Court File and Parties

COURT FILE NO.: FS-18-4130 DATE: 20190522 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: Tazeen Haroon Applicant – and – Haroon Anwar Sheikh Respondent

Counsel: Shelly Kalra, for the Applicant Murray Maltz, for the Respondent

HEARD: May 21, 2019

C. Gilmore, J.

Ruling on Motion

Overview

[1] This motion was originally scheduled to be heard on March 21, 2019. The matter came before me on that date and counsel for the respondent sought an adjournment pending the hearing of the stay motion in relation to the order of Shore, J. dated January 31, 2019. The stay motion was scheduled to be heard on April 8, 2019.

[2] The motion was adjourned to April 30, 2019 on terms which included the payment of spousal support by the respondent in the amount of $6,000 per month, commencing April 1, 2019 on a temporary temporary without prejudice basis.

[3] The issues before me on May 21, 2019 related to child support for the parties’ children F.H. aged 15 and E.H. aged 20, as well as a request for interim disbursements of $75,000.

[4] The respondent sought an adjournment of the May 21, 2019 motion. He has appealed the order of Shore, J. dated January 21, 2019 and her costs order of March 6, 2019. There have been several adjournments of the respondent’s request to stay the Shore orders while the parties attempted mediation. Those attempts were not successful.

[5] At the last date set for the stay motion, the Court of Appeal adjourned the matter to June 4, 2019. The respondent submits that it does not make sense to hear this motion before the stay motion as the result of the stay motion will impact the issues in this motion if the respondent is successful. In short, the respondent takes the position that this court does not have jurisdiction to grant the orders sought given what he says is an already existing divorce order in Pakistan and ongoing litigation in Malaysia where the respondent owns property.

[6] The applicant disagrees. Her position is that the Shore orders are valid until set aside and that Shore, J. made a finding that this court had jurisdiction to deal with the applicant’s request for support and property division under the Family Law Act.

[7] It was this court’s view that there was no reason not to deal with either the child support issue or the disbursements issue notwithstanding the outstanding appeal and request for a stay. The reasons for doing so will be set out below.

Child Support Issues

[8] The respondent earns significant income working in the commercial banking industry in Dubai. His income and living expense allowance translates to approximately $857,000 CDN per year.

[9] It is uncontested that the parties’ son F.H. is attending St. Andrew’s College in Aurora, Ontario and that the respondent pays for the tuition, room, board and incidentals related to F.H.’s education. Those expenses are approximately $70,000 per year.

[10] It is also uncontested that the respondent pays for the parties’ daughter’s university expenses and accommodation. This includes a two bedroom condo in downtown Toronto, utilities, mortgage, condo fees, property tax, insurance, cell, tuition and incidentals. The respondent estimates this expense at about $10,000 per month.

[11] The applicant resides with E.H. in the Toronto condo. When F.H. is on a school break or sick, he resides with his mother and sister in the Toronto condo.

[12] The mother seeks support for both children in the amount of $5,000 per month. She is content that this order extend until the appeal is heard. Her position is that the respondent is exaggerating the incidental expenses he is paying for E.H. In fact the applicant has to use her own funds to buy groceries and many other items for the children including entertainment and incidentals.

[13] The applicant urges this court not to rely on the respondent’s “expense” sheet at Exhibit II to his affidavit sworn April 23, 2019. Both E.H. and the applicant submit that the respondent is very controlling with E.H. concerning her expenditures and scrutinizes them excessively. Further, the respondent has not provided any back up documentation for the expenses he claims. The respondent responds that these expenses are claimed in his sworn financial statement and at this interim stage such documentation is not required.

[14] The applicant submits that she requires child support for F.H. because he will be living with her the entire summer and his school year ends at the beginning of June. The respondent deposed that F.H. will be coming to visit him in Malaysia during the summer. The applicant submits this is not true. The respondent involved both children in the arguments leading up to the parties’ separation and this has greatly affected the children and alienated them from their father. According to the applicant, F.H. does not intend to visit his father in Malaysia this summer.

[15] Further, while the applicant’s living expenses are being paid for indirectly by way of the contributions for E.H., the applicant must pay tax on the spousal support she receives. Given the lifestyle the parties led prior to separation and the respondent’s income, the children should be given the opportunity of a similar lifestyle.

[16] The respondent’s position is that he is paying sufficient amounts for the children and refers to my decision of March 21, 2019 in which I indicated that the children’s needs were being met by way of direct and indirect contributions from the respondent. The issue of child support should be deferred until after the appeal when the jurisdiction issues are clarified.

Ruling on Child Support

[17] F.H. began Grade 9 at St. Andrew’s College in September 2018. On long weekends, holidays, and when he was ill, he lived with his mother and sister at the Toronto condo. The applicant cared for F.H. during those times without assistance from the respondent, other than the indirect assistance she received by way of the contributions towards E.H.’s living expenses.

[18] The respondent submits that he bears the burden of all the family expenses which includes not only the Toronto condo but his accommodation in Dubai and two properties in Malaysia. The cost of maintaining those properties is significant. After paying for those properties, his basic personal expenses and the children’s expenses there is nothing left. Given the generous contributions he is already making towards the children’s expenses, nothing more should be required especially when F.H. may be spending part of the summer with him.

[19] While the respondent does pay all of the family expenses, those expenses and properties are entirely within his control. He could, for example, sell the Malaysian properties and save himself $10,000 a month in expenses. He chooses not to do so at this time.

[20] I am unable, at this stage, to resolve the conflict in the evidence as to where F.H. will spend the majority of his summer. Since he has spent every holiday, long weekend and sick days with his mother in Toronto to date, I infer he will spend the majority of his summer holiday with her.

[21] Keeping in mind the amounts being paid for E.H.’s living expenses and education, F.H.’s school, the spousal support being paid by the respondent as per my March 21, 2019 order ($6,000 per month), and the respondent’s income, support payable as per the Child Support Guidelines for two children would be $7,798 per month. Support for F.H. only (including s.7 expenses of $69,000 per year) would be $6,412 per month. The applicant seeks $5,000 per month in the circumstances.

[22] If the expenses for maintaining the Toronto condo are $6,800 per month (as per the respondent’s expense sheet) then one can notionally attribute 1/3 of that amount to F.H. or $2,266 per month. If that is subtracted from $6,412 per month, the net amount would be $4,146. In my view, this is a reasonable amount of child support for the respondent to pay on a temporary temporary basis until the hearing of the appeal and intended to cover the cost of caring for F.H. during the summer months. The child support should commence on June 1, 2019.

Interim Disbursements

[23] The parties have several joint bank accounts. The applicant removed $45,000 from one of the accounts and retains this amount in her possession. She has not spent it for fear that the respondent will not pay for F.H.’s tuition and it will fall to her to make up the difference. The applicant submits that the respondent has been behind in tuition payments in the past.

[24] The respondent removed $156,000 from the parties’ joint account. He also submits that he has not spent any of this as the parties agreed prior to separation that this would be preserved to pay F.H’s tuition at St. Andrew’s College.

[25] The total amount removed by the parties from the joint account was $191,000. The applicant seeks to be paid half of that. That is, she seeks the sum of $50,500 which would equalize the amounts removed by the parties. This would allow her access to funds to pay her legal fees.

[26] The parties are now litigating in three different countries. The applicant commenced this action in July 2018. The respondent commenced a divorce application in Pakistan in July 2018. He commenced a family law proceeding in Malaysia in January 2019. There is currently a stay motion and a pending appeal in Ontario Court of Appeal in addition to the current ongoing proceeding.

[27] The applicant has spent thousands of dollars in legal fees for these matters. The respondent maintains that he has obtained a valid divorce in Pakistan. The applicant disagrees and submits that the divorce was obtained fraudulently. Both sides have retained counsel and experts to support their positions. The investigations are ongoing.

[28] The respondent commenced litigation in Malaysia as he maintains that that is where the parties were domiciled at separation. The applicant disagrees and maintains that the matrimonial home on separation was the Toronto condo.

[29] The applicant has no further access to the parties’ joint accounts or any matrimonial property, all of which is in the respondent’s name. She has had to borrow over $126,000 from family members to pay for her legal fees thus far. She is not working and requires the requested funds to put her on a level playing field with the respondent who earns the family income and has access to all the significant assets. The applicant does own two small plots of land in Islamabad but she is unable to access or sell them.

[30] The applicant’s counsel estimates that the fees for this matter (subject to steps taken by the respondent) would be at least another $75,000. The costs order of $24,120 in favour of the applicant made by Justice Shore has been stayed given the outstanding appeal.

[31] The applicant further submits that the money she seeks was contained in a joint account and therefore she is entitled to her share of those funds regardless of the status of the litigation.

[32] The respondent resists the applicant’s request for the following reasons: a. The applicant has access to the $45,000 she already removed from the joint account; b. The respondent’s NFP statement reveals that the applicant owes him an equalization payment of $90,000; c. The Pakistani divorce is valid and the applicant is therefore subject to Sharia law which would change her property rights considerably; d. The matter should not be dealt with until the stay motion and appeal are dealt with as Ontario is not the proper jurisdiction for this matter; and e. The $156,000 is earmarked for F.H.’s education as the parties agreed during the marriage.

Analysis and Ruling

[33] Rule 24(18) of the Family Law Rules permits the court to make an order for interim disbursements “to cover part or all of the expenses of carrying on the case, including a lawyer’s fees.”

[34] In Droujko v. Hafen, 2018 ONSC 2975, the court considered the wife’s request for a $50,000 advance for litigation expenses. Droujko made reference to the principles in Stuart v. Stuart which can be summarized as follows: a. An order for interim disbursements is discretionary and should be made only in exceptional cases; b. The claimant must demonstrate that they are necessary to pursue their case; c. The claim advanced must be meritorious; d. The intention is for the costs to level the playing field; e. The funds may be characterized as an advance on equalization;

[35] In more recent cases such as Romanelli v. Romanelli, 2017 ONSC 1312, the court has veered away from the requirement of exceptionality or even the ability to repay the advanced amount (see para 18). The key consideration is leveling the playing field between an impecunious litigant and a more prosperous opponent (para 19).

[36] I find that the applicant in this case meets the considerations in Stuart and Romanelli and that she refutes the concerns raised by the respondent as follows: a. There is an ability and necessity to level the playing field in this case. The assets are all in the respondent’s name. b. The funds in each party’s possession are joint funds. There is no reason they cannot be equalized. c. There was no argument that the applicant did not have a meritorious case. While jurisdiction remains an issue on appeal, the order of Shore, J. currently stands. d. I do not accept that the respondent’s version of the equalization payment owed should prevent an order for disbursements. The applicant presented many reasons why the respondent’s calculations may be wrong and would result in either no equalization payment or one owing to the applicant. e. An advance to the applicant is necessary. The applicant is now forced to respond to litigation in Pakistan, Malaysia and the Ontario appeal. She also has her own claim to pursue which is currently being done in fits and starts given the status of the stay motion and the appeal. Necessarily, her legal fees are significant. She has had to borrow from her family and has substantial upcoming legal fees in three different countries. f. Even if the most recent cases did not trend away from the issue of exceptionality, I would have found this to be an exceptional case in all of the circumstances. g. The amount sought by the applicant is from jointly held funds. It is difficult to fathom that other jurisdictions would prevent parties sharing in funds which they have agreed to be joint. h. I am not persuaded that an order for disbursements is a “property” related order and therefore possibly precluded by the respondent’s arguments related to jurisdiction. First, Shore, J.’s order currently stands with respect to Ontario being the proper jurisdiction for property matters under the Family Law Act. Second, the request is in the nature of an in personam remedy as opposed to one in rem. Finally, even if I am wrong on this point, another jurisdiction can surely engage in the appropriate accounting exercise with respect to the funds advanced to the applicant. i. The fact that the funds held by the husband are earmarked for F.H.’s education is a red herring in my view. Unfortunately, these parties have chosen to litigate against one another in three countries. It may mean that there are insufficient funds to pay for F.H.’s costly private education. That is a decision that may have to be made in future. As well, I am not requiring that the respondent pay the funds to the applicant from the $156,000 he has set aside for F.H. He is at liberty to cash in other assets to satisfy this payment should he so choose.

[37] Given all of the above, I make the following orders: a. The respondent shall continue to pay for the tuition and incidental expenses for F.H. to attend St. Andrew’s College until further agreement of the parties or court order. The respondent shall make such payments as they become due. b. Tuition for E.H.’s third year of university at the University of Toronto shall be paid from the RESP held by the respondent. c. The respondent shall continue to pay all expenses related to the condominium located at 16 Harbour Street, Toronto as well as all of E.H.’s incidental ongoing expenses until further agreement by the parties or court order. The respondent shall make such payments as they become due. d. The respondent shall pay temporary temporary child support for F.H. of $4,416 per month commencing June 1, 2019 until the earlier of 1) the hearing of the appeal in this matter (anticipated to be in September 2019), 2) the parties agree otherwise, 3) any further court order related to child support. e. The respondent shall pay to the applicant the sum of $50,500 by way of interim disbursement for legal fees. The payment shall be made forthwith.

Costs

[38] The applicant seeks costs of $28,000 for this motion and the adjournment hearing on March 21, 2019 (costs were reserved to this motion). The respondent seeks costs of $25,000.

[39] The applicant served two Offers to Settle. The respondent did not serve and Offer to Settle.

[40] The respondent urges the court not to rely on the Offer dated May 20, 2019. By the time it was received late in the day on May 20th, the respondent’s counsel was unable to have it reviewed by his client given the time difference between Toronto and Dubai.

[41] Further, the Offer of May 20, 2019 was not on all fours with the orders made herein.

[42] However, the applicant had success overall. She received child support and interim disbursements where the respondent was opposing the payment of both.

[43] I found the respondent’s approach in this matter to be somewhat unreasonable. His resistance to paying any amounts to the applicant by way of a disbursement for legal fees was concerning given the difference in their financial circumstances. Further, his resistance to effectively equalizing joint funds was also troubling.

[44] I do not accept the respondent’s argument that he could not provide funds to the applicant because they were earmarked for F.H.’s education. That response represents a refusal to recognize the current financial inequality between the parties and the reality of the expenditure of legal fees occasioned in large part by the respondent.

[45] Given all of the above, I order the respondent to pay the applicant the sum of $20,000 in costs which includes HST, disbursements and the costs of the adjournment hearing on March 21, 2019.

C. Gilmore, J. Released: May 22, 2019

COURT FILE NO.: FS-18-4130 DATE: 20190500 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: Tazeen Haroon Applicant – and – Haroon Anwar Sheikh Respondent REASONS FOR JUDGMENT C. Gilmore, J. Released: May 22, 2019