Case law: Equalization, spousal support and costs

Berta v. Berta 2017 ONCA 874:  The parties were married for 27 years, from 1982 to 2010. They had no children. They owned equal shares of a business created by the husband during the marriage.

When they separated in March 2010, there were two principal assets: the matrimonial home and the shares in the business. The home was sold and the proceeds divided equally between the spouses. The issues of spousal support and equalization of net family property were dealt with in a nine-day trial in 2013, at the end of which Justice Harper ordered the wife to make an equalization payment to the husband and the husband to pay the wife indefinite spousal support on the low end of the Spousal Support Advisory Guidelines (“SSAGs”) in the amount of $5,380 per month. The wife was also ordered to pay the husband’s costs of $460,179.57 on a full indemnity basis due to what the judge found was unreasonable behaviour throughout the litigation, including her repeated unproven allegations of fraud against her husband.

The wife appealed this decision on two grounds: the amount of spousal support and the costs award. The Court of Appeal sent the spousal support and cost matters back to the trial judge for determination but upheld Justice Harper’s determination of an equalization payment to be made by the wife.

On the spousal support issue, the Court of Appeal concluded that the trial judge’s determination of the wife’s income was unsustainable and “preclude[d] meaningful appellate review”. It returned the issue to the trial judge to be determined “in accordance with the reasons of this Court”.

Finally, on the costs issue, the court concluded that the trial judge “fell into error in two ways”: first, by stating that the husband’s offer to settle was “as good as if not better than the outcome at trial”; and second, by stating that the husband had been successful at trial “[on] all material issues”. In light of these errors, the court sent this matter back to the trial judge for a rehearing.

At the rehearing, the trial judge fixed indefinite spousal support at $8,000 per month and made a specific finding that the wife had acted in bad faith at the original trial. However, he applied the comments of the Court of Appeal and concluded that the husband should recover “a substantial portion of his costs”, not full indemnity. The trial judge reduced the full indemnity costs by 30 per cent and awarded the husband costs of $322,125.70.

The wife appealed, again.

In this second appeal, the Ontario Court of Appeal considered the issue of entitlement and amount of spousal support. The Court held that “the factors and objectives the court must consider in making an order of spousal support are outlined under subsections 15.2(4) and (6) of the Divorce Act”.

Justice MacPherson cited an earlier case, Bracklow, which outlined “three conceptual bases for entitlement to spousal support: compensatory, contractual and non-compensatory”. The Court of Appeal held the wife to be successful on the point of spousal support because the trial judge’s order of $8,000 per month was based on a higher annual income of the wife than she actually earned. An adjusted amount of $13,759 per month in spousal support was awarded to the wife.

The court allowed the appeal in part on the spousal support issue and ordered that the husband pay spousal support in the amount of $13,759 per month. They dismissed the appeal on the costs issue.

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