CITATION: Tran v. Le, 2016 ONSC 8098
COURT FILE NO.: FD1909/11
DATE: 2016/12/22
ONTARIO
SUPERIOR COURT OF JUSTICE
FAMILY COURT
BETWEEN:
Ha Thi Thu Tran
Norm Aitken, for the Applicant
- and -
Dang Van Le
Peter Eberlie, for the Respondent
HEARD: October 20, 21, and 24-28, 2016
Reasons for Judgment
Aston J.
Background and Issues
[1] The parties married in Vietnam on June 19, 1990 after living together for approximately 10 months. There was some dispute about the legal validity of the marriage in the course of these proceedings, but the parties now agree, and I am satisfied, that they are married spouses of one another.
[2] The parties agree they separated September 1, 2009, about 7 years ago after almost 20 years together. The applicant is 46 years of age, the respondent 49.
[3] There are three children of the marriage, Joseph (now age 24), Darlene (now 23), and Denise, the remaining dependent child within the meaning of the Divorce Act. Denise was born May 27, 1999 and is now 17 years of age.
[4] The three contested issues are equalization of net family property, child support and spousal support. This Order, determining those issues, also will grant the request for dissolution of the marriage, with the usual 30 day effective date provision.
[5] A brief overview of the marriage helps to frame the contested issues. The parties met in Toronto. They lived there until 1996 when the family moved to London. By that time, they had two children, Joseph and Darlene. Ms. Tran testified that in the first five years of the marriage, she did not work outside of the home, but devoted her time to raising the two oldest children who were then infants. Ms. Tran assumed the main responsibility for taking care of the children and running the household rather than working outside the home. Upon the family move to London, she became actively involved with her husband in running their variety store. This business venture was started up in conjunction with Ms. Tran’s uncle, Phuong Ngo, and his wife, Van Trinh. The two couples shared a residence and were both involved in running and expanding their business. They opened a restaurant called, D. J.’s Sports Bar Café (“D.J.’s Sports Bar”) on April 11, 1997. Mr. Le was mainly the chef and Ms. Tran, a server and cleaner, who also looked after the bar. Vin Trinh was less involved with the day to day operation of the business and assisted with child care for Joseph and Darlene while caring for her own children. Although the liquor licence and other licences were in Ms. Tran’s name, the venture was a joint effort in which the four parties each made significant contributions. It was understood that the four of them were equal partners in the business.
[6] Over time Mr. Le expanded other business initiatives in partnership with Ms. Tran’s mother and her Uncle Phuong. Ms. Tran had no participatory role in the companies he subsequently incorporated, known as 1040662 Ontario Limited and Le Holdings Limited.
[7] This application was started in December 2011, two years after the separation. The applicant obtained an ex parte order December 13, 2011 freezing all of the respondent’s assets. That order was set aside because of the applicant’s misrepresentation of the facts. Her subsequent financial disclosure in this proceeding does not restore any confidence in the accuracy or reliability of her financial circumstances from 2009 to the present. She is obviously entitled to an equalization payment and support. The challenge is to fairly quantify those claims.
Net Family Property
(i) Matrimonial Home
[8] The only matrimonial home is the property at 433 Forest Lawn Avenue, London. Ms. Tran is not on title and has now withdrawn her request for a sale of the home. The parties agree that the husband’s interest in the matrimonial home as of valuation date is $108,000, to be included in the calculation of his net family property.
(ii) Armstrong Drive, Niagara Falls
[9] The property at 6327 Armstrong Drive, Niagara Falls was registered in the name of the husband on valuation date and subsequently sold. Title was in Mr. Le’s name alone, but he asserts that his sister was the real owner. She lived there with her children.
[10] The parties agree that at the valuation date the property was worth $179,000, a figure the wife seeks to include in the husband`s net family property. If it is included the outstanding mortgage balance of $33,727 would also be included as a valuation date debt.
[11] Mr. Le testified that he purchased the Niagara Falls property for his sister in 1992. Rather than putting it in her name, he wanted to preserve his credit rating by taking title in his name so that the equity would appear to be his.
[12] Throughout the years there was a basement tenant in the Niagara Falls property. The rental income was reported by Mr. Le on his own tax returns. Year after year he declared himself to be a 100 percent owner of the property on his tax returns, contrary to his testimony that the rent was actually paid to his sister.
[13] The property was sold in July 2015 for $218,000, realizing net proceeds of sale of $203,446.33. Mr. Le reported the capital gain on the sale on his 2015 income tax return. That amount was paid to Mr. Le on closing but the exact amount was immediately transferred from his bank account to his sister’s account. Ostensibly she received all of the net proceeds of sale. Mr. Aiken suggested on cross-examination that Mr. Le’s sister is only holding the money for him until this litigation is completed, at which time she will return it to him. Mr. Le denied that suggestion.
[14] The tipping point on this issue is that Mr. Le’s sister was not called as a witness and there is no other evidence to establish that she treated the proceeds of sale received last summer as her own. It would have been easy to prove, for example, that she purchased another residence in her name or otherwise used the money (or any of it) for herself. I draw an adverse inference from the absence of any such evidence.
[15] I accept that Mr. Le was assisting his sister by subsidizing her accommodation costs, but find that he did not gift the ownership of the property to her before the valuation date.
[16] Mr. Le’s net family property will include the $179,000 as an asset and the $33,727 as a debt.
(iii) 70 McMahen Street, London
[17] Ms. Tran’s current residence at 70 McMahen Street, London was purchased a year before the separation on July 7, 2008. It remained vacant thereafter until Ms. Tran moved in a little more than a year later. She still resides there. Title to the property is in her mother`s name, Luot Ngo. Mr. Le has never lived there.
[18] Mr. Le claims that Ms. Tran purchased this property in anticipation of their separation. He asserts that it is her property, notwithstanding title, and that its value should be included in the wife`s net family property. It was purchased for $324,800, without any mortgage financing.
[19] The agreement of purchase and sale had been signed on September 11, 2007, two years before the parties separated. Ms. Tran was present when her mother completed the paperwork for the purchase. The purchase involved the construction of a new home on a residential lot, with the closing to follow construction in the summer of 2008. Ms. Tran testified she did not contribute any money whatsoever to the two deposits in September 2007 or to the balance due on closing in 2008. She says that the entire $324,800 was funded by her mother as evidenced by the cheques written on a bank account solely in her mother’s name. The lawyer acting on the purchase recorded that the funds came from Luot Ngo and title was taken in her name. The reporting letter from the lawyer on the purchase was addressed to Luot Ngo at the 70 McMahen address, but she never lived there.
[20] Ms. Tran does not pay any rent to her mother, but she does pay all of the carrying costs on the home - i.e. municipal taxes and home insurance, as well as utilities, cable, telephone and internet service. Ms. Tran also paid for a deck at the rear of the property and some other improvements like shower and closet doors and a new floor in the laundry room. She also purchased some furniture. Her evidence is that she spent about $10,000, but it is not clear whether she meant $10,000 just on the improvements or $10,000 including the furniture.
[21] Daniel Harris testified that in 2008 he constructed a deck at the rear of 70 McMahen. All his dealings were only with the applicant. Her mother was never present. Mr. Harris knew both Ms. Tran and her husband Mr. Le. He testified that Ms. Tran told him not to tell Mr. Le about the work he was doing for her. When Ms. Tran happened to run into Mr. Harris at a restaurant several years later, she made a scene, cursing him for telling Mr. Le about the work he had done for her.
[22] Ms. Tran was asked why her mother, who has lived in Philadelphia since 1989 or 1990, would purchase a home in London, Ontario. Luot Ngo did not testify at trial, but Ms. Tran gave hearsay evidence of her mother’s intentions, as well as her own. She explained that it would be a good investment; that Mr. Le was treating Ms. Tran badly and the home would provide her with a place to go if they separated; that Luot Ngo’s money would eventually go to her children anyway; and that it would provide a place for Luot Ngo to stay when she visited London. On this latter point, Luot Ngo may have come to London once in 2008 or early 2009, after the purchase closed but she has never stayed at 70 McMahen and she has not come to London at all since then. No attempt was made to rent the property after it was purchased, as might have been expected if it was purchased as an investment. Ms. Tran also testified that she might buy the McMahen home from her mother if she gets enough money from Mr. Le. She has never claimed that her mother purchased it as a gift to her or that any money for the purchase was a gift to her.
[23] The lawyer acting on the purchase of 70 McMahen confirmed that the land transfer tax paid on the purchase was reduced because of the false statement in the transfer that the purchaser Luot Ngo was a first-time home buyer (which she was not) and that she would occupy the property as her principle residence (which she never had any intention of doing). Though this lawyer confirmed that the funds for the purchase were received from Luot Ngo, he has no way of knowing whether she provided those funds from her own resources or as a conduit for Ms. Tran. From the false statements in the transfer it is evident he did not make a close inquiry into the nature of the transaction or Ms. Tran’s role or involvement in it.
[24] The $10,000 or so that Ms. Tran spent on improvements after the closing of the purchase in 2008 and before she moved into the home in 2009 were, on her own evidence, funded in part by cash she had on hand. She testified that it was not unusual for her to have “a couple of thousand dollars” from D. J.’s Sports Bar and Café (“D.J.’s”), the family business where she worked until March 2009.
[25] However, Ms. Tran insisted that her mother paid all of the acquisition costs of the McMahen property from her own personal bank account, opened September 10, 2007, two years before the date of separation. Ms. Tran’s credibility is critical to the determination of the true ownership of this property, more specifically the determination of who really funded the purchase.
[26] Long before the trial she was asked to produce a copy of the bank statements for her mother’s account for the period September 10, 2007 (when it was opened) through to the closure of that account in January 2012, and to identify the sources of the funds. She gave an undertaking to use her best efforts to do so. She had a power-of-attorney for this account. On cross-examination she testified that when she first tried to get that bank statement she could not get it from the bank because the account had been closed and her name had not been on the account as the account holder. This begs the question of whether she made any attempt to have her mother get the account particulars or statements or to corroborate the source of the funds. This is critical evidence from the husband’s point of view, as she and her lawyer were well aware. The February 2014 letter from Mr. Aiken to Mr. Eberlie (Exhibit E, p.98) asserts that his client “cannot” obtain the information from her mother and that the bank would not give the particulars or statements without Luot Ngo’s authorization “which cannot be provided” because she is in Philadelphia and in frail health as of the date of that letter. It is very difficult to believe that Luot Ngo was unwilling or unable to either sign an authorization or to provide the information herself to prove that the source of the funds for the McMahen purchase was from her own resources and not funded in whole or in part by her daughter, the applicant.
[27] On the husband’s March 2014 motion for disclosure (Exhibit 14) the applicant was ordered to produce her mother’s bank statement. She was able to do so almost immediately, and admitted she had had the passbooks in her possession all along. She said she had only recently found them in a bag of her mother’s personal papers. She said the bag had been given to her by her sister Anh long before this, but she had not looked at the documents in the bag. I am skeptical of that explanation.
[28] Ms. Tran had power-of-attorney on her mother’s account, so she was able to not only make deposits but also withdrawals. The deposits made to Luot Ngo’s account started two years before the date of separation and the accumulation of funds was steady. By April 2008, there were various investments purchased from the account (Tab 17 of Exhibit A) which totaled $377,700. Those investments were used to fund the closing of the purchase in July. The ultimate question is whether any or all of that money came from Ms. Tran rather than from her mother.
[29] Ms. Tran admitted that she may have physically made many of the deposits, but asserted that the underlying money for those deposits did not come from her. There are a great many deposits for $9,900 or $9,950, an amount just shy of the $10,000 limit that requires the bank to report the source of funds. Ms. Tran professed not to know why there were so many multiple deposits the same day or over a sequence of days for these particular amounts. She suggested her sister Anh, who lived in London at the time, and who “may have made some of the deposits”, might have some knowledge of that. Neither her sister nor her mother were called as witnesses or made available for cross-examination.
[30] On cross-examination, Ms. Tran accepted as accurate Mr. Eberlie’s summary of deposits and withdrawals for her mother’s account, found at Tabs 16 and 17 of Exhibit E.
[31] There are at least some deposits to Luot Ngo’s bank account in the relevant time frame that are specifically traceable to the applicant. The deposit on January 9, 2008 in the amount of $23,000 came from an account in the joint names of Ms. Tran and her then 8 year old daughter Denise. That account was controlled entirely by Ms. Tran. Similarly, there is a transfer into Luot Ngo’s account on February 4, 2008 for $19,930 from the account earmarked for the children but controlled by Ms. Tran. There were other deposits to Luot Ngo’s account from that account controlled by Ms. Tran: January 28, 2008 for $20,800 and February 4, 2008 for $19,708. Ms. Tran’s explanation on cross-examination that “maybe we lend her [Luot Ngo] the money” is preposterous.
[32] There were deposits to Luot Ngo’s bank account every single month from September 2007 until July 2008 when the purchase of the McMahen property closed. Ms. Tran denies that she ever contributed to those deposits, but her denial is contradicted by the bank records proving substantial amounts are traceable to the account she controlled “for the children”. There is no doubt she made those deposits. As found below, she treated the “children’s investments” as her own. Her denial that this money ($83,438 in total) came from her is not plausible. These funds certainly did not come from her mother.
[33] There is nothing to support Ms. Tran’s suggestion that the money going into the account in her mother’s name was a “loan” to her mother from Ms. Tran or her children. There is no documentation or other corroborating evidence. In fact that scenario was never even suggested through her answers to undertakings or oral questioning or on her examination-in-chief. It was first suggested by her during her cross-examination at trial. She was simply trapped in a contradiction and looking for an escape. She had always insisted that all the money came from her mother and had no credible explanation for the banking documents that proved otherwise.
[34] It is clear that at least some of the money going into Luot Ngo’s account to fund the purchase of the McMahen property came from the applicant. It is impossible to know how much of the other deposits, or which of them, if any, actually came from her mother’s own resources without evidence from her mother. Later in these reasons I will address why it is possible that Ms. Tran had sufficient resources of her own to fund the entirety of the purchase of 70 McMahen.
[35] Ms. Tran testified that she personally paid the municipal taxes on the McMahen property after she moved into that residence in September 2009. However, a review of her mother’s account shows that municipal taxes in 2009 and 2010 were paid from the remaining balance in the account in the mother’s name. This reinforces the inference that the money in the account in her mother’s name actually came from Ms. Tran herself and was treated by her as her own money. She conceded that other withdrawals from Luot Ngo’s account in February and March of 2010 “might” have been withdrawals that she made. There are payments after the July 2008 closing that are apparently payments on Ms. Tran’s credits cards.
[36] At the trial management conference, the applicant’s list of witnesses included her mother. Counsel for the respondent was counting on the ability to adduce evidence or test Ms. Tran’s evidence through the cross-examination of her mother. However, she was not called as a witness. Ms. Tran testified that her mother, who lives in Philadelphia, is “really sick” and under some kind of treatment or testing for liver disease according to a text from her sister Anh. The text was not produced in evidence, nor is there any other corroboration of this hearsay.
[37] Darlene Tran, now 23 years old, testified that she understood from her mother in 2008 and 2009 that her mother was purchasing the property at 70 McMahen as a “safe place” for her mother and the three children to live in. Darlene helped Ms. Tran in choosing the layout and décor options for the home that was being built. She said her mother “confided in me” and told her not to reveal the purchase of 70 McMahen to her father. Darlene specifically testified that her mother told her that Ms. Tran herself had saved up the money to buy and build 70 McMahen. She told Darlene that “eventually we will all reside there”.
[38] Darlene specifically testified that her mother told her she was going to “protect it” [70 McMahen] by putting the property in Darlene’s grandmother’s name. On cross-examination, Darlene testified that conversations with her mother about the ownership of the McMahen property took place on several occasions, either in the Forest Lawn matrimonial home or while they were out shopping together. On cross-examination she was asked whether her mother said that her grandmother had bought the house but would be transferring it to Ms. Tran at a later date. Darlene denied that suggestion and repeated that her mother told her that she herself had saved up for the purchase and that she was putting it in Darlene’s grandmother’s name to “protect them”.
[39] On cross-examination, Darlene was asked, “Have you met with your father to talk about the evidence today?” She answered no. She was asked, “Never talked to your father about what questions you were going to be asked and what your answers would be today?” Again, she answered no. She was then asked, “You ever talked to Mr. Eberlie about questions and answers?” She answered, “No, I’m just here to testify like I was summonsed to”. Finally, she was asked, “Nobody discussed your evidence with you?” She answered no.
[40] Mr. Aiken submits that these answers are untrue and that the court should find Darlene is not being truthful in her evidence about the conversations she had with her mother concerning 70 McMahen. He points out that Darlene obviously did talk to Mr. Eberlie before testifying and most likely talked to her father as well. Mr. Aiken submits Darlene is biased in favour of her father, pointing out that Mr. Le has supported Darlene financially since 2009, throughout her years at Fanshawe College and more recently in assisting her with the purchase of her own residence. Darlene and her mother have been estranged for years.
[41] Notwithstanding these considerations, I believe the evidence of Darlene Tran concerning the conversations with her mother. She did not embellish her evidence with details as might be expected if she was fabricating the conversations she testified to. She was articulate and gave direct and responsive answers on cross examination. When she was asked questions about her fractured relationship with her mother, I observed tears of sadness not anger. Though Darlene would have met with Mr. Eberlie, and perhaps her father as well, before giving her evidence, her answers to the questions noted above are actually truthful if those discussions did not include discussion about specific questions that would be asked or answers that would be expected or given. The tone of the questioning on cross-examination suggested that Darlene was being coached or instructed on what to say and I take her negative answers to mean that she was merely denying any arrangement to fabricate false evidence.
[42] I have considered the possibility that Darlene misunderstood her mother on this topic. However, Ms. Tran chose not to give any evidence in reply. When Ms. Tran was cross-examined she was asked “Did you tell Darlene that 70 McMahen was your house?”. She answered “I don’t recall telling her that”. Her answer is not the unequivocal denial one might have expected.
[43] Based on a combination of: (i) Ms. Tran’s lack of credibility on this aspect of her evidence and on her evidence in general as noted elsewhere in these reasons, (ii) the adverse inference I draw from the lack of any corroborating evidence from Ms. Tran’s mother or from her sister Anh, (iii) Ms. Tran’s deliberate concealment of her financial resources before and after September 2009 and (iv) the evidence of Darlene Tran, I find that Ms. Tran, is the true owner of 70 McMahen. It is to be included in the applicant’s net family property.
[44] It was purchased for $324,000 and improvements were made before September 2009. There is no evidence of an increase or decrease in value based on the real estate market in general but some value for the improvements can be taken into account. I find the value for the purposes of calculating net family property is $330,000.
(iv) Lot in Vietnam
[45] Shortly before the separation in 2009, Mr. Le went to Vietnam with the two older children. Ms. Tran understood that he wanted the deed for the Vietnam property she had purchased in the names of herself and her mother so that he could gift it to his mother who lives in Vietnam.
[46] Mr. Le paid Ms. Tran $30,000 in July 2009 and obtained the deed so that he could transfer the title once he arrived in Vietnam. Ms. Tran deposited that money in her own account. Mr. Le made the gift to his mother when he travelled to Vietnam in August. He no longer owned it September 1, 2009. Ms. Tran does not claim that it is part of his net family property.
[47] No part of the $30,000 paid to Ms. Tran appears anywhere in her financial statement or net family property calculation. The deposit is recorded on July 8, 2009 as an amount going into her TD Canada Trust bank account (page 17, Tab 49, Exhibit B). By the date of separation, that entire account had been dissipated but there is no clear explanation about where that money went.
[48] There is nothing to include in the net family property of either spouse on account of this property.
(v) Household Items, Jewelry and Vehicles
[49] When she left, Ms. Tran took virtually all of the household contents from the matrimonial home and moved them to the McMahen Street property. Darlene confirmed that when she, her father and brother returned from their trip to Vietnam in August 2009, her mother had already moved most of the household contents to McMahen Street in their absence. Daniel Harris also testified that Ms. Tran had begun to furnish the home in the summer of 2008 but no one was living there. Mr. Le testified that when Ms. Tran moved out of the matrimonial home she left his personal belongings but took everything of value right down to the toilet paper. Mr. Le claims the value of those contents is $10,000 more than the value of what she left.
[50] Mr. Le also states that his wife had many items of jewelry, which he originally “guesstimated” to have a value of $10,000. At trial he stated his belief that the jewelry she removed was worth not less than $5,000. Mr. Le did not identify any particular items of significant value. Ms. Tran denies that she had any jewelry of significant value.
[51] I am satisfied Ms. Tran retained household items and jewelry worth more than she left behind. It is the only conclusion consistent with her subterfuge leading up to the separation and her opportunity to move items from the matrimonial home while Mr. Le was out of the country in August 2009. However, there is no reliable evidence of value. I include in Ms. Tran’s net family property $7,000, an amount I regard as a conservative best estimate for the difference in value between what she took and what she left, including any jewelry.
(vi) Bank Accounts and Cash on Date of Separation
[52] Ms. Tran admits that TD Canada Trust account #3132349 is an account which she had on the date of separation and never disclosed in any of her sworn financial statements in this proceeding. Her explanation for not including it is that it had dwindled down to a small balance of $9.55 by the date of separation and was closed on September 10, 2009 shortly after she left the matrimonial home. This begs the question of course of what deposits and withdrawals were made in the weeks and months predating the separation as she planned to leave the marriage. It also begs the question of the source of a $4000 deposit to this account on September 3, 2009, two days after the valuation date.
[53] Ms. Tran claims she only had one bank account on the date of separation - TD Canada Trust account #3132349 with a balance of $9.55. She does not reveal any cash on hand. It is obvious on the evidence that long before September 2009, having decided to leave the marriage, she was siphoning off and hiding cash and/or bank accounts or investments.
[54] Exhibit 12 and Tab 49 of Exhibit B establish that between January 2, 2009 and September 3, 2009 (the nine-month period preceding the date of separation) Ms. Tran deposited $105,154 to this particular bank account. Exhibit 11 and subsequent follow-up requests establish that Mr. Le has been trying since 2014 to get Ms. Tran to particularize the source of those substantial deposits at a time when she was not employed except at D. J.’s Sports Bar and Café in the first two months of the year. She explained in her cross-examination that $10,000 came from her share of the sale of D. J.’s Sports Bar and $30,000 came from Mr. Le in the summer of 2009 for the lot in Vietnam, but the remaining $65,000 is still somewhat a mystery other than vague assertions that it came from money intended for the children or from her mother, her father or her uncle, none of whom gave any corroborating evidence in that regard. Apart from the deposits, Ms. Tran was also unable to explain or identify many large withdrawals during this same time frame. My conclusion is that for at least this nine-month period (and likely longer) Ms. Tran was accumulating and hiding money somewhere in undisclosed accounts or by the accumulation of substantial amounts of cash.
[55] Ms. Tran opened a bank account at the Bank of Montreal 10 days after valuation date, account #6335991. On October 9, she made two deposits to the account, one for $30,000 and one for $25,000. She was unable to explain the source of these funds. She tried to attribute $30,000 to the money she received from her husband for the Vietnam lot in the summer of 2009, but that evidence was refuted when it was pointed out to her that the $30,000 for the Vietnam lot had been deposited to the TD Canada Trust account which had been completely dissipated by the date of separation. Since she had no income in the five or six weeks from September 1, 2009 to October 9, 2009, the only reasonable inference is that she had at least this $55,000 in cash or in another undisclosed bank account on the date of separation. That amount will be included in her net family property, along with the $4000 deposited to TD Canada Trust account #3132349 on September 3, 2009.
(vii) Children’s Investments
[56] Prior to separation, the parties had saved money over the years, which was held in the name of Ms. Tran, purportedly for the children. The accumulated funds have been referred to as the “children’s investments”. Mr. Le’s pleading asks for an accounting for the money held for the children.
[57] Ms. Tran testified that the most she ever held on behalf of the children from savings over the years was $150,000 in 2002, invested in a five-year certificate. There is no explanation for how she was able to accumulate such a sum. She testified that on maturity in 2007, she converted that money into three bank drafts in the amount of $50,000 each in the respective names of the three children. She did not offer any accounting for the accumulated interest earned between 2002 and 2007. Her evidence with respect to the tracing of the money thereafter is difficult to follow. She testified that with one of the $50,000 drafts she purchased a property in Vietnam for $30,000, leaving $20,000 she earmarked for her daughter Darlene. She says this $20,000 for Darlene stayed in the account for the children and was eventually reinvested with the remaining $100,000 for the other two children. The investments grew to $121,665 at maturity December 31, 2008. On maturity Ms. Tran purchased three drafts, two of them for $30,000 and one of them for $60,000. With the $30,000 used to purchase the lot in Vietnam these three drafts would total the original $150,000 but the Vietnam lot was in the name of Ms. Tran and her mother, not the children.
[58] Ms. Tran admitted that in 2010 she appropriated $30,000, supposedly being held for her son Joseph, for her own needs and expenses. Before she and Mr. Le separated in September 2009, she had a dispute with Joseph and she has had no communication with him ever since. She testified she tried to get his $30,000 to him by attending at his high school in 2010. He would not meet with her so instead she cashed in “his” investment and used it for her own expenses.
[59] The $30,000 she earmarked for Darlene is traced at Tabs 56 and 57 of Exhibit B. According to Ms. Tran, all the $30,000 (though not any interest earned on it) subsequently went to Darlene and Ms. Tran got no part of it. Darlene testified the amount she actually received from her mother in 2015 was only $26,000. I prefer Darlene’s evidence on that point. It seems $30,000 of the 2007 funds supposedly segregated for Darlene went to purchase the Vietnam lot but was never “returned” to Darlene when Mr. Le purchased that lot from Ms. Tran for $30,000 in the summer of 2009. Ms. Tran kept that money as her own.
[60] The December 2008 amount said to be for Denise amounted to $60,000 rather than $30,000. Ms. Tran split those funds in March 2010 into a $40,000 deposit and a $20,000 deposit. She testified that she later cashed in the $20,000 deposit and spent that money as if it was her own so that only the $40,000 deposit remained. She has provided documentation to trace that amount into a GIC maturing December 31, 2011, then reinvested with a different financial institution. Tab 59 of Exhibit B shows there is a guaranteed investment certificate taken out in 2015 maturing in 2018 for $40,022.
[61] There is insufficient evidence to establish a formal debt or trust obligation in favour of Denise or any of the children. There was, at most, a vague intention by the parents to set money aside to assist the children in becoming independent adults someday. Ms. Tran never had any qualms about treating the funds as her own, at her unfettered discretion, right from the outset. Mr. Le never monitored the “children’s investments”. Ms. Tran has given Darlene $26,000 and says she intends for Denise to receive $40,000 after 2018. However, Ms. Tran does not assert any obligation to return to the children the money she has appropriated to herself. No such debt or obligation is listed by her in her financial statements. To the extent that Ms. Tran has appropriated money from the children’s investments for herself such money ought to be attributed to her as income or property. Mr. Le’s request for an order requiring Ms. Tran to pay the appropriated funds to the children is dismissed in favour of this approach which will make Ms. Tran accountable to him for those funds in the determination of his net family property and support obligation.
[62] Ms. Tran has appropriated a substantial part of the $150,000 she held in 2002 for her own purposes, both before and after the separation. In part those funds went into the purchase of 70 McMahen, as already noted above in paragraphs 30 - 32. The funds appropriated after that purchase closed in July 2008 will be addressed in the determination of Ms. Tran’s income and her support claim below. The accumulated interest earned from the original $150,000 will be impossible to trace, but income can be attributed to Ms. Tran for the $30,000 not paid to Joseph, the $30,000 she kept for the Vietnam lot, the $20,000 appropriated from the funds segregated for Denise and the $4,000 shortfall in the money paid to Darlene.
(viii) Oxford Street Mortgage
[63] Tab 12 of Exhibit A gives particulars of a mortgage on a property on Oxford Street from a third-party in favour of Ms. Tran and her uncle, Tran Ha. The mortgage amortization schedule at Tab 13 shows the particulars of the payments received by Ms. Tran as income, reflected in her tax returns. The parties agree Ms. Tran’s share of the balance owing September 1, 2009 is $30,828.39, to be included in her net family property.
(ix) Mortgage registered against Culver Drive Property
[64] The husband was at one time the registered mortgagee on a property at 1804 Culver Drive. It was not formally discharged until September 23, 2009, some three weeks after the parties separated. However, the mortgage had been paid off on September 1, 2008. I accept the evidence of Ms. Tran that the mortgage payments were made to her but that she received no payments after September 2008. The mortgage payments she did receive in the years predating the separation in September 2009 help in understanding one source of funds available to her during calculations. There was nothing owing to either spouse on the date of separation and nothing to include in the net family property of either of them.
(x) Tanoak Drive, London
[65] On June 15, 2011 Mr. Le purchased a property in the joint names of him and Dang Trang Thi Thay, a woman described as his girlfriend at that time. On December 13, 2011, following the breakdown in their romantic relationship, title to 93 Tanoak was transferred into the name of Ms. Dang alone. There is no evidence that Mr. Le was aware of the ex parte order of Vogelsang J. (also coincidentally made on December 13, 2011) restraining him from disposing of any property. In fact, Mr. Le was not served with any court documents until some two weeks later.
[66] Based on the evidence at trial it became apparent that this property is irrelevant to the calculation of net family property and to any other issue to be decided.
(xi) 1040662 Ontario Limited and Le Holdings Limited
[67] 1040662 Ontario Limited is a holding company in which Mr. Le has a one-third interest. His mother-in-law, Luot Ngo, also holds a one-third interest, Ms. Tran’s aunt, Vinh Trin, the other third. It owns three plazas and a 30-acre lot. The parties have agreed that the net value of the husband’s interest in the company is $289,030 as of valuation date.
[68] The parties do not agree on whether he holds that interest in trust for the two of them. Ms. Tran claims that Mr. Le holds his interests in #1040662 Ontario Limited and Le Holdings Limited in trust for her as to a half interest.
[69] Her claim is not properly pleaded and is unsupported by any cogent evidence.
[70] There is nothing in Ms. Tran’s application to identify a trust claim, either in the tick boxes or in the added shopping list of claims. There are no facts pleaded in her application to support the trust claim with respect to his two companies.
[71] Furthermore, there is no evidentiary foundation for such a claim on the applicant’s own evidence, except her vague assertion that whenever she and her husband entered into a venture they did it on behalf of the two of them together as equals regardless of whose name happened to be attached to the venture or the property in question.
[72] Certainly there are specific properties and ventures where that is the case, for example their mutual participation in D. J.’s Sports Bar even though it was registered in Ms. Tran’s name. For that example there was specific evidence about why it was in her name and there was evidence that both of them actively participated in that operation, a true joint venture. For other property the spouses had autonomous control. For example, Ms. Tran unilaterally appropriated for her own use tens of thousands of dollars from the “children’s investments” and she had secret savings for money she received over the years from her mother, father and uncle. Over the years she received tens of thousands, if not hundreds of thousands, of dollars from them. On her theory these assets would be impressed with a trust in favour of Mr. Le if indeed they had an understanding about sharing everything equally.
[73] There is not only no documentation that would corroborate any express trust, there is not even a particular conversation she can point to in that regard. Neither do the facts call out for an implied or equitable trust.
[74] No injustice flows from the rejection of Ms. Tran’s claim for an equitable or implied trust. The target of her claim, the two companies her husband has an interest in, are included in his net family property, effectively giving her half their value as of the date of separation. There is no evidence of any post-separation increases in value. Moreover, the nature of Mr. Le’s interest in his businesses can be addressed as a factor in her spousal support claim in arriving at an award that is fair in all the circumstances of the case. One factor will be the economic consequences of the breakdown of the marriage.
(xii) Money owing to Ms. Tran’s Family Members
[75] Ms. Tran testified that her father has been giving her money for many years. She testified that she was “keeping his money hidden for him” but that she could use it if she needed to. She testified that she often receives and keeps her father’s money in cash. Only when he gave her funds by a bank draft instead of cash would she deposit those bank drafts to an account or investment in her name. Her after the fact record of this money (Tab 50 of Exhibit A) is only a record of bank drafts deposited to one of her various accounts over the years, as an attempt to match up money from her father with her bank records. It does not purport to include all the cash she received from him. However, she testified that because she has often changed banks over the years, she cannot really trace the money she received from her father or distinguish it from other sources of cash that she has had over the years. The cash she kept without depositing it is not accounted for anywhere.
[76] On cross-examination, Ms. Tran testified that there was a time when her father was regularly giving her $3,000 to $5,000 every couple of months. There is no corroboration of the amount of money transferred to Ms. Tran from her father or about any expectation regarding repayment.
[77] By 2014, Ms. Tran’s records indicate that she was holding as much as $47,000 from or for her father, but she also testified that it was not really a debt because she would only have to return the money to him if he asked for it and there was no reason to think that he ever would.
[78] In relation to the money received from her father, she testified on cross-examination that those funds were “given to me, money to put away for him” but “if I needed to spend his money I did”. In her sworn financial statement she indicated that the amount “owing” to her father as of the date of separation was $20,000. She could not identify where she was holding these funds pre-separation but that the funds were “probably invested” and that the amount was actually $15,000 not $20,000. In her net family property calculations, she only shows the “debt” to her father on the date of separation but no offsetting asset. She did not testify that she had spent any of her father’s money before the date of separation, only afterwards.
[79] Tab 50 of Exhibit B starts with an opening balance of August 2010 in the amount of $18,000 which Ms. Tran says reflects money received from her father up to that date, less money refunded back to him. She did not keep a written record before August 2010. Ms. Tran, with her testimony on cross-examination refreshed by looking at a letter from her lawyer, testified that her father had loaned she and Mr. Le $25,000 shortly after they were married but that that amount had been paid back by them before the date of separation. The letter also refreshed her memory that the subsequent amounts she claims as a debt to her father were comprised of amounts advanced by him after the date of separation for assistance in meeting her living expenses, if necessary.
[80] In relation to the running tally of money held for her father at Tab 50 of Exhibit B, Ms. Tran was asked on re-examination why she does not have a similar tally for money she has received from her mother and her uncle. She answered that someday her father might want or need his money back, but her mother and her uncle are not expected to ask for any repayment.
[81] Ms. Tran testified that almost all the money she has received from her uncle and from her mother before and after the separation were gifts, not loans, to her. The exceptions, are the promissory notes that she signed for $70,000 in favour of her uncle and $40,000 to her mother. These were specifically to protect them for their investment in Silver’s if the business was sold or anything happened to her. That business went under in 2014-2015. There is no evidence Ms. Tran’s mother or uncle have asked her to pay anything on account of the promissory notes. I find there is no real expectation she will ever be called upon to pay these promissory notes.
[82] I am not satisfied that Ms. Tran has met the onus of proving any debt to her father, mother or uncle on the valuation date.
(xiii) D.J.’s Sports Bar and Cafe
[83] D. J.’s Sports Bar was sold shortly before the date of separation for $110,000. Thirty-five thousand dollars was paid up front to Mr. Le. He and Ms. Tran each received $10,000 from that $35,000. The remainder was paid to their partners in the business, Ms. Tran’s aunt and uncle. The other $75,000 was payable within a year without interest, but only a small portion of it was actually paid.
[84] The $75,000 balance was subsequently reduced because of allegations that Joseph Tran had been stealing from the purchaser. Though the amended documentation states that $45,000 would be paid to Mr. Le, he did not receive that amount. He received $500 a month for about a year. His company also received rent for a year. Mr. Le acknowledges Ms. Tran’s equal entitlement to the proceeds of sale of D. J’s. In the net family property calculation, $6,000 will be added to his net family property for the receivable actually paid to him. The unpaid and uncollectible balance from the purchasers would be notionally included in equal shares in the respective net family properties of the parties. Because the same amount would be included for both, this unpaid balance is of no consequence in the calculation of any equalization payment.
(xiv) Conclusion
[85] Attached is a schedule detailing the calculation of net family property. It reflects the findings noted above together with other items and figures the parties agreed upon. Mr. Le is to pay Ms. Tran an equalization payment of $139,690.81.
The Support Claims
(i) Wife’s Income
Up to and Including 2009
[86] For twelve years, from April 1997 until March 2009, Ms. Tran worked at D. J.’s Sports Bar. Ms. Tran described her long days starting with clean-up and dishes in the morning then a brief respite at home. After returning to the café later in the day she remained most days until closing at 2:00 a.m. In 2003, there were some difficulties with Canada Revenue Agency resulting in a substantial tax debt and the transfer of the ownership of the business from Ms. Tran to her sister, Anh, in 2005.
[87] Daniel Harris was a regular customer at D. J.’s Sports Bar over an extended period of time. He testified that he would sometimes run a tab at the bar which he would not pay until the next day or a couple of days after that. He testified that he was able to negotiate a discount on his bar bill, specifically the elimination of the tax, by paying cash, an arrangement offered to him by the applicant. He also testified that he tipped the servers at D. J.’s including the applicant. Mr. Harris installed the deck at the rear of the McMahen property at the applicant’s request. Instead of paying him the final $475 for his services, she offered him a bar credit.
[88] Ms. Tran’s tax returns for 2008 and earlier are not part of the evidence at trial. However, it is a reasonable inference that not all her income from D.J.’s was reported to Canada Revenue Agency. It is also a reasonable inference that she was able to use those earnings to accumulate significant savings and investments in the 12 years or so that she was engaged in that business.
[89] On her 2009 tax return, Ms. Tran did not disclose any income from D. J.’s though she worked there in January and February. I impute to her an income of $1,000 a month for each of those months.
[90] Ms. Tran testified she was not employed after February 2009 and had no other income that year except interest and dividend income assessed by CRA at $2,422.
[91] As noted above in reviewing the “children’s investments” evidence, it is appropriate to impute to Ms. Tran for 2009 and 2010 the amounts she appropriated to herself from funds said to be held for Joseph and Darlene; $30,000 for the lot in Vietnam in 2009 and $30,000 not paid to Joseph in 2010. These items are not included in her net family property and on her own evidence the money was used for her personal living expenses.
2010
[92] Ms. Tran testified she had no employment in 2010, though she tried to find work in a bar or restaurant. According to her tax return, her only income in 2010 was interest and investment income amounting to $2,325. Ms. Tran testified that she looked diligently for employment after the separation throughout the remainder of 2009 and 2010 without any success. It is difficult to believe that she was truly “unable” to obtain employment similar to the work she had done for D. J.’s Sports Bar Café. There was no urgency about finding a job. On her own evidence she had access to enough money to meet her needs while looking for employment or a business opportunity.
2011
[93] Ms. Tran testified that she continued to look for work in a bar or restaurant into 2011 but was unsuccessful. She did not report any dividend or investment income in 2011.
[94] In 2011, Ms. Tran approached her uncle, Hung Duy Ngo, about an investment in a restaurant or bar. Together the two of them settled on the purchase of Silver’s Grill House and Bar (“Silver’s”). A company was incorporated to own the new business – 2296681 Ontario Inc. According to both Ms. Tran and her uncle he put up all of the funds to purchase Silver’s in August 2011. Notwithstanding that he had funded the purchase in its entirety, the shares were issued 90 percent to Ms. Tran and 10 percent to him. Though Ms. Tran owned 90 percent of the shares, her uncle was always the only director and officer of the company. He resides in Hamilton, Ontario and had very little to do with the management of Silver’s. Ms. Tran assumed total control over Silver’s, managing staff and every aspect of the business, including handling the revenues, making bank deposits and providing the information to the bookkeeper on the sales revenue. She had signing authority for all aspects of the business and personally controlled its cash sales and its bank account.
[95] Throughout the entire period that Ms. Tran was involved in Silver’s, she had absolute control over the business, including specifically the books and records and the management of all revenue and expenses.
[96] Though both Ms. Tran and her uncle first testified that all of the money for the purchase of Silver’s came from Mr. Ngo, they later both testified that Ms. Tran’s mother, Luot Ngo, provided about $40,000 for the purchase and Mr. Ngo $70,000. Two promissory notes in those amounts dated February 9, 2012 to those individuals corroborate that evidence. Both Ms. Tran and her uncle testified that the purpose of the promissory notes was to protect Luot Ngo and Hung Ngo if the business was sold or if anything happened to Ms. Tran.
[97] Ultimately Silver’s was not successful. It operated as it had in the past from the summer of 2011 until sometime before Christmas 2014 when the kitchen equipment was sold off for $18,000. Thereafter the business operated into 2015 without a kitchen service. It was eventually closed without any additional money being realized. The $18,000 for the sale of the kitchen equipment went into Silver’s bank account at the Bank of Montreal, but was dissipated by the time the business finally closed in October 2015. The assets included in the sale to Ms. Tran and her uncle are found at pages 13 and 14 of Tab 37, Exhibit A. They include many items that would be fixtures. Though the previous owner had purchased those items, I accept the evidence of Ms. Tran and her uncle that the landlord had the ability to veto or control any assignment of the lease or sale of those fixtures. One consequence was that when Silver’s was wound up, it realized only a small fraction of what had been paid for it.
[98] Ms. Tran eventually admitted on cross-examination that her own personal bank account and Silver’s business bank account were used interchangeably. She said, for example, that she paid certain bills of Silver’s from her personal account to avoid a $2 service charge. Ms. Tran reluctantly adopted at trial the answers she gave on oral questioning (questions 1498 to 1501) admitting that she was taking money from Silver’s in cash and using it for her personal expenses, but not recording it anywhere.
[99] Steve Tzavaras, the former owner of Silver’s, testified about the particulars of the business and the sale to Ms. Tran and her uncle in 2011. He confirmed that he gave their accountant financial information and business records, including specifically sales slips and journal entries. From the Canada Revenue Agency HST notices for 2010 and 2011 pre-dating the sale, Mr. Tzavaras confirmed that the recorded quarterly sales ranged from $132,504 to $151,740, an average of $50,530 per month. The financial statements indicated that sales since 2008 had been running a little below this, but at approximately that amount.
[100] Though Mr. Tzavaras confirmed that Silver’s did not seem to be attracting as many customers after he sold it to the applicant, there is no evidence at this trial as to why Silver’s failed as quickly or as badly as it did.
[101] I find as a fact that the recorded sales of Silver’s after Ms. Tran took over that business do not reflect the true revenues of the business. According to the financial records controlled by Ms. Tran, Silver’s only averaged sales revenues of less than $9,200 a month in the first 12 months that she ran it and even less after that. Absent any explanation for such a drastic reduction in the recorded sales I find that substantial cash revenues from Silver’s were going directly into Ms. Tran’s own pocket. I strongly suspect that most of the cash sales were “off the books”. On the other hand, I cannot draw the inference that the sales did continue or could have continued at the same high level achieved under Mr. Tzavaras. Darlene Tran worked briefly for her mother at Silver’s as a server around the time it was purchased. She was originally paid $250 per week but that was reduced to about $150 per week because during the years she worked there Silver’s lost customers.
[102] Hung Duy Ngo confirmed that not only did Ms. Tran have power of attorney but she was given free rein to run Silver’s without any real oversight by him. He said he was content that the income from Silver’s be divided “based on our share” (i.e. 90 percent to Ms. Tran and 10 percent to him) but he has no real idea what she unilaterally paid to herself, including cash receipts. Based on the accounting records, he believes she paid herself $14,000 to $15,000 a year while she operated Silver’s. He testified that from time to time after Silver’s was purchased, he had to put more money into the business to keep the bills up to date, specifically the rent, which he had personally guaranteed, and the utilities which were necessary for the continued operation of Silver’s. He was referred to the financial statements for the restaurant and confirmed that Silver’s gross revenue in its first year of operation under their ownership (August 1, 2011 to July 31, 2012) was $111,628. In the second year those reported revenues fell to $20,021 and for the third year to $18,290. He offered no explanation for the precipitous fall off in revenue. It was his decision to finally close Silver’s in 2015 after years of recorded losses. Mr. Ngo’s estimated personal loss is “more than $100,000”.
[103] In the fall of 2011, Ms. Tran “put herself on the payroll” recording a very modest income of $988 for the 2011 tax year. She admitted that this did not represent all of the money she took from Silver’s for her own expenses but she wanted to have an employment record for the purposes of any future credit application or job application. According to her, she only included in her payroll hours 20 or 25 hours a week, even though she was working 19 hour days routinely in 2011 and 2012.
[104] Ms. Tran’s first sworn financial statement in this proceeding, December 2, 2011, disclosed her employment at Silver’s but did not disclose any income from that employment. She asserted she had “just opened” the business even though she had actually taken over a successful business already up and running. She claimed her personal expenses amounted to more than $46,000 a year but her disclosed income was $7,564 for the year. She also testified that the expenses on this financial statement were consistent with the level of expenses she had been incurring from the date of separation in 2009 until the signature on the financial statement in December 2011. She could offer no real explanation for how she funded the approximately $38,000 annual difference between her income and expenses, except to say that she resorted to money from her mother, her father, her uncle, money held for the children’s benefit and whatever she had on hand on the date of separation.
[105] On cross-examination Ms. Tran admitted that Mr. Le has been attempting on many occasions to obtain particulars of the sources of funds that she used to pay her credit card debts and living expenses, and as well her breakdown of funds she received from her mother, her father, her uncle and the money invested for the children. She has never been able to do that, in fact has made no apparent genuine attempt to even try, though she could have asked the other individuals or made some attempt at tracing the money in and out of her accounts. She answered on cross-examination “if my mom gave me a couple of thousand dollars cash why would I write it down”. The obvious answer, at least since March 2014 when Mr. Eberlie’s requested just that kind of information, is because it is relevant to this case.
[106] For the reasons noted above in relation to the “children’s investments” I also attribute $20,000 in income to her for 2011 because the $60,000 earmarked for Denise was split between a continuing investment of $40,000 and an appropriation to Ms. Tran for her own expenses of the separate $20,000 investment.
2012
[107] Ms. Tran reported income from Silver’s of $3,733 on her tax return together with interest and investment income of $3,421. It is clear that her actual income from Silver’s was substantially more than she reported for tax purposes. It is also evident that the financial statements of Silver’s are not a reliable record of the actual revenues being taken in. It is impossible to accurately assess Ms. Tran’s actual income from Silver’s on the evidence. It is noteworthy that she asserted her claim for spousal support in December 2011 but has hidden from any scrutiny the cash she was taking from Silver’s, a business with a long history of generating about $50,000 a month in revenue before she took it over in the summer of 2011
2013 and 2014
[108] By 2013, Silver’s was doing badly according to Ms. Tran. She says she laid off staff to cut back on expenses, including the bookkeeper, making her the sole employee in 2013. On her tax return Ms. Tran reported no income from running the business in 2013 but only interest and investment income of $3,326. The same is true in 2014. She continued to run the business, but reported no income from it, only interest and investment income of $2,725.
[109] On the applicant’s financial statement in this proceeding sworn July 4, 2014, she still disclosed no income from Silver’s, only interest income and a child tax benefit amounting to a total of $8,580 annually. Though she testified her expenses were more or less unchanged from her 2011 financial statement, she could offer no credible explanation about how she funded the shortfall in her expenses except to say that her mother and father gave her money that she could use if she wished.
2015
[110] In 2015, Ms. Tran continued to operate Silver’s for the first nine months of the year, even though the kitchen was closed, opening only the bar from 3:00 pm to closing. She reports no income from Silver’s during those months in which it operated in 2015.
[111] In October 2015, Ms. Tran found employment as a bartender, cashier and waitress at Ring-a-Wing at $11.25 an hour, initially working 60 hours a week. She earned $4,030 from October to December 2015, according to her T4 slip. She receives but does not report any gratuities on her tax return.
[112] I also impute to Ms. Tran an additional $4,000 for 2015 to reflect the fact she only “repaid” Darlene $26,000 of the $30,000 segregated for Darlene in 2008.
Income to be attributed to the Applicant from Silver’s 2011-2015
[113] Ms. Tran did not report any income from Silver’s for 2013, 2014 or 2015 on her tax returns or in her sworn financial statements in this proceding, notwithstanding her evidence about the long hours she worked there. She controlled all of the cash as well as the information that went to the bookkeeper or into the business financial records.
[114] From August 1, 2011 to October 15, 2015 Ms. Tran had significant undisclosed and untaxed cash income from Silver’s, certainly not less than her uncle’s belief that she was taking out $14,000 to $15,000 a year and probably double or triple that amount based on the sales volume under the previous owner. However, I do accept that the business lost customers over the four years that Ms. Tran ran it, and therefore attribute to her a diminishing income from Silver’s. My best estimate of a conservative approximation is $4,000 a month for the 5 months of 2011; $3,000 a month throughout 2012; $2,000 per month throughout 2013; $1,500 a month throughout 2014 and $10,000 for the period January 1, 2015 to October 15, 2015.
[115] In summary Ms. Tran’s actual and imputed annual income from investment income reported on her tax returns, money appropriated from the “children’s investments”, J.D’s Sports Bar and Grill, Silver’s, and Ring-a-Wing is as follows:
2009 $34,422
2010 $32,325
2011 $40,000
2012 $39,421
2013 $27,326
2014 $20,775
2015 $18,030
2016
[116] In 2016 Ms. Tran has continued her employment at Ring-a-Wing. She says she works 40 to 50 hours each week. Her most current financial statement estimates her current income at $1,797 a month, or $21,564 a year. On her own evidence she makes more than that. Even assuming she is still at her starting salary of $11.25 an hour she would be earning on average more than $500 a week, plus tips. Remarkably, she did not produce a 2016 paystub to prove her current income. I impute employment income of $28,000 to her for 2016.
Husband’s Income
2009 to 2015
[117] Mr. Le’s 2015 income of $80,775 on his tax return includes a one-time taxable capital gain of $39,097 from the sale of the Niagara Falls property. Mr. Aiken concedes on behalf of Ms. Tran that this non-recurring capital gain ought to be excluded in determining income for spousal and child support purposes.
[118] The parties agree his income for support purposes is otherwise as set out at line 150 of his income tax returns:
2009 $28,491
2010 $35,888
2011 $26,061
2012 $28,779
2013 $34,638
2014 $49,537
2015 $41,678
[119] There was no evidence of a change in circumstances in 2016. His 2016 income is rounded up to $42,000.
[120] Mr. Le’s income seems relatively low in relation to the value of his companies. Apparently profits are being re-invested in his businesses rather than being drawn out as income. He has accumulated a substantial shareholder loan account. However, there was no submission that additional income ought to be imputed to him.
Child Support
[121] Ms. Tran claims that child support for Denise ought to be ordered retrospectively to January 1, 2010 and that it be calculated based on the respondent’s annual income for the prior year. Mr. Le does not dispute that approach.
[122] Mr. Le has not paid any child support or spousal support to the applicant since they separated. Ms. Tran never asked the respondent to pay her any child or spousal support except by serving him with this application in January 2012. When asked why, she simply said, “I knew he wouldn’t pay me”. Her delay does not mean that child support is not payable for the period predating January 2012, but Mr. Le is entitled to a “credit” for what Ms. Tran ought to have paid to him for the two oldest children.
[123] Mr. Le has paid medical and dental expenses, including braces and eye glasses for the children whenever he was asked to do so. He also assisted the older two children with their tuition, books and living expenses until they graduated without any contribution from Ms. Tran. He has paid vehicle and cellphone costs for them. He has been paying a regular allowance directly to Denise, currently $40 weekly. He also used to provide Darlene with such an allowance.
[124] Denise is 17 years old and lives with her mother. She is in grade 12 and will finish high school next June. She has no present plans for after that. Mr. Le has an obligation to pay the table amount of child support for Denise. The quantification of that obligation is simply a matter of determining the appropriate start date and Mr. Le’s income under the Child Support Guidelines each year. Any retrospective award may be offset, in whole or in part by Ms. Tran’s obligation to pay support for Joseph and Darlene.
[125] Joseph was 17 years of age and still in high school when his parents separated. He continued to reside with his father and attend school on a fulltime basis until graduating from a three-year program at Fanshawe College in May 2014. Because he lived with his father while attending post-secondary school it would not be inappropriate to use the tables under the Child Support Guidelines in assessing his mother’s obligation to pay Mr. Le child support during Joseph’s eligible dependency. In addition, she would be required to contribute her proportionate share to s. 7 expenses. Joseph now lives in British Columbia and has a very successful award winning career as a chef. He was an eligible dependant under the Divorce Act until May 2014
[126] Darlene who was 16 at the date of separation resided with her mother for about a month thereafter. Following an argument with her mother, she moved in with her boyfriend’s family. She was also on the outs with her father at that time. She later reconciled with him, and he afforded her financial support until she graduated from Fanshawe College. Darlene graduated from high school in June 2011, started at Fanshawe College in September 2012 and graduated in May 2015.
[127] Darlene did not live with either parent after October 2009 and there is no need to consider any table amount payable for her. The only child support consideration for her is that she remained an eligible dependant throughout the remainder of her high school years and her two years at Fanshawe College, finishing in May 2015. She has recently obtained full time employment in a position reflecting her education at Fanshawe and is an independent adult. The only adjustment required between the parents is to calculate Ms. Tran’s proportionate share of the expenses paid by Mr. Le that qualify under s. 7 of the Child Support Guidelines.
[128] Darlene Tran confirmed that her father paid all of the expenses shown at Tabs B11 to B13 of Tab B of Exhibit 29 (the “Brief of Special Expenses”). Though Joseph was not called as a witness, the expenses Mr. Le claims to have paid are not seriously questioned. The only issue is whether the expenses Mr. Le claims for Darlene and Joseph qualify for contribution from Ms. Tran under s.7 of the Child Support Guidelines.
[129] I find that the following expenses meet the qualifying provisions of section 7: Fanshawe College expenses for Joseph in 2012 ($5185.30) and 2013 ($4,441.08); Fanshawe College expenses for Darlene in 2013 ($3,656.08) and 2014 ($6,099.15); culinary school expenses for Joseph in 2014 ($177.77); 2014 dental and orthodontal expenses for Darlene ($3,047); eyeglasses for Darlene ($417.54) and in 2014 the cost of Denise’s trip to Vietnam ($1,750). The other expenses claimed do not qualify.
[130] Attached is a schedule detailing the calculation of child support payable from January 1, 2010 to December 31, 2016. The bottom line is that the applicant owes the respondent $1,191.85 in satisfaction of the claim child support in his answer.
[131] Commencing January 1, 2017 Mr. Le is to pay $379 per month, the table amount for Denise on an annual income of $42,000.
Spousal Support
[132] Different considerations apply to claims for retrospective spousal support than for child support. There is a presumptive obligation to support one’s children but no presumptive entitlement to spousal support. The Divorce Act requires consideration of a broader set of facts, objectives and factors when addressing spousal support.
[133] Ms. Tran did not make any claim for support between September 2009 and the initiation of this proceeding in December 2011. She did not run up any debt in meeting her expenses from 2009 to the present. Her imputed annual income over the last 7 years has averaged a little over $30,000. It has been regularly supplemented by regular and substantial gifts of money over an extended period of time from her mother, her father and her uncle. She has not proven that she has had to spend any of the capital included in her net family property to make ends meet. In short, she has not established a need for support for the period predating the trial.
[134] Neither has she established much of a compensatory claim. She was a stay at home mother and homemaker in the first years of the marriage but there is no evidence that the marriage or her role in the family has had any impact on any career aspirations or educational plans she ever had.
[135] Mr. Le’s annual income over the past 7 years has averaged a little over $35,000 per annum. The discrepancy between his income and the applicant’s income does not justify a retrospective award.
[136] The claim for spousal support pre-dating the trial is dismissed.
[137] However, there has been a significant income discrepancy between the parties the last two years and that discrepancy is likely to continue. Mr. Le has a thriving business rooted in the early years of the marriage. It will provide a stable and secure income for him for many years to come. He can control his income to a certain extent. Though his pattern of annual income goes up and down there is no reason to believe he cannot draw an annual income from his businesses at the level he did in 2015 - $41,678. For 2016 I round that up to $42,000.
[138] Ms. Tran, on the other hand, has no similar opportunity on the horizon. She has job skills that should ensure continuous opportunities for employment but those skills have a limited market value. Unless she finds another business opportunity her potential income is probably not much higher than the $28,000 attributed to her for this calendar year.
[139] The Spousal Support Advisory Guidelines provide a starting point for the quantification of support. The expected future income disparity between the spouses is connected to the business acquired by Mr. Le during the marriage, pointing to spousal support at the higher end of the range. On the other hand, Ms. Tran lives in a house worth much more than the residence Mr. Le shares with his sister-in-law and has not proven either an inability to meet her reasonable needs or a strong claim for compensatory support, factors which point to spousal support at the lower end of the range.
[140] In this particular case there is no range to consider at the moment. The non-taxable child support of $379 monthly, the dependant tax credit Ms. Tran can claim for Denise and the new federal child benefit payable to Ms. Tran for Denise have the effect of leaving her better off than Mr. Le. Even without any spousal support she has 56.5% of the parties’ net disposable income; Mr. Le 43.5%. The suggested Spousal Support Advisory Guideline figure is zero.
[141] However, once Denise is no longer an eligible dependant (and that may be as soon as next summer) the Spousal Support Advisory Guidelines suggest a range of spousal support from a low of $332 monthly to a high of $443.
[142] The most common approach in a case like this would be to dismiss the claim for ongoing spousal support while expressly providing that a fresh application or motion to change might be brought at a later date. However I am convinced that Mr. Le could readjust his financial priorities even now if he had to and could afford to pay a modest amount in spousal support. He was able to find the money to provide new vehicles to his two older children and pay large cellphone bills for them when they were at Fanshawe. To make an order now might avoid the cost of a fresh application or motion to change for litigants who have already spent a great deal to resolve their differences.
[143] Mr. Le is ordered to pay spousal support of $400 monthly commencing January 1, 2017.
Remaining Issues
[144] The request that Mr. Le obtain life insurance to secure his support obligation is dismissed. It is unnecessary given the modest support payable in relation to the size of his estate.
[145] Though this order is made under the Divorce Act it should contain a provision for ongoing annual financial disclosure between the parties using language that mirrors the Family Law Act.
[146] If counsel are unable to agree on costs brief written submissions may be made within 30 days of the release of these reasons.
Aston J.
Released: December 22, 2016
Net Family Property Calculation
Item Wife Husband
Assets
433 Forest Lawn, London 108,000.00
Armstrong Dr., Niagara Falls [Reasons paras 9-16] 179,000.00
70 McMahen, London [paras 17-44] 330,000.00
Household items and jewelry [paras 49-51] 7,000.00
2006 Nissan Altima 8,000.00
2001 GMC Yukon 3,000.00
TD Canada Trust #3232349 9.55
TD Canada Trust #6281264 993.35
TD Canada Trust #7129230 1,748.04
TD Canada Trust #5454713 (RRSP) 22,126.50
Cash and/or undisclosed accounts [paras 52-55] 59,000.00
Industrial Alliance policy (c.s.v.) 1,696.36
1040662 Ontario Limited (one third interest) 289,030.00
Oxford Street mortgage (half interest) 30,828.39
Receivable D.J.’s Sports Bar Café [paras ] 6,000.00
Shareholder loan to 1040662 Ontario Limited 180,000.00 434,837.94 791,564.25
Debts
Mortgage, Armstrong Dr. 33,726.84
Amex credit card 523.11
MBNA credit card 217.91
Notional tax on RRSP 4,867.83
Notional tax on 1040662 Ontario Limited 38,009.00
77,344.69
Net family property 434,837.94 714,219.56
Equalization payment 139,690.81 (139,690.81)
574,528.75 574,528.75
Calculation of Child Support payable January 1, 2010 to December 31, 2016
- Table amount payable by father for Denise each year based on his annual income for the prior year (as claimed by the mother)
Year annual income (prior year) payable total for year
2010* $28,491 $252 x 12 $3,024
2011* $35,888 $332 x 12 $3,984
2012 $26,061 $211 x 12 $2,532
2013 $28,779 $235 x 12 $2,820
2014 $34,638 $299 x 12 $3,588
2015 $49,537 $446 x 12 $5,352
2016 $41,678 $376 x 12 $4,512
Total payable $25,812
*for 2010 and 2011 the table amount is in accordance with the tables in effect until January 1, 2012
- Table amount payable by mother for Joseph each year, also using her annual income for the prior year
Year annual income (prior year) payable total for year
2010* $34,422 $319 x 12 $3,828
2011* $32,325 $296 x 12 $3,552
2012 $40,000 $360 x 12 $4,320
2013 $39,421 $353 x 12 $4,236
2014 $27,326 $222 x 5 $1,110
Total payable $17,046
- Mother’s Share of s.7 expenses paid by Father
(a) Mother’s share of the combined income of the parents:
2012 $39,421/$68,200 57.8%
2013 $27,326/$61,964 44.1%
2014 $20,775/$70,312 29.5%
(b) Qualifying expenses paid by Father
2012 Fanshawe College (Joseph) $5,185.00
2013 Fanshawe College (Joseph) $4,441.08
Fanshawe College (Darlene) $3,656.08
$8,097.16
2014 Fanshawe College (Darlene) $6,099.15
Hendix Equipment (Joseph) 177.77
Dental/ Ortho (Darlene) $3,047.00
Vietnam trip (Denise) $1,750.00
Eyeglasses (Denise) 417.54
$11,491.46
2015 none proven
(c) Mother’s share
2012 57.8% x $5,185.30 $2,997.10
2013 44.1% x $8,097.16 $3,570.77
2014 29.5% x $11,491.46 $3,389.98
Total $9,957.85
- Net amount payable by Mother to Father: $9,957.85 plus $17,046 less $25,812 = $1,191.85
CITATION: Tran v. Le, 2016 ONSC 8098
COURT FILE NO.: FD1909/11
DATE: 2016/12/22
ONTARIO
SUPERIOR COURT OF JUSTICE
FAMILY COURT
BETWEEN:
Ha Thi Thu Tran
Applicant
- and -
Dang Van Le
Respondent
REASONS FOR JUDGMENT
Aston J.
Released: December 22, 2016