Court File and Parties
COURT FILE NO.: FS-17-90997-00
DATE: 20190903
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: URMILA MALIK, Applicant
AND:
BINESH MALIK, Respondent
BEFORE: Regional Senior Justice Peter A. Daley
COUNSEL: Georgina L. Carson, for the Applicant
Daniel W. Simard, for the Respondent
HEARD: August 1, 2019
ENDORSEMENT
[1] This matter again came before the court on August 1, 2019 on a motion by the applicant for a wide variety of relief.
[2] This litigation can best be described as a combination of a “war of attrition” and a “shell game.” The record speaks for itself in recording the many instances where the respondent has done all that is possible to stonewall the applicant in terms of full and frank financial disclosure and as well with respect to the payment of spousal support.
[3] The record also shows that the respondent’s financial affairs are complex and involve shareholder interests in corporations where the full financial record has not been disclosed. Only a few days prior to the return of this motion, having claimed to have made full financial disclosure, further records and documents were produced by the respondent to the applicant in what is euphemistically referred to in family law litigation as a “document dump”.
[4] I will consider each item of relief sought in the applicant’s motion as set out in her motion, some of which will be resolved by me in this endorsement and others will be considered on a new return date.
[5] Lemon J. found the respondent in breach of the Order of Snowie J. of May 23, 2018 in failing to make the full financial disclosure ordered. He ordered that the respondent make compliance with that order and also to pay a monthly fine of $5,000 until compliance was satisfied.
[6] The applicant seeks an order requiring the respondent to pay interim disbursements in order to allow her to engage two experts, one to conduct valuations and to provide tax advice.
[7] The following items of relief that were addressed on the applicant’s motion will be determined by me as outlined in this endorsement: (1) Restraining Order (2) Interim Disbursements; (3) Interim Spousal Support – including imputation of income and retroactive support; (4) Life Insurance as Security for Spousal Support.
[8] All matters of relief which were not addressed on the return of this motion will be considered on the adjourned date of September 18, 2019 before me.
RESTRAINING ORDER:
[9] The applicant sought a restraining order on the return of this motion, however the respondent is subject to a criminal court noncontact order as a result of criminal charges brought against him. The trial of those charges was conducted in the Ontario Court of Justice and the court’s judgment in respect of those charges is scheduled to be delivered on September 3, 2019.
[10] The applicant sought a restraining order relating to the potential conduct of the respondent after the decision on the criminal charges is released on September 3.
[11] The request for the restraining order in this motion is adjourned to the next motion date, namely September 18, 2019 and in the interim pending that date, the respondent, by his counsel, undertook on the record to have no direct or indirect contact whatsoever with the applicant following the court’s decision on September 3. This undertaking was given on a without prejudice basis by the respondent and the onus with respect to the request for the restraining order remains with the applicant on the next return date.
INTERIM DISBURSEMENTS:
[12] As already noted, this case has been fraught with misconduct on the part of the respondent in failing to make full and frank disclosure of his financial situation.
[13] The respondent’s financial position personally and as a shareholder in his businesses is complex and will clearly require the applicant to have expert assistance both in respect of corporate organizations and tax implications relating to her interest in these businesses, as well as for the purpose of obtaining the proper review of the valuation of the businesses.
[14] This is clearly a case that calls for a leveling of the playing field, particularly given the complexity of the respondent’s corporate and shareholder interests as well as because of his strategies involving nondisclosure or delayed disclosure of financial information.
[15] As per the court’s decision in Ludmer v. Ludmer, 2012 CarswellOnt 4586, rule 24 (12) of the Family Law Rules provides for orders requiring the payment of interim fees and disbursements in family law cases even where no exceptional circumstances exist.
[16] In all the circumstances, including significant nondisclosure of financial information, complex and substantial financial affairs involving large sums of money, fairness in this case calls for the respondent, whose means far exceed those of the applicant, to pay interim disbursements to allow the applicant to retain financial, valuation and tax experts.
[17] The applicant has withdrawn funds from her RRSPs since the parties separated, however the respondent has been able to make sizable contributions to his RRSPs. The respondent makes a significant income and has control of sizable corporate assets.
[18] Although there is no evidence available as to how much it will cost the applicant to obtain the necessary financial, valuation and tax opinions, based on my review of the productions released thus far by the respondent, I can reasonably forecast that the cost of obtaining the necessary advice and opinions to assist the applicant in this litigation will be significant: Rea v. Rea 2016, CarswellOnt 509.
[19] The applicant will be entitled to a substantial equalization payment at the very least based on her 49 per cent interest in the parties’ holding company. The respondent asserts in his affidavit evidence that his 51 per cent interest in the parties’ holding company is worth well in excess of $5 million, it is reasonable to conclude that the applicant’s interest in the holding company would be valued at just slightly less.
[20] I have concluded that there is a reasonable necessity for the payment of interim disbursements and that there is little doubt that the applicant will be entitled to a substantial equalization payment. Further, all things considered, it is just in the circumstances to require the respondent, who has the ability to pay, to make a payment towards the applicant’s anticipated disbursements regarding the retaining of financial experts: Laamanen v. Laamanen, 2005 CanLII 50808 (ON SC), 2005 CarswellOnt 8037.
[21] Having considered the evidence with respect to the financial review required and the advice that will be necessary for the applicant to properly pursue this litigation, I have determined that the cost of retaining the necessary experts will be at least in the order of $50,000 and as such I order that the respondent forthwith pay to the applicant that sum so as to allow her to retain the experts.
INTERIM SPOUSAL SUPPORT & IMPUTATION OF INCOME
[22] The scope of the court’s inquiry as to a party’s responsibility to pay interim support is limited given the likely incomplete and untested evidentiary record. The moving party seeking interim support need only set out a reasonable case as to standing and entitlement. The purpose of interim relief is to provide the parties with reasonable arrangements to meet the means and needs of the parties until trial: Barbini v. Edwards, 2014 ONSC 6762, 2014 CarswellOnt 16559.
[23] The respondent, on this motion, acknowledged that he has not paid any spousal support since the date of separation, however it was urged on behalf of the respondent that the applicant has failed to mitigate her claims by seeking employment since she was terminated from her previous employment in 2017.
[24] The applicant fairly acknowledged for the purpose of calculation of her income for support purposes that she be deemed to have received $45,000 per year and as such she sought monthly interim spousal support based on DivorceMate calculations in the sum of $6,869 per month commencing January 1, 2019 and without prejudice to her having her entitlement to spousal support prior to that date reassessed at trial.
[25] The respondent acknowledges that the applicant is entitled to the payment of spousal support, however he argues that given the applicant’s unemployed status a proper interim sum for spousal support would be $4,500 net of any income imputed to her.
[26] Having considered the available financial information, the applicant’s readiness to have income imputed to her and the respondent’s income which is at least in excess of $175,000 per year, I have concluded that a fair and reasonable sum for interim spousal support would be in the amount of $5,500 per month.
[27] As a result, the respondent shall pay to the applicant spousal support in that sum commencing January 1, 2019, without prejudice to the applicant seeking retroactive entitlement to spousal support prior to that date and recalculation of her entitlement once more complete and comprehensive financial information is available at trial.
LIFE INSURANCE AS SECURITY FOR SPOUSAL SUPPORT:
[28] Clearly it is within the court’s jurisdiction to order a support payee to be designated as the beneficiary under the payor’s life insurance policy to provide interim security for the payment of interim spousal support: Family Law Act, RSO 1990 c. F. 3, s. 34 (1) (i) and (k); Katz v. Katz, 2014 ONCA 606; Dagg v. Cameron Estate, 2017 ONCA 366.
[29] This motion and this claim for relief by the applicant came before Lemon J. on November 27, 2018. As the claim for spousal support was adjourned at that time, so was the claim for security in respect of that support obligation.
[30] As was noted by Lemon J., as of that time the parties each had liquid assets of approximately $500,000 and the respondent had control over significant corporate assets.
[31] When considering a claim for security by way of life insurance coverage on the life of the payor spouse who is obligated to pay temporary spousal support, pending a final determination at trial, it must be kept in mind that such security is only temporary and that it should not represent a windfall over and above other exigible will assets that could be looked to for the purpose of covering the deceased’s spousal support obligations.
[32] It is noteworthy that on the appearance before Lemon J., the respondent acknowledged that he was prepared to provide life insurance coverage in favour of the applicant in the sum of $250,000 to secure the applicant’s entitlement to interim spousal support: Malik v. Malik , 2019 ONSC 117 at para 61 (Lemon J).
[33] Again, given that this is a temporary order and recognizing that the respondent has significant exigible assets, on an interim basis only I have concluded that it would be reasonable and appropriate that the respondent designate the applicant as the irrevocable beneficiary of one of the life insurance policies he has in place as outlined in his financial statement sworn in November 19, 2018 with a face value in the sum of $250,000 and he shall deliver up a copy of the said policy with that designation within 20 days of the release of this endorsement. Further, he shall not borrow against other policies in place on his life or otherwise erode their value.
CONCLUSION:
[34] For the reasons outlined above, an order shall issue in the following terms:
(a) the applicant’s claim for a restraining order is adjourned to the motion date of September 18, 2019 and during the period from September 3, 2019 to September 18, 2019 in accordance with his undertaking, the respondent shall have no contact direct or indirect with the applicant;
(b) the respondent shall forthwith pay to the applicant the sum of $50,000 with respect to her interim disbursements to be incurred on retaining financial and tax experts for the purpose of this litigation;
(c) the respondent shall pay interim spousal support from January 1, 2019, in the sum of $5500 per month, without prejudice to the applicant’s right to seek readjusted retroactive spousal support at trial from the date of separation;
(d) the respondent shall forthwith designate the applicant as the irrevocable beneficiary of one of the policies of insurance on his life with a face value coverage of $250,000, which is referenced in his sworn financial statement dated November 19, 2019. He shall deliver a copy of the said policy to counsel for the applicant with that designation within 20 days of the release of this endorsement. He shall not borrow against other policies in place on his life or otherwise erode their value.
[35] In the event counsel are unable to resolve the issue of costs on this motion, counsel for the applicant shall serve and file submissions as to costs of no longer than three pages plus a costs outline within 15 days of the release of this decision. Similar cost submissions shall be served and filed by counsel for the respondent within 15 days thereafter.
Daley RSJ.
Dated: September 3, 2019
COURT FILE NO.: FS-17-90997-00
DATE: 20190830
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: URMILA MALIK, Applicant
AND:
BINESH MALIK, Respondent
BEFORE: RSJ Peter A. Daley
COUNSEL: Georgina L. Carson, for the Applicant
Daniel W. Simard, for the Respondent
ENDORSEMENT
Daley RSJ.
DATE: September 3, 2019