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
Overview
1The Applicant, wife, brings this motion seeking temporary spousal support, disclosure, interim disbursements, exclusive possession of the matrimonial home, and a restraining order.
2The 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.
3The 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.
4She also seeks security for support in the sum of $2,000,000 and interim disbursements in the sum of $100,000.
Husband's Income
5The major issue at this stage is the husband’s income.
6The 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.)
7The 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.
8The 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.
9He 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).
10The 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.
11He denies that he is able to manipulate or control his income.
12He 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.
13The wife is suspicious about this significant income loss.
14The 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.
15The parties cohabited for 20 years and married June 2, 1994 and separated December 15, 2010.
Disclosure Obligations
16The husband has the obligation to satisfy the court as to his income and Net Family Property Statement.
17He has the obligation to compel disclosure from third parties, his father, his father’s company, and two family trusts.
18If 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.
19The husband advised the court that he is the Chief Executive Officer (“CEO”) of Strason Fashion Limited. (“The husband’s father’s business.”)
20I 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.
21In 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)).”
22The 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”.
23In 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.
24The 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”.
25The 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.
26A 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”.
27Thus the Trustees’ counsel advised that they are not prepared to provide the disclosure requested.
28This 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.
29Absent 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.
30On a temporary basis, I have no better or reliable satisfactory income to base support on.
Temporary Spousal Support
31If 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.
32I note that the husband’s affidavit suggests 17 years marriage. He does not appear to contest 20 years cohabitation.
33The 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.
34Pending 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.
35This remains temporary/temporary with the husband having the onus to satisfy the court on his income.
Equalization and Property
36While 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.
37The wife’s Net Family Property on her Financial Statement suggests hers to be $359,425.
38She 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.
39Prima facie, it appears that the husband will owe the wife an equalization payment.
40While 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.
41The 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.
42Without prejudice, the parties are to cooperate to obtain the said funds, with the husband being responsible for maintaining any interest payments.
43The 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.
44I 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.
45The 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.
Disposition and Costs
46While 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).
47Support Deduction Order.
48Costs reserved when motion returns.
Czutrin J.
Released: February 28, 2012