SUPERIOR COURT OF JUSTICE - ONTARIO

DATE: 20120228
DOCKET: FS-11-373679-0000

RE: Edelmira Strauss, Applicant

AND:

Jonathan Robert Strauss, Respondent

BEFORE: Czutrin J.

COUNSEL:
Jaret Moldaver , for the Applicant
J. M. Straitman , for the Respondent

HEARD: February 7, 2012

ENDORSEMENT

[ 1 ] The Applicant, wife, brings this motion seeking temporary spousal support, disclosure, interim disbursements, exclusive possession of the matrimonial home, and a restraining order.

[ 2 ] The Respondent, husband, defends the motion, although concedes the wife’s entitlement to temporary spousal support but cross-motions seeking orders for sale of the jointly held, unencumbered matrimonial home currently occupied by the wife, temporary occupation compensation, and production of the wife’s medical records.

[ 3 ] The wife seeks temporary spousal support of $25,743 per month, retroactive to January 1, 2011, with credits to the husband for amounts paid by the husband and subject to readjustment.

[ 4 ] She also seeks security for support in the sum of $2,000,000 and interim disbursements in the sum of $100,000.

[ 5 ] The major issue at this stage is the husband’s income.

[ 6 ] The wife asks that I should impute income to the husband based on income of the husband and from employment and trust(s) of approximately $700,000 based on 2007 and 2009 income as disclosed in the parties’ Tax Returns and in 2010 the income dropped to $431,693. (This included some income attributed to her from a trust from the husband’s family.)

[ 7 ] The wife’s claim is based on my finding that his income is either $772,300 or $679,991.66 and allowing the wife 41% of the parties’ net disposable income for the higher amount.

[ 8 ] The husband submits that he should pay $6,855 per month retroactive to January 1, 2011, with credit for payments he said he made to his wife of $142,000 since January 1, 2011.

[ 9 ] He claims his income in 2011 was $281,000 and it will be approximately $265,000 in 2012 and he has used the mid-range of the Spousal Support Advisory Guidelines (“S.S.A.G.”) to propose $6,855 per month spousal support (income for him of $293,772).

[ 10 ] The husband claims that his income is from his father ‘s business and that there has been a significant drop in his father’s business and thus a significant drop in the bonus he annually receives that, according to the husband, is his major source of income.

[ 11 ] He denies that he is able to manipulate or control his income.

[ 12 ] He claims that his salary is $200,000 and his bonus in 2011 was $65,364. In the past, he and his wife also received dividend income from a trust controlled by the husband’s uncle.

[ 13 ] The wife is suspicious about this significant income loss.

[ 14 ] The husband’s counsel advised that he has retained Steve Ranot to provide expert evidence concerning the husband’s income, and values to establish his Net Family Property Statement.

[ 15 ] The parties cohabited for 20 years and married June 2, 1994 and separated December 15, 2010.

[ 16 ] The husband has the obligation to satisfy the court as to his income and Net Family Property Statement.

[ 17 ] He has the obligation to compel disclosure from third parties, his father, his father’s company, and two family trusts.

[ 18 ] If the wife is to be compelled to bring motions against the third parties, the husband shall be responsible to pay the wife’s costs for doing so and any claims by third parties for costs. I am hopeful that, on the strength of this endorsement, he will be able to obtain the disclosure that will be confidentiality protected as provided for by the Rules.

[ 19 ] The husband advised the court that he is the Chief Executive Officer (“CEO”) of Strason Fashion Limited. (“The husband’s father’s business.”)

[ 20 ] I was advised that there is an agreement between the husband and his employer that his income is based on certain base salary, benefits, vacation income, and a bonus based on the success of the business.

[ 21 ] In addition, he and his wife received income from a trust that he and his wife are discretionary beneficiaries of. The husband deposed that his uncle advised him (“there will be no distribution from my uncle who has told me he does not intend to distribute money to me if I have to share it with (my wife)).”

[ 22 ] The husband attached a letter to his affidavit from the Controller (of my father’s business) and deposed: “As indicated in (Controller’s letter) the determination of my income is within control of my father”… Given that my bonus is driven by the performance of the business, my income has diminished as the business income reduced”.

[ 23 ] In the circumstances, the husband is required to provide disclosure of the performance of the business satisfactory to the court to determine how the business’s performance affected his bonuses and what additional benefits he received. The letter is insufficient.

[ 24 ] The Controller’s letter suggests that the company’s yearend is January 28 and for the 2012 year end and “based on the performance of the company … Mr. Strauss will receive a bonus in July 2012 which approximates what he received in 2011”.

[ 25 ] The husband should produce year end statements for the company for 2007 through 2012 and how his bonus was calculated each year. His counsel suggested that there was a formula or a percentage.

[ 26 ] A letter from counsel for Louis Strauss Family Trust stated “that the trust was settled after the husband’s marriage and is therefore excluded property … and (the husband) has no fixed entitlement to income or capital. He is but one of many discretionary beneficiaries”.

[ 27 ] Thus the Trustees’ counsel advised that they are not prepared to provide the disclosure requested.

[ 28 ] This endorsement may be provided to counsel and the Trustees to see whether they might reconsider, failing which a motion, on notice to the Trustees, will consider the issues.

[ 29 ] Absent proper disclosure, satisfactory to the court, I will base support on the $431,693 income shown as gross income for last year as disclosed on husband’s November 29, 2011 Financial Statement.

[ 30 ] On a temporary basis, I have no better or reliable satisfactory income to base support on.

[ 31 ] If the S.S.A.G. is the appropriate method of calculation here, neither party used the S.S.A.G. income for the husband that I would use of $431,693 (above the ceiling) and I note that the wife inputted 20 years cohabitation and the husband used 16 years.

[ 32 ] I note that the husband’s affidavit suggests 17 years marriage. He does not appear to contest 20 years cohabitation.

[ 33 ] The wife is to produce clinical notes from any expert she intends to rely on to support her inability to work. These clinical notes should relate to the issue of her employability only.

[ 34 ] Pending receipt of S.S.A.G. calculations based on the age, 20 years of cohabitation, and $431,693, income for the husband commencing January 1, 2012, he is to pay $12,000 per month. Credits and retroactivity will be addressed at a later date.

[ 35 ] This remains temporary/temporary with the husband having the onus to satisfy the court on his income.

[ 36 ] While the exact amount of equalization will depend on disclosure and proper valuations, the husband’s initial Financial Statement suggests that his Net Family Property at approximately 1.3 million dollars with some to be determined (“TBD”) items including two trusts and although exclusion is claimed, the value and proof of this exclusion still need to be provided by the husband. He bears the onus of satisfying the court as the exclusion and its value. His net family property also includes one-half interest in the matrimonial home he shows at $500,000.

[ 37 ] The wife’s Net Family Property on her Financial Statement suggests hers to be $359,425.

[ 38 ] She shows a lower value for the home at $425,000 and TBD for the same items, with notably one-third beneficial interest in properties in Belize.

[ 39 ] Prima facie, it appears that the husband will owe the wife an equalization payment.

[ 40 ] While the wife may, on proper material, be entitled to a further advance on equalization or costs or disbursements, the evidence to support an appropriate amount is inadequate. There is also a difference between counsel as to the purpose of funds previously paid by the husband as terms of adjournment.

[ 41 ] The husband was willing to provide the wife $50,000 by obtaining a loan secured against his share of the matrimonial home to be credited to him in the ultimate outcome.

[ 42 ] Without prejudice, the parties are to cooperate to obtain the said funds, with the husband being responsible for maintaining any interest payments.

[ 43 ] The husband’s life insurance, naming wife as beneficiary, is to be maintained as part security for the support and any equalization payment. Similarly, the husband’s share of the matrimonial home and RSP’s are also so secured.

[ 44 ] I note the wife has a very high debt load, standing, according to her at $106,515. While $21,000 relates to disposition costs of home, nearly $65,000 is credit card debt and she allocates $5,000 to interest payments.

[ 45 ] The parties might agree and perhaps consider allowing the wife to also obtain a secured line of credit on the matrimonial home to eliminate these high credit card interest payments to reduce the interest costs.

[ 46 ] While the parties may proceed by agreement, on return of the motion, when better information is made available as discussed above, subject to my availability on a motion date, the motion is otherwise adjourned on seven days’ notice (counsel should cooperate on dates).

[ 47 ] Support Deduction Order.

[ 48 ] Costs reserved when motion returns.

Czutrin J.

Released: February 28, 2012