CITATION: Akkawi v. Habli, 2017 ONSC 6124

COURT FILE NO.: FC-14-311

DATE: 2017/12/14

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Sean Akkawi

Applicant

– and –

Nada Habli

Respondent

J. Alison Campbell, for the Applicant

Odette Rwigamba, for the Respondent

HEARD: December 2, 2016, May 15-19 and May 23-26, 2017

Reasons for judgment

SHELSTON J.

[1] The parties were married in Lebanon on September 19, 1996, and separated on August 2, 2012, in Ottawa. There are four children of the marriage. The parties had settled the issues of custody and access pursuant to minutes of settlement that were incorporated into the final order of Justice Mackinnon dated September 25, 2015.

[2] The issues for this trial are as follows:

a. a divorce order;

b. retroactive table child support and contributions to section 7 expenses from August 2012 to January 2014;

c. table child support and section 7 expenses commencing February 2014;

d. medical and dental benefits for the children;

e. retroactive spousal support from August 2012 to January 2014;

f. quantum and duration of spousal support commencing February 2014;

g. security for child and spousal support;

h. equalization of the net family property; and

i. costs.

[3] At the end of the trial, I ordered the parties to provide me with their written submissions, which were completed by July 7, 2017. On November 3, 2017, I requested and have received supplementary submissions to address the decision of Bakhshi v. Hosseinzadeh, 2017 ONCA 838, 284 A.C.W.S. (3d) 807, and its impact on the Maher agreement in this case.

Background

[4] At the time of the trial in May 2017, the applicant (“father”) was 48 years of age and the respondent (“mother”) was 39 years of age. The children of the marriage are:

a. Maya, 19 years of age, living with the mother and attending university in Ottawa. Since the end of May/first week of June 2016, she has resided with the mother. She has little contact with her father but will reach out to him for assistance;

b. Adam and Jad, 17 years of age and attending high school. Since separation, the children have lived primarily with the father. They have had no contact with their mother since 2014; and

c. Issam, 9 years of age and attending elementary school. Since separation, the child lived primarily with the father but since September 2015 he has alternated residence with the parents.

[5] In 1995, prior to the marriage, the father purchased a two-storey property in Ottawa as an investment property. At the date of marriage, the father was working as a dental technician in Ottawa, Ontario. The mother was a student living in Lebanon.

[6] When the parties married in Lebanon, the parties entered into a marriage contract required under Muslim law known as a “Maher” where the father was obligated to pay to the mother, in the event of separation, 1 kg of gold and one English gold lira. Since separation, the one English gold lira has been paid.

[7] After the marriage, the father sponsored the mother to come to Canada. The parties’ first residence was the father’s house in Ottawa. When the mother came to Ottawa in 1996, she was 18 years of age. Over the next ten-year period, four children were born.

[8] Before the mother came to Canada, the parties discussed her continuing her education. She arrived in Canada in September 1996 and took English as a second language. The parties agreed that her first priority would be caring for children. The mother continued in her role as the main caregiver while the father maintained his role as the main breadwinner. In 2001, the father was working as a dental technician, where he was injured at work and collected workman compensation benefits. He attended Algonquin College from 2001 to 2003 to complete his high school diploma on a part-time basis.

[9] In 2004, he decided to pursue a career as a denturist. With the support of the mother, the father attended a three-year course in Edmonton, Alberta, while the mother remained in Ottawa with the three children and studied on a part-time basis. The fourth child was born in 2005.

[10] From September 2004 to 2006, the father completed the necessary courses to receive his accreditation as a denturist. During this period of time, he would periodically return to Ottawa to spend time with his family.

[11] As part of the educational program, the father worked as an intern in Alberta until 2008. He was able to finance his education by receiving financial contributions from his parents and the mother’s parents as well as a student loan.

[12] The father moved his family to Edmonton in 2008 to be with him while he worked as an intern. The mother was very unhappy in Edmonton and once the father graduated, the family moved back to Ottawa. The father attempted to find work as a denturist but was unsuccessful. To be able to provide for his family, the father took various jobs, including working as a pizza cook.

[13] Unable to find work as a denturist, the father decided to open his own business in the first floor of his residence while the family would live in the upper part of the residence. He financed the renovations with a $26,000 loan from his brother in March 2009.

[14] The father started his business in March 2009. The father retained a bookkeeper to assist him in running his accounting. The bookkeeper, Mr. Fathallah, would attend monthly and receive the bank statements, the receipts statement and the Visa statements. The father relied on the bookkeeper for providing accurate statements and for preparing his corporate and personal income tax returns.

[15] In March 2011, the parties agreed that they needed more room for the family. The family living on the upper floor of the building was interfering with business. The parties decided to rent a three-bedroom home in Navan while the father used the St. Laurent Boulevard home for his office.

[16] By December 2011, the marriage was not going well. While the parents were on a trip to Cuba in January 2012, they agreed that the marriage was at an end. The parties returned to Canada after the trip. The parties remained together until August 2, 2012, when the mother left the matrimonial home because of her allegation that the father attempted to initiate sexual relations with her against her consent. The mother went to the police to make a statement but no charges were laid.

[17] After leaving the matrimonial home, the mother applied for subsidized housing. She moved in with her parents for a few months then to her brother’s home.

[18] The father remained in the matrimonial home with all four children and assumed all of their expenses. There were problems with the children such as fighting, missing school and doing drugs. The father went to a psychologist for a referral and was interacting with the schools on a regular basis.

[19] From August 2, 2012, until October 2012, the mother made no request to see the children and spent no time with the children. In October 2012, the parties attended mediation where they agreed to a nesting arrangement where the parties rotated living in the matrimonial home. The father would have the children from Monday morning to Friday morning, and the mother would have the children from Friday morning until Monday morning. During this period of time, the father paid for the rent, utilities, clothing and daycare for the youngest child, while the mother assumed the children’s cost every weekend from her OSAP loan income. This arrangement lasted from October 2012 to early March 2013.

[20] When the mother attended at the matrimonial home on the March 4, 2013 weekend to care for the children, she could not enter the property because the father had unilaterally changed the code on the security system. The children knew the code and used that information to gain access to the home with the mother. The mother requested the code from the father by email but he did not respond. That weekend, the twins were not listening to her and they were challenging her authority. The mother requested the assistance of the police to deal with the dysfunctional behaviour of the twins. On Monday morning, the police spoke to the twins to leave the home and go to school. After they left, the mother drove Maya and the youngest child to school that morning. On March 5, 2013, counsel for the mother wrote to the father’s counsel advising that there was a crisis at the matrimonial home and that going forward the mother would exercise access to Maya and Issam at her brother’s residence.

[21] In April 2013, the twins ran to the mother’s home after having an argument with their father. The father contacted the police, who attended at the mother’s home at which point they were advised the children were with the mother. The twins as well as Issam stayed for approximately ten days.

[22] After this incident, from April 2013 until October 2014, the mother would see the children at school during their lunch hour and would have the youngest child every weekend from Friday afternoon to Monday morning.

[23] During this period of time, there were changes in the behaviour of the children. The twin boys were having behavioural problems at school, such as aggressive behaviour and noncompliance with the father, who was involved with the school on an almost daily basis. During this period of time, the mother had no involvement. The father tried registering the twin boys in martial arts and the Air Force cadets to deal with their behavioural issues.

[24] The father commenced proceedings on February 7, 2014, seeking various claims for relief, including sole custody of the four children of the marriage, child support from the mother, security for the child support, exclusive possession of the matrimonial home, an equalization of the net family property and costs.

[25] On March 12, 2014, the mother, in her Answer, claimed sole custody of the children, exclusive possession of real property, an order that the father not remove the children outside of the jurisdiction of Ottawa without her consent or a court order, child support, spousal support retroactive to August 2, 2012, life insurance, an equalization of the net family property, the return of specific chattels and costs.

[26] In October 2014, the father moved his residence to a rental unit in the city. As the youngest child no longer had bussing, the father was required to drop the child off at school in Navan, which resulted in getting to work at 9:30 a.m. In November 2015, the father purchased a new residence.

[27] On October 29, 2014, Justice Blishen granted an order, on consent, that every weekend Issam would be at his mother’s from Friday at 3:40 p.m. until Monday morning at 9 a.m.; Maya would go every second weekend for the same period of time; and the twin boys would go every other weekend for the same period of time. Unfortunately, after approximately four to six weeks, the twins did not follow the schedule because of a dispute with their mother.

[28] Effective September 25, 2015, pursuant to the consent order of Justice Mackinnon, the parties agreed that Maya and Issam would alternate weeks between the parents’ homes. The twins stayed with the father and had no access to their mother.

[29] As of October 2015, on the weeks that the two children were with the mother, the father worked usually from 8:30 a.m. to 4 p.m. to be home to cook for the twins. On weeks that he had Issam, the father worked from 9:30 a.m. to approximately 3:30 p.m.

[30] Since the end of May or the first week of June 2016, Maya lives full-time with her mother.

[31] At the time of the trial, the twins attend high school and reside with the father, Maya is attending university and resides with her mother and Issam alternates weeks with each parent while attending elementary school.

[32] The father had little contact with Maya until recently when she attended for a couple of weekends at the father’s home.

[33] No child or spousal support has been paid by either party since separation in August 2012.

Credibility

[34] Both parties allege the other is not credible. In this proceeding, both parties have provided conflicting evidence on important events that occurred prior to and after their separation. The parties differ on the parenting schedule as well as on issues related to the equalization and the determination of income.

[35] With respect to the father, I found that at times:

a. the father would embellish his answers;

b. the father was evasive on issues related to finances;

c. the father answered many questions with “I do not know” when related to his business;

d. despite testifying that he never mixed business expenses and personal expenses, evidence from his Visa credit card indicates that is exactly what he did on many occasions. Further, Mr. Pittman, the father’s own expert, added back personal expenses paid by the business in calculating the father’s income for support purposes;

e. the father was very motivated to keep his income to the lowest reasonable amount. When presented with the mortgage application where the father indicated that his annual income was $90,000, the father answered that the representative of the bank simply asked for his gross business income. I simply do not find that to be credible, coupled with the fact that the father failed to produce a representative from the financial institution to corroborate his evidence;

f. despite being the only person doing the banking, when asked from which account his business expenses were paid in relation to the financial statement for the 2011 income tax year, the father could not recall; and

g. when the father was asked if the parties had a joint account, he replied that it was closed a long time after separation. When presented with the fact that the bank account was closed on May 11, 2012, prior to the agreed date of separation and that the funds were transferred to his own account, he simply said “could be”.

[36] With respect to the mother, I found that at times:

a. she alleged that she had a student loan that she paid off with a loan from her parents but made no effort to inquire as to possibly having the loan forgiven before she borrowed the money from her parents; and

b. she testified that she incurred expenses for the children but provided no documentary evidence to support that allegation.

[37] Overall, both parties at times were credible and at other times not credible in the face of other evidence, either testimony or documentary.

First issue: Retroactive table child support and contributions to section 7 expenses from August 2012 to January 2014

[38] The mother seeks retroactive child support from the date of separation on August 2, 2012 to the date of commencement of proceedings in February 2014, retroactive child support from February 2014 until the commencement of this trial in May 2017 and ongoing child support. The father opposes any retroactive support before February 2014.

[39] In the mother’s Answer, she did not claim child support from the date of separation but claimed spousal support commencing August 2, 2012. In her opening statement, the mother did not request child support effective August 2, 2012. At no time did the mother seek to amend her pleadings.

[40] The court is bound by the pleadings as filed in arriving at a decision. The pleadings define the issues to be adjudicated. In this matter, both parents have claimed child support in their respective pleadings.

[41] As the mother has not pled a retroactive amount of child support effective August 2, 2012, I find that it would be unfair to the father to permit the mother to seek relief that she did not claim before the court. I find that the mother was alive to the issue of retroactive support because her Answer specifically claims retroactive spousal support back to August 2, 2012. However, no such claim is made for child support.

[42] Further, even if I were to consider a retroactive order for child support, I am guided by the principles set out in D.B.S. v. S.R.G.; L.J.W. v. T.A.R.; Henry v. Henry; Hiemstra v. Hiemstra, 2006 SCC 37, [2006] 2 S.C.R. 231, where the Court directs that I should consider four factors as follows:

(a) Whether there was a reasonable excuse for why the claimant did not pursue child support or increased child support earlier.

(b) The conduct of the payor parent. The Court characterized “blameworthy conduct” as “anything that privileges the payor parent’s own interests over his/her child’s right to an appropriate amount of support” (D.B.S., at para. 106). It emphasized that a payor cannot simply hide their income increases from the recipient parent in hopes of avoiding larger child-support payments.

(c) Consideration of the present circumstances of the child.

(d) Any hardship that may be occasioned by a retroactive order.

[43] The mother relies on the fact that on November 29, 2012, she signed a financial statement that was filed as Exhibit 107, and that her previous lawyer requested support on her behalf. However, the mother’s lawyer did not testify and no evidence was presented with respect to the request. I give no weight to the mother’s testimony as it is hearsay evidence regarding what her previous lawyer did. The mother filed a copy of a letter dated December 17, 2012, filed as Exhibit 87, from Ms. Campbell to the mother’s then lawyer in which she acknowledges receipt of the mother’s financial statement and raises issues regarding parenting and property issues. There is no mention of either child or spousal support.

[44] Applying those factors to the mother’s request for child support for the period from August 2012 to February 2014, I find that the mother did not notify the father of her intention to claim child support before she filed her Answer in March 2014. I do not find any reasonable excuse as to why the mother did not notify the father of her intention to claim child support.

[45] I find that the mother did not meet her evidentiary burden to show that there was a request for support and there is no documentary evidence to conclude that a request for support was made prior to March 2014. I find that the calculation of child support, based on the pleadings filed by the father, should start as of February 1, 2014.

Second issue: Child support effective February 2014

Residential arrangements

[46] Proceeding on the issue of child support as of February 2014, the parties differ on the residential arrangements of the children and the parties’ respective incomes in determining the liability for and quantum of child support. By consent order dated October 29, 2014, Justice Blishen ordered that the children be in the care of their father except for the following times:

(i) Issam shall be in the care of his mother from Friday at 3:40 PM until Monday at 9 AM each weekend;

(ii) Maya shall be in the care of her mother every second weekend from Friday at 3:15 PM to Monday at 9 AM;

(iii) Jad and Adam shall be in the care of the mother every second weekend from Friday at 3:15 PM until Monday at 9 AM. Jad and Adam’s weekend in the mother’s care shall be the opposite of Maya’s weekend.

[47] I make the following findings of fact with respect to the children’s residential arrangements:

a. From February 2014 to December 2014, all four children resided primarily with the father;

b. From January to June 2015, the three oldest children lived primarily with the father and Issam was in a shared custody arrangement;

c. From July 2015 to December 2015, the twins remained with their father and Issam and Maya were in a shared custody arrangement;

d. From January 2016 to December 2016, the twins remained with the father and Issam and Maya were in a shared custody arrangement; and

e. As of July 2016, Maya moved to live full-time with her mother, Issam remains in a shared custody arrangement and the twins continue to reside primarily with their father.

Imputation of Income

[48] Both parties seek to impute income to the other party. In addition, the mother seeks to average the father’s income in arriving at an income determination.

[49] Section 19 of the Federal Child Support Guidelines, S.O.R./97-175, as am. is as follows:

19 (1) The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include the following:

(a) the spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of a child of the marriage or any child under the age of majority or by the reasonable educational or health needs of the spouse;

[50] The Court of Appeal in Drygala v. Pauli (2002), 2002 CanLII 41868 (ON CA), 61 O.R. (3d) 711, 29 R.F.L. (5th) 293, at para. 23 set out a three-part test for determining whether income should be imputed on the basis of intentional under-employment or unemployment as follows:

1. Is the spouse intentionally under-employed or unemployed?

2. If so, is the intentional under-employment or unemployment required by virtue of his reasonable educational needs?

3. If the answer to question #2 is negative, what income is appropriately imputed in the circumstances?

[51] The jurisprudence has considered the following factors on the issue of imputation of income:

a. A spouse is intentionally underemployed if he or she chooses to earn less than he or she is capable of earning having regard to all of the circumstances (Drygala, at para. 28).

b. There is no requirement that the underemployment or unemployment be undertaken in bad faith or with the intention of avoiding support payments (Drygala, at paras. 29-36).

c. The onus is on the party seeking to impute income to establish an evidentiary basis that the other party is intentionally underemployed or unemployed (Homsi v. Zaya, 2009 ONCA 322, 65 R.F.L. (6th) 17, at para. 28).

d. When considering the spouse’s capacity to earn income, the court should consider, among other things, the following principles:

i) There is a duty on the spouse to “actively seek out reasonable employment opportunities that will maximize their income potential so as to meet the needs of their children” (Thompson v. Thompson, 2013 ONSC 5500, at para. 99); and

ii) A spouse’s capacity to earn income can be influenced by his or her age, education, health, work history, and the availability of work that is within the scope of his or her capabilities (Marquez v. Zaipola, 2013 BCCA 433, 344 B.C.A.C. 133, at para. 37).

e. The second step of the Drygala test is generally treated as an overall test of reasonableness. In Jackson v. Mayerle, 2016 ONSC 72, 263 A.C.W.S. (3d) 135, at para. 702, the court held that once intentional underemployment is established, the onus shifts to one of the exceptions of reasonableness.

f. Where the spouse is intentionally and unreasonably underemployed or unemployed, the court has a large range of discretion to impute as income an amount founded on a rational basis, as detailed in the Court of Appeal case of D.D. v. H.D., [2015 ONCA 409](https://www.canlii.org/en/on/onca/doc/2015/2015onca409/2015onca409.html), 335 O.A.C. 376.

g. The main factors a court should consider are the age, education, skills, and health of the spouse, along with the number of hours that can be worked in light of competing obligations and the hourly rate the spouse could reasonably obtain (Drygala, at para. 45).

The mother’s income

[52] The father’s position is that the mother’s income should be calculated by her declared income and an imputed income for 10 hours each week at minimum wage for 46 weeks per year. The mother’s income for support purposes would be as follows:

a) 2014, $16,161 plus $4,887.50 = $21,048.50

b) 2015, $24,007 plus $5,092.50 = $29,099.50

c) 2016, $26,834 plus $10,125 = $36,959

d) 2017, $54,001

[53] The mother’s position is that her income should be fixed at the following:

a) 2014, $16,161

b) 2015, $24,007

c) 2016, $31,929

d) 2017, $54,001

Analysis

[54] When the mother came to Canada in 1996, she was 18 years of age. Her primary responsibility was to care for the four children. The mother pursued, on a part-time basis, a bachelor’s degree in computer science and a minor degree in math. By separation, the mother had graduated with her bachelor’s degree. She pursued a Master’s degree in September 2012 and completed it in 2015.

[55] I accept the evidence of the mother that she attempted to find employment after obtaining her bachelor’s degree, she applied for various jobs but received no interviews and no offers because she had no experience in the field. She decided to pursue a Master’s degree in Statistics in September 2012 to obtain the necessary work experience and to improve her education to make her more marketable in the workforce. She was entitled to a scholarship and worked part-time as a teaching assistant.

[56] The mother had part-time employment with Statistics Canada and the Canadian Institute of Health Research in the years 2014 and 2015. The mother worked on a contract with Statistics Canada from January to May 2016. She had no employment for June, July and August 2016. On September 1, 2016, the mother was hired by Statistics Canada and is on probation for a two-year period ending September 2018. Her annual income is $54,101 per year.

[57] The father’s position is that when the mother graduated with a bachelor’s degree shortly after separation, she should have gone into the workforce. Her decision to take three years to complete a two-year Master’s degree was her own, he was not consulted, and she had the ability to work.

[58] The father argues that the mother should have worked part-time to be able to pay support to her children. The father submits that the mother should have income imputed to her from September 2012 to September 2016 when she secured a full-time job with the federal government. In the alternative, the father submits that an income should be imputed to the mother as of September 2015 when she completed her Master’s degree.

[59] I find that the mother’s decision to pursue a Master’s degree in Statistics was a reasonable option. I accept the mother’s evidence that after graduating with a bachelor’s degree in computer science with no experience, that she was unable to find work. I find that the mother’s ability to find full-time employment with Statistics Canada as of September 2016 confirms that the mother’s decision was the right one.

[60] I reject the father’s submission that the mother could have earned minimum wage income as of the date of separation for two reasons. Firstly, I do not have any evidence as to what the minimum wage was in 2012 or the increase in the minimum wage as submitted by the father. Secondly, I do not find that the mother was intentionally unemployed or underemployed.

[61] As a result, I find that the mother’s income effective February 2014 going forward is as follows:

a) 2014, $16,161

b) 2015, $24,007

c) 2016, $31,929

d) 2017, $54,001

The father’s income

[62] The mother submits that the court should impute an income to the father pursuant to section 19 of the Federal Child Support Guidelines. The mother makes the following submissions:

a) the father has been intentionally under-employed;

b) the father has misrepresented his income and failed to disclose the income information; and

c) where there is an incomplete evidentiary record based on failure of the owner to provide disclosure, the court may draw an adverse inference.

[63] The mother seeks an order imputing income to the father in an amount between $90,000 and $120,000 per year. The father concedes that the revenue declared on his income tax return is not the income that should be used in determining his income for support purposes. The father’s position is that his income should be determined as follows:

a. 2013, $94,317

b. 2014, $56,798

c. 2015, $66,197

d. 2016, $66,197

Analysis

[64] In 2009, the father started his own business as a denturist. At the time he opened his business, with the assistance of Mr. Fathallah, he started to use a computer program designed for denturists known as Denturist Optimization Model (“DOM”). The DOM is a computer program designed for denturists where information is inputted such as patient information and treatment plans, and invoices for client services are generated. The father initially was the person who dealt with the DOM information. At various times, his receptionist would input information

[65] He described that his role as a denturist is to meet with patients, take a dental impression, create a model and complete the task. At the outset, the father and the mother agreed that the mother would do the bookkeeping and accounting. On a monthly basis, his bookkeeper, Mr. Fathallah, would attend at his office to receive the bank statements, the receipts and the Visa statements. All accounting issues, including both corporate and personal tax returns for the father, were prepared by this individual.

[66] In 2010, the father assumed responsibility for an intern from an Alberta college, which required him to pay her living expenses. During this period of time, he had two employees who stayed a total of eight to nine months acting as receptionist.

[67] Ms. Banos worked for five years as an employee for the father, including ordering supplies and posting patient information and treatment plans in the DOM. I find that she was a credible witness. She answered the questions directly, very assured and in a very calm way. She testified as follows:

a. the father did not post any information into the DOM because he was not trained and if she had any questions she would call the DOM support department;

b. the father did not access DOM and could not print out a treatment plan. He was totally reliant on his employees to access the system;

c. there were no instances when she did not put information into the DOM; and

d. all cash payments were entered into the DOM. When the cash is actually received she would put it under the father’s cell phone and he would take the cash. Usually the cash would be in small amounts as most people paid by debit or credit card.

[68] Ms. Banos testified that at a meeting in December 2015 she assisted in the printing out of the requested DOM reports for the bookkeeper, the father, Mr. Pittman and an accountant for the mother. Any report that was requested was printed.

[69] The father’s clientele evolved over time. Private clients usually pay by use of a debit card with very little cash. Patients whose services were paid by the City of Ottawa (those entitled to social service assistance) were requested to make a $25.00 deposit and once the father was reimbursed by the City, he would return the $25.00. If a patient had insurance, the father would bill the patient who would then reimburse the father once they received their payment from the insurance company and on occasions he would bill the insurance company directly. Finally, the father serviced patients who were entitled to benefits under the Ontario Disability Support Program (“ODSP”).

[70] The father testified that his sources of income were cash, debit, MasterCard, Visa, AMEX and insurance payments. The father denies having any undeclared cash received for his services. The father’s evidence is that 60% of his existing clients are ODSP patients. The father’s evidence is that he never reviewed the information inputted into the DOM nor did his bookkeeper, Mr. Fathallah.

[71] The father testified that he does not understand basic accounting principles such as the difference between debits and credits. His evidence was that the denturist course did not address the business part of his profession. Further, the father indicates he does not understand the notion of a shareholder loan nor the information contained in the financial statements and that he relied on his accountants.

[72] The father retained the services of Mr. Stephen Pittman, who was qualified, on consent of the parties, to give an opinion on the valuation of the father’s business as well as on his income. Mr. Pittman’s original report dated January 11, 2016, filed as Exhibit 61, concluded that the father’s income for support purposes was as follows:

a) year 2009 - $14,549

b) year 2010 - $87,646

c) year 2011 - $116,257

d) year 2012 - $49,981

e) year 2013 - $42,000

f) year 2014 - $42,000

g) year 2015 - $42,000

[73] On July 22, 2016, Mr. Pittman filed a report determining the father’s income for support purposes for the years 2012 to 2015. That report replaced his preliminary income report dated January 11, 2016. In that report, Mr. Pittman concluded that the father’s income was as follows:

a. 2012 - $83,540

b. 2013 - $94,317

c. 2014 - $56,798

d. 2015 - $66,197

[74] The mother submits that the father received cash income that is not reflected in Mr. Pittman’s calculation of the father’s income. After Mr. Pittman’s initial report was completed, the accuracy of the report was challenged based on allegations of unreported cash income and personal expenses paid for the father by his business. Mr. Pittman investigated the allegations and found that the information that he relied upon to prepare the report was not reliable because he could not figure out what the bookkeeper had done to the accounting records.

[75] The mother alleges that the father has cash income that was not calculated by Mr. Pittman’s assessment on either the father’s income or the value of the business. There is no corroboration from any witness other than the mother that the father has received cash for his services that was not accounted for in the financial records. The father denies that he receives money under the table. One of the reasons he does not is because to be insulated from liability in the event of any claims for negligence, his liability insurer requires that a receipt is provided to the patient, which is tax-deductible by the patient. The father’s evidence is that if he received unreported cash and there was a claim for negligence, his liability insurer would deny coverage under the terms of the plan.

[76] The father’s evidence is that all of his business expenses are posted to the DOM, which includes equipment and office supplies. The father indicates that his only remuneration from his business is that he is paid a salary from his business and receives a T4.

[77] In 2015, during this litigation process, the father became aware that his accounting records were inaccurate. He retained an accountant, Mr. Ghuman, who redid the father’s financial statements effective December 1, 2012. This accountant reviewed the DOM reports, the financial statements, the bank accounts and the Visa statements. All financial statements going forward have been redone by this accountant. However, the financial statement for the year 2012 has not been redone because the financial statements prior to December 1, 2012, were so defective and incomplete that they were beyond repair.

[78] Mr. Ghuman could not find any additional undeclared income after his review of the father’s financial statements. The gist of the problem was that the DOM program was not posting the invoices and receipts to the father. The father denies that he was aware that such errors were occurring and that he relied on his bookkeeper to provide accurate records. The father further denies these errors were ever brought to his attention prior to the involvement of the accountants for this litigation.

[79] Mr. Pittman was concerned about the accuracy of the financial statements so he contacted the owner of the DOM software in order to ensure that he had all relevant reports that affected revenue and to understand the interaction of the reports. The owner of the DOM software printed for Mr. Pittman the DOM reports that he used in his second report.

[80] Based on the DOM reports and the revised financial statements prepared by the accountant, Mr. Pittman prepared his second report, which provided the following:

a) he adjusted the revenue reported in the financial statements to the revenue reported on the correct DOM billing analysis and reconciled the revenue to the payments received and other relevant DOM reports;

b) he determined that the only way that the DOM system can capture a cash payment is if the patient invoice has been entered into the DOM system;

c) there was no way of knowing if the father provided and received payment for services that were not entered into the DOM system at all;

d) it would not be in the best interest of the father to receive cash payments because his insurer may not provide coverage for patient liability issues if there is no record of the work being done;

e) there was revenue that was not reported in the financial statements that was caused primarily by the combination of the bookkeeper’s failure to even attempt to reconcile deposits in the corporate bank account to revenue and payments recorded in the DOM system and the father’s lack of knowledge of the DOM system;

f) for each of the years of 2012, 2013, 2014 and 2015, he concluded that there were personal expenses that were charged to the business. Mr. Pittman grossed up the personal expenses related to travel, automobile, meals and entertainment, and utilities and added those expenses to the calculation of the father’s income for support purposes; and

g) in schedule 2-D of his report he identified that cash was posted for each year from 2009 to 2015. In 2014 and 2015 there was a drop in the cash receipts posted to the financial statements.

[81] Mr. Pittman did not provide an opinion on the father’s income for 2016. The father’s position is that upon a review of the November 30, 2016, corporate records, the gross profit in 2016 was increased by $11,716 and in both years, 2015 and 2016, the business suffered a loss. For 2016, the father’s position is that his income should be the same as 2015, being $66,197, and that this argument should continue for 2017.

[82] The mother disputes the accuracy of Mr. Pittman’s report. She does not dispute his methodology but that his assumptions and limitations seriously undermine the accuracy of his report.

[83] I reject the submission by the mother that the father intentionally misled Mr. Pittman. Further, I accept the evidence of the father that when he became aware that the DOM reports were not accurate, he hired an accountant and requested that Mr. Pittman revise his valuation report and income report. In addition, the father gave complete disclosure to his accountant and Mr. Pittman to meet at his office, with an accountant representing the mother, to print out the reports directly from the accounting system.

[84] I accept the evidence of the father, Mr. Ghuman and Mr. Pittman that the accounting records up to and including the year 2011 were so badly prepared that even with the assistance of Mr. Pittman, they could not be reconciled to be accurate as to the financial situation of the father’s company.

[85] Further, I do not believe that the father receives cash income that is not reported. Further, Mr. Pittman found no evidence of unreported income. He was alive to the issue. I accept the findings of Mr. Pittman with respect to the father’s income for the years 2012 to and including the year 2015. I find that his report is supported by the documentary evidence of the father’s income he reviewed.

[86] With respect to the argument that the father is intentionally under-employed, I reject that argument as well. While I accept that the father was exaggerating the amount of time that he has been required to miss work with respect to issues regarding one or both of the twin boys, there is no doubt he cares for both of the twin boys on a full-time basis as well as having the youngest son on alternating weeks. I do not find that the father has embarked upon a course of conduct to intentionally reduce his income.

Income averaging

[87] The mother’s position is that the father’s income for the years commencing in 2014 should be $98,038 by averaging his income for the years 2011, 2012 and 2013 as determined by Mr. Pittman, the expert witness retained by the father. In the alternative and taking into consideration that for the year 2015 the father’s income will be determined to be $90,000 as declared by the father on his mortgage application, averaging the years 2011, 2012, 2013 and 2015 the father’s income should be $96,028.50.

[88] The father rejects averaging his income but in the alternative submits that if an average income is identified over the course of four years as identified by Mr. Pittman, being the years 2012 to 2015, the average is $75,213 per year. In the further alternative, the father submits that it would be reasonable to impute an income to him of $70,000 in 2016.

[89] Section 16 of the Federal Child Support Guidelines sets out the general rule that income is determined using the sources of income set out under the heading “Total income” in the T1 General form issued by the Canada Revenue Agency (“line 150 income”):

16. Subject to sections 17 to 20, a parent’s or spouse’s annual income is determined using the sources of income set out under the heading “Total income” in the T1 General form issued by the Canada Revenue Agency and is adjusted in accordance with Schedule III.

[90] Sections 17 and 18 permit a court to depart from line 150 income where the court is of the opinion that the determination of the spouse’s line 150 income would not be the fairest determination of income.

[91] Section 17(1) of the Federal Child Support Guidelines provides that if the court is of the opinion that the determination of a spouse’s annual income under section 16 would not be a fair determination of that income, the court may have regard to the spouse’s income over the last three years and determine an amount that is fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non-recurring amount during those years.

[92] Section 17(2) of the Federal Child Support Guidelines provides that where a spouse has incurred a non-recurring capital or business investment loss, the court may, if it is of the opinion that the determination of the spouse’s annual income under section 16 would not provide the fairest determination of the annual income, choose not to apply sections 6 and 7 of Schedule III, and adjust the amount of the loss, including related expenses and carrying charges and interest expenses, to arrive at such amount as the court considers appropriate.

[93] The decision to average a spouse’s income over a three-year period is discretionary and not mandatory (Decaen v. Decaen, 2013 ONCA 218, 303 O.A.C. 261).

[94] The averaging income approach can be appropriate where a spouse’s income fluctuates significantly due to the unpredictability of income from business interests (Halliwell v. Halliwell, 2017 ONCA 349, 90 R.F.L. (7th) 253).

[95] The Guidelines rely on the more recent past to predict the near future and do not adopt average as a default methodology(Mason v. Mason, 2016 ONCA 725, 132 O.R. (3d) 641, at para. 138).

[96] The mother seeks to include in the averaging analysis the income earned by the father in 2011, being $116,257. Mr. Pittman has not provided an opinion as to the father’s income in 2010 and 2011 because he was not satisfied that the accounting records were accurate enough to allow him to make a determination. I find that using the figure of $116,257 for 2011 is on the evidence provided by Mr. Pittman inaccurate. As such, I will not include the figure of $116,257 for the year 2011 in the income averaging analysis.

[97] In this case, I have accepted that the father’s income in 2012, 2013 and 2014 is as the conclusions of Mr. Pittman’s report. I have determined that support should have commenced in 2014 going forward. I have accepted that in 2014 the father’s annual income was $56,798 and that in 2015 going forward his annual income is $90,000 per year.

[98] Since I am determining support for the years 2014, 2015 and 2016, I see no reason to average the incomes. The policy of the guidelines is that the court is to rely on the most recent information in determining support. I have that information and I will determine the support on a yearly basis based on my findings of the parties’ annual income.

[99] The father’s 2014 income tax return declared an annual income of $42,999.88. In Mr. Pittman’s first report, he concluded that the father’s income was $42,000. In his second report, he concluded that the father’s annual income is $56,798. I accept that conclusion and find that the father’s income in 2014 will be $56,798.

Year 2015 going forward

[100] For the year 2015 and going forward, the mother submits that the father’s income should be set at $90,000, which corresponds to the income that he declared when he applied for a mortgage with the Toronto Dominion Bank in 2015. The father relies on Mr. Pittman’s income report that his income be determined to be $66,157 in 2015.

[101] On October 20, 2015, the father was approved for a mortgage to be registered on his current property in the amount of $299,200. A copy of the mortgage commitment is filed as Exhibit 64 and is signed by both parties. In the mortgage commitment schedule B there was a list of conditions required to be satisfied, which included the following condition:

(a) Proof of employment and income verification as follows: (broker)

(b) Borrower: $90,000-by way of self-declared income letter, business registration order articles of incorporation, and three months bank statements showing income deposits to be annualized.

[102] Attached to the mortgage commitment are copies of bank statements commencing August 31, 2012, up to July 29, 2016. What is not included and has not been produced during this trial is the self-declared income letter that the father provided to the bank. There is no explanation as to why the letter was not provided. However, the father’s position is that the $90,000 was reflective of gross business income and consequently should not be used as his income for support purposes.

[103] The father did not produce the lender from Toronto Dominion Bank to confirm his evidence. I draw an adverse inference against the father for not producing such a witness. This issue was very important as it contradicts the evidence of Mr. Pittman and is crucial in my determination of any support obligations that the father will have towards the mother. Further, I find that in considering the entire circumstances of the loan that it is not credible that the bank would lend the father almost $300,000 based on his gross business income.

[104] I find that the conditions set out in the mortgage commitment clearly indicated that the $90,000 is based on self-declared income and not gross business income. I reject the position that the father’s income was $66,157 in 2015. In October 2015, the father held out to the Toronto Dominion Bank that his income was $90,000 per year. I find that the father has presented one income for support purposes and another income when he applied for a $300,000 mortgage.

[105] I find that the father’s income starting in 2015 and going forward to be $90,000 per year.

Third issue: Section 7 expenses

[106] The father seeks a contribution by the mother in the amount of $2,947.06 for section 7 expenses incurred for the children going back to November 3, 2012, from a total of the section 7 expenses of $9,343.04. The father’s pleadings do not seek retroactive contribution to section 7 expenses and consequently I will only adjudicate the section 7 expenses that were incurred after February 14, 2014, the date of the commencement of this proceeding.

[107] The mother’s position is that the first time that she was aware of the actual expenses incurred by the father was during the trial. This is not denied by the father. Further, the mother submits that many of the alleged section 7 expenses do not qualify, such as swimming lessons, shoes and clothing. Further, the mother submits that I should exercise my discretion on determining the entitlement and the amount of the section 7 expenses.

[108] Section 7(1) of the Federal Child Support Guidelines provides that in a child support order the court may, on either spouse’s request, provide for an amount to cover all or any portion of the following expenses, which expenses may be estimated, taking into account the necessity of the expense in relation to the child’s best interests and the reasonableness of the expense in relation to the means of the spouses and those of the child and to the family’s spending pattern prior to the separation:

(a) child care expenses incurred as a result of the custodial parent’s employment, illness, disability or education or training for employment;

(b) that portion of the medical and dental insurance premiums attributable to the child;

(c) health-related expenses that exceed insurance reimbursement by at least $100 annually, including orthodontic treatment, professional counselling provided by a psychologist, social worker, psychiatrist or any other person, physiotherapy, occupational therapy, speech therapy and prescription drugs, hearing aids, glasses and contact lenses;

(d) extra-ordinary expenses for primary or secondary school education or for any other educational programs that meet the child’s particular needs;

(e) expenses for post-secondary education; and

(f) extraordinary expenses for extracurricular activities.

[109] The father provided a table at Tab I of his submissions purportedly setting out the section 7 expenses related to Exhibits 38 to 52 that were filed during the trial.

[110] Before embarking upon an analysis of what expenses qualify as section 7 expenses, I will not be considering any expenses before the commencement of the proceedings because there is no evidence that notice was given to the mother of such a claim being advanced by the father.

[111] However, from the date of the commencement of the proceedings, where the father made a claim for a contribution to section 7 expenses, I find that there is no evidence that the father ever provided the mother with a copy of the expense until the commencement of the trial in December 2016. I further find that the father did not request reimbursement from the mother prior to the commencement of the trial.

[112] The mother’s position is that she has just started a “decent job” and has incurred debt to support herself and her children. She requested that the court exercise its discretion to deny all of the claims because the mother was never informed and given her limited income was not in a position to contribute.

[113] The mother does agree to share in section 7 expenses commencing July 1, 2017, that are incurred by the parties but that the agreement must be in writing before liability attaches. During the trial, the mother undertook to use her best efforts to submit claims for the children under her extended health plan and to reimburse the father for any sums received.

[114] I have made the above-noted findings based on the documentary evidence filed as exhibits during the trial. I acknowledge that the mother has incurred expenses for the children while in her care but she has not filed any documentary evidence and to assign an amount would be pure conjecture.

[115] The mother’s share will depend on her total income including spousal support. I understand that if any amount is owing by the mother to the father, the father submits it should be offset against any spousal support order.

[116] While it is acknowledged that the father has incurred expenses for optometrist, dental expenses, tutoring expenses, and school costs for the children, I find it is unfair that the father would seek reimbursement from the mother when he never requested payment from her until the commencement of the trial. Further, there was a break in the trial from December 2016 to May 2017 and some of the expenses being claimed were incurred in that adjournment period. The father made no request to the mother or provided receipts to the mother in that adjournment period for any section 7 expenses.

[117] I exercise my discretion to deny the father’s claim for a contribution by the mother to the section 7 expenses that I have identified herein.

Maya

[118] With respect to Maya, at the time of the trial she was 18 years of age. Since September 2016, she has been attending university on a full-time basis. The mother did not request any contribution to Maya’s post-secondary educational expenses.

[119] The father’s submission is that he should not contribute to the post-secondary educational expenses of Maya. He submits that there has been no budget submitted for Maya, no information as to her income earned in 2017, the only information he has as to her income in 2016 is a T4 indicating she made $1,945.43, no proof of expenses incurred and no evidence regarding what her loans could pay. Finally, because the mother has not sought contribution from the father for the commencement of the school year, he should not be responsible to contribute. The mother does not address this issue in her submissions.

[120] The Federal Child Support Guidelines indicate that post-secondary educational expenses are section 7 expenses. As Maya is over the age of 18 and living at home with the mother, the father has an obligation to contribute to her monthly expenses by the payment of Table Child Support. The father has not requested any disclosure from Maya herself as to her income, assets and liabilities.

[121] I find that Maya continues to be a child of the marriage and as such is entitled to receive child support if she is living with one of the parents. I find that she is living with the mother and the father should pay Table Child Support for Maya.

[122] With respect to her post-secondary educational expenses, I will not foreclose Maya from making a claim to have her parents contribute to her post-secondary education expenses such as tuition.

Fourth issue: Medical and dental benefits

[123] As the mother is a federal public servant, she has an extended medical and dental plan available as a benefit through her employment. The father does not have these benefits.

[124] The father seeks an order that the mother shall maintain the extended health coverage, which is available to her for the four children, so long as she is required to provide support for the children. Further, in the event the extended health coverage should be available to the father through his employment at a reasonable cost, he shall secure same for the children.

[125] The mother is in agreement with the proposal with the father, with the proviso that should the mother be required to incur any additional costs that she would have otherwise not have incurred but for the increased cost to insure the children, the amount payable to cover the children shall be considered and shared by the parties as a section 7 expense.

[126] Currently the mother is the only party who has said coverage through the terms of her employment. The mother currently does not have coverage for her dependents but only coverage for herself. The mother has testified that the option of adding her children as dependents is available through the extended health plan.

[127] I find that it is a reasonable request that the mother designate the children as dependents within the meaning of her extended health plan.

Fifth issue: Spousal Support

[128] The father concedes that the mother is entitled to spousal support. The father proposes a lump sum payment of $12,757.87 in satisfaction of the mother’s claims for spousal support up to and including December 31, 2016, less a payment of $11,792 owed by the mother to the father for child support, resulting in a payment of $965.87.

[129] The mother’s position is that she should receive spousal support from the date of separation and that it should continue until December 31, 2020, when the support would be reviewable. The mother’s position is that she is entitled to the midrange of support.

[130] Despite the father conceding the mother is entitled to spousal support, to be able to determine the range and duration of support I must determine the nature of the mother’s entitlement to said support. I find that the mother was entitled to both compensatory and non-compensatory support based on the following;

a) the length of cohabitation from September 1996 to August 2012, a period of almost 16 years;

b) the assumption by the mother of the primary responsibility for caring for the children and assuming the domestic obligations for the family;

c) the benefit derived by the father as a result of the mother assuming care of the children while he was in Alberta upgrading his education and graduating as a denturist;

d) her lack of employment throughout the marriage;

e) the economic loss that she sustained as a result of roles assumed during the marriage; and

f) her ongoing need for spousal support based on the means and needs test.

Retroactive support from August 2012 to March 2014

[131] In Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, the Supreme Court of Canada confirmed that the principles applicable to claims for retroactive child support set out in D.B.S. v. S.R.G.; L.J.W. v. T.A.R.; Henry v. Henry; Hiemstra v. Hiemstra, 2006 SCC 37, [2006] 2 S.C.R. 231, were relevant in deciding the suitability of retroactive spousal support.

[132] In Kerr, the Court cautioned that there are different principles and objectives with respect to the right to spousal support and the right to child support, and that any retroactive claim must be analysed within this framework. In addition, the court identifies the two competing interests that must be taken into consideration. Firstly, the interest of the payor of having certainty knowing his or her legal obligations and, secondly, the general policy of having an incentive for spousal support claimants to advance their claim promptly.

[133] When considering a retroactive spousal support award, the court still must conduct an analysis of the recipient’s needs and the income tax considerations of a lump-sum spousal support award.

[134] The mother first raised her claim for retroactive spousal support in her Answer dated March 23, 2014. The father’s evidence is that the first time he was aware that a claim had been made was when he received the mother’s Answer and that there was no request for spousal support predating the filing of the Answer.

[135] I find that prior to March 12, 2014, the mother did not put the father on notice that she was claiming spousal support. There is no documentary evidence or testimony to provide an evidentiary basis for the finding that prior to March 12, 2014, the mother had provided notice to the father that she was seeking spousal support retroactive to September 2012.

[136] I have weighed the various interests to be considered on a claim for retroactive spousal support. From the time that the mother filed her Answer, the children were residing primarily with the father and did so until the end of December 2015. At this time, the mother was employed as a teaching assistant at the university while she was pursuing her Master’s degree. In 2014 and 2015, the mother had an annual income of $16,161 and $24,007 respectively. The mother did not pay any child support and the father did not pay any spousal support.

[137] If the mother sought spousal support when the parties separated in September 2012, it was incumbent upon her to put the father on notice and advance the claim. Her claim for spousal support was filed in response to the father’s claim for, amongst other relief, child support. Considering all the factors, I find that spousal support should be calculated as of March 1, 2014.

Spousal support commencing March 2014 to date

[138] With respect to ongoing support effective March 2014, I accept the statement of law stated by Justice Mossip in Fox v. Fox, 2017 ONSC 6509, at para. 176:

The decision in Kerr v. Baranow, [2011] S.C.R. 269, affirmed the principles set out in three earlier Ontario Court of Appeal decisions, namely; Mackinnon v. Mackinnon, 2005 CanLII 13191 (ON CA), [2005] O.J. No. 1552; Fisher, and Cassidy v. McNeil, 2010 ONCA 218, [2010] O.J. no. 1158, that post-application support is not “retroactive support,” which requires the more detailed analysis that claims for support in the period before the commencement of an application do. The court is simply making the order that should have been made in the first place, if all the information had been before the court then.

[139] In determining the range of spousal support, I have considered the following factors:

a. the mother was the primary caregiver of the children and assumed the domestic functions;

b. the mother was responsible for the children when the father traveled to Alberta to pursue his education to become a denturist;

c. the mother was not employed through the almost 16 years of cohabitation;

d. the mother was not able to pursue her educational pursuits except on a part-time basis during the cohabitation;

e. the mother sustained economic losses as a result of these responsibilities and the father received an advantage to allow him to retrain and earn an income that supported the entire family;

f. the mother had and has needs that she cannot meet with her current income;

g. the mother’s standard of living has been adversely affected as a result of the separation;

h. the children’s residence has varied since separation, with the oldest child currently living with the mother, the twins residing with the father and the youngest child alternating residences;

i. the mother’s entitlement to an equalization payment is not so large as to provide her with security to be able to support herself without spousal support; and

j. at the date of separation, the mother was 35 years of age.

[140] In this case, the parties have a hybrid or mixed custody arrangement as described in the Spousal Support Advisory Guidelines: The Revised User’s Guide prepared by Prof. Rogerson and Prof. Thompson. At page 36 of the guide, the authors state:

(h) Hybrid or mixed custody

There are cases in which at least one child is in shared custody plus the split, sole or primary residence of the others. These are complex cases, but the software by and large solves the problems of calculation of child support and notional child support.

Because at least one of the children is in shared custody, the discretion of s.9 of the Child Support Guidelines is available in assessing child support…. In turn, as with shared custody, that child support discretion can complicate the SSAG calculations. Any complications can be resolved by simply using this set off to determine child support and using spousal support to adjust, e.g. T.L. v J.L., 2014 ONSC 91.

As with split custody, there is no automatic extension of the range in the formula to include a 50/50 split of the NDI, especially as there may be an odd number of children involved. If there is much movement between the homes, not just for the shared custody child, there may be good argument in favour of equal living standards, e.g. Ryder v. Walker, 2015 ONSC 2332 (1 child primarily with mother, 2 shared, living standards should be “not too dissimilar”).

[141] I have determined that the range of spousal support will vary from the years 2014 going forward based on the residential arrangements of the children and the parties’ respective incomes.

Duration of spousal support

[142] The mother’s position is that the spousal support should be reviewable in the year 2020. The father’s position is that spousal support should end by way of a lump sum payment as of December 31, 2016.

[143] I do not find that a lump sum payment is appropriate in the circumstances. The mother has been out of the workforce for most of their married life and is currently a probationary employee. I do not find that a lump sum payment would meet the objectives of the Divorce Act specifically set out in section 15.2(6), which states that an order should:

(a) recognize any economic advantages or disadvantages arising from the marriage or its breakdown;

(b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;

(c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and

(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.

[144] The Spousal Support Advisory Guidelines provide that based on 16 years of cohabitation with the recipient being age 35 of the date of separation, the range of support is a minimum of eight years and a maximum duration of 18 years.

[145] I find that this is a case for periodic support and not for lump sum support. The question is for how long. In determining the duration of spousal support, I have considered various factors including the following:

a. the nature of the mother’s entitlement to spousal support being both compensatory and non-compensatory;

b. the length of the cohabitation being almost 16 years;

c. the mother’s age at separation being 35;

d. the reasonableness of the mother’s decision to return to university to obtain a Master’s degree;

e. the mother has obtained a full-time position as of September 2016 with a two-year probationary period;

f. the commencement of support is March 1, 2014, when the mother was 37 years of age; and

g. no support has been paid by the father since separation.

I find that the mother shall be entitled to spousal support for 10 years from March 1, 2014 to February 1, 2024. The spousal support will be subject to variation in the event there is a material change in circumstances.

Calculation of Child and Spousal Support

Year 2014

[146] In 2014 all four children resided primarily with the father. Based on the father earning $56,798, the mother earning $16,165, and all four children residing primarily with the father, I order that the mother pay to the father child support of $265 per month commencing March 1, 2014.

[147] With respect to spousal support, I find that the high range of $669 per month is the appropriate amount as it would leave the father with 77% and the mother with 23% of the net disposable income (“NDI”).

[148] As the father will not be able to deduct the spousal support in 2014, the after-tax costs must be considered. The parties have not made submissions with respect to the tax rate to be applied to the non-deductible spousal support. In such circumstances, I have the jurisdiction to make an order. I have decided to use a 30% discount factor resulting in a net payment of $468.30.

[149] Consequently, commencing March 1, 2014, the father should have paid the mother $468.30 per month in net after-tax spousal support.

Year 2015

[150] In 2015 the twins resided with the father on a full-time basis, Issam was in a shared custody arrangement and Maya lived with the father full-time until June 2015 when she entered into a shared custody arrangement. The mother submits that Maya and Issam were in a shared custody arrangement, which would result in a lower amount of spousal support based on shared custody.

[151] The burden of proof is on the mother to provide evidence that she had physical custody of two children not less than 40% of the time over the course of the year 2015.

[152] I accept that the youngest child was in a shared custody arrangement for the entire year. With respect to the eldest daughter, she lived primarily with the father for half of the year and then for the last six months of 2015 she alternated residences between the parties’ homes. The mother has not provided satisfactory evidence to allow me to conclude that Maya has been in her physical custody for not less than 40% of the time in the year 2015.

[153] Consequently, I find that in 2015 the father had physical custody of the three oldest children and the parties shared custody of the youngest child.

[154] Based on the residential arrangements in 2015, the father’s income of $90,000, and the mother’s income of $24,007, I order that the mother pay to the father child support of $202 per month commencing January 1, 2015.

[155] With respect to spousal support, based on the father having three children more than 60% of the year and one child in a shared custody arrangement, I find that the midrange of spousal support is appropriate in the amount of $1,460 per month, which would result in the father having 61% and the mother having 39% of the NDI.

[156] Applying a 30% discount factor to the spousal support of $1,460 results in the payment of $1,022 per month.

[157] I order that the father pay the mother non-deductible spousal support of $1,022 per month commencing in January 2015 up to and including December 2015.

Year 2016

[158] In 2016 the twins lived with the father while Maya and Issam lived in a shared custody arrangement. In June 2016, Maya moved to live full-time with her mother.

[159] Based on the residential arrangements, the father’s income of $90,000 and the mother’s income of $31,929, I order that the father pay to the mother child support of $529 per month commencing January 1, 2016.

[160] With respect to spousal support, I find that the high range is appropriate in the amount of $980 per month of deductible spousal support as it will provide the father with 56% and the mother with 44% of the NDI. I order that commencing January 1, 2016 the father pay to the mother spousal support of $980 per month.

Year 2017

[161] Based on the residential arrangements for the twins living with the father, Maya living with the mother and Issam living in shared custody, the father earning $90,000 and the mother earning $54,001, I order that the father pays to the mother child support of $247 per month commencing January 2017.

[162] With respect to spousal support, I find that the high range is appropriate and a payment of $668 per month will provide the father with 54% and the mother with 46% of the NDI. I order that commencing January 1, 2017, the father pay to the mother spousal support of $668 per month.

Sixth issue: Security for the payment of child and spousal support

[163] Both parties have claimed life insurance to secure child and/or spousal support payments. The father has no life insurance except the mortgage insurance on his new home. The mother has no life insurance.

[164] The mother accepted the father’s proposal for life insurance except that they could not agree on the amount. While this matter was under reserve, the parties advised that they agreed that the amount of life insurance for the child support would be $150,000.

[165] The parties provided me with a draft order, which is more properly applicable to a separation agreement than a court order. I exercise my discretion and make the following order:

a. I order that the mother shall be required to maintain a life insurance policy in the amount of $150,000 identifying the father as the irrevocable beneficiary in trust for the children, and such policies to be maintained until such time as the requirement to pay child support is terminated for all of the children.

b. The father shall be required to maintain a life insurance policy in the amount of $150,000 identifying the mother as the irrevocable beneficiary in trust for the children; such policy is to be maintained until such time as the requirement to pay child support is terminated for all of the children.

c. All payments made for the purpose of child support shall be binding on the estate of that party.

d. In the event that either policy should not be in place, lapse or no longer be in force and effect at the time of the death of one of the parties, any and all support outstanding pursuant to this order shall constitute a first charge in favour of the survivor against the estate of the deceased.

e. In addition to any remedy either the father or mother shall have against the estate of the deceased spouse in the event the insurance proceeds are not paid, the surviving spouse shall be entitled to make application under the Succession Law Reform Act or successor legislation, on behalf of the child, as a dependent. The claim shall form a first charge on the estate.

[166] I received no submissions of life insurance for the spousal support.

Seventh issue: Calculation of the equalization of the net family property

Consent issues

[167] Both parties have provided me with net family property statements. The parties filed an Agreed Statement of Facts where certain agreements were reached regarding the values in the calculation of the net family property. After a review of the written submissions, including the parties’ respective net family property statements, further agreements are indicated such as:

(a) the value of mother’s real property located in Lebanon described as no. 1730 is, at the date of separation, $3,375;

(b) the value of mother’s real property located in Lebanon described as no. 14 is, at the date of separation, $17,760;

(c) the value of mother’s real property located in Lebanon described as no. 31 is, at the date of separation, $16,720;

(d) the value of the father’s notional tax related to the father’s business being Sean Denture and Implant Centre is, at the date of separation, $11,025;

(e) the value of the father’s notional capital gains regarding 712 St. Laurent Boulevard, Ottawa is, at the date of separation, $18,150; and

(f) the value of the father’s notional capital gains regarding 712 St. Laurent Boulevard, Ottawa was, at the date of marriage, $3,200.

Disputed issues

[168] There are six issues in the calculation of the net family property that the parties do not agree upon.

Household goods and furniture

[169] Initially, the father’s position was that there would be no value attributable to the contents in the matrimonial home because the value was minimal, the mother had an opportunity to request a portion of the contents, there is limited evidence regarding values, the mother removed certain items and the only property of significant value is the bedroom set. The mother argued that the value of the contents was significantly more. The father concedes that if the court is to provide a value he proposes $2,450 as being reasonable. The mother in her written submissions accepts that value.

[170] I find that at the date of separation the father retained more contents than the mother and that these contents had a value. I find that the value of contents retained by the father at the date of separation is $2,450.

The value of the father’s business described as Sean Denture and Implant Centre (“SDIC”)

[171] The father relies on the expert report and testimony of Mr. Stephen Pittman that the value of SDIC at the time of separation was $122,500. The mother, in her written submissions, claims the value of SDIC was $158,384 at the time of separation based on her own calculations.

[172] The mother filed no expert report on valuation of the father’s shares in SDIC. In the mother’s opening statement, her counsel advised the court of her intention to call her own expert, Mr. Koshy, to provide an opinion as to the value of the father’s company. During the trial, the mother decided not to call any expert evidence regarding the value of SDIC.

[173] The mother, in her written submissions, makes a calculation on the value of the husband’s business. The mother is not an expert witness and as such cannot provide an opinion as to the value of the father’s shares in SDIC. I find that the only expert evidence I have before me is the opinion of Mr. Pittman.

[174] Further, the mother submits that the financial information given to Mr. Pittman was materially incorrect and that Mr. Pittman did not conduct an investigation to ensure that all fees for services rendered were reported nor were expenses reported for 2011. The mother submits that the expert report is unreliable and that Mr. Pittman as an expert had an obligation to seek out relevant documents and diligently review the documents to arrive at an opinion. The mother’s position is that Mr. Pittman failed to fulfil his obligation.

[175] I have reviewed the two reports prepared by Mr. Pittman regarding the value of the father’s interest in SDIC and had the opportunity to have him testify before me. I find that Mr. Pittman provided an opinion that was fair, objective and nonpartisan. Mr. Pittman executed the form under the Family Law Rules and provided testimony that confirmed that he was aware of his obligation and that he performed the obligation imposed upon him by law.

[176] Mr. Pittman filed two reports, the first dated July 31, 2015, filed as Exhibit 91, and a second report dated July 22, 2016, filed as Exhibit 92. In the first report, Mr. Pittman concluded that the value of SDIC was $37,485, as of January 1, 2012, based on a calculation valuation report, which entails minimal review and analysis of the relevant information with little or no corroboration. Mr. Pittman acknowledged that his report was not an estimate valuation report or a comprehensive evaluation report.

[177] After the first valuation report was prepared, Mr. Pittman became aware of outstanding questions arising from his review of the accounting records and questions raised by the mother. Faced with this dilemma, Mr. Pittman undertook a comprehensive review of the father’s accounting information. Mr. Pittman recommended, and the father agreed, to retain an accountant to review and potentially redo the accounting information for SDIC. Mr. Pittman contacted Mr. Dean Fenwick of DOM to ensure that he had the correct printouts that accurately reflected the income of the business. He then undertook to review some of the expenses to test for personal versus business expenses. Finally, he reviewed and made adjustments to the corporate financial statements to ensure that they were accurate.

[178] By report dated July 22, 2016, Mr. Pittman provided a calculation valuation report, which replaced his earlier report dated July 31, 2015. The second report valued the shares as of August 2, 2016, rather than January 1, 2016.

[179] As result of new information, Mr. Pittman prepared a revised fair market value schedule 2, which was filed as Exhibit 94. It estimated the value of the shares to be $113,000 (low value) and $132,000 (high) with the midpoint being $122,500 less a tax liability of $11,025. In addition, Mr. Pittman noted a tax liability inherent in the share valuation as the father had a notional tax liability of $17,327, which Mr. Pittman agreed should be discounted to the sum of $13,168.

[180] Mr. Pittman was cross-examined by counsel for the mother and did not change any of his conclusions in his report dated July 22, 2016. In cross-examination, Mr. Pittman agreed that if the sum of $10,000 of personal expenses were added back to income in 2011, it would change his valuation. He stated that the valuation would increase as follows:

a) $113,000 would increase to $127,000;

b) $132,000 would increase to $148,000; and

c) the midpoint of $122,500 would increase to $136,500.

[181] Mr. Pittman denied that he found any evidence that the father had undeclared cash income. He did find that personal expenses were put through the business and he added those expenses plus a gross up for income tax back to the father as income for support purposes.

[182] Mr. Pittman stated that he would have picked the low range for the valuation of the shares if he had more transactions reviewed. In his 30 years of practice as a valuator, he normally picks the midpoint valuation.

[183] Contrary to the submission of the mother, I find that Mr. Pittman discharged his obligation to be fair, objective and nonpartisan and made significant efforts to seek out relevant documents, diligently review the documents and provide an opinion after a thoughtful analysis.

[184] I accept Mr. Pittman’s evidence as to the value of SDIC and the corresponding tax liability. Despite not calling her own expert to testify at the trial, the mother has made many submissions regarding the valuation of SDIC, which were not put into evidence, questions not put to Mr. Pittman and evidence that was not before the court.

[185] The father has the burden of proof to provide a valuation that is accepted by the court on a balance of probabilities. In the circumstances, I find that the father has met his burden and the value of SDIC as of August 2, 2012, is $122,500.

Contingent income tax liability by father related to repayment of shareholder loan

[186] I accepted the evidence of Mr. Pittman that the father has a contingent tax liability of $17,327 discounted to $13,168.

Father’s line of credit

[187] As of the date of the separation, the father owed the Toronto Dominion Bank $33,842.15 on his line of credit. Mr. Pittman testified that in arriving at the value of the father’s business, he did not include the value of the line of credit owed by the father to Toronto Dominion Bank at the date of separation because there was no corporate line of credit for the father’s business and that the father’s indebtedness to the Toronto Dominion Bank was an overdraft that the father used for personal purposes.

[188] The father testified that his line of credit with the Toronto Dominion Bank was used for business purposes but that the automatic withdrawal payments for the line of credit came out of his personal chequing account. Further, the father indicated that the line of credit was originally used to purchase business expenses when he started, such as equipment and supplies, and by separation there was no personal use of the line of credit. The line of credit was eventually paid in March/April 2017 when he re-mortgaged 712 St. Laurent Boulevard.

[189] The father’s evidence is that he had a line of credit at the Toronto Dominion Bank as of the date of separation. On February 10, 2012, the father decided to repay his brother, Issam Akkawi, the sum of $26,000 that he had borrowed on March 3, 2009, to finance the renovations on the first floor of his business. There was no written contract, there was no interest payable and there were no repayment terms. The brother testified that on February 10, 2012, the father showed up without prior notice and gave him a cheque for $26,000, which is corroborated by a copy of the bank draft filed as Exhibit 98.

[190] The mother indicated that she was aware that the father’s family helped him start the business but was unaware of the particulars. She says that by 2011, the father was debt-free. She admits that a loan was made but the father told the mother that he paid back the loan in 2011. The mother testified the year 2011 was a good year financially because the father had paid off his OSAP loan, the parties were going to restaurants on a regular basis and they were purchasing better quality clothing for the children. Further, in 2011, the mother indicated that the family had a 2010 Toyota Corolla and a brand-new GMC Acadia SUV. In December 2011, the parents went to Cuba on a vacation.

[191] The mother has serious doubts that the debt to the father’s brother was owing as of the date of separation. She does not believe that the father incurred such a debt.

[192] I believe that the father repaid the debt in February 2012. While I have issues with respect to the father’s credibility regarding some of the issues, I accept the father’s evidence that he repaid his brother the money primarily because I believe his brother, who corroborated the father’s story, to be a credible witness. While the mother may have doubts, I find that on a balance of probabilities that the father owed his brother $26,000 as of the date of separation.

[193] I believe the brother loaned money to the father and that the father repaid the loan in February 2012. The brother was a very credible witness who spoke clearly and directly, and there was no hesitation in his speech. The brother’s evidence is corroborated by a copy of the cheque that was given to him by his brother.

[194] I accept that there was no written contract, no interest schedule and no repayment schedule for the loan of $26,000. This was a loan between brothers. This was not a commercial transaction between an individual and an institutional lender. And in this case the brother testified before the court regarding the original loan and the repayment of said loan.

[195] I find that the father has borrowed money from a relative before, such as when he borrowed $50,000 from his brother Hussam Akkawi on November 5, 2015, which the father paid back in February 2017. Again there was no written loan agreement, no term, and no interest, with the understanding that the father would pay it back when he could.

[196] I find that on the date of separation the father owed the Toronto Dominion Bank the sum of $33,842.15.

Mother’s debt to her parents

[197] The mother submits that at the date of separation she owed her parents $35,000 based on a series of loans given to the mother by her parents to cover the cost of her post-secondary education. She relies on a document dated January 6, 2012, entitled “Accord de Pret.”

[198] The father denies that there was any valid debt ever incurred because he was never aware that his wife had been borrowing money from her parents, the agreement was executed after the funds were advanced, and the document was signed after the parties discussed separation in Cuba in January 2012. Further, he argues that the court should draw an adverse inference because the mother failed to call either her mother or father to testify regarding the alleged indebtedness as they were both signatories of the alleged agreement and the mother failed to provide any evidence that she made any payment towards this debt.

[199] The mother’s evidence is that the cost of her education in the years 2005 to 2007 was paid for by her father. During this period of time, the father was studying in Alberta to be a denturist and money was very tight. Despite alleging that as of September 2016 she has been paying $500.00 a month towards this debt, the mother did not provide any written corroborative evidence from her parents, bank account or copies of cancelled cheques. The mother’s sole evidence is her viva voce evidence.

[200] The mother has the burden of proof to show that on a balance of probabilities that she had incurred the debt with her parents and that the debt existed as of August 2, 2012.

[201] I accept the evidence of the father that he was unaware that the mother had allegedly been borrowing money from her parents to fund her education while he was in Edmonton, Alberta. I am further suspicious about the loan because the loan agreement was signed after the parties returned from Cuba in January 2012 and after, according to the mother, the parties decided to separate in Cuba.

[202] Further, while the father had his two brothers testify to corroborate his evidence regarding the loans, the mother’s parents did not testify. The burden of proof is on the mother to prove that the debt had been incurred and that there was a balance outstanding as of the date of separation. The father submits that I should draw an adverse inference because of the failure of the parents to testify. I will not do so. It is up to each party to present the evidence that they believe supports their contentions in a trial.

[203] I do find that much of the mother’s evidence is vague such as to how much money was paid, when the first payment was made, when the future payments were made and how she calculated the balance of $35,000 as of the date of separation. The only document that exists is the “Accord de Pret” signed after the parties returned for their Caribbean trip where they discussed separation.

[204] The only documentary evidence provided by the mother was a statement of student account from the University of Ottawa and her financial statement sworn May 2, 2017, showing the debt as a liability. On the other hand, I have the evidence of the father who indicates that he helped pay for part of the mother’s education. However, the father’s evidence was vague and not helpful.

[205] Considering all the circumstances, I find that the mother has not discharged her burden of proof. Consequently, I reject the mother’s request to claim a $35,000 loan to her parents owing on the date of separation.

Mother’s Lebanese properties

[206] At the date of separation, the mother owned a share in three properties located in Lebanon, which according to her financial statement dated April 27, 2017, had a value set out below as of the date of separation:

(a) no. 1730, Abdakraman, Saidi, valued at $3,375;

(b) no. 14, Abdakraman, Saidi, valued at $17,760; and

(c) no. 31, Abdakraman, Saidi, valued at $16,720.

[207] The values attributable by the mother to these three pieces of real property were apparently based on an appraisal that her father had obtained. Neither the appraiser nor the father testified, leaving the court without corroborative evidence as to the values of these three properties, save the acceptance by the father of the values inserted by the mother in her net family property statement.

[208] The mother testified that she has no written contract between her and her father relating to the real property and that she found out about the transfer after the date of separation. The mother testified as to the father’s intentions regarding estate planning. However, the mother’s comments regarding her father’s intention are of little weight because they are hearsay. If the mother wanted to have the father testify as to what his intention was, the father should have testified. If the mother sought to exclude the property based on Lebanese law, she had an obligation to provide an expert witness on Lebanese law to advise the court as to the legal effect of the transfers. In both circumstances, the mother did not have the father testify nor did she produce an expert report regarding Lebanese real property law.

[209] As the mother seeks to have the real property excluded as a gift pursuant to the Family Law Act, the burden of proof is on her to provide the evidentiary basis to allow the court to make such a decision.

[210] The mother’s evidence was that her father had gifted the property to her mother and his six children in keeping with the common practice in Lebanon. The mother did not submit an expert witness regarding the mother’s financial interest in the three properties and whether she is listed as an owner. Further, the mother failed to provide a copy of the real estate contract or deed pursuant to which the properties were transferred. Further, the mother failed to provide any evidence to interpret her legal interest in the property to support a contention that she, although listed as an owner, has no right to deal with the property as an owner.

[211] Finally, the restrictions relied upon by the mother with respect to the real properties do not appear with respect to number 1730.

[212] The mother’s evidence is that the real property belongs to her father and under Lebanese law, a child’s entitlement is described in the deed but the property cannot be rented, sold or mortgaged until the mother dies.

[213] The father’s evidence is that the property was gifted to both the father and mother at a time when he had a very good relationship with the mother’s parents and had in fact sponsored their move to Canada.

[214] The mother has not provided any evidence as to Lebanese law and the court cannot take judicial notice of foreign law. I find that the burden of proof is on the mother to indicate that the property should be excluded from the calculation of the net family property. The mother has failed to provide sufficient documentary evidence to permit me to make a judicial finding that the properties should be excluded. The mother had the opportunity to retain an expert in Lebanese law. The mother failed to file an expert report to support her contention that the properties should be excluded. Further, I draw an adverse inference because the mother failed to provide the contracts to which the properties were transferred.

[215] Consequently, I reject the mother’s submission that the three pieces of real property located in Lebanon should be excluded from the calculation of her net family property.

The Maher

[216] On September 19, 1996, the father and mother entered into a marriage contract under Islamic law known as a “Maher”. The father filed a photocopy of the marriage contract with a translation. I have set out the operative provisions of the marriage contract as follows:

(a) The entire amount of the dowry: One kilogram of Gold 99\99 Carat and One English Gold Lira.

(b) According to the permission issued by the Legal Judge of Beirut dated 11\09\1996, and under no. 112\1632:

(c) I have contracted the marriage of Hisham Khalil Akkawi and Nada Abdulwahab Habili, both adult and wife is single, both before the witnesses and in the absence of any religious or legal impediments. They listened to the contract terms and signed here below testifying to what is above mentioned.

(d) Advanced dowry: One English Gold Lira only, the wife’s father acknowledged receiving it and deferred dowry. One kilogram of pure Gold 99\99 or its equivalent of Lebanese currency only.

Deferred:==================

This contract was concluded in the house of the husband, located in Tarik Al-Jadida, at six o’clock, on Thursday 2 Jumada Awwal 1417 Hijri corresponding to 19\09\1965

witnesses the husband the wife the judge

[217] The marriage contract was entered into before the parties married. The agreement was entered into in Lebanon, the place of the marriage; does not refer to the Family Law Act; does not refer to a specific denomination of money but simply refers to one kilogram of pure gold 99\99 or its equivalent of Lebanese currency only. Both parties have referred to the Canadian fair market value of one kilogram of pure gold 99\99 carat on the date of separation.

[218] At the commencement of the father’s evidence, the father filed the marriage contract. His evidence was that he entered into the marriage contract and even though it was not pled nor was the value of his liability for the marriage contract indicated on any financial statement, he requested that the Court deal with the obligation as he was concerned that if he returned to Lebanon, the mother would seek payment.

[219] The mother’s evidence was that the money owed under the Maher is due and payable upon separation and if she requests it, the father must pay it. After separation the father’s brother, Hussam Akkawi, was contacted by the mother who gave him a list of demands that she wanted as a result of the separation. One of the requests was that the mother requested the 1 kg of gold owed under the Maher. The father has not paid the mother the 1 kg of gold.

[220] Both parties testified that the contract was in writing, signed and witnessed, even though the mother’s attorney signed on her behalf.

[221] There are three issues related to the Maher:

a) Firstly, is the contract enforceable in Ontario?

b) Is the money owed and owing under the Maher part of the calculation of the parties’ net family property?

c) Can the court enforce payment under the Maher in the circumstances?

Is the agreement enforceable in Ontario?

[222] In the father’s initial submissions, he argued that there was no claim before the court for the payment under the marriage contract as it had not been specifically pled and that there is no expert evidence called about how the marriage contract was to be addressed in the Muslim culture. Consequently, the father submitted the court should not entertain such a request and, in the absence of evidence regarding the payment under the marriage contract, that there should be no value on the date of marriage and that it was entirely possible that the amount would never be payable.

[223] The mother’s position is that the agreement is enforceable in Ontario and she has requested that the payment be made.

[224] After the Court of Appeal released its decision in Bakhshi v. Hosseinzadeh, 2017 ONCA 838, I requested that the parties provide submissions as result of the decision. The father acknowledges that the payment may be included in the net family property calculation, which would increase the mother’s net assets and decrease the father’s net assets. Further, the father submits that the court was not provided with sufficient information to determine whether the marriage contract would pass as a contract under Canadian law because, unlike the marriage contract in Bakhshi, the marriage contract in this case does not speak to how and when the payment would be due. In addition, the marriage contract in this case is a religious contract and not a civil contract and consequently the contract is not enforceable. As well, the agreement was not signed by the mother but by her attorney and neither party had independent legal advice before signing the contract.

[225] The Court of Appeal has reviewed the proper treatment of the Maher under Ontario law in Bakhshi and set out certain basic principles as follows:

a. if such a religious agreement satisfies the elements of a valid civil contract, it may be enforceable under Ontario law;

b. the determination in each case requires the court to determine the objective intentions of the parties through the particular wording of the Maher when read as a whole and considered in light of its factual matrix;

c. unless the specific Maher contains an express agreement by the parties to exclude the Maher from the net family property calculation, the payment owing under the Maher is to be included in such a calculation;

d. the objective contractual intentions of the parties are determined when the contract was made;

e. absent any evidence of an objective intention at the time of the contract to treat the Maher differently, the payment is treated under the Family Law Act like any other payment obligation owing between spouses;

f. bona fide inter-spousal debts must be included in the net family property calculation;

g. excluding transaction between spouses would be inconsistent with the separate property regime under the Family Law Act; and

h. the payment owning under the Maher is a demand obligation that is a debt for the husband on the date of separation, an asset for the wife on the date of separation; the wife is entitled to collect the debt owed to her.

[226] On the issue of the enforceability of the agreement in Ontario, the father submits that there was no evidence provided by a local religious leaders such as an Imam as to how the Maher is addressed in the Muslim culture. The father’s counsel raises this issue that the court should have evidence of the religious and/or cultural significance of the Maher to be able to consider the objective intentions of the parties. This issue was canvassed by the Court of Appeal in Bakhshi at para. 22 where Juriansz J.A wrote:

These cases treat Mahers like any other contract that may impose a variety of different legal obligations. The outcome of each case depends, just as in any other case of contractual interpretation, on the objective intentions of the parties as ascertained through the particular wording of the Maher when read as a whole and considered in light of its factual matrix. As such, evidence about the religious and\or cultural significance of the Maher to the parties could conceivably be relevant to the factual matrix in determining their objective contractual intentions. In the final analysis, however, the court’s role is confined to enforcing only those undertakings that fulfil the requirements of a civil domestic contract under provincial legislation.

[227] With respect to this submission that the mother did not sign the agreement, both parties during the trial confirmed the validity of the agreement. This is supported by the evidence of the father’s brother who testified that he met with the mother after separation at which time she insisted upon the payment under the Maher. At no time did the father indicate that he was under no obligation to pay the amount due under the Maher.

[228] In this case, the agreement was in writing, signed by both parties, witnessed and entailed clear obligations. I find that both parties believed the contract to be binding and at no time did either party testify that they did not understand the terms of the agreement or that they misunderstood when the obligation crystallized. Both parties testified that they relied on the marriage contract as it was a pre-condition before entering into their marriage.

[229] I find that I do not require expert evidence to determine the terms of repayment under the Maher based on the un-contradicted evidence of the parties. Both parties were aware that upon separation and demand, the amount due was payable.

[230] I further reject the submission that the agreement is not valid for lack of independent legal advice. Neither party raised that issue in their testimony. Further, I find to have a valid domestic contract under Ontario law, there is no requirement for independent legal advice.

[231] I find that the Maher is a valid contract and that it is enforceable as such agreements have been found to be valid and enforceable in the province of Ontario. See Ghaznavi v. Kashif-Ul-Haque, 2011 ONSC 4062, and Khamis v. Norrmohamed, 2011 ONCA 127.

Is the money owed and owing under the Maher part of the calculation of the parties’ net family property?

[232] In the trial decision in Khamis v. Noormohamed, 2009 CarswellOnt 3164, the parties signed a marriage contract before the marriage, which stated as follows:

(a) I hereby agree and undertake to pay an agreed sum of money ($20,000) by way of “Maher” to my said wife.

(b) I hereby agree, confirm and declare that my undertaking to pay the agreed sum of money by way of Maher to my said wife shall be in addition and without prejudice to and not in substitution of all my obligations provided for by the laws of the land.

[233] The Honourable Justice Backhouse made the following findings with respect to the Maher:

71. While the contract does not state when the $20,000 is payable, it is common ground that the amount becomes due following marital breakdown. The contract clearly provides that the agreement to pay the Maher is “in addition and without prejudice to and not in substitution” of the husband’s obligations under the Family Law Act. [Emphasis added.]

72. The husband submitted that if the $20,000 Maher was enforceable, then his net family property at the date of separation should be reduced by $20,000 for the debt then owing. The $20,000 obligation was entered into an in existence at the date of the marriage and comes within the definition of “net family property”. It also existed at the date of separation; accordingly, there is no effect on net family property. By necessary implication of the words in addition and without prejudice to and not in substitution of all my obligations provided for by the laws of the land “, the Maher amount is excluded from net family property. Otherwise, it would undermine the expressed intention of the agreement and the contract would have no meaning. I find that the $20,000 Maher comes within the meaning of s.4(2)6 of the Family Law Act and therefore is excluded from net family property. It provides:

4(2)6. Property that the spouses have agreed by domestic contract is not to be included in the spouse’s net family property.

[234] The Maher in this case differs from the Maher in Khamis as it does not include the words “in addition and without prejudice to and not in substitution of all my obligations provided for by the laws of the land.” In this case, the Maher is more akin to the Maher in the Bakhshi decision where there was no express language excluding the money owed under the Maher from the calculation of the parties’ net family property.

[235] In Bakhshi v. Hosseinzadeh, the Court of Appeal found there was no basis to exclude the payment from the wife’s NFP. Further, the Court found there was no provision in the Family Law Act to exclude transactions between spouses and that excluding transactions between spouses would be inconsistent with the separate property regime under the Family Law Act, which continues during the marriage and terminates on the triggering event of the valuation date. In that case, the Court included the amount due under the marriage contract was an asset for the wife and a liability for the husband, and amended the equalization payment accordingly.

[236] In the mother’s initial submissions and net family property statement, she has excluded the Maher based on the decisions in Khamis and the trial decision in Bakhshi v. Hosseinzadeh, 2015 ONSC 7407. The father’s net family property includes the amount owing under the Maher as a debt to the father and an asset to the mother. In her supplemental submissions and net family property statement, the mother submits that the marriage contract does not contain the words in Khamis, but based on the decision in Bakhshi, the amount of the obligation on the date of marriage and date of separation should be included in the calculation of the net family property statement.

[237] I find that without words to that effect, whereby the parties agree to exclude the obligation under the Maher upon separation in the calculation of the net family property, the asset and corresponding debt must be part of the net family property calculation.

[238] I find the marriage contract in this case does not have the same language as in Khamis to exclude the calculation of the liability from the net family property statement. I find that the value of the amount owing under the marriage contract should be reflected in the value and liabilities of the parties as of the date of separation.

Can the court enforce payment under the Maher in the circumstances?

[239] Neither party’s pleadings refer to the Maher. In the father’s financial statement dated January 23, 2014, he does not list his financial obligations under the Maher as one of his debts owing on the date of separation. During his testimony, the father was concerned that the mother may pursue the father in Lebanon to compel him to comply with the terms of the Maher. The father testified that he will leave it up to the court as to whether or not he is obligated to pay the mother the amount owed. The mother seeks the enforcement of the Maher in the amount of $56,498.62.

[240] The father submits that there is no claim before the court for the payment of the sum owing under the Maher. There was no claim in the Answer nor was there any request to amend the Answer and the father submits that the Court should not entertain such a claim. The mother did not plead the repayment of the Maher in her Answer and Claim.

[241] I find that the mother did request the payment of the Maher after separation. The father raised the issue of the Maher in his evidence and the mother confirmed her request for the payment during her testimony.

[242] In Bakhshi, the court dealt with the issue as to whether or not the payment of the marriage contract needs to be paid if it is included in equalization payment. The court stated at paragraph 43:

The Maher payment included in the equalization calculation is a demand obligation with a paper value. Collection of the demand obligation is not an equalization issue but a debt collection issue. This can be seen clearly by considering the situation where, during the marriage, the husband endorses over to the wife a third party’s promissory note. The third party’s promissory note would be included in equalization, and afterwards the wife could collect the debt from the third party. The same reasoning applies to the husbands own promissory Maher obligation in this case. The wife is entitled to collect the debt owed to her. Thus the wife is entitled to an equalization payment of $36,520 plus post-separation adjustments of $44,449.93 plus realization of the mar obligation of $79,580 for a grand total of $160,549.93.

[243] I adopt the reasoning in Bakhshi and find that the father owes the mother the equalization payment obligation, plus the amount owing under the Maher of $56,498.92.

Premarital deduction

[244] In the initial submissions, neither party argued that the value of the Maher on the date of marriage should be included in the parties’ net family property. Both parties agree that the value of the gold on the date of the marriage was $16,686 (Cdn).

[245] The mother in her submissions in response to my inquiry regarding the Court of Appeal decision in Bakhshi, now seeks to have the value of the Maher, being $16,686, included as an asset and liability for the parties on the date of marriage.

[246] Section 4(1) of the Family Law Act defines “property” as any interest, present or future, vested or contingent, in real or personal property and includes:

a. property over which a spouse has, alone or in conjunction with another person, a power of appointment exercisable in favour of himself or herself,

b. property disposed of by a spouse but over which the spouse has, alone or in conjunction with another person, a power to revoke the disposition or a power to consume or dispose of the property, and

c. in the case of a spouse’s rates under a pension plan, the imputed value, for family law purposes, of the spouse’s interest in the plan, as determined in accordance with section 10.1, from the period beginning with the date of the marriage and ending on the valuation date.

[247] A future interest is contingent if the person to whom it is limited remains uncertain until the cessation of the previous interest (Brinkos v. Brinkos (1989), 1989 CanLII 4266 (ON CA), 69 O.R. (2d) 225, 33 O.A.C. 295 (Ont. C.A.)).

[248] I find that upon the separation and demand, the mother’s entitlement to the payment was crystallized. I do not find that on the date of the marriage there was either a separation or a demand for payment and consequently I will not find that the mother is entitled to premarital deduction.

Disposition

[249] I conclude that the amount owing under the Maher on the date of separation, valued at $56,490.62, shall be listed as an account receivable to the mother and as a debt to the father and calculated in the net family property statement.

[250] Further, I order that the father pay to the mother the amount owing under the Maher in the amount of $56,498.62 in addition to the equalization calculation set out herein.

Equalization of the net family property

[251] Based on the agreements reached by the parties and my findings of fact, I calculate the net family property as follows:

Assets on Valuation Date

Father

Mother

712 St. Laurent Boulevard

$385,000.00

Estate No. 1730 in Lebanon

$3,375.00

Estate No. 14 in Lebanon

$17,760.00

Estate No. 31 in Lebanon

$16,720.00

Household Goods and Furniture

$2,450.00

2010 Toyota Corolla

$10,000.00

Chequing Accounts

$519.00

$225.00

Tax Free Savings Account

$3,218.74

Business Interests (SDIC)

$122,500.00

Maher

$56,498.62

TOTAL

$523,687.74

$94,578.62

Debts and Liabilities on Valuation Date

Father

Mother

Credit Card Debt

$3,030.78

$267.05

Line of Credit

$33,842.15

Notional Capital Gains Tax

$18,150.00

Notional Tax on Business (SDIC)

$11,025.00

Tax Liability

$13,168.00

Maher

$56,498.62

TOTAL

$135,714.55

$267.05

Assets on Marriage Date

Father

Mother

Real Property

$175,000.00

TOTAL

$175,000.00

$0.00

Debts and Liabilities on Marriage Date

Father

Mother

Mortgage

$99,471.95

Notional Capital Gains Tax

$3,200.00

TOTAL

$102,671.95

$0.00

Net Value of Property on Valuation Date (Assets – Debts and Liabilities)

$387,973.19

$94,311.57

Net Value of Property on Marriage Date (Assets – Debts and Liabilities)

$72,328.05

$0.00

Net Family Property (NFP) (Net Value of Property on Valuation Date – Net Value of Property on Marriage Date)

$315,645.14

$94,311.57

Difference Between NFP

$221,333.57

Equalization Payment

$110,666.79

[252] I find that the mother is entitled to an equalization payment of $110,666.79, plus realization of the Maher obligation of $56,498.20, for a total of $167,164.99.

Disposition

[253] I order the following:

(a) the divorce order on the grounds the parties been living separate and apart for more than one year;

(b) the father shall pay the mother an equalization payment of $110,666.79;

(c) the father shall pay to the mother the sum of $56,498.62;

(d) the father shall pay to the mother arrears of child support from March 1, 2014 to December 2017 in the amount of $4,238;

(e) the father shall pay to the mother arrears of spousal support of spousal support from March 1, 2014 to December 2017 in the amount of $36,723;

(f) commencing January 1, 2018, the father shall pay to the mother child support of $247 per month;

(g) commencing January 1, 2018, the father shall pay to the mother spousal support in the amount of $668 per month;

(h) commencing June 1, 2017, the parties shall share agreed-upon special and extraordinary expenses for the children (exclusive of postsecondary education expenses) in proportion to their respective incomes in accordance with section 7 of the Federal Child Support Guidelines. Currently the father’s share shall be calculated on his 2016 imputed income of $90,000 and the mother’s share based on her 2016 income of $54,101. The parties shall be required to contribute to the after-tax cost of the agreed-upon expenses. Both parties must consent in writing prior to the expense being incurred and such consent is not to be unreasonably withheld. In addition to the expenses under section 7 of the Federal Child Support Guidelines, I find the following expenses shall be shared:

a. Issam’s French tutoring expense;

b. the net cost of eye glasses/contact lenses;

c. net dental expenses;

d. summer camp/March break camps for Issam; and

e. the mother’s cost for the monthly premiums for the children becoming beneficiaries of her extended health plan through her employment.

(i) the mother and father shall contribute, on a pro rata to income basis, to the postsecondary education expenses for the children of the marriage, which costs include tuition, supplies, equipment, room and board and other incidental expenses to the extent that these costs are not covered by grants, bursaries, scholarships, loans, available to the child, any accounts in the child’s name or any employment income of the said child;

(j) the mother shall designate the children as the beneficiaries of her extended health coverage available through her employment for so long as the children are entitled to support and the benefit is available to the mother through her employment. If health care coverage becomes available for the father at a reasonable cost, he shall secure same for the children. The mother obtain the cost of said coverage and provide same to the father within 30 days of the release of these reasons. I order that the increased cost of such extended coverage be shared by the parties as a Section 7 expense commencing December 1, 2017;

(k) the father shall be the parent who shall claim the Canada Child tax benefit (including the National Child care benefit supplement and the child disability benefit if applicable), the Universal Child care benefit, the refundable GST/HST credits and the eligible dependent credit for Adam and Jad;

(l) the mother shall be the parent who shall claim the Canada Child tax benefit (including the National Child care benefit supplement and the child disability benefit if applicable), the Universal Child care benefit, the refundable GST/HST credits and the eligible dependent credit for Issam;

(m) once the father is no longer able to claim either Jad or Adam, the mother and father shall alternate claiming Issam for tax purposes, with the father claiming the child in uneven numbered years and the mother in even numbered years;

(n) the above shall not affect the table amount of child support. However, should any tax benefit be received by the mother or father as a result of any special and/or extraordinary expenses, the other parent shall be required to contribute a proportional share of the out-of-pocket (after-tax or net expense) and not the cost of the same period;

(o) the mother shall be required to maintain a life insurance policy in the amount of $150,000 identifying the father as the irrevocable beneficiary in trust for the children, and such policy is to be maintained until such time as a requirement to pay child support is terminated for all of the children;

(p) the father shall be required to maintain a life insurance policy in the amount of $150,000 identifying the mother as the irrevocable beneficiary in trust for the children, and such policy is to be maintained until such time as a requirement to pay child support is terminated for all of the children;

(q) all payments made for the purpose of child support shall be binding on the estate of that party;

(r) in the event that either insurance policy should not be in place, lapse or no longer be in force and effect as per this order at the time of the death of one of the parties, any and all support outstanding pursuant to this order, shall constitute the first charge in favour of the survivor against the estate of the deceased;

(s) in addition to any other remedy that either party shall have against the estate of the deceased spouse in the event the insurance proceeds are not paid, the surviving spouse shall be entitled to make an application under the Succession Law Reform Act or successor legislation, on behalf of the child or children as a dependent. This claim shall form a first charge on the estate of the deceased spouse.

Costs

[254] If the parties are unable to resolve the issue of costs, the father shall provide his written cost submissions not to exceed three pages plus any offers to settle and a detailed Bill of Costs by January 12, 2018. The mother shall file her written cost submissions not to exceed three pages plus any offers to settle and a detailed Bill of Costs by February 2, 2018.

Shelston J.

Released: December 14, 2017

CITATION: Akkawi v. Habli, 2017 ONSC 6124

COURT FILE NO.: FC-14-311

DATE: 2017/12/14

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Sean Akkawi

Applicant

– and –

Nada Habli

Respondent

REASONS FOR JUDGMENT

Shelston J.

Released: December 14, 2017