Court File and Parties
COURT FILE NO.: FS-13-5435 DATE: 2016-07-22
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Vicky Kupreet Bawa v. Harjinder Singh Bawa
BEFORE: Ricchetti, J.
COUNSEL: R. Narang, for the Applicant L. Talbot, for the Respondent
HEARD: 2016-06-02
Endorsement
THE MOTIONS
1There are several motions to be dealt with:
a) The Husband’s Motion of February 3, 2016 seeks: i. An order regarding the sale of the matrimonial home located at 2 Gamson Crescent, Brampton (the “Matrimonial Home”); and ii. An order severing the divorce from the corollary issues.
b) The Wife’s motion of February 22, 2016 seeks: i. Spousal support of $936 per month based on the imputation of $200,000 per annum to the Husband; ii. Child support of $1,477 per month based on the imputation of $200,000 per annum to the Husband; iii. Section 7 expenses of $880 per month; iv. Arrears of support since January 1, 2015; v. The Husband be subject to all penalties under the Family Support Plan Act; and vi. Deferral of the sale of the Matrimonial Home until the Wife retained counsel.
c) The Husband’s motion of February 23, 2016 seeks: i. Variation of the temporary without prejudice child support, spousal support and s. 7 expenses from $3,293 per month to $1,245 per month; ii. Termination of interim spousal support; and iii. Termination of s. 7 expenses.
d) The Husband’s motion of April 13, 2016 seeks: i. An order setting aside the Family Mediation Arbitration Agreement dated February 13, 2014.
e) The Wife’s Motion of April 29, 2016 seeks: i. An order that the Husband pay ½ the mortgage payments on the Matrimonial Home; ii. An order halting the severance of divorce; iii. Imputation of $105,000 per annum income to the Husband; iv. Child support in the amount of $1,477 per month; v. Spousal support in the amount of $816 per month; vi. Payment of the Wife’s education expenses in the amount of $24,942.63; and vii. Payment of the cost awarded at the mediation/arbitration.
2Custody and access of the children of the marriage is not an issue. However, the financial issues are hotly contested. There are serious allegations such as the diversion (or misappropriation) of family funds, lack of disclosure, breach of various agreements and deliberate underemployment. There is considerable conflicting evidence which cannot be reconciled on the affidavit evidence before me.
3A multiplicity of motions, numerous affidavits (often repetitive), and a number of facta have substantially added to the financial costs of these interim motions to both parties. Apparently both parties consider the financial issues to be of such importance that their positions are advanced regardless of the legal costs to them and the risk of an adverse cost award. Having reviewed the Financial Statements of both parties, this court wonders whether the likely costs incurred on these motions are highly disproportionate to the amounts at issue. A more conciliatory attitude and approach to resolution would have been a better, more productive and financially advantageous approach for the parties and the Children. It is unfortunate for the parties that the mediation/arbitration failed to resolve or decide the matrimonial issues.
BACKGROUND
4The Wife is 41 years old. She was a lawyer in India. When she commenced this proceeding, she was employed as a paralegal in Ontario. She received accreditation of her law degree in Ontario in 2016. She will be writing her bar examinations over the next few months and will then be licensed to practice as a lawyer in Ontario.
5The Husband is a self-employed IT consultant through his personal service corporation, 2180997 Ontario Limited (218 Ont.). His largest customers is IBM.
6The parties married on August 5, 2001. They separated on August 20, 2013.
7There are two children of the marriage: Khushleen (born July 17, 2004) and Sabeer (born October 28, 2011) (“Children”).
8The Wife commenced this application on December 5, 2013. An Answer was filed on January 17, 2014 disputing the Wife’s claims.
9The Wife remains in the Matrimonial Home with the Children. The Husband left the Matrimonial Home in approximately October 2013 and lives in rental accommodations.
10On December 19, 2013, the Wife brought a motion for emergency relief. The motion was adjourned to February 7, 2014. On consent, a number of terms were ordered including:
i. the Husband was to make certain payments ($4,000 on January 1 and February 1, 2014) and to bring up to date property insurance premiums and utility accounts to November 2013; ii. the Wife was to make all payments on the Matrimonial Home including the mortgage payments; and iii. The Husband was to account for payments transferred to India since January 2013.
11On February 13, 2014, the parties entered into a Family Mediation/Arbitration Agreement (Arbitration Agreement). Marvin Kurz (now Justice Kurz) was appointed as the mediator/arbitrator. Both parties were represented by counsel at the time.
12The parties entered into an Interim Agreement on February 13, 2014 (“Interim Agreement”) which provided inter alia that:
i. The Husband pay $936 per month in spousal support; ii. The Husband pay $1,477 per month in child support; iii. The Husband pay $880 per month for special and extraordinary expenses including daycare (being 100% of the extraordinary expenses); and iv. The Wife’s counsel was to provide to the Husband’s counsel the name of a real estate agent for the sale of the Matrimonial Home with: “The parties will further negotiate the details of the disposition of the matrimonial home” (para 13)
13The Wife failed or refused to provide the name of a real estate agent or pursue the sale of the Matrimonial Home. The details of the sale could not be agreed upon. The Matrimonial Home has not been sold. The Wife has not made all the payments on the Matrimonial Home as the property taxes are now in arrears. The sale of the Matrimonial Home remains a significant issue between the parties and the most significant issue before equalization can be finalized.
14Shortly after the Interim Agreement, the Husband sought to terminate the Arbitration Agreement and the agreed to interim support payments. The Husband made allegations of bias against the arbitrator and brought a recusal motion. The motion was dismissed.
15The Husband then blamed his lawyer for not providing him proper advice relating to the Interim Agreement. The Husband felt he was paying too much support pursuant to the Interim Agreement. He explained that he did not want to incur the expense for a motion to reduce his support. No motion was brought before the mediator/arbitrator to vary the Interim Agreement.
16When the Husband’s attempts to end the Arbitration Agreement or vary the Interim Agreement failed, in January 2015, the Husband stopped making the interim support payments under the Interim Agreement. He started to pay $1,502 per month claiming a reduction in income and direct payment of s. 7 expenses (instead of the $3,293 per month as per the Interim Agreement). The arbitration was scheduled for December 2015.
17In November 2015, Justice Kurz was appointed to the Ontario Court of Justice. There appears to be no dispute that the Arbitration Agreement is at an end.
18The mediator/arbitrator was not paid equally by the parties as agreed. That issue is now resolved.
19Despite efforts by the Husband to move this matter ahead in the courts in early 2016, it has been delayed by the Wife’s change of counsel.
20The parties now find themselves back in court – almost three years after the separation - to deal with interim relief.
THE ISSUES TO BE DECIDED
21At the hearing, the Husband conceded that the issue of the severance of the divorce from the corollary relief need not be proceeded with at this time.
22The following issues need to be decided:
i. The incomes of the Parties; ii. Child Support; iii. Spousal Support; iv. The Wife’s Educational Expenses; v. S. 7 Expenses; and vi. Retroactive Support.
ANALYSIS and Conclusions
A. Motions for Interim Relief
23This is a motion for interim relief. This motions court cannot conduct a complete inquiry into all the aspects and details at issue or make final findings of fact regarding entitlement and quantum of support. An interim order is designed to be a “holding order” to get the parties to trial by considering the strength of the claims, on (usually conflicting and incomplete) motion materials. The court strives, in the particular circumstances of the case, to achieve fairness to the parties by balancing financial needs, means and any hardship to the parties pending trial.
24By necessity, where the interim relief sought is financial, the motions court must consider the issues of entitlement and quantum in determining whether and what interim order should be made:
a) The motions court must consider all the relevant facts and circumstances set out in the motion materials to make a preliminary assessment of the strength of the claims of the parties for the financial relief sought in the Application; b) If a triable claim has been made out for financial entitlement by the moving party, then the motions judge will have to consider whether interim relief should be granted and, if so, the quantum of interim financial relief by considering all of the circumstances of the case and the factors for support with particular attention to the means, needs and any financial or other hardship that would occasion to either party if an interim order was made or refused pending trial; c) Where retroactive financial support is sought on the interim motion, the motions court is not making the ultimate decision as to whether the party is entitled to retroactive financial support in the Application. That is for the trial judge to determine on a complete evidentiary record. The issue for the motions judge is to consider the factors in D.B.S. based on the motion materials and then proceed, if necessary, to ascertain whether and the extent it is fair and appropriate to both parties that such relief is granted on an interim basis in the circumstances of the evidentiary record of the motion.
B. Is there a Material Change?
25It is unclear whether the Husband’s motion for a variation of the support obligations in the Interim Agreement, is dependent on there being a material change in circumstances given that there is no existing court order – only an agreement made under the Arbitration Agreement.
26It matters not, as I am satisfied that, if necessary, there has been a material change in circumstances since the Interim Agreement that permits this court to review the support terms in the Interim Agreement.
27The material change in circumstances includes:
a) The Husband’s support obligations were based on a higher income. It is not clear what income was used to calculate the support payments. However, given the date of the Interim Agreement and the financial information set out in the materials before this court (reduction of hourly rates and total hours consultants are permitted to work), there is no doubt that the Husband’s income has decreased to a significant extent since the Interim Agreement; and b) The Wife was employed in 2014 as a paralegal but she quit her job in December 2014. The Wife subsequently returned to work in December 2015. She passed her law examinations to be accredited in Ontario. She must now pass two bar admission examinations – one in June 2016 and one in November 2016 – to practice as a lawyer. She has requested for time off to study for her bar examinations in June and November. It was also stated at the hearing that she may be employed as a lawyer at the same firm in November 2016 if she passes her bar examinations. Clearly, the Wife’s needs and financial circumstances have changed and will continue to change in the next few months.
C. The Incomes
28It is surprising, to say the least, that three years after separation, full and complete financial disclosure has apparently not be made by both parties. As a result, this interim order must be made on the little detailed and conflicting financial information in the motion materials before this court.
29It is not necessary or possible to decide certain financial issues such as whether the Husband has improperly transferred money to India or the Wife has improperly transferred money to her friends. Those are issues which will be determined at trial and are not necessary for determining the appropriate interim order to be made, if any.
The Wife’s Income
30The Wife’s pre-separation income is of little assistance given the income splitting from the Husband’s personal service corporation.
31The Wife worked as a paralegal in 2014 and earned approximately $40,231 until she quit in December 2014. The Wife did not return to work until December 2015 citing children’s behavioural and development issues. The Husband denies being told of any such behavioural and development issues; denies seeing any such issues with the Children during his parenting time; and disputes the validity of the Wife’s claim. There is no detailed or reliable evidence to support the necessity for the Wife to have taken approximately one year off from her employment to deal with the Children’s alleged issues. What is important on these motions is that there is now no dispute that the Wife is able to work, including full time.
32In 2016 the Wife’s annual salary was to be $38,000 as a paralegal.
33Exactly, what the Wife’s 2016 income will be is unclear. Obviously, the Wife’s income is expected to increase when she passes the bar admission examinations and practices law. She anticipates this will occur in November 2016. For the purpose of these motions, I am satisfied that a reasonable employment income for the Wife in 2016 is $40,000.
34The Husband submits that the Canadian Child Tax Benefit of $2,600 is to be included in the Wife’s income for support purposes. The Wife's Financial Statement only shows CCTB income of $100 per month. I find this amount to be very low. There was no real challenge to the amount of the $2,600 per annum CCTB income at the hearing. I am satisfied this should be added to the Wife’s income. As a result, I will add $2,600 to the Wife’s income for 2016.
35In my view, a reasonable estimate of the Wife’s 2016 total income is $42,600.
The Husband’s Income
36The Husband relies on his line 150 income which ranges from $78,500 in 2010 (when there was income splitting) to $68,200 in 2014.
37The Husband’s Financial Statement of January 17, 2014 showed an annual income of $105,863 (net) with a gross annual income for 218 Ont. of $174,200.
38The Husband suggested that his line 150 income for 2015 would be $77,200.
39In his February 2016 Affidavit, the Husband suggested that, to his Line 150 income of $68,200, should be added $15,000 from his corporate deductions resulting in an imputed 2016 annual income to him for support purposes of $83,200.
40There is support in the motion materials, including documents from IBM, that makes it clear there has been and will continue to be a reduction in the Husband’s income from IBM. Essentially, IBM appears to be reducing the amounts paid to outside consultants such as the Husband. However, while the evidence shows that there is a reduction of outside consultant fees by IBM resulting in a reduction in gross income to 218 Ont., the difficult issue is: what is the Husband’s 2016 income for support purposes?
41It is difficult to assess whether the Husband’s suggested $15,000 "claw back" from corporate expense deductions is reasonable given that 218 Ont.’s statements are not audited and do not include details of the expenses in each category. 218 Ont. is strictly a personal service corporation which permits 218 Ont. to take corporate expense deductions which would not be available to individual employees. For example, an individual employee would not be permitted to deduct his automobile expenses to travel to work, whereas, a portion of automobile expenses may be deducted by the personal service corporation. In some cases, such expenses which are permitted to be deducted are legitimate expenses necessary for the individual to earn the income in the personal service corporation. In such cases, the individual’s income for support purposes should not include such expenses. In other cases, while expenses may be deductible by the corporation, some of the deducted expenses are those normally incurred by individuals as part of their living expenses. In these cases, it would not be reasonable or fair to use the individual's Line 150 income without considering each corporate expense deduction to ascertain if these “corporate expenses” reduced the shareholder’s needs and increased the shareholder’s means for support purposes. To make matters more difficult, in most categories of corporate expense deductions, a part of the expense may properly be included in the individual's income for support purposes while a part may be a proper and necessary corporate expense.
42As a result, a detailed review of the financial information and documentation is necessary. In this case, there is little evidence to properly assess each corporate expense deduction and determine what the reasonable amount of the "claw back" from the corporate expense deductions to the Husband should be.
43There is no dispute that certain portion of 218 Ont.’s corporate expense deductions should be added to the Husband’s income. The Husband seeks to add $15,000 to his Line 150 income. I note that the Husband’s estimated income and “claw back” of corporate expense deductions has varied to some extent from affidavit to affidavit. The materials filed by the Husband also shows that the amount of deductions he admits should be “clawed back” is largely arbitrary as the Husband used different percentages and arrived at different numbers in his various affidavits and factum.
44I do not accept that $15,000 is a reasonable “claw back” of the corporate expense deductions. Given the lack of detailed financial information, I approach the issue from a different perspective. The Husband states that his hours at IBM are limited to 35 hours per week at $85 per hour. This totals approximately $3,000 per week of gross income. Assuming a 46-week year, this is approximately $138,000 per year. Accepting that there are some legitimate corporate expenses necessary for this personal service corporation unrelated to what would otherwise be the Husband’s personal living expenses, an income of $105,000 per annum (as suggested by the Wife) appears to be reasonable in the circumstances for the purpose of interim support in 2016.
45The onus is on the Husband, as a self-employed person, to produce meaningful supporting documentation with respect to his deductions. See Wilson v. Wilson, 2011 ONCJ 1088 at para 22:
A self-employed person, or a commissioned salesperson such as Boyd Wilson, has the onus of clearly demonstrating the basis of his net income. This includes demonstrating that the deductions from gross income should be taken into account in the calculation of income for support purposes: See Whelan v. O’Connor, 2006 ONSC 13554, 28 R.F.L. (6th) 433, [2006] O.J. No. 1660. Such payors have an inherent obligation to put forward not only adequate, but comprehensive records of income and expenses, from which the recipient can draw conclusions and the amount of child support can be established. See Meade v. Meade, 2002 ONSC 2806, 31 R.F.L. (5th) 88, [2002] O.J. No. 3155, (Ont. S.C.). The onus rests upon the parent seeking to deduct expenses from income to provide meaningful supporting documentation in respect to those deductions, failing which an adverse inference may be drawn. See Orser v. Grant (2000), 96 A.C.W.S. (3d) 644, [2000] O.J. No. 1429, (Ont. S.C.).
46The Husband’s evidence falls very short of establishing deductions in the amount he suggests. As a result, I am satisfied that the Husband’s line 150 income does not accurately reflect the Husband’s true income for support purposes and does not fairly reflect all the money available for the payment of support.
47Imputing the Husband’s annual income at $105,000 is reasonable and fairly reflective of the Husband’s available income for support purposes.
D. Child Support
48There are two Children. The Wife has primary residency of the Children.
49The relevant provisions of the Child Support Guidelines provide:
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.
(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.
- (1) The court may impute such amount of income to a parent or spouse as it considers appropriate in the circumstances, which circumstances include,
(g) the parent or spouse unreasonably deducts expenses from income;
50The Child Support Guidelines provide for child support in the amount of $1,477 per month based on the Husband’s $105,000 annual income.
51Until further order of this court, the Husband shall pay $1,477 per month for child support commencing August 1, 2016.
E. Spousal Support
52Section 15.2 (2) of the Divorce Act empowers a court to grant an interim order requiring a spouse to pay periodic sums the court determines to be reasonable for the support of the other spouse. Interim spousal support orders are in the nature of a “holding” order intending to provide a reasonably acceptable short-term financial solution for the parties until trial. Such interim orders are not binding on the trial judge and the trial judge can vary the amount of interim spousal support, either to increase or decrease the amount which should have been paid and adjust the financial obligations accordingly, so that justice can be done to either or both parties on a full and complete evidentiary record at trial.
53Justice Penny in Jeffery Fine v. Janice Fine, 2013 ONSC 6816 summarized the applicable principles for determining interim spousal support.
[7] The general principles which govern an award of interim spousal support are straightforward. [8] The role of the court on a motion for interim spousal support is a limited one. On an interim motion, the court does not usually have all of the available evidence and must fix such amount as the court thinks reasonable, having regard to the factors set out in section 15.2 of the Divorce Act. Those factors include:
(a) the length of time the spouses cohabited; (b) the functions performed by each spouse during cohabitation; and (c) any order or agreement or arrangement relating to support of either spouse.
9An order made under this section should recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown; relieve any economic hardship of the spouses arising from the breakdown of the marriage; and insofar as practicable promote the economic self-sufficiency of each spouse within a reasonable period of time.
10The court should try to award interim support that is fair and reasonable and meets the needs of the disadvantaged spouse as best as possible based on the apparent ability to pay of the other spouse.
11As well, generally speaking, the spouse receiving spousal support is entitled to receive support that would allow him/her to maintain the standard of living to which he/she was accustomed at the time cohabitation ceased.
54The parties were married for approximately 12 years. Both parties are young and to some degree self-sufficient financially. The Wife’s financial circumstances are in transition and likely to substantially improve. Even the Wife’s counsel admits that the Wife will not need spousal support at the conclusion of her education when she commences the practice of law. The Wife says that she is seeking spousal support “from only until the time I have completed my education”. She completes her bar examinations in November 2016 but considers pursuing a Masters of Law degree - provided that the Husband pay for the expense of obtaining her Master’s degree. Her Masters of Law program, if taken, is expected to be completed by December 2017.
55The SSAG provides a range for spousal support (based on the above child support and incomes of $42,600 for the Wife and $105,000 for the Husband) from $0 to $735 with a mid-range of $166.
56When the expenses of the Matrimonial Home are factored out and reasonable accommodation costs are included for the Wife, the Wife’s immediate needs are significantly reduced.
57In my view, $250 per month interim spousal support is a reasonable amount for the Wife’s interim needs for 2016. Interim spousal support shall be paid to the Wife in the amount of $250 per month commencing August 1, 2016.
F. The Wife’s Educational Expenses
58The Wife seeks to pursue her Masters of Law degree and seeks to have the Husband pay for this education cost of $22,982.88. In late 2015, she was accepted for graduate studies at York University. However, there is no evidence that she has pursued this program as I note that confirmation for enrolment was required by December 9, 2015 and none was included in the Wife’s affidavits.
59I see no basis for making this order that the Husband pay for the Wife's Master's degree on an interim basis. It is not part of the Wife’s needs on an interim “holding” order.
60A Master’s degree is not necessary for her “self-sufficiency” as she alleges. The Wife, upon successful completion of the bar examinations, will be a member of the Law Society of Upper Canada and entitled to practice as a lawyer in Ontario. There is no doubt that the Wife will be able to earn a significant income with or without a Master’s degree.
61The Wife has not demonstrated that payment for her Master’s degree is a financial obligation of the Husband. There was no discussion or agreement prior to separation that the Wife should pursue this post-graduate studies and it should or would be paid by the Husband.
62This claim is dismissed.
63The Wife also seeks that the Husband pay her 2016 LSUC fees of $1,695. Given that she is not yet a lawyer and LSUC fees are normally paid after the “call to the bar”, this is not an appropriate claim at this time. There is no claim for the Wife’s 2016 paralegal fees which I presume were paid at the beginning of the year.
64This claim is dismissed.
G. Section 7 Expenses
65It is difficult to make sense of the conflicting evidence or to come to any conclusions on this issue.
66The Husband sought receipts from the Wife. None were forthcoming as the Wife suggested the day care provider did not provide receipts for the amounts she received. The Husband went through detailed calculations to show weeks where daycare was not required, justifying a lower amount. The Wife disputes the Husband’s calculations.
67The Husband agreed to pay 100% of the s. 7 expenses under the Interim Agreement. The Husband says that he has been paying the s. 7 expenses directly.
68The Wife seeks that the Husband continue to pay 100% of the s. 7 expenses on an interim basis. The Husband submits that there be no further payment of s. 7 expenses.
69I see no basis that the Husband be relieved from paying s. 7 expenses – at least his proportionate share of s. 7 expenses.
70The issue then becomes: what are the reasonable s. 7 expenses for the Children? It is impossible to deal with individual s. 7 expenses when that is not the basis upon which the parties submitted their materials or made submissions at the hearing. Some of the s. 7 expenses have been identified. However, I note that the s. 7 expenses referred to in the motion materials appear to vary each month and change during different times of the year.
71In these circumstances, a fixed monthly s. 7 expense is not appropriate.
72The parties are in the best position to know and agree upon what are reasonable s. 7 expenses for the Children. As a result, s. 7 expenses shall be dealt with as follows.
a) Commencing August 1, 2016, all agreed upon s. 7 extraordinary expenses shall be shared in proportion to the incomes of the parties ($105,000/$42,600 payable by the Husband and $42,600/$105,000 by the Wife). The parties shall act reasonably in deciding what constitute reasonable s. 7 expenses under the Child Support Guidelines. If there is a proposed s. 7 expense disputed by the other party, the party seeking to recover the payment may bring a motion to this court. The court will decide whether it is an appropriate s. 7 expenses and the issue of the costs of the motion; b) Written receipts must be provided to the payor showing the amount paid to independent third parties (i.e. not daycare or other services provided by family members), to whom, and for what services; c) Unless agreed to be shared in advance, the payor shall pay their respective percentage of the expense within one week of presentation of the receipts; and d) All existing sports, academic and afterschool activities the Children were enrolled in as of June 30, 2016 shall be deemed to be s.7 expenses until completion of the activity or program;
H. Retroactive Support Payments
73In Samis (Guardian of) v. Samis, 2011 ONCJ 27, Justice Sherr set out the following regarding the considerations on interim motions including claims for retroactive support:
45This court has jurisdiction to make a retroactive spousal support order. Clause 34(1)(f) of the Family Law Act, R.S.O. 1990, c. F-3, as amended, reads as follows:
- Powers of court.—(1) In an application under section 33, the court may make an interim or final order,
(f) requiring that support be paid in respect of any period before the date of the order;
46Many courts have ordered temporary retroactive spousal support where the “circumstances of the case justify immediate relief with some retroactive award of support.” See Lakhani v. Lakhani, 2003 ONSC 2161, 43 R.F.L. (5th) 125, [2003] O.J. No. 4041, 2003 CarswellOnt 3928 (Ont. S.C.), at paragraph [16]; Dickie v. Dickie, 2001 ONSC 28203, 17 R.F.L. (5th) 304, [2001] O.J. No. 2885, 2001 CarswellOnt 2551 (Ont. S.C.); Elgner v. Elgner, 2010 ONSC 794, [2010] W.D.F.L. 3353, [2010] O.J. No. 562, 2010 CarswellOnt 1113 (Ont. Div. Ct.); Trombetta v. Trombetta, 2011 ONSC 394, [2011] O.J. No. 281, 2011 CarswellOnt 318 (Ont. S.C.); and Turk v. Turk, 2008 ONSC 3420, 50 R.F.L. (6th) 211, [2008] O.J. No. 397, 2008 CarswellOnt 512 (Ont. S.C.).
47Other courts have been disinclined to back-date temporary support to a date prior to the filing of the motion because of the limited evidence available in proceedings for temporary relief, which are based on affidavit evidence. In Hubbard (Gore-Hickman) v. Gore-Hickman, 2005 SKQB 265, 266 Sask. R. 192, [2005] 11 W.W.R. 489, 19 R.F.L. (6th) 55, [2005] S.J. No. 383, 2005 CarswellSask 402 (Sask Q.B., Fam. Div.), the court wrote at paragraph [23]¶8:
- . . . Retroactive support can arise on an interim application. Interim applications, by their very nature, are meant to put in place temporary measures pending trial or settlement. They are not meant to determine the ultimate issues between the parties. Courts on interim applications, for the most part, are dealing with affidavit evidence that is often incomplete and contradictory. There is no opportunity for either party to cross-examine the other or adduce further information that may very well sway the ultimate determination. If parties do not proceed with their application beyond the interim order stage, one must assume they are satisfied with the terms of that order. The fact some people never proceed further is not justification for courts to decide ultimate issues of retroactive support on interim applications. Requests for retroactive orders are more properly dealt with at trial or after a hearing where all relevant evidence can be adduced. Variation applications result in final orders and judges dealing with such applications can order the parties be cross-examined on their affidavits or can order viva voce evidence.
Retroactive Spousal Support
74It would be easy to simply have the Husband honour the Interim Agreement and require him to pay any arrears accrued under the Interim Agreement. However, the Wife is now employed. Her needs have changed. There is something to the Husband’s claim for reduced income from IBM. His means have changed.
75There is a reasonable argument that the Husband may have overpaid for some of the period he paid the full amount under the Interim Agreement due to his reduced income and the Wife’s income or imputed income. A trial judge with a full record will be able to determine the support payments from the date of separation and deal with any retroactive support payments, if any.
76I am not prepared to order any retroactive support prior to the Wife’s motion on February 22, 2016.
77The Husband has paid $1,502 per month for interim spousal and child support. As set out below, the Husband’s interim child support obligation is $1,477 per month. As a result, only $25 per month remained for interim spousal support. This leaves a shortfall of $225 per month for a part of February, all of March, April, May, June and July.
78The arrears of interim spousal support from February 22, 2016 to August 1, 2016 in the total amount of $1,181 (4 ¼ months X $225) shall be paid in six equal monthly installments of $196.88 commencing August 1, 2016.
Child Support
79Given the manner I have calculated the retroactive spousal support to February 22, 2016, there is no outstanding retroactive interim child support.
I. The Matrimonial Home
80The Wife continues to reside in the Matrimonial Home with the Children. The Husband rents accommodations at $1,600 per month.
81The Husband seeks that the Matrimonial Home be sold. The Wife opposes.
82The Matrimonial Home is valued at approximately $750,000 and has a mortgage of approximately $370,000.
83It is now almost three years since separation.
84The carrying costs of the Matrimonial Home have been an issue from the first motion in December 2013.
85The Wife has claimed on numerous occasions to be financially “stretched” or unable to pay the arbitrator or pay living expenses. She states “Since the marital breakdown, I has [sic] been facing financial hardship”. The Wife states she is borrowing money to pay expenses and, without the Interim Agreement payments from the Husband, she cannot make the mortgage payments and other household expenses. Clearly, a $370,000 mortgage on her present income, even with spousal support, is financially debilitating for the Wife. Her “bare bones” monthly expenses show approximately 40% of her monthly expenses is mortgage, taxes and insurance on the Matrimonial Home.
86The Wife has permitted the property taxes on the Matrimonial Home to go into arrears. This raises the potential for a tax sale – whether or not the parties want the Matrimonial Home sold.
87There will also be difficulty in refinancing of the jointly owned Matrimonial Home because of the separation. The Wife expresses an interest in buying out the Husband’s interest in the Matrimonial Home but there is no offer to do so at this time.
88Immediate access to the equity in the Matrimonial Home is necessary for the immediate financial stability of both parties and the Children.
89While the Wife submits that the sale of the Matrimonial Home will be disruptive to the Children, she provides no cogent reasons or evidence of this. I recognize that there will be some upheaval for the Children (who are 4 ½ and 12 years old) leaving their home. The suggestion that the Children will have emotional difficulties leaving the Matrimonial Home because of the breakdown of their parent’s marriage is weak given that the separation occurred three years ago. Whenever the Matrimonial Home is sold, it will cause some emotional difficulty for the Children. However, this doesn’t mean that it is not in the Children’s long term benefits that the Matrimonial Home be sold. The financial stability to the parents, in this case, will certainly benefit the Children.
90I also note that the Wife’s objection to the sale of the Matrimonial Home is highly questionable since it appears the parties, albeit tentatively in the Interim Agreement, agreed to sell the Matrimonial Home, but no agreement could be executed and the Wife refused to proceed with the sale of the Matrimonial Home.
91It is clear to this court that, given the Husband’s desire to sell the Matrimonial Home and the Wife’s alleged financial distress, the Matrimonial Home should be sold. The distribution or partial distribution pending trial can be decided later by this court on motion, if the parties cannot agree on a full or partial distribution.
92I clearly reject the Wife’s submission that the Matrimonial Home should not be sold as it provides security for the Husband’s support payments, the implication being that the Husband may leave the jurisdiction. Aside from suspicion and speculation, the Wife has no support for this allegation. Further, this is not a basis in law to encumber the equity in the Matrimonial Home on an interim motion and on this evidentiary record. The possible need for security for future support payments (even if true and accepted by the court) is not, by itself, an appropriate basis to prevent a sale of the largest joint asset of the parties given their financial situation.
93I also clearly reject the Wife’s submission that her claim for equalization would be prejudiced if the Matrimonial Home is sold. Given the total equity in the Matrimonial Home and the amounts at dispute in the equalization calculations of the parties, any equalization concerns could, if the court felt it was appropriate, be held in trust until final resolution or judicial determination.
94As a result I conclude that the Matrimonial Home be sold as it is in the best long term interests of the Children, necessary given the financial position of the parties and because of the prior implicit agreement to sell the Matrimonial Home in the Interim Agreement. Any claim for exclusive possession would not likely be successful.
95Considering the provisions of s. 24(3) of the Family Law Act, the Matrimonial Homes shall be sold as follows:
a) The Wife shall provide three (3) real estate agents (totally independent of and with no connection to either party or any family member or friends) to the Husband within two weeks of the date these reasons are released; b) The Husband shall select one of the three real estate agents within one week; c) The parties shall execute a Listing Agreement with that real estate agent at a price to be agreed upon or to be set by this court; d) The parties shall cooperate in the showing and sale of the Matrimonial Home; e) If both parties cannot agree on the acceptance of any offer presented or the terms of the offer, this court will decide whether such offer and any terms are to be accepted; f) The parties shall agree upon an independent real estate lawyer to handle the sale of the Matrimonial Home and upon closing, this real estate lawyer shall pay all closing costs and usual adjustments. The real estate lawyer shall hold the net proceeds of sale until written direction of both parties or a court order; and g) Either party may seek further direction from me with respect to the sale of the Matrimonial Home.
J. Trial Date
96This matter needs to be tried as soon as possible. This matter is hereby scheduled for trial in the January 2017 blitz sittings. This trial is peremptory on both parties. I do so because of the length of time since separation and the Wife’s changing financial needs and means.
97All disclosure by both parties must be completed by September 15, 2016. Any questioning to be completed by October 15, 2016.
98Any motion regarding alleged non-disclosure must be brought before me before the end of October 2016.
99A Settlement Conference and Trial Management Date will be set by me at the request of either party.
COSTS
100Either party may submit written cost submissions, if they are seeking costs, within two weeks of the release of these reasons. The costs submissions shall be limited to three pages, plus attachments of the Bill of Costs and any authorities.
101The other party may submit responding submissions in writing within one week thereafter. The responding submissions shall also be limited to three pages plus any authorities.
102There shall be no reply submissions without leave.
Ricchetti, J
DATE: July 22, 2016