Z.A.S. v. T.S. aka T.L.

2024 BCSC 2205 Z.A.S. v. T.S.

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Z.A.S. v. T.S., 2024 BCSC 2205 Date: 20241206 Docket: E210135 Registry: Vancouver Between: Z.A.S. Claimant And T.S. also known as T.L. Respondent Before: The Honourable Madam Justice W.A. Baker Reasons for Judgment Counsel for Claimant: F. Lamer Y. Li, Articled Student Counsel for Respondent: P. Sheppard R. Safartabar Place and Date of Trial: Vancouver, B.C. November 14-17, 20-24 and 27-30, 2023 December 4-6, 2023 Place and Date of Judgment: Vancouver, B.C. December 6, 2024 Background [1] Z.A.S. is a businessman, born November 7, 1966. T.S. is a businesswoman, born February 26, 1970. The parties met in 1991, began living together in December 1996, and were married on August 29, 1998. They have two children: M.S. born September 2009, and A.S., born May 2014. [2] Z.A.S. was trained as a butcher and meat cutter, following in the footsteps of his father. In 1998, Z.A.S. took some funds from an ICBC settlement, and opened a small meat shop in Port Coquitlam, operating as Market Meats through 531890 BC Ltd. T.S. worked with Z.A.S. in the family business. In 2001, they opened a second Market Meats location in Burnaby. [3] In 2002, the parties opened a Market Meats location in Kitsilano through a numbered company, 627948 BC Ltd. ("Kits Corp."). They leased the premises, and have continued operations in that location since 2002. Like

any small business, there were times the business did very well, and times they suffered - such as during the 2009 - 2010 recession. However, the business survived, and after the recession did very well. [4] In 2004, the parties sold the Brentwood location, and by 2006 they had sold the Port Coquitlam location. [5] In 2005, T.S. opened a small business in Kitsilano, called the Beauty Bar Corp. (0705779 BC Ltd.), selling make-up, gifts, and bath and body products. Initially the business did well, but in recent years the business has struggled. [6] In 2014, the landlord for Kits Corp. told Z.A.S. that they would be redeveloping the block. There was a demolition clause in the lease, which the landlord would exercise once a building permit was obtained. As a result of this news, Z.A.S. began looking for an alternate location for the business. [7] Z.A.S. found a location in Kerrisdale, which had been a butcher shop for 25 years although had shut down six years earlier. Z.A.S. negotiated a lease for the building, but in 2016 the lease arrangement fell through. Z.A.S. decided he wanted to purchase the building, rather than lease it. T.S. was not initially interested in them purchasing the land, but Z.A.S. convinced her that, given the uncertainty with the Kitsilano location, the Kerrisdale location would give them certainty. T.S. ultimately agreed. [8] The owners of the Kerrisdale

property were not initially interested, but over the course of a number of months, an agreement was reached and the parties purchased the land in January 2017 for $4,000,000. The parties incorporated a new company to hold the land: 672711 BC Ltd. ("Landlord Corp."). The Kerrisdale location was operated by 531890 BC Ltd. ("Kerrisdale Corp."). [9] The three companies: Kits Corp., Kerrisdale Corp. and Landlord Corp. are referred to collectively in this litigation as the Market Meats Group, or MMG. [10] All the family business are owned equally by the parties, and both parties are directors of the companies. [11] T.S. was the bookkeeper for MMG until July 1, 2019, when she was replaced by Entreflow Consulting Group - a professional bookkeeping and accounting firm. When they bought the Kerrisdale property, T.S. was not able to perform the level of accounting required by their lenders. [12] Horizon Chartered Professional Accountants Ltd. has been the external accounting firm for MMG since 2015. [13] The day to day operating decisions for MMG were made by Z.A.S., and for Beauty Bar were made by T.S.. Material, or important, decisions in the businesses were discussed between them. [14] Renovations of the Kerrisdale location began in 2018 and carried on through 2019. The Kerrisdale location is much bigger than the Kitsilano location, and includes a commercial kitchen, smokehouse,

enclosed meat cutting room, elevator, and other conveniences. The Kerrisdale location opened for business in October 2019. [15] The original budget for renovations was $1,000,000, but because such extensive work was needed, they ended up spending $2,600,000 on the renovations. [16] The purchase and renovations were financed through BDC, and through the sale of three apartments the parties owned. In addition, the renovations were funded in part through a personal line of credit in the amount of $2,500,000 registered on the family home, and borrowings against corporate life insurance policies. [17] Following the purchase of the Kerrisdale location, the finances of MMG were extremely tight. All the money that was coming into Kits Corp. was being spent on the business. Both Z.A.S. and T.S. were engaged in discussions around the progress of the renovations. They experienced many delays, and the costs were higher than expected. [18] Z.A.S. testified that in 2019 money was very tight. Z.A.S. testified that he would transfer $10,000 each month to T.S. to cover day to day expenses, but she was spending closer to $16,000 each month. Z.A.S. said he had stopped taking a salary out of the companies, and was using their personal line of credit to pay their bills. Z.A.S. testified that T.S. was travelling and spending money on things Z.A.S. did not think were necessary. Z.A.S. felt she did

not appreciate the financial strain the businesses were under. T.S. was of the view that Z.A.S.'s spending on costly items, such as expensive watches, did not suggest to her that the business was suffering financially. [19] In 2019, Z.A.S. began raising with T.S. his concerns about the profitability of Beauty Bar. He was concerned that it had been losing money since 2015 or 2016. In 2019 they had to let the landlord for Beauty Bar know if they would be renewing the lease. Z.A.S. encouraged T.S. to shut the business down, and told her that if she wanted to retrain to build a new career, he would support that. [20] In the fall of 2019, Z.A.S. started looking to move the company loans to the Bank of Montreal, as he could obtain a lower interest rate. In April 2020, the businesses took out a $5,400,000 loan from Bank of Montreal. This would allow them to retire the $4,400,000 loan with BDC, and give them a $1,000,000 cushion. In addition, they took out two $500,000 lines of credit - one for Kits Corp. and one for Kerrisdale Corp. The total obligation was $5,900,000. The first year of the loan, only interest payments were required. In April 2021, the principal amount would have to start being repaid. [21] On May 11, 2019, T.S.'s mother passed away. T.S. was the sole executor and beneficiary of her mother's estate. [22] In April 2020, the COVID 19 pandemic was underway, and nobody

knew how this would impact the businesses. The impact of COVID 19 was mixed. On the one hand, the sales in the business increased dramatically. Z.A.S. testified that the sales were the highest he had experienced in 30 years due to the fact people were eating at home. On the other hand, the businesses experienced supply chain issues. The suppliers had problems with COVID outbreaks, and some of the meat packers were closed for months at a time. Costs of goods rose in all areas: including meat, bags, paper, and cleaning supplies. The businesses had continual turn over of staff due to COVID. When staff got COVID they would be off for weeks at a time. It was hard to hire new staff as people were reluctant to be front line workers. The cost of labour went up. It was an intense time for MMG. [23] During the height of COVID, Z.A.S. was working intense hours. He started work at 5am and worked in the shops until 7 or 8pm, after which he did deliveries. He would not typically get home until 11pm. [24] During 2021, COVID was still in full swing, and MMG continued to have good sales. By the last quarter of 2021, however, business started to slow down. Z.A.S. noticed that regular customers started to disappear for a month at a time. While there was no direct evidence of why such customers were gone for a month at a time, particularly around Christmas, Z.A.S. testified, and I accept, that

this happened at a time when travel restrictions began to lift, and people were able to travel again. [25] Z.A.S. noticed that in October, November and December of 2021, sales started to slow down, and the cost of goods and supplies continued to increase. Prices were changing rapidly, often several times in one week. [26] In October 2017, Kits Corp.'s lease was renewed, and that lease included a 180 day notice demolition clause. While it is not known when the demolition clause will be exercised, the landlord owns most of the block in which Kits Corp. is located, all of which is in the process of being developed. While T.S. suggests that Z.A.S. has some ability to influence the landlord's decision to develop the block, this was not proven on any evidence. I accept that the landlord is in the process of developing the land in which Kits Corp. is located, and Kits Corp. is vulnerable to the cessation of the business at any time. [27] Because of the vulnerable status of the Kits Corp. lease, Z.A.S. decided that the business would not renovate or replace equipment or mechanical systems. The equipment was over 20 years old, and they could not get replacement parts for much of it. Z.A.S. asked Entreflow to do an analysis on the cost of renovating and replacing the equipment. They determined that such work would exhaust the company's cash, and leave the company at the mercy of the

landlord if it exercised the demolition clause or if the company had committed to a five-year lease and the equipment failed. Z.A.S. obtained cost estimates from contractors regarding the costs of renovations and equipment replacement, and this information was provided to T.S. at the time the decision was being considered. T.S. did not insist that Kits Corp. enter into a five-year lease, or that Kits Corp. perform the renovations. In March 2022, Z.A.S. decided that the company would run the business on the lifespan of the equipment, and continue on a month to month tenancy to ensure the business was not committed to a lease which it could not continue should the equipment fail. [28] By May 2022, the business had slowed down to pre-COVID levels. Profitability was decreasing due to increased costs of goods and labour. Suppliers were experiencing staffing shortages, and reduced their delivery days. Suppliers also added fuel surcharges on deliveries, which further increased costs. [29] Craig Sheridan, the owner of Legends Haul, a food supplier, testified and corroborated Z.A.S.'s evidence about the rising costs of goods and labour. He testified that in 2022 he experienced 30% inflation in the cost of goods. [30] In the background of the parties' marital difficulties is the fact that both of them engaged in infidelities. T.S. discovered that Z.A.S. had been having affairs in 2014

and 2015. This caused strife in the marriage, but they appear to have reconciled. Then, in 2019 T.S. began having an affair with a man named Dallas. Z.A.S. did not find out about this affair until after the parties separated. His reaction to this betrayal clearly influenced his animus towards T.S. at various points prior to the trial. Credibility [31] As in many family disputes, the credibility of the parties looms large. Z.A.S. [32] I found Z.A.S. to be a forthright and credible witness. T.S. challenged Z.A.S.'s recollection of details in relation to the family businesses, suggesting that he was evasive or non-responsive under cross examination. Examples included his difficulty remembering which clients he bought gifts for, which customers and suppliers he treated to meals or entertainment, and the source of cash shrinkage. I completely reject these assertions by T.S. as being evidence of Z.A.S.'s failure to be forthcoming with the Court. The quantum of these expenses was negligible against the revenues and expenditures of the business. I found Z.A.S. to be a witness testifying to the best of his ability about details of small, unremarkable business expenses in relation to the operations of the business. [33] T.S. challenged Z.A.S.'s evidence that, during the course of construction of the Kerrisdale location, the businesses were in a cash crunch. She pointed out that at the

same time he was saying the businesses were in a cash crunch, he was buying expensive watches for himself. There is no question that Z.A.S. made a few improvident extravagant purchases while the Kerrisdale store was being built out. However, both parties had extravagant tastes and spent money at a rate that outpaced the revenue available from the business. Z.A.S. appears to have recognized earlier than T.S. that such spending was not sustainable. While his spending may reflect poorly on his business judgment, I do not find that this reflects poorly on Z.A.S.'s credibility at trial. [34] Many of T.S.'s challenges to Z.A.S.'s credibility were focussed on the operations of the business, and her suspicions that MMG was generating a much higher income than Z.A.S. reported. I do not accept these challenges, which I will deal with in more detail later in these reasons. [35] T.S. comments on Z.A.S.'s failure to comply with court orders. With respect to the financial orders, Z.A.S. was candid in his inability to make the ordered payments and attempted to resolve this issue by consent, which I will address later in these reasons. [36] T.S. suggests that Z.A.S. breached the conduct orders and involved the children in the parenting schedule. I disagree that Z.A.S. involved the children in the parenting schedule. Examples provided by T.S. include one time when M.S. was crying and did not

want to return to his mother because the children were spending the last bit of time in the family home before it was sold. Z.A.S. told him to ask T.S. if she would agree he could stay over, and said he would ask her also. The tenor of this evidence is that Z.A.S. had an upset child who wanted an accommodation from T.S. in unique circumstances. It should not have caused an incident between the parents, who should be able to discuss such incidents without blowing it out of proportion. I do not find this was deliberate breach of a court order, and I do not accept it reflects poorly on Z.A.S.'s credibility. [37] T.S. made a number of allegations that Z.A.S. said negative things about her in front of the children in breach of the conduct order. Z.A.S. denied he said the things she alleges. I find these statements allegedly made by Z.A.S. to the children were not proven. [38] T.S. points to numerous comments and positions taken by Z.A.S. I agree that Z.A.S. wrote a text which was wholly inappropriate, and changed her name in his phone to a rude name. However, while inappropriate, these are not things which reflect on his credibility in these proceedings. T.S. pointed out that Z.A.S. took issue with how she spent child support - again, this is not a credibility issue. Z.A.S. removed T.S. from their extended health plan - while unkind, this is not a credibility issue. T.S. [39] In

this case I find that T.S. was not a credible witness in relation to a number of key issues, these being the allegations of financial misfeasance with the MMG, the date of the parties' separation, and the allegations of family violence during the marriage. [40] I will deal with the allegations of corporate misfeasance later in these reasons. [41] With respect to the other two issues, T.S. portrayed herself as somehow under the thumb of Z.A.S. throughout the marriage. She suggested that he forced her to make business decisions she did not agree with, and that he forced her to have sex when she did not want to. These allegations are advanced to excuse her own behaviour, and to justify a date of separation far earlier that the true separation date. [42] The evidence at trial does not support the positions taken by T.S. in this litigation. [43] I am satisfied that T.S.'s credibility, when assessed against the factors outlined in Bradshaw v. Stenner, 2010 BCSC 1398 at para. 186, comes up lacking. I am satisfied that T.S. has tailored her evidence in her own self interest; her evidence in many key respects does not accord with documents created contemporaneously with the events, and was often unreasonable or unlikely. [44] I will address various examples in relation to the issues as discussed in these reasons. However, I will briefly outline some of the concerns I have. [45] I do not

accept the allegations that Z.A.S. forced T.S. to engage in a sexual relationship against her will. The contemporaneous communications between them certainly show Z.A.S. had a strong interest in engaging in a sexual relationship with her, and was frustrated that it was not happening in the way he hoped. However, he is not demanding things of her - he is asking her to participate and there is no suggestion that he would or did not accept her decisions as to when to engage in sex. T.S. herself speaks favourably about sex with him, and they discuss their plans together. There is no evidence of abusive or coercive language in the contemporaneous documents. [46] When it came time to obtain financing for the Kerrisdale purchase, Z.A.S. engaged T.S. in dialogue and requested her consent to his plans. He did not force the issue. If anything, it was T.S. who threatened Z.A.S. during this time. She threatened to call the lender and tell the lender the purchase would not happen. She reminded Z.A.S. that she owned the business too and he could not proceed without her consent, to which Z.A.S. replied "I understand that". Counsel for Z.A.S. described T.S. as an active and self-assertive participant in the major decisions affecting the parties' businesses. I agree with his characterization. [47] In the late fall of 2019, the Beauty Bar business had been failing for several years and Z.A.S.

talked to T.S. about whether the lease should be renewed. She agreed with him to wind up the business. However, at the same time she was telling Z.A.S. the business would be closed, she negotiated a new five-year lease with the landlord. She clearly had no intention of ending the business, and lied to Z.A.S. about her intention. This was at a time where the business was consistently losing money. I find this is further evidence of T.S.'s tendency to lie to get what she wants, and I do not accept that her actions demonstrate that she was somehow under the power of Z.A.S.. [48] T.S. made allegations of family violence early in this litigation, and obtained an ex parte protection order on the basis of her affidavit evidence. I will address these allegations later in these reasons. However, suffice it to say I do not accept the affidavits of T.S. sworn in support of her application for a protection order. I find that she overstated and misstated the evidence of violence, and I do not accept Z.A.S. posed a risk to T.S. or the children at any time. Allegations of family violence are very serious. Applications for protection orders are typically made on an ex parte basis, and applicants must be scrupulously fair in their statement of the evidence. I find that T.S.'s affidavit evidence was not fair or accurate, and her decision to proceed with such an application when there was no

basis for it in fact reflects very poorly on her credibility. Date of separation [49] T.S. says the parties separated in April, 2019. On February 26, 2020, T.S. delivered a letter to Z.A.S. which clearly stated her intention to separate. The issue before me is whether the separation began at the time of the February 26, 2020 letter, or at any point between April 2019 and February 26, 2020. [50] It is not necessary for both spouses to agree on a date of separation. A separation can be proven where one spouse has established an intention to repudiate or end the marital relationship and has taken action consistent with that intention: H.S.S. v. S.H.D., 2016 BCSC 1300 para 40-46. [51] An unequivocal communication of intention by one spouse to the other is not necessary, but on all of the evidence the court must be satisfied that the spouse had a settled intention to separate and acted in a manner consistent with that settled intention: Sanderson v. Russell (1979), 24 OR (2d) 429 at para 432, as cited in J.J.G. v. K.M.A., 2009 BCSC 1056 at para 38-39 ["JJG"]. [52] The court in JJG set out some indicia of the cessation of marriage-like relationship. These include the absence of sexual relations, a clear statement of intention to terminate by one of the parties, the physical separation of the parties into different rooms or residences, and the cessation of presentation to the world

that they are a couple. [53] T.S. argues that both parties knew they had separated in April, 2019. She agrees that she did not say so explicitly to Z.A.S., but maintains it was common ground between them. Z.A.S. argues that until he received the letter from T.S. in February 2020, he had no idea she had formed an intention to separate, and he himself had no intention to separate. [54] On discovery, T.S. made the following statements regarding the end of their relationship in April 2019: Q. What I'm asking you about is what, if anything, did you tell him about your intention to terminate your marriage at that time 2000 - in April 2019. A. I think it was just very clear what was going on. It wasn't necessarily spoken. Q. No, I'm not asking you what steps you think he took. I'm asking your what did you say or what did you - and you said nothing. What did you do in particular to convey to him the message that you wanted to put an end to your relationship with him? A. I think the best way for me to explain it is it was unspoken. He was proceeding in his way to handle matters, and I began to proceed in mine. Q. Yeah. Did you feel totally at liberty to have relationships with others? A. At that point, yes. Q. All right. And did you tell him that, that you felt that you - you were totally at liberty to seek companionship of any kind with any other man? A. I didn't make an announcement

if that's what you are asking. Q. All right. I'm going to suggest to you that, in fact, you did that, it's a matter of record that you did that, and that you, in fact, tried to conceal it from him? A. I didn't broadcast it if that's what you are asking. Q. I'm going to suggest to you that you tried to conceal the fact that you were having - extramarital is - this probably the best - an extramarital affair with a gentleman by the stage name of Dallas, right, we'll call him Dallas, and that you tried to conceal that from him and, in fact, did conceal it. A. Well, I didn't discuss it with him if that's what you're asking me, yes. [55] Z.A.S. testified that he had no idea that his wife was seeing another man, and no idea that she considered the marriage was over. He testified that up until February 2020, the parties continued the marital relationship, including having sex, engaging in sexual and flirtatious text conversations, and travelling together as a couple. [56] The text messages produced at trial are consistent with the evidence of Z.A.S. [57] In March 2019 the text messages show normal interactions between a married couple discussing items related to the business, dinner plans, plans with the children, and intimate texts such as, from Z.A.S., "Ur kinda cute, wanna go out sometime?", to which T.S. replied "sorry. Taken". The text messages include periodic complaints from

T.S., but these are followed by texts where the parties are back to discussing ordinary family dynamics, heart emojis by both parties, and texts which suggest they are continuing a sexual relationship. Texts from T.S. which ask how Z.A.S. liked certain sexual experiences between them continue through to the end of April - the date T.S. says they both knew the relationship was over. [58] The text messages between the parties continue in May 2019 and throughout the rest of the year, all demonstrating what appears to be a normal marital relationship, continuing the normal exchanges about the business, their parents, their children, and exchanges of heart emojis and sexual comments between them. The text messages do not demonstrate a couple who are having serious difficulties, who are not operating as a team, or who are not maintaining a normal family life including a sexual relationship. [59] In the summer of 2019, there is some tension in the messages, mostly reflecting the cash crunch the parties were in over the renovations in the new store, but again nothing in the messages suggests that the parties are not communicating about all things related the family and the business, and there are many loving texts exchanged between both of them [60] In August and September 2019, there are communications which suggest the couple is looking forward to, and is engaging in, sexual

intimacy. There is no indication in the texts that T.S. is not a willing and eager participant. [61] In October 2019, there is a long text message from Z.A.S. to T.S., where he sets out concerns he has with their communications, expressing his frustration with some of the behaviours of T.S. towards him. He ends the text with a plea to sit down and discuss what they can do to improve things, saying he is willing to do anything. T.S. responds that if he is up to it, they can talk that evening. Following that exchange, the texts return to normal family and business communication. They each text how much they miss each other when T.S. and the children were away on a short trip. [62] In December 2019, the parties had the following text exchange: [Z.A.S.]: Just want to communicate. I am writing to let you know of certain things that have been on my mind lately. Like the fact that you sleep on the couch every night. I miss you in bed. I assume it's because I snore or is your shoulder still sore? No matter. However I have approached you numerous times and maybe it's bad timing on my part but we are not having sex anymore. I feel you are more interested in watch the television than being intimate. I particularly do not want to fall asleep to the tv as it's a disruptive sleep situation for me so I get up and go upstairs early.. I do have physical needs.. Thought you should know. Love ♥

you Z [T.S.]: I'm glad u are communicating. I think, at least I hope I told u that this last trip wiped me out. I haven't been sleeping well, I was a sick and of course I got my period so I have not been myself. Not to mention the trauma of it all. But I have been falling asleep on the couch then waking up later and yes I try to come to bed but when I realize I won't be able to fall asleep from the snoring I go to [M.S.]'s room. I agree it sucks but we'll work on it. Cool? [Z.A.S.]: Thanks for listening [T.S.]: I'm glad ure saying what is on your mind rather than have a misunderstanding [Z.A.S.]: I'm evolving! [63] Later, on December 29, 2019, Z.A.S. again sends a message expressing his frustration with the couple's lack of intimacy. T.S. replied, "you are right. I will work on it ♥". Z.A.S. asks her what that means, and T.S. replied, "that you are right and we need to change that". [64] In January 2020, the messages reveal some conflict between the couple, as T.S. scheduled a trip to New York without Z.A.S. on Valentine's Day. She told Z.A.S. that she was accompanying a girl friend on the trip. Z.A.S. had made plans for them over Valentine's Day which he had to cancel. The texts are definitely testy and irritable. There are argumentative texts around the closing of Beauty Bar, which T.S. indicates she is taking steps to close. However, the texts do not suggest the parties have

ceased their marital relationship. [65] In January 2020, the parties travelled to Cabo San Luca with several other couples. They presented as a couple on this trip. [66] By mid February, the texts between the parties while T.S. was in New York are not antagonistic. Z.A.S. says "I really want you to enjoy this trip and not worry about home. 50th is a big milestone and you deserve to have a wonderful time." Later, this trip became a bone of contention for Z.A.S. when he discovered that T.S. had, in fact, travelled to New York to spend Valentine's Day with her boyfriend, Dallas. [67] On February 26, in the morning of the day T.S. was intending to deliver the letter to Z.A.S., the parties had the following text exchange: [Z.A.S.]: I do hope you have a super day. [T.S.]: thank you. That means a lot ♥ [T.S.]: hii thanks for the flowers. They're beautiful. [Z.A.S.]: You deserve that and more! I love you see you tonight Happy Birthday again [68] T.S. testified that she felt bullied to continue her relationship, including her sexual relationship, with Z.A.S. during this time. I reject this suggestion. The text messages between the parties show Z.A.S. constantly sought input from T.S. on matters related to the businesses, financial matters, and family matters. At times he was short, but this can be explained by the intense pressure he was under at the time with his efforts to open the

new store. He was not rude or demeaning or controlling. I do not agree that his behavior was bullying towards T.S. [69] Further, T.S. had come into a large inheritance from her mother in 2019, receiving a grant of probate in October 2019. She had funds which would have allowed her to leave and support herself financially, if that had been her decision in 2019. But she continued in the relationship right through to February 2020. I do not accept her proposition that she was intimidated or under the control of Z.A.S. [70] I find that on all of the evidence, the parties continued in a marital relationship until February 26, 2020. The couple presented as married couple to their community, they communicated to each other as a married couple right up until the morning of February 26, 2020, and they continued to engage in a sexual relationship throughout 2019. [71] It is likely that sometime before February 26, 2020 T.S. formed the intention that she wished to leave the marriage, and this resulted in her retaining a lawyer to prepare the letter delivered on February 26, 2020. However, this intention was a closely guarded secret. Even in the morning of February 26, T.S. said nothing to suggest to Z.A.S. that she was unhappy or planning to leave the marriage. I find that T.S. did nothing to communicate to Z.A.S. her intention to leave the marriage, until late in the day February 26,

2020. [72] I find that the date of separation is February 26, 2020. Family Businesses Beauty Bar [73] The parties agree that, at the date of trial, there is no value in Beauty Bar. They also agree that T.S. will retain Beauty Bar, and Z.A.S. with divest himself of all interests in the company. Market Meats Group [74] Before the value of MMG can be determined, the question of accuracy and validity of the underlying books of MMG must be addressed Challenge to the accounting records of MMG [75] T.S. submits that the accounting records of MMG are not accurate. She submits that Z.A.S. maintained a second set of books that show the true financial position of the company, and that Z.A.S. siphoned funds out the company to support himself without recording such payments in the books of the companies. The evidence led at trial does not support the allegations of T.S. [76] The evidence T.S. relies on to support her assertion is not conclusive in any way. At best, she uses discrete pieces of evidence to create a scenario based on innuendo, which was not backed up by concrete examples that could reliably support the inference she hoped to draw. [77] For example, T.S. points to several photographs of Z.A.S.'s calendar entries - one from 2015 and one from 2018, which she says show Z.A.S. was keeping a second set of books. Under cross examination, Z.A.S. testified that for a period of time he

used to keep track of sales, float, customer count and gift cards on his phone. He testified that he did this because he wanted easy access to this information, which was difficult to access from the point of sale system he used at that time, called MaxChain. He rejected the suggestion that it was a record of money received. Z.A.S. also testified that he stopped doing this when they opened the second store as it was too difficult to keep on top of both stores in this way. No evidence was led by T.S. to contradict this evidence of Z.A.S. [78] T.S. referred to hand notes she made with respect to various sums of money, as supporting her suggestion that over $1,000,000 was hidden in or around 2012. She made these notes in 2014. She testified that the document recorded money from the business that they kept in a safe deposit box at that time. The evidence at trial was that, in or around 2014, Z.A.S. deposited the funds that they had been keeping in their home safe, into various bank accounts. At the time, Z.A.S. provided T.S. with an accounting of the deposits. While she testified that "it did not all add up", she provided no actual details of what did not add up. I am not prepared on this evidence to find that anything untoward was happening with the company's accounts at that time. [79] Further, the evidence relied on by T.S. predates the separation of the parties, and in fact

predates the purchase of the Kerrisdale business and the introduction of Entreflow to the accounting of the businesses. The evidence about cash kept in a safe in 2014 has no bearing on the state of the company's financial position in 2020 when the parties separated. [80] Finally, I accept the evidence of Z.A.S. that all of the family's resources were directed to the operation of the business after the acquisition of the Kerrisdale location, including the servicing of the very significant debt held by the companies. I do not accept that Z.A.S. was hiding any funds at the time he was so desperately looking for ways to keep the business afloat. [81] T.S. alleges that in June 2021, there were discrepancies between the amounts of cash deposited and sales recorded in the point of sale system for the business. This is referred to as cash shrinkage, and represents the unaccounted-for loss of cash in a business. T.S. testified that she did not understand how money was going missing, and assumed that Z.A.S. was taking and using it for his own purposes. [82] The evidence at trial, including the evidence of the expert retained by T.S., Ms. Dixon, did not support the allegations of T.S. [83] T.S. has not proven that the cash shrinkage recorded in the MMG accounts establishes that Z.A.S. accessed cash from the business for his own personal purposes, or that Z.A.S. has kept a second set of

books for the business recording its true income. [84] In May 2019, MMG retained an accounting firm, known as Entreflow, to begin doing the bookkeeping for the company. Helina Patience is the CPA at Entreflow who took over the MMG account. She converted the Quickbooks files to an online file, set up the accounting for the Kerrisdale store, did financial planning, did the ongoing going bookkeeping for the store, and provided any support necessary for the business. [85] Entreflow provided services to the three MMG companies. Each month they would close the books for each of the companies. They used a cloud-based document system where they received documents from Z.A.S. or the employees of MMG. They met with Z.A.S. once a month to review the books and address anything needed. Entreflow prepared the general ledgers for the business. [86] The process used by Entreflow to obtain the documents and information needed to prepare the books, validate the data, review credit card expenditures, and prepare the accounting statements was explained by Ms. Patience at trial. Ms. Patience worked with a team of three to four people to address the accounting needs of MMG. These people included payroll specialist, and controller, an accounts payable clerk and an intermediate accountant. [87] Entreflow prepared "management prepared" financial statements for the business which allowed Z.A.S. and

Entreflow to go over the business on a monthly basis. [88] Horizon is an accounting firm that was first retained by MMG in 2015. The CPA responsible for MMG is Zuka Elmandi, who testified at trial. Horizon prepared review engagement financial statements for Kits Corp. from 2015-2019, and notice to reader financial statements for Kerrisdale Corp. and Landlord Corp. until 2019. Beginning with the 2020-year end (June 30), Horizon prepared individual financial statements for each company, and then combined the three to create a review engagement set of financial statements for the combined MMG. [89] In preparing financial statements for the companies, Horizon takes the management prepared financial statements (i.e. since 2019 the financial statements prepared by Entreflow), which they review and make necessary adjustments to. Horizon is responsible to reconcile the books of the companies to ensure that the entries have support. It is a more engaged process than management prepared financial statements. In a review engagement, Horizon provides some assurance to users of the financial statements that nothing is materially off. The review engagement work takes 8-10 weeks for Horizon to complete. [90] Horizon conducted accounting work for MMG during the time T.S. was doing the bookkeeping. Mr. Elmadi testified that Entreflow is another CPA firm and once MMG began using Entreflow,

Horizon saw fewer things that needed adjustments in the books of the companies. [91] I am satisfied that no challenge to the reliability of the financial statements was proven at trial. Even the forensic accountant jointly retained by the parties, Ms. Dixon, had no substantive criticisms of the work performed by these professionals, namely Entreflow and Horizon. Ms. Dixon relied on the work they conducted when doing her own work. While there may have been minor issues in any given year, these were all within the norms of accounting practice and did not result in any material misstatements. I am satisfied that all the accounting professionals retained by MMG exercised their professional skills in accordance with the norms of their profession. [92] The accounting professionals agreed that they relied on advice from Z.A.S. as to the characterization of various expenses. A great deal of time at trial was spent by T.S. challenging minor purchases which were charged to MMG. These included purchases of small items like gum, mints or cookies for the children when Z.A.S. was buying supplies for the store. T.S. urged me to find that Z.A.S. was using corporate account to purchase all his groceries, and pointed to the company account at Stongs as proof of this. I do not accept T.S.'s submission. I accept Z.A.S.'s explanation that he and other employees purchased goods from Stongs for use

in the Kerrisdale Corp. kitchen and deli, where foods such as soups and other premade foods were prepared and sold. Z.A.S. testified that if he used the corporate card for personal purchases, those charges would be allocated to his shareholder loan account. This was not proven otherwise by T.S.. While Z.A.S. candidly admitted that the odd purchase on a company account may have included something for him or the children, these were trivial amounts and certainly did not warrant the amount of time spent on this issue at trial. [93] T.S. challenged a purchase by Z.A.S. in November 2021, when Z.A.S. purchased $3,000 worth of gift cards on the company account. Z.A.S. testified that he initially planned to gift them to staff at Christmas, but then ultimately used them to purchase clothing for himself at Harry Rosen. He acknowledged that the $3,000 should have been charged to his shareholder loan account, and not processed as a company expense. He agreed this was a lapse in judgment, but disagreed he was attempting to hide the fact he was using company funds for personal expenses. [94] Other items challenged by T.S. included cabs and ubers, which Z.A.S. explained were connected to the business, and were used to move items between the stores. He agreed that periodically he used ubers and these were charged to the company account. Again, these amounts are trivial, and not worth the time

spent on them at trial. [95] T.S. challenged the use of the company account to pay for automobile expenses. However, both Z.A.S. and the accounting professionals confirmed that each year they allocate the personal portion of all automobile expenses to Z.A.S.'s shareholder loan account. I accept Z.A.S.'s evidence that he uses his car for his work, driving between locations and making deliveries. While there is a company van that is also used, I accept that Z.A.S. uses his own car. I find nothing incorrect in the allocation of automobile expenses between Z.A.S. and MMG. [96] T.S. challenged expenses in relation to a marketing assistant. Z.A.S. explained who that person was, and I accept his explanation. It is a proper business expense. [97] With respect to purchases from the Apple Store, Z.A.S. agreed that some of those purchases were for the business, and some were for personal use - primarily for the children. The total charges to the Apple Store since separation were less than $8,000. It was not established which portion should have been attributed to personal use, and which portion should have been attributed to the business. If even half of these costs were attributed to personal, at less than $4,000 over three years, it is not an amount that should have taken up time at this trial. [98] T.S. challenged purchases through Amazon as being personal. Again, Z.A.S. explained that

these were corporate purchases, although there may have been some minor purchases that were personal. These amounts were not quantified, and I accept Z.A.S.'s evidence that such amounts were insignificant. [99] T.S. challenged payments to a contractor known as "Do It Simpli". Z.A.S. explained that he hired this company to assist him with organization, filing documents, decorating the store, purchasing and setting up ipads, helping with inventory, and a number of other matters. I accept that this charge is properly a company expense. Z.A.S. also had this company assist with some matters in his home, and he paid the company out of his personal account for those services. I accept Z.A.S.'s evidence. [100] T.S. challenged the fact that Z.A.S. paid his telephone account, and those of his father and his son through the company account. Z.A.S. testified that his father and son are added on to his account for a nominal fee of approximately $30/month. No evidence was led by T.S. to contradict this evidence. I accept that Z.A.S. uses his telephone extensively for his work, and is always available by telephone for his business. I am not satisfied that, in the circumstances of his work, it is inappropriate for the company to pay his telephone bill. The amounts attributable to his father and son, again, are so trivial that they ought not have been raised in this litigation. [101]

Notwithstanding the extensive cross examination by counsel for T.S. regarding these expenses, I am satisfied that Z.A.S. honestly explained the business purpose for virtually all the expenses, and honestly admitted that certain, extremely minor, purchases were personal and were included in the corporate purchases. However, these purchases are so minor they do not rise above de minimis amounts, and make no material difference to any of the financial issues in this litigation. [102] T.S. also suggested Z.A.S. obtained a personal benefit from MMG paying for meals and entertainment as business expenses because Z.A.S. participated with clients in the meals and entertainment. I have considerable difficulty with this proposition. In my view, it is entirely appropriate for a business owner to include his own meal cost when taking clients out for a meal. The meal is a business expense because the business owner is developing a relationship with the client over the meal. It makes no sense to deduct the business owner's portion of the meal. The same applies with respect to entertainment costs. Expenses for meals and entertainment with clients and suppliers are routinely charged to businesses, and are accepted as legitimate deductions for the purposes of taxation. In MMG, meals and entertainment expenses are not excessive in any way, and do not suggest that Z.A.S. is taking improper

advantage of this expense category. In year end 2020, the total meals and entertainment expenses were less than $18,000, in year end 2021 they were just over $15,000, in year end 2022 they were approximately $31,000, and in year end 2023 they were approximately $19,000. T.S. seeks to arbitrarily attribute 80% of all meals and entertainment expenses for MMG to Z.A.S. There is no basis in the evidence for this, and I decline to do so. [103] Similarly, to the extent MMG purchased food for staff, or gifts for staff, these are also legitimate business expenses. I do not accept the submission of T.S. that these expenses are somehow improper or should be charged to the account of Z.A.S.. [104] I accept the validity of the financial statements for the companies for the years since Entreflow was engaged to perform bookkeeping services. The financial records of the companies have been reviewed by Horizon which I accept as an independent reviewer. While there has not been an audit of the records, nevertheless I am satisfied that the work performed by Horizon validates the work of Entreflow. As I will discuss later in these reasons, the forensic review conducted by Ms. Dixon did not give rise to any concerns which would displace my conclusion on the reliability of the MMG financial statements, including with respect to all business expenses challenged by T.S. and which I find were properly

attributed to the company. I accept the review engagement financial statements prepared by Horizon as valid and reliable reflections of the values of assets and liabilities of the companies. [105] The final issue to be addressed is the amounts charged to a fake supplier, known as "Major the Gourmet". T.S. testified that while she was doing the bookkeeping for MMG, she would record payments of up to $60,000 a year to this supplier. However, this supplier did not exist and, in fact, she would deposit such funds into the personal bank accounts of Z.A.S. or T.S. T.S. testified that she was instructed to do this by Z.A.S. Z.A.S. denied any knowledge of this. This practice stopped by March 2015. I am not able to determine on the evidence before me which of T.S. or Z.A.S. formed the intent to make these false entries in the books of the company. However, it appears that it was done, and they both benefited from it. The practice stopped once independent professionals became involved in the accounting of MMG, and five years before the parties separated. I am not satisfied that this evidence establishes a pattern of conduct of falsifying business records, and I am not satisfied that this prior practice has any bearing on the validity of the business accounts at the time of separation or trial. Value of MMG [106] The parties jointly retained the following experts in relation to the

financial issues involving MMG: a) Mr. Oord of Grover Elliot to provide an opinion on the market value of the real estate. b) Ms. Caroline Dixon, of Grant Thornton LLP to prepare a forensic accounting report to review the corporate and financial records of the parties and the companies to determine if there had been a co-mingling of personal and corporate funds. c) Mr. Gary Mynett, a chartered business valuator with Blair Mackay Mynett, to prepare a valuation report for the MMG and Beauty Bar businesses. Mr. Mynett relied on the Grover Elliot report in completing his work. Grover Elliot Appraisal [107] The value of MMG includes the value of the real estate owned by Landlord Corp. [108] The parties jointly retained Mr. Michael Oord, a real estate appraiser with Grover Elliott, to prepare an appraisal of the building on West 41st Avenue owned by Landlord Corp. Mr. Oord also testified at trial. [109] In his report dated December 8, 2022, Mr. Oord was of the opinion that the real estate at 2233 West 41st Avenue had a market value of $6,650,000. [110] Z.A.S. suggested in argument that Mr. Oord confirmed at trial that he included the full value of the tenant improvements in his opinion. I do not agree. Mr. Oord confirmed that he considered the location of the building, and the age of construction. He considered the interior improvements to the extent he noted the improvements looked

pretty standard, and it looked like some of the equipment could be removed from the space by a tenant. He noted that on an income approach, tenant improvements do not always equate to rent. [111] In his report, it is clear that Mr. Oord did not attribute any meaningful value to the leasehold improvements, other than to confirm that the property was in good shape with recent renovations properly outfitted for its current purpose. The comparables employed by Mr. Oord in conducting his appraisal were comparable buildings, not comparable businesses. This makes sense given that he was asked to prepare an opinion on the value of the real estate, not the business. In that sense, the leasehold improvements are not the driver of value. [112] Mr. Oord determined the income approach to valuation resulted in a value of $6,770,000, and the direct comparison approach resulted in a value of $6,520,000. Taking these approaches into account, Mr. Oord determined the market value of the property to be $6,650,000. Mr. Oord confirmed at trial that there had been no material change in value from the date of the report to trial. [113] I accept the opinion of Mr. Oord and find that the market value of the real property owned by Landlord Corp. in December 2022 and at the date of trial was $6,650,000. Forensic accounting report [114] Ms. Dixon was given access to all business records, including banking

records, for the MMG companies. She was also given access to Z.A.S.'s personal banking records. She was given access to the professionals at Entreflow and Horizon who prepared the working papers and financial statements, as well as access to Z.A.S. and T.S. to answer any questions that arose in performing her work. Ms. Dixon and her team spent over 650 hours in performing their work. [115] Ms. Dixon confirmed that she found the professionals at Entreflow and Horizon to be co-operative, knowledgeable, helpful, professional and reliable. Ms. Dixon was not asked to investigate into why there might have been discrepancies in the books. She was asked to determine the following questions: a) Was there any discrepancy between the total dollar value of cash received by MMG according to its point of sale system and the total value of cash deposits between January 1, 2019 and June 30, 2023. b) Whether there was a discrepancy between the actual dollar amount of gift card sales recorded in the point of sale system, and dollar value in gift card sales recorded in general ledgers and financial statements. c) Whether there were any discrepancies in the records of discounts in the point of sale system, the general ledgers and the financial statements; whether a change in recorded discounts had been affected by new technology used by MMG; and whether any persons recorded disproportionately high

levels of discounts. d) Whether there were issues in the recording of cash shrinkage by Entreflow e) Whether there were any issues relating to the payment of life insurance premiums in favour of the MMG companies, borrowing against such policies, and where any such borrowed funds could be traced. f) Conduct a reconciliation of funds to and from the parties' CIBC Homeline Account, including determining whether any such funds were used for personal expenses. g) Conduct a reconciliation of shareholder accounts in the MMG companies. h) Conduct a reconciliation of automatic batch payments in Kits Corp., and Kerrisdale Corp. from July 1, 2021 to June 30, 2023. i) For the period July 1, 2021 to June 30, 2023, determine whether any amounts were credited to or withdrawn from the personal CRA account owned by the parties and, provide details of any such withdrawals. j) From June 29, 2018 to June 30, 2023, trace deposits and withdrawals into and from Z.A.S.'s personal bank accounts. [116] The work conducted by Ms. Dixon was extensive and thorough. However, she candidly admitted that the scope of the work was such that she had not been able to answer all questions, and with more time and more information she might be able to provide answers to some of her outstanding questions. Ms. Dixon also admitted that every accounting system is subject to some errors. It is not a perfect science. She

agreed that the preparation of financial statements is intended to limit the number of errors, and agreed that Horizon did a professional job in the preparation of financial statements for the MMG companies. Cash reconciliations [117] With respect to cash reconciliations, over the period of 2021-2023, there were only minor unexplained variances on recorded sales. The cash deposits were less than recorded in both Kits Corp. and Kerrisdale Corp., but these were explained by various entries for things like petty cash expenditures, cash shrinkage, intercompany sales, and various adjusting entries. Gift card transactions [118] With respect to gift card transactions, there was a minor variance of just over $16,000 for Kits Corp. for the period 2020-2023, and an even more minor variance of $1,170 for Kerrisdale Corp. for the same four-year period. Discounts [119] With respect to discounted transactions, over the years 2020-2023, $177,185 in discounts were recorded for Kerrisdale Corp. and $21,482 in discounts were recorded for Kits Corp. Ms. Dixon confirmed that discounts were recorded by various employees, and Z.A.S. was not the primary person entering discounts. Ms. Dixon was not asked to comment on why discounts were recorded, whether the discounts were properly given, or if there were errors by staff in relation to the entries. [120] On the evidence before me, I cannot conclude

that Z.A.S. was engaged in any improper discounting, or gained any personal benefit from discounts at MMG. Cash shrinkage [121] With respect to cash shrinkage, Ms. Dixon agreed that a typical business experiences up to 5% cash shrinkage against total sales in a year. The cash shrinkage experienced by MMG was in the range of 1-2%. Ms. Dixon agreed that she was not asked to investigate how the cash shrinkage arose or why it fluctuated over the years. She agreed that an increase in cash shrinkage could be associated with MMG's introduction of a new point of sale system due to certain features of the MaxChain system which did not allow for the reversal of errors after the accounts had been processed. She also agreed the cash shrinkage can arise from errors made by staff keying in entries to the system, accessing the discount system, discrepancies in how staff record gift card sales, and a number of other reasons. [122] On the evidence before me, I cannot conclude that Z.A.S. was the cause of cash shrinkage, or improperly removed cash from MMG. I find that the cash shrinkage in MMG was well within the norms of business, and I attribute such cash shrinkage to ordinary errors in the operation of the business and not to any improper dealings on the part of Z.A.S.. Life insurance policies [123] Ms. Dixon identified no issues relating to the life insurance policies in favour of the MMG

companies. She noted that there had been two cash loans taken out and deposited to Landlord Corp.'s accounts. Initially those loans were recorded in Z.A.S.'s shareholder loan account, but those recordings were reversed, such that the net effect on Z.A.S.'s account was NIL. CIBC Homeline account [124] With respect to the Homeline account, Ms. Dixon identified that between January 3, 2018 and June 5, 2023, payments in the amount of $1,725,371 from the CIBC line of credit were made into Z.A.S.'s personal accounts. Between March 26, 2018 and October 28, 2019, $1,155,000 was transferred from Z.A.S.'s personal accounts in the accounts of the MMG companies: $755,000 to Landlord Corp., $220,000 to Kerrisdale Corp., and $180,000 to Kits Corp. [125] Kits Corp. and Landlord Corp. transferred $346,343.63 back to the CIBC line of credit, and Z.A.S. transferred $433,940.70 back to the CIBC line of credit. [126] Most of the transactions in relation to the transfer of funds between Z.A.S., the CIBC line of credit, and the MMG companies occurred prior to the separation. In the period February 25, 2020 to September 5, 2023, Z.A.S. received $141,065.03 from the CIBC line of credit, and repaid the CIBC line of credit $241,200.32. As such, after separation, Z.A.S. has repaid the line of credit $100,135.29 more than he took out of it. [127] While T.S. seeks compensation for the amounts Z.A.S. took

out of the CIBC line of credit, I decline to make such an adjustment. During the marriage, T.S. and Z.A.S. equally shared in any withdrawals from the line of credit. To the extent Z.A.S. used the funds on the family, T.S. benefited equally. To the extent Z.A.S. used the funds for the businesses, T.S. also benefited equally as 50% owner in the businesses. Following separation, Z.A.S. has not received a personal benefit from the line of credit and has, in fact, repaid more than he has taken out. Shareholder loans [128] With respect to the shareholder loan accounts, Ms. Dixon confirmed that as of the date the shareholder loan account was segregated into an account for Z.A.S. and an account for T.S. (June 30, 2020), the existing shareholder loan account was evenly divided, with an adjustment to Z.A.S.'s account for a watch ($54,000) and a car expense ($25,490.20), and an adjustment to T.S.'s account for funeral expenses ($25,000). As of June 30, 2020, Z.A.S.'s shareholder account recorded $276,008 owing to him, and T.S.'s shareholder account recorded $313,499 owing to her. [129] Beginning in 2020, the parties began receiving monthly funds out of the corporate shareholder account. This allowed them to receive funds without incurring a tax liability, as would have arisen on the payment of salaries. [130] As of June 30, 2023, as a result of payments made in favour of the parties since

2020, Z.A.S.'s shareholder account recorded him owing $189,558 and T.S.'s shareholder account recorded her owing $164,447. Batch payments [131] With respect to automatic batch payments, Ms. Dixon's analysis revealed nothing untoward. CRA account [132] In relation to the Personal CRA account, it appears that three deposits of just over $31,000 were made to this account. It appears these deposits were made in error, and were likely intended to be made to the payroll account at CRA for Kits Corp. Neither Horizon or Z.A.S. was aware of why transactions were made to this account. Ms. Dixon recommended that the parties contact CRA to address the status of this account. [133] To the extent this issue can be resolved with CRA, it appears to be an overpayment by Kits Corp. and if it should be reversed, it will be to the benefit of Kits Corp. I decline to make any orders with respect to this amount, as the evidence around it was too uncertain to allow me to properly deal with it. Z.A.S. personal accounts [134] With respect to the deposits and withdrawals into Z.A.S.'s accounts, in the first draft of her report, Ms. Dixon identified over $700,000 in deposits to Z.A.S.'s bank accounts that could not traced or reconciled with a corresponding withdrawal from another known account. After that report was prepared, Z.A.S. was able to provide additional explanations to Ms. Dixon. In her final

report submitted at trial, the unexplained amounts had been reduced to $135,000. Ms. Dixon agreed that as she was given the requisite back up information, she was able to trace or explain most of the amounts she had questioned. With respect to the small amount still outstanding, she agreed that she had not had time to get all the information that might have provided explanations for the transactions. [135] T.S. asked me to assume that the deposits in Z.A.S.'s personal accounts, for which Ms. Dixon was unable to attribute a source, must necessarily be funds taken from MMG. She submits that these funds must have originated in things like cash shrinkage. Both Z.A.S. and his father testified that Z.A.S.'s father has been transferring funds to Z.A.S. for a number of years, to fund Z.A.S.'s living expenses. Z.A.S. Sr. testified that he has loaned over $600,000 to Z.A.S., paid by way of cheques and cash transfers. This evidence was not disproven by T.S. Indeed, some of the reconciliations completed by Ms. Dixon confirmed the deposit of cheques from Z.A.S. Sr. to Z.A.S.'s personal accounts. On the evidence before me, I find that it is more probable that the unidentified deposits into Z.A.S.'s personal account originated with his father, than from improper receipts from MMG. [136] With respect to the long laundry list of transactions Ms. Dixon was asked to review, I not satisfied that

any are material in the context of the issues before me. I am satisfied that there is nothing in the records of the companies that gives rise to any suspicions in the operations of the company. The records are generally accurate, and there has not been a wholesale, inappropriate or unrecorded mingling of corporate and personal monies. To the extent the parties have used their personal assets to benefit the companies, such as through the line of credit secured against the family home, these funds are properly recorded. The records do not support any allegations that cash was inappropriately taken out of the company by Z.A.S., or that discounts or shrinkage in the business was outside of normal business expectations. I accept that the operation of two businesses with many staff can give rise to occasional accounting errors. I see nothing in the records of the MMG companies which is suspicious or would justify a finding that Z.A.S. was improperly operating the business to extract inappropriate personal benefits. Business valuation by Mr. Mynett [137] Mr. Mynett was asked to provide an estimate for the en bloc fair market value of the ownership interests in MMG and Beauty Bar. In addition, he was asked to provide opinions based on a series of alternate assumptions provided by each of the parties, which I will address below. [138] Mr. Mynett described in his report the three

generally accepted approaches for valuing a company or business, and these are: the income approach, the asset-based approach, and the market approach. [139] Mr. Mynett determined that an asset-based valuation approach was appropriate for each of the companies being reviewed. He determined that an asset-based approach was appropriate for Kits Corp. because it did not generate a sufficient return on its investments to be valued using the capitalized cash flows approach, and the landlord could terminate its lease on 30 days notice leaving Kits Corp. with no certainty in relation to its premises. [140] He determined that an asset-based approach was appropriate for Kerrisdale Corp. because its operations were not profitable during the period under review, leaving it with non-capital losses of $2,238,828 at the valuation date. [141] Because Landlord Corp. was an investment holding company, Mr. Mynett used the typical valuation for such companies, namely the asset-based approach. [142] Finally, because Beauty Bar was not profitable during the period under review, and had accumulated non-capital losses of $381,723, the asset-based approach was the appropriate valuation method. [143] While Mr. Mynett was challenged under cross examination on his decision to use the asset-based approach in valuing all companies, he did not agree that his opinion was incorrect or that he should have used

a different approach given the financial information which was before him. [144] Mr. Mynett relied on the financial statements prepared by Horizon and business records prepared by Entreflow, and had access to Mr. Elmadi of Horizon and Ms. Kuntz at Entreflow, as well as Z.A.S. and T.S. through their counsel. [145] Z.A.S. challenged Mr. Mynett's reliance on certain data contained in the financial statements, arguing that the leasehold improvement values were not proven facts. I am satisfied that the value of the leasehold improvements has been established through the accounting records and review engagement work performed by Horizon, which are ultimately based on the original costs attributed to these assets by Kerrisale Corp. I am satisfied that, for the purposes of Mr. Mynett's valuation report, these are reliable values which he can properly use in determining his valuation opinion. [146] The valuation date for all scenarios determined by Mr. Mynett was December 31, 2022. [147] I am satisfied that Mr. Mynett used the appropriate valuation method when conducting his valuation of the companies at issue. Initial valuation prior to assumptions proposed by parties [148] Mr. Mynett determined that as of December 31, 2022, the en bloc fair market value of the shares of the companies was the following: a) Kits Corp.: $1,810,000 b) Kerrisdale Corp.: NIL c) Landlord Corp.: $345,500 d)

Beauty Bar: NIL [149] With respect to Kits Corp., Mr. Mynett assumed that it was operating under a month to month lease, which its landlord may terminate on 30 days notice prior to December 31, 2023. The annualized revenue was approximately $2.8 million for the 2022 fiscal year. Z.A.S.'s assumed economic salary was $200,000, which was based on an assessment of median salary statistics and not the actual salary he received. [150] With respect to Kerrisdale Corp., Mr. Mynett noted that as of the valuation date, non-capital losses of $2,238,828 were available to Kerrisdale Corp. to offset future taxable income. Mr. Mynett also noted that Kerrisdale Corp.'s operations were not profitable during the period under review. Mr. Mynett assumed Z.A.S.'s economic salary was $195,000, and the economic rent for the business approximated $225,000 annually. [151] With respect to Landlord Corp., Mr. Mynett noted it was a holding company with its principal asset being the real property on West 41st Ave out of which Kerrisdale Corp. operates. Its principal liability is a mortgage against the property valued at $5,148,194, which is guaranteed by Kits Corp., Kerrisdale Corp., Z.A.S. and T.S.. As of the valuation date, non-capital losses of $95,378 were available to Landlord Corp. to offset future taxable income. Adjustments to valuation arising from assumptions proposed by parties [152] Mr. Mynett

was asked to make adjustments to his initial valuation opinion, based on various assumptions provided by the two parties. All such assumptions related the MMG business. There was no dispute between the parties that the en bloc fair market value of Beauty Bar was NIL. Assumption that leasehold improvements reported for Kerrisdale Corp. had NIL value [153] Z.A.S. asked Mr. Mynett to assume that the leasehold improvements in the Kerrisdale space had a NIL value, notwithstanding the fact that Kerrisdale Corp. has recorded leasehold improvements valued at $1,085,214 on its financial statements. [154] Z.A.S. submitted that the appraisal prepared by Mr. Oord included the leasehold improvements. Z.A.S. submitted that because the real estate, owned by Landlord Corp., included the leasehold improvements, there would be a double counting of the leasehold improvements if they were also included as an asset in the hands of Kerrisdale Corp. [155] This assumption was objected to by Mr. Mynett. On March 15, 2023, after receiving the instruction to prepare an alternate valuation based on this assumption, Mr. Mynett wrote to counsel for Z.A.S. setting out his emphatic disagreement. He noted that Kerrisdale Corp. recorded the leasehold improvements as assets on its financial statements, and deducted the expenditure, over time, for income tax purposes. Mr. Mynett noted that a taxpayer is not

entitled to an income tax benefit on a non-existent asset. [156] Counsel for Z.A.S. took issue with the opinion of Mr. Mynett, suggesting that he committed errors in his understanding of the leasehold issue, and suggesting that Mr. Mynett did not perform the work himself in the report. He submitted "It has become obvious that Mr. Mynett is not the person he used to be and that he has overused junior valuators in the preparation of his Reports." I do not accept the characterization or criticisms of counsel for Z.A.S. with respect to the work performed by Mr. Mynett. I find Mr. Mynett was competent and knowledgeable, and his work was of assistance to the court. [157] Mr. Mynett disagreed with the suggestion by counsel for Z.A.S. that the real estate appraisal prepared by Mr. Oord of Grover, Elliott & Co. included the leasehold improvements in the appraisal of the building. [158] At trial, Mr. Mynett explained that Kerrisdale Corp. purchased the leasehold improvements and such improvements are properly recorded on Kerrisdale Corp.'s financial statements. Landlord Corp. owns the land and building and, even though there is no written lease, has an implied lease with Kerrisdale Corp. for the use of the building. [159] Notwithstanding his objection to the basis of the assumption, Mr. Mynett determined that the en bloc fair market value of Kits Corp., using the assumption proposed by

Z.A.S., would be reduced to $1,065,000, and Landlord Corp. would be reduced to NIL. However, it is clear that Mr. Mynett did not agree that this was an appropriate assumption to make in the valuation of the MMG. [160] I do not agree that the real estate appraisal included the value of the leasehold improvements in anything more than a notional sense. Mr. Oord was clear that the real estate asset is valued independently of the business being operated inside the space. On the open market, the real estate at issue could be used for any purpose and is not limited to its current use. [161] I find that the leasehold improvements belong to Kerrisdale Corp., as the improvements are tied to the operation of the business itself, and because the financial statements for Kerrisdale Corp. have clearly recorded the improvements as assets of Kerrisdale. [162] I accept Mr. Mynett's written opinion, and his testimony at trial, together with the letter of explanation he prepared to try to explain the misunderstandings of counsel for Z.A.S. [163] I find that the assumption proposed by Z.A.S. is not supported on the evidence, and I reject the en bloc fair market values of Kits Corp. and Landlord Corp. based on that assumption. Assumptions relating to revenues in the businesses [164] T.S. asked Mr. Mynett to revise his opinion on value based on a number of different assumptions as to the revenue

available in MMG being different from the revenue recorded in the financial statements prepared by Horizon. Mr. Mynett applied the assumptions proposed by T.S. to his initial opinion of value, and then to his opinion of value based on the assumption provided by Z.A.S. [165] An opinion of value based on assumptions is only useful to the court if the underlying assumptions are proven at trial. I am not satisfied that the assumptions advanced by T.S. were proven at trial and, as a result, I can place no weight on the opinions of value based on such assumptions. [166] The first assumption advanced by T.S. was that in each of Kits Corp. and Kerrisdale Corp. an additional $360,000 should be recorded as revenue each year. This assumption has not been established on the evidence. [167] The next assumption advanced by T.S. was that Z.A.S. made a unilateral decision to close the two stores on Mondays beginning in October 2021 and that, had he not closed the stores on Mondays, Kits Corp. would have earned an additional $8,700 per day and Kerrisdale Corp. would have earned $7,500 per day. T.S. also asked for a second alternative assumption, namely that each location would have earned an additional $5,000 each day. The evidence at trial from Mr. Mallari, the store manager of Kits Corp., was that they shut the stores on Mondays due to staff shortages. T.S. led no evidence to contradict this

business decision. There is no basis in evidence to support this assumption proposed by T.S. [168] T.S. asked Mr. Mynett to assume that Z.A.S. discounted sales without a legitimate business purpose, and this resulted in various losses, which should be added back into revenue in 2021, 2022 and 2023. T.S. failed to prove that Z.A.S. authorized discount sales without a legitimate business purpose. I reject this assumption outright [169] T.S. asked Mr. Mynett to assume the gross profit margin for Kerrisdale after it opened in 2020 is 48.8%, which is the average gross profit margin for Kits Corp. in 2018 and 2019. This assumption is problematic for a number of reasons. The stores are in different locations. One is well established, and one is brand new. There is no factual correlation between the operations of Kits Corp. in 2018 and 2019, with the operations of the combined operations in 2020 and later. Further, the forensic work performed by Ms. Dixon did not support an assumption that the profit margin of MMG should be 48.8% in the relevant years. I am unable to accept there is any factual basis on the evidence before to accept such an assumption. [170] T.S. asked Mr. Mynett to assume the following expenses incurred in Kits Corp. and Kerrisdale Corp. were personal in nature: 2019 2020 2021 2022 2023 Kits Corp. $260,000 $337,500 $423,000 $434,000 $33,000 Kerridale

Corp. $100,800 $1,500 $16,550 $101,500 $14,300 [171] T.S. did not establish in evidence that such expenses recorded in the company records were personal in nature. Again, I rely on the forensic analysis done by Ms. Dixon which does not support a finding that the companies recorded personal expenses of Z.A.S. in anywhere close to these amounts. I reject this assumption. [172] I have found that I can place no weight on the assumptions proposed by T.S.. Notwithstanding my conclusions on the underlying assumptions advanced by T.S., Mr. Mynett's opinions on the en bloc fair market value for the shares in the MMG companies was unchanged, even when he took the assumptions from T.S. into account. [173] In relation to the assumptions proposed by T.S., Mr. Mynett considered whether such assumptions would cause him to change his valuation method, for example to an income-based valuation, and he concluded that the asset-based valuation remained the appropriate valuation method. Under cross examination at trial he confirmed that, in his opinion, the asset-based valuation method was appropriate. [174] His opinions of value for the MMG remained $2,155,500, where the leasehold improvements were included in the value of Kerrisdale Corp., and $1,065,000 where the leasehold improvements were excluded from the value of Kerrisdale Corp. Adjustments to value from valuation date in Mynett report, to

date of trial [175] The valuation date in the Mynett report was December 31, 2022. The trial was approximately one year later. Mr. Mynett was shown the draft financial statements for the companies' 2023 year end. He agreed that if the valuation incorporated the 2023 financial statements, which were not available when he prepared his report, his calculations on an asset-based approach would take into account the value of the tenant improvements shown on the 2023 financial statements. [176] In the 2023 financial statements of Kerrisdale Corp., the net book value of the leasehold improvements is recorded as $653,737 (as opposed to $1,085,214 as recorded in the 2022 financial statements). In 2023, the net book value of the equipment is recorded as $621,853 (as opposed to $774,516 in the 2022 financial statements). Mr. Mynett agreed that the reduction in book value is an accounting exercise. It does not reflect a market value for the assets. Mr. Mynett also confirmed that rapid depreciation of equipment contributed to the losses recorded in the 2023 financial statements. [177] The result of the new values reported in 2023, is that the book value of the assets of Kerrisdale Corp. is reduced by $584,140, an approximate 40% reduction in the book value of the assets from the year before. In comparison, the reduction in book values of the prior years was in the range of 22-28%. [178] In

his original opinion, Mr. Mynett made an adjustment to the amounts owing from Kerrisdale Corp. to Kits Corp. and Landlord Corp., to reflect the fact that there was insufficient equity in Kerrisdale Corp. to pay those liabilities in full. Mr. Mynett made a pro rata reduction of the total net book value of the liabilities to related parties ($3,133,999) between the two related companies. The value of the related party debt was reduced to $1,994,254, which was then distributed pro rata as follows: $353,230 owing by Kerrisdale Corp. to Kits Corp., and $1,641,024 owing by Kerrisdale Corp. to Landlord Corp. These adjusted values of the inter company debt were then reflected in the en bloc valuations of both Kits Corp. and Landlord Corp. [179] The reduction in asset value on the 2023 financial statements would impact the debt repayable by Kerrisdale Corp. to the related parties, which would in turn reduce the en bloc value of those companies. [180] In order to properly do an analysis as of the 2023 yearend, the other assets and debts of the companies in 2023 would have to be taken into account. [181] The position of Kerrisdale Corp. at the year end 2023 was a deficit of $(2,951,095), against a deficit in 2022 of $(1,959,229). The position of Kits Corp. at year end 2023 was a net income of $108,982, with retained earnings of $2,460,920, against a net income in 2022 of $(112,800) with

retained earnings of $2,351,938. The position of Landlord Corp. in 2023 was a deficit of $(143,188), against a deficit in 2022 of $(231,594). All of the 2023 figures are taken from the draft financial statements produced at trial, and all include the full value of the debts due to related parties. I note that the difference in values arises through the reduction to asset book value in the 2023 financial statements. I cannot rule out the possibility that the significant adjustment downwards, while acceptable from an accounting perspective, may also be motivated by a desire to reduce the value of MMG in the context of this litigation. [182] Counsel for Z.A.S. performed his own recalculation of the value of the MMG companies, using the draft 2023 financial statements. These new calculations were not put to Mr. Mynett. I am not satisfied that the calculations performed by counsel are accurate and accord with my findings on the proper inclusion of the leasehold improvements in the assets of Kerrisdale Corp. I am not satisfied that counsel is qualified to perform the asset-based valuation, notwithstanding Mr. Mynett's agreement at trial that the 2023 valuation could be done using the figures in the draft 2023 financial statements. Conclusion on the value of MMG [183] I accept the initial opinion of value determined by Mr. Mynett for the en bloc fair market value of the four companies

as at the valuation date of December 31, 2022. [184] On the evidence before me, while I do not have the benefit of an opinion of value as at the date of trial, I am satisfied that there should be a modest adjustment downwards from the opinion of value Mr. Mynett prepared as at the valuation date. The valuation date used by Mr. Mynett is a year prior to trial, and I am satisfied that, based on the draft financial statements for 2023, MMG is in a worse financial position than it was as of the valuation date. I find on the evidence before me that a fair value for MMG as of the date of trial is $1,800,000. Admittedly this value is not a detailed calculation of value, but represents what I find to be a reasonable reflection of the changes in value of the company. Family assets and debts Division of MMG and Beauty Bar [185] All of Z.A.S.'s interest in Beauty Bar will be transferred to T.S. This includes any interest in Beauty Bar held by the S. Family Trust. [186] The parties will share equally in the value I have determined for MMG. The starting point in the division of MMG is a value of $900,000 for T.S.'s 50% interest in MMG. This will be adjusted to account for the shareholder loans owing by the parties to the company as at the valuation date. The final payment amount will be adjusted in accordance with the other payment orders made in this decision. Shareholder loan

accounts [187] When the parties started the Kerrisdale location, significant renovations were required. In addition to the mortgage funds secured against the lands, the parties used a line of credit secured against the family home. This line of credit permitted borrowings up to $2,500,000. When money was needed from that line of credit, Z.A.S. would write a cheque from the LOC to his personal account, then write a cheque from his personal account to the account of one of the companies. That transfer was recorded as a shareholder loan to the company. [188] In the 2020 yearend, Horizon split the shareholder loan, which had previously been held jointly by Z.A.S. and T.S. Mr. Elmadi testified that the shareholder loan was divided equally between Z.A.S. and T.S. initially. He then made adjustments for funeral expenses for T.S.'s mother ($25,000), which were allocated to T.S.'s shareholder loan account, and for a watch purchase ($54,000) and automobile expense ($25,490.20) by Z.A.S., which were allocated to Z.A.S.'s shareholder loan account. He also noted he had recorded an automobile expense to T.S.'s account in the amount of $16,999.10. The net result of these adjustments was a shareholder loan due to T.S. in the amount of $313,498.95, and a shareholder loan in the amount of $276,007.85 due to Z.A.S. [189] Mr. Elmadi confirmed that he made the adjustments to the shareholder loan

account on the advice of Z.A.S. [190] After the parties separated, they agreed that they would draw $35,000 per month from their MMG shareholder accounts. Each of the parties would receive $14,500, and they would reserve $6,000 for the children's expenses. This arrangement lasted from June 2020 to July 2021. The draws were shared equally and recorded against their shareholder loan account. [191] T.S.'s shareholder loan account debits since separation reflect the monthly draws to T.S., and payments for children's expenses such as the nanny, various school expenses, and her contribution to the payment of the joint experts retained at trial. It also includes a number of expenses for things such as auto insurance, car payments, and payments to both Z.A.S. and T.S. for which no detail was provided. While Mr. Elmadi agreed that he took instruction from Z.A.S. on the allocation of expenses to T.S.'s shareholder loan account, I am not satisfied that T.S. has established that any of the post separation expenses were improperly allocated to her. [192] T.S. challenges the inclusion of two 2019 expenses in her shareholder loan account. These were the funeral expenses for her mother in the amount of $25,000, and customs duties in the amount of $12,000 in relation to a watch she had with her when she entered the country from France. She argues that such expenses were not paid out of

corporate funds, and should not be shown as a debit from her account. The expenses were paid by Z.A.S. personally. In addition, the expenses were paid during the marriage and should be considered family debts. I agree. I find that the funeral expenses were a family debt paid for by Z.A.S. personally, and were not paid for by MMG. Z.A.S. is unhappy about paying the customs duty on the watch, which he says was purchased while T.S. was on a trip with her boyfriend. T.S. says that the watch was purchased during the marriage and she simply did not have proof with her that she owned the watch before leaving the country, which is why she was charged customs duties. I am not satisfied that Z.A.S. has proven the customs duties were not a family debt. He admitted he paid it personally during the marriage, and the money did not come out corporate accounts. [193] I find that T.S. is entitled to a credit of $37,000 against her shareholder account to reflect the improper inclusion of the funeral expenses and the custom duties in her shareholder loan account. [194] Kits Corp. has loans owing by the shareholders to the company of $199,305, which are split: Z.A.S. - $99,258, and T.S. - $100,047. Mr. Mynett agreed that while they are assets of the company, they are not included in the asset-based company valuation - this is because these loans would have to be extinguished by way of a dividend

declaration prior to a sale of the business. No third-party purchaser will pay the shareholders for these loan obligations. However, it is appropriate to consider these loans in the context of a division of family assets and debts. [195] Z.A.S. will buy out T.S.'s interests in MMG. He submits that he should not be required to acquire the loan the company has made to T.S., as that would require him, on behalf of the company, to pursue T.S. for payment of that loan. He submits that the loans each of them owes to the company should be extinguished by way of a dividend declaration ($199,305 at December 30, 2022), and the net value of the companies should be divided between the parties. [196] T.S. submits that any shareholder loan debts should be repaid by both parties. This will be accomplished through an accounting as proposed by Z.A.S., namely a dividend declaration at the time of the division of family assets. [197] Following the credit to her shareholder loan account of $37,000, T.S.'s shareholder loan debt to the company as at the valuation date is $63,047. Z.A.S.'s shareholder loan remains $99,258 at the valuation date. The total shareholder loans as at the valuation date are: $162,305. A dividend will be declared by MMG to each shareholder in the amount of these shareholder loans. T.S.'s interest in MMG will be reduced by $63,047 to account for her dividend. [198] T.S.'s

interest in MMG, after accounting for her shareholder loan/dividend is $836,953. Maple street [199] T.S. purchased a property located at 401-2687 Maple Street, Vancouver on June 1, 2020 for $2,350,000. She has lived in the Maple Street property since June 2020. [200] T.S. received her mother's home after her death, and sold that property in April 2020 for approximately $1,300,000. She used the proceeds of sale towards the purchase price for the Maple Street property. T.S. has paid all expenses relating to the property since its purchase, including servicing the mortgage. [201] Any increase in value of excluded property received during the marriage, such as T.S.'s inheritance, is a family asset. This includes any increase in value of assets purchased with excluded property. As such, any increase in value of the Maple Street property is family property and subject to division. However, the court retains discretion to reapportion any such increase in value to one or the other spouse, pursuant to s. 95(1) of the Family Law Act, SBC 2011, c 25 ["FLA"]. In circumstances where one person has purchased the asset with excluded property, has been solely responsible for all costs since separation, and purchased the property in anticipation of separation, courts have determined it would be significantly unfair to divide the asset equally: Collins v. Lindahl, 2018 BCSC 1344 at para. 57;

Muraca v. Dunsmore, 2022 BCSC 279 at paras. 91-94; Walburger v. Lindsay, 2015 BCSC 341 at para 109. [202] I am satisfied that T.S. purchased the Maple Street property to have a place for her and the children to live after separation. The property was purchased some four months after the date of separation. The funds for approximately half the purchase price originated in excluded assets. T.S. has not established where the funds to pay household expenses, including the mortgage, originated, but I find it is reasonable to assume that the funds came from the advances she received from her mother's estate, the Kits Corp. shareholder loan account, and support payments ordered by the court. I do not accept that Z.A.S. contributed to the upkeep of the Maple Street property by way of any support payments. [203] I find that Z.A.S. has not contributed to the costs of the Maple Street property, and in the circumstances of this case it would be significantly unfair to divide the increase in value of the Maple Street property between the parties. [204] I reapportion 100% of the increase in value of the Maple Street property to T.S. Family home [205] On April 26, 2021, the parties purchased their home at 4049 West 30th Avenue, Vancouver, for $2,440,000. The family home was sold on September 5, 2023 for $5,950,000. The proceeds of sale are held in trust with counsel for the parties: $462,869

with counsel for Z.A.S., and $534,513 with counsel for T.S. The proceeds were notionally shared equally, but $93,740 was paid out of Z.A.S.'s share to address arrears from an interim support order. Jewelry and Art [206] The parties owned significant amounts of jewelry and art. No appraisals were performed on any of these family assets. I urged the parties to come up with a way to divide these assets, as the evidence before the Court was not adequate to divide these assets with any precision as to their value. Unfortunately, the parties were not able to do so. [207] The art owned by the parties was listed in a schedule marked as an exhibit at trial. Z.A.S. suggests that the parties choose the pieces they would like, alternately, from that list. The first person to choose will be determined by a coin flip. [208] Z.A.S. suggested the jewelry could be divided as follows: T.S. would keep a selection of her jewelry with a total purchase cost of $386,467, as set out in a schedule; Z.A.S. would keep a selection of his jewelry with a total purchase cost of $391,274, as set out in a schedule; all remaining jewelry would be sold at auction with the proceeds being used to fund their children's schooling and any excess to be divided equally. [209] T.S. proposes that the jewelry should be divided on the same basis as the art, i.e. the parties alternate choosing from the listed jewelry. She

disagreed with the procedure suggested by Z.A.S. because she says much of the jewelry has increased in value. [210] Given the dearth of valuation evidence on the jewelry and art owned by the parties, I agree that both jewelry and art should be divided by the parties taking turns selecting from the lists of these assets. T.S. will make the first choice of art, and Z.A.S. will make the first choice of jewelry. RRSPs [211] In their 2021 F8 financial statements, both parties reported RRSPs in the amount of $261,000. [212] By court order on March 7, 2023, Z.A.S. paid $130,000 out of his RRSP to T.S. as a condition for an adjournment of her application for interim support. [213] By the date of trial, Z.A.S. no longer had any RRSPs, having cashed them in to pay living expenses. [214] In her 2023 F8 financial statement, T.S. reported owning $437,041 in RRSPs. Assuming this amount included the $130,000 transferred pursuant to court order, T.S. had net RRSPs in the amount of $307,041. [215] Z.A.S. submitted that if I ordered arrears owing pursuant to any unpaid support obligations, then no further adjustments should be made to T.S.'s RRSP account. [216] In these reasons I cancel all support arrears. Therefore, I must consider whether it would be appropriate to divide any portion of T.S.'s RRSPs. [217] I find that the RRSPs are family assets and subject to equal division. T.S. shall

transfer $150,000 out of her RRSPs to Z.A.S. Child and spousal support Guideline incomes [218] Following separation in February 2020, for just over one year both parties received advances out of their shareholder loan accounts with MMG. [219] On July 8, 2021, on an interim and without prejudice basis, the parties agreed in a court order as follows: a) the guideline income of Z.A.S. was $850,000 and T.S. was $50,000; b) Z.A.S. would pay interim monthly spousal support in the amount of $18,095 to T.S., which would be taxable in the hands of T.S. and deductible from Z.A.S.'s income; c) Z.A.S. would pay monthly child support to T.S. in the amount of $10,419; and d) Z.A.S. was required to cause MMG to pay him a monthly salary of $70,833.33, from which he would pay the spousal and child support. [220] On March 16, 2022, the court modified the July 8, 2021 terms as follows: a) The interlocutory guideline income of Z.A.S. was $780,000, while T.S.'s guideline income remained $50,000; b) Beginning April 1, 2022, Z.A.S. was required to pay interlocutory monthly spousal support in the amount of $16,306, which would be taxable in the hands of T.S. and deductible from Z.A.S.'s income; c) Beginning April 1, 2022, Z.A.S. was required to pay interlocutory monthly child support to T.S. in the amount of $9,593; and d) Effective March 16, 2022, Z.A.S. was required to cause MMG to pay him a monthly

salary of $65,000, from which he would pay the interlocutory spousal and child support. [221] By June 2022, Z.A.S. determined that the companies could not afford to pay him a salary any longer, and he stopped complying with the order requiring him to take a salary, and stopped paying support. [222] A one-time lump sum payment in the amount of $93,740 of arrears from the March 16, 2022 order was made in November 2023, out of the proceeds of sale of the family home. [223] Before me, Z.A.S. submitted that MMG had not been in a financial position to pay the salary amounts ordered in the two prior court orders. He seeks to cancel any arrears arising from the two orders and, if his guideline income for the years in question is less than the interim, without prejudice, assessment of guideline income, an order for repayment or a credit for any excess amounts paid. [224] The relevant sections of the Federal Child Support Guidelines are ss. 15-20. The starting point is the payor's personal tax return (s.16). [225] Section 18(1) is particularly relevant in this case: 18 (1) Where a spouse is a shareholder, director or officer of a corporation and the court is of the opinion that the amount of the spouse's annual income as determined under section 16 does not fairly reflect all the money available to the spouse for the payment of child support, the court may consider the situations

described in section 17 and determine the spouse's annual income to include (a) all or part of the pre-tax income of the corporation, and of any corporation that is related to that corporation, for the most recent taxation year; or (b) an amount commensurate with the services that the spouse provides to the corporation, provided that the amount does not exceed the corporation's pre-tax income. [226] Section 19 provides the court with the discretion to impute income in a number of circumstances, which have been put in issue by the parties, including: 19 (1) The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include the following: (a) the spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of a child of the marriage or any child under the age of majority or by the reasonable educational or health needs of the spouse; (d) it appears that income has been diverted which would affect the level of child support to be determined under these Guidelines; (e) the spouse's property is not reasonably utilized to generate income; (g) the spouse unreasonably deducts expenses from income; (h) the spouse derives a significant portion of income from dividends, capital gains or other sources that are taxed at a lower rate than employment or

business income or that are exempt from tax; Z.A.S.'s income [227] The parties retained Mr. Mynett to prepare a report determining the income available to Z.A.S. for the three most recent taxation years for which records were available, for the purposes of assisting the court's determination of guideline income. In reaching his opinion, Mr. Mynett relied on the financial statements for MMG. [228] T.S. asked Mr. Mynett to prepare alternate opinions based on the same alternate assumptions she advanced in relation to the business valuation report. I rejected those assumptions in relation to the business valuation report, and I also reject the alternate opinions of available income Mr. Mynett prepared based on those assumptions. [229] Mr. Mynett agreed that his task was to determine the pre-tax income available in the companies, as well as Z.A.S.'s reported personal income for the relevant years. The primary sources of information for Mr. Mynett's determination of Z.A.S.'s available income were the financial statements for the MMG companies, and the personal tax returns of Z.A.S. The companies all have a year end of June 30. The personal tax returns are remitted on the calendar year. As a result, there is a disconnect between the two sources of information. [230] In addressing the timing mismatch between the financial statements and the personal tax year, Mr. Mynett assumed that

the pre-tax income (or loss) generated by the MMG companies was available to Z.A.S. during the calendar year immediately prior to the fiscal year in question. Therefore, for the 2019 year, Z.A.S.'s available income would be comprised of his reported income on his personal tax return, and the pre-tax income available in MMG as recorded on the 2020 fiscal year end statements. He agreed that meant that the 2019 guideline income year would include pre-tax income in the companies from the first six months of 2020. [231] Mr. Mynett determined that the income available (loss attributable) to Z.A.S. the years 2019-2021 was: Adjusted line 150 income Income after inclusion of MMG pre-tax income or (loss) 2019 $162,713 $103,000 2020 $339,554 $789,000 2021 $422,113 $(575,000) [232] These determinations are based on all available pre-tax income in the companies being made available to Z.A.S. Retained corporate income [233] Mr. Mynett was cross examined on why, in determining the income available to Z.A.S., he did not deduct capital debt payments in the companies from Landlord Corp.'s income, or add back amortization to Kerrisdale Corp.'s income. Mr. Mynett did not agree with counsel for Z.A.S. that these adjustments were properly done in his initial calculation of available income for Z.A.S. He indicated that s. 18 of the Guidelines provides the court with the discretion to determine what

portion of the corporation's pre-tax income ought properly be retained in the company, such that it is not available to the payor as income. Further, Mr. Mynett stated that amortization is only added back into income where amortization relates to real property, not leasehold assets as in the case of Kerrisdale Corp. I agree with Mr. Mynett. [234] In determining a payor's available income, the court can consider whether any pre-tax income in the corporations should reasonably and legitimately be retained in the company. The legitimate business reasons for retaining income in a company include the need to preserve working capital, reduce interest bearing debt to ensure solvency, maintain minimum financial ratios to comply with debt covenants, replace capital assets, the need to set aside money to fund redemption of retractable preferred shares or other financial instruments which are callable at the holder's option, and other factors: Kowalewich v. Kowalewich, 2001 BCCA 450 at para 58; McKenzie v McKenzie, 2014 BCCA 381 at para. 102. [235] Mr. Mynett calculated the sustaining capital reinvestment and principal debt repayments for MMG. [236] I accept that the following amounts are legitimately retained in MMG, in the fiscal years indicated, to maintain the operations of the business: 2020 2021 2022 principal repayments on long term debt held by Landlord

Corp. $44,302 $207,504 Interest related to long term debt on both the mortgage (Landlord Corp.) and the capital lease (Kerrisdale Corp.). $133,635 $216,756 $212,943 Principal payment obligations under the capital lease (Kerrisdale Corp.). $31,618 $91,687 Sustaining capital investment $21,156 $15,867 $54,715 [237] Where a company has a pre-tax loss, the payor's guideline income would be that of his reported income on his personal taxes. [238] Using the same methodology employed by Mr. Mynett, namely including in Z.A.S.'s available income at year end, the income recorded in the financial statements the following fiscal year end, the following retained income (loss) in MMG must be deducted from the available pre-tax income in MMG to determine the available income for Z.A.S. in the following years: MMG pre-tax income MMG retained income Income available to Z.A.S. from MMG 2019 $(59,328) $154,791 NIL 2020 $448,998 $308,543 $140,455 2021 $(996,662) $566,849 NIL [239] As a result of the income which I have determined is properly retained in the companies, the available income to Z.A.S. from MMG is zero for 2019 and 2021. In 2020, MMG pre-tax income, net of retained income, which was available to Z.A.S. as income was $140,455. [240] As a result, prior to considering any imputations of income under s. 19 of the Guidelines, I find the available income to Z.A.S. for the years 2019-2021,

comprised of his adjusted line 150 income and income available to him from MMG, was the following: a) 2019 - $162,713 b) 2020 - $480,009 c) 2021 - $422,113 Imputation of Income - s. 19 Guidelines [241] Section 19 of the guidelines allows the court to impute to a spouse income where the spouse's reported income is not accepted by the court as appropriate for the purposes of the determination of support. T.S. submits that an imputation of income ought to be made to Z.A.S. because property was not reasonably used to generate income, and he has unreasonably deducted expenses from income. [242] If I find that Z.A.S.'s personal expenses were paid for by the MMG, the amount of such expenses would have to be added to his guideline income for that year. T.S. submits that in allowing MMG to pay his personal expenses, Z.A.S. is able to reduce the personal income required to meet his expenses. [243] Z.A.S. submits that s. 19 of the guidelines is not intended to require a court to engage in a line by line analysis of all expenses in a corporation. Rather, the emphasis should be on whether Z.A.S. acted unreasonably in making corporate decisions, and whether Z.A.S. acted in good faith in the management of the companies and his affairs. [244] I agree that it not helpful to the court to engage in a line by line, receipt by receipt, analysis of all expenses incurred by the company in a search to

find a personal benefit. I have considered whether Z.A.S. charged his personal expenses to MMG, and have found that he has not. [245] I do not accept the test is whether Z.A.S. obtained a benefit in the sense that he also ate dinner when entertaining clients. An unreasonable deduction within the meaning of s. 19 is one where a payor is charging his personal expenses to the company in a way inconsistent with reasonable or proper business purposes. For example, if a payor creates an apartment in a property owned by the company for which he pays no rent, or charges 100% of his personal vehicles or personal food and grocery expenses to the company. In the case before me, such facts have not been established. [246] T.S. challenges Z.A.S.'s vehicle costs, which she says are paid by Kits Corp., but represent a personal benefit. At the time the parties separated, they had three vehicles which were all leased by Kits Corp. The leases had two years left on them at the time they separated. Z.A.S. testified that he told T.S. to take the SUV so that she and the children would have a safe car to drive in. After T.S. left, Z.A.S. learned that she had in fact purchased a Lincoln Navigator before she left, and she returned the SUV to Z.A.S. as she did not need it. Because T.S. was no longer working for MMG, her vehicle could not be charged as an expense to Kits Corp. [247] Z.A.S. was left with

three cars under lease. Because they were under lease, he could not simply return them. Kits Corp. was responsible under the leases for $90,000 in payments if he was to return them in 2020. I accept Z.A.S.'s submission that the decision to lease the three vehicles was a joint decision during the marriage, and it would be unfair to transfer the financial repercussions for that decision solely to Z.A.S. by imputing the cost of such leasehold obligations into Z.A.S.'s income following separation. [248] In addition, the vehicle expenses incurred in the first instance by the company are reallocated between MMG and Z.A.S. each year by way of adjustments to the shareholder loan account. I accept the allocation of expenses, and find that it would be unfair to impute to Z.A.S. vehicle expenses which are business expenses. [249] I decline to impute any income to Z.A.S. pursuant to s. 19 of the Guidelines. Guideline income 2022 [250] Mr. Mynett did not determine Z.A.S.'s available income for the year 2022. [251] On the 2023 financial statements, liabilities of MMG have increased by $300,000 over 2022, retained earnings are in a negative position of (-$6,306,818), gross profit is reduced by $400,000 over 2022, and the company is left with a cash deficiency of (-$393,775) at the end of the year. The loss from operations is improved from 2022 - the loss in 2023 is (-$807,533) against a loss

of (-$1,053,967) in 2022. The most significant difference in expenses between the two years is an almost $300,000 reduction in salaries - which I accept is due to Z.A.S.'s decision to reduce or eliminate his salary in the summer of 2022. Similarly, in 2023 no bonuses were paid, whereas in 2022 bonuses of $200,000 were paid. [252] Reviewing the 2023 financial statements for the same pre-tax obligations which I have found it is reasonable for MMG to retain, MMG has expenses in the categories of principal repayments on long term debt, interest related to long term debt and the capital lease, and principal payments under the capital lease in the total amount of $456,917. [253] While I do not have the benefit of a detailed calculation by Mr. Mynett for Z.A.S.'s 2022 available income, nevertheless on the evidence before me I am satisfied that no pre-tax income from MMG in the fiscal year ending 2023 is available to Z.A.S. such that it should properly be included in his guideline income for the 2022 year. [254] Z.A.S.'s personal tax return for the 2022 year, reports his income as $301,666, comprised of employment income of $271,666 and withdrawals from RRSPs in the amount of $30,000. This income is then adjusted with respect to carrying charges and interest expenses, for a final line 150 income of $298,962. Guideline income 2023 [255] At the time of trial, the tax return of Z.A.S. for

2023 had not been filed. [256] Z.A.S. testified that he paid his living expenses from borrowing and gifts from his father and advances against his shareholder loan account, his line of credit, gifts from his father, and cashing in his RRSPs. Z.A.S.'s father testified that he loaned Z.A.S. $600,000 as a loan which is to be repaid. In addition, he provides Z.A.S. with cash and cheques almost weekly, to help Z.A.S. cover expenses. Starting in approximately 2020, A.S. has been giving Z.A.S. up to $2,000 a week. I accept the evidence of Z.A.S. Sr. as to his contributions to his son's living expenses. [257] T.S. submits that Z.A.S. has received a personal benefit from MMG in that he has continued to advance himself funds out of his shareholder loan account to pay his living expenses, including $81,507 he advanced to himself in 2023. I do not agree that it is a personal benefit paid for by the company when a shareholder receives advances against a shareholder loan account. Z.A.S. is indebted to MMG for the amounts he has received, and that debt is a receivable of the company. [258] I accept the evidence of Z.A.S. that the business of MMG has suffered a significant reduction in profitability between 2021 and the date of trial. I accept that the reduction in profitability arose from market forces, and I saw no evidence which would support a finding that Z.A.S. operated the business

irresponsibly or with a view to anything other than creating the most profitable operation he could. Notwithstanding his efforts, profitability went down. T.S. clearly struggles with accepting the reality of the financial situation for MMG. However, her suspicions are not borne out on the evidence. The guideline income for Z.A.S. will reflect the financial realities of the company, which do not accord with the hopes of T.S. [259] The impact of both the slow down in financial performance of MMG post COVID, and the court ordered payment of a high salary to Z.A.S. in 2021 and 2022, is reflected in the cash and equivalents reported on the consolidated financial statements of MMG over the years 2019 to 2023. While the 2023 financial statements were presented in draft form at trial, I find that they are reliable in demonstrating the financial trend in the companies. The cash and equivalents recorded in MMG from 2019 to 2023 are: a) 2019 - $680,225 b) 2020 - $768,699 c) 2021 - $1,258,961 d) 2022 - $16,698 e) 2023 - NIL [260] Further, the monthly balance sheet for MMG in 2023, in fact, shows significant negative amounts in cash and equivalents in the summer of 2023. In June 2023, the cash and equivalents were $(358,906) and in July 2023 they were $(277,879). [261] I accept that Z.A.S. stopped taking a salary, in breach of a court order, because the finances of MMG simply could not

support the salary ordered in 2022 or 2021. I agree with Z.A.S. that the payment of a salary to Z.A.S. at the levels ordered on the interim applications resulted in a reduction of the assets of the company, and an increase in liabilities as the companies were forced to borrow to pay the salary at the level ordered. [262] In the summer of 2022, Z.A.S. proposed that rather than take a salary, which had tax implications to the company as well as Z.A.S. personally, both parties take a draw from their shareholder loan accounts, each taking $16,000 per month, with an additional $9,593 draw in relation to child support to be split equally between the parties' shareholder loan accounts. This proposal was not accepted by T.S. [263] Following this proposal, Z.A.S. stopped taking a salary from the company. He has not taken a salary since the summer of 2022. [264] The proposal by Z.A.S. in the summer of 2022 would have resulted in close to $500,000 being taken out of the shareholder loan accounts of the parties. [265] I find that the financial trend in MMG does not support the high guideline income for Z.A.S. set on the interim application in 2022. [266] However, this cannot be the end of the analysis for Z.A.S.'s income in 2023 and following. Like all parents, Z.A.S. has an obligation to earn an income to support his children. In Hanson v. Hanson, 1999 CanLII 6307, the court set out the

often cited principles applicable in determining a parent's capacity to earn income: [14] The following principles apply when determining capacity to earn an income. (See Dr. Julien D. Payne, Imputing Income, "Determination of Income; Disclosure of Income", Child Support in Canada, Danrab Inc., August 3, 1999.) 1.There is a duty to seek employment in a case where a parent is healthy and there is no reason why the parent cannot work. It is "no answer for a person liable to support a child to say he is unemployed and does not intend to seek work or that his potential to earn income is an irrelevant factor." (Van Gool at para 30.) 2.When imputing income on the basis of intentional under-employment, a court must consider what is reasonable under 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. 3.A parent's limited work experience and job skills do not justify a failure to pursue employment that does not require significant skills, or employment in which the necessary skills can be learned on the job. While this may mean that job availability will be at the lower end of the wage scale, courts have never sanctioned the refusal of a parent to take reasonable steps to support his or her children simply because the parent cannot

obtain interesting or highly paid employment. 4.Persistence in unremunerative employment may entitle the court to impute income. 5.A parent cannot be excused from his or her child support obligations in furtherance of unrealistic or unproductive career aspirations. 6.As a general rule, a parent cannot avoid child support obligations by a self-induced reduction of income. [17] I agree that income should not be imputed when a change was reasonable in the circumstances. Reasonableness must be assessed in light of the joint obligation of parents to maintain their children and the requirement that a parent must earn to his or her ability. The general principles relating to income earning capacity, set out above, must be applied. [18] Professor McLeod focuses on fairness to the paying parent and the detrimental consequences that the attribution of income can have for that parent. The failure of a parent to earn to the parent's ability can also operate unfairly, with significant detrimental consequences for children. [267] The court's reasoning in Hanson has been quoted with approval by this court in countless decisions, including most recently Jourabchi v. Masbough, 2024 BCSC 1813, Jennens v. Jennens, 2014 BCSC 2014, and P.J. v. A.M., 2020 BCSC 814. [268] During the course of this litigation, Z.A.S. and T.S. were owners of MMG, a business valued at $1,800,000 at the time of trial.

Z.A.S. provides management services to MMG. These services have value. While recognizing the financial strain in these companies in recent years, Z.A.S. cannot avoid payment of child support by pursuing a business that is not profitable. If MMG is truly not profitable, Z.A.S. has an obligation to close the business and pursue something remunerative to ensure his children are looked after. [269] Mr. Mynett in his valuation report assumed that the economic salary for the services Z.A.S. provided to Kits Corp. was $200,000, and to Kerrisdale Corp. was $190,000. As such, the reasonable value of management services Z.A.S. provided to MMG is in the range of $390,000. This number is not inconsistent with the available income determined by Mr. Mynett in the years 2020 and 2021, or Z.A.S.'s reported income in 2022. [270] I accept that in 2023, Z.A.S. kept MMG solvent by choosing to not pay himself a salary. That is not sustainable. I do not accept that it would be appropriate, in light of the value of the business to accept a zero income for Z.A.S. in the year 2023. I find that it is necessary to impute an income to Z.A.S. for the year 2023. In all of the circumstances of this case, taking into account the economic value of the services provided by Z.A.S. to MMG, the financial strain on MMG due to the economically unsustainable salaries paid to Z.A.S. in 2021 and part of 2022 by court

order, and the reduced profits recorded in MMG in 2023, I impute an income of $250,000 to Z.A.S. for the year 2023. Summary of Z.A.S.'s Guideline income 2019 - 2024 [271] For the reasons expressed, I determine that Z.A.S.'s guideline income for the purposes of child support is: a) 2019 - $162,713 b) 2020 - $480,009 c) 2021 - $422,113 d) 2022 - $298,962 e) 2023 - $250,000 [272] For the years 2024 and following, Z.A.S.'s guideline income will be set at the greater of (1) $250,000 or (2) his reported income on his personal tax return plus the pre-tax income in MMG net of the reasonable retained income, as I have identified in these reasons. [273] In addition, once T.S.'s interest in MMG is transferred to Z.A.S., in accordance with these reasons, I find that the debt repayment resulting from any necessary refinancing in relation to such share purchase, is an amount which is properly retained by MMG and is not available for inclusion in Z.A.S.'s income. While Mr. Mynett did provide a calculation of the cost of financing, the calculation will have to be redone in accordance with the financial outcomes arising from my decision. T.S.'s guideline income [274] Z.A.S. submits that T.S. is underemployed, and income in the amount of $120,000 should be imputed to her, pursuant to s. 19 of the Guidelines and the law set out in Hanson. [275] T.S. submits that her income prior to trial should

be determined as the sum of her line 150 income, plus grossed up personal expenses received from Kits Corp. and Beauty Bar, set as follows: a) 2019 - $119,588 b) 2020 - $60,215 c) 2021 - $36,360 d) 2022 - $14,545 e) 2023 - $13,731 [276] Going forward, T.S. appears to rely on an income of $13,731 for future calculations. T.S.'s income history [277] T.S. had an interest in starting a business in the beauty/makeup industry, and in 2005 opened Beauty Bar, a business in that field. She also took a course at Blanche Macdonald, to learn about the field. T.S. has run the operations of Beauty Bar since it opened, including performing bookkeeping services for it. Initially Beauty Bar did well, but by 2015 or 2016 it was losing money. T.S. last drew a salary from Beauty Bar is 2015. [278] T.S. continued to work at Beauty Bar after the children were born. However, her hours were reduced, as she works during the children's school hours and after the children go to bed. [279] T.S. blames Z.A.S., in part, for the financial failure of Beauty Bar. She submits that he required her to entertain his friends and have the company pay for an expensive trip. T.S. says in 2019, Z.A.S. required her to start paying her personal expenses out of Beauty Bar. [280] Z.A.S. denies that he told T.S. to run her personal expenses out of Beauty Bar. He says he told her to stop putting personal expenses on his

black Visa card. Z.A.S. said he wanted her to look after her own expenses, and wanted her to contribute financially to the family. [281] I do not find it credible that Z.A.S. would tell T.S. to put her personal expenses through Beauty Bar. I find it is credible that Z.A.S., at a time when he was telling T.S. the family needed to cut back on expenses due to the financial situation in MMG, would ask T.S. to take care of her own personal expenses and start contributing to the family income. I prefer the evidence of Z.A.S. regarding T.S.'s personal expenses. [282] Z.A.S. wanted T.S. to not renew the lease for Beauty Bar in 2019, and take steps to liquidate the assets and shut down the business, because the business was not profitable. T.S. chose not to do so. She renewed the lease, without telling Z.A.S., and continued to operate the business at a loss up to the date of trial. [283] T.S. says that she is attempting to turn Beauty Bar around. She has owned the business for 18 years, and wants to revive it. She has reduced employees and streamlined expenses. She is exploring new lines of revenue. It is not clear what kind of income she expects she could derive from the business if she turns it around. [284] If T.S. cannot bring Beauty Bar into a profitable position, she intends to sell it. She is also intending on completing a course in counselling, hoping to become certified. The

program costs $35,000, and T.S. can complete it at home. Following the course work there is a one-year practicum. T.S. testified that she expects to be able to earn $60,000/year as a counsellor. She submits that, at 52 years of age, it is reasonable to afford her several years to re-enter the work force in a new career. Imputation of income [285] In the two interim support orders, an annual income of $50,000 was imputed to T.S. [286] Imputing income to a payor must have regard to the payor's capacity to earn in light of their age, work history and availability of work: Hanson at para. 14(2). [287] Z.A.S. submits that an employment income of $100,000 ought to be imputed to T.S., and investment income of $20,000 ought to be imputed to her. He bases the employment figure on the salary of Mr. Mallari, the retail manager at Kits Corp. He submits that a good retail manager can earn an income in the range of $100,000, and T.S. has the skills to take on such a position. The imputation of investment income arises from the money T.S. had available to her as result of her inheritance from her mother. Income received by T.S. since 2019 [288] On May 11, 2019, T.S.'s mother passed away. T.S. was the sole beneficiary of her mother's estate. The estate was comprised of assets worth $1,886,298. In addition, T.S. received $476,617 through a right of survivorship outside the estate. [289] T.S.'s

mother owned a home which was assessed at $1,411,000 at the time of her death, which T.S. sold in April 2020 for $1,331,000. [290] Z.A.S. submits that T.S. received $1,260,741 in cash from her mother's estate between June 2019 and March 2020, as well as the proceeds of the sale of her mother's house. While these are all excluded assets for the purposes of division of assets, Z.A.S. submits that the court should take these funds into account when imputing income to T.S. [291] T.S. used the proceeds from the sale of her mother's house to purchase her Maple Street Property. T.S. spent $216,235 on estate related expenses and gifted $50,000 to a relative. [292] Between June 2019 and August 2020, T.S. spent close to $382,830 from the inheritance on various personal expenses. [293] From her inheritance, T.S. invested $500,000, on December 17, 2019, into a Manulife account. The value of T.S.'s Manulife account in April 2021 was $544,700. By October 2023, it had been reduced to $88,990. In essence, in two years T.S. spent $455,710. Z.A.S. submits that if T.S. had not spent the funds she invested in Manulife, she could have earned a minimum of $20,000/year, based on an attributed 4% interest rate. [294] Z.A.S. submits that he paid T.S. support in the amount of $14,500/month between June 2020 and July 2021, for a total of $188,500. Pursuant to the interim orders, from August to May 2022,

he paid T.S. a total of $177,372 in spousal support and $102,538 in child support. [295] Z.A.S. submits that, since 2019, Z.A.S. has received, and spent, over $1,300,000, both from her mother's estate and from support payments. He submits that T.S. has been a profligate spender, and has not acting reasonably in using her considerable available funds to generate an income. Conclusion on T.S. guideline income [296] I find that T.S. has not acted reasonably since the date of separation in February 2020. As of February 2020, T.S. had an obligation to start down the road to self sufficiency. [297] As of the date of trial, she has had three years to bring Beauty Bar into profitability, and has been unsuccessful. A payor cannot persist in unremunerative employment, which is what she has done. [298] With respect to her future plans, T.S. could have started the counselling course long before trial, such that she would be in a position to start earning income by the date of trial, or shortly thereafter. She had ample funds from her mother's estate and from her support payments to pay for any such education. There was nothing stopping her. [299] T.S. has not established that she is incapable of earning an income. She provided no evidence of attempts to find work, no evidence of disadvantages in seeking employment arising from her age or training. Given that T.S. had been a small business

owner, manager and bookkeeper for 18 years by the time of trial, I am not prepared to simply assume that she cannot find work if she tried. [300] T.S. explained that when A was younger and in therapy, she felt she needed to be with him for the therapy sessions, and attend to his demanding needs. I do not take issue with that decision, which was supported by Z.A.S. at the time. However, the evidence at trial is that A.S. is in school and is thriving. Certainly by 2021, A.S. did not require the intense time commitment that he required when he was working with a behavior and speech therapist in 2016. I am not satisfied that T.S. has established that the children's care needs pose any impediment to her finding employment. [301] I do not accept that an income of $13, 000 or $14,000 is reasonable for T.S. in the circumstances of this case. Such an income does not reflect the requirement on T.S. to provide for her children. It does not represent even a minimum wage income. [302] I find that it is appropriate to impute income to T.S. for the years 2022 and 2023, and into the future. [303] I do not agree that it would be reasonable to impute $100,000 as income to T.S., as suggested by Z.A.S. Minimum wage is approximately $34,000. T.S. has a long history in business. It is not as if T.S. was a stay at home mother for the last 18 years. I am not satisfied that it is appropriate to impute

an income as low as minimum wage to a person with T.S.'s background. [304] I find that a fair imputation of income for T.S. in the years 2022 and 2023 is $40,000. [305] For the years 2019 - 2023 I determine T.S.'s guideline income to be: a) 2019 - $119,588 b) 2020- $60,215 c) 2021 - $36,360 d) 2022 - $40,000 e) 2023 - $40,000 [306] For the years 2024 and into the future, T.S.'s income will be set at the higher of $40,000 or her line 150 income as reported on her personal tax returns. [307] I do not agree that it would be appropriate to impute a further $20,000/year of investment income in the circumstances of this case. The Manulife funds have been spent, and it would be punitive to impute this additional level of income to T.S. Child support [308] Before August 1, 2021, the parties were supporting themselves through withdrawals from their shareholder loan accounts, by agreement and without reference to the Federal Child Support Guidelines. While Z.A.S. characterized the payments prior to the first court orders as support payments from him. I find they were not. They were advances against the parties' shareholder loan accounts in MMG. Z.A.S. did not make these payments out of his personal funds. The payments were all recorded as debts owing to the companies. As the parties share equally in the value of MMG, I find that it is not appropriate to revisit any payments received by

the parties prior to the first interim, without prejudice, consent order which set support based on the Guidelines. [309] The parties are responsible to pay child support based on the Federal Child Support Guidelines, in accordance with the guideline incomes I have determined. For the period August 1, 2021 to December 2023, the child support obligations of the parties are: Year Z.A.S.'s Guidelines income T.S.'s Guidelines income Monthly Child Support Payable by Z.A.S. Yearly child support payable 2021 $422,113 $36,360 $5,370 August to December $26,850 2022 $298,962 $40,000 $3,917 $47,004 2023 $250,000 $40,000 $3,339 $40,068 [310] The total child support payable by Z.A.S. to T.S. from August 1, 2021 to the end of 2023 was $113,922. [311] For 2024, the guideline incomes of the parties are not known. The minimum amount Z.A.S. will owe for 12 months of child support in 2024, if the incomes of the parties remain the same as 2023, will be $40,068. [312] Z.A.S. agrees with T.S.'s proposal on payment of special and extraordinary expenses, which are set out in detail in the summary of orders in these reasons. Spousal support [313] Entitlement to spousal support is determined through considerations of the factors and objectives set out in s. 15.2(1) of the Divorce Act, RSC 1985, c 3. Pursuant to subsection (4), the court must consider: 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. [314] Pursuant to subsection (6), in making a support order the court must: (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. [315] No single objective set out in section 15.2(6) is paramount, and all must be considered by the court: Moge v. Moge, [1992] S.C.R. 813 at para. 850-853. The first two objectives relate to compensatory support, and the last two objectives relate to non-compensatory support. A court is not required to decide one basis of support to the exclusion of the others, and the doctrine of equitable sharing is the overarching principle to be focussed on by the court: Chutter v. Chutter, 2008 BCCA 507 at para. 49. [316] The intention behind compensatory and non-compensatory spousal support entitlement was summarized in M.S. v. K.S., 2019 BCSC 1458: [38] Compensatory support is intended to provide redress to the recipient spouse for economic disadvantage arising from the marriage or the conferral of economic advantage on the other spouse: Chutter v. Chutter, 2008 BCCA 507 [Chutter] at para. 50, leave to appeal denied [2009] S.C.C.A. No.

41. The compensatory basis for relief recognizes that sacrifices made by a recipient spouse in assuming childcare and household responsibilities may impact their future financial prospects: Chutter at para.

50. There may be a corresponding advantage to the payor spouse in the ability to pursue career opportunities free of such responsibilities. [39] Non-compensatory support is "grounded in the 'social obligation model' of marriage in which marriage is seen as an inter-dependent union". Upon marriage dissolution, it falls on the former partner to meet the needs of a disadvantaged spouse and not the state: Chutter at para.

54. Need alone may be sufficient to ground a claim for spousal support: Bracklow v. Bracklow, 1999 CanLII 715 (SCC), [1999] 1 S.C.R. 420 at para. 43. [40] "Need" in this context refers to something more than the basic necessities of life. The concept of need may vary depending on the circumstances of the parties. In longer marriages, courts may measure need against the marital standard of living: Chutter at para.

90. This is subject, of course, to consideration of the post-separation financial circumstances of the party from whom spousal support is sought. [317] In the context of a long-term marriage, as in the case before me, the standard of living of the parties during the marriage, and the standard of living of the parties after separation must be considered. There is no question that the parties' standard of living has reduced after separation. However, this is in large part due to difficulties with MMG, and relates less to the separation itself. At the time of separation, in fact, T.S. had access to considerably more money than Z.A.S., due to the inheritance she received from her mother. She is presently living in a home that she owns, with significant equity. Z.A.S. is living in a rented home. [318] Nevertheless, I accept that due to the long marriage, and the way the parties shared equally in the family companies during the marriage, the economic lives of the parties are intertwined: W. v. W., 2005 BCSC 1010 at para. 11. [319] In addition, while T.S. continued with the business of Beauty Bar throughout the marriage, that business was not the economic driver of the family. MMG was the economic driver, and Z.A.S. focused an extraordinary amount of energy to the success of MMG. Z.A.S. would not have been able to spend the time and energy he did on the business without T.S. taking

the lead with the children and the day to day running of the family. They had a partnership, where each party participated in the family and the businesses, but Z.A.S. was clearly in charge of MMG and T.S. was clearly in charge of the home front and the children. [320] While I have found that T.S. maintained her business throughout the marriage, and for many years contributed services such as bookkeeping to MMG, the economic return from her business is much less than the return from MMG. I say this recognizing that the financial situation of MMG at trial was greatly reduced from the economic return enjoyed by the parties during the marriage. I expect that MMG's finances will improve, as Z.A.S. is committed to the business and the financial pressures on the business which arose due to the start-up of Kerrisdale Corp. and the interim support orders will lessen over time. [321] I anticipate that Z.A.S.'s financial prospects will improve more quickly than T.S.'s, a fact which is implicit in the guideline income determinations I have made. I am also satisfied that the trajectory of MMG is a direct result of the agreed division of labour in the marriage, and the family decision for T.S. to continue exercising primary responsibility for the children after separation. It would be inequitable if Z.A.S. alone reaped the benefit of the groundwork in MMG laid during the marriage. [322] I

am satisfied that the duration of the marriage, the long term interdependent union of the parties in their home life and their business, and the decision they made during the marriage to have T.S. assume primary responsibility for the home and children, freeing up Z.A.S. to spend long hours away from the home building the business, justify an order for support on both a compensatory and non-compensatory basis. Year Z.A.S.'s Guidelines income T.S.'s Guidelines income Monthly Spousal Support Payable by Z.A.S. Annual Spousal Support Payable 2021 $422,113 $36,360 $8,195 August - December $40,975 2022 $298,962 $40,000 $5,178 $62,136 2023 $250,000 $40,000 $3,984 $47,808 Quantum and duration of spousal support [323] I am satisfied that T.S. is entitled to support at the mid-point of the range, based on the guideline incomes I have determined. I find that support will be payable for 15 years. Spousal support will be varied each year based on the guideline incomes of the parties. Quantum of support may be reviewed after five years. The quantum review is permitted in light of the uncertainty as to the parties' likely incomes in the future, and is limited to whether support should be adjusted up or down on the range of support. The review may be initiated by either party. A court on such a review may determine if any future quantum reviews will be permitted. [324] As with child support, I

find that the appropriate start date to determine spousal support is August 1, 2021. For the period August 1, 2021 to December 2023, spousal support was payable in the following amounts: [325] The total spousal support obligations of Z.A.S. in the period August 1, 2021 to December 2023 is $150,919. [326] For 2024, the guideline incomes of the parties are not known. The minimum amount Z.A.S. will owe for 12 months of support in 2024, if the incomes of the parties remain the same as 2023, will be $47,808. [327] I do not agree that security for support orders is warranted in this case. Arrears [328] Z.A.S. seeks cancellation of any arrears flowing from the interim support orders. [329] When the second interim order was made, it was based on projections which showed declining cash and equivalents in MMG. The court found, at that time, that the projections were too pessimistic, and noted that "If I am incorrect in this regard, adjustments can be made in accordance with the trial judge's findings." [330] I am satisfied that the projections were not too pessimistic, and in fact the orders were not sustainable on the actual profits in MMG. I am satisfied that the arrears outstanding from these orders must be cancelled. [331] It is not open to a party to simply exercise self help and stop paying court ordered support. However, in this case Z.A.S., through counsel, made countless

attempts to demonstrate to T.S. the financial state of MMG and pleaded with her to consent to a reduction in support. For various reasons, including her suspicions as to how Z.A.S. was operating the business, she declined to consent to a reduction. [332] T.S. brought in FMEP to enforce arrears, but then cancelled this attempt. Meanwhile, Z.A.S. had to apply to cancel arrears in order to avoid enforcement proceedings by FMEP. Z.A.S. attempted to set a chambers hearing to address the issue but, due to pressures on the court system, was not able to obtain a date. In March 2023, the parties' applications were adjourned on the condition that Z.A.S. pay T.S. $130,000 out of RRSPs, which he did. [333] Therefore, while ordinarily I would not countenance a deliberate non-compliance with a court order, in the circumstances of this case I find that Z.A.S. simply could not make the ordered payments, and did everything he could to find a resolution. He did not simply ignore or thumb his nose at the terms of the order. As such, I am not prepared to issue any orders reflecting disapproval of his actions. [334] Pursuant to the two interim orders, Z.A.S. paid a total of $373,650 in interim child and spousal support, including the payment of $93,740 in November 2023. His total obligations for both child support and spousal support from August 1, 2021 to December 2023 were $264,841. As a result,

Z.A.S. overpaid spousal and child support up to December 2023 in the amount of $108,809. [335] All arrears flowing from the two interim support orders are cancelled. Parenting issues [336] The parties obtained a s. 211 report, dated May 7, 2022, from Dr. Elterman, a clinical and forensic psychologist. Dr. Elterman conducted numerous interviews with the parties, including observing the children with each parent in their own homes. Dr. Elterman met with the family in November and December 2021 and January and March 2022. [337] Dr. Elterman had the opportunity to conduct interviews with a number of people in the children's lives. I will refer to some of the information reported by Dr. Elterman in my discussion of the family dynamics. [338] During the marriage, both parents worked in their businesses. Z.A.S. worked long hours, and T.S. was the primary parent responsible for the children. However, she also was a working parent, and both parents relied on the assistance of the nanny to a great extent. They first hired their nanny when M.S. was 6 months old. She continued with both parents even after the separation, until April 2021, when she stopped working for T.S. [339] According Dr. Elterman's report, A.S. was diagnosed on the autism spectrum when he was young, and was treated by a behavior analyst from age two to age 7. T.S. was the parent primarily engaged in the therapy for

A.S., and this continued after separation. A.S. has made great strides through the program. In the year before trial, the therapy became focussed less on behavior and more on tutoring. [340] It is clear from the interviews conducted by Dr. Elterman, and the witnesses at trial, that both Z.A.S. and T.S. were busy in their businesses and with their family throughout the marriage. Z.A.S. took on a more significant role in the companies. As the primary person building and running two retail food stores, he did not have as much time available to spend with the children as T.S. did. However, I find that T.S. in no way was the exclusive parent in the children's lives. Z.A.S. was an interested and loving parent, and was as available to the children as his business would allow. [341] Since the parties separated and began living in different homes, Z.A.S. has had the children from Friday after school until Sunday evening. [342] Z.A.S. has continued to employ the same nanny the family has had since M.S. was a baby. She works with the children on Fridays and Saturdays. On Saturdays, M.S. has soccer. Z.A.S. takes M.S. to soccer, but A.S. does not want to come so he stays home with the nanny. [343] A.S., the children's grandfather, assists Z.A.S. with the children. He spends time with them and takes them on outings. He picks the children up from school on Fridays if Z.A.S. is not able

to. [344] M.S. goes to St. George's school, and started high school in 2024. [345] A.S. attends Henry Hudson school. Allegations of Family violence [346] T.S. raised issues of family violence in these proceedings. On March 9, 2021, she brought an application for a protection order against Z.A.S. I find that the facts presented, ex parte, on this application did not accurately or fairly describe the true state of affairs between the parties. [347] On the ex parte application, T.S. presented affidavit evidence in which she suggested that Z.A.S. used physical violence with the children, engaged in emotional conditioning with the boys to bring out compliance, and pushed and injured her in front of the children. She stated the children recoiled and flinched when yelled at by their father. T.S.'s representations were accepted by the court, and in part formed the basis of the protection order, as evidenced by the court's reasons. [348] None of this evidence was borne out at trial. [349] At trial, both parties testified about an incident at a park which happened in February 2021. T.S. testified that Z.A.S. pushed her to the ground, and M.S. was in the car watching while this happened. Z.A.S. says that T.S. had parked her car so that he could not move his car. She wanted to talk to Z.A.S., and pulled the phone out of his hand and threw it in the bush. Z.A.S. says that she jumped on the

car, and attacked him. He pushed her off him, and she fell to the ground. Z.A.S. agrees that M.S. saw this and was upset by it. There is no way, on the evidence before me, to reconcile these two different accounts. However, I do find that this was a one time event, and is not representative of the relationship the parties had with each other or with the children. [350] The test messages between the parties through 2019 and up to February 2020, do not in any way suggest that T.S. had any concerns when the children were in Z.A.S.'s care. The parties clearly shared parenting duties, and relied on each other to parent the children appropriately when they were in the care of the other. There were no witnesses at trial called to support the allegations made by T.S. [351] Z.A.S. agreed that when M.S. was young, approximately four years old, he gently smacked on the side of the face or his buttocks, as a form of reprimand. T.S. objected to this, and Z.A.S. stopped doing it. This allegation related to behaviour some seven years before T.S. brought forward her allegations of family violence. I find these allegations were wholly unfounded and not capable of supporting a finding of a risk of family violence at the time T.S. brought her application. [352] Dr. Elterman confirmed that through his interviews with T.S. she related no concerns of violence or increasing violence on the part of

Z.A.S. Dr. Elterman agreed that protection orders were usually sought where there is a current threat of violence, and not in relation to an incident that occurred many years earlier. [353] The interviews with the children did not reveal any fear towards Z.A.S., or any disclosures of inappropriate or concerning behaviours. Similarly, they disclosed no issues of concern with T.S.'s parenting. [354] When Dr. Elterman observed Z.A.S. with the children, he noted that Z.A.S. clearly enjoys the boys and makes good eye contact with them; the children respond by smiling back at him. Dr. Elterman noted: The visit was generally positive and I noted that both boys sit close to Z.A.S. and he is affectionate with them. I thought that the relationship between them was close and healthy. [355] When Dr. Elterman observed T.S. with the children, he noted their positive relationship, and stated: The energy between [T.S.] and the boys was more calm and laid-back compared to a more energetic and upbeat energy between them and [Z.A.S.]. I also thought that the relationship that I observed between the children and [T.S.] was close and healthy. [356] Dr. Elterman did not find evidence of family violence. He stated: With regard to domestic violence, there is not a lot in terms of police records or other records and the parents have very different versions of what took place in the parking lot and it

was unfortunate that [M.S.] was witness to this. The reality is that neither of the parents represent a risk of domestic violence to the children nor do I perceive that either of them would tolerate a partner who would engage in such behaviour and expose the children to this. [357] I find that there are no concerns of family violence and both parties are loving and capable parents. Parenting time [358] With respect to issues regarding the children, the parties cannot agree on a parenting schedule. Since the separation, Z.A.S. has had the children on weekends, and T.S. has had the children during the week. Z.A.S. seeks a week on, week off schedule. T.S. seeks to continue the current arrangement. [359] Z.A.S. seeks equal parenting time. He submits that the current schedule is difficult for him because weekends are the busiest time at the stores, and these are the only days he has the children. He says that an alternating schedule would allow him to plan his time at the store so that he was working while the boys were in school. He could work more when the boys were with their mother, and less in the weeks he had the boys. He would like to be a stronger influence in the children's lives, including their schooling and activities. He is supported by the nanny and his father, who loves spending time with the boys. Z.A.S. lives within walking distance of St. Georges, and M.S. can walk

home from school. Z.A.S.'s father can pick A.S. up from Henry Hudson school on the days Z.A.S. is not able to do it himself. [360] T.S. seeks to maintain the current parenting arrangement. She submits that she has been the primary person involved in the children's schooling and activities, and she is better able to get them to their activities. She is concerned that Z.A.S. will not be able to get the time off work, to allow a week on, week off schedule to work. She believes that A.S. needs consistency and stable routine, which is also supported by the behavioral consultant. [361] Dr. Elterman stated: Having heard the two parents' concerns about each other, I nonetheless came to the conclusion that they are both capable, loving and want what is best for the children. They are both busy people and try and get a lot out of every day. [362] Both children enjoy their time with both parents. Both are content with the current parenting times. However, A.S. would like to spend more time with Z.A.S.. A.S. expressed a strong desire to spend more time with his father. M.S. would like to increase the days with his father to include Sunday nights. M.S. knows that his father wants to have the children on a week on, week off basis, and is willing to give it a try but it is clear he is worried about how much time his father will have for him during the week. [363] While Z.A.S. worked very long

hours when the parties were together, Dr. Elterman indicates that M.S. reports he sees more of his father since the separation. He notes that Z.A.S. picks the children up from school on Fridays, although he then has to return to work. Z.A.S. still has to work on Saturdays most of the time. [364] Dr. Elterman made recommendations for the parenting schedule. While I can consider Dr. Elterman's report, I am not bound by his conclusions or recommendations: M.F.W. v. M.A.H., 2020 BCCA 284. [365] Dr. Elterman made the following recommendation: My recommendation in this case is for the parents to share joint guardianship and joint parenting responsibility. While there is still a great deal of bitterness about the separation and the events that led up to it, I think that they are both rational individuals who would benefit from an independent third party such as a parenting coordinator who is more senior and is able to provide them with clear and direct direction. My recommendation for the parenting arrangement takes into account what appears to be the most likely work schedule, M.S.'s preferences and also what I perceive to be a workable arrangement for the children. I would recommend that they proceed on a 4 week cycle. On the first 3 weekends [Z.A.S.] would have the children from after school Friday until he takes them to school on Monday morning. There needs to be a right of first

refusal such that if he works and leaves the boys for more than 3 hours, that he would give [T.S.] the right of first refusal to have the children during that time. On the 4th weekend this would be [T.S.]'s weekend and immediately after that weekend [Z.A.S.] would pick the boys up from school on Monday and return them to school on Wednesday morning. [366] Dr. Elterman made various other recommendations with respect to holidays and special days, which I do not need to review here. [367] At trial, Dr. Elterman stated that he made his recommendation for parenting time because he was concerned that Z.A.S. would not be able to take time from work to be with his children on the days they were in his care. He observed that A.S. needed stability, and M.S. was worried that Z.A.S. would not be available to him because of his work. Ultimately Dr. Elterman allowed that if the court concludes that Z.A.S. was genuine in his intention to work less on the days the children were in his care, and Z.A.S.'s plans were likely to happen, he would have no difficulty recommending a week on, week off schedule. [368] At trial, Dr. Elterman confirmed that it was in the best interests of children to have maximum contact with their parents. He testified that children do best when they have sufficient time with their parents to maintain attachment. He said parents need sufficient time to do things like put

the children to bed, wake up with the children, comfort the children, give them meals, and do natural parenting things with them. [369] Section 16 of the Divorce Act mandates that the court shall only take into consideration the best interests of the children when making parenting orders. In relation to parenting time, the court should order as much time with each parent as is consistent with the best interests of the children. [370] In this case, during the marriage T.S. was the parent most involved in planning and organizing the children's lives. This continued after separation. T.S. points to the many things she does with the children now as evidence that she is more capable. However, I do not agree that Z.A.S. is incapable of doing all that is required in his children's lives. [371] It must also be remembered that during the period of conflict at the end of the relationship and in the years since the separation, Z.A.S. has been the primary person involved in creating a new and complicated business. The Kerrisdale location was a major undertaking. Very shortly after it opened, the pandemic hit and Z.A.S. had to manage all the complications of operating a business during a pandemic. It is understandable that his time was overtaken by his work responsibilities during these critical periods. [372] The question is whether the routines established during the marriage and until

trial continue to be in the best interests of the children. [373] Dr. Elterman commented that children do best when they have sufficient time with their parents to maintain attachment. He pointed to the things which develop attachment between parents and children, including all the daily contacts between parents and children as they participate in their daily lives. These are the things which are curtailed under the current parenting time regime. [374] The parenting time schedule to date has provided T.S. with a greater role in the children's homework, schooling and after school activities. However, I find the court must be careful not to freeze parenting responsibilities in the format they were in during the marriage. Both parents need time and opportunities to develop the attached relationships that arise through ordinary, day to day, parenting activities. [375] Z.A.S. has demonstrated a clear love for his children, and Dr. Elterman confirmed that the boys also have a close and healthy relationship with their father. The parents have different parenting styles. This is not a negative. It is my view that children benefit from different parenting approaches. [376] Z.A.S. has testified that if he had the children on a week on week off schedule, he could manage his time at the store better. When he has the children, he can focus on them, and when the children are with their

mother he could focus all his attention on the business. He feels his relationship with the children would be better if he could participate more fully in their daily lives. [377] I find that Z.A.S. is sincere in his desire to be more involved in his children's lives, and I accept his proposal for week on, week off parenting will give him the ability to manage his work and his parenting responsibilities. [378] While it will represent a change for the family, I am satisfied that it is in the best interests of the children to move to a stable, week on, week off, alternating week parenting schedule. I order that the new schedule will commence on January 1, 2025. The children will be with Z.A.S. on New Years, and will stay with him until the weekend when they will return to their mother. I was not provided with a preferred day for the children to switch between houses. I suggest that the children switch homes after dinner on Sundays, but I leave it to the parties to work out this detail. Parenting orders [379] Most of the parenting orders go by consent. The only issues raised by Z.A.S. are: a) T.S. seeks a right of first refusal if Z.A.S. is not able to be with the children for a period of over three hours when needs assistance during his parenting time. Z.A.S. does not agree this is necessary. b) T.S. seeks a parenting coordinator. Z.A.S. does not agree this is necessary. c)

Z.A.S. seeks an order that for winter holidays, he has the children every New Years, and T.S. has the children every Christmas, given that the MMG business is particularly intense at Christmas each year. d) T.S. seeks to hold the children's care cards. Z.A.S. does not agree to this. e) Z.A.S. seeks an order that each parent respond to communication from the other within a reasonable time. Right of first refusal [380] One of the advantages of a week on, week off parenting arrangement is that it gives each parent an opportunity to set routines with the children, and for the children to experience different parenting styles. For this to work, the parent needs to be able to manage their responsibilities during their parenting time in the manner they feel is the most appropriate. As both parents are working parents, this means that at times the children will be a nanny, or a grand parent, or a friend. As the children enter high school, they can be expected to spend time on their own. These are all enriching experiences for children, and they are not negatives. [381] I do not agree that parenting times should be interrupted with a court ordered right of first refusal. In my view, that introduces layers of complications and avenues for disputes. Further, there is nothing inherently wrong with a child spending time with other caregivers. There is nothing in the evidence to suggest that

either Z.A.S. or T.S. are likely to make unsafe decisions for the children. [382] I decline to order a right of first refusal in favour of T.S. Parenting coordinator [383] T.S. seeks the appointment of a parenting coordinator, pursuant to the Family Law Act. Parenting coordinators may be appointed to assist in resolving conflicts between the parents, both by way of assisting in reaching agreement or by making determinations. Parenting coordinators are typically specially trained professionals who are skilled in managing high-conflict parental disputes. [384] Dr. Elterman recommended a parenting coordinator be appointed, and suggested such a person should be a senior professional who could provide the parties with clear and direct direction. [385] Z.A.S. is opposed to a parenting coordinator, and submits that T.S. has not established that he is slow to respond or that they cannot solve parenting issues between them. [386] I find that there has been a history of conflict since the separation. These reasons will result in a change to the parenting regime, and I can foresee problems arising as the parties settle into the new regime. I find that a parenting coordinator would benefit these parties as they navigate the first year under the new regime. [387] I appoint a parenting coordinator to assist the parties for one year. The parenting coordinator will have the powers outlined is

ss. 17 and 18 of the Family Law Act. The parties have liberty to apply to extend the term of the parenting coordinator, or may extend the term by consent. Winter holidays [388] The proposal of Z.A.S. is reasonable given his work. T.S. made no objections to the arrangement. I order that, subject to a different agreement between the parties, the children will spend Christmas with T.S., and New Years Day with Z.A.S., as set out in the draft terms attached to the final submissions of T.S. Care cards [389] The care cards need to be held by someone, and I see no reason for T.S. not to hold the cards. However, if Z.A.S. needs the cards during his parenting time, T.S. must arrange for Z.A.S. to have them without delay. Z.A.S. must return the cards to T.S. when he no longer needs them for the specific purpose for which he needed them. Communication [390] I agree that the parties must communicate with each other in a prompt manner. I decline to make any orders in this respect, as I have ordered a parenting coordinator who can assist the parties with their communication. Summary of Orders Divorce [391] I am satisfied that all requirements for an order for divorce have been met, and I order the parties divorced from each other. Parenting and support orders [392] The children will reside with each parent on alternating weeks, beginning on January 1, 2025. [393] All parenting terms set out

in Appendix A to the T.S.'s final submissions at trial are ordered, with the exception of: a) paragraph 3 is deleted; b) paragraph 10 is amended to create a term of one year for the parenting coordinator, subject to further order or agreement between the parties; and c) paragraph 20 is amended to provided that if Z.A.S. needs the cards during his parenting time, T.S. must arrange for Z.A.S. to have them without delay. Z.A.S. must return the cards to T.S. when he no longer needs them for the specific purpose for which he needed them. [394] Z.A.S. will pay child support in accordance with the Federal Child Support Guidelines. [395] Z.A.S. will pay spousal support for 15 years in accordance with the mid-point of the range. Quantum may be reviewed after five years. [396] All arrears owing by Z.A.S. from the two interim support orders are cancelled. [397] T.S.'s claim to retroactive support in the amount of $1,116,806 is dismissed. [398] The parties shall calculate the child and spousal support owing for 2024, and the yearly total will be applied against the overpayment of support paid by Z.A.S. in the amount of $108,809. If the prior overpayment made by Z.A.S. is insufficient to satisfy the 2024 support obligations, Z.A.S. shall pay the difference no later than March 1, 2025. If the prior overpayment exceeds the amount of support owing for 2024, such excess amount will be credited

against Z.A.S.'s payment for T.S.'s interest in MMG. [399] The parties will pay the following special and extraordinary expenses proportionate to their incomes: a) Medical and dental premiums; b) Health-related expenses, including prescription drugs and any required aids such as glasses or hearing aids; c) All therapies agreed to between the parties, including counselling, physiotherapy, occupational therapy, or speech therapy; d) Orthodontics for M.S., currently estimated at $2,400 per year; e) Expenses for primary or secondary school education, as agreed to between the parties; and f) educational or extracurricular activities, as agreed to between the parties. [400] The parties must agree to any special or extraordinary expenses in advance, and within seven days of receiving a receipt for an expense, the party who did not pay the expense in the first instance must repay the party who did pay the expense in the first instance. [401] Z.A.S. will maintain the children on his extended medical and dental benefit plan for so long as the children or eligible to receive such benefits. [402] Z.A.S. will pay T.S. her proportionate share of the retroactive s. 7 expenses in the total agreed amount of $13,821.43 (i.e. Z.A.S.'s share is $10,366). [403] There shall be an annual exchange of financial information in order that the parties can assess whether Guideline incomes should be

adjusted. By December 1 of each year, during the period support is payable, the parties will exchange the following documents: a) T1 personal tax returns; b) T2 Corporate tax returns for any company in which the parties directly or indirectly control and/or own shares; c) General ledgers of any company for which either party directly or indirectly controls; and d) A sworn Form F8 financial statement. [404] Child and spousal support will be adjusted in accordance with the parties' guideline income each year, in accordance with these reasons, no later than February 28 each year for which support is payable. [405] If the parties do not review support or do not choose to vary support payments in writing, both parties are deemed to agree that the quantum of support in place for the preceding year continues to satisfy the requirements of the Federal Child Support Guidelines and the Divorce Act. In the event the parties do review child and spousal support, and a variation is ordered or agreed to, the new amount of support will be effective as of January 1 of that year. Assets and other related orders [406] T.S.'s interest in MMG is valued at $836,953. [407] Z.A.S. will make a compensation payment to T.S. in respect of her interest in MMG in the amount of $836,953, less any overpayment of child and spousal support remaining following the determination of Z.A.S.'s 2024 support

obligations. [408] On payment to T.S. of the compensation for her interest in MMG, T.S. will relinquish her shares in Kits Corp., Kerrisdale Corp., and Landlord Corp. No later than fourteen days after payment of the compensation order, T.S. will execute and deliver to Z.A.S. the documents necessary to: a) Remover her as Trustee of the S. Family Trust; b) Remove her as director and officer of all companies comprising MMG; c) Transfer all of her shares in the capital of the companies comprising MMG to a person designated by Z.A.S.; d) Have herself removed as beneficiary of the S. Family Trust and disclaim any interest in the shares in MMG owned by the S. Family Trust; and e) Complete any steps reasonably necessary to effect the intention set out herein. [409] Within fourteen days of payment of the compensation order, Z.A.S. will execute and deliver to T.S. the documents necessary to: a) Remove him as director and officer of Beauty Bar Corp.; and b) Transfer all of his shares in the capital of Beauty Bar Corp. and all shares held by the S. Family Trust in Beauty Bar Corp. to T.S. [410] At the time of payment of the compensation order, Z.A.S. will provide confirmation that any personal obligation of T.S. to any financial institution on account of any debts, loans, credit facilities and the like in the name of any of the MMG companies has been terminated by those financial

institutions. [411] In the alternative, in the event T.S.'s personal obligations to such institutions have not been expunged, Z.A.S. will indemnify T.S. for any and all debts, expenses, costs in this regard, including but not limited to any legal fees she incurs in relation to such personal obligations on a full indemnity basis. [412] MMG will write off as a bad debt all intercorporate debts owing by Beauty Bar Corp. to any of the MMG companies, which will deliver releases of any and all debts owing by Beauty Bar Corp. to any of the MMG companies. [413] Any growth in value on the Maple Street Property is entirely reapportioned to T.S. [414] T.S. shall receive as her separate property the amount of $534,513 on account of her portion of the proceeds of sale of the family home, currently in the trust account of Farris LLP. [415] Z.A.S. shall receive as his separate property the amount of $462,869 on account of his portion of the proceeds of sale of the family home, currently in the trust account of Kornfield LLP. [416] The parties shall divide their watch and jewelry collection in specie, Z.A.S. will pick first, and each party to choose an item until the entire collection is accounted for. [417] The parties shall divide their art collection in specie, to be chosen in the same manner as the watch collection, T.S. will have first pick of the art, and the parties will alternate

thereafter. [418] T.S. shall transfer $150,000 out of her RRSPs to Z.A.S. [419] The parties will otherwise retain all real property, vehicles, bank accounts, investment accounts, RESPs and other accounts in their names without any adjustment. Costs [420] The parties have leave to make submissions on costs, including any orders for security for costs which may be appropriate given the potential size of a costs award in the face of the extensive expert evidence obtained in this case. "W.A. Baker J."