S.L.C. v. J.R.C.

2020 BCSC 463 S.L.C. v. J.R.C. IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: S.L.C. v. J.R.C., 2020 BCSC 463 Date: 20200331 Docket: E161491 Registry: Vancouver Between: S.L.C. Claimant And J.R.C. Respondent Corrected Judgment: Names of the parties have been anonymized for publication purposes. The text of the judgment was also corrected at paragraphs 145, 173-174, 179-180, 225 and 228 on August 31, 2020. Before: The Honourable Justice Winteringham Reasons for Judgment Counsel for the Claimant: K.L. Basran N. Allen The Respondent, appearing in person: J.R.C. Place and Date of Trial: Vancouver, B.C. October 15-18 and 21-24, 2019 and November 7-8, 2019 Written submissions received by the claimant and respondent: March 4, 2020 Place and Date of Judgment: Vancouver, B.C. March 31, 2020 Table of Contents I. OVERVIEW.. 4 II. ISSUES TO BE DETERMINED. 5 III. EVIDENCE. 6 A. Background and the Children. 6 B. Parties' Employment History. 9 C. Litigation History. 12 IV. CREDIBILITY. 16 V. INCOME OF THE PARTIES. 31 A. The Claimant 31 B. The Respondent 32 C. Legal Principles regarding Income Determination. 33 D. Income Determination -- Analysis. 36 VI. CHILD SUPPORT. 39 VII. SECTION 7 SPECIAL/EXTRAORDINARY EXPENSES. 42 VIII. SPOUSAL SUPPORT. 45 IX. RETROACTIVE SUPPORT. 49 A. Was there a reasonable excuse for the delay?. 52 B. What was the conduct of the respondent?. 52 C. What were the circumstances of the Children and the claimant?. 52 D. Does there exist any hardship that would be occasioned by a retroactive award?. 53 E. Conclusion on Retroactive Support 54 1. Child support owing. 54 2. Spousal Support Owing. 55 3. Support Moving Forward. 57 X. DIVISION OF FAMILY PROPERTY AND DEBT. 58 A. Legal Principles. 60 1. Dissipation of assets. 62 2. Non-disclosure of Assets and Income. 64 3. Section 95(3) 68 4. Conclusion on Unequal Division. 69 XI. ORDER PURSUANT TO THE NAME ACT. 73 XII. DIVORCE. 73 XIII. CONCLUSION AND ORDERS. 74 I. OVERVIEW [1] In 2015, the parties separated after a 27-year relationship. While together, they had four children and appeared to enjoy a moderately affluent lifestyle. Immediately after separation, they resided under the same roof for about seven months although the respondent was out of the country for much of that time. The respondent moved out of the matrimonial home in July 2016. [2] At the time of separation and trial, the children were at various stages of dependency. At the time of separation, the four children resided with the claimant. At the time of trial, the two older daughters were living with the claimant. The youngest daughter began living with the respondent in late 2018. [3] While the children were young, the claimant was a stay-at-home parent and she was not employed outside of the home. She began working part-time as a landscaper in 2011 when a concern arose about finances. [4] Early in the relationship, the respondent worked in the office equipment industry and later made his living through various closely held corporations trading in sports memorabilia. Despite a lifestyle suggestive of some wealth, he has reported extremely low earnings, particularly since separation. The respondent takes the position that but for a few good years in his sport memorabilia business, his financial circumstances have been dire for many years. [5] The issues at trial are primarily financial. The parties presented starkly different financial pictures. They seek determinations regarding division of property, and child and spousal support, including retroactive support. The primary asset was the matrimonial home, sold after separation. The balance of the proceeds of the sale are in a trust account pending the outcome of this litigation. There has been some interim distribution of those sale proceeds. There were no interim orders compelling the payment of child or spousal support. Rather, the respondent was ordered from time to time to make certain "without prejudice and uncharacterized" payments to the claimant. [6] The claimant seeks an unequal division of the family property. The respondent submits that there is no basis to depart from the usual rule that family property be divided equally. [7] The claimant seeks to impute an income to the respondent that is drastically higher than that reported by him on his Canada Revenue Agency (CRA) documents. Similarly, the respondent seeks to impute income to the claimant taking into account her employment history and ability to earn income. [8] The paucity of financial records provided by the respondent complicates the overall analysis when it comes to the court's assessment of income. Indeed, the trial was twice delayed because of the respondent's incomplete financial disclosure. In this case, the claimant seeks an imputation of income based in part on bank statements that show a historical pattern of deposits by the respondent averaging about $20,000 per month in the years leading up to separation. The respondent warns against this form of calculation and provides an alternative explanation for his apparent access to cash. [9] The parties testified. No other witnesses were called. [10] The parties relied on valuation and income determination reports, examination for discovery read-ins, banking records and some documents relating to the respondent's business ventures. [11] I note that the respondent did not have counsel at trial and was represented by counsel only in the first few months after the litigation commenced in 2016. However, the respondent presented as an extremely intelligent and capable advocate. He clearly had a good grasp of the principles at play including providing the court with a comprehensive written legal submission during his closing address. II. ISSUES TO BE DETERMINED [12] The issues presented are related to one another. As noted by Justice Fleming in Delaurier v. Massicotte, 2018 BCSC 1857 at para. 34: . . . Prior to the enactment of the Family Law Act, S.B.C. 2011, c. 25 [FLA], it was well settled the court should decide on the division of assets before determining spousal support (Parton v. Parton, 2016 BCSC 1528 at para. 18). The approach has continued. However, s. 95(3) of FLA, which the claimant relies upon, provides for an unequal division of family property if the objectives of spousal support cannot be met through an order of spousal support. Consequently, it is necessary in this case to consider the issues of spousal support and the division of family property together. [13] Similarly, in this case, the issues of property division and spousal support are closely intertwined and it is necessary to consider the issues of spousal support and the division of family property together. The issues to be determined are as follows: a) Income of the parties; b) Child support; c) Section 7 special or extraordinary expenses; d) Spousal support; e) Retroactive child and spousal support; f) Division of family property and family debt; g) Divorce; h) Order pursuant to the Name Act; and i) Costs. [14] I start with an overview of the evidence, including the background and aspects of the evidence which are not seriously in dispute. I then conduct my credibility assessment before turning to the analysis of each issue. III. EVIDENCE A. Background and the Children [15] The parties began residing together in 1988, moved from Nova Scotia to Vancouver around 1991 and were married on July 30, 1993. They separated on December 15, 2015 following a 27-year relationship. The parties have four children (when addressed collectively, they will be referenced as the "Children"): a) S.C., born August 27, 1995 (age 24 years); b) K.A.C., born July 4, 1997 (age 22 years); c) S.J.C., born September 27, 1999 (age 20 years); and d) H.E.C., born July 29, 2001 (age 18 years). [16] I briefly describe the circumstances of each of the children. At times, the respondent disputed the evidence regarding certain mental health issues described by the claimant. The respondent contends that the claimant failed to produce specific medical evidence to support her description of the "children's mental and/or general health" nor did she provide "receipts or proof" of the treatment associated to the mental health conditions she described. [17] For the reasons set out more fully below, I have little difficulty accepting the claimant's testimony describing the circumstances of the Children, including their physical and psychological health, at the time of separation up to the date of trial. I summarize that evidence in the paragraphs that follow. [18] At the time of separation, S.C. was 20 years old and living in the family home. He had been a junior hockey player but retired after he underwent several hip surgeries in 2014 and 2015. When his parents separated, he was recovering from surgery and taking courses at the British Columbia Institute of Technology (BCIT). At the time of trial, S.C. was close to completing a three-year diploma program at BCIT. After the sale of the family home in July 2017, S.C. and his girlfriend moved with the claimant to her rental accommodation and they paid $500 per month to her. The claimant testified that she remained responsible for the balance of S.C.'s living expenses while he lived in the suite. S.C. moved out of the claimant's home in 2018 when he accepted a position with the Lions Bay Firefighters. [19] S.C. is now self-sufficient. [20] At the time of separation, K.A.C. was 18 years old and lived with the claimant thereafter. K.A.C. was expected to graduate from high school in June 2015 but did not. She had a number of medical issues and was diagnosed with ADHD, anxiety and a mood disorder. Despite the claimant's wish that K.A.C. stay in North Vancouver and obtain her high school diploma, K.A.C. decided to travel to Bali (paid for by the respondent). The claimant testified that K.A.C. developed an eating disorder. After she returned to Canada, K.A.C. obtained her high school diploma and worked intermittently for short periods of time at Super Value and Coco Froyo. K.A.C. continues to struggle with depression, is not attending post-secondary studies but is attending at Foundry, a service available to youth between 18 and 24 years old. Foundry provides, among other services, mental health support for young people. [21] K.A.C. runs an online business trading thrift store items. K.A.C. continues to be financially dependant. [22] S.J.C. was 16 years old and in Grade 11 at Handsworth Secondary School when the parties separated. She has lived with the claimant since separation. S.J.C. was diagnosed with a depressive disorder in 2016. Following treatment, S.J.C. began to thrive. She did well in school, participated on the volleyball team and in theatre. She graduated from high school in June 2017 and attended Capilano College completing her first year in spring 2018. After she started her second year at Capilano College, she went through a traumatic event that caused her mental health to deteriorate. The claimant has tried to organize psychiatric treatment for S.J.C. with Dr. Reddy although progress has been slow. S.J.C. did not return to college in the 2019/2020 academic year. The claimant testified that she is taking a gap year, residing with her and working as a server at Earl's. [23] S.J.C. continues to be financially dependent. [24] H.E.C. was 14 years old and in Grade 9 at Handsworth Secondary School at the time of separation. She was diagnosed with ADHD in Grade 4 and has been prescribed medication since that time. Over time, she has threatened suicide and has received therapy for many years. The claimant testified that H.E.C.'s mental health seemed to deteriorate in July 2017 after the family home was sold and they moved into rental accommodation. She stopped taking her medication, started to be "rageful", skipped school, did not return home at night and was disrespectful to her mother and siblings. Despite the claimant's efforts with professional assistance, H.E.C.'s troubling behavior continued. In December 2018, H.E.C. went to live with the respondent. She returned to her mother's care in January 2019. However, this was short lived and H.E.C. returned to live with her father in February 2019. She was residing with her father at the time of the trial. She graduated from high school in June 2019. B. Parties' Employment History [25] The claimant has a high school education and completed flight attendant and secretarial programs in the late 1980s. She worked for the airlines for about two years then completed a secretarial program in 1990. Following their move to Vancouver, she worked as a secretary at Callnet Telecommunications. She then worked at Polygon and did so until S.C.'s birth in 1995. She did not work outside of the home from 1995 through 2011. [26] She testified that in 2011, the respondent requested that she re-enter the workforce and she did. In 2011, she began working part-time for Carrera Property Management ("Carrera") as a landscaper. She testified that she did so to help stabilize the family income. She later completed yoga instructor training and worked for a few years instructing yoga classes. She testified she was unable to maintain this part-time job because of her employment at Carrera and because she was primarily tending to the needs of the Children. [27] In 2017, the claimant testified that her role with Carrera changed somewhat in that she became more involved with staging properties than with landscaping. S.C. was hired to assist with landscaping. [28] In September 2019, Carrera terminated her employment because she was no longer physically able to perform the landscaping duties and there was not enough work for her in property staging. In lieu of severance, Carrera provided her with a company car. [29] The claimant testified that she intends to obtain her real estate licensing and that she had begun the accreditation requirements some time earlier. She testified that she had deferred taking the exams but intended to do so in the spring of 2020. At the time of trial, the claimant was unemployed and had no income. [30] The respondent was critical of the claimant's decision to forego a severance claim against Carrera. With respect to this issue, I am not satisfied that the claimant was required to advance a claim for severance nor should any income be imputed to her for failing to do so. The claimant explained the basis for her decision to leave Carrera on good terms and to maintain a positive relationship with her former employer, particularly considering her future employment prospects in the real estate business. In my view, her decision was reasonable. [31] I turn to the respondent's employment history. [32] He graduated from high school and worked as a server and at other odd jobs during the early stages of the parties' relationship. He eventually began working for an office equipment company (IKON and a predecessor company) on a commission basis from the early 1990s until 2002. The claimant believed that he was earning over $100,000 annually. The respondent denies that he ever made that kind of money at IKON. [33] The respondent left IKON in 2002 and began working for AvCan. The claimant submits that it is very difficult to track the respondent's income from 2003 onwards. What follows is based on some of the documents and the claimant's understanding about his employment and earnings from 2003 through the time of trial. The respondent rejects the financial picture described by the claimant. Rather, he portrays the family's finances as being relatively desperate for many years despite their lifestyle. [34] In 2004, the respondent incorporated 0707993 B.C. Ltd. (the "07 Company") with his business partner and investor, Jeff McCord. For the next three years, the 07 Company ran the Ultimate Shootout, an event that had competitors shooting golf balls at a barge off of Coal Harbour for prizes. After running this event for three years in Vancouver, the project was discontinued. The 07 Company licensed the project in Toronto and for one year, the respondent provided consulting services to the Toronto company running the event. [35] In 2008, the respondent bought, through the 07 Company, an 80% interest in a company owned by Todd Brunel, 0816904 B.C. Ltd. (the "08 Company"). Mr. Brunel held the other 20% of the 08 Company. This company was involved primarily in the sale and auction of sporting memorabilia. [36] In 2011, the respondent and Mr. Brunel incorporated another sporting memorabilia company, Innovative Sports, this time in the United Kingdom. The name was changed to Pursuit 3 Group Ltd. ("Pursuit 3"). [37] The claimant did not know the extent of the respondent's income from these ventures. However, from 2012 through 2015, the claimant testified that there were deposits from the respondent into the joint bank account sufficient to cover monthly expenses of between $15,000 and $25,000. [38] The parties testified about the purchase and sale of residential properties and subsequent renovations conducted with respect to those properties. The respondent attributes much of the parties' access to cash to the increased equity of their residential properties over time and not because of his corporate earnings. [39] The claimant's position is very different. She accuses the respondent of depleting the value of the companies to the claimant's detriment. In her written submission, the claimant put it this way: [The respondent] now alleges that his companies are failing but has made little to no effort to generate further business or to explore other employment options. Instead, [the respondent] has elected to access funds through the companies in which he holds an interest while these companies remained unprofitable thereby depleting the value of the companies between [the date of separation and the date of trial] by $522,000. [40] The respondent described the success of his sporting memorabilia ventures during the 2010 Vancouver Olympics. He testified that his efforts failed during the 2016 Rio Olympics and that his business took a hit as a result. I will set out his declared earnings when I deal with the financial evidence. At this point, I simply note that the respondent has declared minimal earnings in his 2018 CRA filings. C. Litigation History [41] The litigation history is as follows: a) The Notice of Family Claim was filed in May 2016 and the respondent was served in the summer 2016; b) The parties attended a Judicial Case Conference in September 2016 and there were no orders made regarding interim child or spousal support; c) The claimant filed a Notice of Application seeking interim child and spousal support on November 18, 2016; d) On December 14, 2016, Master Scarth, among other orders, adjourned the Notice of Application to January 13, 2017 and ordered two "without prejudice and uncharacterized" payments to the claimant in the amount of $7,700 each; e) On January 13, 2017, Master Taylor adjourned the November 18, 2016 Notice of Application to February 1, 2017 and ordered one "without prejudice and uncharacterized" payment to the claimant for $7,700; f) On February 21, 2017, Justice Leask adjourned the claimant's amended Notice of Application (dated February 8, 2017) to April 21, 2017 and made further "without prejudice and uncharacterized" payment orders and ordered production of an array of documents including corporate documents, the respondent's Notices of Assessments, tax documents, statements of earnings, RRSPs and other financial documents; g) On April 21, 2017, Leask J. adjourned the February 8, 2017 Notice of Application to May 30, 2017 and ordered that all documents from the February 21, 2017 Court Order be produced by May 19, 2017; h) On May 30, 2017, Leask J. made a number of orders including mandating a meeting with the respondent's accountant, that the respondent attend an Examination for Discovery, orders relating to the determination of the respondent's income and adjourning the February 8, 2017 Notice of Application to June 14, 2017; i) On June 14, 2017, Leask J. granted orders dealing with the partial distribution of the sale proceeds of the matrimonial home to the respondent and claimant, directing the balance of the funds to be held in trust, and orders relating to retaining a joint expert for the purpose of valuing the businesses; j) On August 24, 2017, the claimant was required to attend before the Registrar for the purpose of settling the terms of the June 14, 2017 order of Leask J. - the respondent did not attend the hearing; k) On October 11, 2017, Master Muir adjourned the trial and ordered the respondent to respond to the outstanding discovery requests and comply with the document requests made by the joint valuator; l) On July 20, 2018, Master Tokarek ordered the production of financial documents in the possession of one of the respondent's business associates, Mr. Brunel; m) On August 2, 2018, Master Caldwell ordered the production of financial documents in the possession of another of the respondent's business associates, Mr. McCord and that he attend for an examination on oath; n) On March 13, 2019, Master Vos ordered the production of banking records in the possession of HSBC Bank of Canada ("HSBC"), Royal Bank of Canada ("RBC") and CIBC; o) On March 13, 2019, Master Vos ordered distribution of $150,000 from the funds held in trust from the sale of the matrimonial home to the claimant, that the respondent produce to the joint valuator the requested documents and that the respondent produce an updated List of Documents and an array of other specified financial documents; and p) On August 12, 2019, following the Trial Management Conference, Master Vos ordered the respondent to provide summaries of evidence from those listed on his anticipated witness list and a list of documents on which he intended to rely at the trial. [42] Pervading this litigation is the allegation of nondisclosure of financial documents from the respondent. The claimant was required on numerous occasions to apply to court for document production orders. The respondent typically refused to comply with those orders. The claimant ultimately sought orders compelling the production of documents from third parties, such as banks and the respondent's business partners. [43] Importantly, the respondent refused to produce documents to Daniel Sturgess, the jointly appointed expert. I have reviewed the document production history to Mr. Sturgess and the claimant and it reflects a habit on the part of the respondent to avoid compliance with the Rules of Court. [44] I accept the claimant's submission that it took over two years to obtain some documents from the respondent. Even then, compliance was inadequate. The claimant was required to abandon two trial dates (one in November 2017 and one in October 2018) to allow for the respondent's document production. [45] Although the respondent produced some material to Mr. Sturgess, production was deficient resulting in Mr. Sturgess issuing cautions for his Calculation Valuation Report dated October 10, 2019 ("Valuation Report") and his Income Determination Report dated October 10, 2019 ("Income Report"). [46] Mr. Sturgess states the Valuation Report is subject to the following limitations: In general the financial information does not appear to be of a high quality. For example, the financial statements of the [07 Company], over the course of a number of years, include a number of balances pertaining to assets that are evidently not recoverable or are no longer in existence. Financial information requested from and prepared by management does not in all cases agree to financial statement information; In performing my work I have noted a number of internal inconsistencies between financial information contained in the [the Respondent's] T1 personal income tax return and the financial statements of the 07 and 08 Companies. Specifically, i. The amount of management fees paid from [the 07 Company] to the respondent as shown in the 07 Company's financial statements. Based on the comments of the respondent's accountant, Mr. Duffy, this may be because the 08 Company has paid these fees directly to the respondent; and ii. The amount of management fees paid from the 08 Company to the 07 Company as shown in the financial statements of the 07 Company, differs from the amount of management fees paid from the 08 Company to the 07 Company as shown in an analysis of the 08 Company's management fees provided by the respondent. I have been unsuccessful in obtaining revised financial information in which the above inconsistencies are resolved. Similarly, I have not in all cases received what I consider to be reasonable explanations as to the reasons for the inconsistencies between the information pertaining to the 08 Company and the 07 Company. I consider the financial information upon which I base my conclusions may be unreliable and I qualify my opinion in this respect. [47] Mr. Sturgess repeated the same cautions in the Income Report before he set out the following regarding the respondent's income: i. An independent calculation as to the amount of income available in 2016, 2017 and 2018 to [the Respondent] from all sources including from: 0707992 BC Ltd. 0816904 BC Ltd. Pursuit 3 Group Ltd. ii. The Respondent's Line 150 income before consideration of his share of losses arising in the Companies is: (1) 2016 -- $71,934; (2) 2017 -- $48,028; (3) 2018 -- $19,760. iii. The Respondent's share of the pre-tax corporate income (losses) in the Companies was as follows for the same years (Schedule 1): (1) 2016 - ($25,530); (2) 2017 - ($390,733); (3) 2018 - ($305,111). iv. The result is that the available income to the Respondent from the companies was $nil in 2016, 2017 and 2018. v. The Respondent has continued to pay himself a salary from the companies that is not funded by operating profits. vi. Notwithstanding the foregoing conclusions, I understand that the determination of Guideline income is the purview of the Courts. Accordingly, the comments provided in this report are not intended to express an opinion as to [the Respondent's] Guideline income. [48] I will deal with my findings regarding the Valuation and Income Reports later in these reasons. For now, suffice it to say that the disclosure issues plaguing this litigation have resulted in highly qualified financial reports impacting the reliability of the opinions. IV. CREDIBILITY [49] Before I examine the specific legal issues raised in this litigation, I address my findings regarding the credibility and reliability of the parties. While there was some common ground in their evidence, there were many disputes. [50] In my view, it is useful in a case such as this to set out the often-cited principles governing credibility determinations. When assessing the truthfulness of the testimony of any interested witness, I am guided by the words articulated many years ago in Faryna v. Chorny, [1951] B.C.J. No. 152, at 357: In short, the real test of the truth of the story of a witness in such a case must be its harmony with the preponderance of the probabilities which a practical and informed person would readily recognize as reasonable in that place and in those conditions. [51] I also remind myself of Justice Dillon's recitation of the factors to be considered when assessing credibility in Bradshaw v. Stenner, 2010 BCSC 1398 at para. 186, aff'd 2012 BCCA 296, as follows: Credibility involves an assessment of the trustworthiness of a witness' testimony based upon the veracity or sincerity of a witness and the accuracy of the evidence that the witness provides (Raymond v. Bosanquet (Township) (1919), 59 S.C.R. 452, 50 D.L.R. 560 (S.C.C.)). The art of assessment involves examination of various factors such as the ability and opportunity to observe events, the firmness of his memory, the ability to resist the influence of interest to modify his recollection, whether the witness' evidence harmonizes with independent evidence that has been accepted, whether the witness changes his testimony during direct and cross-examination, whether the witness' testimony seems unreasonable, impossible, or unlikely, whether a witness has a motive to lie, and the demeanour of a witness generally (Wallace v. Davis, [1926] 31 O.W.N. 202 (Ont. H.C.); Faryna v. Chorny, [1952] 2 D.L.R. 152 (B.C.C.A.) [Faryna]; R. v. S.(R.D.), [1997] 3 S.C.R. 484 at para.128 (S.C.C.)). Ultimately, the validity of the evidence depends on whether the evidence is consistent with the probabilities affecting the case as a whole and shown to be in existence at the time (Faryna at para. 356). [52] Also from Bradshaw, I have considered Dillon J.'s statement (at para. 188) about the impact of the failure to produce relevant documents to support one's case: . . .The inability to produce relevant documents to support one's case is also a relevant factor that negatively affects credibility. [53] I turn then to the credibility assessment in this case. [54] I have found the claimant to be a matter-of-fact and reflective witness. She was not prone to exaggeration or criticism of the respondent. Her thoughtful approach was evident in how she conducted herself during the respondent's cross-examination of her. I give two examples. [55] First, the respondent cross-examined her about her refusal to engage in mediation with him. Her response was straightforward. She testified that she considered this option but was concerned about her lack of knowledge regarding the respondent's business affairs. She acknowledged her ignorance about the respondent's earnings and testified that she needed more information from the respondent before she could make a true and informed decision about resolution. As an aside, one of the underlying reasons for document discovery is to level the playing field - so that both sides know what the other has (or does not have). It is only then that parties can make informed decisions about resolution. The claimant's evidence in this regard seemed pragmatic and reflected an effort by her to make decisions carefully as she traversed the early days of the separation. She was not argumentative nor was she combative when pressed on her refusal to engage in mediation. [56] Second, she was very fair in her characterization of the respondent's dealings with her after the separation. For example, she was cross-examined about his timeliness of the "uncharacterized payments" that were often a term of the various interlocutory orders. She agreed that those payments were always made on time. She did not make any gratuitous criticisms regarding the respondent - as is so often the case in family law disputes. Rather, the claimant took her time to carefully respond to the detailed questions about the status of various bank accounts (opened and closed by her after the separation and often without first obtaining the consent of the respondent) and the disposition of family property, including a recreation property referred to as the Machete Lake property. This was all in the context of a cross-examination conducted by the respondent himself and in circumstances where the respondent had not been forthcoming in his document production over the years leading up to the trial. [57] The claimant bore no apparent animosity towards him. This is so despite the respondent's conduct throughout the litigation, including the effort required of her to obtain any information, to which she was entitled, to help her make decisions about her financial well-being as she embarked on her post-marriage life. [58] When it came to describing the respondent's interaction with the Children, the claimant was equally as diplomatic. She openly acknowledged that their youngest daughter should move in with the respondent. She was cross-examined about her fear of the respondent and how her supposed fear was inconsistent with her position that H.E.C. move in with him. Again, her response was measured - making it clear that the fear was hers and hers alone. When questioned about the respondent's contribution to their Children's education, vehicles or electronics, she agreed that he may very well have contributed in the manner he suggested although she could not say for certain whether he had. [59] Throughout the marriage, the respondent kept most of his corporate dealings away from the claimant. In the later years of the marriage, I cannot say whether this was intentional. However, it was clear during the testimony of both that the claimant did not participate (except for a few token trips and social engagements) in the respondent's corporate life. He kept that information to himself. Her source of knowledge was mostly limited to the deposits that were made into their joint bank account. During the trial, it was through counsel challenging the respondent on his financial affairs that additional financial information came to light. [60] I have had an opportunity to review the financial documents tendered by the claimant during the trial. I will say more about this later but for now comment simply that the claimant's testimony regarding her understanding of financial matters is corroborated for the most part by the evidentiary record she presents. [61] In short, I have no difficulty relying on the claimant's evidence and I do so. [62] I turn to the respondent and I will spend some time on my credibility assessment. At the outset, I have found that he was not credible. [63] Significantly, I have determined that the respondent was not forthright about his finances, the key issue at trial. It became evident as the trial proceeded that the respondent had created a story to explain away any notion of apparent wealth (during the marriage and after separation). He was committed to this story even when squarely confronted with documentary evidence to the contrary. Simply put, his evidence was that the family had almost always lived beyond their means, that his businesses (despite some marginal success with the 2010 and 2012 Olympics) failed, and that the family lived off of debt and increased equity from the sale of their various residential properties. [64] The respondent's financial statements were contradicted by the overall evidence at trial. The respondent's evidence dealing with details of his finances was often internally inconsistent or inconsistent with the documents or logic. [65] In the course of this proceeding, he actively resisted producing information that might assist the claimant. I have concluded that to a considerable extent his evasiveness was deliberately deceitful. I come to that conclusion after considering the number of applications required to obtain typical document discovery in circumstances where a spouse is the controlling mind behind several closely held corporations. Even more concerning perhaps, was what appeared to me to be an effort to take advantage of a trusting spouse. She testified that she had always trusted him in his employment pursuits stating that "he was an entrepreneurial person" and she had "always trusted him." Again, the legal principles developed around document disclosure are in part an effort to ameliorate that sort of disadvantage. [66] Before turning to specific examples of inconsistencies, I identify two features of the respondent's evidence which impact my assessment of his credibility. Firstly, his combative approach to this litigation, including his persistent delayed or nondisclosure. Secondly, his attempt to explain his financial circumstances post-separation. [67] I deal then with the issue of non or delayed disclosure. I start with Justice Kent's remarks in Wiebe v. Treissman, 2017 BCSC 1523 where he stated at paras. 92-94: It is of course central to any determination of a spouse's income for child support purposes that the spouse make full and proper disclosure of all financial information necessary for that determination. Non-disclosure has often been called the "cancer" of family litigation. Insofar as child or spousal support claims are concerned, s. 19(1)(f) permits imputing income to any spouse who fails to make proper disclosure of his or her income information. The disclosure requirements set out in the Guidelines are supplemented by Rules 5-1 and 9-1 of the Supreme Court Family Rules which pertain to financial disclosure and discovery of documents respectively. Among other things, these rules provide for: · mandatory production of detailed financial statements and supporting documentation; · ongoing and updated disclosure where information becomes inaccurate or incomplete by virtue of later changed circumstances; · production of corporate documentation and information both by the spouse holding the corporate interests and by the corporation itself; and · in the event of non-disclosure, imposing fines, drawing adverse inferences and/or attributing income in such amount as the court considers appropriate. The burden of proving the reasonableness of deductions from business income, whether in the context of self-employment or within a wholly-owned corporation, lies with the spouse making the deduction. It is the obligation of that spouse to fully disclose the financial information and documentation relied upon to justify the deduction of each expense. It is not the other party's responsibility to hire, nor is it the court's obligation to appoint, an accountant or other professional to assess and challenge the reasonableness of the deduction, although of course both are at liberty to do so in appropriate circumstances. For a recent affirmation of these principles, see Cunningham v. Seveny, 2017 ABCA 4. [68] In this case, the claimant was required to expend considerable resources to obtain the disclosure statutorily mandated in all family law proceedings. As is evident from the history of this litigation, his financial picture remains very much incomplete. In these circumstances, the court will be required to (1) draw certain inferences from the limited financial information produced and (2) attribute income as found to be appropriate. [69] The second feature of the respondent's evidence relevant to my credibility assessment arises out of his effort to explain his lack of earnings over the past years and his evidence regarding his potential for earnings in the future. [70] During his direct examination, the respondent testified about his corporate pursuits. For the most part, he testified from memory about his different corporate interests since leaving IKON. In these reasons, I have focused on the five years prior to separation to the time of trial. I have done so because this is where the respondent's nondisclosure has had the greatest impact. [71] The respondent described considerable financial success with the 2010 Vancouver Olympics venture. His company attempted to duplicate that success with the 2016 Rio Olympics. He testified about the dismal failure of that experience, his efforts to recover some of their loss by participating in an arbitration process and his overall inability to recoup even their initial financial outlay. The respondent testified that this explanation answers the question about what happened with the business and explains why it went into debt. He testified that for the company to fulfill its obligations, they had to use a line of credit from HSBC and that they relied on this line of credit. [72] The gist of the respondent's testimony is that the companies were failing because of an out-dated and unsustainable business model and events outside of their control. He denied that in the years following separation, he depleted the income from the companies. Rather, he testified that the losses were caused by "a few things not going their way" and by a risky business model. In his written submission, the respondent summarized the failings of the business as follows: Over the past 9 years the business averaged one event every year and a half. The major events (London 2012 and Rio 2016) required massive resources and each had inherent risks In the early stages, this business model had some intermittent success but in the latter years, market conditions had a very adverse impact on the business as a whole. Although the business was in decline for a couple of years, the Rio 2016 Olympics really had a devastating impact on our business as after our absolute best efforts (including relocating to Brazil for approximately 6 months) and investing over $1M dollars in preparing for and providing upfront guarantees to the organizing committee, the project was an unmitigated failure. The Games as a whole were poorly received and commercial success for most partners did not happen. After Rio 2016 we realized that this business model (given the market conditions and risk factors) was not going to be viable in the future. We did however commit to a project in the UK; namely the British Open Golf Tournament. This project was not successful. [73] Nonetheless, the respondent testified that his company is considering a joint partnership with a known partner to bid for the Tokyo 2020 Games. Without explaining how, he contends that the risk would be limited should he decide to move forward with the project. On the one hand, the respondent stands by his assertion that the companies failed because of an outdated and risky business model. At the same time, he suggests that he intends to use this same failed business model in his next business venture. This evidence is contradictory and leads me to be skeptical of the respondent's overall explanation for the depletion of the corporate asset. [74] My credibility assessment is further impacted by aspects of his testimony that were either materially inconsistent with prior statements or demonstrative of dishonesty. I address the three areas below. [75] The first example of seeming dishonesty arose during his testimony about the Vertex One RRSP and LIRA documents (collectively, the "Retirement Funds"). Initially, the respondent denied that the Retirement Funds were in his name suggesting that the banking statements were ambiguous and the accounts could have been held by the claimant. During cross-examination, the respondent was presented with documents clearly showing the Retirement Funds were in his name (and the claimant was named as beneficiary). [76] Even after he was presented with copies of the accounts for the Retirement Funds, he maintained that the accounts could still be the claimant's. [77] Further, he denied making a withdrawal from the Retirement Funds in 2017 despite documents demonstrating otherwise and despite a Consent Restraining Order in place at the time of the withdrawal. His suggestion that the claimant must have withdrawn the funds is inconsistent with the documentary evidence. Also relating to the Retirement Funds, the respondent eventually admitted he withdrew funds within four to five months before the trial and that he had not disclosed the disposal of this asset on his sworn financial statements. [78] The second area of his evidence that I have found to be damaging to the respondent's credibility was his testimony relating to the payment of his expenses post-separation. During this part of his cross-examination, the respondent was asked to explain the disparity between his declared income and his living expenses. He was combative and evasive to the point that I disbelieved his evidence. He was combative in the sense that he would respond to a clear and direct question with a question of his own. He was evasive when confronted with his own testimony, sometimes given only moments earlier, which contradicted his later answer. He typically blamed counsel stating that she had not understood his evidence. As I reviewed my notes and listened to his evidence, I find that this was an attempt on the part of the respondent to avoid answering questions when he would have known the truthful answer did not accord with the financial picture he was trying to portray. I give a few examples of this: a) He was cross-examined about the 08 Company paying his personal expenses and was asked whether the 08 Company paid his $21,000 MasterCard bill in 2016. He responded with: "When you are saying my MasterCard, be more specific." To which counsel stated, "the MasterCard you hold corporately, was paid by the 08 Company in 2016." The respondent answered: "So my corporate MasterCard that is used for the business is being paid for by the business. That is the normal course of business. Yes." b) This exchange continued. Counsel asked, "did you use that MasterCard for personal expenses as well as business." The respondent answered, "No. What I said was, it could have been used. If it was used it was recorded properly from the bookkeeper - or should have been recorded properly." c) A few moments later, he was asked whether the 08 Company and/or Pursuit 3 paid for his travel. His response was, "can you be more specific. Travel to where?" d) At the end of this exchange, counsel directed him to a page of his document showing that his living expenses for the month (post-separation) were $11,762.24 and that he could not have afforded those expenses with his declared income no matter which version (his declared income varied between his Form F8, CRA documents and his testimony) was relied upon. The exchange went like this: Q: Whether it is $6,500 or $23,000 of annual income - you cannot afford all of these expenses? A: Incorrect. You are making a massive assumption that my only source of money is income. Q: You have other sources of income? A: No -- I didn't say that. Q: You have annual expenses that add up to $141,000. How do you afford that? e) The respondent then directed counsel to the Scott Report (marked as an exhibit for identification) which showed that there was a line of credit registered against the matrimonial home and to which he testified, "I put it to you, I can live off debt." When counsel reminded him that the credit facility had been maxed out since 2011 and virtually no credit was available after that time, he testified, "my point is illustrating that you make a very big assumption that the money is from income. I can borrow from friends and families which I've done and disclosed and that's that." When he was challenged about the state of the evidence regarding his borrowing, he responded with, "I said I could have." f) Concluding this part of his cross-examination, he was asked how he paid for the $141,000 in expenses and he responded, "I don't remember." [79] The above is but one example of the respondent's attempt to advance his theory of the case that he had virtually no money, no assets and limited income yet had declared, in his own Financial Statements, spending well over $100,000 for his annual living expenses. [80] The third area of the respondent's evidence that I have found to be damaging to his credibility relates to two incidents that were described by the parties during the trial. The first related to the respondent's access to the claimant's private email account. The second relates to his withdrawal of significant funds from a joint account. [81] I touch briefly on both. [82] First, the respondent admitted he accessed the claimant's personal email account. In so doing, he accessed, read and kept documents that were subject to a claim of solicitor-client privilege in that the correspondence was between the claimant and her lawyers. The claimant learned about this breach when the respondent filed documents in court in relation to one of the interlocutory applications and appended the privileged material to an affidavit. He was asked to return or destroy the material identified as privileged. He refused. At trial, he testified that he had accessed only one email from the claimant's personal email account and he explained why it was that he thought he was entitled to do so. During cross-examination, he admitted that he had testified at his Examination for Discovery that he had done an exhaustive search of the claimant's email account. The claimant testified about how upsetting it was to her to learn the respondent had gone into her personal email. At trial, the respondent maintained that he had some sort of proprietary right to do what he did (because it was a family email account that he had set up prior to separation) and attempted to justify his conduct in that way. In my view, even if he did not initially appreciate the seriousness of the breach, which I do not accept, he was later asked to destroy the documents he had taken. He refused. His conduct in this regard showed a flagrant disregard for the claimant's privacy interests and made worse by the fact that he took no steps to cure the breach. [83] Second and relevant to my credibility assessment is an incident that was described in relation to the parties' mortgage. The claimant testified that she and the respondent had a conversation in 2010 about their mortgage and the increased equity in their home. The respondent asked the claimant to agree to obtain a credit facility referred to as the RBC Home Credit Line. She, with some hesitation, agreed and the parties were then authorized to access a line of credit of just over $300,000. The claimant testified that she believed they were not going to use that money but only have access to it in emergencies. The claimant testified that a few months later, she discovered a bank statement showing that the line of credit had been fully exhausted - that some $300,000 had been withdrawn. She said that the respondent had been in Whistler and she confronted him on his return about this withdrawal. She testified that he told her he needed the money for his business and that it would be returned down the road. [84] Her testimony about the furtive withdrawal from the RBC line of credit is contrary to the respondent's evidence on this point. His testimony is also contrary to prior statements made by him regarding the withdrawal. I turn to some of this testimony now. [85] In his direct examination at trial, the respondent was very specific about the use he made of this money testifying that he had withdrawn $316,272.96 on July 29, 2010 (from the RBC Home Credit Line) and that he had invested those funds into his companies. He testified that they obtained the RBC line of credit and he believed that the ceiling was "somewhere in the magnitude of a half a million dollars." He believed that obtaining this credit facility coincided with the Olympic bid and that he was of the view that the Olympic contract was guaranteed. Because he felt so secure, he testified "I decided to take it upon myself to invest. I invested that money from our line of credit into the business ... that was a shareholder loan personally - from me or us - into the business." [86] He was cross-examined about his evidence regarding the RBC line of credit and in particular his prior statements regarding it. He was presented with testimony from his Examination for Discovery. I reproduce the prior testimony here: Q: And as you pay your mortgage, your line of credit max increases, because you're always entitled to $924,000. So as you're paying your mortgage down, your line of credit goes up; correct? A: I would assume so, but [the claimant] had 100 percent control of that. Q: So you never took out funds from the line of credit? A: Directly, not that I recall. Q: So when you obtained the line of credit in or about 2010, was the entirety of that line of credit personal use? A: I don't recall. Q: Do you recall if any amount of that line of credit was utilized to invest in any of your corporate interests? A: I don't recall. . . . Q: So claimant's document M2, 1.3, states how the line of credit at July 21st, 2010 could go to a maximum of $509,239. And the previous document, the claimant's document M2, 1.2, says how the mortgage was $414,760, which works out to 924. And the mortgage payment is $2,387. So at that time, I'm suggesting to you, the respondent, in 2010, you had a credit line that could go up to 509,000 approximately. And do you recall where all of that money has gone since 2010? It's now up to 600 and some odd thousand? A: Correct. Q: Where has that money gone? A: I would ask [the claimant]. Q: You have no idea where 600,000 has gone? A: As I suggested before, it probably went to support our living. We lived beyond our means, and then we dipped into our line of credit as much as we can. And the records will reflect that it was probably at its max for the last three or four years. We simply lived beyond our means and we used that to support our family. And [the claimant] had 100 percent access and control of that account. I didn't even have, the records will show, an RBC card, debit card, or even an active credit card. And I relied on her solely. And I repeat: solely. Her discretion to do what she needed to do with that account. Q: So none of those funds went into any corporate interest? A: I cannot recall. Q: But you're stating that their entirety - expenditure on the credit line was solely [the claimant]? A: She could have dispersed it. I don't recall. Q: Okay. A: You can ask her. Q: No. I'm asking you, sir. A: And I'm telling you. Q: So you don't recall if you accessed funds on this credit line; is that what you're stating? Whether it be for corporate interests? A: I don't recall. [Underlining added.] [87] During the Examination for Discovery, the respondent was asked to refresh his memory about this RBC line of credit and whether he had used the money. Specifically, he was asked "Advise if any amount of the RBC line of credit was utilized to invest in any of the respondent's corporate interests." [88] The Examination for Discovery occurred on June 12, 2017. By court order dated October 11, 2017, Master Muir adjourned the trial and ordered the respondent, among other orders, to respond to this outstanding discovery requests within 14 days. After the time for response had expired, the respondent sent an email that included a response to this outstanding request. He stated: Upon review of the RBC line of credit that the claimant provided, I do not see any instances where any monies from the LOC were used for any corporate interests. [89] Having reviewed the respondent's direct examination, cross-examination and pertinent excerpt of the examination for discovery transcript, I find that there is a material inconsistency between what the respondent said at trial regarding the RBC line of credit and what he said at his examination for discovery and his written response delivered pursuant to court order (his response being delivered past the date ordered). [90] The inconsistency was significant. Only at trial did he admit to accessing this substantial amount of money thereby thwarting the claimant's ability to investigate further. [91] In my view, this evidence indicates dishonesty. As I review the testimony from trial and his prior statements on this topic, I disbelieve the respondent. With the benefit of bank statements before him at discovery, he was asked in clear and simple language to explain what happened to over $300,000. He initially insinuated that the claimant was the cause of that depletion. Even after he was given an opportunity to correct his evidence on this point, he simply avoided answering the clear question. [92] I conclude my credibility assessment of the respondent with these comments. I have concluded that statements by the respondent that serve his own financial interests in this proceeding are not reliable or credible, and have to be viewed with extreme caution unless supported by other evidence such as bank or other financial statements. As stated earlier, the respondent's document production has impaired this part of the analysis as well. [93] The respondent's conduct required the claimant to go to considerable lengths before trial to find documents showing the respondent's sources of income, including his financial relationship with corporations and tracing the payment of personal and business related expenses. It is no answer that she may have obtained orders of costs following the interlocutory applications. His partial and often late compliance with the many interim orders further interfered with the claimant's discovery rights and forced her to obtain the respondent's documents, where available, from third parties. [94] The respondent's pattern of nondisclosure persisted up to the commencement of the trial when he tried to disclose new documents. The claimant objected to the introduction of the new documents received by counsel on the Friday afternoon before the trial started three days later. Often late disclosure can be remedied by an adjournment. However, in this case, the claimant was facing her third trial date, the litigation had been outstanding for over three years and the prejudice, in my view, to the claimant was profound. An adjournment was inappropriate yet the claimant needed time to consider the document production. As such, I upheld the claimant's objection regarding the admissibility of the new documents. [95] I find that in a case like this where the claimant was required to go to great lengths to obtain information from the respondent before trial, that such late and partial disclosure by the respondent was an obvious attempt to avoid pre-trial discovery and the subsequent testing of the information in the documents. In my view, this does reflect poorly on his credibility and my findings regarding the determination of the legal issues are impacted accordingly. [96] I turn to the issues and determinations related thereto. V. INCOME OF THE PARTIES A. The Claimant [97] I have reviewed the claimant's CRA filings and documents relating to her earnings since separation. I am satisfied that the evidence establishes the claimant's income to be: Year Total income for year Source of income/loss 2016 $55,254 $56,043 landscaping income ($789) business loss from yoga instructing 2017 $60,223 $56,079 landscaping income $4,144 yoga instructing business 2018 $67,209 $65,777 landscaping income $1,432 yoga instructing business 2019 $67,209 Landscaping income [98] In September 2019, the claimant was terminated. She is currently unemployed. She testified that she has completed most of the real estate licensing requirements and intends to write her exams after the trial is concluded. As such, she recognizes that any order regarding spousal support will be subject to a review. [99] The respondent seeks an imputation of income to her based on her ability to earn income and her failure to pursue severance pay. [100] I accept that her absence from the workforce is reasonable in the circumstances she described and it is temporary. This period of unemployment will be addressed by an early review. In the circumstances, and considering the jurisprudence set out more fully below, I will not impute income to the claimant during her temporary period of unemployment. B. The Respondent [101] The respondent's income for 2016-2018 is recorded in his CRA T1 personal tax filings as follows: Year Total Income Source 2016 $71,934 Business income Consulting/Sales 2017 $48,028 Business income Consulting/Sales 2018 $19,760 Business income Consulting/Sales [102] In the Income Report, Mr. Sturgess notes that the respondent has continued to pay himself a salary from the companies that is not funded by operating profits of the Companies. In her written submission, the claimant put it this way: [Mr. Sturgess] provides an opinion as to the amount of income available to the Respondent as a shareholder of the 07, 08 and Pursuit 3 Companies. He asserts that the companies were deeply unprofitable in 2016, 2017 and 2018 and the available income to the Respondent was $nil as a result. It is noted by Mr. Sturgess that despite the lack of profit of the companies in those years, the Respondent continued to draw funds out of the companies. [103] The claimant submitted that the financial information demonstrates that the respondent dissipated his portion of the corporate assets by $522,000. She says he should not have dissipated this asset but rather should have had other employment income submitting: In the time since separation, the Respondent has not sought other employment and has not worked on other projects. Conversely, he has continued to travel extensively, referring to many of the trips as business travel which were paid for by the companies and admitted in evidence at trial that he has done nothing to improve his training or skills but was now in October 2019, considering taking courses to upgrade his training. The Claimant respectfully submits that the Respondent made no efforts to secure remunerative employment since separation, electing instead to access family property to pay his personal and living expenses since separation. This is akin to a spouse relying upon an investment account acquired during the relationship to fund living expenses after separation, in order to avoid their obligations to work to their capacity. [104] The claimant takes the position that I should impute an income to the respondent of $150,000 based on the following: a) his previously recorded earnings; b) by adding back personal expenses that appeared to have been paid for by the companies; c) by drawing adverse inferences from his deficient document production; d) by assessing his historical contributions to the joint bank account in the years leading up to separation; e) by taking into account the dissipation of the income available to the respondent as a shareholder of the 07, 08 and Pursuit 3 Companies; and f) by considering that he should have had other employment in the years' post-separation. [105] I will first set out the principles governing income determination in circumstances where, as here, the party is a principal of a closely held corporation. I will then set out my analysis. C. Legal Principles regarding Income Determination [106] Justice Kent, in Wiebe, provides a helpful overview of the calculation of a spouse's income for purposes of child support as governed by s. 16-20 of the Federal Child Support Guidelines, SOR/97-175 (the "Guidelines"). Justice Kent says this at paras. 87-91: . . . The starting point is provided by s. 16, namely the "total income" set out on line 150 of the spouse's income tax return. That amount is then to be adjusted in accordance with Schedule III of the Guidelines which, among other things, deals with deduction of certain employment expenses, deduction of spousal support and universal child care benefits, capital cost allowance for real property, et cetera. Section 18 of the Guidelines addresses situations where a spouse is a shareholder, director or officer of a corporation. If such a spouse's annual income as determined under s. 16 (i.e., his line 150 income, as adjusted) "does not fairly reflect all the money available to the spouse of the payment of child support", the court can review corporate pre-tax income and impute all or part of that income to the spouse for child support purposes. Section 21 of the Guidelines requires a spouse who controls a corporation to disclose the financial statements of the corporation and its subsidiaries as well as a "statement" of all amounts or benefits paid to persons who were not "at arm's length" to the corporation. Section 18(2) of the Guidelines requires all such non-arm's-length payments to be added back to corporate pre-tax income unless the spouse "establishes that the payments were reasonable in the circumstances". One of the "benefits" enjoyed by a spouse who is able to structure his financial affairs through a wholly-owned corporation is the ability not only to "income-split" with third parties, and to distribute income by way of a mixture of salary and dividends, but also to have what are essentially personal expenses paid by the corporation. To the extent such expenses are personal and not bona fide corporate expenses, they are properly "added back" to the corporation's pre-tax income, all or part of which can then be imputed to the spouse for Guideline income purposes. Section 19 of the Guidelines also permits the court to impute income to a spouse for child support purposes in a wide variety of circumstances. Among other things, this section permits adjustments where a spouse has derived tax advantages by structuring his or her affairs to attract a lower overall tax rate than the rate contemplated by the Guidelines. For example, subsections 19(1)(g) and (h) include situations where a spouse has unreasonably deducted expenses from income and/or where a spouse derives a significant portion of income from dividends, capital gains or other sources which are either exempt from tax or taxed at a lower rate. [107] In support of her position, the claimant relies on s. 19(1)(a), (b) and (f) of the Guidelines which provide as follows: 19(1) The court may impute such amount of income to a spouse as it consider appropriate in the circumstances, which circumstances include the following: (a) The spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of a child of the marriage or any child under the age of majority or by the reasonable educational or health needs of the spouse; (b) The spouse is exempt from paying federal or provincial income tax; . . . (f) the spouse has failed to provide income information when under a legal obligation to do so; . . . [108] In Marquez v. Zapiola, 2013 BCCA 433, the Court recognized a broad discretion to impute income to either or both spouses for the purpose of determining child and spousal support. In circumstances where there are allegations of under-employment or unemployment, the test for imputing income is "reasonableness, having regard to the parties' capacity to earn income in light of their age, education, health, work history and work availability:" para. 37. In Marquez, at para. 38, the Court of Appeal concluded: Although the legal foundation for awarding spousal support is different from that of child support (see Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269 at para. 208), the test for imputing income for the purpose of fixing the quantum of support is similar. Again, the test is one of reasonableness, having regard to the same factors to be considered in imputing income for child support. However, the concept of "needs" for non-compensatory support also includes a consideration of the marital standard of living: Myers v. Myers (1995), 65 B.C.A.C. 226, 17 R.F.L. (4th) 298 at para. 10, Moge at 870, Bracklow at para. 36. "Means" has been interpreted to include all capital and other sources of income (Leskun v. Leskun, [2006] 1 S.C.R. 920 at para. 29). [109] When considering income for the purposes of non-compensatory spousal support, the marital standard of living must be considered and means will include all capital and other sources of income. [110] In M.A.G. v. P.L.M., 2014 BCSC 126 at para. 52, Fleming J. wrote that three fundamental principles apply to all child support applications: . . . 1. parents have a joint and ongoing legal obligation to support their children; 2. the children, not the parent with custody, have the right to support; and 3. support payments are based on earning capacity and not only on what a parent actually earns. As a result a parent has a legal obligation to earn as much as he or she is reasonably capable of earning: Earle v. Earle, [1999] B.C.J. No. 383 (S.C.). [111] At para. 54, Fleming J. referred to Hanson v. Hanson, [1999] B.C.J. No. 2532 identifying the principles that apply when determining a parent's capacity to earn an income: . . . When that parent is under or unemployed, the court considers what is reasonable in the circumstances. The age, education, experience, skills and health of the parent are factors to be considered in addition to such matters as availability of work, freedom to relocate and other obligations. Persistence in underpaid employment may entitle the court to impute income. As a general rule, a parent cannot avoid child support obligations by a self-induced reduction in income: Hanson at para. 14. [112] Regarding the adverse inference sought here, I note that the court has imputed income to a party who has failed to provide financial information when he has been under an obligation to do so. In cases where the evidence indicated a lifestyle inconsistent with a proclaimed income, the court has imputed income to that party. See Friedlander v. Claman, 2014 BCSC 2136 and Gonabady-Namadon v. Mohammadzadeh, 2008 BCSC 606. D. Income Determination -- Analysis [113] The claimant seeks to impute an income at least equal to the income available to the respondent prior to the breakdown of the marriage. The respondent asks the court to rely on the Income and Valuation Reports as evidence supporting his position that he has had minimal earnings in the years leading up to the trial. [114] I am satisfied, based on my assessment of credibility and the whole of the evidence including the testimony of the respondent, that this is an appropriate case for the court to impute income to the respondent. I make that determination based on both parties' testimony about the respondent's pre-separation working capacity. I take into account the evidence before me showing substantial deposits into the joint account in the three years prior to separation. The respondent's financial statements show living expenses, after separation, that well exceed his declared earnings. [115] In making my determination of income, I find that this is a proper case to drawn an adverse inference against the respondent and I do so. That finding is based on all that I have just stated and Mr. Sturgess' unchallenged conclusion that he never received the underlying documents he required from the respondent. [116] I also make that determination, based on the financial evidence that was produced (primarily by the claimant) and by drawing an adverse inference against the respondent's submission, that his failing companies are now valued at nil. [117] I find that the respondent has been intentionally under-employed and not working to his full capacity since separation subject to one exception that I will address more fully below as it relates to the evidence regarding the 2016 Rio Olympics. As I consider his capacity to earn income, I have considered the respondent's age, education, experience, skill and health and his resourcefulness evident in the family's lifestyle in the years leading up to separation. [118] I find it remarkable that this intelligent, able-bodied and resourceful middle-age man with four children (three of whom he acknowledged had not withdrawn from dependency) would declare $19,760 for his 2018 CRA T1 filing. [119] I do not accept the respondent's evidence that the family's lifestyle was supported by drawing on the equity from the sale of residential properties or from access to credit facilities. The respondent's position in that regard is not consistent with the years of financial information produced by the claimant showing regular deposits in the parties' bank accounts. [120] I accept the claimant's submission that following the 2016 Rio Olympics, the respondent made no effort to secure remunerative employment. Rather, he chose to use family property to pay his personal and living expenses and has done so since separation. Further, I accept the claimant's submission that there are many gaps in the respondent's evidence about his income, expenses and ability to generate income either personally or through his company. He did not provide a credible explanation as to how he has been paying his personal expenses since 2016. [121] The difficulty remains about the amount of income to be imputed. The claimant submits that the evidence demonstrates the respondent had the capacity, at least historically, to generate annual earnings of between $100,000 and $265,000 and that this amount should be grossed up to account for the fact that the deposits into the joint account were largely untaxed. In determining income, I have found the respondent's deposits into the joint bank account to be particularly compelling. Although he tried to explain away many of these deposits as either belonging to the claimant or not relating to his "income," I am satisfied that the evidence establishes that these deposits were made by the respondent and reflected, at least in part, his earnings at the time. Those deposits were calculated to be: Year Average monthly deposits from the respondent 2012 $13,233 2013 $22,022 2014 $14,664 2015 $8,844 [122] The claimant's evidence from her Form F8 sworn June 16, 2016 was that the parties were paying family expenses of $18,344 per month or $220,136 per year at the time of separation, which I accept. [123] Based on the respondent's pre-separation capacity to earn income[1], his post-separation decision to reduce his income and pay his expenses by drawing on the corporations' profits and the banking evidence presented, I am satisfied that imputing an income consistent with the pre-separation monthly deposits is reasonable. Again, I remain troubled by the lack of a credible explanation by the respondent as to how he has paid his personal expenses since separation. [124] I am satisfied that it is reasonable to impute an annual income to the respondent of $125,000 for both child and spousal support. I have made this determination having taken into account the respondent's evidence regarding the 2016 Rio Olympics and the corporate losses. Although I remain skeptical of the respondent's partial disclosure generally, I have accepted the aspect of his evidence indicating that the companies suffered some loss following the 2016 Rio Olympics. To account for this, I have imputed income to the respondent, up to the time of trial to be: Year Annual Income 2016 $125,000 2017 $100,000 2018 $125,000 2019 $125,000 [125] Regarding the claimant, I accept her evidence as reported to CRA in the years' post-separation. I accept that she is no longer earning an income because of circumstances that are not of her making. She is now pursing a career in the real estate industry and is completing her credentials to that end. A review of her income will thus be required. [126] The parties will exchange financial information annually beginning June 1, 2021 with the support adjusted accordingly. VI. CHILD SUPPORT [127] The Family Law Act (FLA) and the Divorce Act both provide that child support is payable for children under the age of 19 unless a child over the age of 19 is unable to withdraw from the charge of their parents. In this case, the parties do not dispute that the three daughters remain "children of the marriage." As stated earlier in these reasons, the claimant described in some detail the mental health issues impacting the girls' ability to withdraw from dependency. Initially, the respondent objected to the nature of the medical evidence presented on this issue. Based on the detailed evidence of the claimant regarding the particular circumstances relating to each child, the professionals consulted and the respondent's acknowledgement that the girls "are not quite there yet", I am satisfied that both K.A.C. and S.J.C. remain "children of the marriage" (K.A.C. would have turned 19 on July 4, 2016 and S.J.C. would have turned 19 on September 27, 2018). [128] In oral submissions, the respondent agreed that K.A.C., S.J.C. and H.E.C. all remain dependant on their parents. He acknowledged their daughters "were not quite there yet" in terms of withdrawing from their parents' charge. Based on the parties' submissions regarding dependency and based on the evidence regarding the Children's specific circumstances, I find that K.A.C., S.J.C. and H.E.C. are "children of the marriage" for the purpose of determining child support. [129] With respect to S.C., I am satisfied based on my review of the evidence that he was a child of the marriage from the date of separation to December 2018 when he moved to Lions Bay. [130] This finding of dependency is based on the position taken by the parties and informed by a consideration of the legal principles relevant to an assessment of adult children and their dependency. In W.P.N. v. B.J.N., 2005 BCCA 7, the B.C. Court of Appeal addressed entitlement to child support in the context of a university attending adult child seeking a post-graduate degree in medicine. In that case, the chambers judge found that the parties' daughter was entitled to child support as a child of the marriage within the meaning of s. 2(1) of the Divorce Act, (R.S.C., 1985, c. 3 (2nd Supp.)). [131] The Court of Appeal agreed with the chambers judge's finding. Levine J.A. summarized the assessment in this way: [16] Under s. 15.1(1) of the Divorce Act, a court may make an order "requiring a spouse to pay for the support of any or all children of the marriage". The definition of "child of the marriage", in s. 2(1) of the Act, includes a child who: (b) is the age of majority or over and under their [her parents] charge but unable, by reason of illness, disability or other cause, to withdraw from their charge or to obtain the necessaries of life; . . . [18] The pursuit of education necessary to equip a child with a career qualifies as "other cause" for continuing dependence of a child of or over the age of majority: Martin v. Martin (1988), 26 B.C.L.R. (2d) 390 at 393 (C.A.). In determining whether a child pursuing an education is unable to withdraw from her parents' charge or obtain the necessaries of life a court must consider the surrounding circumstances; mere attendance at an educational institution is not sufficient: Ciardullo v. Ciardullo (1995), 15 R.F.L. (4th) 121 at para. 17 (B.C.S.C.). [19] A list of relevant circumstances was formulated by Master Joyce (as he then was) in Farden v. Farden (1993), 48 R.F.L. (3d) 60 at para. 15 (B.C.S.C.) and referred to by this Court in Darlington v. Darlington (1997), 32 R.F.L. (4th) 406 at para. 14 (B.C.C.A.). These factors were considered by the chambers judge, who noted that in Darlington, this Court made it clear that there does not have to be evidence on all of the factors in order to establish that a child is a "child of the marriage" because she is pursuing an education. Nor should this list be considered to be exhaustive of the relevant factors. [Emphasis in original.] [132] In this case, S.J.C. and K.A.C. have interrupted their post-secondary education with the hope they will return to school. They have faced mental health challenges that have played a role in their attendance at school. In light of these factors (interrupted attendance at post-secondary institutions and mental health) and the position taken by the parties, I am satisfied that S.J.C. and K.A.C. remain children of the marriage. H.E.C., by virtue of her age, is also a child of the marriage. [133] In this case, I have determined that the usual Guidelines approach is the more appropriate method of calculation. That is because the girls' living circumstances and state of dependency more closely reflect factors that normally apply to a child under the age of majority (that is, they are living with a parent, making nominal earnings and taking steps to treat mental illness). See: M.A.T. v. K.P.T., 2017 BCSC 1603 at para. 177. I have assessed ongoing child support accordingly. [134] Taking into account the girls' age and uncertain future, there should be an early review of child support for each. [135] Later in these reasons, I will deal with any requirement to pay retroactive child support. VII. SECTION 7 SPECIAL/EXTRAORDINARY EXPENSES [136] The claimant seeks an order requiring the respondent to pay his proportionate share of special/extraordinary expenses she has incurred for the three girls in the amount of $48,588[2], relying upon documentary evidence and her testimony. She testified that the respondent had not contributed at all to the special expenses. [137] The respondent, on the other hand, testified that he paid many other expenses directly and sought to use his expenditures to off-set any order allowing special expenses should one be made. The respondent did not produce documents or records demonstrating the particulars relating to any of those expenses. For example, during the trial he pointed to ICBC entries in the banking statements as proof that he had paid the insurance on S.J.C.'s car. I will deal with this after setting out the statutory provisions governing special expenses. [138] In addition, the respondent disputes the amount of the claim for special expenses submitting that the claimant has failed to provide proper receipts for the amount she says she has paid. [139] The law on section 7 expenses was summarized in Clarke v. Clarke, 2014 BCSC 824: [48] Section 7 of the Federal Child Support Guidelines gives the court the discretion to order payment of an amount over and above the regular table amount. However, in order to qualify for a s. 7 order, the expenses must be proven to be "special" or "extraordinary" in some way. [49] This is because the basic table amounts of child support are designed to cover all the "ordinary" costs of raising a child: D.M.C.T. v. L.K.S., 2008 NSCA 61 at para. 25. Food, shelter, clothing and other necessities are all ordinary, as are many educational, extracurricular and recreational expenses: McLaughlin v. McLaughlin (1998), 167 D.L.R. (4th) 39 (B.C.C.A.). [50] So when does an expense qualify as special or extraordinary? First, it must fit within one of the categories of expenses listed in section 7[(1)]: . . . [51] That list is exhaustive. If the claimed expense does not fit into any of those categories, it cannot be a special or extraordinary expense: Kase v. Bazinet, 2011 ONCJ 718 at para. 39. [52] Even where an expense fits into one of the listed categories, that is not the end of the story. The expenses must be both "necessary" -- as defined in relation to the child's best interests -- and "reasonable," as measured against the combined financial means of the parents (and, where appropriate, the child) as well as the family's spending patterns prior to separation: see section 7(1) and Yensen v. Yensen, 2003 BCSC 1372 at para. 8. In addition if the expense is one listed under subsection (d) or (f) -- educational programs or extracurricular activities -- the party claiming the expense must prove that they are "extraordinary." [53] There is no straightforward definition for "extraordinary" although section 7.1, recently added to the Guidelines, provides some guidance; it requires a sort of proportionality inquiry, looking at the nature and number of activities, any special needs or talents of the child, the overall cost of the activities, and any other similar relevant factors: see D.M.C.T. at para. 32. [54] Because the tests are fact-specific, I cannot definitively say what types of expenses qualify in every case. But I can say what does not qualify as special or extraordinary: Ÿ Expenses such as "entertainment, pets, vacations, school fees, school supplies, children's allowances, meals outside the home, personal grooming, and clothing" are not section 7 expenses: Mertler v. Kardynal (1997), 35 R.F.L. (4th) 72 (Sask. Q.B.). Ÿ A home computer and other similar technologies do not qualify as extraordinary as they are "common item[s] found in most homes": Yensen at para. 18. Ÿ Recreational sports and other similar extracurricular activities -- dance lessons, community sports leagues, ski trips, etcetera -- are generally considered "ordinary." The question is whether the participation goes beyond that of the "average child": D.L.C. v. F.M.C., 2010 BCSC 1312 at para. 67. [140] Any expenses of the Children found to qualify as section 7 expenses are to be shared in proportion to the parties' income after taking spousal support into account. [141] Based on the parties' submissions and the evidence presented, I am satisfied that the balance of the items (for example, post-secondary expenses, dental and tutoring) claimed as section 7 expenses qualify as such. I am not satisfied that the gym memberships qualify as special expenses and I have adjusted the claimant's claim for reimbursement accordingly. I am satisfied that the claimant is entitled to reimbursement, as special expenses, as follows: K.A.C. S.J.C. H.E.C. 2016 $2,520 $10,394 $4,200 2017 $2,520 $10,394 $4,200 2018 $500 $3,100 $900 2019 $500 $1,000 $900 TOTAL $6,040 $24,868 $10,200 [142] The total amount allowed for special expenses is $41,108. [143] The claimant seeks to have the respondent pay his proportionate share of the special expenses based on a 65/35 proportion which is the average proportionate sharing in 2016 - 2019 based on the parties' income and assuming a mid-range of spousal support is ordered. Based on the income levels I have imputed to the respondent; I have adjusted this proportionate sharing to be 60/40. Accordingly, the respondent's share of the special expenses from 2016 through 2019 is $24,664.80. [144] I have not off-set this amount to account for the respondent's testimony that he paid directly for some of the Children's expenses. This aspect of his testimony was not corroborated by the banking or financial evidence tendered. Without some evidence demonstrating when he paid and for what, I do not accept his testimony on this point. [145] Moving forward and allowing for the parties' respective incomes, I have adjusted the proportionate sharing slightly so that the respondent would be responsible for 74% of the special expenses and the claimant responsible for 26%. I accept the claimant's submission that the special expenses should include the following: a) Health related expenses for K.A.C., S.J.C. and H.E.C. that exceed insurance reimbursement by at least $100 annually, including orthodontic treatment, professional counselling provided by a psychologist, social worker, psychiatrist or any other person, physiotherapy, occupational therapy, speech therapy and prescription drugs, hearing aids, glasses and contact lenses; b) Cost of wisdom teeth extraction for K.A.C. and S.J.C.; c) Tuition fees and books for post-secondary education; and d) Any other expenses that the parties agree to in writing in advance. VIII. SPOUSAL SUPPORT [146] The claimant seeks retroactive and ongoing spousal support. [147] The principles applicable to a claim for spousal support are set out in s. 15.2 of the Divorce Act: (1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse. . . . (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. (5) In making an order under subsection (1) or an interim order under subsection (2), the court shall not take into consideration any misconduct of a spouse in relation to the marriage. (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. [148] The leading cases concerning the proper application of the principles set out in this section are the judgments of the Supreme Court of Canada in Moge v. Moge, [1992] 3 S.C.R. 813, and Bracklow v. Bracklow, [1999] 1 S.C.R. 420. In Bracklow, Justice McLachlin, as she then was, speaking for the court, described three conceptual models for entitlement to spousal support: a) Compensatory to redress economic disadvantage as a result of the breakdown of the marriage; b) Contractual; and c) Non-compensatory based on the needs of the recipient spouse. [149] In this case, the claimant argues she is entitled to support based on compensatory and non-compensatory principles. [150] Justice Grauer in Younger v. Younger, 2016 BCSC 990 at paras. 83-85 neatly summarized the relevant principles: [83] Compensatory support relates mostly to the first two objectives in s. 15.2(6): Chutter at para 47. It is rooted in the "independent" model of marriage and "is intended to provide redress to the recipient spouse for economic disadvantage arising from the marriage or the conferral of an economic advantage upon the other spouse": Chutter at para 50.94 [84] The marital standard of living informs compensatory entitlement. It is particularly important in longer marriages because "[a]s marriage should be regarded as a joint endeavour, the longer the relationship endures, the closer the economic union, the greater will be the presumptive claim to equal standards of living upon its dissolution": Moge at 870. [85] This approach was discussed in W v W, 2005 BCSC 1010: [11] In British Columbia this comment in Moge has been interpreted to mean that in long marriages the result will likely be a rough equivalency of standards of living. Doing so recognizes that the longer a marriage lasts, the more intertwined the economic and non-economic lives of the spouses become. [12] Throughout the marriage, each spouse makes decisions that accommodate the economic and non-economic needs of the other. The decisions include the way in which child care and other family responsibilities will be handled and the way careers will develop. These decisions can have a significant impact upon the income earning ability of each at the time of separation. Yet it is not easy to determine exactly the relationship between these decisions and the consequent benefits and detriments to each spouse. The rough equivalency of standard of living approach has operated as a workable substitute to assess compensatory claims. [151] With regard to non-compensatory support, I again turn to Grauer J.'s summary of the principles at paras. 97-98 of Younger, where he states: [97] Non-compensatory supports relates mostly to the third and fourth objectives in s. 15.2(6): Chutter at para 47. The Court in Chutter described non-compensatory support as follows: [54] Where compensatory principles do not apply, need alone may be sufficient to ground a claim for spousal support (Bracklow, at para. 43). Non-compensatory support is grounded in the "social obligation model" of marriage, in which marriage is seen as an interdependent union. It embraces the idea that upon dissolution of a marriage, the primary burden of meeting the needs of the disadvantaged spouse falls on his or her former partner, rather than the state (Bracklow, at para. 23). Non-compensatory support aims to narrow the gap between the needs and means of the spouses upon marital breakdown, and as such, it is often referred to as the "means and needs" approach to spousal support. [55] The concept of "needs" in the context of non-compensatory spousal support goes beyond basic necessities of life and varies according to the circumstances of the parties. As stated by Finch J.A. (as he then was) in Myers v. Myes (1995), 17 R.F.L. (4th) 298, 65 B.C.A.C. 226, at para. 10: "Need" or "needs" are not absolute quantities. They may vary according to the circumstances of the parties and the family unit as a whole. "Need" does not end when the spouse seeking support achieves a subsistence level of income or any level of income above subsistence. "Needs" is a flexible concept and is one of several considerations which a trial judge must take into account in deciding whether any order for spousal support is warranted. [98] Self-sufficiency and need are relative concepts informed by the marital standard of living: Chutter at paras 56 and 60. Need is also determined in relation to the other spouse's post-separation standard of living: Chutter at para 88. [152] In my view, the claimant has demonstrated both a compensatory and non-compensatory entitlement to spousal support. [153] The claimant's entitlement to support on compensatory grounds is very strong. The factors I take into account in coming to this conclusion are these: a) the relationship was of a long duration, lasting some 27 years; b) the claimant was a stay-at-home parent who took care of their four children, three of whom developed mental health conditions that required (at times) significant care and attention; c) the claimant gave up her career path in order to care for their children; d) throughout the marriage, the respondent was required to travel and spend considerable time away from the family; e) the claimant's role as the primary care provider and the one who managed household responsibilities left her with fewer future prospects of financial success, and a lower earning potential particularly in light of her role as a labourer and which duties she can no longer perform; f) immediately following separation, the respondent absented himself from the country for over six months leaving all household and childcare responsibilities to the claimant; and g) since separation and considering their ongoing mental health needs, the claimant maintained her role as the primary caregiver to all but H.E.C. [154] I am satisfied that the claimant has also demonstrated an entitlement to spousal support on a non-compensatory basis. I accept that the claimant continues to have an entitlement to spousal support based on need. In assessing this entitlement, I have had regard to the parties' standard of living during the relationship and the parties' needs and means thereafter. I have taken into account the respondent's means and needs, including his income, H.E.C.'s living arrangements at this time, and his financial support of K.A.C. and S.J.C.. [155] Balancing these factors, I take into account the fact that child care responsibilities are now considerably reduced and will soon come to an end, the claimant's pursuit of employment in the real estate field after she completes her exams and her work ethic evident in what she has managed since separation. [156] A review of the quantum, not compensatory entitlement, of spousal support will be required by June 1, 2021 or earlier by agreement of the parties. By that date, the claimant should have completed her real estate exams and commenced her employment in the real estate industry. In the meantime, s. 15.2(3) of the Divorce Act allows for terms to be imposed on spousal support orders. Considering the history of the litigation and the cost to the claimant to obtain basic disclosure, this is an appropriate case to impose terms by securing the future spousal support payments. To that end, spousal support will be secured by directing a specific amount to be held in trust to be released to the claimant each month and in accordance with the terms of this order. IX. RETROACTIVE SUPPORT [157] The claimant seeks retroactive child and spousal support. The leading case on retroactive child support is D.B.S. v. S.R.G., 2006 SCC 37. Justice Bastarache, for the majority, addressed retroactive child support awards where there has been a previous court order at paras. 62-74. He summarized this portion of his Reasons at para. 74: In summary, a payor parent who diligently pays the child support amount ordered by a court must be presumed to have fulfilled his/her support obligation towards his/her children. Acting consistently with the court order should provide the payor parent with the benefit of predictability, and a degree of certainty in managing his/her affairs. However, the court order does not absolve the payor parent -- or the recipient parent, for that matter -- of the responsibility of continually ensuring that the children are receiving an appropriate amount of support. As the circumstances underlying the original award change, the value of that award in defining parents' obligations necessarily diminishes. In a situation where the payor parent is found to be deficient in his/her support obligation to his/her children, it will be open for a court, acting pursuant to the Divorce Act or the Parentage and Maintenance Act [RSA 2000, c P-1], to vary an existing order retroactively. The consequence will be that amounts that should have been paid earlier will become immediately enforceable. [158] The following factors can be considered when assessing a retroactive child support claim (see C.A.R. v. G.F.R., 2006 BCSC 1407 at para. 9) follows: a) whether there exists a reasonable explanation for why retroactive child support was not sought earlier; b) the conduct of the payor parent; c) the circumstances of the child; and d) whether there exists any hardship that would be occasioned by a retroactive award. [159] When considering a claim for retroactive child and/or spousal support, the B.C. Court of Appeal, in Ducharme v. Rempel, 2016 BCCA 198, stated the following: [17] I begin by noting that the same factors are to be taken into account whether retroactive child or spousal support is in issue. It is the weighing of those factors that will differ: concerns about the applicant's delay and misconduct "carry more weight" in relation to spousal support (Kerr at para. 208). In contrast, the entitlement of a child to support is generally so compelling that those factors will be less significant in the exercise of the court's discretion to make a retroactive award. The underlying facts are, however, relevant to both types of support applications. [18] It is to be remembered as well that although the majority in D.B.S. identified four factors to be considered, Mr. Justice Bastarache began by saying: 99 I will now proceed to discuss the factors that a court should consider before awarding retroactive child support. None of these factors is decisive. For instance, it is entirely conceivable that retroactive support could be ordered where a payor parent engages in no blameworthy conduct. Thus, the British Columbia Court of Appeal has ordered retroactive support where an interim support award was based on incorrect financial information, even though the initial underestimate was honestly made: see Tedham v. Tedham (2003), 20 B.C.L.R. (4th) 56, 2003 BCCA 600. At all times, a court should strive for a holistic view of the matter and decide each case on the basis of its particular factual matrix. [Emphasis added.] . . . [26] What constitutes blameworthy conduct will vary depending on the facts of the particular case. In my view, the trial judge did not err in finding blameworthy conduct on the part of Mr. Rempel in relation to spousal support. He was aware that the spousal support he paid from August 2008 until trial was based on estimated income of $96,000 - a number well below his actual guideline income in that and subsequent years. He also knew that $96,000 had been used because he had not complied with his obligation to file a financial statement before the JCC. In addition, Mr. Rempel swore a financial statement in September 2008 showing income of approximately $98,000 which also significantly understated his guideline income. [27] As for delay, the trial judge found "considerable delay" by Ms. Ducharme in bringing the matter of support back before the court, in particular after the second trial date was adjourned in 2011. In Mr. Rempel's submission, if the trial judge had considered the delay factor as it should be applied in the context of spousal support, she would have found it weighed heavily against a retroactive award. [28] I agree that delay by an applicant seeking spousal support will weigh more heavily against a retroactive award than would be the case on an application for retroactive child support. But the significance of the delay may be diminished when there is a reasonable excuse for the failure to proceed. In D.B.S. at para. 101, Bastarache J. said: 101 Delay in seeking child support is not presumptively justifiable. At the same time, courts must be sensitive to the practical concerns associated with a child support application. They should not hesitate to find a reasonable excuse where the recipient parent harboured justifiable fears that the payor parent would react vindictively to the application to the detriment of the family. Equally, absent any such an anticipated reaction on the part of the payor parent, a reasonable excuse may exist where the recipient parent lacked the financial or emotional means to bring an application, or was given inadequate legal advice: see Chrintz v. Chrintz (1998), 41 R.F.L. (4th) 219 (Ont. Ct. (Gen. Div.)), at p. 245. On the other hand, a recipient parent will generally lack a reasonable excuse where (s)he knew higher child support payments were warranted, but decided arbitrarily not to apply. [Emphasis added.] [Italic emphasis in original.] [160] There is a discrepancy between the respondent's oral and written submission as to his position on the payment of retroactive child and spousal support (retreating somewhat from his written submission that no retroactive support was payable). Nevertheless, I will review each of the factors to make the determination regarding retroactive payment. A. Was there a reasonable excuse for the delay? [161] Relevant to my consideration of this factor are the early steps the claimant took to seek support. At para. 41 of these reasons, I set out the litigation history demonstrating the claimant's persistent pursuit of support. She commenced the proceedings in June 2016, served the respondent in the summer 2016, participated in a judicial case conference in September 2016 and filed a Notice of Application seeking, among other orders, child and spousal support. [162] I find that there was no delay in bringing an application for support. B. What was the conduct of the respondent? [163] I am satisfied based on the record before me that the respondent has engaged in blameworthy conduct that is directly connected to his failure to meet his support obligations. It is apparent that the respondent failed to disclose his corporate and/or personal financial documents in 2017 and 2018 and the claimant continued to pursue this disclosure in 2019, not long before the third trial date. His failures in this regard must be considered in the context where he was the primary earner in this family yet did not take responsibility for child or spousal support since their separation. At trial, he testified repeatedly that he did not need to pay support because there was no court order or agreement. C. What were the circumstances of the Children and the claimant? [164] I set out the Children's circumstances earlier in these reasons. I have found that S.C. was a child of the marriage until December 1, 2018 and the three girls still remain children of the marriage. The Children resided with the claimant until H.E.C. moved in with the respondent in late 2018. [165] In the months immediately following separation, the respondent had left the country to work on his company's project at the 2016 Rio Olympics and was gone for about seven months. The respondent testified that S.C. worked as an intern at the 2016 Rio Olympics and so accompanied him for at least part of the time. The girls resided with the claimant. The claimant testified that the respondent made deposits into the parties' joint RBC account from January 2016 to November 2016 but that the amount of the deposits were insufficient to meet the family's expenses. The claimant testified that she needed to pay for most of the expenses for the Children since 2016 including their clothing, food, other living expenses and medical treatment. [166] The claimant agreed that the respondent was involved with the Children in the years before separation by coaching sports teams, attending S.C.'s hockey games, and driving to some activities. However, the evidence before me overwhelmingly demonstrates that the claimant was the primary parent responsible for addressing the needs of the Children, including managing, at times, the significant mental health challenges that faced each of the girls. [167] I have considered the claimant's testimony regarding her employment in the years immediately prior to separation. She described her involvement with yoga instructing but testified she had to give up this source of remuneration because she simply could not manage her hours at Carrera and the day-to-day needs of the Children. In my view, the claimant's decision to abandon yoga instructing is consistent with her testimony that she was the primary person responsible for taking care of the Children, both before and after separation. [168] S.C. and H.E.C. have not resided with the claimant since the end of 2018 and the claimant has adjusted her claim for retroactive child support accordingly. D. Does there exist any hardship that would be occasioned by a retroactive award? [169] During his testimony and closing submissions, the respondent took the position that he had the capacity to earn at least as much as the claimant. In fact, he seemed to invite the court to assume an annual income for him of $94,000[3] and provided DivorceMate calculations incorporating that figure. In light of this position and considering the findings I have made, I am not satisfied that the respondent will experience hardship as a result of an order that he pay child and spousal support retroactively. E. Conclusion on Retroactive Support [170] In the overall analysis and considering the four factors engaged when determining an obligation for retroactive support, I am satisfied that there should be an order for retroactive support. There will be some adjustments to account for the respondent's deposits into the joint bank account (and also taking into account his withdrawals) and the uncharacterized payments to the claimant from December 2016 to June 2017 for $55,100. I will deal with the adjustments shortly. 1. Child support owing [171] Based on the positions taken by the parties and the evidence presented, I am satisfied that retroactive child support is payable by the respondent as follows: a) For S.C., from January 1, 2016 through December 1, 2018; b) For K.A.C., from January 1, 2016 through November 1, 2019; c) For S.J.C., from January 1, 2016 through November 1, 2019; and d) For H.E.C., from January 1, 2016 through December 1, 2018. [172] Taking into account the incomes for the claimant and the respondent and where the Children resided, the following table sets out the calculations for retroactive child support from January 2016 through November 1, 2019: Month/Year Incomes Child residing with in household CSGL Amount Amount owing Claimant Respondent Claimant Respondent January 1, 2016 - December 31, 2016 $55,253 $125,000 S.C. K.A.C. S.J.C. H.E.C. $2,774 per month for 12 months $33,288 January 1, 2017 - December 31, 2017 $60,224 $100,000 S.C. K.A.C. S.J.C. H.E.C. $2,359 per month for 12 months $28,308 January 1, 2018 - November 30, 2018 $67,209 $125,000 S.C. K.A.C. S.J.C. H.E.C. $2,850 per month for 11 months $31,350 December 2018 $67,209 $125,000 K.A.C. S.J.C. H.E.C. $1,207 for one month $1,207 January 1, 2019 - October 1, 2019 $67,209 $125,000 K.A.C. S.J.C. H.E.C. $1,207 for ten months $12,070 TOTAL: $106,223 2. Spousal Support Owing [173] I turn to retroactive spousal support. Applying a holistic view of the factors analysed and considering the finding I have made regarding retroactive child support, I have determined that the claimant is entitled to a retroactive award for spousal support in the mid-range of the Spousal Support Advisory Guidelines (SSAG) (although she has a very high compensatory claim which may very well entitle her to the high-range). Taking into account section 7 expenses as assessed, the retroactive spousal support is broken down as follows: Month/Year Incomes SSAG Mid-Range Total for year Claimant Respondent January 1, 2016 - December 31, 2016 $55,254 $125,000 $971 per month for 12 months $11,652 January 1, 2017 - December 31, 2017 $60,224 $100,000 $346 per month for 12 months $4,152 January 1, 2018 - November 30, 2018 $67,209 $125,000 $660 per month for 11 months $7,260 December 2018 $67,209 $125,000 $604 per month for one month $604 January 1, 2019 - October 1 2019 $67,209 $125,000 $627 per month for ten months $6,270 TOTAL: $14,964 [174] The result of the above calculations is that there has been an underpayment of child support of $106,223 and an underpayment of spousal support of $14,964 for a total of $121,187. I agree that there should be adjustments to account for the respondent's 2016 deposits into the joint account (adjusted for his withdrawals) and the uncharacterized payments. [175] I will deal with each. [176] First, before me are the bank statements from the joint RBC account that was used by the parties from January 2016 through November 2016. I accept the claimant's submission regarding the calculation of the deposits and determining the source of the deposits by examining the day-to-day historical transactions of the joint account. To that end, the respondent is credited with deposits of $81,000. He also made some withdrawals during the same time period although the respondent disputes the withdrawals. In so doing, he does not deny that he made withdrawals. Rather, from his written submission he states: "Unsubstantiated. These figures have not been substantiated and the respondent disagrees with these amounts." The respondent contends that there is no evidence to support the inference the claimant seeks to draw from the historical banking records. [177] Having reviewed the banking records, the nature of the withdrawals summarized attributed to the respondent and considering the absence of any records demonstrating that the respondent was not responsible for the specified amounts, I am satisfied that I can properly draw the inference that the respondent was responsible for withdrawals totalling $28,873. In addition, although the respondent was in Rio during much of this time, he testified that he returned to the matrimonial home in September 2016. As such, he would have been responsible for half of the monthly mortgage premium ($2,475 per month) and half of the monthly interest payment on the RBC Home Credit Line (approximately $1,420 per month). Any credit should be adjusted by $17,527 to account for his obligations to the mortgage and interest on the RBC Home Credit Line. The respondent should be credited with payments of $34,600 into the joint account from January 1, 2016 to November 30, 2016. [178] In addition, the respondent paid $55,100 to the claimant as "without prejudice and uncharacterized" payments pursuant to various court orders. [179] Again, I have found the total child and spousal support obligation to have been $121,187. Deducted from this amount will be $89,700. The respondent is thus ordered to pay retroactive child and spousal support to the claimant from January 2016 to October 2019 of $31,487. 3. Support Moving Forward [180] In terms of moving forward and for the reasons set out previously, the claimant has established that child support and spousal support be payable, based on an imputed income to the respondent of $125,000 and a current income to the claimant of $0 as follows: a) Child support payable by the respondent for K.A.C. and S.J.C.: $1,845 per month; b) Child support payable by the claimant for H.E.C.: nil; c) The offset amount payable from the respondent to the claimant: $1,845 per month; and d) Spousal support payable by the respondent of $2,463 per month of an indefinite duration based on the claimant's age at the date of separation and the years of cohabitation. [181] Either party is at liberty to apply if there are errors in the calculation. X. DIVISION OF FAMILY PROPERTY AND DEBT [182] The claimant argues for an unequal division of family property in her favour. The claimant submits that this can be achieved in part by adjusting the valuation date of the corporate asset and by apportioning 75% of the value of the family property to her. [183] The respondent submits that the presumption of equal division of family property is not displaced here - for the reasons advanced by the claimant or otherwise. [184] The parties identified the family property to be divided, agreeing about value but disagreeing about valuation date (for the 07 Company and the Retirement Funds) as well as apportionment. For convenience, I list the property here and later provide my findings regarding apportionment and distribution. Asset Claimant's position re: Value Respondent's position re value The net sale proceeds of the former matrimonial home after payment of the mortgage, line of credit and adjustments and before advances paid to the parties $1,498,917 $1,498,917 Respondent's interest in 07 Company valued at date of separation $443,700 0 Claimant's Vertex RRSP through Canada Western Trust as at December 31, 2015 $50,200 $50,200 Respondent's Vertex RRSP through Canada Western Trust as at December 31, 2015 $34,983 $34,983 Respondent's Vertex LIRA through Canada Western Trust as at December 31, 2015 $56,464 0 2004 Volvo Wagon (respondent) $6,000 $6,000 2003 Toyota Sequoia (respondent) $5,000 $5,000 2007 Jeep Wrangler (used by K.A.C.) $12,000 $12,000 2008 Honda CRF 450X motorbike (in storage) $3,800 $3,800 2009 Honda CRF 150X motorbike (in storage) $2,200 $2,200 2009 Honda CRF 150X motorbike (in storage) $2,200 $2,200 2009 Honda CRF 100X motorbike (in storage) $1,500 $1,500 2009 Honda CRF 70X motorbike (in storage) $1,000 $1,000 2009 Honda CRF 50X motorbike (in storage) $1,000 $1,000 [185] I address one item that I have not included in the list of properties, the Machete Lake property. The respondent alleges that the claimant sold the property post-separation without his knowledge or consent (because it was in her name solely) and that she failed to account for the sale proceeds of $72,000. The claimant testified that she sold the Machete Lake property in February 2016 and that the respondent knew she was taking the steps to do so. [186] I have reviewed the correspondence, banking records and testimony relating to the disposition of this asset. I have no difficulty accepting the claimant's version of what occurred with this property. I accept that she and the respondent agreed that the property was to be sold and that she took the necessary steps to complete the sale of the property. The claimant explained that the $72,000 sale proceeds went to pay for repairs/upgrades to the family home, joint credit card debt and dental work for H.E.C. The claimant provided banking records and invoices to demonstrate the transfer of the Machete Lake sale proceeds into her account and then to the various expenditures described by her. Most of the sale proceeds were attributed to repairs to the family home and joint family debt. However, I have adjusted the retroactive support order I have made to take into account the $7,000 payment of H.E.C.'s dental expenses from the Machete Lake sale proceeds. [187] I also note that the parties agree with Mr. Sturgess' valuation of the respondent's interest in the 07 Company to be $443,700 as at the date of separation and zero at the time of trial. I will deal with the corporate asset after I set out the legal analysis. A. Legal Principles [188] I turn then to the jurisprudence governing the division of family property. [189] The FLA statutory regime provides, absent an agreement, the spouses are equally entitled to family property and equally responsible for family debt. I set out the relevant statutory provisions here: 81 Subject to an agreement or order that provides otherwise and except as set out in this Part and Part 6 [Pension Division], (a) spouses are both entitled to family property and responsible for family debt, regardless of their respective use or contribution, and (b) on separation, each spouse has a right to an undivided half interest in all family property as a tenant in common, and is equally responsible for family debt. . . . 87 Unless an agreement or order provides otherwise and except in relation to a division of family property under Part 6, (a) the value of family property must be based on its fair market value, and (b) the value of family property and family debt must be determined as of the date (i) an agreement dividing the family property and family debt is made, or (ii) of the hearing before the court respecting the division of property and family debt. [190] Section 95 provides the court may order an unequal division only when an equal division would be significantly unfair on specified grounds: (1) The Supreme Court may order an unequal division of family property or family debt, or both, if it would be significantly unfair to (a) equally divide family property or family debt, or both, or (b) divide family property as required under Part 6 [Pension Division]. (2) For the purposes of subsection (1), the Supreme Court may consider one or more of the following: (a) the duration of the relationship between the spouses; (b) the terms of any agreement between the spouses, other than an agreement described in section 93 (1) [setting aside agreements respecting property division]; (c) a spouse's contribution to the career or career potential of the other spouse; (d) whether family debt was incurred in the normal course of the relationship between the spouses; (e) if the amount of family debt exceeds the value of family property, the ability of each spouse to pay a share of the family debt; (f) whether a spouse, after the date of separation, caused a significant decrease or increase in the value of family property or family debt beyond market trends; (g) the fact that a spouse, other than a spouse acting in good faith, (i) substantially reduced the value of family property, or (ii) disposed of, transferred or converted property that is or would have been family property, or exchanged property that is or would have been family property into another form, causing the other spouse's interest in the property or family property to be defeated or adversely affected; (h) a tax liability that may be incurred by a spouse as a result of a transfer or sale of property or as a result of an order; (i) any other factor, other than the consideration referred to in subsection (3), that may lead to significant unfairness. (3) The Supreme Court may consider also the extent to which the financial means and earning capacity of a spouse have been affected by the responsibilities and other circumstances of the relationship between the spouses if, on making a determination respecting spousal support, the objectives of spousal support under section 161 [objectives of spousal support] have not been met. [Emphasis added.] [191] The claimant relies on ss. 95(2)(c) and (g) and 95(3), though little was said about s. 95(2)(c) during submissions. I have also taken into account ss. 95(2)(f) and (i). I turn to those provisions now as I assess her claim that there be an unequal division. 1. Dissipation of assets [192] With reference to s. 95(2)(g), the claimant contends that the respondent dissipated his interest in the 07 Company reducing the value of this family property from $443,700 to zero. She submits that where the court has determined that a family law litigant has wasted, dissipated, or otherwise devalued a family asset post-separation, the Court may remedy the devaluation in two ways: by valuing the asset as at the date of separation, instead of the date of trial (see Zilic v. Zilic, 2019 BCSC 1482 at para. 44) or by reapportioning existing assets in favour of the other party (see M.K. v. A.I.K., 2004 BCSC 1052). [193] The claimant advanced her position in this way: In the case at Bar, the parties had a successful business prior to separation. Their business ventures allowed the parties to purchase a property in North Vancouver and cover expenses of $15,000 to $20,000 per month. Post-separation, however, and without the benefit of an explanation provided by adequate financial disclosure, the companies are now failing. There is no evidence before the Court explicating the cause of this sudden failure. The respondent has also failed to establish whether he is making reasonable efforts to save the companies or gain income from other sources. [194] In summary, the claimant submits that the respondent's failure to answer the questions regarding the devaluation of the company should result in a reapportionment of the lost value in the companies in favour of the claimant. [195] The respondent steadfastly disputes this submission and the assertions underpinning it. The respondent agrees that he was sometimes slow in producing documents but maintains that he has now made full disclosure. He says Mr. Sturgess' reports corroborate his position regarding full disclosure and that the decreased value of the corporate interest is fully explained. His response on the company's decline is stated this way in his written submission: The entire content of this section is misleading, lacks evidence and relevance. Business related expenses are not income, nor is shareholder loan payback. It was the evidence of the respondent that any monies paid on behalf of the corporations that were for personal usage must be repaid in entirety. The records will accurately reflect this. . . . The respondent has provided full disclosure and ample explanation for any change in the company value. This is further substantiated in [Mr. Sturgess' Valuation and Income Reports] and with our primary project over the past few years, namely Rio 2016. The respondent has clearly demonstrated all best efforts to ensure the viability of the business. Adverse conditions and matter completely out of the control of the Respondent and/or his companies were a major factor in the downturn of the business as a whole. Not that as per our historical evidence, the Olympic Summer Games [showed] London 2012 profitable. It was through no fault whatsoever of the respondent or his companies that Rio 2016 was not successful. Noted in the Expert Report, the majority of our revenue derived from our project is captured after completion of the specific events. Rio 2016 should have commercial activity for approximately 18 - 24 months post Games (so this would include 2017 and 2018). This was the case in London 2012 as is evidenced in the financials. [196] In support of this submission, the respondent relies on Exhibit 21[4] and the Valuation and Income Reports. I note that the references to Mr. Sturgess' reports includes his assumptions that were "based on discussion and information provided by [the respondent]". In other words, Mr. Sturgess' reports do not corroborate the respondent's submission as suggested. In any event, I reject the respondent's explanation about the diminished value of the 07 Company. I have done so based on the adverse credibility findings I have made and because this submission is not corroborated in any way by the financial evidence before me. [197] I have found that the preponderance of the evidence shows that the respondent substantially reduced the value of the 07 Company after separation. In other words, I accept the claimant's submission that the respondent dissipated the corporate asset which had a total value of $522,000 at the time of separation and was worthless at the time of trial. In support of this finding, I have relied on the Valuation Report, Mr. Sturgess' statements about inconsistencies between the companies' financial transactions with the respondent and the incomplete corporate records. I also note the inconsistency between the respondent's reported living expenses post-separation and his evidence that he earned very little income during those years. 2. Non-disclosure of Assets and Income [198] I turn to the second factor raised by the claimant, non-disclosure of assets and income. Here, the claimant submits that there is sufficient evidence to establish on the balance of probabilities that the respondent has assets and income at his disposal that he has failed to disclose. [199] The respondent disputes the suggestion that he has failed to disclose assets or income. He says there is no evidence to support this "baseless and unsubstantiated claim" and that "the claimant has not provided any material evidence to support" it. [200] I wish to address for a moment the suggestion that the respondent has failed to disclose both income and assets. In this regard, I pause to note Chang v. Xia, 2015 BCSC 1994, one of the cases cited by the claimant. [201] In Chang, Fleming J. reviewed a number of authorities and noted that courts can divide the parties' assets on the basis that a spouse's undisclosed assets had an imputed value equal to the disclosed assets, provided that there is a strong evidentiary basis for the proposition that one of the spouses had hidden assets and there is evidence of the value of the undisclosed assets, even if that evidence is sparse (see paras. 48-50). [202] In Wu v. Sun, 2011 BCCA 239 (later cited in Singh v. Singh, 2020 BCCA 21), our Court of Appeal found the trial judge erred in valuing undisclosed assets at $1.6 million. Donald J.A., for the Court, wrote: [41] I am not the first to observe that non-disclosure is the Achilles heel of family assets litigation. Strong measures are justified in discouraging it. However, one cannot make something out of nothing. The right note of caution was sounded by Madam Justice Baker in Palanca v. Palanca, 2005 BCSC 1014: [127] Counsel for Mrs. Palanca submitted that the court could draw an adverse inference against Mr. Palanca's estate in relation to the existence of family assets in the Philippines because Mr. Palanca failed to comply with court orders relating to accounting and disclosure. I accept that Mr. Palanca did not meet his obligations in this regard, but an adverse inference is not an adequate substitute for evidence about specific assets, the ownership of those assets, whether the assets were used for a family purpose, or otherwise met the definition of family assets, or the value of the family assets, sufficient to allow for the making of a compensation order that is more than a guess. [42] With respect, I think the judge erred in putting any value on the overseas investments when there was not any evidence about them. In my view, the $1.6 million ascribed to this item must be taken out of the reckoning of family assets. [203] These authorities show that there must be some evidentiary basis to support an allegation that assets have not been disclosed and additionally, an evidentiary basis to impute value to those undisclosed assets. [204] Before turning to the evidentiary record presented here, I wish to address Singh, a decision very recently handed down by the B.C. Court of Appeal dealing with the interpretation of s. 95(2)(i) and, in particular, the meaning of "significant unfairness."[5] This discussion is relevant to the positions advanced by the parties. [205] In Singh, Garson J.A., before assessing whether the trial judge had erred, reviewed the jurisprudence surrounding s. 95: [128] Before turning to the manner in which the judge applied s. 95 to the facts he found, I shall review the jurisprudence on the scope of s. 95, the meaning of the language "significant unfairness," and the interpretation of ss. 95(2)(i). [129] First is the question of the meaning of the term "significant unfairness." [130] In Jaszczewska v. Kostanski, 2016 BCCA 286, Justice Harris, for the Court, engaged in an extensive analysis of s. 95. He first noted that the Legislature sought to increase certainty, fairness, and predictability in property division matters with the FLA by reducing the discretion of the courts to depart from equal division: at para. 36. The test in the previous legislation (Family Relations Act, R.S.B.C. 1996, c. 128) only required unfairness, whereas the FLA requires "significant unfairness." In addition, the legislature more precisely specified the factors to be considered in applying this threshold. [131] Justice Harris agreed with the analysis in Remmem v. Remmem, 2014 BCSC 1552, in which Justice Butler (as he then was) defines "significant" as "extensive or important enough to merit attention" and something that is "weighty, meaningful or compelling," concluding that to justify an unequal distribution "[i]t is necessary to find that the unfairness is compelling or meaningful having regard to the factors set out in s. 95(2)": at para. 41, citing para. 44 of Remmem. Justice Harris then noted that it would be unwise to attempt to define the meaning of "significant unfairness" but found that reapportionment under s. 95 would require "something objectively unjust, unreasonable or unfair in some important or substantial sense": at para. 42. He said: [44] in enacting s. 95(2)(i) the Legislature recognized that there may be factors other than those listed that could ground significant unfairness. Hence, while the Legislature intended to limit and constrain the exercise of judicial discretion to depart from equal division, it did not provide a closed list of factors and it did not eliminate the discretion. [132] Ultimately, Justice Harris held that unequal division was justified in the case under appeal given that the significant increase in value to one property in question was caused in part by the respondent after separation: at paras. 52-53. [133] In V.J.F. v. S.K.W., 2016 BCCA 186, Justice Newbury described s. 95 as requiring a high threshold of "significant unfairness" to depart from equal division: at para. 81. Other cases have reached similar conclusions about the high threshold necessary to reapportion assets under s. 95. In Khan v. Gilbert, 2019 BCCA 80, for example, Justice Fenlon noted that cases in which unequal contribution was found to reach the significantly unfair threshold have involved marked, prolonged, and intentional or unexplained disparities in contribution to family burdens: at para. 32. [134] In summary, it is clear that the Legislature intended the general rule of equal division to prevail unless persuasive reasons can be shown for a different result: Jaszczewska at para. 41. Reapportionment will require something objectively unjust, unreasonable, or unfair in some important or substantial sense. This is in contrast to the previous legislation where courts had discretion under s. 65 to reapportion property or debt where it would be simply "unfair" not to do so. The threshold for "significant unfairness" is high. There must be a real sense of injustice that would permeate the result if the court did not deviate from the presumptive equal division. [206] Garson J.A. then moved to consider the statutory interpretation of s. 95(2)(i). She determined that the statutory construction rule of 'limited class' applied stating: [140] Accordingly, I find that the limited class rule is applicable and I must consider whether the factors the judge relied upon are properly the subject of s. 95(2)(i). In my view, they are. The economic characteristics of a spousal relationship would clearly encompass the existence of undisclosed assets. This class would also permit consideration of the costs of bankruptcy, and a party's motivations for entering bankruptcy, as the trial judge did in the case at bar, and the consequent impact on the value of the asset. Alternatively, I note that the cost of the bankruptcy proceeding could also in this case fall under s. 95(2)(f): "whether a spouse, after the date of separation, caused a significant decrease in the value of family property " [141] I see no error in law in the judge's application of s. 95. [142] Keeping in mind the highly deferential standard of review regarding the judge's exercise of discretion in his consideration of the above factors, I also see no reason to interfere with his conclusion that an equal division of assets would be significantly unfair. [207] I wish to specifically address the claimant's allegation that the respondent has undisclosed assets and income. I do so bearing in mind Garson J.A.'s analysis in Singh where she states, at para. 44: In my view, the judge did not "make something out of nothing" as was the case in Wu. Here, there was a reasonably based finding that there were additional undisclosed and unknown assets. This is an exceptional case. Usually such an award would need to be based on evidence tied to a specific asset but where, as here, the party has been found to be completely unreliable and his own evidence leads to a reasonable inference that he is hiding assets, a judge may be justified in making a restrained and conservative order such as was done here. I note that the s. 95 award is based only in part on the unspecified assets. I also note that, unlike in Wu, the judge did not ascribe any specific value to the undisclosed assets. Rather, he simply considered the strong likelihood of their existence in fashioning a fair division of assets. I would not disturb the award on this basis. [208] In Singh, the trial judge made an order for reapportionment in part on the basis of a finding that Mr. Singh had additional unspecified properties and funds in India. Garson J.A. stressed that there was evidence to support the trial judge's finding in this regard. [209] Garson J.A. also notes that this was an exceptional circumstance because such an award would need to be based on the evidence of a specific asset (See Wu at para. 41 citing Justice Baker in Palanca v. Palanca, 2005 BCSC 1014 at para. 127). [210] When I consider the economic characteristics of this marriage and following the analysis in Singh, I find that the claimant has established that the respondent has undisclosed assets and I have imputed an income to the respondent based in part on undisclosed income. In making this determination regarding assets, I have taken into account Mr. Sturgess' conclusions regarding the depletion of value from the companies, the various disclosure applications and subsequent noncompliance and the expenses recorded by the respondent post-separation. I find that during the years following separation, the financial evidence demonstrates the respondent has had access to funds that far exceed what he has reported. Significantly, even taking into account the depletion of the 07 Company, the respondent has had access to funds exceeding $443,700. In other words, the disparity between the respondent's reported living expenses and reported income is not fully answered solely by reference to the loss in value of the 07 Company. In this case, I find on a balance of probabilities that the respondent has assets and income at his disposal that he has failed to disclose. [211] I will deal with the impact of these findings after I address the claimant's third basis for reapportionment, section 95(3). 3. Section 95(3) [212] Third, the claimant relies on s. 95(3) and I turn to that provision now. Here, the claimant submits that she has suffered economic disadvantage as a result of the role she assumed during the marriage including her absence from the workforce for many years as she raised the Children, the labour-based nature of her employment when she returned to the workforce in 2011 and that her earnings simply supplemented those of the respondent who was at all times the primary earner. I agree with the claimant's characterization of the role she assumed in the marriage and its impact on her and I have found her entitlement to compensatory spousal support is very strong. [213] In addition, the respondent's declining income over the years since separation concern the claimant about whether he will pay any order relating to spousal support. The claimant contends that his historical lack of compliance with court orders suggests that he may very well fail to comply with any order the court makes regarding spousal support. [214] The claimant submits that s. 95(3) has been applied in cases where economic hardship occasioned to one party that could not be remedied through a spousal support award results in a reapportionment of family property: see Greenwood v. Greenwood, 2019 BCSC 382 at paras. 127-131. I note that in Greenwood, Justice Sewell had found that an order for spousal support based on the SSAG would not adequately meet the objectives of s. 161 of the FLA and s. 15.2(6) of the Divorce Act. As such, Sewell J. indicates that there were two available remedies to address Ms. Greenwood's needs. The first is to order spousal support in excess of the amount recommended under the SSAG. The second is to order an unequal division of the proceeds of sale of the matrimonial home. [215] In this case, I have imputed an income to the respondent and in so doing, took into account his high reported living expenses, his earning capacity, his low reported income and the dissipation of the corporate asset. I have awarded both retroactive and prospective spousal support based on this income. I have also made an order securing the payment of prospective support. Accordingly, there is no risk the respondent will not comply with those orders. Consequently, I am not satisfied that an equal division of family property will result in significant unfairness based on the application of s. 95(3). 4. Conclusion on Unequal Division [216] In short, the test for unequal division of family property is whether equal division (as of the date of trial) would be significantly unfair. I have concluded that the equal division of property would result in significant unfairness to the claimant. I have come to that conclusion having regard to the factors set out in ss. 95(2)(c), (f) and (g). I have taken into account the following factors in reaching this conclusion: a) The Valuation Report and its limitations as reported by Mr. Sturgess because of the unexplained inconsistencies between the financial information contained in the respondent's T1 personal income tax returns and the financial statements of the companies, including the payment of management fees and the discrepancies noted. It was these unexplained inconsistencies where Mr. Sturgess noted: I have been unsuccessful in obtaining revised financial information in which [these] inconsistencies are resolved. Similarly, I have not in all cases received what I consider to be reasonable explanations as to the reasons for the inconsistencies between the information pertaining to the companies. b) The gaps in the evidence relating to the corporate records for the 07, 08 and UK Companies and the related banking information, all of which would be in the possession and control of the respondent; c) Although the respondent now states that the business became unprofitable as of 2016 following the separation, he continued to take draws from the company and to have the company pay his personal and travel expenses. In this regard, I have taken into account the claimant's submission about the respondent's access of funds since separation and his receipt of draws or benefits from the company in 2016 totalling over $159,200 before tax and without including the personal expenses that the respondent paid directly from the corporate bank accounts which the claimant broke down as follows: a) $103,000 was transferred from the 08 Company into the Respondent's 07 Company bank account. The Respondent confirmed that the 07 Company bank account was used exclusively by him to pay his personal expenses and to make transfers into his personal account. b) $20,500 was paid directly from bank accounts in the name of the 08 Company into the joint RBC account held by the parties. c) $7,700 was paid from the 08 Company directly to the claimant in December 2016. This was an amount that the Respondent was to pay to the claimant directly. d) $21,000 paid on the respondent's MasterCard from the 08 company's HSBC Accounts. e) $7,000 paid on the respondent's HSBC MasterCard from the 08 Company's Scotiabank accounts. f) The respondent admitted during cross-examination that the 08 Company and Pursuit 3 Group made a number of payments for his expenses including travel, accommodations, vehicle rentals and meals which amounts were paid directly from the HSBC bank accounts or Scotiabank accounts of the companies. g) The Respondent admitted under cross-examination that the company regularly paid off the corporate credit cards and that he used those credit cards to pay personal expenses. He also admitted that an accounting exercise would be performed whereby the expenses that he paid personally on the corporate credit cards and the other personal expenses that he ran through the company were recorded as money owing by the Respondent to the companies. He confirmed that he was not repaid any of these monies to the company and there is still an amount owing. d) The unexplained money received by the respondent after separation which is inconsistent with his CRA filings and with the corporate records that were produced; e) The respondent's low declaration of earnings to CRA; f) The respondent's historical lack of compliance with or delayed compliance with court orders; and g) The claimant's role in this spousal relationship including her ongoing support of two daughters with mental health needs. [217] Based on these factors and my rejection of the respondent's explanation about his financial circumstances since separation, I have found that the evidence demonstrates that the respondent has failed to disclose assets and income. To repeat somewhat, this is based in part on my finding that the dissipation of the 07 Company to zero which does not fully answer the disparity between the respondent's reported income and expenses. I have also relied on Mr. Sturgess' Valuation and Income Reports demonstrating that the respondent continued to pay himself a salary from the companies that was not funded by operating profits. Mr. Sturgess sought to reconcile inconsistencies and the respondent failed to produce the information requested. [218] Having found an equal division of family property would be significantly unfair to the claimant due to the respondent's dissipation of the corporate asset and my finding he has undisclosed assets, I have determined that the significant unfairness is best addressed by taking into account the value of the 07 Company and the parties' Retirement Funds at separation and reapportioning the division of existing family property accordingly. In my view, the reapportionment fairly addresses the fact that the respondent deprived the claimant of her entitlement to an equal share of that family property. [219] I start with the total value of family property, including the 07 Company, being $2,118,964. I then deal with adjustments for: (1) the corporate asset; (2) Retirement Funds; and (3) vehicles. [220] The claimant's share of the corporate asset is not available for distribution. In addition, I have found that the claimant has established further undisclosed assets. For the reasons set out above and my finding of significant unfairness, I have reapportioned the claimant's entitlement by $443,700. This amount is based on the dissipation of the corporate asset and its value at the time of separation, my finding regarding further undisclosed assets, and the disparity between the respondent's reported living expenses and income. [221] Regarding the Retirement Funds, each party will keep their respective Retirement Funds as valued (at the time of separation) at para. 184 of these reasons. To account for the respondent's larger amount, I have further adjusted the distribution of the family property in favour of the claimant in the amount of $20,623.50. [222] Third, I address the vehicles. The parties agree the total value of the vehicles is $34,700. The parties will keep the vehicles as allocated at para. 184 of these reasons. To account for the slightly higher value of the respondent's vehicles, I have further adjusted the distribution of the family property to the claimant in the amount of $5,350. [223] I have summarized the reapportionment in the table below. At the end of the table, I have taken into account the advance payments, retroactive support and section 7 expenses. Item Claimant Respondent Total to each following reapportionment $1,059,482 $589,808.50 Adjusted for payments received $340,000 $150,000 Total $719,482 $439,808.50 Retroactive support and section 7 expenses now owing +$39,461 +$24,664.80 -$39,461 -$24,664.80 Grand Total $783,607.80 $375,682.70 [224] The balance of the net sale proceeds of the family home is held in trust and was $1,020,499.23 on October 23, 2019. I direct that some of the money held in trust be paid out as follows: a) To the claimant, $783,607.80; and b) To the respondent, $100,000. [225] As set out at para. 156 of these reasons, I am ordering that a balance of the respondent's portion of the proceeds be held in trust, in part to secure future support payments (child support of $1,845 and spousal support of $2,463) which is to be released to the claimant each month. As well, in light of the findings I have made regarding noncompliance with court orders, some of the respondent's portion will remain in trust pending the court's determination on the issue of costs. XI. ORDER PURSUANT TO THE NAME ACT [226] I grant the order that the claimant's name be changed from S.L.C. to S.L.M.H. pursuant to s. 5 of the Name Act. XII. DIVORCE [227] The uncontradicted evidence is that there are sufficient grounds to grant an order for divorce. The marriage has broken down and there is no likelihood of reconciliation, the needs of the Children of the marriage have been addressed, and the parties have been living separate and apart for over four years. There is no evidence of collusion. I grant the order for divorce to take effect 31 days after the date of these reasons. XIII. CONCLUSION AND ORDERS [228] For the reasons set out above, I grant the following orders: a) Subject to s. 12 of the Divorce Act, the claimant and the respondent who were married at Halifax, Nova Scotia, on July 30, 1993, are divorced from each other, the divorce to take effect on the 31st day after the date of this order; b) Pursuant to s. 5 of the Name Act that the name of the claimant be changed from S.L.C. to S.L.M.H.; c) That the parties respective Guideline incomes for the purpose of calculating child and spousal support retroactive to January 2016 and ongoing be as follows: i. The claimant: (1) 2016: $55,252; (2) 2017: $60,224; (3) 2018: $67,209; (4) October 2019: $65,777; (5) October 2019 onward: 0. ii. The respondent: (1) 2016: $125,000; (2) 2017: $100,000; (3) 2018: $125,000; (4) October 2019 onward: $125,000. d) The respondent pay to the claimant retroactive basic child support and mid-range spousal support of $39,461; e) The respondent pay to the claimant $24,664.80 as his proportionate share of the special expenses for the Children from January 2016 to date; f) That the child support commencing October 1, 2019 be as follows: i. Child support payable by the respondent to the claimant for K.A.C. and S.J.C. is $1,845 per month; ii. Child support payable by the claimant to the respondent for H.E.C. is $0; iii. The offset amount payable from the respondent to the claimant $1,845 per month. g) That the parties share the following special or extraordinary expenses for K.A.C., S.J.C. and H.E.C. responsible for 74% of the special expenses and the claimant responsible for 26%: i. Health related expenses for K.A.C., S.J.C. and H.E.C. that exceed insurance reimbursement by at least $100 annually, including orthodontic treatment, professional counselling provided by a psychologist, social worker, psychiatrist or any other person, physiotherapy, occupational therapy, speech therapy and prescription drugs, hearing aids, glasses and contact lenses; ii. Cost of wisdom teeth extraction for K.A.C. and S.J.C.; iii. Tuition fees and books for post-secondary education; and iv. Any other expenses that the parties agree to in writing in advance. h) The respondent will pay to the claimant spousal support in the amount of $2,463 per month; i) The parties will divide the family property and debts as follows: i. That the family property be valued in accordance with these reasons; ii. Taking into account the advances that each party has received from separation to date, that the funds held in trust from the sale of the family home be distributed as follows: (1) The claimant to receive (her share of the division of family property, retroactive child and spousal support and contribution to section 7 expenses): $783,607.80; and (2) The respondent to receive (his share of the division of family property as reapportioned and less amounts found to be owing for support and section 7 expenses): 375,682.70 with $100,000 payable now and the remaining available balance held in trust (in accordance with para. 156 of these reasons) in part to secure future spousal support payments in the amount of $2,463 and future child support in the amount of $1,845 which will be released to the claimant each month. [229] As stated earlier in these reasons, either party is at liberty to apply if there are errors in the calculation. [230] The claimant sought liberty to reappear for the purpose of making submissions on costs. Having now received the court's determination on the various issues, the parties are at liberty to provide further submissions (in addition to those already received) in writing by May 1, 2020. If oral submissions are required, the parties can organize a hearing once the court resumes regular operations. If the parties are content to leave their costs submissions in writing, please advise scheduling accordingly. "Winteringham J." [1] In this assessment, I have considered the respondent's capacity to start his own company and later acquire an 80% interest in the 08 Company; the parties' purchase of residential properties and the interest at Cedarcrest Street, North Vancouver, an interest in Beaumont Street, North Vancouver; and Machete Lake; and the respondent's portion of deposits into the joint bank account in the years prior to separation. [2] The special expenses claimed include post-secondary expenses, dental, and tutoring. [3] The respondent provided two versions of DivorceMate calculations for 2016 - 2019 based on an annual guideline income for him to be $94,000 and $60,000 for the claimant (in the first version) and $94,000 for him and $72,268 for the claimant (in the second version). [4] This was a document entitled Mediation and said to demonstrate a proposed settlement for the companies arising out of the Rio Olympics mediation. [5] I invited the parties to provide written submissions on Singh if they wished. Both provided written submissions on March 4, 2020.