Court File and Parties
COURT FILE NO.: 36173-03 DATE: 2017/01/09 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Georgios Lekkas, Applicant AND: Helen Lekkas, Respondent
BEFORE: The Honourable Mr. Justice D.J. Gordon
COUNSEL: Sandra M. Spiegelberg, Counsel for the Applicant Respondent appearing in person
HEARD: December 5, 2016
REASONS FOR DECISION
[1] Each party presented a motion to change the final consent order granted on May 14, 2007.
Factual Background
[2] The parties married on June 29, 1999 and separated on October 11, 2003. Two children, now adults, were born to their relationship.
[3] The original proceeding was commenced by a Petition For Divorce, issued on November 10, 2003. The Answer and Counterpetition was dated December 9, 2003. In these pleadings, claims were advanced pertaining to custody and access, child support, spousal support, equalization of net family properties and related matters.
[4] Several temporary orders were granted in 2003 and 2005. The case was placed on the trial list for the sittings in February 2006. Several adjournments followed until April 2007 when the trial was scheduled to proceed when called.
[5] On May 14, 2007 the parties and counsel appeared in court, presenting a final consent resolving all claims. Hambly J. then granted the divorce, incorporating the settlement terms into the order. Relevant to the current proceedings are the following provisions of that consent order:
a) sole custody of the children to Ms. Lekkas with access to Mr. Lekkas at the initiation and prior consent of the children;
b) Mr. Lekkas to pay guideline child support of $521.00 monthly on his gross income of $35,000.00;
c) Mr. Lekkas to pay $200.00 towards his retroactive proportionate share of s. 7 expenses;
d) Mr. Lekkas to pay his proportionate share of future s. 7 expenses with Ms. Lekkas to provide receipts quarterly and Mr. Lekkas to reimburse within 30 days thereafter;
e) parties to exchange income tax returns annually;
f) no spousal support payable by either party;
g) no equalization payment payable by either party;
h) arrears of child support and spousal support fixed in the amount of $8,952.50 with Mr. Lekkas, through his Trustee in Bankruptcy, to endeavour to pay the preferred portion of the support arrears within 30 days of receipt of his equity in the matrimonial home; and
i) Ms. Lekkas to cooperate with Mr. Lekkas, through his Trustee in Bankruptcy, for an appraisal on the matrimonial home.
[6] Mr. Lekkas had made an assignment in bankruptcy on February 12, 2007. Ms. Lekkas made an arrangement with the Trustee in Bankruptcy to retain possession of the matrimonial home and defer the sale, apparently having regard to the ages of the children at that time. Ms. Lekkas remains in possession of the former matrimonial home. It has not been sold. Any issue pertaining thereto is a matter between Ms. Lekkas and the Trustee in Bankruptcy. It is not a factor on these motions.
Motion to Change – Mr. Lekkas
[7] The motion to change of Mr. Lekkas was issued on January 25, 2016. He seeks an order terminating his child support obligations and related provisions. The basis for his request is that the children are now adults, having completed post-secondary education programs and obtained employment. The motion also requests an order for reimbursement from Ms. Lekkas for the overpayment of child support.
Motion to Change – Ms. Lekkas
[8] The motion to change of Ms. Lekkas was issued on August 12, 2016. She seeks considerable relief as follows:
a) child support for both children in the monthly amount of $2,000.00, commencing May 1, 2016;
b) spousal support of $6,000.00 monthly, commencing May 1, 2016;
c) payment of child support arrears of $8,952.00 plus interest;
d) payment of s. 7 arrears of $68,606.22 plus interest;
e) a settlement of $2 million; and
f) other related matters.
Issues
[9] A settlement conference was held on November 7, 2016. On this occasion, Campbell J. directed the motions to change be argued on the long motions list for the weeks of November 28 and December 5, 2016. He went on to define the issues requiring determination, as follows:
i) limitation period for spousal claim of $1.5 to $2 million;
ii) validity of s. 7 claims by respondent for two children for nine years;
iii) D.B.S. guideline of three years barring fraud, etc. which is claimed by respondent;
iv) not on consent, child support is terminated for Frances from July 1, 2014 and for Jimmy from June 1, 2015 pending full argument;
v) property claim for $2 million also to be argued with regard to the limitation period; and
vi) whether motions judge shall have viva voce evidence.
Hearing
[10] The motions for change came before me on December 5, 2016. At the commencement of the hearing, Ms. Lekkas requested the affidavit of Mr. Lekkas, sworn November 30, 2016 and the applicants book of authorities be struck as being unethical and allowing her no time to respond. I declined to grant her oral motion as the affidavit of Mr. Lekkas was in response to her affidavit sworn October 7, 2016 and the book of authorities was a standard filing to assist the court. I then asked Ms. Lekkas if she was seeking an adjournment to file a reply affidavit. Ms. Lekkas declined my invitation in this regard.
[11] I inquired as to the issue of viva voce evidence. Apparently, at the settlement conference, Ms. Lekkas had requested a trial of the issues or, at least, oral evidence in some manner. In response to my question, Ms. Lekkas withdrew her request, reporting that she now wanted the substantive issues addressed by argument.
[12] In preparation for the hearing, as is my usual practice, I had prepared a list of topics to be addressed in submissions. Following the hearing, I determined that I had neglected to inquire about the financial disclosure of Spartan Granite and Cabinetry Inc., a company owned by Mr. Lekkas and his current spouse. Correspondence was forwarded to Ms. Spiegelberg and Ms. Lekkas inviting written submissions as to the requirement of such disclosure. In response, Ms. Spiegelberg delivered income statements and corporate income tax returns for 2013, 2014 and 2015 and the income statement for 2016 year to date. Correspondence was then forwarded to Ms. Spiegelberg and Ms. Lekkas inviting written submissions or, in the alternative, setting a date for oral submissions. Ms. Lekkas did not respond. The documentation provided is considered part of the evidentiary record.
Children – Present Circumstances
[13] The parties agree on the following facts concerning the present circumstances of the children:
i) Frances is 24 and Jimmy is 22;
ii) Frances graduated from the Community and Criminal Justice program at Conestoga College in July 2014;
iii) Jimmy graduated from the Electrical Engineering Technician program at Conestoga College in June 2015;
iv) Both children are working.
[14] Ms. Lekkas further reports that one or both of the children may return to school in the future. She indicates Jimmy’s employment is in an apprenticeship program. Ms. Lekkas did not advise as to the incomes of the children.
Consent Order – May 14, 2007
[15] A significant factor in this case is that the parties were able to resolve the original dispute. At the time, both were represented by well-respected competent counsel. The settlement terms, as they pertained to the children, required and received judicial approval. Of some further interest, counsel on behalf of Children’s Lawyer was involved in the proceeding and resolution.
Incomes and Other Financial Circumstances
[16] Most of the claims advanced by Ms. Lekkas are financial in nature. It is helpful, therefore, to summarize the evidence presented by the parties.
Ms. Lekkas
Ms. Lekkas has disclosed income as follows:
2011 $9,275.00 (notice of assessment) 2012 $18,653.00 (notice of assessment) 2013 $9,953.00 (notice of assessment) 2014 $19,386.00 (notice of assessment) 2016 $18,312.00 (financial statement, sworn March 16, 2016)
[17] Her current source of income is Ontario Disability Support Plan. She has been unemployed since 2004.
[18] At the time of the original resolution in May 2007, it appears Ms. Lekkas was receiving social assistance from Ontario Works. Her financial statement, sworn December 15, 2005 and found in the original trial record, reported the only source of income as $475.00 monthly from the Canada Child Tax Benefit.
[19] In her most recent financial statement, sworn March 16, 2016, Ms. Lekkas identifies her only asset as the matrimonial home with a value of $250,000.00. Her current debts are said to be the mortgage on this home at $90,000.00, legal aid lien of $12,000.00 and $68,000.00 owing to the Trustee in Bankruptcy. Ms. Lekkas also reports expenses annually of $28,944.00 but does not explain how the shortfall in expenses is paid, given her income of $18,312.00.
Mr. Lekkas
Mr. Lekkas has disclosed income as follows:
2007 $34,000.00 (consent and court order May 14, 2007) 2008 $35,612.00 (notice of assessment) 2009 $18,085.00 (notice of assessment) 2010 $4,853.00 (notice of assessment) 2011 $4,149.00 (notice of assessment) 2012 $17,631.00 (notice of assessment) 2013 $23,082.00 (notice of assessment) 2014 $21,740.00 (notice of assessment) 2015 $31,938.00 (notice of assessment) 2016 $35,057.00 (corporate income statement)
[20] Relevant to the discussion as to the income of Mr. Lekkas are the financial records for Spartan Granite and Cabinetry Inc. The company was incorporated on May 19, 2010. The directors are Mr. Lekkas and his spouse, Judy Milbrandt.
[21] The corporate income statements and tax returns reveal the following (payroll expense being shown as Mr. Lekkas would be the principal employee):
Year Revenue Payroll Expense Total Expense Net Income (Loss) 2013 107,375.68 23,508.16 129,892.37 (22,516.69) 2014 345,396.47 22,008.55 317,608.07 27,788.40 2015 241,738.19 38,100.00 227,300.65 14,437.54 2016 295,193.90 47,793.34 293,404.23 1,789.67
[22] The balance sheet attached to the 2015 tax return shows assets of $17,026.00 and liabilities of $53,333.00, including $24,461.00 due to shareholders and other liabilities of $28,872.00. Retained earnings were ($36,307.00).
[23] As previously mentioned, Mr. Lekkas made an assignment in bankruptcy on February 12, 2007, shortly before the settlement in the original proceedings.
[24] In his financial statement, sworn June 24, 2016, Mr. Lekkas reports annual income of $31,938.00 and expenses of $43,918.32, with his current spouse contribution $1,025.63 monthly to household expenses from her employment income, in the same amount, from their company, Spartan Granite and Cabinetry Inc. The only significant asset disclosed is property in Greece, having an unknown value and inherited from his mother on her death on May 16, 2016. As hereafter discussed, Mr. Lekkas has also reported the property to have passed to him and his siblings on his father’s death in 2002, subject to a life interest in favour of his mother. No mention is made of a residence, such presumably being in the name of his spouse. No debts of any interest are disclosed.
Discussion and Analysis
Threshold Issues
[25] Each claim has its own discrete issues. However, having regard to the provisions in the consent order of May 14, 2007, for Ms. Lekkas to succeed on most matters raised by her, she must establish one or both of the following:
a) significantly higher income of Mr. Lekkas than he has reported; and
b) fraud by Mr. Lekkas.
[26] In my view, these are threshold issues that ought to be addressed at the outset of this decision so as to avoid repetition. It must be clearly said, given the circumstances of this case, that a determination of the issues relies on the evidence presented, not merely on allegation, assumption, conjecture or innuendo.
[27] Ms. Lekkas raises four matters in her affidavits sworn: March 15, 2016; April 19, 2016; June 30, 2016; and October 7, 2016. I will deal with each in the following manner:
Revenue Canada Lien
[28] Ms. Lekkas provided the first page of the abstract of title for the matrimonial indicating a lien registered by Revenue Canada on November 21, 2006 for $11,901.00. She neglected to provide the second page where it was revealed the lien was discharged on March 27, 2014.
[29] Ms. Lekkas asserts the lien is proof of the unreported income of Mr. Lekkas. I disagree. There is no evidence as to why the lien was registered, the presumption being it was for unpaid tax. The lien predates the settlement in 2007, on which occasion the parties and their then counsel would have been well aware of the debt given the bankruptcy.
[30] I conclude the lien is not relevant to the issues in this case.
Fraudulent Bankruptcy
[31] Ms. Lekkas says Mr. Lekkas faked the assignment in bankruptcy to avoid paying proper child and spousal support. In part, she relies on the purported business income as hereafter separately discussed. Ms. Lekkas also reports that Mr. Lekkas failed to disclose to the trustee the ownership of property in Greece, that when she did so Mr. Lekkas was charged or fine $15,000.00. She relies on a bankruptcy discharge order dated December 18, 2007 stating such to be conditional on payment of “$15,000.00 on terms to be arranged with the trustee or consent to judgment for same.”
[32] Mr. Lekkas claims the trustee was aware of the property in Greece. The property, he says, passed to him and his siblings following the death of his father in 2002 but that his mother was granted a life interest. She died in 2016. The trustee, according to Mr. Lekkas, took the position the property was not his until his mother passed away; however, as a result of Ms. Lekkas pursuing the matter, the value of $15,000.00 was assigned and paid over time.
[33] Further, Mr. Lekkas reported that the Superintendent of Bankruptcy requested that Royal Canadian Mounted Police to investigate the complaint of Ms. Lekkas as a criminal matter. Correspondence dated March 10, 2009 indicates the police investigation revealed insufficient evidence to support her allegations.
[34] The evidence presented by Ms. Lekkas does not establish fraud with respect to the bankruptcy. Of greater importance, there is no fraud with respect to the claims in these proceedings. Ms. Lekkas was well aware of the property in Greece, such being reported in her financial statement, sworn December 15, 2005, and her net family property statement dated July 11, 2005, both being located in the original trial record.
Lifestyle Exceeds Income
[35] Ms. Lekkas says Mr. Lekkas “goes on trips every year with his common law wife” and refers to “luxurious trips to Greece” to claim he has a lifestyle exceeding reported income.
[36] In response, Mr. Lekkas disclosed three trips in 12 years to Greece where his family resided. He goes on to say he lives within his income, did not take a wage when the business was not doing well and never sought to reduce his child support income.
[37] The evidence of Ms. Lekkas can simply be described as a bold allegation, no detail being provided in support. Her assertion in this regard is rejected.
Significant Income – Prior Business Records
[38] Ms. Lekkas repeatedly makes reference to the business income of Mr. Lekkas of over $1 million a year. She refers to only two documents, saying Mr. Lekkas earned $543,875.00 in 2003 and $853,166.00 in 2004.
[39] The first document is the income statement for the prior company, Lekkas Store Fixtures and Millworking Ltd., as at December 31, 2003. Revenue is reported at $543,875.00 but expenses were $543,327.00 resulting in a net income of $548.00. The second document is a partial copy of a letter from her former counsel to the Law Society of Upper Canada, said to be dated June 29, 2007, in which the lawyer refers to the unaudited financial statement of the company for 2004 as showing business sales as $853,166.00. It appears this document was actually identified in the questioning during the original proceeding although it was not tendered in evidence on this motion.
[40] The position articulated by Ms. Lekkas as to the prior business income of Mr. Lekkas is a gross misrepresentation. She refers to revenue as income, ignoring expenses.
[41] Further, Ms. Lekkas did not present submissions, nor request an oral hearing, with respect to the financial disclosure of Spartan Granite and Cabinetry Inc., as previously mentioned, despite my invitation to do so.
[42] The evidence does not disclose income of Mr. Lekkas other than as reported. No doubt, some personal expense is paid by the company, but such would have been the situation as well in 2007 and before. In result, Ms. Lekkas has not established significant income of Mr. Lekkas, nor any income other than as he has disclosed.
Summary
[43] The threshold issues described above have not been resolved in Ms. Lekkas’ favour. I reject her position that Mr. Lekkas has income higher than reported or that he has committed fraud in his financial affairs or in this case.
Guideline Child Support - Termination
[44] As previously stated, child support was terminated by the order of Campbell J. pending full argument. The termination dates coincide with the completion of the children’s respective college programs. Both children still reside with Ms. Lekkas. Both are working; however, Ms. Lekkas did not disclose their incomes or other financial circumstances. As the children are adults, the onus is on Ms. Lekkas to establish entitlement to ongoing child support.
[45] At best, Ms. Lekkas indicates Jimmy is participating in an apprenticeship program, a component involving some attendance in school. But, he is paid a wage. Ms. Lekkas says Frances may pursue a post-graduate program. There is no evidence she has. Frances is earning an income. Ms. Lekkas says she has never inquired of the children as to their incomes.
[46] Ms. Lekkas, I conclude, has not met the onus to establish entitlement. The children ceased to be children of the marriage for support purposes when they each graduated from college.
[47] In result, a final order is granted terminating the child support obligation of Mr. Lekkas as in para. 5 of the order granted May 14, 2007, for Frances as of July 1, 2014 and for Jimmy, as of June 1, 2015.
[48] Mr. Lekkas continued to pay child support well beyond these termination dates. He is entitled to a refund for the overpayment. However, as hereafter discussed, Mr. Lekkas does not seek such relief, subject to my ruling on retroactive s. 7 expenses.
Support Arrears
[49] The order of May 14, 2007 fixed arrears at $8,952.50. Reference was made in the order to payment of same by the Trustee in Bankruptcy from the sale of the matrimonial home. The home has not been sold.
[50] Ms. Lekkas claims the support arrears were never paid. She relies on a statement of arrears from the Family Responsibility Office (FRO), dated February 15, 2007, showing arrears of $8,673.50. But, that document predates the consent order.
[51] Mr. Lekkas asserts the support arrears have been paid. The FRO, he says, refused to wait until the house sold and, therefore, he paid additional amounts from 2011 to 2014 for the arrears. Ms. Spiegelberg obtained a statement of account from the FRO, dated November 25, 2016. They advise that all periodic guideline amounts and the support arrears have been paid in full.
[52] Despite this evidence, Ms. Lekkas continues to claim the arrears remaining outstanding. Her position is incorrect. The arrears have been paid in full and I so find. Her claim in this regard is dismissed. It had no merit and should not have been pursued.
Section 7 Expenses
[53] Ms. Lekkas seeks to recover retroactive extraordinary expenses in the amount of $69,369.54, plus interest, or, at least, the appropriate pro rata share owing by Mr. Lekkas. He opposes any payment.
[54] Paragraph 7 of the order granted May 14, 2007 directed Mr. Lekkas to pay his proportionate share of future s. 7 expenses, with Ms. Lekkas to provide receipts quarterly and reimbursement to be made within 30 days. There is a dispute as to the delivery of such receipts and with annual income disclosure so as to determine the proportionate share. Regardless, Ms. Lekkas did not pursue this claim until Mr. Lekkas served his motion to change.
[55] A number of issues arise with respect to her claim, including:
a) appropriate retroactive time period;
b) validity of claims under s. 7;
c) whether some claims included in student loan;
d) post-secondary expense;
e) child’s contributions; and
f) income of each party.
[56] The last item has now been addressed herein regarding disclosed incomes. I see no justifiable reason to go back beyond the three year period identified in D.B.S. v. S.R.G., 2006 SCC 37. Ms. Lekkas did not adequately explain her delay. Although Mr. Lekkas must have known there would be some expense, he did make inquiry and his conduct was not blameworthy. There would now be a hardship given the amount claimed.
[57] Nevertheless, the most significant problem is the way in which the evidence was tendered, simply receipts without explanation. Many of the items claimed, such as school fees or supplies, do not qualify under s. 7 but, rather, are a component in the guideline amount. Other items for college may have been covered by the student loans.
[58] The most significant claims pertain to student loans, $50,901.00 for Frances and $8,588.00 for Jimmy. But, Ms. Lekkas did not provide disclosure as to the actual education expense or the incomes of each child. The children have an obligation to contribute to their education. On this evidence, I cannot determine what the respective shares of child, mother and father ought to have been. However, on the incomes of the parties in the relevant time periods, the parental contribution would have been modest.
[59] On this evidence, the best I can say is that Mr. Lekkas would owe some amount for retroactive s. 7 expenses; however, such would not exceed the refund Mr. Lekkas is entitled to for the overpayment of guideline support. The proposal advanced by Ms. Spiegelberg to terminate child support as of the date of the hearing and to determine there are no s. 7 arrears is, therefore, fair and reasonable. In result, the claim by Ms. Lekkas for retroactive s. 7 expenses is dismissed.
Spousal Support
[60] The order of May 14, 2007, in para. 12, provided there would be no spousal support payable by either party. Nevertheless, the court still has jurisdiction to entertain a claim for such support. The threshold test, under s. 17(4.1), Divorce Act, is material change in circumstances, as defined in Willick v. Willick (1994), 6 R.F.L. (4th) 161 (S.C.C.).
[61] The incomes and expenses of both parties in 2016 are comparable to that in 2007.
[62] Indeed, incomes are less due to inflation. The children are now adults, providing financial relief to both parties. Ms. Lekkas remains in possession of the former matrimonial home, the equity having increased as she has been able to pay the ongoing mortgage and other related expenses. There is no material change on these facts.
[63] The only matter requiring determination pertains to the disability of Ms. Lekkas. She claims her disability results from the abuse by Mr. Lekkas during the marriage. She relies on correspondence/reports of her physician, Dr. Lang, as hereafter discussed.
[64] Mr. Lekkas denies the alleged abuse. He says the criminal charge was withdrawn by the Crown Attorney. Mr. Lekkas believes her brain injury resulted from a childhood injury.
[65] This matter has already been addressed by the Criminal Injuries Compensation Board in a decision released February 21, 2013. Ms. Lekkas had submitted a claim for compensation for pain and suffering, as a result of physical and sexual assault, and loss of wages. Both parties testified. Medical reports, as above, were filed in evidence.
[66] The Board determined Ms. Lekkas was a victim of crime as a result of one incident on October 12, 2003, finding that she sustained some bruising to her arms when grabbed forcefully by Mr. Lekkas. She was awarded $1,500.00 for pain and suffering. The Board did not accept her evidence, or that of her physician, with respect to the many other physical and sexual abuse claims. Of some interest, the Board noted Ms. Lekkas did not raise these allegations with her doctor until after she was served with the application herein.
[67] Further, the Board denied the wage claim of Ms. Lekkas in its entirety, finding that her inability to work did not result from an injury caused by crimes of violence.
[68] The medical reports of Dr. Lang dated January 24, 2011 and March 10, 2016 do not meet the criteria as expert evidence. Dr. Lang admits to being “an advocate on Ms. Lekkas’ behalf” and his reports clearly demonstrate a bias in her favour. No attempt was made to document a medical history or to present the basis for his diagnosis. Rather, only conclusions are presented, particularly that Ms. Lekkas has an acquired brain injury caused by Mr. Lekkas. As mentioned above, the Board rejected Dr. Lang’s evidence. I do as well.
[69] The principal events Ms. Lekkas relies on, referred to by Dr. Lang, and addressed by the Criminal Injuries Compensation Board occurred in 2003. Criminal charges were laid and subsequently withdrawn. Ms. Lekkas sought medical treatment. Yet no claim was presented for the alleged assault or for spousal support due to an inability to work as a result of the assault (although her answer did refer to the assault event) in the original proceeding. By 2007, when the settlement was negotiated, Ms. Lekkas had to be aware of her claim, if there was any basis for it, given her involvement in the case and her representation by counsel and, in respect of the evidentiary record herein, the original report of Dr. Lang.
[70] Ms. Lekkas does not take the position, nor could she in light of Dr. Lang’s report, that the injury was not discovered until after the settlement in 2007. Hence, there is no material change in circumstances. The claim for spousal support was only advanced in response to Mr. Lekkas’ motion to terminate child support. There is no merit to her claim. It is dismissed.
Property Claim
[71] Ms. Lekkas seeks an order directing Mr. Lekkas to pay her “$2 million in settlement, presumably as an equalization payment. The order of May 14, 2007 in para. 13 provided there would be no equalization payment by either party.
[72] The limitation period for such a property claim expired on May 14, 2009 as provided in s. 7(3), Family Law Act. As previously determined, Ms. Lekkas has failed to establish fraud such as to avoid the limitation period.
[73] In result, her claim is dismissed.
Summary
[74] For these reasons, the motion to change of Mr. Lekkas is granted, save for reimbursement for overpayment, and that of Ms. Lekkas is dismissed.
[75] This is a matter that should have been presented as a consent motion to change by terminating child support. Indeed, Ms. Lekkas should have notified the FRO when each child graduated so as to terminate enforcement. In her motion to change, Ms. Lekkas simply attempts to re-litigate claims previously dealt with in 2007. Even self-represented parties must bear the consequences of pursuing litigation that has no merit.
[76] In this regard, Ms. Spiegelberg requests a cost award on behalf of Mr. Lekkas in the amount of $7,646.71. Ms. Lekkas declined to address this item in her submissions. Regardless, I have reviewed the bill of costs presented and I am satisfied with the time recorded and the hourly rate. Indeed, the claim is modest in that Ms. Spiegelberg has restricted it to the long motion, not for preparation of the initial motion to change and related documents or for attending the case conference and settlement conference.
[77] In result, I award costs to Mr. Lekkas in the amount of $7,646.71, inclusive of disbursements and HST, payable by Ms. Lekkas within 30 days of the release of this decision.
D.J. Gordon J.