Massai v. Massai, 2012 ONSC 6467

NEWMARKET COURT FILE NO.: FC-11-038466-00

DATE: 20121115

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Alfredo J. Massai, Applicant

AND:

Kimberley Ruth Massai, Respondent

BEFORE: The Honourable Madam Justice H.A. McGee

COUNSEL: Doug Laframboise, for the Applicant

Gordon F. Allan, for the Respondent

HEARD: November 14, 2012

ENDORSEMENT

1This is the respondent wife’s long motion dated August 20, 2012 for:

i. Temporary spousal support;

ii. An extension of time to bring an application for an equalization payment;

iii. An order that certain terms of the parties’ April 3, 2002 Separation Agreement be set aside;

And her motion dated November 8, 2012 for:

iv. An order that the applicant husband comply with a request for information and for production of financial disclosure.

2The applicant husband is represented by counsel and did not attend today’s hearing. He served no response to either motion until yesterday, November 13 th . Counsel for the wife consented to the filing of his affidavit with the filing of the wife’s responding affidavit. Counsels also agreed that the relief sought at 1(iii) is unavailable on motion.

3The parties were married on May 7, 1977 and separated on March 23, 2000. Their children are now 27 and 32 years of age. In 2002 the wife agreed to meet with a mediator selected by the husband. The mediator, Mr. Don Baker was a family law lawyer. At the meeting on April 19, 2002 Mrs. Massai was presented with a document entitled “Interim Separation Agreement” that was dated April 3, 2002.

4Ms. Massai was persuaded that day to sign the Interim Separation Agreement. Within the Agreement she was to receive $140,000 for her share of the jointly owned matrimonial home, title of which was later transferred absolutely to the husband. Mr. Baker witnessed both signatures to the Interim Agreement.

5Ms. Massai did not have counsel at the time of signing the Interim Agreement. She states that she had been recently released from medical care. Mr. Baker’s file is not (and may not ever be) available. There is no evidence that the parties had exchanged financial statements or any manner of financial disclosure prior to their meeting with Mr. Baker.

6The portions of the Interim Separation Agreement that are relevant to this motion are:

Paragraph 11 : In consideration of the Undertaking by Fred to pay child support for both children without contribution by Kimberley, Kimberley will waive spousal support until such time as child support is no longer payable. The Husband and Wife agree that that is an Interim Agreement and the issue of spousal support has not been foreclosed.

Paragraph 14 (b): The parties have not accounted for the equalization of their net family property and will do so by further agreement.

Paragraph 19: Other than as provided by this Agreement, [emphasis added] the Husband and Wife intend this Agreement to be final as to all claims and hereby release all claims arising out of their marriage, past event and financial dependency. [The paragraph then continues in a standard form of release.]

7The husband’s counsel asks the court to ignore these sections of the Interim Separation Agreement and rely exclusively of the standard form releases and acknowledgements which follow paragraph 19.

8To do so would be a stark denial of the parties’ own agreement, and any objective view of procedural or substantive fairness.

9It is not contested that the parties had assets other than the home at the time of separation. At a minimum, each held an employment pension, and the husband owned over $200,000 of RRSPs. The husband also held unregistered savings in an undisclosed amount.

10Neither is it contested that the adult children ceased fulltime education in 2002. Any financial support provided by the father since 2002 has been voluntary in nature and does not extend the period of waiver contemplated at paragraph 11 of the Interim Separation Agreement.

11The Interim Separation Agreement clearly contemplates outstanding tasks as set out in its paragraphs 11 and 14(b.) There is no limitation period for spousal support.

12The wife felt that she had reason to defer seeking formal support as the husband was providing some modest benefits through a monthly RRSP contribution [1] and payment of her automobile insurance. Her fears that he would terminate these modest benefits upon her taking any action have been realized. Both contributions have ceased; the latter upon receipt of the wife’s Answer and Claim to his Application for simple divorce.

Claim to Extend Limitation period

13Section 7(3)(b) of the Family Law Act proscribes a limitation period of six years from the date of separation, two years from the date of divorce. The parties are not divorced. Notwithstanding the limitation period, subsection 2(8) allows the court to extend the time within which to bring a claim if it is satisfied that, on a balance of probabilities:

a. there are prima facie grounds for relief;

b. relief is unavailable because of delay that has been incurred in good faith; and

c. no person will suffer substantial prejudice by reason of the delay.

14The Ontario Court of Appeal has made it clear that a spouse should not be deprived of his/her share of matrimonial property rights because of a missed limitation period, except in cases of bad faith, or a wilful or reckless disregard for the limitation period. Moreover, a limitation period ought not expire while the parties are negotiating: see Hutchinson v. Hutchinson (2001), 2001 24060 (ON CA) , 11 R.F.L. (5th) 297 (Ont. C.A.).

15There is a prima facie case that the wife is entitled to an equalization payment. It is clear on a plain reading of the Interim Separation Agreement that the parties intended to deal with the equalization claim at a later date and that neither released his or her claim. There is no substantial prejudice by delay and any modest prejudice can be remedied through a costs award or an adjustment of prejudgement interest.

16Pursuant to Section 2(8) of the Family Law Act , order to go extending the period in which the wife can make a claim for an equalization period to January 31, 2012, thus permitting the Claim set out in the Answer issued January 11, 2012 to proceed.

17In order that the equalization payment can be determined, order to go that the applicant husband shall provide by December 21, 2012 all documents set out in the Request for Information dated May 9, 2012 and the following:

a. 2011 Income Tax Return with attachments and Notice of Assessment

b. Corporate Tax Returns for 2009, 2010 and 2011

c. Financial Statements for Freddie’s No Frills for 2009, 2010 and 2011

d. Purchase documents for No Frills franchise

e. Form 13.1 Financial Statement inclusive of all date of statement values

18This matter is then to proceed to a Settlement Conference to be scheduled through the Trial Coordinator.

19I ask the wife’s counsel in preparing this draft order to include the documents set out in the Request for Information for ease of future reference.

Claim for Temporary Support

20Temporary spousal support can be ordered in the face of a release provided that there is a prima facie case that: the agreement was not signed in unimpeachable circumstances as set out in Miglin .v Miglin 2003 SCC 24 () , 2003 CarswellOnt 1374, (S.C.C) and that it did not otherwise meet the objectives of the Divorce Act .

21It is unnecessary to assess whether there is a prima facie case as it is clear from the drafting of the Interim Separation Agreement that the wife’s claim to spousal support remains unaffected but for the period when the children were entitled to child support.

22The wife does not seek support for the period prior to 2003, and asks only for spousal support commencing January 2012 when she issued her Claim within an Answer to the husband’s Application for Divorce. The period following service of a Claim is not a retroactive period, and thus the D.B.S. v. S.R.G. et al. , 2006 SCC 37 () , analysis need not be undertaken. As previously stated, there is no limitation period to a claim for spousal support.

23The husband’s current income for support purposes has been shielded. He has not disclosed his 2011 Income Tax Return or Notice of Assessment. He did not disclose until yesterday that dividends set out in prior Notices of Assessment are issued from a company that he owns and operates as Freddie’s No Frills, a grocery store in Toronto. Without production of his corporate financial statements it is unknown what pre-tax corporate income is available to him through the usual payment of expenses, shareholder’s loans, third party payments, retained earnings or other corporate benefits.

24What is known is that the husband takes an annual management salary in the range of $100,000 which includes a car allowance. Dividends have averaged $70,000 per annum over the years of 2008 to 2009 for which he has provided Notices of Assessment, but not Income Tax Returns. An annual bonus is payable. Capital gains and interest are received annually. An averaging of annual remuneration (2008, 2009, and 2010) equates to amounts captured on his 2010 Notice of Assessment.

25Temporary motions are not exact calculations. The evidence has not yet matured and the court must do its best on the record available. I am satisfied that the attached SupportMate Calculation provided by counsel for the wife correctly sets out the range of support per the Spousal Support Advisory Guidelines based on the husband’s 2010 income; and that 2010 income is the best evidence available to date upon which support can be determined.

26The wife has taxable income of $23,435 per annum. She seeks an award of spousal support in the mid range. A high range award would not be perverse given the outstanding equalization payment and dramatic if not startling, disparity in the parties’ respective net family property some ten years post Interim Agreement. Given the wife’s claim and her modest expenses which would be satisfied by an award in the mid range, there shall be an order for spousal support in the rounded up mid range of $5,000 per month commencing February 1, 2012.

27I am not prepared to consider a payment plan for arrears created by today’s order. The evidence shows that the husband withdrew in May of 2012 a sum of $52,000, from a joint bank account which was previously unknown to the wife. [2]

Costs

28For oral reasons given the husband shall pay to the wife forthwith costs of $4,500. Had the wife served an offer to settle on terms more favourable that the terms of this endorsement, a full recovery of costs would have been available per Rule 18(14) of the Family Law Rules.

Footnotes

1. 1It was not in evidence whether the husband also maintained health, medical or dental benefits for the wife, who requires prescription coverage. Such eligibility for coverage would terminate on the granting of a divorce.
2. 2The husband actually drew a sum in the range of $148,000 placing the account in an overdraft of $95,000.