Court File and Parties

COURT FILE NO.: FS-12-4865-00 DATE: 2016-06-08 ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

NIKITA SURANA Archana Medhekar, for the Applicant Applicant

- and -

KAPIL SURANA Michael H. Tweyman, for the Respondent Respondent

HEARD: June 7, 2016, at Brampton, Ontario Price J.

Reasons For Order

NATURE OF MOTIONS

[1] The parties brought three motions which the court heard on June 7, 2016, and which are addressed in these reasons:

a) Kapil Surana (Respondent)’s, moved to vary Justice Skarica’s non-dissipation order dated December 17, 2012, and for leave to dispose of his interest in his dental clinic in Guelph. That motion was initially brought for hearing February 16, 2016, and was adjourned from time to time, most recently on April 8, 2016, to require further disclosure from Dr. Surana.

b) Nikita Surana (Applicant) moved for sale of the matrimonial home. She brought her motion initially for hearing April 8, 2016. It was adjourned that day for further disclosure by Dr. Surana, to permit assessment of the potential impact of his proposed buy-out of Ms. Surana’s interest in the home on her claims.

c) Ms. Surana moved for interim child support on May 13, 2016, for hearing on June 7, 2016, pursuant to leave granted in paragraph 1 of my endorsement dated April 8, 2016.

ISSUES

[2] The court must determine the following issues arising from these motions:

a) What is the proper order to make regarding Dr. Surana’s motion to vary the non-dissipation order? That is, should the motion be declared moot, be dismissed or otherwise determined, be marked withdrawn, or be adjourned?

b) Should Ms. Surana’s motion for interim child support be determined, or adjourned? If determined, what amount of child support should Dr. Surana be required to pay pending the trial of this proceeding?

c) What order for costs is appropriate in the circumstances?

POSITIONS OF THE PARTIES

[3] The parties took the following positions at the hearing on June 7, 2016:

a) The respondent’s motion to vary the non-depletion term of Justice Skarica’s order and for leave to sell his interest in his Guelph dental clinic:

Dr. Surana did not wish to pursue this motion on June 7th because an Offer by Dr. Surana’s colleague to purchase his interest in their clinic did not materialize, as noted in my endorsement of March 10, 2016, and Dr. Surana had not received any further offers to purchase his interest in the clinic. Dr. Surana asked that the motion be declared moot. Ms. Surana asked that an order be made requiring that the motion be returned before me in the event that Dr. Surana proposes to dispose of his interest in the clinic in the future.

b) Ms. Surana’s motion for sale of the matrimonial home:

Dr. Surana now consents to an order for sale of the matrimonial home to an arm’s length buyer.

c) Ms. Surana’s motion for interim child support and arrears of child support:

Ms. Surana seeks an order for interim child support, and arrears of child support, today. Dr. Surana takes the position that by reason of his consenting to the sale of the matrimonial home, Ms. Surana’s motion for variation of child support need not be determined.

BACKGROUND FACTS

[4] Dr. Surana has not responded to Ms. Surana’s motion for child support and occupancy rent. He has relied on what he submits was an assurance given at the hearing on April 8th that if he agreed to a sale of the matrimonial home, the motions for support and occupancy rent would not proceed.

[5] I have reviewed the digital recording from April 8, 2016. It discloses that the following discussion took place. After the luncheon recess, Ms. Surana’s counsel reported that in the discussion that had taken place between counsel, Mr. Tweyman had indicated that he could provide the Income Valuation by April 13, 2016. She indicated that Ms. Surana wished to return on April 29th to resolve Dr. Surana’s motion for leave to sell his interest in his dental practice and Ms. Surana’s motion for sale of the home at that time.

[6] The court then raised the question of whether there would be a utility in the court entertaining motions for a variation of spousal support or for child support at that time. Ms. Surana’s counsel replied that if they could have the income report by that time, they could probably bring the motion for child support forward that Ms. Surana had initially intended to bring earlier but had been delayed by the delay in resolving the parenting issues and by the delay in obtaining disclosure of Dr. Surana’s income. She indicated that once she received the income valuation, she would be in a position to make an offer to settle the issue of spousal and child support on a final basis.

[7] The court noted that the most urgent issue appeared to be the sale of the matrimonial home, and that Ms. Surana’s motivation for pressing that issue appeared to derive from her view that the support being provided to her was unreasonably low and that Dr. Surana was getting, in effect, a “free ride” by being able to remain in the matrimonial home without paying occupancy rent. The court suggested that if support were reviewed on April 29th, the urgency of selling the matrimonial home could be relieved. Ms. Surana’s counsel replied that both the issues of support and occupancy rent were reviewed, that would reduce the urgency of selling the home. She noted that she calculated the accrued value of Dr. Surana’s occupancy rent at $84,000, of which Ms. Surana’s share should be $42,000, and that the delayed sale of the home increased the amount of her claim in that regard.

[8] The court then asked whether, if an order for sale of the home was not made by the end of April, the issues of support and occupancy rent could be dealt with at that time, so that the issue of the sale of the home could be deferred to a later date. Dr. Surana’s counsel replied that because he was not returning from an overseas trip until April 28th, it would be impossible for him to be ready for a motion for support and occupancy rent to be heard by the end of that month. Discussion then ensued on a timetable that would accommodate both the anticipated dates of Dr. Surana’s compliance with undertakings, and of his delivery of his income valuation, and counsel’s schedule. The date of June 7th was agreed upon for the hearing of those motions, as well as for the hearing of Dr. Surana’s motion for leave to sell his Guelph dental practice and Ms. Surana’s motion for sale of the home.

[9] Before the court began writing its endorsement, Dr. Surana’s counsel asked whether, if there was an agreement to sell the matrimonial home, these other motions might not be necessary, and the court agreed that this might obviate the need for those motions. There was no detailed discussion as to the timing of such agreement, but based on the earlier discussion, it should have been clear that it was if agreement was not reached on the sale of the home by April 29th, that the motions for support and occupation rent might then have to be brought, which is why the delivery of the motion material for those motions was scheduled for May 13th. That discussion cannot reasonably have been interpreted as an assurance that if Dr. Surana agreed, on the eve of the hearing of the motion on June 7th to a sale of the home, the motion that Ms. Surana had brought in the interval would not proceed.

[10] As the court began writing its endorsement on April 8th, Dr. Surana made a “good faith” offer to increase the support he was paying by $2,000 per month, on a without prejudice basis, commencing April 1, 2016. Dr. Surana may have made this increase in the hope of avoiding a motion by Ms. Surana for variation of spousal support, and possibly a motion by her for child support, and it may have had this effect if his agreement to sell the matrimonial home had come at an earlier time. However, it cannot, in fairness to Ms. Surana, be given the effect of precluding her from proceeding with her motions for temporary child support, pending the trial of the proceeding, which is not likely to take place until January 2017.

[11] Dr. Surana’s agreement to sell the matrimonial home, although given late in the proceeding, reduces the urgency with which the court must address Ms. Surana’s motion for occupancy rent. A full hearing of that aspect of Ms. Surana’s motion can be deferred pending the parties’ efforts to sell the matrimonial home. This will give Dr. Surana a further opportunity to respond. Child support, however, is the right of the Surana children. Ms. Surana’s motion for temporary child support should not be further delayed by reason of Dr. Surana’s past delay in producing his income valuation and agreeing to sell the matrimonial home.

ANALYSIS

a) Child Support

[12] The parties separated on December 20, 2013. There are three children of the marriage, namely:

a) A daughter, Samraddhi Surana, who is 14 years old (born October 19, 2001);

b) Twin sons, Surgog Surana and Sanyog Surana, who are 9 (born July 1, 2006).

[13] Ms. Surana commenced the present proceeding by application issued on December 2013, in which she seeks, among other remedies, custody of the children and child support for them from January 1, 2014. Justice Ricchetti made an order regarding parenting issues on December 20, 2013. He noted at paragraph 41 of his reasons that the motion for child support could not be argued until the parenting issues were determined. Justice Ricchetti’s order directed that the children were to reside primarily with Ms. Surana. His order was without prejudice to Ms. Surana’s right to proceed with her motion for child support.

[14] As noted above, Ms. Surana was delayed in proceeding with her motion for child support by Dr. Surana’s delay in producing his income valuation, which the court had ordered him to provide. Dr. Surana’s expert, Peter Weinstein issued an initial report in which he gave a preliminary calculation of Dr. Surana’s income for 2010, 2011, and 2012. Mr. Weinstein later issued another report dated April 28, 2016, in which he gave a calculation of Dr. Surana’s income for 2013, 2014, and 2015.

[15] As noted above, Ms. Surana claims child support from January 1, 2014. I will therefore restrict my analysis to that period. Mr. Weinstein calculated Dr. Surana’s income in the years 2013 to 2015 as follows:

a) 2013: $273,000 b) 2014: $477,000 c) 2015: $461,000

[16] Sections 1 to 19 of the Federal Child Support Guidelines (“FCSG”) set out the methodology that the court is to use in calculating a spouse’s income for the purpose of determining his obligation to pay child support. Where the parties do not agree on the payor spouse’s income, the court is to have reference to the spouse’s line 150 income in the most recent Notice of Assessment from the Canada Revenue Agency. Where the payor’s income has varied significantly from year to year, the court is to average his line 150 income in the three most recent years for which tax information is available. If that does not appear to be the fairest way to determine the spouse’s income, the court is to impute income to him, having regard to all the available evidence concerning his means and circumstances.

[17] Having regard to Dr. Surana’s self-employment, and the control he exercises over the reporting of his income to the Canada Revenue Agency, I find that the fairest way to determine his income is by reference to the opinion of the chartered income valuators the parties have consulted. Ms. Surana’s valuator has given a critique of Mr. Weinstein’s calculations, and has proposed higher amounts for Dr. Surana’s income. He notes that the lower income that Mr. Weinstein attributes to Dr. Surana in 2013, which is significantly lower than his income in 2012 and 2014, can be explained by the fact that Dr. Surana changed his business’ year end in 2013. He questions Mr. Weinstein’s reduction of Dr. Surana’s income by the amount his business recorded as having been paid to Ms. Surana as an employee of his business, when she was not, in fact, an arm’s length employee, and did not, in fact, receive the salary attributed to her. He also questions Mr. Weinstein’s failure to account for investments made by Dr. Surana with the proceeds of his dental practice.

[18] The court has frequently commented on the challenge of making findings of fact based on conflicting affidavits or expert reports when the evidence they contain has not been tested by cross-examination. [1] In the present motion for temporary child support, it is appropriate, pending the testing of the experts’ evidence by cross-examination at trial, to take a conservative approach by basing Dr. Surana’s income on the opinion of his own expert.

[19] The court does not yet have a calculation of Dr. Surana’s income for 2016. Because his income varied significantly from 2013 to 2014, I am applying the methodology in sections 15 to 19 of the FCSG by analogy, and averaging his income, as calculated by Mr. Weinstein, for the most recent three years for which he gave valuations. The average of Dr. Surana’s income from 2013 to 2015, based on those calculations, is $403,666.67.

[20] Based on Dr. Surana’s estimated income in 2014 and 2015, and his averaged income for 2016, the table child support he owes, based on the FCSG, is as follows:

2014: Table child support for 3 children, based on Dr. Surana’s estimated income of $477,000 for that year, is $7,320 per month, ($2,611 + 1.44% x the amount in excess of $150,000), or $87,840 ($7,320 x 12 months) for the year;

2015: Table child support for 3 children, based on Dr. Surana’s estimated income of $461,000 for that year, is $7,089 per month, or $85,068 ($7,089 x 12 months) for the year;

2016: Table child support for 3 children, based on Dr. Surana’s average income of $403,666.67 from 2013 to 2015, is $6,263.80 per month. For the five months from January to May 2016, this amounts to $31,319 ($6,263.80 x 5 months).

[21] Based on the foregoing amounts, the total child support owed by Dr. Surana for the period from January 1, 2014, to May 31, 2016, is $204,227.

[22] Dr. Surana paid $3,500 per month for child support from June 2014 to March 2016, for a total of $77,000 ($3,500 x 22 months) and an additional $2,000 per month in April and May 2016, for a total of $11,000. He is therefore entitled to a credit of $88,000 to the end of May 2016. After crediting him with this amount, he owes net child support in the amount of $116,227.

[23] Based on Dr. Surana’s average income of $403,666.67 from 2013 to 2015, he will be required to pay temporary child support in the amount of $6,265 from June 1, 2016, onward, pending the trial of the proceeding.

[24] Claims for contribution to the children’s special and extraordinary expenses pursuant to s. 7 of the FCSG were not addressed in this motion.

b) Occupancy Rent

[25] The court has the power, pursuant to s. 122(2) of the Courts of Justice Act, to grant occupation rent when it is appropriate to do so. [2] The Courts of Justice Act provides:

122. (2) An action for an accounting may be brought by a joint tenant or tenant in common, or his or her personal representative, against a co-tenant for receiving more than the co-tenant’s share.

[26] While occupation rent is an exceptional remedy, [3] especially in the absence of an order for exclusive possession, the Court of Appeal has noted, “the common law remedy of occupation rent is not saddled with such a prerequisite”. [4]

[27] The general rule once was that one joint tenant, unless ousted by her joint tenant, could not sue another for use and occupation. More recently, it has been held that when a joint tenancy is terminated by a court order for partition and sale, the court may make all just allowances and give such directions as will do complete equity. What is just and equitable depends on the circumstances of each case. [5]

[28] The legal test for occupation rent has been variously described as follows:

a) In Higgins v. Higgins, above, the Court of Appeal endorsed the following, quoted from Irrsack v. Irrsack: “Since I find that the wife is an equal joint owner thereof, it follows that she is entitled to be compensated for the sole use and occupation by the husband, which includes her half interest”. [6]

b) Awarding occupation rent is said to be founded on equity and reasonableness, and as a means of doing equity in the circumstance of the case. [7]

c) Awarding occupation rent is an attempt to balance the equities when dealing with a claim. It is meant as a tool used to achieve justice in the circumstances of the case. [8]

[29] The court considers the following factors, among others, in determining whether occupation rent should be granted:

a) The conduct of the non-occupying spouse, including a failure to pay support;

b) The conduct of the occupying spouse, including the failure to pay support;

c) Delay in making the claim;

d) The extent to which the non-occupying spouse has been prevented from having access to his or her equity in the home;

e) Whether the non-occupying spouse moved for sale of the home and, if not, why not;

f) Whether the occupying spouse paid the mortgage and other carrying charges of the home;

g) Whether children resided with the occupying spouse and, if so, whether the non-occupying spouse paid, or was able to pay, child support;

h) Whether the occupying spouse has increased the selling value of the property;

i) Ouster is not required, as once was thought in some early decisions. [9]

[30] Both parties are legally responsible for the expenses of a jointly owned home. [10] Where the co-tenant in occupation claims for such expenses, including mortgage interest, taxes, and repairs, he will not be allowed such items unless he submits to be charged with occupation rent. [11] Even if no such claim is made by the tenant in occupation, the non-occupying joint tenant may still claim occupation rent, provided that she is prepared to suffer an allowance to the joint tenant in occupation for repairs, improvements, maintenance, and carrying charges. [12]

[31] Even if occupation rent is not available because the co-tenant in occupation has not claimed for upkeep and repairs, the court may still order compensation to the non-occupying tenant where it is equitable to do so. [13]

[32] In the present case, Dr. Surana has, albeit late in the proceeding, consented to the sale of the home. This has lessened the urgency of determining whether he should be obliged to pay occupation rent for the period since December 20, 2013, during which he has been in exclusive possession of the home. It also lessens the prejudice that Ms. Surana would suffer from acceding to Dr. Surana’s request for an adjournment of the motion to give him additional time to prepare responding material.

[33] The sale of the property may provide better evidence upon which to determine some of the above factors, including the value of the property, and the impact that Dr. Surana’s occupancy had on its value, the extent of the delay in the sale, and whether Dr. Surana’s co-operated in the sale, the state of accounts for the mortgage, property tax, and insurance on the property at the time of sale, the state of repair of the home, and the claims, if any, that Dr. Surana makes against Ms. Surana for the expenses he paid during his occupancy.

[34] For the foregoing reasons, Ms. Surana’s motion for occupancy rent will be adjourned to a date to be fixed following the sale of the home, or in the event there is unreasonable delay in its sale.

CONCLUSION AND ORDER

[35] For the foregoing reasons, it is ordered that:

1. The respondent, Kapil Surana, shall forthwith pay to the applicant, Nikita Surana, on a without prejudice basis, the sum of $116,227, as retroactive temporary child support for the period January 1, 2014, to May 31, 2016, for the three children of the marriage:

a) Samraddhi Surana, born October 19, 2001;

b) Surgog Surana, born July 1, 2006;

c) Sanyog Surana, born July 1, 2006.

2. The respondent shall additionally pay to the applicant, on a temporary and without prejudice basis, $6,265 per month beginning June 1, 2016, for the support of the said children.

3. The respondent shall, by July 1st each year beginning in 2016, until a final judgment for child support is made, produce to the applicant a valuation of his income in the previous year from a chartered income valuator.

4. The balance of the applicant’s motion, including her motion for occupancy rent, is adjourned to a date to be arranged with the trial office following the sale of the matrimonial home, or in the event of unreasonable delay in the sale of the home, as the applicant may be advised. In the meantime, the parties have leave to deliver additional evidence in connection with that motion.

5. The respondent’s motion to vary the non-depletion order of Justice Skarica dated December 17, 2012, and for leave to sell his interest in his Guelph dental clinic, is adjourned to a date to be arranged with the trial office, for hearing prior to entering into any agreement to dispose of or encumber the said dental clinic or other property in which he has in interest.

6. If the parties are unable to agree on costs, they shall submit written arguments, not exceeding 4 pages, and a Costs Outline, by June 30, 2016.

Price J.

Released: June 8, 2016

COURT FILE NO.: FS-12-4865-00 DATE: 2016-06-08 ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: NIKITA SURANA Applicant - and – KAPIL SURANA Respondent REASONS FOR ORDER Price J. Released: June 8, 2016

[1] Ziskos v. Miksche, 2007 ONSC 46711, per Spies J., at para. 44; Vopni v. Norris, (1994) 73 O.A.C. 305 (Ont. Div. Ct.); Finch v. Butler, 2010 ONSC 4796, per Di Tomaso J., at para. 52; McNutt v. Draycott, 2015 ONSC 5363, per Gray J., at para. 21 and 40; Logiacco v. Papadopoulos, 2005 ONSC 5473, per Hoilett J., at para. 4; Compresseurs Gagnon INc. v. Max Auto Supply Ltd., 1998 ONCA 874, per curiam, at para. 1; Smith v. Smith, 2009 ONSC 50215, per Daley J., at para. 8 and 15.

[2] Family Law Act, R.S.O. s. 24(i)(c); Courts of Justice Act, R.S.O. 1990, c. C. 43, as a.m., s. 122

[3] Malesh v. Malesh, [2008] O.J. No. 2207 (ONSC), per Ducharme J., at para. 43; Foffano v. Foffano, 1996 ONSC 8097; Barclay-Morrison, 2008 ONSC 60330.

[4] Higgins v. Higgins, [2001] O.J. No. 3011, para. 43

[5] Mastron v. Cotton, [1925] O.J. No. 134 (C.A.), at paras. 16 and 17; Griffiths v. Zambusco (2001), 54 O.R. (3d) 397, 19 R.F.L. (5 TH ) 135, [2001] O.J. No. 2096 (C.A.); Irrsack v. Irrsack (1979), 27 O.R. (2d) 478, 106 D.L.R. (3d) 705 (C.A.)

[6] Higgins v. Higgins, [2001] O.J. No. 3011, (C.A.), para. 43

[7] Higgins, supra, at para. 50, citing McColl v. McColl.

[8] Higgins, supra, para. 54

[9] Higgins, supra, at para. 53

[10] Pagliaroli v. Pagliaroli, [2001] O.J. No. 401 (S.C.J.) at para. 44

[11] Mastron v. Cotton, supra, at para. 17; Also see Szuba v. Szuba, 1950 CarswellOnt 115 (H.C.J. (Master), at para. 9

[12] Diotallevi v. Diotallevi, [1982] O.J. No. 3285 (H.C.J.), at para. 6

[13] Zegil v. Opie, [1995] O.J. No. 4298 (Gen. Div.), at paras. 26 to 37, aff’d [1997] O.J. No. 20185 (C.A.)](https://www.canlii.org/en/on/onca/doc/1997/1997canlii1220/1997canlii1220.html), at paras. 12 to 15