Falkener v. Falkener

2020 BCCA 303 Falkener v. Falkener

COURT OF APPEAL FOR BRITISH COLUMBIA Citation: Falkener v. Falkener, 2020 BCCA 303 Date: 20201105 Docket: CA46355 Between: Linda Christine Falkener Respondent (Claimant) And James Falkener Appellant (Respondent) Corrected Judgment: The text of the judgment was corrected at paragraph 1 on November 6, 2020. Before: The Honourable Mr. Justice Willcock The Honourable Mr. Justice Abrioux The Honourable Madam Justice DeWitt-Van Oosten On appeal from: An order of the Supreme Court of British Columbia, dated August 13, 2019 (Falkener v. Falkener, 2019 BCSC 1351, Kamloops Docket E52916). Counsel for the Appellant (via videoconference): G.A. Lang Counsel for the Respondent (via videoconference): M.G. Perry P.M. Mennie Place and Date of Hearing: Vancouver, British Columbia September 9, 2020 Place and Date of Judgment: Vancouver, British Columbia November 5, 2020 Written Reasons by: The Honourable Mr. Justice Abrioux Concurred in by: The Honourable Mr. Justice Willcock The Honourable Madam Justice DeWitt-Van Oosten Summary: The appellant appeals an order for lump sum spousal support on the basis of alleged erroneous findings of fact made by the trial judge regarding his health, the valuation of his interests in several private companies and the source of funds held in his name in a British bank account. The appellant seeks to adduce additional evidence in support of his appeal. Held:

Appeal dismissed. The trial judge made no error in exercising her discretion to award lump sum spousal support. The applications to adduce further evidence are dismissed. Reasons for Judgment of the Honourable Mr. Justice Abrioux: Introduction [1] The appellant, James Falkener, appeals an order made by Justice Dillon following an eight-day trial ordering him to pay $381,000 in lump sum spousal support to his wife, the respondent, Linda Falkener. [2] Both parties were self represented at the trial. As the judge noted in the introduction to her reasons which are indexed at 2019 BCSC 1351: [3] Both parties were self represented and worked hard to present his or her case at trial. However, there were many issues with document disclosure, organization, and admission into evidence. There were also issues because the parties had not realized what documents or evidence were required, particularly pertaining to the value of family assets. As a result, documents were introduced 'on the fly', but with the consent of each party. The lack of expert evidence as to valuation of real estate and corporations made valuation of these assets particularly difficult. The failure to obtain a proper evaluation of business assets has especially negatively affected the respondent who owns these assets and which evaluations had to be based upon best evidence without discount. The same can be said for the

medical status of each party. Without medical evidence, reliance was placed upon acceptance for disability tax credit and reporting medical letters, as well as the testimony of each party. No disrespect is meant by informing that the court had to lead each party through their evidence to ensure that relevant evidence was put before the court so that a fair and just result could be achieved at the end of the day. Even then, there were facts suggested in argument that had not been established during the evidentiary portion of trial and which this court has not included in considerations of fact. [3] The appeal is based on alleged erroneous findings of fact made by the trial judge in relation to Mr. Falkener's disability, the valuation of his interests in several private companies and the source of certain funds in a bank account in his name in England. [4] The appellant brings three applications to adduce further evidence in relation to his alleged disability and the source of the funds in his English bank account. [5] Ms. Falkener urges the Court to refuse to hear this appeal since the appellant is in contempt of court in relation to his support obligations. [6] For the reasons that follow, I would dismiss the applications to adduce further evidence and would also dismiss the appeal on the merits. That being the case it is not necessary to consider Ms. Falkener's application

that the appeal not proceed due to the appellant's breach of prior court orders. Background [7] The parties commenced living together in 1985, were married on August 2, 1992 and separated on February 24, 2016. There are no children of the marriage. [8] Ms. Falkener was 69 years old at the time of trial. She obtained a bachelor's degree in 1968 and a Master's Degree in Fine Arts in 1974. She taught ceramics and was a curator at a municipal art gallery. In 1985, she and her son, Lee Falkener, moved from Penticton to Aldergrove to be with Mr. Falkener. She has had minimal formal employment since moving to Aldergrove in order to develop the relationship. [9] When Ms. Falkener moved to Aldergrove in 1985, she sold her home in Penticton and used the $70,000 in proceeds to purchase a property in Aldergrove, which was held jointly by both parties. [10] Mr. Falkener was 62 years old at the time of trial. He has a Bachelor Degree in Economics, and has worked as an insurance adjuster since 1985. Since 1994, he has been self-employed and has specialized in catastrophic disaster work. In 2008, he started his own insurance adjusting company, Canada Cat Inc., which had one other shareholder. Each held a 50% stake. [11] In his Form 8 Financial Statement in September 2018 the appellant valued his interest in the company at $500. The balance sheet and income statement as of December 31, 2015

showed a net loss of (- $86,747) and retained earnings of (- $6,001). [12] Mr. Falkener also had an interest in a company called Fire Marque Inc. which is a cost recovery service provided to municipalities for the attendance by emergency fire departments at insured properties. [13] Mr. Falkener also had an 8.75% interest in Eligio CRM Inc., a business software consulting firm. He testified that Eligio was used to set up the systems for Canada Cat Inc. [14] In 1991, the parties purchased a five-acre property in Pritchard, BC (the "Pritchard Property") which they considered to be their family home. [15] Until 2002, the parties ran a llama farm on the Pritchard Property. Mr. Falkener was named as the sole proprietor, however, Ms. Falkener did the majority of the work and did not receive compensation for her labour. Mr. Falkener deducted losses from this business against his own income. [16] Mr. Falkener spent long periods away from home for work, including in the United States. By 2008 he was infrequently at the Pritchard Property. In 2012, he purchased a property in Airdrie, Alberta (the "Airdrie Property"). Mr. Falkener operated his business out of this property and received rental income from adjusters who rented rooms. [17] While Mr. Falkener was away, he paid Ms. Falkener $5,000 per month to cover expenses related to the Pritchard Property, the llama business, the mortgage,

and Ms. Falkener's day-to-day needs. He also paid for his own expenses in Alberta, including the mortgage on the Airdrie Property, estimated to be $4,000 per month. [18] Mr. Falkener maintained his U.S. resident work visa and social security number and continued to work in the United States from time to time, through to 2017. When he was mostly working in the United States, he filed tax returns there, the last being in 2017. [19] One of the main issues at the trial related to Mr. Falkener's assertion that the Airdrie Property was contaminated by mold and he was thus disabled from working as at the time of trial. [20] Following the parties' separation in February 2016, Mr. Falkener continued to pay Ms. Falkener $5,000 per month. In May 2016, after being served with the Notice of Family Claim, he immediately stopped paying this amount. [21] Ms. Falkener cashed in a $22,000 GIC, an inheritance from her father, to pay her post-separation living expenses and for expenses related to the Pritchard Property. She was also obliged to take out a second mortgage to meet her expenses. [22] On October 12, 2018, Mr. Falkener received an inheritance of £113,161.33 British Pounds (approximately $198,500 Canadian) in a Santander UK bank account. [23] The first four days of the trial took place from February 5 to 8, 2019, with the last four days taking place from April 9 to 12, 2019. [24] On

February 8, 2019 prior to the trial being adjourned generally, the judge made the following comments to the parties, in particular to Mr. Falkener regarding ongoing documentary disclosure: THE COURT: In the meantime, I think you probably have an appreciation now of the detail with which we have to review the evidence to come up with a fair and legal solution to your matrimonial issues. And so I would ask you please to review your files, especially you, Mr. Falkener, at this stage because your case has yet to be presented-- MS. FALKENER: Yes, Your Honour. THE COURT: -- to make sure that everything is there. Like, for example, all of the companies that you have been involved with you have to provide full financial statements, you have to provide as much information as you can. There was orders made some time ago that you were to provide all information and documentation to support any remuneration, shareholders' loans, positions, all of that -- MR. FALKENER: Right, Your Honour. THE COURT: -- and some of that still has not been provided. And it must be provided, otherwise, to be quite frank with you, this is not what I'm going to do necessarily, but if you don't provide full disclosure I can make an adverse finding against you. MR. FALKENER: Yes, Your Honour. THE COURT: So, it's in your best interest to provide the information, please. MR. FALKENER: Yes, Your Honour. [Emphasis

added.] [25] On February 20, 2019, Mr. Falkener received € 60,710 Euros (approximately $92,000 Canadian) from a Mr. Peter Meronek, the circumstances of which are detailed below. The Trial Reasons for Judgment Introduction [26] The trial reasons are indexed at 2019 BCSC 1351 (the "Reasons"). [27] Since this appeal is based on alleged palpable and overriding errors made by the trial judge, it is necessary to set out some of the judge's findings and reasoning in some detail. [28] As I have noted, the judge referenced the difficulties faced by the parties regarding document disclosure, noting that the lack of expert evidence made valuing the real estate and corporations "particularly difficult". This was also the case with respect to their medical status. Medical issues [29] As for the appellant's contention regarding his disability due to mold contamination in the Airdrie Property was concerned, the judge stated at para. 20 of the Reasons: [20] The respondent maintains that the Airdrie property is contaminated by mold as a result of an incident that occurred before he became owner of the property in 2013. The respondent presented a list of house expenses from Home Depot and the like that he said were incurred as a result of mold in the amount of $17,090; but, there are no details or receipts provided to establish that the expenses were specifically related to mold or any other

particular expense. The respondent has said that he has "mold flakes in my brain", as a result of this situation, a fact unproven in evidence. Amanda Parsons testified that she was hired by the respondent in 2017 to renovate the property because of mold. In 2018, the respondent's family physician reported to Service Canada that the respondent had suffered from toxic mold exposure since April 2017, there being no other explanation for symptoms incurred since 2017. Notwithstanding the doctor's suggestion, it is unlikely that the respondent would have purchased the property in 2013 if it was contaminated with mold. Further, there is no expert or other opinion that the property was so contaminated as to cause a health condition. Finally, in any event, the respondent has since renovated the property. Valuation of appellant's companies [30] Due to the difficulty the judge identified with valuing the appellant's companies, she placed some weight on a financial statement personally prepared by Mr. Falkener in 2015 (the "2015 Statement") which was submitted into evidence by Ms. Falkener, stating at para. 22 of the Reasons: [22] The claimant located a personal financial statement prepared by the respondent for his personal use in September 2015, just months before separation in February 2016. This statement listed various assets and liabilities that will be referred to herein. Of

particular significance is his statement and valuation of corporate interests. In the absence of expert valuation, this personal statement of the value of the respondent's corporate interests has worth to determine the value of the corporate assets held by the respondent. [31] The judge also relied on the limited financial disclosure the appellant did make as well as evidence relating to prior sales of shares in Fire Marque. [32] Regarding Canada Cat Inc., the judge, at para. 24 of the Reasons, noted that Mr. Falkener had valued his interest at $100,000 in the 2015 Statement, but valued it at $500 in his September 2018 F8 sworn financial statement. The company's 2014 corporate tax return indicated gross taxable income of $35,218. The 2015 corporate tax return indicated income loss of $86,747, with diminution of retained earnings to the minus bracket and a 50% reduction in sales. The judge said no explanation was given for this reversal and no further tax or other corporate statements from Canada Cat Inc. were in evidence: para.

24. Given that the 2015 Statement was made shortly before separation, and in the absence of other evidence of value such as recent tax or corporate statements, the judge accepted the $100,000 amount as the value: para. 60. [33] As to Fire Marque, Mr. Falkener testified that in 2014 he had sold 75,000 of his 450,000 shares, leaving him with 375,000 shares. The judge rejected this evidence, referring to the 2015 Statement which indicated he owned 450,000 shares. The 2015 Statement also valued the shares at $1.50 each. The judge also rejected this evidence relying on the 2014 sale price of $0.333 per share. Accordingly, she valued the appellant's interest at $149,850. [34] Mr. Falkener testified that his interest in Eligio CRM Inc. was worth $15,000 to $20,000. The judge preferred the value of $65,625 as set out in the 2015 Statement and the Response which was filed in the proceedings below in 2018. The judge found that the appellant did not offer an adequate explanation for his stated value of $15,000-$20,000: para. 62. [35] The judge also referred to other enterprises, noting at para. 33: [33] The respondent also held a business card that stated that he was president of Street Legal Research, related to Cohof Holdings Ltd. Neither of these enterprises was listed in the respondent's F8 and the evidence failed to establish the nature or financial status of these businesses. Other

assets and financial disclosure [36] The judge noted that on the 2015 Statement, Mr. Falkener listed a 1/3 interest in property in Stansted, England, valued at $203,000, but that this property was not disclosed in his F8 statement. As for the inheritance funds in the Bank of England account, Mr. Falkener testified that they had been received shortly before the trial. In the Reasons, the judge stated that no further details or documents were provided regarding this issue. [37] The judge made the following comments and reached certain conclusions regarding Mr. Falkener's financial disclosure and assets: [42] The respondent failed to list in his 2016 and 2018 F8 financial statements all bank accounts that he held. Particularly, the respondent failed to list the following accounts that he held in 2018: a TD bank account held in Airdrie, Alberta; and the Bank of America U.S. account referred above at paragraph 9 referenced to the respondent at an address in Florida. The TD account was originally in joint names with Amanda Parsons but was solely in the name of the respondent by March 2018. The respondent testified that he wired money from his U.S. Bank of America account into the TD account to pay bills. Deposits into the TD account in 2018 totalled $101,821. Not all of these, however, can be followed into the Bank of America account. The respondent testified that $32,808 received in

August, 2018 came from his mother's estate: but there is no documentation to support this statement and the deposits to the respondent's United Kingdom Santander bank account suggest that the respondent did not receive estate proceeds of 114,200 GBP until October 2018. The Bank of America account documents are not complete but demonstrate that the respondent had significant deposits throughout late 2017 and 2018, leading to the inference that the respondent was still working in the United States in 2018. [43] The respondent also received a substantial deposit of funds into his U.K. Santander savings account no. X0573008 in February 2019. The transaction was not included in the respondent's documents introduced at trial. The Santander account documents ended as at October 2018. The documents confirming the transaction were sent to the respondent at the Pritchard property; hence, the claimant found out about it. The respondent explained in cross-examination that the funds came from an old neighbour in Alberta, that he was simply holding the funds for this person, and that he transferred the funds in small amounts to the neighbour's account in Germany. He further explained that this friend lives in the Turks and Caicos but has funds in the Bahamas and that the Bahamas has "no reciprocity with Germany". He gave no reason for engaging in this transaction except that it was a favour

for an unnamed friend. This explanation defies reality when looked upon in the context of the documents themselves. [38] The judge concluded on this issue: [59] The values of business and other interests owned by the respondent has varied between values listed by the respondent in his own personally prepared financial statement of 2015 and his declared values at trial. Without the benefit of expert valuation, the best evidence as to value of the corporations has been used. [39] Regarding Mr. Falkener's dealings with Mr. Meronek, the judge stated at para. 44 of the Reasons: [44] The respondent received 60,710 Euros from a "Peter Meronek" at the Winterbotham Trust Company on February 20, 2019, just after the first week of trial at a time when the trial was not otherwise expected to have continued. This amount was immediately exchanged into 52,253 GBP in a savings account in the name of the respondent. The transaction was detailed as " for investment purposes ". Because the money was originally sent in Euros, it is inexplicable as to why it needed to be exchanged into GBP before being sent on to Germany as the respondent suggested. Further, there is no evidence that any of these monies were actually sent to Peter Meronek, the name listed as the original transferor, if that is indeed the name of his friend. The confirmations of electronic funds transferred on February 20, 2019, the

same day that the funds were received by the respondent, shows two transfers of these funds from the respondent to the respondent: the first, 1,700 Euro to bank account AA92N84G46AA4CCQ in the respondent's name at the "Fidor Bank AG" (an account not disclosed in the F8) and, the second, to the respondent's account at the Toronto Dominion Bank as already described. The purpose of this second and largest transfer on February 20, 2019 of 20,000 GBP was stated to be "pay bills and personal use". On February 26, 27, 28 and March 1, 2019, the respondent sent (1,700 Euros x 4) 6,800 Euros to the same account .AA4CCQ in the respondent's name with details of Payment related to "Kraken.com". The respondent transferred 2,220 Euros to an unnamed account at "Bank Frick & Co AG for "consulting and set up costs" on February 26, 2019. None of these transactions were explained adequately by the respondent. It is concluded that these funds were originally owned by James Falkener and that he had several accounts in foreign jurisdictions in which he deposited funds and received payments. The details of these foreign accounts have not been disclosed. Summary regarding family assets and debt/reapportionment [40] The judge summarized her findings regarding family property and debt: [70] In summary, the following assets are family property valued as follows: Pritchard property $477,459 Baja property proceeds 28,722 Airdrie property 43,023 Canada Cat 100,000 Fire Marque shares 149,850 Eligio shares 65,625

RRSP 2,652 Total value $867,331 [71] The family debt is as follows: Credit card debt $36,314 Revenue Canada 36,903 Total debt $73,217 [41] The judge then considered the implications of an equal division of family property and debt, stating at para. 72: [72] An equal division of family property minus family debt results in $397,057 to each of the claimant and the respondent. If the claimant retains the Pritchard property (including mortgages) and half of the Baja proceeds, she will have received $491,820. If the respondent retains the Airdrie property (including mortgages), half of the Baja proceeds (to be applied towards arrears of spousal maintenance), Canada Cat shares, Fire Marque shares, Eligio shares, and his RRSP and if the respondent is credited with assuming all of the family debt, he will have received $302,294. This amount is $94,763 less than an equal division of family property and debt. [42] She then reviewed the applicable legal framework as set out in Parton v. Parton, 2018 BCCA 273 at paras. 34-36 [Parton] and ordered an unequal division of family property minus debt in favour of Ms. Falkener stating at paras. 74-76: [74] The main asset of the parties, as it turns out, is the Pritchard property which the claimant has maintained at significant cost to herself, both physically and financially. The claimant has significantly and permanently suffered from the

responsibilities of the llama farm property that she assumed, to the detriment of her own career. The respondent had not fully participated in the operation and maintenance of the Pritchard property since 2008. The claimant wants to sell the property and move into more modest and less demanding housing. The respondent basically ran rough shod over the claimant financially over the years, supporting her and the llama business in the amount of $5,000 per month, but not otherwise sharing financial information, decision making, or additional benefit. The claimant was unable to accrue any means for herself in the future, except for the Pritchard property for which she had been sued because of the respondent's failure to pay income tax. She used excluded property, her inheritance, to maintain the Pritchard property after separation. In the meantime of all of this, the respondent established himself in the insurance industry with his own business that operates internationally and with shareholder interests in related businesses. He has engaged in recent undisclosed financial transactions involving significant sums of money and undisclosed bank records. His firm control over finances was mismanaged because he failed to separate business from personal expenses such that the credit card debt that existed as at the date of separation is incapable of differentiation between business and

personal expense. [75] It would be significantly unfair for the respondent to receive an equal share of the Pritchard property. The division as set out at paragraph 72 will benefit the claimant to the amount of $94,763. This unequal division reflects the extent to which the financial means and earning capacity of the claimant have been detrimentally affected throughout this marriage. [76] To effect this division, the parties shall each keep the properties and debt as presently registered in his/her own name. The respondent shall be removed as a mortgagor on the Pritchard property. Future spousal support/lump sum support [43] On the basis of evidence of two witnesses and the fact that Mr. Falkener received funds from work in the U.S. in 2017, the judge inferred that he was capable of working in the insurance business, and had gained an "international reputation for over 30 years" doing so: para. 95. [44] The judge specifically considered and commented on the appellant's position that he was disabled from working due to the consequences of toxic mold in the Airdrie Property, stating at paras. 96-97: [96] The respondent presented hundreds of pages of medical information to the court, a replication of the medical file that he provided to the Province of Alberta and Canada Pension, to show that he was disabled from work. Much of this was repetitive and composed of laboratory and

other test results that were not medically interpreted in evidence. The claim for disability itself was not put into evidence. Neither Alberta nor Canada Pension confirmed a disability as at the completion of trial. The matter was still in progress with Canada as at October 2018 and the respondent testified that he still has not received a decision on the disability claim. There is some evidence that the respondent has suffered from episodic gout for many years. He had difficulties in 2017 that were extensively tested and studied with largely normal results and without diagnosis of any health condition. Ultimately, his general practitioner reported to Service Canada in August 2018 that the respondent's symptoms were thoroughly investigated by multiple specialists and that the only possible explanation for his symptoms was "mold exposure". No further medical follow up was planned. No medications were prescribed. No prognosis was made. In these circumstances, it cannot be concluded that the respondent suffers from any health condition that disables him from employment. [97] In this regard, the unqualified opinion of Amanda Parsons, that "the mold and mouse issue in the [Airdrie] home had a dramatic effect on [the respondent's] health and mental condition", is disregarded. The house was never tested for mold by a qualified professional and any evidence is anecdotal. In any event,

the house situation has been remedied with renovations. [Emphasis added.] [45] The judge then reviewed in some detail the documentary evidence relating to Mr. Falkener's income over the years including: · rent to own application; · 2013 Porsche lease; · mortgage renewals; and · corporate and personal income tax returns. [46] She referred to unexplained discrepancies between certain of these documents concluding at para. 103-105 of the Reasons: [103] After consideration of all of the evidence, it is concluded that the respondent has not been forthright with the court as to his true income. The circumstances include: failure to disclose bank and other assets; failure to disclose and adequately explain 2017 income from the United States; failure to factor rental from the Airdrie property into income; failure to adequately explain the U.K. Santander bank and foreign bank transactions in February 2019; and deduction of business expenses from income and intermingling of business and personal expenses. Another factor in the imputation of income to the respondent is the respondent's previous statements of income for purposes other than income tax or court and the likely rental income to be received from the Airdrie property. The average income over the 3 years 2015-2017, with deemed income of $126,000 attributed in 2017, is $101,100, giving the benefit of a low of $50,575 in 2016. The

respondent is deemed to have an annual income of $110,200. [104] Application of the Spousal Support Advisory Guidelines indicate a range for spousal support of between $2,745 to $3,620 per month for an indefinite period. [105] Factors favouring indefinite support for the claimant include her age, inability to work, her lack of capital other than her home, the length of the marriage, and the lack of other sources of benefits or gains. Clearly, the claimant is entitled to indefinite support. This means that the support would be subject to variation and review (Parton at para. 57). [47] The judge then turned to the issue of lump sum support, summarizing the evidence and the rationale for her conclusions on this issue: [106] Consideration must be given to the fact that the respondent is 62 years old and has already realistically limited his insurance adjusting abilities. He no longer climbs on the roofs. However, he continues to be active in his own business and is looking for ways to adapt. It is unlikely that the respondent would be able to pay indefinite support at the lowest SSAG level. This is so even though the respondent has purposefully reduced or hidden his work following separation in an effort to avoid payment of spousal support. He is nearing the end of his career. He is unlikely to maintain the earning capacity in retirement that he did throughout the marriage. [107]

Lump sum support should be considered. The factors to consider were set out in Parton at paras. 47-48. The advantage of an award here would be to terminate ongoing contact in a situation where a s. 183 FLA order has been made, there is a real risk of non-payment of periodic support, there has been a lack of financial disclosure on the part of the respondent, and arrears of court ordered support have accumulated. It is unlikely that the claimant's ongoing needs will be adequately met or that she will be fully compensated for the economic disadvantage that she suffered in the marriage. The disadvantage of such an award include the limited capital ability of the respondent to pay a lump sum and his recent stated refusal to maintain his historical employment. In consideration of a lump sum award, this court is fully aware that such an award would foreclose the prospect of variation in spousal support. The tax effect of a lump sum award has not been presented. [108] The means of the respondent for spousal support includes his capital base, his income earning capacity, and "any other available source of benefits or gains" (Parton, at para. 78). A lump sum award would likely result in the sale or transfer of either Fire Marque or Eligio shares, or in the dissipation of excluded inheritance property: however, provision of compensatory and non-compensatory support may not be otherwise

achieved. [109] The SSAG lump sum recommended after tax range for payment by the respondent is $381,394-$513,650 based upon indefinite duration. The demonstrated concern here is that the respondent will not pay periodic support and has hidden assets. It is also acknowledged that the claimant acts for herself and continuation of proceedings is not in her interest. [110] The respondent is ordered to pay spousal support in the amount of $381,394. [111] Lump sum spousal support is ordered to be payable as follows: - $50,000 payable immediately; - $100,000 payable no later than December 31, 2019; - $100,000 payable no later than March 30, 2020; - $131,394 payable no later than June 30, 2020. Grounds of Appeal [48] Mr. Falkener raises three ground of appeal, being that the judge erred by making erroneous findings of fact in that she: (a) misapprehended the documentary and other evidence relevant to the values of the appellant's interest in several private companies; (b) misapprehended medical evidence that supported the appellant and other witnesses' testimony regarding his disability as a result of toxic mold exposure; and (c) misapprehended the weight of the evidence that militated against a finding that the appellant held funds providing him with the capacity to make a lump sum spousal support payment of $381,000 over a period of 10 months. Analysis Standard of review [49] The

standard of review in relation to a support order was described this way by Justice Dickson in Parton at paras. 32-33: [32] The standard of review for findings of fact is highly deferential. An appellate court will interfere with a trial judge's factual conclusions only if there is an obvious (palpable) and material (overriding) error: Housen v. Nikolaisen, 2002 SCC 33 at paras. 5, 6, 8, 10. In Toneguzzo-Norvell (Guardian ad litem of) v. Burnaby Hospital, [1994] 1 S.C.R. 114, Justice McLachlin, as she then was, explained this well-established principle, emphasizing that appellate intervention is justified only if the judge has made a "manifest error, has ignored conclusive or relevant evidence, has misunderstood the evidence, or has drawn erroneous conclusions from it": p. 121. [33] A trial judge's determination of the form and quantum of a support order is a discretionary decision to which a deferential standard of appellate review is also applicable. A support order should not be overturned on appeal unless the reasons for judgment disclose an error in principle, a significant misapprehension of the evidence, or the award is clearly wrong: Robinson v. Robinson, 2012 BCCA 497 at para.

16. In addition, where an award is substantially above or below the range provided for in the SSAG, in the absence of exceptional circumstances to explain the anomaly, appellate intervention may be justified: Redpath v. Redpath, 2006 BCCA 338 at para.

42. Arguments on appeal Introduction [50] Underlying many of the appellant's arguments on appeal is the submission that the parties were unrepresented at the trial. As a result, Mr. Falkener was ill‑prepared to present his case and misunderstood his documentary disclosure obligations. [51] The appellant acknowledges the difficulties which faced the judge in the manner in which the parties presented their respective positions. And yet he also submits that a miscarriage of justice occurred in that the judge failed to properly consider the documentary evidence and did not accept much of what he and the witnesses he called had to say. [52] This approach on appeal is evidenced, in part, by the applications to adduce further evidence, which I will consider within the context of the particular issues they are intended to address. Did the judge make palpable and overriding errors by misapprehending the evidence regarding the appellant's disability resulting from toxic mold exposure? [53] I will first deal with this ground of appeal in that the appellant, in his factum states: The flaws in the court's valuation of the appellant's operating company, Canada Cat Inc. can be linked to the trial judge's rejection of the appellant's illness, which prevented him from working after December of 2017. While the trial judge emphasized to the parties that the "value has to be fair market value at

the time of this trial", she ignored the medical and other evidence that explained the appellant's financial circumstances beginning in 2018 and continuing throughout 2019 and to this day. [54] The appellant relies on the fact that on the first day of the trial, when Ms. Falkener was giving her evidence in chief, both parties advised the court that they had prepared document briefs which contained medical information and that they did not intend to call the authors of the various reports to give evidence. [55] Following an exchange between the court and the parties the following occurred: THE COURT: -- to the extent that there are medical records in here or letters of opinion, both sides have now indicated that they're prepared to let those go in for the truth of their contents on both sides as they may be presented; is that correct? MR. FALKENER: Absolutely, Your Honour. THE COURT: Yes. Ms. Falkener? THE WITNESS: Yes. THE COURT: All right. Let me just make a note. And if there are other documents that arise that I notice that are similar, I'll draw it to your attention because it will be important for you to agree on the record that they can be admitted because otherwise, later on, it might become an issue. MR. FALKENER: Absolutely. THE COURT: Okay? MR. FALKENER: You bet, thank you. THE COURT: All right. Proceed. [56] The appellant's position is that since all of the medical

records went in "for their truth" the judge misapprehended the evidence regarding his disability and inability to work due to the toxic mold in the Airdrie Property. [57] It should be noted that the issue arose anew when the trial continued in April 2019. When Mr. Falkener was giving his evidence in chief, he raised the fact he had applied for a Canada Pension Disability. Within the context of the judge exercising her gatekeeper responsibilities, the following exchange occurred: THE COURT: The application status information dated October 15, 2018 will be marked as Exhibit -- where are we, Madam Registrar? THE CLERK: Fifty-four. THE COURT: Fifty-four. EXHIBIT 54: Printout headed "Application Status" from the Government of Canada, in progress as at October 15, 2018 THE WITNESS: The actual documentation would contain all the -- the paperwork that's in item number 7. THE COURT: Sorry, just one second, sir. A: Oh, sorry. THE COURT: I'm sorry, what did you just say? A: File number 7 -- file placed under 7 in my -- in Tab 7. THE COURT: Tab 7 in your book? A: Yeah. That's all of the medical reports, which is what they require, and then they also require a release so that they can contact doctors as well, which is what -- what that first page was that you were talking about. THE COURT: Yes, this is very large group of documents, sir. Most of them are not admissible and they're not --

they have no pages. You don't have a medical report from a doctor anywhere? A: I do not, other than that -- that one there that I just mentioned to you where -- with the filing, and there's the doctor's report in there where he states what his findings are for the CPP disability. THE COURT: Where is that? A: the medical report from my doctor that went with the application. THE COURT: Exhibit 54, Madam Registrar. [Emphasis added.] [58] Exhibit 54 was the report of Dr. Vakil, a family physician who practices in Calgary, Alberta, to Service Canada dated August 24, 2018 ("Dr. Vakil's Report") and which is referred to at para. 96 of the Reasons (para. 44 above). [59] Dr. Vakil's report under the heading "Diagnosis" wrote "Toxic mold exposure", while under the heading "Relevant/significant medical history" he wrote: In 2017 James became very unwell with abdominal pain, weight loss, memory impairment & dizziness. His symptoms were severe and constant. He has been thoroughly investigated and seen by multiple specialists. The only possible cause found was mold exposure. [60] The report also referred to certain physical findings and functional limitations, which included the notation: James is required to climb up ladders for work which he is unable to do because of his dizziness He also struggles cognitively. He struggles to prepare reports for work. His recall is poor compared to

before. [61] Dr. Vakil's Report is the only medical opinion which Mr. Falkener relies on to support this ground of appeal. [62] The appellant seeks to adduce as new evidence a letter from Service Canada dated November 12, 2019 (the "CPP Letter") which grants him a disability benefit "as of January 2018, which is the date [he] stopped work." The letter also advises Mr. Falkener that he is to inform the Canada Pension Plan if his medical condition improves and "encourages and supports [his] attempts to return to work." [63] Mr. Falkener's counsel advised the Court that the granting of the CPP disability pension was based on Dr. Vakil's Report. [64] Accordingly, it is submitted the judge's finding on this issue as summarized at para. 96 of the Reasons amounted to a palpable and overriding error and a miscarriage of justice. [65] The appellant also seeks to adduce as fresh evidence a document prepared by Bio-Chem Consulting dated September 18, 2019 entitled "Analytical test report". The Certificate of Analysis Direct Microscopic Fungal Analysis under the title "Observation/Comments" specifies "High" for the "Relative Abundance" of "Stachybotrys" and "Moderate" in relation to "Hypal Fragments". Under the heading "Comments" the word "None" appears. It is clear the document does not comply in any way with the requirements relating to the admissibility of expert evidence both at common

law and under the Supreme Court Civil Rules. [66] The legal framework which applies to the admission of further evidence is well known and was summarized this way by Justice Butler in Jean Louis v. Jean Louis, 2020 BCCA 220 at para. 16: [16] The admission of further evidence is governed by the test in R. v. Palmer (1979), [1980] 1 S.C.R. 759 (S.C.C.). Four factors are considered to determine whether admitting the evidence is in the interests of justice. The first is that fresh or new evidence should not be admitted on appeal if, by due diligence, it could have been adduced at trial. In Spoor et al. v. Nicholls et al., 2001 BCCA 426 at para. 16, this Court confirmed that the due diligence test should be applied more strictly in civil than in criminal cases. The second and third Palmer factors state that fresh or new evidence is not admissible unless it is relevant in the sense that it bears upon an important issue and credible in the sense that it is capable of belief. Fourth, to be admissible, the evidence must be decisive in the sense that if it is believed it might, along with other evidence from trial, be expected to have affected the result: Palmer at 775. [67] In my view, neither the CPP Letter nor the Bio-Chem Consulting Certificate of Analysis satisfy the Palmer criteria. [68] I agree with Ms. Falkener that evidence regarding Mr. Falkener's alleged disability or mold

exposure was available before the trial and that he failed to exercise due diligence in obtaining sufficient evidence to establish his claim that he was disabled from working as of January 2018. [69] The Bio-Chem report would also not have been admitted as expert evidence at the trial for the reasons I have explained at para. 65. [70] As far as the CPP Letter is concerned, while it does constitute new evidence, I am of the view that when it is considered with the evidence that was before the judge, it lacks the significance required such that it could reasonably be expected to have affected the result if it had been adduced. [71] A third party adjudicator in an entirely different forum without witnesses or cross examination reached a decision on medical disability based on Dr. Vakil's report. That, however, is not helpful or necessary with respect to the judge's analysis and conclusions following an eight-day trial. (See Luney v. Luney, 2007 BCCA 567 at paras. 30 and 33.) [72] It is of assistance to recall the distinct role of appellate courts. As this Court has stated, the "function of appellate review is not to re-try a case or to continue the trial at a different stage. Rather, its purpose is to examine the record below to determine if material or reversible error has been demonstrated": Kane v. Proffitt, 2018 BCCA 106 at para. 42. [73] The issue then becomes whether the

judge made a palpable and overriding error in concluding that Mr. Falkener had failed to establish a disability which prevented him from earning an income as at the time of trial. [74] In my view she did not. First of all, the judge was aware that Mr. Falkener had applied for a CPP disability benefit but that no decision had been made as at the time of the trial. [75] Furthermore, it was for Mr. Falkener to prove that his medical condition had disabled him to the extent to have prevented him from earning an income. [76] The judge was entitled, based on the record, to conclude that Mr. Falkener had not satisfied his onus of proof on this issue. Namely: (a) the only medical evidence was Dr. Vakil's Report, which specifically referred to other "specialists' reports", none of which were adduced at the trial; (b) in any event, that report did not indicate that further tests or treatments were contemplated; and (c) the report did not provide a diagnosis regarding the length of time of the disability, and/or whether Mr. Falkener was partially or totally precluded from working. [77] I would add that: · on Mr. Falkener's evidence he was still working up to the end of 2017; he also testified that due to his age, he was no longer "working on ladders". His business partner Mr. Evans, who testified at the trial, in fact performed the physical work and Mr. Falkener intended to concentrate on

administrative functions in the future; and yet · notwithstanding Mr. Falkener's evidence at trial that he had not worked in the 2018 calendar year, Dr. Vakil in August 2018 referred to the appellant's inability to climb ladders and noted that "he struggles to prepare reports for work." [78] There was also evidence that Mr. Falkener was involved in a potentially lucrative business. Lee Falkener, who worked for Mr. Falkener, testified that: it's a very lucrative business, make great money. Once you pass your exams, you could make easily upwards of $100,000 a year. If you stick with it long enough, you could be up where James is, making, you know, 200 to $300,000 a year on a good year. [79] Mr. Lee Falkener confirmed that a Mr. Bob Currie continued to work in this field despite his advancing age by hiring and training younger adjusters. [80] Mr. Peter Evans testified that Mr. Falkener was not a front-line worker and did not need to personally attend properties. He testified that in 2014/2015 he was earning between $100,000 and $150,000 per year, and Mr. Falkener would have received a similar amount as a result of a 50/50 fee split. [81] The judge noted that Mr. Falkener's Bank of America statements noted deposits from Southwest Adjusters from September 2017 until January 2019, as well as expenses in Florida, Texas, Arizona, Utah, and California, leading to the inference that he

continued to work during this period. [82] In my view, within the context of this evidence, and the judge's largely unheeded comments to the appellant before the trial adjourned in February 2019 respecting his need to make proper documentary disclosure, it was entirely appropriate for the judge to reach the conclusions she did at para. 96 of the Reasons. She clearly had significant concerns regarding whether the appellant had access to other sources of funds, which may have included professional income which had not been disclosed. [83] The judge was also entitled, in my opinion, to disregard the evidence of Amanda Parson for the reasons outlined at para. 97 of the Reasons. Admissible expert evidence regarding the mold (as opposed to the Bio-Chem Consulting Certificate of Analysis which the appellant sought to have admitted as new evidence on appeal) could and should have been adduced on this issue. [84] Accordingly, I would not accede to this first ground of appeal. Did the judge make palpable and overriding errors by misapprehending the evidence regarding the valuation of the appellant's private companies? Did the judge err in misapprehending the weight of the evidence that militated against the finding that the appellant had the capacity to make a lump sum spousal support payment of $381,000 over a period of 10 months? [85] In my view, these grounds of appeal should be

considered together. [86] The appellant devoted a considerable amount of his submissions to the issue of the valuation of the private companies. He reviews in considerable detail the evidence of many of the witnesses, including his own, and asks this Court to reach different conclusions than did the judge. [87] He also challenges the judge's valuation of the companies in question, in part on the basis that she ought not to have used the "self serving" 2015 Statement which Mr. Falkener himself had prepared. Rather he argues that the documentary evidence in fact established that the companies had little, if any value. [88] The difficulty with this ground of appeal, in my view, is that the appellant does not challenge the consequences of the judge's valuations, that is her conclusions regarding the valuation of those assets within the context of the apportionment of the family assets and the reapportionment which was ordered. [89] In fact, Part 4 of the appellant's factum provides: PART 4 - NATURE OF ORDER SOUGHT The appellant seeks the following Orders: 1. That new evidence be admitted; 2. That the lump sum spousal support order be set aside; 3. That the order of costs payable to the respondent be set aside; 4. That the appellant receive costs of this appeal. [90] During oral submissions, it became apparent that the basis for the appellant's submission on these issues essentially

related to his argument that: · although Ms. Falkener was entitled at law to spousal support, the appellant did not have any ability to earn an income due to his disability caused by toxic mold; · the private companies did not provide the financial means for an income stream that could provide the basis for an award of spousal support to be made either on a periodic or lump sum basis; and · in any event, the lump sum spousal support award was predicated on a palpable and overriding error in relation to Mr. Falkener's income for spousal support purposes. [91] In his factum Mr. Falkener states the issue this way: 76. Based on unsupported findings of fact and unreasonable conclusions, the trial judge erred by ordering the appellant to pay the respondent $381,000 in lump sum spousal support over a period of ten months, in the face of the following evidence: a. The appellant was disabled and unemployed since December 2017, had physical and cognitive difficulties as identified by his physician and witness Amanda Parson, and the physician's report was admitted for the truth of its contents; b. Further medical reports submitted by the appellant were deemed to be "inadmissible" despite the parties' agreement and the judge's confirmation that the medical reports would be admitted for the truth of their contents. The reports supported Amanda Parson's evidence with regards to the endless

medical appointments and multiple medical investigations with a variety of medical specialists to get to the bottom of the appellant's frail condition. c. The appellant was left with family property consisting of shares in private companies, with a total value of $315,000 with no evidence that there was a market for the sale of shares and ample evidence that the values assigned by the trial judge were unsupportable. The best evidence of value were the 2017 corporate financial statements admitted into evidence. In his closing submissions, the appellant offered to transfer the shares of Canada Cat Inc. to the respondent, which the court valued at $100,000. d. The trial judge reapportioned the Pritchard Property to the respondent in its entirety, in the amount of approximately $477,000. The appellant retained the Airdrie property with equity of $43,000. e. Based on a bank statement that was sent to the Pritchard Property in February 2019 and first provided to the appellant several days before his cross-examination on April 10, 2019, the appellant clearly and unhesitatingly explained the transactions. The subject bank statement corroborated his explanation and he had provided statements for this account up to October 2018. The evidence disclosed that additional statements were sent to the former family home, the Pritchard Property. With no contrary evidence, the trial judge

speculated that the appellant's evidence was not true, no doubt influenced by her findings that the appellant's health situation was also untrue. f. Had the appellant been given proper notice of this bank statement he could have arranged for Peter Meronek to testify by video in rebuttal, but the respondent kept this bank statement hidden from the court and the appellant until almost the end of the trial. Had the appellant had counsel at trial, the trial could have also been adjourned to accommodate the appellant's rebuttal evidence. As it was, the trial judge admitted this evidence with no consideration of the timing of its introduction, no inquiry as to when the respondent had the document in her possession, and gave no opportunity for the appellant to call evidence in support of his explanation. Instead she used this "ambush" to make an award of lump sum support, that was unreasonable in all the circumstances. [92] I would not accede to either of these inter-connected grounds of appeal. [93] First of all, it should be noted that the appellant does not challenge the legal framework used by the judge in determining whether an award for lump sum support should be made, that is Parton at paras. 47-48: [47] In some cases, a lump sum spousal support award is preferable to an order for periodic payments. When deciding whether to make such an award, the court should weigh the

advantages and disadvantages of a spousal support order in lump sum form compared to those of an order made in the more common periodic payment form. In Davis v. Crawford, 2011 ONCA 294, the Ontario Court of Appeal discussed the relevant factors for consideration and, in doing so, emphasized the need to distinguish the purpose of a lump sum spousal support award from the effect of such an order. As the Court noted, any lump sum spousal support order will, in effect, involve the transfer of property from one spouse to another, although the redistribution of assets is not the purpose of spousal support: [60] It is well accepted - and undisputed - that a lump sum award should not be made in the guise of support for the purpose of redistributing assets: Mannarino; Willemze-Davidson v. Davidson (1997), 98 O.A.C. 335 (C.A.), at para.

32. Moreover, the governing legislation does not recognize redistribution of assets as one of the purposes of a spousal support award. [61] That said, a lump sum order can be made to "relieve [against] financial hardship, if this has not been done by orders under Parts I (Family Property) and II (Matrimonial Home)": Family Law Act, s. 33(8)(d). [62] In any event, the purpose of an award must always be distinguished from its effect. Any lump sum award that is made will have the effect of transferring assets from one spouse to the other. The real question in any particular case is the underlying purpose of the order: Willemze-Davidson at para. 32. [63] Similarly, it is well accepted that an important consideration in determining whether to make a lump sum spousal support award is whether the payor has the ability to make a lump sum payment without undermining the payor's future self-sufficiency. ... [66] Most importantly, a court considering an award of lump sum spousal support must weigh the perceived advantages of making a lump sum award in the particular case against any presenting disadvantages of making such an order. [67] The advantages of making such an award will be highly variable and case-specific. They can include but are not limited to: terminating ongoing contact or ties between the spouses for any number of reasons (for example, short-term marriage; domestic

violence; second marriage with no children, etc.); providing capital to meet an immediate need on the part of a dependant spouse; ensuring adequate support will be paid in circumstances where there is a real risk of non-payment of periodic support, a lack of proper financial disclosure or where the payor has the ability to pay lump sum but not periodic support; and satisfying immediately an award of retroactive spousal support. [68] Similarly, the disadvantages of such an award can include the real possibility that the means and needs of the parties will change over time, leading to the need for a variation; the fact that the parties will be effectively deprived of the right to apply for a variation of the lump sum award; and the difficulties inherent in calculating an appropriate award of lump sum spousal support where lump sum support is awarded in place of ongoing indefinite periodic support. [69] In the end, it is for the presiding judge to consider the factors relevant to making a spousal support award on the facts of the particular case and to exercise his or her discretion in determining whether a lump sum award is appropriate and the appropriate quantum of such an award. [48] The factors discussed in Davis generally apply in this province when lump sum spousal support is considered. . [Original emphasis in italics; emphasis added by underlining.] [94] In my view the

judge, at paras. 106-111 of her Reasons (para. 47 above) clearly considered the relevant factors in this case and exercised her discretion appropriately in determining both that a lump sum award was appropriate and the amount that should be awarded. She was entitled to consider, and did consider, amongst other factors: · the appellant's history of non-payment of support and his failure to abide by a court order in that regard. There was a real risk of non-payment of periodic support; · the lack of proper financial disclosure; · Mr. Falkener's own assertions as to the value of his assets in the 2015 Statement which he prepared shortly before the parties' separation in comparison to other documentary evidence before the court. In that regard, the judge did not accept the 2015 Statement in its entirety. This she was entitled to do; and · Mr. Falkener had other assets apart from the private companies which could be utilized to fund the lump sum award. These included his property in England, the inheritance he had received, and the Airdrie Property. [95] There is simply no basis, in my view, upon which this Court should interfere in this "highly variable and case specific" exercise of the judge's discretion. [96] I have also referred to several of the alleged errors referred to at para. 76 of the appellant's factum and explained why in my view no reversible error was committed by

the judge. [97] Mr. Falkener also argues that the judge rejected his evidence regarding the Meronek monies absent any evidence contrary to his explanation. His position is that trial unfairness occurred since the judge did not adjourn the trial in order to allow Mr. Meronek to testify. [98] This raises the third aspect of the fresh evidence application in which Mr. Falkener seeks to have admitted an affidavit of Mr. Meronek sworn April 21, 2020 in where he purports to explain the transaction in question, being his receipt of € 60,710 Euros on February 20, 2019. [99] In my view this evidence fails to satisfy the Palmer criteria. Mr. Falkener testified in some detail at the trial as to his relationship with Mr. Meronek and how the funds in question were deposited into his account. [100] At para. 44 of the Reasons (para. 39 above), the judge provided a comprehensive review of the evidence on this issue and her rationale for concluding that Mr. Falkener's testimony was "inexplicable". She also pointed to his failure to provide banking records and his overall inadequate explanations as to what had transpired. [101] As for the question of trial unfairness, if Mr. Falkener was caught by surprise when this issue was raised when the trial resumed in April 2019, he has only himself to blame. The existence of these funds only arose after the trial was adjourned in February 2019, when a

bank statement was sent in error to the Pritchard Property where Ms. Falkener resided. Without that, the existence of this account would never have come to her and the court's attention. [102] Under these circumstances it is not for Mr. Falkener, in my view, to attempt to buttress his evidence, which was not accepted by the judge, by relying on the untested evidence of a potential witness who he should have called when exercising due diligence in the presentation of his case. In any event, in light of the judge's conclusions on this issue I am not satisfied that this fresh evidence was of such significance that it could reasonably be expected to have affected the result if it had been adduced. [103] There is also a real issue relating to the probative value of Mr. Meronek's affidavit in that it is based predominantly on statements made to Mr. Meronek by Mr. Falkener. [104] Accordingly, I would not accede to either of these grounds of appeal. The appellant's failure to adhere to court orders and his contempt of court [105] Ms. Falkener seeks to have the appeal dismissed on the basis that Mr. Falkener is currently in breach of several court orders regarding his support obligations. [106] There is no question that the appellant appeared at the hearing of this appeal in breach of several court orders relating to his failure to pay his support obligations. [107] While I am mindful

of the principles set out in Elensky v. Elenskaya, [1993] B.C.J. No. 2144 (C.A.), Pfann v. Pfann, 2008 BCSC 452, and Larkin v. Glase, 2009 BCCA 321, amongst others, I am of the view that there is nothing to be gained by dismissing the appeal on this basis. [108] That is because to do so would allow Mr. Falkener to pursue the appeal afresh if and when his obligations were in fact satisfied, or once a "convincing explanation" was provided as to why they were not. [109] Rather, it is in the interests of justice for the appeal to be dismissed on the merits, for the reasons I have explained. Special costs [110] In the event the appeal is dismissed, Ms. Falkener seeks special costs in this Court. [111] In my view Ms. Falkener has not established that Mr. Falkener's conduct in the pursuit of this appeal has been either reprehensible or worthy of reproof or rebuke: Sandhu v. Mangat, 2019 BCCA 238 at paras. 4-5. Conclusion [112] I am not persuaded the judge made any palpable and overriding errors in her assessment of this case. [113] In fact, the opposite is the case. As the parties acknowledge, the judge was in a difficult position, presiding in a proceeding where the parties were self represented and where the documentary evidence was presented "on the fly", in the judge's apt description. [114] I wish to make the following comments in light of the appellant's allegations that the

judge, at times during the trial, did not properly assist him and that a miscarriage of justice occurred. [115] In my view, it is clear from a review of the record that the judge attempted to assist the parties as best she could and performed her obligations in an even handed and entirely fair manner. [116] Furthermore, she carefully considered the evidence, cited and properly applied the applicable law and committed no reviewable error in the factual findings she made and the conclusions she then reached. [117] I would dismiss the appeal. "The Honourable Mr. Justice Abrioux" I AGREE: "The Honourable Mr. Justice Willcock" I AGREE: "The Honourable Madam Justice DeWitt-Van Oosten"