CITATION: Wehbe v. Wehbe, 2016 ONSC 1445

COURT FILE NO.: FC-13-202

DATE: 2016/03/01

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Sakina Wehbe

Applicant

– and –

Michael Mohammed Wehbe and

Local Motion Transportation Inc.

Respondents

Michael Heikkinen, for the Applicant

Leonard Levencrown, for the Respondent

HEARD: November 23, 24, 25 and 26 and December 10, 2015

REASONS FOR JUDGMENT

Justice A. Doyle

[1] The Applicant Sakina Wehbe (“wife”) is applying for a divorce, ongoing and retroactive spousal support, security for spousal support, an equalization of net family property and a vesting order. The Respondent Michael Mohammed Wehbe (“husband”) consents to the divorce but disputes the balance of the claims.

[2] The issues are as follows:

1. What is the equalization payment?

2. Is the wife entitled to spousal support? If so, what is the quantum and duration? Is retroactive spousal support payable?

3. Should there be a vesting order for payment of the equalization payment and spousal support?

4. How should the court characterize the payments made by the husband pursuant to the interim orders?

Background

[3] The parties married in 1976 and they separated on May 8, 2007.

[4] They have three adult children of the marriage. Sam Hussein Wehbe, born May 22, 1978, who is financially independent, Wessam Wehbe, born March 5, 1987, who is unemployed and residing with the wife, and Bassam Wehbe, born March 28, 1982, who has developmental delays and lives in a group home.

[5] The wife is 56 years old and works part-time at her cleaning business. Her 2014 reported gross business income was $9,360 with a net income of $7,451.94 plus $7,500 in support payments received from the husband. The husband is 61 years old and drives a taxicab. His 2014 reported income was net $11,485.

[6] Both parties were born in Lebanon. In 1975, the husband immigrated to Canada and sponsored the wife who arrived in Canada in 1976 and then they were married.

[7] At that time, the husband took odd jobs such as cleaning and kitchen work. The wife worked as a dishwasher at the Lord Elgin Hotel.

[8] The wife worked until the second child was born in 1982. She returned to work in 2006 when she worked for a cleaning company and briefly at a senior residence home.

[9] In 1990, he commenced working as a taxicab driver with Blue Line Taxi Company.

[10] On August 11, 1999, the husband incorporated Local Motion Transportation Inc. (“the company”) to operate a taxi and limousine service in the Ottawa area.

[11] In 1995, the whole family travelled to Lebanon. The parties returned to Canada and left the children with family members in Lebanon. The parties were planning to buy property in Lebanon. The husband provided a power of attorney authorizing the wife to purchase property in Lebanon (“the Lebanon property”) and provided her with $50,000. She returned to Lebanon without the husband. The parties disagree on how the money was used. The parties disagree on the legal status and value of the Lebanon property. The wife remained in Lebanon with two of the children while the eldest child lived with his father in Canada. In 1999, the wife and the children returned to Canada to resume living with the husband.

[12] After the separation in October 2007, the husband purchased a property located at 1351 Gaultois (“Gaultois property”) in Ottawa for $317,000. He paid a deposit and the balance was paid through a mortgage of $254,000. He resides there with his new partner.

[13] The husband indicates that he placed the property in the company’s name as he owed tax arrears to the Canada Revenue Agency (CRA) and he wished to avoid the seizure of that property. The Gaultois property is not shown as an asset in the company’s financial statements. The wife currently resides in a subsidized apartment through Ottawa Community Housing with Wessam. Her living expenses are supplemented by payments from her eldest son, Sam.

Procedural History

[14] Master MacLeod’s Order of March 27, 2013 and Justice Parfett’s order of April 1, 2014 detailed disclosure to be provided by the parties.

[15] On July 30, 2013, Justice Warkentin ordered that, pending the return of the motion, the husband was to pay $5,000 to the wife and the trial judge would ascertain whether that amount would be assigned to retroactive spousal support, ongoing spousal support, an equalization payment and or costs/disbursements. Justice Warkentin also ordered $316 per month as spousal support, on a without prejudice basis, and the husband was ordered not to dissipate, sell, mortgage or otherwise encumber the Gaultois property.

[16] The motion was adjourned to October 25, 2013, at which time Justice Minnema ordered spousal support in the amount of $2,990 per month commencing November 1, 2013. He imputed $100,000 as income to the husband and imputed $18,000 annual income to the wife. He also ordered a lump sum for retroactive spousal support from February 1, 2013 (from the first day of the month following the issuance of the application) to October 1, 2013 in the amount of $26,278 and $6,000 costs against the husband.

[17] Contrary to the order of Justice Warkentin, the husband registered a mortgage in favour of his sister on the Gaultois property. The order of Justice Mackinnon dated November 20, 2014 ordered the husband to remove this mortgage and the following:

• The husband would provide a neutral valuation of the taxi plates;

• He would provide an authorization to his accountant to provide personal and corporate disclosure previously ordered;

• He would pay $35,000 to the wife before November 30, 2014 with the trial judge to determine how it is to be credited to the husband; and

• Justice Minnema’s Order for spousal support was replaced by an obligation that the husband would pay $1,000 to the wife on December 1, 2014 and on January 1, 2015 and each month thereafter and the trial judge would determine how these payments were to be credited to the husband.

[18] Justice Mackinnon also ordered that, if and when the Gaultois property was sold, the net sale proceeds would be held in trust and that a motion could be scheduled for the purpose of the husband’s compliance. She ordered that the wife would have a $50,000 security interest on the Gaultois property and she gave permission to the wife to amend her application to request that the Gaultois property be vested in her in satisfaction of support and property. In addition, costs were ordered against husband in the amount of $2,000.

[19] The Gaultois property has not been sold and the company remains the registered owner of the property.

[20] The husband has paid $5,000 as ordered by Warkentin J. and made two payments of $316. He has also paid the amount of $35,000 ordered by Justice Mackinnon plus a payment of $1,000. There has been garnishment of other smaller funds through Family Responsibility Office (“FRO”).

[21] In 2014, the husband entered into a consumer proposal in which he is obliged to pay $510 per month to the Trustee in Bankruptcy. Justice Blishen’s order of April 21, 2015, lifted the stay of proceedings by virtue of s. 69.4 of Bankruptcy and Insolvency Act, R.S.C. 1985 c. B-3, and hence the stay of proceeding as a result of the consumer proposal ceased to operate in respect of the wife.

[22] The trial originally set for September 2015 was adjourned and costs were to be determined by the trial judge.

1. What is the equalization payment?

[23] The contentious issues in the parties’ net family property statements are as follows:

At Valuation date

1. Value of the husband’s shares in the company and value of taxi cab plate owned personally by the husband

2. Title and value of the Lebanon property and whether the husband advanced $50,000 to the wife

3. Value of the household items

4. Cash on hand owned by the husband

5. Husband’s bank account balance

6. Husband’s debts

At Date of Marriage

7. Value of husband’s assets

1. Value of the husband’s shares in the company and value of taxi cab plate owned personally by the husband

Position of the Wife

[24] The wife relies on Dave Clarke’s valuation report dated October 16, 2014 and submits that the value of the shares owned by the husband in Local Motion Transportation Inc. at valuation date is $84,600.

[25] Mr. Clarke, of Collins Barrow, was qualified as an expert on business valuations and income determination.

[26] Given Mr. Clarke’s findings, she submits that the value of the husband’s other taxi cab plate is $173,600.

Position of the Husband

[27] The husband relies on Jean Claude Desnoyers’ report dated December 17, 2013 and submits that there is no value to the shares he owns in the company as at valuation date and the value of his other taxi cab plate is $65,000.

[28] Mr. Desnoyers was qualified as an expert on business valuations and income determination.

Analysis

Legal principles

[29] Section 4 of the Family Law Act sets out the framework for division of property between married spouses. The value of an asset must be determined at the valuation date, i.e. date of separation. The parties agree that the date of separation is May 7, 2007.

[30] In determining the value of an asset, the court must determine the fair market value (“FMV”). See Menage v. Hedges (1987), 1987 CanLII 5234 (ON SC), 8 R.F.L. (3d) 225 (Ont. Dist. Ct.) and Rawluk v Rawluk, 1990 CanLII 152 (SCC), [1990] 1 S.C.R. 70.

[31] Hindsight is acceptable when valuing shares. This was discussed by the Court of Appeal in Debora v. Debora (2006), 2006 CanLII 40663 (ON CA), 83 O.R. (3d) 81, at para. 46:

The general principle that emerges from both Domglas, supra, and Ford, supra, is that hindsight information is generally inadmissible and cannot be used as part of the process of establishing the value of shares at a particular date An exception to this principle is that hindsight, or the actual results achieved after the valuation date, may be compared against the projected or forecasted corporate results made by valuators and used to test the reasonableness of the assumptions made by those valuators.

As stated in Harry, supra, at para. 17, “when evaluating the fair market value of a business hindsight is inappropriate”. However, as in the corporate context, “one cannot entirely ignore events which followed [the valuation date] in assessing the fundamental assumptions underpinning the opinions expressed by the [the experts]”, Woeller, supra, at para. 31.

Mr. Clarke’s report

[32] Mr. Clarke acknowledges his role was to provide the FMV and at paragraph 3, he states:

For the purpose of our calculation, fair market value is defined as the highest price, in terms of money or money’s worth, obtainable in an open and unrestricted market between informed and prudent parties, acting at arm’s length, neither party being under any compulsion to transact.

[33] Mr. Clarke states that there are three types of reports:

• comprehensive valuation report: based on a comprehensive review and analysis of the business, its industry and all other relevant factors, adequately corroborated and generally set out in the detailed valuation report;

• estimate valuation report: based on limited review, analysis and corroboration of relevant information and generally set out in the less detailed valuation report; and

• calculation valuation report: based on a minimal review and analysis and little or no corroboration of relevant information and generally set out in the brief valuation report.

[34] He was asked to prepare a calculation valuation report and consequently, Mr. Clarke states in his report that his opinion is “inherently limited by the nature of this type of report”.

[35] He indicates that he was not provided with formal appraisals of the fair market value of the tangibles and assets owned by the company. Therefore, he assumed that the fair market value of the company’s assets approximate their book value as set out in the report. In the preparation of his report, Mr. Clarke relied on:

• year-end financial statements of the company;

• the company’s 2006 and 2007 corporate tax return;

• SME preliminary calculation of Local Motion Transportation Inc. as of May 7, 2007 dated December 17, 2013;

• publicly available and licensed databases containing economic transactional private company and public company information; and

• reference materials.

[36] At paragraph 34 of his report, he also made the following assumptions:

• the company had no contingent liabilities, unusual contractual obligations or substantial commitments other than the ordinary course of business, or litigation pending or threatened other than that was disclosed to us;

• there were no agreements, contracts or covenants restricting the sale or transfer of any of the company’s assets or issued shares;

• the company had no redundant assets;

• the capital dividend account was nil;

• income tax laws pending or prevailing at the valuation date would continue in future;

• there were no environmental issues impacting the company;

• revenues and expenses have been properly recorded in all accounting periods presented in this report;

• all transactions have been recorded in the books and at fair market value except as noted in schedule A; and

• there are no facts known to the company’s management that might materially impact our estimate of value.

[37] Mr. Clarke indicated that there was no evidence present that the company would cease being a going concern in the foreseeable future and hence the company was valued on a going concern basis.

[38] He indicates that privately held companies which are going concerns are valued on one of three approaches:

• asset values,

• cash flows, and

• actual market values.

[39] The asset approach is used when the company being valued is in the nature of an investment holding company or property holding company where liquidation is contemplated or the outlook for a company’s ongoing concerns is uncertain. At the time of the valuation date, the company had operated for one full fiscal year. The value of the company is made up of its assets. Mr. Clarke used a net book value approach i.e. asset approach.

[40] At paragraph 30, he states that the cash flow approach is used “in most going concern situations as the value of the business is generally its ability to generate cash flows and provide an appropriate rate of return on invested capital”.

[41] Mr. Clarke indicated that the key component of the value of the business is the taxi plate. With respect to the value of the taxi cab plate, he states the following:

We were unable to obtain industry research for the fair market value of taxi owner license (“taxi plate”) at the valuation date. We have therefore relied on industry information prepared subsequent to the valuation date as a basis for fair market value on the taxi plate. Given the nature of this engagement, it is our view that the industry research relied upon was sufficiently relevant to provide a reasonable basis for the fair market value at the time of the valuation date.

[42] In estimating the value of the plate, Mr. Clarke considered the fact that, at the date of separation, the City of Ottawa had restricted the number of taxi plates in circulation. In his opinion, this results in the trade of taxi plates at high value.

[43] At schedule A, the calculation of the adjusted net book value of the shares was stated as follows:

• equity at December 31, 2006 ($63,532)

• add:

the fair market value of taxi plate license = $173,600

• the fair market value of limousine license per SME report = $1,250

• amount due to shareholder = $12,231

• less

• estimated loss from January 1 to May 7, 2007 = ($10,000)

• net book value of taxi plate license = ($28,990)

• Therefore, adjusted net book value at May 7, 2007 = $84,559 rounded to $84,600

[44] Since Mr. Clarke was unable to obtain industry research with respect to the fair market value of taxi plates at the time of separation, he relied on industry information published after the valuation date.

[45] The FMV of Ottawa taxi plate licences was shown in schedule A of Mr. Clarke’s report. He has provided the following three valuations of the taxi plate licenses.

• $185,000 as the 2009 fair market value as per a paper written by Professor Barry Prentice, Associate Professor Charles Mossman and Research Intern Adam van Schijndel;

• $210,000 in accordance with the 2010 Superior Court decision Al-Edabi v. Zahran 2010 ONSC 1905; and

• $250,000 as estimated by a research paper prepared by Harrah Associates Inc. dated April 28, 2012 regarding taxicab regulation in North America

[46] Mr. Clarke estimated the fair market value of the taxi plate owned by the company by averaging the above estimated license values per industry information from 2009-2010 as set out above. He then deducted the estimated value in 2002 of $80,000 (as stated by the husband) found in Mr. Desnoyers' report.

[47] He then estimated the increase in value over the 7 or 8 year period and multiplied the increase in value per year to 5.35 years (January 1, 2002 to May 7, 2007). He then averaged the three numbers to arrive at $173,600 as the value of the taxi cab licence.

[48] He also stated that since limousine licenses are regularly issued by the City of Ottawa, he assumed that the value approximates the cost of obtaining the limousine plate. Both experts agree that the value of the limousine licence is $1,250.

Mr. Desnoyers' report

[49] Mr. Desnoyers, of SME, prepared a preliminary calculation of the valuation. He admits that it is not a full valuation but rather a preliminary report limited in nature. In his report, he states that “the scope of review in the preparation of this preliminary calculation of value was limited”.

[50] He states that the fair market value is defined as:

the highest price, expressed in terms of cash equivalents, at which property would change hands between a hypothetical willing and able buyer and a hypothetical willing and able seller, acting at arm’s length in an open and unrestricted market, when neither is under compulsion to buy or sell and when both having reasonable knowledge of the relevant facts.

[51] He calculated the value of the company to be zero and agreed that the main difference between his valuation and Mr. Clarke’s valuation is the value of the taxi plate.

[52] He stated that in preparing this preliminary calculation he limited his scope of review and relied on the financial statements for 2006 and 2007. He also relied on the fair market value of the taxi and limousine licenses provided by the husband.

[53] His assumptions are as follows:

• the fair market value of the assets and liabilities are equal to book value unless specified otherwise;

• the company had no significant contingent liabilities, unusual contractual obligations or substantial commitments, other than in the ordinary course of business, or material litigation pending nor threatened, at the relevant valuation date;

• There were no contracts being negotiated at the valuation date which would have a material effect on the future operating results of the business that have not been noted in this report;

• There were no contracts or agreements in effect at the valuation date that would otherwise have a bearing on our valuation conclusions;

• The current tax rates are to continue;

• The financial statements would not change if they were subject to an audit;

• We have not exposed the business to the marketplace and, consequently, have not determined if there are any specific purchasers to whom such investment would be of a special economic advantage or other special interest;

• The fair market value of the capital assets provided to us is reasonable;

• The fair market value of the taxi license and limousine license provided to us by Mr. Wehbe are reasonable;

• There is no information that would have a material impact on the valuation that was not considered; and

• All the information provided and examined is reasonable.

[54] He further states as follows:

Should any of the above major assumptions not be accurate or should any of the other information provided to us not be factual or correct, our preliminary calculation of the fair market value of the business, as expressed herein, could be significantly different.

[55] He also concluded that the going concern approach to valuation was more appropriate. He states the following: “a going concern approach assumes that the business will continue to operate profitably or operate with the potential for future profits and positive cash flow. To determine the fair market value of the business, we have used the capitalization of maintainable earnings approach and the market comparable approach.”

[56] He states that the market value of the shares as a valuation date was nil and that the company owed an amount to the shareholder on that date.

[57] Mr. Desnoyers calculated the fair market value of the net adjusted book value of the shares as follows:

• Shareholders’ equity as of December 31, 2006 ($63,532)

• add

+fair market value of the taxi license = $65,000

+fair market value of the limo license = $1,250

+amount due to the shareholder = $12,231

• deduct

• -net book value of taxi license = ($40,924)

• -estimated net loss from January 1, 2007 to May 7, 2007 = ($10,000)

• -fair market value of the hundred percent of the shares and the amount owed to the shareholder = - $35,975 rounded to 0

[58] He provided the following notes to his calculation:

• the taxi license was purchased in 1990 for $51,000. In 2002, Blue Line taxi sold licenses at $80,000. For the cost of $80,000, the purchaser would become a Blue Line taxi driver and could probably make about $15,000 in net profits when they worked for Blue Line compared to the amount that they would make working on their own, according to Mr. Wehbe. According to Mr. Wehbe, the taxi license, as at the valuation date, for an independent taxi driver, was worth about $65,000. Based on the level of profits generated by the business, we believe that the amount provided by Mr. Wehbe is reasonable;

• according to Mr. Wehbe, the cost to obtain a license for limousine service was about $1,250;

• for the purposes of this report Mr. Desnoyers assumed that the amount due to the shareholder at valuation date was the same amount due as of December 31, 2006; and

• he calculated the net loss based on the results of the period ending December 31, 2006. $30,564 x 4/12 = $10,188 rounded to $10,000.

Decision

[59] Both experts admitted that their reports were limited in nature.

[60] They both agree that:

• the company should be valued as a going concern;

• the company should be valued using the asset approach;

• they should use the net book value as of December 31, 2006; and

• both experts prepared limited reports and admitted the limitation of their opinion due to the nature of their retainer and available information.

[61] In summary, the Court has the benefit of two reports with restrictions prepared by experts who agreed on the general approach needed when valuing a business.

[62] They both agreed that the main difference with respect to their valuation is the value they attribute to the taxi plate. Mr. Clarke relied on outside references after the valuation date and then relied on Mr. Desnoyers’ values set out in his report. Mr. Desnoyers’ values were determined by the husband’s representations made to him.

[63] The court is asked to accept the value of taxi plate: $65,000 as suggested by Mr. Desnoyers or $173,000 as calculated by Mr. Clarke.

[64] Neither party nor their expert presented evidence of sales or purchase or advertisements of the sale of taxi plates as of 2007. Mr. Clarke provided information from outside sources dated between 2010 and 2012. Mr. Desnoyers relied on the representations by the husband.

[65] In Justice Parfett’s consent order dated April 14, 2014, paragraph three provides that “by July 1, 2014 the respondent shall provide the applicant with a valuation of taxi plate number 225 and number 572 with the values verified by the City of Ottawa license department.”

[66] The wife states that the wording of Justice Parfett’s order is unequivocal that the husband was to provide an independent valuation and that the values would be verified by the city of Ottawa.

[67] The husband indicates that the city of Ottawa was unable to provide a valuation and therefore he was unable to comply with that particular paragraph of the order. He believes this exonerates him from compliance with the order.

[68] The husband told Mr. Desnoyers that the taxi cab license, as at the valuation date, for an independent taxi driver, was worth $65,000. In his financial statement dated November 16, 2015, he stated that the value of his other taxi plate #572, which he owns personally, at valuation date was $75,000. He does not provide any corroborating evidence as to how he arrived at those figures. At trial, his attempt to provide a value was curtailed by the court’s ruling after an objection by wife’s counsel that, as he was not an expert, he could not provide opinion evidence.

[69] I agree with the wife that the husband has failed to comply with Justice Parfett’s order. The court can draw a negative inference due to the husband’s failure to obey a court order.

[70] Also, I place little weight on Mr. Desnoyers’ report as his valuation as it was based primarily on the husband’s representations. In addition, this was a preliminary report and the Court finds that this diminishes the weight of this report as the author merely relied on the representations of the client. He accepted the information provided by the husband at face value. He was not asked to verify the information nor study outside sources. His retainer was severely limited in its ability to assist in determining the value of the plate which is the company’s major asset. As he stated in his report:

Should any of the above major assumptions not be accurate or should any of the other information provided to us not be factual or correct, our preliminary calculation of the fair market value of the business, as expressed herein, could be significantly different.

[71] Therefore, as an expert he is admitting the report’s limitation as it is limited by the information provided him, which included the husband’s representations.

[72] Although Mr. Clarke did admit in cross-examination that his report would have changed if he had been given other information, based on what he was indeed given, his report was fairly put forth before the court. Any limitations were as a result of the lack of information provided to him. His report is a calculation valuation report based on a minimal review and analysis and little or no corroboration of relevant information and generally set out in the brief valuation report. The Court notes its limitations similar to Mr. Desnoyers’ report.

[73] However, the difference is that Mr. Clarke’s report provides an analysis using outside sources, rather than relying primarily on the husband’s word. This report is therefore accorded more weight than Mr. Desnoyers’ report.

[74] The court notes that the Prentice, Mossman, van Schijnel report referred to in Mr. Clarke’s report states that the 2009-2010 fair market value of taxi cab plates were trading at that time at $185,000. Although, this report was not produced, Mr. Clarke relied on the information therein and the court may consider this third party information rather than the husband’s self-serving estimates.

[75] The Court does not accept the value provided in the 2010 Superior Court case Al-Ebadi v. Zahran. The court valued the plate, which permits fares to be picked up from the Ottawa airport, at $210,000. The husband does not have this authority. Hence, this Court finds that the value of $250,000 presented by Harrah Associates Inc. should also not be considered as it must, by its value suggest that it has other privileges (such as authority to pick up fares from the airport) not accorded to the husband’s plate.

[76] The court accepts the value of the taxi cab licence in 2009-2010 was $185,000.

[77] The Court accepts the husband’s evidence that he purchased the licence #572 for $51,000 in 1990. The documentary evidence filed in the proceedings (Exhibit 8) show the transfer documents regarding the sale. The wife did not contradict this evidence nor cross-examine on this issue. This is the best evidence that the court has with respect to the value at that time.

[78] Therefore, over the 20 year period from 1990 to 2010, the value increased by $134,000 or $6,700 per year. Using Mr. Clarke’s method of multiplying the increase in value per year, the value is calculated as follows: $6,700 per year for 17 years (2007 – valuation date) =$113,900 plus the original purchase price of $51,000 = $164,900

[79] Therefore, inserting the value of the plate as $164,900 in Schedule A of Mr. Clarke’s report, the value of Mr. Wehbe’ s share in the company is $76,200.

[80] The value of the other taxi-cab plate (#572) is found to be $164,900. The husband’s evidence suggests that both his plates have the same privileges and does not include the authority to pick up fares from the airport.

2. Title and value of the Lebanon property

Wife’s position

[81] The wife submits that the husband owned a property in Lebanon as of the date of separation.

[82] In 1995, the wife had a power of attorney for the husband who asked her to purchase property in Lebanon. She states that she bought the property and placed it in his name. She stayed in Lebanon from 1995 to 1999.

[83] The wife states that the value of the Lebanon property is $350,000. She states that she used the $48,000 (she stated $48,000 in her testimony, but given her counsel’s submission and the husband’s financial statement, the court will use the $50,000 figure) given by her husband to buy the lot and that he had sent over $300,000 over the 4 years whilst she was there. A property was built with these funds. She states that he would send her $10,000 to $12,000 at a time on a regular basis to pay the engineers and contractors. He would call her when he was about to send the money and she would receive it from a bank in Chtaura, which is close to Jdita.

[84] In 2006, which is the last time she was in Lebanon, the husband asked her to finish the building but she refused. She stated that at that time the home was not complete including the need for the utilities to be hooked up. A door was installed as there was an issue with squatters.

Husband’s position

[85] The husband firstly questions whether he is really still the owner as he advanced the wife $50,000 and did not see proof that she bought the property. If the court finds that he is the owner, then he submits that the property has no value for various reasons:

• It has a number of issues including right of way issues;

• The wife presented a deed that even though the property was in his name, it was marked “seized in 2003”;

• He was unable to value it or confirm his ownership as he tried to return to Lebanon in 2000, but at the airport his passport was confiscated and was not able to return to the country to determine what happened to the $50,000 and the property;

• The husband states that the land in Jdita, Lebanon remains in litigation and the political circumstances compromise the marketability and hence the fair market value is negligible; and

• His evidence is that further construction was halted due to a problem with road access.

[86] His financial statement sworn November 16, 2015 summarizes his position, identifying that he owns the land located at Jdita, Lebanon which was “undeveloped, no FMV given access dispute, mortgages claim and political instability. Property controlled by the applicant given POA”.

[87] He states that while the wife was in Lebanon, he forwarded $15,000 CDN to pay for construction of the building. He questions whether the $50,000 provided to the wife was used for the purpose it was intended, i.e. to buy a lot for him.

Analysis

Legal principles

[88] As stated in Homsi v. Zaya, 2009 ONCA 322, 65 R.F.L. (6th) 17, at paragraph 38:

While it is true that there is a paucity of evidence in this regard, the onus is on the party asserting the value of the asset he or she controls to provide credible evidence as to its value: Conway v. Conway, 2005 CANLII 14136 (ONSC) at para. 14. Homsi had control of the items in question since he took possession of the matrimonial home and proceeded to sell it without Zaya’s consent. It was open to the trial judge to draw an adverse inference from Homsi’s failure to produce an updated financial statement or an assessment of the property in support of his position.

Decision

Title of the Lebanon property

[89] By order of Justice Parfett dated April 14, 2014, the husband was to provide an independent valuation of the Lebanon property by July 1, 2014. The husband has failed to comply with this order.

[90] He states that he is unable to enter Lebanon. Even if we were to accept that he was not permitted to travel within Lebanon, he could have made arrangements to obtain a valuation of the same.

[91] He states that in 2001, when he arrived in Lebanon, his passport was confiscated at the airport and was prohibited from travelling in the country. He denies he visited the property on that occasion.

[92] Their son, Sam, visited the property in 2007 and the court accepts his evidence that he was shown the property and that the extended family treated it as if it was still his father’s property. The court notes that Sam’s observations while there was that the family members were showing him the property on the basis that the father owned the building. The inference from those actions is that as far as the local community is concerned the building is that of the husband. This provides some corroboration that the husband was still the owner of the Lebanon property at the date of separation.

[93] During cross-examination, the wife tendered a document titled Real Estate Statement from the Republic of Lebanon. It was not an original document that the wife could identify as a document pertaining to the Lebanon property. The wife was referring to the document for the sole reason to refute the husband’s allegation that she did not use the amount of $50,000 provided by the husband to purchase property for the husband. When asked why it had not been previously produced, she indicated that no one had asked for it.

[94] The wife was cross-examined on this document. The “deed registration showed that the property was ‘seized in 2003”. This is 4 years before the separation. There is nothing before the court to confirm what happened after this “seizure” and whether it was redeemed and arrangements were made to return the title to the husband. The closest event to the date of separation is the visit by Sam to the Lebanon property in 2007, which is the year of separation.

[95] Although it was admitted into evidence, the court gives little weight to the document as it was produced for the first time at trial, which did not allow the husband to investigate this document.

[96] The Court finds that the husband is the owner of the Lebanon property for the following reasons:

1. He admits to owning the same in his sworn financial statement dated November 16, 2015 and describes it as follows:

“Jdita, Lebanon

Undeveloped, no FMV given access dispute, mortgage’s claim and political instability. Property controlled by the Applicant given POA”;

2. His son confirmed that he still owned it in 2007 when he was there. The court finds that Sam’s evidence is credible. When visiting the property just prior to separation, the court accepts his evidence that he was shown the property and that the extended family showed it to him as the property of his father. There was no evidence from him whilst in Lebanon that the property was other than belonging to his father;

3. The photos identified by the wife were a fair depiction of the property. The pictures that she identified were produced for the first time at trial. She admitted that she kept them from him and wanted to have proof that indeed this property existed.

Value of the Lebanon Property

[97] The husband says it is worth nil and the wife says it is worth $350,000. Neither party provided me with documentary evidence that would assist the Court in determining its value as of valuation date.

[98] The wife states that the property was placed in her husband’s name and that he would send her money periodically to build the house. She states that the total amount provided to her in the five years that she was there from 1995 to 2000 was approximately $300,000.

[99] Her photos show a building with five garages, three floors with two apartments per floor. She states that the apartments are spacious and have two bedrooms each.

[100] Both parties confirm that the husband provided the wife with funds before she returned to Lebanon in 1995. The court finds that the wife used the $50,000 that was provided to her by the husband. On the balance of probabilities, it is reasonable to accept that monies were needed to purchase the lot.

[101] However, the court is not prepared to accept that she received approximately $300,000 in a four-year period from the husband. No evidence was produced with respect to these monies purportedly sent by the husband. Although, the wife described the bank in Lebanon where the funds were received, no receipts, invoices or contracts or estimates from the workmen on the site were produced.

[102] The husband did not value it as he was ordered. It was his duty to value his asset. The court can draw an adverse interest for his failure to do so. No explanation was given other than he was not allowed back in the country because his passport was confiscated last time he visited Lebanon. He was not expected to attend his property, but rather he was ordered to obtain a value. He could have made arrangements through an agent. His failure to comply with the court order is unacceptable. He has not provided any valid reason for not complying with the court order.

[103] Although the husband was court ordered to value the property, the wife could have made some arrangements to obtain an estimate of the property. The wife could have provided the court with comparable properties and the values of them.

[104] The court is not prepared to accept that the property is worth $350,000. On the balance of probabilities and on the evidence provided, the court finds that the husband did not forward $300,000 from 1995 to 1999, which would average approximately $60,000 per year or $5,000 per month. There was no documentary evidence to corroborate this claim and, therefore, the court is not prepared to accept the wife’s uncorroborated statement.

[105] In addition, it is noted the wife had pleaded different amounts in her original application dated January 2013. At page 8, paragraph 13 of her application, the wife indicated that her husband sent money to her in Lebanon totalling approximately $87,000 of which $84,000 was spent on the construction of the building. Although the Application is unsworn, it is the original pleading that instituted the application and was signed by the wife.

[106] The court is asked to accept this significant value without any independent evidence showing the value of the home.

[107] The court has no evidence that would assist it to determine what a property in a small community in Lebanon would have been worth in 2007. It cannot speculate.

[108] In contrast, the Court is troubled by the husband’s failure to comply with court orders and failure to disclose court ordered information. This undermines his credibility and can lead to negative inferences. His evidence is inconsistent, as he, on one hand, says that he is not really certain that she bought the property and on the other hand, declares the ownership on his financial statement but claims it is worthless.

[109] It is clear from the photos and the viva voce evidence that the building is not complete. There was no evidence as to whether any further work was completed on the property since the wife returned to Canada in the late 90’s or early 2000’s.

[110] The court also heard evidence of the political turmoil, but has no evidence of the impact that might have on the property value.

[111] What is the market value? What would someone have paid for it in 2007?

[112] The preamble of the Family Law Act states that it is desirable “to provide in law for the orderly and equitable settlement of the affairs of the spouses upon the breakdown of the partnership”.

[113] Since the husband has failed to comply with the court order, the Court must base its decision on the limited information before it in order to provide “the orderly and equitable settlement”.

[114] The court cannot speculate. It is fair and reasonable that the wife receive her share of the original investment that the court finds was placed into the property.

[115] The Court finds that the property is worth at least the initial investment of $50,000 plus the second investment of $15,000 of monies provided by the husband, which he testified had been sent to the wife whilst she was there in the late 1990’s. Therefore, the amount of $65,000 for the value of the Lebanon property will be included in the NFP statement.

[116] These are family funds that were placed in an asset that existed at the date of separation.

[117] I also find that the wife used the $50,000 for the purchase of the property and the development of the building. Therefore, the court rejects the husband’s claim that he advanced these funds to her and that she used them for her own use.

3. Value of the household items

Wife’s position

[118] The wife indicates that the each party had household items worth $5,000 at Valuation date.

Husband’s position

[119] The husband states that he had $1,000 worth of household furnishings remaining in the home after the wife left following separation. He states that she took most of the furniture from the matrimonial home at the time of the separation.

Analysis

[120] There was no valuation of the items.

[121] The application was commenced in 2013, which was six years after the separation. Neither party explored the issue with respect to the division of the items during the litigation nor brought any motion with respect to the values.

[122] Neither party gave details regarding the furniture such as the description, the make, the state, and the age and purchase price.

[123] The court cannot merely guess at the valuations.

[124] On the balance of probabilities, the Court assumes that the parties were content with the division of the items. They acquiesced to the status quo which existed just after the separation. The wife returned to the home to obtain some of the items. There was no evidence of further discussion regarding the items. This issue was raised again only in the context of litigation which was commenced six years after separation.

[125] Since the court has no credible evidence to establish the value and given the length of time that the parties have acquiesced to the division of the items after separation, the court finds that the items were divided at separation and that the household items were equally divided.

4. Cash on hand with husband

Wife’s position

[126] The wife states that the husband had $250,000 worth of cash at the date of separation.

[127] The wife indicated that she used to count the money during the marriage and the cash would be in Giant Tiger bags and would include $1,000 bills.

Husband’s position

[128] The husband denies that he had cash on hand.

Analysis

Decision

[129] The wife is requesting a finding that the husband had a significant amount of cash in their home. She stated that she counted this money in the early 2000’s. She did not testify that she counted money around the time of the separation in 2007.

[130] She relied on Colafranceschi v. Colafranceschi (2001), 2001 CanLII 28188 (ON SC), 15 R.F.L. (5th) 294 (Ont. S.C.), where Justice Heeney made a finding that the husband had $30,000 in cash on the date of separation. The court found that the large amount of cash was consistent with certain admissions made by the husband, including that he had four to six thousand dollars in cash on his person at any given time, he had many thousands of dollars in a diaper bag on one occasion, placed cash in an envelope regularly, that he was prepared to cheat the income tax department and admitted that personal expenses were routinely paid through the business account, and that he paid his wife when she did not work for the business. This case is distinguishable as there were no admissions by the husband.

[131] The Court accepts the wife’s evidence that she first saw cash in bags in 2002 and that she would count it when he was not around. She stated if she heard his voice, she would put the bag away. She remarked that she first saw a $1,000 bill when reviewing the cash and the husband told her that they were only available at the bank. She described it as purple.

[132] She alleges that the husband derived some of his earnings through cash transactions, including payment of the rental of the other cab plate and paying his employees in cash.

[133] Although the court accepts the wife’s evidence that cash transactions were part of the husband’s cab business, this fact does not necessarily translate to a finding that there were large sums of cash in the home at the date of separation.

[134] The Court finds her evidence is exaggerated and incredible and the court does not accept it. The reasons are as follows:

• No details were provided with respect to counting the monies closer to the date of separation;

• No details were provided regarding denominations and how they were bound or stored; and

• No details were provided regarding how many bags would be needed to store $250,000.

[135] It is difficult for the court to find that the stated sum of money existed in the home. The wife made no claim nor raised any issue regarding this until this matter was brought to litigation six years later. It was not raised in her original Application instituted in January 2013.

[136] One wonders why the wife did not request a share of this money before her departure and insist on receiving some of it right after the separation.

[137] For the court to accept such a large sum of funds, it would need to receive more details and corroboration.

[138] The Court finds that, as she exaggerated the monies sent over by the husband to Lebanon for the building of the property there, she has also done the same in trying to convince the court that the husband had a large stash in the house at the time of her departure from the matrimonial home in May 2007.

[139] Therefore, the Court finds that the husband did not possess the amount of $250,000 in cash at the date of separation.

5. Husband’s bank account balance

Wife’s position

[140] The parties agree that the husband had $4,500 in his TD bank account ***645 and $1,253 in Account *****985 with Scotiabank.

[141] In addition, the wife alleges that she saw the husband’s bank statement showing a balance of $96,000 shortly after the separation when he tried to lure her to reconcile. He was trying to convince her to buy a home with him and represent to the financial institution that she made $60,000 per annum. She refused.

[142] The wife submits that the husband used $63,500 of those funds to purchase the Gaultois property in October 2007, which was 6 months after separation. The Home Trust loan commitment confirms that the financial institution required the husband to have those funds available for a deposit for the home purchase as a condition of financing.

Husband’s position

[143] The husband denies that he had funds in the bank or funds on hand. He states that he borrowed the monies for the down payment but provides no evidence showing the loan.

Decision

[144] Master MacLeod’s order compelled the parties to produce their draft NFP statements with the supporting documentation. Bank statement balances existing at valuation date were not tendered in evidence.

[145] Disclosure of bank balances would obviate the need for the court to analyze and review other evidence to determine this issue.

[146] The court notes that the husband did in fact purchase the Gaultois property after separation and placed a deposit of $63,500.

[147] He did not contest that he had placed a down payment on the home. There was no evidence of a loan to obtain this down payment. On the balance of probabilities, the court finds that he would have had to have those funds at the date of separation.

[148] In addition, the court accepts the wife’s evidence that she was shown his bank account. It is credible that he would have shown her that he had money in the bank to buy a property in trying to lure her into returning to him. The court accepts her evidence that he was very interested in persuading her to reconcile. He demonstrated that he had funds in his account and he could provide her a home.

[149] Therefore, the court finds that the husband had $96,000 in his bank account at the time of separation.

6. Husband’s debts at date of separation

Husband’s position

[150] The husband claims that he had the following debts at valuation date:

i) W. Haddad $150,000

ii) CRA $65,964

iii) Ottawa Metro Towing $10,080

iv) George Ackl $50,000

v) BMO $20,000

vi) CIBC $26,000

vii) MBNA $46,000

viii) RBC loan $15,000

ix) Ford Lincoln Town Car $1.00

• For a total of $383,045.00

[151] In his financial statement dated November 2015, and his NFP statement, the husband shows a construction lien debt on the Gaultois property. Since the Gaultois property was purchased after separation, this lien did not exist at valuation date. He admitted this under oath.

Wife’s position

[152] The wife contends that the husband has failed to prove the debts with credible evidence, documentary proof or that they are statute barred.

[153] In addition, she submits that the debt to Canada Revenue Agency forms part of the husband’s consumer proposal made under the Bankruptcy and Insolvency Act and would be extinguished. In addition, the Ottawa Metro is a debt owed by the corporation not personally by the husband.

Analysis

Legal principles

[154] The onus is on the party claiming the deduction to prove the same. Section 4(3) of the Family Law Act stipulates that the onus of proof is on the person claiming the deduction or exclusion.

[155] The Court requires a documentary trail such as evidence of the debt, payments made to the debt, history of the debt, bank records, money transfers or corroborating evidence including viva voce evidence of the creditor.

[156] In Jacobs v. Jacobs, 2011 ONSC 2699, 5 R.F.L. (7th) 458, the Court would not permit the deduction of a debt as on the balance of probabilities, the defendant had not demonstrated that he would have to repay the amount. There had been no demand of payment, no evidence of payments and he admitted that he had no intention of repaying it.

[157] In Wood v. Wood (2004), 2004 CanLII 19028 (ON SC), 6 R.F.L. (6th) 441, at paras. 52-57, the Court indicated that the court may examine hindsight evidence to determine whether a debt will ever be repaid by a party claiming the debt for NFP calculation purposes. The court also held that when an alleged loan has remained unpaid for a period which is greater than the limitation period, then the loan should not be considered a debt for the purposes of determining NFP. Also in Andrade v. Andrade, 2012 ONSC 2777, the court did not permit the deduction of debts as there was no documentation to support the debts.

[158] In Ross v. Ross, 2006 CanLII 41401 (ON CA), 83 OR (3d) 1 (C.A.), at para. 39, the Ontario Court of Appeal ruled that courts should not rely on hindsight evidence to value debts at the date of separation, citing Justice Aitken’s decision in Buttrum v. Buttrum (2001), 2001 CanLII 28187 (ON SC), 15 R.F.L. (5th) 250 (Ont. S.C.):

In valuing an asset as of the valuation date, only facts known or reasonably foreseeable on that date should be taken into account. It is inappropriate to look to events that occurred after the valuation date if they were not reasonably foreseeable on the valuation date. Nevertheless, post-valuation events can be looked at to confirm or challenge the reasonableness of inferences drawn based on the information available on the valuation date.

Decision

[159] The Court notes that at the date of the consumer proposal in 2014, the husband’s liabilities consisted of the following:

• Banque de Montréal: $20,000

• CRA: $79,000

• CIBC: $26,000

• Ford: $1 (secured)

• MBNA: $46,000

• For a total of $171,000

[160] The debts of the corporation as at December 31, 2006 were as follows:

• Long term loans from financial institutions: $83,566

• Payable and accrued liabilities: $65,129

• Due to Shareholder: $12,231

[161] The debts as of December 31, 2007 were:

• Long term loans from financial institutions: $93,224

• Payable and accrued liabilities: $66,985

• Due to Shareholder: $10,879

[162] There was no evidence led to particularize what the above debts consisted of and whether there were personal.

[163] The evidence produced by the husband to prove his debts include:

• Translated document from Arabic dated November 25, 1997 confirming that the husband had borrowed $20,000 from his father Hussein Said Wehbe;

• Power of attorney dated April 3, 1990 whereby Khaled H. Wehbe (the husband’s brother) appoints the husband to deal with taxi cab plate #225;

• A declaration of trust dated March 23, 1990 executed by Khaled H. Wehbe which states:

I hereby declare that I hold title to Ottawa Taxi Plate No. 225 and 1981 Chevrolet Caprice bearing serial NO. 2G1AN69H9B1145720 in trust for my brother Mohamed Wehbe. I will upon written request convey same in such manner as Mohamed Wehbe may direct.

• A letter from Ottawa Metro Towing and Recovery to Local Motion Transportation Inc. dated December 1, 2012 which indicates that he owed rent arrears from January 1, 2007 to December 31, 2008 of $10,080. It indicates that if payment is not made by a certain time, then they will “pursue a legal action against you personally and against Local Motion Transportation Inc.”;

• The husband signed the parking lot lease agreement dated June 29, 2006 on behalf of Local Motion Transportation Inc.; and

• His 2007 Notice of assessment showing a balance owing to CRA of $65,964.70 as of December 31, 2006.

[164] Based on the evidence, I make the following findings with respect to the debts that the husband claimed existed at separation.

[165] W. Haddad $150,000: There is no proof of this debt of 1996. The husband says interest accrues at 3 percent, but no payments have been made. Furthermore, this debt is statute barred.

[166] CRA $65,964: This was proven by way of his 2007 Notice of Assessment. There were no taxes payable for the 2007 calendar year and hence the court assumes that the amount of $64,964 was due and owing at the end of 2006. It is part of the consumer proposal and the issue is whether this debt is extinguished by bankruptcy. The consumer proposal was instituted over seven years after separation. There is no evidence that in 2007 at the time of the separation, the husband was contemplating instituting bankruptcy proceedings. The court will not use hindsight to determine the status of this debt at the date of separation. Therefore, the NFP statement will show that the husband owed $65,964 to CRA at valuation date.

[167] Ottawa Metro Towing $10,080: Firstly, the debt extended to a time period after separation, i.e. December 31, 2008 and there is no evidence of what portion is attributable to the period prior to separation. Secondly, and more importantly, it is the company’s debt as the contract was with the company. Despite the threat by the creditor to pursue the husband personally, nothing in the lease suggests that he is liable for these parking fees on a personal basis.

[168] George Ackl $50,000: The husband’s proof is his oral evidence and his financial statement which shows the same amount owing at the date of separation in 2007 and in 2015 when the statement was sworn. As with the claimed debt to W. Haddad, there is no proof of payments made or how the money was transferred to the husband. Further there is no calculation of interest, and no demand. In addition, the debts to Haddad and Ackl are not part of the consumer proposal. It is certainly contradictory to show a debt still owing but not included in a consumer proposal.

[169] With respect to the debts owed to the financial institutions, the husband again shows the same amount owing at the date of separation and in his November 2015 financial statement.

• BMO $20,000: no proof provided.

• CIBC $26,000: no proof provided.

• MBNA $46,000: no proof provided.

• RBC loan $15,000: no proof provided.

• Ford Lincoln Town Car $1.00: no proof provided

[170] A litigant has the onus of proving a debt. Here, the husband has provided evidence of debts within the company via providing his financial statements of the company and the debts which formed part of the consumer proposal. But there are no documents confirming the debts that he personally had at the valuation date. The company’s debts were accounted for in the determination of the value of his company.

[171] The consent Court Order of Master MacLeod dated March 27, 2013 provided that the parties would exchange draft NFP statements, including supporting documentation for all assets and debts included therein, by May 1^st, 2013. The husband failed to do so.

[172] By the Order of Justice Warkentin dated July 30, 2013, the court ordered the husband to provide the outstanding disclosure within 30 days. The outstanding disclosure included the proof of TD Canada Trust credit card statements, proof of MBNA credit card statements, and an RBC Bank Loan statement. He failed to comply.

[173] Therefore, the Court finds that the husband has proven the debt in the amount of $65,964.70 to CRA.

7. Husband’s net worth at marriage

Husband’s position

[174] The husband states that at the time of his immigration to Canada in 1975 he had $50,000 in cash. He declared the same at customs. He had worked since he was 14 years old and had saved that money up to the time he arrived in Canada.

[175] He states that in 1995 he provided this $50,000 to the wife for purchasing the land and constructing a home.

Wife’s position

[176] The wife asserts that the husband did not have any substantial assets at the date of marriage. He was about 21 years old when he immigrated to Canada in 1975 having worked in a poor area in Lebanon. He was of limited means and did not have the means to save that amount of money prior to the date of marriage.

[177] She is prepared to agree that he had $5,000 in cash at the date of marriage.

Analysis

[178] On this issue, the husband has not provided any corroborating evidence that he had this type of cash on hand at the date of marriage.

[179] The Husband did not provide details other than his own testimony. In evidence, he contradicted himself. He first indicated at the beginning of his testimony that he had not worked prior to his arrival in Canada. Later in his testimony when he was asked by his counsel to describe how he was able to possess $50,000 at the date of marriage, he stated that he has worked since he was 14 years old in the Lebanon and, while living with his parents, he was able to save that amount of money prior to marriage.

[180] On this issue, the court accepts the wife’s evidence. The husband has no corroborating physical evidence to substantiate this asset and he contradicted himself on this issue so his evidence is not believable.

[181] Given the husband’s lack of concrete evidence, the Court accepts the wife’s position that given his age and short work experience and having just arrived from Lebanon under impoverished conditions, he would not have had that amount of cash on hand at the date of marriage.

[182] Therefore, the value of the husband’s assets at the date of marriage is $5,000 in cash.

Conclusion

[183] Based on my findings of facts and the values placed on the figures in dispute, I find that the husband owes the wife an equalization payment of $168,132.52 based on the calculation below.

Net Family Property Statement

Item

Husband

Wife

1. Assets at Valuation Date

Household furnishings

no valuation provided – assumed equally divided by the parties

CIBC Account

$623.25

TD Canada Trust ****645

$4,500

Scotiabank Account *****985

$1,253

Lebanon Property

$65,000

Ottawa Taxi Plate #572

$164,900

Local Motion Transportation

$76,200

Cash on hand

$0

Monies in bank (includes Deposit on Gaultois $63,000)

$96,000

Total Assets at Valuation Date

$407,853

$623.25

2. Debts and Liabilities at Valuation Date

($65,964.70)

3. Property Owned at Marriage

$5,000

4. Excluded Property

$0

Net Family Property

$336,888.30

$623.25

Equalization Payment

$168,132.53

Is the wife entitled to spousal support? If so, what is the quantum and duration and is retroactive spousal support payable?

i) Is there Entitlement?

Wife’s position

[184] The wife’s position is that she is entitled to spousal support both on a compensatory and non-compensatory basis.

[185] She had completed her grade 9 education in Lebanon and briefly took some courses while in Canada but did not continue due to family commitments.

[186] She submits that she was a traditional wife caring for the family and the home.

[187] As stated above, she was sponsored by the husband to come from Lebanon in 1976 and married when she arrived in Canada. At the date of marriage in April 1976, she was 17 and the husband was 22.

[188] She stopped working in 1982 after the birth of her second son who was disabled and returned to work in the cleaning business in August 2006 with Merry Maid.

[189] The second child, Bassam, was diagnosed with serious developmental delays with a form of autism. He had special needs which required attendance to various medical personnel.

[190] This is a 31 year long traditional marriage where the wife remained at home for 24 years caring for the family and the household, while helping out with the husband’s business: driving clients, and arranging for repairs and for refreshments in the vehicles. The husband was the main breadwinner as a successful taxi driver.

[191] They separated on May 7, 2007 after a domestic dispute to which the police were called. The wife left the residence.

[192] Currently, she has eight clients in her home cleaning business. Her financial statement shows a modest budget that is supplemented by her son Sam. She has a vehicle and pays $266 per month and the outstanding balance is $7,000.

Husband’s position

[193] The husband indicates that the wife is not entitled to support either on a compensatory or non-compensatory basis. She does not need support.

[194] The husband states the wife worked throughout the marriage, her contribution to the marriage was minimal. He stated that she sent money to her relatives in Lebanon.

[195] He further submits that she has no claim on a compensatory basis as she does not meet the criteria set out in Moge v. Moge, 1992 CanLII 25 (SCC), [1992] 3 S.C.R. 813.

[196] He invites the court to review the factors set out in Divorce Act, R.S.C. 1985, c.3 (2nd Supp), s. 15.2, and the four objectives which must be taken into account.

[197] The Court has overriding discretion depending on the facts of each case. The husband claims that there were no advantages to the husband and no disadvantages to the wife. Although she took care of the children, she can make a living and has supported herself from the date of separation. For six years, she did not claim support. Her role during the marriage did not affect her ability to earn an income after separation. She had limited education at the time of the marriage and hence there was no economic disadvantage for her remaining in the home during the marriage and not working. Her livelihood opportunities did not change.

[198] She is living modestly and is able to support herself with the help of Sam with little deficit. She is able to write off some of her expenses due to her business. Even if the wife is found to be entitled to support, his income is minimal and below the poverty level and he has no ability to pay.

Analysis

Legal Principles

[199] In considering entitlement to spousal support, the Court is guided by the Divorce Act:

Spousal support order

15.2 (1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse.

Factors

(4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including

(a) the length of time the spouses cohabited;

(b) the functions performed by each spouse during cohabitation; and

(c) any order, agreement or arrangement relating to support of either spouse.

Spousal misconduct

(5) In making an order under subsection (1) or an interim order under subsection (2), the court shall not take into consideration any misconduct of a spouse in relation to the marriage.

Objectives of spousal support order

(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should

(a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;

(b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;

(c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and

(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.

[200] Compensatory support is premised on a marriage being a joint endeavour, and seeks to alleviate economic disadvantage by taking into account all the circumstances of the parties, including the advantages conferred on either spouse during the marriage. It is concerned with an equitable sharing of the benefits of the marriage. Contractual entitlement, on the other hand, flows from the express or implied agreement. Finally, non-compensatory support may be ordered “where it is fit and just to do so” (Poirier v. Poirier, 2010 ONSC 920, 81 R.F.L. (6th) 161).

Decision

[201] All 4 objectives of the Divorce Act must be considered. No single objective is paramount.

[202] I have considered the three foundational elements of spousal support as set out in Bracklow v. Bracklow, 1999 CanLII 715 (SCC), [1999] 1 S.C.R. 420. I have not considered any misconduct of the parties. The Court finds that the wife is entitled to spousal support based on both a compensatory and non-compensatory basis. I make this finding for the reasons set out below.

[203] The wife has a need for spousal support. She continues to face economic hardship after separation.

[204] The wife is living at the poverty line. Her expenses are kept down as much as possible and her financial statement shows modest spending. Her business income along with the assistance she receives from her sons allows her to meet her modest needs. She is in need. The husband was the main breadwinner during the marriage and she no longer has his financial aid to help her make ends meet.

[205] On a compensatory basis, there is ample evidence to demonstrate that the wife suffered economic hardship as a result of the role she played in the marriage.

[206] The parties were married for 31 years. During this time, the wife was unemployed for 24 years, from 1982 to 2006. She was home raising the children and caring for the household. She assisted the husband in his taxi business including arranging for the delivery of vehicles after gas fill-up or repairs, arranging for refreshments for the customers, and completing some administrative work.

[207] She was at home raising the children and was Bassam’s primary caregiver. Given his special needs, she was responsible for his physical and medical needs which included bringing him to many appointments. The husband was busy working very long hours and hence, he was not as involved in the home responsibilities.

[208] In determining support, the Court has reviewed the economic circumstances of each spouse’s role during the marriage.

[209] The wife has proven her entitlement for compensatory support as her role during the marriage compromised her ability to pursue her own career. She testified that she had taken some courses and dropped out to meet the family needs. She was unable to attain self-sufficiency and build up her own career and, in contrast, the husband as the main breadwinner was able to build up his business. See Walsh v. Walsh, 2006 NBQB 338, 311 N.B.R. (2d) 1, where the Court identifies non-specific compensatory support (where a spouse’s ability to achieve self-sufficiency was comprised by career/job dislocation for the family).

[210] The principles regarding spousal support are aptly set out in Moge and Bracklow. The Court finds that the wife’s education, career development or earning potential has been impeded as a result of the marriage because she withdrew from the workforce and deferred her own career opportunities and education to provide for the children and the family.

[211] In contrast, the husband was able to advance his career and has grown his business and owns 2 taxi plates and a home (although under his corporation). He also owns a property in Lebanon. He has a livelihood that is able to generate income that can support him residing in a single family home. The husband was able to continue operating his taxi business and his long hours would include often sleeping in his cab at night. The evidence is that he had economic advantages arising from the marriage which includes owning two taxi cab plates, Lebanon property, and the Gaultois property.

[212] Therefore, the wife is entitled to support based on a needs and compensatory basis.

ii) What is the Quantum of support that should be ordered?

Income

[213] Firstly, the Court must determine the husband’s income.

[214] In determining the husband’s income, the Court has considered the three experts’ reports, a Labour Market Analysis prepared by R.J. Skirda & Associates Inc. and the more current information provided in evidence.

Husband’s position

[215] The court asks the court to rely on the figures set out in Mr. Desnoyers’ report i.e. 2013: $26,000 and 2014: $14,000.

[216] He also relies on the Labour Market analysis of R.J. Skirda & Associates Inc. dated October 11, 2013 where at page 10 it states that:

there appears to be a consensus that the average Driver’s gross earnings approximate $45,000/year. If one were to reduce this amount by an approximate one half or even $20,000/year for expenses (as reported by the Owner of Executive Cabs), then one is earning less than Minimum Wage as most drivers are working a minimum of 50 hours/week to make gross earnings.

Wife’s position

[217] The wife asks the court to rely on Mr. Clarke’s report in which he estimated that the husband’s income in 2012 was $297,000 based on a review of his bank and credit card statements and the increase of his net worth during that period of time.

[218] Alternatively, she stated that this court should continue to use the amount of $100,000 per year found by Justice Minnema on an interim basis. The wife relies on Trang v Trang, 2013 ONSC 1980, 29 R.F.L. (7th) 364, where Justice Pararatz stated in a motion to change a final order at paragraph 52:

52. A party who argues that an imputed income level is no longer appropriate must go beyond their subsequent declared income. They must address why income had to be imputed in the first place. They must present evidence of changed circumstances which establish that either:

a. It is no longer necessary or appropriate to impute income. The payor’s representations as to income should now be accepted, even if they weren't accepted before.

or

b. Even if income should still be imputed, changed circumstances suggest a different amount is more appropriate.

[219] Therefore, she submits that the Court should rely on the previous determination of Minnema J. that the husband’s income is $100,000 per annum as business dealings have not changed.

Income determination by the experts

Clarke’s report

[220] The wife relies on Dave Clarke’s report dated February 24, 2015 “Calculation of income available for child and spousal support purposes”.

[221] The purpose of the report was: “to calculate[e] income available to Michael Mohammed Wehbe for the 2012 taxation year”.

[222] In Paragraph 2, Mr. Clarke states: “we were not provided complete record of the accounts of Mr. Wehbe. Accordingly, this report is considered to be a preliminary analysis which will be updated once further information is received.”

[223] His conclusion is that the income available for support before gross up for 2012 was $211,500 plus income tax gross up of $85,700 for a total income available for support of $297,200.

[224] At paragraph 6 he states:

Please note the above conclusion should be regarded as a preliminary indication of income available to Mr. Wehbe based on information we have as at the date of this report. As noted below, our report is qualified in respect of certain information we know is missing from the analysis and other information which is unknown, but is relevant to our analysis. Any missing accounts will have a significant impact on the conclusions of this report. Accordingly, we recommend you request from Mr. Wehbe complete list of all cash, investment and liability account. As noted in paragraph 16, we will consider the impact of new information on the conclusions of this report at your request

[225] At paragraph 7 he states:

The income tax gross up is a discretionary amount calculated under section 19 of the Federal Child support guidelines. Essentially, income which is received but not reported for tax purposes represents an after-tax amount. Accordingly, the after-tax amount is grossed up to calculate the pre-tax earnings necessary to provide the after-tax amount. The difference between the grossed up amount and the unreported amount represents a tax benefit associated with the untaxed remuneration. Given the size of the net worth discrepancy which results in a large gross up amount, we have disclosed this amount separately in the above-noted conclusion.

[226] He states that he had originally been requested to analyse 2012 and 2013 tax years but was unable to receive the requisite 2013 information to complete the analysis for that year.

[227] Mr. Clarke starts with the premise that the husband’s reported $11,485 in self-employment income in 2012 is not reliable for determining support. He believes that to support his lifestyle he requires an income significantly higher than the income reported in his personal income tax return.

[228] He uses the Federal Child Support Guidelines as the basis for calculating income for purposes of determining spousal support. He starts with the premise in section 16 that income is determined using income for income tax purposes as reported in the T1 form. Under section 17, he considered the pattern of the husband’s income as well as the income he is expected to earn the future. Mr. Clarke calculated income using a net worth approach.

[229] At paragraph 24 Mr. Clarke states the following:

the use of the net worth analysis to determine income is commonly used in income tax audits where it is determined that income has not been reported and, thus a taxpayer’s income tax returns are considered unreliable for assessing income taxes. The net worth analysis is designed to assess whether there is discrepancy between cash outflows attributed to a taxpayer and the income declared on the taxpayer’s income tax return. Where the cash outflows are greater than the income reported on the person’s income tax returns and the source of the funds cannot be identified, the difference is included in the taxpayer’s income as an unreported income. Essentially where a taxpayer spending is greater than the reported income the difference between the amounts spent and the income reported is considered unreported income.

[230] Mr. Clarke goes on to say at paragraph 25 that “a typical net worth analysis has four components”:

i) establishing balance sheets for the individual which tracks the change in net worth over a number of years;

ii) analysing the withdrawals from the accounts of the individual to determine the amount of cash outflows attributable to the taxpayer;

iii) eliminating cash flows related to inter-account transfers; and

iv) adjusting for other reconciling or non-cash items.

[231] Mr. Clarke started with the increase in net worth and the withdrawals available according to a withdrawal analysis. He eliminated the company’s business expenses since they are allowable deductions for tax purposes.

[232] Therefore, according to schedule A of this report the husband’s calculation of income for support purposes for 2012 is as follows:

• personal income tax return schedule B $11,485

• net worth discrepancy $199,996

• imputed income before gross up $211,481

• gross up of unreported income/net worth discrepancy $85,713

• total income per guidelines section 19 $85,713

• calculated income for support purposes $297,200

Mr. Desnoyers’ report

[233] Mr. Desnoyers prepared an expert report dated December 17, 2013 showing available income to the husband for the years 2007 to 2012. He indicated that “since the end of 2012, Mr. Wehbe was operating a taxi service only.”

[234] For the purposes of this calculation he determined that the available income is one defined by the Federal Child support Guidelines.

[235] He relied on Mr. Wehbe’ s 2007 to 2012 personal income tax returns and projections for 2013, bank and credit card statements and the company’s 2007 to 2012 financial statements for Local Motion Transportation Inc. There was no independent review or audit of the financial statements.

[236] Mr. Desnoyers relied on multiple assumptions: that there was no unrecorded cash income, that the husband does not have any other sources of income, that there are no personal expenses paid by the business other than those specifically mentioned in the report, and that there was no remuneration paid to a person related to the husband other than those mentioned in the report.

[237] Based on the information provided, Mr. Desnoyers calculated the available income to Mr. Wehbe as follows:

2007

2008

2009

2010

2011

2012

2013

$36,000

$36,000

$34,000

$34,000

$25,000

$26,000

$14,000

[238] In the determination of the income, he imputed income to the husband and accounted for the personal use of the vehicle from the company. He included the amount paid to his girlfriend of $17,000 minus the fair market value remuneration of $2,500. Therefore, he considered the amount of $14,500 as income splitting and added this amount back to income.

[239] In Schedule 4, he also makes a notation that “the company was frozen at the end of 2012 and was not in operations in 2013. Please note that Mr. Wehbe has advised us that he has a medical condition that could limit his earning capacity in the future”.

Mr. Clarke’s critique of Mr. Desnoyers’ report

[240] Mr. Clarke was asked to comment on the approach Mr. Desnoyers used to determine the personal expenses paid through the company.

[241] He stated that it was unclear how Mr. Desnoyers determined the value of the annual benefit related to the personal use of the vehicle and the personal use of the vehicle in 2011 and for subsequent years. There is also no further investigation as to what other expenses incurred by the company were of personal nature.

[242] He also questioned the approach used to determine the amount of unrecorded sales in the company and to determine 2013 forecast income. He further stated that Mr. Desnoyers should not have not have relied only on Mr. Wehbe’ s representation.

[243] Mr. Desnoyers does not explain how the 2014 income was estimated at $14,000, which would mean a 44% drop in his income from 2013.

Labour market analysis

[244] A labour market analysis report dated October 11, 2013 prepared by R. J. Skirda and Associates Inc. was filed by the husband. Melissa Skirda gave evidence regarding the report which was ordered by Justice Warkentin and was not qualified as an expert.

[245] This report was an analysis of the husband’s “taxi firm within the context of a comparative analysis of the Ottawa labour market for similar taxi business (i.e., objective information involving median taxi driver income)”.

[246] The method can be summarized as follows:

The analyst was requested to evaluate the earning capacity of taxi drivers in the Ottawa region as a comparative analysis with Mr. Wehbe’ s business as owner/operator of Metro City Taxi and Metro City Limousine. Information security generated through on-line research of city of Ottawa bylaw regulations online publications/articles regarding the taxi industry and then direct contact with the city of Ottawa licensing clerk, local taxi fleet companies and an independent taxi owner/operator. This information was then compared with the information presented by Mr. Wehbe and review his income tax documents/earning.

[247] Ms. Skirda indicates that the taxi industry is regulated by the City of Ottawa through various bylaws and licensing requirements. She states that the release of taxi plates by the City and the ability of an owner to sell them over the open market do impact the worth of plates on the “open market”. In addition, a CBC news report dated March 22, 2012 stated that the new accessible plates could expect to trade for $100,000 or more, whereas other publications hold that the plates can secure upwards of $300,000.

[248] Ms. Skirda indicates that the industry has been impacted by the high tech downturn and related layoffs including the tightening of government spending.

[249] She states that:

The Driver Account Administrator for West-Way reports that their drivers may earn up to approximately $45,000 a year, almost half of this amount is used to cover the expenses associated with operating the taxi. They are working seven days a week at 10 to 12 hours a day if not more. This information is also consistent with reports from the Driver Account Administrator for Coventry Connections which now owns Capital and more recently DJs taxi. She confirmed that there are more drivers on the road competing for fares. She says that some drivers are managing to earn a living while others are struggling.

[250] The owner of Executive reports similar gross earnings and reports of other contacts saying that an approximate $20,000 of earnings goes towards expenses. He too has witnessed a downturn in taxi usage over the past several years and notes that it is taking longer to achieve previous earnings each week. He stated that from a business perspective he must also pay out $6,000-$7,000 in HST a year.

[251] Ms. Skirka’s findings are that if a driver is dispatched, he or she will be paying fees to the fleet company. An independent taxi owner is also paying cell phone related fees to access customer calls. She indicated that the husband’s income tax reported earnings fell below the average gross income reported by her industry contacts as his gross earnings were approximately $30,000 per year. She stated that Mr. Wehbe does not have access to dispatching services. In addition, his current declining health will put him at a further competitive disadvantage if he cannot manage the significant hours needed to earn a reasonable income.

[252] Ms. Skirka was not aware that the husband had another plate #572 and she did not review the husband’s corporate tax returns and financial statements.

Legal principles

[253] The Child Support Guidelines have been used in the determination of spousal support income. See Murray v. Murray (2003), 2003 CanLII 64299 (ON SC), 66 OR (3d) 540 (S.C.) reversed on other grounds in (2005), 76 O.R. (3d) 548 (C.A.).

[254] The relevant sections of the guidelines are set out below:

16. Subject to sections 17 to 20, a parent’s or spouse’s annual income is determined using the sources of income set out under the heading “Total income” in the T1 General form issued by the Canada Revenue Agency and is adjusted in accordance with Schedule III.

17. (1) If the court is of the opinion that the determination of a parent’s or spouse’s annual income under section 16 would not be the fairest determination of that income, the court may have regard to the parent’s or spouse’s income over the last three years and determine an amount that is fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non-recurring amount during those years.

[255] Sections 18 and 19 of the guidelines provide that the court is not bound by Line 150 shown in the T1 Annual General Return for the purposes of determining support.

18. (1) Where a parent or spouse is a shareholder, director or officer of a corporation and the court is of the opinion that the amount of the parent’s or spouse’s annual income as determined under section 16 does not fairly reflect all the money available to the parent or spouse for the payment of child support, the court may consider the situations described in section 17 and determine the parent’s or spouse’s annual income to include,

(a) all or part of the pre-tax income of the corporation, and of any corporation that is related to that corporation, for the most recent taxation year; or

(b) an amount commensurate with the services that the parent or spouse provides to the corporation, provided that the amount does not exceed the corporation’s pre-tax income.

19. The court may impute such amount of income to a parent or spouse as it considers appropriate in the circumstances, which circumstances include,

(a) the parent or spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of any child or by the reasonable educational or health needs of the parent or spouse;

(b) the parent or spouse is exempt from paying federal or provincial income tax;

(c) the parent or spouse lives in a country that has effective rates of income tax that are significantly lower than those in Canada;

(d) it appears that income has been diverted which would affect the level of child support to be determined under these guidelines;

(e) the parent’s or spouse’s property is not reasonably utilized to generate income;

(f) the parent or spouse has failed to provide income information when under a legal obligation to do so;

(g) the parent or spouse unreasonably deducts expenses from income;

(h) the parent or spouse derives a significant portion of income from dividends, capital gains or other sources that are taxed at a lower rate than employment or business income or that are exempt from tax; and

(i) the parent or spouse is a beneficiary under a trust and is or will be in receipt of income or other benefits from the trust.

Decision

[256] The court is prepared to impute income to the husband. In not accepting the husband’s evidence that his income is as stated in his T1 annual tax returns and as calculated by Mr. Desnoyers, the Court considers the following:

1. The husband’s lack of financial disclosure and forthrightness;

2. Mr. Clarke’s report;

3. Gaultois property dealings;

4. cash dealings;

5. Ms. Skirda’s report on the taxi industry; and

6. the husband’s current situation.

7. Husband’s lack of financial disclosure and forthrightness

[257] The Court is prepared to impute income in this case as the husband has failed to be forthcoming in financial disclosure when he was under a legal obligation to do so.

[258] As noted above, the Court has found the husband not credible in his testimony. The Court has made numerous findings that the husband has not been forthright and open in providing financial information. The Court does not find the husband to have been honest with respect to past and present earnings.

[259] In considering the husband’s income, the Court notes that the husband has not been forthright in providing financial disclosure as ordered by the Court, including the failure to provide values for property in Lebanon and his taxi plates, failure to provide the source documents that would explain payments (such as down-payment on the Gaultois property and payment of $35,000 owing from Justice Mackinnon’s Order) and failure to provide financial statements.

[260] He has shown dishonesty in not advising the trustee in bankruptcy regarding the personal loan from Mr. Haddad on the premise that he is out of the country. In addition, he did not report his shares in the company, the 572 plate or that the fact that the company owns the Gaultois property in his consumer proposal.

[261] He also provided a document in Arabic which purported to be a loan from George Ackell which was not part of the consumer proposal. He alleged that he was going to provide Mr. Ackell with the property in Lebanon in exchange for the outstanding loan of $50,000. This contradicts his evidence that the property is worthless. In addition, he also questions whether the wife actually used the $50,000 he gave her to buy the land.

[262] He did not provide up to date information including his 2014 personal tax document return, recent bank statements and credit card statements from 2013 to present, despite being requested to do so by wife’s counsel. There was no court order that he do so but certainly these documents are relevant in the preparation of an income analysis.

[263] He changed bank accounts and there are no further records before the court that would permit an analysis as prepared by Mr. Clarke;

[264] His lack of honesty is also manifested by the wife’s evidence that he tried to convince her to declare an annual income of $60,000 after separation in order that may be able to obtain financing for the purchase of a property.

2. Mr. Clarke’s report

[265] For the year 2012, Mr. Clarke found that there was substantially more income earned than declared. In his report, Mr. Clarke showed a number of large cash withdrawals Canadian bank drafts, US bank drafts, and cheques withdrawn from 2010 until the account closed in 2013 (year application commenced), and many ATM deposits. His conclusion is that the husband had received $211,481 in 2012. If this amount is grossed up for tax purposes, then $297,000 was available to the husband.

[266] Mr. Clarke’s analysis is persuasive and given his accounting of the withdrawals and deposits, he has demonstrated that the husband was not earning merely $11,000 in 2012 as he suggests in his tax return. Indeed, the husband’s income in his 2012 Notice of Assessment as provided by the CRA was $26,000. Mr. Clarke’s report is not critiqued. There is no report suggesting that his analysis was incorrect or that his numbers were not accurate. Rather the suggestion is that the final numbers would have changed if he had been given other information. This is a forthright and predictable response from the expert. He worked with what he had and his opinion is given weight for what he produced based on the information provided to him. The husband did not explain why that much money had been withdrawn from his accounts in 2012. When asked under cross-examination, he retorted that had he been asked earlier, he would have tried to obtain explanations. In cross-examination, he suggested that some monies were borrowed.

[267] However, the court does not have bank statements and credit statements from 2013 to present or the similar analysis for 2015 by Mr. Clarke.

3. Gaultois property

[268] As noted above, the Gaultois property was paid for through funds that existed in the husband’s bank account at the date of separation.

[269] The husband’s real estate solicitor was to confirm no secondary financing is being placed on closing which would mean that the husband was not supposed to borrow the down-payment.

[270] The husband’s mortgage application stated that gross earnings were $96,000.

[271] The mortgage amount is $1,800 per month – which is $30,000 per year, which is more than his income. Though his current partner shares the expenses, it defies logic that he can afford to pay a monthly amount of $1,800 on mortgage and taxes and only earn approximately $9,000 in 2014. I do not accept his evidence that the monthly mortgage amount is $600 per month. No documentation was produced confirming this amount.

[272] The Court has found that he had $96,000 in his bank account and he used $63,500 to purchase the Gaultois property just after separation.

[273] Contrary to a Court Order, the husband placed a mortgage on Gaultois property and removed it after the Court ordered him to do so.

4. Cash dealings

[274] In considering the husband’s income, the Court also notes the following:

[275] He denies the receipt of unrecorded sales. The Court accepts the evidence of the wife and son:

• Sam Wehbe testifed that he worked for his father for 15 years from 1997 to 2012 and his father used plate # 225;

• Sam Wehbe testsified that plate #572 was rented to another driver and he recalled it being $1,500 per month;

• Sam testified that he did some invoicing for his father from 2006 to 2011, and that he earned cash income and other individuals were also paid in cash by the husband; and

• The wife testified that during cohabitation the husband received payments from Hussein Salami in the amount of $1500 per month for the rental of taxi cab plate #572. The amounts of $1500 were shown in his bank statements filed in the court.

[276] The wife testified that the husband would drive to Toronto for $800 and at times would earn $1,000 a day.

[277] The wife testified that the husband received cash payments during the marriage.

[278] The wife testified that the husband continues to rent out the other taxi cab licence/plate. The Court accepts that based on the son’s evidence and the evidence of deposits in the bank accounts, that the husband earns $1,500 per month from the rental of his other taxi plate. This rental income is not recorded in his tax return or in his company financial statement, resulting in $18,000 of tax-free income.

5. Ms. Skirda’s report on the taxi industry

[279] Ms. Skirda provided the following relevant information:

• The average gross income of a cab driver is $45,000, and that expenses amount to almost half of this amount;

• taxi cab drivers are battling in the industry;

• the industry is suffering from the loss of corporate clients;

• Uber’s entry into the market has caused more competition

• Mr. Wehbe has no dispatch service; and

• Mr. Wehbe cannot pick fares from the airport.

6. Husband’s current situation

[280] In determining the husband’s current income, the Court notes that the husband is 61 years old with medical issues and has been prescribed numerous medications.

[281] The husband has some heart issues and suffers from diabetes which requires monitoring his daily sugar. He is required to stop driving his cab if his sugar levels are high and not return to the road until his sugar levels have stabilized. In addition, he cannot drive well at night as his night vision has deteriorated. It is difficult to determine how his health issues impact on his ability to work the long hours required in the taxi industry.

[282] In addition, there have been other changes since 2012, including the loss of the corporate contracts as the result of the downturn of the high tech business in Ottawa and he has no dispatch services.

[283] Therefore, even if the Court accepts Mr. Clarke’s report in 2012, those circumstances do not necessarily exist today.

[284] I now turn to the argument that the husband has the onus to show a change of business practices since the order of Justice Minnema where he found his income to be $100,000.

[285] The Trang case involved a motion to change a final order based on a material change of circumstances. Justice Pazaratz placed the onus on the payor’s spouse to explain why the Court should not continue to impute income to him.

[286] In the case at bar, we are not dealing with a final order. Secondly, Justice Minnema’s interim order was made based on financial statements and affidavits filed in 2013. At trial, the Court has had the benefit of a full record of evidence including the testimony of the witnesses. A finding at an interim level regarding imputed income determined in 2013 does not bind the trial judge in determining income in 2015.

[287] Even if I were to accept the principle that the husband has the onus to demonstrate a change in his business practices, I find that he has done so, as discussed above, specifically his current circumstances.

[288] I give little weight to Mr. Desnoyers' report that relied on the information provided by the husband. As an expert, he was entitled to rely on evidence provided by the owner but certainly this self-serving information without an analysis and confirmation of the facts or more than a cursory glance at the company’s financial statement merely weakens the strength of his report. The Court gives his report little weight in the analysis of determining the husband’s income.

[289] The Court finds that the income as set out in the husband’s T1 Annual General Return is not a fair determination of his income for the purposes of determining support for the above reasons. Section 19 of the guidelines allows the court to impute income where income as been diverted.

[290] Based on the evidence provided, the Court has completed a gross analysis of the information provided. In arriving at a reasonable income of $50,000 to be imputed to the husband, the Court considers the following:

• the husband is receiving tax free monthly income of approximately $1500 per month for the rental of this taxi plate, ($18,000 tax free per year)

• the evidence in the Skirda report that cab drivers can gross $45,000 per year with expenses (netting approximately $22,000);

• the Court cannot accept he is earning an annual income of $14,000 if he is living in a home with a mortgage and realty taxes and sharing those expenses with his partner;

• the husband’s lack of candour and forthrightness in providing financial disclosure.

[291] In addition, the Court finds that Mr. Clarke’s estimate of income in 2012 is not a reasonable measure of the husband’s current income given the husband’s current situation as outlined above, including his health issues.

[292] Therefore, it is reasonable for the Court to find that an income of $50,000 per year should be imputed to the husband.

Quantum

Wife’s position

[293] The wife is requesting a lump sum support as the husband is unlikely to pay any court ordered periodic support.

Husband’s position

[294] The husband denies that the wife is entitled to spousal support.

Legal principles

[295] The Divorce Act, s. 15.2 grants the Court power to award a lump sum support. In determining whether a lump sum should be awarded, the Court needs to consider the factors set out in s. 15.2(4)and having in mind the objectives set out in s.15.2(6).

[296] In Davis v. Crawford, 2011 ONCA 294, [2011]106 O.R. (3d) 221, the Ontario Court of Appeal set out the parameters and basis for granting a lump sum payment.

[297] The Court emphasizes that a lump sum should not be ordered as a guise for a redistribution of property. The court must explain the purpose and the underlying reason of the order for the order.

[298] In addition, the court must ensure that the payor can make the lump sum without jeopardizing his ability to be self-sufficient. Section 15.2(4) of the Divorce Act mandates the Court consider the condition, needs, means and other circumstances of the parties.

[299] At paras. 66 to 70, the Court provided an analysis of when a lump sum support could be ordered. Importantly, such an award it not “limited to very unusual circumstances”.

[66]Most importantly, a court considering an award of lump sum spousal support must weigh the perceived advantages of making a lump sum award in the particular case against any presenting disadvantages of making such an order.

[67] The advantages of making such an award will be highly variable and case-specific. They can include but are not limited to terminating ongoing contact or ties between the spouses for any number of reasons (for example, short-term marriage; domestic violence; second marriage with no children, etc.); providing capital to meet an immediate need on the part of a dependant spouse; ensuring adequate support will be paid in circumstances where there is a real risk of non-payment of periodic support, a lack of proper financial disclosure or where the payor has the ability to pay lump sum but not periodic support; and satisfying immediately an award of retroactive spousal support.

[68] Similarly, the disadvantages of such an award can include the real possibility that the means and needs of the parties will change over time, leading to the need for a variation; the fact that the parties will be effectively deprived of the right to apply for a variation of the lump sum award; and the difficulties inherent in calculating an appropriate award of lump sum spousal support where lump sum support is awarded in place of ongoing indefinite periodic support.

[69] In the end, it is for the presiding judge to consider the factors relevant to making a spousal support award on the facts of the particular case and to exercise his or her discretion in [page234] determining whether a lump sum award is appropriate and the appropriate quantum of such an award.

[70] As we have said, we do not endorse the submission that lump sum spousal support awards must be limited to "very unusual circumstances" as a matter of principle. Nonetheless, we agree that most spousal support orders will be in the form of periodic payments.

Decision

[300] Based on the husband’s imputed income of $50,000 per year and the wife’s income of $9,360 declared in her financial statement dated April 23, 2015, the mid range of spousal support under the Spousal Support Advisory Guidelines is $1,482 per month. The Court finds that the mid-range of support is reasonable given the length of the marriage, the ages of the parties and the role played by the wife in the marriage. It would provide her with 48.2% of the Net Disposable Income. This would permit her to meet her financial needs set out in her financial statement without having to rely on her son.

[301] Given the length of the marriage and the roles played during the marriage as described above, this amount would be payable indefinitely.

[302] The Wife is requesting a lump sum spousal support payment pursuant to Davis v. Crawford, 2011 ONCA 294, 106 O.R. (3d) 221, on the basis that she is unlikely to realize any support if there is periodic support payable.

[303] The husband has failed to pay his ongoing obligations of $1,000 per month as ordered by Justice Mackinnon and he has failed to make support payments as ordered by Justice Minnema. He is in arrears of his support payments.

[304] Given the above findings and the lack of co-operation by the husband and his defiance of Court Orders, the Court finds that he is unlikely to obey any court order for payment of support. He has failed to obtain valuations when ordered to do so and he has failed to pay two Costs Orders. Contrary to a Court Order, he placed a mortgage against the Gaultois property. He has been found to refused to supply financial disclosure as set out in the reasons of Justice Mackinnon.

[305] The husband does not seem to appreciate the significance of complying with Court Orders.

[306] Given numerous findings regarding his non-compliance I agree that the husband is unlikely to obey a Court Order for support.

[307] Of great concern that as he is self-employed, the Family Responsibility Office cannot garnish his wages. FRO has been able to garnish only small amounts.

[308] Based on the amount of the equalization payment and the equity remaining in the Gaultois property, there are sufficient funds left in equity to satisfy a lump sum payment.

[309] An immediate lump sum payment would ensure that the wife receives a support amount that reflects the objectives set out in the Divorce Act. It will address the economic impact that the marriage has had on the wife and the sale of the property (once she obtains the vesting order set out below) will allow her some funds to meet her financial needs in the foreseeable future.

[310] The SSAG calculations for a lump sum based on the mid-range payable for the next three and half years until the husband reaches the age of retirement of 65 years is $50,000. Therefore, the Court orders a lump sum spousal support payment of $50,000.

[311] The wife is entitled to vary spousal support if there has been a material change of circumstances which can include the fact that the husband continues to work past age 65 or she has obtained other evidence that should have been produced in these proceedings.

[312] Therefore, there will be a lump sum spousal support payment payable to the wife in the form of a vesting order as against the Gaultois property as discussed below.

Retroactive Spousal Support

Wife’s position

[313] The wife is requesting retroactive spousal support to the date of separation and has produced schedules calculating support based on various imputed incomes for the husband, i.e. $100,000 per year, $211,500 per year and $297,500 per year.

[314] The after tax annual lump sums have been calculated on each of the above scenarios and the range of support calculated ranges from $200,000 to over $500,000.

Husband’s position

[315] The husband resists this claim.

Legal Principles

[316] The issue of retroactive spousal support has been dealt with extensively in various cases.

[317] The leading case is D.B.S. v. S.R.G., 2006 SCC 37, [2006] 2 S.C.R. 231, which dealt with child support can also apply to spousal support cases. The Supreme Court of Canada set out the general principles when dealing with retroactive payments. The Court should consider the following:

1. Reasonable Excuses for Why Support Was Not Sought Earlier;

2. conduct of the Payor Parent;

3. circumstances of the Child;

4. hardship Occasioned by a Retroactive Award.

[318] The principles in DBS were followed when the Supreme Court dealt with retroactive spousal support in Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269. Justice Cromwell confirms at paragraph 207:

While D.B.S. was concerned with child as opposed to spousal support, I agree with the Court of Appeal that similar considerations to those set out in the context of child support are also relevant to deciding the suitability of a “retroactive” award of spousal support. Specifically, these factors are the needs of the recipient, the conduct of the payor, the reason for the delay in seeking support and any hardship the retroactive award may occasion on the payor spouse. However, in spousal support cases, these factors must be considered and weighed in light of the different legal principles and objectives that underpin spousal as compared with child support. I will mention some of those differences briefly, although certainly not exhaustively.

[319] And at paragraph 209, he states:

Where, as here, the payor’s complaint is that support could have been sought earlier, but was not, there are two underlying interests at stake. The first relates to the certainty of the payor’s legal obligations; the possibility of an order that reaches back into the past makes it more difficult to plan one’s affairs and a sizeable “retroactive” award for which the payor did not plan may impose financial hardship. The second concerns placing proper incentives on the applicant to proceed with his or her claims promptly (see D.B.S., at paras. 100-103).

[320] In Reid v. Carnduff, 2014 ONSC 605, the court ordered retroactive support where the court found that the husband’s threats and his poor treatment of the wife during the marriage contributed to her delay in commencing the application for support.

[321] In that case, Justice Wildman found that the husband had abused the wife and a previous assault charge against the husband resulted in broken ribs to the wife. In another incident the wife broke her hand during an argument.

[322] In Taylor v. Taylor, 2011 ONSC 3690, Justice James considered that the usual commencement date for spousal support entitlement was the initiation of the proceedings. However, given that the wife had undergone financial hardship following the separation, and that she was a homemaker and left the marriage impoverished and was relying on social assistance, the court ordered spousal support retroactive to the date that the husband stopped making payments i.e. July 2008. He had been contributing to family expenses from the date of separation in August 2007 until then.

Decision

[323] Firstly, there have been temporary Court Orders since the commencement of litigation in 2013. Based on the various orders, the husband owes extensive support arrears. Justice Minnema made a retroactive support order to the first day after the commencement of the application. Those monies are still due and owing.

[324] The wife states that she had limited resources to retain a lawyer following the separation to institute proceeds and that there was a power imbalance during the marriage that resulted in her reluctance to pursue support.

[325] The court applies the factors set out in DBS.

Notice first given and reasons for the delay

[326] The wife did not bring this action until 2013. She did not provide any notice before that time.

[327] She states that she was in abusive situation. The only evidence is the facts surrounding the separation. We heard of infidelity, but not abuse or violence as in the Reid case discussed above. There was evidence that she did go to a shelter during the marriage, but the court did not hear the details or the reason.

[328] She stated that she was without means to institute proceedings. However, notice can be made in the form of written communication to the husband from the wife or a representative requesting that support be paid. No evidence of such communication was provided.

[329] In particular, she stated she had no funds to retain a lawyer. She does not mention whether she had availed herself of the legal aid plan or sought advice from the court offices, family law information centres, or obtained self-help through various community legal clinics or women’s associations.

[330] Her lack of notice to the husband and unreasonable delay in bringing the application for support can be prejudicial to the husband who had not made the financial arrangements for this obligation.

[331] As stated in DBS, regarding retroactive child support, it is the right of the child and parents have a joint responsibility to financially support a child from birth and a child should not suffer if a parent fails to pursue that child’s right to support. A parent has the obligation regardless of notice. However, when dealing with spousal support, the courts place more responsibility on a spouse to pursue relief as it is for their own benefit and not for a child. See para. 208:

With respect to notice, the payor parent is or should be aware of the obligation to provide support commensurate with his or her income. As for delay, the right to support is the child’s and therefore it is the child’s, not the other parent’s position that is prejudiced by lack of diligence on the part of the parent seeking child support: see D.B.S., at paras. 36-39, 47-48, 59, 80 and 100-104. In contrast, there is no presumptive entitlement to spousal support and, unlike child support, the spouse is in general not under any legal obligation to look out for the separated spouse’s legal interests. Thus, concerns about notice, delay and misconduct generally carry more weight in relation to claims for spousal support: see, e.g., M. L. Gordon, “Blame Over: Retroactive Child and Spousal Support in the Post-Guideline Era” (2004-2005), 23 C.F.L.Q. 243, at pp. 281 and 291-92. [emphasis added]

[332] This same sentiment is expressed at paragraph 209 in Kerr:

….there are two underlying interests at stake. The first relates to the certainty of the payor’s legal obligations; the possibility of an order that reaches back into the past makes it more difficult to plan one’s affairs and a sizeable “retroactive” award for which the payor did not plan may impose financial hardship. The second concerns placing proper incentives on the applicant to proceed with his or her claims promptly (see D.B.S., at paras. 100-103).

Conduct of the blameworthy party

[333] The husband did not make any payments to the wife prior to the litigation.

[334] There was no interim agreement for payment of the same. The husband did not volunteer any monies.

[335] The husband’s conduct has not been exemplary during the litigation as noted above in his lack of cooperation regarding disclosure and valuations and lack of compliance with court orders.

[336] Given the lengthy history of blameworthy conduct, the court must ask: for what period of time is the blameworthy conduct to be reviewed?

[337] As Justice Cromwell stated at para. 207 above, the court must examine the conduct of the payor relevant to his support obligation.

[338] During the litigation and his testimony at trial, the husband provided inconsistent testimony and the documentary evidence did not corroborate some of his positions.

[339] As stated in DBS at paras. 106-107:

Courts should not hesitate to take into account a payor parent’s blameworthy conduct in considering the propriety of a retroactive award. Further, I believe courts should take an expansive view of what constitutes blameworthy conduct in this context. I would characterize as blameworthy conduct anything that privileges the payor parent’s own interests over his/her children’s right to an appropriate amount of support.

[340] In Reis v. Bucholtz, 2010 BCCA 115, 3 B.C.L.R. (5th) 71, the court stated at para. 78:

While the Court cautioned that undue delays in actually proceeding with litigation might affect retroactivity, it also recognized that blameworthy conduct is a factor to be considered: where a payor parent has taken steps to hide his or her true financial situation, or has actively dissuaded the recipient parent from exercising his or her legal options, retroactive support may be ordered even where formal legal action was delayed.

[341] The husband had threatened during the marriage that she would not get anything if they separated. She was aware of his financial means and his ability to pay support.

[342] Clearly, he had the ability to pay a support amount prior to separation. Mr. Clarke found that he had an excess of $200,000 available in 2012. Under the SSAG, even if he had been earning $100,000, as found by Justice Minnema the mid-range support would have been $2,990.

[343] The husband is to be faulted for not financially assisting the wife when he had this income at this disposal. He was living in a single family home while his wife was waiting for subsidized housing and relying on their sons to offset her expenses.

Circumstances of the wife occasioned by non-payment of support

[344] As per Kerr, the Court considered the wife’s needs at the time that support should have been paid. Did the wife enjoy the advantages she would have received from the support?

[345] With the help of her sons, the wife has been able to meet her expenses.

[346] At the date of separation, she had no debt and a small amount in her bank account.

[347] At the time of trial, she had no debt other than the car loan, on which she manages to make payments on a regular basis and $7,000 remains outstanding.

[348] The parties appeared to live a modest lifestyle during their marriage. Other than the occasional trip to Lebanon, there is no evidence that they lived an extravagant lifestyle, such as indulging in elaborate vacations, meals outside the home, expensive clothing and jewellery, large investment holdings or real estate.

[349] After separation, the wife continued to live a modest lifestyle that she enjoyed during the marriage.

[350] What is concerning, however, is that the husband has been able to earn unreported income and has not shared it with the wife. She is entitled to share in the fruits of his labour and equitably share the benefits from the marriage.

Hardship to the payor if retroactive support ordered

[351] As stated in DBS at para. 96:

Unlike prospective awards, retroactive awards can impair the delicate balance between certainty and flexibility in this area of the law. As situations evolve, fairness demands that obligations change to meet them. Yet, when obligations appear to be settled, fairness also demands that they not be gratuitously disrupted. Prospective and retroactive awards are thus very different in this regard. Prospective awards serve to define a new and predictable status quo; retroactive awards serve to supplant it.

[352] Although there was a legal obligation for him to pay his wife support, for the court to retroactively go beyond the date of the application when the husband first received effective notice would pose a hardship to him. The wife should not receive a windfall in the amounts that she is claiming from $200,000 to $500,000.

[353] In contrast, the wife has made do and, although had a different lifestyle than the husband, as she was living in subsidized housing, she has little debt and now owns a vehicle.

[354] The court finds that the husband already has significant financial obligations pursuant to the interim support orders and is not prepared to add further financial obligations by making a retroactive payment beyond the date of the application.

[355] Pursuant to this judgment, he will be transferring the Gaultois property which has sizeable equity.

[356] The court finds that fairness dictates that the retroactive order not go beyond the date of the application, which is three years ago. This presumption was also enunciated in the DBS case. I find that fair in the circumstances.

[357] In summary, from 2007 to 2013 when spousal support was payable, there is no evidence that the wife’s needs were not met. She failed to provide notice to the husband that she intended to pursue her rights and hence the husband was lulled into a financial situation where he did not give any consideration to pay the wife support. A retroactive amount would cause hardship to him.

[358] In conclusion, the Court is not prepared to go beyond the date that support was payable as per Justice Minnema’s order.

Vesting Order

Wife’s position

[359] The wife is seeking an order pursuant to section 9 of the Family Law Act, R.S.O. 1990, c. F.3, and/or section 100 of the Courts of Justice Act, R.S.O. 1990, c. C.43, that the equalization payment and spousal support be satisfied through the vesting of the Gaultois property in the name of the wife.

[360] She submits that, based on his non-payment of support owing pursuant to numerous Court Orders and breaches of non-dissipation and disclosure orders, he is unlikely to pay periodic support or the equalization payment.

[361] The company, which is a party to these proceedings, owns Gaultois property and she submits that the Court should pierce the corporate veil. The husband is the sole shareholder of the company.

[362] The wife submits that the market value of the Gaultois property as shown by the husband in his November 16, 2015 financial statement is $425,000 with a mortgage balance of $233,746 and hence the equity is approximately $200,000. The amount would satisfy the equalization payment and any lump sum support award ordered.

Husband’s position

[363] The husband denies that there is an equalization payment owing or that the wife is entitled to spousal support.

[364] Nevertheless, he suggests in his final submissions, that if the court, were inclined to provide the wife with any monies this could be accomplished by the lump sum payment of $50,000 currently registered as a lien against the Gaultois property.

Legal principles

[365] A vesting order can be made pursuant to s.100 of the Courts of Justice Act which states:

A court may by order vest in any person an interest in real or personal property that the court has authority to order be disposed of, encumbered or conveyed.

[366] Authority for a vesting order is also set out in s. 9(1)(d)(i) of the Family Law Act, which sets out the powers of the court: “the court may order … (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”.

[367] A vesting order has its roots based on equitable principles. In Bulman v. Bulman (2009), 2009 CanLII 63126 (ON SC), 76 R.F.L. (6^th) 112, the court confirmed that the vesting order is an equitable remedy to use as an enforcement mechanism where there was little likelihood that the husband would comply with any lump sum spousal support or equalization order.

[368] In Regal Constellation Hotel Ltd. Re 2004 CanLII 206 (ON CA), [2004] Carswell Ont 2653, the Ontario Court of Appeal outlined that although, a vesting order is a creature of statute, its’ origins are equitable in nature.

[369] The Ontario Court of Appeal in Chippewas of Sarnia Band v. Canada (Attorney General) [2000] CarswellOnt 4836 stated at para. 281:

Vesting orders are equitable in origin and discretionary in nature. The Court of Chancery made in personam orders, directing parties to deal with property in accordance with the judgment of the court. Judgments of the Court of Chancery were enforced on proceedings for contempt, followed by imprisonment or sequestration. The statutory power to make a vesting order supplemented the contempt power by allowing the court to effect the change of title directly: see McGhee, Snell's Equity, 30th ed. (London: Sweet and Maxwell, 2000) at pp. 41-42. As explained by Proudfoot V.C. in Robertson v. Robertson (1875), 22 Gr. Ch. 449 at p. 456, the statute gives the court the power "to make a vesting order whenever it might have ordered a conveyance to be executed". Quite apart from its equitable origins, by the very terms of s. 100, the power to grant a vesting order lies in the discretion of the court.

[370] The Court notes that in Risto v. Marcelais, 2014 ONSC 1873, Justice De Sousa granted a vesting order securing a lump sum spousal support award as the respondent would not likely comply with any future spousal support order. Spousal support was awarded pursuant to the Family Law Act.

[371] A vesting order is in the form of enforcement remedy. Once the court has determined that the wife is owed a payment, she must satisfy the court that, given the husband’s conduct to date, he is unlikely to comply with terms of the order. The basis for such an order can be on the premise of a number of criteria.

[372] In Thibodeau v. Thibodeau 2001 ONCA, 110, Justice Blair J.A. stated at para. 42:

The onus is on the party seeking such an order, and as a general rule the court's discretion will only be exercised in favour of a s. 9(1) order where it is established -- based on the targeted spouse's previous actions and reasonably anticipated future behaviour -- that the equalization payment order granted will not likely be complied with in the absence of additional, more intrusive provisions.

[373] In Bargout v. Bargout 2013 ONSC 29, Justice McDermot considered whether the Respondent was entitled to a vesting order with respect to the matrimonial home in order to satisfy the husband’s spousal support obligations. In that case, the Applicant had made it difficult for the Respondent to enforce support as a result of his residency. He had concealed his location, income and assets. Given the historical difficulties and lack of cooperation and disclosure, the Court had no difficulty in making a vesting order.

[374] In Vetro v. Vetro 2013 ONCA 303, the Ontario Court of Appeal confirms the court’s jurisdiction to make a vesting order when there has been a history of non-payment.

[375] In Rezagholi v. Ezami 2010 ONSC 5469, Justice McGee refused to grant a vesting order as the Court was uncertain of the wife’s continued residence, the quantum of spousal support had not been determined and the there was no evidence of the value of the Ontario assets was in the range of the outstanding liability.

[376] In McLean v. Danicic [2009] W.D.F.L. 4579, Justice Harvison Young dealt with an unmarried couple and claims of unjust enrichment. He found that a vesting order was necessary to ensure the Respondent’s obligations due to his past un-cooperative behavior.

[377] He ordered that the vesting order in favour of the Application authorize the vesting of title in her so that she may sell the properties with a view to satisfying the amounts owing to her.

[378] In Judge v. Tait [2010] W.D.F.L. 859, Justice Ellen Macdonald dismissed a motion by the wife for a vesting order with respect to the matrimonial home. The husband was in arrears of taxes and in arrears in his support payments. The Court found that there were no support arrears and the husband had no history of abandoning his financial obligations to the wife and children.

[379] In Keyes v. Keyes [2015] W.D.F.L. 3904, Justice Chiapetta, found that the wife had failed to discharge the onus to establish that a vesting order was necessary. In that case the husband was voluntarily paying the expenses on the matrimonial home and voluntarily paying spousal support. There was no evidence that the husband would fail to comply with court orders.

[380] In Belton v. Belton [2010] W.D.F.L. 2010, Justice MacPherson made a vesting order with regards to a husband’s account to ensure payment of the equalization payment. The husband’s whereabouts were unknown and he had acted in bad faith incurring debts, including forging the wife’s signature, non payment of support.

[381] Justice Shaw in Newton v. Newton 2014 ONSC 2757, [2014] W.D.F.L. 2793, granted a vesting order as the wife’s past conduct and her anticipated future behaviour demonstrated that she would unlikely to comply without a more intrusive remedy such as a vesting order. The court found that there was an appropriate relationship between the equity in the home and the amount she owed her husband.

[382] In the Court of Appeal case of Lynch v. Segal (2006), 2006 CanLII 42240 (ON CA), 82 O.R. (3d) 641, at paras. 32-33, a vesting order was ordered to ensure that support payments are paid:

[32] I do not think any useful purpose is served by attempting to categorize the types of circumstances in which a vesting order may issue in family law proceedings. The court has a broad discretion, and whether such an order will or will not be granted will depend upon the circumstances of the particular case. I agree with the appellants that the onus is on the person seeking such an order to establish that it is appropriate. As a vesting order -- in the family law context, at least -- is in the nature of an enforcement order, the court will need to be satisfied (as the trial judge was here) that the previous conduct of the person obliged to pay, and his or her reasonably anticipated future behaviour, indicate that the payment order will not likely be complied with in the absence of more intrusive provisions: see Kennedy v. Sinclair, 2001 CanLII 28208 (ON SC), [2001] O.J. No. 1837, 18 R.F.L. (5th) 91 (S.C.J.), affd 2003 CanLII 57393 (ON CA), [2003] O.J. No. 2678, 42 R.F.L. (5th) 46 (C.A.). Thus, the spouse seeking the vesting order will have already established a payment liability on the part of the other spouse and the amount of that liability, and will need to persuade the court that the vesting order is necessary to ensure compliance with the obligation.

[383] In Lynch v. Segal, the case involved a businessman who had placed real estate in his corporations’ names. The court agreed with the trial judge that a vesting order was necessary to ensure compliance by the husband of his obligation to pay support for the wife and children.

[384] With respect to piercing the corporate veil, the Court stated:

[35] The well-known corporate law principle, first enunciated in Salomon v. Salomon & Co., [1897] A.C. 22, [1985-9] All E.R. 33 (H.L.), that the shareholders of a corporation are separate and [page652] distinct from the corporate legal entity is -- as MacPherson J.A. recently noted in Wildman v. Wildman,2006 CanLII 33540 (ON CA), [2006] O.J. No. 3966, 151 A.C.W.S. (3d) 666 (C.A.), at para. 23 -- "an important one" but not, however, "an absolute principle". There is a line of jurisprudence establishing in very general terms that the courts will not enforce the "separate entities" notion where "it would yield a result 'too flagrantly opposed to justice, convenience or the interests of the Revenue' ".

[36] A more flexible approach is appropriate in the family law context, particularly where -- as here -- the corporations in question are completely controlled by one spouse, for that spouse's benefit and no third parties are involved.

[385] However, a vesting order has certain limitations. In Trick v. Trick [2006] 83.O.R. (3d) 55, the Court of Appeal overturned a trial decision where the trial judge vested the spouse’s pension in the other spouse. In doing so, the court found that:

i) s. 100 of the Courts of Justice Act is not a stand alone remedy

ii) the Family Law Rules do not permit a vesting order

iii) the vesting of the pension to the other spouse is contrary to the Pension Benefits Ac, and

iv) The Divorce Act does not list a vesting order as an available mechanism. It does give a court jurisdiction to secure a spousal support order. However, the court commented that it might be construed as providing the CJA s.100 authority to "encumber" an asset.

[386] The Divorce Act, states:

2 (1)"support order" means a child support order or a spousal support order.

15.1(1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to pay for the support of any or all children of the marriage.

15.2(1) A court of competent jurisdiction may . . . make an order requiring a spouse to secure or pay, or to secure and pay . . . such . . . sums, as the court thinks reasonable for the support of the other spouse.

15.1(4) and s. 15.2(3) The court may make an order . . . and may impose terms, conditions or restrictions in connection with the order . . . as it thinks fit and just.

[387] In Trick, the Court of Appeal stated:

[25] The motion judge also referred to the DA s. 15 jurisdiction to "impose 'terms, conditions, or restrictions in connection with' a child or spousal support order". In addition, s. 17(3) provides, on a variation application, that a court may make an order that "could have been included in the order in respect of which the variation order is sought".

[26] In my view, these provisions do not assist the respondent. The phrase, "in connection with", only modifies the terms of the support being ordered so that a judge may impose various terms and conditions on the payments being ordered. The provision does not go so far, however, as to provide jurisdiction for the judge to order enforcement of the order or to order security for the payments. I say this because both enforcement and security are specifically addressed elsewhere in the DA.

[27] The DA gives a court jurisdiction to require a spouse "to secure and pay" spousal support pursuant to s. 15.2(1) and s. 17(3) of the DA. Jurisdiction to secure an order for child support is provided by s. 12 of the Federal Child Support Guidelines. The securing of support, which has been available since the 1985 DA amendments, was addressed in Long v. Long, 1993 CanLII 7276 (AB QB), [1993] A.J. No. 966, 1 R.F.L. (4th) 110 (Q.B.). In that case, Veit J. held that because "there is specific authority in the Divorce Act allowing the courts to secure the payment of support," she had the jurisdiction to order support payments deducted from the payor's wages. She explained at para. 18 that such an order "is like a receivership order and is therefore within the category of securing orders that also contains mortgages, bonds, and pledges." [See Note 4 below] [page67]

[28] Such an order for security arguably could provide the necessary additional authority upon which to found a subsequent CJA s. 100 vesting order because such an order could be interpreted as providing the "authority" to "encumber" property. In any event, apart from the fact that this analysis was not argued by the respondent, in my view, the provisions of the PBA, which I will now discuss, preclude such an order, at least at law.

[388] In Cunningham v. Montgomery, [2010] ONSC 1817, Justice Coats followed Trick and dismissed a husband’s motion of a vesting order to secure an outstanding costs award. Her order was based on the following reasons:

• there was no order for an equalization payment and hence s. 9 of the Family Law Act was not available;

• there is no power under s.9 of the Family Law Act to order a vesting order for costs;

• support was determined under the Divorce Act, not the Family Law Act, and therefore, she had no power to make a vesting order under s. 34(1) (c) of the Family Law Act that authorizes the court to transfer a property or vest property in the dependent when granting support;

• s. 100 of the Courts of Justice Act does not provide stand-alone jurisdiction to grant a vesting order. She stated: “it does not provide a free-standing right to property simply because the Court considers that result equitable.”

Decision

i) Equalization payment

[389] The husband owes the wife an equalization payment, a lump sum spousal support payment and support arrears. These are substantial amounts.

[390] The husband made some support payments and made the lump sum payments ordered by Justices Mackinnon and Warkentin. He is in arrears for payments due pursuant to court orders.

[391] Other than his cab plates and his company, he has no other assets. The Gaultois home is in the company’s name. His declared income to CRA is artificially low. Other than small sums that have been garnished for taxi services that the husband has provided government employees, very little has been garnished by FRO. Attempts to enforce these payments due under the court orders have not been fruitful.

[392] In failing to obey court orders by providing financial information and valuations, the husband has demonstrated his flagrant disregard and disrespect to this court’s orders. The court finds that, given his past history of non-compliance, the wife will be faced with numerous challenges in enforcing the payments owed to her by the husband.

[393] With respect to the equalization payment, s. 9 (1) (d) of the Family Law Act, the court has the power to transfer property to a spouse to satisfy an equalization payment made under section 7.

[394] Section 7, grants the Court power, on the application of a spouse, to determine the issue of entitlement and sets out prescription periods.

[395] “Property” is defined under s. 4:

property” means any interest, present or future, vested or contingent, in real or personal property and includes,

(a) property over which a spouse has, alone or in conjunction with another person, a power of appointment exercisable in favour of himself or herself,

(b) property disposed of by a spouse but over which the spouse has, alone or in conjunction with another person, a power to revoke the disposition or a power to consume or dispose of the property, and

(c) in the case of a spouse’s rights under a pension plan, the imputed value, for family law purposes, of the spouse’s interest in the plan, as determined in accordance with section 10.1, for the period beginning with the date of the marriage and ending on the valuation date; (“bien”)

[396] When determining the equalization payment, the court will be guided by the definition of “net family property” in s. 4 and the elaboration of the definition of excluded property and net family property liabilities.

[397] Section 4 does not restrict the definition of “property” to the property that existed at the date of separation.

[398] Section 9 allows the Court to vest property owned by the spouse at any time.

[399] The Court is prepared to pierce the corporate veil. The husband is the controlling mind and the sole shareholder of the company.

[400] In Lynch v. Segal, the husband had placed his assets in corporations and he was the beneficiary owner of many companies. The husband had failed to pay significant support payments. The court made a vesting order pursuant to s. 34 (1) (c) of the Family Law Act and stated the following:

[20] She succeeded. The trial judge found that "the limited companies and Mr. Segal are one and the same" and that "[Mr. Segal] is the beneficial owner of the property". He ordered that the Lands be vested in Ms. Lynch in satisfaction of the monetary claims outlined above, and costs.

[401] The Court of Appeal referred to the extensive authority to do so.

[35]The well-known corporate law principle, first enunciated in Salomon v. Salomon & Co., [1897] [A.C. 22, [1985-9] All E.R. 33 (H.L.), that the shareholders of a corporation are separate and [page652] distinct from the corporate legal entity is -- as MacPherson J.A. recently noted in Wildman v. Wildman, 2006 CanLII 33540 (ON CA), [2006] O.J. No. 3966, 151 A.C.W.S. (3d) 666 (C.A.), at para. 23 -- "an important one" but not, however, "an absolute principle". There is a line of jurisprudence establishing in very general terms that the courts will not enforce the "separate entities" notion where "it would yield a result 'too flagrantly opposed to justice, convenience or the interests of the Revenue' ".

[402] The Court finds that the company and the husband are “one and the same” and that the husband is the beneficial owner of the Gaultois property. As in the Lynch v. Segal case, the Court is prepared to pierce the corporate veil. The husband is the sole shareholder of the company and has complete control of the company.

[403] The vesting of the Gaultois property in the wife’s name will provide payment of the equalization payment.

[404] In summary, the husband has shown a constant lack of cooperation and non-compliance with court ordered payments. If the wife is ever to see any monies, the court must grant a vesting order. The Court finds that a vesting order in favour of the wife of the Gaultois property is required to ensure that the husband complies with his financial obligation of making his equalization payment arising from this judgment.

[405] Therefore a vesting order with respect to the Gaultois property in favour of the wife to satisfy the equalization payment owed to her by the husband.

ii) Spousal support

[406] However, a vesting order cannot issue in favour of the wife for the payment of spousal support lump sum or arrears.

[407] The court is bound by the Trick case, which confirmed that s. 100 of the Courts of Justice Act, is not a stand-alone remedy.

[408] I note the reasoning of Justice Blair in Lynch, which suggests that s. 100 should be interpreted as flexible and elastic and in family law to assist the court in ensuring that support obligations are met. In Lynch, the vesting order was granted under the Family Law Act.

[409] In this case, the court finds no authority under the Divorce Act to make a vesting order with respect to spousal support.

[410] I agree with the reasoning in Cunningham v. Montgomery, since the support order in this matter is not under the Family Law Act, the Court cannot make a vesting order with respect to the spousal support payment or support arrears.

[411] Nevertheless, the court can consider alternative means to ensure compliance of the lump sum support payment.

[412] The spousal support lump sum payment will be paid by way of the lien currently registered against the Gaultois property as ordered by Justice Mackinnon. Given the wife will obtain the Gaultois property via vesting order, she will be taking the property with a lien in favour of herself.

How should the court characterize the payments made by the husband pursuant to the interim orders?

[413] The Court is characterizing the $5,000 payable under Justice Warkentin’s order dated July 30, 2013 as a payment towards his financial obligations of spousal support pursuant to the order of Justice Minnema.

[414] The payment under Justice Mackinnon’s order, which required the husband to pay $35,000 by November 30, 2014, will be also characterized as a credit towards his support payment.

[415] The payment of $1,000 which the husband paid pursuant to the Justice MacKinnon’s order along with the other credits shown in the FRO statement will be attributed to support.

[416] He was also garnished by FRO in 2014 and 2015 for the amount of $1,007. This will be credited towards spousal support payments.

[417] The wife should have been paid the spousal support since she instituted her proceedings, and hence, it is fair and reasonable that these interim payments be utilized by the wife for her own support. Given the facts of the marriage and the economic dependency of the wife and compensatory elements of her support, the husband owed a duty to the wife to support her after separation.

Conclusion

[418] The court orders the following:

i) Divorce order granted based on one year of separation;

ii) The husband owes the wife the equalization payment of $168,132.53;

iii) The husband will be credited the amount of $5,000 he paid on August 12, 2013 and the amount of $35,000 he paid in December 2, 2014. towards his support order;

iv) As stated above, any payments made pursuant to Justice Mackinnon’s payment order of $1,000 per month will be credited towards support;

v) there will be a lump spousal support of $50,000 payable by the husband to the wife;

vi) The quantum of spousal support may be varied upon a material change of circumstances after August 1, 2019;

vii) The above equalization payment will be paid via a vesting order on the Gaultois property;

viii) Upon transfer to the Gaultois property to the wife, she will be responsible for all carrying costs associated with that property, including, but not limited to, the mortgage, realty taxes, utilities and repairs;

ix) The wife’s lump sum spousal support will be satisfied by way of the lien of $50,000 currently registered against the property (ordered by Justice Mackinnon);

x) Given there will likely be a sale of the property to satisfy the husband’s obligations for the equalization payment and spousal support lump sum payment, there may be a surplus or shortage of funds. If the parties are unable to agree on the accounting, the matter can be returned before me for directions.

[419] If the parties cannot agree on costs, the wife may submit her three pages of submission by March 25, 2016 and the husband may provide his three pages of submission by April 8, 2016. The wife may file a reply by April 18, 2016.

Madam Justice A. Doyle

Released: March 1, 2016

CITATION: Wehbe v. Wehbe, 2016 ONSC 1445

COURT FILE NO.: FC-13-202

DATE: 2016/03/01

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Sakina Wehbe

Applicant

– and –

Michael Mohammed Wehbe and

Local Motion Transportation Inc.

Respondents

REASONS FOR JUDGMENT

Madam Justice A. Doyle

Released: March 1, 2016