COURT FILE AND PARTIES

COURT FILE NO.: FC-14-2544

DATE: 2016/01/15

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Debbie Nocita, Applicant

AND

Diodato Nocita, Respondent

BEFORE: Justice Julianne Parfett

COUNSEL: Darlene Summers, for the Applicant

Leonard Levencrown, for the Respondent

HEARD: December 8, 2015

Amended ENDORSEMENT

This is an amendment to the Endorsement released December 14, 2015. The amendment occurs at para. 16, third bullet, where the words “The Respondent is ordered to reinstate payment of spousal and child support in accordance with the order of Master MacLeod dated February 4, 2015 starting December 1, 2015.” were deleted. The bullet now reads: “The Respondent’s request to suspend payment of spousal and child support pursuant to the order of February 2015 is dismissed.”

[1] The Respondent filed a motion requesting the suspension of payment of both spousal support and child support pending final resolution of all issues in this matter. In addition, he sought an order requiring that the matrimonial home and two other properties be listed for sale.

[2] The Applicant filed a cross-motion requesting reinstatement of spousal support and child support payments, and an order for an interim disbursement in order to retain and pay a forensic accountant. In addition, the Applicant sought an order that the Respondent pay all of the joint debt and an order seeking the addition of Kelly Nocita – the sister-in-law of the Applicant and a co-owner of certain properties – as a party. There were a multitude of other orders requested by the Applicant in relation to the co-owned properties, but ultimately these were not dealt with in this motion.

Background

[3] The parties began living together in 1996 and married in 2000. They are the parents of two twin boys who are now 16 years of age. The Applicant mother has not worked full-time outside the home since the birth of the children in 1999. The Respondent is a hair stylist, who along with his brother, owned a number of hair salons in the City of Ottawa.

[4] The parties separated in 2013, although the precise date of separation is in dispute. The Applicant says it was December 2013 and the Respondent says it was September 2013. In the context of this motion, the difference in the date of separation is immaterial.

[5] It is the financial affairs of these parties that are at the heart of this dispute. At the time of the separation, the Applicant was working part-time as a bookkeeper at the hair salons and received an annual salary of $62,000. The Respondent also received an annual salary of $62,000. In addition, the parties used the company to pay for personal expenses. The hairdressing business involves cash transactions in the form of tips and these monies were also used to fund the parties’ lifestyle.

[6] Between the date of separation and October 2014, the Applicant continued to be paid a salary by the company. She also had access to the Respondent’s salary, which was deposited into a joint account, and she was paid $750/week in child support. In October 2014, approximately a year after separation, the company terminated the Applicant and she was no longer paid a salary nor did she have access to the Respondent’s salary. For reasons that were never explained, child support was also terminated. Therefore, this application was filed. In February 2015, this court ordered the payment of both child support and spousal support. It was paid until June 2015, at which point the Respondent again decided to terminate all support.

[7] In the seventeen years of their relationship, the parties managed to acquire significant assets. They own an expensive house backing onto the Kanata Lakes golf course, as well as several investment properties. Some of the investment properties are owned jointly, some are owned individually. Some of the properties have been sold since separation; some are still owned by the parties. In addition, the Applicant co-owns two recreational properties with her sister-in-law (the wife of the Respondent’s brother). One of these properties is in Mont Tremblant, Quebec; the other in Boca Raton, Florida. Furthermore, they accumulated significant debt.

Analysis

[8] The problem with the parties’ financial affairs lies in the fact that there was significant co-mingling of business expenses with personal expenses and now it is necessary to disentangle the various financial threads in order to determine what debts are personal to each party, what are joint, and what debts are strictly those of the business. The issue of assets is much simpler, but there will also be issues with respect to exclusion of property. Until the process of disentanglement is concluded it will be impossible for these parties to settle their affairs.

[9] Initially, the Applicant was requesting an interim disbursement of $25,000 in order to fund the cost of a forensic accountant. However, ultimately the parties agreed that while an accountant is required to assist in this case, a forensic accountant is not. Mr. Dave Clarke of Collins Barrow has already been retained to do an income analysis for the Respondent as well as a business evaluation of the hair salons. The parties agree that Mr. Clarke is in a good position to conduct an analysis of their financial affairs. The cost of this further analysis should be shared between the parties.

[10] The Respondent seeks the sale of the matrimonial home and the two recreational properties. All these properties are currently listed for sale. However, no offers have been received. There is nothing further to be done on this issue at this time.

[11] The Applicant requests the addition of Kelly Nocita as a party given she co-owns the two recreational properties with the Applicant. Initially, the Respondent was opposed to this request on the basis that the Applicant only wanted to harass her former sister-in-law. However, as the argument on the motion progressed, it became apparent that Ms. Nocita needs to be a party. There are allegations that the Applicant took money from the bank account set up to fund the Mont Tremblant property in order to pay personal expenses. There are also allegations that Kelly Nocita has refused to pay her share of the expenses of both the recreational properties. These issues require sorting out (possibly with the assistance of the accountant) and a reconciliation done before the parties can equalize the family property. Kelly Nocita’s input will be required. Consequently, there will be an order adding Kelly Nocita as a party.

[12] The last and most important request is the Respondent’s request that spousal support and child support be suspended pending final resolution of these issues. The basis for the request is the Respondent’s allegation that the Applicant has been misappropriating funds from the company for her personal use. He alleges that she has taken approximately $130,000 since the date of separation. Furthermore, according to the Respondent, the Applicant has had access to funds from the sale of two of the parties’ investment properties and the sale of the parties’ vehicles. In addition, the Respondent alleges that the Applicant took money from the bank account for the Tremblant condo for personal expenses, maxed out the couples’ credit cards and their line of credit, and has not paid her share of the carrying costs of the matrimonial home. Consequently, the Respondent argues there is a significant overpayment to the Applicant and no further monies should be paid to her.

[13] With all due respect to the Respondent, there are a number of problems with his assertions. First, the use of company funds to pay personal expenses was established well prior to the separation. That fact is readily apparent when the parties’ incomes are compared with their lifestyle. While the Applicant will have to assume responsibility for personal expenses paid for by the company after the date of separation, in these circumstances that practice cannot be described as misappropriation of company funds. Moreover, the company will have to assume responsibility for company expenses that have been left to the Applicant to pay. The calculation of monies owed is part of the process of disentanglement noted above and it will undoubtedly be factored into the final equalization payment. In addition, the Respondent has conflated equalization payments with support payments. The sale of properties and other assets and increases in joint debt will form part of the equalization process; they are irrelevant to the issue of spousal and child support.

[14] Finally, the parties disagree fundamentally on who has paid what toward the carrying costs of the matrimonial home. The Respondent insists that he has paid all of those costs from the date of separation to the present despite the fact that as of February 2015, the Applicant was ordered to pay half the costs. The Applicant states that she has paid all of those costs at some points in time, has paid half at other points and none at still other points in time. There is no question that these expenses do enter into the calculation of arrears owed or overpayment of both spousal and child support. However, no evidence was offered by either party to show who paid what toward the carrying costs of the matrimonial home, so no accounting could be done by the court assuming it was inclined to do so – which it was not. Consequently, that issue will also have to be set aside pending further evidence. This also may be an issue where the input of the accountant may be helpful.

[15] On the other hand, the fact that there may have been an overpayment of spousal or child support at certain points in time does not justify the Respondent’s unilateral decision to cut off all support to his family, nor does it justify an indefinite suspension of support. The Respondent is ordered to reinstate the payment of spousal and child support in accordance with the order of Master MacLeod dated February 4, 2015. As noted earlier, the issue of arrears cannot be resolved until the issue of payment of the carrying costs of the matrimonial home is resolved.

[16] Therefore, there will be an order as follows:

• The parties are to retain Mr. Dave Clarke of Collins Barrow (or another accountant agreed upon by the parties) to conduct an analysis of the parties’ financial affairs in order to determine personal expenses, joint expenses and company expenses. In addition, the accountant should prepare a reconciliation of payments towards these expenses. The cost of this analysis should be shared between the parties;

• Kelly Nocita is to be added as a party to this application; and

• The Respondent’s request to suspend payment of spousal and child support pursuant to the order of February 2015 is dismissed.

Justice Julianne Parfett

Date: December 14, 2015

COURT FILE NO.: FC-14-2544

DATE: 2015/12/14

ONTARIO

SUPERIOR COURT OF JUSTICE

RE: Debbie Nocita, Applicant

AND

Diodato Nocita, Respondent

BEFORE: Justice Julianne Parfett

COUNSEL: Darlene Summers, for the Applicant

Leonard Levencrown, for the Respondent

amended ENDORSEMENT

Parfett J.

Released: December 14, 2015