Court File and Parties
Citation: Foulidis v. Foulidis, 2016 ONSC 4819 Court File No.: FS-15-404561-00 Date: 2016-07-27 Superior Court of Justice – Ontario
Re: Lynne Foulidis, Applicant And: George Foulidis, Respondent
Before: C. Horkins J.
Counsel: Jodi L. Feldman and Jas Dhaliwal, for the Applicant Tanya N. Road, for the Respondent Gary Caplan, for the Foulidis Group of Companies Howard Manis, for proposed Receiver Raymond Stancer, for Alexander and Elena Foulidis
Heard at Toronto: July 21, 2015
Endorsement
Overview
1The parties separated in late June 2015 after a long term marriage. They have three children, ages 20, 17 and 16. The youngest child resides with the applicant mother in the matrimonial home. This has quickly become a high conflict dispute.
2The appellant wife brings a motion for the following extensive relief:
(a) The appointment of a receiver under s. 101 of the Courts of Justice Act, R.S.O. 1990, c. C.43;
(b) An order under rule 24(12) of the Family Law Rules, O. Reg. 114/99, that the respondent pay $50,000 for the applicant’s experts fees and $50,000 for her legal fees;
(c) An order that the respondent deliver an expert income report for child and spousal support purposes;
(d) An order that the respondent deliver an expert business valuation report for all of the companies in which he has an interest;
(e) An order imputing a yearly income to the respondent of $1M;
(f) Retroactive spousal support of $55,000;
(g) Interim monthly spousal support;
(h) Interim child support;
(i) Exclusive possession of the matrimonial home;
(j) An order directing that the respondent deposit his shares in 8441553 Canada Limited and 9615482 Canada Limited (both Tim Horton’s Franchises);
(k) An order continuing the July 7, 2016 non-depletion order; and
(l) A restraining order against the respondent.
3The applicant’s motion has been adjourned twice at the request of the respondent husband. It was scheduled as a long motion.
4I granted the second adjournment on July 7, 2016 with terms. As a term of the second adjournment, I ordered the respondent not to deplete any of his assets and that he provide extensive disclosure. I also ordered the respondent to continue paying the matrimonial home expenses: line of credit, hydro, water, cable and all property and fire insurance. I ordered the respondent to pay the applicant $1500 to cover food for a thirty day period and directed that he pay applicant’s counsel $5000 as a payment under rule 24(12) of the Family Law Rules toward accounting fees (already incurred).
5On July 7, 2016, the applicant expressed concern regarding the stability of the respondent’s financial circumstances. I granted the applicant’s request to bring a motion for the appointment of a receiver under s. 101 of the Courts of Justice Act. This motion was scheduled to be heard together with the return of the applicant’s main motion.
6A few days before the return of the applicant’s motions, the respondent served his own motion. This motion was not contemplated when the applicant’s long motion was scheduled. The applicant seeks an adjournment of the respondent’s motion.
7The respondent’s motion seeks exclusive possession of the matrimonial home for himself and the three children. Alternatively he wants an order that the parties negotiate an extension of the line of credit secured against the matrimonial home in the amount of $100,000 to $200,000 so that the parties can finance this litigation or the immediate sale of the matrimonial home. Lastly he asks that the Office of the Children’s Lawyer be appointed to conduct a custody and access investigation.
8The respondent’s motion was not previously scheduled and the applicant has not had sufficient time to respond. I will deal with this motion to the extent that it is necessary, because it overlaps with some of the relief that the applicant seeks.
Appointment of a Receiver
9The applicant seeks the appointment of a receiver under s. 101 of the Courts of Justice Act to preserve the respondent’s assets. This section provides that the court may appoint a receiver by interlocutory order "where it appears to a judge of the court to be just or convenient to do so."
10As the court stated in Anderson v. Hunking, 2010 ONSC 4008, at para. 15, the following guiding principles for a s. 101 order have emerged from recent jurisprudence:
(a) the appointment of a receiver to preserve assets for the purposes of execution is extraordinary relief, which prejudges the conduct of a litigant, and should be granted sparingly: Fisher Investments Ltd. v. Nusbaum (1988), 31 C.P.C. (2d) 158, 71 C.B.R. (N.S.) 185 (Ont. H.C.);
(b) the appointment of a receiver for this purpose is effectively execution before judgment and to justify the appointment there must be strong evidence that the plaintiff's right to recovery is in serious jeopardy: Ryder Truck Rentals Canada Ltd. v. 568907 Ontario Ltd., 16 C.P.C. (2d) 130, [1987] O.J. No. 2315 (Ont. H.C.);
(c) the appointment of a receiver is very intrusive and should only be used sparingly, with due consideration for the effect on the parties as well as consideration of the conduct of the parties: 1468121 Ontario Ltd. v. 663789 Ontario Ltd., [2008] O.J. No. 5090 (Ont. S.C.J.), 2008 66137, referring to Royal Bank v. Chongsim Investments Ltd., 1997 12112 (ON SC), 32 O.R. (3d) 565, [1997] O.J. No. 1391 (Ont. Gen. Div.);
(d) in deciding whether to appoint a receiver, the court must have regard to all the circumstances, but in particular the nature of the property and the rights and interests of all parties in relation thereto: Bank of Nova Scotia v. Freure Village on Clair Creek (1996), 1996 8258 (ON SC), 40 C.B.R. (3d) 274 (Ont. Gen. Div. [Commercial List]), 1996 8258;
(e) the test for the appointment of an interlocutory receiver is comparable to the test for interlocutory injunctive relief, as set out in RJR-MacDonald Inc. v. Canada (Attorney General), 1994 117 (SCC), [1994] 1 S.C.R. 311 (S.C.C.) at paras. 47-48, 62-64, (1994), 111 D.L.R. (4th) 385 (S.C.C.);
(i) a preliminary assessment must be made of the merits of the case to ensure that there is a serious issue to be tried;
(ii) it must be determined that the moving party would suffer "irreparable harm" if the motion is refused, and "irreparable" refers to the nature of the harm suffered rather than its magnitude -evidence of irreparable harm must be clear and not speculative: Syntex Inc. v. Novopharm Ltd. (1991), 1991 14290 (FCA), 36 C.P.R. (3d) 129, [1991] F.C.J. No. 424 (C.A.);
(iii) an assessment must be made to determine which of the parties would suffer greater harm from the granting or refusal of the remedy pending a decision on the merits - that is, the "balance of convenience": See 1754765 Ontario Inc. v. 2069380 Ontario Inc.(2008), 2008 67403 (ON SC), 49 C.B.R. (5th) 214 at paras. 7 and 11, [2008] O.J. No. 5172 (S.C.);
(f) where the plaintiff's claim is based in fraud, a strong case of fraud, coupled with evidence that the plaintiff's right of recovery is in serious jeopardy, will support the appointment of a receiver of the defendants' assets: Loblaw Brands Ltd. v. Thornton, 78 C.P.C. (6th) 189, [2009] O.J. No. 1228 (Ont. S.C.J.).
11The record does not support making an order under s. 101 of the Courts of Justice Act as explained below.
12The respondent’s financial circumstances are complicated and unclear. He has an ownership interest in 16 companies. Five of the companies are apparently inactive. His ownership interest in the active companies ranges from 25% to 100%. The respondent is the subject of an extensive Revenue Canada audit. His income for 2009, 2010 and 2011 has been reassessed. On his July 14, 2016 financial statement he lists a debt owing to Revenue Canada of $3,323,000 and zero balance on his net family property statement.
13While the respondent appears to have financial problems, he has honoured all of the court orders that have directed him to pay monies to the applicant. There are no orders that the respondent has been unable to pay. This dispute has not progressed to a settlement conference and very little has been accomplished since the applicant commenced her action in August 2015. There is a significant dispute about the respondent’s income for support purposes and the identification and value of his assets.
14What is driving this motion under s. 101 is the applicant’s fear that Revenue Canada will take steps to collect what the respondent owes in taxes, leaving nothing for the parties to equalize and no money to pay support.
15The court has the respondent’s estimate of what he says he owes Revenue Canada. The respondent has filed two recent financial statements that list a debt to Revenue Canada. In the financial statements dated June 28 and July 14, 2016, the debt on valuation date was $4,902,972. In the June 28 financial statement the value of the debt “today” is $3,040,800 and in the July 14 financial statement it is $3,323,000.
16There is no document from Revenue Canada stating what is owed as a result of re-assessing the respondent’s income for 2009-2011. The respondent advised the court during the motion that no such document has been delivered. This is curious since the two financial statements provide specific amounts and there is no evidence to show how the respondent arrived at these amounts.
17If the tax debt is what the respondent estimates then it is obviously a serious looming problem for this family.
18Correspondence from Revenue Canada dated October 28, 2015 states that the audit is complete and Revenue Canada has revised the respondent’s 2009 to 2011 taxable income as follows:
2009: $79,433 revised to $2,095,730
2010: $90,000 revised to $463,362
2011: $90,000 revised to $1,023,252
19Revenue Canada states that the respondent can object to the reassessment. It is not clear if he has done so. If the respondent filed an objection it has not been produced and there are no affidavits explaining that an objection was filed.
20Revenue Canada sent a letter dated June 21, 2016 to Mr. Richard Yasny. He is the tax lawyer who assisted the respondent on the Revenue Canada audit. The “re” line of the letter states “1784917 Ontario Ltd – Notice of Objection - 2009, 2010 & 2011”. It is unclear if this letter is dealing with the audit of the respondent’s personal income tax returns since it references one of the respondent’s inactive numbered companies. The letter states that the next step is an appeal to the Tax Court of Canada. There is no evidence of an appeal.
21As noted the respondent’s July 14, 2016 financial statement lists a debt owing to Revenue Canada of $3,323,000 and zero balance on the NFP. It is impossible on this motion and the available evidence, to assess if this is reliable.
[22] The group of companies that the respondent has an interest in are referred to as the Foulidis Group of Companies. Counsel for the companies (Mr. Caplan) learned at the last moment that the applicant was bringing a motion for an order appointing a receiver under s. 101 Courts of Justice Act. He attended in court to make submissions.
23Mr. Caplan expressed concern about a s. 101 order being granted because in his view it could negatively affect the income that the respondent has available through his Tim Horton’s franchises. It is alleged that this is the respondent’s only source of income. Counsel states that the appointment of the receiver would be a breach of a covenant under the franchise agreement and the respondent could lose the franchises. While the court had no evidence to document this concern, it would not be surprising to know that such a covenant exists.
24I conclude that on the facts of this case, as they currently exist, it is not just and convenient to order the appointment of a receiver under s. 101 of the Courts of Justice Act.
25There is an urgent need to understand the respondent’s complicated financial circumstances and this is best achieved through an order under rule 20.1(3) of the Family Law Rules. I will now turn to this rule.
Rule 20.1(3) order
26The applicant seeks an order under rule 24(12) for money to pay her own expert. I have decided not to make an order under this rule. The interests of the parties are best served if one expert is appointed by the court under rule 20.1(3). If as the respondent states, the partys’ resources are limited, then they should rely on one expert. This is the most responsible use of their financial resources.
27Appointing one expert recognizes “the primary objective” of the Family Law Rules as set out in rule 2 that states in part as follows:
2 (2) The primary objective of these rules is to enable the court to deal with cases justly.
(3) Dealing with a case justly includes,
(a) ensuring that the procedure is fair to all parties;
(b) saving expense and time;
(c) dealing with the case in ways that are appropriate to its importance and complexity; and
(d) giving appropriate court resources to the case while taking account of the need to give resources to other cases.
(4) The court is required to apply these rules to promote the primary objective, and parties and their lawyers are required to help the court to promote the primary objective.
28Family Law Rule 20.1(3) gives the court the power to appoint an expert. The rest of the rule provides direction on payment of the expert’s fees and the partys’ use of the report. The rule states as follows:
(3) The court may, on motion or on its own initiative, appoint one or more independent experts to inquire into and report on any question of fact or opinion relevant to an issue in a case.
(4) An order under subrule (3) appointing an expert shall name the expert and, where possible, the expert shall be a person agreed on by the parties.
(5) An order under subrule (3) appointing an expert shall contain the instructions to be given to the expert, and the court may make any further orders that it considers necessary to enable the expert to carry out the instructions.
(6) The court shall require the parties to pay the fees and expenses of an expert appointed under subrule (3), and shall specify the proportions or amounts of the fees and expenses that each party is required to pay.
(7) If a motion by a party for the appointment of an expert under subrule (3) is opposed, the court may, as a condition of making the appointment, require the party seeking the appointment to give such security for the expert’s fees and expenses as is just.
(8) The court may relieve a party from responsibility for payment of any of the expert’s fees and expenses, if the court is satisfied that payment would cause serious financial hardship to the party.
(9) The expert shall prepare a report of the results of his or her inquiry, and shall,
(a) file the report with the clerk of the court; and
(b) provide a copy of the report to each of the parties.
(10) A report provided by an expert shall contain the following information:
The expert’s name, address and area of expertise.
The expert’s qualifications, including his or her employment and educational experiences in his or her area of expertise.
The instructions provided to the expert in relation to the proceeding.
The nature of the opinion being sought and each issue in the proceeding to which the opinion relates.
The expert’s opinion respecting each issue and, where there is a range of opinions given, a summary of the range and the reasons for the expert’s own opinion within that range.
The expert’s reasons for his or her opinion, including,
i. a description of the factual assumptions on which the opinion is based,
ii. a description of any research conducted by the expert that led him or her to form the opinion, and
iii. a list of every document relied on by the expert in forming the opinion.
- An acknowledgement of expert’s duty (Form 20.1) signed by the expert.
(11) The expert’s report is admissible in evidence in the case.
(12) Any party may cross-examine the expert at the trial.
29There is evidence from two experts on this motion. Neither can act as an expert under rule 20.1(1) as explained below.
30The respondent has been relying on Athena Mailloux. She is a forensic accountant who filed an extensive affidavit for the respondent on this motion. She states that she was “retained to provide assistance to a tax lawyer acting for the Foulidis Group of Companies with respect to a CRA audit” that started in February 2013 and is ongoing. This affidavit explains that the Foulidis Group of Companies consists of 15 companies. It describes the respondent’s ownership interest in 14 of the 15 companies and the 50% interest that he also owns in two Tim Horton’s.
31Ms. Mailloux’s affidavit seeks to explain the complicated circumstances of the Foulidis Group of Companies and the Revenue Canada audit. She provides an income calculation and concludes that in 2013, 2014 and 2015 the respondent had a negative income stream from the Foulidis Group of Companies and the two Tim Horton’s franchises ( 2013 -$136,293; 2014 - $17,307; 2015 - $257,169).
32Ms. Mailloux’s affidavit includes a complicated 13 page chart that she relies on to support her conclusion that the respondent has a negative income stream. It is impossible on this motion to fully understand this chart and assess whether it is reliable.
33While I recognize that Ms. Mailloux is a qualified forensic accountant, she has been involved with the Foulidis Group of Companies and the respondent, as their advocate during the tax audit. The work that she has done will provide the court appointed expert with relevant information. However, given Ms. Mailloux’s role with the respondent and his companies, she cannot perform the role of the non-partisan expert under Family Law Rule 20.1(1).
34The applicant retained Crowe Soberman. They have done a very preliminary review of the respondent’s documents. Their letter dated July 19, 2016 was filed with the court.
35I gave the parties an opportunity to consider the appointment of a court appointed expert. They agree that one expert alone should be identified to assess the respondent’s income for the purpose of support. They agree that this would be far more cost efficient. The respondent will not agree to use Crowe Soberman. As a result, the parties considered alternative experts and agreed on Vivian Alterman at “ap Valuations Limited”.
36The parties have filed a letter dated July 21, 2016 from Ms. Alterman confirming that she is available to prepare an expert report that will set out her analysis of the respondent’s income for the years 2013 through 2015 for support purposes. Her letter states that she will complete a report that is compliant with CICBV standards and deliver it within 60 days. She requires a retainer of $50,000 to “undertake this work”. Counsel state that this retainer will cover the fees for completion of her work and report. This is what I understand the letter to say.
37The parties have agreed that this report shall focus on the respondent’s income from the companies that he has an interest in. It is recognized that a valuation of his corporate assets may be required. The need to proceed with this inquiry will be considered after the income report is received.
38The parties cannot agree on who should pay the $50,000 for the income report. The applicant argues that the respondent should pay the full amount. The respondent says they should share the cost equally and use the remaining equity in the matrimonial home to pay the fees.
39Family Law Rule 20.1(6) and (8) govern the issue of who should pay for this report. At this point in the dispute, I relieve the applicant from the responsibility of paying a share of the fees because I am satisfied that payment would cause her serious financial hardship. The following supports this decision.
40The applicant does not work and has no stream of income other than what the respondent gives her. Fortunately the respondent has been paying the household expenses as ordered.
41The applicant has no assets other than the equity in the home that is in her name alone. The applicant believes the home has a fair market value of at least $1.2M. There is no appraisal available.
42According to the respondent his financial circumstances are dire. He claims he is living on loans and only earned $38,740 from 8441553 Canada Limited in 2015. This is the Tim Horton’s located at a Hospital site and the first of two Tim Horton’s that the respondent acquired an interest in. The respondent has not filed an income tax return for 2015.
43The respondent used the equity in the home to buy one of the Tim Horton’s franchises that he owns. The applicant states that the respondent placed a line of credit on the home and $1,050,000 is owed. The respondent states that a $500,000 line of credit is the only encumbrance on the title. There are no documents that show exactly what is on title and what is owed. It is not clear how the respondent secured a line of credit against the home given that the applicant owns the property.
44The respondent recently acquired a 50% interest in a second Tim Horton’s franchise in February 2016. There is no evidence to explain how he paid for this purchase.
45There is no evidence to value the respondent’s interests in the numerous companies that he owns.
46The respondent states that “he is temporarily out of cash and to operate” his businesses he has had to borrow money “heavily from friends family members and private lenders”. He does not say when he expects this “temporary” situation to end.
47In these circumstances it would cause serious financial hardship to the applicant if the court ordered that the remaining equity in the home be used to pay the expert fees.
48The applicant has had no money to pay experts, aside from the $5000 payment that was ordered on July 7, 2016. In contrast the respondent has had accountants and lawyers acting for him on the Revenue Canada audit. He has also had lawyers acting for him in the family dispute and to deal with the criminal charge. He has paid about $250,000 in fees to tax and accounting professionals. He expects that the Revenue Canada audit process and appeal will cost a further $200,000 over the next two years. There is no evidence that he has appealed the Revenue Canada re-assessment.
49While the respondent claims that his net worth is nil, I am not satisfied on the record that this is so. His evidence about expenses is conflicting and many of the loans are not documented. More importantly he owns a share in various corporations that have significant value.
50The respondent states in his affidavit that his annual “family expenses” are in excess of $120,000 (or $10K monthly). However, in the respondent’s July 14, 2016 financial statement he lists yearly expenses of $64,664.40 ($5388.70/month). This is in addition to various expenses (amounts not identified) that are paid by 8441550 Canada Limited (the first Tim Horton’s) or 998381 Ontario Inc. (a family car leasing company).
51In recent months, the respondent says that he has had to find “creative ways to finance” his expenses. It is unclear what this means.
52The respondent’s July 14, 2016 financial statement reveals that he is the sole owner of a condominium in Greece that he values at $40,000.
53The financial statement shows the following values for his “business interests”. While some of the respondent’s companies are valued at nil, many have significant value.
54The respondent’s 100% ownership of Tuggs Incorporated is valued at $1,554,610. The respondent’s 25% interest in 1565032 Ontario Limited is valued at $290,000. His 50% interest in 1471083 Ontario Limited is valued at $264,000 (both are holding company for commercial rental units).
55He estimates the value of his investment in the first Tim Horton’s at $250,000. No value is listed for the second Tim Horton’s in which he has a 50% interest. He owns 50% of the shares in each Tim Horton’s.
56The respondent lists debts and liabilities that total $5,800,232.19. Included in the total is the estimated debt to Revenue Canada of $3,323,000. There is no record confirming this amount.
57The respondent also records two significant loans owed to his brother, Danny Foulidis. The first is a loan of $809,457 that he describes as funds used mostly for an unidentified corporate purpose. The second loan is for $237,000. This is 50% of $475,000 that he says the parties owe his brother. This is the brother’s interest in the matrimonial home (according to the respondent). The respondent also lists a $500,000 loan from his parents.
58There is no evidence to document the loans from his brother and parents. It is not known when the loans were made, for what purpose and what the respondent used the money for. The loans are shown to exist on valuation date, but otherwise no details are provided.
59The respondent has a pending deal with Cara. When it is finalized he states he will be able to draw more income. He does not say where this income will be drawn from or how much.
60The respondent has paid private school fees for two children and managed to pay all court orders to date. His Tim Horton’s franchise is paying the line of credit payments secured against the matrimonial home. He states that he relies on loans to pay his obligations and has attached letters from friends and some relatives, (not his brother or parents), purporting to document the loans. The letters were written for the purpose of this motion and most are not contemporaneous with the alleged loans. The reliability of this evidence has not been tested.
61In 2015, Ms. Mailloux calculated the respondent’s total income at ($257,169). This included per-tax corporate losses of about $464,000 for 1784917 Ontario Limited. Ms. Mailloux states that this numbered company operated as Paralia Restaurant and has not been active since December 2015. Crowe Soberman suggests that this deduction may not be correct. There is no financial statement for the company. If the deduction is not allowed then Crowe Soberman states that the respondent’s income in 2015 was $207,000.
62In 2015, 1565032 Ontario Limited (a real estate company - the respondent owns 25%) paid management fees of about $90,000 or about 40% of revenue. It is not known who received these fees.
63The respondent says that he has not prepared and filed his 2015 income tax return because of the work underway with the Revenue Canada audit. If, as he states, he only earned a T4 salary from his Tim Horton’s business, filing his income tax return should be straightforward as noted by Crowe Soberman.
64In summary, the respondent’s finances are a complicated mess. I see no reason to require the applicant to use the remaining equity in the matrimonial home to sort out the mess that the respondent created. To do so would cause her serious financial hardship that is not justified.
65The only reasonable approach is to order one expert to value the respondent’s income for support purposes. After this is done the parties can address how best to the value the assets.
66The parties must quickly come to terms with the value of their assets and the respondent’s income. If the respondent is believed, he is on the brink of insolvency. However, I do not accept that the respondent is unable to pay the $50,000 fee for the court appointed expert and I order him to do so.
67I make the following orders under Family Law Rule 20.01(3):
(1) Vivian Alterman of “ap Valuations Limited” (“the expert”) is appointed pursuant to Family Law Rule 20.1(3) to inquire into and report on the respondent’s income for the years 2013, 2014 and 2015 for the purpose of determining what is owed for child and spousal support. This shall include income from all corporations in which the respondent has an interest.
(2) The respondent shall provide the expert with a retainer of $50,000 by August 15, 2016. This is without prejudice to his right to seek reimbursement of 50% of this payment in the course of this action when equalization is being resolved.
(3) The parties shall provide the expert with access to all documents that the expert requires and shall do so immediately upon request.
(4) The parties shall promptly answer any questions that the expert has that are relevant to the expert’s inquiry. All questions and answers shall be confirmed in writing.
(5) The expert shall prepare a report upon completion of the inquiry and file it with the Family Court office (by delivering a copy to the trial coordinator). The report shall be filed in the family court file no FS -15- 404561. A copy shall also be delivered to the parties.
(6) The report shall comply with Family Law Rule 20.1(10).
(7) Subject to the parties complying with the expert’s request for documents and further information, the expert shall complete the report within 60 days of receiving the retainer.
(8) The parties shall provide a copy of this decision to the expert.
Rule 24 (12) order
68The applicant seeks an order under rule 24(12) of the Family Law Rules requiring the respondent to pay her counsel Jodi L. Feldman, $50,000 in trust to cover legal fees.
69Rule 24(12) states as follows:
The court may make an order that a party pay an amount of money to another party to cover part or all of the expenses of carrying on the case, including a lawyer's fees.
70Rule 24(12) is discretionary. In exercising discretion under rule 24(12), the court must ensure that the primary objective of fairness as set out in rules 2(2) and (3) is met. Specifically, the court must deal with cases justly and ensure that the procedure is fair to all parties.
71I agree with the court in Stuart v. Stuart 2001 28261 (ON SC), [2001], 24 R.F.L. (5th) 188 (Ont. S.C.) at paras. 9-13 as follows:
… The discretion should be exercised to ensure all parties can equally provide or test disclosure, make or consider offers or possible go to trial. Simply described, the award should be made to level the playing field.
An order under section [sic] 24(12) should not immunize a party from cost awards. The order is to allow the case to proceed fairly and should not be such that a party feels a license to litigate.
Certainly the proof of the necessity of interim disbursements would be critical to the successful claim. The claimant must clearly demonstrate that the disbursements are necessary and reasonable given the needs of the case and the funds available. In particular, if an expert is the subject of a requested disbursement, the claimant must demonstrate there is a clear need for the services of said expert.
The claimant must demonstrate that he or she is incapable of funding the requested amounts.
The claim or claims being advanced in the case must be meritorious as far as can be determined on the balance of probabilities at the time of the request for disbursements.
72As Mesbur J. stated in Ludmer v. Ludmer, 2012 ONSC 4478, at para.14, "[o]ne of the primary themes of the case law is that orders may be required in order to 'level the playing field' between the litigants."
73According to the court file, the parties agreed to an order before the Dispute Resolution Officer on October 20, 2015. One term of the offer was that the applicant would receive $25,000 from the extended line of credit to be accounted for during the litigation. It is not known if this money was paid and if so what it was used for.
74The respondent paid the applicant $10,000 pursuant to the order of Glustein J. on June 14, 2016. The applicant used the $10,000 to pay bills.
75On July 7, 2016 I ordered the respondent to pay the applicant $1500 for food. This was intended to cover the next 30 days.
76The respondent has paid the household related expenses although not always on time. He has paid all costs orders. There is no child or spousal support order in place.
77In 2015, the applicant earned $9432.54 working at one of the respondent’s Tim Horton’s. Conflict between the parties brought this job to an end and the applicant is now unemployed. Aside from this job the applicant has no employment skills or work experience.
78Her financial statement lists monthly expenses of $2405.80. This is in addition to what the respondent pays for house related expenses.
79The applicant seeks an order that the respondent pay her $50,000 to cover her legal fees. The applicant states that she has incurred legal and accounting fees of $65,000 that she has not been able to pay.
80I accept, given the activity on this file, that fees have been incurred and are likely significant. This motion alone has required three court attendances and voluminous material has been filed.
81I am satisfied that the applicant is not capable of paying for her legal fees at this time. Her ability to find a job similar to the work at Tim Horton’s was not canvased on this motion and she has not worked outside the home aside from the short term at Tim Horton’s. She has a meritorious claim for support and equalization. The respondent finds funds to pay accountants and several lawyers. The applicant has no access to money. It would be grossly unfair to expect her to use the remaining equity in the home to pay legal fees, when it is her only asset.
82The playing field is uneven. A reasonable amount under rule 24(12) is justified to help level the playing field. I order the respondent to pay the amount of $25,000. I conclude that $25,000 is a reasonable amount. I decline at this time to order a greater amount. This is a sufficient amount to cover the work done to date and the work anticipated in the near future. The money shall be paid to the applicant’s counsel in trust for the purpose of paying legal fees.
The Remaining Relief
Child and Spousal Support Issues
83The applicant seeks an order imputing income to the respondent of $1M. Using this imputed income she asks the court to order child and spousal support. It is premature to impute a $1M income given the rule 20.1 order that I have made.
84With the disarray of the respondent’s financial circumstances it is extremely difficult to identify an income for imputation that has a measure of reliability.
85Section 15.2(2) of the Divorce Act R.S.C. 1985, c. 3 (2nd Supp.) empowers the court to grant an interim order requiring a spouse to secure and/or pay such lump sum and/or periodic sums as the court deems reasonable for the support of the other spouse.
86Interim orders are in the nature of a "holding order": see O.L.G. v. D.C.G., 2015 BCSC 474; Keyes v. Keyes, 2015 ONSC 1660, at para. 61. They are intended to provide a reasonably acceptable short-term solution until the court conducts a more thorough and judicious resolution of the issues at a settlement conference or trial.
87It is well-established that interim support motions are not intended to involve a detailed examination of the merits of the case. Nor is the court required to determine the extent to which either party suffered economic advantage or disadvantage as a result of the relationship or its breakdown. These tasks are for the trial judge. Orders for interim support are based on a triable or prima facie case (see Jarzebinski v. Jarzebinski, [2004] O.T.C. 979 (Ont. S.C.), at para. 36; Damaschin-Zamfirescu v. Damaschin-Zamfirescu, 2012 ONSC 6689, at para. 24.
88This was a long term marriage. The applicant has no employment history and needs support. In the absence of interim spousal support she will experience economic hardship. She has a prima facie claim to spousal support.
89On July 7, 2016, I ordered the respondent to pay expenses associated with the home: line of credit, hydro, water, cable, and all property and fire insurance. This order continues pending further order of the court.
90The respondent proposes that support be set using a salary of $78,283. This is the average of the respondent’s line 150 income in 2012, 2013 and 2014. While I do not accept that these amounts are reliable, it is a temporary way to set child and spousal support, pending the income report and a better explanation of the respondent’s assets. For this reason I impute an income of $78,283 to the respondent on a temporary basis.
91I order the respondent to pay the following support orders effective September 1, 2016: $711 a month in child support for Nikolas Matthew Foulidis born May 13, 2000 and $1021 for monthly spousal support. This is the low end of the range for spousal support as shown in the Divorcemate calculation that the respondent provided. I have chosen the low end because the respondent is still required to pay the household expenses in para. 19 of the July 7, 2016 order.
92The court was advised that Nikolas is the only child that continues to live with the applicant. If the second child (Elena Nicole Foulidis born January 30, 1999) returns home to live with the applicant, then the respondent shall pay $1151 a month for child support for two children.
93I adjourn the applicant’s claim for a retroactive spousal support order. The court was not provided with a calculation of this claim. Further, consideration of this retroactive claim requires clear evidence of what the respondent has paid to date to cover expenses for the applicant since the date of separation. In this case it is best dealt with at trial or through settlement.
Exclusive Possession of the Matrimonial Home
94Both parties seek exclusive possession of the matrimonial home.
95Section 24(3) of the Family Law Act R.S.O. 1990, c. F.3, deals with exclusive possession of the matrimonial home and states:
(3) In determining whether to make an order for exclusive possession, the court shall consider,
(a) the best interests of the children affected;
(b) any existing orders under Part I (Family Property) and any existing support orders or other enforceable support obligations;
(c) the financial position of both spouses;
(d) any written agreement between the parties;
(e) the availability of other suitable and affordable accommodation; and
(f) any violence committed by a spouse against the other spouse or the children.
96The matrimonial home is in the name of the applicant and she has resided in the home since the date of separation. According to the respondent his brother owns an interest in the home. No further evidence of his interest was provided. If an agreement exists it was not produced.
97The respondent left the matrimonial home on July 21, 2015. The police were called and the respondent was charged with assaulting the applicant. The charge is still outstanding and the terms of the respondent’s bail prevent him from being within 100 meters of the matrimonial home.
98The respondent and the eldest son are residing with the respondent’s parents. The youngest child lives with the applicant. The middle child moved out of the home and then returned. Shortly before the motion was heard she moved out again. There is no affidavit that updates her living circumstances.
99The children have unfortunately been involved in this litigation. The two eldest children appeared in court on July 7, 2016 and had counsel appear when this motion was argued. The respondent has now filed affidavits from the two eldest children in support of his motion. It is very unfortunate that the children have been directly involved in this litigation. Their affidavits suggest that they are aligned with their father. They describe having left home because they were extremely unhappy and stressed while living with their mother. The eldest child accuses his mother of verbally abusing them. He describes his mother as exhibiting bizarre behaviour and being unstable. He is worried about the safety of his youngest sibling. The daughter who will be 18 in January is concerned for her mother’s safety and describes unprovoked outbursts. She says that her mother asked her to leave the home following an “altercation” that is not explained.
100There is no direct evidence from the 16 year old son. According to the respondent the child told the respondent that he was concerned because he was not being driven back and forth to school and he said he had no food. The applicant has explained that she has lacked money to pay for gas and food. This problem has been remedied through recent orders.
101The respondent also says that his son is afraid his mother will kill herself. The respondent says that the applicant engages in unprovoked screaming sessions with the children. He also makes numerous statements about the alleged behaviour of the applicant. None of this evidence has been tested in court. There is no third party evidence that lends any support. It has been a year since the respondent left the matrimonial home. There is no evidence that the Children’s Aid Society has been involved. The respondent’s solution is that he and the children live in the matrimonial home and that the Office of the Children’s Lawyer be asked to investigate.
102There is no evidence that the applicant has alternative suitable and affordable accommodation. The respondent is living with his parents. While this may not be ideal, the facts of this case favour the applicant remaining in the matrimonial home.
103I order that the applicant shall have temporary exclusive possession of the matrimonial home at 17 Airley Crescent, Toronto, Ontario. This order recognizes that the matrimonial home may have to be sold in the very near future and for this reason the order is pending further order of the court.
Tim Horton’s Share Certificates
104The respondent delivered the share certificates and they confirm his interest in the two companies. A copy has been placed in the court file. I previously ordered that the respondent not deplete any of his assets. This order continues and in particular this includes preservation of the respondent’s shares in the Tim Horton’s companies.
Restraining Order
105It is not necessary at this time for the court to issue a restraining order. The respondent’s terms of release, arising from the criminal charge, order him to stay away from the applicant and the matrimonial home.
Appointment of the Children’s Lawyer
106For the purpose of determining access and custody for the youngest child Nikolas Matthew Foulidis born May 13, 2000, I am requesting the Office of the Children's Lawyer to prepare a report to assist in determining access and custody pursuant to s. 112 of the Courts of Justice Act. Alternatively the Office of the Children's Lawyer is requested to appoint counsel for the child and/or prepare a Voice of the Child Report. The parties shall promptly cooperate in the completion and filing of all forms necessary for this order to take effect.
107Given the evidence of the respondent and the two older children, the involvement of the Office of the Children's Lawyer is required.
Further Conferences and Orders
108The parties shall schedule a settlement conference as soon as the rule 20.1(3) expert report is available. This shall be coordinated with the team leader of the Toronto Family Court (Justice S. Stevenson) who shall appoint a conference judge to handle all conferences going forward.
109Absent an emergency, the parties shall not bring any further motions until they have received the rule 20.1(3) expert report and attended a further conference.
Conclusion
110In summary the following orders are issued:
(1) The applicant’s motion to appoint of a receiver under s. 101 of the Courts of Justice Act is dismissed.
(2) I make the following orders under rule 20.1(3) of the Family Law Rules:
(i) Vivian Alterman of “ap Valuations Limited” (“the expert”) is appointed pursuant to Family Law Rule 20.1(3) to inquire into and report on the respondent’s income for the years 2013, 2014 and 2015 for the purpose of determining what is owed for child and spousal support. This shall include income from all corporations in which the respondent has an interest.
(ii) The respondent shall provide the expert with a retainer of $50,000 by August 15, 2016. This is without prejudice to his right to seek reimbursement of 50% of this payment in the course of this action, when equalization is being resolved.
(iii) The parties shall provide the expert with access to all documents that the expert requires and shall do so immediately upon request.
(iv) The parties shall promptly answer any questions that the expert has that are relevant to the expert’s inquiry. All questions and answers shall be confirmed in writing.
(v) The expert shall prepare a report upon completion of the inquiry and file it with the Family Court office (by delivering a copy to the Family Court trial coordinator). The report shall be filed in the family court file no FS -15- 404561). A copy shall also be delivered to the parties.
(vi) The report shall comply with Family Law Rule 20.1(10).
(vii) Subject to the parties complying with the expert’s request for documents and further information, the expert shall complete the report within 60 days of receiving the retainer.
(viii) The parties shall provide a copy of this decision to the expert.
(3) Pursuant to Family Law Rule 24(12), I order the respondent to pay the applicant’s counsel, Jodi L. Feldman in trust, the amount of $25,000, for the purpose of paying legal fees. This payment is due no later than August 31, 2016.
(4) On a temporary basis, pending further order of the court, the respondent shall pay the following support orders effective September 1, 2016: $711 a month in child support for Nikolas Matthew Foulidis born May 13, 2000 and $1021 for monthly spousal support. This is in addition to the continuation of the amounts the respondent owes under para. 19 of the July 7, 2016 order. This order is without prejudice to the right of the parties to have the support orders reviewed after a further conference has been conducted, but only if the judge hearing the conference permits such review to occur prior to trial.
(5) The applicant’s motion for a retroactive spousal support order is adjourned.
(6) The applicant shall have temporary exclusive possession of the matrimonial home at 17 Airley Crescent, Toronto, Ontario, pending further order of the court.
(7) Unless indicated otherwise in this decision, the orders made on July 7, 2016 continue, pending further order of the court.
(8) The applicant’s motion for a restraining order is dismissed.
(9) The Office of the Children's Lawyer is requested to conduct an investigation into access and custody of Nikolas Matthew Foulidis born May 13, 2000 pursuant to s. 112 of the Courts of Justice Act. Alternatively the Office of the Children's Lawyer is requested to appoint counsel for the child or prepare a Voice of the Child Report. The parties shall promptly cooperate in the completion and filing of all forms necessary for this order to take effect.
(10) The applicant’s motion for an order that the respondent deliver an expert business valuation report for all of the companies in which he has an interest, is adjourned to a date to be set after the parties have attended a further conference.
(11) The parties shall schedule a further conference to take place after the rule 20.1 report is available. This conference shall be coordinated with the team leader of the Toronto Family Court (Justice S. Stevenson) who shall appoint a conference judge to handle all conferences going forward.
(12) Absent an emergency, the parties shall not bring any further motions until they have received the rule 20.1 report and attended a further conference.
(13) The parties are encouraged to agree on the costs of this motion. If they are unable to agree they shall exchange brief written submission and deliver them to the court by August 19, 2016.
C. Horkins J.
Date: July 27, 2016