COURT OF APPEAL FOR ONTARIO

CITATION: Laurentian University of Sudbury (Re), 2021 ONCA
    199

DATE: 20210331

DOCKET: M52287

Hoy, Pepall and Zarnett JJ.A.

In the Matter of
    the
Companies Creditors Arrangement Act
,

R.S.C. 1985, c.
    C-36, as amended;

And in the
    Matter of a Plan of Compromise or Arrangement

of Laurentian
    University of Sudbury

Murray Gold and James Harnum, for the moving party the Ontario
    Confederation of University Faculty Associations

Susan Philpott and Charles Sinclair, for the moving
    party the Laurentian University Faculty Association

Miriam Martin, for the moving party the Canadian Union
    of Public Employees

D.J. Miller, Scott McGrath and Derek Harland, for the
    responding party Laurentian University of Sudbury

Ashley Taylor, Elizabeth Pillon and Zev Smith,
    for the responding party Ernst & Young Inc., acting as the Monitor

Heard: in writing

Motion for leave to appeal from the order of Chief Justice
    Geoffrey B. Morawetz of the Superior Court of Justice, dated February 26, 2021.

REASONS FOR DECISION

[1]

Laurentian University of Sudbury (Laurentian)
    is a publicly funded, bilingual and tricultural post-secondary institution,
    serving domestic and international undergraduate and graduate students. Due to
    recurring operational deficits, it has encountered a liquidity crisis and is
    insolvent.

[2]

Laurentian sought and obtained protection under
    the
Companies Creditors Arrangement Act
,
    R.S.C. 1985, c. C.36 (CCAA), to permit it to restructure, financially and
    operationally, in order to emerge as a sustainable university for the benefit
    of all stakeholders.
Among the stated reasons for Laurentians CCAA application
    was what it described as unsustainable academic costs, which Laurentian attributes
    in part to the terms of its collective agreement with its faculty members.

[3]

Two unions representing Laurentian employees - the Laurentian
    University Faculty Association (LUFA) and the Canadian Union of Public
    Employees (CUPE) -  and the Ontario Confederation of University Faculty
    Associations (OCUFA), an umbrella organization representing faculty
    associations, seek leave to appeal the decision of the CCAA judge, dated
    February 26, 2021, which continues a sealing order over two documents that Laurentian
    filed on its application for CCAA protection.

[4]

Having reviewed the written submissions of the parties and the
    sealed documents, we refuse leave for the reasons that follow.

Background

[5]

On  February 1, 2021, the CCAA judge made an order (the  Initial
    Order),  granting Laurentian initial relief under the CCAA.

[6]

Four days later, on February 5, 2021, the CCAA judge made an
    order appointing Dunphy J. as mediator to conduct a confidential mediation
    among Laurentians key stakeholders. The mediation is intended to address
    various issues concerning Laurentians restructuring, including a new
    collective agreement with LUFA, which represents 612 Laurentian faculty,
    accounting for 60% of the universitys payroll. LUFA supported the appointment
    of the mediator.

[7]

The Initial Order contained a sealing provision.
    At the comeback hearing, there was opposition to it. The CCAA judge continued the
    sealing provision in the Amended and Restated Order, dated February 11, 2021,
    on an interim basis, pending a supplementary endorsement.

[8]

The sealing provision, which was identical in both orders, covers
    two exhibits (Exhibits EEE and FFF) to the
affidavit by
    Dr. Robert
Haché,
which was filed in support of Laurentians request for the Initial Order. Dr.
    Hach
é is the President, Vice-Chancellor
    and CEO of Laurentian.

[9]

The sealing provision states that
the Exhibits
    are herby sealed pending further order of the Court, and shall not form part
    of the public record. Both the Initial Order and the Amended and Restated
    Order provide that any interested party may apply on seven days notice to vary
    or amend the order.

[10]

The sealed Exhibits consist of two letters. Exhibit
    EEE is a letter from the Ministry of Colleges and Universities (Ministry) to
    Laurentian, dated January 21, 2021. Exhibit FFF is a letter from Laurentian
    to the Ministry, dated January 25, 2021. Laurentian has described the letters
    as containing information with respect to [Laurentian] and certain of its
    stakeholders, including various rights or positions that stakeholders or
    [Laurentian] may take either inside or outside of these CCAA proceedings, the
    disclosure of which could jeopardize [Laurentians] efforts to restructure.

[11]

None of the moving parties sought to
    cross-examine Dr. Hach
é
on his affidavit or the communications between Laurentian and the
    Ministry.

[12]

The CCAA judge released his supplementary endorsement on February
    26, 2021, continuing the sealing provision. The effect of the sealing provision
    is that both the broader public and the parties to the CCAA proceeding are
    prevented from accessing the Exhibits.

[13]

The CCAA judge held that the sealing provision was authorized
    under s. 137(2) of the
Courts of Justice Act
, R.S.O. 1990, c. C.43,
    and by the application of the principles in
Sierra Club of Canada v. Canada
    (Minister of Finance)
, 2002 SCC 41, [2002] 2 S.C.R. 522. According to
Sierra
    Club
, at para. 53, a confidentiality or sealing order should only be
    granted when:

(a) such an order is necessary in order
    to prevent a serious risk to an important interest, including a commercial
    interest, in the context of litigation because reasonably alternative measures
    will not prevent the risk; and

(b)

the
    salutary effects of the confidentiality order, including the effects on the
    right of civil litigants to a fair trial, outweigh its deleterious effects,
    including the effects on the right to free expression, which in this context
    includes the public interest in open and accessible court proceedings.

[14]

The CCAA judge summarized the evidence in Dr.
    Hach
é
s affidavit
    and noted that he had reviewed the Exhibits in detail. He indicated that the
    evidence, as contained in Dr. Hach
é
s affidavit, outlines that there has been continuous communication
    between Laurentian and the Ministry with respect to Laurentians financial
    crisis, and that the government is well aware that a real-time solution must be
    found if Laurentian is to survive. He noted that the role, if any, that the
    Ministry will play is at this moment uncertain.

[15]

Considering the first branch of the
Sierra
    Club

test, he concluded that disclosure of the Exhibits,

at this time
, could be
    detrimental to any potential restructuring of [Laurentian] (emphasis added).
    Accordingly, the risk in disclosing the Exhibits is real and substantial and
    poses a serious risk to the future viability of [Laurentian]. He also noted
    that it is speculative to conclude that the Exhibits contain information that
    is not helpful to [Laurentians] position.

[16]

He found that the commercial interest was that
    of the entire Laurentian community, including the faculty, students, employees,
    third-party suppliers and the City of Greater Sudbury and the surrounding area;
    that it is of paramount importance to these groups that all efforts to
    restructure Laurentian be explored; and that it is necessary to maintain the
    confidentiality of the Exhibits in order to do so. He reiterated that [t]he
    disclosure of the Exhibits,
at this time,
could undermine the restructuring efforts being undertaken by
    [Laurentian] (emphasis added).

[17]

He was not satisfied that there were any
    reasonable alternatives to a sealing order over the Exhibits. Stakeholders were
    involved in the mediation and the negotiations could or could shortly be at a
    sensitive stage. It would not be appropriate to implement any alternative to a
    confidentiality order. To do so could negatively impact the mediation efforts.

[18]

Turning to the second branch of the
Sierra
    Club

test, the CCAA judge was also satisfied, based on
    the evidence, that the salutary effects of the sealing provision outweighed its
    deleterious effects, including the public interest in accessing the Exhibits.

Leave Test

[19]

Section 13 of the CCAA provides that any person
    dissatisfied with an order or a decision made under the CCAA may appeal from
    the order or decision with leave.
Leave to appeal in CCAA proceedings is
    to be granted sparingly
and only where there are serious and
    arguable grounds that are of real and significant interest to the parties.
This cautious approach is a function of several factors.

[20]

First, a high degree of deference is owed to discretionary
    decisions made by judges supervising CCAA proceedings, who  are steeped in the
    intricacies of the
CCAA
proceedings they oversee.  Appellate
    intervention is justified only where the supervising judge erred in principle
    or exercised their discretion unreasonably:
9354-9186 Qu
é
bec inc. v. Callidus Capital Corp.
, 2020
    SCC 10, 78 C.B.R. (6th) 1, at paras. 53 to 54.

[21]

Second, CCAA proceedings are dynamic. It is often inappropriate
    to consider an exercise of discretion by the supervising judge in isolation of
    other exercises of discretion by the judge in endeavouring to balance the
    various interests:
Edgewater Casino Inc. (Re)
, 2009 BCCA 40, 51
    C.B.R. (5th) 1, at para 20.

[22]

Third, CCAA restructurings can be time sensitive. The existence
    of, and delay involved in, an appeal can be counterproductive to a successful restructuring.

[23]

In addressing whether leave should be granted,
    the court will consider four factors, specifically whether:

(a)

the
    proposed appeal is
prima facie
meritorious or frivolous;

(b)

the
    points on the proposed appeal are of significance to the practice;

(c)

the
    points on the proposed appeal are of significance to the action; and

(d)

whether the proposed appeal will unduly hinder the progress of
    the action.

See:
Nortel Networks Corp.
    (Re)
, 2016 ONCA 332, 130 O.R. (3d) 481, at para. 34.

Leave is Not Warranted

[24]

As we will explain, we refuse to grant leave
    because the proposed appeal is not
prima facie
meritorious, granting leave would unduly hinder the progress of the action, and
    the proposed appeal is not of significance to the action. This is not an
    appropriate case for this court to explore issues of significance to the
    practice relating to the granting of sealing orders in the CCAA context.

Leave Not
Prima Facie
Meritorious

[25]

The moving parties raise three questions for determination on
    their proposed appeal, which we paraphrase as follows:

1. Did the CCAA judge err in focussing
    solely on Laurentians assertion of an important commercial interest without
    balancing the various competing interests applicable to a sealing order?

2. Did the CCAA judge err in granting
    the sealing provision without a sufficient evidentiary foundation?

3. Did the CCAA judge err in concluding
    that the sealing provision was justified as a result of speculative concerns
    about the impact that disclosure of the Exhibits that were sealed would have on
    the CCAA restructuring process?

[26]

A significant plank of the moving parties argument is that the
    sealing provision denies access to the sealed documents to parties to the CCAA
    process on the ostensible ground that the documents might have an impact on the
    positions those parties choose to take vis-
à
-vis the
    restructuring. They argue that the importance of the documents to the
    formulation of their positions is the exact reason why they should have access
    to the documents, not a justification for denying access to them.

[27]

We note that one of the moving parties, OCUFA, is not a creditor
    of Laurentian and is apparently not participating in the court-ordered mediation,
    the aim of which is a consensual restructuring. It is not clear in what sense
    OCUFA is a party to the CCAA proceeding or is in any different position than
    any other member of the public who may be interested in the court-filed
    materials. Yet the moving parties do not differentiate, in their proposed
    appeal questions or in the relief they propose to seek, between the
    entitlements of OCUFA to obtain the documents and those of the other moving
    parties. In other words, although reference is made to the denial of access to
    litigants, the underlying theory of the moving parties actually starts and
    stops with the proposition that there should be no sealing order at all.

[28]

We are not persuaded that the proposed appeal, challenging what
    is a discretionary order, is
prima facie
meritorious.

[29]

The CCAA judge set out the
Sierra
    Club
test in his reasons. Contrary to the submissions of
    the moving parties, he was well aware that
Sierra Club

required him to balance the deleterious effects of the sealing order.

[30]

In earlier reasons, the CCAA judge noted that if
    the restructuring is to be successful, it will have to be largely completed by
    the end of April 2021. The timeline is exceptionally short. In exercising his
    discretion, the CCAA judge concluded that the risk to the potential
    restructuring of Laurentian within this extremely tight timeframe if the
    Exhibits were disclosed outweighed other relevant interests.

[31]

The moving parties were (and are) concerned that
    they understand the Ontario governments position in relation to the
    restructuring, yet they did not seek to cross-examine Dr. Hach
é
. The CCAA judge, who
    reviewed the Exhibits, strove to address that concern, carefully signaling that
    the role, if any, that the Ministry will play is at this moment uncertain. Alive
    to concerns about fairness, he also signaled to the parties that it would be
    speculative to conclude that the Exhibits contain information that is not
    helpful to [Laurentians] position.

[32]

The moving parties have expressed particular concern that the
    sealing order creates an informational imbalance that may hurt them in the
    mediation process.
Nothing before us suggests that the moving
    parties who are participating in the court-ordered mediation (which appears to
    be only LUFA) have been hampered by any informational imbalance. The judicial
    mediator, who was appointed by the CCAA judge, is a bulwark against unfair
    treatment in the mediation. Should the judicial mediator have concerns that the
    moving parties have been hampered in the mediation by an informational
    imbalance or a perceived informational imbalance, it is open to him to raise them
    with the CCAA judge within the parameters of the February 5, 2021 order
    appointing the mediator.

[33]

Nor do we see anything in the sealing provision that would
    prevent a party from making a request to the CCAA judge, at the appropriate
    time, for relief on appropriate terms. As noted, the sealing provision is
    expressly subject to further order of the Court. The CCAA judge in his
    reasons of February 26 said only that an alternative to the sealing provision
    was not appropriate at this time.

[34]

In seeking leave, the moving parties have raised
    questions about how s. 2(d) of the
Charter of Rights and Freedoms
comes into play, as one of the purposes of the mediation is to
    conclude a new collective agreement with LUFA. But they do not dispute
    Laurentians submission that this issue was not argued below. It is difficult
    to fault the CCAA judge for not weighing a competing interest that was not asserted
    before him.

[35]

The moving parties also say that the CCAA judge
    failed to advert to the impact his ruling would have on freedom of expression. We
    are satisfied he did take that factor into account, as he mentions it in
    setting out the test and later says that the deleterious effects include the
    public interest in accessing the Exhibits.

[36]

The second and third questions raised by the
    moving parties ask the court to revisit an issue raised before the CCAA judge. He
    described the essence of the submissions made to him by those opposing the
    sealing order as there being no evidence that the sealing order was necessary
    to protect a valid commercial interest.

[37]

The CCAA judge was satisfied that there was a
    sufficient evidentiary basis. He based his conclusion that disclosing the
    Exhibits posed a serious risk to the restructuring on his review of the Exhibits
    and Dr.
Haché
s
    evidence. The moving parties are correct that Dr.
Haché

did not opine in his
    affidavit that disclosure of the Exhibits posed a serious risk to the viability
    of the restructuring. But Dr.
Haché
s evidence describes something of the dynamics at play and is clear
    as to Laurentians dire position and the timeframe within which the
    restructuring must be completed, if it is to be successful. It provided the
    foundation on which the Monitor, an officer of the court, supported Laurentians
    position that disclosure posed a serious risk, and the CCAA  judge, who has
    extensive experience in CCAA restructurings, concluded that disclosure posed a
    serious risk. The CCAA judge exercised his judgment, based on an evidentiary
    record.

[38]

The fact the proposed appeal is not
prima
    facie
meritorious weighs significantly against granting
    leave.

Appeal Would Hinder Progress of the Action

[39]

As we have said, this restructuring is on an exceptionally short
    timeline. We are told that the mediation is ongoing, with sessions occurring
    daily. There is urgency to being able to reach a successful restructuring by
    the end of April, in light of Laurentians financial position and the need for
    certainty regarding the next academic year. There is too great a risk that an
    appeal would be a distraction from restructuring efforts and thus would unduly
    hinder the progress of the action, which also weighs significantly against
    granting leave.

No Significance to the Action

[40]

Given the involvement of a court-appointed mediator and that it
    is open to the CCAA judge to revisit the sealing provision and possibly revoke
    it or limit its impact by allowing the parties to the CCAA proceeding to access
    the sealed documents, the significance of the proposed appeal to the action is
    insufficient to justify leave.

Significance to the Practice

[41]

The
facts of this case highlight some
    novel and interesting questions about the application of the
Sierra Club
test in the CCAA context.
These include questions about
    granting sealing orders over information filed in support of the application
    for protection under the CCAA, the granting of sealing orders where interests
    under s. 2(d) of the
Charter
are arguably at
    play, and about the application of sealing orders  to parties and stakeholders
    involved in the restructuring efforts. However, given our view of the merits of
    the proposed appeal and the other factors, this is not the appropriate case in
    which to explore these issues.

Disposition

[42]

Leave to appeal is refused. In the circumstances, there shall be
    no order as to costs.

Alexandra Hoy J.A.

S.E. Pepall J.A.

B. Zarnett J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Lengyel v. TD Home and Auto
    Insurance, 2021 ONCA 237

DATE: 20210415

DOCKET: M51658 (C67778)

Tulloch, Nordheimer and Jamal
    JJ.A.

BETWEEN

Gabriella Lengyel

Appellant (Plaintiff)

and

TD Home and Auto Insurance

Respondent (Defendant)

Gabriella Lengyel, in person/responding
    party

Heather Hogan, for the Public
    Guardian and Trustee/moving party

No one appearing for the
    defendant

Heard: April 9, 2021 by video
    conference

REASONS FOR DECISION

[1]

The Public Guardian and Trustee brings a motion
    to quash this appeal on the grounds that this court lacks jurisdiction to hear
    it. We are advised that the defendant supports the motion

[2]

The Public Guardian and Trustee is the litigation
    guardian for Gabriella Lengyel with respect to two civil proceedings arising
    out of automobile accidents where Ms. Lengyel is the plaintiff. The Public
    Guardian and Trustee settled those proceedings and obtained court approval of
    the settlement, over the objections of Ms. Lengyel.

[3]

Ms. Lengyel has appealed the approval order to
    this court. The Public Guardian and Trustee says that this court does not have
    jurisdiction to hear this appeal because (a) Ms. Lengyel has no right to bring
    the appeal as that authority lies entirely with her litigation guardian and (b)
    if Ms. Lengyel is seeking to challenge the appointment of the Public Guardian
    and Trustee as her litigation guardian, then that appeal lies only to the
    Divisional Court, with leave.

[4]

Both points made by the Public Guardian and
    Trustee are well-taken. Once a litigation guardian is appointed, the litigation
    guardian has sole control over the proceeding:
Kavuru (Litigation guardian
    of) v. Heselden
, 2014 ONSC 6718, 328 O.A.C. 399, 70 C.P.C. (7th) 60 (Div.
    Ct.). As was pointed out in
Kavuru
, if Ms. Lengyel is unhappy with the
    settlement, she could have sought to replace the Public Guardian and Trustee as
    her litigation guardian, but she has not done so.

[5]

Further, if Ms. Lengyel were to take the route
    of seeking to replace her litigation guardian, that would be a matter to be
    dealt with before the Superior Court of Justice or, if taken by way of appeal
    from the original appointment order, to the Divisional Court, with leave.

[6]

In either event, Ms. Lengyel does not currently
    have the authority to appeal the order approving the settlement.

[7]

The appeal is quashed for lack of jurisdiction. Our
    order is without prejudice to Ms. Lengyel bringing a motion before the
    Divisional Court for an extension of time to seek leave to appeal from the order
    appointing the Public Guardian and Trustee as litigation guardian, if she is so
    advised. We would not make any order as to costs.

M.
    Tulloch J.A.

I.V.B.
    Nordheimer J.A.

M.
    Jamal J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Lenihan v. Shankar, 2021 ONCA 142

DATE: 20210303

DOCKET: M52203 & M52231 (C68956)

Benotto J.A. (In
    Chambers)

BETWEEN

Kevin William Lenihan

Applicant
(Moving Party on M52203/
Responding Party on M52231)

and

Indira Shankar

Respondent
(Responding Party on M52203/
Moving Party on M52231)

Andrew Chris and Joanna Hunt-Jones, for
    the moving party/responding party

Indira Shankar, acting in person

Heard: February 17
    and 25, 2021

REASONS FOR DECISION

INTRODUCTION

[1]

The applicant, Kevin
    Lenihan, is the father of two-year old M. The respondent, Indira Shankar is the
    mother. They have been involved in high conflict custody litigation for M.s entire
    short life. Ultimately, the trial judge awarded sole custody to Mr. Lenihan and
    the right for him to move to Oregon with M. Ms. Shankar appeals. Mr. Lenihan
    brought a motion for security for costs.

[2]

At the original return
    of the motion, Ms. Shankar indicated that she wanted to file a response, but
    the court office would not accept her material because it was not in the
    correct format. I adjourned the motion to be returned before me and advised the
    motions office to accept her material notwithstanding its deficiencies.

[3]

I have now heard and
    read submissions from both parties.

BACKGROUND

[4]

Mr. Lenihan, an
    American citizen, lives in Oregon where he owns a home near to his parents and
    two brothers. He and Ms. Shankar met in Oregon. Very quickly after their
    meeting, Ms. Shankar moved into his home and they married in June 2017. Ms. Shankar
    is a citizen of India with permanent residence status in Canada. A month after
    their marriage she returned to Canada ostensibly to maintain her permanent
    residence status. The following month, the parties learned that Ms. Shankar was
    pregnant. Mr. Lenihan moved temporarily to Ontario to be with her. Problems in
    the marriage arose and they separated in December 2017.

[5]

In early February 2018 Ms.
    Shankar sent Mr. Lenihan a series of text messages indicating that the baby had
    been born prematurely and was in the neo-natal intensive care unit, breathing
    on a ventilator. These statements were false. M. was born on March 30, 2018.

[6]

M. was born with a
    condition called craniosynostosis. She underwent three corrective surgeries in
    2018 and 2019. The surgeries were successful, and she has no continuing
    disability, although updates will be required from time to time.

[7]

From the day of her
    birth, M. has been at the center of conflict and litigation. Due to allegations
    made by Ms. Shankar, the Childrens Aid Society (CAS) became involved. So too
    did the Office of the Childrens Lawyer (OCL). The CAS and OCL determined
    that the allegations were false. Several family court judges conducted case
    conferences. Finally, the custody trial began on November 17, 2020.

[8]

Mr. Lenihan and
his mother travelled from their home in Oregon
    to Ontario two weeks in advance of the trial to sit out their required
    quarantine period in a local hotel where they maintained their residence
    throughout the proceeding.

THE TRIAL

[9]

The trial lasted for
    four weeks.  The trial judges reasons describe its many challenges.
On the fifth day of trial, Ms. Shankar,
    alleging that Mr. Lenihan was not the biological father, filed the results of a
    paternity test. She then said he was just a sperm donor and filed a Sperm
    Donor Agreement which showed he did not want to be involved with the child.
    She also filed an email exchange between the father and his counsel which
    alleged the planning of a criminal act to remove the mother from the
    litigation. It became evident rather quickly that these documents were  in the
    words of the trial judge  transparent and shocking forgeries created by the
    mother. This was not the only forgery presented by Ms. Shankar. She also
    presented an 18-page affidavit from someone who  upon being called as a
    witness by Mr. Lenihan  said she did not know Ms. Shankar and had never signed
    the affidavit.

[10]

The mothers two counsel
    her tenth and eleventh  withdrew from the record upon realizing their
    unwitting participation in placing fraudulent evidence before the court. The
    trial judge granted Ms. Shankars request to continue the trial in-person. The
    day was a Friday. It concluded with witness planning, generous directions on
    self-representation and the sorting of details for that evenings weekend
    transfer of M. to her father.

[11]

Thirty hours later, Ms. Shankar
    boarded a plane for Delhi, India, first class, with a transfer from Delhi to
    Bengaluru. She did not inform the court, the father or the child. She did not
    return. Her agent counsel attended on the following Monday, seeking leave for
    the mother to continue with the trial on Zoom from her family home in India.
    The trial judge granted the request and ordered her to provide travel and other
    particulars, including a copy of her return ticket. A return ticket was never
    provided.

[12]

The trial continued until
    December 11, 2020. Ms. Shankar never returned.

[13]

Due to the urgency of the
    situation, the trial judge gave oral reasons at the end of the trial, to be
    followed by more extensive written reasons. She said:

Time is of the essence in this decision. There
    is a young child who has been living in a hotel for the past 20 days with a
    father who is a resident of Oregon, and a mother who has left the jurisdiction
    without a return ticket.

I find that it is
    in [M.s] best interest to transfer her residence from Ontario, Canada to
    Oregon, USA where she will have a stable residence, extended family supports,
    medical care and a good education. In doing so, I acknowledge that this change
    in residence will remove this case from Ontario jurisdiction.

[14]

The trial judge
    dispensed with the requirement of the mothers consent for M. to travel.  She also
    dispensed with the need for the mothers consent to issue a birth certificate,
    passport (both Canadian and American) and any other travel or identifying
    documents necessary for Mr. Lenihans return to Oregon with M.

[15]

As she said she would,
    the trial judge then provided more detailed written reasons reported at 2021
    ONSC 330.

FURTHER REASONS OF
    THE TRIAL JUDGE

[16]

The trial judges
    further reasons examined the extensive evidence and her findings in more
    detail, all with a view to the childs best interests. She
concluded that Ms. Shankars actions were entirely
    inconsistent with the childs best interests. She had taken extreme steps to
    keep the father, the professionals, CAS and the OCL from knowing basic facts.
    She did not name the father on their daughters Statement of Live Birth or
    obtain a birth certificate. She asserted non-existent court Orders to
    professionals and the hospital and ignored Orders that did exist, particularly
    Orders for disclosure. She had a second child but did not disclose the father of
    her second child or his legal name to Mr. Lenihan, the Society, the OCL or the
    Court. She repeatedly threatened the father, his family and CAS workers.

[17]

The trial judge found that
    the mother had virtually no credibility because of her repeated lies and
    attempts at forgery. She was also, according to the trial judge, incapable of
    putting the childs needs before her own. She went to extreme lengths to attack
    the father.

[18]

The trial judge found the
    father caring and competent, attuned to the childs needs and genuinely willing
    to foster the mother-daughter relationship while being appropriately
    protective. Because of the allegations against him by the mother, he was
    extensively investigated by the Toronto and Peel CAS. He has been further
    vetted by a Childrens Lawyer. The OCLs final Report detailed 18 substantive
    allegations that had been made by the mother against the father, all of which were
    determined to be false. The OCL found him to be a fully available and capable
    caregiver. His plan of care is sound and supported by his extended family. He
    offers the child a stable, healthy, and emotionally rich childhood. The trial
    judge said that he built a strong attachment with M. in the face of
    unimaginable adversity. She found that the father will meet the childs
    medical, educational, and emotional needs. She had evidence from a pediatrician
    in Oregon who has agreed to continue the required follow-up for her care. The
    trial judge found that the father was more than a capable parent.

[19]

Against this background
    Mr. Lenihan moves for security for costs of Ms. Shankars appeal.

SECURITY FOR COSTS

[20]

It is rarely
    appropriate to award security for costs in a child-related matter. This is a
    rare case. As the trial judge said:

I say this
    gravely: but for cases of infanticide or abduction, Ms. Shankars actions in
    and outside of this litigation exceed any known to me in the caselaw.

[21]

I turn to the legal principles
    engaged by the motion in the context of these facts.

(1)

Applicable test

[22]

Security for costs may
    be ordered pursuant to r. 61.06(1) of the
Rules of Civil Procedure
, R.R.R.
    1990, Reg. 194, when it appears that:

(a)

There is good reason to
    believe that the appeal is frivolous and vexatious, and that the appellant has
    insufficient assets in Ontario to pay the costs of the appeal;

(b)

An order for security
    for costs could be made against the appellant under r. 56.01; or

(c)

For other good reason,
    security for costs should be ordered.

[23]

The overarching
    principle is the justness of the order sought.

(2)

Frivolous and vexatious

[24]

There is good reason to
    believe that the appeal is frivolous and vexatious.

[25]

The appeal is readily
    recognizable as lacking merit and therefore frivolous. The trial judge made
    credibility and factual findings that were strongly supported by the evidence
    and the mothers conduct throughout the proceedings, which I have summarized
    above. In particular, the trial judge carefully considered the childs best
    interests and found that they were best served by being with the father in
    Oregon. Because of the mothers conduct towards the father and his family,
    there was no basis to award joint custody.

[26]

Ms. Shankars appeal raises
    no errors of law. She challenges the trial judges findings of fact and her
    assessments of credibility. As I have set out, the trial judge gave detailed
    reasons for her findings. Under these circumstances there is little chance of
    overturning the result: see
Henderson v. Wright
,
    2016 ONCA 89, 345 O.A.C. 231, at para. 19.

[27]

The mothers conduct
    toward the father throughout has also demonstrated that there is good reason to
    believe that the appeal is vexatious.

[28]

Ms. Shankars motion
    material runs to approximately 160 pages single spaced. In her written and oral
    submissions, she makes outrageous claims against Mr. Lenihan including that he
    has trafficked, abducted, illegally brought the child to the United
    States, and is torturing M. and keeping her in a cage. She says he is a drug
    addict and homeless. She has already reported him to Child Protective Services
    in Oregon. She says that he may sell the child or give her up for adoption.
    She claims that she does not know if the child is alive or dead, then describes
    their regular Skype calls.

[29]

There is clearly good
    reason to believe that the appeal is frivolous and vexatious.

(3)

Insufficient assets in
    Ontario

[30]

Although the mother says
    she has returned to Ontario, her materials contradict this. Her costs
    submissions filed on February 5, 2021 repeatedly assert that she lives in India
    with her family. She states in those submissions that she had no choice but to
    leave Canada. She also claims to have no money.

[31]

During her oral
    submissions, she said she was in Ontario and working for the government. She
    has claimed an income of $95,000 per year. Her last filed financial statement,
    together with her representations throughout the proceedings, indicate that she
    has no assets available to pay the costs of this appeal.

(4)

Other good reason

[32]

There are other good
    reasons to require security for costs.

[33]

First, the mother engaged
    in deceitful and fraudulent conduct as found by the trial judge.

[34]

Second, the child is now
    in Oregon. As the trial judge recognized, future parenting disputes would be addressed
    there.

[35]

Finally, and most
    importantly: this appeal involves the wellbeing of a child who has been the
    subject of litigation her entire life. Her best interests must be considered in
    every step of the proceeding. Her best interests would not be served by a
    continuation of this proceeding. The impact of this litigation on the child
    cannot be ignored. As Poupore J., sitting as an appeal judge of the Divisional
    Court said: security for costs [is] warranted because of the applicants
    motivation for the appeal, the cost to the parties and judicial resources used
    to date and the impact of the litigation on the children:
Morwald-
Benvenides v. Benvenides
, 2017 ONSC 3786, [2017] W.D.F.L. 3729, at para. 13.

MOTHERS MOTION FOR A
    STAY

[36]

Ms. Shankar included in
    her responding material a request that the child be returned to Ontario,
    thereby requesting a stay of proceedings.

[37]

The test for a stay of
    judgment pending appeal is the three-part test set out in
RJR-McDonald Inc.
    v. Canada (Attorney General),
[1994] 1 S.C.R. 311, at p. 334. The
    appellant has the burden to demonstrate that (1) there is a serious question to
    be determined on the appeal; (2) she will suffer irreparable harm if the stay
    is denied; and (3) the balance of convenience favours granting a stay. These
    three criteria are not watertight compartments. The court must decide whether
    the interests of justice call for a stay:
Circuit
    World Corp. v. Lesperance
(1997), 33 O.R. (3d) 674 (C.A.), at p. 677.

[38]

I have already
    described why there is no serious issue to be determined on appeal.

[39]

The child is the one
    who will suffer serious harm. She is in Oregon with her father, grandparents
    and extended family. She has a pediatrician. On the other hand, there is no
    basis to conclude that the mother will suffer serious harm if the stay is not
    granted.

[40]

The balance of
    convenience favours the child remaining in Oregon with his father and his
    family.

[41]

For these reasons, I do
    not require responding material from the father for the mother has not met the
    test for a stay.

CONCLUSION

[42]

The motion by Mr.
    Lenihan for security for costs is granted. Ms. Shankar is required to deposit
    $30,000 to the credit of the appeal by March 30, 2021.

[43]

Ms. Shankars motion
    for a stay pending appeal is dismissed.

[44]

Costs of these motions
    are payable by Ms. Shankar to Mr. Lenihan fixed at $6,500 inclusive of HST and
    disbursements.

M.L.
    Benotto J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Lesko v. Lesko, 2021 ONCA 369

DATE: 20210602

DOCKET: C68396

Strathy C.J.O., Brown and Miller JJ.A.

BETWEEN

Kelly Sue Lesko

Applicant (Respondent)

and

David Joseph Lesko

Respondent (Appellant)

Gary S. Joseph and Stephen P. Kirby, for the appellant

Peter M. Callahan, for the respondent

Heard: February 12, 2021 by video conference

On appeal from the
    orders of Justice Michael R. Gibson of the Superior Court of Justice, dated May
    19, 2020, June 25, 2020, and August 7, 2020.

BROWN J.A.:

I.

overview

[1]

The appellant, David Joseph Lesko (David), and the respondent, Kelly
    Sue Lesko (Kelly), started to live together in September 1998 and married on
    August 23, 2003. They have two children. They legally separated on
    December 31, 2014 but continued to live together thereafter as a family
    until the matrimonial home at Valleyview Court in Oakville was sold in November
    2015.

[2]

By the time of the trial, the parties had settled many issues. The remaining
    issues were adjudicated by the trial judge, which resulted in his Divorce Order
    dated May 19, 2020 (the Order).

[3]

David appeals three parts of that Order:
[1]
(i) awarding an equalization payment to Kelly. That award resulted from the
    trial judges finding that based on her unjust enrichment claim Kelly had a 50%
    interest in a property on Taplow Crescent, Oakville that David had acquired
    prior to the date of marriage. That finding permitted Kelly to deduct 50% of
    the marriage date value of that property in her net family property calculation;
    (ii) fixing Davids income at $208,000.00 for purposes of support calculations;
    and (iii) disallowing Davids claim of a credit against retroactive support
    obligations of approximately $48,000 in expenses that David contends he
    incurred between the date of legal separation and the sale of the matrimonial
    home.

[4]

For the reasons set out below, I am not persuaded that the trial judge erred
    in his conclusions and I would dismiss Davids appeal. For ease of reference, I
    propose to deal with the relevant facts under each of the issues on appeal.

II.

STANDARD OF REVIEW

[5]

Orders resolving financial disputes in family
    law cases are entitled to significant deference. An appeal court should only
    intervene where there is a material error, a serious misapprehension of the
    evidence, or an error in law. It is not entitled to overturn a support order
    simply because it would have made a different decision or balanced the factors
    differently:
Hickey v. Hickey
, [1999] 2 S.C.R.
    518, at para. 12.

III.

FIRST ISSUE: the TREATMENT OF THE TAPLOW PROPERTY

Background facts

[6]

In June 1998, David purchased Taplow  a fixer upper property  through
    power of sale proceedings for $164,000. David financed the purchase through a
    $41,000 down payment and a $123,000 mortgage. By the time of purchase, Kelly
    and David had been dating for over a year. They decided to move in together
    once Taplow had been made habitable, which was accomplished by September 1998.

[7]

Kelly did not contribute financially to the purchase of Taplow nor was
    her name put on title. However, starting in August 1998 she contributed $500 a
    month to cover the couples expenses, which included a monthly mortgage payment
    of $831.35. Those contributions continued until a few months before their first
    child was born in 2004.

[8]

Taplow was gutted from top to bottom, and extensive renovations were
    made to the property between 1998 and the propertys sale in 2007, about four
    years after Kelly and David married. Since David and Kelly both worked full
    time, the renovations were done during evenings and on weekends. David
    completed most of the physical renovations, while Kelly took charge of
    housekeeping and home maintenance.

[9]

When Taplow was sold in 2007, David and Kelly put the full sale proceeds
    into their new Valleyview Court house, another fixer upper in need of
    renovation. As with Taplow, they renovated their new house with a view to reselling
    it for a profit and investing the sale proceeds into yet another new property.
    Their separation occurred before they could fulfill this plan.

[10]

In her Application, Kelly requested a declaration that she had a 50%
    beneficial interest in Taplow at the date of marriage on the basis of
    constructive trust as she had contributed to the acquisition, preservation,
    maintenance, and improvement of the property in both money and moneys worth.
The
    trial judge awarded Kelly a half-interest in Taplow on the date of marriage.

Davids position on appeal

[11]

David
    submits the trial judge erred in awarding Kelly an interest in Taplow as there
    was no unjust enrichment in this case. The trial judge never considered or applied
    the elements of unjust enrichment in his reasons and, without this clear
    finding, it was inappropriate to consider whether there was a joint family venture.
    Moreover, if the trial judge had properly considered the test for unjust
    enrichment, he should have concluded that Kellys claim failed because she was simply
    in a tenant-landlord type of relationship with David prior to their marriage.
    During that time, she provided her labour without any expectation of
    compensation
.

[12]

Further, there was no joint family venture in respect of Taplow. The
    factors outlined in
Kerr v. Baranow
, 2011 SCC
    10, [2011] 1 S.C.R. 269, do not support the trial judges finding. Even if
    there was a joint family venture, Kellys contributions did not entitle her to
    a half interest in Taplow.

[13]

Finally,
the trial judge erred when he failed to consider whether the
Family
    Law Act
,
R.S.O. 1990, c. F.3 (
FLA
)

equalization
    scheme remedied any unjust enrichment arising from the relationship.

Governing
    legal principles

[14]

If a party establishes the three elements of a claim
    for unjust enrichment  enrichment, corresponding deprivation, and lack of
    juristic reason  the remedy can take one of two forms: a personal (or monetary)
    award or a proprietary award:
Kerr
, at paras.
    46, 55;
Moore v. Sweet
, 2018 SCC 52, [2018] 3
    S.C.R. 303, at para. 89. The framework in which a court should assess the
    appropriate remedy was summarized by this court in
Martin v. Sansome
, 2014 ONCA 14, 118 O.R. (3d) 522, at para. 52:

In this way, the framework established in
Kerr
requires
    the court to ask the following questions:

1) Have the elements of unjust enrichment  enrichment and a
    corresponding deprivation in the absence of a juristic reason  been made out?;

2) If so, will monetary damages suffice to address the unjust
    enrichment, keeping in mind bars to recovery and special ties to the property
    that cannot be remedied by money?;

3) If the answer to question 2 is yes, should the monetary
    damages be quantified on a fee-for service basis or a joint family venture
    basis?; and,

4) If, and only if monetary damages are insufficient, is there
    a sufficient nexus to a property that warrants impressing it with a
    constructive trust interest?

[15]

A monetary award is the default remedy and
    should suffice in most cases to remedy the unjust enrichment:
Kerr
, at para. 47;
Moore
, at para. 89.
    In
Kerr
, the Supreme Court of Canada clarified
    that monetary awards for unjust enrichment could be quantified in two ways.
    First, a monetary award may be calculated on a
quantum meruit

or fee-for-service basis

the value of the claimants uncompensated services. Second, a
    monetary award may be calculated on a value survived basis, by reference to
    the overall increase in the couples wealth during the relationship:
Kerr
,
at paras. 49 and 55.

[16]

The concept of joint family venture helps courts
    to quantify the monetary remedy where a claim of unjust enrichment has been
    made out. Where the evidence shows that the domestic arrangements under which
    the unmarried parties have lived amounted to a joint family venture, monetary
    damages should be calculated on the value survived basis, namely on the basis
    of a share of the wealth generated in the joint family venture proportionate to
    the claimants contributions:
Kerr
, at para.
    102. If there was no joint family venture, monetary damages calculated on a
quantum
    meruit

basis are likely appropriate.

[17]

The proprietary remedy of constructive trust in
    a property requires a claimant to show two things: that monetary damages are
    inappropriate or insufficient to remedy the unjust enrichment; and the
    claimants contribution was linked to the acquisition, preservation,
    maintenance, or improvement of the disputed property. The required link has
    been variously described as demonstrating a sufficiently substantial and
    direct link, a causal connection, a nexus or a clear proprietary
    relationship:
Kerr
, at paras. 50-51, 78;
Moore
, at para. 91. The extent of the constructive trust interest should
    be proportionate to the claimants contributions:
Kerr
, at para. 53;
Moore
, at para. 91.

Analysis

[18]

I
    find no reversible error in the trial judges conclusion that Kelly established
    a claim for unjust enrichment which entitled her to deduct 50% of the
    marriage-date value of Taplow for purposes of the net family property
    calculation under the
FLA
.

[19]

Although
    the trial judges reasons on this issue are terse and would have benefited from
    further elaboration and explanation, they disclose that he made the following
    findings:

(i)      The evidence clearly demonstrated that the parties
    jointly planned to purchase the Taplow property, renovate it, and sell it for
    profit: at para. 53;

(ii)      Kelly contributed extensively to the acquisition,
    preservation, maintenance and improvement of the property in both money and
    other contributions: at para. 55;

(iii)     David would be unjustly enriched if he were to
    receive the benefit of Kellys efforts without recognition of them: at para. 56;

(iv)     A clear connection existed between Kellys
    contributions and the property sufficient to impose a constructive trust in her
    favour: at para. 56; and

(v)     The parties owned the property equally on the date of
    their marriage, with the result that each could deduct 50% of the net value of
    the property on that date for the purposes of calculating their net family
    property: at para. 57.

[20]

Ample
    evidence supported findings (i) and (ii): in the months leading up to their
    co-habitation, Kelly helped David select a property that was a fixer-upper; following
    its purchase, Taplow was gutted; they moved in several months after the initial
    renovations made it habitable; the full renovation of the property consumed the
    next five years; while David completed the physical renovations, Kelly managed
    their household so that he could devote his free time to the renovations; she
    cooked, cleaned, did the laundry, gardened, landscaped, and generally
    maintained the house; she also assisted with the selection of fixtures, tiles,
    flooring, and backsplashes, among other furnishings; and Kelly contributed $500
    a month to their household expenses, an amount that covered more than half the
    monthly mortgage payment of $831.35.

[21]

That
    evidence also supported the trial judges finding (iv) that a clear connection
    existed between Kellys contributions and the property.

[22]

However,
    the trial judge did not expressly address arguments David made about why Kelly
    had not made out a claim for unjust enrichment, including the presence of a
    juristic reason for retaining the benefit. The trial judge should have.
    However, on the simple factual record before us I see no prejudice from the
    trial judges failure to do so. The answers to the question why the trial
    judge was satisfied that Kelly had established her claim to unjust enrichment are
    clear in the record:
R. v. G.F.
, 2021 SCC 20, at para. 70.

[23]

David
    first argued that a contractual reason existed which entitled him to retain the
    benefits conferred by Kelly. He contended that from the time they moved into
    Taplow in September 1998 until their marriage five years later in August 2003,
    their relationship was that of landlord and tenant. David contended that the
    $500 Kelly contributed each month from the time they started to co-habit was
    rent or, as he put it in cross-examination: Um, she paid $500 a month I guess
    rent. At trial, a receipt dated August 10, 1998 for $500 that David had given
    to Kelly was filed as an exhibit. On the receipt David had noted: August 98 Rent.
    David also made much of the fact that Kelly agreed on cross-examination that it
    was reasonable to suggest that she had given David post-dated cheques for her rent.

[24]

When
    the evidence is viewed as a whole, there was good reason why the trial judge
    did not accept this argument by David. Admissions made by David during his
    cross-examination belied his characterization of their relationship as one that
    was landlord and tenant-like. David acknowledged that he and Kelly moved into a
    property that was barely livable and required extensive renovations, hardly a
    scenario in which one party would pay rent:

Q. So she was all in, and you were all in too. Buying this
    crappy house, fixing it up, fixing it up over, and living in it while you were
    fixing it up  she was in on all of that. And so were you.

A. Yeah. I suppose.

Q. Yeah, young people do crazy things like that. And you did
    it together. Right?

A. I guess, yeah
.

Q. Yeah. And she lived in that Taplow house with you while it
    was basically under construction?

A. Yeah. I mean the main floor was done, but the  except other
    than the kitchen but that was you know another issue, but the basement was....
    (Emphasis added.)

[25]

David
    also acknowledged that Kelly contributed to their ability to proceed with and
    complete the renovations at Taplow:

Q. You said to this court sir, that you did the next phase of
    the renovation when you could afford it?

A. Yes.

Q. And Kelly contributed to the savings that led to you being
    able to afford it?

A. She contributed to the monthly you know maintenance and
    operational household expenses. Absolutely.

Q. And she reduced your monthly expenses because she had an
    income and she was contributing to the household?

A. Yeah.

Q. Yeah. She was keeping things together to allow you to do the
    physical work?

A. Um, yeah, I don't know because she also worked at nights
    too, so.

Q. Yeah, thats right

A. Yeah.

Q. ...because thats what it took to keep this whole project
    afloat?

A. Sure.

Q. To keep money coming in so that you would have food on the
    table while you were still building this home? She had to do that. You needed
    extra money.

A. Yeah, sure. Absolutely. All money helps.

[26]

Davids
    second argument was that even if there was unjust enrichment, the trial judge
    should have considered whether the
FLA
s equalization scheme remedied
    the unjust enrichment. David emphasizes that the sale proceeds from Taplow were
    placed into the couples next home, in which they held title as joint tenants,
    thereby enabling Kelly to participate in any future appreciation of value.

[27]

I
    see no merit to this argument. The
FLA

s equalization scheme governs asset accumulation during
    marriage:
McNamee v. McNamee
, 2011 ONCA 533, 106 O.R. (3d) 401, at
    para. 66;
Martin
, at para. 66. While the equalization scheme will
    likely resolve most unjust enrichment claims resulting from a marriage, a claim
    that one party was entitled to an interest in a property existing at the date
    of marriage based on unjust enrichment arising prior to marriage requires
    analysis under the common law framework outlined in
Kerr
. Consequently,
    the trial judge was not required to consider Kellys entitlements that would
    arise post-marriage date under the
FLA
when considering her unjust
    enrichment claim based on events occurring before and in respect of an asset
    existing at the date of marriage.

[28]

On
    appeal, David also argues that the mutual conferral of benefits that occurred
    during the pre-marriage stage of the relationship amounted to a juristic reason
    for his enrichment and Kellys deprivation. While mutual benefit conferral can
    be taken into account at the juristic reason stage of the analysis, its use at
    that stage is limited to providing relevant evidence of the parties reasonable
    expectations that could support the existence of a juristic reason outside the
    settled categories, such as a contractual relationship:
Kerr
, at
    paras. 109 and 115. As the trial judge pointed out at para. 53, the evidence in
    the present case pointed in a different direction. After their marriage in
    2003, David and Kelly sold the Taplow property and used the proceeds to buy
    another fixer-upper, this time with the title registered in both their names.
    Accordingly, the evidence as a whole showed that David and Kelly arranged their
    affairs to acquire fixer-uppers, renovate them, and then sell them at a
    profit, with both parties expecting to benefit from their mutual efforts.

[29]

To
    summarize the analysis to this point, I see no reversible error in the trial
    judges findings (i) to (iv) described in para. 19 above that supported his
    conclusion Kelly was entitled to a remedy in respect of her contributions to
    the renovation of the Taplow property on the basis of unjust enrichment.

[30]

That
    leaves for consideration the trial judges finding (v) that David and Kelly
    owned the Taplow property equally on the date of their marriage, with the
    result that each could deduct 50% of the net value of the property on that date
    for the purposes of calculating their net family property. Having found that
    Kelly had made out her claim for unjust enrichment, the
trial
    judge did not then consider whether monetary damages would suffice to address
    the unjust enrichment, which
Martin
indicates
    is the next step in the analysis. Given the way the parties framed the issues
    for the trial judges determination, it is understandable that he did not
    consider the sufficiency of a monetary award.

[31]

The remedy Kelly sought for the unjust
    enrichment was not a monetary award in the trial judgment or a proprietary
    interest in an existing asset. Instead, Kelly sought a remedy that would enable
    her to include part of the value of Taplow at the date of marriage in her net
    family property statement thereby recognizing the unjust enrichment David had
    received.

[32]

On his part, David did not argue that monetary
    damages would provide Kelly with an adequate remedy; he sought to prevent Kelly
    from obtaining any remedy that would permit her to claim part of the marriage
    date value of Taplow in her net family property statement. On appeal, David has
    not argued that the trial judge erred by failing to consider a monetary award;
    instead, he argues that the trial judge erred by allowing Kelly to include 50%
    of the marriage date value in her NFP statement.

[33]

Unfortunately,
    the trial judge gave no reasons for his conclusion that fairness required Kelly
    to receive a 50% interest in Taplow for her contributions. As stated in
Kerr
at para. 53:

The extent of the constructive trust interest should be proportionate
    to the claimants contributions. Where the contributions are unequal, the
    shares will be unequal As Dickson J. put it in
Rathwell
, The court
    will assess the contributions made by each spouse and make a fair, equitable
    distribution having regard to the respective contributions. (Citations
    omitted.)

[34]

Unlike the
FLA
,
    which presumes that couples are entitled to an equal share of net family
    property accumulated during marriage, there is no presumption that a finding of
    unjust enrichment entitles a claimant to a half interest in the property. The
    extent of the claimants interest must be proportionate to their contributions:
Kerr
,
at para. 102. When the
    contributions are unequal, the shares should be unequal:
Kerr
, at paras. 84-85.

[35]

I
    have concluded that on the record before us, the trial judges finding that
    Kelly was entitled to deduct 50% of the net value of the Taplow property on the
    date of marriage for purposes of calculating her net family property is a
    reasonably fair and equitable remedy.
It is clear from the
    evidence that prior to their marriage Kelly and David were engaged in the joint
    project of renovating the Taplow fixer-upper for their mutual benefit. As
    well, the trial judges finding is supported by the evidence that David
applied
    the full proceeds from the sale of Taplow to acquire the Valleyview Court
    fixer upper and put Kelly on title as co-owner, without any separate
    financial contribution by Kelly. Although that purchase took place four years
    after the date of marriage, it stands as a powerful recognition by David of
    Kellys equal contribution to the success of the Taplow renovation, which
    enabled them to move up the economic ladder to a higher-end house. Accordingly,
    I would not interfere with the trial judges finding on this issue.

IV.

SECOND ISSUE: DAVIDS INCOME FOR SUPPORT
    PURPOSES

Factual background

[36]

Davids
    income for support purposes was contested at trial. David earned his living
    through his successful painting business, Mr. Paint. David and Kelly each hired
    experts to review Davids personal and corporate financial information and opine
    on Davids annual income. Their opinions were relatively similar, with Kellys
    expert finding a slightly higher income than Davids expert:

Year

2013

2014

2015

2016

2017

Kellys Expert

$
147,605

$
178,637

$
105,550

$
111,464

$
207,904

Davids Expert

$92,626

$140,103

$
87,379

$
115,706

$
193,816

[37]

David
    argued that his income for support purposes should be set at $132,300, based on
    the average of his income in 2015, 2016, and 2017. He contended that his income
    in 2017 was an outlier and that the loss of a client in 2018 had resulted in a
    significant reduction in his earnings.

Analysis

[38]

I
    would not interfere with the trial judges decision to use Davids 2017 income
    for support purposes, rather than a three-year average.

[39]

The
    starting point for determining income for both child and spousal support is ss.
    16 to 20 of the
Federal Child Support Guidelines
, S.O.R./97-175.
[2]
Section 16 sets a presumption that a spouses most recent
[3]
annual income shall be determined from the sources of income set out in Revenue
    Canadas general tax return Line 150 income:
Punzo v. Punzo
, 2016 ONCA
    957, 90 R.F.L. (7th) 304, at para. 19. Section 17(1) permits a court to look
    over the last three years in the following circumstances:

17(1) If the court is of the opinion that the
    determination of a spouses annual income under section 16 would not be the
    fairest determination of that income, the court may have regard to the spouses
    income over the last three years and determine an amount that is fair and reasonable
    in light of any pattern of income, fluctuation in income or receipt of a
    non-recurring amount during those years.

[40]

Accordingly,
    the Guidelines rely on the more recent past to predict the near future and do
    not adopt averaging as a default methodology:
Mason v. Mason
, 2016
    ONCA 725, 132 O.R. (3d) 641, at para. 138. The language in s. 17 is permissive,
    not mandatory. The trial judge was under no obligation to average Davids
    income:
Decaen v. Decaen
, 2013 ONCA 218, 303 O.A.C. 261, at para. 50.

[41]

Furthermore,
    the evidence at trial indicated that Davids suggested three-year averaging of
    his annual income at $132,300 would significantly understate his actual income.
    On cross-examination, David conceded that based on his current mortgage, tax,
    and insurance costs alone, he would have to be earning at least $160,000 a
    year to support those expenses. As well, as the trial judge noted David did not
    call at trial a representative of the client which Mr. Paint lost in 2018.

[42]

Finally,
    I see no basis for interfering with the trial judges decision to exclude
    Davids 2018 T4 Statement of Remuneration Paid and Mr. Paints unaudited 2018
    Financial Statements. In his reasons on the
voir dire
, the trial judge
    noted that Davids counsel conceded that the two documents were not essential
    to the case and their only value was that the corporate revenue report indicated
    that 2017 was an exceptional year and revenues fell in 2018. The trial judge stated
    that he was not satisfied that David took all reasonable steps to expedite the
    production of the T4 and company financial statements knowing that the matter
    was scheduled for trial at the April 2019 sittings. He further held that the documents
    late disclosure prejudiced Kelly as her expert did not have sufficient time to
    consider them. The trial judge concluded that the prejudice accruing from the
    admission of these documents would outweigh their probative value and, as a
    result, he would not admit them into evidence:
Family Law Rules
, O.
    Reg. 114/99, ss. 1(8)(d) and (8.1). It was within the trial judges discretion
    to exclude that evidence on the ground that its prejudicial effect outweighed
    its probative value:
Gray v. ICBC
, 2010 BCCA 459, 326 D.L.R. (4th)
    564, at para. 1.

[43]

For
    these reasons I would not interfere with the trial judges decision to use
    Davids 2017 income for support purposes. Of course, if Davids income materially
    declines in the future, he may bring the appropriate motion to change.

V.

THIRD ISSUE: DAVIDS CLAIM FOR POST-SEPARATION
    EXPENSES

Factual background

[44]

At
    trial, Kelly and David both sought reimbursement for family-related expenses,
    most of which were incurred between the date of their legal separation on
    December 31, 2014 and the sale of the matrimonial home in November 2015. As
    mentioned, the family continued to reside in the house until its sale.

[45]

Kelly sought reimbursement from David for his
    share of expenses charged to the family Visa card after separation relating to
    home maintenance, Mr. Paint expenses, medical, family vacation, childrens
    activities, and interest charges. The trial judge granted this claim writing
    simply: The amount owing by [David] in this regard would be $12,285.59.

[46]

David sought reimbursement for half of the
$48,160.68
    in expenses he testified he had incurred in respect of the family home from
    January 1, 2015 until the house was sold in November 2015. In disposing of this
    claim, the trial judge wrote, in full:
This was not advanced
    in his Answer. [David] should not be entitled to an adjustment of the household
    expenses that he claimed.

[47]

David submits that two errors infect that conclusion by the trial
    judge:

(i)      The trial judge applied a double standard in
    considering the parties reimbursement requests, disallowing Davids because he
    did not plead it in his Answer but allowing Kellys although she had not
    included them in her Application;

(ii)      The trial judge erred in law by failing to give David
    credit against his retroactive support obligations for payments he made to
    third parties on a support recipients behalf, namely Kelly and their children.

Analysis

[48]

I do not accept Davids first submission that
    Kelly failed to advance a reimbursement claim in her Application. In para. 16
    of her Application, Kelly pleaded: The Applicant is in need of funds to
    support herself and the children and to pay the credit card debt that the
    parties accumulated after separation. The Applicant has requested that [David]
    consent to the release of a portion of the sale proceeds, however, [David] has
    refused this request with no reasonable explanation. Kelly squarely put the
    issue on the table from the start of the litigation.

[49]

As to Davids second submission, given the thinness
    of the trial judges reasons on this issue a consideration of the record is
    required to ascertain whether it provides a clear answer:
G.F.
, at para. 70.

[50]

David and Kelly agreed on a legal separation
    date of December 31, 2014. However, they and their children continued to live
    together in the family home until it was sold in November 2015. Kelly testified
    that during 2015 she and David carried on with the status quo, playing like [they]
    were together as they did not want their children to know about the separation
    until the house was sold.  As to their understanding about the responsibility
    for family expenses following the legal date of separation but before the sale
    of the house, Kelly testified on cross-examination as follows:

Q. Okay. And so the same principle, just so I
    understand  Im not belabouring the point, so the same principle would apply to
    the family vacation in Florida, the Sabres game; in other words, you were
    living in the same house, you hadnt told the kids yet, and there was no
    expectation that there was going to be some formal accounting of how money was
    spent.

A. All we were doing as we always had done  I
    was still buying the groceries, I was still  my role was still - hadn't
    changed...

Q. Right.

A. since we separated, so.

[51]

Prior to the date of separation, David had made
    all the payments on the family Visa card. After the date of separation, David
    only made occasional payments on the card even though family expenses,
    including expenses related to the family home, continued to be charged to the
    card. David explained that notwithstanding his pre-separation payment of all
    charges to the card, he stopped paying because technically the Visa card was in
    Kellys name and he just had a secondary users card.

[52]

As to his own claim against Kelly for 2015
    expenses in respect of the family home, David only advised Kelly a few weeks
    before the April 2019 trial that he would be seeking reimbursement for them.
[4]
He explained that he only
    decided to claim reimbursement when he realized that Kelly was seeking
    retroactive child and spousal support. However, cross-examination revealed that
    position to be completely unfounded. David admitted that Kellys September 2016
    Application clearly stated she was seeking retroactive support.

[53]

At trial, Kelly did not dispute that David had
    paid most of the $48,160.68 in expenses he was claiming but pointed out that
    his claim for reimbursement was a departure from the
status quo

regarding the management of the familys affairs that had prevailed
    during 2015 until the house was sold.

[54]

By the time of the trial, over three years had
    elapsed between the time David had incurred the expenses and his 11th hour reimbursement
    claim just prior to trial. He clearly knew from Kellys September 2016 Application
    that she was asserting claims for retroactive child and spousal support, yet he
    included no claim for any reimbursement of expenses in his November 2016
    Answer. Prior to trial, David only paid monthly child support of $250,
    notwithstanding his position at trial that his income during that period of
    time averaged at least $132,300. Further, his claim for reimbursement of
    post-separation expenses marked a departure from the parties
status
    quo

approach between the date of legal separation and the
    sale of the house, an approach adopted in the interests of their two young
    children. The expenses for which David was seeking reimbursement benefitted all
    members of the family, including himself, as he continued to live in the family
    home until it was sold. Given those circumstances, I see no error in principle,
    or unreasonableness in the result, of the trial judge exercising his discretion
    to deny David his 11th hour, three-year old claim for expenses incurred during
    2015. Accordingly, I do not give effect to this ground of appeal.

VI.

disposition

[55]

For
    the reasons outlined above, I would dismiss the appeal. Based on the agreement
    of the parties at the hearing, I would award Kelly her costs of the appeal
    fixed at $15,000, inclusive of disbursements and applicable taxes.

[56]

At
    the end of oral submissions, Kellys counsel requested an order that the
    parties real estate solicitor release the remaining sale proceeds held in
    trust in accordance with these reasons. Davids counsel did not object to that
    request. Accordingly, an order shall go that the remaining funds held in trust
    be distributed to the parties in satisfaction of the amounts awarded in the trial
    judges Order and the costs of this appeal.

Released: June 2, 2021 G. R. S.

David Brown J.A.

I agree. G.R. Strathy
    C.J.O.

I agree. B.W. Miller
    J.A.

[1]

Davids factum also argued that the trial judge erred by
    making the August 7, 2020 order. However, during oral argument, Davids counsel
    advised the court that this issue is now moot and effectively settled. Kellys
    counsel agreed. Accordingly, there is no need to comment on the merits of this
    argument. As well, David requested that this court re-visit the costs awarded
    below only in the event he succeeded on the appeal, which he has not.

[2]

Section 6.1 of the
Spousal Support Advisory Guidelines

(Ottawa: Department of Justice, 2008) states that the starting
    point for the determination of income under the
Spousal Support Advisory Guidelines
is the definition of income under the
Federal Child Support Guidelines
.

[3]

Section 2(3) of the
Federal Child Support Guidelines

states that: Where, for the purposes of these Guidelines, any
    amount is determined on the basis of specified information, the most current
    information must be used.

[4]

March 18, 2019 Trial Scheduling Endorsement Form.