Superior Court of Justice - Ontario

COURT FILE NO.: FS-18-000543

DATE: 20180406

RE: Marie Fiorellino-Di Poce, Applicant

AND:

John Di Poce, Respondent

BEFORE: Kiteley J.

COUNSEL: Harold Niman and Chloe van Wirdum, for the Applicant

Aaron Franks and Penelope Ng, for the Respondent

HEARD: March 22, 2018

ENDORSEMENT

Background

[1] This is a motion for temporary spousal support and other relief.

[2] The parties began to live together in June 2006. When they married on October 29, 2010, the Applicant was 53 years old and the Respondent was almost 75 years old. At the time of the motion, the Applicant was 60 and the Respondent was 82. Both have adult children from earlier relationships.

[3] The Applicant alleges that the parties separated on January 4, 2017. In his Answer the Respondent takes the position that they separated in December 2017. In the affidavits, the parties gave evidence as to what had transpired between January 2017 and December 2017. From the Applicant’s perspective, they were negotiating a separation agreement, the Respondent failed or refused to provided financial disclosure, and in frustration she issued the Application on February 14, 2018. From the Respondent’s perspective, they were negotiating a marriage contract until her hospitalization in December, 2017. For purposes of this motion, I do not need to make any findings as to the date of separation, except to say that, at the hearing of the motion, the evidence was that they were separated.

[4] Each party has some health issues. However, the Applicant had an acute condition in December 2017.

[5] The Applicant said that her health began to decline around 2012. In 2014, as a result of an emergency visit to hospital, she was diagnosed with a collapsed lung from advanced interstitial lung disease. In 2015 her lung collapsed again and in 2016 her other lung collapsed. She had many significant medical interventions and treatments but her health continued to decline. She says that, due to her multiple hospital admissions and the fragility of her health as well as the deteriorating relationship with the Respondent, in 2017 she moved in and out of the Shangri-La Hotel for extended periods of time to be in close proximity to the hospital.

[6] In November 2017, the Applicant was placed on the highest priority for transplantation and had a double lung transplant on December 11, 2017. The Applicant said that, through extensive rehabilitation, her health is slowly improving. She expects to have 3 – 4 medical appointments per week over the next year and for that reason, she will be required to stay within the vicinity of the hospital for that period of time.

[7] It is not clear when she was discharged from hospital. At the time of her February 16, 2018 affidavit she was in hospital and expected to be discharged in the next couple of weeks. At the time of her March 9 affidavit, she had been discharged.

Relief sought in the Amended Amended Notice of Motion

[8] In her affidavit sworn February 16, 2018, the Applicant said that she was worried about her precarious financial situation and that the Respondent had left her “with no choice but to commence court proceedings and to bring this motion on an urgent basis so that I can, among other things, have appropriate accommodations once I am discharged from the hospital”.

[9] On Friday February 16 at 3:40 p.m. the notice of motion returnable Thursday February 22, 2018 and the affidavit of the Applicant sworn February 16, 2018 were served on the firm of Epstein Cole. On February 21, 2018, the firm accepted service of the Application issued February 14 and the Applicant’s form 13.1 financial statement sworn February 14, 2018.

[10] On February 22, 2018 Moore J. made an order on consent adjourning the motion to March 15 and directing the parties to attend a case conference on March 5. That order also established a timetable for delivery of materials in relation to the motion.

[11] On February 27, Mr. Franks sent to the Applicant’s counsel a cheque from the Respondent in the amount of $50,000 to be credited at some future date.

[12] The case conference did not occur on March 5, 2018. According to the endorsement of Moore J., the Applicant did not attend because she had a medical procedure and the Respondent did not attend but was in the building. Moore J. authorized the motion to proceed on March 15 with counsel required to schedule a case conference thereafter with parties in attendance.

[13] The matter was before me on March 15 on the regular list. I adjourned it to a long motion on March 22 on condition that I would hear only the submissions with respect to temporary spousal support and the request that it be retroactive to the date of separation.

[14] Prior to the hearing of this motion, the Applicant had delivered the Application, affidavits sworn February 16 and March 9 and a form 13.1 financial statement. The Respondent had delivered affidavits sworn March 5, 13 and 19 and the Answer and two financial statements form 13.1, neither of which was fully completed. His counsel had also provided two affidavits of Cara Lio and one of Janeth Rubio. The Respondent had served two Certificates (Form 13A) that reflected significant disclosure. Each counsel filed a factum and authorities.

[15] The notice of motion has been amended and includes the following requests:

(a) an order that this motion shall be heard prior to a case conference;

(b) an order commencing January 1, 2018 and on the first of the month thereafter, for temporary spousal support in the amount of $200,000 per month until further order of the court or written agreement between the parties;

(c) an order that the spousal support be made retroactive to the date of separation (i.e. January 2017);

(d) an order that the Respondent continue to pay all expenses associated with the matrimonial home in Kleinburg, the ranch property in Singhampton, and the condo in Florida;

(e) an order that the Respondent continue to pay the Applicant’s health insurance premiums, dental expenses, medicine and drugs, eye care, life insurance premiums, costs associated with the private medical clinic membership, and the Applicant’s personal care assistant;

(f) an order striking “without prejudice” letters sent to Mr. Franks from counsel for the Applicant that had been attached as exhibits to the Respondent’s affidavit sworn March 5, 2018;

(g) costs.

[16] As indicated in the endorsement dated March 15, in the time that was made available on March 22, I did not hear the request that the Respondent continue to pay all expenses associated with the homes. In any event, his affidavits make it clear that he has and will continue to do so. Although the relief sought in (e) was not specifically before me, in the context of their submissions on the amount of spousal support, counsel made submissions about health expenses and the personal care assistant. I did not hear submissions with respect to striking letters attached as exhibits.

Analysis

A. Entitlement to Spousal Support

[17] The parties were together for 11 years during which time the Applicant was financially dependent on the Respondent. Counsel for the Respondent agrees that the Applicant is entitled to temporary spousal support.

B. Standard of living

[18] The evidence of the parties is in conflict on many issues including the standard of living they enjoyed. The parties do agree that the Respondent is wealthy and was responsible for maintaining their three residences (a home and a farm in Ontario and a home in Florida). The Applicant described their “extravagant lifestyle” or “lavish lifestyle”. The Respondent disputes those adjectives. He said they enjoyed an “extremely comfortable standard of living”.

[19] For purposes of this motion, I do not need to be more precise. His multi-million dollar charitable contributions on his or their behalf demonstrate significant generosity that is likely derived from considerable wealth.

[20] One of the many issues of conflict is the extent of the Respondent’s generosity in the years 2015 and 2016 and 2017. The Applicant is highly critical of the Respondent making unilateral changes in the resources he provided to her. The Respondent is equally as critical of the spending habits of the Applicant. I do not need to resolve those conflicts.

[21] According to her summary, due to her deteriorating health, in 2017, in order to stay close to the hospital, the Applicant stayed at the Shangri-La Hotel from January 9 to 13, January 27 to February 27, June 2 to 4, June 4 to 10, October 27 to November 14 and November 20 to December 12. I accept that the status quo was as follows:

(a) each month the Respondent gave the Applicant a cheque for $16,000;

(b) the Respondent paid accommodation expenses at Shangri-La Hotel when she stayed there. He was unhappy about the expense but did not complain on account of her failing health;

(c) the Respondent gave the Applicant a secondary credit card. In earlier years she had incurred expenditures of approximately $50,000 each month but in 2015 he refused to continue. She repaid him some of the expenses and the maximum was reduced from $50,000. I was not told whether a new maximum was established but he did say her charges were much less than $50,000. The Applicant insists that he recently terminated her use of the credit card. The Respondent explained how it had to be cancelled because the Applicant’s daughter said it had been lost;

(d) the Respondent paid for supplementary medical expenses and for some months, a personal care assistant who worked 24/7 at an hourly rate that equated to over $28,000 per month. About 1/3 of that was covered by health insurance;

(e) it appears that the Respondent has paid various uninsured health expenses because he readily agreed to reimburse the Applicant for the amount of approximately $4,000 outstanding at the time of the motion;

(f) The Respondent has continued to pay the annual membership fee for the Applicant in the amount of $22,000 for a private medical clinic.

C. Applicant’s financial circumstances

[22] The Applicant’s form 13.1 reflects an interest in three properties, two of which were sold in 2017 and which the Applicant asserts were beneficially owned by each of her children. The Hamilton property was allegedly beneficially owned by her son. It sold in August. The condominium on Avenue Rd was allegedly beneficially owned by her daughter. It sold in November. Other than asserting the beneficial ownership, she has not provided documentation as to the distribution of the proceeds of sale. She still owns a condominium on Avenue Rd in which her son resides. She has two accounts with TD Bank. In January 2017 the total balance was approximately $69,000. In her affidavit sworn March 9, she said they totaled $143,000 which constitutes a doubling. Her line 150 income for 2016 was approximately $65,000. Counsel for the Respondent was critical of the Applicant’s failure to fully disclose her circumstances. While the Applicant must provide more disclosure, I am satisfied that, for purposes of this motion, her disclosure is satisfactory and that her income and assets are modest, if not inconsequential. Mr. Franks agreed that her assets paled in comparison with the Respondent’s.

D. Respondent’s financial circumstances

[23] The Respondent’s approximate line 150 income is as follows:

(a) 2014: $837,000;

(b) 2015: $4.4 million;

(c) 2016: $7.5 million.

[24] In 2015 and 2016, he deducted millions of dollars in carrying charges and interest in connection with his purchase of units in a film property that reduced his line 236 net income significantly.

[25] The Respondent has the matrimonial home, the farm, a rental property in Caledon and the condominium in Florida. Based on his March 19, 2018 financial statement each property is registered in the name of a corporation but he is the beneficial owner of the matrimonial home and the rental property. In his evidence on this motion, he said he has already obtained fair market valuation reports on the home, the farm and the condominium that would be served in the near future. The Respondent pays for all of the carrying charges and associated expenses on all of the properties.

[26] Not surprisingly, in view of the haste in preparation, in both of the form 13.1 financial statements sworn by the Respondent, there are many items “TBD”. In his affidavit sworn March 5, 2018, the Respondent provided an organization chart that identified family trusts established in 1998, 2007, 2009, and 2010. Based on his disclosure to date, the Applicant is not a beneficiary of any of the trusts.

[27] The Respondent described his circumstances as follows:

(a) paragraph 53: I have retained Farley Cohen to provide a value of my corporate interests as of the date of marriage and as of separation and to provide an income calculation. Due to the complexity of my financial affairs, it could take 12 to 18 months and cost more than $500,000.

(b) paragraph 55: my line 150 income is not necessarily the appropriate income figure for purposes of calculating my support obligation. My financial affairs are extremely complex.

(c) paragraph 56: I confirm I have sufficient income to pay Marie a level of support that is consistent with the financial support that I was providing her during our marriage.

(d) paragraph 57: my financial affairs are extremely complex.

E. Temporary Spousal Support

[28] In the original notice of motion and the subsequent amendments, the Applicant asks for temporary spousal support in the amount of $200,000 per month. Having now received some financial disclosure, including the tax returns, counsel for the Applicant takes the position that if the Respondent’s line 150 income in 2016 is the “most current income” before the court, then a 50/50 net disposable income scenario results in monthly spousal support of approximately $312,000 per month. However, the Applicant continues to ask for an order for $200,000 per month which leaves her with 32.4% of the net disposable income and with net income of $100,000 per month.

[29] The Respondent takes the position that temporary spousal support should be in the amount of $40,000 per month and he would pay the costs of the Applicant’s medical expenses including a full-time nurse/personal care assistant to a maximum of $17,500 per month. In addition he would continue to pay for all of the real properties. The full time nurse/personal care assistant has been costing $28,000 per month. Counsel could not provide an explanation for the reduction to $17,500 per month except that the Applicant had not provided any medical confirmation that it was needed on an ongoing 24/7 basis.

[30] Both counsel made submissions based on their respective views of the case law. Mr. Franks’ updated Factum contained a schedule of 36 cases of high income support cases some of which were temporary orders and some final orders. It is not necessary that I review the many cases to which counsel have referred. The fundamental principles are these. The formulae in the SSAG “ceiling” cases are not to be applied automatically. Above the ceiling, spousal support cases require an individualized, fact-specific analysis to the extent possible at this early stage of the proceedings. Interim support motions are not intended to involve a detailed examination of the merits of the case. An order for interim support is in the nature of a “holding order” for the purpose of maintaining the accustomed lifestyle pending trial.

[31] I approach this from the unique circumstances of the Applicant. She has provided evidence of the unfurnished rental accommodation she has secured effective March 1, 2018 at a cost of $12,000 per month plus utilities. The parties agree that she has had $16,000 for miscellaneous expenses. The parties agree that she has had access to the Respondent’s credit card for purchases which, until the Respondent refused to continue, peaked at $50,000 per month. Before and after her life-saving surgery, the Applicant had engaged a full-time personal care assistant at a cost of $28,000 per month that the Respondent paid, although somewhat under protest.

[32] The budget prepared by the Applicant in her form 13.1 sworn February 14, 2018 totaled $94,000 per month and included a residence rental expense of $25,000 (reduced to $12,000 plus utilities), an approximate average of household expenses in the amount of $11,950 including entertaining (ranch parties/Christmas/Easter catering) of $4,500; personal driver and gas and oil of approximately $3,000 per month; clothing of $16,000 per month; hair care and beauty of $3,400 per month; gifts of $6,500 per month; and $18,750 for vacations. It also included a miscellaneous expenditure to purchase household items such as flatware and furniture and art in the amount of $8,300 per month.

[33] I agree that some of those items are not being incurred. On the Respondent’s evidence, she will have medical appointments 3 to 4 times a week and must stay within the proximity of the hospital for a year from which I infer that, in the foreseeable future, her expenditures for vacations will be nil and her entertainment expense will be much less than estimated. I expect that her expenditures for clothing and hair care and beauty will be less than the estimate. However, it might also be important for her recuperation that she look and feel well dressed and as healthy as possible. Capital expenditures for furniture and art do not belong in a budget. Her income (which I have not taken into consideration below) or her capital may be a source of purchasing such items. In any event, I encourage the lawyers to attempt to negotiate the retrieval of some of the household furniture and furnishings.

[34] In my view, a budget that is reasonable under the circumstances for the basis of a temporary order is as follows:

Expenditure

Amount Per Month

Rent

$12,000

Utilities est’d

$500

Household expenses Including entertainment

$6,000

Personal Care Assistant

$28,000

Transportation

$3,000

Clothing and hair care

$10,000

Gifts

$ 6,500

Miscellaneous

$16,000

TOTAL TEMPORARY SPOUSAL SUPPORT INCLUDING PCA

$82,000

TOTAL TEMPORARY SPOUSAL SUPPORT PCA PAID DIRECTLY

$54,000

[35] As indicated above, the Respondent has been paying the invoices of the personal care assistant. As the Applicant improves, I expect that the 24/7 care will be reduced. I do not impose any time limit on her to do so. However, I consider it unfair to include in the global amount a fixed allocation for the PCA when reduction is likely. For that reason, the amount of the order for temporary spousal support will separate the personal care assistant but the Respondent shall be required to pay the invoices promptly.

[36] Once the Respondent pays spousal support pursuant to an order, it is tax deductible to the Respondent and tax payable by the Applicant. However, I do not reflect any amount for income taxes because the Applicant’s personal income tax situation is in flux. She will have significant medical expenses as well as significant legal expenses, some of which are deductible. In any event, in the first year of payment, she is not required to make any quarterly remittances. The tax will fall due in April 2019 by which time the parties will likely have progressed further in their analysis of expenditures and income tax. Furthermore, as indicated above, the Respondent has substantial carrying charges that may mean he does not want to deduct spousal support in which case the parties may negotiate an arrangement that does not provide for periodic spousal support in a way that attracts tax to the Applicant. That issue will be addressed by me no later than March 31, 2019.

[37] The Respondent said that the premium for 2018 for the private medical clinic has been paid and that he would reimburse the Applicant for accumulated non-insured medical expenses.

[38] The amount of temporary periodic spousal support I order is neither a floor nor a ceiling. It is not based on the Respondent’s Line 150 income. Indeed, I will not attribute any specific income to the Respondent. Nor do I take the Applicant’s modest income into account at this stage. The amount ordered is based on her budget, as I have modified it. He has the means and the ability to pay it.

[39] During submissions, both counsel emphasized their criticisms of the disclosure, or lack thereof by the other party. Mr. Franks conceded that in 2017, whether they were negotiating a marriage contract or a separation agreement, the Respondent had provided no financial disclosure. While I understand her life circumstances were uncertain and her health precarious and she was frustrated by the lack of disclosure during whatever was being negotiated in 2017, this is a motion that demands caution. There are important differences between the parties as to the standard of living. The Applicant has been dependent on the Respondent for all of her expenditures and probably has not kept the kind of records that would facilitate the creation of a reliable budget. On the other hand, he may have records that would support his perspective or her perspective on their shared standard of living and he will prepare a budget that can be used as a comparator. Her health and financial circumstances are in a state of flux.

[40] I am making this order “temporary”. However, given the speed with which it came before the court and the outstanding disclosure issues, I anticipate that either the Respondent will want to bring a motion to reduce the periodic support or the Applicant will want to bring a motion to increase it. I do not allow for either to take such steps.

[41] As indicated below, the order will take effect March 1, 2018. The evidence indicates that the Applicant was discharged from hospital at about that time and arranged rental accommodation. They have a difference as to whether they were separated in January 2017 as she alleges. Under these circumstances, I am not prepared to require the payment of temporary spousal support to precede the bringing of the motion.

[42] It goes without saying that the Respondent will not provide a credit card to the Applicant.

[43] I am required to make a support deduction order but I expect counsel will agree to a withdrawal of the order from the Family Responsibility Office.

Next Steps

[44] It is imperative that the parties and counsel attend a case conference in the immediate future. After this intensive period of activity resulting in a temporary order, the parties and their counsel need an opportunity to regroup and make a plan for the orderly processing of the Applicant’s claims. Unfortunately, the urgency with which the motion was brought has led to both parties being extraordinarily critical of the other. If the parties are to be productive in advancing the case, they need to get past that.

[45] To ensure that they have that opportunity, I intend to make an order prohibiting either party from bringing motions. In his submissions, Mr. Niman observed that the Applicant’s legal expenses and expert fees will be enormous. Indeed, if the Respondent’s expert has given a preliminary estimate of 12 to 18 months and approximately $500,000, it stands to reason that her claim for similar payments to establish a “level playing field” will be pursued. But not at this time.

[46] The record filed on behalf of the Respondent indicates that his advisors have reached out to the Applicant’s counsel to ascertain the identity of the Applicant’s financial advisors. Perhaps the Applicant has not yet retained financial advisors; and that may be partly because her personal capital is limited. But it would likely be wise for the experts to communicate. Whether the Respondent’s property was owned personally or through corporations or whether the lion’s share of his assets had been made the subject of estate freezes, it is only logical that he is likely entitled to a sizeable pre-marital deduction. The burden of proof is on him to establish the amount. His counsel’s assertion in correspondence that the Applicant likely owes him money was unfortunately aggressive.

[47] As both parties observed, at ages of 60 and 82, each with health challenges, these parties ought not to be preoccupied with fighting a contentious and expensive legal proceeding.

ORDER TO GO AS FOLLOWS:

[48] Commencing March 1, 2018 and on the first of each month until agreement or order otherwise, the Respondent shall pay to the Applicant temporary spousal support in the amount of $54,000 gross per month;

[49] Commencing March 1, 2018 and monthly thereafter when the invoices are presented, the Respondent shall pay temporary spousal support to the Applicant (or to the caregiver) the expense of a personal care assistant for as much as 24 hours 7 days a week at a cost not to exceed $28,000 per month.

[50] The Respondent shall receive credit for amounts paid since March 1, 2018, namely $32,000 ($16,000 for March and April) and the voluntary payment of $50,000 and the Respondent shall pay the balance of the arrears by April 12, 2018.

[51] Support Deduction Order to issue.

[52] By April 12, 2018, the Respondent shall reimburse the Applicant for outstanding medical expenses estimated at $4,000.

[53] The Respondent shall continue to pay the annual membership for the Applicant at the private medical clinic.

[54] Neither party may bring any motion for any relief except with leave by me or by Team Leader Justice Stevenson or to whomever she may delegate for that purpose.

[55] Counsel and the parties shall attend a case conference before me on April 25, 2018 from 2:30 to 4:30. They are not required to prepare case conference briefs. Counsel shall exchange lists of issues and proposed methods of resolution. If possible, counsel should serve offers to settle on as many of the issues as is feasible.

[56] If by April 19, 2018 the parties have not agreed as to costs of this motion, then they shall make written submissions not exceeding 3 pages plus costs outline plus offers to settle on this timetable:

(a) Applicant April 30, 2018;

(b) Respondent May 15, 2018;

(c) Applicant May 30, 2018.

Kiteley J.

Date: April 6, 2018