COURT FILE NO.: FS-559-16
DATE: 2019-02-05
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
AGNIESZKA NIEMIEC
Applicant
– and –
RAFAL NIEMIEC
Respondent
Charles Mota, Counsel for the Applicant
Lukasz Szymura, Counsel for the Respondent
HEARD: January 29, 30 and 31, 2019
THE HONOURABLE MR. JUSTICE P.J. FLYNN
REASONS FOR DECISION
The Trial
[1] This trial tackled two issues: determining the Respondent’s income for Child Support (including s.7 expenses) and Equalization of Net Family Property.
[2] The parties are stuck in their positions. Several settlement conferences, including a mid-trial one, have not budged them.
[3] After the evidence was in and counsel had made their submissions on those issues, Applicant’s counsel, almost as if an afterthought, casually suggested that the parties would also like a divorce. The Applicant seemed surprised that she hadn’t sought one in her Application. The parties were then relieved to discover that the Respondent had sought a divorce in his Answer.
[4] But neither party had led any evidence or made any submissions with respect to this elusive trophy. Nor did the Respondent ask to re-open his case so as to accomplish this goal. So the claim for divorce must fail here, without prejudice to the parties moving forward with an uncontested divorce application. To that end, I hereby sever that quest from the collateral issues with which I am herein dealing.
[5] This was not the only gap in the evidence or agreement. Counsel seemed not to understand that the rules of evidence applied to family law cases. For example, one ingredient in the equalization mix was the value of the 2015 Kia motor vehicle used exclusively by the Applicant prior to separation and retained by her after that time (March 26, 2016). For equalization purposes, that value should be in “her column” of the value of assets owned on valuation date. She had dominion and control of the vehicle.
[6] The Applicant testified that the Kia’s value was $23,000, on valuation day, based on a July 23, 2016 appraisal given to her by Kitchener Kia, the business from which the Kia was purchased and where it was regularly serviced.
[7] To that end, Applicant’s counsel presented to the court, as evidence, a Customer Appraisal Summary for the Kia. Of course, that document was pure opinion hearsay.
[8] The Respondent disagreed with the document’s conclusion but did not object to its admission. No one from Kitchener Kia was called. The difference in the parties’ valuation of the Kia is $5,000.
[9] Anyway, much of the trial stumbled on in that fashion. I am left to sort ill-advanced argument often based on a wobbly factual foundation.
[10] Only the parties testified.
[11] Of course, as is the case in many matrimonial squabbles, credibility of the main combatants plays a not insignificant role in my determinations. And mainly because of the evidence given by the parties on the question of whether the Respondent, an independent flooring installer performed under the table cash jobs, not reported on his Income Tax Returns, wherever the testimony of the Applicant differs in any material way from that of the Respondent on any given point, I prefer the Applicant’s evidence.
[12] And with particular regard to the question of cash jobs, I completely reject the Respondent’s evidence that he never did them and fully accept the Applicant’s evidence that a substantial amount of the Respondent’ work was for cash under the table. After all, she did the books when they were together and said that there was always lots of cash in the house. The Respondent denied all of this. But me thinks the man protested too much. It is a notorious fact that small operators in the construction trades often offer to do jobs for two different prices – one with or one without a receipt. By not conceding he did any cash jobs, the Respondent has thrown his credibility to the wind. I don’t believe him.
The Circumstances
[13] The parties were married on April 30, 2005 and separated March 29, 2016.
[14] There are three children of their marriage:
Daniel Niemiec, (13) born November 5, 2005
Patrick Niemiec, (11), born August 17, 2007 and
Conrad Niemiec (9), born June 26, 2009, collectively, “the boys”.
[15] The boys are with their mother. The parties have previously resolved all parenting issues, save for child support, including s.7 expenses.
[16] Both parents say the boys are doing fine with the current parenting arrangements.
[17] Spousal support is no longer an issue. The parties have also agreed that for the purposes of the determination of s.7 expenses for the boys, the Applicant’s income be imputed at $28,000 per annum.
[18] Until the Family Responsibility Office began to enforce temporary child support orders, the Respondent was not willingly providing financial support for the boys.
The Respondent’s Income
[19] Prior to separation, even by his tax returns, the Respondent seemed to do well at his work.
[20] His gross business income for 2013 was reported at $113,322 (line 150 $45,465), for 2014 it was reported at $76,466 (line 150 $18,322) and for 2015 it was reported at $168,806 (line 150 $79,726). In the year of separation (2016) he reported gross income of $112,543 and then his reported income fell off to $89,630 in 2017. He reported income in 2018 as gross $49,876 and line 150 $22,661.60. Both preposterous in light of his stated expenses.
[21] The Respondent’s tax returns show expenses for meals and entertainment, telephone and utilities and capital cost allowance, which the Respondent concedes are not legitimate outlays for the business, and should be available to determine his income for child support purposes.
[22] The Applicant seeks to have the Respondent’s income imputed at no less than $120,000 per annum. She argues mainly that the Respondent is underreporting his actual income and asks that it be grossed up because of that and a further 35% because he is not paying appropriate taxes.
[23] The Applicant made several other arguments to buttress the $120,000 income claim. But the problem for this trier of fact is that no expert evidence was called by either side to justify or explain the proffered arguments. I find that the Respondent was indeed underreporting his income and overstating his expenses but have no rationale to illuminate the Applicant’s conclusion. In my view, the Applicant overreaches. Is their corroboration for either side?
[24] In September 2016, the Respondent bought a new pick-up truck worth about $49,000 and applied for a loan (Exhibit 16) where he disclosed gross business income of $129,000 per annum. And in August 2017, he applied for a mortgage claiming that he made $83,049 per annum.
[25] The truth is not to be found in any of these disclosure documents. So I must manufacture an imputation of income. Using the approximate ratio of line 150 income to gross business income found in respect of the Respondent’s 2015 reported income for tax purposes ($79,727 / $168,806) = where line 150 is approximately 50% of gross and using the gross business income stated in Exhibit 16 and the line 150 equivalent in Exhibit 17, I arrive at a line 150 equivalent of approximately $80,000.
[26] Then to account for both the underreporting of income and the excessive expenses claimed, I would round up this putative income to arrive at an imputed income for support purposes in 2016 of $90,000.
[27] I take the Respondent’s testimony to mean that he will do better starting this year.
Child Support
[28] The table amount for three children on $90,000 is $1,764. So, for the 34 months from separation, the Respondent should have paid $59,976 in table support.
[29] In addition, the Applicant seeks $4,439 in contribution toward s.7 expenses and the Respondent agrees with all of those expenses claimed except for Bible camp. I would allow the Bible camp expense as well as the others claimed.
[30] Based on the Applicant’s imputed income of $28,000, the Respondent was responsible for 76% of those s.7 expenses and should have paid $3,374.
[31] So, since separation, the Respondent should have paid $63,350 in child support, including s.7 expenses.
[32] Since separation, the Applicant concedes that the Respondent contributed $4,185 to child support by deposits into their joint account; $1,530 in August 2017 and $22,207 through FRO. In addition, the Respondent paid a further $1,000 towards s.7 expenses. Accordingly, the Respondent should have credit for $28,922.
[33] By my estimation, therefore, child support “arrears” stand at $34,428.
[34] Going forward, the Respondent shall pay to the Applicant for the boys, table support in the amount of $1,764 per month in addition to 76% of the claimed s.7 expenses. Those claims must only be made when disclosed to the Respondent before any expenditure is made by the Applicant.
Equalization of the Net Family Property
[35] In the presentation of the case, the parties kept losing themselves in unimportant details.
[36] In the big picture, the matrimonial home sold in July 2016 for net proceeds of $90,688.28, meaning that both sides should show $45,344.14 in their assets column. The Applicant owned the Kia and must count that asset at $23,000.
[37] I accept the worth set out by the Respondent for the Ford F150 ($5,000), and the tent trailer ($2,500) and the tools ($0.00).
[38] The parties’ joint account had a balance at separation of $912.81 attributable to each. The Applicant had an insurance policy with a cash surrender value of $1,153 at separation. And the Respondent had visa points worth $1,386.
[39] For a reason not explained to me, the Respondent doesn’t claim the Kia loan as a debt on valuation date, but it so existed then in the amount of $29,470.36, even though it has since been paid down by $20,000 from the house proceeds. The Respondent can also claim $4,929.02 for his TD Visa account.
[40] So when the valuation date properly attributable debts are deducted from the proper value of the assets, the Applicant’s net family property should amount to $70,409.95 and the Respondent’s $20,743.12.
[41] This means that the Applicant must make an equalization payment to the Respondent of $24,833.12.
[42] The parties may use the net sales proceeds of the matrimonial home to effect both the equalization payment by the Applicant and to clear the retroactive support required by the Respondent.
Costs
[43] At the conclusion of the trial, both parties presented me with their written costs submissions in sealed envelopes. I have briefly reviewed them and have decided to hear oral submissions on costs. These are scheduled for April 5, 2019
P.J. Flynn J.
Released: February 5, 2019
COURT FILE NO.: FS-559-16
DATE: 2019-02-05
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
AGNIESZKA NIEMIEC
Applicant
– and –
RAFAL NIEMIEC
Respondent
REASONS FOR decision
P.J. Flynn J.
Released: February 5, 2019