Month: September 2026

“When considering the amount of amortization expense, Mr. Evans reduced the amount of amortization expense to $45,000, arguing that it is more consistent with the average for 1618302 over the past five years.  He opined that it was a reasonable adjustment considering its impact on corporate income.  Mr. Evans makes the point that there is no logic in a corporation spending close to one million dollars in equipment purchases only for the owner to be making less than minimum wage at the end of the year.  This is not a reasonable return on the corporate investment. Mr. Evans’ report states that corporate income was adjusted for all years under review.

The amortization expense is also viewed as being unreasonable by Mr. Evans given that the 2018 sale of much of the equipment realized returns that were much higher than the book value. Thus, Jaime’s income for 2018 is significantly higher.

Mr. Clarke disagrees.  He has opined that the rate of amortization is consistent with the maximum amounts permitted by Revenue Canada. He also points to the fact that the Guidelines prohibit amortization for real property but not for equipment.  In terms of the specific amortization expense amounts, Mr. Clarke testified that the amount of amortization was lower than what CRA allows for 2018 but it was higher for 2019 and 2020.  However, based on Exhibit #67, it seems that the dispute only applies to 2019.

Jaime’s accountant, Mr. Mehlman also felt that Jaime’s depreciation is common for similar businesses that have significant assets that can be depreciated. He felt it was common for other similar businesses.

I agree in large part with Mr. Clarke. While I accept that the impact of the amortization expense effectively shelters Jaime from his support obligations, the reality is that the Guidelines specifically prohibit amortization in relation to real property and not for equipment.  This is clearly not an oversight.  To make an arbitrary reduction in the amortization expense to $45,000 does not find any support in s. 19 of the Guidelines.  I am of the view that it is not a principled way of addressing the impact of the amortization expense.

However, the evidence is that Jaime’s amortization expense has not strictly followed the CRA guidelines, and that at least for 2019 and 2020, the amortization expense has exceeded the CRA amounts.  I have no evidence to deal with the excessive amortization expense for certain years but I disagree with the approach of arbitrarily reducing the amount to $45,000.

Some inequity is apparent in the fact that the amortization expense does not get added back to Jaime’s income since it is not related to real property.  Amortization is a non-cash expense that positively impacts corporate cash flow but negatively impacts available corporate income to the shareholder.  A cash flow analysis was done by Mr. Clarke for the years 2015, 2016 and 2017 as part of Exhibit #66.  In that report, Mr. Clarke draws a parallel between the cash flow analysis and the level of income imputed by the court in the amount of $82,000.

It is noteworthy that the cash flow analysis in Exhibit #66 provides a range of cash flow that is between $30,000 to $50,000 higher than Jaime’s reported income.

The issue of positive corporate cash flow becomes more relevant when considering the question of imputed income as will be discussed below.  In the end, I reject Mr. Evan’s approach to reduce amortization to $45,000.”

Davidson v. Davidson, 2022 ONSC 4375 (CanLII) at 178-186

“In Damashin-Zamfirescu v. Damaschin-Zamfirescu, 2012 ONSC 6689 (Ont SCJ) additional principles for the Court to consider on temporary spousal support motions were set out as follows:

(1) The party claiming temporary spousal support has the onus of establishing that there is a triable (prima facie) case, both with respect to entitlement and quantum. The merits of the case in its entirety are to be dealt with at trial.

(2) In the event a spousal support claimant cannot establish an arguable case for entitlement to spousal support, the motion for temporary relief should be dismissed, even if the claimant has a need and the other party has ability to pay.

(3) The court is not required to carry out a complete and detailed inquiry into all aspects and details of the case or to determine the extent to which either party suffered economic advantage or disadvantage because of the relationship or its breakdown. That task is for the trial judge.

(4) The primary goal of interim spousal support is to provide income for dependent spouses from the time the proceedings are commenced until trial. Interim support is meant to be a “holding pattern” to, in so much as possible, maintain the accustomed lifestyle pending trial.

(5) If a triable case exists, interim support is to be based primarily on the motion judge’s assessment of the parties’ means and needs. The objective of encouraging self-sufficiency is of less importance.”

          John v. John, 2020 ONSC 5337 (CanLII) at 122

“When a respondent to a divorce application fails to serve and file an answer within 30 days of service pursuant to rule 10(1) of the Family Law Rules, O. Reg. 114/99 (“FLR”), the applicant may seek final Orders on an uncontested trial per rules 10(5) and 1(8.4). No further notice need be provided.

An uncontested trial is a trial at which only the party making the claim provides evidence and submissions. The moving party bears the onus to demonstrate on a balance of probabilities that there is a sufficient evidentiary basis on which to make each of the Orders sought.

Additionally, the moving party has a “very high duty” to make full and frank disclosure at an uncontested trial, and to advise the court of all material facts required to make a just determination, including material facts that do not assist his or her case: see Irons v. Irons, 2020 ONSC 1471, at para. 90.

Orders on uncontested trials have a special form (25D) and a special affidavit (23C), but the evidentiary standards remain the same. Affidavit evidence may be relied on at an uncontested trial unless the court directs that oral evidence be given, see rule 23(22) of the FLR.”

Sethi v. Sethi, 2025 ONSC 5079 (CanLII) at 34-37

“While the law concerning gratuitous transfers as articulated in the leading case from the Supreme Court of Canada in Pecore v. Pecore 2007 SCC 17 is not on point, I did find some assistance in a gratuitous transfer case decided by the Ontario Court of Appeal in Barber v Magee  139 OR (3d) 78, 2017 ONCA 558, 139 OR (3d) 78, In discussing a case of a gratuitous transfer between family members, in Barber at para 4 the Ontario Court of Appeal discussed the difference between gifts and loans stating;

[4] Generally, there are objective indicators that can assist in determining whether an advancement is a gift or a loan (citations omitted) A gift is a transfer in which the absence of an expectation of repayment tends to be reflected in the absence of security, recording, payments or efforts to collect payments. A loan often involves a formal, recorded transfer in which terms are set out and in which repayment is made or sought. In evaluating whether the presumption of resulting trust has been rebutted, a trial judge will naturally look at such indicia.

This decision is useful as it outlines indica of a loan in a family law context. Those indicia of a loan noted in Barber, such as formal records setting out terms and demand for payment are lacking in the present matter.”

Langlais v. Dolyny, 2025 ONSC 5010 (CanLII) at 18-19

“Section 131 of the Courts of Justice Act provides that subject to the provisions of an Act or Rules of Court, costs are in the discretion of the court, which may determine by whom and to what extent the costs shall be paid. This section must be read in conjunction with Rules 24 and 18 of the Family Law Rules, which set out numerous principles to guide the court in the exercise of its discretion in the family law context.

The modern rules respecting costs aim to foster the following four fundamental purposes: (a) to partially indemnity successful litigants for the cost of litigation; (b) to encourage settlement; (c) to discourage and sanction inappropriate behaviour by litigants; and (d) to ensure that cases are dealt with justly in accordance with the primary objective of the Family Law Rules set out in Rule 2(2). See: Ryan v. McGregor (1926), 1925 CanLII 460 (ON SCAD), 58 O.L.R. 213 (Ont. C.A.), at p. 216; British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71 (CanLII), [2003] 3 S.C.R. 371 (S.C.C.); Fong v. Chan, 1999 CanLII 2052 (ON CA), 1999 CarswellOnt 3955, 181 D.L.R. (4th) 614, 46 O.R. (3d) 330 (C.A.); Serra v. Serra, 2009 ONCA 395 (C.A.) and Mattina v. Mattina, 2018 ONCA 867 (C.A.)).”

Malpani v. Malpani, 2022 ONSC 5029 (CanLII) at 5-6