W.L.G. v A.C.G., 2021 SKCA 112

Court of Appeal for Saskatchewan Docket: CACV3612 Citation: W.L.G. v A.C.G. , 2021 SKCA 112 Date: 2021-08-18 Between: W.L.G. Appellant (Respondent) And A.C.G. Respondent (Petitioner) Before: Jackson, Ottenbreit, Caldwell JJ.A. Disposition: Application for fresh evidence dismissed; Appeal allowed in part Written reasons by: The Honourable Mr. Justice Ottenbreit In concurrence: The Honourable Madam Justice Jackson Dissenting reasons by: The Honourable Mr. Justice Caldwell On appeal from: 2020 SKQB 43 , Regina Appeal heard: December 11, 2020 Counsel: Kyla K. Dilling for the Appellant Kenneth J.

Brodt for the Respondent Ottenbreit J.A. I. INTRODUCTION [ 1 ] W.L.G. appeals a decision of a Court of Queen’s Bench judge after trial awarding A.C.G. spousal support, as well as awarding child support for their son: A.C.G. v W.L.G. , 2020 SKQB 43 [ Decision ] . [ 2 ] W.L.G. also applies to adduce fresh evidence of financial dealings concerning a dividend paid to him in 2017 by a corporation in which he has an interest. [ 3 ] For the reasons hereinafter set forth, I would dismiss the fresh evidence application and allow the appeal in part. II.

FACTS AND BACKGROUND [ 4 ] The parties married in August of 1996, and separated in 2014. At the time of their marriage, both worked at retail stores. W.L.G. worked at his stepfather’s Home Hardware franchise store in Regina, Saskatchewan. That store and a similar store in Moose Jaw were owned by Allied Lumberland Ltd. [Allied]. [ 5 ] W.L.G. was offered an opportunity to become an owner of the Home Hardware franchise but was required to move to Moose Jaw and work in the store in that city as a condition of buying into the business.

The couple moved to Moose Jaw and established their family home there. [ 6 ] W.L.G. initially acquired a 10 per cent interest in Allied, eventually buying out his stepfather and owning 25 per cent of the corporation along with three other shareholders. [ 7 ] After the move to Moose Jaw, A.C.G. continued her job in Regina and commuted. Thereafter, she quit her job and worked in the real estate business and then became a property manager for W.L.G.’s stepfather. When W.L.G.’s earnings rose to the point where A.C.G.’s income was unnecessary, she quit work.

In 2007, their son was born and A.C.G. became a stay-at-home mom, taking care of their son and the family home. [ 8 ] W.L.G.’s three business partners sold their shares in Allied in 2010 and ownership of the corporation was reorganized. Thereafter, W.L.G. held his interest in Allied shares through a holding corporation known as WLG Holdings Ltd. [WLG Ltd.], of which he was the sole shareholder. At all times relevant to this matter, W.L.G. had a 30 per cent share in Allied through WLG Ltd. [ 9 ] At the time of separation, A.C.G. was 36 years old and W.L.G. was 40 years old.

After separation, the parties were able to negotiate a series of interim consent orders regarding child and spousal support. The most recent order issued in 2018 and was in force at the date of the trial. It set W.L.G.’s income at $396,501 per annum and provided for child support of $3,070 per month (apart from s. 7 expenses) and spousal support of $6,000 per month. [ 10 ] At the pretrial conference in 2019, the parties were able to resolve issues of custody and access. Their son has resided primarily with A.C.G. from the time of separation. A.C.G. and W.L.G. have both re-partnered.

The parties proceeded to trial in November of 2019. III. DECISION OF THE TRIAL JUDGE

[ 11 ] The issues at trial were division of family property, retroactive and ongoing child support and retroactive and ongoing spousal support. The trial judge ordered an unequal division of family property, which resulted in a total net payment from W.L.G. to A.C.G. of approximately $2.3 million. W.L.G. appeals the decision of the trial judge only with respect to spousal and child support.

I will refer only to the portions of the Decision germane to those issues. [ 12 ] The trial judge first turned to the issue of child support, namely, whether income should be imputed to W.L.G. and whether past child support paid by him pursuant to the consent orders was reasonable. [ 13 ] A.C.G. submitted the consent orders should be adjusted retroactively and that further income should be imputed to W.L.G. based on the income of Allied and/or WLG Ltd. W.L.G. argued that he had fairly paid child support and that no further adjustment was required.

However, he acknowledged that if an adjustment was warranted, then the pre-tax income of WLG Ltd. could be considered for that purpose, excluding a dividend of approximately $990,000 received by WLG Ltd. from Allied in 2017. He argued that dividend was a one-off. [ 14 ] The trial judge declined to retroactively adjust child support for the period prior to the 2015 consent order. [ 15 ] She reviewed the law germane to the imputation of income, as well as the provisions found in ss. 16–20 of the Federal Child Support Guidelines , SOR/97-175 [ Guidelines ].

The trial judge noted that the objective of those sections was to establish an amount that fully and fairly reflects the income available for child support purposes. [ 16 ] The trial judge noted that the parties had used a three-year average of W.L.G.’s line 150 income in his tax returns to arrive at the support set out in the consent orders.

She then turned to review the evidence of W.L.G.’s actual and potential income from 2014 to 2018. [ 17 ] For each of those years, the trial judge did a calculation of possible income scenarios using W.L.G.’s line 150 income, a three- year average of his employment and rental income without capital gains, the pre-tax income of WLG Ltd. and WLG Ltd.’s proportionate share of Allied’s pre-tax income. The details of this calculation and a

summary table [summary table] thereof are set out in the Decision at paragraphs 57 to 65. I will reproduce the

summary table later in these reasons. [ 18 ] After reviewing the income scenarios in the

summary table, the trial judge found that using W.L.G.’s line 150 income alone, or a three-year average thereof, was not the fairest determination of the income available for support purposes. This was because Allied had had substantial past earnings and had paid out infrequent but sizeable dividends to WLG Ltd. Therefore, there appeared to have been other money available for support apart from W.L.G.’s line 150 income.

She noted, however, that WLG Ltd. had gone years without receiving any dividends from Allied despite there being money available and due to it. [ 19 ] The trial judge then turned to A.C.G.’s submission that Allied could be used as a source of income for support purposes. She found as a fact that the practice of Allied, based on its financial statements, was to accumulate pre-tax income and then pay out large dividends. She found that although W.L.G. was a director of Allied, he did not control when or how much he would receive in dividends or how the pre-tax income of Allied would be spent.

She noted that W.L.G. admitted to holding cash in the “companies” in anticipation of paying out A.C.G.’s family property entitlement. [ 20 ] She concluded: [71] Given W.L.G.’s lack of control over Allied, combined with the way the company has dealt with the pre-tax income over the years, I am not able to add a proportionate share of the pre-tax income from Allied to W.L.G.’s income for support purposes as requested by A.C.G. His minority shareholder interest in Allied renders s. 18 of the Guidelines inapplicable to that corporation.

Nonetheless, I am satisfied that income should be imputed to W.L.G. for support purposes. W.L.G. has a majority interest in his holding company and there have been large dividend payments to WLG Ltd. In addition, the evidence further establishes that there are monies due to WLG Ltd. from Allied. W.L.G. admitted to stockpiling money in the corporations in anticipation of a property settlement with A.C.G. There is money due to WLG Ltd. from Allied which W.L.G. has simply chosen to leave there in anticipation of having to pay A.C.G. a settlement.

Clearly, there is property from which W.L.G. could reasonably generate an income for support purposes. … [72] Although it may not be appropriate to pierce Allied’s corporate veil given W.L.G.’s lack of control over Allied, his actions in stockpiling funds in the companies clearly demonstrates that he has property from which he can realize an income for support purposes and income should be imputed to him. W.L.G. has had both employment income and dividend income. There is also a pattern of income, albeit, one of W.L.G.’s making. WLG Ltd. had income of over a million dollars in 2012 and again in 2017.

The Allied books indicate that in 2017 there was more money available to WLG Ltd. as the amount due to shareholders demonstrates that. Between the date of petition, December 2014 and December 2018, the amount due to WLG Ltd. from Allied increased from $1,455,708 to $2,503,891 according to the year-end financial statements. These amounts are over and above the revenue WLG Ltd. received in 2017 ($990,000) and 2018 ($300,000).

Having regard to the monies held in WLG Ltd. and the monies due to WLG Ltd. from Allied, imputing income to W.L.G. is both fair and reasonable in the circumstances. [ 21 ] On the issue of imputation of income and child support, she concluded: [77] Setting W.L.G.’s income at $500,000 provides a reasonable support level for [the child], having regard to the lifestyle the parties had while together, and having regard to the needs A.C.G. outlined in her financial statement, particularly when consideration is also given to the spousal support to which she is entitled.

An argument may very well be made to impute a greater level of income to W.L.G. given the resources available to him in both WLG Ltd. and what is due to WLG Ltd. from Allied but it is an unnecessary exercise as $500,000 per annum affords A.C.G. with sufficient resources to meet her and [the child’s] needs. W.L.G.’s child support obligation based on an imputed income of $500,000 is $4,000 per month. W.L.G. shall pay this amount retroactive to the date of the first child support order with credit to be given for payments already made.

W.L.G. shall continue to pay $4,000 per month on the 1st of each month until further order of the court or agreement of the parties.

Section 7 expenses for [the child] will be shared proportionately. For 2020, the proportionate share shall be based on A.C.G.’s spousal support amount as set out below and W.L.G.’s imputed income of $500,000. A.C.G. shall provide W.L.G. with legitimate s. 7 expense receipts and W.L.G. shall provide reimbursement for same within 60 days.

[22] The trial judge then turned to spousal support. She reviewed the germane provisions of the Divorce Act, RSC 1985, c 3 (2dSupp) [Divorce Act].

She also reviewed the governing law and the factors to be considered when determining spousal support and thebasis for deciding whether compensatory and non-compensatory spousal support should be ordered. [23] The trial judge appropriately referred to this Court’s explanation in D.B.B. v D.M.B., 2017 SKCA 59 at para 82 [D.B.B.], as thebasis for ordering non-compensatory support. [24] She then reviewed the history of the parties’ married relationship, the choices the parties made to pursue or not to pursue acareer, as well as childcare responsibilities, A.C.G.’s work experience and educational limits, and her ability to achieve self-sufficiency.The trial judge concluded, after canvassing all the evidence, that A.C.G. was entitled to both compensatory and non-compensatory spousalsupport. [25] She then turned to the quantum of spousal support. [26] The trial judge found that A.C.G.’s income was negligible and, given her absence from the workforce for years and the factthat her interior decorating business has been part-time, she was not prepared to impute employment or self-employment income to her.Moreover, in the absence of evidence at that time about the investment of A.C.G.’s family property equalization payment and a potentialrate of return achievable therefrom, she could not impute any income from that source. [27] The trial judge noted that Carol Rogerson and Rollie Thompson’s Spousal Support Advisory Guidelines ([Ottawa]: Departmentof Justice Canada, 2008) [SSAG] must be part of the overall consideration of the quantum of support.

She reviewed the germane law setforth in Linn v Frank, 2014 SKCA 87, 442 Sask R 126 [Linn], regarding the application of the SSAG and whether its application wasappropriate utilizing the imputed income. [28] She summarized the factors guiding her discretion: [84] … The SSAG suggest a range between $12,400 and $14,909. The suggested duration is 9.25 to 18.5 years. The low end of theSSAG, combined with the child support received, is more than what A.C.G. felt she needed to ensure a good lifestyle for her and [thechild]. A.C.G. was 36 years of age at the time of separation.

Her age is a factor to be considered in determining the duration of support.She has made little effort to achieve self-sufficiency since separation and claims that is due to her responsibilities for [the child]. [Thechild] was already attending school when the parties separated so there was certainly time available to A.C.G. to search out employmentor retrain. On the other hand, this was a marriage in which A.C.G. was responsible for the bulk of matters on the home front and W.L.G.worked long hours to grow his business interests.

Although W.L.G. is now critical of A.C.G.’s failure to grow her business or find work, itwas not a concern while they were together. The parties had agreement that A.C.G. was to remain home. … [29] On the issue of spousal support, the trial judge concluded: [85] Imputing income to W.L.G. at $500,000 and applying the low end of the SSAG provides A.C.G. with a monthly spousal support of$12,400 per month.

This amount, combined with her child support and whatever nominal amount she may continue to receive through [herbusiness] as well as any monies she may earn from investing, should provide her with more than enough to maintain a decent standard ofliving for herself and for [the child]. The SSAG suggest a termination date given their years of marriage with a maximum duration of 18.5years. By April of 2020, the parties will have lived separate and apart for six years.

Barring any material change in circumstance, spousalsupport should continue for a further 12.5 years. [30] The trial judge made the following determination as to retroactive spousal support: [86] A.C.G. has requested spousal support retroactive to the date of petition. For the reasons cited earlier respecting child support, I amnot prepared to order spousal support retroactive to the petition date, but it is fair, given the income and resources that were available toW.L.G., that he pay spousal support retroactive to the date of the first order for support with credit given for the payments made.

W.L.G.was aware that the consent order for support was made without prejudice to A.C.G. claiming a greater amount at trial and is not prejudicedby the retroactive claim. IV. STANDARD OF REVIEW [31] This Court recently summarized the standard of review applicable to support orders in P.M. v S.M., 2019 SKCA 111, 34 RFL(8th) 34: [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 errorin principle, a significant misapprehension of the evidence, or unless the award is clearly wrong. … [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, 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 in original; citations omitted)

V. ISSUES [ 32 ] W.L.G. raises a number of issues, many of which can be dealt with together, and they can broadly be restated as follows: (

a) Should the fresh evidence be admitted? (

b) Did the trial judge err in imputing a $500,000 income to W.L.G.? (

c) Did the trial judge err in determining ongoing spousal support? (

d) Did the trial judge err in failing to apply the legal test for retroactive spousal support? (

e) Did the trial judge err in double-counting the cash flow of WLG Ltd. in her award of spousal support? [ 33 ] Based on the approach taken by W.L.G. in his factum and oral argument, his challenge of the order for retroactive child support depends on whether the trial judge erred in determining his income for that purpose and is therefore subsumed in that issue. VI. ANALYSIS A.

Should the fresh evidence be admitted? [ 34 ] W.L.G. seeks to adduce evidence that the $990,000 dividend declared and paid by Allied to WLG Ltd. in 2017 was in anticipation of a payment by him to A.C.G. pursuant to a mediated family property settlement, that the settlement was not concluded and that the dividend was paid back to Allied.

He argues that declaration of the dividend and its retention on Allied’s books were relevant to the trial judge’s imputation of his income. [ 35 ] His affidavit in support of his application states that the parties had reached a settlement which contemplated an equalization payment by him of $2.3 million to A.C.G. He had prevailed on the other shareholders of Allied to declare in total a $3.3 million dividend, of which $990,000 was WLG Ltd.’s proportionate share.

Although not explicitly stated by W.L.G. , he implies that the $990,000 became part of the deposit by him into his lawyer’s trust account for the purposes of that settlement. The settlement did not conclude and the money was paid back to Allied. [ 36 ] W.L.G. argues that this transaction only became important after the close of A.C.G.’s testimony, when she posited to the court that the payment of the 2017 dividend was part of Allied’s routine and guaranteed business practice that she submitted showed a larger pool of income available for the purposes of support.

He argues this was a misrepresentation. [ 37 ] W.L.G.’s argument is not supported by the record and his application to adduce fresh evidence lacks merit, as I will explain. [ 38 ] As a first observation, the parties proceeded at trial on the basis of a joint exhibit binder containing, in part, the financial records of Allied and WLG Ltd. The financial statements of Allied and WLG Ltd. clearly set out that a dividend of $3.3 million was declared by Allied in 2017 and $990,000 was received by WLG Ltd. in the same year.

There was also testimony to that effect. [ 39 ] Second, A.C.G. in her testimony did not posit any characterization of the 2017 dividend to the court as submitted by W.L.G., especially that the 2017 dividend related to routine and guaranteed business practice. Nor am I satisfied that she misrepresented the 2017 dividend. If anything, W.L.G.’s submission on that point to this Court is a misrepresentation of the record.

A short review of the record is in order. [ 40 ] A.C.G. testified, based on being shown the financial statements of Allied and WLG Ltd., that the 2017 dividend had been declared by Allied and that $990,000 had been paid out to WLG Ltd., but that she was unaware of more than that.

She never once used the words “routine”, “guaranteed” or “ordinary course of business” or any similar word or phrase in relation to the 2017 dividend or the portion thereof paid to WLG Ltd. [ 41 ] Marc Hoffort, the chartered business valuator initially jointly retained by the parties but later called as part of A.C.G.’s case, testified that, in light of Allied issuing large dividends only in 2012 and 2017, the corporation did not necessarily declare regular dividends.

He also testified that the corporation was “super healthy” with a strong balance sheet and no long-term debt, and that $7.7 million could be taken out of the corporation without affecting its operations. [ 42 ] W.L.G. testified that WLG Ltd. had received $990,000 in 2017 from Allied as its proportionate share of a larger $3.3 million dividend. However, WLG Ltd. only paid out $158,700 that year to him. He admitted that in 2018, Allied owed WLG Ltd. $2,503,891 in declared but unpaid dividends. He indicated that he was keeping the money to be able to pay A.C.G.’s family property entitlement.

He acknowledged in cross-examination that Allied did not distribute all of its profits on an annual basis. [ 43 ] It was common ground that dividends had not been declared or paid out in every year by Allied. In final submissions, A.C.G. argued that W.L.G. had chosen to keep the declared and undistributed dividends in Allied because he wanted to have funds available for payment of the property entitlement. Her counsel noted that W.L.G. did not take out this proportionate share of the 2017 dividend. He also noted that both Mr. Hoffort and Nadine Wightman (who was called by W.L.G. to critique Mr.

Hoffort’s opinion of the value of his corporations) spoke of redundant assets of over $7 million in Allied. A.C.G.’s counsel posited that dividends were available in Allied that could be paid out at any time the shareholders chose to do so but that they had not done so regularly over the last five years. It was during

the submissions by counsel that the trial judge described these dividends as a “guarantee” and that it might be just a matter of decidingwhen to draw on them. [44] W.L.G.’s application to adduce fresh evidence seeks to bolster his argument at trial that the 2017 dividend was “a one-off” andthat it should, therefore, not have even been considered as income by the trial judge.

His application is grounded on the false assumptionthat for a dividend to be considered in an analysis for the purpose of imputing income, it must be one made as a part of a regular corporateprocess and in the ordinary course of business. [45] W.L.G. argues with reverse logic that, because the trial judge considered the 2017 dividend, she must have found that it wasmade in the ordinary course and as part of a regular program of declaring dividends.

Having thus established the straw man, he attempts toknock him down by submitting by way of the proposed fresh evidence that the dividend was “a one-off” because it was paid out to fund aproperty settlement and then repaid to Allied. [46] During final submissions, the trial judge engaged W.L.G.’s counsel on whether the payment of the dividend from Allied was amatter of “when, not if”. At trial, counsel acknowledged that there was a huge dividend that W.L.G. had not drawn but which wasavailable to him.

When asked by the trial judge whether that could be added back into W.L.G.’s income, his counsel responded: Yes, the -- there are, obviously, given that we were in this, kind of, five-and-a-half-year settlement discussion, things we can’t talk aboutdoesn’t mean that we can lie about them. Think about what happened in 2017. There was mediation. [A.C.G.] wasn’t -- wasn’trepresented. [W.L.G.] took out a -- an -- or declared a dividend, Allied declared a dividend for the purposes of settlement. It wasn’tactually paid out. I -- you know, I can’t say exactly what happened there because it was all without prejudice.

The trial judge observed that the money was due and owing to him and that all the other shareholders had received their dividends, butW.L.G. had not. [47] With this background and based on the record, I turn to the governing principles. [48] The principles germane to applications to adduce fresh evidence are well known as the Palmer criteria and are set out in R vPalmer, (SCC), [1980] 1 SCR 759. These principles have been the subject of substantial explication by this Court.

I willdeal with each of the four criteria in my analysis. [49] After reviewing the record and the nature of the fresh evidence, I am satisfied that the Palmer criteria have not been met andW.L.G.’s application must be dismissed. [50] With respect to the due diligence criterion, the evidence that W.L.G. did not take the benefit of the 2017 dividend was alreadybefore the court, as was its connection with mediation and a possible property settlement. W.L.G.’s counsel alluded to that as noted above.All the evidence W.L.G. seeks to adduce was in existence at the date of the trial.

It was clear to all at trial that no settlement had in factoccurred. After the close of A.C.G.’s testimony, W.L.G. had ample opportunity to further explain the circumstances surrounding the 2017dividend without addressing the specifics of the mediation. I say this because it was obvious given the total family property to be dividedthat A.C.G. would be receiving a substantial property entitlement that would be clearly in excess of the $990,000 WLG Ltd. received fromAllied. She ultimately received an equalization payment from W.L.G. of approximately $1.9 million.

W.L.G. had already testified that hewas accumulating money in Allied to make such a payment. There would have been no prejudice to him to testify that the dividend hadfirst been advanced for that purpose but paid back without disclosing the specifics of the amount of the putative settlement. He chose notto say anything about the dividend other than saying it was a “one-off”. [51] Moreover, as indicated above, there was no characterization by A.C.G., as submitted by W.L.G., that the 2017 dividend waspart of a routine and guaranteed business practice of issuing dividends. That was never the position of A.C.G.

It was in fact the opposite;the dividends were not declared and paid out regularly by Allied. [52] There is no merit to W.L.G.’s submission that the evidence could not with due diligence have been adduced at trial. [53] I turn to the relevance criterion. I accept that the details of the handling of the 2017 dividend is relevant to the arguments putforward by W.L.G. [54] With respect to the last criterion, I am not satisfied that the proposed fresh evidence when taken together with the otherevidence at trial might be expected to have affected the result.

The trial judge specifically accounted for the 2017 dividend at paragraph72 of the Decision. She excluded it from her observation that the amount due to WLG Ltd. from Allied between 2014 to 2018 hadincreased by over a million dollars regardless of why and how it was paid. [55] As noted above, the trial judge was also aware that the 2017 dividend was intended to partially fund a property equalizationpayment. W.L.G.’s counsel said as much in her submissions at the conclusion of trial.

More detail about that issue would not have made adifference to the trial judge’s analysis. [56] The assertion that the 2017 dividend was central to the trial judge’s determination of W.L.G.’s income is simply incorrect. Thetrial judge did not, as argued by W.L.G., accept A.C.G.’s submissions that the 2012 and 2017 dividends were part of a predictable businesspractice because that is not what she argued.

She argued the contrary, i.e., that there were only two significant dividends paid to WLG Ltd.from Allied in the five years prior to trial, despite the fact that Allied had built up a reserve of money that it could apparently pay outwithout financial harm. [57] The most significant aspect of how dividends were handled was the fund of cash that had accumulated in Allied. This hadincreased by more than $2 million between the date of the petition and the trial.

The crucial factor in the trial judge’s analysis of potentialsources of income was not the 2017 dividend itself or whether the dividend was paid out to WLG Ltd. or paid back, but rather that therewas a reserve of money in Allied that had been built up over five years that could have been channelled to W.L.G. but was not and,furthermore, would at some point be paid out. Why the funds were being “stockpiled” did not matter. They were being held in reservewhen they could have flowed to W.L.G. via WLG Ltd. and have been used as a source of income for support.

[ 58 ] In short, if the trial judge had known the details of the proposed fresh evidence, i.e., that the 2017 dividend was declared and paid to fund a possible settlement and then later paid back to Allied, it would not have made any difference to her analysis because there was strong evidence of accumulated funds tucked away in W.L.G.’s corporations potentially available for support. [ 59 ] When taken with the other evidence adduced at trial, knowing the 2017 dividend had been paid out and then remitted, as well as why that had happened, could not reasonably be expected to have affected the result. [ 60 ] Based on all the foregoing, I would dismiss the fresh evidence application.

B. Did the trial judge err in imputing a $500,000 income to W.L.G.? [ 61 ] The trial judge imputed income to W.L.G. using the provisions of the Guidelines . The provisions germane to the issues in this matter read: Calculation of Annual Income 16 Subject to sections 17 to 20, a spouse’s annual income is determined using the sources of income set out under the heading “Total income” in the T1 General form issued by the Canada Revenue Agency and is adjusted in accordance with

Schedule III. Pattern of income 17

(1) If the court is of the opinion that the determination of a spouse’s annual income under

section 16 would not be the fairest determination of that income, the court may have regard to the spouse’s income over the last three years and determine an amount that is fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non-recurring amount during those years. Non-recurring losses

(2) Where a spouse has incurred a non-recurring capital or business investment loss, the court may, if it is of the opinion that the determination of the spouse’s annual income under

section 16 would not provide the fairest determination of the annual income, choose not to apply sections 6 and 7 of

Schedule III, and adjust the amount of the loss, including related expenses and carrying charges and interest expenses, to arrive at such amount as the court considers appropriate. 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. 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: … (

e) the spouse’s property is not reasonably utilized to generate 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; … [ 62 ] It is common ground that the trial judge imputed income to W.L.G. under s. 19 of the Guidelines , although she did not specify which provision of that

section she was using. [ 63 ] W.L.G. submits that his income for the purposes of support is $298,853, which corresponds to 100% of the pre-tax earnings of WLG Ltd. in the most recent tax year (at the time of trial), being 2018. He submits that the trial judge committed a number of errors when she arrived at an income of $500,000. I will discuss each of his arguments in turn. [ 64 ] W.L.G. submits first that the trial judge erroneously found that Allied had a practice of accumulating pre-tax income and then paying out large dividends. He argues that the evidence does not support such a finding.

I disagree. [ 65 ] The determination by the trial judge that funds were being accumulated in Allied is a factual finding reviewable on the standard

of palpable and overriding error. Based on this standard, W.L.G.’s submission must fail. [66] There is ample evidence that supports the trial judge’s conclusion. I have earlier referred to the evidence of an accumulation ofa large fund of money in Allied that could be paid out without any financial harm to the corporation and evidence that Allied did not payregular dividends. Moreover, W.L.G. admitted that the earnings of Allied were not distributed each year and that he was accumulatingfunds in Allied to pay out A.C.G.’s family property entitlement.

Whether it was, as found by the trial judge, a practice of Allied toaccumulate funds is neither here nor there; funds had accumulated. [67] The trial judge reviewed in detail what funds had been accumulated and were available in Allied. She noted that dividendswere paid out in 2012 and then again in 2017 but that there were substantial earnings in Allied during that period. WLG Ltd.’sproportionate share of pre-tax income during that period was $2,021,877.

She also noted that between 2014 and 2018, the amount due toWLG Ltd. from Allied increased from $1,455,708 to $2,503,891 over and above the dividends received by WLG Ltd. in 2017 and 2018.She noted that Allied had recorded liabilities to related parties during that time period. [68] The trial judge concluded, “[c]learly, there is property from which W.L.G. could reasonably generate an income for supportpurposes” (at para 71). Although not stated by the trial judge, that conclusion accords with the situation set forth in s. 19(1)(

e) of theGuidelines, i.e., the spouse’s property is not reasonably utilized to generate income. Her conclusion also accords with the comments of thisCourt in Rudachyk v Rudachyk (1999), (SK CA), 180 Sask R 73 (CA): [28] Determining income from capital assets is not subject to readily identifiable rules. The Guidelines, for instance, make no attemptto relate support payments to the total wealth of the spouse. There is however, a right which is supported by the following

section toreview a spouse’s assets to see whether they are underutilized, and this is an appropriate investigation even where there is no suggestion ithas been deliberately accomplished: “19(1) The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstancesinclude the following: (

e) the spouse’s property is not reasonably utilized to generate income;” [29] Such a review would be justified to prevent a wealthy spouse from avoiding an obligation for support merely because the incomeof that spouse was negligible. The question is what measure should be applied in such circumstances to determine an appropriate deemedincome. One such measure is the concern that assets might be underutilized, such as vacant property that could be rented, money loanedwithout interest or at a very low rate of interest, or unproductive assets which are not disposed of when opportunities to do so exist.

Thissection is intended to provide the authority to make an assessment of imputed income where the income is needlessly low. To somedegree it will be an arbitrary figure, but the use of this approach does provide some opportunity for the exercise of a judicial discretion toassure the payment of reasonable and fair support payments. [69] W.L.G. next argues that the 2012 Allied dividend that flowed through to WLG Ltd. was not paid in the normal course ofbusiness and had nothing to do with a business practice of paying out accumulated income. This argument must fail as well. It is a redherring.

It erroneously implies that the trial judge considered this dividend to have been made as part of a regular business practice ofAllied. The trial judge made no such finding. She understood that it was connected to the sale of shares and reorganization of thecompanies at the time. [70] The reason for the 2012 and 2017 dividends is neither here nor there. There was substantial evidence that Allied deliberatelydid not regularly dividend out money during the period 2012 to 2018, despite its earnings.

I take the statement by the trial judge thatAllied had a “practice” of accumulating income not as a statement of the corporation’s business practice but as a description of whatactually happened. It is factually accurate. I can find no palpable error in that determination. [71] W.L.G. next argues that the trial judge’s analysis of his potential sources of income set out in the

summary table is erroneous.At this point, it is helpful to view the

summary table taken from paragraph 65 of the trial judge’s reasons: Line 150 –Capital Gains 3 year·averagewithout CapitalGains WLG Ltd.Pre-tax WLG’s Interestin Allied pre-taxincome Column 1 + 4 2014 $260,454 $288,263 ($952) $582,502 $842,956 2015 $421,154 $350,329 ($971) $346,677 $767,831 2016 $416,670.59 $365,868 ($1,014) $123,511.41 $540,181 Line 150 includesdividend Column 1 –dividends +Column 4 -2017 $218,339 $352,054.37 $988,469 $456,656 $516,294.52

2018 Line 150 includes dividend $ 19 3,539 $276, 18 2 $298 , 8 53 $512 , 531 $568,070 [ 72 ] With reference to the

summary table, W.L.G. submits that ss. 17 and 18 of the Guidelines only permit a court to consider three years of corporate income rather than five years as done by the trial judge. This argument relies on the reference in s. 17(1) of the Guidelines that if the application of s. 16 will not result in a fair determination of income, then resort may be had to the annual income of the last three years.

Unfortunately, W.L.G. misunderstands what the trial judge was doing in setting out potential sources of income for five years. [ 73 ] The trial judge was tasked with determining the income for each of the years 2014 to 2018 to allow her to decide whether the income used for the purposes of the support orders the parties had agreed to for those years was fair and reasonable, i.e., retroactive support. She therefore appropriately considered that five-year time span.

She was not restricted in doing so by s. 17(1) . [ 74 ] Because the trial judge was trying to determine the income and funds available for retroactive support for each of the years between 2014 and 2018, she was entitled to analyze the corporate income of Allied and WLG Ltd. for each of those five years. She did not average of any of that income, noting that she is prevented by the case of Thompson v Bear , 2014 SKCA 111 , 446 Sask R 160 [ Bear ] , from averaging corporate pre-tax income. Notably, she did set out a three-year average for each year in one of the columns in her

summary table as a possible scenario to determine income. She did not depart from the provisions of the Guidelines . [ 75 ] W.L.G. next argues that the last column of the

summary table adds the previous columns and thereby double and triple counts income, and that this mistake led the trial judge into the error of believing that his income was greater than $800,000 during each year canvassed. He argues this crucial error informed the balance of her analysis that resulted in the imputation of income of $500,000. [ 76 ] There is simply no merit to this submission. W.L.G. misreads the

summary table. Only the first and fourth column, i.e., W.L.G.’s line 150 income and his interest in WLG Ltd.’s proportionate share of Allied’s pre-tax income, are added in the fifth column of the

summary table. [ 77 ] W.L.G. next submits the consideration by the trial judge of the 2012 dividend in her analysis of the financial behaviour of Allied is a double counting because this dividend was a factor in the valuation of WLG Ltd., of which A.C.G. received her share of family property. [ 78 ] He again misreads the Decision . The 2012 dividend was not factored into any of the trial judge’s actual calculations of income. She merely referred to that dividend in the course of making her finding that Allied paid large but infrequent dividends to WLG Ltd. The 2012 dividend does not appear on her

summary table of potential sources of income and she did not attribute any portion of the 2012 dividend as income to W.L.G. [ 79 ] Moreover, it is not double counting to consider the 2012 dividend in the analysis. Only WLG Ltd. was valued as a family asset. The shares of Allied held by WLG Ltd. were valued. The valuation date of WLG Ltd. was the date of the petition, namely, December 5, 2014. Both expert witnesses valued WLG Ltd. on the basis of a discounted adjusted net book value of its assets, including its interest in Allied as at the valuation date.

While the 2012 dividend – declared two years prior to the valuation date – was included as a cash asset in the valuation of WLG Ltd., there is no direct relationship between it and the sum of $500,000 imputed to W.L.G. so as to conclude that there has been a double counting of the value of that dividend. This argument must fail on that account as well. [ 80 ] W.L.G. next argues that the income of $500,000 is arbitrary and not anchored in any specific numbers or methodology.

I disagree. [ 81 ] Imputation of income must be grounded on the guiding principle set out in s. 19(1) of the Guidelines of determining a fair and reasonable income based on evidence. There was substantial evidence to inform that determination. [ 82 ] The trial judge reviewed the potential sources of income available to W.L.G. for support in detail. These are set out in her

summary table. With respect to the imputation of income, the trial judge noted that the overall objective of the Guidelines is to find an amount that fully and fairly reflected the income available for child support purposes. This is what she did. [ 83 ] She determined that she could impute some income to W.L.G. above his line 150 income. She concluded that “[h]aving regard to the monies held in WLG Ltd. and the monies due to WLG Ltd. from Allied, imputing income to W.L.G. is both fair and reasonable in the circumstances” (at para 72).

It is clear that she did not directly impute the proportionate share of WLG Ltd.’s receipt of notional payments of dividends from Allied. [ 84 ] The trial judge gave reasons for arriving at an income of $500,000: [77] Setting W.L.G.’s income at $500,000 provides a reasonable support level for [the child], having regard to the lifestyle the parties had while together, and having regard to the needs A.C.G. outlined in her financial statement, particularly when consideration is also given to the spousal support to which she is entitled.

An argument may very well be made to impute a greater level of income to W.L.G. given the resources available to him in both WLG Ltd. and what is due to WLG Ltd. from Allied but it is an unnecessary exercise as $500,000 per annum affords A.C.G. with sufficient resources to meet her and [the child’s] needs. [ 85 ] Based on the reasons given, I am satisfied that the trial judge’s determination of quantum was not arbitrary. If it can be said that she reasoned to a result, any error in that regard was to A.C.G.’s detriment not to that of W.L.G.

[ 86 ] W.L.G. next argues that, although s. 4 of the Guidelines grants the trial judge discretion in determining the quantum of child support where the payor’s income is over $150,000 per year, the trial judge improperly used s. 4 together with A.C.G.’s need to impute his income. I see no indication of that. [ 87 ] The trial judge concluded that income should be imputed before ever mentioning s. 4. When she did mention s. 4 , it was in the context of trying to determine the quantum of child support and dealing with A.C.G.’s assertion that she was owed $183,991 in arrears of child support.

The trial judge noted that “child support should allow for ample discretionary spending but should not be so excessive in comparison to the reasonable needs of the children that it effectively loses its character as child support or overshoots the goals and objectives of the Guidelines ” (at para 75, quoting Gordon v Nielson , 2018 SKQB 207 at para 248 ) . In short, W.L.G. completely misinterprets the trial judge’s reference to and use of s. 4 .

The trial judge, after considering s. 4 , concludes the needs of the child do not warrant the level of retroactive support requested by A.C.G. [ 88 ] Last, W.L.G. submits that if the trial judge found s. 18 of the Guidelines was inapplicable, then she could not, as a matter of law, have used s. 19 thereof to impute income for support purposes. In this respect, he has abandoned ground 4(

b) of his notice of appeal that sets out that the trial judge erred in not indicating on which subsection of s. 19 her imputation of income was based. He also argues that, in resorting to s. 19 , the trial judge impermissibly pierced the corporate veil of Allied. He cites in support of this argument the comments of this Court in Walker v Walker , 2019 SKCA 96 at para 31 , 31 RFL (8th) 310 [ Walker ] that s. 19 does not allow piercing of the corporate veil. [ 89 ] To evaluate this argument, I turn first to the law regarding ss. 18 and 19 of the Guidelines .

The principles regarding attribution of pre-tax corporate income under s. 18 are set forth in Dungey v Dungey , 2020 SKCA 138 , 454 DLR (4th) 560 [ Dungey ] : [73] When a payor spouse is the sole owner of a corporation, all or part of the pre-tax corporate income is available as income for the payment of support , subject to the corporation’s reasonable business needs, obligations and management of risk: Bear v Thompson , 2014 SKCA 111 , 378 DLR (4th) 649 [ Bear ] , Potzus v Potzus , 2017 SKCA 15 , [2017] 7 WWR 296 , and Walker .

While the attribution of corporate income is limited to the amount of the most current year’s pre-tax corporate income, a court is fully entitled to scrutinize a corporation’s historical earnings and other financial information to determine what portion of the current year’s income should be attributed: Bear at para 74 and Potzus at para 78 .

The objective of analyzing all potential sources of the payor’s income is to arrive at an amount that fully and fairly reflects the income available for support purposes: M.H. v A.B ., 2019 SKCA 135 , 36 RFL (8th) 261 . [74] The overall application of this concept was helpfully summarized by Wilkinson J. in Tucker v Tucker , 2019 SKQB 317 : … [35] While retained earnings are not a direct consideration in the s. 18 [ Federal Child Support ] Guidelines analysis, to the extent that the current level of retained earnings are deemed sufficient for the purposes of the corporation, it may justify an attribution of the entirety of the corporation’s pre-tax income to the support payor: Schemenauer v Schemenauer , 2018 SKQB 20 at paras 46–47 .

Moreover, in appropriate circumstances, retained earnings can be the focus of an analysis under s. 19 of the Guidelines , where imputation of income is the primary consideration: Potzus . [ 90 ] While s. 18 would normally have allowed the trial judge to consider the pre-tax income of WLG Ltd., she observed that there was a difficulty in doing that. WLG Ltd. had gone years without taking any dividends due to it from Allied and, moreover, the case of Bear restricted attribution of pre-tax income to no more than that of the most recent year of the corporation.

She noted as well that because W.L.G.’s minority interest in Allied was through WLG Ltd., s. 18 could not be used in respect of Allied. This led her to consider s. 19 . [ 91 ] When sources of income, after adjustment according to the provisions of

Schedule III of the Guidelines , do not give a reliable picture of a payor’s annual income for support purposes, s. 19 provides the court with additional discretion to determine income through imputation. [ 92 ] That discretion is broad, allowing the court to impute “such amount of income to a spouse as it considers appropriate in the circumstances”. The

section contains a list of circumstances, set out in s. 19(1)(a)–(

i) and s. 19(2), where the discretion to impute income can be exercised. The list sets forth deliberate or irresponsible conduct, such as being intentionally underemployed or unemployed, as well as neutral circumstances, such as where a significant portion of income is derived from dividends, capital gains or other sources that are taxed at a lower rate than employment or business income. [ 93 ] For example, this Court in M.H. v A.B . , 2019 SKCA 135 , 36 RFL (8th) 261 [ M.H. ] , explained how s. 19(1)(

h) may be used to determine the income truly available to the parties : [100] In situations where a parent derives a significant portion of his or her income from dividends or other sources taxed at a lower rate than employment or business income, or sources which are exempt from tax, s. 19 (1)(

h) gives judges discretion to impute such income as is considered appropriate in the circumstances. Imputing income under s. 19 (1)(

h) will often be appropriate where dividends are received from a corporation in which the recipient is the sole shareholder. As Larlee J.A., of the New Brunswick Court of Appeal noted in [ D.E. v L.E. , 2014 NBCA 67 ] (citing [ Austin v Austin (2008), 45 RFL (6th) 401 ] with approval) : [12] ... s. 5 [of Sch III] applies where dividends are received from a Canadian corporation not controlled by either spouse (para. 24). That

section does not preclude a court from imputing additional income to a spouse who is the sole shareholder of a company and who elects to receive dividends from the company in lieu of salary. Smith J. points out in the circumstances of that case, “ s. 18(1) or s. 19(1) (

h) of the Federal Child Support Guidelines should be applied and would be a fairer method to determine child support where the corporation is solely controlled by the payor spouse” (para. 25). [ 94 ] However, the wording of s. 19 makes clear that the list of situations where a judge may exercise his or her discretion to impute income is not exhaustive, leaving the discretion open ended. In Bak v Dobell , 2007 ONCA 304 , 281 DLR (4th) 494 [ Bak ] , the court explained this: [33] Subsection 19(1) is clearly intended to capture cases that, in fairness, require an adjustment to the payor’s presumptive income

and, for this purpose, it provides a court with the discretion to impute income when it is “appropriate [to do so] in the circumstances”. [34] The list of circumstances in s. 19(1 ) is not exhaustive: the legislature only provides that the list “include” items (a)–(i). Further, there is nothing in the provision that suggests other appropriate circumstances must be analogous to those specifically enumerated, although similarity of circumstance to one listed in s. 19(1 ) would support the imputation of income, simply because such a circumstance would be consistent with legislative intention.

The absence of analogy to a listed circumstance is simply a factor to be considered in interpreting the provision. (Footnotes omitted) [ 95 ] In Walker , this Court also confirmed that the list is not closed but queried whether a non-enumerated situation must be analogous to the enumerated ones (see paras 42–43).

Apropos that question, this Court has indicated that, in appropriate circumstances, retained earnings can be the focus of s. 19 analysis ( see: Potzus v Potzus , 2017 SKCA 15 at para 92 , [2017] 7 WWR 296 [ Potzus ] ; and Dungey at para 74 ). [ 96 ] In Bak , the Court held that the use of s. 19 in non-enumerated situations must be consistent with the rationale underlying s. 19(1) and s. 19(2) of the Guidelines . I agree with that

interpretation. Based on the very broad language used in s. 19 , I find that non-enumerated situations need not be analogous for s. 19 to be used, as long as they comport with the objectives of the Guidelines . Such an

interpretation accords with the broad nature of the discretion exercised by a court acting under s. 19, as explained in Bak , and with the general objectives of ss. 16–20 of the Guidelines , as explained in M.H. : [86] As this Court stated in Potzus v Potzus , 2017 SKCA 15 at para 76 , [2017] 7 WWR 296 , the overall objective of ss. 16–20 of the Guidelines is to find an amount that fully and fairly reflects the income available for child support purposes. … [ 97 ] Of similar effect is Olchowecki v Olchowecki , 2005 SKQB 144 , 267 Sask R 83 , which was cited with approval in M.H. at paragraph 87 , before Kalmakoff J.A. summarized: [90] From all of this, it is clear that the task of a judge in a proceeding where child support is in issue is to determine the income truly available to the parties for that purpose. … [ 98 ] Based on the foregoing, I find that the trial judge did not err by using s. 19 to impute income in the circumstances of this case. [ 99 ] She was confronted with a situation where W.L.G. is the sole shareholder of a corporation that depends on dividend income from another corporation of which he was the largest, but nevertheless a minority, shareholder.

The way that second corporation’s financial and corporate affairs were arranged, made – or had the effect of making – funds it had accumulated that could be used for support unavailable for that purpose. In these circumstances, I find that it was open to the trial judge, on the basis of the wide ambit of s. 19 as discussed, to use that provision to impute income to W.L.G. Her use of s. 19 in these circumstances accords with the objectives of the Guidelines set forth above. [ 100 ] The trial judge was invited by A.C.G. to pierce Allied’s corporate veil and impute its pre-tax income to W.L.G.

While Walker does state that s. 19 does not allow for the piercing of the corporate veil (at para 31), the Court went on to acknowledge that imputation of corporate income under s. 19 is nevertheless generally appropriate where there is insufficient evidence to allow s. 18 to be used (at paras 32–36). [ 101 ] The trial judge stated she would not pierce the corporate veil of Allied.

Without determining if the corporate veil of Allied could be pierced under s. 19 , I find that the trial judge did not actually do so. [ 102 ] Based on all the foregoing, I am satisfied that the exercise of the trial judge’s discretion in imputing the amount of income she did was appropriate. I have not been persuaded in the circumstances of this case that there is a material error, a serious misapprehension of the evidence or an error of law that compels intervention. C.

Did the trial judge err in determining ongoing spousal support? [ 103 ] W.L.G. makes a number of submissions in relation to this issue. [ 104 ] He first submits that the trial judge determined spousal support on the basis of what the parties might have enjoyed given their resources, rather than the lifestyle they did in fact enjoy during the marriage. He argues that A.C.G. is not entitled to be supported in excess of the marital standard of living and, as a result of the amount of support he had given her, it had in fact already improved beyond that level.

Implicit in this submission is that the level of spousal support negotiated in the consent orders was sufficient. [ 105 ] W.L.G. had paid combined spousal and child support of approximately $100,000 per year since separation. A.C.G.’s financial statement disclosed that she was spending approximately $144,000 per year.

She submitted to the trial judge that she needed approximately $150,000 per year to meet the lifestyle to which she was accustomed. [ 106 ] W.L.G. submits that even if A.C.G.’s stated needs required $150,000 per year of support, the combined spousal and child support of nearly $200,000 per year ordered by the trial judge was clearly in excess of that proposal. He submits such an order does not comport with the objectives of support. I disagree. [ 107 ] I turn first to the governing law.

The objectives of a spousal support order and the factors to be considered by a court are set out in s. 15.2(4) and s. 15.2(6) of the Divorce Act , respectively: Factors

(4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition,

means, needs and other circumstances of each spouse, including (

a) the length of time the spouses cohabited; (

b) the functions performed by each spouse during cohabitation; and (

c) any order, agreement or arrangement relating to support of either spouse. … Objectives of spousal support order

(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should (

a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown; (

b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage; (

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

d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time. [ 108 ] In D.B.B. , this Court explained the two general objectives of spousal support as follows: [75] The purposes and objectives of a spousal support order, as conveyed in the Divorce Act , were discussed in James MacDonald & Ann Wilton, The 2017 Annotated Divorce Act (Toronto: Thomson Reuters, 2016) at 299: Spousal support is a remedy which serves two purposes in Canadian law.

Firstly, it provides compensation when a relationship has increased the earning power of one spouse at the expense of the other spouse. Secondly, it serves to relieve the financial need which a spouse experiences after a relationship. These two purposes animate the four objectives listed in s. 15.2(6) and s. 17(7) of the Divorce Act . In the Spousal Support Advisory Guidelines (“SSAG”), the strength of the compensatory and needs-based claims to spousal support both (

i) influence the amount chosen within the range, and (ii) help define the exceptional fact patterns in which the SSAG ranges are inappropriate. … [ 109 ] In Potzus , this Court explained the non-compensatory aspect of support: [131]

Section 15.2(4) of the Divorce Act mandates that in making a spousal support order “the court shall take into consideration the condition, means, needs and other circumstances of each spouse ... .” Appropriately, in a situation of pecuniary advantage, the issue of need is well capable of being measured against the parties’ marital standard of living. “Need” can arise from a decline in standard of living as compared to the marital standard.

The Supreme Court of Canada has adopted a broad and expansive approach in ascertaining means and ability to pay spousal support, one that includes consideration of “all pecuniary resources, capital assets, income from employment or earning capacity, and other sources from which the person receives gains or benefits”: Leskun v Leskun , 2006 SCC 25 at para 29 , [2006] 1 SCR 920 . [ 110 ] In Linn , this Court noted that the use of the SSAG to determine support based on incomes above $350,000 (which is the case here) is a fact specific exercise: [ 139] As the User’s Guide indicates for incomes above $350,000 the formulas alone cannot be used (p. 38).

Above $350,000, the formulas require “ an individualized, fact-specific analysis ” (emphasis in original, p. 38), which, in my view, is precisely what the trial judge did in this case.

He calculated what the ranges would be, if the Guidelines applied, and then proceeded to consider whether that was the appropriate amount as part of the individualized decision-making process. [ 111 ] The principles applicable to the use of the SSAG for incomes above $350,000 were summarized in Potzus : [128] The [ Spousal Support Advisory Guidelines: The Revised User’s Guide (Ottawa: Department of Justice Canada, 2016)] summarizes the principles that have emerged from case law addressing incomes above the $350,000 ceiling: • The formulas for amount are no longer presumptive once the payor’s income exceeds the “ceiling”. • The ceiling is not an absolute or hard “cap” , as spousal support can and usually does increase for payor incomes above $350,000. • The formulas are not to be applied automatically above the ceiling, although the formulas may provide an appropriate method of determining spousal support in an individual case, depending on the facts. • Above the ceiling, spousal support cases require an individualized, fact-specific analysis .

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

Somewhere between $500,000 and $700,000, it seems. • Once the payor’s income is “far” above the ceiling , then the amount of support ordered will usually be below the low end of the SSAG range, but SSAG ranges are still calculated and sometimes the outcome will fall within the SSAG range.

... [131]

Section 15.2(4) of the Divorce Act mandates that in making a spousal support order “the court shall take into consideration the condition, means, needs and other circumstances of each spouse ... .” Appropriately, in a situation of pecuniary advantage, the issue of need is well capable of being measured against the parties’ marital standard of living. “Need” can arise from a decline in standard of living as compared to the marital standard. ... (Emphasis in original) [ 112 ] The trial judge reviewed the law germane to the determination of ongoing compensatory and non-compensatory support.

She canvassed the factors set out in s. 15.2(4) . She reviewed A.C.G.’s experience and education noting that, at the time of trial, these limited her ability to earn a living. The trial judge reviewed the history of the parties’ economic relationship and the function of each in the marriage. She found that it was not practicable for A.C.G. to achieve self-sufficiency quickly, having regard to the nature of the economic partnership the parties enjoyed during the marriage.

There is no palpable and overriding error in the findings that led to in that conclusion. [ 113 ] Based on her analysis, the trial judge determined that A.C.G. was entitled to both non-compensatory and compensatory support. I see no error in that. [ 114 ] She then turned to the issue of quantum and the part that the SSAG plays in the determination of that issue.

The SSAG have been described as a “litmus test” for what constitutes equitable sharing of the economic consequences of the marriage or its breakdown ( D.B.B. at para 89 ). [ 115 ] As she was required to do, the trial judge considered the SSAG but noted that because W.L.G.’s income is over $350,000, caution respecting the use of the guidelines was warranted. She fixed monthly spousal support at $12,400, which was the low end of the range indicated by the SSAG .

She also noted that the high end was $14,909. [ 116 ] The trial judge had earlier noted and accepted that A.C.G.’s needs were set out in the financial statement sworn by her and filed at trial. While it is true that the trial judge acknowledged that the parties did not have an extravagant lifestyle during their marriage, that is not a determining factor. Lifestyle and standard of living is only one factors of several and must be understood in the context of the objectives of spousal support, including the purpose of non-compensatory support.

On the matter of lifestyle and standard of living, the trial judge concluded: [85] Imputing income to W.L.G. at $500,000 and applying the low end of the SSAG provides A.C.G. with a monthly spousal support of $12,400 per month. This amount, combined with her child support and whatever nominal amount she may continue to receive through [her business] as well as any monies she may earn from investing, should provide her with more than enough to maintain a decent standard of living for herself and for [the child]. The SSAG suggest a termination date given their years of marriage with a maximum duration of 18.5 years.

By April of 2020, the parties will have lived separate and apart for six years. Barring any material change in circumstance, spousal support should continue for a further 12.5 years. [ 117 ] However, the trial judge was also dealing with the compensatory aspect of support. The focus in respect of that issue goes beyond needs and lifestyle.

The trial judge noted that the low end of the SSAG combined with child support was more than A.C.G. said she needed to ensure a good lifestyle for her and their child, but observed she had been responsible for the bulk of matters on the home front and W.L.G. had worked long hours to help grow his business interests.

She acknowledged that choice would continue to affect A.C.G.’s earning capacity for some time and that compensatory support was warranted. [ 118 ] In short, despite the fact that the trial judge appears to have awarded support in excess of A.C.G.’s stated need based on her lifestyle, she made no error in doing so.

Her award must be seen as encompassing both A.C.G.’s needs and compensation for the economic disadvantages of the marriage suffered by her. [ 119 ] I conclude that the trial judge made no error in her handling of the lifestyle factor in her determination of spousal support. [ 120 ] W.L.G. next submits that the total of child and spousal support has been increased drastically over that set out in the consent orders entered into by the parties and it does not comport with the objectives of support as stated in the Divorce Act .

After a thorough review of the trial judge’s analysis as it relates to ongoing support, I am satisfied that, taken as a whole, she appropriately addressed the objectives of support set forth in the Divorce Act , the relevant factors in that Act as well as in the SSAG and conducted the necessary fact-specific analysis required for incomes over $350,000. [ 121 ] W.L.G. next argues that the trial judge overemphasized A.C.G.’s needs and underemphasized her means.

He argues that the trial judge failed to consider that A.C.G. has the ability to earn an income greater than that provided by her part-time employment, that she had made little effort to attain self-sufficiency, that she was underemployed and that income should have been imputed to her as a result. He argues that the trial judge found she had no obligation post-separation to become self-sufficient. [ 122 ]

Section 15.2(6) (

d) of the Divorce Act requires that economic self-sufficiency of the spouse be factored into a support order. While there are aspects of the trial judge’s analysis of A.C.G.’s obligation to become self-sufficient that are of concern, taken as a whole and given the standard of review, I cannot say she erred. I will explain. [ 123 ] As I noted above, the trial judge found that A.C.G. was, at the time of trial, not self-sufficient and would not quickly become so. The trial judge noted that A.C.G.’s work experience and education limited her ability to earn an income at that time.

She also noted that, during the marriage, A.C.G. had worked from time to time and that once their son was born, she remained at home to look after him. At the time of trial, A.C.G. had been out of the workforce for a substantial period of time. The trial judge observed that it was not practicable to expect her to achieve self-sufficiency quickly, having regard to the economic partnership the parties enjoyed during the marriage. However, she made no determination that A.C.G. would never become self-sufficient.

While A.C.G. might have done more to become self-sufficient as their son started going to school full-time, it is not for this Court, based on the standard of review, to reassess the weight placed on that factor in the trial judge’s self-sufficiency analysis.

[ 124 ] W.L.G. had also argued that the trial judge should impute some income to A.C.G. on the basis that she could invest some of her family property equalization and earn income from it. However, surprisingly, neither party adduced any evidence with respect to the rates of return that might be generated by such an investment. As a result, the trial judge indicated that she refused to speculate as to what income, if any, the potential investments might generate.

Accordingly, the trial judge was not prepared to impute income to A.C.G. at that time. [ 125 ] I do not take the trial judge’s consideration of the issue that A.C.G. could, in the future, generate income from investment of the property equalization payment as foreclosing an application by W.L.G. to vary ongoing spousal support on that basis. Indeed, the trial judge noted there may be a revisiting of support when A.C.G. invested her settlement funds in a business. [ 126 ] The trial judge understood and considered the means and needs of both parties.

Her assessment of the weight of those factors is within her discretion. I cannot say that she erred in making that assessment. [ 127 ] Last, W.L.G. argues the trial judge erred in failing to give any reasons for her determination of the appropriate duration of spousal support. He submits the trial judge imposed the maximum duration of support and some justification was required. [ 128 ] The trial judge provided numerous reasons for the duration of her spousal support, including: (

a) The parties had met while A.C.G. was still in high school; (

b) The relationship had been financially focused around W.L.G.’s career, which necessitated that the parties move to Moose Jaw to allow for his rise in the business; (

c) The parties had agreed A.C.G. would be the primary caregiver for their child; (

d) The life and financial choices the parties had made would continue to affect A.C.G. for some time; (

e) A.C.G.’s work experience and education limited her ability to earn a living; (

f) A.C.G. had been financially dependant upon W.L.G. since marrying; (

g) A.C.G.’s age; and (

h) The SSAG suggested a termination date given their years of marriage with a maximum duration of 18.5 years. [ 129 ] The duration of spousal support is discretionary, having regard to the particular facts of the case. The trial judge set out the facts as noted above, on which she based her decision both as to duration and quantum. The trial judge clearly referred to and considered duration of support in the context of the SSAG . She noted that, given the income of W.L.G. and the circumstances and duration of the marriage, “[t]he SSAG suggest a range between $12,400 and $14,909.

The suggested duration is 9.25 to 18.5 years” (at para 84). [ 130 ] As such, the trial judge properly exercised her discretion in limiting the duration of spousal support to another 12.5 years.

This was clearly not the maximum duration that was open to her as submitted by A.C.G., who argued for an indefinite period of support. [ 131 ] I conclude that the trial judge’s determination that A.C.G. is entitled to receive ongoing spousal support of both a non- compensatory and compensatory nature, as well as her determination of the quantum of that support and the duration thereof, were grounded in the evidence before her. Based on the standard of review set forth above, I can see no error in the trial judge’s exercise of discretion with respect to those matters. D.

Did the trial judge err in failing to apply the legal test with respect to retroactive spousal support? [ 132 ] As a preliminary observation, I note again that W.L.G. has not challenged or argued that child support should not be retroactive per se but says that the trial judge erred by imputing the income she did and had she not erred in that respect, there would be no retroactive child support payable. [ 133 ] W.L.G.’s position on this issue is reasonable and, given my conclusion regarding his income, it accords with authority that child support should be recalculated to reflect the payor’s income. [ 134 ] As noted by the Supreme Court of Canada in D.B.S. v S.R.G. , 2006 SCC 37 , [2006] 2 SCR 231 : [54] In

summary, then, parents have an obligation to support their children in a way that is commensurate with their income. This parental obligation, like the children’s concomitant right to support, exists independently of any statute or court order. To the extent the federal regime has eschewed a purely need-based analysis, this free-standing obligation has come to imply that the total amount of child support owed will generally fluctuate based on the payor parent’s income.

Thus, under the federal scheme, a payor parent who does not increase his/her child support payments to correspond with his/her income will not have fulfilled his/her obligation to his/her children. … … [68] … As I concluded above, a payor parent always has the obligation to pay – and the dependent child always has the right to receive – child support in an amount that is commensurate to his/her income. This obligation is independent of any court order that may have been previously awarded.

Accordingly, even where the payor parent has made payments consistent with an existing court order, (s)he would not have been fulfilling his/her obligation to his/her children if those payments did not increase when they should have, according to the applicable law at the time. Thus, the support obligation of a payor parent, while presumed to be the amount ordered by a court, will not necessarily be frozen to the amount ordered by a court. It is the responsibility of both parents to ensure that the payor parent fulfils his/her

actual obligation, tailored to the circumstances at the relevant time. Where they fail in this obligation, a court may order an award thatrecognizes and corrects this failure. Such an award is in no way arbitrary for the payor parent.

To the contrary, it serves to enforce anobligation that should have been fulfilled already. (Emphasis in original) [135] Therefore, based on my analysis above and my determination that the trial judge did not err in imputing $500,000 income toW.L.G., the analysis that follows is confined to spousal support. [136] I turn now to W.L.G.’s argument that the law governing retroactive spousal support has not been properly applied.

W.L.G.acknowledges that it was open to the trial judge to order a different amount of support for the period of 2014 to 2018 and, at trial, took theposition that the task of the trial judge was to determine a reasonable amount of support and to compare that with what the parties hadagreed. He submits, however, that the trial judge merely did a recalculation of the income and backdated it to the date of the petitionwithout doing any analysis of whether retroactive spousal support was warranted in the circumstances.

To evaluate this submission, I turnto the governing law. [137] It is the duty of the trial judge to review the appropriateness of any interim orders when considering a permanent order forsupport and to determine if retroactive support is justified. In Ford v Ford, 2015 SKCA 23, 457 Sask R 19, this Court said: [26] With respect to interim child support orders, Payne and Payne have commented on trial judges’ authority vis-à-vis existing interimchild support orders. They state: ... Although

section 17 of the Divorce Act relates only to applications to vary permanent orders and

section 15.1 of the DivorceAct includes no express provision for the variation of interim orders, a court has inherent jurisdiction to vary an interim order. In orderingpermanent child support, a trial judge is not bound by a pre-existing order for interim child support. An amount payable under an interimorder may be adjusted retroactively by a trial judge, if an erroneous assumption was made concerning the obligor’s income. [emphasisadded] See: Julien D. Payne & Marilyn A.

Payne, Canadian Family Law, 5th ed (Toronto: Irwin Law, 2013) at 453-454. [138] Interim orders are intended to cover a short period of time between the making of the order and trial. They are admittedly moresusceptible to error than orders made later after a full investigation of the facts, but the purpose of an interim order is simply to provide areasonably acceptable solution to a difficult problem until trial (see: Sypher v Sypher (1986), (ON CA), 2 RFL (3d) 413(Ont CA) at 413).

A review of an interim order at trial may result in an order for additional or retroactive support. [139] However, retroactive spousal support is not awarded on the same footing as ongoing support (see: P.M. v S.M., 2012 SKCA 55 atpara 21, 393 Sask R 229 [P.M.]). In P.M., this Court noted the guiding principles behind an award of retroactive spousal support: [23] Cromwell J. [in Kerr v Baranow, 2011 SCC 10, [2011] 1 SCR 269] explained that the factors relevant to an award of retroactivespousal support are (

a) the needs of the recipient, (

b) the conduct of the payor, (

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

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

However, in spousal support cases, these factors must be consideredand weighed in light of the different legal principles and objectives that underpin spousal as compared with child support. I will mentionsome of those differences briefly, although certainly not exhaustively. [208] [T]here is no presumptive entitlement to spousal support and, unl

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