ONTARIO

SUPERIOR COURT OF JUSTICE

CAYUGA COURT FILE NO.: FS-10-57

DATE: 2014/01/06

BETWEEN:

SUSAN MARIE WHITE

Deborah L. Ditchfield, for the Applicant

Applicant

• and -

RICHARD GLENN WHITE

Paul K. Steckley, for the Respondent

Respondent

HEARD: September 10, 11, 12 and 13, 2013

The Honourable Madam Justice L.M. Walters

[1] This is a divorce application brought by the wife, Susan Marie White, seeking a divorce and corollary relief. The respondent husband, Richard Glenn Wright, filed a reply and answer advancing his own claims before the court.

[2] Susan White was born on August 8, 1956 and is currently 57 years of age. Richard White was born on October 9, 1954 and is currently 59 years of age. The parties married on October 3, 1981 and separated on March 31, 2009. There are two children of the marriage, namely Glen Henry Richard White, born August 2, 1990, and Matthew Broderick White (“Matt”), born March 10, 1993. Both boys are no longer dependent children of the marriage, however, when this application was commenced in April 2010, Matthew was 17 years of age and still dependent on his parents for his support.

[3] By the time of trial, the issues to be determined were as follows:

1. The granting of a divorce;

2. Retroactive child support for Matthew from the period July 2011 to and including May 2013;

3. Spousal support for both parties;

4. Equalization of the parties’ net family property;

5. Restraining order against Mr. White;

6. Costs.

[4] At the commencement of trial, the applicant withdrew any claim for spousal support, and during the course of his evidence, the respondent withdrew his claim for spousal support. At the conclusion of trial, the court granted the divorce and, accordingly, the four outstanding issues are child support, equalization, restraining order and costs.

[5] As time did not permit oral submissions at the conclusion of the evidence, counsel provided me with their written submissions, which I have now had the opportunity to review.

[6] For the purpose of these reasons it is not necessary to set out in detail the background facts. I will make reference to the evidence and my findings of fact as I discuss each issue.

[7] I will deal first with the issue of retroactive child support.

[8] Matt is currently 20 years of age. He is no longer a dependent. He married in May 2013. After separation, pursuant to an interim order of Glithero J., the respondent was obliged to pay child support of $405 per month for Matt. Any accumulated arrears were repaid by order of Gordon J. dated June 20, 2011. The applicant did not pursue any further interim child support claims. At trial, Mrs. White sought retroactive child support for Matt from the period July 2011 (after Gordon J.’s order) until his marriage in May 2013.

[9] Mrs. White’s uncontradicted evidence at trial was that Matt finished high school in June 2011. Due to lack of funds, Matt did not go on to university. He instead obtained fulltime employment in the landscaping industry. He did start at Brock University in September 2013, after his marriage, and certainly after any period of dependency on his parents.

[10] The court did not hear directly from Matt. Matt turned 18 on March 10, 2011. He was not enrolled in a full time program of education during the relevant time. Although Mrs. White says she supported Matt, the court has no financial information whatsoever regarding Matt’s earnings for the period of time Mrs. White is claiming support for him. There is simply no evidence to support a claim that Matt was “unable by reason of illness, disability or other cause” to withdraw from his parents’ charge or obtain the necessaries of life.

[11] There is no authority under either the Divorce Act or the Family Law Act to award child support in these circumstances and, accordingly, this claim is dismissed.

[12] I now turn to the issue of a restraining order.

[13] It is of note that Mrs. White’s application does not make such a claim. No request for an amendment to her pleadings was ever made. Interestingly, however, a non-molestation order was made by Glithero J. at a case conference on September 2, 2010. Mr. White incredibly disputes that this order pertains to him because of a discrepancy in his date of birth. Reilly J. also ordered that Mr. White be restrained from molesting, annoying and harassing Mrs. White and the children on April 7, 2011.

[14] Mrs. White seeks a continuation of the restraining order. She testified that on March 30,2009, Mr. White assaulted her and she was forced to leave the matrimonial home. Mr. White was charged criminally, however those charges were ultimately withdrawn by the Crown. Mr. White disputes that he assaulted Mrs. White. A letter written by the applicant, and filed at Tab 23 of Exhibit 2, stated that she was “not fearful” of her husband.

[15] Mrs. White also testified that on one occasion she saw Mr. White sitting in his car on her street watching her. She also reported him driving by her current residence. Despite the restraining order in place, just prior to trial, he sent an email through Mrs. White’s counsel, to wish his wife a happy birthday. Mrs. White feels that Mr. White is watching and stalking her and will not leave her alone. No doubt, Mr. White’s conduct throughout this litigation has been very frustrating to Mrs. White however, that behavior itself does not support a restraining order.

[16] In my view, the evidence is not sufficient to satisfy the court that Mrs. White has reasonable grounds to fear for her safety at the hands of Mr. White. Accordingly, any current restraining order is terminated forthwith.

[17] I will now turn to the issue which occupied much of the trial – the equalization of the parties’ net family property. Necessarily, the court must make several findings of fact regarding the value of the assets to be included in any equalization calculation.

[18] At this juncture, it is important to comment on the evidence of each of the parties and why, for the most part, I have relied on the evidence of Mrs. White.

[19] Mrs. White gave her evidence in a straightforward manner and was forthcoming regarding her income and expenses. There was no attempt to mislead or not disclose relevant information. When mistakes were made, she readily acknowledged her errors.

[20] The same cannot be said for Mr. White. At times, particularly during his cross-examination, he was very evasive and not forthcoming. Even allowing for his disability and memory loss, he had apparent difficulty in answering some very straightforward questions. I found that he was less than truthful on more than one occasion. A few examples will suffice:

(a) Incredibly, Mr White failed to mention the sale of an airplane for more than $100,000.00, knowing it involved the most significant issue at trial. He swore an updated financial statement on September 10, 2013 and made no mention of the sale of this airplane. This disclosure was only made during his cross-examination.

(b) Mr. White provided no information about the purchase of his current home, including a downpayment from his friend, Donna Zappacosta. The revelation of this information resulted in Mr. White abandoning his claim for spousal support on the third day of trial. It is of note that this same friend is the individual he purported to sell the contents of the matrimonial home to, in order to thwart the removal of those contents by Mrs. White.

(c) As will be discussed in fuller detail later, Mr. White purposely gave the business valuator incomplete and inaccurate information regarding the assets of Peninsula Air.

(d) Mr. White’s explanation about not answering the door for a process server defied credibility.

(e) Mr. White’s continued insistence that the restraining order of Glithero J. did not apply to him was disingenuous at best.

(f) Mr. White’s insistence that he had not read the Minutes of Settlement did not bear scrutiny.

[21] In the end, Mr. White’s credibility has been seriously damaged. For the most part, where the evidence of the applicant and respondent conflicted, I have preferred the evidence of Mrs. White.

[22] In comparing the net family property statements filed by each of the parties in their written submissions, there are several areas of agreement. Where that occurred, even if the parties have not provided evidence of value, I have accepted the agreed upon value. There remain a number of assets where the parties cannot agree on value and I will go through each item in dispute. It is important to note that with respect to several items, both parties have failed to provide the court with the necessary evidence to permit the court to make a finding of fact as to the asset’s value. The court cannot pick numbers out of the air. The Family Law Act is clear that the owner of an asset must provide the value for equalization purposes.

[23] At the same time, sworn financial statements must be given some weight. The other party is entitled to rely on those statements. For example, a party may be content with the value claimed, and so makes no effort to obtain evidence to the contrary. Later, serious prejudice would arise if the affiant testifies that the value ascribed to an asset was incorrect, especially if no additional proof is forthcoming.

[24] If the evidence is completely lacking, I have removed the item from any equalization calculation.

[25] I will now set out my findings of value to determine the net family property of each party.

1. Matrimonial Home

The net proceeds of sale (after adding back $13,129.14 improperly deducted for Mrs. White’s legal fees) is $212,669.69, or $106,334.84 each.

2. Household Contents

Mrs. White argues that the contents have already been divided in specie. Mr. White disagrees; however neither party has provided the court with any inventory or appraisal. Mr. White obtained a court order permitting him to have the contents valued however he took no steps to do so. Without any evidence, the court cannot assign a value to any such un-itemized items. Subject to specific items on which the parties are in agreement, I have removed the contents from any equalization calculation.

3. Cars and Vehicles

The parties agree that the value of the applicant’s 1999 Ford is $300.00 and that the value of the respondent’s 1987 Virago Bike, 1987 Grew boat and trailer, and the 2000 Grand Prix is $500.00, $150.00 and $500.00, respectively.

The parties disagree on the value of the 1977 Camaro. The vehicle is owned by the respondent and he was obliged to value it. He did not provide any appraisals for either the date of marriage or date of separation. The respondent claims the car was worth $6,000.00 on the date of marriage, and only $500.00 on the valuation date. The applicant claims the car has a valuation date value of $5,000.00. This value was taken from Mr. White’s sworn financial statement of July 14, 2010. At trial, Mr. White argues this was a typographical error. The applicant in her written submissions is prepared to agree that Mr. White had household contents and a vehicle worth $19,000.00, as taken from Mr. White’s sworn financial statement of July 14, 2010. There is no breakdown between household items and vehicles. Mr. White’s net family property statement sets the value for the same household contents and vehicle at $21,000.00 and his breakdown is that $6,000.00 of that $21,000.00 represents the value of the Camaro and $15,000.00 is for the electronic stereo equipment that he owned on the date of marriage. Without agreement and without evidence as to the value of the Camaro on the date of marriage and on the valuation date, the Camaro will be excluded from any equalization calculation.

4. Jewellery

The applicant failed to provide the court with any appraisal or opinion of value for her jewellery. The respondent did produce appraisals for the replacement, not fair market, value of the jewellery. These appraisals were not prepared for trial but were obtained prior to the date of separation. On the Personal Property Schedule of the parties’ house insurance, the jewellery was valued at $8,700.00. In my view, this is a better reflection of the current value, and that is the value I ascribe to the jewellery.

5. Electronics

The respondent has provided evidence of his purchase of stereo equipment prior to marriage. He testified that on the valuation date most was no longer operational, and he attributes a nominal value of $500.00 to it. The applicant has accepted the date of separation value, but not the date of marriage value, although she has accepted a combined value of $19,000.00 for the pre-marriage value of the Camaro and the stereo equipment. I have already excluded the Camaro from the equalization calculation. I accept Mr. White’s evidence with respect to the value of the stereo equipment.

6. Other Special Items

I heard no evidence regarding the value of other household or special items, regardless of what may or may not have been in a prior sworn financial statement. These items will be removed from the equalization calculation.

7. Bank Accounts and Savings

The only dispute here is Mrs. White’s contention that she was somehow locked out of the joint accounts at the Royal Bank of Canada, and that the full value of these joint accounts should be shown on Mr. White’s side of the ledger. Exhibit 2, Tabs 14 and 15 are statements from these joint accounts and show various withdrawals from the accounts. I accept these accounts are properly shown as belonging to both parties equally.

8. Life and Disability Insurance

The only dispute under this heading is the value of the Transamerican Life Insurance policy. The applicant claims the value is $42,648.80. The respondent claims the value is $34,229.17. Exhibit 2, Tab 10 makes it clear the cash surrender value on the valuation date is $34,229.17.

9. Business Interests

The most contentious issue at trial, and the matter which occupied the majority of time, was the value of Mr. White’s interest in Peninsulair on the valuation date.

Mr. White’s father started Peninsula Air Services Limited in 1946. The company was successful for many years and operated out of the Hamilton Airport on land owned by the airport and leased to Peninsula Air on a long-term basis. It is not disputed that prior to marriage the respondent held a 16% interest in the company. At some point in time, after marriage, the assets of Peninsula Air Services Limited were transferred to Peninsulair Limited, and the respondent acquired a 51% interest in this company, which he still owned on the date of separation. The other owners were Mr. White’s brother and sister. Mr. White (the respondent) held the position of President and CEO. Mr. White is also a pilot and flew the majority of the charter flights for the company.

During the course of the marriage, Peninsulair provided the primary source of financial support for the family. By the time the parties separated in 2009, the company was in serious financial difficulty.

Peninsulair’s hangar was located on land owned by the airport. Peninsulair became involved in a dispute with Tradeport International, the operators of the Hamilton Airport, with respect to the lease. The airport did not want to renew the lease. On or about November 2, 2008, Tradeport International locked out Peninsulair, effectively shutting down the company. Litigation was commenced. Peninsulair was afforded the opportunity to remove some of its aircraft, parts and equipment from the airport. Other property including the hangar, were left at the airport.

The respondent hired Pettinelli Mastroluisi Consulting Inc. to prepare a valuation of Mr. White’s interest in Peninsulair on the date of marriage, and valuation date. A report was prepared by Mr. Nicholas Mastroluisi and Mr. Michael Iantomasi. Mr. Iantomasi testified at trial.

Mr. Iantomasi was qualified as an expert in the area of business valuations and permitted to give opinion evidence. It was his opinion that the value of Mr. White’s interest in the business on the date of marriage was $143,000.00. The applicant takes no issue with this valuation. In addition, the report sets out that Mr. White had a receivable owing to him from the company in the amount of $23,700.00. Mrs. White provided no evidence to the contrary.

Mr. Iantomasi opined that the value of Mr. White’s interest in the business on the valuation date was nil. This valuation is strenuously objected to by the applicant.

A more detailed review of Mr. Iantomasi’s report is warranted. Mr. Iantomasi confirmed that the report he prepared was a “calculation report”, which according to him represented the lowest level of assuredness. A calculation valuation report does not constitute a comprehensive valuation report or an estimate valuation report according to the Canadian Institute of Chartered Business Valuators. Mr. Iantomasi did not have financial statements for the company as at March 31, 2009. What he did have, was a management prepared unaudited balance sheet and income statement of the corporation for the year ending December 31, 2007 and a management prepared unaudited balance sheet of the company as at November 30, 2008. The last financial statements externally prepared for the company were as at December 31, 2006.

The report makes it clear that Mr. Iantomasi made certain assumptions in arriving at his opinion of value.

The information Mr. Iantomasi relied on in his report was provided by Mr. White and his long time accountant, Gordon Wright. Mr. Iantomasi had access to Mr. Wright’s working papers. He testified that according to the information he received from Mr. White, Tradeport locked the company out of the hangar at the Hamilton Airport, and refused to extend the lease. Rick advised him that only five aircraft were retrieved, which aircraft had a sale value of $37,000.00. Mr. Iantomasi was under the mistaken assumption that the balance of the aircraft could not be removed and that the more valuable aircraft were unrecoverable since these aircraft were in the hangar at the date of the lockout. There were no appraisals or opinions of value for any of the aircraft. There was in fact no inventory of the existing aircraft.

In fixing a value for the hangar, Mr. Iantomasi relied upon the unaudited statements, prepared internally by the corporation, which listed the book value of the hangar as $20,000.00.

Mr. Iantomasi testified that he understood that after the lockout, Peninsulair no longer had ownership of the hangar. Mr. Iantomasi further assumed that there were no bona fide offers for any of the assets of the corporation as of the valuation date.

On cross-examination, Mr. Iantomasi confirmed that he was not aware that Peninsulair only lost ownership of the hangar after separation. He was not aware that 11 aircraft existed at the date of separation, nor did he have valuations for any of those aircraft. He was not aware of the “hull value” of the aircraft.

Specifically, he was not aware that one of the aircraft (the eight-seater) was sold in February 2012, three years post-separation, by Mr. White, for $110,000.00. He conceded that if all this information had been made available to him, it may have changed his opinion about the value of the business.

Regarding the value of the hangar, Mr. Iantomasi was aware of an opinion of value prepared by Donna Bacher, in September 2009, which valued the hangar at some $2,200,000.00. He instead chose to rely on the book value of the hangar.

Mr. Iantomasi was advised by Mr. White that there was some interest in the sale of the business, but there was no bona fide offer. Mr. Iantomasi was not aware of any tentative agreement, or the particulars of any agreement with Mr. Hill. He testified that if there was such an offer he would have looked into the matter, and this information could have changed his opinion of value.

There is no question about Mr. Iantomasi’s qualifications or his credibility as a witness. However, the value of any expert opinion is subject to the underlying facts relied upon by the expert in rendering his opinion. Mr. Iantomasi was severely handicapped in this case. I find that Mr. White was no more forthcoming with his expert than he was with the court. He provided only limited, and at times inaccurate, information to Mr. Iantomasi.

In the end, through no fault of the business valuator, his opinion as to the value of the company on the valuation date is of limited use to the court.

The court is left with the very difficult decision of determining the real value of this business on the date of separation without proper and complete evidence. The only person who can be blamed for this lack of information is the respondent. I find that he has purposely misled the valuator, his wife and this court to prevent anyone from knowing the true value of the corporation.

The evidence I do accept is that although Mr. White is not the sole shareholder of the corporation, he has been the President and CEO and has had complete financial control of the business. He has been free to deal with the assets as he sees fit, with apparently little or no input or involvement from his brother or sister. The monies of the corporation are available to him for his personal use, as evidenced by the most recent sale of the eight-seater plane.

There is no doubt that the fortunes of the company were on a decline by 2008 when Tradeport refused to extend Peninsulair’s lease at the Hamilton airport. There are still many unanswered questions about what transpired with Tradeport, and what, if anything further, Mr. White could have done to preserve the assets of Peninsulair. Seeing the writing on the wall, I find that Sue and Rick were scrambling to get out whatever inventory they could. In February 2009, less than two months before the parties separated, they entered into legitimate discussions with Mr. William Hill to purchase the assets of the corporation.

The court was impressed with the evidence of Mr. Hill. Mr. Hill is a self-made successful businessman and entrepreneur. He has had extensive experience in the buying and selling of heavy equipment and machinery, including aircraft. His evidence regarding his legitimate interest in the purchase of the aircraft of Peninsulair was corroborated by Mrs. White and evidenced by a tentative agreement filed at Tab 5 of Exhibit 1.

I find that these were not idle discussions. A Letter of Intent, filed at Tab 5, Exhibit 1, was prepared. Mr. Hill’s company prepared a business plan which was forwarded to the airport authority, which was filed at Tab 4, Exhibit 2.

I accept Mr. Hill’s evidence that he was in a financial position to purchase the aircraft.

If February 2009, Mr. White, of course, trying to get the most money he could, valued the company’s assets, including the hangar and parts, at some $1,200,000.00. Exhibit 1, Tab 4, partly in Mr. White’s hand-writing, confirms his position that shortly before separation the aircraft were valued at $630,000.00, parts at $100,000.00, and the hangar at $500,000.00.

Mr. Hill, as a good businessman, was trying to get his hands on as much as he could, for as little as he could. He was prepared and able to pay $630,000.00 for those assets. There is some discrepancy as to whether this amount included the hangar or not. For the purpose of valuation, I am prepared to use this number for all the assets including planes, parts and the hangar. At minimum, this is an amount both Sue and Rick accepted was a reasonable value. In light of the failure of Rick to provide the necessary or proper information to have his company fairly valued, this is the most accurate information regarding the value of the company at or near the time of separation.

That the sale did not go through after the date of separation is using hindsight in order to determine value.

Other evidence confirms that this value is not unrealistic in all of the circumstances. Firstly, one aircraft, three years post separation, sold for more than $100,000.00. There are still other planes which are available for sale. Apparently, there are parts, including a simulator, that were available for sale. I have no confidence that Mr. White has been truthful in telling the applicant, the valuator, or the court, if in fact he has sold any other assets and received any other monies that may have been due to the corporation. Mr. Hill, although not an expert, did tell the court what he was prepared to pay for various aircraft and/or parts. In 2006, the book value alone of the various aircraft was some $126,000.00. The replacement value of the planes for insurance purposes in 2006 was in excess of $800,000.00. For reasons set out above, I have not accepted much of the evidence of Mr. White, and accordingly, his evidence regarding the value of the planes is of little weight.

In the end, I am satisfied that the proper value of this business on the valuation date is the $630,000.00 that Mr. Hill was prepared to pay for it and Mr. White testified he would have accepted. From this amount must be deducted the liabilities of the corporation which are as set out in Schedule 1 to Mr. Iantomasi’s report. Mr. White, in his testimony, confirmed that no monies were being repaid to the bank, nor did the court receive any information regarding any efforts by any creditors to realize on their loans. Certainly, Mr. White was free to sell aircraft and use the monies for his personal purposes without having to account to his other shareholders or creditors. I have not included any loans payable to shareholders in determining the liabilities of the corporation as any loans would obviously be paid to Mr. White and would then be included as a personal asset. I have not included any monies owing to Mr. White as an asset to him on his net family property statement. The liabilities I accept total $324,342.00, leaving the net value of the corporation at $305,658.00. Mr. White’s 51% interest in this asset is accordingly $155,885.58.

10. Debts and Liabilities

The only claimed debt is that of outstanding premiums for the Transamerica Life Insurance policy. I am not satisfied that there were unpaid premiums not already accounted for in the value of the policy on the valuation date.

11. Property on Date of Marriage

Both parties agree that Mrs. White had $6,000.00 in general household items and vehicles on the date of marriage.

I accept the evidence provided by Mr. White regarding the valuations for Peninsulair Limited, the stereo equipment, life insurance and the receivable from Peninsulair Limited. Otherwise, except for their personal opinions, the parties have not provided the court with any evidence to support their claims for any other property owned on the date of marriage, and, accordingly, will not be allowed.

12. Excluded property

I am not satisfied that either party has properly proven the exclusions set out in their respective Net Family Property Statements.

Taking into account my findings of fact as set out above, the equalization of net family properties is as follows:

LAND

Item
Description
Applicant (Mrs.)
Respondent (Mr.)

Matrimonial Home (joint) Net proceeds of sale
93 Haldimand Rd. 12, Fisherville, Ontario
$106,334.84
$106,334.84

Totals: Value of Land
$106,334.84
$106,334.84

HOUSEHOLD ITEMS AND VEHICLES

Cars, boats, vehicles

1999 Ford Explorer
$300.00

1987 Virago 1100 Bike
$500.00

1987 18’ Grew Boat & Trailer
$150.00

2000 Grand Prix
$500.00

Jewelry, electronics

Jewelry
$8,700.00

Electronics
$500.00

Totals: Value of Household Items and Vehicles
$9,000.00
$1,650.00

BANK ACCOUNTS AND SAVINGS, SECURITIES AND PENSIONS

Bank account (joint)
RBC Fisherville #5018635
$2,419.47
$2,419.47

Bank account (joint)
RBC Fisherville #5018742
$692.18
$692.18

RRSP
MRS Trust Co. 9675695
$99,808.38

RRSP
Manulife Plus 89249049
$52,196.95

RRSP
David Roloson MRS
$64,370.36

TFSA
558542544
589.36

Totals: Value of Accounts and Savings
$68,071.37
$155,116.98

LIFE AND DISABILITY INSURANCE

Manulife Financial
Owner: Richard Glenn White Face Amt: $10,000.00
$1,590.00

Desjardins
Owner: Richard Glenn White Face Amt: $10,000.00
$1,285.00

Transamerica Life
Owner: Richard Glenn White Face Amt: $500,000.00
$34,229.17

Totals: Cash Surrender Value of Insurance Policies
$0.00
$37,104.17

BUSINESS INTERESTS

Peninsulair Limited
51% of $305.658.00
$155,885.58

Totals: Value of Business Interests
$0.00
$155,885.58

DEBTS

Totals: Debts
$0.00
$0.00

VALUE OF PROPERTY OWNED ON VALUATION DATE
$183,406.21
$456,091.57

LESS: PROPERTY, DEBTS AND OTHER LIABILITIES ON DATE OF MARRIAGE

General household items and vehicles
$6,000.00

Electronics
$15,000.00

Life insurance
$1,625.00

Business interests
$143,000.00

Receivables
$23,700.00

Totals: Value of Property owned on date of marriage (Deduct)
($6,000.00)
($183,325.00)

NET FAMILY PROPERTY
$177,406.21
$272,766.57

DIFFERENCE
$95,360.36

EQUALIZATION PAYMENTS

Applicant Pays Respondent
$0.00

Respondent Pays Applicant
$47,680.18

[26] This equalization payment shall be paid forthwith to the applicant from the monies currently held in trust. The balance of funds is to remain in trust until the issue of costs is determined.

[27] Each party has claimed they are entitled to costs from the other. The parties may provide me with written submissions, including any offers to settle, within 10 days of today’s date. I will deal with all costs issues, including costs allegedly thrown away for the December 2012 trial, after I receive those submissions.

[28] Order to go accordingly.

Walters J.

Released: January 6, 2014

CAYUGA COURT FILE NO.: FS-10-57

DATE: 2014/01/06

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

SUSAN MARIE WHITE
Applicant

• and -

RICHARD GLENN WHITE
Respondent

REASONS FOR JUDGMENT

Walters J.

Released: January 6, 2014