SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: FS-12-2492-00

DATE: August 20, 2013

RE: Catherine Jane Horner, Applicant

AND:

Rick Khomal Benisasia a.k.a. Khomal Rick Benipersaud, Respondent and

Jyoti Johal a.k.a. Prabhjot Kaur Johal

BEFORE: André, J.

COUNSEL:
David Pomer, for the Applicant

Stephen J. Codas, for Rick Khomal Benisasia

Leo Klug, for Jyoti Johal

HEARD: July 18, 2013

ENDORSEMENT

[1] The respondent moving party, Mr. Benisasia, seeks a number of court orders including the retention of the net proceeds of the sale of the matrimonial home in trust, the rescission of Justice Wein’s June 12, 2012 Order and an order that arrears of child and spousal support to be fixed at $0.00 as of June 30, 2013. The applicant has brought a cross-motion petitioning the Court not to hear the respondent’s motion until he pays outstanding court costs of $36,865 and ordering that special expenses relating to dental work for the applicant and her two children and accounting and legal fees incurred by the applicant be paid out of the net proceeds of the sale of the matrimonial home.

[2] I must therefore decide the following issues:

i. Should the court hear the respondent’s motion given his failure to pay at least three court orders for costs from June 12, 2012 to July 5, 2013?

ii. If yes, should the court rescind Justice Wein’s Order dated June 12, 2012?

iii. Should arrears of child and spousal support be fixed at zero?

iv. Should the special expenses claimed by the applicant and legal fees incurred by her be paid out of the net proceeds of the matrimonial home? and

v. Should the Family Responsibility Office be refrained from suspending Mr. Benisasia’s driver’s licence and passport?

Overview

[3] The applicant and Mr. Benisasia had a common-law relationship from July 10, 1993 to September 9, 2011. They have two children, 18 year old Spencer and 16 year old Dylan both of whom currently resides with the applicant.

[4] The couple purchased a home in 1999, with ownership being placed in the applicant’s name. Mr. Benisasia paid the down payment for the home and a disproportionate number of the mortgage payments. He left the home in September 2011 while the applicant continued to reside there with Spencer and Dylan. In September 2012, Spencer left the home to attend Wilfrid Laurier University while Dylan remained at the home with his mother. They lived in the home until June 2013 when it was sold. Spencer no longer attends Wilfred Laurier University.

Order of Justice Wein

[5] On June 26, 2012, the applicant brought an urgent motion for child and spousal support and payment of household expenses in advance of a case conference scheduled for September 18, 2012. She deposed that Mr. Benisasia had not paid the mortgage, she could not work due to medical problems, her cupboards were bare and that the couple’s line of credit was in arrears.

[6] The applicant listed expenses in excess of $11,000 a month, including $2308 for monthly mortgage payments. The respondent did not file any responding materials. However, he agreed to pay child and spousal support on an income of $114,000.

[7] Justice Wein made the following orders on an interim interim basis, without prejudice:

i. The respondent to pay the applicant $1,587 monthly for child support and $1,250 monthly for extraordinary expenses relating to Spencer’s university enrollment;

ii. The respondent to pay the applicant $3,000 for spousal support;

iii. The respondent to pay the applicant $4,512 a month for the household, mortgage and line of credit expenses;

[8] Justice Wein also ordered the respondent to pay the applicant’s costs, fixed at $5,000 inclusive, payable within 30 days.

Decision of Price, J.

[9] On July 26, 2012, Mr. Benisasia brought a motion to set aside the orders of Justice Wein on the ground that it was based on false evidence.

[10] Justice Price heard the motion and found that Justice Wein’s decision was not based on false evidence. He concluded that while Mr. Benisasia had summarized certain expenses disclosed in his bank statements, he had also used bank accounts and credit cards of his wife Jyoti Johal which Mr. Benisasia acknowledged had not been disclosed nor the marriage agreement that the respondent indicated that he and Ms. Johal signed.

[11] Justice Price then concluded, as did Justice Wein before him, that Mr. Benisasia had substantial business interests in his and Ms. Johal’s name or both.

[12] Justice Price dismissed Mr. Benisasia’s motion and ordered him to pay the applicant’s costs fixed at the amount of $11,865.06.

Decision of Donahue, J.

[13] The motions before this court were initially brought on June 20, 2013 before Justice Donahue and were adjourned to a long motion date of July 18, 2013. Costs were reserved to the judge hearing the matters on July 18, 2013.

Court of Appeal Decision

[14] Mr. Benisasia appealed the July 26, 2012 decision of Justice Price to the Court of Appeal. The Court dismissed the appeal and held that Justice Price did not make any palpable and overriding errors in concluding that Justice Wein’s Order was not made based on false evidence.

[15] The Court of Appeal awarded costs in favour of the applicant/respondent fixed in the amount of $20,000. It also concluded that this amount, “plus the outstanding costs award of Justice Wein and the motion judge totalling $16,865 shall be paid forthwith.”

Position of the Respondent Moving Party

[16] Mr. Benisasia seeks:

i. A support order for child support for one child and spousal support based on his 2012 income of $121,977;

ii. An order that $117,500, of which $80,000 constitutes child and spousal support arrears, and $36,000 representing unpaid awards of costs made against the moving party should be paid out of the net proceeds of the matrimonial home;

iii. An order regarding payment of child support of $1,053 per month, commencing July 1, 2013 given that the parties’ elder child, Spencer, attends Wilfrid Laurier University;

iv. Spousal support of $2,156 monthly based on an income of $20,000 imputed to the applicant. If the applicant’s income is imputed to be $50,000 annually, spousal support would be $1,138 monthly;

v. A court finding that there should be no imputation of Mr. Benisasia’s income given that he does not own the assets or businesses claimed by the applicant and that furthermore, any gifts he may have received and his current lifestyle should not be included in his income;

vi. Even if I impute Mr. Benisasia’s income, the applicant’s monthly expenses as indicated in her financial statement are listed as $7,234 per month compared to $10,358 monthly decided by Justice Wein.

Position of the Applicant

[17] The applicant submits that:

i. The respondent Mr. Benisasia owns a number of businesses and luxury items including:

a. A yacht docked at the Port Credit Yacht Club;

b. The Benisasia Funeral Home;

c. A 700 Hawker aircraft;

d. Two properties in Alexandria Bay, USA;

e. A Resort and Spa in New York, USA;

f. An investment company;

g. A 51-room property in Palm Beach, Florida; and

h. Interests in two funeral homes.

ii. The child support order made by Justice Wein should not be varied given that their son Spencer, is no longer going back to Wilfrid Laurier University and is now living with the applicant;

iii. The child and spousal support orders made by Justice Wein should not be varied because the respondent has failed to show that there has been a material change in circumstances to justify a change in the orders;

iv. Mr. Benisasia’s affidavit does not include a number of disposed assets within the last two years;

v. There have been a number of unexplained monetary deposits into Mr. Benisasia’s bank account suggests that he has undisclosed sources of income.

Issue I

[18] Should the court hear the respondent’s motion given his failure to pay and comply with three court orders?

[19] The applicant submits that the Courts of Justice Act, R.S.O. 1990, c. C.43 [as am. by S.O. 1991, c.46] r.14(23) provides that:

A party who does not obey an order that was made on motion is not entitled to any further order from the court unless the court orders that this sub rule does not apply.

[20] The respondent bears the onus, on a balance of probabilities, to show that R. 14(23) of the Act does not apply; Gordon v. Starr, 2007 35527 (ON SC), 2007 Carswell Ont. 5438, 42 R.F.L.

[21] Additionally, R. 1(8) of the Act provides that the court may deal with a failure to follow these rules by making an order dismissing a claim made by a party who has willfully failed to follow rules or obey the order.

[22] There is no doubt that Mr. Benisasia has failed to comply with the orders of Justice Wein, and Justice Price to pay costs. Furthermore, the Court of Appeal, in its endorsement dated July 5, 2013, ordered the respondent to pay costs fixed at $20,000 plus the outstanding costs awards of Justice Wein and Justice Price totalling $16, 865 “forthwith”. These amounts remain unpaid.

[23] Mr. Benisasia relies on his alleged impecuniosity as the reason why these costs awards remain outstanding. For the reasons I elucidate later, I have great reservations about the respondent’s claims of having no assets. To that extent, I am not persuaded that the respondent’s alleged impecuniosity provides a justification for his failure to comply with these orders.

[24] On the other hand, Mr. Benisasia submits that he relied on Justice Donahue’s endorsement on June 20, 2013 that the matter will be heard as a long motion on July 18, 2013.

[25] Her Honour reserved three hours for the hearing of the respondent’s motion. She also ordered that materials, including factums, were to be filed seven days in advance of the date of hearing. Her Honour, by virtue of her endorsement clearly contemplated that the respondent’s motion to vary the provisions of Justice Wein’s June 26, 2012 order would be heard on July 18, 2013. To that extent, while I have some reservations about hearing the motion given Mr. Benisasia’s patent failure to comply with the prior court orders, I will nevertheless hear the respondent’s motions.

Issue II

[26] Should the court rescind Justice Wein’s Order dated June 12, 2012? The applicant submits that Mr. Benisasia’s true income for support purposes has already been adjudicated and that it is an abuse of process to have these issues adjudicated again. The applicant also submits that these issues should not be reviewed unless there has been a material change in circumstances of Mr. Benisasia.

[27] I disagree. Justice Wein made it abundantly clear that her order was on an “interim, interim order without prejudice” and “subject to adjustment.”

[28] In Goulding v. Ternoey, 1982 2259 (ON CA), 35 O.R.(2d) 29 (1982) para. 27 (C.A.), the Ontario Court of Appeal adopted the Supreme Court of Alabama’s decision in Palmer et al. v. Rucker et al., 268 SO 2d 773 (1972) that the words “without prejudice” in their general adaptation, when used in a decree, mean that there is no decision of the controversy on its merits, and leaves the whole subject in litigation as much open to another suit as if no suit had ever been brought.”

[29] Justice Wein clearly intended that upon a full adjudication of the issues of support and financial assistance to the applicant, her conclusions about child and spousal support and payment of family expenses would be subject to adjustment.

[30] I also disagree that the decisions of Justice Price and the Court of Appeal are dispositive of these issues. Justice Price dismissed Mr. Benisasia’s motion to set aside Justice Wein’s Order. He also found, like Justice Wein before him, that Mr. Benisasia has substantial business interests either in his name, Ms. Johal’s name or both, that justified payment of $11,000 monthly to the applicant to cover the monthly family expenses.

[31] The Court of Appeal affirmed Justice Price’s order. It held that he did not make any palpable and overriding errors in upholding Justice Wein’s decision. The Court of Appeal’s decision therefore, does not address the substantive issues following a proper analysis of the financial information presented by both parties. To that extent the decision does not prevent Mr. Benisasia from bringing a motion to vary Justice Wein’s order.

[32] The applicant also opposes Mr. Benisasia’s motion on the ground that he has failed to prove, on a balance of probabilities, that there has been a material change of circumstances. He points to the fact that the respondent’s income has increased from $114,000 since Justice Wein’s Order, to $121,977 in 2012.

[33] While the applicant is quite correct that this income increase undermines any claims that Mr. Benisasia has experienced a material change in circumstances, it does not bar him from seeking to vary the order given that it was made on an interim, interim basis, without prejudice.

[34] Should the court vary or rescind Justice Wein’s order? The respondent submits that it should given that:

i. There is no evidence that Mr. Benisasia has any business interests generating undeclared income;

ii. The couple’s eldest son, Spencer, does not reside with the applicant;

iii. The matrimonial home has been sold and to that extent, the housing expenses claimed by the applicant have been significantly reduced.

[35] The respondent deposed that he has no interest in the properties which the applicant claimed that he has full or partial ownership. He maintains that his only income is that reflected in his 2012 tax documents which is $121,977.

[36] The respondent Ms. Johal has disposed that the yacht attributed to Mr. Benisasia is owned by herself and her brother. The plane which the applicant claims is owned by Mr. Benisasia is owned by a bank in Utah. Ms. Johal has deposed that she is the primary shareholder in a small hotel in Alexandra Bay, in the U.S. and that she incorporated a company to purchase a hotel in Florida. She maintains that the source of her wealth is not Mr. Benisasia, but her parents who left her a considerable fortune amounting to millions of dollars. Both respondents maintain that their assets and income are separate and apart and that there is no basis for the court to find that the applicant possess a constructive trust over Ms. Joyal’s assets.

[37] However, there are a few areas of concern regarding the documentary evidence filed by the respondents. Mr. Benisasia’s financial statement did not make any mention of property he disposed of in the preceding two years including a house in New York that he sold. Neither is there any mention of a yacht that he purchased in 2007. His name is also on the ownership records of two properties in Florida and two others on Holland St. in New York, all of which is not disclosed in his affidavit.

[38] Ms. Johal however, deposed that the Holland St. properties which were foreclosed on July 20, 2011 had been in her name before the foreclosure.

[39] Ms. Johal has conceded that, on February 29, 2012, April 1, 2012 and April 2, 2012 there were deposits of $79,387, $53,088 and $1,312,476.57 respectively into Mr. Benisasia’s account.

[40] Ms. Johal, however, has provided explanations for these deposits. Her June 6, 2013 affidavit suggests that the $1.3 million was a mortgage loan to the two companies that own the Benisasia Funeral Home and that the other two sums were mistakenly placed into Mr. Benisasia’s account.

[41] While I have no reason to reject this information provided by Ms. Johal, I find it passing strange that although the respondents kept their income and assets separate and apart, on three separate occasions within a relatively short period of time, significant sums of monies intended for Ms. Johal’s businesses were mistakenly placed into Mr. Benisasia’s account.

[42] A third area of concern regarding Mr. Benisasia’s financial information stems from the fact that he has misrepresented to Revenue Canada that his son Spencer lived with him for some time. This raises serious questions about his credibility regarding his financial disclosure in this matter. At the very minimum, it appears to me that an order for the questioning of the respondents is warranted on this matter.

[43] I also have concerns about the veracity of the respondent’s financial disclosure, based on the following information in Ms. Horner’s affidavit and supporting documents:

i. An article which appeared on one of Mr. Benisasia’s websites, rickbenisasia.net, on June 12, 2013, entitled “Rick Benisasia – Entrepreneur in the Transportation and Funeral Home Industries” indicates that he presently owns Benisasia Funeral Home Inc. which he founded in 2002. It also states that Mr. Benisasia “proudly owns a Townline Squadron yacht.”

ii. Mr. Benisasia’s July 25, 2012 financial statement indicates that Ms. Jyoti’s annual is $35,250.00. It is simply inconceivable, however, that the respondents would be able to conduct multi-million dollar real estate transactions given their individual or joint incomes.

iii. Mr. Benisasia incorporated a company, Benisasia Investments Inc. on March 12, 2012, which was not disclosed in his January 2, 2013 statement. The directors of the corporation are Mr. Benisasia and Ms. Jyoti.

iv. Mr. Benisasia appears not to have made full disclosure of his assets to the Trustee in Bankruptcy following his declaration of bankruptcy on February 2, 2009.

[44] The applicant concedes that there has been a change in her accommodation and housing expenses that warrant a variation of Justice Wein’s order of June 12, 2012. Spencer no longer attends Wilfrid Laurier University and to that extent, the applicant concedes that the educational expenses of $1,250 set by Justice Wein should be reduced by $500 to $750.

[45] Secondly, the applicant has indicated that the matrimonial home has been sold and consequently, that the household expenses should be reduced from $4,500 monthly to $4,000 monthly.

[46] The respondents’ submit that the applicant possesses the ability to earn approximately $50,000 annually and has not shown why she has not been earning this income.

[47] Mr. Benisasia also submits that the applicant has worked full time on this case and her income should be imputed at $50,000 annually.

[48] The applicant bears the onus of showing why she is not underemployed. She has deposed in her June 19, 2013 affidavit that she has been stricken by a medical condition called severe ulcerative colitis which has made her unable to work at this time. Her doctor, Dr. Trudy Chernin, has indicated in a letter dated January 29, 2013 that both Ms. Horner’s gastroenterologist and herself concur that Ms. Horner is incapable of working in the foreseeable future. There is no evidence from the respondent contradicting this information. The fact that Ms. Horner has expended time and energy to deal with the respondents’ motion cannot be the basis on which this court should conclude that she is able to work.

Issue III

[49] Should arrears of child support be fixed at zero? If not, should they be paid out of the proceeds of sale of the matrimonial home?

[50] In my view there is no basis to fix the child support arrears as zero. The child support of $1,587 decided by Justice Wein was based on Mr. Benisasia’s 2011 income of $114,000. His income increased by approximately $8,000 in 2012. There are, in my view, still questions about whether he continues to have business interests and additional sources of income.

[51] Should the outstanding arrears of $80,000 and outstanding costs be paid out of the proceeds of the sale of the matrimonial home being held in trust by the applicant’s counsel?

[52] In my view, they should not. The applicant has deposed that the amount being held in trust from the sale of the matrimonial home is $201,602. Assuming without deciding that Mr. Benisasia is entitled to at least 50 percent of this amount, then the aggregate of the support arrears and the outstanding costs exceeds his 50% share in the proceeds of sale of the matrimonial home.

[53] More problematic is the fact that Mr. Benisasia declared bankruptcy in 2009 and was discharged in 2011. The Bankruptcy and Insolvency Act R.S.C., 1985, c. B-3, provides that on a bankruptcy order being made or an assignment being filed with an official receiver, a bankrupt ceases to have capacity to dispose of or deal with their property which shall immediately pass to and vest in the trustee in bankruptcy.

[54] Had Mr. Benisasia owned half of the matrimonial home when he declared bankruptcy then his interest in that home should have vested in the trustee in bankruptcy. Had that occurred his interest in the matrimonial home would have been used to satisfy the debts that he owed to his creditors. To that extent, there may be serious questions about whether he can now assert a claim over the net proceeds of the matrimonial home that had been in the applicant’s name.

[55] In my view the outstanding support arrears and the outstanding cost orders should not be deducted from the proceeds of the matrimonial home being held in trust.

Issue IV

[56] Should the special expenses claimed by the applicant and the legal and accounting fees incurred by her be paid out of the net proceeds of the family home?

[57] The applicant is unemployed on account of her medical problems. She clearly requires financial resources to deal with the ongoing legal matters that have arisen following the breakup of her relationship with Mr. Benisasia. The applicant’s accountant remains unpaid thereby preventing her from filing her income tax returns with Revenue Canada.

[58] In these circumstances, it is reasonable that the applicant’s legal and accounting costs be paid from the monies held in trust from the sale of the matrimonial home.

[59] Similarly, the applicant will be allowed to pay dental fees relating to herself and children of approximately $7,000, to be paid from the trust account of her real estate lawyer.

Issue V

[60] Should the Family Responsibility Office (FRO) be refrained from suspending Mr. Benisasia’s licence and passport?

[61] In her June 20, 2013 endorsement, Justice Donahue granted a refraining order against the FRO from suspending Mr. Benisasia’s driver’s licence and passport pending the hearing of this motion. Counsel for FRO takes the position that the court has no jurisdiction to prevent FRO from suspending Mr. Benisasia’s passport. However, he submits that if I uphold Justice Wein’s Order, I should order Mr. Benisasia to pay FRO $50,000 at a rate of $1,500 per month. He further submits that if there is any change in Justice Wein’s order, then Justice Donahue’s Order lapses.

[62] Under the provincial Family Responsibility and Support Arrears Enforcement Act, S.O., 1996, c. 31, individuals who fail to comply with a support order may have their licence suspended. Under the federal Family Orders and Agreements Enforcement Assistance Act, R.S.C. 1985, c. 4, defaulting payors may have their application for a federal licence, including a passport, denied and their existing federal licences suspended.

[63] The justification for these statutory provisions is to provide the FRO with effective tools to ensure compliance with support orders. Absent such tools, FRO’s powers to ensure compliance with court orders would be effectively eviscerated.

[64] In this case, I have concluded that Mr. Benisasia is responsible for payments of all outstanding arrears from Justice Wein’s Order. I am sceptical about his assertion that he has no additional assets or sources of income. To that extent, I decline to make an order refraining FRO from suspending Mr. Benisasia’s driver’s licence.

[65] I disagree with counsel for the FRO that I lack jurisdiction to order the FRO to withdraw any federal licence denial application. Section 71 of the federal legislation merely prohibits an appeal “from any action taken under this part;” (re. Licence Denial) the provision does not apply to a motion. Director, Family Responsibility Office for the Benefit of Sylvie Langlois and Melonie Herb, 240, 29 (Ont C.A.) para. 28. However, while I conclude that I have the discretion to order the FRO to refrain from asking the Federal Government to suspend and or refuse to renew Mr. Benisasia’s passport, I refrain to do so for the reasons noted above.

[66] Given that my intention is to vary Justice Wein’s Order, then Justice Donahue’s refraining Order lapses.

[67] Based on the above, I order that:

a. The respondent husband, Ric Benisasia, will pay child and spousal support based on his 2012 declared income of $121,977 per annum.

b. The respondent, Mr. Benisasia, will pay to the applicant the amount of $1,684.31 per month for child support

c. The respondent, Mr. Benisasia, will pay to the applicant the amount of $750 per month for extraordinary expenses regarding Spencer’s schooling.

d. The respondent, Mr. Benisasia, will pay to the applicant the amount of $2,600 per month for spousal support commencing August 1, 2013 and payable on the last day of each month for the following month.

e. The respondent, Mr. Benisasia, will pay to the applicant the amount of $3,000 per month for housing, utilities, and other related expenses commencing August 1, 2013, on the last day of each month.

f. Payment for dental fees in the amount of $7,000 for the applicant and the children will be made from the trust account of the applicant’s real estate lawyer, Robert Boccia.

g. The account of Grant Thornton, in the amount of $11,045.75, shall be paid from the trust account of the applicant’s real estate lawyer, Robert Boccia.

h. The legal fees and interim disbursements of the applicant’s lawyer, David Pomer, in the amount of $25,000 plus HST, shall be paid from the trust account of the applicant’s real estate layer, Robert Boccia.

i. There shall be questioning of Jyoti Johal on her June 6, 2013 affidavit and of Rick Benisasia on his June 5, 2013 affidavit within sixty days of today’s date.

j. Until the support order is withdrawn from the Office of the Director of the Family Responsibility Office, it shall be enforced by the Director and amounts owing under the order shall be paid to the Director who shall pay the support to the person whom they are owed.

k. This order bears interest at the rate of 3% per annum an any payments in default from the date of the default.

[68] If the parties cannot agree on costs of this hearing, they may deliver written costs submission no later than September 10, 2013, with responding costs submissions no later than September 20, 2013.

“Justice I.W. André”

André, J.

Date: August 20, 2013