Court File and Parties

COURT OF APPEAL FOR ONTARIO

DATE: 20210702 DOCKET: C67558

Tulloch, Roberts and Thorburn JJ.A.

BETWEEN

Vishal Mahtani Applicant (Appellant)

and

Videshi Mistry Respondent (Respondent)

Counsel: Stephen P. Kirby, for the appellant Robert A. Fernandes, for the respondent

Heard: June 18, 2021 by video conference

On appeal from the order of Justice Michael G. Emery of the Superior Court of Justice dated September 11, 2019, with reasons reported at 2019 ONSC 5260 and a corrigendum at 2020 ONSC 1142, and the costs order dated June 3, 2020, with reasons reported at 2020 ONSC 3454.

Reasons for Decision

[1] The appellant husband appeals from the order for spousal and child support, as well as for equalization of property granted to the respondent wife. While he initially sought leave to appeal costs, the appellant now takes the position that the costs order of $129,313 made in favour of the respondent should be set aside if the appeal is allowed but agrees that it should stand if the appeal is dismissed.

[2] At the conclusion of the hearing of the appeal, we dismissed it with reasons to follow. These are those reasons.

[3] At issue on appeal, as at trial, are the questions of the amount of income to be imputed to the appellant under s. 19 of the Federal Child Support Guidelines S.O.R./97-175, and the valuation of his 50% interest in his business, VAMS Canada Inc., for the purposes of determining support and equalization of property. Both parties called expert evidence at trial on these issues.

[4] The appellant submitted that the trial judge made the following reversible errors: he erred in accepting the evidence of the respondent’s expert to impute income to the appellant because the expert’s calculations were based on generalized data without regard to the parties’ particular circumstances, and the expert exceeded the scope of his expertise; and he made inconsistent findings with respect to the valuation of VAMS Canada Inc. as at the dates of separation and marriage for the purpose of the equalization calculation.

[5] We do not accept these submissions.

[6] The trial judge’s findings about spousal support and equalization largely flowed from his negative credibility assessment of the appellant’s evidence which, in turn, materially affected the validity of his expert’s opinion where it depended on the appellant’s evidence. Where there was a conflict, the trial judge preferred the evidence given by the respondent and her expert. The appellant does not point to any error in the trial judge’s credibility assessment, which is in any event entitled to deference on appeal.

[7] With respect to the income imputation, the trial judge did not base his conclusion simply on the figures in the expert reports but looked at all the evidence. He found that the appellant was deliberately underemployed, did not make full financial disclosure, and intentionally diverted business from VAMS Canada Inc. to VAKA Trading Inc., a company incorporated by his family roughly two weeks after his separation, the timing of which the trial judge found to be suspicious. These findings were open to the trial judge on the record and are not challenged on appeal.

[8] Further, it was open to the trial judge to accept the opinion of the respondent’s expert that, based on several indicators, additional income should be imputed to the appellant. These indicators included census tract data, borrowing costs, and evidence of the appellant’s lifestyle and expenses, from which the trial judge, reasonably in our view, inferred that the appellant was receiving a higher income than he reported. It is difficult for the appellant to criticize the approach followed by the respondent’s expert and applied by the trial judge as improperly speculative given his failure to make the financial disclosure that would have provided more information for the assessment. There is nothing in the respondent’s expert’s evidence to suggest he exceeded the scope of his qualified expertise and no such objection was made at trial. We see no error that warrants appellate intervention.

[9] Similarly, we see no basis to interfere with the trial judge’s determination of the value of the appellant’s interest in VAMS Canada Inc. The appellant argues that the trial judge erred by taking an inconsistent approach: he discounted to zero the shareholder loans allegedly owing to the appellant that the appellant had listed as part of his assets existing at the date of marriage but accepted the appellant’s expert’s opinion that the value of VAMS Canada Inc. was zero at the date of marriage because it was reduced by the shareholder loans indicated on the balance sheet. The appellant argues further that the trial judge adopted inconsistent methodologies for the valuation of VAMS Canada Inc., assigning a valuation of zero at the date of marriage based on the appellant’s expert’s net‑asset approach while assigning a higher valuation at the date of separation based on the respondent’s expert’s income approach.

[10] We see no inconsistencies in the trial judge’s approach.

[11] The first difficulty with the appellant’s argument is that it conflates the existence of shareholder loans on the company’s balance sheet for the purpose of the appellant’s expert’s valuation with the question of whether any of those shareholder loans were truly owed to the appellant. It also fails to take into account the trial judge’s findings concerning the deficiencies in the evidence and the lack of credible financial disclosure and documentation.

[12] There was no credible evidence that the appellant was owed anything or that the proffered financial documentation was correct. The appellant had failed to produce court-ordered evidence demonstrating the existence of the loans allegedly made by him. The trial judge was not prepared to accept the running ledgers of VAMS Canada Inc., which the appellant had himself maintained, as sufficient evidence that the appellant had loaned any of his own funds to the company. The trial judge found that the evidence of the company’s accountant “was clear that Mr. Mahtani put none of his own money into the corporation, and he was the accountant at all material times for both VAMS Canada and Mr. Mahtani.” Indeed, as the trial judge observed, the evidence was that many of the “shareholder loans” represented loans from relatives and third parties, not from the appellant.

[13] The trial judge therefore concluded that the appellant had not proven that the shareholder loans were from him or owed to him, either at the date of marriage or at the date of separation. This conclusion was amply supported by the evidence that the trial judge was entitled to accept.

[14] It is in the context of these findings that the trial judge accepted the opinion given by the appellant’s expert that the value of VAMS Canada Inc. and of the appellant’s interest in the company was zero at the date of the marriage. This was not inconsistent with his finding that the shareholder loans on the balance sheet were not owing to the appellant.

[15] Moreover, the trial judge’s decision to adopt different methodologies for the valuation of VAMS Canada Inc. at the date of marriage and the date of separation does not give rise to an inconsistency necessitating appellate intervention, nor is the purported discrepancy inadequately explained, as the appellant suggests. There was expert evidence before the trial judge that changing circumstances could necessitate changing methods of valuation. The trial judge clearly explained why he preferred the respondent’s expert’s evidence regarding the value of VAMS Canada Inc. at the date of separation, including the credibility issues arising from the appellant’s failure to make the required financial disclosure both to the court and to his own expert.

[16] We see no error that warrants appellate intervention.

[17] Accordingly, the appeal is dismissed.

[18] As agreed, the appellant shall pay the respondent costs of $15,000, all inclusive.

“M. Tulloch J.A.”

“L.B. Roberts J.A.”

“J.A. Thorburn J.A.”