument was largely undeveloped in this Court.

In light of this state of affairs and the seeming contrary authority elsewhere in Canada, this issue is best left for another day. [ 45 ] This brings me to Mr. Walker’s complaint that the 40-plus paragraphs devoted to the income issue by the trial judge was “unexplainable”. In assessing the adequacy of reasons, appellate courts must take a functional, substantive approach to reading them as a whole in the context of the evidence, the arguments at trial, and with an appreciation for the purposes or functions for which they are delivered.

There must be a logical connection between the result and the basis for the reasons in respect to the evidence, the submissions of the parties, and the live issues at trial: R v R.E.M. , 2008 SCC 51 at para 35 , [2008] 3 SCR 3. [ 46 ] The trial judge carefully examined the law and the evidence. Turning to s. 19, although he commented upon the lack of precision of Ms. Walker’s allegation about Mr. Walker’s personal use of Safari funds, he clearly found there was enough evidence to support a conclusion that some imputation of income was warranted.

Given the state of the evidence that was before him, his findings of fact, and the arguments of the parties, the decision to apply s. 19 instead of s. 18 to impute additional income to Mr. Walker was adequately explained. [ 47 ] Mr. Walker’s contention is without merit. 3. Did the trial judge err in principle in the imputation of income to Mr. Walker by making an error in his application of s. 19 of the Guidelines ? [ 48 ] Mr.

Walker submits that, if pre-tax income had been imputed to him pursuant to s. 18 of the Guidelines , it would have violated the principle established in Thompson v Bear , 2014 SKCA 111 , 378 DLR (4th) 649 [ Bear ]. [ 49 ] Bear analyzed whether s. 18 (

a) of the Guidelines entitles courts to attribute more than the current corporate pre-tax income to the payer for calculating child support. In the end, this Court adopted the “Limited Rule” for imputation of corporate income to a spouse under s. 18 of the Guidelines . This rule provides that when a court determines how much corporate income to impute to a spouse, it may consider only the corporation’s income for the most recent fiscal year.

This approach differs from the available approach for dealing with fluctuating, non-corporate income of a spouse, which allows a court to take a three-year average of income in setting that spouse’s annual income for support purposes. [ 50 ] Mr. Walker argues in his factum that, “if the calculation method described in the trial decision was applied under s. 18 of the Guidelines , the trial judge would have been in violation of the Unlimited Rule [ sic ] as it was established in Bear .” As I understand Mr.

Walker’s argument, he is saying that at some stage in the trial judge’s analysis he took a three-year average of the value of the benefits derived by Mr. Walker from Safari—those benefits being a vehicle allowance, personal expenses, and personal accommodation covered by Safari—and in so doing, he violated the principle established in Bear . [ 51 ] In my view this argument has no merit. [ 52 ] In the first place, the trial judge expressly declined to rely on a three-year average in setting Mr.

Walker’s personal income for child and spousal support purposes ( Trial Decision ): [137] As for the application of s. 17, I do not accept [Ms. Walker’s] argument that a three-year average should be used in the determination of income for either year. While there is an obvious fluctuation in income between 2011 and 2015, the evidence received at trial satisfies me that the downturn in the oil industry has sufficient stamina that it will likely continue into the indefinite future.

If anything, the evidence tends to suggest that the good years immediately before 2014 were more of an aberration than the years after. [ 53 ] Second, no authority was cited for the proposition that the Limited Rule applies in the context of s. 19. As discussed above, the trial judge plainly did not base his analysis on s. 18 of the Guidelines (to which the Limited Rule applies), but on s. 19. In choosing this analytical path, the trial judge effectively sidestepped the application of the Limited Rule.

The argument that the Limited Rule could apply in the context of s. 19 is novel at best, and to say that the trial judge erred in principle by not contemplating this novel argument— especially when it was not argued before him—cannot be sustained. While there may be principled reasons to accept such an argument, it can hardly be said that the failure to consider the Limited Rule in the s. 19 context constitutes an error in principle that would invite

appellate intervention, especially given the high deferential standard of review applicable to support decisions of trial judges. [ 54 ] Third, it is not altogether clear to me which “calculation method” Mr. Walker is referring to that would justify the application of the Limited Rule in the trial judge’s s. 19 analysis. I suspect Mr. Walker calls into question the calculation at paragraphs 141–144 of the Trial Decision , where the trial judge estimated the amount of Safari’s income to impute to Mr.

Walker in respect of personal expenses: [141] While the evidence clearly supports the conclusion that Safari’s pre-tax income is greater than the amount shown in the relevant financial statements, it is less clear as to the actual amount that should be added to it. Although there was cross-examination on the questionable general ledger entries and the additions to capitalized real property, none of the witnesses or counsel parsed through all of the entries to identify a specific amount that could be added to Safari’s pre-tax income. In saying this, I do not mean to be critical.

It would have been extremely tedious and would likely have extended the trial considerably. I suspect that these concerns largely informed [Ms. Walker’s] strategy to emphasize the application of s. 19, instead of s. 18 . [142] Despite the difficulty in identifying a precise amount by which Safari’s pre-tax income should be increased, there is evidence to support an increase and a figure should be determined, even if done somewhat arbitrarily. In the circumstances of this case, I think it is reasonable to estimate the increase, for the fiscal year ending 2014, at between $75,000 and $115,000.

Taking the median of this range, $90,000, I find that it is fair and reasonable to add this amount to Safari’s pre-tax income, as described in its financial statement for that year. This results in an increase to $95,884, from $5,884. Whether any portion of this amount is imputed to [Mr. Walker] is another matter. [143] The circumstances with respect to Safari factored more heavily into [Ms. Walker’s] argument with respect to s. 19, which is the provision under which she urges the court to adjust income. In this respect, she posited that the personal expenses [Mr.

Walker] incurred through Safari, including the accommodation expenses, should be imputed to him. The amounts suggested are $40,000 for the personal expenses and $24,000 for the accommodations Safari provided, above and beyond the amount he paid in rent. [144] To some extent, this argument is handicapped by the same lack of precision that presented itself in determining how much Safari’s pre-tax income should be increased under s. 18 . Some imputation is certainly arguable. At the same time, I must recognize that the court did not hear specific evidence with respect to every questionable expense.

At the risk of being somewhat arbitrary, I am satisfied that it is appropriate to impute $20,000 of personal expenses from Safari in both 2013 and 2014, with a further imputation of $25,000 in 2015. With respect to the accommodation expenses covered by Safari, I accept the figure proposed by [Ms. Walker], in the amount of $24,000, for 2015. [ 55 ] At paragraph 142, the trial judge took the median of two amounts and, I suspect, that is the calculation referred to by Mr. Walker.

However, this calculation would apply in a s. 18 analysis only and thus the Limited Rule, as I have explained, has no bearing on the result reached by the trial judge. Further, as I understand the trial judge, he did not take the average of three years of benefits derived by Mr. Walker from Safari. Rather, the trial judge made a finding of fact to which the Limited Rule has no application. I understand the trial judge to have made a similar finding of fact at paragraph 144, where he established the value of certain benefits and allowances Mr. Walker received as personal expenses.

Here also, the Limited Rule would have no application. [ 56 ] With respect to the vehicle allowance, no average appears to have been used in setting its value at $2,000 per month, or $39,500 annually after grossing it up for taxes. I say this because this amount was admitted by Mr. Walker at trial: [113] The first issue relates to the vehicle allowance from Postell. In cross-examination, [Mr. Walker] admitted that, prior to 2016, Postell had paid him a vehicle allowance of $2,000 per month, separate and apart from his salary. [Mr.

Walker] also admitted that, despite the allowance, he had been consistently using the truck registered in Outback’s name. The tax returns produced in evidence did not include the allowance as a taxable benefit in any of the tax years prior to 2016. Grossed up for tax purposes, this vehicle allowance, by my calculation, would amount to approximately $39,500 per year. [ 57 ] Finally, with respect to personal accommodation expenses paid by Safari to Mr. Walker, there is no indication the trial judge relied on an average in setting this amount. He simply accepted the evidence of Ms.

Walker in deciding $24,000 should be imputed to Mr. Walker’s income for 2015 (see paras 143–144, reproduced above). [ 58 ] The trial judge did not take the average of three years of benefits, he simply made a finding of fact to which the Limited Rule does not apply (at para 143). [ 59 ] Consequently, there is no merit to this ground of appeal either. B. Did the trial judge err by misapprehending the evidence in imputing income to Mr. Walker? [ 60 ] This ground of appeal, relating to spousal support, is essentially a disagreement with the facts as found by the trial judge. To warrant this Court’s intervention, Mr.

Walker must show a “significant misapprehension of the evidence” ( D.B.B. at para 48 ) or a palpable and overriding error with regard to findings of fact. 1. Vehicle allowance [ 61 ] Mr. Walker makes two arguments. In these arguments, he says discretion must be exercised “reasonably”. As set out in D.B.B. , however, decisions with respect to child and spousal support are not assessed on a reasonableness standard: [48] Under family law legislation, a trial judge’s exercise of discretion in making spousal and child support orders is entitled to considerable deference.

As a result, “appeal courts should not overturn support orders unless the reasons disclose an error in principle, a

significant misapprehension of the evidence, or unless the award is clearly wrong” (Hickey v Hickey, (SCC), [1999] 2SCR 518 at 525 [Hickey]). [62] In his factum, Mr. Walker argues the vehicle allowance he received from Postell in 2013, 2014, and 2015 should not havebeen imputed to him because it was expended directly on his vehicle. This argument is contrary to the trial judge’s finding, which wasbased on Mr. Walker’s testimony (repeated here for ease of reference): [113] The first issue relates to the vehicle allowance from Postell. In cross-examination, [Mr.

Walker] admitted that, prior to 2016,Postell had paid him a vehicle allowance of $2,000 per month, separate and apart from his salary. [Mr. Walker] also admitted that,despite the allowance, he had been consistently using the truck registered in Outback’s name. The tax returns produced in evidence didnot include the allowance as a taxable benefit in any of the tax years prior to 2016. Grossed up for tax purposes, this vehicle allowance,by my calculation, would amount to approximately $39,500 per year. [63] Mr.

Walker admitted at trial that, despite the vehicle allowance he received from Postell, he had been consistently using atruck registered to Outback. His income tax returns submitted at trial did not include the vehicle allowance as a taxable benefit in thoseyears. His argument on appeal plainly contradicts what he admitted at trial: that he received a vehicle allowance from Postell but used thetruck registered to Outback.

His argument that no evidence was presented at trial that the vehicle allowance was used for anything otherthan its intended purpose of vehicle maintenance is untenable without some evidence to support it. There was no significantmisapprehension of evidence. [64] Further, Mr. Walker argues that the trial judge made an error in the determination of his imputed income since Postell stoppedproviding him with the vehicle allowance in 2016 and instead provided him with a work vehicle.

To the extent the vehicle allowance wasincluded in the trial judge’s determination of imputed income and the amount of support payable post-2016, the trial judge may havebeen persuaded by the argument of Ms. Walker’s counsel that it was reasonable to value the personal benefits Mr. Walker received fromthe numerous work vehicles provided to him at an amount equivalent to the vehicle allowance. The trial judge had evidence that Mr.Walker did not pay for the fuel, maintenance, and upkeep of these vehicles. As such, it was reasonable for him to find that Mr.

Walkerreceived a personal benefit from the Postell vehicle that should be imputed to his income. [65] Mr. Walker’s second argument is in the alternative to his first argument. He says that if the $2,000 a month vehicle allowanceis imputed to him as income, it should be apportioned to reflect the fact that he used his personal vehicles in the course of hisemployment. In the absence of an explanation or any evidence to support this argument, I see no merit to it. There is evidence to supportthe trial judge’s conclusion and no evidence, only argument, to the contrary. [66] Finally, Mr.

Walker argues that use of the Outback vehicle was a “family expense” and, as such, the $2,000 vehicle allowancefrom Postell simply offset the cost of this expense for his family. I fail to see any merit to this argument. The question for the trial judgeto resolve was whether additional income should be imputed to Mr. Walker because of this allowance, not how he used the money oncehe received it or whether he used it to pay for family expenses. 2. Personal expenses [67] Mr.

Walker next argues he understood personal expenses covered by Safari were allocated to his shareholder’s loan accountand he was expected to repay them. Therefore, he argues, the imputation of income to him for personal expenses was improper becausehe was responsible for repaying those personal expenses, and that the trial judge erred by disregarding the evidence of his repaymentobligation. [68] This argument is contrary to the evidence at trial, as found by the trial judge: [116] In both direct and cross-examination, [Mr. Walker] explained some, but not all, of these expenses.

There were several expenses forwhich he said he could not recall their specific purpose. Expenses that [Mr. Walker] considered to be legitimate included taxidermyexpenses for office decoration items, travel, accommodation and meal expenses to promote business with the shareholders of Postell,Safari’s sole client. [117] [Mr. Walker] acknowledged that there were other expenses which were personal to him. This was despite the existence of ashareholders loan account that was to be used when Safari incurred expenses for his benefit.

Such personal expenses, not accounted forin the shareholders loan account, included airline expenses, accommodation expenses, chiropractic expenses, legal expenses andpayments towards his personal credit card. The court also heard evidence about Safari incurring expenses relative to the mobile home[Mr. Walker] has lived in since the family home was sold. In this respect, Safari paid the expenses for the deck and hot tub associatedwith the home. [69] Mr. Walker testified at trial that the loans were to be paid back, but he was not sure if all of them had been accounted for.Mr.

Scott, Safari’s other shareholder, also testified about the nature of these expenses. He said Mr. Walker was allowed to borrowmoney from the company because Mr. Walker was “undergoing some financial hardships right now”, but it was with the “fullexpectation that he has to pay it back” and that it was not a gift. He was unable to identify precisely what Mr. Walker owed, but he wasconfident that “at the end of the day he’ll show me what’s taken out of the company and take steps to pay it back”. Oncross-examination, Mr. Scott agreed that he was happy with whatever Mr.

Walker was doing with Safari and was prepared to have himcontinue to operate the business in the same fashion going forward. [70] Against the evidence from Mr. Scott, the trial judge had evidence about numerous personal expenses of a wide variety thatwere completely unaccounted for in the shareholder’s loan account. Further, according to Safari’s general ledgers, the trial judge wassatisfied that the practice of using Safari as a personal bank was wide-ranging and obvious, and not confined to one fiscal year or even toMr. Walker. There was evidence Mr.

Scott had used corporate funds to purchase a vehicle. [71] In light of the totality of the evidence before him, it is clear the trial judge did not accept Mr. Scott’s testimony at face value.

The absence of entries in the shareholder’s loan account for the numerous expenses incurred over a number of years simply did not square with his position that the personal expenses incurred by Mr. Walker were all loans from Safari. It was open to the trial judge to come to the conclusion to which he came. The evidence reflects loose accounting practices at best. Mr. Walker has failed to show a significant misapprehension of the evidence. The trial judge considered his explanation, and accepted some, but not all, of the expenses.

This is borne out by his decision to impute some, but not all, of the expenses identified in the Safari ledger that were incurred by Mr. Walker. 3. Accommodation expenses [ 72 ] Mr. Walker says the evidence showed Safari’s mobile home was purchased for Safari’s use and he was paying rent to occupy it. However, the evidence also showed that it was purchased after there was a downturn in oil prices; therefore, it was open to the judge to infer the purchase was for Mr. Walker’s benefit and not to entice a reliable employee to work for Safari (as had been suggested), as an additional employee was not required.

The Safari accounts show rent was owed, but there is no evidence rent was ever collected from Mr. Walker or even that there had been attempts to collect it. Further, there was no evidence Mr. Walker tried to find any other accommodations. Therefore, the inference was open to the trial judge that the mobile home was purchased for Mr. Walker’s personal benefit. Again, there is no misapprehension of evidence. [ 73 ] Finally, imputing the use value and the capital value of the mobile home is not double accounting as alleged by Mr. Walker. I see no merit to this ground of appeal. [ 74 ] Mr.

Walker’s submission that the trial judge misapprehended the evidence must fail. C. Did the trial judge err in the valuation of Safari? 1. Failure to account for correction of expert [ 75 ] Mr. Walker submits the trial judge erred in the valuation of Safari. [ 76 ] The trial judge accepted Mr. Doran’s estimate of the value of Safari of $676,000 and rounded the value to $675,000. The trial judge also discounted Mr. Walker’s 50% interest in Safari by 5% to account for the fact that Safari had only one customer, Postell, which was controlled by Safari’s other 50% shareholder.

In accepting the $675,000 figure, the trial judge was relying on a report prepared by Mr. Doran that had initially set the net asset value at $676,000. However, at trial, Mr. Doran corrected an error in his calculation: Q All right. Anything else you wanted to note on this page? A Yes. Sorry. … there was a little bit of confusion. Our initial understanding was they were mutually exclusive, one representing the shop, and then there was a second one which we understood Safari had bought a mobile home. And we thought, we understood that the newer report reflected the mobile home.

That -- yeah, as I was preparing for this – Q Yeah. A -- going through the documents again, I recognize that that’s not the case. [ 77 ] Mr. Doran went on to testify that he had double-counted two updates to his report when one was the replacement for the other. Accordingly, he opined a reduction in the valuation should be made. In the absence of an explanation by the trial judge as to why this was not done, it must be assumed to be an oversight. [ 78 ] Mr. Doran explained how he corrected this error in his calculation.

Safari’s balance sheet initially reflected that the line item “property and equipment” had an adjusted value of $101,059. Notes to the balance sheet broke that adjusted value into land and building values, automotive and equipment values, and small tool values, of which land and buildings were valued at $715,000. In his testimony, Mr.

Doran indicated that the $715,000 value attributed to the land and buildings was made in error and that “the market value for land and building would be closer to $450,000 by making that adjustment” which reduced the line item “property and equipment” from $101,059 to $7,940, and ultimately reduced Safari’s adjusted net assets to $411,000. [ 79 ] Mr. Doran’s valuation of Safari was accordingly reduced from $675,000 to $411,000. When factoring in the trial judge’s 5% discount of Mr. Walker’s interest in Safari, the result is that the value of Mr.

Walker’s interest in Safari is $184,950, not $303,750, as found by the trial judge. This then is an overvaluation of $118,800 of Mr. Walker’s interest in Safari, which should be accounted for in the rest of the family property division. [ 80 ] The trial judge found Mr. Walker’s net assets were valued at $493,342.76. A downward of adjustment of $118,800 puts the value of Mr. Walker’s actual net assets at $374,542.76. This, of course, has an impact on the Walkers’ total net assets. Adding Mr. Walker’s net asset value to Ms.

Walker’s net asset value ($275,688.40) results in a total net asset valuation of $650,231.16, one-half of which is $325,115.58. [ 81 ] To achieve an equal value of the assets for each party, Mr. Walker must pay Ms. Walker an equalization payment of $49,427.18, representing a downward adjustment of $59,400 from the $108,827.18 originally ordered by the trial judge. [ 82 ] To this extent, the trial judge committed a reviewable error. I would make the above adjustment to correct the error. 2. Failure to consider cautionary words of the expert witness [ 83 ] Mr.

Doran’s testimony included some cautionary words to the effect that Safari’s value should be reduced by as much as 50% based on downward market trends and his experience in valuing oil enterprise. [ 84 ] There is no merit to this allegation. The trial judge clearly did not accept the evidence of Mr. Doran in full. He was clear about

what he accepted and found the net adjusted value was appropriate. This is not inconsistent with his reasons and is not a palpable andoverriding error. D. Did the trial judge err in the valuation of Outback? [85] Mr. Walker simply disagrees with the trial judge’s decision to treat potential oil well remediation liabilities for Outback underThe Oil and Gas Conservation Act, RSS 1978, c O-2, as a contingent liability for each party in equal parts. No case law or authority isgiven for this proposition and, in such absence, no error is disclosed. E.

Did the trial judge err by failing to explain why he departed from theSpousal Support Advisory Guidelines by limiting spousal support to seven years? [86] Ms. Walker, in her cross-appeal, submits the trial judge did not explain why spousal support was time limited to a duration ofseven years.

She says he was obligated to give reasons because he departed from Carol Rogerson and Rollie Thompson, Spousal SupportAdvisory Guidelines (Ottawa: Ministry of Justice, 2008) [Spousal Guidelines], and his failure to do so is an error in principle thatrequires this Court to intervene. [87] For this Court to be justified in intervening, it must be shown that there was an error in principle, a significantmisapprehension of evidence, or that the award is clearly wrong: Linn v Frank, 2014 SKCA 87 at para 82, [2014] 10 WWR 215 [Linn],citing Hickey v Hickey, (SCC), [1999] 2 SCR 518 at 525–526.

This is a highly deferential standard of review. Anappellate court is not entitled to overturn a support order simply because it would have balanced the applicable factors differently. [88] Ms. Walker is primarily concerned with the trial judge’s decision to make a fixed term support order instead of an indefiniteterm support order. She argues that, given the finding that the parties were in a 21-year marriage, spousal support limited to seven yearsfalls outside the range of what is considered appropriate under the Spousal Guidelines.

She submits that, at a minimum, the SpousalGuidelines would suggest a duration of at least one-half year for each year of marriage. She adds that a 21-year marriage leads to apresumptive conclusion of indefinite duration. Further, she says a 21-year marriage falls into the category of a long-term marriage and, assuch, a determinate order on the facts of this case is inappropriate. The trial judge found entitlement on a compensatory basis based onthe fact that the traditional role of wife and mother that had been adopted by Ms.

Walker, combined with her other circumstances, hadleft her without the tools necessary to support herself. [89] In Linn, this Court set out a number of principles applicable to an appeal from a spousal support order made pursuant to theSpousal Guidelines, including the following: [78] The trial judge is clearly correct as to the status of the Guidelines.

They have no legislative or regulatory status and they are a usefultool in “calculating spousal support and ensuring that spousal support awarded to individuals in similar circumstances is in a similarrange” (para. 198). [79] While these observations are clearly correct, that does not end the matter. If the Guidelines are “a useful tool for trial judges,” whatrole do they play on appeal? [80] This Court of Appeal is one of the few courts of appeal in Canada that has not spoken on this issue. This does not mean thatthe Guidelines are not being used or followed in this jurisdiction.

Since the first working draft of the Guidelines to the present version,their use, importance and impact have grown to the point where it is a rare case where they are not cited for one reason or another. Aquick review, using a standard search engine, reveals over 100 reported family law decisions in this jurisdiction alone wherethe Guidelines have played some role.

Only a few of those decisions have been appealed, and none of them has demanded somestatement from this Court whether the application of the standard of review has been affected by the Guidelines. [81] Since Saskatchewan is one of the last Courts of Appeal to comment on this issue, we have the benefit of extensive appellate andtrial jurisprudence from across the country, including from the Court of Queen’s Bench of this province. It is not my intention to canvassthat jurisprudence as it has recently been thoroughly reviewed by Ross J. in Dowhaniuk v. Dowhaniuk, 2014 ABQB 217 .

Fromthis case law, some observations can be made about the role of the Guidelines when applying the standard of review for the purposes ofthe within appeal. [82] First, when a court of appeal reviews a spousal support order, where the application of the Guidelines has been put in issue, thecourt refers to the usual standard of review first stated authoritatively by L’Heureux-Dubé J. for the Court in Hickey v.

Hickey, (SCC), [1999] 2 S.C.R. 518: 11 Our Court has often emphasized the rule that appeal courts should not overturn support orders unless the reasons disclose anerror in principle, a significant misapprehension of the evidence, or unless the award is clearly wrong. These principles were stated byMorden J.A. of the Ontario Court of Appeal in Harrington v. Harrington (1981), (ON CA), 33 O.R. (2d) 150, atp. 154, and approved 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 standardof appellate 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,a serious misapprehension of the evidence, or an error in law, it is not entitled to overturn a support order simply because it would have

made a different decision or balanced the factors differently [emphasis added]. [83] Within the confines of the standard of review analysis as articulated in Hickey, the issue for an appeal court then becomes the extentto which a failure to follow or apply the Guidelines gives rise to “material error” or “an error of law” permitting or requiring appellateintervention. [84] Second, the starting point for any analysis of the appropriate level of spousal support continues to be the legislative obligationsprescribed by the applicable legislation.

A court referring to the Guidelines must still perform the analysis prescribed by Moge v. Moge, (SCC), [1992] 3 S.C.R. 813 and Bracklow v. Bracklow, (SCC), [1999] 1 S.C.R. 420. If the trial judgedoes not perform that analysis, it may not be possible to sustain the decision on appeal whether or not the Guidelines are applied(see Sawatzky v. Sawatzky, 2008 ABCA 355 at para 16, 59 R.F.L. (6th) 88).

A complete factual analysis is also important todetermine which of the amounts suggested by the appropriate range apply or to determine whether to give effect to one of the exceptions—or indeed whether to fix an amount suggested by the Guidelines at all (see Deringer v. Hill, 2007 SKQB 206 at para. 16,308 Sask. R. 122). [85] Third, it is critically important to understand that the Guidelines require more analysis than inserting a few numbers into a formulato obtain a number, which is then considered to be the ideal and immutable amount of spousal support.

The Guidelines recognize theconsiderable discretion enjoyed by trial judges. The Spousal Support Advisory Guidelines: A New and Improved User’s Guide to theFinal Version ([Ottawa]: Department of Justice, 2010) also make it clear that a sophisticated analysis of the parties’ needs and means isrequired to arrive at the best possible spousal support order in the circumstances of each case. This principle is fully understood in themany decisions of the Court of Queen’s Bench to date (see, for example, Billett v. Billett, 2013 SKQB 269 at para. 63,425 Sask. R. 217; Verhelst v.

Verhelst, 2013 SKQB 12 at para. 52, 415 Sask. R. 17, Sangray v. Sangray, 2012 SKQB 455 at para. 6, 407 Sask. R. 149; Geransky v. Geransky, 2012 SKQB 218 at para. 25). [86] Fourth, when counsel makes a submission with respect to the Guidelines in the trial court, it is expected, as a matter of good judicialdecision-making, that the trial judge’s reasons explain why the Guidelines were or were not followed. This would be so in relation to anysignificant argument seriously made to a court at any level (see Fisher v.

Fisher, 2008 ONCA 11 at para. 103, 288 D.L.R. (4th) 513). [87] Fifth, with the passage of time, more and more of the reported decisions are awarding an amount derived from the application of theGuidelines such that future compliance with them will become more typical. They will become a “litmus test,” to use thewords of Steele J.A. in Kynoch v. Kynoch, 2013 MBCA 73 at para. 48, 294 Man. R. (2d) 250, for what constitutes an “equitablesharing of the economic consequences of marriage or marriage breakdown” (Moge at p. 866). See also De Winter v.

De Winter, 2013ABCA 311 at paragraph 28 where the Court referred to the Guidelines as being “a useful tool when determining spousal support… and the need to view the award through the lens of the criteria set forth in the Divorce Act.” [88] Sixth, over time it can only be expected that the Guidelines will influence judicial thinking about what is a clearly wrong award. Asthe Court stated in Fisher, “when considered in their entirety and subject to their limitations, the Guidelines also assist in informing anappellate standard of review” (at para. 102).

This will permit the use of the Guidelines to ensure consistency in situations when theparties do not wish to use the courts to resolve the question of spousal support (see: S.C. v. J.C., 2006 NBCA 46 , 27 R.F.L.(6th) 19 at para. 5, leave to appeal refused). [89] In sum, the role of the appellate court reviewing a spousal support order in 2014 remains the same as under Hickey: i.e., a court ofappeal will intervene only if it finds a material error, a serious misapprehension of the evidence, or an error in law.

A court of appeal willshow considerable deference to the decision under appeal, but if the Guidelines have been fully argued by counsel, an appeal court mayintervene if reasons are not or cannot be given to support the trial judge’s disposition in relation to them. [90] It is important to stress that the foregoing points are broad observations only. They do not prescribe when this court will intervene.In the pre-Guidelines era, it was not possible to determine the precise point at which an appellate court would intervene.

This was sobecause many factors entered the equation; evidence and individual circumstances, as well as the particular issue the appellate court isasked to address, influence outcomes. The same can be said in the Guidelines era. The Divorce Act and The Family Maintenance Act,1997 continue to grant considerable discretion to judges of first instance. [90] Further, as stated above, this Court in Linn explained that where a submission is made regarding the Guidelines, as a matter ofgood decision-making, the trial judge’s reasons should explain why the Guidelines were not followed.

An appellate court may interveneif “reasons are not or cannot be given to support the trial judge’s disposition in relation to [the Guidelines]” (at para 89). [91] With that I return to the matter under appeal. Although the trial judge did not expressly make a finding of entitlement on acompensatory basis, he functionally did just that as evidenced by the following passage: [190] In the present case, [Ms. Walker’s] entitlement to spousal support was not seriously disputed. There is little doubt that, whateverelse might be said of the marriage, [Mr. Walker] derived a significant economic advantage from it. [Ms.

Walker’s] efforts in maintainingthe home on a daily basis, and attending to their daughters’ needs, allowed [Mr. Walker] a significant opportunity to build rewardingrelationships in the oil industry, which, in turn, led to the development of marketable skills and experience. While the industry ispresently facing a significant downturn, it cannot be ignored that there were better times in the past, and that [Mr. Walker] had theopportunity to make the best of it. [191] I cannot ignore the benefits [Ms. Walker] derived from the opportunities [Mr. Walker] took.

That said, she also derived a certaindegree of disadvantage in that she gave up years of opportunity to improve herself and attain a greater level of self-sufficiency. Spousalsupport is required to compensate for that lost opportunity. [92] At trial, Ms. Walker’s counsel identified the various factors applicable to her situation. In particular, he identifiedMs. Walker’s limited training and education, the parties’ traditional stay-at-home marriage, and how Mr. Walker benefitted from thisarrangement. He noted that Ms.

Walker was 42 years of age at the time of trial and that since separation she had run from job to job tomake ends meet. He noted that at her age, there was an element of permanency to the loss of opportunities she faces. He identified the

need for retraining. Finally, Ms. Walker’s trial counsel drew attention to the length of the marriage (21 years) with a focus on theSpousal Guidelines which would suggest a minimum duration of support of 10.5 years, but because of the parties’ long-term marriage, heargued there should be no end point. In the end, Ms. Walker’s trial counsel recognized that because of Mr. Walker’s age—he is 9.5 yearsolder than Ms. Walker—a review clause might be appropriate after 10.5 years. The ChildView calculations filed by Ms. Walker at trialused the “hybrid formula for adult children” and 21 years of cohabitation.

Because spousal cohabitation was greater than 20 years, an“indefinite” duration was suggested under the Spousal Guidelines. [93] Counsel for Mr. Walker focused on Ms. Walker’s relative youth and her limited efforts to achieve self-sufficiency. Mr.Walker also filed ChildView calculations.

He used the “with child formula” and 18 years of cohabitation as parameters. (The length ofcohabitation was an issue at trial.) Using this approach, the suggested minimum duration was nine years (one-half year per each year ofcohabitation) and the maximum was 18 years. [94] In the end, although the trial judge did not make explicit reference to the Spousal Guidelines, he did discuss a number of thefactors, specifically the strength of Ms. Walker’s claim for support, and her age and needs. The trial judge also considered the children’sages and their needs in the child support analysis and considered Mr.

Walker’s ability to pay earlier in the judgment. Factors that werenot relevant to the analysis were not discussed. Accordingly, while the trial judge did make reference to some factors, he perhaps did notconnect those factors to the support analysis as clearly as he might have. [95] This is not fatal. It would place too onerous a burden on trial judges to explicitly refer to each and every factor in theGuidelines and check them off against the facts in each particular case. [96] Where the trial judge did err, however, is with the duration of the spousal support he ordered. The trial judge grantedMs.

Walker spousal support for a fixed term of 7 years. His conclusion and reasoning for it is found at paragraph 192 of the TrialDecision: [192] Despite the guiding principles that apply to the determination of spousal support, the final decision, on the quantum and durationof support, is very much a matter of discretion, albeit one that must be judicially exercised.

In determining the quantum and duration ofspousal support to be awarded in this case, I find that I cannot ignore the fact that Becky was relatively young at the time of separation –nor can I ignore her less-than-ambitious efforts to attain self-sufficiency. [97] The trial judge found as fact that the parties had a traditional marriage and that they had cohabited for 21 years. TheChildView calculation provided by Ms. Walker—using 21 years cohabitation—recommended support of indefinite duration. In spite ofthese important considerations, and Ms.

Walker’s submission that there was an air of permanency to her lost opportunities, the trial judgeappears to have arbitrarily fixed spousal support at 7 years duration with no indication as to how this would compensate her for herlong-term marriage and lost opportunities. As noted in Moge v Moge, (SCC), [1992] 3 SCR 813 at 867, the financialconsequence on marriage breakdown includes loss of earning power, loss of seniority, missed promotions and lack of access toworkplace benefits. [98] Respectfully, in in light the compensatory nature of Ms.

Walker’s claim, it is my view the trial judge erred by focusing solelyon her relative youth at the time of marriage breakdown and her ineffective efforts to secure employment. This constituted a reversibleerror. [99] For the reasons mentioned above, I would allow Ms. Walker’s appeal with respect to spousal support and make the term ofher spousal support order indefinite. While Mr. Walker will retire at some point in the future, there is no evidence when that may be andwhat the circumstances of the partner might be at that time. Such an occurrence may ground a variation application at that time. VII.

CONCLUSION [100] As there was mixed success on the appeal, I would make no order as to costs. “Whitmore J.A.” Whitmore J.A.I concur. “Ottenbreit J.A.” Ottenbreit J.A.I concur. “Schwann J.A.” Schwann J.A.