NEWMARKET COURT FILE NO.: FC-15-49464-00
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Carla Falcone Cichella Applicant
– and –
Fabrizio Cichella Respondent
Counsel for the Applicant: S. Mannella
Counsel for the Respondent: V. Ruscitto
HEARD: June 29, 2016
Reasons for decision
1This is a motion by the applicant wife (“the wife”) for an Order for child and spousal support. The respondent husband (“the husband”) acknowledges his child support obligation but disputes the wife's entitlement to temporary spousal support.
2The wife has also requested an Order severing the divorce from the corollary relief issues. As this was not opposed, that Order will be made.
Background
3The parties married in June 2002 and separated in mid-July 2015. There are three children of the marriage (twelve, nine and six years old). The oldest child is autistic and requires full-time care.
4The wife says that the parties “adopted traditional roles throughout the course of the marriage”: the husband was the primary breadwinner. She cared for the children, although for several years before the parties separated she was employed, taking a stress leave from that work before the parties’ final separation.
5Until 2011, the husband was employed in the housing industry as a labourer, contractor, and then a site supervisor for a residential home developer. In 2011 he started a company, Arrowcon Inc. (“Arrowcon”) which focused on providing renovation services. It succeeded in obtaining a contract from a major home developer. Before Arrowcon, the family’s finances were “bleak” according to the husband. But Arrowcon thrived, and so did the family’s circumstances. The husband earned $172,500 in 2012 and $174,000 in 2013. The wife earned $48,751 and $51,162 respectively in those years. The average family income for those years was slightly more than $223,200.
6The evidence is unchallenged that funds borrowed by Arrowcon were secured against title to the matrimonial home and partially used for renovations there as well as for payment of the children's nanny and other family expenses.
7The evidence is also unchallenged that near the end of 2013 the developer with whom Arrowcon had its renovation contract experienced a change of management, a consequence of which was that the developer began to use a different company for its renovation needs. That developer had been Arrowcon’s principal client. The company’s revenue and profitability fell dramatically. In 2014, the husband earned $59,442 and the wife earned $31,909, for a total family income of $91,351.
8The change in the parties’ financial circumstances paralleled a breakdown in their personal relationship although whether one preceded the other is not relevant. Suffice it that in January 2015, the matrimonial home was sold and the parties rented alternate housing. The net proceeds of sale were about $224,000 and were deposited into the parties’ joint bank account.
9A Consumer Proposal was made by the husband. On December 1, 2015 Arrowcon made an Assignment in Bankruptcy listing $130,200 in unsecured creditors, no assets.
10On or about July 16, 2015 the husband left the matrimonial home. There was then about $160,000 left in the bank account (the husband had already withdrawn $30,000). The husband was unemployed and the wife remained on stress leave. In February 2016, the husband obtained employment as a labourer earning about $24,000 a year. When this motion was argued only a modest amount remained from the proceeds left in the joint bank account, and the wife’s evidence is that she had been obliged to borrow another $17,000 from a relative. Only she used the bank account after the parties separated.
11There has been no questioning. On January 5, 2016 McGee J. made an Order, on consent, for (among other things) disclosure. The husband complied with that Order, but the wife had questions arising from the disclosure provided and served a Request for Information (“RFI”) on May 18, 2016. The wife's affidavit in support of the motion before the court was sworn on June 7, 2016. In that affidavit she complained that the husband had not answered the RFI. On June 8, 2016 the husband’s solicitor provided, in my view, satisfactory answers to the RFI, although some remained outstanding as they depended on third-party cooperation.
Analysis
12In the immediate aftermath of a marriage or relationship breakdown the vast majority of families cannot sustain a pre-separation lifestyle. Too often temporary support motions are argued seemingly oblivious to the unanticipated financial costs of separation. These would include, for example, alternate housing (surely a major component of any intact family’s budget!), food, transportation, even legal fees. Refusing to acknowledge this new financial paradigm invariably leads to a race to the bottom - impoverishment of the family and, worse, blighting children's educational options.
13In this case, there are a number of troubling aspects to the parties’ evidence. For example,
(a) in her Financial Statement sworn December 15, 2015 the wife acknowledged that her chequing account held $160,527.30 on July 16, 2015 but only $17,553.27 on the statement date, a decrease of $142,974.03 or $28,594 monthly. Her sworn monthly expenses were $10,132.22. There was no debt;
(b) in the Financial Statement sworn June 7, 2016 the wife’s bank account was $3,244.19 and she claimed that her stepfather had provided $17,000 in financial assistance. This means that the wife was, on average since separation, incurring about $14,000 a month in expenses. In June 2016 her monthly expenses were $9,882. No debt;
(c) in the husband's Financial Statement sworn November 4, 2015 he disclosed a monthly deficit of $5,055. He had $84,000 in debt. He was unemployed from June 2015 to February 2016. His Financial Statement sworn June 23, 2016 disclosed exactly the same debt (although $54,000 was apparently extinguished by Arrowcon’s bankruptcy). He disclosed a monthly deficit of $1,000. There was otherwise no change in his overall debt picture since November 2015; and,
(d) while the husband stated that he paid some of his expenses from the $30,000 he received from the net sale proceeds of the former matrimonial home, no breakdown was provided, nor did he identify how much he had borrowed from his family or who had lent him money. His current debt statement is silent about these advances.
14There is no question that the wife and children need support. But I cannot accept as reasonable what her evidence discloses about how much she has spent (in excess of $174,000 in less than 12 months) nor can the court understand why, given the family circumstances that led to the sale of their matrimonial home, the wife would not have acted more reasonably in budgeting her expenses. Accepting her December 15, 2015 Financial Statement as accurate in claiming even $10,132.22 in expenses monthly, she has overspent by about $54,000 since the parties separated.
15Nor can I accept the husband’s explanations about how long he was unable to obtain employment, and then only at a minimum wage. Ever since the parties separated, it is his evidence that he has experienced a monthly cash flow deficit ranging anywhere from $1,000 to $5,000, but without any increase in debt. He could have disclosed more about how he was meeting his financial obligations but demurred. The court can no more accept the husband’s evidence about his income and employment challenges than understand how the wife has managed her expenses.
16In circumstances where a family is either about to engage, or already engaged, in family litigation and is experiencing financial stress, it is incumbent on both parties to realistically assess their respective circumstances and act reasonably and responsibly. It is equally incumbent that as early and as transparently as possible meaningful financial disclosure be made that is relevant and proportionate to the issues. At every step in a case parties will be held accountable if they ignore these obligations.
17Some support should be paid. It may be that when this matter is finally adjudicated, the court will have before it a more robust picture about how the parties have managed their financial affairs before, and since, they separated. What is now known is that notwithstanding a monthly deficit ranging between $1,000 to $5,000 the husband has not incurred additional debt (at least not that he has disclosed). Somehow, somewhere, though he has managed to fund on average a $3,500 monthly deficit, or $2,500 more monthly than he claims that he is currently experiencing. There shall be imputed to him a qualifying income of $54,000 a year comprising his currently acknowledged annual income of $24,000 and $30,000 a year for the excess in average expense over his income that he seems to be able to finance without incurring additional debt.
Disposition
18An Order shall issue as follows:
The husband shall pay to the wife base Guideline support of $1,046 a month effective August 1, 2016. This is based on an income imputed to the husband of $54,000 a year.
The husband shall be responsible for the children’s section 7 expenses based on the fact that the wife has no earned income at this time. Neither party shall incur an expense for which a contribution will be sought from the other without first obtaining that party’s consent in writing, such consent not to be unreasonably withheld.
No Order is made at this time for spousal support.
All issues with respect to retroactive child and/or spousal support are reserved to the trial judge.
The wife’s employment before trial is a material change in circumstance.
Either party may question the other, such questioning to be held before September 30, 2016.
The issue of divorce shall be severed from the corollary relief issues and the wife may proceed as requested to obtain a Divorce Order.
19A Support Deduction Order shall issue.
20A settlement conference should be scheduled as soon as possible. Every effort should be made to expedite as early a final adjudication of the issues as possible too.
21In the event that the parties are unable to agree upon the costs of this motion, they shall file on or before August 12 their cost submissions limited to three double-spaced pages, exclusive of their Offers to Settle (if any), Bills of Costs and Authorities upon which they may be relying. The cost submissions shall be filed in the Continuing Record.
Justice D.A. Jarvis
Date: August 2, 2016