COURT FILE NO.: FS-14-80843
DATE: 2019 09 11
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
VISHAL MAHTANI
Applicant
Arman Hoque for the applicant
- and -
VIDESHI MISTRY
Respondent
Robert Fernandes for the respondent
HEARD: July 17, 18,19 and 20, 2018; October 18 and 19, 2018 at Brampton
Emery J.
REASONS FOR JUDGMENT
[1] The applicant husband, Vishal Mahtani, brings this application seeking a divorce, and an order for equalization between the values for all net family property owned by him and by the respondent wife, Videshi Mistry, at the date of separation, including the value of his interest in the matrimonial home he owned jointly with his mother, Rina Mahtani, throughout the marriage.
[2] Mr. Mahtani initially made claims over the custody and access of the two children of the marriage, Krish Mahtani born on May 13, 2008, and Ayanna Mahtani born on February 23, 2011. Those issues were resolved by the time this case went to trial.
[3] Ms. Mistry made claims in her Answer for custody of the two children, retroactive and ongoing child support, retroactive and ongoing spousal support, an equalization between net family property values, and a divorce.
[4] The issues relating to the parenting of the children were resolved by the parties, and are set out in the orders made by Justice Baltman on May 9, 2016 and Justice Andre on December 6, 2016. The orders provide that the children shall reside primarily with Ms. Mistry, with Mr. Mahtani having generous access.
[5] The parties have also agreed that, because of the parenting time and decision making they will share under the parenting regime, child support is offset to the extent that no party shall be ordered to pay child support to the other parent.
[6] The trial therefore proceeded on the contested issues spousal support claimed by Ms. Mistry, and equalization. There is also a dispute about jewelry that was apparently stored in a safety deposit box registered in the name of both parties.
NEUTRAL FACTS
[7] The parties were married on June 9, 2007 in Mississauga. They agree that the date of separation was April 25, 2014 for the purposes of this litigation. The total period the parties cohabited was therefore approximately six years and ten months.
[8] During their cohabitation, the parties resided with their children Krish and Ayanna, at 6240 McCracken Drive in Mississauga (the “family home”). Mr. Mahtani’s parents, Rajkumar Mahtani (“Rajkumar”) and Rina Mahtani (“Rina”), also resided at the family home with the parties and their children.
[9] Title to the family home on McCracken Drive is held by Mr. Mahtani and his mother, Rina, each as to a 50% interest as joint tenants. The parties agree that the family is properly characterized as the matrimonial home under the Family Law Act, and should be treated as such. They also agree that Mr. Mahtani and his mother are the true owners of their respective interests in this property, so that only the value of Mr. Mahtani’s interest should be included in the calculation of his net family property.
[10] After the parties separated, Ms. Mistry moved to her parents home in Toronto with the children. Ms. Mistry and the children lived in her parents home up to the time of trial.
[11] Mr. Mahtani was employed as the president of VAMS Canada Inc. (“VAMS Canada”) throughout the marriage. VAMS Canada is an importer, wholesaler and distributor of men’s clothing. It is in the business of purchasing mens clothing from India, China and other countries, and re-selling that clothing in Canada. Mr. Mahtani owns 50% of all outstanding and issued shares in VAMS Canada. His sister, Anjali Mahtani (“Anjali”), hold the other 50% of those shares.
[12] VAMS Canada was incorporated on July 16, 2002 under the (Ontario) Business Corporations Act.
[13] The head office for VAMS Canada is still located in the family home .
[14] VAMS Canada operates an office and warehouse in Mississauga. VAMS Canada also operates a retail outlet known as “Millennium Wear” in the Shopper’s World Shopping centre, located at 499 Main Street South in Brampton. In addition to filling orders for men’s clothing, VAMS Canada sells inventory through this retail outlet.
[15] Mr. Mahtani also held all of the shares in another company, VAMS USA Inc., during the marriage, as well as a 50% interest in another company, 1811470 Ontario Inc. that carries on business under the name Seraphic. Mr. Mahtani’s sister Anjali owns the other 50% interest in Seraphic.
[16] Other members of the Mahtani family have assisted Mr. Mahtani with operating the business of VAMS Canada. Rajkumar has reportedly assisted VAMS Canada with negotiating purchase orders, coordinating with suppliers and sourcing inventory for the company. There is evidence that Rina also provided services at the business office attached to the warehouse where VAMS Canada would store overflow inventory, and at Millenium Wear.
[17] Despite the involvement of Mr. Mahtani’s parents in VAMS Canada, Rina incorporated a separate company, VAKA Trading Inc. on May 6, 2014. Since that date, VAKA Trading has engaged in business as an importer, wholesaler and distributor of men’s clothing. There is significant evidence that VAKA Trading carries on the same kind of business as VAMS Canada.
[18] Ms. Mistry was unemployed as of the date the trial commenced. She has received education and training in business management.
[19] Mr. Mahtani is currently 43 years old. Ms. Mistry is currently 41 years of age.
ANALYSIS
Support
[20] The determination of spousal support requires a finding of Mr. Mahtani’s annual income since the date of separation, including his current income. The court must also make a finding of Ms. Mistry’s income since date of separation, including her current income for the purpose of determining the proper amount of spousal support Mr. Mahtani should be ordered to pay if Ms. Mistry can show entitlement. These incomes will be determined on an actual or imputed basis. The respective incomes of the parties is also necessary to decide the appropriate contribution each parent is to make to the extraordinary expenses of the children under section 7 of the (Federal) Child Support Guidelines.
[21] First, I will look at Mr. Mahtani’s income.
Mr. Mahtani’s income
[22] Mr. Mahtani has derived his employment income from VAMS Canada throughout his marriage. His income has risen commensurate with the success of the company. He became knowledgable in the field of importing, wholesaling and distributing mens clothing. He has become well known in this field thoughout the years. This is the business through which he has achieved success in his industry.
[23] Ms. Mistry accepts that Mr. Mahtani’s only source of income throughout the marriage has come from his employment with VAMS Canada. However, she challenges the amounts that Mr. Mahtani and VAMS Canada has recorded for the income paid to Mr. Mahtani in a given year. Ms. Mistry holds the view that Mr. Mahtani receives payments in cash as an owner. These payments increase the actual amount he receives for income from the business. A higher income is reflected by the lifestyle Mr. Mahtani leads, particularly in light of the fact he carries most, if not all the expense of the family home with little effort.
[24] There is little evidence that VAMS USA or Serafic generated any meaningful revenues at the time of trial, or if Mr. Mahtani was earning any significant income from either of those other companies after separation. They are more relevant to the case when it comes to considering Mr. Mahtani’s assets for equalization purposes as they have bank accounts with cash balances.
[25] The evidence at trial shows that Mr. Mahtani declared the following income from VAMS Canada for the three years leading up to separation:
2012- $37,656
2013 - $50,693
2014 - $43,393
[26] Mr. Mahtani also testified that he earned $48,000 from VAMS Canada in each 2015 and 2016, despite the reported decline in sales by the company. He explained that he decided to wind up VAMS Canada in 2016 and, as a result, his income from reported sources in 2017 and 2018 was uncertain, but significantly less.
[27] The first witness called to testify on Mr. Mahtani’s income was his own accountant, Isaac Mousadji. Mr. Mousadji was also the accountant for VAMS Canada at all material times.
[28] Although Mr. Mousadji was not qualified as an expert, he described the business of VAMS Canada and the importing of clothing business generally for the court as part of his professional knowledge and experience. His evidence on the nature of the business largely reflected the evidence given later by Mr. Mahtani. His evidence was most insightful, however, when he described how Mr. Mahtani would keep the books and records of VAMS Canada, and would consult with him annually on the amount of income he could record for himself.
[29] I do not have any basis to conclude that VAMS Canada was or was not earning consistent revenues over time, or that Mr. Mahtani’s income was subject to irratic swings. To the contrary, I conclude that VAMS Canada made money in the business niche it had developed, and that the amounts Mr. Mahtani took in from the business and the income he had Mr. Mousadji record for himself were not necessarily the same.
[30] Ms. Mistry asks the court to impute specific incomes to Mr. Mahtani for the following years: $121,638 for 2014, $121,430 for 2015, and $123,350 for 2016 under section 19 of the (Federal) Child Support Guidelines. She refers to the following evidence given at trial to support this position:
a) Mr. Mahtani provided no analytical reason why the sales of VAMS Canada declined after the high water mark year in 2014 that coincides with the date he and Ms. Mistry separated. He provided reasons in his examination-in-chief such as claiming that in the clothing industry “anything can happen” and that in some years “you sell more, some years you sell less”.
b) VAMS Canada employed his mother, Rina, as an employee for $1,000 a month. At the same time, Mr. Mahtani’s mother and father were incorporating VAKA Trading Inc. to compete with VAMS Canada in the same business, and within the same territory. Yet Mr. Mahtani continued to employ Rina, a would be and concurrent competitor of his business.
c) During his evidence, Mr. Mahtani stated that he attempted to wind down VAMS Canada since 2014 so that he could pursue a salaried position with another employer. This intention, along with existence of VAKA Trading, was not make known to Mr. Mahtani’s own income valuator. Mr. Mahtani at no time disclosed this intention to Mr. Carnegie prior to January 1, 2018, and only made that intention known after he received Ms. Mistry’s expert report. To make matters even more confusing, Mr. Mahtani never disclosed this intention to his sister, Anjali, the other shareholder in VAMS Canada.
d) Despite his declared intention fours years after the fact, Mr. Mahtani has yet to take any steps to wind down the operations of VAMS Canada.
e) Mr. Mahtani did not consider the logical step of selling the business to his parents instead of allowing them to incorporate VAKA Trading to go into direct competition with VAMS Canada without protest. This would have been the logical thing to do if Mr. Mahtani had the genuine intention to wind VAMS Canada down, or to seek employment elsewhere.
f) At the same time the gross revenues generated by VAMS Canada were declining starting with the year after the date of separation, Mr. Mahtani has shown his ability to earn greater amounts than he has disclosed because he has been able to generate sufficient funds to repay indebtiness owing to his sister, an uncle and a cousin, all within a short period of time. This repayment of indebtedness satisfied shareholder loans that have been outstanding throughout the duration of his marriage to Ms. Mistry.
[31] Ms. Mistry argues that this evidence provides the appropriate evidentiary foundation to inpute annual income to Mr. Mahtani on the following grounds:
a) Intentional underemployment, pursuant to subsection 19(1)(a);
b) Diversion of income, pursuant to section 19(1)(d); or
c) Failure to provide income information when under a legal obligation to do so, pursuant to section 19(1)(f).
[32] The question of whether, and if so how much income should be imputed to Mr. Mahtani since the date of separation was the subject of opinion evidence given by experts called by each party. Ms. Mistry called Matthew Krofchick to provide his opinion on what income should be imputed to Mr. Mahtani, as well as the valuation of the fair value of shares he held in VAMS Canada. Mr. Mahtani called Mr. Michael Carnegie of Taylor Leibow LLP on the same issues. On consent, both experts were qualified by the court to give opinion evidence within their field of expertise on income valuation, and the valuation of corporations.
[33] Mr. Krofchick gave his opinion, based on facts in evidence or otherwise admitted, that Mr. Mahtani’s income was greater than he had disclosed in the course of this family law case. Using Mr. Mahtani’s line 150 income for each of the years 2014, 2015, and 2016 as a starting point, he relied upon facts that supported Ms. Mistry’s theory that Mr. Mahtani was intentionally underemployed, including the fact that he formed an intention to cease employment at VAMS Canada and to wind it up: subsection 19(1)(a) of the Federal Child Support Guidelines.
[34] Ms. Mistry also had Mr. Krofchick examine evidence that Mr. Mahtani was deliberately diverting work away from VAMS Canada, and therefore his ability to earn a greater income from that corporation after date of separation. In this respect, he refers to the unequiviocal fact that it was discovered after Mr. Carnegie had delivered his first report that Mr. Mahtani’s parents, Rina and Rajkumar, had incorporated VAKA Trading to operate in business that was identical or similar to VAMS Canada, and within the same trading area. Mr. Krofchick relied on those facts to conclude that Mr. Mahtani would have a greater earning ability but for the business he had diverted to VAKA Trading under section 19(1)(d) of the Guidelines.
[35] Ms. Mistry also asked the court to find that Mr. Mahtani had failed to provide full and proper disclosure despite efforts to obtain that disclosure in the course of this proceeding. A finding of this nature would bring section 19(1)(f) into play as a basis for imputing income. In particular, he has failed to provide the disclosure pursuant to the terms of the Order made MacKenzie J. dated January 16, 2015 setting out numerous documents relating to his own income, his liabilities, and documents relevant to fair value of VAMS Canada, VAMS USA and Seraphic.
[36] Mr. Krofchick discussed the household expense for the Mahtani home that Mr. Mahtani likely covered from his income. He considered this basis as viable for the attribution of a greater income to Mr. Mahtani given that Rina earned only $1,000 per month when employed at VAMS Canada, and Rajkumar was admittedly retired from the business and had no active income at all. The court may impute a greater income to a payor if there is evidence that the payor earns more to support a certain lifestyle: Heard v. Heard, 2014 ONCA 196.
[37] From his analysis based on lifestyle, Mr. Krofchick concluded that Mr. Mahtani’s contributions to the household expenses would have been at least $10,000 greater each year than his declared income. Although this does not establish what income he was earning by virtue of the household expenses he was covering, it should at least call Mr. Mahtani’s credibility into question about the income he did disclose.
[38] Mr. Carnegie provided his opinion evidence about what income should be used for Mr. Mahtani in a genuine, straight forward manner. He used representations from Mr. Mahtani as the basis for his opinion, including his explanation that sales had declined as a result of his desire to wind down VAMS Canada, and his decision to become a salaried employee at another business.
[39] Mr. Carnegie also refutes Ms. Mistry’s theory that Mr. Mahtani was intentionally underemployed or diverted work away from VAMS Canada from which he could have earned a greater income, particularly to or through VAKA Trading. Mr. Carnegie referred the court to financial statements provided for VAKA Trading that showed VAKA Trading was unprofitable. Mr. Carnegie invited the court to concluse that if Mr. Mahtani was receiving income from both companies, income from VAKA Trading would not have added to his income because it was operating at a loss.
[40] Mr. Carnegie also refutes the allegation that VAMS Canada received much of its income by cash payments. The argument here is that if VAMS Canada receives payments in cash, Mr. Mahtani would have received corresponding income in cash. To explain incoming deposits to family accounts, Mr. Hoque referred Mr. Carnegie to confirm in evidence that cash was received by Rajkumar from savings, investments, or from Rajkumar’s brother in India who held certain properties in trust for him, and who would pay him proceeds of sale.
[41] While Mr. Carnegie provided his expert opinion based on the facts, those facts were based on the information provided by Mr. Mahtani. To the extent that Mr. Mahtani withheld information from Mr. Carnegie, or other evidence is accepted over the evidence given by Mr. Mahtani or any other fact witness on his behalf, Mr. Carnegie’s opinion in respect of the proper income to impute to Mr. Mahtani since the date of separation, as well as the valuation of VAMS Canada, is limited to the same extent.
[42] In order to make findings on Mr. Mahtani’s income, it is necessary to review the revenues of VAMS Canada to determine the income received by, or available to Mr. Mahtani to provide context.
[43] Between 2009 to 2014, VAMS Canada generated generated annual gross revenues averaging $1,040,619. For the year ending December 31, 2014, during which the parties separated, the company recorded earnings totaling $1,406,746. This was the highest gross revenue the company had earned over the six preceding year period.
[44] In 2015, VAMS Canda recorded gross revenues of $807,113 that year. This was approximately 57 % of the revenue earned over the previous year.
[45] The company’s annual gross revenues declined even further in 2016, to $451,185. This is represented a further reduction to 32% of the gross revenues that VAMS Canada had reported in 2014.
[46] It is hard to believe that VAMS Canada is not profitable when it was in a position to pay out shareholder loans to Anjali and other relatives after the parties separated, but not enough for Mr. Mahtani to continue with operating the business. Yet he remained as an employee of VAMS Canada right up to trial.
[47] VAMS Canada had paid the final amounts owing to Anjali for her investment in VAMS Canada by 2016. Anjali, still a shareholder in VAMS Canada, then turned around and invested $80,000 in VAKA Trading to compete with the company her brother was operating while living in the same house as their parents. She explained that she has more confidence in her mother’s management of a business than her brother’s abilities because he was “stressed out” after the children were moved from the family home.
[48] I did not find this evidence convincing to say the least. All Mr. Mahtani had to do was take a leave of absence from VAMS Canada, with his mother assuming a greater management role. Instead, the Mahtani family has split the business in two, with one half going to VAKA Trading.
[49] VAKA Trading was incorporated under suspicious circumstances. The certificate of incorporation for VAKA Trading Inc. shows that it was incorporated on May 6, 2014, approximately two weeks after Mr. Mahtani and Ms. Mistry separated.
[50] Mr. Carnegie was not informed of the existence of VAKA Trading until he received Mr. Krofchick’s report dated December 22, 2017. I find that Mr. Mahtani withheld this fact from his own expert as well as from Ms. Mistry and her professional team of counsel and accountants. This was information that was intentionally concealed.
[51] In view of the evidence concealed from Mr. Carnegie and from Ms. Mistry, I am imputing income to Mr. Mahtani for manufacturing the situation where he is intentionally underemployed at VAMS Canada. I further find that Mr. Mahtani is diverting work to VAKA Trading to minimize that income. Although I do not find on the evidence that Mr. Mahtani is receiving income from VAKA Trading for the business diverted to it, I find that:
• both companies are now operated by the same family,
• family members operating both companies reside in the same family home where they see each other every week, if not each day,
• The warehouse units for the two companies are located within the same complex in Mississauga,
• The Millennium Wear store in Brampton stores or sells retail clothing interchangeably for the two companies. Photographs of a box labelled for VAKA Trading was taken at Millenium Wear store in Brampton that continues as a retail outlet for VAMS Canada. This would suggest that product from both corporations are being sold out of the store, and income is being received as a joint enterprise.
[52] Having regard to all of the evidence, I prefer the income analysis provided by Mr. Krofchick. On the strength of that analysis, I consider the annual incomes I am imputing to Mr. Mahtani to be reasonable. These incomes are double the highest income of $50,693 he reported for 2013 when he was operating only VAMS Canada prior to the incorporation of VAKA Trading, and before VAMS Canada had record earnings in 2014. The imputed incomes take into account the prospect that Mr. Mahtani receives cash payments from the business directly or through Rajkumar, as well as the extra $10,000 of expenses he is more than likely paying in excess of his declared income.
[53] This conclusion also takes into account the finding that VAKA Trading is buying and selling mens clothing in parallel with VAMS Canada, and that they are complementary businesses and not in competition at all.
[54] I find on the totality of the evidence given on the issue of what income to impute to Mr. Mahtani that he had the ability to earn an average of $121,430 each year between 2014 and 2016. I further find that he was able to earn $123,000 a year in 2017 and 2018, and that amount again in 2019. I make these findings based on the following evidence:
a) Mr. Mahtani has given no other explanation for his stated intention to cease operating and earning income form VAMS Canada than he has made that decision himself. There is no business reason given for that decision that would justify ceasing operations;
b) Although Mr. Mahtani has stated that he formed this intention in 2016, he has not ceased operations at VAMS Canada to date;
c) He did not disclose the incorporation of VAKA Trading by his parents, or its start up of operations in the same industry and in close proximity to the warehouse where VAMS Canada holds its stock. It defies belief that his mother, an employee who was earning a $1,000 a month at VAMS Canada and his father who is essentially retired except for providing some services to purchase product historically for VAMS Canada, would go into business in competition to VAMS Canada. Rina and Rajkumar relied on Rina’s employment at VAMS Canada for her income; I do not accept that she would incorporate a corporation with Rajkumar to conduct business at a loss instead.
d) The absence of evidence that this all occured without a disruption in the Mahtani house, given that Mr. Mahtani resides with his parents who have allegedly become his competitors.
e) After the parties separated, VAMS Canada had the liquidity to pay out capital of some description to Anjali (even though she had no shareholder loans owing to her at the time) and most, if not all of the indebtedness to other relatives who had made loans to the corporation.
Ms. Mistry’s income
[55] I now turn to the income for Ms. Mistry.
[56] After the separation date, Ms. Mistry is content that an annual income of $22,230 be imputed to her pursuant to the ability of a person to earn a minimum wage, starting on the date of separation in 2014. It would be fair to impute at least $22,230 a year to her for income purposes in any event, based on the adjusted minimum wage effective in Ontario before it was increased in October 2017.
[57] The evidence at trial showed that Ms. Mistry earned $45,202 between 2012 and 2014 at Medical Mart. This was a time when Ms. Mistry earned the highest annual income she has ever earned. She agrees to have the court impute that higher amount as income she was able to earn starting in 2017 for support purposes.
[58] I find that Ms. Mistry therefore had an annual income for support calculation purposes of $22,230 from the date the parties separated on April 25, 2014 to January 1, 2017, and $45,202 annually after that time.
Entitlement to spousal support
[59] The Supreme Court of Canada in Bracklow v. Bracklow 1999 715 (SCC), [1999] 1 SCR 420 has clearly identified the basis for entitlement to spousal support under three essential categories:
Need based support, dependent on evidence of need established by the recipient spouse;
Compensatory support, evidenced by the foregoing of advancement opportunities by the recipient spouse as a result of the marriage to care for the children and the home; and
Contractual support.
[60] The court in Bracklow directs a trial judge to start with the objectives set out under section 15.2 (6) of the Divorce Act to determine the appropriate amount to order for spousal support. No one objective supersedes any other; all must be considered if and where applicable. The court is then directed to consider the factors set out in subsection 15. 2 (4), which includes criteria such as the needs of the applicant spouse and the means of the payor to meet those needs. These are the guiding principles a trial judge must follow when exercising his or her discretion when determining the question of spousal support.
[61] Of these categories for spousal support, Ms. Mistry has established on the evidence that she has devoted a significant part of her life during the marriage and to bringing up the children. She has sacrificed the orderly progression of her career advancement to permit Mr. Mahtani establish and develop the family business up to the point they separated.
[62] Ms. Mistry is entitled to spousal support on a compensatory basis because of the sacrifice she made throughout the marriage to enable Mr. Mahtani to develop the business at VAMS Canada in order to earn a higher income.
[63] Ms. Mistry also has a need based claim for support to compensate her for the lack of support since separation, and the requirement of support going forward.
[64] I find on the balance of probabilities that Ms. Mistry is entitled to spousal support from Mr. Mahtani because of these deferred opportunities to develop her career. She now finds herself in need of support to maintain a respectable standard of living. This includes the financial ability to afford independant accommodation for the children and herself.
[65] I am awarding Ms. Mistry spousal support she has requested in the amount of $980 a month, which is below the mid-range amount of $1,190 using the same criterea under the Spousal Support Advisory Guidelines, commencing on September 1, 2019. This amount of support is based on an annual income of $123,000 imputed on Mr. Mahtani, and an annual income of $45,202 imputed to Ms. Mistry. Mr. Mahtani should consider himself fortunate in that Ms. Mistry is seeking spousal support only to April 30, 2020. There shall be an order that he pay spousal support only to that date, at which time the ongoing spousal support ordered shall terminate.
[66] I am also awarding Ms. Mistry retroactive spousal support against Mr. Mahtani in the amount of $48,000 for 32 months between May 1, 2014 and January 1, 2017. This support is awarded at $1,500 each month based on Ms. Mistry’s annual income of $22,230 for those months, and an annual income for Mr. Mahtani of $121,430 for those months. I am awarding an additional $23,232 for the 32 months since January 1, 2017 at $726 each month based on the increase of Ms. Mistry’s income to $45,202, and an income imputed to Mr. Mahtani of $123,000. These amounts are awarded at the low end of the SSAG range in each respect because of the retroactive nature of this part of the order.
Proportionate contributions to section 7 expenses
[67] The parties have agreed that they shall share section 7 expenses equally up to April 1, 2020. Those expenses are currently identified as:
a) Singular school related expenses in excess of $50 a year; and
b) The uninsured portion of either child’s medical/health related expenses each year in excess of $100.
[68] Based on an income for Ms. Mistry of $45,202 of imputed income and $14,280 for spousal support totaling $59,482 and Mr. Mahtani’s imputed income of $123,000 a year, Ms. Mistry should contribute 33% and Mr. Mahtani should contribute 67% of the payment for all section 7 expenses for the children each year.
[69] After April 1, 2020, the parties shall contribute to section 7 expenses for the children in proportion to their incomes, which shall be 33% for Ms. Mistry, and 67% for Mr. Mahtani until further order.
Equalization
[70] Each party claims an equalization payment against the other. At the outset of trial, Mr. Mahtani was seeking an equalization payment from Ms. Mistry in the amount of $29,000. However, Mr Mahtani stated under cross examination that he was seeking a final order limiting his total equalization payment he was to make to $15,000. For her part, Ms. Mistry seeks an equalization payment from Mr. Mahtani in the amount of $169,575.49.
[71] Despite the difference in the position of each party on various assets or debts, the determination of the Court on the proper equalization payment that Mr. Mahtani shall pay Ms. Mistry turns primarily on the disposition of the jewelry issue, the valuation of VAMS Canada and the validity of debts claimed by Mr. Mahtani on the date of marriage and on the date of separation.
Credibility
[72] The means by which the parties proved or did not prove the existence of assets or liabilities at specific points in time, and the value of those assets or liabilities consisted of the evidence each party gave, and the opinion evidence of Mr. Krofchick and Mr. Carnegie. Any finding of credibility in favour or against a party added to, or took away from the veracity of an expert’s opinion to the extent of any finding with respect to one party or the other.
[73] Generally speaking, I preferred the evidence given by Ms. Mistry over the evidence Mr. Mahtani gave at trial. Her evidence was given directly, and it was consistent with the documentary evidence entered as exhibits. Mr. Mahtani was often evasive in his answers, and he took positions that varied from other times evidence was given in the case on the same issue. His answers were vague, and non-committal His explanations for the decisions he has made since the date of separation, and in particular the decision to wind up VAMS Canada and to seek employment elsewhere, defied common sense under all of the circumstances. Like the credibility assessments this court made on findings to award spousal support based on imputed incomes, I found Mr. Mahtani’s overall credibility lacking when he gave evidence on matters relating to equalization.
- Value of property on the Valuation Date
(a) LAND
[74] The parties are in substantial agreement that Mr. Mahtani owns 50% of the Mahtani home at 6254 McCracken Drive in Mississauga, and that his mother Rina owns the other 50% as joint tenant. As I understand it, Ms. Mistry no longer claims that Rina holds her 50% in trust for Mr. Mahtani. The parties are in substantial agreement that the home on McCracken Drive was the matrimonial home, and that Mr. Mahtani’s interest in the matrimonial home as of the date of separation was $382,500.
(b) GENERAL HOUSEHOLD ITEMS AND VEHICLES
[75] The parties filed a Form 14C: Comparison of Net Family Property Statements after trial at my request. Of the several articles of household items and vehicles listed, the parties agreed to facts on the existence and value of all but the jewelry that Mr. Mahtani states Ms. Mistry removed from their joint safety deposit box at CIBC. The determination of the issues with respect to this jewelry will have a significant impact on the calculation of any equalization payment.
[76] Mr. Mahtani takes the position that jewelry belonging to Ms. Mistry had a value of $100,000, and that this value should be attributed to her. Ms. Mistry refutes the existence of jewelry kept in the safety deposit box or otherwise owned by her on the date of separation. Ms. Mistry testified that the only jewelry she owned as of that date had a value of $5,985.
[77] The onus in a family law case of proving that one spouse owned property as of the valuation date, and the value of that property is on the party seeking to establish ownership and value: section 4(3) of the Family Law Act. Each of the parties had the burden of establishing the value of property he or she claims as of a particular date, even to the extent of calling expert evidence on value: Di Luca v. Di Luca, 2004 5044 (ON SC), [2004] O.J. No. 711 (SCJ).
[78] Even though the burden to prove the value of property owned by that party is placed evenly on the shoulders of the respective parties, the onus is on the opposing party in a family case to prove the failure of the other party to satisfy her or his obligation as it would be in any civil case. This means that Mr. Mahtani that had the burden of proof to provide evidence that establishes, on the balance of probabilities, that Ms. Mistry owned the jewelry alleged, and the value that should be attached to it for the calculation of her net family property.
[79] There was no evidence called at trial by Mr. Mahtani to prove these facts. There was no photograph of this jewelry, or invoices, receipts or appraisals of the property he claims that Ms. Mistry owned on that date. All that was given in evidence was an appraisal from Maharani Jewelers Ltd. dated June 17, 2014 prescribing a value for the following pieces: one pair earrings at $115, one piece diamond band at $1,200, five piece coloured bangles at $2,485, one long chain and pendant at $1,285, and diamond multi colour stone earrings at $900 for a total $5,985.
[80] The value of this collection of jewelry is the amount claimed by Ms. Mistry for the jewelry she owned on the date of separation.
[81] Mr. Mahtani did not provide the court with any video recordings of their wedding at which he said Ms. Mistry was wearing jewelry having a value far and excess of this amount. None of the donors or vendors of this jewelry were called, including members of Mr. Mahtani’s own family. The existence of this jewelry, and the value that Mr. Mahtani ascribes to it is made all the more suspicious by Mr. Mahtani’s offer made in his evidence in chief that he would be agreeable to allowing Ms. Mistry to retain the jewelry and exempting it from the equalization process if she agreed to hold the jewelry strictly in trust for the children. In doing so, Mr. Mahtani betrayed the true motive behind alleging that Ms. Mistry owned jewelry of this kind and having this value: to apply leverage on her so that she would capitulate on other issues.
[82] Mr. Mahtani also accused Ms. Mistry of forging his initials on the sign in sheet to gain access to the safety deposit box at CIBC to remove jewelry around the date of separation. However, he called no employee from CIBC to give evidence about the process for signing in to access a jointly held safety deposit box, or any bank employee about Ms. Mistry attending at the bank on the particular day, or the results of the investigation that he asked CIBC to conduct.
[83] In Qaraan v. Qaraan, 2012 ONSC 6017, a case with similar facts, one party had alleged that the other had absconded with her jewelry that was stored in a jointly owned safety deposit box. In Qaraan, the Court held that where there is no credible evidence to prove the value of the jewelry in question, it becomes moot to make findings of fact as to who may have taken it. Accordingly, it is open for the Court to omit the missing jewelry altogether from the equalization calculation.
[84] In Wilson v. Wilson, 2015 ONSC 2543, one of the parties alleged that the other had seized a US/Canadian coin collection. The Court held that, in the absence of the party alleging the removal to prove the existence of the coins and their value through documentary evidence, the collection assigned a nil value for equalization purposes.
[85] Mr. Mahtani has not met the burden of proof required of him to prove the existence of the jewelry he claims Ms. Mistry removed from the safety deposit box, or its value. I find as a fact that Ms. Mistry did not own jewelry on the date of separation having a value of $100,000. Consequently, there is no legal basis to ascribe that value to the alleged jewelry unless there is other evidence to the contrary. Ms. Mistry has disclosed and admits that she owned jewelry with a value of $5,985 upon separation. This is the amount that shall be included in her net family property for jewelry.
[86] I therefore conclude that Mr. Mahtani and Ms. Mistry had general household items and vehicles with a value of $12,330 and $5,985 respectively on the date of separation.
(b) BANK ACCOUNTS AND SAVINGS, SECURITIES AND PENSIONS
[87] The parties have agreed that Mr. Mahtani had accounts totaling $3,953.46 and Ms. Mistry had accounts totaling $18,878.82 on separation.
(d) LIFE AND DISABILITY INSURANCE
[88] Mr. Mahtani had a term life insurance police for $600,000 in which his parents are named as beneficiaries. Ms. Mistry had a life insurance police with Manulife Financial in the amount of $250,000 naming Krish and Ayanna Mahtani as beneficiaries. Neither of these policies had a cash value.
(e) BUSINESS INTERESTS
VAMS Canada
[89] The fair value of Mr. Mahtani’s shares representing a 50% ownership in VAMS Canada is the other issue on which the experts testified, with different results. Mr. Mahtani took the position supported by Mr. Carnegie that his shares had a fair value of $33,000 on date of separation. Mr. Krofchick supported Ms. Mistry’s position that those shares had a fair value of $101,000 on that date.
[90] There was no middle ground in this battle of the experts. Each expert provided his opinion on the assumptions made as to fundamental facts, and using different methodologies.
[91] On the basis of the evidence given by the fact witnesses and the respective approaches taken by Mr. Carnegie and Mr. Krofchick, I prefer the opinion given by Mr. Krofchick.
[92] There is no dispute that, through no fault of his own, Mr. Carnegie had no knowledge of the decision made by the Mahtani family to incorporate VAKA Trading to either compete with, or to expand the business of VAMS Canada. This is a fundamental fact that Mr. Carnegie did not have when he provided his initial valuation in June, 2015. Mr. Krofchick learned about this fact, and relied upon it in his valuation, which goes a long way torwards explaining the approach he took to the valuation, and the conclusions he reached.
[93] I prefer Mr. Krofchick’s valuation because he employed an income based methodology to determine a value for the shares in VAMS Canada. This is in contrast to the asset based methodology used by Mr. Carnegie. An asset based approach is appropriate when the valuation contemplates the liquidation of the underlying assets owned by a corporation upon winding it down.
[94] There is good reason to prefer the income based approach employed by Mr. Krofchick. VAMS Canada was in the sale of goods business that generated an income stream. For valuation purposes, it was a going concern. The income stream it was generating represented earnings before interest and taxes (EBIT) on which to apply a multiple of 4, which is a multiple that Mr. Carnegie did not challenge when he gave evidence. Using this approach, Mr. Krofchick concluded that the fair value of all shares in VAMS Canada as of the date of April, 2014 would have been $202,000. Mr. Mehtani’s 50% interest in VAMS Canada on the date of separation therefore had a value of $101,000.
[95] In contrast, Mr. Carnegie’s valuation was reached using an asset based methodology. He used this approach because he concluded the return on the invested capital in VAMS Canada was too low to employ a methodology based on income or earnings. He approached the valuation with an eye of what a buyer would pay for the company. This is curious because Mr. Carnegie stated under cross-examination that Mr. Mahtani did not tell him that he intended to scale back operations or to wind up VAMS Canada until after Mr. Carnegie had delivered his first report.
[96] Mr. Carnegie acknowledged that he never reviewed in detail how the accounting for VAMS Canada was set up. He candidly stated that he made no further inquiries into these status of shareholder loans he treated as a liability of the company. In view of the estimate level of the report he was retained to prepare, he made the calculations asked of him on information provided, but no more. He even remarked in direct examination that it was “lost on him” why the amounts due to shareholders were not broken out differently.
[97] Ms. Mistry took the further position that in actual fact, Mr. Mahtani owns all shares in VAMS Canada despite the fact that 50% of those shares are held in Anjali’s name. Ms. Mistry made the submission that the entire value of $202,000 assessed by Mr. Krolchick for those shares should be included in Mr. Mahtani’s asset column for net family property purposes.
[98] I must disagree with Ms. Mistry in this respect. There is nothing in the evidence of either Mr. Krolchick or Mr. Carnegie to suggest that Mr. Mahtani is the sole owner of VAMS Canada. Anjali was involved in the startup of VAMS Canada. She invested in VAMS Canada, and was issued shares in VAMS Canada at inception. Theres nothing to support the view that she holds shares in trust for her brother or that she is not otherwise an owner.
VAMS USA Inc.
[99] There are two bank accounts at Citizens Bank containing US funds in the name of VAMS USA Inc. that are also contested. These accounts appear to be the only assets remaining in VAMS USA as there was evidence given that it is no longer operating.
[100] I am satisfied that the bank account statements from Citizens Bank in the name of VAMS USA Inc. fairly represent the value of the remaining assets of the corporation as of the date of separation. The cash balance in each of those accounts was $2,851.86 and $332using a conversion rate of CDN 1.10 to 1 US dollar. These amounts are attributed to Mr. Mahtani directly as assets.
1811470 Ontario Inc. o/a Seraphic
[101] I am similarly satisfied by the banking account statements in evidence that the bank account held in the name of 1811470 Ontario Inc. operating as Serafic had the ascribed value of $5,126.74 as of December 31, 2013. This was the date of the last bank statement disclosed for this account. Mr. Mahtani’s one half share of this cash would be $2,563.57.
(f) MONEY OWED TO YOU
[102] The parties were able to agree upon minor amounts of money owed to each of them for income tax refunds for the year 2014. However, Mr. Mahtani claims a shareholders loan he advanced to VAMS Canada in the amount of $286,675.37 as an issue for trial. Ms. Mistry disagrees, stating that no money was owing for the shareholders loan on that date.
[103] Mr. Mahtani has introduced pages from the company general ledger going back to 2006 and 2007 listing shareholder loans made by himself and other third parties, including relatives through him, to VAMS Canada for the purchase of inventory. Even if this evidence was credible, I find that VAMS Canada would likely use borrowed funds to purchase inventory and then repay those funds to lending parties on a routine basis. These loans were revolving in nature and did not represent new loans everytime, but rather the same money lent over and over again.
[104] I conclude that the shareholder loans that Mr. Mahtani claims he is owed by VAMS Canada on the date of separation, and for that matter as of the date of marriage, have not been proven. Justice Price made a temporary order on November 23, 2017 that Mr. Mahtani was to provide those ledger accounts, together with documentation sufficient to corroborate the actual transfer of funds form each shareholder to the company, and vice-versa (to show which were repaid), all by December 14, 2017. This was never done, and no evidence to prove these facts was given at trial, despite the fact Mr. Mousadji was called as a witness by Mr. Mahtani.
[105] The shareholders loan from Mr. Mahtani to VAMS Canada has not been proven. The ledger statements show nothing more than amounts that Mr. Mahtani has described as owing to unidentified family members who would lend to the corporation for operating capital. If this were the case, they would not even be funds owing to Mr. Mahtani. I would not give these shareholder loans He claims for himself, either at the date of separation or on the date of marriage. The evidence of Mr. Mousadji was clear that Mr. Mahtani put none of his own money into the corporation, and he was the accountant at all material times for both VAMS Canada and Mr. Mahtani.
[106] I therefore conclude that the money owed to each of the parties was $210.62 to Mr. Mahtani, and $1,216.15 to Ms. Mistry on the date of separation.
(g) TOTALS:
[107] Mr. Mahtani therefore had net family property having a value of $502,966.46 and Ms. Mistry had net family property having a value of $24,863.82 on the date of separation, before exclusions or deductions.
- Value of Debts and Other Liabilities on Valuation Date
[108] The parties have agreed to all debts and other liabilities each of them is claiming as of the date of valuation, except for the personal loans in the amount of $135,503 that Mr. Mahtani is claiming as a deduction.
[109] Mr. Mahtani relies upon promissory notes that he has given to Rina since 2006 in various increments totaling the $135,503 he now claims. Those promissory notes include the following features:
• Demand Loan dated July 17, 2003 for $60,000, without interest
• Amendment to Demand Loan dated February 25, 2005, replacing the July 2003 loan with this note for $73,577, without interest. If Mr. Mahtani was unable to repay this loan, the note provides he would transfer his equity in 6254 McCracken Drive to the lender.
• November 7, 2007 for $21,500 without interest, payable on demand
• Amendment to Demand Loan dated May 7, 2008 for $31,500, without interest to replace the note dated November 7, 2007
• Amendment to Demand Loan dated May 3, 2010 for $55,926 to replace the note dated May 7, 2008.
[110] Ms. Mistry takes the position that no claim for indebtedness should be allowed as there is no evidence of any actual cash advance from Mr. Mahtani’s mother to himself. She argues he should not be permitted to claim a deduction in this regard, as it would artificially create a greater difference in their respective net family property values.
[111] The issue of how the Court is able to deal with an interfamily loan for the purpose of calculating net family property in a family law case was addressed in the recent decision of the Court of Appeal in Rados v. Rados, 2019 ONCA 627. The Court of Appeal reviewed the case law considered by the trial judge in that case in Reasons released on March 26, 2018 by observing that:
[13] The trial judge also reviewed the case law permitting the court, when calculating net family property, to discount a debt owing by a spouse to reflect the likelihood that the spouse would ever be called to repay the debt: paras. 229-235, citing Salamon v. Salamon, [1997] O.J. No. 852 (Gen. Div.); Poole v. Poole (2001), 2001 28196 (ON SC), 16 R.F.L. (5th) 397 (Ont. S.C.); and Cade v. Rotstein, 2002 2811 (Ont. S.C.), aff’d (2004), 2004 24269 (ON CA), 181 O.A.C. 226 (C.A.).
[14] Applying this legal principle to the evidence – including 33 specific factors regarding the timing and circumstances of the promissory note and whether the corporate loan was ever expected to be repaid (para. 274) – the trial judge found that any monies advanced by the appellant’s parents to the corporation “were advanced for the future benefit of [the appellant] (and his family) and that there was almost certainly no intention that the monies were to be repaid”: para. 275. She found that the prospect of a call for repayment was “extremely unlikely” and “close to non-existent”, but it was “difficult to say with one hundred percent certainty that there was absolutely no possibility whatsoever”: paras. 276, 278.
[15] Accordingly, the trial judge found that the debt was a contingent liability that had to be “significantly discounted”: para. 277.
[16] Based on her appreciation of all the evidence, the trial judge exercised her discretion to discount the promissory note by 90% of its face value as a “true reflection of the practical reality”: para. 279.
[112] The Court of Appeal then concluded as follows:
[24] The trial judge correctly considered the applicable law. The case law relied on by the trial judge is consistent with this court’s guidance in Zavarella v. Zavarella, 2013 ONCA 720, 117 O.R. (3d) 641, at para. 40, that the debt is to be valued based on the reasonable likelihood that it will ever be repaid.
[25] The trial judge’s application of that law to the facts and her decision to discount the promissory note by 90% as a true reflection of the practical reality of the situation is owed substantial deference.
[26] We also do not agree that any of the factors listed by the trial judge were irrelevant. She set out the nature of the parties’ relationship based on all the evidence and evaluated whether there was any reasonable likelihood that there would ever be a call to repay the debt. We see no basis to interfere.
[113] The appeal decision in Zavarella was included in the submissions made to this court by Ms. Mistry. I therefore sought no reason to bring Rados to the attention of counsel for the purpose of requesting further submissions, and I received no request for that opportunity upon it’s release from either counsel.
[114] The principles set out in Rados are clearly relevant to the personal indebtedness claimed by Mr. Mahtani as a deduction. I have already reviewed the suspicious nature of the facts leading up to the incorporation of VAKA Trading and how the VAMS business and Mr. Mahtani’s income from it has been kept “all in the family”. It is apparent from the evidence that Mr. Mahtani and his parents Rina and Rajkumar have a financial relationship as family members that allows for the use of funds earned or held by one of them for the benefit of all of them. They reside together, they worked together at VAMS Canada, and Mr. Mahtani has raised no objection to the incorporation of VAKA Trading to operate a similar business within close proximity to his own.
[115] It is not difficult to conclude that there is very little likelihood that Rina will demand repayment of the loans that Mr. Mahtani claims he borrowed from her. If they were arms length and adverse in interest, Rina would have difficulty in collecting much of the indebtedness because of the absence of evidence that funds were actually advanced, and because she would likely encounter a limitations issue if she commenced an action.
[116] I find as a fact that the prospect that Rina will seek repayment of this indebtedness is minimal. There is equally little prospect that Mr. Mahtani will ever repay the amount he claims as deduction. I therefore assess this interfamily loan at 10% as in Rados, in the amount of $13,550.
[117] The value of debts and other liabilities of the parties on the date they separated were therefore $290,289 for Mr. Mahtani, and $10,067.55 for Ms. Mistry.
- Net Value of Property and Debts on Date of Marriage
a) PROPERTY
[118] All but three of the property items in this category have been agreed upon by the parties.
[119] Mr. Mahtani takes the position that his motor vehicle, a 2004 Mitsubishi Lancer, had value of $7,916.50 on the date of marriage. Ms. Mistry owned a jewelry having a value of $5,985. I find that these are reasonable values to attribute to each of the parties as a date of marriage asset.
[120] Mr. Mahtani also owned three watches on the date of marriage. I find, based on the appraisals given in evidence, that those watches had a value of $14,000 as of the date of marriage.
[121] Mr. Mahtani also claims that VAMS Canada owed him $342,045 on the date of marriage. For the same reasons that were given for disallowing the shareholders loan as property on the date of separation, I give no value to this shareholders loan. Not only is it a greater value than the amount of the asset claimed on a date of separation to create a further deduction of $55,370 from his total assets, I have concluded above that I did not find the running ledgers as sufficient evidence that the funds were actually deposited.
[122] I take the same view that the shareholder loans were, if anything, simply replaced by inventory carried by VAMS Canada at the date of marriage as well as at the date of separation. This is especially so since no audited financial statements for VAMS Canada were given in evidence in their entirety for those years, and therefore no values for inventory carried by VAMS Canada have been proven at either point in time. I therefore conclude that the loans Mr. Mahtani is claiming he lent to VAMS Canada to purchase product should have a zero balance as of the date of marriage.
[123] I am also of the view there is no value to assign to Mr. Mahtani’s shares in VAMS Canada as of the date of marriage. Mr. Carnegie testified that those shares would have a nil value as of that date using his approach. There shall be no deduction for the value of those shares as a result.
[124] The property owned by each Mr. Mahtani and Ms. Mistry as of the date of separation therefore had a value of $26,446.50 and $13,887.68 respectively.
b) DEBTS ON THE DATE OF MARRIAGE
[125] The total debts as of the date of marriage were similarly agreed upon, except for a balance owing on Mr. Mahtani’s American Express credit card and the personal loan he owed to his mother, Rina.
[126] On the American Express credit card, I find as a fact, based on the credit card statement in evidence, that Mr. Mahtani owed $1,000 on that credit card.
[127] I do not allow the personal loan owing to Rina as of the date of marriage claimed by Mr. Mahtani in the amount of $73,577. This was simply the root of the indebtedness he claimed as a loan payable on the date of separation. This claim as a debt as of the date of marriage is disallowed for the same reasons given for the same disposition for loans of that description as of the date of separation.
[128] The total debts owing by Mr. Mahtani and Ms. Mistry as of the date of marriage are $42,000 and $4,279.70 respectively. Therefore, the net value of property owned on the date of marriage of Mr. Mahtani had a negative value of $15,553.50, and Ms. Mistry had property having a net property value of $9,607.98 as of the date of marriage.
Conclusions
[129] The findings of property and indebtedness on the date of marriage and as of the date of separation for each of the parties are as follows:
Valuation Date (VD)
Total Value of Assets on VD
ASSETS
MAHTANI
MISTRY
Matrimonial Home
$382,500
Bank accounts and savings, securities and pension
$3,953.46
$18,878.82
Business Interests
$104,183
Personal Articles and Jewelry
$12,330
$5,985
Value of Property Owned on VD
$502,966.46
$24,863.82
Total Value of Debts & Liabilities on VD
Total: Value of Debts & Liabilities
$290,289
$10,067.55
Net value of Property Owned on VD
$212,677.46
$14,796.27
Date of Marriage (DM)
net Value of property (other than a Matrimonial Home) & Debts on DM
Assets
RRSP
$7,845.38
2004 Lancer
$7,916.50
Cartier/ Tag Heuer Watches
$14,000
Value of Property Owned on DM
$26,446
$13,887.68
Total Value of Debts and Liabilities on DM
Debts & other liabilities
Total: Value of Debts & Liabilities
$42,000
$4,279.20
Excluded Property
N/A
N/A
Net value of Property Owned on DM
$15,553.40
$9,607.98
TOTALS VD & DM
Net Value of Property Owned on the VD
$212,677.46
$14,796.27
Net Value of Property Owned on the DM
$15,553.40
$9,607.98
NET FAMILY PROPERTY
$197,124.04
$5,188.89
[130] The difference between the value of Mr. Mahtani’s net family property and that of Ms. Mistry is $191,935.71. Neither party has asked this court for an order, or called evidence in support of a claim for an unequal division of this difference. Mr. Mahtani is therefore ordered to pay one half the difference in the amount of $95,967.85 to Ms. Mistry for equalization.
Jewelry
[131] I have made no finding that either party removed any jewelry that may have been stored in the safety deposit box. I therefore make no order for one party to return jewelry that may belong to the other solely or jointly as the existence, value or possession of any jewelry put in issue by one party or the other has not been proven.
Life insurance as security for support
[132] Mr. Mahtani currently has a term insurance policy with The Cooperator’s for $600,000 on his life. He is to change the beneficiaries of that policy to include both children as beneficiaries as to $250,000, maintain that policy in good standing, or to purchase another policy in its place for that amount designating the children as beneficiaries. Either way, he is to keep that policy in good standing until the last of the two children has reached the age of 18 and is not enrolled in a full-time program at a recognized post-secondary institution.
Collapsing of RESP Accounts
[133] The parties are not likely to agree on the further funding of the RESP accounts they opened for each of the children at an earlier time in their lives. Those accounts are held jointly. Making financial contributions to the post secondary education of each child will be a section 7 expense for the parties to share in proportion to their respective incomes when the time comes. There is no compelling reason to keep these funds on deposit over an extended period. I order that Ms. Mistry is entitled to collapse each RESP account, and she shall be entitled to retain Mr. Mahtani’s share of each account as a credit towards the equalization payment he owes to her.
Further Credits
[134] Mr. Mahtani paid $5,000 towards spousal support pursuant to the temporary order made by Lemon J. dated July 28, 2015. This shall be applied as a credit against the principle amount Mr. Mahtani owes for retroactive spousal support in 2014.
[135] Ms. Mistry was ordered to pay $5,000 for costs by Skarica J. on July 25, 2014. This amount shall be applied as a credit against the equalization payment Mr. Mahtani has been ordered to pay to her.
ORDERS
[136] Mr. Mahtani is ordered to pay spousal support as follows:
a) ongoing spousal support to Ms. Mistry at the mid range level under the Spousal Support Advisory Guidelines (SSAG’s) of $980 a month, commencing on September 1, 2019 and on the first day of each and every month up to and including April 1, 2020. This amount of support is based on an annual income of $123,000 imputed to Mr. Mahtani, and an annual income of $45,202 imputed to Ms. Mistry.
b) retroactive spousal support to Ms. Mistry as follows:
i. $48,000 for 32 months, from May 1, 2014 to January 1, 2017 at $1,500 each month based on Ms. Mistry’s annual income of $22,230 and an imputed annual income of $121,430 to Mr. Mahtani for those months, less $5,000 for a net total of $$43,000; and
ii. $23,232 for 32 months since Janaury 1, 2017 at $726 each month to August 1, 2019 based on Ms. Mistry’s income of $45,202 a year and an annual income of $123,000 imputed to Mr. Mahtani.
[137] The parties shall share the following section 7 expenses for the children equally up to and including April 1, 2020:
a) Singular school related expenses in excess of $50 each year; and
b) The uninsured portion of either child’s medical/health related expenses each year in excess of $100.
[138] After April 1, 2020, the parties shall contribute to those expenses for each of the children that qualify as section 7 expenses in the following proportions until further order:
a) Ms. Mistry: 33%
b) Mr. Mahtani: 67%
[139] Within 60 days from today’s date, Mr. Mahtani and Ms. Mistry shall execute the necessary documentation to fully collapse their joint RESP accounts with Knowledge First Financial Inc. (account numbers ****343-1 and ****108-1). The proceeds in both of these accounts shall be divided equally between the parties, and Ms. Mistry is entitled to retain Mr. Mahtani’s portion as a credit towards the equalization payment.
[140] Mr. Mahtani shall make or maintain the following designation in his current policy of insurance with the Co-operators Group Limited (policy number ****6301) to designate the children as the irrevocable beneficiaries of no less than $250,000 of the total proceeds payable pursuant to this policy, or he shall purchase a new policy on this basis. In this regard, Mr. Mahtani shall furnish Ms. Mistry with proof that he has made these arrangements within 60 days from the date of this order.
[141] Mr. Mahtani shall continue to maintain the required insurance policy in good standing while he is under an obligation to financially support the children and to this end, he shall (1) pay all premiums when due; and (2) take any medical examinations or tests necessary to maintain the policy.
[142] Mr. Mahtani is ordered to pay $95,967.85 as an equalization payment to Ms. Mistry, less $5,000, for a net total of $90,967.85.
[143] Mr. Mahtani shall pay Ms. Mistry accumulated pre-judgment interest on the amount for arrears and spousal support at the pre judgment interest rate of 1.5% per year, from April 21, 2014 to today’s date.
[144] Mr. Mahtani shall pay post-judgment interest on all amounts at the rate of 3% per year, commencing 30 days after the date these reasons are released.
[145] The claim for divorce of either party is hereby severed from all other claims for relief. Either party is at liberty to apply to this Court to obtain a divorce from the other on an uncontested basis.
[146] All other claims set out in Mr. Mahtani’s application or in Ms. Mistry’s amended answer which have not been resolved pursuant to this order are hereby dismissed.
[147] A Support Deduction Order shall issue.
COSTS
[148] If the parties require the assistance of the court to decide costs, the following terms shall apply:
Any party claiming costs shall serve and file written submissions by September 28, 2019;
The responding party shall file written submissions by October 18, 2019;
No submission in reply is permitted, without leave; and
All written submissions shall be no more than three double spaced, typewritten pages, not including a bill of costs or any offer to settle.
[149] Each party may also file submissions consisting of no more than two pages of any mathematical corrections or request for clarification of these reasons they wish to call to my attention, provided any requested correction or clarification is consistent with my findings of fact. Those submissions are due at the same time that submissions on costs are due.
[150] Written submissions may be filed by sending them to my judicial assistant at (905) 456-4834, or by email to melanie.powers@ontario.ca in Brampton.
[151] I would like to thank the parties and their counsel for the patience and understanding they have shown while waiting for the release of this decision.
Emery J.
Released: September 11, 2019
COURT FILE NO.: FS-14-80843
DATE: 2019 09 11
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
VISHAL MAHTANI
Applicant
- and -
VIDESHI MISTRY
Respondent
REASONS FOR JUDGMENT
EMERY J.
Released: September 11, 2019