COURT FILE NO.: FC-14-273 DATE: 2019/03/12 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: LEMLEM KAHSAI, Applicant AND KIDANE HAGOS, Respondent

BEFORE: Justice Marc R. Labrosse

COUNSEL: J. Alison Campbell, Counsel for the Applicant Wade L. Smith, Counsel for the Respondent

HEARD: March 21, 2019

ENDORSEMENT

Overview

[1] The Respondent has moved for an order varying the current temporary order dealing with spousal support. He seeks to suspend the payment of spousal support on a without prejudice basis retroactive to December 1, 2018. He also seeks disclosure of bank records. The Applicant opposed the motion to vary and sought significant disclosure, an allowance to attend at the matrimonial home to retrieve belongings and for a non-dissipation order.

[2] The Applicant’s order to retrieve belongings was not pursued and the Respondent’s motion for disclosure of bank records proceeded on consent.

[3] As for the motion for a non-dissipation order, it was refused for oral reasons given. There was not sufficient evidence for the Court to conclude that the Respondent was or was going to dissipate his assets. Although the Applicant has advanced a trust claim and seeks a form of equalization, the Applicant has not met her onus of showing that the balance of convenience is in her favor. In addition, there is no evidence of the value of the Applicant’s trust claim and there is insufficient evidence for the Court to conclude that the Respondent would not be able to satisfy such an award. The risk of irreparable harm has not been made out. Although there is no evidence to suggest that the Respondent is looking to sell his properties, if such evidence becomes available, the motion could be brought back to the Court.

[4] With respect to the disclosure requested by the Applicant, I dealt with those requests orally with the parties during the hearing of the motion and my order on each requested item is set on Schedule “A” attached to this Endorsement.

Variation of Spousal Support

[5] The Respondent seeks to suspend the spousal support award of Shelston J. in Kahsai v. Hagos, 2015 ONSC 3900 where it was ordered that the Respondent pay “interim without prejudice spousal support in the amount of $1,500 per month”.

The Law

[6] The criteria to be applied to the Respondent’s motion to vary spousal support in a temporary order is set out in Damaschin-Zamfirescu v. Damaschin-Zamfirescu, 2012 ONSC 6689. In essence, the Court must determine the nature of the temporary order that it is being asked to vary. Is it a temporary order or a temporary temporary without prejudice order?

[7] When dealing with temporary orders, the Court begins by highlighting that the general principle is that parties should be encouraged to advance their case to trial as soon as possible and that variation of temporary orders should not be encouraged. For this reason, the applicable criteria is that a party must establish that there has been a substantial change in circumstances since the previous temporary order was made. Thus, the onus is a heavy one: see Damaschin-Zamfirescu at para 20.

[8] Turning now to what is referred to as “temporary temporary without prejudice orders” in Damaschin-Zamfirescu, I note that this term has evolved over the years. These types of orders have at times been referred to as interim interim orders and I will refer to them as temporary without prejudice orders for the purpose of this Endorsement. The focus of the analysis must be to determine if the temporary order was made without prejudice to either party being able to bring the matter back to court. This can occur when the temporary order was made on consent and/or at a time when there is uncertainty as to issues that are relevant to the determination of temporary spousal support. Most commonly, this occurs where there is an incomplete record concerning the income of one or both parties.

[9] When considering temporary without prejudice orders, these orders are often made to find a temporary solution for an even shorter period of time than from the date of the order until trial. Thus, the substantial change in circumstances test is not appropriate and motions to vary this type of temporary order should be reconsidered as a hearing de novo on the more complete record now before the Court: see Damaschin-Zamfirescu at para 23.

[10] When considering the temporary order that is the subject of this motion to vary, Shelston J. expressed concern over the evidentiary record before him. The Respondent’s financial statement showed a budget with gross income of $177,600 for 2015 and expenses of $309,219.96. Shelston J. clearly notes in his decision that there is missing information to explain the Respondent’s gross income and expenses. There is no doubt as to the without prejudice nature of Shelston J.’s temporary order and thus the applicable criteria on this motion to vary is to consider the motion as a hearing de novo.

[11] In Damaschin-Zamfirescu, the Court sets out the test that applies on an initial motion for temporary spousal support by highlighting the applicable legislative criteria and the following principles:

(1) The party claiming temporary spousal support has the onus of establishing that there is a triable (prima facie) case, both with respect to entitlement and quantum. The merits of the case in its entirety are to be dealt with at trial.

(2) In the event that a spousal support claimant cannot establish an arguable case for entitlement to spousal support, the motion for temporary relief should be dismissed, even if the claimant has need and the other party has the ability to pay.

(3) The Court is not required to carry out a complete and detailed inquiry into all aspects and details of the case, or to determine the extent to which either party suffered economic advantage or disadvantage as a result of the relationship or its breakdown. That task is for the trial judge.

(4) The primary goal of interim spousal support is to provide income for dependent spouses from the time the proceedings are commenced until the trial. Interim support is meant to be in the nature of a “holding order” to, insomuch as possible, maintain the accustomed lifestyle pending trial.

(5) Assuming that a triable case exists, interim support is to be based primarily on the motion judge’s assessment of the parties’ means and needs. The objective of encouraging self-sufficiency is of less importance.

[citations omitted]

Position of the Parties

[12] The Respondent’s principal argument in favor of suspending the payment of spousal support is that since the date of Shelston J.’s endorsement, both parties have retained experts to determine the Respondent’s income available for support. The Respondent’s expert opines that the income available for support from 2012 to 2017 is as follows:

Year	Income Available
2012	$186,000
2013	$174,000
2014	$117,000
2015	$ 94,000
2016	$ 79,000
2017	$ 67,000

[13] The Applicant’s expert provided a draft report that set out the following amounts as the income available for support from 2012 to 2017:

Year	Income Available
2012	$192,835
2013	$180,699
2014	$121,383
2015	$98,107
2016	$83,599
2017	$70,279

[14] The Respondent relies on recent DivorceMate calculations based on the new income figures that suggest that a minimal amount of spousal support is owing although those calculations do not properly reflect the Applicant’s gross income of $58,399.13 as set out on her 2018 T4. By using the updated income figure, the proper monthly amount for spousal support would have a low of $247, a mid-range of $288 and high range of $330.

[15] The Applicant highlights that the draft report filed by her expert is incomplete. She focuses on certain qualifying statements that put in question the accounting practices of the Applicant and his various business interests. The Applicant also relies on the ongoing disclosure issues surrounding the Respondent’s finances and undisclosed bank accounts.

Analysis

[16] In his 2015 endorsement, Shelston J. considered the applicable principles on a motion for interim spousal support. I do not purport to re-do that analysis as it still applies today. The Respondent focussed on the means and needs of the parties and did not challenge entitlement. The Applicant has made out a prima facie case for entitlement to spousal support and nothing has changed since 2015. The issue is the quantum of the spousal support.

[17] When considering a suspension or reduction of spousal support, I am concerned with the changes in the Respondent’s income available for support. The most significant change comes from the Respondent’s decision to essentially close his cleaning business operating as Shaman Maintenance Inc. While I accept that this business lost an important contract with the City of Ottawa, there is little evidence of the efforts made by the Respondent to replace that revenue. In addition, the Respondent says he is 65 years of age and he says his health is declining but provides nothing to corroborate this statement.

[18] Also, his gross income figures have increased since 2015 and are now up to $191,106. His budgeted expenses have decreased and the equity he has in his assets has increased. I note that the cash in his bank accounts has significantly decreased since the date of separation. When looking at the Respondent’s budget, he shows a monthly surplus of $6,833.50 and this includes the payment of $1,500 a month in child support. This significant monthly surplus is caused by his largest expense – Expenses for Ottawa rental Properties – shown as “TBD”. This makes it very difficult for the Court to assess his monthly budget along with his ability to pay. I am therefore unable to conclude that he has an inability to continue to pay spousal support.

[19] As for the Applicant, her financial circumstances have remained consistent although she is still in a deficit position as she has taken on over $10,000 of credit card and line of credit debt.

[20] The Respondent provided an up-to-date financial statement for this motion but the Applicant did not. However, I accept that the Financial Statement dated November 18, 2018 is sufficiently current to allow me to compare the parties’ ongoing finances as the Applicant also provided her 2018 T4. Her financial statement shows a monthly deficit of approximately $1,900 and this is after including the $1,500 in monthly spousal support. I have no difficulty concluding that she is still in need of spousal support although her expenses may be affected by the fact that her daughter is living with her.

[21] Having concluded that the Applicant is still in need of spousal support and given that I am unable to conclude that the Respondent is unable to continue to pay spousal support, I conclude that the Respondent should continue to pay spousal support.

[22] The expert reports and DivorceMate calculation provided by the Respondent certainly suggest that the evidence of the means and needs of the parties has changed since 2015. The Applicant’s budget shows a need but also suggests that her expenses are higher as her daughter is living with her. As for the Respondent, his budget does not allow the Court to come to a firm conclusion on his monthly expenses. After considering all the evidence, I am satisfied that a reduction to spousal support is warranted but the Respondent’s request for a suspension of spousal support is denied.

[23] I order that the temporary spousal support be reduced from $1,500 to $1,000 per month commencing on May 1, 2019. I also order that the temporary spousal support continue to be on a without prejudice basis. While this matter is scheduled to proceed to trial in the fall of 2019, there was discussion during the motion of further amendments to the pleadings and this may further delay the trial of this matter and the evidentiary record on the Respondent’s income for support purposes is not yet complete.

Order to issue

[24] Based on the foregoing, an order shall issue as follows:

(a) Paragraph 1 of the Order of the Honourable Mr. Justice Shelston dated May 11, 2015 is varied to provide that commencing April 1, 2019 and continuing on the first day of each month that follows, the Respondent shall pay the Applicant spousal support in the amount of $1,000 per month;

(b) the Applicant will produce true copies of her bank records and credit card statements from January 1, 2018;

(c) the Applicant’s request for a non-dissipation order is dismissed;

(d) the Respondent shall provide disclosure as per Schedule “A” attached.

[25] If either party wishes to pursue a claim for costs in connection with this matter, they shall serve and file written submissions (maximum of 3 pages), a detailed Bill of Costs and copies of any Offers to Settle by May 3, 2019. Any reply submissions shall be served and filed by May 17, 2019.

Justice Marc R. Labrosse Date: 2019/03/12

COURT FILE NO.: FC-14-273 DATE: 0219/03/12 ONTARIO SUPERIOR COURT OF JUSTICE

RE: LEMLEM KAHSAI, Applicant AND KIDANE HAGOS, Respondent

BEFORE: Justice Marc R. Labrosse

COUNSEL: J. Alison Campbell, Counsel for the Applicant Wade L. Smith, Counsel for the Respondent

HEARD: March 21, 2019

ENDORSEMENT Justice Marc R. Labrosse Released: 2019/03/12

Schedule “A”

OUTSTANDING DISCLOSURE

Disclosure	Document	Order of Justice Labrosse
Shamar Maintenance 2017 and 2018 (when available) Financial Statement and copies of the Excel workbook that the accountant Colas Accounting would have prepared to generate the Financial Statements	Letter to Smith dated May 17, 2018 Letter to Smith July 9, 2018	To be provided by June 15, 2019.
Income tax returns (including all attachments and schedules) for Shamar Maintenance	Case Conference Brief dated March 31, 2014 Order of Master Roger dated March 31, 2014	To be provided including attachments and schedules by June 15, 2019.
Value of Shamar Maintenance	Letter to Smith dated May 17, 2018	Respondent to provide evidence to be relied upon at trial to establish value at date of separation and current value by June 15, 2019.
List of rental incomes and expenses for 2018	Letter to Smith dated December 20, 2018	To be provided by June 15, 2019.
List of current available unit in each of Mr. Hagos’ properties	Letter to Smith dated December 20, 2018	Provided.
Property Values – evidence required to support financial statement Value of 272 Gracewood – current Value of 416 Blake – date of separation, current Value of 392 Carmen – date of separation, current Value of 29 Manju – current Value of 68 Sweetland – date of cohabitation	Letter sent December 6, 2014 Follow up letter sent January 6, 2014 Case Conference Brief dated March 31, 2014 Order of Master Roger dated March 31, 2014 Order of Justice Beaudoin dated March 31, 2015 Follow up letter sent April 20, 2015	Respondent to provide evidence to be relied upon at trial to establish valued by June 15, 2019.
Property Abstracts Abstract for Manju property Abstract for Sweetland property Abstract for Gracewood property	Letter to Smith dated March 14, 2018 Letter to Smith dated May 17, 2018	Obtained by the Applicant
Breakdown of the repairs and maintenance expense for 2013 and 2014 for Carmen and Blake Property	Letter sent March 14, 2016 (Pittman) Follow up letter sent March 22, 2016 Follow up letter sent April 12, 2016	To be provided by June 15, 2019 subject to Mr. Smith confirming in writing that it has been provided and where it can be found.
MPAC statements for Carmen and Blake properties - 2013 and current	Letter to Smith dated May 17, 2018	To be provided by June 15, 2019 subject to Mr. Smith confirming in writing that it has been provided and where it can be found.
Mortgages – evidence required to support financial statement Gracewood mortgage Manju Mortgage Blake mortgage Carmen Hagos Park	Letter sent December 6, 2013 Follow up letter sent January 6, 2014 Case Conference Brief dated March 31, 2014 Order of Master Roger dated March 31, 2014 Order of Justice Beaudoin dated March 31, 2015 Follow up letter sent April 20, 2015	To be provided for date of separation and current by June 15, 2019 subject to Mr. Smith confirming in writing that it has been provided and where it can be found.
Debts – evidence required to support financial statement Line of Credit - **882317 Line of Credit - **19738 Business Line of Credit Student Loan for children Credit Card - Visa Card **017 Credit Card - MasterCard Credit Card – US Visa WSIB Audit - $19,200 (evidence of date of separation and payment) Citi Financial – Equipment (floor scrubbers, steam cleaners) (evidence of date of separation and payment)	Letter sent December 6, 2013 Follow up letter sent January 6, 2014 Case Conference Brief dated March 31, 2014 Order of Master Roger dated March 31, 2014 Order of Justice Beaudoin dated March 31, 2015 Follow up letter sent April 20, 2015 Letter dated October 13, 2017 Letter dated May 17, 2018 re: updated Financial Statement	To be provided for date of separation and current by June 15, 2019 subject to Mr. Smith confirming in writing that it has been provided and where it can be found.
Bank accounts - evidence required to support financial statement Bank account statements for Mr. Hagos’ personal accounts from January 1, 2016 to date Scotiabank RRSP **9501 Scotiabank Non-Registered **3128 Scotiabank Chequing **7183 Scotiabank US Chequing **3929 BB&T Chequing **9215	Follow up letter sent January 6, 2014 Case Conference Brief dated March 31, 2014 Order of Master Roger dated March 31, 2014 Order of Justice Beaudoin dated March 31, 2015 Follow up letter sent April 20, 2015 Letter to Smith dated December 20, 2018	To be provided by June 15, 2019 subject to Mr. Smith confirming in writing that it has been provided and where it can be found. Respondent to also provide an authorization and direction to allow the Applicant to confirm the number of actual accounts and the account numbers.
IRS Tax Lien	Letter sent December 6, 2013 Follow up letter sent January 6, 2014 Case Conference Brief dated March 31, 2014 Order of Master Roger dated March 31, 2014 Order of Justice Beaudoin dated March 31, 2015 Follow up letter sent April 20, 2015	To be provided by June 15, 2019 subject to Mr. Smith confirming in writing that it has been provided and where it can be found.
Full financial statements for Hagos Park LLC – 2012, 2013, 2014	Letter sent March 14, 2016 (Pittman) Follow up letter sent March 22, 2016 Follow up letter sent April 12, 2016	To be provided by June 15, 2019 subject to Mr. Smith confirming in writing that it has been provided and where it can be found.
Full financial statements for Hagos Park LLC – 2015, 2016, 2017	Letter to Smith dated July 9, 2018	To be provided by June 15, 2019 subject to Mr. Smith confirming in writing that it has been provided and where it can be found.
Information provided to Mr. Desnoyers regarding state of the real estate industry	Letter sent March 14, 2016 (Pittman) Follow up letter sent March 22, 2016 Follow up letter sent April 12, 2016	To be provided by June 15, 2019 subject to Mr. Smith confirming in writing that it has been provided and where it can be found.
Details of the following expenses for Shamar Maintenance for 2017 and 2018 (when available): - Management fee expense - automobile expense -advertising and promotional expense - meals and entertainment expense - communications and utilities expense - office expense	Letter sent March 14, 2016 (Pittman) Follow up letter sent March 22, 2016 Follow up letter sent April 12, 2016 Letter to Smith dated May 17, 2018	Withdrawn by Applicant.
Police Reports	Letter to Smith dated March 14, 2018	To be provided by June 15, 2019 subject to Mr. Smith confirming that an undertaking already exists.
Financing application from Midtown Bank	Letter to Smith dated March 14, 2018 Letter to Smith dated May 17, 2018	To be provided by June 15, 2019 or a letter from the bank confirming that no application was made.
CAS Reports	Letter to Smith dated March 14, 2018 Letter to Smith dated May 17, 2018	To be provided by June 15, 2019 subject to Mr. Smith confirming that an undertaking already exists.
Full Sale documents for Hagos Park	Letter to Smith dated March 14, 2018 Letter to Smith dated May 17, 2018 Letter to Smith dated July 9, 2018	Statement of Adjustments and evidence of disbursement of funds to be provided by June 15, 2019 subject to Mr. Smith confirming in writing that it has been provided and where it can be found.
Medical File from Askedian	Letter to Smith dated March 14, 2018	To be provided by June 15, 2019 subject to Mr. Smith confirming in writing that it has been provided and where it can be found.
Strategic Investments Information	Letter to Smith dated March 14, 2018 Letter to Smith dated May 17, 2018	To be provided by June 15, 2019 subject to Mr. Smith confirming that an undertaking exists.
Pleadings re: Submeters	Letter to Smith dated March 14, 2018 Letter to Smith dated May 17, 2018	To be provided by June 15, 2019 subject to Mr. Smith confirming in writing that it has been provided and where it can be found.
Child Support – periods claimed	Letter to Smith dated November 12, 2018 Letter to Smith dated November 27, 2018 Letter to Smith dated December 20, 2018	To be provided by June 15, 2019 subject to Mr. Smith confirming in writing that it has been provided and where it can be found.
Each child’s income tax returns and NOAs for the above child support periods claimed	Letter to Smith dated November 12, 2018 Letter to Smith dated November 27, 2018 Letter to Smith dated December 20, 2018	To provide all evidence to be relied upon at trial for claim for child support and s. 7 expenses by June 15, 2019.
Information re: childrens’ grants, bursaries, scholarships, or loans	Letter to Smith dated November 12, 2018 Letter to Smith dated November 27, 2018 Letter to Smith dated December 20, 2018	To provide written confirmation that none were received by June 15, 2019.
Detailed budget for each child	Letter to Smith dated November 12, 2018 Letter to Smith dated November 27, 2018 Letter to Smith dated December 20, 2018	To provide all evidence to be relied upon at trial for children’s budget or confirmation that no budget will be presented at trial by June 15, 2019.
Full particulars of post-secondary expenses being claimed	Letter to Smith dated November 12, 2018 Letter to Smith dated November 27, 2018 Letter to Smith dated December 20, 2018	To be provided by June 15, 2019 subject to Mr. Smith confirming in writing that it has been provided and where it can be found.
Copy of condemnation of Hagos Park	Letter to Smith dated May 17, 2018	To be provided by June 15, 2019 subject to Mr. Smith confirming in writing that it has been provided and where it can be found.
Date that City of Ottawa lost contract	Letter to Smith dated May 17, 2018	To be provided by June 15, 2019 subject to Mr. Smith confirming in writing that it has been provided and where it can be found.
Update Accounting Statement for rental properties and documents/information provided to accountant to support rental amounts used in personal ITR for 2018 and 2019 (when available)	Letter to Smith dated May 17, 2018 Letter to Smith dated July 9, 2018	To be provided by June 15, 2019.
Explanation as to inclusion of utilities expenses in 2017 and 2018 (when available) for Carmen and Blake rental properties for first time	Letter to Smith dated July 9, 2018	To be provided by June 15, 2019 subject to Mr. Smith confirming in writing that it has been provided and where it can be found.
Vehicles - evidence required to support financial statement Mercedes 2008 Porsche 2014 BMW 1991	Case Conference Brief dated March 31, 2014 Order of Master Roger dated March 31, 2014	Evidence to be relied upon at trial to be provided by June 15, 2019.