BACKGROUND
Ms. Jeffrey, the Applicant Wife, and Mr. McNab, the Respondent Husband, were common law partners who had a relationship lasting approximately 13 years. The date of commencement of cohabitation is disputed. The parties met while working together at the Husband’s family-owned and operated patient transfer business (Sports Medic Inc.). The Wife worked at Sports Medic Inc. until December 2003 and then the parties undertook several entrepreneurial initiatives. The parties separated in June 2015, and shortly thereafter, the Husband sold his non-urgent patient transfer business for a sum of $5 million. Further, the Wife accused that the Husband committed fraud by falsifying records that he received $250,000 less on the sale of the business.
The Wife was seeking retroactive spousal support based on the maximum possible income of the Husband. She also sought ongoing spousal support in the amount of $15,034 per month, and a finding of gross and obvious repudiation of the relationship. Further, she argued she should receive a share of the sale proceeds from the Husband’s business as she claimed she was a shareholder.
ISSUES
- When did the parties begin to cohabitate?
- Was the Wife a shareholder of Sports Medic Inc.?
- Was the Wife entitled to spousal support?
- If so, what are the parties’ income for support purposes?
- Does the Husband’s conduct constitute an obvious and gross repudiation of the relationship?
- What is the quantum and duration of the support?
ANALYSIS
When did the parties begin to cohabitate?
The Wife argued that the parties began cohabiting in January 2001 when she moved into the Husband’s home after being hired at Sports Medic Inc. in 1999 and dating throughout 2000.
The Husband argued that the parties began cohabiting in January 2004 when they relocated from Windsor to Niagara-on-the-Lake. He testified that although the parties spent time together in his previous home in Windsor, the Wife was back and forth between Windsor and Niagara-on-the-Lake.
The court found that the parties commenced cohabitation on March 1, 2002, based on documentation such as the Wife’s temporary driver’s licence showing her address to match the Husband’s as well as a rent receipt she received from the Husband dated in 2002.
Was the Wife a shareholder of Sports Medic Inc.?
The Wife argued that she was a shareholder and was fraudulently removed by the Husband. The Husband denies that the Wife was ever a shareholder as although she received dividends, she was never registered as a shareholder. The court stated that the Wife failed to put forth evidence supporting the theory that she was a shareholder and as such, the court was not satisfied that the Wife was, in fact, a shareholder.
In any event, the court found that the parties resolved all proprietary claims prior to trial and the Wife was paid $1.2 million.
Was the Wife entitled to spousal support?
The parties had a 13-year relationship, and the Husband has paid spousal support since the date of separation. These payments were voluntary, until they ceased and court intervention was required.
The Wife argued that retroactive spousal support would be calculated annually from 2001 to 2023 and ongoing support would commence in January 2024 and end on June 1, 2029. The Husband argued that the Wife had had 10 years since separation to become self-supporting.
The court gave consideration to the fact that the Wife made minimal efforts to obtain self-sufficiency and also that she was struggling with a personal matter at the time.
In terms of ascertaining incomes for support, the parties both retained experts to provide opinions with respect to the Husband’s income. Ultimately, the court determined a fluctuating income for the Husband between the years 2020 and 2023 – all of which (besides 2023) were over the $350,000 ceiling. The Wife’s income was imputed to $35,000 for the years 2021 to 2024 (the court explained that none of the Wife’s entrepreneurial initiatives had been successful and that she worked a series of odd jobs), and $55,000 for 2025 and onward (as she had access to investment returns).
With respect to the Wife’s accusations of obvious and gross repudiation of the relationship, the court did not accept that she was fraudulently removed as a shareholder, nor that the Husband committed fraud by falsifying records to reflect the sale of the business being $250,000 less than it was. The court explained that fraud under section 33(10) of the Family Law Act is a very high threshold and the Husband’s conduct in this case was not at an exceptional level to meet that threshold.
CONCLUSION
With respect to the retroactive spousal support payments, the court found that the wife was entitled to support payments from 2020 to 2024. The court found that the husband should have paid the wife approximately 20% of the difference in their incomes for each year of that period. If the parties could not agree on a net amount payable in a lump sum, they could bring a motion to have it decided.
With respect to ongoing spousal support payments, the court ordered the husband to pay $5,079 per month (and he will receive credit for past payments).
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