COURT FILE NO.: FC 15-691
DATE: 2018/05/29
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Ioanna Oschisor
Applicant
– and –
Catalin Oschisor
Respondent
Steve Duplain, for the applicant
Self-represented
HEARD: May 14 and 16, 2018 (at Ottawa)
REASONS FOR JUDGMENT
SHELSTON, J.
OVERVIEW
[1] This matter proceeded as an uncontested trial where the applicant sought various claims for relief including a divorce, child support, spousal support, retroactive child and spousal support to the date of separation, an annual cost of living adjustment to the spousal support, an order requiring the respondent to maintain dental, medical and extended health coverage for the applicant, an order requiring the respondent to maintain a policy of life insurance as security for spousal support, a restraining order, an equalization of the net family property and costs.
[2] At the trial, the applicant withdrew her claim for a restraining order.
[3] This matter proceeded on an uncontested basis based on my order dated April 10, 2018 where I struck the respondent’s answer, vacated the trial management conference scheduled for April 25, 2018, ordered that the matter proceed to an uncontested trial on the May 2018 trial sittings, noted the respondent in default and ordered the respondent to pay costs for the motion to the applicant in the amount of $1,200 payable forthwith.
[4] The applicant filed two detailed affidavits dated May 2 and May 14, 2018, an updated financial statement and three separate net family property statements and testified as to the issues before the court.
FACTS
[5] The parties married on October 23, 1993 in Romania. At the time of the marriage, both parties were 28 years of age. There were two children born during the marriage, namely, Andrew, born July 29, 1995 and Sabrina, born January 6, 1997.
[6] The parties met in high school but started to date after high school. At that time, the respondent was in university pursuing a degree in electronic engineering. After high school, the applicant worked in an electronic factory until 1989 when she decided to pursue a career in aesthetics. From 1990 to 1993, she studied and worked as part of the three-year program.
[7] After graduating from university in the period of 1989-1990, the respondent moved to Belgium for a number of years before moving to Canada where he worked in both Montreal and Toronto prior to the marriage.
[8] The parties’ relationship became more serious and they decided to marry on October 23, 1993. In November 1993, the respondent returned to Toronto and started the immigration procedures to have the applicant move to Canada to live with him. While in Romania, the applicant worked as an aesthetician. It was only on October 29, 1994 that the applicant was admitted to Canada to live with the respondent in Toronto.
[9] By December 1994, the applicant found employment as an aesthetician after having completed a three-month course.
[10] In May 1995, the parties moved to Burlington, Ontario because the respondent found a better paying job. The first child, Andrew, was born on July 29, 1995. The applicant left her employment in Toronto to follow her husband to Burlington, Ontario.
[11] In June 1996, the parties moved to London, Ontario because the respondent found a three-month contract position after being terminated from his employment in Burlington, Ontario. Again, the applicant was required to leave her employment to follow her husband’s career.
[12] In September 1996, the parties moved back to Toronto where the respondent found new employment. On January 6, 1997, the second child, Sabrina, was born. After Sabrina’s birth, the respondent stayed home for approximately 18 months and then returned to work as an aesthetician in Toronto where she was employed for approximately one year.
[13] In August 1999, the parties moved to Ottawa, Ontario since the respondent found a full-time position as a testing engineer for a company in Kanata, Ontario. Unfortunately, within the year, the company closed its branch in Ottawa but the respondent was successful in obtaining employment in the summer of 2000 with another company.
[14] In the summer 2001, the respondent lost that employment. For the next three years, the respondent worked off and on. He was mostly unemployed and stayed home. At this time, the children were only starting the kindergarten process but over time both were in full-time daycare. He would find intermittent contract positions in the high-tech field in Kanata, Ontario.
[15] By 2005, the respondent found a permanent position. Over the next four years, the respondent changed employment on a number of occasions until 2009 when he became employed with Cryptocards where he stayed until January 2013. The respondent worked for Safenet until 2014. He then worked for AVG until February 5, 2016 when he was terminated.
[16] When the parties moved to Ottawa, they rented a townhouse that they eventually purchased and was, at the time of separation, the matrimonial home. The respondent intended to purchase the property in his name alone. However, prior to closing, he was advised that the property had to be put in the names of both the applicant and the respondent. He did so reluctantly. The applicant had no idea as to the financial arrangements regarding the purchase of the matrimonial home. Throughout the marriage, the respondent did not share any financial information with the applicant.
[17] In October 1999, the applicant started to work as an aesthetician renting a room in a salon as a sole proprietorship. In the years 2000 to 2004, the applicant earned between $8,000 and $10,000 per year after expenses. In the years 2005 to 2007, her net income after expenses increased to between $12,000 and $15,000 per year.
[18] In 2009, at the request of the respondent, the parties incorporated the business known as Exclusive Beauty Spa Inc. The new company entered into a five-year lease for a location in a strip mall. The applicant was concerned because the new rent was triple her previous rent and she had increased the number of rooms from 1 to 3 without increasing the number of aestheticians. As part of the lease, the company was required to make leasehold improvements which were financed by the home equity line of credit registered against the matrimonial home. The applicant was not aware of the exact financial arrangements. Construction started in November 2009 and by February 2010, the applicant moved into the new location. The applicant worked at the location until the end of the lease in December 2014. The additional rooms and the increased rent were significant challenges to such an extent that the parties attempted to sublease the space but were unsuccessful.
[19] The parties separated in August 31, 2013 and proceedings were commenced by the applicant on March 31, 2015. The respondent signed his answer on May 15, 2015. At separation, the applicant left the matrimonial home and rented a townhouse. Andrew and Sabrina continued to reside with the respondent. The applicant saw Sabrina most weekends. In August 2015, Sabrina moved to live with the applicant.
[20] At the end of the lease in December 2014, the applicant moved to a new location under a sole proprietorship. The applicant’s clients moved from her previous location at the strip mall to her current location.
[21] Throughout the marriage, the applicant was the main caregiver of the children and was responsible for preparing meals, assuming most of the domestic duties regarding the matrimonial home, purchasing clothing for the children and attending to most of the medical/dental appointments for the children. The respondent assisted when required but because of her work schedule as well as her employment being closer to the matrimonial home, she was in a better position to attend to most of the appointments. When the respondent worked in Kanata, Ontario, his hours were usually between 9 to 5 or 6 pm.
[22] Throughout the marriage, the respondent was the main wage-earner except for the three-year period of 2001 to 2004 when the applicant was working on a full-time basis.
[23] Throughout the marriage, the applicant had no idea as to the respondent’s annual income. The parties never had a joint bank account but maintained separate bank accounts. When the parties purchased the matrimonial home, the monthly mortgage payments were deducted directly from the respondent’s bank account. The respondent assumed responsibility for most of the expenses except that the applicant would use her income to pay for the children’s activities, purchase clothing, books and, at times, food for the family. At the time of separation, the parties had two cars and resided in a 1,500-square-foot, three-bedroom, fully furnished townhouse.
PARTIES’ INCOME
[24] The applicant’s history of self-employed income is as follows:
(a) 2015, the sum of $17,305;
(b) 2016, the sum of $10,749;
(c) 2017, the sum of $28,284.45; and
(d) 2018, the sum is anticipated to be approximately the same as 2017, $28.284.45.
[25] The respondent’s history of income from all sources is as follows:
(a) in 2012, the sum of $75,760;
(b) in 2013, the sum of $78,286.16; and
(c) in 2014, the sum of $81,727.02.
[26] One of the problems in this proceeding is that the respondent has failed to provide proof of his income for the years 2015, 2016, 2017 and 2018. Despite these court orders, the respondent did not provide the required disclosure. There have been a series of court orders in this proceeding dealing with disclosure, such as the:
(a) order of Justice Warkentin dated June 22, 2015 requiring the respondent to serve his financial statement with copies of all of his bank and credit card statements that demonstrate the debts and assets in his name as of August 31, 2013 and permitting the respondent to file his financial statement without copies of his income tax returns for the last three years but to include T4 slips from his employer as well as his June 30, 2015 paystub;
(b) order of Justice Phillips dated August 18, 2016 requiring the respondent to provide by September 21, 2016 proof of his termination of employment, evidence of his efforts to secure gainful employment since that time, proof of his 2016 income from all sources and disclosure of all bank activity for the year 2016;
(c) order of Justice James dated December 5, 2016 requiring the respondent to complete and file his tax returns for 2013, 2014 and 2015 within 60 days, complete all outstanding disclosure, file a fresh financial statement within 30 days and schedule a case conference within 20 days to be heard by the end of February 2017;
(d) order of Master Fortier dated February 7, 2017 requiring the respondent to provide disclosure of his efforts to seek new employment, requiring both parties to advise the other of any change in their employment status or income, requiring both parties to provide particulars of the change in income as well as to update the financial statements and to promptly answer all reasonable and relevant requests for production; and
(e) order of Justice Engelking dated June 12, 2017 requiring the respondent to serve by August 18, 2017 various documents of disclosure, including an updated sworn financial statement, his 2016 income tax return and notice of assessment, a certificate of financial disclosure and a net family property statement relating to his claim for equalization from the applicant.
Analysis
[27] The applicant seeks to impute an income to the respondent in the amount of $78,600 which is the average income that he earned in the period of 2012 to 2014 as well as the respondent’s own estimated income for the year 2015.
[28] Section 19 of the Federal Child Support Guidelines, S.O.R./97-175, as amended 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.
[29] The Court of Appeal in Drygala v. Pauli (2002), 2002 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?
[30] 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 under-employment 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 under-employed 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:
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
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 under-employment is established, the onus shifts to one of the exceptions of reasonableness;
(f) where the spouse is intentionally and unreasonably under-employed 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, 335 O.A.C. 376; and
(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).
[31] In this case, the respondent has failed to provide disclosure as required by court orders as well as mandated by the Family Law Rules.
[32] The history of the respondent’s employment and income are significant factors that I have taken into consideration in deciding to impute an income to the respondent. Despite having numerous opportunities to file his financial disclosure, provide answers to requests for disclosure, provide information as to his efforts to find employment and being required to file his income tax returns, the respondent simply did not comply. I conclude that the respondent did not wish to disclose his financial circumstances for reasons known only to the respondent and I draw an adverse inference against him that he has intentionally refused to provide his financial disclosure.
[33] In imputing an income to a party, the court must have an evidentiary basis. The sum of $78,600 is the average of the income earned by the respondent in the three years of income information that has been provided.
[34] Considering all the circumstances, I find that it is fair and reasonable to impute an income to the respondent in the amount of $78,600 commencing in the year 2015 and forward.
[35] With respect to the applicant’s income, I accept her evidence as to her income commencing in 2015 and forward.
CHILD SUPPORT
[36] Proceedings were commenced in March 2015. The applicant sought retroactive spousal support to the date of separation. The respondent claimed child support but made no claim for retroactive table child support. In the circumstances, I will order child support as of April 2015.
[37] At the date of trial, Andrew is 22 and Sabrina is 21 years of age. Andrew has just completed his undergraduate program in criminology at Carleton University and he may return to school in September 2018.
[38] Sabrina moved to live with the applicant full-time in August 2015. Sabrina stopped attending high school on a full-time basis in June 2015 when she was 18 years of age. She could not graduate because she needed one additional course so she worked until January 2016 when she returned to high school and took a full term of credits and graduated in June 2016.
[39] The applicant concedes that Sabrina was not entitled to child support once she stopped attending high school in June 2015. The applicant seeks child support from January to June 2016.
[40] Further, the applicant seeks child support for Sabrina as of September 1, 2018 because she has been accepted into a one-year pre-animation course at Algonquin College to start in September 2018. It is Sabrina’s intention to enrol in the three-year general arts program after completing this one-year program.
[41] Further, the applicant does not seek any contribution to Sabrina’s postsecondary educational expenses because Sabrina has her own resources.
[42] There have been a number of court orders dealing with child support in this proceeding set out as follows:
(a) order of Justice Mackinnon dated February 18, 2016 ordering the respondent to pay child support for Sabrina commencing February 1, 2016 in the amount of $736 per month based on an annual income of $81,727. The respondent did not make the child support payment and fell into arrears;
(b) order of Justice Phillips dated August 18, 2016 ordering the support order made by Justice Mackinnon on February 18, 2016 to continue in full force and effect absent independent evidence of the respondent’s present income; and
(c) order of Justice James dated December 5, 2016 ordering the respondent to pay $5,000 by December 31, 2016 and $5,000 by January 31, 2017 on account of the outstanding costs orders, the balance of which is to be credited against the child support arrears as part of a refraining order brought in the face of enforcement of arrears of support.
[43] The respondent paid said sums. The sum of $3,500 was applied towards costs and $6,500 was applied towards child support arrears. The respondent made no other payment towards child support since complying with the terms of the refraining order.
Summary of child support towards April, May and June
Year 2015
[44] For the year 2015, I find that the applicant’s income was $17,305, the respondent’s income was $81,727 and both children resided with the respondent from April to July 2015. Sabrina was entitled to child support until June 2015.
[45] I order that the applicant pay to the respondent table child support for the two children in the amount of $242 per month for a three-month period totalling $726.
[46] I order the applicant pay to the respondent table child support for Andrew in the amount of $124 per month commencing July 2015 to December 2015 totalling $620.
[47] Consequently, the applicant owes the respondent the sum of $1,346 as table child support for 2015.
Year 2016
[48] For the year 2016, based on the respondent’s imputed income of $78,600, the applicant’s annual income of $10,749, Sabrina being entitled to child support from January through June 2016, I order the respondent to pay to the applicant table child support amount of $932 per month for the period of January through June 2016, totalling $4,392. Based on the applicant’s income, she has no liability to pay child support for Andrew.
Year 2017
[49] Based on the respondent’s imputed income of $78,600, the applicant’s income of $28,284, Andrew continuing to be entitled to child support, I order the applicant to pay to the respondent the sum of $239 per month totalling $2,868 for the year.
Year 2018
[50] Based on the respondent’s imputed income of $78,600, the applicant’s income of $28,284 and Andrew attending school on a full-time basis until April 2018, I order that the applicant pay to the respondent table child support in the amount of $239 per month totalling $956 for the period of January to April 2018.
Summary
[51] Consequently, taking into consideration the finding set out herein, I find that from April 2015 to April 2018, the applicant owes the respondent table child support in the amount of $5,170 and the respondent owes the applicant child support of $4,392, resulting in the applicant owing the respondent the sum of $778 in table child support.
[52] In addition, the respondent is entitled to a credit for support paid since the commencement of these proceedings. The respondent gave the applicant twelve post-dated cheques payable directly to Sabrina for child support for the period of January through December 2016, each in the amount of $300. However, the respondent put stop payments on the cheques for April, May, June, September and October 2016. In the fall 2016, the respondent called the applicant to say that he was unemployed, he could not afford to pay the support and that the applicant should not attempt to catch any of the support cheques. Consequently, she did not cash the post-dated cheques for November and December 2016. I find that the respondent is entitled to a credit of eight post-dated cheques totalling $2,400 paid in 2016.
[53] In addition, on December 5, 2016, a refraining order was granted by Justice James compelling the respondent to pay $10,000 of which $6,500 was towards child support arrears.
[54] To summarize, I find that the applicant owes the respondent $778 for child support. The respondent is entitled to credit of $2,400 and a further credit of $6,500 resulting in a total of $9,678. I find that the applicant owes the respondent the sum of $9,678 up to April 30, 2018.
[55] Sabrina has been accepted at Algonquin College to start school in September 2018. At this time it is her plan to attend school but she has not started school and I will not make an order for child support until confirmation is that she is attending school on a full-time basis. Further, Andrew may return to school in September 2018. Based on these uncertainties, I will not make an order for child support, but in the event that either child attend school on a full-time basis, the issue of child support will have to be revisited which will have an effect on the quantum of spousal support.
EQUALIZATION OF THE NET FAMILY PROPERTY
[56] There have been a series of orders made during this proceeding that will have an impact on the calculation of the net family property.
[57] By order dated February 18, 2016, Justice Mackinnon ordered that the matrimonial home be listed for sale on or before March 18, 2016 unless the respondent offered to purchase it from the applicant and she accepted within that timeframe.
[58] By order dated August 18, 2016, Justice Phillips ordered that both parties would have the right to obtain an up-to-date real estate appraisal to establish a fair market value of the matrimonial home.
[59] On February 23, 2017, Justice Doyle, with the consent of the parties, ordered the applicant to transfer her interest of the matrimonial home to the respondent under the following conditions:
(a) the agreed-upon fair market value of the matrimonial home shall be $230,000; and
(b) in consideration of the transfer of the home, the respondent shall no later than April 14, 2017 assume all joint debts registered against the matrimonial home, including the outstanding line of credit estimated at $183,000 and the outstanding property taxes estimated at $17,000. In addition, from the remainder of the $30,000, the respondent was to arrange for the reimbursement of the outstanding lien to Legal Aid Ontario in the applicant’s name estimated at $8,000 and to provide the applicant with the payment of $7,000 for the remainder of her share of the interest in the matrimonial home.
[60] In the event that the applicant’s interest in the matrimonial home cannot be transferred to the respondent based on these conditions by April 14, 2017, the matrimonial home was to be sold and provisions regarding the sale were set out in the order.
[61] By order dated June 6, 2017, Justice Beaudoin, with the consent of the parties, varied the conditions related to the applicant’s transfer of her interest in the matrimonial home to the respondent set out in the order of Justice Doyle as follows:
(a) the agreed-upon fair market value of the matrimonial home shall be $230,000;
(b) in consideration of this amount, the respondent was to assume the outstanding line of credit estimated at $183,000 and the outstanding property taxes in the amount of $21,671.39; and
(c) from the agreed-upon equity of $25,328 in the matrimonial home, the applicant is entitled to $12,664. In lieu of transferring the sum, the respondent shall arrange for the reimbursement of the applicant’s outstanding lien owing to Legal Aid Ontario in the amount of $12,664.
[62] Further, the respondent was to transfer $5,000 to the applicant by cheque or money order to the attention of Steve Duplain in trust for the applicant. The applicant acknowledged that this transfer was part of the respondent’s contribution towards the satisfaction of any outstanding equalization and/or support, then being claimed by the applicant in these proceedings. Further, the respondent was to reimburse outstanding legal costs in the amount of $400, make arrangements to arrange for legal counsel to transfer the applicant’s interest in the matrimonial home to the respondent and make any arrangements for refinancing of the line of credit.
[63] From the agreed upon equity, the applicant was to have her Legal Aid lien paid off by the respondent plus the respondent would pay an additional $5,000 towards the respondent’s contribution to equalization and/or support being claimed by the applicant in these proceedings. It was anticipated that the applicant’s share of the equity would be satisfied by the payment of her Legal Aid lien and that she would receive an additional $5,000.
[64] The property was transferred from the applicant on November 3, 2017 to the respondent. On that date, the Legal Aid lien was paid out to the benefit of the applicant which was less than originally anticipated and was actually in the amount of $9,886.21. I find that the applicant received the sum of $9,886.21 instead of the $12,664. The respondent continued to owe the applicant the difference, being $2,777.79. Coupled with the $5,000 payment to be made in addition to the transfer of the applicant’s interest in the matrimonial home, the applicant should have received $7,777.79. In fact, she received a cheque in the amount of $8,258.79. In the circumstances, the applicant was entitled to $2,777.79 to satisfy her entitlement to her half equity in the matrimonial home, being $12,664.
[65] I will credit the respondent with the balance of $5,481 against the equalization payment owed by the respondent to the applicant.
[66] At the time of separation, the parties had an outstanding indebtedness to the Royal Bank of Canada. They owed $170,091.05 on a credit line and $11,774.50 on a mortgage loan for a total indebtedness of $181,865.55. By January 31, 2014, the line of credit had increased to $176,800.05 while the balance owing on the mortgage loan was down to $6,498.96 for a total of $183,299.01. I note that the mortgage was paid bi-weekly by the respondent in the amount of $993.46.
[67] The applicant seeks reimbursement of approximately $6,605, representing half of the increase in the line of credit post separation. The applicant submits that she should not be responsible for the increase in the line of credit from the date of separation to the date of payment on November 3, 2017. On that date, the line of credit, being the only remaining indebtedness, was paid off in the amount of $183,300. The applicant submits that the increase in the indebtedness in the amount of $13,208.95 was done without her knowledge or consent and she seeks reimbursement from the respondent for half of that amount which I calculate to be $6,604.47.
[68] Upon a review of Exhibit 7, the RBC Home Line Plan statement dated August 31, 2013 indicated a total indebtedness of $181,865.55. The RBC Home Line Plan statement for January 31, 2014 indicated a total indebtedness of $183,299.01. I find that the line of credit was increased from $170,091.05 to $176,800.05. At the same time, the mortgage was reduced from $11,774.50 to $6,498.96.
[69] I do not find that the respondent unilaterally increased the line of credit by $13,300 between August 31, 2013 and January 31, 2014. The total indebtedness was increased by $1,433.46. In the circumstances I dismiss this claim for relief.
Contents of the matrimonial home
[70] The applicant testified that when she left the matrimonial home on August 31, 2013, she left behind a house that was fully furnished, including three bedrooms, a kitchen and appliances such as a washer, dryer, and dishwasher. I accept the evidence of the applicant that she readily admitted that the contents were old but that they were significant in number and I accept the valuation of $5,000 which was retained by the respondent.
2006 Mazda motor vehicle
[71] The applicant testified that she valued the vehicle at $4,000 based on her analysis of similar vehicles with similar mileage listed for sale in the Autotrader Magazine. I accept the value of $4,000 for the vehicle retained by the applicant.
Bank accounts
[72] I find that the respondent had a Bank of Montreal account with $102 on the date of separation, as set out in Exhibit 5.
[73] I find that the respondent had a bank account in the amount of $2,059.55 based on the bank statement filed as Exhibit 6.
[74] I find that the respondent had a registered retirement savings plan in the amount of $12,732.87 based on the admission set out in the respondent’s financial statement dated July 6, 2015.
Business
[75] The applicant testified that she and the respondent were apparently listed as directors of Exclusive Beauty Spa Inc., the company that was incorporated in 2009 to operate a beauty salon in a strip mall in Ottawa. The salon operated from February 2010 until December 2014.
[76] At the end of the lease, the Company owed the landlord unpaid rent in the amount of $1,716. Since the applicant vacated the leased premises, she has not received any demand letter for the payment of said debt.
[77] At the end of the lease in December 2014, the applicant removed some physical assets, such as the reception desk, facial beds, manicure table, two lamps, a mirror and two trolleys. She left other physical assets on site. She advised that the respondent, after she vacated the premises, returned and removed the physical assets. There is no evidence as to the value of the contents retained by each party. In the circumstances, I will attribute no value to the physical assets of this company.
[78] The applicant testified that the company never filed income tax returns during the period of operation of the salon. The applicant’s concern is that Revenue Canada may pursue the directors of the corporation for the nonpayment of the corporate income tax due and payable.
[79] The applicant does not have the corporate documents to be able to prove whether she is a shareholder or a director. She admits that she signed the lease with the respondent on behalf of the corporation. In the circumstances, I attribute no value to the business.
Applicant’s debts
[80] I find that at the date of separation, based on the best evidence presented during this proceeding, the applicant has the following debts:
(a) Sears $668.69
(b) Toronto Dominion visa $4224.44
(c) Bank of Montreal visa $17,443.41
Respondent’s debts
[81] I make the following findings of the respondent’s debts on the date of separation:
(a) CIBC visa $1711.08
(b) MasterCard $4766.05
(c) Citi MasterCard $2115.02
(d) Amex $1021.18
[82] I find that the equalization of the net family property is to be calculated as follows:
ASSET APPLICANT RESPONDENT
Matrimonial home $115,000 $115,000
Household goods $5000
2006 Mazda $4000
Chequing account $102
Chequing account $2,059.55
RRSP $12,732.07_____
Total $119,102 $134,791.62
DEBTS
RBC Joint line of credit $90,932.78 $90,932.78
Municipal taxes $10,835.70 $10,835.70
Sears $668.69
Toronto Dominion visa $4,224.44
Bank of Montréal visa $17,443.41
CIBC credit card $1,711.08
MasterCard $4,766.05
Citi MasterCard $2,169.72
American Express $1,021.18 __----
Total $124,105.02 $111,437.50
Property debts and other liabilities and date of marriage
zero zero
Excluded property
zero zero ________
Total debts and other liabilities
$124,105.02 $111,437.50
Value of property on the date of marriage
$0 $0
Value of all excluded property
$0 $0
Value of property on valuation date $119,102 $134,791.62
Less $124,105.02 $111,437.50_____
$0 $23,354.12
Difference $23,354.12
Equalization payment owing $11,677.06
[83] The respondent owes the applicant an equalization payment of $11,677.06 less the credit related to the transfer of the applicant’s interest in the matrimonial home, being $5,481 set out in paragraph 65, herein, leaving a balance owing by the respondent of $6,196. I order the respondent to pay to the applicant, the sum of $6,196 as the equalization of the net family property.
Exclusive Beauty Spa Inc.
[84] In the applicant’s affidavit dated May 2, 2018, one of the issues she identified was the sharing of corporate taxes from the jointly-owned business. In her affidavit and testimony, the applicant’s concern was that the corporate income taxes were never paid for the corporation. Throughout the preceding the applicant obtained three separate court orders before the respondent provided her with the electronic data necessary to complete the corporate income taxes. The applicant has attempted to address this issue with the respondent without success.
[85] The applicant seeks an order granting her authority to obtain the services of a qualified accountant to prepare and file the outstanding corporate income taxes for the business with the respondent being responsible to share in such costs. The applicant testified that it would cost at least $1,000 per year and that there are five years of relevant income tax reports to be prepared and filed. Further, the applicant requests that any liability for interest accruing on the income taxes owing since the commencement of proceedings, being March 31, 2015, should be paid by the respondent.
[86] By order dated June 12, 2017, Justice Engelking ordered, inter alia, that the parties were to retain an accountant at a shared 50/50 cost to complete the income tax assessment of the family business, Exclusive Beauty Spa Inc., subject to the following conditions:
(a) by July 28, 2017, the respondent shall choose the names of three available accountants in the Ottawa area which she shall provide to counsel for the applicant for review;
(a) by August 18, 2017, the applicant shall select the name of one of the three accountants who will be charged with the task of completing the tax assessment and submit same to the Canada Revenue Agency on behalf of the parties; and
(b) the accountant shall be jointly retained (at shared costs) by both parties and shall share all information provided to him by the parties openly between them.
[87] The applicant’s evidence is that the respondent reneged on his agreement after the settlement conference and did not comply with the order to retain an accountant and complete the necessary income tax filings. However, the order was never appealed or set aside and by the time of the trial, the respondent had not complied with the terms of the order.
[88] In the circumstances, the corporate income taxes must be filed and paid. There is an existing order that has not been complied with. In the circumstances, I order the parties to prepare and file the corporate income tax returns for Exclusive Beauty Spa Inc. I order that the applicant shall provide the respondent, by June 8, 2018, with the name of three accountants to prepare the corporate income tax returns. I order that the respondent must select one of the three proposed accountants, in writing to the applicant, by June 15, 2018. The accountant’s costs to prepare and file the corporate income tax returns will be shared equally by the parties.
[89] In the event that the respondent fails to select an accountant in writing to the applicant by June 15, 2018, the applicant may unilaterally select one of the three proposed accountants to prepare and file the necessary income tax returns on behalf of the corporation. Any costs incurred by the applicant to comply with the terms of this order regarding the preparation and filing of the corporate income tax return shall be shared equally by the respondent.
[90] Further, any interest accruing on any income tax owned by Exclusive Beauty Spa Inc. shall be paid by the respondent based on his lack of cooperation in addressing this issue.
SPOUSAL SUPPORT
[91] I find that the applicant is entitled to spousal support both on a compensatory and non-compensatory basis. My finding is based on the following:
(a) the parties lived together for just under 20 years;
(b) at the date of the marriage, the parties were 28 years of age, at separation, 48 years of age and at the date of trial, 53 years of age;
(c) the applicant followed the respondent from Toronto to Burlington to London and eventually Ottawa in furtherance of the respondent’s career in the high-tech fields;
(d) the applicant sustained an economic disadvantage by following the respondent’s employment career;
(e) the respondent was the main wage-earner during the marriage and assumed responsibility for the majority of expenses incurred by the family and in maintaining their lifestyle which included a family trip to Romania in 2001;
(f) the applicant assumed the majority of the child care responsibilities, domestic functions, responsibility for the children’s medical and dental care;
(g) the respondent has earned an average of $78,060 from 2012 to 2014 and I have imputed that income to him effective 2015 going forward;
(h) the applicant’s average income from 2015 to 2018 is $21,084.50; and
(i) the applicant cannot maintain the same standard of living to which she was accustomed while residing with the respondent.
[92] The applicant has sought retroactive support to the date of separation, being August 31, 2013. Proceedings were commenced on March 31, 2015. There is no evidence that prior to the commencement of proceedings the applicant requested spousal support from the respondent. In the circumstances, I exercise my discretion to order that spousal support shall commence on April 1, 2015, the day after the commencement of proceedings. Once proceedings were commenced, the respondent was aware that the applicant was seeking spousal support.
[93] At a case conference on June 22, 2015, Justice Warkentin, on consent, ordered that the respondent pay to the applicant temporary spousal support of $200 per month commencing July 1, 2015 on a without prejudice basis.
[94] On February 18, 2016, Justice Mackinnon ordered the respondent to pay to the applicant the midrange of spousal support of $1,322 per month commencing February 1, 2016 based on the respondent’s income of $81,727 and the applicant’s income of $15,120. Further, Justice Mackinnon indicated that no back payments were awarded at that time as a result of a lack of documentary evidence of the applicant’s income and that the order was without prejudice to such a claim being determined in the future.
[95] The applicant admits that the respondent provided her with three cheques of $300 each for an unspecified reason. The applicant admits that the respondent paid support from August 1, 2015 to May 1, 2016 in the total amount of $200 per month for a total of $2,000.
[96] I have determined that the proper range of spousal support should be in the midrange. I have considered the various factors set out in the Spousal Support Advisory Guidelines: the Revised User’s Guide. I have considered the applicant’s strong compensatory and non-compensatory claim. In addition, the parenting arrangements of the children have resulted in circumstances where, at times, one or both children were entitled to child support. At times, both children lived with the respondent or there was a split custody situation with each child living with one of the parents.
April to July 2015
[97] Based on the respondent earning $81,727, the applicant earning $17,305 and the applicant paying $242 per month as child support, I order the respondent to pay to the applicant the midrange of spousal support in the amount of $1,295 per month. However, the said support will not be tax-deductible by the respondent or taxable by the applicant and, consequently, I have considered the net after-tax cost/benefit of said spousal support. In the circumstances, I order the respondent to pay to the applicant the sum of $947 per month representing the midpoint between both parties’ net after-tax cost/benefit for the months of April, May, June and July 2015, totalling $3,788 as net spousal support.
August to December 2015
[98] During this period of time, Andrew continued to reside with the respondent and Sabrina moved to live with the applicant. I have determined that Sabrina was not entitled to child support at that time as she was no longer attending school on a full-time basis, was 18 years of age and working full-time.
[99] Based on the respondent’s income of $81,727 and the applicant’s income of $17,305, with the applicant paying $124 per month in table child support for Andrew, the midrange of spousal support is $1,560 per month. Proceeding on the same principle that the support is tax neutral, I have determined that the midpoint between both parties’ after-tax cost/benefit should be utilized resulting in a payment of $1,143 per month by the respondent to the applicant as net spousal support.
[100] I order the respondent to pay to the applicant the sum of $5,715 as net spousal support for the net spousal support for the months of August, September, October, November and December 2015.
[101] The total owing by the respondent for the year 2015 in net spousal support is $9,503. I find that the respondent paid to the applicant $1,200 of spousal support in 2015. Consequently, I order the respondent to pay to the applicant net spousal support in the amount of $8,303 for 2015.
Year 2016
[102] Based on Andrew being entitled to child support for the year, Sabrina being entitled to child support for the period of January through June 2016, the respondent’s imputed income of $78,600 and the applicant’s income of $10,749, with the respondent paying $732 per month as child support for Sabrina, the midrange of the spousal support is $1,259 per month payable by the respondent to the applicant.
[103] Considering that the said support will be tax neutral, I have determined that the midpoint of the tax neutral support is applicable, being $945 per month. I order that the respondent pay to the applicant spousal support in the amount of $5,670 for the period of January, February, March, April, May and June 2016.
[104] Effective July 1, 2016, Sabrina was no longer entitled to child support and the applicant’s income was insufficient to pay any amount of table support for Andrew. The midrange of said support is $1,598 per month and the midpoint of the tax neutral spousal support is $1,199 per month. I order the respondent to pay to the applicant the sum of $7,194 for spousal support for the months of July, August, September, October, November and December 2016.
[105] I find that the respondent paid $1,200 for spousal support in 2016 and he should receive a credit against any spousal support owing.
[106] Consequently, I order the respondent to pay to the applicant, the sum of $11,664 of net spousal support for the year 2016.
Year 2017
[107] Based on Andrew being entitled to receive child support, Sabrina working and not being entitled to child support, the respondent’s imputed income of $78,600 and the applicant’s income of $28,284, with the applicant paying $239 of child support, the midrange of the spousal support is $1,070 per month.
[108] In these circumstances, the spousal support is tax-deductible and taxable in the hands of the parties. I order the respondent to pay to the applicant the sum of $1,070 per month totalling $12,840 as spousal support for 2017.
January to April 2018
[109] Based on Andrew continuing to be entitled to child support until he completed his education in April 2018, the respondent’s imputed income of $78,600 and the applicant’s income of $28,284, with the applicant paying child support of $239 per month, the midrange of spousal support is $1,070 per month. I order the respondent to pay to the applicant the sum of $1,070 per month commencing January 1, 2018 and the first day of each month thereafter.
Duration of spousal support
[110] From 1993 until 2013, a period of almost 20 years, the applicant sustained an economic disadvantage as a result of the roles that she assumed during this marriage. From 2015 to date, at one time or another, both children or one child was entitled to child support.
[111] This is not a case for a time-limited amount of spousal support. The Spousal Support Advisory Guidelines provide that based on the length of the marriage and the recipient’s age at separation, the spousal support should be for an indefinite (unspecified) duration subject to variation and possibly review.
[112] I find that as a result of the roles assumed during the marriage, that this is a long term marriage and that the applicant’s entitlement to spousal support is based on a strong compensatory and non-compensatory basis. I find that the applicant is entitled to indefinite support subject to variation in the event of a material change in circumstances.
Indexation of spousal support
[113] The applicant seeks indexation of the spousal support. Indexation was a claim for relief made by the applicant in her application. The Court has the discretion to order indexation under the Divorce Act in a manner consistent with the Family Law Act (Linton v. Linton (1990), 1990 2597 (ON CA), 1 O.R. (3d) 1, 24 A.C.W.S. (3d) 524 (Ont. C.A.)).
[114] Pursuant to subsection 34(5) of the Family Law Act, indexation may be ordered in accordance with the percentage change in the Consumer Price Index for Canada.
[115] One of the policy considerations behind indexation is that it insulates the support payee from the erosion of support by inflation and it avoids the need for future variation applications (Linton at paras. 102-106).
[116] Where the entitlement to spousal support is based on non-compensatory and compensatory factors, it is appropriate that spousal support be indexed annually to the cost of living (Meiklejohn v. Meiklejohn (2001), 2001 21220 (ON CA), 150 O.A.C. 149, 19 R.F.L. (5th) 167 (Ont. C.A.)).
[117] I have found that the applicant is entitled to spousal support based on non-compensatory as well as compensatory factors. I see no reason why the spousal support should not be indexed.
LIFE INSURANCE
[118] The applicant seeks an order requiring the respondent to obtain and maintain a policy of life insurance naming her as the irrevocable beneficiary in trust for a minimum amount of $400,000 as security for the spousal support. Further, she seeks an order that this designation is to occur within 30 days of the date of any order and proof of same to be provided through her counsel’s office.
[119] However, the applicant admits she has no evidence that the respondent has a policy of life insurance.
[120] In Katz v. Katz, 2014 ONCA 606, 377 D.L.R. (4th) 264, the Court of Appeal confirmed that a court may order a spouse to obtain insurance to secure payment of support following the payor’s death. The court is given broad discretion to impose terms, conditions, and restrictions in connection with an order for child or spousal support, including the power to order a spouse to obtain insurance to secure the payment to be binding on the payors’ estate.
[121] The court directed that once the issue of insurability and the cost of insurance is resolved, the court must ensure that the amount of life insurance cannot exceed the amount of support payable over the duration of the support order; the amount of insurance to be maintained should decline over time as the amount of spousal support payable will diminish over the duration of the award; the obligation to maintain insurance should end when the support obligation ends; and the court should first order that the support obligation is binding on the payor’s estate.
[122] Despite the applicant having no evidence as to the respondent’s life insurance policy, the respondent’s financial statement sworn July 8, 2015 indicates that he has a life insurance policy with Manulife. The financial statement does not indicate the amount of the life insurance but indicates that the children are each a 50% beneficiary of the life insurance policy. Upon a review of the respondent’s financial statement, he does not indicate the cost of the monthly premiums.
[123] I do not have a sufficient evidentiary basis to order the life insurance policy as security for support. However, I have the jurisdiction to order that the respondent’s obligation to pay child and spousal support shall form the first charge on his estate. I so order.
EXTENDED HEALTH CLAIM
[124] There was no evidence provided that the applicant requests this relief or that the respondent has such a plan. This claim is dismissed.
COSTS
[125] Counsel for the applicant provided me with his Bill of Costs including preparation and attendance for the settlement conference on June 12, 2017 and preparation for the uncontested trial on May 14 and 16, 2018, wherein counsel seeks costs including disbursements and HST in the amount of $4,749.29.
[126] At the settlement conference on June 12, 2017, the costs were reserved to the trial judge.
[127] Counsel for the applicant advised that no offers to settle were served. I find that the applicant is a successful party in this litigation and is presumptively entitled to her costs. The respondent has not participated in the trial as a result of his answer being struck directly related to his noncompliance with existing court orders for disclosure and the general requirement to make timely disclosure under the Family Law Rules.
[128] I find that the hourly rate of counsel for the applicant, his articling student and the time spent are all reasonable.
[129] In the circumstances, I order the respondent to pay to the applicant costs fixed in the amount of $4,000 inclusive of disbursements and HST.
DIVORCE
[130] The parties married in October 23, 1993 and separated on August 31, 2013. The parties have not reconciled and there is no chance of reconciliation. A divorce order shall issue.
DISPOSITION
[131] I make the following orders:
(a) the parties are divorced;
(b) the applicant owes the respondent the sum of $9,678 up to April 30, 2018 representing the overpayment of child support;
(c) the arrears of child support owed by the applicant in the amount of $9,678 be credited against the arrears of spousal support owed by the respondent;
(d) for the year 2015, I order the respondent to pay to the applicant, the sum of $8,303 as non-deductible spousal support;
(e) for the year 2016, I order the respondent to pay to the applicant, the sum of $11,664 as non-deductible spousal support;
(f) commencing on January 1, 2017 and on the first day of each month thereafter, I order the respondent to pay to the applicant the sum of $1,070 per month as spousal support;
(g) the spousal support shall be increased annually commencing January 1, 2019 and on the first day of January of each subsequent year by the percentage change in the Consumer Price Index for Canada for prices of all items since the same month of the previous year, as published by Statistics Canada;
(h) the respondent’s obligation to pay spousal support shall form the first charge on his estate;
(i) the respondent owes the applicant an equalization payment of being $6,196;
(j) the parties to prepare and file the corporate income tax returns for Exclusive Beauty Spa Inc. I order that the applicant shall provide the respondent, by June 8, 2018, with the name of three accountants to prepare the corporate income tax returns. I order that the respondent must select one of the three proposed accountants in writing to the applicant by June 15, 2018. The accountant’s costs to prepare and file the corporate income tax returns will be shared equally by the parties. In the event that the respondent fails to select an accountant in writing to the applicant by June 15, 2018, the applicant may unilaterally select one of the three proposed accountants to prepare and file the necessary income tax returns on behalf of the corporation. Any costs incurred by the applicant to comply with the terms of this order regarding the preparation and filing of the corporate income tax return shall be shared equally by the respondent; and
(k) the respondent to pay the applicant her costs fixed in the amount of $4,000 inclusive of disbursements and HST.
Shelston J.
Released: May 29, 2018
COURT FILE NO.: FC 15-691
DATE: 2018/05/29
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Ioanna Oschisor
Applicant
– and –
Catalin Oschisor
Respondent
REASONS FOR JUDGMENT
Shelston J.
Released: May 29, 2018