Sooriyanarayana v. Sooriyanarayana, 2015 ONSC 1184

COURT FILE NO.: FS-08-1940-00

DATE: 2015-02-24

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Vijayakumary Sooriyanarayana

Kim Larson, for the Applicant

Applicant

and -

Kosalaram Sooriyanarayana

Self-Represented, Respondent

Respondent

HEARD: January 22, 23, 24, 28, 29, 30, 31, 2014, and continued February 26, 27, 2014 and further continued June 17,18,19,20, 2014

REASONS FOR JUDGMENT

M. J. Donohue, J.

Contents

Background. 5

Issues. 6

What is Kosa’s Income?. 8

Expert Evidence on Kosa’s Income. 10

i. Figov’s Report 12

ii. Mr. Feldman’s Report 14

What Spousal Support is payable?. 19

Viji’s Work History. 19

Viji’s New Spousal Relationship. 20

Care for Viji’s Mother and Rental Income. 21

Viji`s employment and financial situation. 21

Analysis of Spousal Support 23

Retroactive Spousal support 26

Life Insurance for Support 27

Should Child Support be Terminated?. 29

Sumathy. 29

Roshaan. 30

What Child Support is Payable, Retroactively and On-Going?. 30

Retroactive Support 30

What Section 7 Expenses are payable?. 32

Sumathy’s Expenses. 33

Roshaan’s Expenses. 34

Reasonableness of the Expenses. 35

What is the Date of Separation?. 36

What equalization payment is to be made?. 38

Assets. 38

Matrimonial Home Value. 38

Household Goods Value. 38

Vehicles & Boat Value. 39

Cash Owned by Viji at Separation Date. 40

Jewellery Value at Separation Date. 41

RRSP Value. 42

Value of Life Insurance Policy at Separation Date. 42

Value of Two Corporations at Separation Date. 43

Cottage Separation Date Value. 44

Value of Aeroplan Points at Date of Separation. 44

Debts. 45

Matrimonial Home Debts. 45

Sale Expenses of the Cottage. 45

Line of Credit Debt 46

Kosa’s CIBC Visa Card. 46

Debt owed to Francis Santhirakumar 47

Debt owed to Viji’s mother at Separation date. 48

Bank Guarantee CIBC business overdraft 49

Notional Taxes on RRSPs. 50

Summary of NFP Findings. 50

Should an unequal division be made?. 51

Increased Line of Credit by $170,000. 52

Increased Interest Payable on the Line of Credit 55

Delays in Selling Property. 56

Mortgage payments. 57

Should there be an adjustment for Cottage Expenses?. 58

Lack of Communication. 58

Other Issues. 60

Should There be a Finding of Contempt as Against Kosa?. 60

Should Viji’s Shares in the Corporation to be transferred to Kosa?. 62

Should Kosa Pay a Penalty for the Lawnmower Purchase?. 63

May Kosa Obtain Proof of Payment to the Accountant?. 64

What Damages are Payable for an Abusive Relationship?. 64

Should the Cottage be Listed for Sale with Viji’s choice of Real Estate Agent?. 66

Should Kosa’s interest in the cottage be transferred to Viji?. 67

Conclusion. 70

Return Date for Further Submissions. 71

Background

[1] Mr. and Mrs. Sooriyanarayana met and married in Sri Lanka in 1988. They immigrated to Canada in 1990, and opened their family manufacturing business, Laser Choices Inc., in 1995. They worked together in the business until approximately seven months before their separation in the early summer of 2007.

[2] Throughout the trial, the Applicant/wife and Respondent/husband were referred to, and addressed as, Viji and Kosa, respectively. I will also do so in this judgment.

[3] They have raised a daughter, Sumathy, who is now 25 years of age and studying medicine. They also raised a son, Roshaan, who is now 21 years of age, and studying to be a computer-engineering technician.

[4] Some time after separation, Kosa moved in with a former employee, Andrea Fernando, and they have now married. Viji lives in a house with her son, Roshaan. Her mother also lives with her.

[5] Viji is now 49 and Kosa is now 48.

[6] The trial was lengthy, involved voluminous documentation, and was complicated by the number of issues that the parties raised with almost no agreement on even the simplest evidence. By the end of trial, however, there was some recognition of the opponent’s position on various points.

[7] In the course of the trial, Kosa, as a self-represented litigant, referred to offers and evidence that were considered inadmissible in the trial. He again referred to such in his closing submissions. I did not consider that inadmissible evidence or those offers in deciding the issues.

Issues

[8] The issues are:

a) What is Kosa’s income?

b) What spousal support is payable, whether compensatory or needs-based?

c) What child support is payable, retroactively and on-going?

d) Should child support be terminated?

e) What s. 7 expenses are payable?

f) What is the Date of Separation?

g) What equalization payment is to be made?

h) Should an unequal division be made?

i) Should there be a finding of contempt against Kosa?

j) Should Viji’s shares in the corporation to be transferred to Kosa?

k) Should Kosa Pay a Penalty for the Lawnmower Purchase?

l) May Kosa Obtain Proof of Payment to the Accountant?

m) What damages are payable for an abusive relationship?

n) Should the cottage be listed for sale with Viji’s choice of real estate agent?

o) Should Kosa’s interest in the cottage be transferred to Viji?

[9] The parties each provided lengthy written submissions, the last of which were received in August 2014. Kosa did not refer to any case law or legislation. Viji’s counsel provided case law but did not refer to any legislation.

[10] This was a lengthy trial spread out over a period of five months. At various points in the two parties’ testimony, they were shown to have erred in their recounting of the facts. When confronted with contradicting evidence, each of them, at various times, acknowledged their errors.

[11] Inability to communicate and each party’s desire to punish or disadvantage the other party explain a great deal of the post-separation behaviour. Each recounts their history as the other party being the initiator of the trouble.

What is Kosa’s Income?

[12] Kosa argues that the court should find his income to be $39,000. Viji argues that it should be imputed at $100,000, relying on her expert’s evidence.

[13] Kosa’s income has always been from his business, Laser Choices. This business involves the remanufacturing of recycled toner cartridges for printers, photocopiers, and fax machines.

[14] Historically, Kosa split his income with Viji for tax purposes. The purchase of a cottage was funded through the business. The parties were able to increase their equity in their matrimonial homes and accumulate some RRSP savings. There is no evidence of an extravagant lifestyle. The parties travelled once a year to a trade show for business. They made occasional trips back to Sri Lanka. They carried a credit card debt of approximately $33,000, a line of credit on their house of $53,000, a business line of credit of $73,000, and the mortgage on the matrimonial home of $230,000. They bought and sold several homes throughout their marriage, taking advantage of the rising market.

[15] There is no evidence of extravagant lifestyle since separation. Kosa has begun a second family. His debt load now is also similar, with credit card debt, debts secured against the cottage property, and the business line of credit. His line of credit on the business was $94,845 as of early 2014.

[16] Kosa testified that the business peaked long before separation and has been steadily declining. The financial statements support this evidence. The gross sales for the business were: $529,410 in 2004; $542,954 in 2005; $500,947 in 2006; $460,449 in 2007; $424,114 in 2008; $468,201 in 2009; $360,201 in 2010; $362,202 in 2011; $374,714 in 2012; and $319,707 in 2013. Sales have declined by 40 per cent since 2004.

[17] Kosa explained that, in the profitable times, there were nine employees working at the plant. For some time now he has had only three. His second wife currently works 50 hours a week at the business. She was hired before the separation as an office assistant in 2006 for a yearly salary of $29,900 ($1,150 bi-weekly). She began at reception, performing clerical and administrative duties, but in recent years she has taken on packaging, shipping, and receiving duties. I am satisfied her 2013 remuneration of $39,000 represents a market related remuneration for her services, rather than an amount received for income-splitting purposes.

[18] Before separation, Kosa’s and Viji’s tax returns show identical income: $30,000 in 2003; $29,900 in 2004; $28,750 in 2005; and $29,900 in 2006. The evidence is that Viji was largely a homemaker and only occasionally did labouring work in the business. I find her income should be attributed to Kosa. On that basis, it is appropriate to consider that, before separation, Kosa earned $60,000 in 2003; $59,800 in 2004; $57,500 in 2005; and $59,800 in 2006.

[19] Since separation, Kosa’s tax returns show declared income of $31,850 in 2007, $29,900 in 2008; $29,900 in 2009; $29,900 in 2010; $32,500 in 2011; $32,500 in 2012; and $39,000 in 2013.

Expert Evidence on Kosa’s Income

[20] Both parties called experts.

[21] Before separation, as the business was more profitable, some personal expenses could be claimed by the business. The two experts analyzed some of the information after separation to determine what his income should actually be, taking into consideration the expenses that were covered by the business.

[22] Both parties’ accountants noted it was appropriate to recognize the tax advantages of personal expenses going through the business. These tax advantages become particularly important when calculating income for the purpose of child support. In Osmar v. Osmar, 2000 CanLII 22530, [2002] OJ No 2058 (ON SCJ), a similar dispute arose with respect to determining the fathers income for the purpose of child support where personal expenses were deducted from business income. Justice Aston held that the fathers income, as reflected in line 150 of his T1 General Income Tax Return, must be adjusted to account for those personal expense deductions, even though they were allowed by Revenue Canada. At para 5, he stated:

In my view, the [Child Support] Guidelines require the court to examine expenses from the perspective of balancing the business necessity against the alternative of using those funds for child support. The court should respect the right of self‑employed persons to run their business as they see fit, but may, nevertheless, question whether particular expenditures ought to be indirectly subsidized by lower child support.

[23] Viji’s expert, Mr. Figov, testified regarding what income should be attributed to Kosa. Mr. Figov used as a base for his analysis a draft report by Kanagaratnam Accountants, which was not in evidence. The Kanagaratnam report was intended to be a joint report for the parties, but it was never finalized.

[24] Kosa had his own expert, Mr. Feldman, testify as to what income should be attributed to him. Mr. Feldman’s approach was to use Mr. Figov’s report as a base and provide a critique of certain areas of the report. All reports were based on unaudited, internally prepared financial statements. The Kanagaratnam report was prepared without any input from Kosa. Accordingly, the expert evidence of income was weak, at best.

[25] For the following reasons I prefer Mr. Feldman’s approach.

i. Figov’s Report

[26] Mr. Figov, on behalf of Viji, provided four scenarios for Kosa’s annual income. Each scenario set out income levels for 2006 to 2009, and provided an average income over the years 2008 and 2009. Each scenario adds income to the previous scenario.

[27] In scenario one, Mr. Figov noted a number of personal expenses that Kosa was able to run through the business, which resulted in tax savings. He then grossed up those items for the purpose of calculating Kosa’s income. Scenario one is therefore calculated on the basis of Kosa’s income tax returns plus benefits grossed up. This scenario found Kosa’s average income for 2008 to 2009 to be $50,368.

[28] I preferred Mr. Feldman’s evidence below on this approach because he had the advantage of Kosa’s evidence that a number of the expenses were shown to be business expenses rather than personal expenses.

[29] In scenario two, Mr. Figov assessed Kosa’s income to include his income as stated in his tax returns, plus benefits grossed up, plus tax benefits of income splitting. The tax savings through income splitting were also grossed up. On this basis, the average income for 2008 and 2009 was found to be $57,013. This scenario assumed that Ms. Fernando, Kosa’s second wife, is doing the work that Viji did in the business and is being paid the salary that Viji was paid.

[30] For reasons set out, I found that Viji did only occasional, labouring work in the business, in contrast to Ms. Fernando’s skilled clerical work and extra hours of labouring work. As stated, I find the evidence supports that Ms. Fernando’s income is market remuneration for the time and work she does in the business.

[31] I therefore do not accept scenario two of Mr. Figov’s calculations.

[32] In scenario three, Mr. Figov calculated Kosa’s income to include his income stated in his tax returns, plus benefits grossed up, plus tax benefits of income splitting, plus spousal income. The spousal income consisted of Viji’s income for 2006 and Ms. Fernando’s income for the years 2007-2009. On this basis, Kosa’s average income for 2008 and 2009 was found to be $88,213.

[33] As I found Ms. Fernando’s income to be market remuneration and not a form of income splitting, I did not accept scenario three either.

[34] Finally, in scenario four, Mr. Figov calculated Kosa’s income to include his income stated in his tax returns, plus benefits grossed up, plus tax benefits of income splitting, plus spousal income, plus shareholder loan repayments. On this basis, Kosa’s average income for 2008 and 2009 was found to be $106,621.

[35] I consider this final scenario improper to have included shareholder drawings as income to Kosa. I find that the shareholder drawings were repayment of the loan that Kosa had loaned to the company. Loan repayments are not income. I therefore do not accept scenario four of Mr. Figov’s calculations.

[36] Mr. Figov did not have time to analyze all of the income data before providing his report for trial. In particular, he did not have an opportunity to do a detailed review for 2010 onwards. He assumed that Kosa’s income for 2010 was within a similar range of income as the income level he calculated for 2008 and 2009.

[37] As noted above, however, business sales have declined steadily by over $100,000 since 2009. Accordingly, I am not prepared to accept his assumption in that regard. I do not accept Mr. Figov’s calculations for Kosa’s income after 2009.

ii. Mr. Feldman’s Report

[38] Mr. Feldman, on behalf of Kosa, had the benefit of all the data, as well as the evidence from Kosa, who had a greater understanding of the business. Mr. Feldman did not include the shareholder drawings for the reasons above; he did not include Ms. Fernando’s income as income splitting for the reasons above; he reduced some of the personal expenses (and the corresponding gross up) for reasons below; and he reduced the gross up on personal expenses to reflect the effective personal income tax rate rather than the marginal income tax rate used by Mr. Figov.

[39] By reducing the gross up on personal expenses to reflect the effective personal income tax rate, I find Mr. Feldman’s analysis to be more realistic in light of the modest income reported by Kosa and the fact that an increase in income would have been subjected to a progressive increase in tax rates. Mr. Figov was not critical of this approach, other than that he said it was unusual.

[40] Mr. Feldman reviewed each of the personal expenses that Mr. Figov had added back as income. A number were shown to be improperly added back as income. For example, $14,000 shown on the books as paid to the children was never actually paid. (This was a bookkeeping error that Kosa had corrected and Mr. Figov acknowledged.) Other examples include: an advertising expense incurred at Play It Again Sports, which was proven to be a Christmas present to a client; a hotel expense, which was for a business consultant; and a number of LCBO purchases, which were client Christmas gifts purchased in December. The evidence of Kosa at trial supports that these expenses were proper business expenses.

[41] Mr. Feldman found Kosa’s annual income for Guideline purposes to be $58,991 in 2007; $42,872 in 2008; and $38,740 in 2009.

[42] Reviewing all the evidence in conjunction with the two expert reports, I am satisfied that Mr. Feldman’s approach is more consistent with the evidence.

[43] In addition to the income sources accounted for in two expert reports, there was also evidence by Viji of cash sales in the past. Kosa’s evidence is that the location of their business was not conducive to customers coming there, and that cash sales were rare and modest. There is insufficient evidence to support cash income being anything more than a trace amount. I, therefore, do not consider this to be an additional source of income to be attributed to Kosa.

[44] It is argued that Kosa had the benefit of earning Aero-plan points on his personal credit card, which was used in the business. Kosa argues that these points were primarily used for company promotions and should not be considered because they have no significant cash value. If a cash value is attributed to these points, Kosa argues that the value should be deducted from business expenses from which they were earned. Alternatively, they should be deducted from company losses. This would imply that they would be used in calculating business income and would not be attributed to Kosa personally.

[45] I was not provided with reliable evidence as to the value of the points that would be accumulated annually. It was Kosa’s evidence that the points were fed back into the business as gifts to clients or used for him to travel on trade shows. I have, therefore, not included these points as income for Kosa.

[46] In summary, as per the report of Mr. Feldman, I am satisfied that Kosa’s income for support purposes is $58,991 in 2007; $42,872 in 2008; and $38,740 in 2009.

[47] In respect of the years 2010 to 2013, neither expert had an opportunity to provide a review of Kosa’s income. The only evidence before the court on these years is Kosa’s income tax returns, which show declared income of $29,900 for 2010, $32,500 for 2011, $32,500 for 2012, and $39,000 for 2013.

[48] Viji argues that relying on the line 150 income would not be representative of the Kosa’s true income. She invites the court to review both personal and business income and expenses in determining the correct income to use for support purposes.

[49] I acknowledge that the reasonableness of a deduction under the Income Tax Act does not necessarily mean that such a deduction should be accepted for calculating support. This is reflected in the reports of both experts. However, without any evidence as to what expenses and other deductions should properly be included in Kosa’s income for the applicable years, I have no basis on which to make these calculations.

[50] A review of the expert reports reveals that this is a complicated process, involving detailed review of financial statements, the construction of tables, and advanced calculations. I am not in a position to assume these accounting functions on behalf of Viji, especially in light of the fact that Viji has not advised me as to what amounts specifically should be imputed to Kosa.

[51] Therefore, I am prepared to accept that Kosa’s income for the years 2010 to 2013 was: $29,900, $32,500, $32,500 and $39,000, respectively.

[52] For the purposes of on-going support, I find that Kosa’s line 150 income in 2013 of $39,000 is accurate. Even if he concludes that Laser Products is no longer profitable and closes it, Kosa is a hard-working businessman, and he would be able to obtain such an income in the labour market.

[53] In summary, I find Kosa’s income, for support purposes to be $58,991 in 2007; $42,872 in 2008; $38,740 in 2009; $29,900 in 2010; $32,500 in 2011; $32,500 in 2012; $39,000 in 2013; and $39,000 for 2014 and 2015. He will, of course, have to provide the usual confirmation of his future income to Viji.

What Spousal Support is payable?

[54] I find this was a long and traditional marriage of 19 years.

[55] Kosa submitted that no spousal support was payable.

Viji’s Work History

[56] Viji, up to the time of separation, did not have a separate bank account or credit card. Kosa filed her tax returns, which show an average of $30,000 attributed to her as income from the business since 2003. Viji was never directly paid a paycheck.

[57] In an affidavit of July 11, 2008, filed at trial, Kosa said:

“Starting in or about 1997, I employed Paul Constantino, and my wife did not work in the business from between in or about 1997 until January 2006. From in or about January 2006 until in or about November/December 2006, Viji worked in the business.” “Viji states in her affidavit that she is not knowledgeable about the business. That is correct. I operated the business. I paid the bills for the house. Viji wife [sic] knows nothing about financing, sales expenses, accounting, profit or loss in the business.” “The business grew in sales to a peak in 2003 of sales of $623,000.” “Viji remained in the home with the children between 1998 and 2005. There was income splitting to save income tax.” “Viji returned to work in remanufacturing and/or shipping in 2006 when the shipper left. Usually she packed the cartridges or helped me because she could not do all the work.” “On or about November 27, 2006, my shipper/receiver came back to work, therefore my wife was not required. The shipper/receiver was faster, more independent, more efficient and experienced so the business had to use him. …..My wife has not worked in the business since in or about November/December 2006.”

[58] These statements are consistent with the evidence by Viji and Sumathy; Viji has largely stayed at home running the household and raising the children. Her only work experience was occasional labouring work in the company business. Viji has no more than a high-school education from Sri Lanka.

[59] Viji testified to the work that she did at Laser Choices. She cleaned, packed, and shipped. She kept simple logs for shipping purposes. There is no evidence that she worked in the front office doing clerical work or handling customers or phones. She did not do the office work that Ms. Fernando does.

Viji’s New Spousal Relationship

[60] Kosa points to the fact that Viji now lives in a house owned with Peri Nadaraja. He suggests there is a spousal relationship between them. Mr. Nadaraja was not summoned to give evidence. Viji denies that he is a spouse. The evidence in the mortgage document states that he is not a spouse. There is no evidence that Mr. Nadaraja resides in this property.

[61] I find on the evidence that Viji does not have a spouse.

Care for Viji’s Mother and Rental Income

[62] Viji states she has been caring for her mother in the last year or so. Viji’s brother testified and said that their mother must go to doctor’s appointments, but otherwise their mother is “okay”. Sumathy testified that her grandmother walks with a cane and will not get up or go to the bathroom without assistance. However, there was no evidence that Viji had to arrange a care-giver when she was out.

[63] No medical evidence was produced to support the medical care needed for Viji’s mother. There were no particulars of her medical condition. I do not find that Viji is required to remain at home to care for her mother.

[64] The evidence is that Viji’s mother moved in with her in 2007 after the separation. Her mother began paying rent of $300 per month. Viji has declared net rental income of $501 in 2011 and $681 in 2012.

Viji`s employment and financial situation

[65] Viji had employment income in 2008 of $4,492 for 417.9 hours of work. This suggests an hourly rate of $10.75. She was an account card representative. In 2011, she had employment income of $1,123 working for SPP Communications. There was no evidence of what efforts she made before or after 2011 to find employment.

[66] Viji’s financial statement sets out her living expenses as $3,128 per month.

[67] Her evidence is that she has been drawing from capital earned from the sale of the matrimonial home and borrowing from friends and family to meet her expenses. There are no loan agreements or other testimony supporting such loans.

[68] Most of Viji’s evidence was given through a Tamil interpreter. Initially, when she was giving her evidence in English, her accent was so strong that I could not understand her very well. She has had some sporadic work with CIBC encouraging people to apply for credit cards. She did this work in English, so I am satisfied that she has a basic understanding and speaking ability for the working world.

[69] In the months after separation, Viji testified that she was left with no funds. Kosa testified that he dropped off groceries and paid the mortgage and house expenses after separation. However, he took $170,000 from the house line of credit, which maxed out the line, such that there were no funds left for her to access.

[70] Kosa built a business with some help from Viji. There has been economic hardship to her, however, in light of the fact that she stayed home to care for the children while Kosa was left free to build his business.

Analysis of Spousal Support

[71] I find that, post separation, significant s. 7 expenses have been underpaid, such that for the last seven years Viji has been further prejudiced in seeking retraining and re-entry into the work force.

[72] In Moge v. Moge, 1992 CanLII 25 (SCC), [1992] 3 S.C.R. 813, [1992] S.C.J. 107, the Supreme Court of Canada recognized that support orders should be made to account for the unique disadvantages that spouses may face in achieving self-sufficiency upon the break-down of a marriage. At para 36, L’Heureux-Dubé made the following observation:

Often, in order to draw the line after which no more support will be ordered, courts have distinguished between "traditional" marriages in which the wife remains at home and takes responsibility for the domestic aspects of marital life, and "modern" ones where employment outside the home is pursued. Perhaps in recognition that, as Judge Rosalie S. Abella (now J.A.) wrote in "Economic Adjustment On Marriage Breakdown: Support" (1981), 4 Fam. L. Rev. 1, at p. 4, "it is hard to be an independent equal when one is not equally able to become independent," courts have frequently been more amenable to finding that "traditional" marriages survive the so-called "causal connection" test than "modern" ones.

[73] Viji seeks the high range of the Spousal Support Advisory Guidelines (SSAGs) in light of an assault on her by Kosa. She also seeks the high range based on Kosa’s actions following the separation, including underpaying support and s. 7 expenses, as well as taking her funds from the line of credit.

[74] While self-sufficiency is encouraged, in these circumstances, Viji will continue to require Kosa’s support in order to achieve self-sufficiency.

[75] In Bracklow v. Bracklow, 1999 CanLII 715 (SCC), [1999] 1 S.C.R.420, the Supreme Court of Canada stated that a spouse’s lack of self-sufficiency may be related to foregoing career and educational opportunities because of the marriage, and that it is

important to recognize that sometimes the goals of actual independence are impeded by patterns of marital dependence, [and] that too often self-sufficiency at the time of marriage termination is an impossible aspiration, and that marriage is an economic partnership that is build upon a premise (albeit rebuttable) of mutual support (para. 32 and 42)

[76] In cases where self-sufficiency is impossible, the Court indicated that the support obligation may flow “from the marriage relationship and the expectations the parties had when they married” (para 45).

[77] Viji is 48 years of age. There is no suggestion or evidence of ill-health. I find she has worked part-time in the past. She is a presentable woman with a ready smile, although her poor English skills will be a handicap. As noted above, there was no evidence of her job search since separation.

[78] I find she could do part-time labouring work. Twenty hours a week at $11/hour would impute $11,440 to her. She earns approximately $600 in net rental income. Therefore, I find that annual income of $12,000 is to be imputed to Viji from 2008. I impute no income to her for the year of separation, 2007, in light of the uncertainty and upset immediately following the assault and separation.

[79] She has been, and continues to be, in need, as her earnings have been modest. Her skills are modest. Her part in this marriage has been that of homemaker and child care provider, which leaves her disadvantaged in the market place.

[80] In light of the above, I find that Viji is entitled to spousal support on a compensatory and non-compensatory basis.

[81] I conclude that the high-range of spousal support is to be paid on an indefinite basis, in light of the fact that she had to support the children alone in their education for so long. The support is compensatory as well, in light of her years taking care of the household and raising the children.

[82] The high-range spousal support also takes into consideration that Viji will have to pay for her own health plan expenses as she is unlikely to qualify for coverage as a part-time worker, while Kosa is able to expense such costs through the business.

[83] Kosa argued that no spousal support is payable. Viji relied on the SSAGs. Neither suggested any reason not to follow the Guidelines.

[84] The Guideline amount cannot be determined until child support and s. 7 expenses are determined below. As also set out below I require further submissions from the parties to finalize the calculations.

Retroactive Spousal support

[85] I find that the spousal support is payable retroactively to the date of separation. Based on the parties’ incomes, and applying the high range of spousal support under the applicable Guidelines, this translates to monthly spousal support of: $27 in 2007; $303 in 2008; $222 in 2009; $27 in 2010; $384 in 2011; $351 in 2012; and $526 in 2013. The total annual support payable for each year is: $324 for 2007; $3,636 for 2008; $2664 for 2009; $324 for 2010; $4608 for 2011; $4212 for 2012; and $6312 for 2013. This amounts to a total of spousal support of $22,080.

[86] Court ordered support has been paid pursuant to a court order for spousal/child support. I require submissions from the parties as to what amounts have been paid for court ordered support, and what amount is to be credited to the support that I have determined?

[87] Kosa also claims a credit for payments he made on the house and cottage, which totals $79,794.

[88] I require the parties to return to court to make submissions on these credits in light of my findings regarding the funds taken from the joint line of credit below.

[89] Submissions are required to determine what responsibility Viji had regarding half of such expenses as mortgage; line of credit; household insurance; taxes and her responsibility toward utilities such as heat, hydro, water and phone.

[90] I also require submissions on the tax effect of retroactive spousal support, keeping in mind that a lumpsum retroactive payment would not be taxable to Viji nor deductible for Kosa and this could create an inequity for the parties

Life Insurance for Support

[91] Viji asks that any life insurance plan that Kosa maintains be arranged such that half the policy would be payable to her. Alternatively, Viji asks this court to order Kosa to obtain a life insurance plan of $250,000 to secure spousal support in the event of his death. Viji asks for proof annually that the policy is active and that she is a named beneficiary.

[92] Under s. 15.2(3) of the Divorce Act, the court is given broad discretion to impose terms, conditions, and restrictions in connection with a spousal support order. This discretion is understood to include the power to impose terms aimed at securing payment of a support order. Additionally, s.12 of the Federal Child Support Guidelines gives the court express authority to order a spouse to supply security with respect to a child support order. The court also has the power to order that support payments are binding on the payor’s estate, provided there is explicit language in the order to that effect (Katz v. Katz, 2014 ONCA 606 at paras. 71-72).

[93] In recognition of these principles, the Ontario Court of Appeal held in Katz v. Katz, 2014 ONCA 606, that a court is entitled to order a spouse to obtain insurance to secure payment of support orders under the Divorce Act that are made to be binding on the payor’s estate (para 73). In making such an order, the following applies where no existing policy is in place:

…where there is no existing policy in place, a court should proceed carefully in requiring a payor spouse to obtain insurance. This case demonstrates the desirability of having evidence of the payor's insurability and of the amount and cost of the available insurance. Careful consideration should be given to the amount of insurance that is appropriate. It should not exceed the total amount of support likely to be payable over the duration of the support award. Moreover, the required insurance should generally be somewhat less than the total support anticipated where the court determines that the recipient will be able to invest the proceeds of an insurance payout. Further, the amount of insurance to be maintained should decline over time as the total amount of support payable over the duration of the award diminishes. The obligation to maintain insurance should end when the support obligation ceases — and provision should be made to allow the payor spouse to deal with the policy at that time. Finally, when proceeding under the Divorce Act, the court should first order that the support obligation is binding on the payor's estate (para 74).

[94] I may consider an order that the support obligation is binding on Kosa’s estate in light of the fact that my order is for indefinite spousal support. This order must await the final calculations.

[95] I have no evidence regarding Kosa’s insurability and the cost and amount that would be appropriate. As such, I am not in a position to order life insurance be put into place.

Should Child Support be Terminated?

Sumathy

[96] In his written submissions, Kosa seeks to terminate child support for Sumathy, age 25, on the basis that she owns a property and has an income to qualify for a mortgage. The evidence, however, is that she has been a full time medical student. She was put on title for a property with her mother and is not self-supporting. I am satisfied that she remains in need of support as of the time of trial.

Roshaan

[97] In his written submissions Kosa also seeks to terminate child support for Roshaan, age 21, as he had an income of $28,000 for 2013. The evidence is that Roshaan was on a work term at the time, but he has now returned to full time studies.

[98] Both children were in full time studies as of the time of trial. Evidence may show that they are no longer in need of support in the near future, but, at this time, I am unable to consider termination of child support.

[99] In the circumstances, I find that both children are children of the marriage, as defined by s. 2(1) of the Divorce Act, and are therefore entitled to child support from Kosa.

What Child Support is Payable, Retroactively and On-Going?

Retroactive Support

[100] Kosa argued that there should be no retroactive child support payable as he had been paying more than his share of the household expenses. Child support, however, is payable in addition to any obligation for the maintenance of the matrimonial home. The evidence was that he drew funds on the joint line of credit against the house to pay those expenses, such that half of his payments were made using some of Viji’s funds.

[101] The child support obligation commenced as the date of separation. Viji submitted that Kosa has paid $56,440 in child and/or spousal support to the end of trial in June 2014, which is to be a credit to past support owed. Kosa did not state his position on these payments made.

[102] Kosa produced copies of a number of cheques which he gave directly to the children. Many of these cheques were close to the children’s birthdays and appear to be more in the nature of gifts rather than support payments. Kosa’s previous counsel says in correspondence dated January 7, 2010, “enclosed are cheques payable directly to the children to cover some of their activities.” Payments made directly to the children do not assist Viji, who was paying for their support and education expenses. I have determined that these cheques constitute gifts and not support payments. Therefore, they do not provide a credit to Kosa in this application.

[103] Based on the income I have found above, the Child Support Guidelines set the monthly support amount to be $887 in 2007; $649 in 2008; $579 in 2009; $442 in 2010; $480 in 2011; $474 in 2012; and $563 in 2013. This amounts to annual child support of: $10,644 in 2007; $7,788 in 2008; $6,948 in 2009; $5304 in 2010; $5760 in 2011; $5,688 in 2012; and $6,756 in 2013.

[104] In light of the s. 7 expenses below, I require submissions regarding how much child support is payable during the time that Sumathy was not resident with Viji.

[105] I require submissions on what monthly child support is payable in light of Sumathy not residing with Viji in the future.

[106] As noted above, I require submissions by the parties as to the amount of child support that has been paid and that is to stand as a credit to any arrears.

[107] I am unable to determine the support without these further submissions.

What Section 7 Expenses are payable?

[108] The total claim for past s. 7 expenses are $95,578.

[109] Viji acknowledges that a credit is owed to Kosa of $9,175, being half of the $15,000 and $3,350 that was taken, on consent, by way of an increase to their line of credit.

[110] Kosa was not prepared to accept the s. 7 expenses claimed by Viji, such that several days at trial were spent going over each expense and having it filed separately.

[111] Kosa conceded at the end of trial that the s. 7 expenses were valid - after each expense was submitted into evidence and testified upon by both Viji and Sumathy.

[112] Ultimately, he did not argue that any were unreasonable; just that one of the expenses, $350, had been paid by him.

Sumathy’s Expenses

[113] Viji testified, as did Sumathy, regarding the post-secondary education expenses for Sumathy. They amounted to $84,516, less the $350 optical claim that Kosa paid, for a total net claim of $84,166.

[114] Sumathy worked part time while she lived at home until commencing her medical degree studies. Her tax returns show income of $1,973 in 2007; $5,278 in 2008; and $0 in 2010.

[115] Kosa argued that Sumathy should have gotten a student loan and contributed to her education expenses.

[116] Sumathy was unable to work while residing and studying in Dominica. She was a full-time student and there were no semester breaks. She was prepared to get a student loan and pay it back on completion of her degree. However, Kosa was initially not cooperative. Two court orders were necessary to get him to attend at the bank. The loan was then refused as he gave his income as $30,000. I find Sumathy made efforts to get a loan but was not successful.

Roshaan’s Expenses

[117] Viji also testified as to the post-secondary education expenses of Roshaan, as well as his hockey expenses, which together amounted to $13,007. Viji deducted the OSAP of $1,595, for a net total amount of $11,412. This does not include expenses for the fall term for 2014. I did not hear any evidence with respect to those expenses.

[118] Roshaan worked part-time at Tim Horton’s and earned summer income through a co-op placement. In 2012, his income was $5,534.72. In 2013, he had a longer placement and earned $28,874.31.

[119] In light of Roshaan’s earnings, Viji proposes the s. 7 claim be reduced by 1/3 of the expense, which would be assumed by Roshaan. This would reduce Roshaan’s s. 7 expenses from $11,412 to $7,608. I consider this to be reasonable in light of his past earnings.

Reasonableness of the Expenses

[120] Kosa testified that he had wanted to sell the house to reserve funds early on for the children’s education, but Viji refused to allow this. I accept that, but for the separation and subsequent acrimony, Kosa had planned to financially support his children through post-secondary education.

[121] The case-law is clear that whether an adult child remains a “child of the marriage” while pursuing post-graduate studies must be considered on the facts of each case. In this case, Sumathy’s continued post-secondary medical education is oriented towards a clear and valid career goal. The fact that Kosa was also committed to supporting his children through post-secondary education supports a finding that Sumathy is still a “child of the marriage.”

[122] A similar conclusion was reached recently in the case of Herar v. Herar, 2012 BCSC 1257, where Baker J. held that adult children pursuing a medical degree were still considered children of the marriage, such that their parents would be required to contribute to their education expenses. In support of this conclusion, Baker J. observed that had the

“family unit remained intact, both parents would have happily supported their children’s career goals and would have continued to contribute financially to their post-secondary education and medical training” (para 65).

[123] I am satisfied that the same result applies here.

[124] The imputed income to each party is determined in this decision. The parties are to be responsible for their pro rata share of the s. 7 expenses. Kosa receives a credit on his share of $9,175. The expenses were not broken down with totals for each year.

[125] I require submissions from the parties as to s. 7 expenses that are to be calculated for each year according to the parties pro rata incomes.

[126] Viji argued that she should only be asked to pay 15 per cent of the s. 7s in light of her low income. However, this would be unreasonable in light of the imputed income levels I have found for each of the parties above.

What is the Date of Separation?

[127] A large amount of effort, court time, and evidence dealt with the circumstances of the separation, wherein Viji accused Kosa of having an affair with his office assistant, Ms. Fernando in June 2007. Kosa struck Viji on the face, which was witnessed by his two children. He then moved to the basement of the house.

[128] For reasons that follow, there is no difference in the determination of the equalization payment between the two dates. The parties disputed it, however, and, therefore, I must make a finding.

[129] Viji is adamant that Kosa moved out of the house on June 17, 2007, following the assault. Her evidence was that he made it clear then that the marriage was over.

[130] Kosa claims the separation date is July 18, 2007, when he moved out of the house without returning. He testified he had been living in the basement since the assault.

[131] In final submissions, Viji proposed using the mid-point of July 1, 2007, for the purposes of calculating retroactive child and spousal support. This was proposed for ease of calculation and as a compromise.

[132] I found Kosa’s evidence more persuasive in that he had to arrange new accommodation.

[133] I find the date of separation to be July 18, 2007.

What equalization payment is to be made?

Assets

Matrimonial Home Value

[134] The parties agree that the home had a gross value of $890,000 as of the date of separation. That value would be equally apportioned between Viji and Kosa, for a total of $445,000 each.

Household Goods Value

[135] Viji said she valued the two sofa sets and three bedroom sets that she kept at $800. Kosa valued them at $15,000.

[136] Viji gave no value to the sofa set that Kosa kept. Kosa valued it at $15,000. This appears high and may reflect his misunderstanding of how to complete the Form 13B, in that he valued his sofa set as equal to all the furniture that Viji kept from the house.

[137] Neither party produced any other supporting documentation. Out of a household of furniture, including bedroom suites, dining rooms suite, office furniture, and gym equipment, Kosa took only a sofa set and a television.

[138] I find that Viji has undervalued the entire household contents and that Kosa has overvalued the contents. It is reasonable to expect that the contents that Viji took had a value of $7,500, and that the contents that Kosa took had a value of $500.

[139] Neither party valued the pool table as of the date of separation. It was left with the house, based on the testimony of Viji. Kosa testified that he specifically left it and the lawnmower out of the agreement of purchase and sale. However, he appears not to have claimed the table or lawnmower when the house changed hands. Kosa and Viji did not communicate about what was to be done with these items, which he did not consider part of the sale.

[140] I consider the pool table, in these circumstances, to have no value. It was located in the basement of the house. Common sense says it may well have cost more to remove it than either party was willing to pay.

[141] There was also discussion regarding a riding lawnmower. This was left with the house.

Vehicles & Boat Value

[142] Kosa ultimately agreed with Viji that: his Lexus had a value of $4,000; his Dodge minivan had a value of $300; and his boat at the cottage had a value of $500. These were all in his possession.

Cash Owned by Viji at Separation Date

[143] Kosa argued that Viji had $15,000 in cash. Viji denies this.

[144] The evidence supports that she had no bank account and no credit card. There is no evidence to show how those funds were derived. The business allocated income to her, but she was not actually paid those amounts.

[145] Kosa argues that he found $11,200 in Viji’s possession in 2003. He believes that she obtained this by taking money from his wallet. He believes that the amount would have risen to $15,000 by the date of separation, four years later. He did not have any evidence that she had this cash at the date of separation.

[146] Kosa’s evidence was also that there were no significant cash sales. This contradicts his evidence that Viji was able to take large amounts of cash from his wallet.

[147] Viji was not cross-examined on whether she took cash regularly from his wallet. If she did take cash from his wallet as he alleges, that would be all she had to spend, so I find it unlikely that she could save it.

[148] I am not satisfied that Viji had $15,000 in cash at separation.

Jewellery Value at Separation Date

[149] Kosa admits to taking a box of jewellery from the house shortly after separation. Viji provided photographs of some of the jewellery and a hand drawing of the jewellery that was in the box that Kosa took. Kosa’s testimony was that he took the box from his home office so it would not be stolen. He said he did not return it for fear Viji would sell it “away from the children”. I find this supports that he realized it was valuable and not simply costume jewellery.

[150] Viji estimated the value of the jewellery at $50,000. Her counsel suggested $20,000 to $35,000.

[151] Kosa stated that all the jewellery was returned to Viji, and he argued that the value of returned jewellery was $4,000. Viji was to have it independently valued, but there was no evidence of this being done.

[152] Kosa also states that the missing jewellery referred to in the photographs was rented or only costume jewellery for special ceremonies. Viji and Sumathy deny this. Kosa put into evidence decorative jewellery comparisons at modest prices, which looked similar to those in the photographs filed by Viji.

[153] Kosa testified that he no longer has the jewellery that was jointly owned in the marriage.

[154] Viji and Sumathy gave detailed descriptions, drawings, and lists of jewellery that was not returned. Much of it was described as gold. I am persuaded that they knew the details of the items missing, and that Kosa has not returned all the jewellery.

[155] Viji did not value the items returned to her as agreed. Kosa had stated that what he returned to her was valued at $4,000. Kosa, in his actions, was dividing all their property. I find he kept in possession jewellery of equal value. I, therefore, conclude that the missing jewellery had a similar value to what had been returned to Viji.

[156] I find that each party owned $4,000 of jewellery.

RRSP Value

[157] Ultimately, Kosa accepted the RRSP values of $42,767.66 for each of them to be correct.

Value of Life Insurance Policy at Separation Date

[158] The parties agreed it was $9,500.

Value of Two Corporations at Separation Date

[159] The parties were joint owners of Laser Choices and a shell company called Canadian Business Products. The experts for both parties found there was no value to the assets of the two corporations. Canadian Business Products is not active.

[160] Mr. Figov, on behalf of Viji, testified that, if the right buyer was found, either as a competitor or someone who wanted to buy the businesses that would provide a steady income, there might be value to the businesses. Viji’s counsel suggested the value would be one year’s income, after accounting for income-splitting and tax benefits.

[161] This is highly speculative in light of the financial statements showing extremely high liabilities compared to assets. The current assets of the business when compared to the current liabilities demonstrate a company that cannot meet its day-to-day liabilities. This concern is underscored by the fact that the majority of the current assets are accounts receivable - which may not be realizable.

[162] The income statement demonstrated a lack of cash-flow being generated from the business, especially when one takes into consideration the cost of rent and salaries compared to the gross margin generated by the company. The inability of the company to generate net income would impede any ability for the company to pay off its overdraft liability to the bank or be profitable as a going concern.

[163] I, therefore, find that the business has no value except for debts set out below.

Cottage Separation Date Value

[164] Viji relies on the cottage value prepared by Kosa’s real estate agent, which was $280,000. Kosa prefers $249,000, which was the value of the property when Viji sold her half interest to him.

[165] As with the matrimonial home, it ultimately did not sell for what the real estate agent had hoped. It was Viji who requested the cottage price be reduced in light of it not selling at the higher listing.

[166] I find the appropriate value of the cottage is the sale price of $249,000.

Value of Aeroplan Points at Date of Separation

[167] Kosa had a personal credit card. He used this personal credit card for business purchases. Aeroplan points were earned on that card as a result. As noted above, Kosa testified that he used those points in the business for business travel and for clients.

[168] I find that the points were earned largely on business purchases and used in business promotion.

[169] I was not provided any evidence of how to value the points that were available at the date of separation.

[170] As I had no evidence of value, I am unable to include the Aeroplan points in the list of assets.

Debts

Matrimonial Home Debts

[171] The house mortgage was $230,000, which was paid out on closing. The real estate commission on closing was $32,052.52. Legal fees were $682.50. Property taxes were $5,572. These amounts were not disputed by the parties and are equally shared.

Sale Expenses of the Cottage

[172] The parties paid real estate commission on the cottage of $14,068.50 and legal expenses of $800.

[173] Viji disagrees with the amount of the real estate commission paid. She argues that a commission of 2.5 per cent of the sale value was agreed upon, and that this totalled $7,034, which was to be a shared expense.

[174] Correspondence from Century 21 confirms that the commission was $12,450 less the deposit of $5,000, which is a net of $7,450. They also state that there is tax of $1,618.50 owing, such that the balance to be paid is $9,068.50.

[175] Viji signed the agreement to sell the property and pay half the real estate commission, subject to adjustments. I find that the tax is such an adjustment.

[176] In light of the Century 21 confirmation I do not accept her argument that she was overcharged on the commission.

Line of Credit Debt

[177] The Home Equity Line of Credit from the Toronto Dominion Bank at the valuation date was $52,694.26.

[178] After separation, Kosa took $170,000 from the Line of Credit. This is dealt with below.

Kosa’s CIBC Visa Card

[179] Kosa testified about his Visa card but did not enter it properly on his NFP statement. His CIBC Aerogold Visa card was $33,049 at separation. It was used for some personal items in the marriage, as can be seen by a review of the charges before separation. It was also used in the business.

[180] Viji entered this debt as zero and described it as a business debt. The reality is that it was a personal credit card for which Kosa was personally liable. It must be reflected in his NFP for the purposes of equalization.

Debt owed to Francis Santhirakumar

[181] Viji testified that she and Kosa owed $50,000 to her brother, Francis. Her evidence was that Francis worked in the business and allowed half his pay-cheque to be withheld as a forced savings plan. She advised that Francis also gave them cash for the same reason.

[182] Kosa agreed that they held savings from pay-cheques for his brother-in-law but denied any cash amounts. The business records show that $15,346.32 is still owing to Francis on this forced savings plan.

[183] Both parties treated this as a personal loan and so have I.

[184] Viji’s evidence is that she paid the $50,000 debt out to Francis on the sale of the cottage. She presented evidence of a bank record showing a payment to Francis of $50,000, although she said she then had to borrow it all back.

[185] Francis himself had no paperwork. He could not explain how he could have saved as much as $50,000 from the modest job he held at the business. He was vague about when and what payments had been made. He testified that Viji had paid him $50,000, borrowed it back, repaid $30,000, and still owed him $20,000.

[186] I prefer the detailed record from the business that Kosa has produced on this issue, rather than the vague evidence given by Viji and Francis - which had no documentation apart from one payment by Viji to Francis.

[187] I find that the parties owed Francis $15,346 at separation. I allocate $7,673 to each party. As Viji has shown evidence that she paid out that debt on behalf of both of them, I allocate $15,346 to her and zero to Kosa.

Debt owed to Viji’s mother at Separation date

[188] The parties agree that $1,500 was owed at separation to Viji’s mother. Viji testified that she repaid the debt for both of them. There is no documentation of this repayment. Her mother did not testify. Kosa confirmed that he did not pay his share of the debt. Kosa did not dispute that Viji repaid her mother.

[189] I would allocate $750 to each party. As Viji has paid out that debt on behalf of them both, I allocate $1,500 as owed by her and zero by Kosa.

Bank Guarantee CIBC business overdraft

[190] Kosa claims debts on his NFP statement. He did not advise from where he derived his number. He did not break it down or identify the debts despite my requests for him to do so.

[191] He did, however, testify to a personal guarantee to CIBC business overdraft. Viji also acknowledged this personal guarantee to CIBC.

[192] Viji, although an equal shareholder of the business and personally liable on the debt, acknowledged in her evidence that this was owed but did not include it on her NFP. Viji argued that the business Line of Credit is a debt only of the business and goes to the value of the business. She argues it is not considered in equalization, as it is not a personal debt, despite being personally guaranteed by the parties.

[193] Viji, however, acknowledged that the cottage, a personal asset, was purchased in 2003 without a mortgage by funds paid by the business through business debt.

[194] In these circumstances, I find the personal guarantee must be included for each of them.

[195] In evidence, the CIBC Operating Line statement ending June 30, 2007, had a closing balance of $73,722. That is the closest bank statement to the date of separation.

Notional Taxes on RRSPs

[196] This amount is agreed to be 25 per cent or $10,691.91 for each party.

Summary of NFP Findings

Should an unequal division be made?

[198] Viji seeks an unequal division of property and relies on Merklinger v. Merklinger, 1992 CanLII 7539 (ON SC), 11 O.R. (3d) 233, [1992] O.J. No. 2201 (appeal dismissed on November 20, 1996. See 1996 CanLII 642 (ON CA), 30 O.R. (3d) 575) to say that post-separation actions taken by the husband to deprive the wife of a proper equalization claim can justify an unequal division.

[199] Section 5(6) of the Family Law Act provides that a court may award a spouse an amount that is more or less than half the difference between the net family properties if the court is of the opinion that equalizing the net family properties would be unconscionable, having regard to, a number of factors including (h) any other circumstance relating to the acquisition, disposition, preservation, maintenance, or improvement of property.

[200] Viji is seeking a finding that Kosa’s behaviour was unconscionable.

[201] Viji argues that an unequal division of the equalization should be made for a number of reasons.

[202] The reason most emphasized was the $170,000 taken by Kosa from the line of credit on the house within two months after the separation.

Increased Line of Credit by $170,000

[203] At the date of separation, being July 18, 2007, the evidence is that the joint Line of Credit, secured against the house, was at $52,694. The maximum allowed was $233,000.

[204] Without notice to Viji, Kosa withdrew $100,006.50 in early August 2007, and a further $70,006.50 in early September 2007, from the joint line of credit. These two withdrawals pushed the line of credit to $232,183.85 - just under the maximum allowed. When the house was sold, the line of credit was paid out equally by the parties.

[205] With respect to the first withdrawal of approximately $100,000, Kosa explained that the business operating line of credit with CIBC as of August 3, 2007, had risen to $90,452. He testified that he was worried the loan would go into default. Kosa explained that he took the $100,000 from the house line of credit to pay to Laser Choices. The evidence supports that this is where he placed the funds.

[206] Kosa produced evidence that it was the business that paid for the cottage purchase. As these funds were taken from the business line of credit, which was personally guaranteed, he thought it appropriate to repay the business from the equity in their personal home.

[207] Above, I found that, as of the separation date, the business line of credit was $73,722 and it was a liability for both parties. Kosa took $100,000 on the line of credit against the matrimonial home and paid out the business line of credit. It was appropriate action to the extent of the $73,722 debt. He paid off one joint debt by increasing another joint debt.

[208] I find no issue with that, apart from his failure to communicate this to Viji at the time. He was, however, under arrest for the assault charges as of August 2007 and was thereafter prohibited from communicating with her.

[209] Kosa did, however, take an extra $26,278 from the line of credit, for a total of $100,000. Only half of that $26,278 was his to take from the equity of the matrimonial home. He therefore owes Viji a credit of $13,139.

[210] Kosa testified that the $70,000 withdrawn in September 2007 was to pay expenses on the matrimonial home. There is evidence of payments that he continued to make on the line of credit over the next year and evidence of payments on joint expenses for the house. His evidence is that the payments exceeded the $70,000 he withdrew.

[211] He used these joint funds to pay joint expenses. I am satisfied that this was proper and cannot be considered unconscionable in a claim for unequal division of assets.

[212] The complication is that, as noted above, he seeks to also claim a deduction of those payments against support.

[213] I, therefore, require submissions of the parties as to whether Kosa can credit the joint expenses he paid on the house and cottage but also deny that he owes half of the line of credit of $35,000 back to Viji.

[214] After separation, Viji removed $2,847 from the line of credit. Half of that amount is properly owed to Kosa. I, therefore, find that Viji owes $1,423.50 to Kosa.

[215] In light of Kosa’s behaviour in removing these funds without her knowledge or consent, Viji submits that it is reasonable to make an unequal division of assets and to allocate to her a further $15,000.

[216] Viji relies on Tamitegama v. Tamitegama [1993] O.J. No. 803 (Ont. Gen. Div.), where an unequal division was made in favour of the spouse to rectify post-separation action. The spouse removed funds from a joint line of credit without the knowledge or consent of the other spouse, who received no benefit from that activity other than to inherit a joint liability for it.

[217] Viji argues that Kosa’s behaviour was unconscionable because he did this when she was home with two children, no job, no bank account, and facing only uncertainty in her future. Child support was also not being paid at this time.

[218] However, the evidence shows that he provided groceries, and used most of the funds to clear their joint business debt and to pay joint expenses of the matrimonial home and cottage.

[219] I am, therefore, not satisfied that his behaviour was unconscionable.

Increased Interest Payable on the Line of Credit

[220] As noted above, Kosa owes Viji $13,139 less a credit of $1,423.50 in respect of joint funds withdrawn from the line of credit after separation. The net amount owing by Kosa to Viji in respect of the line of credit is $11,715.50.

[221] Viji claims six per cent interest per annum charged on the net amount owing by Kosa for the two years in between the date of separation and the date the house was sold. That would amount to $702.93 each year for a total of $1,405.86.

[222] The evidence shows, however, that Kosa was making regular payments to the line of credit during that timeframe, which would negate the claim for interest. I, therefore, deny Viji’s claim for interest.

Delays in Selling Property

[223] Viji also argues for unequal division on the basis that Kosa refused to list the cottage for sale and then interfered with the sale. Her evidence was that Kosa left the property in disrepair and unclean, such that it did not market well. Photographs of the cottage showed that it required a great deal of work and would not necessarily “show” well. I am not satisfied on a balance of probabilities that Kosa’s behaviour caused the property not to sell on the open market.

[224] Kosa countered with Viji’s delay in selling the matrimonial home, wherein he ultimately had to seek a court order for same as she would not agree to the realtor he suggested. Initially it had been hoped that the home would sell for $1,100,000 but ultimately it sold for less. He suggests that the decrease in value was due to her delay.

[225] On balance, I find that neither can be held accountable for the fluctuating real estate market. I am not prepared to base a claim for unequal division on this evidence.

Mortgage payments

[226] Kosa was to pay the mortgage, but, on three occasions, payments were not made and they were instead taken by the Bank from Viji’s bank account. Overall, she had to pay $3,182.50 for the mortgage. Because, at the time, Viji had limited funds, this caused her financial hardship.

[227] Missing three mortgage payments does not meet the criteria for unconscionable behaviour and I am not prepared to make an unequal division on that basis.

[228] In addition, Viji was required to pay interest on the funds, and, as such, she claims a total amount of $5,200 as an adjustment on equalization.

[229] As noted above, I require submissions from the parties as to what credits can be made and also what responsibility Viji has for the mortgage payments.

Should there be an adjustment for Cottage Expenses?

[230] Court orders were required to allow Viji and the children to use the cottage.

[231] Kosa’s consent was required to release funds from the house line of credit. However, Viji says that Kosa insisted that any release of funds include payments for all the expenses of the cottage. Viji also claims that the cottage was used almost exclusively by Kosa. Therefore, she argues that she was in essence subsidizing his almost exclusive use of the family cottage through the increase in the line of credit, which reduced the equity in the home when it was sold. Viji seeks an adjustment of $8,000 as compensation for this.

[232] Kosa denies that he had exclusive use of the cottage, as Viji had equal time sharing.

[233] The evidence does not support that Kosa had exclusive use of the cottage. There were lawyers’ letters confirming the sharing times and court orders confirming sharing times. I will, therefore, not give effect to this argument.

Lack of Communication

[234] Viji argued that Kosa deliberately refused to provide adequate disclosure, which caused delay and increased costs. She claims that the long delay caused her stress, for which she claims damages. Further, Viji asserts that the delay in providing disclosure unnecessarily depleted the equity in the matrimonial home and prevented an adjustment to support. On this basis, she argues that an unequal division of assets be made in her favour in the amount of $15,000.

[235] What we have here is a failure to communicate.

[236] Early correspondence by counsel for both parties show efforts by each to move things forward regarding disclosure, sale of the properties, and disclosure of Sumathy’s education program.

[237] The litigation stalled when the joint accounting report did not get completed for three years, ultimately requiring both parties to obtain their own expert accountants.

[238] Kosa did not receive tax returns for the children and for Viji until trial. He rarely got children’s report cards; and he did not have details of Sumathy’s medical education in the Caribbean.

[239] Viji argues that there were long delays in disclosure of productions from Kosa. However, there is correspondence from Kosa’s counsel producing large amounts of documents. Viji further argues that the CIBC Visa account statements were slow in being produced, and were needed to show the personal expenses that were put through the business. However, Kosa’s counsel, early on, advised that the accountant retained by Viji’s counsel could attend to see any of the books. There was, in fact, evidence of such offers by Kosa’s counsel to attend at the business and review the books; there was also plenty of productions, which were followed by further requests for documents.

[240] Kosa also asked for documents from Viji that were slow in being produced.

[241] Viji was to value the jewellery. Kosa was to value the Aero-plan points. Each failed to do so.

[242] The evidence on this point does not support an unequal division being made in Viji’s favour.

Other Issues

Should There be a Finding of Contempt as Against Kosa?

[243] Viji argues for a finding of contempt against Kosa. She argues that he flouted court orders and caused unnecessary adjournments and delay.

[244] By the consent order of Mossip J. on July 18, 2008, Kosa was to make air miles available for Sumathy to fly to Dominica for school. This did not happen. Kosa showed some of his efforts to comply, but he and Sumathy were not communicating. She did not respond to his inquiry. He could not locate flights that flew directly to Dominica. Essentially, he appears to have given up trying.

[245] Kosa gave as an explanation for his failure to comply that there were no flights to that destination, and that he was unable to communicate directly with Sumathy to discuss flights. Kosa’s email to Sumathy, dated November 1, 2010, is evidence of his difficulty relaying what flights were available on Aero-plan points, and of his communicating through lawyers and through Viji to get the information to Sumathy.

[246] Kosa says he complied and made points available. Kosa points to Sumathy never contacting him to get the tickets issued. I do not find that he flouted the court order.

[247] Kosa was also ordered to provide a breakdown of the use of the Aero-plan points.

[248] Kosa’s counsel wrote to Viji’s counsel on January 7, 2010, saying that he made inquiries pursuant to a court order and that the Aero-plan points were simply not available.

[249] Kosa was ordered to cooperate with the sale of the cottage property. Viji accused him of hiding the “For Sale” sign. He denied doing so. He explained that the sign was posted on a right of way and an angry neighbour moved it. I am not satisfied that he attempted to thwart the sale.

[250] On these facts, there is no proof of contempt beyond a reasonable doubt. A review of the endorsements show a number of consent orders to satisfy each parties’ requests; a number of argued motions where there was mixed success; and the usual conferences where both parties participated and agreed to orders. The record does not show one party or the other simply flouting court orders and causing unnecessary adjournments or delay. The case for contempt is, therefore, not made out.

Should Viji’s Shares in the Corporation to be transferred to Kosa?

[251] Viji has agreed that her shares in both corporations would be transferred to Kosa after the equalization payment has been made. Viji asks that this be done at Kosa’s expense and that Kosa provide an indemnity to her for any liabilities of the corporation from the date of separation.

[252] Kosa argues that Viji should be ordered to transfer to him the shares without an indemnity.

[253] No argument or evidence was presented on this issue at trial.

[254] I anticipate that there will be no transfer of shares if Kosa does not provide Viji with an indemnity. That will have to be the subject of further civil litigation. I can make no order in this regard.

Should Kosa Pay a Penalty for the Lawnmower Purchase?

[255] The property at the matrimonial home was large. Kosa argued that, when he was arrested in August 2011, Viji stopped the landscapers cutting the grass. He argued that Viji bought the lawnmower without any prior request from him to have the grass cut. Viji testified that Kosa stopped the landscapers.

[256] To maintain the property after separation, initially Kosa paid someone to cut the grass. He later discontinued doing so. The property was more than an acre in size. Viji had purchased a riding lawnmower for $1,500 on a deferred payment plan.

[257] Ultimately, a court order required Kosa to contribute to the lawnmower, but the delay was such that there was an interest penalty of $459. The lawnmower and the penalty were paid out of the proceeds of sale of the matrimonial home. Viji argues that Kosa should be responsible for the full amount of $1,959 as an adjustment to equalization.

[258] The mower was a joint expense; funding it was expensive. The amount of $1,500 is to be shared equally. The penalty of $459 is an adjustment owed by Kosa due to his delay in sharing this equal expense.

May Kosa Obtain Proof of Payment to the Accountant?

[259] The parties agreed to do a joint income and business valuation. Through no fault of the parties, those reports were not finalized by the accounting firm. Both parties had to obtain their own reports in 2013. This appears to be the primary problem that has led to delay in being able to resolve many of the issues.

[260] Kosa notes that $10,000 was received by Viji’s counsel to do the company valuation. He has requested proof that the $10,000 was paid to Kanagaratnam Accountants or a trust ledger demonstrating the same.

[261] He is entitled to this being provided by Viji’s counsel. I cannot make an order against a non-party. Kosa may seek his remedy directly against counsel or through the Law Society of Upper Canada. I encourage counsel to provide the record as early as possible.

What Damages are Payable for an Abusive Relationship?

[262] The evidence is that Kosa was found guilty of assault on Viji in criminal court. He was given a conditional discharge.

[263] Roshaan testified at the criminal court hearing on February 3, 2009. He said that his father made a “quick punch” on Viji’s chin and lower cheek. He said it left a purple mark for about three weeks, but she had no treatment.

[264] Sumathy said the cheek was purple, but her mother did not go to the doctor.

[265] On this issue, Kosa testified that Viji “pinches.” In response to her pinching, he testified that “my hand reached…”.

[266] In this family trial, Viji suggested there was a history of violence by Kosa, but gave no details of this. Sumathy did not provide evidence of other assaults. She recalls her parents arguing and her father being hostile, but does not recall incidents of physical or mental abuse.

[267] Kosa testified that, years before, the police were called when Viji was violent.

[268] Viji claims $20,000 damages for the pain, humiliation, and emotional harm she had to undergo.

[269] While it appears this may have been a tumultuous relationship, there is simply insufficient evidence of an abusive relationship to support an award for general damages.

[270] The evidence of the assault in June 2007 is clearer. It was, however, a minor injury requiring no medical treatment other than ice. An appropriate damage amount is a nominal amount of $500.

Should the Cottage be Listed for Sale with Viji’s choice of Real Estate Agent?

[271] In light of Kosa owing funds taken from the line of credit, and potential support arrears, Viji is concerned that there will be no assets to satisfy these awards. She, therefore, seeks an order that the cottage be listed for sale.

[272] The cottage was transferred into Ms. Fernando’s and Kosa’s name on January 7, 2011, – the same date that Viji’s name was removed.

[273] There is a new line of credit against the cottage with two payments to Ms. Fernando’s family, which Kosa claims were made in case the business failed and the bank came after him for the money owed on the business line of credit. Viji argues that these payments were really made to deplete the value of the cottage in the event that the court orders the cottage to be sold to satisfy her equalization and support claims.

[274] Viji argues that this court should order that the cottage be listed for sale so that funds can be used to satisfy the amounts ordered. She claims that these monies should be paid out of both Kosa and Ms. Fernando’s share of the sale proceeds, in light of the payments made to Ms. Fernando from the line of credit secured against the cottage.

[275] Viji expects she will not receive cooperation from Kosa or Ms. Fernando with respect to the sale of the cottage. She, therefore, requests that the order stipulate that the sale is to be handled by Viji’s choice of real estate agent.

[276] At the beginning of trial, the court informed Viji that orders affecting Ms. Fernando’s interest cannot be made in this proceeding because Ms. Fernando has not been made a party in this action. Viji did not, thereafter, seek to make Ms. Fernando a party.

[277] Therefore, I cannot make an order for the sale of the cottage.

Should Kosa’s interest in the cottage be transferred to Viji?

[278] In the alternative, Viji argues that an order should be made for the immediate transfer of Kosa’s interest in the cottage to her. Viji seeks this order without his consent or signature, as he is unlikely to willingly sell the cottage to satisfy any order of the court.

[279] Similarly, Ms. Fernando would be affected by such an order and has not been made a party.

[280] I am unable to grant this relief on that basis.

[281] Kosa valued the cottage at $287,000 as of August 27, 2013, on the basis that he had put $50,000 worth of work into it.

[282] I acknowledge that this cottage may be the only asset on which Viji can realize funds owing to her.

[283] Section 9(1) of the Family Law Act authorizes the court to make various orders in respect of an equalization claim. It provides that the court may order:

(a) that one spouse pay to the other spouse the amount to which the court finds that spouse to be entitled under this Part;

(b) that security, including a charge on property, be given for the performance of an obligation imposed by the order;

(c) that, if necessary to avoid hardship, an amount referred to in clause (a) be paid in instalments during a period not exceeding ten years or that payment of all or part of the amount be delayed for a period not exceeding ten years; and

(d) that, if appropriate to satisfy an obligation imposed by the order,

(i) property be transferred to or in trust for or vested in a spouse, whether absolutely, for life or for a term of years, or

(ii) any property be partitioned or sold. R.S.O. 1990, c. F.3, s. 9 (1); 2009, c. 11, s. 25.

[284] I could consider that Kosa’s obligation to Viji could be secured by ordering a charge on the cottage property for any arrears or payments owing. However, without the submissions of the parties, as noted, I am unable to determine what arrears or payments are owing at this time.

[285] Section 15.2(1) of the Divorce Act grants a court the power to make an order requiring a spouse to secure and/or pay spousal support as the court thinks reasonable. Section 12 of the Child Support Guidelines grants a court the power to require that a child support order be paid or secured in a manner specified in the order.

[286] I, therefore, may order that Kosa’s child and spousal support arrears be secured with a charging order on Kosa’s interest in the cottage once there is a determination of what the arrears are.

[287] Kosa argues that the court should make a final decision and not allow further claims against him or Ms. Fernando and their assets. This court does not have the authority to order that no further claims be brought against Kosa or Ms. Fernando.

Conclusion

[288] In summary, I have found as follows.

[289] The date of separation is July 18, 2007.

[290] Kosa’s income for support purposes is $58,991 for 2007; $42,872 for 2008; $38,740 for 2009; $29,900 for 2010; $32,500 for 2011; $32,500 for 2012, $39,000 for 2013; and $39,000 going forward.

[291] Retroactive child support is payable from the date of separation based on Kosa’s income set out above.

[292] Kosa is to receive credit for any payments made to date for child support.

[293] The s. 7 expenses shall be shared on a pro-rata basis according to the parties’ income. The s. 7 expenses are $84,166 for Sumathy and $7,608 for Roshaan. Kosa is to receive a credit on his share of $9,175.

[294] For as long as child support is to be paid, the payor and recipient, if applicable, must provide updated income disclosure to the other party each year, within 30 days of the anniversary of this order, in accordance with s. 24.1 of the Child Support Guidelines.

[295] I find that Viji is entitled to the high range of spousal support for an indefinite period. I impute income to her of $12,000 as of 2008 and on-going. I order spousal support retroactive to the date of separation less credits to be determined.

[296] Viji owes an equalization payment to Kosa of $4,451.50.

[297] Kosa owes Viji $13,139 on the line of credit.

[298] Viji owes Kosa $1,423.50 on the line of credit.

[299] Kosa owes Viji $459 for the lawnmower expense penalty.

[300] I order Kosa to pay damages for the assault on Viji of $500.

Return Date for Further Submissions

[301] I require the parties to file submissions and make an appointment with the Trial Coordinator’s Office to appear before me to speak to the following issues:

a. What amounts have been paid for court ordered child and spousal support, to be credited to the support that I have determined?

b. What amount if any should be credited to Kosa’s child and spousal support arrears as a result of payments he made on the house and cottage expenses, in light of my findings regarding the funds taken from the joint line of credit above?

c. What responsibility did Viji have regarding half of such expenses as mortgage; line of credit; household insurance; taxes and what responsibility did she have toward utilities such as heat, hydro, water and phone?

d. How much child support is payable during the time that Sumathy was not resident with Viji?

e. What monthly child support is payable in light of Sumathy not residing with Viji?

f. What is the tax effect, if any, of retroactive spousal support, keeping in mind that a lump sum retroactive payment would not be taxable to Viji or deductible for Kosa?

g. What are the s. 7 expenses for each year from 2007 to 2013, and what are the total s. 7 expenses owing to date?

h. Whether Kosa can credit the joint expenses he paid on the house and cottage but also deny that he owes half of the line of credit of $35,000 back to Viji?

i. Are there any arithmetical errors in the calculations of these findings?

[302] Viji is to serve and file her submissions 21 days in advance of the hearing date. Kosa is to file reply submissions 14 days before the hearing date. If any responding materials are to be submitted by Viji, they are to be filed 7 days before the hearing.

[303] Such written submissions are to be forwarded to me at my chambers in Brampton; 7755 Hurontario Street.

M. J. Donohue, J.

Released: February 24, 2015

CITATION: Sooriyanarayana v. Sooriyanarayana, 2015 ONSC 1184

COURT FILE NO.: FS-08-1940-00

DATE: 2015-02-24

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Vijayakumary Sooriyanarayana

Kim Larson, for the Applicant

and –

Kosalaram Sooriyanarayana

Self-Represented, Respondent

REASONS FOR JUDGMENT

M. J. Donohue, J.

Released: February 24, 2015

Sooriyanarayana v. Sooriyanarayana, 2015 ONSC 1184

REASONS FOR JUDGMENT

Background

Issues

What is Kosa’s Income?

Expert Evidence on Kosa’s Income

i. Figov’s Report

ii. Mr. Feldman’s Report

What Spousal Support is payable?

Viji’s Work History

Viji’s New Spousal Relationship

Care for Viji’s Mother and Rental Income

Viji`s employment and financial situation

Analysis of Spousal Support

Retroactive Spousal support

Life Insurance for Support

Should Child Support be Terminated?

Sumathy

Roshaan

What Child Support is Payable, Retroactively and On-Going?

Retroactive Support

What Section 7 Expenses are payable?

Sumathy’s Expenses

Roshaan’s Expenses

Reasonableness of the Expenses

What is the Date of Separation?

What equalization payment is to be made?

Assets

Matrimonial Home Value

Household Goods Value

Vehicles & Boat Value

Cash Owned by Viji at Separation Date

Jewellery Value at Separation Date

RRSP Value

Value of Life Insurance Policy at Separation Date

Value of Two Corporations at Separation Date

Cottage Separation Date Value

Value of Aeroplan Points at Date of Separation

Debts

Matrimonial Home Debts

Sale Expenses of the Cottage

Line of Credit Debt

Kosa’s CIBC Visa Card

Debt owed to Francis Santhirakumar

Debt owed to Viji’s mother at Separation date

Bank Guarantee CIBC business overdraft

Notional Taxes on RRSPs

Summary of NFP Findings

Should an unequal division be made?

Increased Line of Credit by $170,000

Increased Interest Payable on the Line of Credit

Delays in Selling Property

Mortgage payments

Should there be an adjustment for Cottage Expenses?

Lack of Communication

Other Issues

Should There be a Finding of Contempt as Against Kosa?

Should Viji’s Shares in the Corporation to be transferred to Kosa?

Should Kosa Pay a Penalty for the Lawnmower Purchase?

May Kosa Obtain Proof of Payment to the Accountant?

What Damages are Payable for an Abusive Relationship?

Should the Cottage be Listed for Sale with Viji’s choice of Real Estate Agent?

Should Kosa’s interest in the cottage be transferred to Viji?

Conclusion

Return Date for Further Submissions

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Expert Witnesses

Financial Outcomes

Issues

Statutory Provisions 7

Legal Tests 1

Legislation 3