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MARITAL PROPERTY - Equalization or division - Asset types - Business, commercial or non-family assets - Valuation of assets - Practice and procedure - Appeals

Tuesday, May 16, 2017 @ 8:42 AM  

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Appeal by the husband from an order for equalization of net family property and retroactive and ongoing spousal support. The parties married in 1983, separated in 2009 and divorced in January 2016. Their two children were independent adults. The wife left work as a real estate agent to raise the children and manage the household. She returned to work in 1994 to support the family following the husband's sudden loss of his job. She continued part-time work until 2012. Meanwhile, the husband reestablished his career, achieving significant success and amassing substantial wealth. The wife played a role in the administration of the husband's companies until just after separation. Her involvement was abruptly terminated and her monthly advances were reduced from $11,500 to $5,000. Litigation ensued. An interim order provided for spousal support of $10,000 per month. The 2016 trial judgment required the husband to pay the wife $3 million to equalize net family property in five equal annual instalments based on valuation of the husband's corporate interests. The wife was awarded monthly spousal support of $28,978 based on the husband's imputed annual income of $1 million and the wife's imputed annual income of $35,000. Arrears of retroactive support were fixed at $1.1 million, subject to an income tax reduction. The husband appealed.

HELD: Appeal allowed in part. The trial judge did not err in his determination of the appropriate equalization payment. The husband's contention that it was unreasonable for the trial judge to utilize the same valuation multiplier in assessing the value of two different companies was not borne out, as the companies were in the same business, used the same key employees, and had the same management team and expertise. The trial judge provided sufficient explanation for valuing various assets based on the wife's expert valuation evidence. With respect to spousal support, the trial judge erred in the assessment of quantum. Although there was no error in the approach to imputing income, the trial judge failed to undertake an individualized, fact-specific analysis that fully considered the effects of the equalization payment on the wife's compensatory and non-compensatory entitlement. In addition, the trial judge failed to exclude the effect of investment income from equalized assets. Approaching the issue afresh resulted in substituting a monthly figure of $20,000 per month for ongoing support, with arrears calculated using a figure of $21,000 per month rather than $30,028.

Halliwell v. Halliwell, [2017] O.J. No. 2230, Ontario Court of Appeal, E.E. Gillese, S.E. Pepall and L.B. Roberts JJ.A., May 2, 2017. Digest No. TLD-May152017003