COURT OF APPEAL FOR ONTARIO

CITATION: Van Delst v. Hronowsky, 2020 ONCA
    329

DATE: 20200529

DOCKET: C66973

Rouleau, Hourigan and Roberts JJ.A.

BETWEEN

Lynda Mary Van Delst (Hronowsky)

Respondent

and

Thomas John Hronowsky

Appellant

Rodney Cross, for the appellant

Katherine Shadbolt and David
    Migicovsky, for the respondent

Heard: March 11, 2020

On appeal from the order of Justice Tracy
    Engelking of the Superior Court of Justice, dated April 24, 2019, with reasons
    reported at 2019 ONSC 2569, 23 R.F.L. (8th) 306.

Hourigan J.A.:

Part I: Introduction

[1]

Certainty in the resolution of financial issues
    flowing from the dissolution of family relationships has been a policy
    imperative underlying much of the recent reform of family law in Canada. Child
    support, spousal support, and the division of family property have all been clarified
    through legislative and regulatory reform. While certainty should be tempered
    by limited judicial discretion to ensure fairness, certainty facilitates two
    essential policy objectives of family law: the encouragement of settlement and
    the avoidance of costly litigation to resolve financial issues.

[2]

The Government of Ontario enacted legislation that
    came into effect in 2012 amending the
Pension Benefits Act
, R.S.O.
    1990, c. P.8 (the
PBA
) and the
Family Law Act
, R.S.O. 1990,
    c. F.3 (the
FLA
), to simplify the valuation of pensions for purposes
    of calculating net family property. This legislation brought much-needed
    certainty to the valuation of what, in many cases, is the most significant
    asset held by litigants on their valuation date. A formula was established for
    pension valuations and the responsibility for calculating that value was
    imposed on pension administrators. Thus, courts largely got out of the business
    of pension valuation. For litigants this provided both certainty and fairness.
    It also allowed them to avoid the costly process of retaining actuarial experts
    and litigating competing pension valuations.

[3]

The Ontario rules for valuating provincially
    regulated pensions for equalization purposes are relatively clear and easily
    applied. However, the valuation of federally regulated pensions is not as
    certain. Parliament has not reformed the law regarding pension valuations to
    bring it in line with the Ontario legislation. Until it does, Ontario courts must
    apply, to the extent reasonably possible, the provincial approach to valuing federal
    pensions for family law equalization.

[4]

In the present case, the most significant issue
    at trial was the valuation of the parties federally regulated pensions for
    equalization purposes. Three
aspects of the trial
    judges reasons on this issue are challenged on appeal: (i) the determination
    of the parties normal retirement dates; (ii) the decision not to include in
    the respondents net family property the contingent interest she held in the
    appellants pension; and (iii) the inclusion of a contingent survivor benefit
    in valuating the parties pensions. While the trial judge reached the right conclusions
    on the survivor benefit and contingent survivor benefit issues, she erred in
    her approach to all three issues by failing to
heed
    the requirement of s. 10.1(2) of the
FLA

that, in
    valuating pensions that are not provincially regulated, the Ontario method of
    valuation should be applied, with only necessary modifications.

[5]

In my view, the correct approach to pension
    valuation issues such as those on appeal is for parties to obtain valuations
    from their pension administrator where possible. Where this is not possible or
    issues remain as to the proper application of the Ontario regime to a federal
    pension plan, the parties should refer such issues to a trial judge for
    determination, usually with the aid of a jointly appointed expert. However in
    this case, given what has transpired, I would suggest, as will be explained
    below, a different process to resolve these issues.

[6]

In addition to the pension valuation issues, the
    appellant also appeals certain date of marriage deductions and notional
    disposition costs used by the trial judge in calculating net family property. Further,
    he seeks an order permitting him to pay part of his equalization payment by
    means of the transfer of a lump sum from his pension. I would dismiss these
    grounds of appeal, as they are meritless.

Part II: Background Facts

[7]

The appellant and respondent were married in
    October 1995 and separated in September 2016. Both spouses worked for entities
    governed by the federal
Public Service Superannuation Act
, R.S.C.
    1985, c. P-36 (the
PSSA
). The appellant became a pension member on
    December 4, 1984, and retired on December 17, 2016. The respondent started working
    for the Royal Canadian Mounted Police in 2008 and continues to be employed.

[8]

The respondent commenced an application in the
    Superior Court in May 2017 seeking orders for spousal support, child support
    and custody, along with the equalization of net family property. In August
    2017, the appellant filed his answer. In September 2018, the respondent amended
    her application to include a claim for divorce. The appellant was alerted to
    the respondents intention to divorce at least as early as November 2017. The
    parties were able to resolve all issues except equalization, which proceeded to
    trial. The calculation of net family property was based on a series of findings
    made by the trial judge that are challenged on appeal.

[9]

The most significant component of the net family
    property calculation was the values of the parties pensions. According to s.
    10.1(1) of the
FLA
, the imputed value for family law purposes of a
    spouses interest in a pension plan is determined in accordance with s. 67.2 of
    the
PBA
.

[10]

If, as here, the pension plan is a plan to which
    the
PBA
does not apply, s. 10.1(2) of the
FLA

nevertheless
    requires the
PBA
approach be used, with necessary modifications. One
    element of the valuation calculation under the
PBA
is the normal
    retirement date under the plan. Provincially regulated plans are required to
    provide a normal retirement date, which permits a straightforward valuation
    calculation. The
PSSA
does not list a normal retirement date.

[11]

Both parties tendered reports by experts
    valuating their respective pension plans. The respondents expert used 65 as
    her normal retirement date because, although retirement with an unreduced
    pension is possible at 60, a fair amount of civil servants work past 60. The
    appellants expert calculated the value using ages 60 and 65. He used 60
    because this is when all members who joined prior to 2013 are entitled to
    unreduced benefits. The appellants expert opined that 65 was also reasonable for
    several reasons, including because it was not unusual for members to retire
    after 60 and the majority of pension plans in Canada define the normal
    retirement age as 65.

[12]

The trial judge concluded that the normal
    retirement date for the appellant was age 60 and for the respondent age 65.
    These conclusions were based on the pre-separation evidence of the parties
    intended retirement dates. In approaching the issue this way, the trial judge
    relied on the method for determining the likely retirement date from
Di
    Francesco v. Di Francesco
, 2011 ONSC 3844, at para. 31. The trial judge
    found that the respondent continues to work and intends to do so until age 65.
    The appellant, meanwhile, planned to retire when he was entitled to an
    unreduced pension. There was evidence that he remained in his job slightly
    longer than that in order to settle a grievance with his employer.

[13]

When she calculated net family property, the
    trial judge excluded the respondents survivor benefits under the appellants
    pension, because the respondent would lose her entitlement to those benefits at
    the time of divorce. The value of the appellants survivor benefit was not
    provided and was not included in his net family property. Contingent survivor
    benefits were included in the net family property calculation, over the
    appellants objection. The trial judge also made several findings on the
    appellants date of marriage deductions and the parties notional disposition
    costs.

[14]

Ultimately, the trial judge calculated net
    family property of $1,834,578 for the appellant and $707,458 for the
    respondent. Accordingly, she ordered that the appellant must pay the respondent
    $563,560 to equalize their net family properties.

Part III: Analysis

[15]

There are five main issues on this appeal: (i)
    the appellants motion to tender fresh evidence; (ii) objections to the pension
    valuations; (iii) objections to the
date of marriage deductions; (iv) objections to notional disposition
    costs used by the trial judge in calculating net family property; and (v) a
    request for an order that part of the appellants
equalization payment be made by means of a transfer of a lump sum out of his
    pension plan.

(i)

Fresh Evidence Motion

[16]

The appellant brought an application to tender
    fresh evidence. I would dismiss that application, other than with regard to the
    documents at tabs 12, 13, 14, and 15 of the appellants materials, which were
    trial exhibits.

[17]

The appellant has not met his onus under
Palmer
    v. The Queen
, [1980] 1 S.C.R. 759, to establish that the remaining
    evidence could not have been adduced at trial with due diligence.

(ii)

Pension Valuation Issues

(a)

The General Approach

[18]

The process for valuating pensions is set forth
    in s. 67.2 of the
PBA
, the relevant provisions of which provide as
    follows:

67.2
(1)
    The preliminary value of a members pension benefits, a former members
    deferred pension or a retired members pension under a pension plan, before
    apportionment for family law purposes, is determined by the administrator in
    accordance with the regulations and as of the family law valuation date of the
    member, former member or retired member and his or her spouse.  2010, c. 9, s. 44
    (1).

*
    * *

(5) The imputed value, for family
    law purposes, of each spouses pension benefits, deferred pension or pension,
    as the case may be, is that portion of the preliminary value that is attributed
    by the administrator, in accordance with the regulations,

(a) to the period beginning with
    the date of the spouses marriage and ending on their family law valuation
    date, for the purposes of an order under Part I (Family Property) of the
Family
    Law Act
; or

(b) to the period beginning with
    the date determined in accordance with the regulations and ending on the
    spouses family law valuation date, for the purposes of a family arbitration
    award or domestic contract.  2009, c. 11, s. 49.

[19]

The other critical legislative provisions for
    the purposes of the valuation of pensions in the family law context are
    subsections 10.1(1) and 10.1(2) of the
FLA
:

10.1
(1)
    The imputed value, for family law purposes, of a spouses interest in a pension
    plan to which the
Pension Benefits Act
applies is determined in
    accordance with section 67.2 or, in the case of a spouses interest in a
    variable benefit account, section 67.7 of that Act.  2009, c.11, s. 26; 2017,
    c. 8, Sched. 27, s. 21 (1).

*
    * *

(2) The imputed value, for family
    law purposes, of a spouses interest in any other pension plan is determined,
    where reasonably possible, in accordance with section 67.2 or, in the case of a
    spouses interest in a variable benefit account, section 67.7 of the
Pension
    Benefits Act
with necessary modifications.  2009, c.11, s. 26; 2017, c. 8,
    Sched. 27, s. 21 (1).

[20]

The use of the phrase with necessary
    modifications in s. 10.1(2) of the
FLA
indicates a legislative intent
    that the substance of s. 67.2 of the
PBA

be applied, while
    recognizing that some details may require modification. As the Supreme Court of
    Canada has recently observed, the words with necessary modifications are a
    contemporary reformulation of the Latin phrase
mutatis mutandis
: see
R.
    v. Penunsi
, 2019 SCC 39, 378 C.C.C. (3d) 37, at para. 49. They mean that
    the rules to be applied are read with necessary changes in points of detail,
    while the matter remains the same:
Penunsi
, at para. 50.

[21]

In a recent decision considering s. 10.1(2) of
    the
FLA
, Raikes J. held that any departure from the
PBA

methodology
    must be justified as necessary by the party seeking that departure:
Kelly
    v. Kelly
, 2017 ONSC 7609, at paras. 161-162. I agree with and adopt that
    statement. This approach is consistent with the language of necessary
    modification. If one of the parties can show that, because the plan is not
    regulated under the
PBA
, a modification to the approach is necessary,
    departure will be warranted. Otherwise, the default position is that the
PBA

approach is to be used.

[22]

This approach is also consistent with the
    legislative intent in reforming pension valuation on marital breakdown. The
    purpose of the new legislation was to create a uniform approach that would
    create certainty and avoid costly litigation over pension valuations: see Ontario,
    Legislative Assembly,
Official Report of Debates (Hansard)
, 39th
    Parl., 1st Sess., No. 92 (24 November 2008) at 4156 (Hon. Christopher Bentley);
    and Ontario, Legislative Assembly,
Official Report of Debates (Hansard)
,
    39th Parl., 1st Sess., No. 111 (19 February 2009) at 4891 (Hon. Christopher
    Bentley).

[23]

In summary, the legislature has signalled a
    clear intention in s. 10.1(2) of the
FLA
that a non-Ontario pension be
    valuated wherever possible in the same manner as an Ontario regulated pension.
    This means that the valuation formula in the
PBA
regulation
Family
    Law Matters
O. Reg. 287/11 should be applied to a non-Ontario pension with
    modifications only where necessary. In addition, a purposive interpretation of
    s. 10.1(2) of the
FLA

requires that, to the extent that other
    Ontario statutory provisions or regulatory requirements impact the valuation of
    a pension for family law purposes, they too should be applied to the valuation
    of a non-Ontario pension.

[24]

In other words, a pension administrator should,
    to the extent possible, valuate a non-Ontario pension as if it were an Ontario
    pension. This is consistent with the purpose of the valuation exercise, which
    is to obtain a fair, predictable, and consistent division of net family
    property. Thus, it is important that provincial and federal pensions be
    valuated in the same manner, to the extent reasonably possible.

[25]

The problem with the trial judges analysis of
    the parties pensions is that she did not default to the requirement that a
    federally regulated pension should be valuated in the same manner as a provincially
    regulated pension unless a departure from the methodology was necessary in the
    circumstances. Instead, she applied the pre-legislative-reform approach of
    tailoring the pension valuation to the parties specific circumstances. I turn
    now to consider the specific objections to the trial judges valuation of the
    parties pensions.

(b)

Did the trial judge err in determining the
    parties normal retirement date?

[26]

As noted, the term normal retirement date is
    one of the variables included in the pension valuation methodology prescribed
    under the
PBA
. In this case, in order to calculate the value of the
    parties pensions in accordance with this methodology, the parties actuaries
    had to fix a value for this variable. Fixing a value for the normal retirement
    date for the plan at issue requires a modification. This is because normal
    retirement date is a defined term in the
PBA

meaning the date
    or age specified in the pension plan as the normal retirement date of members:
    see s. 1(1). Plans regulated by the
PBA

must specify a normal
    retirement date: s. 10(1)4. However, the plan at issue is not regulated by the
PBA

and therefore is not required to, and does not, specify a normal retirement
    date. The definition is therefore not helpful and must be modified when
    applying the
PBA

rules to valuate these pensions for family law
    purposes.

[27]

The question is what modification is necessary.
    As discussed above, the legislature signaled a desire, in prescribing the
PBA

methodology with necessary modifications, that the substance of this
    methodology be followed, even though the details of a federally regulated plan
    may not map perfectly onto provincially regulated plans.

[28]

In the absence of a fixed value referenced in
    the definition, the meaning of the term normal retirement date can nonetheless
    be determined by reference to how it is used in the provincial scheme. An
    analysis of its use in the
PBA
and other regulated pension plans shows
    that the normal retirement date is not a case-specific value reflecting when a
    given member is likely to retire. Rather, it is a generalized value
    representing the date at which the pension plan entitles any given member to
    unreduced pension benefits.

[29]

After reaching the normal retirement date,
    working members become entitled on terminating employment to the benefits to
    which they are entitled under their plan:
PBA
, s. 35(3). The
PBA

requires that this date be no later than one year after the member turns
    65: s. 35(1). However, members do not necessarily all retire at the normal
    retirement date. The
PBA

foresees that members may work past
    the normal retirement date and potentially earn additional pension benefits,
    but these additional amounts can be capped by the terms of the plan:
PBA
,
    s. 35(3).

[30]

This analysis is confirmed by the terms of
    various major pension plans. Across pension plans, members normal retirement
    date is the date at which any member is entitled to retire with unreduced
    pension benefits: see OMERS Primary Pension Plan, s. 16; University of Toronto
    Pension Plan, s. 6.01; Healthcare of Ontario Pension Plan, ss. 6.1, 6.2; OPSEU
    Pension Plan, s. 10.1; Rules and Regulations of the Multi-Sector Pension Plan,
    s. 3.01; and The College of Applied Arts and Technology Pension Plan, s. 6.01.

[31]

This is consistent with guidance from the
    Financial Services Commission of Ontario (FSCO), the agency responsible for
    the regulation of Ontario pensions. In their policy,
Retirement Dates
,
    R700-101
,
they define the normal retirement date this way:

As a minimum standard under the PBA the normal
    retirement date is the date or age specified in the pension plan as the normal
    retirement date of members. The PBA requires every plan to specify a normal
    retirement date. Section 10(1) of the PBA specifies the documents that create
    and support a pension plan shall set out the normal retirement date under the
    plan. Section 35(1) requires this date be no later than one year after the
    member reaches age 65.
A member has the right to retire and begin receiving
    an unreduced pension at the normal

retirement date, if the member so
    chooses.
The PBA does not require a pension plan member to cease employment
    and begin receiving a pension at the normal retirement date or age. A former
    member or other person who is entitled to a deferred pension is also eligible
    to begin receiving an unreduced pension at the normal retirement date.
    [Emphasis added.]

[32]

Thus, the functional meaning of the term normal
    retirement date in the
PBA

scheme is the date or age at which
    any given member of a pension plan is entitled to retire with unreduced pension
    benefits.

[33]

The trial judge did not ask what modification
    was necessary in order to calculate the value of the pension in accordance with
    the
PBA

methodology. Instead, she determined the parties
    respective normal retirement dates based on their case-specific intentions.

[34]

This approach is inconsistent with s. 10.1(2) of
    the
FLA
, which provides that the
PBA

formulae be used
    subject to necessary modifications. As discussed above, this language connotes
    the legislative intent to preserve the substance of the referenced rules, while
    providing for inevitable adjustment on points of detail. Though a modification
    was required here because the federal pension did not stipulate a normal
    retirement date as required under the
PBA
, the trial judge was
    required to adopt the

functional
meaning of normal retirement
    date in the
PBA
 namely the date or age at which any given member is
    entitled to retire with unreduced pension benefits.

[35]

The
PSSA

pension benefits are
    structured in a similar way to pension benefits under Ontario plans. Upon
    reaching a specified age, a contributor who ceases to be employed in the public
    service is entitled to unreduced benefits (an immediate annuity): ss. 12(1),
    12.1(2), 13(1)(a), 13.001(1)(a). Unreduced benefits are also available by
    reason of disability:
PSSA
, ss. 12(1)(a,c), 12.1(2)(a,c), 13(1)(b), 13.001(1)(b).
    Contributors who cease to be employed in the public service earlier may
    nonetheless be entitled to unreduced benefits based on their years of service,
    and otherwise are entitled to reduced benefits: ss. 13(1)(c), 13.001(1)(c).

[36]

It is discernable from the terms of the
PSSA

at what age all contributors are entitled to retire with an unreduced
    pension, which is equivalent to the normal retirement date in the provincial
    plans. Using this date preserves the substance of the
PBA

rules
    in applying them to plans that do not explicitly specify a normal retirement
    date. This is consistent with the intention underlying s. 10.1(2) of the
FLA
.

[37]

The trial judge erred by replacing the generalized
    concept of normal retirement date, as defined under the provincial scheme, with
    a case-specific value for which there is no statutory authority. This was not
    necessary because a functional equivalent to the normal retirement date is
    apparent on the face of the parties pension plan. The trial judges approach
    is undesirable because it implements a case-specific approach that is likely to
    involve more litigation, and is exactly what the legislature sought to avoid in
    enacting s. 10.1(2) of the
FLA
.

[38]

Applying an approach based on the terms of the
    pension plan rather than the intentions of the parties, the normal retirement
    date for both parties is age 60. The parties benefits are outlined in s. 13 of
    the
PSSA
. It

provides different sets of pension benefits
    depending on when the person began contributing and the amount of pensionable
    service they have accumulated. Contributors are entitled to s. 13 benefits
    where they are Group 1 contributors with two or more years of pensionable
    service: s. 13(1). Both parties in this case are Group 1 contributors because
    they worked for the public service before 2013:
PSSA
, s. 12(0.1). They
    both also have at least two years of pensionable service. Therefore, s. 13
    applies to both parties.

[39]

The functional equivalent of the normal retirement
    date in s. 13 is the date on which the contributor reaches 60 years of age.
    Section 13 provides any contributor who has reached 60 years of age and has
    credited two years of pensionable service with immediate unreduced benefits on
    retirement:
PSSA
, s. 13(1)(a). As in the provincial plans, there are
    circumstances in which certain contributors may be entitled to unreduced
    benefits at an earlier date due to disability or having credited a threshold of
    pensionable service. However, at age 60, any contributor who retires is
    entitled to unreduced benefits, as with the normal retirement date in the
    provincial scheme.

[40]

For these reasons, applying the
PBA

valuation
    methodology with necessary modifications to the pension benefits provided by s.
    13 of the
PSSA

requires the substitution of the definition of normal
    retirement date with the date that the parties reach age 60.

[41]

I add the following regarding the process to be followed when valuating
non-Ontario pensions. Generally, the same process should be followed as
    with a provincially regulated plan. The parties should request that the pension
    administrator generate a value based on the Ontario law. If a pension
    administrator, who is not regulated by the provincial legislation, refuses to
    calculate the value, or if issues arise regarding the necessary modifications
    to be made, directions from the court may be sought. The preferable approach is
    that a single jointly-appointed

expert provides expert
    evidence. The appointment of competing valuators should be avoided because it
    encourages the type of costly valuation litigation that the new legislation was
    designed to avoid.

[42]

I note the
Family Law Rules

were recently changed to
    encourage the use of joint litigation experts. Rule 20.2(8)2 now requires joint
    litigation experts wherever the court so orders. Rule 17(4)(d.1) prompts the
    court to explore expert evidence issues at case conferences and make related
    orders. The joint expert can set out for the court the relevant decisions that
    need to be made in order to apply Ontario law to a federal pension, as well as potentially
    necessary modifications. It would then be for the court to determine whether
    any of the suggested modifications meet the high threshold of necessary
    mandated by the
FLA
.

[43]

What remains to be done in this case is a calculation of the
    equalization payment owing based on a correct normal retirement date of age 60
    for both parties. The appellants expert provided a calculation assuming a
    normal retirement date of age 60, and it appears that the respondents expert
    prepared this calculation as well. In the circumstances of this case, where
    important arguments regarding normal retirement date were not clearly made
    before the trial judge, and where further cost and delay should be minimized, I
    would direct the matter back to the trial judge to determine the equalization
    payment owing based on the experts age 60 calculations plus the parties
    further equalization calculation submissions.

(c)

Should the trial judge have included the survivor
    pension in the respondents net family property?

[44]

The appellant submits that the trial judge erred
    in not including in the respondents net family property the contingent
    interest she had in the appellants pension in the event that he died while
    they remained married. The parties positions on appeal on this issue mirror
    their arguments at trial.

[45]

The appellants position is that the respondent
    was entitled to a survivor pension from him that was valued at $392,270 on the
    valuation date and that this asset should be included in her net family
    property calculation. As of the date of separation, he argues, there was no
    intention to divorce and he notes that the respondent did not claim a divorce
    in her original application.

[46]

In response, the respondent submits that under
    the terms of the
PSSA
she is not entitled to a survivor pension from
    the appellant if she is not his spouse at the time of his death. Therefore, she
    submits that this contingent right cannot count as an asset of hers at the date
    of separation. She takes the position that the fact that she did not claim a
    divorce in her original pleadings is irrelevant, as she subsequently sought and
    was granted leave to amend her pleadings to include that claim.

[47]

The trial judge accepted the respondents submission
    that this amount should not be included. Her reasoning was that the respondent
    had asked for a divorce, which was consented to by the appellant, and therefore
    the appellant would not fall within the definition of a survivor within the
PSSA
.
    In making this ruling, the trial judge relied on
Humphreys v. Humphreys
(1987), 1987 CarswellOnt 309, 7 R.F.L. (3d) 113, and
Martin v. Martin
,

2018 ONSC 6804.

[48]

In my view, the trial judge reached the correct
    result on this issue but erred in her analytical approach. She determined that
    the most equitable result would be that the survivor pension should not be
    included because the respondent would lose the benefit of this asset as soon as
    the divorce was granted. The correct approach was to treat this issue the same
    way it would be treated if this were an Ontario pension by first asking: What
    would the law require if this were an Ontario pension? Once that has been
    determined, the next question is whether any modifications of that approach are
    necessary in the circumstances.

[49]

The appellants expert provided the following
    opinion in his report:

The Ontario Pension Benefits Act and
    regulations only assigns a family law value to a survivor pension payable to
    the former spouse if the separation occurs after retirement. This is logical for
    Ontario regulated pension plans since a spouse who is separated from the member
    prior to retirement will not be entitled to a survivor pension on the member's
    retirement. However, this does not necessarily reflect the survivor pension
    entitlements in the case of pension plans from other jurisdictions, such as the
    PSSA, where a separated married spouse is entitled to the survivor pension if
    the marriage commenced prior to retirement and the member and spouse are not
    divorced at death.

[50]

In the present case, neither spouse had retired
    as of the date of separation. The appellants expert testified that inclusion
    of the survivor benefit, and exclusion of the contingent survivor benefit, would
    be modifications of the usual approach but they might be necessary:

Q. What necessary modifications did you have
    to make?

A.  The other issues of necessary
    modifications are the two issues we've discussed in Section 2.1 and 2.2. And
    whether those modifications are necessary is for the court to decide, but one
    modification could be to remove the contingent survivor benefits from the value
    in this case.
Another modification could be to ascribe some value for the
    survivor pension payable to Ms. Hronowsky - her current entitlement to it I
    should say, not payable.
But other than that, I haven't made any, any
    modifications to the rules per se, aside from making a judgment on the normal
    retirement age. But
I provided Section 2.1 and 2.2 due to the unique nature
    of the survivor benefits in this plan. The Court might deem it appropriate to
    make an, an adjustment to the standard rules, so I provided sufficient - tried
    to provide sufficient information to allow the court to make that judgment.
[Emphasis added.]

[51]

The appellants expert was of the view that including
    some value for the survivor benefit in these circumstances would represent a modification
    of the usual approach, and an adjustment of the standard rules. He suggested
    that this might be necessary because, unlike with an Ontario pension, the respondent
    remained technically entitled to the survivor benefit post-separation until the
    parties divorced.

[52]

I do not see modification of the usual approach
    to include this benefit as necessary on the facts of this case. The expectation
    is that the Ontario regime will be applied where reasonably possible, unless
    there are compelling reasons not to. In these circumstances, where entitlement
    to the survivor benefit terminates upon divorce, and the respondent sought a
    divorce early on in proceedings, and the appellant consented to the granting of
    a divorce, there is no compelling reason to depart from the requirements of the
    standard rules to include the full value of an asset never to be realized in
    the hands of the respondent.

[53]

Based on the forgoing, I would dismiss this
    ground of appeal.

(d)

Did the trial judge err in including a
    contingent survivor benefit in the appellants net family property?

[54]

The appellant argues that the trial judge erred
    in including a contingent survivor benefit in valuating his pension. A
    contingent survivor benefit is payable to a pension members future potential
    spouse. Some value for a contingent survivor benefit is included in the value
    of a pension based on the probability of the member having an eligible spouse
    at death and based on the age of the spouse. The appellant took the position
    that this figure should not be included in the value of his pension, whereas
    the respondents expert included the figure in her pension valuation. The trial
    judge included these figures in calculating the value of both parties
    pensions.

[55]

Again, the trial judge reached the correct
    result on this issue but erred in her analytical approach. As with the other
    pension issues, the correct approach was to determine what the law would
    require if this were an Ontario pension and then determine whether any
    modifications of that approach are necessary in the circumstances.

[56]

The appellants expert stated that the
Standards
    of Practice of the Canadian Institute of Actuaries
require actuaries to
    include contingent survivor benefits in the commuted value of a members
    pension benefits on termination. He further stated that the FSCO has instructed
    pension plan administrators to include the value of contingent survivor
    benefits in the family law value in the same way the pension plan includes this
    value when determining the commuted value for terminated pension plan members.
    He described the inclusion of this benefit in the appellants net family
    property as in accordance with the regulations and the generally accepted
    methodology for calculating Ontario family law values.

[57]

The appellants expert opined that,
    notwithstanding the foregoing, including the survivor pension payable to a
    possible future spouse was unfair because the member may not have an eligible
    spouse, and even if the member does have an eligible spouse, the survivor
    pension would be an asset of the future spouse, not an asset of the member.

[58]

According to even the appellants expert, if this
    were an Ontario pension the pension administrator would have been obliged to
    follow the FSCO direction and include these figures. In the testimony quoted
    above, the appellants expert acknowledged that exclusion of the contingent
    survivor benefit would represent a modification of the standard methodology.
    Again, I see no compelling reason why the usual valuation approach should be
    modified for the parties federal pensions. The ability to confer a survivor
    benefit on a future partner is of value to a pension member even if the member
    does not receive these funds personally. In any event, no changes are necessary
    for the court to apply the usual provincial approach to these federal pensions.
    The appellants retirement was a post-separation event, and such events
    generally will not affect the valuation of assets on valuation day according to
    the standard methodology. I would, therefore, dismiss this ground of appeal.

(iii)

Date of Marriage Deductions

[59]

The issue here is the treatment of interest in
    the appellants net family property statement. In his date of marriage
    property, he included prorated figures for interest earned on his Scotiabank Guaranteed
    Investment Certificate, Canada Savings Bonds, and Bank of Nova Scotia RRSP. The
    trial judge found that it was permissible for the appellant to include the
    interest earned on his pre-marriage assets. However, in order to include this
    interest as property owned on the date of marriage, she found that the
    appellant was obliged to include interest for the property he owned on the date
    of separation. The trial judge found that he did not undertake this exercise
    for these date of separation assets and stated that the appellant cannot
    benefit by including interest in his calculations when it is advantageous to
    him and not including it when it is not.

[60]

The appellant submits that the trial judge erred
    in fact in finding that he did not include interest in his date of separation
    assets. I am not persuaded by this argument. The appellants net family
    property statements suggest that he did not include interest in his date of
    separation assets. For example, in his December 10, 2018 statement, his
    Scotiabank Guaranteed Investment Certificate is assigned a value of $85,000 as
    of the valuation date and the same figure is used for the current value. This
    strongly suggests that interest was not included, as there is no increase in
    the value between the two dates. The onus is on the appellant to show that the
    trial judges factual findings should be overturned. This would require
    evidence of the inclusion of interest in his date of separation values, and the
    methodology used to reach such figures, sufficient to displace the trial
    judges findings against him on this issue.

[61]

Having found as a fact that the appellant did
    not include interest in these date of separation asset values, I see no legal
    error in the trial judges decision to disregard the date of marriage interest
    values for the sake of consistency. I would, therefore, dismiss this ground of
    appeal.

(iv)

Notional Disposition Costs

[62]

The appellant has raised a number of alleged
    errors regarding the treatment of notional disposition costs. Specifically, he
    submits that the trial judge erred in:

·

not using a marginal tax rate of 26.9% for the
    pre-marriage portion of his retiring allowance;

·

using a 25.8% marginal tax rate at age 60 instead
    of a rate of 26.9%;

·

not using a 45% marginal tax rate for the
    retiring allowance as at the date of separation;

·

not applying a notional disposition cost for his
    non-registered SSI account; and

·

using an 18% disposition rate for the respondents
    remaining contribution deficiencies.

[63]

I am not persuaded that there is a basis to
    interfere with the trial judges calculation of notional disposition costs. The
    appellant failed to meet his onus of adducing sufficient evidence to establish
    these costs. For example, the appellant led no evidence regarding the
    appropriate tax rate to apply to his date of marriage severance pay, and the
    only information the court had with regard to the appellants marginal tax rate
    as at the date of separation was the agreement of the parties that the tax rate
    on the retroactive pay he received should be 45%. Moreover, the 25.8% rate used
    was the same one used by the appellants actuary assuming a retirement age of
    60. In addition, the 18% rate was the same rate the appellant used in his Net
    Family Property Statement dated December 10, 2018, and he did not challenge
    this rate at trial. Deference is owed to the trial judges assessment of the
    evidence relating to costs of disposition: see
Berta v. Berta
, 2015
    ONCA 918, 128 O.R. (3d) 730, at para. 82.

[64]

For these reasons, I would dismiss this ground
    of appeal.

(v)

Method of Equalization Payment

[65]

The appellant submits that the trial judge
    should have permitted him to satisfy part of his equalization payment by
    transfer of a lump sum out of his pension plan. He submits that the requirement
    to make such a large equalization payment means that he will have to arrange
    financing to satisfy the equalization payment.

[66]

I would not give effect to this submission. The
    appellant stated explicitly in his amended answer, in the context of his
    argument that the respondent should have his survivor pension added to her net
    family property, that he would not apply for division of his pension under the
Pension
    Benefits Division Act
, S.C. 1992, c. 46, Sch. II, as this would terminate
    her entitlement to the survivor benefit. Thus, he made a strategic decision not
    to seek an order for a lump sum transfer.

[67]

In addition, the evidence at trial established
    that he had the ability to make the required equalization payment without the
    need to rely on a lump sum transfer from his pension. His financial statement
    showed substantial liquid assets, including cash, proceeds from the sale of the
    family home, and securities.

[68]

In his closing argument, the appellants counsel
    summarized his clients position this way:

The last point I will bring up, Your Honour,
    is splitting - my friend alluded to splitting Mr. Hronowskys pension of the
Pension
    Benefits Division Act
. He does not want to do that, hes able to pay, and
    therefore theres no need to make that order. Certainly, in light of the fact
    that he has enough liquidity, that, within a matter of a month or so, he should
    be able to pay the  whatever the equalization payment, Your Honour, thinks is
    appropriate.

[69]

The trial judge cannot be criticized for doing
    exactly what the appellant invited her to do. In taking the strategic position
    he did at trial, the appellant was no doubt aware of the possibility that the
    trial judge would be making an order for a substantial equalization payment.

[70]

I would dismiss this ground of appeal, as I see
    no basis for appellate interference. The cross-appeal seeking an order that any
    lump sum payment be grossed up need not be addressed, given the result on this
    issue.

Part IV: Disposition

[71]

I would allow the appeal in part and order that
    the parties pensions be valuated in accordance with these reasons, and that
    the resulting adjustment be made by the trial judge to the equalization order.
    If the parties cannot agree on the costs of the appeal and the trial, they may
    serve and file written submissions of no more than five pages, plus bills of
    costs, within two weeks of the date of these reasons.

Released: P.R. May 29, 2020

C.W. Hourigan J.A.

I agree. Paul Rouleau J.A.

I agree. L.B. Roberts J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Volk v. Volk, 2020 ONCA 297

DATE: 20200508

DOCKET: M51316

(C67918)

Miller
    J.A. (Motions Judge)

BETWEEN

George
    Volk

Responding
    Party

Applicant
    (Respondent)

and

Doris
    Volk,
Darlene Mussato
, Lisa Volk,
Felicia Mussato
and Public Guardian and Trustee

Moving Parties

Respondents
    (
Appellants
)

Jerry W. Switzer, for the moving
    parties

Ellen Ann Brohm, for the responding
    party George Volk

Heard: May 6, 2020, by combination of Teleconference
    and Videoconference

REASONS
    FOR DECISION

OVERVIEW

[1]

The moving parties bring this motion for a stay
    of an order for the sale of real property, pending appeal to this court of an
    order of McCarthy J. dated January 7, 2020. The order under appeal provides a
    suite of remedies in an application under the
Substitute Decisions Act
,
    R.S.O., 1990 c. 30, brought by the respondent, George Volk, primarily against
    his daughter, Darlene Mussato, and granddaughter Felicia Mussato. For the
    reasons given below, the motion for a stay is dismissed.

[2]

The litigation arises out of a dispute over the
    alleged mismanagement by the moving parties of the financial affairs of Doris
    Volk, the wife of George Volk and mother of Darlene Mussato. Doris Volk is
    incapable of managing her own affairs, and had executed a power of attorney for
    property and personal care, appointing her daughters Darlene Mussato and Lisa
    Volk.

[3]

The attorneys sold the matrimonial home in which
    George and Doris Volk resided. The application disputes their authority to have
    done so, and seeks an accounting of the proceeds of sale and other assets.

[4]

Some of the proceeds of sale are alleged to have
    been used by the moving parties to purchase, improve, and maintain the real
    property that is the subject of this motion  4 Rose Cottage Lane, Schomberg
    supplying the down payment, the continuing mortgage payments, and other
    expenses.

[5]

Felicia Mussato is the registered owner as to
    99% of the property, with Doris Volk the registered owner as to 1%. There is a
    dispute as to whether Doris Volk intended to gift the down payment and
    continuing mortgage payments to Felicia.

[6]

George Volk and Doris Volk had been living at
    the property with Darlene Mussato and her partner. The arrangement has not been
    a happy one.

[7]

George Volk brought the present application as a
    dependant of Doris Volk under the
Substitute Decisions Act
, R.S.O.
    1990, C. 30, seeking, among other things, guardianship for Doris Volks
    financial and personal care, and a passing of accounts. He also sought the sale
    of the property, which George Volk argues is depleting the resources of Doris
    Volk to her detriment (and to his, as her dependant) and to the benefit of the
    moving parties.

[8]

George Volk brought a motion for interim relief,
    in which he sought  among other things  an order that Darlene Mussato and her
    partner vacate the property, that the property be listed for sale, and that the
    proceeds of sale be paid to George Volk in trust for Doris Volk. This relief
    was granted in the order under appeal and the moving parties have appealed to
    this court. A court ordered timetable remains in place to address the balance
    of the application.

Analysis

[9]

The question whether a stay should be ordered is
    governed by the three inquiries set out in
RJR-Macdonald Inc. v. Canada
    (Attorney General)
, [1994] 1 S.C.R. 311. The moving party must show that:

a)

There is a serious question to be tried;

b)

The moving party will suffer irreparable harm if the stay were
    refused; and

c)

The balance of convenience favours granting the stay.

[10]

As to the first inquiry, there is little
    likelihood that the appeal could succeed. The moving parties have not
    identified a plausible ground of appeal. There is no serious dispute that they
    were validly served. Furthermore, it was evident from the materials they
    received, and the correspondence they had with counsel for the respondent,
    their previous attendances in court, and their answers to undertakings that
    they knew what was in issue. They chose not to attend. They did not move under
    Rule 37.14 to have the order set aside in Superior Court on the basis of
    accident, mistake, or insufficient notice. Nor could they have done so, on
    the evidence before me. The moving party Felicia Mussato objects that counsel
    for George Volk did not advise myself or my mother that it would be in our
    best interest for us to attend the court on January 7, 2020. Counsel had no
    obligation to persuade the moving parties to attend. Their failure to appear
    does not provide a ground to appeal the order.

[11]

The second ground of appeal identified by the
    moving parties is that it was an error to order the sale of the property at the
    application of George Volk, when George Volk is not an owner of the property
    and is not the attorney for property of a registered owner. This cannot succeed.
    The application was brought under the
Substitute Decision Act
. The
    moving parties needed to engage with the powers of the court under the
Substitute
    Decision Act
, and explain how those powers were exercised in error. They
    have not an argument in this regard.

[12]

The moving parties have not met their onus on
    the first branch of
RJR- Macdonald
.

[13]

In my view, that is sufficient to dispose of the
    motion. I will, however, briefly consider the other factors.

[14]

The moving parties do not face irreparable harm
    from the sale of the property. Neither of them resides at the property, and
    neither appear to have more than a minimal financial investment in it, if
    anything at all. There appears to be no concern that the proceeds of sale would
    be dissipated. The moving parties have not met their onus under the second
    factor.

[15]

With respect to balance of convenience, there is
    no harm to the moving parties. As noted above, they do not currently reside in
    the property (albeit because of court order) and have no financial stake in it.
    There is, however, potential harm to George Volk, who attests to the ongoing
    depletion of the assets of Doris Volk in maintaining a house that is larger and
    more expensive than what they require. The balance of convenience favours
    George Volk.

DISPOSITION

[16]

The motion is dismissed. Costs of this motion,
    and costs of the motion before Paciocco J.A. on April 14, 2020 that were
    reserved to this motion, are awarded to George Volk in the amount of $15,000
    inclusive of disbursements and HST, payable forthwith.

B.W.
    Miller J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Welton v. United Lands Corporation
    Limited, 2020 ONCA 322

DATE: 20200527

DOCKET: C67272

Lauwers, Huscroft and Thorburn
    JJ.A.

BETWEEN

Darlene Welton

Plaintiff (Appellant)

and

United Lands Corporation Limited
    and
Stonebrook Properties Inc.

Defendants (Respondents)

AND BETWEEN

Darlene Alice May Welton

Plaintiff (Appellant)

and

United Lands Corporation Limited
    and
Stonebrook Properties Inc.

Defendants (Respondents)

Sarah J. Erskine and Shannon Bennett,
    for the appellant

Cameron D. Neil, for the respondents

Heard: In Writing

On appeal from the judgment of Justice
    Antonio Skarica of the Superior Court of Justice, dated September 27, 2019,
    with reasons reported at 2019 ONSC 3623.

Lauwers J.A.:

[1]

Stonebrook hired the appellant, Darlene Welton, as Vice President of
    Marketing and Sales. A dispute arose concerning her compensation for sales for
    additional services she provided. She appeals the trial judges award of
    compensation to her on the basis that it was inadequate on the facts and the
    law. For the reasons that follow, I would dismiss the appeals on the merits.

A.

The factual context

[2]

David and John Welton were brothers and had
    worked together for decades. They incorporated Stonebrook Properties Inc. in
    2004 as a joint venture to build a condominium development in Mississauga. Each
    of their respective companies, Davwel Investments Inc. and Johwel Investments
    Inc., held a 50% share in Stonebrook. The brothers fell out over this
    development and, it appears, over the appellants role and compensation.

[3]

The Stonebrook development comprised two high-rise
    condominium buildings, with Phase I having 226 units and Phase II having 225 units.
    Phase I sales launched in 2006 and the building was substantially completed in
    2010. Phase II sales launched in 2010, but the building was cancelled in May
    2012, as the result of low sales.

[4]

In the late 1990s, the appellant was a marketing
    and sales director at Hunter Milborne, a brokerage firm retained by developers
    to sell pre-construction condominium units, earning about $150,000 annually. She
    met David Welton in 2003-2004 when the Welton brothers retained Milborne to
    replace another brokerage on their Oakridge Heights condominium development,
    which was an earlier project. The appellant married David Welton about one year
    later.

[5]

In 2005, Stonebrook hired the appellant as Vice
    President of Marketing and Sales. Her employment was terminated at the end of
    2012. During her tenure, the appellant received bi-weekly advances and some
    additional payments toward the ultimate remuneration owing to her. The trial
    judge accepted that Stonebrook paid her a total of $744,277.23.

[6]

On June 6, 2012, John Welton advised the
    appellant that her position would be terminated once the last units in Phase I
    were sold or transferred, which occurred in December 2012. The trial judge
    found that she received her last pay cheque at the end of December 2012, and,
    as of January 1, 2013, she was no longer employed by Stonebrook.

[7]

The case turned on the fact that the terms of
    the appellants employment were never formalized. The appellant brought two
    actions for compensation. She issued the 2012 Statement of Claim on October 25,
    2012, while still employed by Stonebrook, claiming unpaid sales commissions of
    about $1.35 million. In the 2015 action, the appellant claimed compensation in
    the amount of $440,000 related to the Tarion Warranty claim, particularly her
    Technical Audit work for Phase I from 2011 to 2013, including her settlement
    negotiations with its Condominium Corporation for outstanding deficiencies.

B.

ISSUES

[8]

This appeal raises four issues concerning the
    appellants compensation: The rate of commission the appellant was to receive for
    the Phase I sales; the rate of commission for the Phase II sales; compensation
    for her construction services work; and compensation for her work on the Tarion
    Warranty claim against Stonebrook. The fifth issue concerns the costs award
    made at trial.

[9]

I address each issue in turn.

C.

Analysis

(1)

Issues One and Two: The Rate of Commission on
    Phase I and Phase II Sales

[10]

It is convenient to deal with the first two
    issues together.

(a)

The Appellants Claim

[11]

As the appellant describes it, in the 2012
    action, she claimed commissions equaling the greater of 2% of sales revenue
    net of taxes for Phases I and II, or $220,000 per annum. By her calculation,
    as submitted to the trial judge, 2% totalled $1,330,997.22 for Phase I and
    $744,898.76 for Phase II. She advanced an alternative claim for $220,000 per
    year for seven years and four months, which amounted to $1,613,333.33.

(b)

The Trial Judges Award

[12]

The trial judge assessed the 2012 action in two
    parts corresponding to the developments two phases. He set a fair rate of
    remuneration for Stonebrook Phase I at 1.5% of net sales, net of HST/GST and
    insider sales: at para. 510. The trial judge deducted from this amount payments
    to sales agents and sales personnel per the industry standard practice and
    draws paid to the appellant: at para. 510. The appellants factum provides
    details of the trial judges calculations:

The trial judge calculated the amount owing to
    [the appellant] for Phase I as 1.5% of $67,635,404.30 which totaled
    $1,014,531.06. He then deducted the amounts paid to sales staff of $261,268 and
    the $744,277.23 in advances already paid to [the appellant] to arrive at
    $8,985.83. The trial judge calculated the amount owing to [the appellant] for
    Phase II as 1.5% of $37,244,938.20 which totaled $558,674.07. He then implied a
    further term to reduce this amount to one-third and deducted amounts paid to
    sales staff and amounts paid to [the appellant] of $6,800 and $6,257.71, respectively,
    to arrive at $173,166.98.

[13]

For Phase II, the trial judge found that pursuant
    to the usual practice , [the appellant] would be entitled to 1/3 of her
    commissions based on the same commission rate of 1.5% of net sales net of
    HST/GST as the project was cancelled before construction commenced: at para.
    511.

[14]

In the result, the trial judge awarded the
    appellant the following commissions, at para. 517:

·

Stonebrook Phase I: $8,985.83 (net of deductions
    and draws)

·

Stonebrook Phase II: $173,166.98

·

Total: $182,152.81

(c)

The Appellants Position at Trial

[15]

The appellant argued at trial that the agreed
    remuneration was the greater of $220,000 per annum or 2% commission on sales
    revenue net of taxes.
The
    trial judge traced the $220,000 per annum figure to a letter dated June 18,
    2012 and signed by the appellants husband David Welton. He noted: Crucially,
    this Tab 138 letter, dated June 18, 2012, signed by David and addressed to
    Darlene Welton confirm the verbal [agreement] between you and I
i.e.
David and
    Darlene: at para. 450.

[16]

The trial judge rejected the appellants
    evidence for two reasons. First, he relied on the evidence of Stonebrooks chief
    financial officer. Second, he invoked the appellants own evidence, at paras.
    451-452:

The Tab 138 letter also indicates the agreed
    upon remuneration is 2% of sales revenue or $220,000 per annum, whichever is
    greater. Sidney Dick, Stonebrooks chief financial officer, was shocked to see
    this $220,000 per annum claim. Accordingly, it can be concluded that Sidney
    Dick, a key financial officer, was never advised of an agreement of a minimum
    $220,000 per annum payment to Darlene. Sidney Dick testified that the
    subsequent Exhibit 1, Volume 3, Tab 148 demand letter from Darlenes lawyer
    asking for $220,000 came out of the blue, (the Tab 148 letter was dated July
    16, 2012).

In cross-examination, Darlene conceded that
    this reference to $220,000 per annum payment never appears in the documentary
    record prior to June 18, 2012.

[17]

Credibility was at issue in this case. The trial
    judge identified ten material inconsistencies and contradictions in the
    appellants evidence, which led him to reject her evidence as being neither
    credible nor reliable: at para. 414. He found that the appellant failed to
    prove there was an agreement to pay her a 2% commission of sales revenue net of
    taxes or $220,000 per annum, whichever was greater, at paras. 413-414, 458:

Darlenes evidence presented numerous
    inconsistencies. Further, as outlined above, she was also contradicted by her
    discovery evidence, filed exhibits, undertaking answers, and the evidence of
    other witnesses.

Accordingly, I find that Darlenes testimony
    was neither credible nor reliable. I reject her evidence, particularly her
    evidence regarding the alleged three-way agreement in 2006. I reject her
    evidence that John agreed to pay a 2% commission and/or $220,000 per year.

Considering the evidence that I have
    summarized and my analysis of it, I have come to the conclusion that the
    plaintiff has failed to prove that there was an agreement between John, David
    and Darlene for a 2% commission of sales revenue net of taxes or $220,000 per
    annum, whichever is greater[.]

[18]

In my view, the trial judges findings are amply
    justified by his extensive review of the evidence; the appellant has not
    identified a palpable and overriding error.

(d)

The Basis of the Trial Judges Commission Award

[19]

Stonebrooks chief financial officer testified
    that he assumed that the sales commission rate would be the same rate as that
    of prior sales consultants  1.5%  based on instructions received after a
    private meeting between the Welton brothers. Regarding this evidence, the trial
    judge noted, at para. 456:

Mr. Dick testified that three months before
    the first cheque to Darlene in May 2006, John, after a closed door meeting with
    David, told Mr. Dick that Darlenes sales commission would be the same sales
    commission rate as prior sales consultants. Mr. Dick assumed it would be 1.5%.

[20]

The trial judge found that there had been no
    further discussions apart from an understanding in accordance with Welton
    brothers tradition that the appellant would receive fair remuneration in
    accordance with industry standards and the brothers past practices regarding
    commission rates: at para. 490.

[21]

The trial judge determined that he should apply the
    principles of
quantum meruit
to determine the appropriate amount of
    remuneration in the absence of a formal written agreement: at para. 494. He found
    that the appellant had established a
quantum meruit
claim because she
    provided services at Stonebrooks request in circumstances that render[ed] it
    unjust for [Stonebrook] to retain the benefit conferred by the provision of the
    services: at para. 192. As the trial judge found, John and David hired the
    appellant to be the Vice President of Marketing and Sales and, based on the
    documentary record, it would be unjust for Darlene not to receive a fair
    commission for her services: at para. 494.

(e)

The Appellants Appeal Argument

[22]

On appeal, the appellant shifted her position
    and did not argue that there had been agreement on her compensation. Instead, she
    argued that the trial judge had not properly valued her services. The appellant
    asserted in her factum:

In light of all of the circumstances, $220,000
    per year is a fair and reasonable valuation of Mrs. Welton's services to
    Stonebrook, and what Stonebrook could reasonably expect to pay someone else to
    perform those services. For the period between 2006 through 2013, Stonebrook
    should pay Mrs. Welton $1,760,000 less advances already paid of $744,277.23.
    This results in a damages award of $1,015,722.77.

[23]

The appellant argued that the trial judge made a
    palpable and overriding error by: Making a finding of an industry standard
    [of 1.5%] in the absence of any evidence of such standard, and in conflict with
    the expert evidence adduced by both parties that there is no industry
    standard.

[24]

I would reject these submissions because the
    trial judges decision was rooted in the available evidence.

[25]

The appellants expert testified that there was
    no industry standard for sales commissions, but her report specifies that
    commission rates vary widely between 1% and 2%. Likewise, the respondents
    expert report stated there is no standard for commissions, but then summarized
    several attached agreements that set commission rates at between 1.25% and
    1.5%.

[26]

The trial judge canvassed the evidence on
    industry practice, at paras. 496-504, and concluded that 1.5% was a reasonable
    commission rate, within the experience and expectations of the [parties], and
    in conformity with industry standards: at para. 505. The trial judge also noted
    that 1.5% was midway between the 1% and 2% typical commission ranges as
    indicated at p. 3 of the plaintiffs Exhibit 8 expert report: at para. 505. He
    repeated this conclusion, at para. 510, before carrying out the calculation,
    based on a 1.5% sales commission rate, that led to the award for Phase I of the
    development.

[27]

On appeal, the appellant also challenged the
    trial judges deduction of amounts paid to sales staff of $261,268, renewing an
    argument she made at trial.

The appellant testified at trial that she did not
    agree that sales staffs salaries would be deducted from her commission. However,
    this evidence appears to conflict with an e-mail she sent to the company
    bookkeeper, Dolores Gosine, on August 3, 2011. In that e-mail, the appellant
    explains that Ms. Gosine had deducted salaries paid for
both
phases
    (emphasis in original). She asked Ms. Gosine to
recalculate the salaries paid for Stonebrook Phase I
    only and to remove any salaries paid to the others with the exception of the
    sales staff, receptionists, sales office part-time help, and opening event
    help. She then stated that all salaries paid, including my commission advances
    since June 4, 2010 [the date on which Phase II began], are to be applied
    against commissions earned for Phase II. When pressed on cross-examination,
    she agreed she could have been clearer in the e-mail and simply informed Ms.
    Gosine that none of those salaries were to be deducted from her commission, if
    the sales staffs salaries were irrelevant. The appellant then said she did not
    recall the e-mail at all or why she wrote it that way and what she was
    addressing in the e-mail.

[28]

In my view, the trial judge made no error in the
    deductions he made from the Phase I commissions.

[29]

Sales in Phase II began in spring 2010 and
    continued for just under two years. The trial judge found that due to
    insufficient sales to obtain the necessary construction loans John Welton
    decided that the project was no longer viable and would lose money. He
    cancelled Phase II in May 2012. The appellant claimed full commissions for the
    units sold in Phase II even though it was cancelled.

[30]

The trial judge reviewed comparable contracts
    provided by the experts and noted that the industry standard was to provide for
    cancellation, with payment of 1/3 of the commission for units on which the
    transaction closed. On that basis, he awarded the appellant 1/3 of her
    commissions based on a rate of 1.5% of net sales, net of HST/GST.

[31]

I see no error in the trial judges assessment
    of the commission rates applied to sales in Phase I and Phase II.

(2)

Issue Three: Compensation for Construction
    Services

[32]

The appellant submits that the trial judge
    failed to consider the expert evidence that the additional construction
    services [she performed]  were not services performed by an outside broker.
    The appellants expert testified that the additional construction services the
    appellant undertook did not fall under her mandate as Vice President of
    Marketing and Sales. Stonebrooks expert did not provide evidence on this
    point.

[33]

The appellant argues that she should receive
    $150,000 per year (2006-2009) for her services as Vice President of Marketing
    and Sales, and $249,800 per year from 2010 through to the end of 2013 when she
    also performed additional construction services previously performed by Colin
    Pillar. Accordingly, she values this work at about $100,000 per year from 2010
    to the end of 2013 based on the calculated differential between her salary and
    that of the Vice President of Development and Construction, Mr. Pillar, who was
    relieved of that work on the Stonebrook development. She argues that had she
    been unable to perform his duties, Stonebrook would have had to employ someone
    else to oversee the project. She asserts that the trial judge should have
    determined what Stonebrook would have to pay someone to perform those
    service[s] if she had not provided them.

[34]

The claim appears to be overstated because the
    appellants employment with Stonebrook ended in December 2012 and she did not
    begin to undertake this work until partway through 2010.

[35]

The trial judge found that both Darlene and
    Stonebrook benefitted from their arrangement: at paras. 496-497. Stonebrook
    leveraged its full time sales and marketing employee who could devote more
    time and effort than a broker could provide with respect to the Tarion
    process and construction issues (areas not normally done by brokers): at para.
    496. The trial judge found that the appellant anticipated commission in excess
    of her former base salary but was not exposed to the risks brokers commonly
    bear  [she] had no overhead and did not have to pay sales agents personally.
    Basically, her commission pay was being in part subsidized by Stonebrook for
    many years: at para. 497.

[36]

In my view, the trial judge did the best that
    could be done in the absence of evidence on the issue. The appellant provided
    no evidence as to the value of the additional construction services. I would defer
    to the trial judges findings on this issue.

(3)

Issue Four: Compensation for Work on the Tarion
    Warranty Claim

[37]

In the 2015 action, the appellant claimed unpaid
    wages of $440,000 related to the Tarion Warranty Claim, particularly her
    Technical Audit work for Phase I from 2011 to 2013, including her settlement
    negotiations with its Condominium Corporation for outstanding deficiencies.
    The trial judge dismissed this action.

[38]

The trial judge accepted that the appellant did
    some work on Tarion Warranty issues concerning the condominium building. Stonebrook
    settled the Tarion Warranty claim in November 2013 by paying $50,000 to the
    condominium corporation.

[39]

The trial judge
observed that the appellants
claim
    for work on the warranty issues ha[d] shrunk from an initial potential claim
    in 2015 of approximately $600,000 to a claim in 2016 of $440,000 to a claim in
    2019 of $220,000: at para. 550. The trial judge noted that the appellant
    submitted no invoices for this work over the years that she was involved with
    it, from February 2010 to November 2013, and did not mention it in the 2012
    action. The trial judge noted that:
The first invoice
    was service of the October 2015 Statement of Claim: at para. 529.

[40]

The trial judge analyzed this claim under the
    rubric of unjust enrichment and applied the correct test:
Moore v. Sweet
,
    2018 SCC 52, [2018] 3 S.C.R. 303. He concluded that the first two elements of
    unjust enrichment were established: the defendant received Darlenes services
    and Darlene was not paid for her Tarion Warranty services: at para. 552. However,
    he found that t
he claim did not
    survive on the third element: whether there was a
reason
    in law or justice for Stonebrooks retention of the benefit conferred by the appellant.

[41]

The third element of the unjust enrichment
    analysis consists of two stages. First, the plaintiff must demonstrate that
    the defendants retention of the benefit  cannot be justified on the basis of
    any of the established categories of juristic reasons: a contract, a
    disposition of law, a donative intent, and other valid common law, equitable or
    statutory obligations (internal citations omitted):
Moore
, at para.
    57.

[42]

At the second stage, the defendant bears the onus
    of rebut[ting] the plaintiffs
prima facie
case by showing that there
    is some residual reason to deny recovery (internal citations omitted):
Moore
,
    at para. 58. Here, the court considers two factors: the parties reasonable
    expectations and public policy considerations:
Moore
, at para. 58.

[43]

The trial judge focused on
the second stage, particularly on the parties
    reasonable expectations.
He found: By January 2013,
    Stonebrook was no longer paying [the appellant] and refused to pay her invoices
    as Johns opinion was that [she] was asking for unreasonable amounts: at para.
    553. Therefore, the trial judge considered it to be objectively reasonable for
    her to expect that Stonebrook would not pay for any future services provided
    by [her] for 2013: at para. 553. He pointed out that the appellant admit[ted]
    that given the litigation and background circumstances she herself expected
    that Stonebrook would refuse to pay voluntarily for any future services in
    2013, without legal intervention: at para. 553.

[44]

The trial judge observed that the appellant was
    involved in the Tarion Warranty process with Stonebrook in 2013, but found she
    was then employed by Davwel, which had a 50% interest in Stonebrook and had begun
    paying her salary as of June 2013.

[45]

The trial judge dismissed the appellants claim
    for unjust enrichment on the basis that, on the evidence, objectively it was not
    within the reasonable expectation of the parties that any of Darlenes services
    in 2013 would give rise to an after-the-fact claim for payment under the
quantum
    meruit
and unjust enrichment doctrine: at para. 554.

[46]

The trial judge identified and applied the
    correct legal principles in dismissing the 2015 action. The appellant has not
    identified any palpable and overriding factual errors.

(4)

Issue Five: The Trial Costs

[47]

The appellant seeks leave to appeal the costs
    award in the 2012 action, on the basis that the trial judge imposed r. 49.10(2)
    costs consequences on her even though the respondents offer to settle was not
    delivered at least seven days before the commencement of the hearing:
Rules
    of Civil Procedure
, R.R.O. 1990, Reg. 194. It was delivered on May 13,
    2019, which was six calendar and four juridical days before the trial started.
    The offer was for $190,000 plus costs. At trial, the appellant was awarded
    $182,000, but was required to pay the respondents trial costs on the basis
    that, as the trial judge said: The defendants have beat their offer.

[48]

However, the offer must be put into context. The
    trial judge noted in his costs reasons that the only previous offer was made
    before the 2012 lawsuit began. He noted that:
On July
    26th, 2012, the defendants, through their lawyer, offered a commission total of
    $14,898.26. The action was started in October 2012. It is hard to see the
    attitude of the guiding minds of the respondents as anything other than roundly
    contemptuous of the appellant and her claims. It appears that reason entered
    the picture mere days before the trial, and the date, in the context of the
    animosity, might well have been strategic, to assert maximum pressure at the
    very last minute.

[49]

The trial judge rejected the respondents request
    for substantial indemnity costs on the basis that there was no misconduct to
    justify such an award. He found he had residual discretion under r. 49.13 to
    impose r. 49.10(2) costs consequences on the appellant based on this courts
    decision in
König v. Hobza
, 2015 ONCA 885, 129 O.R. (3d) 57. He
    accepted the respondents submission that there was ample time for the
    appellant to deal with the offer even though it was too late.

[50]

In the result, the trial judge set off the
    appellants costs up to the date of the offer at $33,000 against the
    respondents partial indemnity trial costs, which he calculated to be
    $34,566.42, plus HST of $4,493.63, plus disbursements at $2,240.04, for a total
    of $41,300.09. The offset gave the respondents $8,300.09.

[51]

Reviewing courts should not readily interfere
    with the costs decision by a judge of first instance, whose decision is
    entitled to deference unless the judge made an error in principle or if the
    costs award is plainly wrong (internal citations omitted):
Hamilton v.
    Open Window Bakery Ltd.
, 2004 SCC 9, [2004] 1 S.C.R. 303, at para. 27;
Boucher
    v. Public Accountants Council for the Province of Ontario
(2004), 71 O.R.
    (3d) 291 (C.A.), at paras. 19-20.

[52]

However, in my view, it was unreasonable for the
    respondents to make a last-minute settlement offer after the deadline expired
    and following a previous offer that can only be described as contemptuous. The
    trial judge invoked his residual powers under r. 49.13, but, as this court has
    explained, in exercising those powers he must adopt a holistic approach:
König
,
    at para. 35. In my view, the respondents did not comply with the spirit of rule
    49:
Lawson v. Viersen
, 2012 ONCA 25, at para. 46. Accordingly, this
    is not an appropriate case where the r. 49.10(2) costs consequences should
    apply against the appellant.

[53]

The costs consequences in r. 49.10(2) are real
    to the appellant. The appellant won a large amount of money in the 2012 action.
    Under ordinary principles, she is entitled to costs in the 2012 action.

[54]

The task is to determine the costs to which the
    appellant is entitled in the 2012 action. The trial judge awarded the appellant
    $33,000 in partial indemnity pre-trial costs. He awarded the respondents
    $41,300.09 in partial indemnity trial costs. In my view, the appellant is
    entitled to both her pre-trial and trial costs due to her success in the 2012
    action. I would accept the trial judges assessment of her pre-trial costs at $33,000
    and fix her trial costs at $41,000, which is about the amount he awarded the
    respondents. This amount reflects a fair and reasonable costs award in the
    circumstances; the court need not fix costs according to the exact measure of
    the actual costs to the successful litigant (internal citations omitted):
Boucher
,
    at para. 24. In total, the appellant is entitled to $74,000 in costs for the
    2012 action.

D.

DISPOSITION

[55]

For these reasons, I would dismiss the appeal. I
    would grant leave to appeal the trial costs award. I would allow the appellants
    costs appeal from the 2012 action and grant trial costs to her in the amount of
    $74,000. Because the respondents were otherwise successful on appeal, they are
    entitled to costs for the appeal in the amount of $25,000, which I would reduce
    to $20,000 in view of the appellants success on the costs appeal. The
    respondents costs will be offset against the appellants costs award in the
    2012 action.

[56]

I conclude by expressing a concern about the length
    of the reasons for decision in this case, which is reflective of an
    unfortunately growing trend, of which this is not the worst example, but it is
    the one before us.

[57]

Trial judges attend to the evidence in light of
    the relevant law, listen to it and think about it, draw appropriate inferences,
    distill the key evidence, make the factual findings, apply the law to the
    findings, and communicate the basis for the decision to the parties through the
    reasons. Of these various tasks, simply being present to receive the evidence
    is only a trial judges first step on the path to the decision.

[58]

More specifically, in their reasons trial judges
    identify the key issues; find the facts relevant to the issues; assess
    credibility and reliability where there is conflict; set out the chain of
    reasoning; make the decision; and then write the reasons to clearly communicate
    the decision. All of this is necessary for the reasons to be of acceptable
    quality and for there to be a meaningful right of appeal. (All of these
    elements are present in the reasons in this case but are somewhat hard to
    discern in the expanded text.)

[59]

Note that in setting out these essential tasks I
    have reversed the customary sequence in decisions, in which the recitation of
    facts precedes the statement of the issues. The problem I wish to highlight
    occurs precisely there. It makes good narrative sense to inform the reader by setting
    the context first, which involves telling the underlying story briefly. But the
    real marshalling of the facts according to their relevance and salience is only
    possible when the trial judge has identified the live issues. In short, factual
    determinations and descriptions should be issue-driven.

[60]

It is important for trial judges to focus the
    analysis on the live issues that will decide the case. Helpful guidance can be
    found in the somewhat analogous function that trial judges perform in crafting
    criminal and civil jury instructions: The obligation to review the substantial
    parts of the evidence and relate it to the issues that ripen for decision by
    the jury imposes no duty upon the trial judge to review
all
the
    evidence.
The role of the trial judge is to decant
    and simplify (internal citations omitted)
:
R. v. Saleh
, 2013
    ONCA 742, at para. 142,
per
Watt J.A. There is, to emphasize, no need
    to recite all of the evidence, even the irrelevant, or to refer to every
    argument made by every party, no matter how unhelpful:
R. v. R.E.M.
,
    2008 SCC 51, [2008] 3 S.C.R. 3 at paras. 11-12, 35-57;
Canada (Minister of
    Citizenship and Immigration) v. Vavilov
, 2019 SCC 65, at para. 128.

[61]

Appellate courts see reasons for decision that do
    not address the evidence and the arguments and are criticized as conclusory, on
    the one hand, and decisions that leave nothing out, on the other hand. The task
    of a trial judge is to find the golden mean, to decant and simplify, to
    synthesize the evidence and make the necessary findings; the task is not to be
    a court reporter.

[62]

Many overly long decisions, including this one,
    contain what I would call a factual data dump. Pages 5-79 consist of a
    witness-by-witness account of examination in-chief, cross-examination, and
    re-examination. The analysis of the evidence starts at para. 394 on p. 79 and
    it repeats some of the evidence previously reviewed, adding to the length.

[63]

Perhaps this emerging style is artifact of
    electronic note-taking by judges, but it is not helpful and can be confusing. A
    blizzard of words can obscure. Digesting unduly lengthy reasons consumes far
    too much time because every word must be read by the parties, by their counsel
    at great expense, and by appellate courts. A data dump does not constitute fact-finding.
    It is an extended note to self best kept to oneself because it hinders the
    efficient and economical communication of judicial reasoning.

Released: P.L. May 27, 2020

P.
    Lauwers J.A.

I
    agree. Grant Huscroft J.A.

I
    agree. Thorburn J.A.


WARNING

This is a case under the
Child, Youth and Family
Services Act, 2017
and subject to subsections 87(8) and 87(9) of this
legislation.
These subsections and subsection 142(3) of
the
Child, Youth and Services Act, 2017
, which
deals with the
consequences of failure to comply, read as follows:

87
(8)
Prohibition
re identifying child
 No person shall publish or make public
information that has the effect of identifying a child who is a witness at or a
participant in a hearing or the subject of a proceeding, or the childs parent
or foster parent or a member of the childs family.

(9)
Prohibition re identifying person charged
 The court may make an order prohibiting the publication of information
that has the effect of identifying a person charged with an offence under this
Part.

142
(3)
Offences
re publication
 A person who contravenes subsection 87(8) or 134(11)
(publication of identifying information) or an order prohibiting publication
made under clause 87(7)(
c
) or subsection 87(9), and a director, officer
or employee of a corporation who authorizes, permits or concurs in such a
contravention by the corporation, is guilty of an offence and on conviction is
liable to a fine of not more than $10,000 or to imprisonment for a term of not
more than three years, or to both.

COURT OF APPEAL FOR ONTARIO

CITATION: Windsor-Essex Childrens Aid
Society v. J.C., 2020 ONCA 328

DATE: 20200527

DOCKET:
C67138 (
M51549
)

Benotto, Zarnett and Thorburn
JJ.A.

BETWEEN

Windsor-Essex Childrens Aid
Society

Applicant
(Respondent on Appeal)

and

J.C. and J.C.

Respondents
(Appellants on Appeal)

Aileen Manalang, for the appellants

Ronald Burnett, for the respondent

Heard by video conference on May 26, 2020

On appeal from the judgment of Justice
Hebner of the Superior Court of Justice dated May 31, 2019, with reasons
reported at 2019 ONSC 3337.

REASONS FOR DECISION

[1]

This is the second appeal relating to the
protection of a four-year old child. The Ontario Court found that the child was
in need of protection but that he could be adequately protected by a one-year
supervision order requiring that the father not be left alone with him. The
Society appealed to the Superior Court which allowed the appeal substituting a
protection order and disposition placing the child in the care of his
grandmother and uncle where the childs two siblings reside.

[2]

The respondent brought a motion before the panel
for directions since the matter is now back before the Ontario Court on a
Status Review and the parents have consented to an order that the child reside
in the grandmothers home. Given the changing situation regarding the child,
this matter is properly before the Ontario Court where the presiding judge will
consider the evidence.

[3]

The appeal is dismissed as moot.

M.L.
Benotto J.A.

B.
Zarnett J.A.

Thorburn
J.A.