Court File and Parties

COURT FILE NO.: FS-15-00020005-0000 DATE: 20160616 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

KAREN FOGEL Applicant

• and - GIOVANNI CHIRIATTI Respondent

COUNSEL: Grant Gold, for the Applicant Paul Fox, for the Respondent

HEARD: April 30 & 31, June 1, 2, 3, 6 & 7, 2016 BACKHOUSE J.

Reasons for judgment RELEASED JUNE 16, 2016

Summary

[1] The applicant is 36 years of age. The respondent is 53 years of age. They cohabited for 14 years. They did not marry. They separated in May, 2014. They have one child, Leonardo Antonio Chiriatti, born July 5, 2007, soon to be 9 years old.

[2] The respondent’s financial disclosure is both inadequate and dishonest. He was caught in a multitude of lies. I found that there has been a pattern of the respondent trying to take advantage and effect a con or scam wherever the opportunity presented itself. He is not a credible witness. The applicant is a credible witness.

[3] I have found that the applicant is the stronger parent and better suited to make decisions for the child. It is in Leonardo’s best interests that the applicant has sole custody of Leonardo. The respondent shall have access Wednesdays overnight and Saturdays from 6:00 p.m. until Sundays at 6:00 p.m.

[4] It is necessary to impute income to the respondent because of his lack of full and frank disclosure, his receipt of unreported cash income and his failure to work. I find that he falsely portrayed himself as too ill to work due to injuries sustained in a motor vehicle accident and claimed that he was on social assistance so that he had nothing to lose at trial and would recover his interest in the house without having to pay child or spousal support. Based on the lifestyle that he supported during cohabitation, his failure to make disclosure, his unreported cash income and the credit card and line of credit payments that he made since separation, I have concluded that income in the amount of $150,000/year should be imputed to him.

[5] I have concluded that the applicant is capable of earning income in the amount of $150,000 and that neither party is entitled to support from the other because both are capable of working and being self-supporting.

[6] I have ordered that the respondent must support the child at the rate of $1263/month being the table amount for one child for an income of $150,000. In addition, I have fixed the respondent’s 50% share of s. 7 expenses at $500/month.

[7] I have concluded that given the history of default, there is no likelihood of the respondent making child support payments and that therefore 10 years of both base child support and the respondent’s share of the section 7 expenses should be secured to her out of the amount he is otherwise entitled to from the notional house proceeds. After the various adjustments which are detailed in the reasons, I have held that the amount the respondent is entitled to on account of his 50% share of the adjusted notional proceeds of 398 St. Clements Avenue shall be finalized after the costs have been determined.

The Issues

[8] The issues in this case are:

(a) whether there should be joint custody with an equal sharing of time with the child (the respondent’s position or sole custody to the applicant mother (the applicant’s position);

(b) the parties’ respective shares in 398 St. Clements Avenue, Toronto (the parties disagree on the value of the property and the appropriate adjustments);

(c) the income to be imputed to the respondent (the applicant submits $300,000 should be imputed; the respondent’s position is that he has no income);

(d) child and/or spousal support.

Custody

[9] The applicant’s evidence was that during cohabitation, she was the primary caregiver, staying at home with the child full-time until he was 18 months and then doing part-time consulting until he started attending school full-time in January, 2012. Her evidence was that during cohabitation, the respondent mostly did not come home before the child went to sleep and he worked weekends.

[10] Since the parties’ separation in May, 2014, the child has primarily resided with the applicant. The respondent did not have the child overnight until August 2015. The applicant testified that this was because the respondent did not have a separate bed for the child to which she objected. The respondent’s evidence was that the child would fall asleep on a lounge chair and did not really need much space, that he had one mattress and box spring and an air mattress on which he often slept and did not see the need for another bed. The respondent’s overnight access began in August, 2015 when he verified that he had purchased a separate bed for the child as requested by the applicant.

[11] The parties consented to the applicant having temporary primary residence and the respondent having temporary access on Wednesdays after school until 7:30 p.m. and every Saturday at 6 p.m. until Sunday at 6 p.m. which consent was incorporated into the August 4, 2015 order of Justice Paisley. In addition, the parties agreed to the respondent having 2 vacations/year with the child.

[12] The applicant testified to concerns about joint custody and/or increasing the respondent’s time with the child which may be summarized as follows:

1. The respondent has a bad temper and has been abusive of the applicant and the child, yelling, calling the child “stupid” and on one occasion, taking a high powered hose to the child’s head.

2. The respondent was inappropriately hard on how the child played team sports. The child has been unwilling to participate in team sports since the respondent got ejected from the child’s soccer game. The father went onto the field and yelled at a teenage assistant coach for not giving the ball to the child, causing the whistle to be blown and 20 or 30 concurrent games to be stopped.

3. The child has some academic challenges and has homework every night. The child told the applicant that he does not want to do homework at his father’s because his father screamed at him and threw everything off the table.

4. The respondent is habitually late in exercising his access. From the time of the August 4, 2015 access order, the respondent returned the child numerous times after the agreed upon time and after the child’s bedtime, including on the 2 occasions he had access during the trial.

5. The respondent refused to agree to the child having certain teeth extracted as recommended by the child’s orthodontist to make room for his adult teeth to come in and thereby minimize the orthodontal treatment necessary in the future.

6. The respondent allowed the child to use a bb gun and gave the child a Swiss Army knife.

7. The respondent refused to consent to a psychoeducational assessment recommended for the child by Sterling Hall, the school he has attended since junior kindergarten.

[13] The respondent’s evidence was that he had a close, loving relationship with the child and that the child wanted to spend more time with him and would benefit by spending equal time with his father. He knew how the child felt because he asked him and they discussed it. From the age of 3 years old, the respondent had driven the child to school every day. He participated and volunteered in all school events, special events, special presentations and Terry Fox runs. During cohabitation, he came home from work to have dinner with the child and then returned to work after the child went to bed. He spent cottage weekends with the family.

[14] The respondent denied the applicant’s allegations. He minimized the soccer incident, objecting to the rule that prevented even the coaches from being out in the field showing children how to play. He acknowledged an incident at 398 St. Clements when he was angry with the workers doing the reconstruction and embedded an axe in the wall. He saw nothing wrong with showing the child the bb gun and giving him the Swiss Army knife after he showed him how to use it. He testified that if something happened to him, he would learn from it. He had not kept track of the times he arrived late for pickup and return of access. He testified that most of the time he was late because Leonardo did not want to leave his father’s home. He testified that since the incident where the child got upset while doing his homework with his father, he has not done much homework with him because he has been told not to. He blamed the incident that occurred on Leonardo being tired, not wanting to do his homework and the respondent pushing him to do his homework because the applicant had insisted that the homework get done. He testified that when the applicant asked to switch the access on a couple of occasions so that the respondent had the child for the full weekend instead of the court ordered access of one night of the weekend and Wednesday after school, he did not agree because he asked the child who did not want to change.

[15] The respondent testified that his current life was in a state of disarray. He acknowledged that the parties were not able to communicate about any substantive issue regarding the child. He testified that he would consider working with a parenting coordinator.

The Psychoeducational Assessment

[16] Jennifer Colleran, the Sterling Hall Director of Teaching and Learning, gave the following testimony. Leonardo’s report cards show that school has not been easy for him. Leonardo had been struggling since the previous school year with a growing knowledge gap. She wrote to both parents in December, 2015 confirming that they had been advised in earlier emails to get a psychoeducational assessment for Leonardo before the end of the school year. The letter reconfirmed that the school was concerned about Leonardo’s progress and that the information gained through an assessment was very important to help them plan and teach with the hope that he could make greater gains in the future. Up until the recommendation for the assessment, the recommendations had been that there be a study hall each night to catch up or complete his homework with homework packages and a timetable for the package. This was to help foster routines in the development of the skills being taught.

[17] School staff met with each parent separately to discuss the psychoeducational assessment being recommended and to provide a list of persons performing psychoeducational assessments. Ms. Colleran and three other school staff met with the respondent in November, 2015. They advised him that the assessment was very important to help them plan and teach the child. Following that meeting, she had understood that the respondent was in agreement. The respondent dropped by her office a few days before the April 1, 2016 date scheduled for the assessment and expressed concerns about it, in particular about the assessor’s neutrality. Ms. Colleran told the respondent that the school did not make the recommendation lightly and she did not know what there would be to be neutral about. As matters turned out, the applicant was in favour of the assessment but the respondent did not consent. As a result, no assessment has taken place.

[18] Nathalie Conn Krieger, a child and adolescent educational psychologist, gave the following testimony. She worked with New Bridges Child & Adolescent Psychological Services, one of the assessment groups on the list Sterling Hall had provided the parties to conduct the assessment. New Bridges was contacted by the applicant who passed on the referral to Dr. Krieger. Dr. Krieger spoke to the applicant to find out the nature of the concerns and to book the assessment. She met with both parents separately and requested both parents to sign a Consent and an acknowledgment that the purpose of the assessment is to obtain an understanding of the child’s learning profile and recommendations to assist in academic programming, not to assist custody and access decisions. The applicant signed. Dr. Krieger thought the respondent was consenting. However, he said that he would like to take the forms home and return them signed before the first appointment. Instead, he sent an email to Dr. Krieger at 8:27 p.m. the night before the appointment for the assessment listing his concerns and the assessment did not proceed.

[19] Notwithstanding the written acknowledgment that the assessment was not for custody and access decisions, the respondent was suspicious that the applicant had an ulterior purpose. He also thought how the child felt about it should be considered. In cross-examination, he testified that he has not had the opportunity to reschedule the assessment, that money is “tight”, that he would like to again review the matter, have his questions addressed and consider other options such as tutoring.

Dental Surgery

[20] The respondent testified that he sought a second opinion from another orthodontist, Dr. Venditelli, as to whether the child should have teeth extracted as recommended by Dr. Freeman, his orthodontist. He testified that Dr. Venditelli concurred with Dr. Freeman but said that there was no harm in putting it off until the age of 12 years. It also seemed from the respondent’s evidence that in deciding that the teeth extraction was not necessary, he relied upon his girlfriend, Margherita Selvitella, a dental hygienist. He testified that while not an orthodontist, she reads orthodontic reports.

Support

[21] The applicant testified that during cohabitation, the respondent paid for the family’s living expenses, groceries, private school, camp, extracurricular expenses for the child and family trips to Mexico, the Bahamas, California, Italy and Turks and Caicos. The respondent pleaded in his Answer that from 2003 through to the birth of Leonardo in 2007, the applicant earned only menial income and contributed substantially less than him to the household and personal expenses of the parties; from 2007 until late 2012, the applicant was never substantially employed and only returned to work fulltime after her maternity benefits expired; at all material times, the applicant rarely made any substantial contributions to the household and personal expenses of the parties.

Applicant’s Income

[22] The applicant was a vice-president of marketing and communications for a mortgage broker group until January, 2016 when she was terminated. In 2015, she earned $154,750 (base salary of $133,500 plus a $20,000 bonus). She recently resolved a claim for termination without cause on the basis that she will receive the equivalent of 6 months’ notice. She has not yet found new employment.

Respondent’s Income

[23] During this litigation the respondent has represented himself as disabled and on social assistance. In his evidence in chief he testified that as a pedestrian he was struck and injured by a motor vehicle on June 10, 2014. In cross-examination, he testified that this occurred in June, 2015 which was shortly before he went on vacation to Italy. He testified that he did not call the police, no accident report was prepared and he has an open claim against his own insurer. At the opening of trial, the respondent’s position was that he was receiving $681/month from social assistance and had no other income. He also filed a financial statement sworn May 27, 2016 to this effect although he knew at that time that his benefits had been suspended effective May 1, 2016 for failing to make the disclosure requested by his caseworker. In support of his welfare application which appears to have been initiated on September 16, 2015, he submitted a medical certificate dated November 27, 2015 signed by Dr. Chris Sun. Dr. Sun assessed him as having no limitations to participating in activities of daily living. This was the same doctor who the respondent testified treated him for his motor vehicle accident injuries and told him the injuries were permanent. He was unable to explain the contradiction. In his May 27, 2016 affidavit in support of his claim for custody and access he stated: “Once I have recovered from the injuries I sustained in a motor vehicle accident in June 2015, I will resume efforts to generate an income.” The respondent produced 2 medical notes dated January and May, 2016 to the effect that he had an infraspinatus partial tear (which the respondent explained as rotator cuff) and nerve damage and muscular strain in his left knee; physiotherapy, chiropractory and acupuncture were recommended. There is nothing to support that the respondent is unable to work. He has not had the ultrasound and neurological examination for which he said that he was referred.

[24] During cohabitation, the respondent had a high end clothing store of Italian imports called ‘Seso’ located in Hazelton Lanes and on Cumberland Avenue in Yorkville. He later opened up a store at 2587 Yonge Street called L.A. The respondent testified that his clothing business has not made money since 2014 (he also said since 2013 at various times) and that he has not worked since the separation. He also testified to various floods and water damage causing damaged inventory and store closures. Unfortunately he has not complied with numerous orders for financial disclosure and the disclosure that he did make was selective and incomplete. At his questioning, matters were taken under advisement such as whether to provide the corporate records of the companies of which he is the sole shareholder, the real estate file of the house he is living in and owns through a numbered company, the account number of his line of credit account and the numbers of each of his credit cards to the date of the questioning. As of May 18, 2016, he had not produced notices of assessment for personal income tax returns for the years 2012 to 2015, corporate tax returns, minute books or corporate bank statements. Although his four sworn financial statements filed in these proceedings identify only one numbered company, he acknowledged on cross-examination that he was the sole shareholder of 5 numbered companies. Additional documentation was produced at the beginning of the trial, giving the applicant no opportunity to analyze it. No corporate financial statements were ever produced. No 2015 income tax return was produced.

[25] Although the respondent shows as a debt in his financial statements a mortgage to the TD bank of $387,000 and a loan to his girlfriend of $140,000 used to purchase a residence for himself and Leonardo at 63 Buttonwood, Toronto (through a corporation), no offsetting $599,000 value for the property appears. In his mortgage application around March, 2015, he represented his income as $59,647. He testified that he was encouraged to “embellish” his income by $20,000 which he said the bank expected and was “normative.” At another point in his testimony he blamed the mistake on the bank making an accounting error when averaging his income for the prior 3 years. He also blamed the bank for the fact that his mortgage application states that he owns $47,000 in RRSPs at the Bank of Montreal when he no longer did.

[26] In his September, 2015 application for social assistance, the respondent represented that he had had no income since 2013. He did not disclose that he owned 63 Buttonwood through a corporation and he produced 2 phoney rental agreements for it, one purportedly signed by the son of the vendors and one signed by his girlfriend, Margherita Selvitella, apparently on behalf of the numbered company in whose name title had been taken but with one digit off. When asked what authority Ms. Selvitella had to sign on behalf of the company, the respondent testified that he named her as the manager. The welfare file is replete with lies told by the respondent to the caseworker including that Ms. Selvitella was the beneficial owner (which she denied), that she uses the property for storage and that she pays him $600/month for storage. The respondent testified that he did not state this information attributed to him in the welfare file and that the caseworker must have got it wrong. While Ms. Selvitella attempted in her evidence to back up the respondent’s story about her paying for storage which she said came back to her in cash if the respondent paid her $650 for rent, what she said made no sense and it was an obvious attempt to try to support the lie the respondent had been caught out in telling the welfare authorities. The respondent testified that the applicant and her lawyer had provided information to the welfare authorities to meddle with his claim. He made this same complaint to the caseworker who denied this. He testified that the caseworker asked a lot of questions which he did not think were pertinent to his eligibility.

[27] In his lawsuit for business damages caused by a flood against the landlords of his clothing store, L.A., located at 2587 Yonge Street, Toronto, the respondent testified on August 7, 2015 that he was the owner of 2249634 Ontario Limited, the company carrying on business as L.A. and that the sales in the month of July 2015 were between $18,000 to $28,000. He testified that he has settled the lawsuit for $116,000 in damages. Yet he told the welfare authorities and this court that he sold the business to his salesperson, Maryan Fattahi, on July 30, 2015 for monies he owed her for working in the store. Despite purporting to have sold the business, he testified that he remains responsible for the lease, continues to have access to the premises to come and go as he wishes and retains signing authority over the business bank account. In his October 7, 2015 Form 13 financial statement, he swore that he was self-employed carrying on business under the name of L.A. 2587 Yonge Street.

Unreported Cash Income

[28] In support of her submission that the respondent’s income should be attributed at $300,000, the applicant’s evidence was that the respondent dealt in a large amount of unreported cash income and that during cohabitation, cash was kept both in a safety deposit box and in a safe which the respondent removed from the home at the time of separation. She testified that he put $375,000 into a safety deposit box when it was opened in January 9, 2012 to which they both had keys and which he had cleaned out at separation. She produced shoe boxes of clothing tags and handwritten tallies of amounts owed and payments made replicated in Exhibit 7. She relied upon what the family was spending including $35,000/year paid by the respondent for Leonardo’s private school fees. She testified that from the disclosure provided, notwithstanding many missing monthly statements in the respondent’s productions of his credit card statements, he made credit card payments in 2013 of $119,993 (plus line of credit payments of $11,000), in 2014 of $127,847 and in 2015 of $128,389. It was submitted that at a minimum, his income should be imputed at double that.

[29] Joe Falzone, the applicant’s financial planner, gave the following testimony. He went to see the respondent at his store in January, 2014 at the applicant’s request to get the respondent to sign a transfer of a joint RESP to Mr. Falzone’s firm. He bought a pair of $500 boots. The respondent asked him to pay cash and he had to go to a cash machine around the corner. He did not get a receipt. The respondent mentioned that he had $500,000 in his safety deposit box and asked Mr. Falzone if he could invest it for him. Mr. Falzone said that he could not invest cash income. Mr. Falzone was not cross-examined on his testimony.

[30] Enio Correale, the parties’ friend and contractor, sold 37 Roe Avenue to the parties around 2003. He testified that the respondent told him to come to his store for a further deposit and the respondent paid him from a cardboard container $30,000 or $40,000 in hundred dollar and fifty dollar bills. Mr. Correale also testified that approximately a year ago the respondent asked him if the respondent could list him as one of his creditors. Mr. Correale testified that the respondent did not owe him any money and he refused. He testified that he also refused the respondent’s request to allow furniture the respondent said he required for his son to be delivered to Mr. Correale’s garage and to act like he had not seen it. The respondent then intended to deny that it had been delivered to avoid paying for it. Mr. Correale also testified that in discussions with the respondent about the litigation, the respondent was adamant that this litigation would cause the applicant financial harm.

[31] The respondent denied that he asked Mr. Falzone to pay cash for the boots for which he charged $250 and that he only told Mr. Falzone that he possibly had some cash to invest without mentioning an amount.

[32] The respondent testified that the largest amount of cash he had at one time in his safety deposit box for which he and the applicant both held keys was $69,000 and that was in March 2014 when he counted it. He kept cash in the house which could range between $2,000 and $15,000. He testified that cash was a small part of his business and it was all duly reported as income. He testified that there was significantly less clothing paid for in cash over the years and that 2014 was the high water mark. He testified that clothing tags were retained as a way of inventory control and denied that what was produced in Exhibit 7 was proof of unreported income.

[33] The respondent did not deny that he paid cash to Mr. Correale for the purchase of 37 Roe Avenue. He did deny that he asked if he could list Mr. Correale as one of his creditors and that there was any intended impropriety in asking if he would take delivery of furniture for him. He testified that he did not say that he would cause the applicant financial harm but that it was financially harmful for them to be litigating.

[34] The respondent testified that once he recovered from injuries sustained in a motor vehicle accident which occurred in June, 2015, he would resume efforts to generate an income. He plans to get into a different business that is more viable such as developing a food product. He has other plans if that does not work out.

Default in Support

[35] The respondent paid no child support to the applicant since the separation in May, 2014 (other than some private school fees and camp fees). He consented to an order to pay $1,000/month in child support on April 29, 2015. The respondent paid the $1,000/month for 3 months and then stopped. He was ordered to and did not pay the private school fees currently outstanding in the amount of $19,67245 and section 7 expenses. While in default, he took two trips to Italy, one in June, 2015 with Leonardo because he had promised him and one in August, 2015 as a sabbatical or therapy.

[36] It was only when the parties appeared before Justice Wilson just prior to trial on May 16, 2016 that the respondent consented to his half of a jointly issued insurance cheque in the amount of $11,733.30 being applied to 10 months of child support arrears and $1,733.30 towards the outstanding private school fees.

398 St. Clements Avenue, Toronto

[37] It is agreed that the parties each have a 50% interest in 398 St. Clements Avenue, Toronto and that the applicant shall be entitled to possession. The home was damaged during the December, 2013 ice storm and renovated with insurance proceeds. Pursuant to the consent Order of Justice Wilson dated May 16, 2016, the parties agreed that the property should be appraised to reflect its value at May 30, 2014 assuming that the insurance proceeds were utilized to upgrade the home even though the funds were paid after May 30, 2014. The parties agreed:

“2. The parties shall be each free to obtain their own appraisal as at May 30, 2014.

3. a. From the average of the two appraised values as at May 30, 2014, the Applicant shall receive $100,000 being the amount that the Applicant paid down on the mortgage principal out of funds she received from an inheritance;

b. The mortgage, line of credit and notional real estate commission of 4% shall be deducted from the appraised value.

4. The balance remaining as provided for in #3 above shall notionally be divided equally between the parties.

5. Out of his notional share of the proceeds the Respondent shall pay to the Applicant the sum of $30,000, being the amount that the Respondent used from the line of credit secured by the property.

6. The parties shall each be entitled to seek further adjustments from the other’s respective notional shares of the proceeds subject to proper documentary proof.”

[38] Both parties had experienced residential real estate appraisers conduct appraisals as at May 30, 2014. On behalf of the applicant, Selig Greenberg appraised the property as having a fair market value of $1,200,000. Jim Parthenis of Lebow Carrington Appraisers appraised the property as having a fair market value of $1,645,000. Given the spread between the appraisals, the parties chose to call the appraisers and have the court determine fair market value rather than follow the agreement reflected in Justice Wilson’s May 16, 2016 order of the mid-point value. The appraisers disagreed over whether the property having a pool was a plus or minus factor and to what extent being across from a school with the added noise and traffic impacted fair market value. Mr. Parthenis was of the view that Mr. Greenberg had not sufficiently considered as a plus factor the quality of the subject property’s renovations compared to the comparables he used. Mr. Parthenis’ comparables were larger homes with garages in the case of two of the three comparables. None of the three were across from the school. The subject property did not have a garage and was across from the school. One of the comparables used by Mr. Greenberg was next door to the subject property at 402 St. Clements Avenue which sold in February, 2014 for $1,410,000. It differed from the subject property in that it had an additional fireplace, it was 187 square feet larger, had an additional bedroom in the basement and had no pool. It was similar to the subject property in lot size, it also had no garage and was across from the school. To the extent that one could tell from the pictures of the interior of both properties, they appeared to have comparable renovations.

Adjustments

[39] Both parties seek adjustments as per paragraph 6 of Justice Wilson’s May 16, 2016 order. The order provides that among other things, the line of credit is to be deducted from the appraised value and then out of the respondent’s notional share of the proceeds, the respondent will pay the applicant $30,000, being the amount that he used from the line of credit secured by the property. The applicant was cross-examined on whether this was a duplication. She testified that it was not because $30,605 was the balance on the line of credit secured against the home as at May 20, 2014 and that the respondent drew $30,000 in further advances post separation which she paid (Exhibit 8, Tab 8).

[40] The adjustments claimed by the applicant are set out in Exhibit 8 and are summarized at Tab A. Apart from items 4, 5 and 6 which deal with retroactive section 7 expenses and child and spousal support which will depend upon the income attributed to the respondent and what order is made for retroactive support, the respondent objected to the following items:

Item 7-Mortgage savings of $40,951 to May 30, 2014 from the applicant’s $100,000 principal payment on the mortgage

[41] Gary Cilivitz is the Chief Financial Officer at Radius Financial, a private mortgage lending company. He prepared a calculation at Tab 6 of Exhibit 8 as to the total amount saved in principal and interest up to the date of separation resulting from the applicant’s prepayment of the mortgage by $100,000 from funds she inherited. The respondent did not challenge the accuracy of the calculation. He objected to this adjustment on the basis that when he consented to the applicant receiving the $100,000 credit which was incorporated into Justice Wilson’s May 16, 2016 order, he did so on the basis that that was a full resolution of that claim. His evidence was that he made regular contributions to the property that exceeded the applicant’s and the settlement of that issue assumed that they contributed equally (apart from the extraordinary $100,000 prepayment) to avoid having to go through the whole history of payments.

Item 10-Peter Higgin’s Architect-50% of $2,618.46

[42] The respondent objected to this item on the basis that he had paid a significant amount and would like the opportunity to re-examine the bills and the amounts already paid.

Item 11-Extra renovation costs-50% of $30,608.25

[43] The applicant’s evidence is that the parties agreed to extra renovations not covered by insurance (the estimate for which is at tab 10 of Exhibit 8) and that $101,177.14 from the insurance cash out payment for the household contents was applied to the extras, leaving a balance owing for the renovations paid by her of $30,608.23. The respondent did not dispute that the amount had been incurred for improvements in the house but objected to having to pay for 50% because the applicant was the one living in the house and was the one to benefit. He questioned whether the value of the home would be reflected in these improvements and would like the opportunity to reconsider her list of improvements.

[44] The respondent’s claimed adjustments are contained in a list at Exhibit 37.

Item 1-$5,000 half of moving expenses

[45] The respondent claimed $5,000 for one half of the moving expenses he incurred in moving from multiple locations over a period of 2 years between December 2013 and June 2015. A June 30, 2015 invoice from Bascoe Service was produced for $4,500 for “moving client from multiple locations over a period of two years between December, 2013 and June 2015.”

Item 2-$14,500 Yorkdale Self Storage

[46] The respondent claimed $14,500 for storage in support of which invoices for Yorkdale Self Storage were provided from May, 2013 continuing until May, 2016. May, 2013 predates the damage to 398 St. Clements caused by the ice storm in December, 2013. Two of the receipts are marked “insurance declined”. The respondent estimated that about 25% of the storage contents were business inventory. He testified that there were a lot of items in storage from 398 St. Clements that he did not need at Buttonwood.

Item 3-$55,250 insurance rent payout

[47] The respondent claimed half of the rent paid by the insurer for 17 months for the residence where the applicant and Leonardo resided until 398 St. Clements was habitable. The applicant was paying the mortgage and taxes on 398 St. Clements during this time period. The respondent testified that he had to pay almost $2,000/month for his own rental accommodation. There was no documentary proof of this amount.

Item 4-$55,558 insurance household contents payout

[48] The respondent claimed one half of the insurance household contents payout. He acknowledged that the cash payout of $101,177 for the household contents was used to pay for the additional renovations not covered by the insurance. He was not sure if there was a balance owing on the Barcelona chairs that he had recovered.

Item 5-$20,000 start up costs to get established in home

[49] The respondent testified that most of the household contents were his and that the applicant received contents out of the pods which were used to store contents. He also asserted that the applicant received $20,000 or $17,000 from the insurer in start up costs. The respondent testified that if the contents were replaced, the insurer would pay 100% of the replacement value. If the contents were not replaced, there was a 30% depreciation deducted.

[50] The applicant testified that the respondent wanted to replace the contents, get reimbursed 100% from the insurer in order to maximize the recovery from the house insurance and then return the items. She was not prepared to participate in this. She testified that anything he got replaced he was reimbursed for such as the recovery of the Barcelona chairs.

[51] The respondent called Golan Joseph, a property and liability field adjuster at Walanesa who was the examiner on the parties’ claim. He gave the following testimony. There was an independent adjuster and Mr. Joseph had not dealt with the applicant directly nor had he brought the file (other than Exhibit 46, a payment summary for the claim) because he was asked to attend court late in the day the night before and was not able to get to his office before court. The cash value of the household contents was $150,634. The insurer paid $101,177 for the household contents after 30% depreciation. If receipts for replacement of contents were received, these would be reimbursed and those items would not be included in the above cash value. The applicant was paid $7,500 as an initial advance for immediate contents. This type of advance was usually applied to actual cash replacement value. Additional living expenses (“ALE” on Exhibit 46) were paid either to the landlord or to reimburse for rent paid to a landlord. Generally only one rental location per claim was allowed. The contractor had submitted storage, moving and handling expenses. Any additional storage, moving and handling expenses would have to be reviewed by the adjuster.

Contents

[52] In his October 7, 2015 financial statement, the respondent showed under “General household items and vehicles” the following items not in his possession:

Household goods and furniture $100,000 Cedar canoe $ 6,500 Paddle boat $ 1,550 Art $ 15,000 Tools $ 15,000 Housewares, kitchen equipment $ 10,000 $148,055

[53] These items did not appear on the other 3 financial statements filed in these proceedings including the financial statement sworn for trial. It was unclear whether the respondent was seeking reimbursement for these items or seeking them in specie.

[54] There are one or 2 invoices for what appear to be household goods contained in the respondent’s productions at Exhibit 10B which were not referred to. One of them is made out to Seso, the respondent’s former store. There are a few invoices at Exhibit 10B which were not totalled (but appear to total approximately $1100). There was no evidence about what they were for. Apart from this, there were no documents to support who had paid for the items claimed by the respondent, what had been paid or their current values.

ANALYSIS

Credibility of the Applicant

[55] The applicant gave her testimony in a straightforward way. She did not exaggerate or contradict herself. She was not undermined on cross-examination. I find that she was a credible witness.

Credibility of the Respondent

[56] The respondent was caught in a multitude of lies. He blamed all the inconsistencies between his sworn statements on others-e.g. his prior lawyer, the bank, the welfare worker. I find that the respondent says whatever he thinks will further his cause, regardless of the truth. He lacks any credibility. His obliviousness to the obligation to make full and frank disclosure is illustrated by the evidence he gave in an effort to explain the inconsistencies in his sworn financial statements. He testified that they “were true but did not say everything”. His evidence that the bank encouraged him to exaggerate his income on his mortgage application and was responsible for overstating his assets is incredible. His denial that the welfare caseworker’s notes reflect what he told the caseworker is not believable. I find that he was suspended from social assistance benefits because his story did not add up and there were too many inconsistencies. I do not believe that he sold his clothing business to Maryan Fattahi. At most, I find that he allowed Ms. Fattahi to retain income earned from selling off the remaining inventory to satisfy what she was owed in wages.

[57] I find that there has been a pattern of the respondent trying to take advantage and effect a con or scam wherever the opportunity presents. His alleged motor vehicle accident is one example but there are many others. If the respondent was in fact injured by a motor vehicle in 2014 or 2015, these injuries did not affect his ability to work. He exaggerated his injuries in an effort to recover damages and to improve his position in this lawsuit. I accept the applicant’s evidence that had she not stopped it, the respondent’s scheme was to replace the insured household contents damaged in the ice storm to maximize the insurance recovery and then return the items. His own evidence was that he bought items on line from Costco by credit card that he did not want for the purpose of returning the items for cash in the store. He also testified to making an insurance claim for two alleged break-ins to his store for which the insurance company denied recovery. I accept the evidence of Mr. Correale that he had a scheme to overstate his debts by listing Mr. Correale to whom he did not owe money as a creditor and another scheme to deny that furniture had been delivered and thereby avoid paying for it.

Custody and Access

[58] While the respondent loves his son and has been an important part of Leonardo’s life both before and after separation, I find that anger towards the applicant and self-pity are his predominant motivations. Joint custody is not in the child’s best interests for the following reasons. Both parties acknowledge that they are not able to communicate about any substantive issue regarding the child. To make matters worse, the respondent seems to go out of his way to make things more difficult with respect to decisions that have to be made for the child. For example, he was unable to make a decision to consent to the psychoeducational assessment although the child’s school had been recommending to the parents in writing since at least December, 2015 that they were concerned about Leonardo’s progress and that the information gained through an assessment was very important to help them plan and teach going forward. After meeting with the school staff and the assessor, he left the impression that he was in agreement with the assessment but then refused to sign the consent and the assessment scheduled for April 1, 2016 could not proceed. He is still opposed to the psychoeducational assessment notwithstanding that the child has been struggling in school and a lot of time was taken to explain to him the need for the assessment. This should have been a simple matter. Instead, because the applicant was for it, he was reflexively against it. He allowed his paranoia that it could impact the custody/access proceedings, despite the written acknowledgement that it was not for that purpose, to derail what clearly was necessary and in the child’s best interests.

[59] I consider it likely that the respondent’s refusal to consent to the recommended teeth extraction had more to do with thwarting the applicant than a difference of opinion about the necessity of the treatment. The applicant is the stronger parent and the parent better suited to make decisions for the child. The applicant shall have sole custody. To be clear, she shall not require the respondent’s consent to a psychoeducational assessment or to orthodontic treatment for the child that she considers in the child’s best interests.

[60] I do not consider the respondent’s proposal of “week about” in the child’s best interests. The applicant’s life is stable. She was the primary parent during the marriage and has continued to put the child first since separation. The respondent did not have the child overnight for fifteen months after separation. He blames this on the applicant unreasonably insisting that he have a separate bed for the child rather than letting him fall asleep in a lounge chair. However, if he was putting the child’s interests first, buying a bed is something with which he could have easily complied rather than letting fifteen months go by without having his son overnight. But the respondent saw this as capitulating to the applicant which he was not prepared to do, even though it meant that there were no overnights with his son for 15 months.

[61] There are many other examples of the respondent not putting the child’s interests first. He has paid virtually no child support since separation despite consenting to a court order to do so. Instead, he took two pleasure trips to Italy, for which he had various rationales. From his testimony that the applicant got all the benefits from the house insurance and that it did not cost more than $200 a month to support Leonardo, it was clear that despite having consented to pay child support of $1,000/month, he did not feel he should have to pay.

[62] Leonardo had been attending Sterling Hall for several years at the time of separation. During cohabitation, the respondent paid the private school fees. He consented to pay the fees after separation but in the main failed to do so. This was not in the child’s best interests. In his affidavit in support of his claim for custody and access sworn on May 27, 2016, he stated that the child will attend the Sterling Hall private school. Notwithstanding this, he testified a few days later that he did not think Sterling Hall was very beneficial to Leonardo and there were not the resources for him to go there next year. Aside from whether Leonardo should continue to attend Sterling Hall, the respondent’s inconsistency in position in such a short time suggests a chaotic individual who is not focused on or able to make decisions on the needs of the child.

[63] The respondent’s life is unstable. He purports to have no income. He testified that he does not wish to continue in the retail clothing business but was unable to identify what he would do apart from a very vague idea about developing a food product. It was unclear whether this was just a stance for trial to avoid having to pay spousal and child support. He purports to being supported by his girlfriend and to being in debt everywhere.

[64] The respondent has lied under oath numerous times. He has lied in court proceedings including this one. He has lied to the bank about his income. He has lied to the welfare authorities. He has numerous scams going. He is a person who has no regard for the truth and makes things up when he thinks it will assist him. He is not a good role model for the child. He has anger issues as illustrated by putting an axe through the wall of his house out of anger and getting kicked out of the child’s soccer game.

[65] The fact that the respondent thought it appropriate to ask the child if he wanted to change his access time when the respondent was asked to do so by the applicant and that the respondent thought the child should be asked if he wished to have a psychoeducational assessment both suggest he is inappropriately involving the child in the issues between the parents and failing to exercise appropriate parental decision-making or authority. Although the respondent knows that it is important to the applicant that he be on time for access, he is frequently late which interferes with the child’s bedtime routine. This continued during the trial. His attempt to explain that this is because the child does not want to leave the respondent’s home does not explain why he is also late for pickup. It also suggests that he is empowering the child to make decisions which should be made by the parent. It is more likely that the respondent’s continual lateness is due to his anger against the applicant. The applicant testified that the current access schedule whereby the respondent has the child one overnight every weekend rather than the more usual arrangement of alternate weekends was because the respondent would not bring the child to scheduled activities during his time which evidence I accept.

[66] Leonardo is a child who is struggling at school. The reasons for this are not known because a psychoeducational assessment has not yet occurred. Nevertheless, his school has made recommendations that routines and skills be fostered by having a study hall each night to catch up or complete his homework with homework packages and a timetable for the package. The applicant is the parent who has primarily assumed the homework responsibility. I accept her evidence that the child does not want to do homework with his father because the respondent became angry and frustrated with Leonardo. The applicant is the parent who has routines and is better organized. It would not be in the child’s best interests to alternate weekly between his parents for many reasons which include the need for homework routines and parental supervision of homework.

[67] The parties consented to the present access arrangement which was incorporated into the August 4, 2015 order of Justice Paisley. It provides that the child is to have temporary residence with the applicant and the respondent temporary access on Wednesdays after school until 7:30 p.m. and every Saturday at 6:00 p.m. until Sunday at 6:00 p.m. The applicant is agreeable to the Wednesday access being extended overnight with the child being returned on Thursday mornings to school or camp (when there is school or camp). In addition, the parties have been able to agree upon two vacations/year. I am satisfied that such a schedule is in the child’s best interests and should be the final order.

398 St. Clements Avenue

[68] I have concluded that 402 St. Clements Avenue which sold in February, 2014 for $1,410,000 is the closest comparable. 398 St. Clements is a smaller home. The pool takes up the entire backyard of a 33 x 132 foot lot across from an elementary school. I accept that in these circumstances, the pool is a negative factor because there is no backyard and because the pool poses a risk, given the proximity to the school. To the extent that one can tell from the pictures of the two properties, the renovations appear comparable. I accept Mr. Greenberg’s other adjustments for 402 St. Clements Avenue for the additional fireplace and basement bedroom. I find that his adjusted value of $1,319,500 for 402 St. Clements Avenue to be the fair market value of 398 St. Clements Avenue.

ADJUSTMENTS

Applicant’s Claim for Adjustments

[69] In my view, with the exception of items 4, 5, and 6 of Tab A on Exhibit 8 which I deal with below, the applicant has proved the other items. With respect to item 7, the respondent accepts Mr. Cilevitz’ calculation of the principal and interest attributable to the $100,000 extraordinary prepayment on the mortgage. Pursuant to paragraph 6 of Justice Wilson’s May 16, 2016 order, the parties were each entitled to seek further adjustments from the others’ respective notional share of the proceeds subject to proper documentary proof. The applicant’s Exhibit 8 provided proper documentary proof. With respect to items 10 and 11, if the respondent needed to review all the architect or renovation accounts in order to know whether the applicant’s claim for an adjustment was justified, the time to do this was prior to trial. The parties agreed that the house would be appraised assuming the renovations had been completed. There was no evidence that the additional renovation costs were in any different category than all the other renovation costs.

[70] Accordingly, I allow adjustments totalling $98,024 to be deducted from the respondent’s notional share of the house proceeds (not including support which I deal with below).

[71] Justice Wilson’s order provides for the line of credit being deducted from the appraised value (Paragraph 3(b)) and an additional $30,000 being deducted from the respondent’s notional share, being the amount that he used from the line of credit post separation and for which she paid (Paragraph 5). I accept the applicant’s evidence that this was not a duplication.

Respondent’s Claim for Adjustments

[72] With respect to item 1 ($5000-one-half of moving expenses), I allow $4,500 as per the invoice produced for that amount.

[73] With respect to item 2 ($14,500 for Yorkdale Self Storage), the respondent was storing items prior to the damage claim. He acknowledged that some of the storage for which he was claiming an adjustment was business inventory. The insurance covered storage of the contents of 398 St. Clements, not business inventory. His evidence was that he did not get any household items and he has made a claim for contents in these proceedings. The fact that he chose to keep items in storage after he got a residence is not a basis for a storage adjustment to be made in his favour. He has not proved on a balance of probabilities that this is an appropriate adjustment.

[74] With respect to item 3 ($55,250 rent for 17 months), the most the respondent is entitled to as a 50% owner of the home and beneficiary of the insurance proceeds is to a credit for his own rental outlay until he bought his own home. The parties separated in May 2014. The respondent lived rent-free with the applicant’s parents for 2 months. His evidence is that he was paying almost $2,000/month in rent until June, 2015. He was not cross-examined on his rental outlay. Despite the fact that no documentation was produced to support his rental outlay, I allow an adjustment in his favour of 9 months of rent at $1,800/month for a total of $16,200.

[75] With respect to item 4, the respondent acknowledged that the cash payout of $101,177 for the household contents was used to pay for the additional renovations not covered by the insurance which renovations are reflected in the value of 398 St. Clements.

[76] In the result, the adjustments claimed by the respondent are allowed in the amount of $20,700 ($4,500 + $16,200).

Contents

[77] The items claimed by the respondent appeared on only one of his 4 financial statements filed in these proceedings. There were almost no supporting documents. The respondent’s claim is not allowed.

[78] With respect to the applicant’s jewellery which she testified was in the safe which disappeared, there was no evidence of its value. Accordingly, I make no adjustment in this regard.

CHILD AND SPOUSAL SUPPORT

Respondent’s Lack of Financial Disclosure

[79] The respondent has made incomplete financial disclosure and much of it so late in the proceedings that it prevented the applicant from having any realistic opportunity to analyze it. His sworn financial statements are so patently wrong, contradictory and misleading that it is clear that he has complete disregard for the truth. I have concluded that he made a tactical decision that his policy of non-disclosure would benefit him and that not all his income would be discovered.

IMPUTATION OF RESPONDENT’S INCOME

Cash Income

[80] I accept the applicant’s evidence that during cohabitation, the respondent had significant unreported cash income. I accept the evidence of Mr. Falzone and Mr. Correale regarding the respondent’s practice of dealing in cash. While the respondent admitted to having $69,000 in cash at one point, I do not believe his evidence that he had reported the cash. His own evidence is that he made the majority of the contributions to the household and personal expenses of the family’s expensive lifestyle which included private school ($35,000/year) and vacations. The respondent reported his income on his personal income tax returns as $50,000 in 2012, $37,500 in 2013 and $35,400 in 2014. All he seems to have produced for 2015 is a T5007 for $2,346 in social assistance payments. The evidence of what he paid on credit cards (even with many missing statements) and the line of credit suggest a substantially higher income than that to which the respondent admits.

[81] Because of the respondent’s failure to make disclosure and his cash income, there is no way to determine his true income with precision. His failure to produce corporate financial statements prevents the court from considering whether pre-tax corporate income is available and should be included in his income as the court is required to consider under the Child Support Guidelines. What benefits he has received for entertainment, travel, clothing, etc. are also not disclosed. Based on his failure to make disclosure I am unable to make the determination of his income as called for in the Guidelines.

[82] Subsection 19(1)(a) of the Guidelines permits the court to impute income where the spouse is intentionally underemployed. Subsection 19(1)(f) permits the court to impute income where a spouse has failed to provide income information. Both circumstances apply to the respondent. The respondent has not replenished his business inventory according to his evidence since some time in 2015. While he said that he lacked the funds to buy inventory, he chose to buy a home and take 2 vacations. I find that he falsely portrayed himself as too ill to work due to injuries sustained in a motor vehicle accident and claimed that he was on social assistance so that he had nothing to lose at trial and would recover his interest in the house without having to pay child or spousal support.

[83] I note that the $1,000/month child support which the respondent consented to is the Guideline amount for one child for a payor with an income of approximately $115,000. In the absence of financial disclosure, at least from the applicant’s perspective, this amount was an arbitrary amount drawn out of the air.

[84] I find that the respondent’s income on a conservative basis should be imputed at $150,000/year. Although I believe that his actual income is at least that amount or could have been, had he chosen to work, he has only himself to blame if the true amount is lower.

[85] I find that the applicant is able to support herself at approximately $150,000, the same level as I have attributed to the respondent. I find that neither party is entitled to spousal support because they are both capable of working and being self-supporting.

[86] Child support for one child on an income of $150,000 is $1263/month under the Child Support Guidelines. The arrears of base child support from June 1, 2014 to June 1, 2016 are 37 months x $1,263 less $13,000 paid = $33,731. The applicant claims $12,452.46 as section 7 expenses pursuant to Justice Corbett’s August 27, 2015 order. The breakdown with supporting invoices are set out at Tab 4 of Exhibit 8. The respondent did not submit that these were not proper section 7 expenses. I fix the respondent’s proportionate share at $12,452.46 x 50% =$6,226.23. These 2 amounts shall be further adjustments deducted from the respondent’s share of the notional house proceeds.

[87] I find that given the history of the respondent’s failure to comply with court orders, there is no likelihood of him making child support payments or section 7 expenses in the future. I find that therefore 10 years of both child support payments and section 7 expenses should be secured to the applicant as a fund out of which to pay child support and the respondent’s share of section 7 expenses from of the amount the respondent is otherwise entitled to from the notional house proceeds.

Future Section 7 Expenses

[88] During cohabitation, the parties agreed to send Leonardo to private school which costs approximately $35,000/year. Now that the parties have the additional expense of maintaining separate households with each having an income that I have assessed at $150,000, I find that private school is not a sustainable expense for the future.

[89] Leonardo also went to camps which currently cost approximately $4,000/year, and participated in skiing which cost approximately $1,000/year. The applicant testified that because the respondent had not been contributing to extracurricular expenses, Leonardo had been doing more activities at Sterling Hall which were included expenses. His future extracurricular expenses can expect to go up if he stops going to private school. In addition, it can be reasonably anticipated that the costs of a psychoeducational assessment and orthodontal expenses will be incurred in the near future. Given Leonardo’s educational difficulties, tutoring or other remedial expenses may also be incurred. My estimation of reasonable section 7 expenses based on the expenses incurred during cohabitation, since separation and that may be expected to be incurred in the reasonably foreseeable future is $1,000/month, 50% of which the respondent shall be responsible for. Accordingly, $500/month x 12 months x 10 years shall be secured to the applicant as a fund out of which to pay the respondent’s share of section 7 expenses from the amount the respondent is otherwise entitled to from the notional house proceeds. The applicant shall be entitled to receive from the fund $1,263/month commencing July 1, 2016 plus up to $6,000/year for section 7 expenses from the fund subject to the applicant providing an accounting to the respondent on an annual basis.

[90] The calculation of the division of the notional proceeds of 398 St. Clements is as follows:

Fixed value of home $1,319,500 Less applicant’s prepayment from inheritance as per Justice Wilson’s May 16, 2016 order ($100,000) Less mortgage at May 30, 201 as per Justice Wilson’s May 16, 2016 order ($174,933) Less secured line of credit at May 30, 2014 as per Justice Wilson’s May 16, 2016 order and line of credit statement ($30,605) Less 4% notional costs of disposition as per Justice Wilson’s Order ($52,700) $961,262 ($480,631 each) From respondent’s share $480,631 Less line of credit repayment as per Justice Wilson’s order ($30,000) Less adjustments allowed applicant ($98,024) not including arrears of support Less retroactive child support ($33,731) Less retroactive section 7 expenses ($6,226) Less security for child support: $1263/month x 12 months x10 years ($151,560) Less security for section 7 expenses: $500/month x 12 months x 10 years ($60,000) Plus adjustments allowed respondent $ 20,700 $121,090

[91] The respondent shall be entitled to pre-judgment interest on $121,090 from May 30, 2014.

[92] The applicant shall make brief written submissions on costs within 14 days of the release of these reasons. The respondent shall have 14 days thereafter to respond.

[93] The amount the respondent shall be entitled to be paid on account of his share of the adjusted notional proceeds of 398 St. Clements Avenue shall be finalized after the costs have been determined.

BACKHOUSE J.

Released: June 16, 2016

COURT FILE NO.: FS-15-00020005-0000 date: 20160616 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

KAREN FOGEL Applicant

• and - GIOVANNI CHIRIATTI Respondent

REASONS FOR JUDGMENT

BACKHOUSE J.

Released: June 16, 2016