COURT OF APPEAL FOR ONTARIO

CITATION: Conseil Scolaire Catholique
    Franco-Nord v. Nipissing

Ouest (Municipalité), 2021 ONCA 544

DATE: 20210728

DOCKET: C67949

Rouleau, Hoy and van Rensburg
    JJ.A.

BETWEEN

Conseil
    Scolaire Catholique Franco-Nord

Applicant (Appellant)

and

La Corporation de la Municipalité
    de Nipissing Ouest

Respondent (Respondent)

Pierre Champagne and Andréane Lafrance,
    for the appellant

Michael F. Sirdevan, for the respondent

Heard: May 31, 2021 by video conference

On appeal from the judgment of Justice David
    R. Nadeau of the Superior Court of Justice, dated December 17, 2019, with
    reasons reported at 2019 ONSC 6474.

Rouleau J.A.:

FACTS

[1]

The Conseil Scolaire Catholique Franco-Nord (the
    school board) is a successor school board to the Nipissing District
Roman Catholic Separate School Board
. In 1988, the
    Nipissing District Roman Catholic Separate School Board sold a property known
    as the St. Jean Baptiste School to the Township of Caldwell (the Township). The
    Municipality of West Nipissing
(the Municipality)
is
    the successor to
the Township. In return for the school, the Township agreed
    to provide snow and garbage removal services to one of the school boards other
    schools located in the Township, the Ste. Marguerite dYouville School.

[2]

The evidence documenting the sale tendered by
    the school board is straightforward. It consists of a March 10, 1988 letter
    from the Township offering to buy the school and a school board resolution
    accepting the offer subject only to the approval of the sale by the Ministry of
    Education. The relevant parts of the Townships offer letter are as follows:

Further to our past discussions regarding the
    above mentioned [school], please be advised that the Council of the Township of
    Caldwell wishes to acquire the St. Jean Baptiste School for the sum of $1.00.

We have been approached by many interested
    groups such as the Recreation Committee, lUnion Culturelle des Femmes Franco-Ontariennes
    etcfor accommodations in this building.

The municipal library is presently in dire
    need of additional space and is also located on a second storey being [a] very unsuitable
    location

As you can tell, we have many plans for the
    use of this building all being for the best of the community. Please note that
    these organizations are all non-profit and are vital to the well-being of the
    area residents.

However, the
    municipality is agreeable to render certain services to the School Board such
    as clearing of snow in school yard and garbage pick-up at Marguerite dYouville
    School. I wish to point out that the school is already using our arena
    facilities at no cost. We are also open to any other suggestions.

[3]

The school boards resolution accepting the
    offer is dated April 13, 1988.
It reads as follows: Que
    le C.E.C.L.F. accepte loffre dachat de lécole St-Jean-Baptiste soumise par
    le canton de Caldwell le 10 mars 1988, sous réserve dautorisation du ministère
    de léducation.
The Township began providing snow and
    garbage removal services to the school board shortly thereafter. These services
    would continue until 2017.

[4]

At the time of the sale, the disposition of
    school board property required approval from the Ministry of Education in
    accordance with the Ministrys 1979 Capital Grant Plan. On June 15, 1988 the
    Ministry granted its approval for the transfer of the school:

It is noted that the requirements of the
    Ministry have been met. Accordingly, this letter may be considered as approval
    to dispose of this school building to the Township of Caldwell for community
    use.

This approval does not absolve the board from
    any other responsibility under the Education Act respecting the sale of
    property. The Regional Office will confirm with you any reduction in recognized
    extraordinary expenditure that may arise as a result of this transaction.

I should like to
    thank the board for its co-operation in the disposal of this surplus asset in
    accordance with section 12.3 of the Capital Grant Plan as amended.

[5]

On September 16, 1988 the school board received
    a letter from its lawyers enclosing a copy of the signed transfer and a cheque
    for $1 as payment in full of the purchase price.

[6]

The transfer included two clauses of relevance
    to this appeal. First, the transfer granted the school board a vendors lien
    over the transferred property in the following terms:

The within
    conveyance is subject to a Vendors Lien in the amount of $27,300.00. In the
    event that the Transferee grants, transfers or in any way conveys its interest
    in the within described lands or any portion thereof, prior to the expiration
    of ten (10) years from the date of registration herein, the Transferee shall
    remit payment of the said sum of $27,300.00 to the Transferor. This Vendors
    Lien shall expire ten (10) years from the date of registration of this
    transfer.

[7]

Second, the transfer granted the school board a
    right of first refusal if the Township intended to sell the school within 20
    years of the initial transfer:

The Transferee
    further grants to the Transferor the right of first refusal to purchase the
    land described herein and any buildings and improvements thereto for the sum of
    ONE ($1.00) DOLLAR. This first right of refusal shall run for a period of
    twenty (20) years from the date of registration of the within transfer. The
    Transferee agrees not to sell the real property described herein to another
    party without first offering the Transferor the right to repurchase the lands
    and buildings for the said sum of ONE ($1.00) DOLLAR.

[8]

Contrary to the application judges finding, the
    school board submits that these clauses had nothing to do with the duration of
    the Townships obligation to provide snow and garbage removal services in
    payment of the purchase price. They were inserted to ensure that the Township
    could not resell the property without first giving the school board the
    opportunity to repurchase it, and to comply with s. 12.7.3 of the Ministrys
    Capital Grant Plan, which provided:

When a complete
    school property is sold to a preferred agency and the sale price is below the
    total undepreciated value of the building, and the market value of the land, a
    commitment in writing shall be obtained from the purchaser which will ensure
    that the board recovers equity if the property is resold within a period of ten
    years from the date of sale.

[9]

In 1999, all of the Townships obligations were
    transferred to the Municipality. The Municipality continued to provide snow and
    garbage removal services to the school board in the same manner as before.

[10]

In 2002, the Municipality advised the school
    board that it intended to put an end to the snow removal service. Following discussions
    between the school board and the Municipality, the Municipality agreed to continue
    providing snow removal services. The school board confirmed that it would hold
    the Municipality harmless for damage to school property.

[11]

In 2012, the Municipality again indicated an
    intention to put an end to the snow and garbage removal services. Once again,
    following discussions, the services were maintained.

[12]

Finally, in November 2017, the Municipality informed
    the school board that it had, by resolution, decided to end the snow and
    garbage removal services. The school board attempted to negotiate with the Municipality
    over the summer of 2018 but the Municipality would not deviate from its
    decision. During these discussions, the school board maintained that the 1988
    agreement was intended to last in perpetuity.

[13]

On August 31, 2018 the school board filed its
    notice of application in this matter, seeking, among other things, a
    declaration that the 1988 contract remained in force and that the Municipality had
    an obligation to continue providing snow and garbage removal free of charge.

[14]

In support of its application, the school board
    filed affidavits of school board employees who were either employed by the
    school board in 1988 or involved in the 1988 agreement with the Township. The
    affiants stated that the contract did not provide for any expiry or term.

DECISION BELOW

[15]

The application judge found that the application
    raised two separate issues as follows:

a.

Was the 1988 contract of perpetual duration?

b.

Could the Municipality terminate the contract unilaterally
    as it had done in November 2017?

[16]

On the first issue, the application judge found
    that the school board had not satisfied him that the agreement was perpetual in
    duration.

[17]

When the application judge turned to the second
    issue, he referenced the case of
1397868 Ontario Ltd. v. Nordic Gaming
    Corporation (Fort Erie Race Track)
, 2010 ONCA 101, finding it to be instructive.
    He also noted that, unlike the case of
Thunder Bay (City) v. Canadian
    National Railway Co.
, 2017 ONSC 3560, revd 2018 ONCA 517, leave to appeal
    refused [2018] S.C.C.A. No. 358, the word perpetual is nowhere mentioned in
    the contract. He acknowledged that there was complete silence as to the
    duration of this contract and that there had been continuous performance of
    snow and garbage removal since 1988.

[18]

In attempting to characterize the relationship
    between the parties, the application judge found that while the relationship
    created by the 1988 contract is not one of employment or partnership, it
    resembles in some fashion a personal services contract, adding that [t]hese
    are the types of contracts into which Courts routinely imply terms of termination
    on reasonable notice.

[19]

The application judge found that the surrounding
    circumstances, including the vendors lien expiring after 10 years and the
    right of first refusal expiring after 20 years, pointed away from a perpetual
    agreement. He considered the non-pecuniary considerations expressed in the
    Townships letter such as mutual betterment of the community but he did not
    explain how these considerations figured into his analysis. The application
    judge also found that the Municipalitys efforts to terminate the agreement in
    2002 and 2012 supported a finding that the contract could be terminated on
    reasonable notice in November 2017.

[20]

Although he did not determine what would
    constitute a reasonable notice provision in the circumstances, the application
    judge was satisfied that the Municipality has properly exercised its implied
    right to terminate its obligations on reasonable notice to the Board.

ISSUES

[21]

The only issue on appeal is whether the
    application judge erred in concluding that the 1988 agreement was terminable on
    reasonable notice. In light of my conclusion that he did so err and that the
    agreement was not terminable on reasonable notice, I need not address the issue
    of whether reasonable notice was in fact given in this case.

THE LAW

[22]

Before addressing the specific arguments raised
    in this case, I will outline the principles that guide the interpretation of
    contracts that are silent on the issue of termination.

[23]

The interpretation of a contract that is not a
    standard form contract or contract of adhesion involves questions of mixed fact
    and law. An appellate court will only intervene if the decision below is
    tainted by palpable and overriding error:
Sattva Capital Corp. v. Creston
    Moly Corp.
, 2014 SCC 53, [2014] 2 S.C.R. 633, at paras. 4, 55-56, and
    69-71.

[24]

As this court explained in
Thunder Bay
,
    at para. 30, the overriding principle is that the meaning of an agreement and
    the intent of the parties in entering into it must be derived from the words
    the parties used and the context in which they used those words.

[25]

In this case the court must determine whether,
    in the absence of any stipulation as to the duration of the contract or the
    parties rights of termination, the contract should be treated
as either perpetual in
    nature or as an indefinite term contract into which the court implies a
    provision of unilateral termination on reasonable notice
. The
    inquiry focuses on the specific parties to the contract in issue. As the
    Supreme Court specified in
M.J.B. Enterprises Ltd. v. Defence Construction
    (1951) Ltd.
, [1999] 1 S.C.R. 619, at para. 29:

A court, when
    dealing with terms implied in fact, must be careful not to slide into
    determining the intentions of
reasonable
parties
    (emphasis in original).

[26]

The case law has in the last 150 years
    identified certain challenges unique to the issue of when parties are silent on
    issues of duration and termination.

[27]

Historically, courts concluded that contracts of
    indefinite duration were presumptively perpetual and that the burden lay on the
    party seeking termination to establish an implied right of termination.
John McCamus explains as follows:

Initially, the
    common law took the position that if the parties did not stipulate in the
    agreement a method of termination, the agreement should be presumed to be
    perpetual in nature. The presumption could be set aside if the party alleging
    an entitlement to terminate, perhaps on reasonable notice, was able to
    demonstrate either from the wording of the agreement or its nature that the
    presumption should be set aside.

See John McCamus,
The Law of
    Contracts
, 3rd ed. (Toronto: Irwin Law, 2020), at pp. 844-845.

[28]

The 1875 House of Lords decision in
Llanelly
    Railway & Dock Co. v. London & North Western Railway Co.
(1875),
L.R. 7 H.L. 550 is typically
    cited as the starting point for this line of cases. In that case, the Llanelly
    Railway company allowed trains owned by the London & North Western Railway
    to travel on its rails. The contract did not stipulate any kind of term. Lord
    Selborne wrote what was, for a time, the predominant view:

My lords, an
    agreement
de futuro
, extending over a tract of time which, on the face
    of the instrument, is indefinite and unlimited, must (in general) throw upon
    anyone alleging that it is not perpetual, the burden of proving that
    allegation, either from the nature of the subject, or from some rule of law
    applicable thereto.

[29]

The presumption that an indefinite contract was intended
    to be perpetual survived in one form or another into the mid-20
th
century, appearing for example in Kerwin J.s reasons in
Gill Brothers v.
    Mission Saw Mills Limited
, [1945] S.C.R. 766, where he wrote: Speaking
    generally, a contract indefinite in time is
prima facie
perpetual.

[30]

Despite the long lifespan of the historical
    approach, a contrary presumption in favour of termination rights arose in the
    commercial context. The trend favouring a presumptive right to terminate on
    reasonable notice appears to have gained traction following the House of Lords
    decision in
Winter Garden Theatre (London) Ltd. v. Millennium Productions
    Ltd.
,
[1948] A.C. 173, in
    which Lords Porter and Uthwatt acknowledged that, in a business context, it is
    more realistic to expect that parties
do not
intend an indefinite arrangement to be perpetual, and that they would generally
    expect to be granted a right to terminate on reasonable notice: See
Rapatax
    (1987) Inc. v. Cantax Corporation Ltd.
, 1997 ABCA 86, 145 D.L.R. (4th)
    419, at paras. 15-19, leave to appeal refused [1997] S.C.C.A. No. 307. Even
    before
Winter Garden
, however, this court had expressed a view that
    business contracts must be interpreted in a business way; and it would be a palpable
    absurdity to consider such a contract as a perpetual chain on the defendant to
    oblige it for all time to continue the plaintiff in such work; the only
    reasonable way of interpreting it is to consider it as terminable on reasonable
    notice:
Robinson v. Galt Chemical Products Ltd.
, [1933] O.J. No. 114
    (C.A.), at para. 14.

[31]

More recently, the law has evolved to eschew all
    presumptions in favour of a more balanced contextual approach. As McCamus
    explains at p. 844, there is no longer any kind of presumption going either
    way:

Modern authorities appear to accept, however,
    that the matter is to be determined simply on the basis of ordinary principles
    of interpretation, without the aid of a presumption in favour of perpetuity.

While the trend of
    the modern cases appears to lie in the direction of implying rights to
    terminate on reasonable notice, there is no reason, in principle, precluding
    parties from agreeing to indefinite or perpetual obligations and if, on the
    proper construction of the agreement, a perpetual obligation is intended, it
    will be enforced.

[32]

The modern reconciliation between conflicting
    presumptions is best expressed in the Manitoba Court of Appeal decision in
Shaw
    Cablesystems (Manitoba) Ltd. v. Canadian Legion Memorial Housing Foundation
    (Manitoba)
(1997), 143 D.L.R. (4th) 193. In
Shaw
, a cable company
    provided cable television to two retirement homes at a promotional price. The
    contract provided for a unilateral right of termination in favour of the
    clients, but it was silent on Shaws right to terminate. Ultimately, the
    Manitoba Court of Appeal held that the contract was perpetual, largely because
    the contract included a price adjustment clause ensuring that Shaw was not
    required to provide services at an unreasonably low price in the future.

[33]

Shaw
provides
    an authoritative expression of what has become the dominant approach.

Huband
    J.A. wrote at p. 196:

There is no lack of
    reported cases where the courts have implied a term into a contract allowing
    one of the parties to terminate an agreement that otherwise would be unlimited
    in time, by giving reasonable notice. There is also a host of cases which go in
    the other direction
I think the essence of the case is
    simply that each of the decisions turns on the particular agreement under
    consideration and the circumstances surrounding it
.

[34]

In concurring reasons, Helper J.A. agreed at p.
    211 that whether a contract is on the one hand perpetual in duration or on the
    other hand, terminable by one or both parties, is purely a matter of
    construction. Arguably, contracts are not subject to a presumption one way or
    the other.

[35]

Turning to the particular facts in
Shaw
,
    Huband J.A. explained at p. 200:

Counsel for the company argues that the
    parties must have contemplated from the outset that the company would not
    continue to provide the service on a subsidized basis until the buildings
    crumble into dust.

This would be a
    strong argument indeed, if there was no provision for an increase in the
    monthly fee. But the agreements specifically contemplate the prospect of future
    rate increases. The agreements foresee what has taken place over the years,
    namely, that the individual service fee has more than doubled; and so has the
    fee payable by these customers. The agreements contemplate contingencies far
    into the future, and contemplate that the service fee payable by these
    customers would remain subsidized into the future.

[36]

This court adopted the approach set out in
Shaw
in
Nordic Gaming
, at para. 13, where OConnor A.C.J.O. stated:

When the term of a
    contract is not fixed and there is no provision for termination on reasonable
    notice, a court may treat a contract
as either perpetual
    in nature or as an indefinite term contract into which the court implies a
    provision of unilateral termination on reasonable notice
In
    determining this issue, courts typically look to the specific terms of the
    contract as well as to the relationship between the parties and the surrounding
    circumstances. As the majority of the court explained in
Shaw
at para.
    15, the essence of the cases is simply that each of the decisions turns on the
    particular agreement under consideration and the circumstances surrounding it.
    [Emphasis added. Citations omitted.]

See also
Brown v. Belleville (City)
,
    2013 ONCA 148, 359 D.L.R. (4th) 658, at para. 64.

[37]

In considering the nature of the parties
    agreement, the case law places a particular emphasis on the relationship
    created by the contract. As this court recognized in
Nordic Gaming
, at
    para. 14, certain types of contracts naturally give rise to an implied right to
    terminate upon reasonable notice. Employment relationships, partnerships, and
    personal service contracts, all of which depend upon a level of trust and
    continuous performance, engage specific concerns about the extent to which
    courts should enforce performance when a relationship has collapsed. The
    implied right to terminate a contract for personal services is in a sense the corollary
    to the courts general unwillingness to order specific performance of such
    contracts.

[38]

In
Nordic Gaming
, for example, the
    trust relationship was inherent in the nature of the contract, as OConnor
    A.C.J.O explained at para. 24:

The agreement
    contemplates that the two parties would work together with 139 operating a food
    and beverage service and maintaining the premises, and Nordic running the [off-track
    betting] operation in the premises. Thus, they would have to work together closely
    and co-operation would be important. While the relationship created by the
    agreement was not one of employment, partnership or, strictly speaking, for
    personal services  which are the types of contracts into which courts
    routinely imply terms of termination on reasonable notice  it did involve many
    of the same components, such as the need for trust, confidence and
    satisfaction.

[39]

However, the simple characterization of a
    contract as a personal service contract does not automatically give rise to
    an implied right of termination on reasonable notice; the court is still
    required to examine the agreement in its entire context. Mesbur J. examined
    this question in
Credit Security Insurance Agency Inc. v. CIBC Mortgages
    Inc.
(2006), 268 D.L.R. (4th) 725, affd 2007 ONCA 287. In that case,
    Credit Security agreed to provide pooled mortgage insurance to customers of
    FirstLine Trust, later acquired by CIBC Mortgages. The contract stipulated that
    the agreement could only be terminated by mutual agreement or for fundamental
    breach. CIBC decided for business reasons that it wished to terminate the
    agreement and gave Credit Security three months notice of termination. Credit
    Security commenced an action to enforce the agreement.

[40]

Mesbur J. found that the contract between Credit
    Security and CIBC was a commercial contract with only some of the hallmarks of
    trust and confidence that would normally give rise to an implied right to
    terminate on reasonable notice. She said, at para. 33: While there is no doubt
    that there is a provision of services element to the contract, it is also,
    and primarily, a contract for the provision of a product to CIBC Mortgages, a
    product in which  Credit Security was to retain a long-term proprietary
    interest for which it was to be paid. She continued, at para. 36:

As I have said, it
    is true that there are elements of provision of services within the contract.
What the court must look at, however, is whether, from the
    inception of the contract there should be an implied right to terminate
.
    One does not look at the circumstances at the time that one of the parties
    wishes to terminate to see if it is then commercially reasonable. One must look
    at the time of the formation of the contract to make that determination.

[41]

On appeal, this court held Mesbur J.s analysis
    to be entirely sound in every respect on all issues: at para. 1.

[42]

As
Credit Security
makes clear, the
    existence of a provision of services element in a contractual relationship
    does not automatically relieve the court of going through the exercise of
    determining whether, at the moment of contract formation and in all the
    circumstances, a term could be implied into the parties agreement providing
    for termination on reasonable notice. The existence of a special relationship
    or trust relationship is a strong and often decisive factor, but it is not
    definitive. This aligns with the Manitoba Court of Appeals reasoning in
Shaw
,
where the companys ongoing obligation
    to provide cable services was found to be perpetual, despite what could be
    described as a service element.

[43]

I turn now to the consideration of the issues
    raised in this case.

POSITIONS OF THE PARTIES

[44]

The school board argues that, in carrying out
    his analysis, the application judge committed several errors. Specifically, the
    school board submits that he erred in:

1.

Placing the burden of showing that the contract
    is perpetual on the school board;

2.

Finding that the contract is one of personal
    service involving the need for trust, confidence and satisfaction such that a
    term of termination on reasonable notice ought to be implied;

3.

Considering the Municipalitys post-contract
    desire to terminate; and

4.

Considering the two clauses inserted in the deed
    of transfer as being indicative of value or intention.

[45]

For its part, the Municipality argues that the
    application judges assessment of the circumstances relevant to the contract
    and his determination that it resembles in some fashion a personal services
    contract are reasonable findings. In its submission there is simply no basis to
    set aside his conclusion that the contract did not bind the Municipality in
    perpetuity.

ANALYSIS

[46]

In my view, the path taken by the application
    judge to reach his conclusion was flawed in several respects. As I will
    explain, the application judges analytical approach was confusing, and he
    erred in concluding that the agreement at issue was in the nature of a personal
    service contract such that a right of termination on reasonable notice ought to
    be implied. He also erred in his consideration of the surrounding
    circumstances. On a proper analysis, he ought to have concluded that the
    contract was perpetual in nature

(1)

How the application judge approached his task

[47]

The application judges reasons present the
    analytical task as one involving two steps to address two discrete issues, with
    the first step requiring him to decide if the contract was perpetual in
    duration and the second requiring him to decide whether the contract could be
    terminated unilaterally by the Municipality in the manner it had done.

[48]

In his analysis on this first issue, the
    application judge noted that nowhere is it indicated, or even implied, that
    this contract is to be of perpetual duration. He went on to state that, on the
    basis of what he considered to be cryptic evidence as to the terms of the
    agreement, he had tremendous difficulty finding that the [school board] has
    satisfied me that this indefinite contract is of perpetual duration. He then
    indicated that this did not end the analysis and further consideration was
    necessary. It was at that point that he turned to the second issue, where he reviewed
    the case law and considered the relationship of the parties and the surrounding
    circumstances.

[49]

In my view, the application judges decision to
    divide the analysis into two separate questions was unnecessary and confusing
    in light of the applicable test. As this court explained in
Nordic Gaming
,
    when a contract contains no fixed term and no provision for termination on
    reasonable notice, the court may treat the contract either as perpetual or as
    indefinite into which a provision of unilateral termination on reasonable
    notice is implied. The decision as to which is the proper interpretation is an
    exercise in contractual interpretation which requires the court to examine the
    specific terms of the contract as well as the relationship between the parties
    and the surrounding circumstances. Because there is no presumption either way,
    neither party bears an onus except to the extent that any applicant bears the
    onus in an application for declaratory judgment, such as this one. The
    application judges reasons, however, could be read in such a way as to place
    the onus on the school board to satisfy the court that the contract was
    perpetual. Thus, without giving rise to a reversible error, the application
    judges reasons tend to obscure his approach to the relevant legal principles.

[50]

It was on his second step that the application
    judge considered the application of
Nordic Gaming
and addressed the
    relationship between the parties and the surrounding circumstances. However,
    despite correctly identifying
Nordic Gaming
as the governing authority,
    the application judge committed palpable and overriding errors in its
    application, to which I now turn.

(2)

The nature of the relationship

[51]

Relying on
Nordic Gaming
, the application
    judge found that the relationship created by the 1988 contract resembles in
    some fashion a personal service contract and that the provision of snow
    removal and garbage disposal involves the need for trust, confidence and
    satisfaction. The application judge then concluded that the contract was the
    type of contract into which courts routinely imply terms of termination on
    reasonable notice.

[52]

I disagree. The contract in this case is
    fundamentally different from the types of contract into which the courts
    routinely imply termination on reasonable notice. In my view, the application
    judges characterization of the agreement between the parties is tainted by
    palpable and overriding error. When compared against the contract at issue in
Nordic
    Gaming
, for example, there are two critical differences.

[53]

First, in
Nordic Gaming
, the services
    being provided were being paid for on an ongoing basis. In the present case,
    the services provided by the Municipality form part of the consideration payable
    for real property transferred in 1988. This is not an ongoing relationship
    where service is being provided and payment made on an ongoing basis. Indeed,
    in
Nordic Gaming
, at para. 27, the court explained that a partys
    large upfront investment can provide an indication that the parties intend to
    create a perpetual agreement:

However, there are
    aspects of the surrounding circumstances which could point to a perpetual
    agreement. Most significantly, was the large cost incurred by 139 in order to
    install fixtures in the premises. In passing, the trial judge indicated that
    this amount was $117,700, but made no clear finding on the point. This sum of
    money could have taken 139 many years to recover.
Thus,
    it may be argued that it would be unusual for 139 to agree to enter a contract
    that could be terminated on reasonable notice where such a significant initial
    investment was needed
. [Emphasis added.]

[54]

The school boards upfront investment was the
    transfer of the school for one dollar. As contemplated in
Nordic Gaming
,
    it would be unusual in this case for the school board to transfer property to
    the Municipality in return for a nominal sum plus ongoing services if those
    services could be terminated unilaterally and potentially prematurely. In that
    regard, it is of particular significance that the school board was transferring
    real property with enduring value.

[55]

A second basic difference is that in
Nordic
    Gaming
, one party was serving the clientele of the other party. As the
    court explained, in such circumstances the parties had to work together
    closely and co-operation would be important. Implying a term permitting one
    party to exit the relationship in such circumstances is reasonable as it would
    be inappropriate to force such parties to continue working together where there
    is no longer any trust.

[56]

The services being provided by the Municipality in
    this case are not the types of services that raise concerns of the nature
    referenced in
Nordic Gaming
. Snow and garbage removal are normal functions
    of a municipality, and the standards to which they are provided is generally
    consistent and uniform throughout the municipality. They do not engender the
    same type of trust relationship that gives rise to a presumption of an implied
    right to terminate. Nor is it suggested that the relationship of trust
    between the school board and the Municipality, if one was required, has
    collapsed or deteriorated to a point where it would be inappropriate to force
    the relationship to continue. In my view, the contract between the Municipality
    and the school board is not the sort of agreement into which courts routinely
    imply a right to terminate on reasonable notice and the application judge erred
    in so concluding.

(3)

The surrounding circumstances

[57]

In his analysis of the surrounding circumstances,
    the application judge referenced:

1.

The mutual betterment of the community;

2.

The provision in the transfer imposing a lien in
    the amount of $27,300 for 10 years and the right of first refusal in favour of
    the school board for 20 years; and

3.

The length of time the Municipality performed
    the services and the Municipalitys express desire to end the relationship.

[58]

The application judge considered that these
    circumstances supported the implication of a term permitting the Municipality to
    terminate the agreement unilaterally in the manner it did. The Municipality in
    its submissions further argued that, because the services had been provided for
    over 30 years, the transferred property had been paid for many times over. This
    provided further support for the application judges decision and addressed the
    concern, discussed above, that a unilateral termination right might prevent the
    school board from recovering fair value for the transferred property if the
    services were terminated prematurely.

[59]

As I will explain, the application judge erred
    in his appreciation of the surrounding circumstances by considering irrelevant
    factors and failing to consider relevant factors. Viewed properly, the
    surrounding circumstances support the conclusion that the contract is perpetual
    in nature. Moreover, the Municipalitys suggestion that it has provided enough
    services over time to pay for the transferred property is not persuasive. The
    circumstances that are most relevant in interpreting the agreement are those
    known to the parties when they reached the agreement, not when the Municipality
    seeks to terminate it. I turn first to the three circumstances identified by
    the application judge.

[60]

The application judge made reference to the
    mutual betterment of the community but he did not provide any indication of how
    it might favour either the school boards or the Municipalitys interpretation
    of the agreement. I view this circumstance as being neutral in that it is
    simply an observation that the transaction was of benefit to the community
    served by both parties. At most, the status of the parties as public bodies working
    for the betterment of the community provides an indication that neither party
    was pursuing strictly commercial aims by entering into the agreement.

[61]

As for the two provisions inserted into the transfer,
    these provisions appear to flow directly from the requirements of the Ministrys
    Capital Grant Plan and the school boards desire to ensure that the Municipality
    would not simply resell the property. They are of little assistance in
    interpreting the Municipalitys obligation to provide snow and garbage removal,
    which is not tied to its continued ownership of the property.

[62]

With respect to the third surrounding
    circumstance considered by the application judge, the length of time the Municipality
    rendered the services and its repeated attempts to bring them to an end, this
    circumstance may have relevance once it is decided that a reasonable notice
    period should be implied. It is, however, of little assistance in deciding the
    central issue as to whether the agreement is perpetual or one into which a
    reasonable notice provision should be implied.

[63]

Similarly, the Municipalitys argument that the transferred
    property has been paid for many times over is of no assistance. The Municipality
    submits that this is relevant because the Township would have been alive to
    this possibility at the time of contract formation and would not have agreed to
    a contract requiring it to continue providing services until long after the
    aggregate value of the services exceeded the value of the property. The Municipality
    suggests that because it has provided services in excess of the propertys
    value many times over, it should now be permitted to terminate the agreement.

[64]

I reject the Municipalitys position for two
    reasons. First, the record does not permit an accurate assessment of either the
    value of the school property or the value of the municipal services either at
    the time the contract was entered into or in the years following. The Municipality
    refers to the affidavit of Stephan Poulin, Director of Economic Development and
    Community Services for the Municipality of West Nipissing, where the
    calculation of the overpayment is contained. In his affidavit, Mr. Poulin
    suggests that the amount of the vendors lien included in the transfer, some
    $27,300, was the value of the property at the time of transfer. There is
    nothing to substantiate his evaluation on this point, and no indication of how
    the value of the property might have changed in relation to the value of the
    services over time. It is simply impossible to determine on this record the
    value of the property, whether at the date of the sale or in the period since
    the sale.

[65]

With respect to the value of the snow and
    garbage removal services, Mr. Poulin estimated that the value of the services
    provided by the Municipality since 1988 could be as much as $270,000. This too
    is impossible to substantiate. Mr. Poulins figure is taken from the affidavit
    of Mr. Cantin, for the school board, who deposed that in 2017-18, when, on
    short notice, the school board was forced to pay for its own snow and garbage
    removal, it paid $4,500 for each service, or $9,000 for the year. Mr. Poulin
    then apparently extrapolates back to 1988, simply multiplying $9,000 by 30
    years (1988-2019) to reach the figure of $270,000. There is no evidence of the
    value to the school board of the snow and garbage removal over the period, nor of
    the cost to the Municipality of providing the services. The amounts paid by the
    school board in 2017-18 for the services previously provided by the Municipality
    are of no assistance in determining the value of the services that the Township
    agreed to provide.

[66]

Second, and more importantly, even if it could
    be shown that the value of snow and garbage removal had exceeded the value of
    the property since the 1988 sale, it does not necessarily follow that the
    parties did not intend those services to be provided in perpetuity. Contractual
    interpretation focuses on the intentions of the parties at the moment of
    contract formation:
Sattva
, at para. 58. Or, as Mesbur J. wrote
    in
Credit Security
, at para. 36: One does not look at the
    circumstances at the time that one of the parties wishes to terminate to see if
    it is then commercially reasonable. One must look at the time of the formation
    of the contract to make that determination.

[67]

At the time the contract was entered into, the
    parties would not have known how long the school board would continue to
    operate the Ste. Marguerite dYouville School. Obviously, if the school is closed,
    the Municipalitys obligations would come to an end. The schools closure could
    have occurred five, ten or more years after the agreement was entered into. An
    early closure would potentially constitute a windfall for the Municipality. The
    fact that the school has remained in operation for over 30 years may result in
    a windfall to the school board, which it would turn out was not known nor
    likely contemplated by the parties when they made their contract. It ought not
    to have been a factor in the application judges decision.

[68]

The application judge also appears to have overlooked
    other relevant considerations, such as the nature of the contracting parties as
    well as additional surrounding circumstances.

[69]

This was an agreement between two public
    institutions. Both were in the business of providing services to the community
    they served, and both saw the agreement as a win-win in that regard. Neither
    party was pursuing strictly commercial objectives and it is doubtful, based on
    their relationship and on the available evidence, that much consideration was
    given to whether one might achieve a windfall at the others expense. It simply
    was not the focus of the parties negotiations.

[70]

The public nature of the contracting parties
    also explains an additional surrounding circumstance with which the application
    judge failed to grapple. The parties did not carry out a valuation of the St.
    Jean Baptiste School being transferred, nor did they estimate the costs to the Municipality
    of incorporating the snow and garbage removal services for the Ste. Marguerite
    dYouville School into their usual operations. An after-the-fact analysis as to
    whether the arrangement turns out to be economically advantageous to one party
    or the other ought not to have factored into the interpretation of the agreement
    that was reached. The fact that an agreement reached between two parties is
    not, after many years of operation, economically fair to one party or the
    other should not operate so as to justify ending the relationship. It is not
    the courts role to save a contracting party from a bargain that proves
    improvident with hindsight:
Northrock Resources v. ExxonMobil Canada
    Energy
, 2017 SKCA 60, at para. 21; see also
Churchill Falls (Labrador)
    Corp. v. Hydro-Québec
, 2018 SCC 46, [2018] 3 S.C.R. 101.

[71]

I hasten to add that, even if I were to conclude
    that the contract was ambiguous such that it became necessary to look at the
    subsequent conduct of the parties, that is, the fact that the service continued
    to be provided for over 30 years despite the twice stated intention of the Municipality
    to end it, this would not assist the Municipality. The fact that the Municipality
    continued to provide the services until 2017, well after the 10 and 20 year
    periods set out in the transfer had passed and despite the twice stated
    intention to end the provision of the services, is, in my view, more consistent
    with the agreement being perpetual in nature. The continuous 30-year
    performance and the abrupt termination in 2017, without any reference to an
    understanding that the agreement contained an implied termination provision,
    suggests that the agreement had been treated by the Municipality, until then,
    as being perpetual.

CONCLUSION

[72]

In summary, in determining whether to treat a
    contract
as either
    perpetual in nature or as an indefinite term contract into which the court
    implies a provision of unilateral termination on reasonable notice
,
    the court looks to the specific terms of the contract as well as to the
    relationship between the parties and the surrounding circumstances.

[73]

The contract in this case does not contain any
    clear indication as to whether it was intended to be perpetual. The word
    perpetual does not appear in the contract, nor does the contract provide for unilateral
    termination.

[74]

As I have explained, the application judge erred
    in his analysis of the surrounding circumstances and in his characterization of
    the contract as a personal services contract into which courts routinely imply
    a right of termination upon reasonable notice. Viewed properly, the
    relationship between the parties and the surrounding circumstances suggest that
    no such right of termination was intended, nor should one be implied. As noted
    above, the contracting parties are two public institutions offering services to
    the same community. The arrangement reached was mutually beneficial. This was a
    relatively small township seeking to acquire a property it needed but was
    unable to pay for. In exchange for the acquisition of this capital asset, it
    made a commitment that was neither onerous nor unusual for a municipality. It
    already had the perpetual obligation to carry out snow and garbage removal
    throughout its boundaries. The Ste. Marguerite dYouville School, a school
    located in and serving its township, would simply be treated as the Municipality
    might treat municipal arenas, libraries, parks and the like. It would clear
    snow from the parking lot and remove garbage for as long as the facility
    continued to operate.

[75]

The school board, for its part, disposed of a
    capital asset and, although it did not receive payment for it, nonetheless
    benefitted in that the arrangement reduced its ongoing operating costs for the
    Ste. Marguerite dYouville School. It is not possible to determine at this
    point and on this record what a sale of the property at fair market value might
    have generated in 1988 or what income might have been derived from investing
    the proceeds of sale, nor is that information necessary to understand and
    properly construe the bargain struck between the parties at the time. In
    exchange for an enduring capital asset, the school board received an enduring
    benefit, one that would last for as long as the school board continued to
    operate the Ste. Marguerite dYouville School.

[76]

Both parties also saw the advantage, as public
    bodies, of the St. Jean Baptiste School continuing to benefit the community
    served by them.

[77]

Therefore, considering the terms of the
    agreement, the relationship of the parties and the surrounding circumstances at
    the time the contract was entered into, I conclude that the obligation of the
    municipality to provide snow and garbage removal services to the Ste.
    Marguerite dYouville School is perpetual in nature.

DISPOSITION

[78]

As a result, I would allow the appeal, set aside
    the application judges decision and grant judgment:

a.

declaring that the 1988 agreement between the
    parties remains in force;

b.

awarding the appellant damages in the amount of
    $9,000 plus applicable taxes per year from the month of November 2017 to the
    date of this decision; and

c.

awarding costs of the appeal fixed in the amount
    of $12,000 to the appellant, together with costs of the application below.

[79]

If the parties cannot agree on the amount of
    costs of the application below, I would ask the parties to submit brief written
    submissions not exceeding three pages, with the appellants submissions due
    within 10 days hereof and the respondents submissions due 7 days thereafter.

Released: July 28, 2021 P.R.

Paul
    Rouleau J.A.

I
    agree Alexandra Hoy J.A.

I
    agree K. van Rensburg J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Politis v. Politis, 2021 ONCA 541

DATE: 20210728

DOCKET: C68238

Tulloch, Nordheimer and Jamal
    JJ.A.

BETWEEN

Catherine Elizabeth Politis

Applicant
    (Appellant and

Respondent
    by way of cross-appeal)

and

Themistocles Politis

Respondent
    (Respondent and

Appellant
    by way of cross-appeal)

Herschel I. Fogelman and Lauren Daneman,
    for the appellant and respondent by way of cross-appeal

James D. Singer, for the respondent and
    appellant by way of cross-appeal

Heard: April 6, 2021 by video conference

On appeal from the order of Justice E. Llana
    Nakonechny of the Superior Court of Justice, dated February 27, 2020, with
    reasons reported at 2020 ONSC 1306.

On cross-appeal from the costs
    endorsement of Justice E. Llana Nakonechny of the Superior Court of Justice,
    dated April 9, 2020.

Tulloch J.A.:

A.

Introduction

[1]

The parties were married for 25 years. They
    separated in 2008, when they were both 48 years old. By the time of trial, the
    parties had been separated for eleven years and the appellant had resided with
    her new partner, Mr. Burleigh, for at least eight years.

[2]

After a six-day trial, the trial judge held that
    the appellant established a prima facie entitlement to spousal support on both
    a compensatory and needs-based model. The trial judge reduced the spousal
    support payments that the respondent owed to the appellant, reasoning that the appellants
    second spouse had an increasing obligation to contribute. The trial judge
    further ordered the support payments to terminate as of October 2026. The trial
    judge awarded costs of $45,000 all-inclusive to the appellant.

[3]

On appeal, the appellant submits that the trial
    judge erred in law in her determination of the quantum and duration of spousal
    support. The respondent cross-appeals the costs order awarded against him at
    trial.

[4]

For the reasons that follow, I would dismiss
    both the appeal and the cross-appeal.

B.

Overview of the facts

[5]

As noted above, the parties were married for 25 years.
    They had three children together. The children are now adults and independent.

[6]

The appellant has a high school education. She
    was a full-time homemaker and caregiver to the parties children throughout the
    marriage. She has not been employed since separation. She was diagnosed with
    Lyme disease in October 2012, affecting her ability to re-enter the
    workforce. At trial, her position was that she had no ability to earn income or
    contribute to her own support.

[7]

The respondent is a civil engineer. He earns
    income through his own professional corporation, which he has owned since 1992.

[8]

At the time of separation, the parties did not
    have any significant assets, besides the matrimonial home, which was
    significantly encumbered. The net proceeds of sale were $113,263.05. Neither
    party paid any equalization payments to the other.

[9]

In 2015, the appellant brought a motion for
    interim spousal support. On November 13, 2015, the motion judge ordered the
    respondent to pay spousal support in the amount of $5,288 per month on an
    interim basis, based on an imputed income of $200,500. The respondent paid the outstanding
    arrears of support, totalling $52,880, to the appellant from his share of the
    net proceeds of the sale of the family home. In calculating the quantum of
    interim support, the motion judge took into consideration a monthly amount
    contributed by Mr. Burleigh to the appellants expenses.

[10]

At trial, the appellant sought increased monthly
    spousal support for an indefinite period. She argued that the respondent
    underpaid support as his income was actually higher than the income imputed by the
    motion judge. For his part, the respondent sought a termination of spousal
    support, and credit for overpayments made to the date of trial. His position
    was that the entirety of his support obligation should shift to the appellants
    new partner.

C.

Decision below

[11]

There were three issues before the trial judge:
    (1) whether the appellant was entitled to spousal support; (2) if so, what was
    the respondents income for the purpose of calculating spousal support; and (3)
    what was the effect of the appellants cohabitation with her new spouse on
    entitlement to, as well as quantum and duration of, spousal support.
    Additionally, the trial judge determined the quantum of costs to be awarded in
    relation to these proceedings.

[12]

The sections that follow summarize the trial
    judges conclusions on each of these issues, in turn.

(1)

The Appellants Entitlement to Spousal Support

[13]

The trial judge found that the appellant had
    established a prima facie entitlement to spousal support on both a compensatory
    and needs-based model. On this issue, the trial judge made the following
    findings of fact: the parties had a long-term marriage; the appellant was a
    stay-at-home parent, but the respondent assisted her with home and parenting
    responsibilities when he could; as a result of the appellants age, health,
    lack of education and work experience, she had a difficult time re-entering the
    workforce following separation; and she cannot be self-sufficient based on her
    own income or assets.

(2)

The Respondents Income for Support Purposes

[14]

For the quantum of spousal support, the starting
    point was determining whether the amount imputed to the respondents income in the
    interim order was appropriate. The appellant sought an adjustment upward, while
    the respondent sought credit for overpayment.

[15]

While the respondents income deviated somewhat from
    the amount imputed by the motion judge in the two years since the interim order
    was issued in 2015, the trial judge found that the sums paid to the appellant ultimately
    balanced out. Accordingly, the trial judge decided that: On balance, and
    taking into account the means, needs, and circumstances of the Applicant and
    the financial support she received from Mr. Burleigh in the relevant years,
    neither an increased payment nor a credit for overpayment is appropriate in
    this case.

(3)

The Effect of the Appellants Common Law Spouse
    on the Quantum and Duration of Spousal Support

[16]

The trial judge found that the appellant and Mr.
    Burleigh began a committed relationship in 2009 and began cohabitating in 2011.
    She noted that a spouses re-partnering does not disentitle her to spousal
    support but does affect quantum and duration.

[17]

The trial judge found that the appellant enjoys
    a standard of living with Mr. Burleigh that is comparable to, or better
    than, the standard of living that the parties enjoyed during their marriage. The
    trial judge concluded that while a greater portion of the Applicant's need
    should now be met by Mr. Burleigh, the economic loss from her marriage to the
    Respondent has not been completely compensated by the support paid by the
    Respondent to date.

[18]

The trial judge disbelieved several aspects of
    the appellants evidence, including: that she had no knowledge of Mr.
    Burleighs financial circumstances; and that she was obligated to repay a loan
    to Mr. Burleigh on a monthly basis. According to the trial judge, the
    appellants evidence concerning her financial arrangement with Mr. Burleigh did
    not ring true.

[19]

The trial judge found that the appellant received
    a net financial benefit from Mr. Burleigh in the amount of at least $3,100 per
    month. The trial judge grossed-up this amount to a notional income of $44,268
    per year. The respondents income was $193,816. The trial judge determined that
    the Spousal Support Advisory Guidelines formula (SSAGs) range for this income
    differential contemplates both needs based and compensatory support. She
    further identified the SSAGs formula range as follows: $4,673 at the low end, $5,452
    at the mid range, and $6,185 at the high end.

[20]

In determining the amount of support to be paid
    by the respondent, the trial judge considered the SSAGs ranges, the partially
    compensatory and initially partially needs-based nature of the applicants
    entitlement, as well as the benefit she receives from her cohabitation with Mr.
    Burleigh. The trial judge concluded that spousal support payments should not be
    terminated as the appellant had not yet been fully compensated for her economic
    loss. However, the trial judge reduced the amount owed based on her
    significantly decreased need given her second spouses ability to support her.

[21]

As of November 1, 2019, the respondent was
    ordered to pay spousal support in the amount of $3,000 per month up to and
    including October 1, 2024. Commencing November 1, 2024, the respondent was
    ordered to pay spousal support to the appellant in the amount of $1,500 per
    month up to and including October 1, 2026. Thereafter, the trial judge held
    that spousal support shall terminate.

[22]

The respondent was also ordered to pay
    $10,446.50 to the appellant to reimburse her for debts paid by her on the
    respondents behalf.

(4)

Costs

[23]

The trial judge awarded costs of $45,000 all
    inclusive to the appellant. On balance, she found that the appellant was the
    more successful party based on the claims made by the parties in the pleadings
    and at trial, as well as the outcome of the trial. She was entitled to a
    portion of her costs.

D.

ISSUES RAISED by the appellant

[24]

The appellant argues that the trial judge erred in
    her determination of the quantum and duration of spousal support because she
    deviated from the values generated by the SSAGs formula. Additionally, the
    appellant argues that the trial judge effectively double-counted the
    contributions of the appellants new spouse, first as a source of income and
    then as benefits paid to the appellant.

E.

standard of review in relation to the
    appellants grounds of appeal

[25]

Before addressing each of these issues, it is
    important to briefly set out the applicable standard of review as it shapes the
    contours of the discussion below.

[26]

This court should not overturn a support order
    "unless the reasons disclose an error in principle, a significant
    misapprehension of the evidence, or unless the award is clearly wrong":
Hickey
    v. Hickey
, [1999] 2 S.C.R. 518, para. 12. This court is not entitled to
    overturn a support order simply because it would have made a different decision
    or balanced the factors differently. This deferential posture is informed by
    both the discretion involved in making support orders and the importance of
    finality in family law litigation.

F.

analysis of the appellants grounds of appeal

[27]

As noted above, the appellant first takes issue
    with the trial judges determination of the quantum and duration of spousal
    support, namely, she asserts that the trial judge deviated from the SSAGs formula
    ranges of support entitlement and from the Rule of 65. She also asserts
    insufficiency of reasons. As I will explain, I disagree.

(1)

SSAGs Guidance

[28]

The appellant is correct in pointing out that
    the ranges generated by the
Spousal Support Advisory Guidelines
(Ottawa: Department of Justice, 2008) formulas are the presumptive starting
    point for awarding support:
McKinnon v. McKinnon
, 2018 ONCA
    596, [2018] O.J. No. 3487, at para. 24;
Slongo v. Slongo,
2017 ONCA
    272, 137 O.R. (3d) 654, at paras. 105-106. While not binding, the SSAGs should
    not be lightly departed from:
Slongo,
at para. 105. Any departure
    requires adequate explanation:
McKinnon,
at para. 24. That being said,
    while the SSAGs formula offers a valuable tool in assessing a reasonable amount
    of spousal support, there are complicating factors that must be considered:
Gray
    v. Gray,
2014 ONCA 659, 50 R.F.L. (7th) 257, at para. 45.

[29]

Where, in my view, the appellants position errs
    is in equating the principled guidance offered in the SSAGs
as a whole
with the values generated by the short-hand formulas. Those formulas are
    intended to be used as tools only and, according to the SSAGs themselves,
    cannot be applied automatically in every case.

[30]

Re-partnering in particular is a circumstance that
    the SSAGs suggest, at s. 14.7, requires case-by-case decision-making:

Where the recipient remarries or re-partners
    with someone who has a similar or higher income than the previous spouse,
    eventually  faster or slower, depending upon the formula adopted  spousal
    support would be extinguished. We have been unable to construct a formula with
    sufficient consensus or flexibility to adjust to these situations, despite
    considerable feedback that a formula would be desirable. In this final version,
    we still have to leave the issues surrounding the recipients remarriage or
    re-partnering to individual case-by-case negotiation and decision making.

[31]

Re-partnering is also specifically contemplated
    by the SSAGs as a reason to revisit entitlement to support and consider
    terminating it. On the topic of re-partnering, the SSAGs

state at
    §13.8:

Entitlement may then be revisited for any
    number of reasons  the recipient finding employment, the recipients
    remarriage or re-partnering, the payors retirement or loss of employment, etc.
     and support may be terminated if entitlement has ceased.

[32]

Section 16 the
Spousal Support Advisory
    Guidelines: The Revised Users Guide
(Ottawa: Department of Justice,
    2016), echoes the sentiment in instructing that re-partnering does not mean
    the automatic termination of spousal support, but support is often reduced and
    sometimes even terminated. This depends on whether support is compensatory or
    non-compensatory, as well as the length of the first marriage, the age of the
    recipient, the duration and stability of the new relationship and the standard
    of living in the recipients new household.

[33]

Here, the original support was awarded on both a
    compensatory and needs basis. The trial judges explanation for deviating from
    the SSAGs formula range is clear with respect to both bases of support
    entitlement and reveals no error in principle.

[34]

First, it is clear from the trial judges
    reasons that she viewed the contributions of the appellants new spouse as
    sufficient to meet the appellants needs. The trial judge found that the
    appellant enjoys a standard of living that is comparable to, or better than,
    the standard of living she enjoyed during the marriage. The trial judge viewed
    the appellants new relationship as lengthy and one of permanence. The trial
    judge also rejected the appellants evidence that she was under any obligation
    to repay her new spouse for the financial assistance he provided her during
    their relationship. These factual findings support the trial judges conclusion
    that re-partnering diminished the appellants needs-based entitlement to
    spousal support.

[35]

In this way, the trial judges deviation from
    SSAGs formula ranges on this point was not in error, but rather was consistent
    with the SSAGs overall guidance.

[36]

Second, the trial judges reasons explain her decision
    with respect to the partially compensatory nature of the appellants support
    entitlement, and similarly disclose no error in principle. On this point, the
    trial judge said as follows:

In my view, the time has not yet come when the
    Applicant has been fully compensated for her economic loss and the Respondents
    obligation to pay support to her can end. However, it is appropriate for the
    amount of support and the ranges themselves to be reduced, based on the
    increasing obligation of the Applicants second spouse to contribute to her
    need.

[37]

The trial judge also noted that at the time of
    trial, the respondent had paid the appellant spousal support for about nine
    years. Given the considerable length of the parties marriage, the respondent was
    ordered to continue to pay support until 2026, albeit on a reduced basis. By
    then, the trial judge found that the appellant will be compensated for any
    economic loss associated with the dissolution of the marriage.

[38]

Again, the trial judges approach was consistent
    with the overall guidance in the SSAGs, is owed considerable deference, and I
    see no reason to interfere.

[39]

I would dismiss this ground of appeal.

(2)

The Rule of 65

[40]

The appellant also takes issue with what she
    refers to as the trial judges deviation from the Rule of 65, as set out in
    s. 3.3.3 of the SSAGs  that is, where the length of cohabitation in years plus
    the recipients age at the date of separation equals or exceeds 65, indefinite
    spousal support is appropriate:
Climans v. Latner,
2020 ONCA
    554, 449 D.L.R. (4th) 651, at para. 3.

[41]

Here again, the appellants position fails to
    consider the more nuanced explanations provided in the SSAGs. Section 7.5.3 of
    the SSAGs explains further:

The
without child
support formula
    provides that indefinite (duration not specified) support will be available
    even in cases where the marriage is shorter than 20 years
if the years
    of marriage plus the
age
of the support recipient
at the time of
    separation
equals or exceeds 65.
In a shorthand
    expression, we described this as the rule of 65. [Emphasis in original.]

[42]

The SSAGs make very clear at s. 13.8 that indefinite
    support is not permanent support:

Under the Advisory Guidelines duration of
    spousal support will be indefinite, under both formulas, where the parties have
    been married for 20 years or more, or where the rule of 65 applies. But
    indefinite support, under the Guidelines as under the current law, does not
    necessarily mean that support is permanent or infinite, only that the
    duration has not been specified. We have purposely changed the language in this
    final version to convey that notion; our new terminology is indefinite
    (duration not specified).
Duration may be specified at
    some point in the future and support terminated, if entitlement ceases.
[Emphasis
    added.]

[43]

Moreover, the SSAGs explain at s.7.5.3 that the Rule
    of 65 is, intended to respond to the situation of older spouses who were
    economically dependent during a medium length marriage and
who may have
    difficulty becoming self-sufficient given their age
(emphasis added).

[44]

As already mentioned above, re-partnering is
    highly relevant to what otherwise might be an insurmountable difficulty in
    becoming self-sufficient. Given the trial judges findings that the appellants
    standard of living was now comparable to, or higher than what it was during the
    marriage, I see no error in this aspect of the trial judges reasons either.

[45]

I would dismiss this ground of appeal.

(3)

Accounting for Mr. Burleighs Contributions

[46]

Finally, the appellant alleges that the trial
    judge effectively double counted Mr. Burleighs contributions  first as a source
    of income, and second as benefits paid by Mr. Burleigh  as justification for
    her order outside of the SSAGs formula ranges. I do not read the trial judges
    reasons in the same light. The impugned comments are as follows:

I am satisfied that the Applicant receives a
    net financial benefit from Mr. Burleigh in the amount of at least $3,100 per
    month: half of the $5,500 he contributes to the household expenses and the $350
    alleged debt repayment. Grossed up for tax at 19%, this results in a notional
    income of $44,268 per year. The
SSAG
range for the Applicants income
    of $44,268 and the Respondents income of $193,816 is $4,673 at the low end,
    $5,452 at the mid range, and $6,185 at the high end. The amounts in this range
    contemplate both need-based and compensatory support.

[47]

She then goes on to state that it is
    appropriate for the amount of support and the ranges themselves to be reduced,
    based on the increasing obligation of the Applicants second spouse to
    contribute to her need.

[48]

Again, the SSAGs guidance on the need for
    case-by-case decision-making in the face of re-partnering cited above is
    apposite.

[49]

I would dismiss this ground of appeal as well.

G.

Conclusion on the appeal of the support order

[50]

I would dismiss the appeal.

H.

Cross appeal of costs

[51]

The respondent seeks to cross-appeal the costs
    order, dated April 9, 2020, in the sum of $45,000. This cross-appeal requires
    leave pursuant to s. 133(b) of the
Courts of Justice Act
and r.
    61.03.1(18) of the
Rules of Civil Procedure.
The respondent argues
    that the trial judge erred in the following ways: (a) by effectively
    disregarding the nature, calculations and purpose of the respondents offer to
    settle; (b) by determining that the appellant was the more successful party at
    trial; (c) by failing to take into account each party's behaviour during trial
    and thereby committing an error in principle; and (d) by taking into account the
    outcomes of a pre-trial and mid-trial motion on the costs awarded for the trial,
    in effect double-counting.

[52]

In
Nolan v. Kerry (Canada) Inc.
, 2009
    SCC 39, [2009] 2 S.C.R. 678, at para. 126, Rothstein J. held that costs
    awards are quintessentially discretionary. Discretionary costs decisions
    should only be set aside on appeal if the court below has made an error in
    principle or if the costs award is plainly wrong:
Hamilton v. Open
    Window Bakery Ltd.
, 2004 SCC 9, [2004] 1 S.C.R. 303, at para. 27.
    None of the respondents arguments meet this exacting standard. Accordingly,
    leave to appeal the costs order is granted. However, I would dismiss the
    cross-appeal of costs.

I.

Conclusion and Disposition

[53]

I would dismiss the appeal and, while I would
    grant leave to appeal the costs order, I would dismiss the cross-appeal of the
    costs order.

[54]

If the parties cannot agree on the disposition
    of costs of the appeal, they may make brief written submissions of no more than
    two pages, plus a costs outline, within ten days of the release of these
    reasons.

Released: July 28, 2021 M.T.

M.
    Tulloch J.A.

I
    agree. I.V.B. Nordheimer J.A.

I
    agree. M. Jamal J.A.