ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Marcia A. Dias Applicant
– and –
Eduardo Jose Amado Dias Respondent
Allan L. Morrison, Shruthi Raman, for the Applicant
Ray Stancer, for the Respondent
HEARD: November 23, 24,25,26,27,30, 2015
REASONS FOR JUDGMENT
Madam Justice Chiappetta
1The parties had a traditional marriage for over 20 years. They were married on March 16, 1991 and separated on November 1, 2011. There are 2 children of the marriage; Sarah Dias born November 1, 1992 (“Sarah”) and Dara Dias born January 13, 1999 (“Dara”). The roles assumed by the parties during the marriage were such that the Respondent relied on the Applicant for the needs of the household and the needs of the children while the Applicant relied on the Respondent to provide financially for the family.
2At the time of separation, the Respondent operated his own business; Rosedale Marble & Granite Ltd. (“Rosedale Marble”). His true income for support purposes was a live issue between the parties until the eve of trial. On the first day of trial, prior to opening statements, counsel advised that the parties had reached an agreement on the issue. Forensic accounting firm, Froese Forensic Partners Ltd. (“FFP”) was retained by the Applicant to calculate the Respondent’s estimated earnings for support purposes and the estimated earnings of Rosedale Marble for the years 2010 -2014. Forensic accounting firm, Smith Forensics Inc. (“Smith”) was retained by the Respondent to estimate the earnings of Rosedale Marble for the fiscal years ended November 3, 2010 to 2014. Smith was not retained to calculate the earnings for support purposes and thus has not addressed income tax gross–up.
3Representatives from the two forensic accountant firms met shortly before the scheduled trial date to review differences in results and methods and to jointly review supporting documentation underlying the differences. They agreed that a 4-year average is appropriate for calculating the Respondent’s true income for support purposes. For the 4-year period they agreed that the Respondent’s estimated average net income is $147,800.00 and that, including income tax gross-up on unreported income, the Respondent’s 4-year average income is approximately $215,000.00. The parties agreed to accept the agreement of the respective forensic accountants for the purposes of resolving the remaining issues for trial.
4The parties also agree that the remaining issues for trial are:
(a) Whether the Respondent’s income for support purposes should include income tax gross-up on unreported income.
(b) Whether the Respondent is obligated to pay child support retroactive to November 1, 2011; the date of separation.
(c) Whether the Applicant is entitled to spousal support retroactive to November 1, 2011; the date of separation.
(d) What is the appropriate amount of retroactive spousal support payable by the Respondent to the Applicant if entitlement is established.
(e) What is the appropriate amount of ongoing spousal support payable by the Respondent to the Applicant (entitlement and duration are not in issue).
(f) Whether ongoing spousal support payments should be subject to security.
Whether the Respondent’s income for support purposes should include income tax gross-up on unreported income
5As noted above, the parties agreed that for the purposes of the remaining triable issues, the Respondent’s net income for support purposes is $147,800.00 and that, including income tax gross-up on unreported income, the Respondent’s income for support purposes is $215,000.00. The relevant remaining triable issues include entitlement and amount of retroactive spousal and child support and the amount of ongoing spousal support. The Respondent submits that the remaining triable support issues are properly determined using his net income for support purposes. The Applicant disagrees. She submits that the remaining triable support issues are properly determined by including income tax gross-up on the Respondent’s unreported income.
6Section 19(1) of the Federal Child Support Guidelines, SOR\97-175, as am., provides that the court may impute such income to a spouse as it considers appropriate in the circumstances, including where the spouse is exempt from paying income tax. The practice, commonly referred to as “grossing-up” is done to ensure consistency of treatment where a party’s affairs are arranged to pay less tax on income (Sarafinchin v. Sarafinchin, 2000 CanLII 22639 (ON SC), 2000 O.J. No. 2855 (ONSC) at para. 63).
7The Respondent agrees that as the sole owner, shareholder and director of Rosedale Marble, he has arranged his affairs in a way to pay less tax on his income. He acknowledges that he has deducted expenses from his gross income to lower the total amount of his reported income for tax purposes. He agrees therefore in principle that the concept of gross-up is applicable to his income. The Respondent submits, however, that it is not appropriate to determine his support obligations using his income including income tax gross-up on unreported income, given the nature of the use of some of the unreported income.
8For example, in 2010 and 2011 $72,000.00 and $55,000.00 respectively were deducted from the Respondent’s reportable income for residential property expenses. The Respondent’s evidence is that these monies were used toward renovating and maintaining investment properties jointly owned by the parties. As the Applicant received at least half of the benefit of these monies, it is argued, they should not be added back to his income in calculating his support obligations.
9Similarly, in 2011 and 2013, $13,391.00 and $17,235 respectively were deducted from the Respondent’s reportable income for auto expense and fuel. The Respondent’s evidence is that he purchased a car for Sarah in 2011 and paid for its insurance through to July 2014. The Respondent makes a similar argument that the funds were used for the benefit of a payee such that they should not be added back in determining his income for support purposes.
10The court recognizes that there may be circumstances wherein monies the payor deducted from income for tax purposes should not properly be added back in determining income for support purposes if, for example, it is demonstrated that the monies benefitted the payee in a way sufficient to establish double counting. The circumstances would necessarily be limited, however, to the determination of income for support purposes for the specific year the monies were deducted from income for tax purposes. In this case, the Respondent’s position is that the specific deductions noted are sufficient to warrant use of the Respondent’s net income for support purposes on a macro retroactive and go-forward basis. The Respondent’s business affairs are such that he has access to the use of unreported income. The unreported income is properly grossed-up to reflect the reality of his means to pay support retroactive to September 1, 2012 and on a go forward basis. The fact that the Respondent chose to use a portion of his unreported income to the benefit of a payee in a specific year, does not entitle him to use his net income for the broader purpose of determining the triable support issues.
11For these reasons, therefore, I conclude that the Respondent’s income for determining the remaining triable issues is properly his income including income tax gross-up on unreported income. This amount as agreed by the parties is fixed at $215,000.00.
Whether the Respondent is obligated to pay child support retroactive to November 1, 2011; the date of separation
Background
12On consent, by Order of Justice Spies dated August 22, 2012, the Respondent has paid table amount child support to the Applicant for the 2 children based on his declared income of $79,206.00, being $1,163.00 monthly without default since September 1, 2012 (the “Spies Order”).
13After separation, the parties continued to live separate and apart in the matrimonial home until September 1, 2012 when the Respondent moved out to live in one of the parties’ investment properties. The children remained with the Applicant in the matrimonial home.
14Sarah testified at trial on behalf of her mother. Her evidence is that she moved out of the matrimonial home in February 2013 because she had an argument with her mother. Although she testified that she had no bond with her father as he worked a lot and therefore did not spend time with the family, she chose to live with her father from February 2013 to July 2014. He provided her with a car and an apartment. The Respondent also continued to pay the Applicant child support for Sarah during the time Sarah lived with him, in accordance with the Spies Order.
15The Respondent and Sarah had a culminating argument in July 2014. Sarah’s evidence is that her father “wouldn’t listen to my advice.” She states that he disrespected her by bringing a woman in and out of the property they shared. Although Sarah lived in a separate apartment unit to her father’s residential space on the property she felt it was too soon after her parents’ separation for him to be seeing another woman. Her evidence is that when she expressed this to him he insisted that she move out that day or he would throw her things on the street. She moved out that day; July 20, 2014, and has not spoken with him since.
16The Respondent agrees that he would not listen to Sarah’s “advice.” He testified that Sarah told him that as a 50 year old man he should have no further women in his life. He stated as well that the conflict began because Sarah would not permit his father to walk through her apartment to get to his. His father stayed with him from Portugal for 6 months of the year. Sarah would lock her back door requiring his father, at 81 years old, to walk around the house in the snow. He found this disrespectful. The conflict eventually culminated with Sarah moving back to live with her mother. Sarah has not spoken to her father since July 2014 and she did not attend her grandfather’s funeral.
17Dara continued to live in the matrimonial home with her mother from the time the Respondent left in September 2012 through to July 2015. Dara now lives with the Respondent. He testified that she is doing very well. She is driving, doing well at her private school and working with a nutritionist. The Respondent has paid the tuition of approximately $11,000.00 a year for the last 3 years of Dara’s private school. He expects that she will graduate in September 2017.
18The parties agree that the Respondent was not obligated to pay child support to the Applicant for Sarah during the 17 months she lived with him and that the amount he paid during this time should be set off against his retroactive obligations, if any. The parties also agree that no child support is owed by the Respondent to the Applicant for the period after July 2015. The Respondent is not making a claim for child support from the Applicant for Dara from July 2015 onwards.
19The Applicant asks the court to order the Respondent to pay a lump sum retroactive child support payment for Sarah and Dara over a period of September 1, 2012 until July 31, 2015 based on his income for support purposes of $215,000.00. She acknowledges that the Respondent ought to properly receive a credit against this lump sum for the amounts paid to her for child support in accordance with the Spies Order.
20The Respondent submits that there should be no order for retroactive child support. He argues that any retroactive award would not benefit Dara as Dara now resides with the Respondent. In terms of Sarah, he argues that she is 20 years old and only recently announced that she is back to full time studies. He questions whether or not she continues to be a child of the marriage in need of support in accordance with Section 15.1 of the Divorce Act, R.S.C. 1985, c.3.
21In D.B.S. v. S.R.G. 2006 SCC 37, [2006] 2 S.C.R. 231, the Supreme Court directed that in determining whether to make a retroactive award for child support, a court should strive for a holistic view of the matter and decide each case on the basis of its particular facts. The court should consider the reason for the recipient’s delay in seeking child support, the conduct of the payor parent, the past and present circumstances of the child and whether the retroactive award might entail hardship.
The recipient’s delay
22The Applicant caused this proceeding to be commenced in May 2012. She consented to an award for child support effective September 1, 2012 based on the Respondent’s reportable income. In my view, it is appropriate that any retroactive award made be retroactive to September 1, 2012, the day the parties consented that support payments would commence.
The conduct of the payor
23The Applicant testified that since the inception of this proceeding until recently, the Respondent has intentionally concealed his true income for support purposes; thereby delaying the resolution of this issue until the eve of trial.
24The Respondent testified to his belief that he attempted or did provide all financial documents available, to the Applicant as requested. He notes that at the first scheduled case conference on August 1, 2012, Justice Goodman made an Order for his financial disclosure. By the second appearance on August 22, 2012, he had fully complied with the Order of Justice Goodman. Further, he stated that the first time the Applicant raised the issue of a need for a forensic accountant was on November 4, 2013. The Applicant consented to provide a forensic accountant report concerning the Respondent’s income for support purposes on January 20, 2014 and the parties consented to adjourn the trial scheduled for November 18, 2013. The Applicant’s forensic accountant report was not provided until September 30, 2015. The first request for documents from the Respondent by the Applicant’s first forensic accountant was not made until January 20 2014. The Respondent submits that he consented to the requests when they were made, although some material had been previously provided, and he signed all authorizations for production as requested. He submits that a large part of the delay in settling the Respondent’s issue for support purposes therefore lies with the Applicant.
25The Respondent’s evidence is that as the sole operator of Rosedale Marble he has done his best to maintain organized financial records but he admits that he has failed to do so. He does not have an office but rather operates the business today from his phone. The issue is somewhat more complicated, he stated, as sometimes the invoice is billed to the client and paid by the designer or the builder. The Respondent concedes that his attempts to organize his financial records through a computerized accounting system called Quickbooks were unsuccessful. He has worked with a part-time book keeper for 30 years, providing him copies of invoices every 3 months for tax obligation purposes. He has never had any issue with the Revenue Canada. His bookkeeper is as well a sole proprietor however so instead of organizing all of his invoices in a file cabinet, after his bookkeeper is done with the 3 months of invoices, he places them loose in a folder and places the folder in a box.
26In his endorsement of April 9, 2015, in addressing the issue of determining the Respondent’s income for support purposes, Justice Penny writes “The main problem appears to be, not that documents are being withheld but that it is difficult to reconcile them.” Justice Penny goes on to write “It is, in my view, [the Respondent’s] obligation to prove his income is as he asserts. It is not sufficient to “dump and run”, leaving to the other party the obligation to organize, review and reconcile financial records of the Respondent husband’s business. The Respondent husband has not fulfilled this obligation.”
27The evidence fails to demonstrate that the Respondent intentionally supressed his income for support purposes during this proceeding. Rather, he operated his businesses without organized financial records. He made efforts to cooperate with the Applicant’s efforts to determine his income; he provided disclosure, attended questioning and provided the documents he had. I accept his evidence that all invoices were provided to the Applicant but the ones prior to separation that were housed at the matrimonial home. I find no evidence of intentional efforts by the Respondent to conceal his true income for support purposes from the court or the Applicant. Rather, the Applicant’s efforts to verify the asserted income of the Respondent were rendered more difficult because he did not maintain satisfactory accounting records.
28Having said that, the blame for the delay in resolving the issue of the Respondent’s true income for support purposes nonetheless must lie with the Respondent. While the delay was not designed by intention to deceive; it can fairly be described as blameworthy. I agree with Justice Penny that it was the Respondent’s obligation to prove his income as he asserted; it was not the obligation of the Applicant to disprove or satisfy herself as to its accuracy. The Respondent knew that he did not keep organized financial records, he knew that his income for support purposes was a live issue in this proceeding, he knew he was paying support based on his reported income and he knew that he deducted personal expenses to limit his taxable income such that his reportable income was not an accurate reflection of his true available income for support purposes. In my view, in these circumstances, it was incumbent upon the Respondent to retain a forensic accountant to determine his true income for support purposes, far before October 2015. Instead, until his financial statement sworn November 17, 2015, he continued to represent that his income for support purposes was his reportable income. The Respondent consented to support payments effective September 1, 2015 based on a reportable income he knew was not his true available income. He took no active steps to determine his true available income for support purposes until October 2015. His conduct is not fraudulent but it is sufficiently blameworthy to warrant a retroactive award.
The past and present circumstances of the child
29The court was provided with no objective evidence sufficient to demonstrate that the children’s past circumstances were such that their needs or lifestyle were affected in any way by the Respondent paying support based on his reportable income since September 2012. Sarah testified that that her mother told her she was worried that the mortgage or the bills would not be paid and that she heard a voicemail from the bank inquiring about a late mortgage payment. The evidence establishes however and I accept that the Respondent continued to fund all household expenses after separation although some payments may have been late.
30In my view, however, it is nonetheless not appropriate to forgive the Respondent’s retroactive child support obligations outright and in effect reward his failed effort to put forward his true available income for support purposes until the eve of trial. It was not enough that he cooperated with the Applicant’s efforts to determine his true income. From September 1, 2012, he was content to pay child support based on his reportable income without being proactive in determining his true available income for support purposes. By making this choice, the Respondent fairly subjected himself to a retroactive award based on his true available income for support purposes.
31Having said that, I remain mindful of the present circumstances of the children. While Sarah is 20 years old, she presently lives with her mother, is estranged from her father and is engaged in full time studies. There is reason therefore to believe that she will benefit from the retroactive child support payment made to the Applicant on her behalf.
32I cannot say the same for Dara. Dara is 16 years old, she lives with her father. Her father pays for her housing, for her car and for her private school. There is no ongoing claim for child support by the Respondent from the Applicant for Dara. For these reasons, the evidence fails to demonstrate that Dara would benefit from a retroactive child support payment made to the Applicant on her behalf. Rather, in my view, the Respondent’s funds in this regard are best used directly to meet her present needs and lifestyle.
Whether the retroactive award might entail hardship
33The court was presented with no evidence suggesting that a retroactive award of child support might entail hardship to the Respondent.
Conclusion
34For reasons noted above I have concluded that the Respondent is obligated to pay child support to the Applicant retroactively from September 1, 2012 to July 1, 2015 for Sarah Dias born November 1, 1992, but for the 17 months (February 2013-July 2014) wherein Sarah resided primarily with the Respondent.
Is the Applicant entitled to spousal support retroactive to November 1, 2011; the date of separation
Background
35The parties separated on November 1, 2011. The Respondent continued to live in the matrimonial home until September 1, 2012. During this time, he continued to fund the family expenses, although not as punctually as had done so prior to the separation.
36Around the time of separation, the Applicant withdrew $147,000.00 from the parties’ joint line of credit. The withdrawals were done in 2 parts; $130,000.00 on October 28, 2011 and $17,000.00 early in November 2011. The Applicant’s evidence is that she withdrew the $17,000.00 after seeing a visa bill, in case the Respondent did not pay it. Although the Respondent paid the visa bill, she did not return the $17,000.00 to the line of credit.
37The Applicant testified that she put the funds into 2 separate accounts in her name as security for her and the 2 children as the Respondent told her that if they were to separate, he was going to hire a lawyer and not give her a penny. Sarah testified that she heard her father tell her mother that he would rather spend money on lawyers in court than give her a penny. The Respondent denies that he made such a statement and states that the Applicant told him that the proceeding would result in him not having access to his beloved matrimonial home.
38In any event, the parties agree that from the $147,000.00 the Applicant spent $63,432.19. Her banking records reflect that the money was spent on lawyer’s fees for this proceeding, credit cards, cash withdrawals and the payments for utilities and taxes for the rental properties. The parties agree that the $63,432.10 shall be set off from any amounts owing to the Applicant from the Respondent.
39In accordance with the Spies Order, the Respondent has paid spousal support to the Applicant in the monthly amount of $969.00, based on his reported income of $79,206.00. He has not defaulted since September 1, 2012. The Applicant testified that she consented to that monthly amount as she knew that if it was not enough to pay her expenses she could access the $147,000.00 she withdrew from the parties’ joint line of credit.
40The Ontario Court of Appeal has held that retroactive spousal support is available when the recipient establishes at trial that she was entitled to a greater amount of interim support, the Respondent had an ability to pay, and the imposition of retroactive support would not create undue hardship for the payor (Fisher v. Fisher, 2008 ONCA 11, 2008 CarswellOnt 43).
Entitlement to a greater amount of interim support
41The Applicant has established that she was entitled to a greater amount of interim support than the Respondent paid her in accordance with the Spies Order. The Spies Order was based on his reportable income of $79,206.00 when his income for support purposes ought to properly have been $215,000.00.
42The Applicant consented to the amount of spousal support as set out in the Spies Order effective September 1, 2012, based on the Respondent’s reportable income. The Applicant did not think the amount of interim support was enough but she agreed knowing that she had the $147,000.00 as security. She has agreed to credit the Respondent for all amounts of the $147,000.00 she used. In my view, therefore, her consent to the amount of interim support in the Spies Order should not be held against her when considering whether she was entitled to a greater amount of interim support.
43After the Spies order, the Applicant made reasonable efforts to determine the Respondent’s true available income for support purposes, although it was the Respondent’s obligation to prove his income was as he asserted. The comments made above at paragraphs 23 to 28 with respect to the Respondent’s blameworthy conduct are equally applicable when considering entitlement to retroactive spousal support.
Ability to pay
44The court was offered no evidence on the Respondent’s ability to pay spousal support during the retroactive time in question, based on his true income for support purposes. There was no suggestion that he did not have the ability to pay at the time or that he does not have the ability to pay a retroactive award today.
Undue hardship for the payor
45Similarly, the court was offered no evidence on whether the obligation to make a lump sum payment for retroactive support would cause undue hardship for the Respondent.
Conclusion
46For reasons noted above I have concluded that the Applicant is entitled to spousal support from the Respondent. In my view entitlement is properly retroactive from September 1, 2015, the date the parties consented the support payment should commence.
What is the appropriate amount of retroactive spousal support payable by the Respondent to the Applicant if entitlement is established
47The Respondent started working as an apprentice in the marble installation industry in Portugal when in was 15 years old. He started his own business at 17. He came to Canada in 1984 at 19 years old where he continued to operate his own marble installation business. The Respondent travelled to Brazil in 1989 and met the Applicant who was working at a gift shop at the airport. They talked over a 9 month period, fell in love and decided that they wanted to be together in Canada.
48The Applicant came to Canada in May 1990, having obtained her visa upon spending 30 days with the Respondent’s sister in Portugal. The parties lived together from the date of her arrival to Canada and married the next year.
49At the time of marriage, the Respondent was operating his marble installation business under the name of ED Marble. The Respondent and ED Marble went bankrupt in 1993, causing the parties to live with the Respondent’s parents for a few months. Shortly thereafter, the Respondent reconstituted his business under the name of EM Marble and moved out of his parents’ apartment with the Applicant and Sarah into a rented home. The parties purchased their first home in 1997. The parties agree that prior to 2000, they struggled financially. The Applicant testified that she tried to help out financially by working for brief periods while she was pregnant with Sarah and when Sarah was 2 or 3 years old.
50In 2000, the Respondent started conducting his marble installation business under the name of Rosedale Marble and the business began to be successful. The parties purchased the matrimonial home on 54 Appleton Drive in Toronto (“Appleton”) that year. Appleton had 4 garages which assisted the Respondent with his business efforts.
51The Applicant testified that thereafter the Respondent was always working and spent little time with the family. Rosedale is solely owned by the Respondent. He has been working in the industry from the time he was 15 years old. He came to Canada and continued his pursuit of financial stability. He lost everything in 1993 and had to start over and build a secure future for himself and his family. The parties had 2 small children. It was the Respondent who was tasked with providing financially for the family. It is not unreasonable, in my view, that he devoted extensive time to his business for the purposes of providing for his family. He made these efforts for the benefit and not the detriment of his family.
52The success from Rosedale Marble provided the parties the opportunity to purchase 2 investment properties in Toronto; 180 Morrison in 2002 (“Morrison”) and (379 Ossington in 2006 (“Ossington”). The properties were owned jointly. The Applicant testified that she was not aware of the specifics of these purchases but rather trusted the Respondent and signed the paperwork required to facilitate the respective purchases. The Respondent testified that he wanted the Applicant to assist him with his efforts to rent the properties but she refused. Morrison was sold during the course of this proceeding. The parties shared equally in the net proceeds of sale.
53As noted above, the Applicant also has full access to the parties’ joint line of credit.
54The Applicant testified that she started working cleaning houses, as soon as possible after separation. In my view, the income she generated from this employment is properly considered in an award for retroactive spousal support. Retroactive spousal support is therefore to be calculated based on the Respondent’s income of $215,000.00 and the Applicant’s income of $12,000.00.
55The parties agree that the award is properly payable in accordance with the Spousal Support Advisory Guideline (SSAG’s). The Applicant submits however that the high range of the SSAG’s is appropriate given the Respondent’s conduct in what she describes as intentionally supressing his income. As noted above, I find no intention on behalf of the Respondent to purposely mislead the court or the Applicant in term of his income for support purposes. Rather, I find that he failed to meet his proactive obligation to prove the income he asserted was his true income for support purposes. He was content to be reactive to the Applicant’s efforts in this regard. I agree that his conduct was blameworthy for the purposes of a retroactive award. I do not agree that it also warrants an award consistent with the high range of the SSAG’s. Rather, retroactive spousal support is more appropriately paid in accordance with the mid-range of the SSAG’s.
What is the appropriate amount of ongoing spousal support payable by the Respondent to the Applicant (entitlement and duration are not in issue)
56In 2015, the Applicant began working only a few days week as she stated her health is presently “not so good”. The Applicant testified that she has arthritis and while she will continue to work it will not be at her present capacity. It is nonetheless appropriate, in my view, and for the same reasons, to award ongoing spousal support in a fashion consistent with retroactive spousal support. Ongoing spousal support shall be paid, therefore, in accordance with the mid-range of the SSAG’s calculated based on the Respondent’s income of $215,000.00 and the Applicant’s income of $12,000.00.
Whether the ongoing spousal support should be subject to security
57The Applicant submits that the ongoing spousal support obligations of the Respondent to the Applicant ought to be secured against Appleton given what she submits is the demonstrated risk that the Respondent will relocate to the Cayman Islands to avoid his ongoing support obligations. To demonstrate this risk, the Applicant relies on the frequency of visits to the Cayman Islands by the Respondent since October 2011 and the evidence of Sarah who testified that in 2013 her father took her to an ongoing project in the Cayman Islands and told her it was his project. I accept that the Respondent had legitimate business and personal reasons to travel to the Cayman Islands as often as he did since 2011. I do not accept that there is a risk that he intends to relocate to the Cayman Islands for the purposes of avoiding his ongoing spousal support obligations. I make this conclusion for the following reasons taken together:
(a) The Respondent testified that in 2010 he received an email form Nick Natale, a person he had done work for in the past. Mr. Natale asked him if he was interested in doing the marble work for a large custom home in the Cayman Islands. The client’s name was Yonnet (“the Yonnet project”). The project required 15,000 square feet of marble installed both inside and outside of the home. Mr. Natale stated that the job was valued at $375,000.00 USD. The Applicant testified that in 2011 the Respondent told her of Rosedale Marble’s lucrative opportunity to work in the Cayman Islands. She conceded that he shared a copy of the contract with her demonstrating a payment of over $300,000.00 USD.
(b) Nick Natale testified on behalf of the Respondent. I found his testimony to be credible and objective and I accept it. He has a business relationship with the Respondent. He confirmed that he reached out to the Respondent for the purposes of the required marble work on the Yonnet project.
(c) Both the Respondent and Mr. Natale testified that the Respondent commenced the job in October 2011 and substantially completed it in December 2012. His last payment was in August 2012. Mr. Natale has held back a small portion of the contract funds due to the warranty and repair work that continues even today on the project. Both the Respondent and Mr. Natale confirmed that that there were issues with the marble work since substantial completion. The Respondent has been travelling back to the Cayman Islands regularly to address these issues and returned as recently as a week and a half ago to fix a leaking fountain. His flights are paid for by Mr. Natale’s employer, Deco Limited.
(d) The Respondent testified that he has a girlfriend in the Cayman Islands. In 2014, he travelled there approximately 20 times and some of these trips were personal and were paid by his girlfriend. He advised the court of his intention to continue travelling to the Cayman Islands to see his girlfriend and to conduct further work on the Yonnet project.
(e) According to his passport, the Respondent has made 10 trips to the Cayman Islands in 2015. Mr. Natale testified that 6 or 7 of those trips were required for ongoing work on the Yonnet Project.
(f) Mr. Natale confirmed that it is not unusual in the Cayman Islands for marble work in a custom home to continue well beyond the substantial completion date. He stated that there were customs homes on the island wherein the work has continued for 10 years. He explained that the business practice is different than in Canada; that the island is small and there is rarely litigation over these matters. Rather, the builders continue to serve the needs of the home owners on a warranty, repair and replacement basis.
(g) The Respondent testified that he has never done any other work in the Cayman Islands other than the Yonnet Project. His work permit for the Cayman Islands is limited to the Yonnet Project. Mr. Natale testified that his company does a lot of work on the small island. He is not aware of the Respondent doing work on any other project on the island. He further stated that obtaining a work permit is very difficult, that it is project specific and that it must be obtained through a local marble installation company.
(h) Sarah’s evidence is that in August 2013 her and her boyfriend visited her father in the Cayman Islands for 3 days. She testified that her father took her and her boyfriend to see the Yonnet Project. Her evidence is that her father told her that this was a project he completed. Considering the evidence of the Respondent together with that of Mr. Natale, I am satisfied that the Respondent continues to travel to the Cayman Islands to perform warranty, repair and replacement work on the Yonnet project.
(i) Sarah further testified that on this trip her father took her and her boyfriend to see a yet completed project called “Casa Luna.” The project consisted of 15 Villas. Her evidence is that her father told her that this was a project that he was working on; that he was responsible for installing all of the inside and outside marble. She stated that she went into one of the villas and saw a handful of her dad’s employees working on the tiles. On cross-examination, Sarah conceded that she assumed the men working inside Casa Luna were the Respondent’s employees because they were working on tiles. The Respondent testified that he took Sarah to Casa Luna as he was going there to meet with his painter friend, Junior who was to introduce him to a local marble installer, Alan Laidlaw. He was hoping Mr. Laidlaw would assist him with the further work on Yonnit, during those times when the work was required but he was unable to travel to the Cayman Islands. He denies that he told Sarah that Casa Luna was his project.
(j) Mr. Laidlaw testified on behalf of the Respondent. I found his testimony credible and objective and I accept it. He lives in the Cayman Islands, having been there for 25 years. He owns a company there whose work includes marble installation. Mr. Laidlaw confirmed the Respondent’s evidence that Junior introduced him to the Respondent. He also confirmed that Casa Luna was his project; not the Respondent’s. Finally he confirmed that the Respondent asked him to perform the further work on Yonnet when he was unable to be in the Cayman Islands to do so. Mr. Natale explained that the owners of Yonnet do not want the work done to their home unless they are there. They travel a lot. There have been times when he needed the Respondent to come to the Cayman Islands to do some further work as the owners were in town, but the Respondent was unable to travel at that time to the Cayman Islands. He therefore asked the Respondent to secure a back-up marble installer on the island. The Respondent found Mr. Laidlaw through Junior for this purpose, as the Respondent had met Junior on the Yonnet project and both Junior and Mr. Laidlaw were working at Casa Luna. Mr. Laidlaw stated that he has performed repair and replacement work at Yonnet on behalf of the Respondent and that the Respondent still owes him approximately $46,000 USD.
(k) On cross-examination Sarah admitted that the Respondent never told her not to tell her mother about the trip or the projects but she understood he did not want her to. She was unable to offer an explanation as to why he would share this information with her boyfriend who he met on only a few occasions, except to say he trusted him.
(l) Sarah testified that on the same trip in 2013 her father mentioned to her that he might be working on a hotel in the Cayman Islands as people were attracted to the quality of his reasonably priced work. During cross-examination, however, she stated that she doesn’t know the name of the hotel or if the Respondent ever worked on the hotel. The respondent denies that he made this statement to Sarah. He testified that he has not done any other work in the Cayman Islands but for that pertaining to the Yonnet project.
(m) Sarah did not disclose anything about her 2013 Cayman Island trip with her dad to her mother or her mother’s lawyers until November 24, 2015, after her mother testified at this trial and the day before she was to testify. Her evidence is that her mother did not even know that she went to the Cayman Islands in 2013. She testified that although she knew this evidence was important she did not tell as she was worried about what her father would do financially to her and her mother; she was worried he might seek revenge. She stated that she told on November 24, 2015 as she felt it was safe to do so. During cross-examination Sarah stated that the revenge she was worried about was her father not cooperating in this proceeding and him not making mortgage payments on the Ossington property. She stated that she heard the bank leave a voicemail about a late payment on the Ossignton property but she was unable to say when between 2011 and today that voicemail was made. She conceded that she did not know the exact date. The evidence is consistent that the Respondent was late making the mortgage payment on the Ossington property once shortly after he left the matrimonial home. In terms of her fear of the Respondent not cooperating if she disclosed her Cayman Island trip, she stated that she believed he was not cooperating because that is what she was told by her mother and her mother’s lawyers.
(n) Sarah stated that after their visit to Casa Luna her father told her that the money he was receiving for that project was going to be “washed” through Mario’s bank account. She understood that instead of depositing his money into his account, he was going to deposit it into someone named Mario’s account. She does not know who Mario is. Her evidence is that her father told her that the reason for this is that he never wants her mom to get her hands on the money. The Respondent admits that he knows over 20 people in the Cayman Islands named Mario and that his only employee of Rosedale Marble is named Mario but he denies that he made this statement. Sarah has been estranged from her father since July 2014. She testified that she has been helping her mother with these proceedings since then. Ultimately Sarah agreed that if her evidence is accepted it would assist her mother in this proceeding and not her father. There is no credible evidence of the Respondent’s efforts to supress his income and deny his family law obligations. Considering the Respondent’s evidence along with that of Mr. Natale and Mr. Laidlaw, I accept that that the Respondent has not done any work on Casa Luna.
(o) The Respondent openly acknowledged his intention to continue to visit the Cayman Islands regularly. He stated that he has no intention of relocating there.
(p) Dara is 16 years old and is now living with the Respondent. The Respondent has voluntarily and happily assumed primary care of her. The Respondent’s marble installation business is here. He has worked tirelessly to establish its success since coming to Canada. He has been trying since 2012 to secure ownership of Appleton as its garages assist him with his business. He has now obtained ownership on consent at trial. Although his girlfriend is in the Cayman Island and he continues to perform warranty work on Yonnet, there is no evidence of future work opportunities for him in the Cayman Islands such that his connections to the Cayman Islands are relatively limited.
(q) The Respondent has never defaulted on his obligations to pay support in accordance with the Spies Order.
For these reasons, in my view, there is no demonstrated need to secure the Respondent’s ongoing spousal support payments by subjecting Appleton to a charge in favour of the Applicant. Considering the indefinite obligation and the realities of a traditional marriage, however, I do agree that it is appropriate to secure the ongoing spousal support payments by way of a life insurance policy wherein the Applicant is named as the irrevocable beneficiary.
Order to go:
The Respondent’s income for support purposes shall be his income including income tax gross-up on unreported income. As agreed by the parties this amount is fixed at $215,000.
The Applicant’s income for support purposes shall be fixed at $12,000.
Commencing January 1, 2016, the Respondent shall pay the Applicant ongoing monthly spousal support at the mid-range of the Spousal Support Advisory Guidelines in the amount of $5,921.
The Respondent shall designate the Applicant as an irrevocable beneficiary of a life insurance policy in an amount sufficient to meet his ongoing spousal support obligations, such designation to remain for so long as he is obliged to pay spousal support. The Respondent shall forthwith provide confirmation to the Applicant that she has been made an irrevocable beneficiary of a life insurance policy sufficient to meet his ongoing spousal obligations.
The Respondent shall pay the Applicant a lump sum amount representing retroactive child support for Sarah Dias born November 1, 1992 from September 1, 2012 until July 1, 2015, based on the Respondent’s income of $215,000.00.
The Respondent shall receive a credit for the amounts of child support payments he has paid to the Applicant for Sarah Dias born November 1, 1992 from September 1, 2012 until July 1, 2015, in accordance with the Order of Justice Spies made on consent on August 22, 2012. He shall also receive a set off from the retroactive amount owing, of the amount of child support payments he paid to the Applicant for Sarah during the 17 months Sarah lived with him.
The Respondent shall pay the Applicant a lump sum amount representing retroactive spousal support from September 1, 2012 until December 31, 2015, based on the Respondent’s income of $215,000.00 and the Applicant’s income of $12,000.00 and considering the principle residence of the children during the relevant time, in accordance with the mid-range of the Spousal Support Advisory Guideline (SSAG’s).
The Respondent shall receive a credit for the amounts of spousal support payments he has paid to the Applicant from September 1, 2012 to December 31, 2015 in accordance with the Order of Justice Spies made on consent on August 22, 2012.
I shall remain seized of any issues the parties may have in calculating the lump sum amounts as ordered in paragraphs 5 -8 above.
On consent, the Respondent shall pay the amount of $65,000 to the Applicant representing an equalization payment.
On consent, the Applicant shall repay $63,432.19 to adjust for monies withdrawn by her from the line of credit at the time of separation.
On consent, the equalization payment set out in paragraph 7 and the repayment set out in paragraph 8 shall be satisfied in full by a payment by the Respondent to the Applicant of the differences in the 2 amounts; being $1,567.81.
On consent, on or before March 15, 2016, the Respondent shall purchase the Applicant’s interest in the matrimonial home located at 54 Appleton Avenue, in the City of Toronto. The purchase price shall be $441,530.16, on the basis of an appraised value of $1,325,000.00 and considering the notional costs of disposition at 5%. Payment shall be made by way of certified cheque to the Applicant or as she may direct and vacant possession of the said property shall be delivered by the Applicant to the Respondent upon closing.
If the relevant bank does not consent to formally remove the Applicant’s liability to the parties’ joint line of credit and the existing mortgage on 54 Appleton Avenue in the City of Toronto, the existing line of credit and mortgage will be discharged and a nominal fee as agreed will be assigned to cover real estate and legal fees.
On or before January 15, 2016, the jointly owned property located at 379 Ossington Avenue in the City of Toronto shall be listed for sale by a realtor mutually agreeable to the parties. The parties shall agree to a fair market value for which to list the property. If the parties are unable to agree, they will defer to the realtor’s recommendation. Until released by court order or mutual agreement of the parties, the proceeds of sale shall be paid into court or otherwise held in trust after deduction of all encumbrances, commissions, legal fees and any capital gains.
The parties are encouraged to agree on a mutually acceptable award of costs for this proceeding. If no agreement is reached within 30 days, the parties may submit written submissions to me of not more than 2 pages, along with respective bills of costs and all relevant offers to settle, first from the Applicant within 60 days of this order and then the Respondent within 20 days thereafter.
Chiappetta J.
Released: December 2, 2015