COURT FILE NO.: FS-18-2429
DATE: 20190128
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Adam Rothschild, Applicant
AND:
Amanda Rothschild, Respondent
BEFORE: P. J. Monahan J.
COUNSEL: Harold Niman and Richard Niman, for the Applicant
Jaret Moldaver and Jesse Rosenberg, for the Respondent
HEARD: December 18, 2018
ENDORSEMENT
[1] The parties were married on July 1, 2012. They have two children, a daughter ER, born October 1, 2014, and a son HR, born October 10, 2017. The parties separated in late 2017 shortly after HR’s birth, although they continued to reside (separate and apart) in the matrimonial home until the Applicant moved out on October 25, 2018.
[2] Divorce proceedings were commenced in May 2018. In late November 2018, the parties each brought a motion seeking a variety of interim relief in connection with issues arising from the breakdown of their marriage. These issues include an appropriate interim residential parenting arrangement for the children; interim without prejudice child and spousal support; whether to order a s.30 custody and access assessment; whether to grant the Respondent exclusive possession of the matrimonial home; and whether to order an interim disbursement to fund costs associated with this litigation.
Background Facts
[3] At the time of their marriage in 2012, the Respondent was working as an elementary school teacher. However when ER was born in October 2014, the Respondent left the paid workforce and since that time has been a stay-at-home mother. Recently, she has started to undertake small social media ventures which currently generate nominal income but which she hopes to grow over time. The Respondent is currently 31 years old.
[4] The Applicant worked as a project manager for various companies before starting his own company, Rothcon Fine Homes (“Rothcon”) in 2014. Rothcon builds and/or renovates high-end homes or properties for residential and commercial clients. He is currently 36 years old.
a. Parenting Issues
[5] A significant focus of the argument on these motions related to the conflicting accounts of the parties respecting their previous involvement as parents with their children, and the appropriate parenting arrangements moving forward.
[6] The Applicant maintains that prior to the parties’ separation he was an involved and equal co-parent with the Respondent. He states that because of the flexibility in his work schedule, he was able to work from home from the time of ER’s birth until she was about two years old. This enabled him to spend considerable time with his daughter throughout the day, and he regularly changed, dressed, bathed and fed her. He has regularly taken her to dance class on Sundays, and they have enjoyed drawing together frequently. The Applicant has a close and loving relationship with ER.
[7] The Applicant similarly states that following the birth of HR, he made efforts to be home with his son as often as he could. He is as affectionate as possible with HR at every opportunity. The Applicant indicates that HR’s eyes light up when he sees his father and they have a warm and loving relationship.
[8] The Applicant maintains, however, that the Respondent has actively excluded him from their two children’s lives and limited his parenting time, particularly since their separation in December 2017. For example, the Applicant maintains that until recently, the Respondent did not allow him to take HR out of their home without her permission. He also states that the Respondent has refused to encourage the children’s relationship with the Applicant’s parents.
[9] In contrast, the Respondent maintains that she has always been the primary parent responsible for all aspects of their children’s care. This has included primary responsibility for the children’s morning routines, evening routines, diaper changes, reading to the children, bathing them, attending for all professional appointments, and dealing with the children’s social and recreational care. She further maintains that, following the parties’ separation in December 2017, the Applicant has had limited involvement with the children and has declined her invitations to become more involved.
[10] When the parties decided to separate in December 2017 but continue to temporarily reside (separate and apart) in the matrimonial home, it became necessary for them to make arrangements for the manner in which they would provide for the care and custody of their children. In a December 18, 2017 letter (the “December 2017 Letter”), Applicant’s counsel proposed that the Applicant would vacate the matrimonial home and that he would have parenting time with ER every Tuesday and Thursday evening from 5 PM until her bedtime, as well as from 10 AM until 6 PM one day each weekend. The Applicant would also have appropriate time, in the range of a half-hour, with HR during the occasions when he picked up or dropped off ER at the matrimonial home. These arrangements were to be temporary, pending participation by the parties in open mediation to address custody and access arrangements.
[11] Although the parties did not enter into a formal parenting agreement at that time, it appears that, commencing in December 2017, the Applicant spent time with the children roughly in accordance with the schedule set out in December 2017 Letter. That is, he cared for ER after school on Tuesdays and Thursdays, and one day on the weekend. He also spent some time with HR on Tuesdays and Thursdays, during his time with ER.
[12] In July 2018, the parties began attending open parenting mediation sessions with Marcie Goldhar, MSW (“Goldhar”), without counsel. This mediation led to the parties executing a two-phased parenting agreement, described as a “Without Prejudice Interim Parenting Time Agreement”, on October 25, 2018 (the “Interim Parenting Agreement”).
[13] Phase One of the Interim Parenting Agreement provided that the Applicant was to vacate the matrimonial home immediately, and that he would have parenting time with ER and HR outside of the home on Tuesdays and Thursdays between 4:30 PM and 6:30 PM. The Applicant would also spend every other Friday night dinner with the two children from 5 PM to 7 PM, and would spend one day each weekend with ER from 9 AM to 5 PM (alternating between Saturdays and Sundays), with HR joining for lunch on the relevant weekend day from 11 AM to 1 PM. During Phase Two of the Interim Parenting Agreement, which was to begin 15 days after the commencement of Phase One, the Applicant’s parenting time would remain the same except for the addition of one overnight visit per week with ER, on alternating Friday or Saturday nights.
[14] The Applicant moved out of the matrimonial home as contemplated by the Interim Parenting Agreement and is now living in a rented house in the Summerhill area of Toronto, which is relatively close to the matrimonial home. He has decorated his new home to make it as warm and child friendly as possible. Each of ER and HR have their own rooms and he has equipped HR’s room with a crib, baby monitor and all of the baby proofing items required for his safety. The house has a studio for arts and crafts as well as a playroom.
[15] The implementation of the Interim Parenting Agreement has been made much more difficult by an incident which occurred on November 1, 2018. On this occasion, the Applicant attended at the matrimonial home along with his father in order to retrieve his belongings, as had been contemplated by the Interim Parenting Agreement. During the course of this visit there was some sort of altercation between the parties which resulted in the Respondent phoning the police. The police attended at the home but did not lay any charges at that time. However the next day the Respondent attended at the police station and this resulted in the Applicant being charged with one count of assault. His conditions of release included a “no contact” provision which prohibited him from communicating directly or indirectly with the Respondent or attending within 100 metres of the matrimonial home.
[16] Because of the “no contact” provisions that were included in the Applicant’s conditions of release, it was impossible to implement the Interim Parenting Agreement as it had been written. (The Agreement contemplated that the Applicant would pick up and drop off the children at the matrimonial home.) The parties subsequently agreed to modify the Interim Parenting Agreement, primarily by altering the manner in which the pickups and drop-offs of the children would occur. However, the Applicant states that during the month of November 2018 he was deprived of significant parenting time with the children as a result of the criminal charge. It was not until December 8, 2018 when he had the first overnight visit with ER at his Summerhill residence.
[17] It should be noted that the assault charge against the Applicant was stayed by the Crown on December 14, 2018. The transcript of the proceeding before the Ontario Court of Justice, which was entered as an exhibit on these motions, indicates that the Crown Attorney explained that the incident was “very minor in nature” and that the criminal charge “should not have been laid.”
[18] On these motions, the Respondent is proposing that the parenting arrangements contemplated by the Interim Parenting Agreement remain in place on a temporary basis. She also proposes that a custody and access assessment be conducted pursuant to s. 30 of the Children’s Law Reform Act.[^1]
[19] In contrast, the Applicant is proposing an increase in his parenting time from that provided under the Interim Parenting Agreement, primarily through additional overnight visits with ER and HR, as described more fully below. He also argues that there is no need for a s. 30 assessment and that requiring one will cause significant delay in the ultimate resolution of the divorce proceedings.
b. Financial Issues
[20] Since the parties’ separation, the Applicant has continued to pay for certain household expenses, including property tax, home insurance and utilities. He has also continued to pay for a nanny, for some of the children’s special or extraordinary expenses, for the Respondent’s car lease, and provided her with a weekly allowance of $500. However apart from these informal arrangements, there has not been any order in place for the payment of child or spousal support.
[21] Both parties agree that interim child and spousal support should be ordered at this time, but they differ on the Applicant’s income for support purposes. The Applicant takes the position that his income for support purposes is approximately $236,000, while the Respondent argues that his income for support purposes is $459,000. I describe below the reasons for this wide variance, the manner in which it should be resolved, and the appropriate level of interim child and spousal support payable by the Applicant to the Respondent.
[22] The Respondent is also proposing that the Applicant be required to advance her an interim disbursement of $108,000, pursuant to Rule 24(18) of the Family Law Rules and s. 131 of the Courts of Justice Act.[^2] She proposes that approximately half of this interim disbursement be applied to the fees and disbursements of an expert she has retained, in order for him to complete his analysis of the Applicant’s income, and the remaining funds be used to pay her litigation debts and ongoing legal fees.
[23] The Applicant maintains that he does not have the financial ability to provide the interim disbursement sought by the Respondent. He proposes, in the alternative, that the parties obtain a line of credit secured against the matrimonial home, with each party being able to draw down a maximum of $100,000 in order to assist with their legal and expert fees. Each party would be responsible for servicing any funds they draw down from the line of credit. The line of credit would also be used to pay for ER’s private parochial school tuition for 2019 – 20.
Issues
[24] The following issues arise on these motions:
a. should the parenting arrangements set out in the Interim Parenting Agreement remain in place for now, as proposed by the Respondent, or should the Applicant’s parenting time be increased in the manner he proposes?
b. should a s. 30 assessment for the parties’ two children be ordered?
c. what is the Applicant’s income for support purposes, on an interim without prejudice basis?
d. what amount of child support, including both table support and s. 7 expenses, should be paid on an interim without prejudice basis by the Applicant?
e. what amount of spousal support should be paid on an interim without prejudice basis by the Applicant?
f. Should child or spousal support be ordered on a retroactive basis?
g. Should the Applicant be required to pay an interim disbursement to the Respondent or, alternatively, should the parties’ litigation expenses and/or ER’s parochial school tuition be funded through a line of credit secured against the matrimonial home, as proposed by the Applicant?
h. Should the Respondent be granted an order for exclusive possession of the matrimonial home and, if so, on what terms?
i. Is there any ancillary relief, including orders for disclosure and for questioning, that are appropriate at this time?
[25] I consider each of these issues in turn.
Parenting Issues
[26] The principal issue with respect to parenting is essentially whether the parenting schedule set out in the Interim Parenting Agreement should continue in place (subject to some minor modifications proposed by the Respondent to take account of the children’s schedules), or whether the Applicant should be entitled to additional parenting time with ER and/or HR, principally in the form of additional overnight visits.
[27] As noted, the Interim Parenting Agreement contemplates that the Applicant shall have one overnight visit each week with ER (alternating between Friday and Saturday nights), and no overnight visits with HR. The Respondent is proposing that the schedule established by the Interim Parenting Agreement remain in place, arguing that additional overnight visits would not be in the best interests of either child of this time. The Respondent does suggest one small change to the schedule contemplated by the Interim Parenting Agreement, such that the Applicant’s parenting time with the children during the week take place slightly earlier, from 3:45 PM until 6 PM, rather than from 4:30 PM until 6:30 PM; she proposes this change principally because ER is too tired at the conclusion of the Applicant’s weekday access visits, taking into account that ER has already spent the day at school. The Respondent would like to have the children returned home by 6 PM so they can start getting ready for bed earlier, and proposes adjusting the timing of the Applicant’s weekday visits accordingly.
[28] The Applicant proposes a number of changes to the schedule contemplated by the Interim Parenting Agreement, but the most significant proposed change is to increase his overnight visits with both ER and HR. With respect to ER, the Applicant is proposing a two week schedule in which, in the first week, he would have one overnight visit with ER (with this visit occurring on Tuesday overnight, rather than on the weekend, as is currently the case), while in the second week he would have four overnight visits (in addition to the Tuesday overnight, ER would also spend Friday, Saturday and Sunday overnight in his care.)[^3] With respect to HR, the Applicant is proposing one overnight visit to occur each week, either on the Friday (in the first week) or the Saturday (on the second week). The Applicant also proposes that his visits with both children during the week be slightly longer, commencing after school at 3:45 PM and extending until 7 PM.[^4] The changes in the schedule with ER would commence immediately, while the changes in the schedule with HR would commence February 1, 2019,
[29] The parties are agreed that the parenting arrangements for ER and HR should be determined in accordance with the best interests of the children, in accordance with s. 24 of the CLRA. Subsection 24(2) provides that in determining best interests I must consider all the children’s needs and circumstances, including,
a. the love, affection and emotional ties between the child and,
i. each person, including a parent or grandparent, entitled to or claiming custody of or access to the child,
ii. other members of the child’s family who reside with the child, and
iii. persons involved in the child’s care and upbringing;
b. the child's views and preferences, if they can reasonably be ascertained;
c. the length of time the child has lived in a stable home environment;
d. the ability and willingness of each person applying for custody of the child to provide the child with guidance and education, the necessaries of life and any special needs of the child;
e. the plan proposed by each person applying for custody of or access to the child for the child’s care and upbringing;
f. the permanence and stability of the family unit with which it is proposed that the child will live;
g. the ability of each person applying for custody of or access to the child to act as a parent; and
h. any familial relationship between the child and each person who is a party to the application.
[30] The Applicant also relies on the “maximum contact principle”. As McLachlin J. (as she then was) pointed out in Gordon v. Goertz,[^5] “Parliament has indicated that maximum contact with both parents is generally in the best interests of the child.” Thus, s. 16 (10) of the Divorce Act,[^6] directs the court to give effect to the “principle that a child of the marriage should have as much contact with each spouse as is consistent with the best interests of the child…”
[31] As discussed above, each of the parties has filed a number of detailed affidavits outlining the circumstances relating to their marriage and separation, and describing the parenting arrangements that existed both prior to and following their separation. Each presents significantly differing accounts of their past and current involvement with their two children. The Respondent argues that she has always been the primary parent responsible for all aspects of the children’s care and that the Applicant has had relatively limited involvement with the children because he has prioritized his own interests over assisting the Respondent in caring for the children. In contrast, the Applicant maintains that he has been a loving and involved parent, particularly in relation to ER. He also complains that the Applicant attempted to exclude him from a relationship with HR since the parties’ separation. He indicates that he agreed to the arrangements in the Interim Parenting Agreement only because he “capitulated” to the Respondent, so that he could vacate the matrimonial home in an effort to reduce the conflict between the parties, which he recognizes to be in the children’s best interests.
[32] These motions seek interim relief only, and there has been no cross examination on any of the affidavits filed. I am mindful of the fact that I do not have the same vantage point as the trial judge who will hear viva voce evidence tested by cross-examination, not just from the parties themselves but from others involved with the children. The trial judge will thus be in a position to assess credibility, weigh evidence and to resolve disputed issues of fact, whereas I have very limited capacity to do so.
[33] That said, I believe that the specific parenting issues raised on these motions can be satisfactorily addressed without attempting to resolve the many factual differences between the parties. I can do so simply by considering what arrangements are in the best interests of the children, given certain facts or circumstances which are not in real or meaningful dispute.
[34] I begin by indicating that, despite their conflicts, I see no fundamental disagreement between the parties over the fact that they both care deeply about their children, are committed to being involved in their upbringing, and wish to have a close and loving relationship with them. Moreover, it is also manifestly in the interests of both ER and HR that they have a warm and loving relationship with both of their parents.
[35] The fundamental and specific question that arises on this motion is whether it is the best interests of ER and HR that the existing parenting arrangements, as set out in the Interim Parenting Agreement, should remain in place for now, or whether they should be altered in the manner proposed by the Applicant. The following considerations, none of which is in dispute, appear particularly relevant to the determination of this question:
a. the parenting arrangements set out in the Interim Parenting Agreement are broadly similar to those proposed by the Applicant himself in the December 2017 Letter. In fact, the access provided to the Applicant under the Interim Parenting Agreement is more generous than that set out in the December 2017 Letter. The Letter had proposed no overnight visits with either of the children, and no weekend time with HR. In contrast, the Interim parenting Agreement provides for one overnight visit each week with ER, as well as weekend time with HR ;
b. the arrangements proposed in the December 2017 Letter appear to have been followed by the parties commencing in December 2017 until the Applicant departed the matrimonial home in the October 2018;
c. the schedule proposed by the Applicant would involve significant changes in the established parenting arrangements for both ER and HR, arrangements that have been in place essentially since the parties’ separation in late 2017. First, the Applicant is proposing to have a midweek overnight visit with ER, as well as three overnights (Friday through Sunday) in the second week. This would be a significant change for ER, since her first overnight with the Applicant at his new home only occurred very recently. Similarly, HR does not appear to have spent any overnights away from the Respondent since being born. HR does not yet sleep through the night and the Respondent continues to breastfeed him when he wakes up, which assists him in getting back to sleep. While the Applicant indicates that he is ready and willing to settle HR in the night, he does not contradict the Respondent’s evidence to the effect that he has very limited experience in this regard to this point in time. Thus spending one night a week away from the Respondent at this stage would be a significant change for HR;
d. Apart from the challenges associated with implementing the additional overnight visits proposed by the Applicant, the Respondent has indicated that ER is tired after her existing weekday visits with the Applicant; the Respondent is suggesting that ER needs to begin getting ready for bed earlier and is therefore proposing to conclude that the weekday visits earlier. It is unclear what impact a midweek overnight visit with the Applicant would have on ER, and whether it is in her best interest to implement such a visit at this time.
e. despite the recent disruption in the children’s lives as a result of their parent’s separation, both parties agree that the children are thriving and developing well under the current parenting arrangements.
[36] Given these various considerations, on balance I am not persuaded that it would be in the best interests of either ER or HR to make the changes in the schedule proposed by the Applicant at this time. This should not be taken as an indication that the parenting arrangements currently in place will remain appropriate and in the children’s best interests indefinitely. I accept the Applicant’s submission that he is a caring and loving parent to both children, that it is in their interests to further foster and develop their relationship with him, and that the parties should both work towards greater parenting time for the Applicant. Nor do I accept the Respondent’s submission that the interim parenting arrangements should necessarily remain in place until such time as there is a “compelling reason” to change them. The paramount consideration is and will remain what arrangements are in the best interests of the children.
[37] That said, I accept the Respondent’s argument that the Applicant’s proposal to increase ER’s overnight parenting time with him from the current one overnight per week, implemented only very recently, to five overnights every two weeks is simply too much too soon. I further find that HR is not yet ready for overnight access with the Applicant at this time. HR still does not sleep through the night and, due to his dairy allergy, the Respondent continues to nurse him during the night after he wakes up in order to soothe him and put him back to sleep. Given these circumstances, in my view the parenting schedule proposed by the Respondent, which largely follows the Interim Parenting Agreement as well as the Applicant’s own proposals in the December 2017 Letter, is in the children’s best interests at this time.
[38] Considerable discussion during oral argument was focused on the significance to be attached to the Interim Parenting Agreement. The Respondent argued that, although the Agreement was expressly described as being “without prejudice”, courts are and should be reluctant to allow any disruption of the status quo in the absence of compelling reasons indicative of the necessity of a change, in order to meet the children’s best interests.[^7] The Respondent argued that there is no evidence of a “compelling reason” to depart from the parenting arrangements in the Interim Parenting Agreement. The Applicant, on the other hand, maintained that the Interim Parenting Agreement was merely intended to provide a temporary solution until the argument of this motion and that the governing principle should remain what is in the best interests of the children. The Applicant argues that, to the extent that more frequent contact with both parents is possible, it should be put in place as soon as possible. He relies on academic research which has indicated that maximum contact is particularly important for young children.[^8]
[39] I need not make a determination as to which of these two proposed legal tests should be applied since, as noted above, I have found that the changes in the Interim Parenting Agreement proposed by the Applicant would not be in the children’s best interests at this time. Therefore, regardless of which of the two proposed legal tests is applied, this aspect of the Applicant’s motion cannot succeed.
[40] I therefore order that the parenting arrangements proposed by the Respondent apply on an interim without prejudice basis.
Should a s. 30 Assessment be Ordered?
[41] Section 30 of the CLRA authorizes a court to make an order to “appoint a person who has technical or professional skills to assess and report to the court on the needs of the child and the ability and willingness of the parties or any of them to satisfy the needs of the child.” Sections 30(3) and 30(4) of the CLRA provide that the court shall if possible appoint a person agreed upon by the parties, but if the parties do not agree the court shall choose and appoint the person. The court shall not appoint a person unless the person has consented to make the assessment and to report to the court. The Respondent has identified two assessors who have indicated that they would be available and willing to conduct a custody and access assessment.
[42] The Applicant opposes the request for a s. 30 assessment. He argues that the case has already suffered from a significant amount of delay, since it took the parties nearly 11 months to arrive at the Interim Parenting Agreement. He notes that the assessors who have been contacted by the Respondent have indicated that, given their schedules and existing commitments, it would be a number of months before they could even commence the assessment. He further argues that the Respondent has not clearly explained why an assessment is necessary in this case, or why it would be in the children’s best interests.
[43] As Kiteley J. held in Sprott v. Ohm,[^9] a clinical issue is not needed for the court to order an assessment. Kiteley J. concluded that a s. 30 assessment was in the best interests of the two young children in that case for a variety of reasons, including that the parents had been unable to make any significant decisions about the children’s needs vis-à-vis the parenting schedule that would be in their best interests. The parents in Sprott also had vastly different perspectives on the needs of the children and on their respective capacities to respond to those needs.
[44] I do not see the circumstances in the present case as being analogous to those before Kiteley J. in Sprott. Here, although there is a high degree of conflict between the parents, they were able to agree on an interim parenting schedule for their two children. Moreover, despite their differing views on their respective parenting roles in the past, I see no fundamental divide between the parties on the desirability of fostering a positive relationship between the children and both parents.
[45] I am further concerned about the delay that would be involved in obtaining the s. 30 assessment. In my view, this case should move forward as efficiently and expeditiously as possible, either to a consensual resolution or to trial. Ordering a s. 30 assessment would likely impede that process since it would require a considerable amount time to be completed, and courts are often reluctant to adjust the parenting status quo pending the completion of an assessment.[^10]
[46] Fundamentally, the Respondent has provided no significant reason why an assessment will be of sufficient assistance in this case to justify the delay that it would involve. Accordingly, I decline to order the assessment.
What is the Applicant’s Income for Support Purposes?
[47] The Applicant is self-employed and owns 100% of Rothcon. He also holds a 50% share of Adamie Properties, a single entity business which owns a rental property in Toronto. Further, he is the beneficiary of two trusts, the Columbia Drive Trust (the “Columbia Trust”), which owns a property in the United States, and the Rothschild Family Trust (the “Rothschild Trust”), which owns 100% of a numbered company, 2025320 Ontario Ltd. (“320 Limited”). 320 Limited has purchased marketable securities using the proceeds of a $1 million loan from the Applicant’s father, and the Applicant receives all of the annual dividends from 320 Limited.
[48] The Applicant retained Steve Ranot of Marmer Penner Inc. to prepare an income report regarding the Applicant’s 2015 to 2017 income pursuant to the Federal Child Support Guidelines (the “Guidelines”). Ranot calculates the Applicant’s income for support purposes as being $300,000 in 2017, $300,000 in 2016 and $110,000 in 2015. The Applicant has indicated that he expects his 2018 income to be approximately $220,000. He takes the position that his income for support purposes should be calculated based on his average income over the years 2015 – 2017, which he argues is $236,666.
[49] Based on these incomes, the Applicant proposes that, effective January 1, 2019, he pay interim without prejudice child support of $3117 per month. The Applicant also proposes to pay 75% of the children’s s. 7 expenses, except for tuition for ER’s private parochial school, which the Applicant proposes that the parties jointly fund through drawing down on a line of credit to be obtained against the matrimonial home.
[50] The Applicant concedes the Respondent’s entitlement to spousal support on an interim without prejudice basis. However he seeks to impute income to her of $25,000 per year. On this basis he proposes that he pay interim without prejudice spousal support in the amount of $4071 per month, which is the midrange of the Spousal Support Advisory Guidelines (the “SSAG”).
[51] The Respondent also retained her own financial expert, Wayne Rudson (“Rudson”) to prepare a critique of Ranot’s report. He calculates the Applicant’s 2017 income as $459,000. Rudson is of the view that Ranot significantly understates the Applicant’s income for a variety of reasons, including the following:
a. Ranot deducts taxable dividends that the Applicant received from Rothcon of $143,960 and 2015 and $134,550 in 2017. Ranot then attributes pre-tax corporate income from Rothcon of only $45,877 in 2015 and $28,567 in 2017. Rudson indicates that there is no explanation as to why the dividends received by the Applicant from Rothcon should be deducted in arriving at his income;
b. Ranot does not attribute pretax corporate income from 320 Limited to the Applicant. 320 Limited had positive pre-tax income of $23,441 in 2015 and $47,958 in 2017. Rudson indicates that there is no discussion of this issue in Ranot’s report;
c. the Applicant indicates yearly expenses of approximately $207,000 on his financial statement sworn May 11, 2018. Rudson notes that it would take approximately $400,000 of pretax income in order to support this level of personal expenditures. He indicates that Ranot fails to reconcile his income calculations in light of the Applicant’s yearly expenses.
[52] Ranot has responded to these observations by Rudson, as follows:
a. Ranot notes that over the past three years, Rothcon has paid out more in dividends than it earned. In effect, Rothcon has been depleting its capital, which Ranot does not believe is reflective of income. It is for this reason that Ranot ignored the amount that the Applicant drew as dividends each year and, instead, added 100% of the company’s pre-tax income, which he believes more accurately reflects what the company actually earned in each year;
b. Ranot also suggests that Rudson’s recommended approach with respect to the dividends issue reflects the fact that he calculated the Applicant’s income for 2017 only. Ranot notes that under the Rudson methodology, because of the unusual timing of the payment of dividends from Rothcon, the Applicant’s income would have been just $180,000 in 2016, as compared to $411,000 in 2017. Ranot argues that this significant fluctuation results entirely from the arbitrary timing of the dividends paid out by Rothcon, whereas his approach (which calculates the Applicant’s income as being $300,000 for each of 2016 and 2017) appears to be more reflective of the actual earnings of the corporation and of the Applicant’s real income;
c. Ranot explains that he did not attribute any of 320 Limited’s income to the Applicant, other than the $48,000 of annual dividends (plus related gross-up for the lower tax rate), because the Applicant is one of multiple beneficiaries of the trust and was receiving the majority of the trust income from 320 Limited. Ranot further indicates that he understands this to be a legal issue which neither he nor Rudson can determine;
d. with respect to the observation that the Applicant’s yearly expenses would require about $400,000 of pretax income, Ranot notes that the Applicant drew down on capital in 2017. Adding in the “excess dividends” he received, his cash flow would have been the equivalent of $386,000, which closely approximates Rudson’s expected requirement.
[53] The Respondent has provided further correspondence from Rudson dated December 13, 2018 in which he identifies various information requests that still remain outstanding. However, Rudson does not follow up with any further analysis of the specific responses provided by Ranot to Rudson’s initial critique.
[54] Ranot has offered a reasoned analysis supporting his determinations of the Applicant’s income for 2015 to 2017. Rudson has not made any determination of the Applicant’s income for 2015 or 2016, and has offered a preliminary analysis of the Applicant’s income for 2017. Although Rudson has raised a number of concerns regarding Ranot’s conclusion regarding the Applicant’s 2017 income, Ranot has provided reasoned responses to the concerns identified.
[55] I note that any determination of the Applicant’s income made on these motions is interim only and is subject to revision by the trial judge. Moreover, the trial judge will have the benefit of a complete analysis undertaken by both experts, as well as cross examination on their evidence. At this stage of the litigation I see no basis to reject Ranot’s conclusions with respect to the Applicant’s income for the past three years, and would utilize his findings for purposes of interim child and spousal support.
[56] The Applicant invites me to average his income over this period, on the basis of s. 17 of the Guidelines. Section 17 invites the court to have regard to a spouse’s income over the last three years in light of “any pattern of income, fluctuation in income or receipt of a non-recurring amount during those years.”
[57] Ranot has already taken into account the fact that the Applicant received dividends on a non-recurring basis which, he argued, should be backed out of his income for Guidelines purposes. Ranot does not identify any other unusual or non-recurring amounts which might result in an inappropriate determination of the Applicant’s Guidelines income, at least for 2016 and 2017. I therefore find no basis at this interim stage to average or otherwise adjust the income amounts put forward by the Applicant’s own expert for the years 2016 and 2017. I would utilize the Applicant’s $300,000 income in 2017 for purposes of calculating interim child and spousal support, without prejudice to the trial judge adjusting this income level in accordance with the evidence at trial.
Interim Child Support
[58] The parties agree that the Applicant is required to pay table child support for the two children of the marriage. Based on a Guidelines income of $300,000, the Applicant shall pay the Respondent table child support in the amount of $3877 effective February 1, 2019, on an interim without prejudice basis.
[59] The parties are also agreed that the Applicant shall pay 75% of the children’s s. 7 special or extraordinary expenses, pursuant to s. 7 of the Guidelines. The only issue in dispute on this aspect of the motions is whether the special and extraordinary expenses should include private parochial school tuition for ER. This issue is considered further below.
Spousal Support
[60] Both parties are agreed that the Applicant should be required to pay the Respondent temporary spousal support at the mid-range of the SSAG. Having determined the Applicant’s income, the only remaining issue in dispute is whether it is appropriate to impute and income of $25,000 to the Respondent.
[61] The Applicant has indicated that she is in the process of applying for a position as a part-time supply teacher with the Toronto District School Board. The Applicant indicates that he is concerned that the Respondent is applying to be a part-time teacher rather than full time. He states that he is unclear why she is not returning to the workforce on a full-time basis.
[62] Although the Respondent argues that no income should be imputed to her, she concedes that she is currently applying for part-time employment as a teacher, and has also initiated certain social media ventures. She has a full-time nanny and is 31 years old. She has also acknowledged in the Interim Parenting Agreement that she has an obligation to seek to become self-sufficient. I therefore believe that it is appropriate to impute a modest income to her. The amount suggested by the Applicant of $25,000 is less than minimum wage, and no alternative amount was offered or specified by the Respondent herself. I would therefore accept the Applicant’s position on this issue and impute an income of $25,000 to the Respondent for purposes of calculating spousal support, on an interim without prejudice basis.
[63] Based on an income of $300,000 for the Applicant and an income of $25,000 for the Respondent, and taking into account the child support payable, the midrange of the SSAG suggests monthly spousal support of $5442, and I would so order.
Retroactive Support
[64] The Respondent invites me to order child and spousal support retroactive to January 1, 2018. The Applicant opposes this request. Resolution of the issue of retroactivity would require findings on disputed issues of fact, which I have earlier found I am not in a position to make. I see no compelling reason as to why the issue of retroactivity should be determined on these motions. I would leave these issues in the hands of the trial judge, who will be in a much better position than I to resolve them fairly and appropriately.
Payment of an Interim Disbursement
[65] The Respondent seeks payment of an interim disbursement from the Applicant in the amount of $108,000. She argues that she requires $53,000 to fund the fees and expenses of Rudson in order to allow him to complete his analysis of the income of the Applicant. She further argues that she requires $50,000 to fund her prior and ongoing legal fees.
[66] The court may grant an order for interim disbursements under Rule 24 (18). The court’s discretion should be exercised in order to “level the playing field”, and it is not necessary to demonstrate that there are exceptional circumstances in order to make such an order. The claimant bears the onus of showing the disbursement is necessary and reasonable given the needs of the case and the funds available. The claims being advanced must be meritorious as far as can be determined on a balance of probabilities, and the claimant must be incapable of funding the requested amount.[^11]
[67] In cases where an interim disbursement is sought, it is also necessary that the payor have the ability to make the payment sought.[^12] The Applicant argues that he does not have the funds to pay the interim disbursement sought by Amanda. He points out that his income has been reduced substantially in 2018 in part as a result of the stress of these proceedings. He indicates that he has already been forced to deplete capital to fund the parties’ lifestyle during the marriage, and since the separation he has been required to borrow substantial funds from his father. He maintains that an order for interim disbursements would compromise his ability to pay support to the Respondent and to pay for the children’s expenses.
[68] The Applicant makes an alternative suggestion which would provide the Respondent with the funds she seeks. He points out that there is substantial equity in the matrimonial home. It is valued at approximately $3.5 million and, even taking into account the existing mortgage secured against the property of approximately $2 million, there is equity of at least $1.5 million in the property. The Applicant proposes that a line of credit be secured against the property and that each party be permitted to draw down approximately $100,000 on this line of credit in order to fund their expenses. In addition, he proposes that ER’s private school tuition for 2019-20 be funded out of this line of credit.
[69] The Respondent objects to this proposal on the basis that she does not believe there should be additional loans secured against the property. However in oral argument there was no reason advanced as to why proceeding with the line of credit proposed by the Applicant would be inappropriate or cause prejudice to the Respondent.
[70] I have already noted that, given the limited record before me, it is difficult to resolve disputed issues of fact. This extends to issues relating to the Applicant’s capacity to fund the interim disbursement sought by the Respondent. Assuming a line of credit can be secured against the property, this would appear to provide a practical solution that would meet both parties’ objectives.
[71] Since the Respondent has not identified any concrete or specific prejudice that would flow from this proposal, I would order that the parties proceed with the line of credit in the manner suggested by the Applicant. The parties will cooperate in establishing the line of credit and will jointly bear any costs associated with putting it in place. Each party will be permitted to draw down up to $125,000 from the line of credit secured against the home, and will be responsible for funding interest costs associated with any amounts they themselves draw down. (I have increased the amount proposed by the Applicant so as to provide additional flexibility, and also to provide each party with a mechanism to access funds that may be needed to pay interest and other costs associated with the line of credit.) This obviates the need for the interim disbursement requested by the Respondent.
[72] I also agree that it would be appropriate to utilize the line of credit in order to fund ER’s private school tuition. The Applicant has further suggested that the parties’ share responsibility for ER’s school tuition for 2019 – 20 on a 50-50 basis. However, they have earlier agreed that the Applicant should be responsible for 75% of the s. 7 expenses for their children. I see no reason to depart from this apportionment and, accordingly, would order that the Applicant be responsible for 75% of the amounts borrowed in order to fund ER’s school tuition, with the Respondent responsible for the remaining 25%.
Order for Exclusive Possession of the Matrimonial Home
[73] The parties are agreed that the Respondent should be granted exclusive possession of the matrimonial home on an interim basis. The only area of dispute is with respect to responsibility for payment of the property taxes and house insurance on the matrimonial home, as well as the cost of repairs to the home.
[74] According to the financial statement filed by the Applicant (who is currently paying these expenses), the property taxes are approximately $1250 per month while the house insurance is approximately $700 per month. The Respondent argues that these costs should be split equally between the parties, while the Applicant argues that the Respondent should be entirely responsible for them.
[75] The Respondent has filed a financial statement indicating that her monthly expenses are currently approximately $14,215 per month. The child and spousal support that I am ordering will provide her with approximately $9300 per month, before taking into account income taxes payable on the spousal support she will be receiving. The Respondent argues that she is not in a position to fully fund the property taxes and home insurance, in addition to the other monthly expenses for herself and her children.
[76] Normally a recipient of child and spousal support is expected to utilize that support to fully fund his/her ongoing expenses, including the cost of housing. However it is clearly in the best interests of the children to remain in the matrimonial home for the present time, and I accept the Respondent’s submission that she will not be not in a position to fully fund the costs associated with the matrimonial home with the income stream that she will have available to her. Therefore as an interim measure I would agree that the property taxes and house insurance on the matrimonial home should be split equally between the parties, pending further court order. The Respondent will be responsible for all other costs associated with the matrimonial home.
[77] Although the details are not entirely clear, it appears that there are certain repairs that are needed to the matrimonial home. The parties bear equal ultimate responsibility for these costs. I leave it to the parties to settle between themselves how these costs are to be funded in the short-term, on the basis and understanding that all such home repair costs will be shared equally by the parties through equalization of net family property.
Other Matters
[78] Each party seeks an order for questioning of the other. I order that such questioning be conducted by no later than April 30, 2019.
[79] Rudson has set out certain information required in order to complete his analysis of the Applicant’s income for support purposes. The Applicant is to provide the information requested within 30 days, or to explain why such information is unavailable.
[80] All other relief sought by each party in their respective motions is hereby dismissed.
Disposition
[81] An order will issue as follows:
a. on a temporary basis, the children of the marriage, namely, ER (born October 1, 2014) and HR (born October 10, 2017), shall reside primarily with the Respondent, and shall have parenting time with the Applicant in accordance with the following two-week rotating regular residential schedule:
i. Week 1
Tuesday with the children from 3:45 PM to 6 PM;
Thursday with the children from 3:45 PM to 6 PM;
Friday overnight with ER at the Applicant’s residence from 5 PM on Friday to Saturday at 5 PM;
Friday with HR from 5 PM to 7 PM; and
Saturday with HR from 11 AM to 1 PM.
ii. Week 2
Tuesday with the children from 3:45 PM to 6 PM;
Thursday with the children from 3:45 PM to 6 PM;
Saturday overnight with ER at the Applicant’s residence from 5 PM Saturday to Sunday at 5 PM;
Saturday with HR from 5 PM to 7 PM; and
Sunday with HR from 11 AM to 1 PM.
b. On a temporary basis, during each of the Applicant’s above-noted overnight parenting times, he will facilitate one telephone call or one Face Time call between ER and the Respondent, to occur at 7:30 PM, and for a duration of no more than 10 minutes;
c. on a temporary basis, during each of the Respondent’s overnight parenting time with the children, she will facilitate one telephone call or one Face Time call between ER and the Applicant, to occur at 7:30 PM, and for a duration of no more than 10 minutes;
d. on a temporary basis, pursuant to the above-noted regular residential parenting schedule, all pickups and drop-offs of the children shall occur at the matrimonial home, with the Applicant to be responsible for all such pickups and drop-offs;
e. no custody and access assessment pursuant to s. 30 of the CLRA shall be undertaken at this time;
f. on an interim without prejudice basis, the Applicant’s income for child and spousal support purposes is determined to be $300,000, and an income of $25,000 is imputed to the Respondent;
g. commencing February 1, 2019, and ongoing on the first of each month thereafter, the Applicant shall pay to the Respondent table amount child support for the children in the amount of $3877 per month, on an interim without prejudice basis;
h. commencing February 1, 2019, the Applicant shall contribute 75% of the children’s special or extraordinary expenses, pursuant to s. 7 of the Guidelines, with the Respondent to contribute 25% of such special or extraordinary expenses;
i. commencing February 1, 2019, the Applicant shall pay to the Respondent periodic spousal support in the amount of $5442 per month, on an interim without prejudice basis;
j. the above orders for child and spousal support are without prejudice to the parties’ right to seek an adjustment of such amounts retroactive to the date of separation;
k. the parties shall cooperate in establishing a line of credit secured against the matrimonial home, and share equally in the costs of establishing the line of credit. The parties will each be entitled to draw down up to $125,000 from any line of credit thus established, and each will be responsible for funding interest and other costs associated with any amounts they themselves draw down;
l. there shall be no order for interim disbursements at this time;
m. the parties may fund private school tuition costs for ER for the 2019-20 school year out of the line of credit to be secured against the matrimonial home. The Applicant will be responsible for 75% of any such amounts borrowed or drawn down, and the Respondent responsible for 25%;
n. the Respondent shall be granted temporary exclusive possession of the matrimonial home, known municipally as 338 Courtleigh Boulevard, Toronto, and its contents;
o. During the Respondent’s temporary exclusive possession of the matrimonial home, the parties will share equally the costs of property taxes and home insurance;
p. each party will make themselves available for questioning by the other by no later than April 30, 2019;
q. the Applicant will provide the information requested by Rudson in order to permit him to complete his analysis of the Applicant’s income within 30 days, or explain why such information is unavailable; and
r. all of the other relief sought on these motions is hereby dismissed.
[82] I direct the parties to attempt to settle between themselves the issue of costs. In the event that they are unable to do so, the Applicant will provide written costs submissions of up to three pages (excluding Bills of Costs and Offers to Settle) by February 7, 2019; and the Respondent will provide responding costs submissions on a similar basis by February 21, 2019.
P. J. Monahan J.
Date: January 28, 2019
[^1]: R.S.O. 1990, c. C-12 (the "CLRA").
[^2]: R.S.O. 1990, c. C-43.
[^3]: This is the schedule proposed in the Applicant's notice of motion. At the hearing, counsel for the Applicant provided the court with a draft of a proposed order setting out the relief he was seeking; this draft order contemplated three rather than four overnight visits between the Applicant and ER during the second week. However during oral argument it was indicated that the Applicant was seeking four overnight visits with ER during the second week, and this is the basis on which I have proceeded.
[^4]: However on Tuesdays the visit with ER would not end at 7 PM, since the Applicant proposes that ER stay overnight with him.
[^5]: 1996 CanLII 191 (SCC), [1996] 2 S.C.R. 27.
[^6]: R. S. C. 1985, c. 3 (2nd supplement). Even though the "maximum contact" principle is not explicitly referenced in the CLRA, it is a relevant and proper consideration in determining the best interests of the child: see Craig v. Torrance, 2018 ONSC 541 at paragraph 154.
[^7]: The Respondent relies upon Grant v. Turgeon, 2000 CanLII 22565 (Ont. S.J.) at paragraph 15. Nevertheless, the Court in Turgeon also noted that "the governing consideration is what is in the children's best interests".
[^8]: See Joan Kelly and Michael Lamb, "Using Child Development Research to Make Appropriate Custody and Access Decisions for Young Children", 38 Family and Conciliation Courts Review (2000) 297 – 311 at page 300.
[^9]: 2016 ONSC 5746 at paragraphs 45 – 53.
[^10]: Diab v. Cartwright, 2013 ONSC 5678 at paragraph 41.
[^11]: Ludmer v. Ludmer, 2012 ONSC 4478; Stuart v. Stuart, 2001 CanLII 28261 (ON SC), [2001] O.J. No. 5172 (Ont. SCJ).
[^12]: Ludmer at paragraph 52.