At Trial, the Trial Judge gave Judgment for retroactive lump sum spousal support. Submissions were not made on, and the Trial Judge did not consider, the tax consequences of a lump sum spousal support payment. That is, if the payments were made monthly instead of in a lump sum, the payments would be deductible for the payer and taxable upon the recipient. With a lump sum payment the payment is not deductible for the payer, and is not taxable income for the recipient.

Following the release of the Trial Judge’s Reasons for Judgment, but prior to entry of the Order, the Respondent wrote a letter to the Trial Judge requesting that the Trial Judge consider the tax implications of the lump sum payment award and its effects on the parties. In a letter to the Trial Judge, counsel for the Appellant responded to the Respondent’s letter submitting that it was inappropriate to make any changes to the Judgment, and a reduction in the lump sum spousal support would create hardship for her client.

In an oral Judgment, the Trial Judge varied the Judgment on the basis that the parties had agreed that the Spousal Support Advisory Guidelines (“Guidelines”) should be followed, and the amounts in the Guidelines are based on the payer deducting those amounts and the recipient being taxed on those amounts.

The Appellant then Appealed to the Court of Appeal and argued that the Trial Judge varied the Judgment without hearing sufficient evidence, and the Trial Judge was required to give her notice of the Court’s intention to vary the Judgment. Additionally, the Appellant sought to adduce fresh expert evidence.

The Court of Appeal held that the Appellant’s submissions that she required notice that the Trial Judge may vary the Judgment were not sustainable, as she knew that the Judge would be hearing submissions on the issue and chose to not put forward further evidence at that time. The Court of Appeal denied the admission of fresh evidence, holding the evidence should have been put forward to the Trial Judge after it became clear that the tax consequences of the lump sum spousal support award were at issue. Further, the Court of Appeal held that to admit fresh evidence would be problematic as the purported expert had not been qualified as such, the Rules had not been complied with, there had been no cross-examination of the expert and the Court of Appeal was not given the benefit of the Trial Judge’s assessment of the expert evidence. The Application was dismissed.