SUPERIOR COURT OF JUSTICE
CITATION: Belli v. Belli, 2015 ONSC 44
COURT FILE NO.: D24004/13
DATE: 2015/01/05
ONTARIO
B E T W E E N:
Maria Grazia Belli
M. Kenneth Douglas, for the Applicant
Applicant
- and -
Joseph Belli
Patricia Lucas, for the Respondent
Respondent
HEARD at Welland, Ontario:
October 6, 7, 8, 9, 10 & 23, 2014
November 25, 26, 27 & 28, 2014
The Honourable Justice C. A. Tucker
JUDGMENT
Issues
[1] The issues are:
(I) Should the respondent enjoy increased access to Matteo during the school week?
(II) What are the parties’ respective entitlements to the proceeds of the matrimonial home?
(III) What is the respondent’s income for child support purposes?
(IV) Is the applicant liable to the respondent for the operating costs of the matrimonial home from the date of separation to date of sale?
(V) Is the respondent liable to the applicant for occupation rent?
[2] The following orders were made on consent and with the approval of the court:
The parties shall be divorced, such divorce to take effect 30 days from the release of this decision.
Final order to go in accordance with the Minutes of Settlement attached to this decision as Schedule “A”.
The respondent shall not smoke in the presence of his son at any time.
The applicant shall reimburse the respondent the cost of four months of car insurance in the amount of $131.00 per month for a total of $524.00.
The applicant shall pay property tax and interest in the amount of $1,758.00 to the respondent for the time she occupied the matrimonial home in 2011.
Overview
[3] Mr. and Mrs. Belli were married in Niagara Falls on October 19, 2002. The parties separated in July 2005 but reconciled and resumed their relationship in January 2006. Their only child, Matteo Joseph Belli, was born on July 5, 2007. The parties separated again in April 2011 but continued to live together until the applicant moved out of the matrimonial home on June 5, 2011.
[4] At the date of marriage Mr. Belli owned a property which became their matrimonial home. The house was located at 8191 Mount Carmel Boulevard, Niagara Falls (“Mount Carmel”). After the first separation Mr. Belli commenced a family law proceeding which was resolved by Minutes of Settlement and a marriage contract, the latter of which was executed in March 2006. The marriage contract provided that among other things each of the parties were entitled to retain what was defined as “settled property”. Part of the contemplation of the contract was that the Mount Carmel property would be sold March 7, 2006 and a new residence purchased at or about the same time. In actual fact the new home purchase closed prior to the sale of the old home and as a result the transaction was completed with bridge financing. It became clear during the trial that Mr. Belli received some $9,000 from the proceeds of the sale of the Mount Carmel home for which he can no longer account and of which Mrs. Belli was unaware until the trial.
[5] The central issue in the trial relates to the division of the proceeds of the new matrimonial home located at 8170 Costabile Drive, Niagara Falls (“Costabile”). Although Mrs. Belli had urged the sale of this property immediately upon separation, it required a court order to have the property listed in the summer of 2014 and another order to have an agreement of sale executed with the property finally closing in late fall of 2014, just prior to the completion of evidence in the trial. The net sale proceeds after payment of closing costs are held in trust pending my decision.
[6] The issue centres in the interpretation of the marriage contract, specifically paragraph 7(b) which reads as follows:
“For further certainty, Maria and Joseph will be using the monies they are receiving from the sale of the Family Residence (Maria $80,000.00, Joseph approximately $130,000.00) to purchase the new Family Residence at 8170 Costabile Drive, Niagara Falls, Ontario. Although this residence will be owed (sic) jointly, on a breakdown of the marriage except for death, each of them will receive the amount that they have invested in this residence and any replacement residence. Any increase in the equity beyond these amounts will be shared equally.”
[7] Unfortunately, on the sale of Costabile the total proceeds received were approximately $134,000.00 while the contract contemplated proceeds of at least $210,000.00. As a result of the shortfall, various interpretations have been put upon the marriage contract which I will summarize as follows:
(I) It was always intended that Maria receive $80,000 from the proceeds and any balance would go to Joseph; or
(II) Since the parties were both wrong about the expected proceeds, a mutual mistake occurred and the contract is unenforceable. Accordingly, the parties would each take half the proceeds. The property was a matrimonial home and prima facie each would be entitled to 50% of the proceeds; or
(III) The unequal contribution and division was entered into to reflect and repay Joseph for his $50,000 payment for the lot for their first matrimonial home and that the parties’ shares in the actual proceeds from the second home should be reduced proportionately based upon the same percentage as in the original agreement, which would result in Maria receiving 38% and Joseph 62% of the actual proceeds; or
(IV) That arguably Joseph must have contributed more to the purchase of Costabile Drive, being $148,000, which is the rationale for him receiving the balance of the proceeds being “approximately $130,000” and as such should receive a greater percentage of the proceeds estimated to be 35% for Maria and 65% for Joseph. The amount required to close, he asserts, was $148,000 and not $130,000. I note “arguably” because it is difficult, if not impossible, to find that such a contribution was actually made by Joseph or that it came from “his” funds. I note that Joseph already received approximately $9,000 from the sale of Mount Carmel.
There is no case law presented to assist the court in making this determination.
[8] Attempts were made during the course of the evidence to discredit the other party. Maria was portrayed as altering bank documents which she admitted she did. I find she was stalemated in her attempt to purchase a new home by the actions of Joseph, which did not justify her action but explained it. She also acknowledged that for financial reasons she had withdrawn the funds in Matteo’s RESP. Pursuant to the Minutes of Settlement, she has agreed to replace those funds once she receives her portion of the proceeds of the home.
[9] Joseph was portrayed as an obstructionist in terms of the sale of the home and I find that he did all he could to prevent Maria from getting any money from their home. He also failed to provide financial information or any true explanation of his “income”. I found that he was very evasive and became hostile during cross-examination, unable to recall any details which might be beneficial to Maria. He claimed, I find, unbelievably that he did not recall the name of the contractor who installed their kitchen. Maria was straightforward in her answers, willing to compromise, focused on the best interests of their child, and obviously stressed by the litigation. The parties both delayed the litigation either by choice of counsel or to delay hoping that the other party would give in, or with the hope that a negotiated settlement could be achieved without the cost of litigation. Overall, I find Maria to be credible and Joseph not.
Matteo Access
[10] I will deal with the most important, but to me the most straightforward, issue - increased access by Mr. Belli to his son during the school week.
[11] Matteo is now in grade two in a French immersion school. He and his mother reside with his mother’s sister and her two children with whom he is very close and who attend the same school. After separation Maria, due in part to financial difficulties, was forced to move numerous times but is now happily settled with her sister. Her sister’s children are slightly older than Matteo and are able to assist him with French. He does his homework interactively with his teacher on her website.
[12] His father seeks overnight access three nights a week with his child. The mother resists this suggestion as contrary to the best interests of Matteo and the pursuit of a bilingual education for him. Matteo is delivered every morning by Maria to Joseph on or about 7:30 and Joseph takes him to school. She testified about the work she was obliged to do to have the child enrolled at this particular school, the computer program that is utilized for the language education that she has in her home, and her access to resources such as teachers who can assist her. She spends time every school night working with Matteo, reading to him, which she denies that her husband does. She stressed that Matteo’s school years are critical and proudly repeated that her son was recently noted as the “overall most improved student”. I find it is in the best interest of Matteo to have this support of his mother.
[13] Mr. Belli expressed the view that he can access the same resources and he can purchase the same computer program and assist his son with his homework. It was clear from Mr. Belli’s testimony that he was unaware that Matteo’s homework was completed on the computer. Mrs. Belli pointed out that Mr. Belli never once took the proffered overnight access with his son during this past summer. She was willing to have Matteo spend overnights in the summer with his father, even two or three nights a week. She also pointed out that he rarely took this opportunity in the prior summer. Mr. Belli did not deny this evidence. This makes, I find, his claim to desire more time with his son incredible. The court can only conclude that either he wants access to be on his demand and/or he does not want to have to get up for his son first thing in the morning each day which must be an inconvenience for him but rather have the child sleep over. Given Mrs. Belli’s concerns about her son being told to be quiet in the morning to avoid disturbing Mr. Belli’s girlfriend, it would appear that the latter is the one appropriate answer to the question. For these reasons, I cannot find that Mr. Belli’s claim is focused on the best interests of Matteo. Mr. Belli’s work schedule prevents weekend access at this present time. Accordingly, I order that his access will remain as set out in the Minutes of Settlement attached as Schedule “A”.
Proceeds of the Matrimonial Home
[14] I find that the only equitable way to deal with the proceeds of the matrimonial home is to try to follow the spirit of the contract, rather than letting the contract fall and thus reverting back to the legislation and a 50/50 split of the proceeds, which would be the only other choice I see as viable but would require a determination that the agreement was invalid which I am not prepared to conclude on the facts and law I have before me.
[15] It is clear that the parties contemplated an unequal division of the proceeds. It is clear that the contemplated total proceeds would be $210,000, “subject to adjustments” and as such Maria would receive $80,000 with Joseph receiving a larger portion reflecting his $50,000 lot purchase. The phrase in the contract “Joseph approximately $130,000” I find meant $130,000 subject to the usual real estate adjustments. It did not contemplate any further investment of money by either party. It is the proportions that I find to be the relevant factor rather than an absolute entitlement for either party to receive the specific amount set out in the marriage contract. There would be unnecessary uncertainty of contract for Maria to agree to a percentage of proceeds without knowing the total proceeds and thus realizing what she believed to be an appropriate portion of such proceeds. To argue now that Joseph invested more in the new home without an analysis of the source of these funds or a tracing to prove that any additional funds were not from mutual matrimonial resources would be inequitable. The only way to interpret the contract is to grant each party the same proportion of the proceeds of the actual sale proceeds as they would have been entitled to if the contemplated proceeds had been received. The figure therefore I find would be Maria receiving 38% and Joseph 62% of the proceeds, and I do so order. Further, I conclude my decision is supported by the wording of the contract which provides “each of them will receive the amount that they have invested in this residence and any replacement residence” – being the $80,000 and $130,000 amounts. Further, it provided that “any increase in the equity would be shared equally”, which could be interpreted as inferring that any decrease should be shared proportionately recognizing the estimated totality of the pool of funds being $210,000.
Occupation Rent/Payment of Expenses on Matrimonial Home
[16] I find that it was always Maria’s wish that the matrimonial home be sold and that Joseph resisted that until the court forced him to sell. I acknowledge the nominal listing of the home just after separation. I refer to it as “nominal” as the price was in excess of the agent’s recommendation and the listing was not renewed. Mr. Belli wanted to remain in the home and he did until late October of 2014, some three years after the parties separated. Unable to access her equity or a release from the contract on the matrimonial home, Maria was left without any ability to purchase a home for herself and Matteo. I find it is telling that Mr. Belli, whose business “loses” money each year and claims to earn a nominal amount as a seasonal waiter, was able to purchase a new house closing the same date the matrimonial home was sold. In other words, within weeks. He testified that his brother lent him all the money. It is a finding of this court that Mr. Belli’s financial situation is not as portrayed by him but, in fact, is much better, albeit to an extent unquantifiable by the court due to a lack of full financial information from the respondent. Recently the tax arrears on the matrimonial home were leading to a tax sale which resulted in a motion. At that point the taxes in the amount of approximately $10,000 were paid by Mr. Belli. At the same time, inexplicably, Mr. Belli allowed his credit cards to go into arrears resulting in substantial executions on the matrimonial home with debts that attracted substantial and high rates of interest. I question how a person with apparent access to ready cash would allow this to happen, suggesting motivation beyond lack of funds.
[17] Mr. Belli had the use of the matrimonial home which was not expensive to maintain while failing to pay child support. I acknowledge that even if the home had been listed on the day of separation it may have taken some time to sell, but point out that even with the listing ordered by the court where I find Mr. Belli refused proper showings, the property sold within a very few months at its appraised price. I find the house issue could have been completely dealt with very shortly after separation had a proper price and listing occurred. This would have reduced the carrying costs to both parties.
[18] In these circumstances, I find Mrs. Belli liable only for the $1,758.00 portion, which is item #5 of the consent order. I also find Mrs. Belli is not therefore in the circumstances entitled to occupation rent, notwithstanding that Mr. Belli had “exclusive” possession of the home. It is clear to the court that he took exclusive possession of the home and that Maria was excluded from it. It even took a court order to have her be able to attend the premises to remove her belongings prior to sale.
Income of the Support Payor
[19] Even after trial it is difficult to determine the income of Mr. Belli for child support purposes. He operates a “party” company which consistently has lost money each year, until recently, resulting in refunds paid by the government to him. His recent small profit comes from his gratuities as a waiter which inexplicably are expensed against his party business. He “expenses” his tips from work through this company and I find, as a result, these funds are “untaxed”. Tips should therefore be grossed up. He has apparently a “tip record” which exists to verify his gratuities but did not produce it at trial. He also failed to provide any evidence of any compensation that he received from his employment injury. As a starting point, I would add to his “reported” income from employment his gratuities. The next problem is to calculate the financial benefit as a dollar figure that he receives as a result of being able to “write off” expenses against his business. This is difficult to ascertain or perhaps it is simply incalculable.
[20] Joseph submits in his financial statement that for 2014 his income will be $40,000 and that it was $40,000 in 2013. In argument, however, Mr. Belli suggests that his income in 2011 was below guidelines, that in 2012 it was $24,987.47, $31,000 in 2013 (with $12,000 in tips), and $34,000 in 2014 (with $15,000 in tips). The respondent denies that income should be imputed to him without a factual basis for so doing, however, I cannot ascertain from his financial information why $40,000 is his “suggested financial statement income” for 2013 or 2014.
[21] I find that it is reasonable to conclude that as a parent with an obligation to support a child Mr. Belli would earn at least minimum wage in 2011 and, accordingly, I impute that income amount to him for 2011. With tips, I find his income for 2012 to be $25,000. For 2013 and 2014 he suggests at least $31,000 and $34,000 respectively. The evidence showed that his broker did a mortgage application which showed his income at $50,000. He only started paying child support in 2013 based upon a $26,000 income. Accordingly, the amounts that I have determined appropriate for his income for child support purposes for 2013 was $37,000, and $40,000 for 2014.
Costs
[22] If the parties are unable to agree upon costs, I may be spoken to prior to January 9, 2015.
Tucker J.
Released: January 5, 2015
CITATION: Belli v. Belli, 2015 ONSC 44
COURT FILE NO.: D24004/13
DATE: 2015/01/05
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Maria Grazia Belli
Applicant
- and –
Joseph Belli
Respondent
JUDGMENT
Tucker J.
Released: January 5, 2015