Separation Agreement and Divorce Filing, Mason v. Mason
*Mason v. Mason, 2016 ONCA 725
“The parties married in 1992 and separated in 2011. During their marriage, they worked together to build a successful business. On the first day of the trial, they entered into minutes of settlement resolving all issues except spousal support. The minutes of settlement provided that the husband would purchase the wifeâ€™s interest in the business and pay her an equalization payment of $1,636,130. The minutes of settlement also provided that an interim child sup- port order, which was premised on a finding that the husbandâ€™s annual income was $136,500, would be incorporated into the final order. The trial judge found that the husbandâ€™s income for spousal support purposes, based on both salary draws and after-tax corporate profits, was $400,000 and that the wifeâ€™s income was $82,500. The trial judge ordered the husband to pay the wife $9,584 per month in spousal support. The husband appealed.
Held, the appeal should be allowed.
The minutes of settlement did not constitute a binding determination of the husbandâ€™s income for the purposes of spousal support. They did not â€œdeal withâ€ the husbandâ€™s income for spousal support purposes within the meaning of s. 2(10) of the Family Law Act, R.S.O 1990, c. F.3. Moreover, had the parties intended that the minutes of settlement would constitute a binding determination of the husbandâ€™s income, counsel would undoubtedly have raised that issue at trial. They did not do so. The final order premised on the minutes of settlement did not give rise to issue estoppel in relation to the husbandâ€™s income for the purposes of spousal support.
The trial judge erred when determining the husbandâ€™s income. Despite using the Spousal Support Advisory Guidelines to determine the range for support, he arrived at the income figure without either applying the Guidelines or explaining why they were in applicable. He failed to take into account the fact that the businessâ€™ gross revenue and income had peaked in 2008, and had been on a downward trend since then. His use of a simple long-term average to deter- mine future corporate income gave equal weight to all years and failed, without explanation, to recognize the downward trend. His determination of the husbandâ€™s income should be set aside.
Section 17 of the Guidelines permits a court to consider a payorâ€™s income over the last three years to determine an income that is fair and reasonable. Section 17 does not restrict a court to considering the payorâ€™s income on line 150 of the income tax return over the last three years; rather, a court may also consider amounts of pre-tax corporate income included in a spouseâ€™s income under s. 18 of the Guidelines for each of the last three years. Properly calculated, the husbandâ€™s annual income for spousal support purposes was $214,872. The trial judge also erred in calculating the wifeâ€™s annual income, which was in fact $109,535. Spousal support in the amount of $1,500 per month was appropriate.”
*source: Ontario Reports