Court File No.: FS-17-90289-00 Date: 2021-01-06
Superior Court of Justice
Between:
CINDY LOUISE CORDI, Applicant Cindy Louise Cordi, self-represented
- and -
CARLO CORDI and VINCENZO CORDI, Respondents Counsel: Mr. S. Mannella and Mr. A. Durante, for the Respondent, Carlo Cordi Mr. J. Lo Faso and Ms. J. Romita, for the Respondent, Vincenzo Cordi
Heard: September 20, November 9, 10, 12, 13, 16, 17, 2020 at Brampton
Reasons for Judgment
Stribopoulos J.
Introduction
[1] The Applicant, Cindy Cordi, and the Respondent, Carlo Cordi, separated in September 2016 after more than three decades of marriage. In her application, Cindy advances various claims against Carlo and his father, the other Respondent, Vincenzo Cordi.
[2] Cindy claims against Carlo for divorce, spousal support, the equalization of net family property, and damages for what she alleges was Carlo's abusive behaviour towards her during their marriage.
[3] Carlo joins Cindy in seeking a divorce. He denies that Cindy is entitled to spousal support or that he ever subjected her to any form of abuse during their marriage. Finally, Carlo claims that he, not Cindy, is owed an equalization payment.
[4] Cindy’s claims against Vincenzo Cordi relate to a farmhouse he owns that she and Carlo resided in for much of their marriage until separation. First, she claims that Vincenzo holds title to the farmhouse in trust and that she and Carlo are the home's beneficial owners. Alternatively, she claims that the contributions she and Carlo made towards improving and maintaining the farmhouse and the surrounding property resulted in Vincenzo’s unjust enrichment. To remedy this, Cindy seeks a monetary award from Vincenzo.
[5] Vincenzo denies that Cindy enjoys any beneficial interest in the farmhouse or that her contributions towards the farmhouse unjustly enriched him. Vincenzo asks for the dismissal of the claims against him.
[6] Given the pleadings, the evidence and the positions taken by the parties, the court must decide the following questions on this application:
i. Spousal Support – Whether Cindy is entitled to spousal support? If she is, whether to impute additional income to Carlo because, as Cindy claims, his taxable income does not reflect his actual earnings, something that Carlo denies? And, whether to impute income to Cindy because, as Carlo claims, she is intentionally unemployed? Finally, if an order for spousal support is appropriate, the quantum and duration of such an order?
ii. Equalization of Net Family Property – Whether an equalization payment is payable? And, if so, by whom, and in what amount? The parties mostly agree on their assets and liabilities on the date of separation, the only exception being the value of Carlo's interest in a business he co-owns with his siblings. They also disagree about Carlo’s liabilities, and Cindy's assets, on the date of marriage.
iii. Intentional Infliction of Mental Suffering – Whether Cindy is entitled to damages because Carlo subjected her to verbal abuse during the marriage, which Carlo denies?
iv. Claims Involving the Farmhouse – Whether Vincenzo holds title to the farmhouse in trust for Cindy and Carlo, such that Cindy has a half beneficial interest in it? Alternatively, whether there has been an unjust enrichment of Vincenzo through contributions made by Cindy towards improving and maintaining the farmhouse?
[7] These reasons proceed in two main parts. Part I will outline some of the uncontested background facts regarding the parties and their relationship. Part II will analyze each of the discrete questions that the court must decide on this application, given the law, the evidence, and the court’s findings.
Part I – Background Facts
[8] Cindy and Carlo are both now 58 years of age. They began dating in 1983 when they were just 21 years of age. After about a year of dating, Carlo moved in with Cindy and her parents.
[9] At the time, both were working full-time. After graduating high school with a grade 12 diploma, Cindy secured employment with an insurance company where she performed administrative work. After graduating from high school, Carlo also entered the workforce, employed as a pastry chef at a bakery owned by his father.
[10] During this period, the relationship between Carlo and his father soured due at least, in part, to his parents disapproving of Carlo’s relationship with Cindy. In 1985, Carlo left his father’s bakery and began working in the construction industry.
[11] The insurance company that Cindy worked for when she and Carlo first met ceased operating in 1986. Shortly after that, she secured another full-time administrative position with a different company.
[12] On April 12, 1986, the couple married. After their wedding, they continued living with Cindy’s parents. The following year they rented an apartment of their own and moved out of Cindy’s parents’ residence.
[13] In January 1989, the pastry chef at Vincenzo’s bakery sustained an injury and could not return to work. At that point, Vincenzo approached Carlo and asked him to return to the bakery and take up the pastry chef position. Carlo agreed to do so, although the precise terms of the arrangement were the subject of conflicting evidence at trial.
[14] After Carlo agreed to return to the bakery, Vincenzo renovated a farmhouse on a rural property he owns in Caledon. Vincenzo and his wife also lived on the property in a home they constructed in the 1970s. Vincenzo still resides there (his wife passed away in 2017). In 1990, Carlo and Cindy moved into the renovated farmhouse with their infant daughter, who was born in the spring of 1989.
[15] After the birth of their daughter, Cindy never returned to full-time work. Given Carlo’s irregular hours at the bakery, where he commenced work in the very early morning hours and returned home in the early afternoon, the parties agreed that it would be best for the family if Cindy assumed primary responsibility for the children and the household. Their second child, a son, was born in 1996.
[16] From 1990 onward, Cindy has only worked on a part-time basis, ranging from 15 to 30 hours per week. For a period, she worked at Vincenzo’s bakery. Eventually, she secured employment outside of the family business, performing data entry. That position allowed her to work from home, permitting her to care for the children and attend to the household’s needs.
[17] In 2001, Cindy developed carpal tunnel syndrome. Because of that condition, she could no longer perform data entry work and left the job she had for much of the 1990s. Her absence from the workforce became the subject of some tension in the couple’s relationship, causing her to return to work the following year.
[18] In September 2002, Cindy secured another part-time position doing administrative work with a consultancy firm in Caledon. Although her employer restructured over the years, merging with other firms and changing its name, Cindy remained in the same position until February 2019. Since then, Cindy has been unemployed and relying on interim spousal support to meet her needs.
[19] In the late 1990s, Carlo, along with three of his siblings, purchased the bakery from their father when he retired. They remain equal partners in the business to this day, with each equally holding shares in the bakery corporation. The bakery business is Carlo’s only source of income.
[20] Throughout their marriage, the parties enjoyed a middle-class lifestyle. They ate out occasionally. Took regular family vacations, sometimes travelling by plane but mostly road trips to various destinations in the United States. They travelled to Europe on a couple of occasions, visiting both Italy and Greece over the years. The family had sufficient resources to regularly host parties for both family and friends at their home and for Carlo to pursue his golfing hobby, mainly at local courses but also by going south for an annual winter golfing trip with friends.
[21] Finally, the parties agree that they separated on September 5, 2016, have lived separate and apart since then, and there is no prospect for their reconciliation.
Part II – Issues, Findings, and Analysis
[22] Before addressing the discrete issues that the court must decide on this application, I begin with a more general observation about the evidence of Cindy Cordi and Carlo Cordi at trial.
[23] During their marriage, the parties agree that Cindy took primary responsibility for all of the family’s administrative affairs. Carlo acknowledged he was not well-suited for such matters, whereas Cindy was. Therefore, during their marriage, Cindy took the lead in handling all aspects of the family’s finances.
[24] Not surprisingly, then, as between them, Cindy was the much better witness when it came to remembering when events in the distant past took place, their chronology, and the family’s finances historically. Carlo struggled to recollect such matters during his trial testimony.
[25] In short, as between the two of them, Cindy was the more reliable witness concerning the historical details of the family’s life together.
A. Spousal Support
[26] The court has the authority to order a spouse to pay a lump sum or periodic sums, or a combination of these, “as the court thinks reasonable for the support of the other spouse”: Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), s. 15.2(1).
[27] In exercising its authority to order spousal support, s. 15.2(4) of the Divorce Act requires the court to consider certain enumerated factors. The court must take into account the means, needs, and other circumstances of each spouse, including:
a) the length of time the spouses cohabited;
b) the functions performed by each spouse during cohabitation; and
c) any order, agreement or arrangement relating to support of either spouse.
[28] The objectives of an order for spousal support are also statutorily enumerated. Section 15.2(6) of the Divorce Act directs that an order for spousal support should:
a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;
b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;
c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and
d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.
i) Entitlement to Spousal Support
[29] Section 15.2 of the Divorce Act, as interpreted by the case law, recognizes three conceptual bases for entitlement to spousal support: 1) compensatory, 2) non-compensatory, and 3) contractual: Bracklow v. Bracklow, [1999] 1 S.C.R. 420, at pp. 431, 448; see also Moge v. Moge, [1992] 3 S.C.R. 813.
[30] Given the marriage’s length, the parties’ respective roles within it, and their financial circumstances after separation, I am satisfied that Cindy is entitled to spousal support on compensatory and non-compensatory grounds.
[31] In terms of Cindy’s compensatory entitlement, I am mindful of several factors. First, this was a very lengthy marriage, lasting just slightly more than three decades before the parties separated.
[32] Second, there are the roles assumed by the parties during their marriage. Cindy enjoyed full-time employment for nearly a decade before the birth of the couple’s first child. After that, she only returned to part-time work, permitting her to focus on raising the couple’s children and managing the family’s household. The role she assumed enabled Carlo to work the irregular hours that the bakery business demanded of him.
[33] Finally, the roles assumed during the marriage economically impacted each of the parties differently. By assuming the domestic responsibilities of family life and only working part-time, Cindy gave up the potential for career advancement and higher earnings and the long-term financial security these provide. By assuming those responsibilities, she also enabled Carlo to dedicate himself to the family bakery business. Through that dedication, he eventually secured an ownership interest in the bakery, an asset he retains, which provides him with future earning potential and long-term economic security, benefits that Cindy, without spousal support, would otherwise not share.
[34] I am also satisfied that Cindy’s entitlement to spousal support has a non-compensatory basis. At 58, having been out of the full-time workforce for three decades, the end of the marriage means that Cindy faces a drastic downward step in her living standard relative to that enjoyed by the family before separation. Absent spousal support, there is the spectre of Cindy living in poverty. In such circumstances, Cindy’s entitlement to spousal support also has a compelling non-compensatory basis: it is very much needs-based.
[35] Given all of this, it is understandable that counsel for Carlo Cordi, Mr. Mannella, did not contest Cindy Cordi’s entitlement to spousal support during submissions. The real issue dividing the parties concerns the quantum of spousal support, which mainly turns on whether the court should impute income to either party.
ii) Income Imputation for Purposes of Spousal Support
[36] Each of the parties submits that the court should impute income to the other in determining the quantum of spousal support. Cindy claims that Carlo receives undeclared cash income from the bakery. While denying that allegation, Carlo claims that Cindy is intentionally unemployed. Therefore, he submits, the court should impute income to her.
[37] When a party seeks to have income imputed to another party to determine support obligations, the court must consider the circumstances enumerated in s. 19(1) of the Federal Child Support Guidelines, SOR/97-175. Courts have held that the same considerations apply in deciding whether to impute income for purposes of spousal support and child support and to both support payors and recipients: see Diamond v. Berman, 2020 ONSC 1566, at para. 33; Favero v. Favero, 2013 ONSC 4216, at para. 94; Rilli v. Rilli, [2006] O.J. No 4142 (S.C.), at paras. 14-16. The Federal Child Support Guidelines provide:
Imputing income
19 (1) The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include the following:
a) the spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of a child of the marriage or any child under the age of majority or by the reasonable educational or health needs of the spouse;
b) the spouse is exempt from paying federal or provincial income tax;
c) the spouse lives in a country that has effective rates of income tax that are significantly lower than those in Canada;
d) it appears that income has been diverted which would affect the level of child support to be determined under these Guidelines;
e) the spouse's property is not reasonably utilized to generate income;
f) the spouse has failed to provide income information when under a legal obligation to do so;
g) the spouse unreasonably deducts expenses from income;
h) the spouse derives a significant portion of income from dividends, capital gains or other sources that are taxed at a lower rate than employment or business income or that are exempt from tax; and
i) the spouse is a beneficiary under a trust and is or will be in receipt of income or other benefits from the trust.
[38] Subsection 19(1) provides the court with discretion to impute income when it is “appropriate [to do so] in the circumstances.” The list of circumstances found in the subsection is not exhaustive. The court may impute income in other circumstances that are not listed but analogous or in situations that are dissimilar to the examples provided but in keeping with the provision’s purpose: Bak v. Dobell, 2007 ONCA 304, at paras. 33-35; Riel v. Holland (2003), 67 O.R. (3d) 417 (C.A.), at para. 35.
[39] Mindful of the court’s discretion to impute income to either party, I return to the circumstances of this case. I begin by determining Carlo Cordi’s income for support purposes.
[40] During the marriage, after obtaining an ownership interest in the bakery, at least in recent years, Carlo split his income from the bakery with Cindy. Although Cindy only worked at the bakery part-time for a period in the 1990s, in the years preceding separation, she received a portion of what would otherwise have been Carlo’s earnings as salary from the bakery.
[41] Nancy Rogers, a Chartered Accountant and Chartered Business Valuator, provided expert opinion evidence at trial in the areas of business valuation and income analysis. Ms. Rogers determined Carlo’s income for 2014, 2015, 2016, and 2017, years during which the income splitting occurred. In calculating his income, she recaptured that portion diverted to Cindy. She also grossed those amounts up to account for the tax benefit Carlo derived through the income splitting arrangement. Through that process, she arrived at the following figures:
| Year | Income |
|---|---|
| 2014 | $66,558.00 |
| 2015 | $76,173.00 |
| 2016 | $71,547.00 |
| 2017 | $58,752.00 |
[42] In examining the bakery’s unaudited financial statements and Carlo’s tax returns, Ms. Rogers noted that in 2015, Carlo received a $12,500 dividend from the company that he failed to report on his 2015 tax return. As a result, she incorporated that amount into Carlo’s income for 2015 and included it as part of his income for that year in the figure noted above.
[43] Additionally, at trial, Carlo produced his tax return and notice of assessment for 2018. That year, his taxable income was $66,512.00.
[44] Cindy testified that, beyond his paycheques from the bakery reflected in his taxable earnings, Carlo also received undeclared cash from the bakery business. She testified the bakery has two cash registers with one earmarked for customers paying with cash. Cindy testified that Carlo and his three siblings, who are equal partners in the bakery, split the cash between them at the end of each week. She testified that Carlo always had large sums of cash in his wallet.
[45] According to Cindy, Carlo would provide her with the paycheques from the bakery payable to her and him. She would use these funds to cover the family’s household expenses. Occasionally, Carlo would also give her cash, for example, $500. However, she testified that Carlo usually retained the monies he received in cash and used those funds at his discretion, for example, to pay for golf.
[46] Given that Carlo ordinarily retained the cash he received from the bakery, Cindy could not specifically say how much money he received in undeclared cash, but she estimated about $500 per week.
[47] In her effort to substantiate her claim that Carlo received undeclared cash income from the bakery, Cindy produced various financial records from Carlo’s bank accounts, lines of credit accounts, and credit card accounts. These span 2013 to 2017, and some go back much further. Relying on these records and using Excel spreadsheets, she endeavoured to show that the family’s expenditures far exceeded the family’s income over these years.
[48] However, cross-examination effectively impeached the reliability of Cindy’s spreadsheets. She occasionally recorded figures in the spreadsheets incorrectly and erroneously treated some incoming funds as attributable to unexplained sources when they were, in fact, traceable to another account. In such instances, funds were treated as income when they involved nothing more than shifting debt from one account to another. As a result, I am unable to place any weight on the spreadsheets.
[49] During his direct testimony, in the course of denying that he had tax debt when the parties married, Carlo testified that, “I pay my taxes.” He disputed that he carries large sums of cash. He produced credit card records to show that he used a credit card to pay for travel, accommodation, and green fees during his annual overseas golfing trips. Questioned about how he paid for golf at home in Canada, he testified to withdrawing money from the bank and paying for green fees with cash. Although he did not explicitly say as much, the effect of his testimony was to deny receiving undeclared cash income from the bakery.
[50] During her testimony, Ms. Rogers, who did not conduct a forensic audit of the bakery business or Carlo’s finances, opined that the bakery was unlikely to have undeclared cash sales. She noted she visited the bakery, and it had employees who could potentially expose a scheme to conceal cash sales. Further, Ms. Rogers pointed out that the four partners would need to agree to keep cash sales off the books. In her view, these circumstances made it unlikely that the bakery had undeclared cash sales.
[51] Although she visited the bakery, Ms. Rogers could not remember how many cash registers it had. Notably, she acknowledged relying on the unaudited financial statements and Carlo’s tax returns to come to her conclusions regarding the business’s value and Carlo’s income.
[52] With respect, not having carried out a forensic audit, I cannot credit Ms. Roger’s opinion regarding the bakery unlikely having unreported cash sales. First, I fail to understand how, when a business has more than one till, it having employees would prevent the owner(s) from failing to report the sales from all of the registers. After all, a business’s employees are not ordinarily privy to its accounting practices. Second, while I accept that co-ownership increases the risks associated with keeping cash sales off the books, which could discourage some partners from participating in such an arrangement, common sense suggests that a shared desire to increase their net income may outweigh such concerns for less scrupulous and risk-averse partners. In my view, such fears are unlikely to deter such a practice when the partners are especially close-knit, for example, in a business co-owned by siblings. As a result, because it does not withstand logical scrutiny, I place no weight on Ms. Rogers’ opinion that the bakery was unlikely to have unreported cash sales.
[53] Ultimately, the determination of this issue turns on the credibility of Cindy and Carlo. On this particular issue, I prefer Cindy’s evidence. Although she understandably could not speak to the precise amount of unreported cash Carlo received, she gave specific evidence regarding the method used, with customers directed to one of two registers when paying cash. It is somewhat conspicuous that Carlo did not deny that particular allegation during his testimony.
[54] Second, although Carlo testified that “I pay my taxes,” Ms. Rogers’ examination of the unaudited financial statements for the bakery and Carlo’s tax returns revealed that, in 2015, he had $12,500.00 in dividend income from the bakery that went unreported for tax purposes. This demonstrates that Carlo does not always pay his taxes, as he claimed during his testimony.
[55] Third, the financial records filed at trial reveal a pattern of ATM transactions by Carlo, with funds flowing into his TD line of credit account in 2013, 2014, 2015, and 2016, involving even numbered amounts, consistent with him depositing sums in cash rather than by cheque.
[56] Fourth, a close review of Carlo’s financial records over several recent years reveals that, although an avid golfer, he very rarely paid for green fees in Canada using his credit or debit card. His explanation that he withdrew cash from the ATM to pay for green fees finds little support in the financial records and is unconvincing. I also found his testimony that golfing is a relatively inexpensive pastime for him less than credible.
[57] Ultimately, I am satisfied on a balance of probabilities that Carlo receives undeclared cash income from the bakery business. I accept Cindy’s evidence that she ran the household with funds from their paycheques and that Carlo had undeclared cash funds for use at his discretion, including to cover the cost of his golfing.
[58] Unfortunately, in cases involving cash revenue that goes undeclared for tax purposes, the imputation of income under s. 19(1)(d) of the Guidelines does not lend itself to precision. Nevertheless, there must be a rational basis underlying the figure selected, and the exercise of the court’s discretion must be grounded in the evidence: Drygala v. Pauli (2002), 61 O.R. (3d) 711 (C.A.), at para. 44; Mason v. Mason, 2016 ONCA 725, at para. 127. In my view, based on the evidence, a reasonable albeit conservative estimate of the amount of undeclared cash received by Carlo Cordi is $400.00 per week, which translates into $20,800.00 annually.
[59] To help determine Carlo’s spousal support obligation, given that his reported income fluctuates from year to year, it is sensible to average his taxable earnings over the most recent three-year period for which information is available: Federal Child Support Guidelines, s. 17(1). His average annual taxable income from 2016 to 2018 was $65,603.67. Additionally, the court will also impute an annual undeclared cash income to him of $20,800.00. The latter sum will be subject to a gross-up because it is untaxed income.
[60] With Carlo Cordi’s income for purposes of support settled, I turn to Cindy Cordi’s income. At present, Cindy relies on interim spousal support to make ends meet ($1,315.00 per month).
[61] Carlo submits that Cindy is intentionally unemployed. Relying on s. 19(1)(a) of the Federal Child Support Guidelines, he asks the court to impute income to her in deciding the issue of spousal support. Given Cindy’s work experience and skills, Mr. Mannella submits that there is no reason why she could not obtain full-time employment and earn $40,000 per year. Therefore, he argues for the imputation of income to her in that amount.
[62] Most recently, Cindy had part-time employment for seventeen years with the same firm. During her testimony, she described leaving that position in February 2019, characterizing the circumstances as essentially involving a mutual parting of ways. During cross-examination, she conceded that she quit her job because of a longstanding conflict with another employee that her supervisor never resolved to her satisfaction. From 2015 to 2017, Cindy’s income from that position was as follows:
| Year | Income |
|---|---|
| 2015 | $16,563.00 |
| 2016 | $18,804.00 |
| 2017 | $18,102.00 |
[63] At the time of trial, Cindy had still not filed her tax returns for either 2018 or 2019.
[64] Cindy’s former employer provided her with a glowing letter of reference. In the letter, her employer describes her as having exceptional organization and communication skills, being a diligent, hardworking, and conscientious employee who took pride in her work. Cindy agrees that the reference letter provides an accurate description of her skills and abilities.
[65] Since February 2019, when she left her former position, Cindy testified to making a concerted effort to obtain employment. She claimed that despite her best efforts, she had been unable to find another job. Although she claimed a desire to return to full-time work, when pressed during cross-examination about the steps she has taken to secure a job since February 2019, it became apparent that she has only made, at best, token efforts. It would appear that Cindy did not want to obtain another position because she wanted time to devote herself to this litigation and worried about taking time off work to attend court.
[66] The law is clear that a party “is intentionally unemployed when he or she chooses not to work when capable of earning an income”: Drygala v. Pauli (2002), 61 O.R. (3d) 711 (C.A.), at para. 28. Applying that definition to Cindy’s circumstances, I am satisfied that she is intentionally unemployed. She voluntarily left her last job and has not made meaningful efforts to obtain other employment. Accordingly, the law requires the court to impute income to Cindy in deciding the quantum of spousal support.
[67] In deciding the amount of income to be imputed, the court must consider what is reasonable in all of the circumstances, taking account of Cindy’s age, education, experience, skills, health, past earning history, and her potential remuneration if she worked to her capacity: Drygala v. Pauli (2002), 61 O.R. (3d) 711 (C.A.), at para 45; Lawson v. Lawson (2006), 81 O.R. (3d) 321 (C.A.), at para. 36.
[68] To be sure, Cindy has employable skills and a positive employment history. As a result, she is capable of obtaining and maintaining employment. Nor do I doubt her sincere desire to return to full-time work. That said, I cannot ignore that Cindy is now 58 years of age, has only a high school diploma and suffers from carpal tunnel syndrome, all of which serve to narrow her employment prospects. Further, she has not been employed full-time for over three decades.
[69] Given all of that, it is unrealistic to expect that Cindy will secure full-time employment or earn anything close to $40,000.00 annually. A more reasonable estimate of her current earning potential corresponds with what she was making at her last position, $18,000 per year. Accordingly, the court will impute an income to her in that amount in determining the issue of spousal support.
[70] Having determined that Cindy Cordi is entitled to spousal support and having imputed income to each of the parties, the remaining issues are the quantum and duration of spousal support.
iii) Quantum and Duration of Spousal Support
[71] The factors and objectives set out in s. 15.2 of the Divorce Act guide the exercise of the court's discretion when determining the quantum and duration of spousal support.
[72] Additionally, the Court of Appeal for Ontario has recognized that, although neither legislated nor binding, after establishing entitlement, the Spousal Support Advisory Guidelines supply a useful tool in deciding the quantum and duration of spousal support: Fisher v. Fisher, 2008 ONCA 11, at para. 95. They assist because “they suggest a range of both amount and duration of support that reflects the current law”: Fisher, at para. 98. All of that said, the Court of Appeal also provided the following caution in Fisher, at para. 96:
Importantly, in all cases, the reasonableness of an award produced by the Guidelines must be balanced in light of the circumstances of the individual case, including the particular financial history of the parties during the marriage and their likely future circumstances.
[73] The Spousal Support Advisory Guidelines generate suggested ranges for both quantum and duration of spousal support, taking into account the factors and objectives identified in the Divorce Act relevant to spousal support: Carol Rogerson and Rollie Thompson, Spousal Support Advisory Guidelines (Ottawa: Department of Justice Canada, 2008), at p. 98.
[74] In this case, the Spousal Support Advisory Guidelines, with Carlo having a taxable income of $65,604 and an untaxed annual income of $20,800, and Cindy having an annual income of $18,000, results in a range of spousal support of $2,440 (low), $2,847 (mid), and $3,078 (high), for an indefinite period.
[75] As explained earlier, Cindy suffered significant economic disadvantage due to the roles assumed during this long-term marriage, giving rise to an entitlement to spousal support on both compensatory and non-compensatory bases. A strong compensatory claim is a factor that supports an award at the higher end of the range both for amount and duration: Mason, at para. 200.
[76] Cindy has also suffered significant disadvantage because of the breakdown of the marriage. On separation, the couple had relatively modest assets after three-decades of marriage. Carlo’s principal assets were his share of the bakery business and $9,486.44 in RRSP savings. Cindy had $77,878.95 in RRSP savings. Since separation, as of March 2019, Cindy had already depleted a third of her RRSP savings. Unlike many married couples, the parties failed to amass substantial equity in a home. As a result, a large equalization payment will not cushion the economic blow of the breakdown of the marriage for Cindy: Mason, at para. 202. At 58 years of age, having not held down full-time employment in three-decades, Cindy’s employment prospects are also limited. In short, Cindy needs spousal support.
[77] In contrast, Carlo retains his interest in the bakery, a long-established and successful business. As noted, Carlo was able to work the irregular hours required to make the bakery a successful business in no small part because Cindy worked only part-time to take care of the couple’s children and manage the family’s household. Despite the end of the marriage, Carlo retains his interest in the bakery, which will continue to provide him with a substantial income into the future. In short, Carlo has the means to pay spousal support.
[78] In all of these circumstances, mindful of the relevant factors and objectives identified in s. 15.2 of the Divorce Act, I conclude that an award of spousal support at the high-end of the range for an indefinite period is warranted. Cindy Cordi is entitled to spousal support from Carlo Cordi of $3,078 per month for an indefinite period. That award provides each of the parties with precisely fifty percent of their combined incomes. Such an order will result in a fair and equitable distribution of the marriage's economic benefits and the consequences of its breakdown: Bracklow, at pp. 439-40.
B. Equalization of Net Family Property
[79] The parties each claim that they are entitled to an equalization payment: Family Law Act, R.S.O. 1990, c. F.3, s. 5(1). They mostly agree about their assets and liabilities on the date of separation, except for the value of Carlo’s one-fourth share in the bakery business. They also disagree about Carlo’s liabilities and Cindy’s assets on the date of their marriage. I will address each of these issues in turn.
[80] I begin with the value of Carlo’s interest in the bakery on the date of separation. In Ms. Rogers’s expert opinion, the bakery was worth $290,000 on the date of separation. She valued Carlo’s 25 percent interest, subject to a “10% discount for illiquidity” as $66,000. In forming her opinion, she relied, in part, on the unaudited financial statements of the bakery and several assumptions, including that “[t]here are no unreported cash sales received”.
[81] When asked how $100,000 of unreported cash sales would affect her valuation of the bakery business, Ms. Rogers testified that it would result in the bakery having a value of $380,000. Given that evidence, combined with the court’s finding (detailed above) concerning unreported cash sales, I find that Carlo’s share of the bakery, on the date of separation, should be valued at $85,000, not the $66,000 he claims.
[82] Carlo maintains that he did not have any liabilities on the date of marriage. In contrast, Cindy testified that when the couple married, Carlo had an outstanding income tax debt of $15,000. It was while disputing that claim that Carlo testified, “I pay my taxes.” I prefer the evidence of Cindy concerning the family’s finances historically for the reasons already detailed above. Therefore, in calculating the equalization of net family property, a liability of $15,000 shall be attributed to Carlo on the date of marriage.
[83] Additionally, Cindy testified that when the couple married, she had a $3,000 Canada savings bond and $8,000 in savings from severance pay she received when the insurance company she worked for went out of business in 1986. Given that Cindy worked full-time in the years preceding the couple’s wedding while also living with her parents, I accept her evidence regarding having these funds before the marriage.
[84] However, during cross-examination, Cindy conceded using some of her severance funds to pay for the wedding. That included purchasing the wedding rings, the bonbonniere, her wedding dress, and flowers. Ultimately, she testified that the couple paid for the wedding with the cash gifts they received, but they still owed $5,000 to Carlo’s brother-in-law, who had lent them money for the wedding.
[85] Given the wedding expenses that Cindy acknowledged using the severance monies to pay for, combined with the couple’s debt for the wedding, I think it improbable that any of the $8,000 from the severance pay remained as of the date of the wedding. Therefore, the court cannot include that amount as an asset of Cindy’s on the date of marriage when calculating the net family property.
[86] The $3,000 savings bond is a different matter. Cindy testified that the couple cashed it out when they purchased a brand-new Honda and used the proceeds as their deposit towards the car. Carlo disputed that, testifying that they put the vehicle deposit on a credit card. The vehicle purchase agreement for the Honda, dated October 31, 1988, became an exhibit at trial. It refers to a $3,500 “cash down payment.”
[87] Ultimately, given that she was the more reliable witness concerning the couple’s finances, combined with the “cash down payment” reference on the purchase agreement for the Honda, I accept that Cindy had a $3000 savings bond as of the date of marriage. Therefore, the court will include that amount as an asset of Cindy’s on the date of marriage in calculating the net family property.
[88] In light of the parties’ agreement concerning the value of their assets and liabilities on the date of separation, combined with these findings concerning their respective assets and liabilities on the date of marriage and on separation, Carlo Cordi must pay Cindy Cordi an equalization payment of $5,690.07.
C. The Claim for Damages
[89] In her application, Cindy Cordi pleaded that she was entitled to damages of $100,000 as compensation for her pain and suffering due to Carlo Cordi’s intentional infliction of mental and physical distress, psychological and emotional abuse, and his repeated assaults.
[90] During questioning on November 8, 2019, when she still had the assistance of counsel, Cindy undertook not to advance claims during this proceeding involving allegations of assaultive behaviour by Carlo. Accordingly, I will not reference that aspect of her pleadings, given that she expressly abandoned those claims and only made the most passing reference to these allegations during her testimony.
[91] What remains is Cindy’s claim of intentional infliction of mental distress. In Prinzo v. Baycrest Centre for Geriatric Care (2002), 60 O.R. (3d) 474 (C.A.), the Court of Appeal for Ontario confirmed the existence of the tort of the intentional infliction of mental suffering, and summarized its elements as follows, at para. 48: “(1) flagrant or outrageous conduct; (2) calculated to produce harm; and (3) resulting in a visible and provable illness” (emphasis added).
[92] Cindy testified that Carlo subjected her to verbal abuse throughout their relationship and that it only seemed to worsen in later years. She testified that he called her derogatory names and that he “cut her up,” especially in front of other people. Although Carlo testified that the couple had arguments, he denied verbally abusing Cindy during their marriage.
[93] Cindy testified that, because of the abuse she endured during the marriage, in combination with an incident in August 2015 involving Carlo and her best friend’s niece, she suffers from depression and post-traumatic stress disorder. She testified that she had undergone counselling since separation and produced invoices to prove this and demonstrate its cost. During submissions, Cindy abandoned her claim for $100,000 in damages. Instead, she now only seeks a monetary award to cover her costs for counselling.
[94] Cindy’s evidence that she suffered from depression and post-traumatic stress disorder appears based on what at least one of her therapists told her. None of her therapists testified at trial, nor was there any evidence regarding their qualifications. During cross-examination, Cindy acknowledged that no medical doctor had diagnosed her with either depression or post-traumatic stress disorder or prescribed medication for the treatment of these conditions.
[95] The absence of medical expert evidence is not necessarily fatal to a claim of intentional infliction of mental suffering: Prinzo, at para. 46. Nevertheless, to succeed, Cindy must establish that she suffered more than the type of mental distress that many spouses experience at the breakdown of their marriage; she must establish a visible and provable illness: Merrifield v. Canada (Attorney General), 2019 ONCA 205, at para. 60. In my view, on this record, she has failed to prove this on a balance of probabilities.
[96] In light of that conclusion, the court refrains from making any finding concerning the allegations that Carlo subjected Cindy to verbal abuse during the marriage. The court also refrains from deciding whether the limitation period would serve to bar any aspect of Cindy's claim for intentional infliction of mental suffering: see Limitations Act, 2002, S.O. 2002, c. 24, Sched. B.
D. The Claims Concerning the Farmhouse
[97] In her pleadings, Cindy Cordi advanced claims concerning the farmhouse owned by Vincenzo Cordi that she and Carlo Cordi lived in together from 1990 until the date of separation. She pleaded that Vincenzo holds title to the farmhouse in trust, and that she and Carlo are its beneficial owners. Alternatively, she pleaded that the contributions she and Carlo made towards improving and maintaining the farmhouse and the surrounding property resulted in Vincenzo’s unjust enrichment, for which she seeks a monetary award to compensate her for her contributions. I will briefly review the evidence concerning these claims before addressing their merits in light of the governing legal principles.
[98] In the late 1980s, Carlo was working in the construction industry. Cindy testified that, in January 1989, the pastry chef at what was then Vincenzo’s bakery became injured and was unable to return to work. She recalled a conversation between her and Carlo in the kitchen of their apartment, testifying that Carlo told her that his father wanted him to return to work at the bakery and, if he did so, promised him the farmhouse and a half interest in the bakery business. Given that conversation, she agreed to move into the farmhouse, which they did after Vincenzo finished renovating it in March of 1990.
[99] Cindy’s mother also testified at trial. She described a conversation at her Etobicoke home in 1989. Her late husband, Carlo and Cindy were all present. At the time, the farmhouse was under renovation. She testified that Carlo said that his father was renovating the farmhouse and giving it to them as a late wedding gift. Cindy’s mother did not believe the farmhouse had anything to do with Carlo returning to the bakery.
[100] Cindy testified that, over the years, Carlo routinely referred to the farmhouse as “our house.” She testified that it was only in the year preceding their separation that Carlo began to say that “it is not his house.” Even during that period, however, she testified that he periodically made comments that left her with the impression that she was entitled to half the farmhouse. For example, in May 2016, she testified that after the farmhouse was appraised for insurance purposes, Carlo told her it was “worth $750,000, and you're entitled to half.”
[101] Cindy testified that the renovations to the farmhouse undertaken by Vincenzo before they moved in ultimately proved deficient. As a result, over the 25 years that she and Carlo lived there, they were required to make significant renovations to the house. Cindy also testified that they made substantial improvements to the property around the farmhouse. She testified that she had receipts showing that the couple had spent at least $25,000 on the property, but that amount did not reflect everything they had spent over the years.
[102] Carlo testified that his decision to leave the construction business and return to the bakery was not the result of his father promising him the farmhouse and a half interest in the bakery. Instead, he testified to leaving the construction business for the bakery because work in the construction industry was unreliable and also hard on him physically. According to Carlo, all his father offered him in return was the chance to live at the farmhouse rent-free, which sounded like a good financial arrangement for Cindy and him. Carlo testified that there was no promise of an ownership interest in the bakery, but that he hoped, in time, to become an owner.
[103] Carlo denied ever telling Cindy that the farmhouse belonged to them. According to him, there was no appraisal of the farmhouse in May 2016; he denied there would have been any reason for such a thing.
[104] Carlo acknowledges that they made many improvements to the farmhouse over the years. However, he maintained that he always sought his father’s permission beforehand when they did any work because his father remained the owner.
[105] Vincenzo Cordi, who is now 87 years of age, also testified. He was a challenging witness, partly because of the effects of age and also due to his obvious hostility towards Cindy exacerbated by this litigation. Vincenzo denied ever promising the farmhouse to Carlo to secure his return to the bakery business. According to his affidavit, filed as his direct testimony at trial, he allowed Carlo and Cindy to live at the farmhouse rent-free to enable them to amass some savings and purchase a home of their own. He also wanted them to live in a better residence after they began having children. He testified that he never expected them to remain in the farmhouse for 25 to 30 years, and he faulted their inability to manage their money as the reason they stayed there as long as they did.
[106] Long before Cindy initiated this application, Vincenzo ordered his affairs in a manner that is unquestionably inconsistent with an intention on his part to create a trust like that claimed by Cindy in her pleadings.
[107] First, on February 5, 1996, he executed his only ever Will. In it, he leaves his entire estate to his wife, and should she predecease him, equally to all five of his children. The Will does not confer any separate interest in the farmhouse to Carlo or to Carlo and Cindy.
[108] Second, in 1998, Vincenzo transferred his entire interest in the bakery to four of his five children, including Carlo, who each took an equal share in the business. That year, he severed a parcel of land from the 100-acre Caledon property where his house and the farmhouse are also located. Vincenzo transferred that parcel to his one daughter, who is not a partner in the bakery, where she and her husband subsequently built a house. Vincenzo explains that transfer as stemming from his desire to treat each of his children equally, noting that he gave his daughter this land because she did not receive an interest in the bakery business.
[109] Vincenzo, Carlo, and Cindy all testified that over the years, Cindy and Carlo never paid rent for the farmhouse to Vincenzo. They all agree that the couple also never made any contribution towards the property taxes or the insurance.
[110] In light of this evidence, I turn to consider the two claims concerning the farmhouse.
i. The Trust Claim
[111] Canadian courts have repeatedly recognized three essential preconditions for the creation of an express trust. As explained by Donovan W.M. Waters, Mark R. Gillen, & Lionel D. Smith, eds., Waters' Law of Trusts in Canada, 4th ed. (Toronto: Carswell, 2012), at p. 140:
For a trust to come into existence, it must have three essential characteristics … considered fundamental in common law Canada, (1) the language of the alleged settlor must be imperative; (2) the subject-matter or trust property must be certain; (3) the objects of the trust must be certain. This means that the alleged settlor, whether he is giving the property on the terms of a trust or is transferring property on trust in exchange for consideration, must employ language which clearly shows his intention that the recipient should hold on trust. No trust exists if the recipient is to take absolutely, but he is merely put under a moral obligation as to what is to be done with the property. If such imperative language exists, it must, second, be shown that the settlor has so clearly described the property which is to be subject to the trust that it can be definitively ascertained. Third, the objects of the trust must be equally and clearly delineated. There must be no uncertainty as to whether a person is, in fact, a beneficiary. If any one of these three certainties does not exist, the trust fails to come into existence or, to put it differently, is void.
[Footnotes omitted]
[112] Given these requirements and the evidence at trial, Cindy failed to establish that the farmhouse was subject to a trust. This claim depends entirely on what Cindy testified Carlo told her about what Vincenzo told him. In other words, the only information before the court regarding the purported settlor’s intention is inadmissible hearsay. There is no admissible evidence before the court to sustain a finding that Vincenzo intended to create a trust with him holding legal title to the farmhouse subject to a trust in favour of Carlo, or Cindy, or the both of them.
[113] That said, I do not doubt that Carlo said things to Cindy that left her with the impression that they could live in the farmhouse as long as they wanted if he returned to the bakery business. Nor do I doubt that, over the years, he said things to Cindy that only fuelled her belief that the house was theirs. For all practical purposes, having lived in the farmhouse for decades without paying any rent, both Carlo and Cindy would have felt like it belonged to them. However, their sense of entitlement to the farmhouse is not enough to make them its beneficial owners.
[114] In the end, it is Vincenzo’s intention, the purported settlor, that is key. Based on his evidence, which is corroborated by the Will he executed decades before this application commenced, it is apparent that he never intended to create a trust in the farmhouse in favour of either Carlo or Cindy or the both of them. It is evident, from his perspective, that the farmhouse has always belonged to him, and that Carlo and Cindy were essentially nothing more than his guests. To be sure, the beneficiaries of his generosity, but not the beneficiaries of a legally binding trust.
[115] Nor do I doubt that, had Cindy and Carlo not separated, they would have continued to reside in the farmhouse at least until Vincenzo’s passing, and possibly subject to agreement between the siblings even after that. However, just because Cindy and Carlo have long benefitted from Vincenzo’s generosity and may have continued to do so into the future had they not separated, is not enough to sustain a claim that they were the beneficiaries of a trust in the farmhouse.
[116] The evidence fails to establish a trust. Accordingly, that claim fails.
ii. Unjust Enrichment Claim
[117] To establish unjust enrichment, a plaintiff must demonstrate that a defendant enjoyed an enrichment, that the plaintiff suffered a corresponding deprivation, and an absence of a juristic reason for the enrichment: see Pettkus v. Becker, [1980] 2 S.C.R. 834, at p. 848; Moore v. Sweet, 2018 SCC 52, at para. 37.
[118] Over the years, I accept that Cindy and Carlo probably spent approximately $50,000 making renovations to the farmhouse and improvements to the surrounding property. However, even though that could be understood as enriching Vincenzo, as the owner of the property, I struggle to identify a corresponding deprivation to Cindy and Carlo.
[119] Ultimately, Cindy and Carlo lived in the farmhouse together for 26 years. Since separation, Cindy has continued to live there. Over the last three decades, Vincenzo has foregone receiving any rental income from the farmhouse. The evidence establishes that he was earning rental income from the farmhouse before Carlo and Cindy moved in.
[120] As between them, the contributions made by Cindy and Carlo represent only a small fraction of the money Vincenzo could have received over the years as rent for the farmhouse. Even charging a modest amount, for example $1,000 per month, he could have collected a few hundred thousand dollars in rent over the last three decades. By permitting Carlo and Cindy to live at the farmhouse rent-free, Vincenzo gave up far more than he received. In my view, if this arrangement unjustly enriched anyone, it was Carlo and Cindy.
[121] As a result, Cindy’s claim for unjust enrichment fails.
Conclusion
[122] For all of these reasons, the following Final Order shall issue:
i. This court Orders that the Temporary Order of Justice Snowie, dated December 6, 2017, is vacated;
ii. This court Orders that commencing February 1, 2021, and thereafter on the first day of every month, Carlo Cordi shall pay Cindy Cordi spousal support of $3,078.00. He shall continue to do so for an indefinite period, subject to further order of this court based on a material change in circumstances which may include Carlo Cordi’s retirement from full-time employment;
iii. This court Orders that by no later than February 1, 2021, Carlo Cordi pay Cindy Cordi an equalization payment of $5,690.07;
iv. This court Orders that within sixty (60) days, Carlo Cordi shall obtain, maintain and designate Cindy Cordi the sole, irrevocable beneficiary of a life insurance policy or policies having a death benefit of no less than $500,000, and provide Cindy Cordi with a copy of that policy or policies;
v. This court Orders that Cindy Cordi vacate the property at 4814 Old School Road, Caledon, Ontario, L76 0W4, by no later than March 1, 2021; and
vi. This court Orders that Cindy Louise Cordi and Carlo Cordi, married on April 12, 1986, at the City of Mississauga, are divorced, and that the divorce shall take effect thirty-one (31) days after this order.
[123] Should the parties be unable to agree as to costs, any party claiming costs (including Cindy Cordi) must serve and file written submissions, no longer than three pages, not including a bill of costs or copies of any Rule 18 Offer to Settle, by no later than February 1, 2021. Any responding submissions, also no longer than three pages, not including any Rule 18 Offer to Settle, shall be served and filed by no later than February 15, 2021. There are to be no reply submissions unless requested by the court.