Court File and Parties

Oshawa Court File No.: FC-18-1539 Date: 20200416 Ontario Superior Court of Justice – Family Court

Between: Manon Guevremont, Applicant And: Kevin Pasternak (Guevremont), Respondent

Counsel: Robert Halpern/Jessica Brown, for the Applicant Michael Stangarone/Stephen Kirby, for the Respondent

Heard: February 27, 2020

Endorsement on Cross-Motions

Scott J.

Introduction

[1] In May 2019 the respondent husband brought a motion for the sale of the matrimonial home (registered in his name alone), also seeking certain terms regarding the conduct of the sale and treatment of its net proceeds.

[2] In response, the applicant wife brought a cross-motion for exclusive possession of that property, temporary spousal support (including a retrospective award), child support, both table amount and reimbursement of s. 7 expenses for three children that she alleges are “children of the marriage” (including a retrospective award), and payment to her of $150,000 for either interim disbursements or an advance on equalization.

[3] Due to the length of time required for oral submissions and a lack of court resources, these motions did not come before the court until the trial sittings in February 2020. It was anticipated in the governing case management order that this matter would proceed to trial in May 2020 but, due to the current extraordinary suspension of the Superior Court of Justice because of the novel COVID-19 outbreak, these sittings have been cancelled.

[4] The applicant brought a “short motion” on January 23, 2020, seeking the same relief as set out above but also served an offer to settle for $15,000. The respondent accepted this offer “on a without prejudice basis, subject to later characterization”. Counsel do not now agree as to the scope or effect of this payment and neither has been particularly clear in their submissions as to the impact this settlement ought to have on the relief now sought before this court.

Result

[5] Commencing April 1, 2020, the respondent shall pay the applicant $5,000 per month in temporary spousal support, retroactivity reserved. Retroactivity of child support, both table amount and s. 7 expenses are reserved. The balance of the applicant’s cross-motion is dismissed. The respondent is granted exclusive possession of the matrimonial home and is permitted to list it for sale forthwith and accept any reasonable agreement of purchase and sale without the written consent of the applicant, on condition that copies of any such documents are provided to the applicant. From the net proceeds of sale, the sum of $100,000 shall be paid forthwith to the applicant and another $100,000 shall be paid immediately thereafter to the respondent. Any balance remaining from the net proceeds of sale is to be held in trust by the solicitors acting on the sale, unless the parties agree otherwise. Costs are reserved.

Background

[6] The applicant wife, now 45 years of age, and the respondent husband, now 46 years of age, met in November 2010, commenced cohabitation in December 2010, and married on April 4, 2011. There are no biological children born of the marriage.

[7] The parties now agree that they separated on the 13th day of July 2018.

[8] The applicant has two biological children from a previous marriage; Melanie, born December 22, 1992, and Matthew, born April 19, 1995. The children’s biological father is Dean Poirier, whom the applicant divorced in 2001. Thereafter, the applicant was in a long-term relationship with Bruce Broom, which ended in early 2010.

[9] The respondent also had a previous long-term relationship which produced two biological children, Kyle, who is currently 28 years of age, and Tyler, who is currently 26 years of age – both of whom are now independent.

[10] Since 2015, the applicant has mostly resided in the Dominican Republic with intermittent returns to Canada (for a week, approximately every few weeks or so). The applicant is engaged in humanitarian work in the Dominican Republic, volunteering (she is not employed) with an orphanage.

[11] Throughout this period, the applicant has either adopted or continues an “arduous and lengthy process” to adopt two children - namely, Darnley, born March 31, 2009, and Ashley, born June 12, 2011. The applicant’s affidavits are inconsistent on whether either adoption has been finalized and no adoption documents have been filed in the court record to this point.

[12] It is hotly contested between the parties as to the respondent’s degree of knowledge and participation in these adoptions. At this point it has been demonstrated that he has signed no adoption applications nor any related documents, and he has only visited these children on one occasion.

[13] The applicant’s son, Matthew, who is just turning 25 years of age, resided with the parties during their period of married cohabitation and returned to the home for holidays until the summer of 2019. As well, until the latter months of 2019, he attended Ohio Malone University “on a full scholarship for football”. His continued “dependency” and whether the respondent ever stood “in loco parentis” to him is hotly contested between the parties.

[14] The respondent is now the sole owner and shareholder of a numbered company which carries on business as “Popeye’s Supplements”. Prior to marriage, the respondent and a business partner owned two such franchises, a third was acquired during the marriage after the business partner was bought out, and a fourth after the marital separation. Prior to separation, the applicant was noted as an employee of the corporation and a salary and reimbursement of expenses was assigned to her – whether she received the renumeration is contested between the parties.

[15] Recently, the respondent has delivered an Income Report and then a Business Valuation Report for the above noted corporation. The applicant seeks disclosure of the supporting documents in order to obtain critiques of these opinions.

[16] The applicant also owned four businesses, apparently prior to marriage and perhaps operated during the marriage. There is little information before the court as to the current operations or income flow of these companies.

[17] Since approximately 2015 to the date of separation, the respondent says that he was advancing money to a real estate broker in the Dominican Republic to facilitate his and the applicant’s purchase of certain properties. The applicant does reside in a condominium in the Dominican Republic which she may occupy on a “rent to own” arrangement. Apparently, she has a bank account and motor vehicles there, but these assets have not been described in her financial statement.

[18] After separation, the respondent has continued to reside in the matrimonial home (registered in his sole name) where he maintains his work office. He complains that the applicant does not contribute to the expenses of the home (which includes mortgage payments of $2,958 biweekly), has allowed both of her adult children to enter the home without his permission, and has attended the home herself without notice, threatening to have him charged with assault. The applicant did obtain police assistance to enter the home in 2018.

[19] The applicant alleges that the respondent has been abusive towards both herself and her son Matthew, although the allegations appeared to be in the form of threats to remove her from the home, stop paying the mortgage, and/or having the property sold. The applicant’s son reports that the respondent has blocked his access to the home and called him derogatory names. Further, the applicant complains that the respondent has not maintained the property, allowing garbage and dead animals to accumulate on the porch and in the backyard.

[20] The respondent acknowledges that he had changed the residence’s locks and installed security cameras. The respondent says these measures were taken to ensure no damage or false criminal charges result due to the incursions into the home by the applicant, her children and her friends. The respondent insists that he has maintained the home properly, including replacing a furnace at his own expense, securing a damaged gate, and moving food from a broken freezer.

[21] The respondent alleges that some other repairs to the home have been hampered by the applicant. For example, the replacement of a leaking toilet that caused water damage, was hampered by the applicant’s refusal to remove her numerous cats from the property so that the property’s insurer could authorize the completion of the necessary work.

[22] Both parties now allege exigent financial circumstances.

[23] The applicant reports that she has received no financial support from the respondent for herself or the children. She insists that she has no income from employment or from any of her businesses. The monies that flow through her bank account are not hers but are from the “Bridges of Hope” charity to fund the operation of the orphanage.

[24] In order to meet her day-to-day living expenses in the Dominican Republic, pay for private school tuition for her daughters, purchase medication for the elder child and assist Matthew, she has incurred loans from family and friends in an amount approaching $340,000. Without an award for interim disbursements or an advance on her entitlement to equalization of family property, she will not be able to fund the necessary business valuation critiques or the legal fees to continue the litigation.

[25] According to the respondent, the income analysis prepared by his business valuator demonstrates that his corporate income has decreased significantly in recent years due to increased competition in the marketplace. In order to maintain living and house expenses and flow money to the applicant, the respondent has now distributed all the capital/retained earnings of the company. The respondent describes his business as currently having no net equity with most of the corporate assets being inventory, required to be sold in the business’s operation.

[26] Consequently, he says he must liquidate the equity remaining in the matrimonial home as he has now incurred debt to the extent that lenders will not extend further credit to him. Recently, he has borrowed approximately $60,000 from a family member in order to meet short-term obligations, including the settlement of the above noted short motion.

The Evidence

[27] Both parties have filed multiple affidavits herein but, despite the lengthy delay in hearing this matter, there has been no cross-examinations held.

[28] The applicant submits that in light of the respondent’s late concession of her position on the valuation date and the withholding of information pertaining to certain franchise, banking and corporate documentation, that the court should prefer her description of the facts over that of the respondent’s.

[29] It is not unheard of that a party, even after a number of months through the litigation process, will concede to the other party’s position on a date of separation. While this may be tactical rather than an assessment based on the evolving evidence, it does not, in my view, affect the litigant’s credibility.

[30] It is regrettable that the respondent’s affidavits have not been tested by examination, but a review of their contents does reveal consistent descriptions of events, a reasonable level of corroboration and at least at this point, considerable timely compliance with the court-ordered disclosure.

[31] Respondent’s counsel submits that the applicant has not produced an evidentiary base that can support the variety of relief that she seeks on a motion prior to trial. He points to the overall vagueness and inconsistencies, for example, the applicant’s changing description of whether her two daughters’ adoptions have been granted. Counsel notes the complete lack of any documentary corroboration in the applicant’s affidavits, for example, of the adoption process or of Matthew’s current school registration and invoices or receipts of his post-secondary expenditures since 2018. He emphasizes the applicant’s late and incomplete compliance with the last disclosure order of the case management judge.

[32] Due to the nature of the relief sought in the applicant’s motion it is incumbent on her to provide specific, detailed and accurate descriptions of her living circumstances, her needs, cash flow and assets, wherever situated. Her last affidavit and current financial statement are, in my view, deficient in these particulars. I find some of her descriptions, especially surrounding her duties and role at the orphanage, the history of the adoption process of her daughters and Matthew’s current education plan and the source of its funding, to be vague to the point of misleading. Consequently, I cannot, as counsel suggests, give the applicant’s evidence “more weight” than that of the respondent’s evidence.

Analysis

Did the respondent stand in Loco Parentis to the Children?

[33] Section 2 (1) of the Divorce Act defines a “child of the marriage” as a child of two spouses or former spouses, who at the material time:

(a) Is under the age of majority and who has not withdrawn from their charge; or

(b) Is the age of majority or over and under their charge but unable, by reason of illness, disability or other cause, to withdraw from their charge or to obtain the necessities of life.

Section 2 (2) of the Divorce Act provides that a “child of the marriage” in subsection (1) means a child of two spouses or former spouses and includes:

(a) Any child for whom both stand in the place of parents; and

(b) Any child for whom one is the parent and for whom the other stands in the place of a parent.

[34] In Chartier v. Chartier, [1999] 1 S.C.R. 242 (S. C. C.), Bastarache J. established the test for the above-noted finding, at para. 39:

[…] The court must determine the nature of the relationship by looking at a number of factors, among which is intention. Intention will not only be expressed formally. The court must also infer intention from actions, and take into consideration that even expressed intentions may sometimes change. The actual fact of forming a new family is a key factor in drawing an inference that the stepparent treats the child as a member of his or her family, i.e. a child of the marriage. The relevant factors in defining the parental relationship include, but are not limited to, whether the child participates in the extended family in the same way as would a biological child; whether the person provides financially for the child (depending on ability to pay); whether the person disciplines the child as a parent; whether the person represents to the child, the family, the world, either explicitly or implicitly, that he or she is responsible as a parent to the child; the nature or existence of the child’s relationship with the absent biological parent. The manifestation of the intention of the stepparent cannot be qualified as to duration, or be otherwise made conditional or qualified, even if this intention is manifested expressly.

[35] The applicant has demonstrated her worthy intention to establish a permanent legal relationship with the two children for whom she has been providing care in the Dominican Republic – whatever the current stage of the legal processes. However, the evidence that the applicant has presented of the respondent’s intention regarding these children is almost nonexistent.

[36] If the respondent had been participating in the legal adoption process it would have been a threshold requirement, in my view, that he had executed applications or other documents. His financial support of these children would have had to have been direct or demonstrably identified, that is “earmarked” as such, through payments to the applicant. Currently there is insufficient evidence of this before the court.

[37] Most worrying is the “limited”, some would say, nonexistent role, that the respondent has played in these children’s lives. It is common ground that he has only visited them once and apparently has never cared for or disciplined them. Civil greetings on FaceTime do not a parent make. There appears to be no evidence that the applicant could bring before the court that the respondent has held himself out to be these children’s parent.

[38] As Chartier, supra., directs, once this role is undertaken and the relationship established, it is a lifelong obligation which also provides rights to both the child and the parent. The applicant, whose onus it is, has not provided sufficient, persuasive evidence that the respondent formed the necessary connection with these children to stand in the place of a parent to them. The applicant’s claim for the respondent to provide temporary child support for these two children is hereby dismissed.

[39] While the respondent’s position is that the relationship between himself and the applicant’s biological son, Matthew was “not close”, there is at least some uncontradicted evidence that for a number of years, the respondent and Matthew resided in the same home, interacted with each other and operated as a family unit until Matthew went away to school. The respondent in earlier years did fund some of Matthew’s school expenses and whether jointly with the applicant or not, did provide a motor vehicle for Matthew’s use.

[40] It is very likely, therefore, that the respondent formed a parental relationship with Matthew. The difficulty in confirming the existence and extent of the respondent’s obligation to this young man is that there is almost no evidence, other than confirmation that they exist, relating to the roles of Matthew’s biological father and “first” stepfather. The applicant, whose onus it is, has provided virtually no information as to the current financial circumstances and willingness of these two other parents to provide assistance to Matthew. It may be, subject to below, that the respondent is just as, or even more, obligated to provide support to Matthew as are these two other father-figures, but at this point, that is impossible to determine.

[41] The greatest deficiency in the applicant’s evidence to establish the respondent’s obligation to provide support for Matthew, turning 25 years of age this month, is the complete lack of description, let alone corroboration, that Matthew continues in a full-time program of education – that is, to establish that Matthew remains “a dependent” entitled to ongoing child support. Even if Matthew’s course of studies continued into the 2020 academic year, the applicant has provided no budget to demonstrate that Matthew’s former “full scholarship” does not provide all or most of his academic and living expenses.

[42] It may be that the applicant will establish a retroactive claim for “summer table amount” child support for part of July and August 2018 and an additional four months entitlement for 2019, but this calculation must be adjourned to trial. Similarly, any claim for the respondent to participate in provision of past s. 7 expenses will require the applicant to establish at trial those expenditures and demonstrate the contribution, or the reasons for lack thereof, from Matthew’s two other fathers.

[43] For these reasons, the applicant’s claim that the respondent pay temporary, ongoing child support, table amount and contributions to s. 7 expenses for Matthew is hereby dismissed. The issue of retroactivity is adjourned to trial.

Exclusive Possession of the Matrimonial Home

[44] As the respondent holds title to the matrimonial home in his name alone, he does not require an order for partition of the property, but he must be able to market it and provide vacant possession to any prospective purchasers.

[45] The applicant now seeks an order of exclusive possession of the home in order to have ongoing access to the property, allow Matthew a “place to live during the summer”, and establish an address so that her daughters’ adoptions can be completed (for them to be legally permitted to leave the Dominican Republic and enter Canada).

[46] There is evidence before the court that:

(i) The applicant has resided primarily in the Dominican Republic since sometime in 2015, she returns to Canada every six weeks or so, and stays approximately one week.

(ii) The respondent has continued to reside in the home since the separation and operates his business from an office there.

(iii) Both before and after the separation, the respondent paid, without contribution from the applicant, the maintenance and carrying costs of the home, which currently include mortgage payments of approximately $2,900 biweekly.

(iv) Both parties accuse the other of “abusive” behaviour, including threats of criminal charges and “losing everything” in the litigation. The applicant says the respondent has threatened both herself and her son and used derogatory language towards Matthew. The respondent says that in March 2018, the applicant actually physically assaulted him.

(v) Both parties allege that the other has failed to maintain the property, caused damage to it and/or its contents and left chattels, personal effects and garbage strewn through and outside the property, thereby diminishing its value.

(vi) Since the latter part of 2019, Matthew has living accommodation elsewhere and only attends the home intermittently.

(vii) It is uncontroverted that the applicant’s two daughters have never been in Canada, let alone the home.

[47] Subsection 24 (2) of the Family Law Act, R.S.O. 1990, c. F.3, allows the court to award a spouse exclusive possession of the matrimonial home on an interim basis. Subsection 24 (3) sets out the criteria for an exclusive possession order, which includes:

(a) the best interests of the children affected;

(b) any existing orders under Part 1 and any existing support orders or other enforceable support obligations;

(c) the financial position of both spouses;

(d) any written agreement between the parties;

(e) the availability of other suitable and affordable accommodation; and

(f) any violence committed by a spouse against the other spouse or the children.

[48] As indicated above, there are some deficiencies in the current evidence before the court that Matthew remains a, “child of the marriage”. Even if Matthew’s continuing dependence is later established, he has resided away from the home at school for a number of years. To maintain this property for Matthew’s holiday use would not be financially responsible and consequently not in his best interest.

[49] While it may be that the applicant must provide a residential address to complete her daughters’ adoptions and obtain appropriate permission to enter Canada, there is no evidence whatsoever when this may occur. It is obvious that these children have no past life experience residing in this property. They would have no additional sense of security in residing at this home as opposed to any other reasonably alternative accommodation. Their best interests are not, therefore advanced, by an order of exclusive possession for this property.

[50] Due to the current structure of the property’s mortgage, its monthly payments are considerable, in excess of $7,000 per month. The property is a single-family dwelling; it is unnecessarily large, certainly for the respondent living alone but also for the applicant and the two young children, whenever they may be able to arrive in Canada. There is no evidence before the court that Matthew would return to reside primarily in this home. In short, this is too much house and too expensive to maintain so that the availability and cost effectiveness of alternative accommodation is very likely.

[51] A court always takes seriously allegations of abuse or threats by one spouse against another or to a child – even a child who has reached age of majority. It is obvious that the tensions arising from the parties’ disintegrating marriage and then separation have caused each of them to act without civility to the other, to use intemperate language and attempt to coerce the other to abandon the home through words and “self-help” manipulations of the property. The evidence establishes that it would not be appropriate for the parties to continue to share the residence or to leave the issue of its legal possession undetermined.

[52] An order of exclusive possession is not granted to punish the misdeeds of a spouse; it is made to ensure the personal safety and/or security of the vulnerable spouse. I do not find the allegations of the respondent’s alleged misbehaviours sufficiently “dangerous” to grant the applicant exclusive possession of the property – especially when she resides so infrequently there.

[53] For these reasons, I find that the applicant has not met the threshold to obtain an order of exclusive possession.

Is the Applicant Entitled to Spousal Support?

[54] Respondent’s counsel urges that the applicant is not entitled to spousal support on either compensatory or non-compensatory grounds. He submits that the applicant has not been disadvantaged by the marriage which allowed her to “incur further assets and strengthen her financial position.” Further, she has not established “need” due to her own vagueness as to her true living and financial circumstances, with the current lack of documentary disclosure.

[55] The applicant submits that the respondent’s “financial abandonment” of herself and her children has placed her in desperate circumstances, unable to pay her “rent” and requiring her to incur approximately $340,000 in debt, although she has not specified when and where she has applied these funds. I considered the respondent’s position that the applicant’s lack of disclosure should disentitle any award of support until her full means as well as income could be explored at trial (for example, by tracing monies that have flowed through her CIBC bank account or through the previously ordered Equifax report). However, the trial has been delayed for a number of months.

[56] The respondent does acknowledge providing a credit card to the applicant and settling the charges incurred thereon, which he now characterizes as “charitable donations”. The respondent was aware that the applicant was continuing her volunteer duties at the orphanage, that is, unpaid work, both before and after the separation. For a number of years, the respondent acquiesced to this arrangement. Even if he remained uncertain as to the specifics of the expenditures on the credit card, it is obvious that prior to the separation, the respondent was underwriting at least a portion of the applicant’s living expenses.

[57] While this marriage cannot be described as “traditional”, the roles assumed and acquiesced to by both spouses did include the respondent being the primary wage earner and the applicant, despite her previous business background, generating less income from her own resources and only being “nominally” employed in the respondent’s business – which position the respondent ended around the date of separation.

[58] This long-standing arrangement between the parties meets the threshold for a temporary order of spousal support on a combination of needs and compensatory basis. It may be that further evidence will reveal the extent of the applicant’s investment activity in the Dominican Republic which, with fruition, will ultimately lessen her needs-based support.

[59] It is troubling that the applicant, some 19 months after the separation and with no explanation proffered, has not obtained employment. This will very likely result in an imputation of income to her and/or the lessening of the respondent’s periodic obligation to provide funds.

[60] Given the length of the marriage and the applicant’s age at the date of separation, her compensatory entitlement to support may be found hereafter to be brief in duration and “transitional” in nature. These are issues to be determined at trial on a full record.

[61] At this point, I am satisfied that the applicant requires reestablishment of the financial assistance that traditionally flowed to her prior to the separation. As noted by McGee J. in Menchella v. Menchella, 2012 ONSC 1861, at para.35:

The role of the Court on a temporary motion is limited to awarding support that is fair and reasonable that meets the needs of the disadvantaged spouse as best as possible based on the then apparent ability to pay of the other spouse. Huska v. Adams, [2009] O. J. No. 1617 (Ont. S. C. J.).

What is the Respondent’s Income for Spousal Support Purposes?

[62] Applicant’s counsel submits that the respondent’s income for support purposes should be fixed at $377,551, being the dividends that the respondent has paid out to himself over a 10-month period in 2019 from his solely owned corporation.

[63] The difficulty with this approach is that it does, as respondent’s counsel suggests, relate to pre-tax retained earnings of the company, generated in previous years, some of which will be characterized as an asset of the corporation and subject to equalization. This mischaracterization of cash flow as income to the respondent would result in a “double counting” and ignores the tax cost issue.

[64] Respondent’s counsel submits that the court can rely on the recently received expert analysis of the respondent’s income which fixes his 2019 income at $157,000 – decreasing in each year according to the opinion as a result of increased competition in the marketplace. Counsel does not explain why the income earned in the year after separation would be appropriate for the calculation of the respondent’s spousal support obligation.

[65] The difficulty with this approach is that, firstly, it begs the question as to why the respondent incurred further debt to acquire additional franchises (including another post separation) if the company’s income was on a downward trend and the flow of income to the sole owner, the respondent, was reduced in each year – especially since the separation. The respondent’s income in 2016 was $223,117 (NOA), in 2017 was $199,717 (NOA), and projected in 2018 to be $185,600 (T5).

[66] Secondly, the expert’s opinion is currently untested and while some personal/discretionary expenses have been added back and “grossed up for tax”, this “add back” may be found to be insufficient or omitting reassignment of the purchase price of personal chattels. The applicant’s counsel also previously identified alleged deficiencies in the treatment of amortization expenses and a failure to add back the wife’s unpaid income (if so found).

[67] In light of these potential deficiencies, the expert’s opinion may not be the “best evidence” of the respondent’s ability to pay spousal support, given the analysis required as described in paragraph 61 above.

[68] In reviewing the undated chart included as an exhibit to the respondent’s last affidavit, I note that the personal spending of both parties was well in excess of the income projected by the expert or reported in the respondent’s NOA’s, even if one takes into account (strictly from a “cash flow” point of view) the respondent’s recent drain of the company’s retained earnings.

[69] This does, in my view, allow a court attempting to determine an “apparent ability to pay” to consider the provisions of Sections 18 and 19 of the Child Support Guidelines – often applied to calculations of spousal support, to “pierce the corporate veil” and recharacterize expenses of the company (not identified as retained earnings) as money available for the payment of support.

[70] While it is impossible to precisely recalculate using the limited raw data available, it would seem to me that a conservative estimate of the respondent’s income in the year of separation (now determined to be 2018), is or ought to be, in the range of $300,000 - (that is, with some additional personal expenses paid by the company, grossed up for tax and a potential for some of the 2018 amortization expense to have been available to be paid out to the respondent as income.

[71] If the Suggested Spousal Advisory Guidelines (SSAG) are calculated using the above-noted attribution, with no imputation of income to the applicant, the monthly ranges are low: $2,812, medium: $3,281, and high: $3,750 – the latter representing allocation of the parties’ net disposable income to the applicant of just under 20%. This ratio results from the use of the “without child” formula for a period of married cohabitation “rounded up” to 7.5 years.

[72] The applicant seeks temporary spousal support of $7,770 per month, (calculated by use of the SSAG “with child” formula and based on attributing to the respondent a higher income than can be demonstrated on the current evidence before the court). There was no reference to the applicant’s specific circumstances or budget in this choice of the mid-range calculation.

[73] It is impossible to precisely estimate the applicant’s monthly personal living expenses given the lack of detail in her budget as currently presented, but to be fair, also with its emphasis on her daughters’ costs. While there is a concerning lack of specificity of where loan advances from family and friends have been applied, the applicant has persuaded the court that she has incurred debt to meet ongoing living expenses since the separation.

[74] It would appear from the expenses that the applicant has itemized that even the high range of the SSAG noted above would be insufficient to fund her ongoing obligations in the Dominican Republic. In my view, she will have little choice but to obtain paid employment.

[75] On a temporary motion, a court can consider the frailties of the SSAGs and contrast the proposed ranges to an analysis in compliance with the criteria set out in the Divorce Act, R.S.C., 1985, c. 3, Subsection 15.2 (4):

FACTORS - In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including:

(a) the length of time the spouses cohabited;

(b) the functions performed by each spouse during cohabitation; and

(c) any order, agreement or arrangement relating to the support of either spouse.

[76] For a number of years of their marriage, the parties established an arrangement where the respondent generated the family’s income in Canada and the applicant maintained a residence and charitable work in the Dominican Republic which the respondent assisted to fund. It would appear that the applicant sacrificed her previous capacity to independently earn income and the respondent acquiesced to this, at least prior to the parties’ separation. While the respondent may not have participated in the applicant’s plans to adopt the two children, he was aware that the applicant was taking steps to parent them. All these circumstances must be accounted for in a determination of the applicant’s financial needs.

[77] For these reasons, I am of the view that even the high range of the SSAG, noted at paragraph 71 above, does not adequately address a “fair and reasonable” amount of temporary spousal support, taking into account the factors set out in paragraph 75, above.

[78] Further, I am satisfied that the respondent can afford a re-allocation of the net disposable income currently available to the parties, at least until there is an analysis based on better evidence at trial. While it may be later determined that this order is a “front-end load” of the respondent’s obligation to pay final spousal support to the applicant, there will be a temporary order, fixing monthly support payable by the respondent to the applicant in the amount of $5,000, commencing April 1, 2020. Retroactivity is reserved.

Is the Applicant Entitled to Receive Interim Disbursements or an Advance on Equalization?

[79] The applicant seeks an order requiring the respondent to pay her $150,000 within 30 days as an interim disbursement or as an advance against the equalization payment owing by him, for which he will receive a credit in these proceedings.

[80] Rule 24 (18) of the Family Law Rules provides as follows:

The court may make an order that a party pay an amount of money to another party to cover part or all of the expenses of carrying on the case, including a lawyer’s fees.

[81] In Stuart v. Stuart (2001), 24 R.F.L. (5th) 188 (Ont. S.C.), at para. 8, Rogers J. summarized previous caselaw relating to interim disbursements.

[8] The themes in the case law concerning interim disbursements in Canadian jurisprudence are as follows:

1. The ordering of interim disbursements is discretionary: Airst v. Airst, [1995] O. J. No. 3005 (Ont. Gen.Div.); Hill v. Hill (1988), 63 O. R. (2nd) 618 (Ont.H.C.) and Lossing v. Dmuchowski, [2000] O. J. No. 837 (Ont. S. C. J.).

2. A claimant must demonstrate that absent the advance of funds for interim disbursements, the claimant cannot present or analyze settlement offers or pursue entitlement: Hill v. Hill (1988), 63 O. R. (2nd) 618 (Ont. H. C.) and Airst v. Airst, [1995 ]O. J. No. 3005 (Ont. Gen.Div.).

3. It must be shown that the particular expenses are necessary: Lossing v. Dmuchowski, [2000] O. J. No 837 (Ont.S.C.J.)

4. Is the claim being advanced meritorious? Lynch v. Lynch (1999), 1 R. F. L. (5th) 309 (Ont. S. C. J.) and Randle v. Randle (1999), 1999 ABQB 954, 3 R. F. L. (5th) 139 (Alta. Q. B.).

5. The exercise of discretion should be limited to exceptional cases: Organ v. Barnett (1992), 11 O. R. (3d) 210 (Ont. Gen. Div.).

6. Interim costs in matrimonial cases may be granted to level the playing field: Randle v. Randle (1999), 1999 ABQB 954, 3 R. F. L. (5th) 139 (Alta. Q. B.).

7. Monies might be advanced against an equalization payment: Zagdanski v. Zagdanski, 2001 CarswellOnt 2517 (Ont. S. C. J.).

[82] While the parties disagree on the exact amount owed, the respondent appears to acknowledge that the applicant will be entitled to an equalization payment, although much less than the applicant now estimates. Further, as set out above, the applicant has achieved the threshold of entitlement to spousal support. These claims can both be characterized as “meritorious” so that the applicant has met the criteria in para 8 (4) of Stuart, supra.

[83] The value of the respondent’s business and the income available to be flowed therefrom will be central findings required in this case. The applicant has identified, upon first review of the respondent’s expert’s analysis of his income and the report of his company’s value, potential areas for challenges of those opinions.

[84] Therefore, the necessity of some expenditure for a critique of these reports has been made out. However, in Goddard v. Goddard, [2009] O.J. No. 1293, Kershman J. noted at para. 35 that the claimant must demonstrate that the disbursements are necessary and reasonable given the circumstances of the case and the funds available (emphasis my own).

[85] The respondent’s business, while having four physical locations, is a single numbered company with no associated affiliates, with one shareholder, owning no real estate nor any other assets requiring problematic valuations. Its gross revenues and types of expenses have been fairly consistent throughout the period to be reviewed and have never been counted in the tens of millions of dollars (in contrast see: Bagheri-Sadr v. Yaghoub-Azari, 2011 ONSC 611).

[86] The applicant has amended her original request for requesting the respondent advance money for a critique of one report from $5,000, to now presenting an estimate of her chosen expert’s retainer at between $50-$75,000. Few details were provided of the tasks to be undertaken within the scope of this review. In light of the lack of complexities in the corporate structure and assets set out above, this estimate does not meet the threshold of “reasonable”, especially when the applicant seeks an additional $75,000 – presumably for ongoing legal fees.

[87] The respondent says he lacks the funds to provide such an advance to the applicant. He has produced some recent evidence with some documentary corroboration, albeit untested, that the company’s retained earnings accumulated over the last few years have been substantially depleted. The respondent has also demonstrated that at least one financial institution will extend him no further credit. These circumstances must also be factored in to the determination of whether the applicant has satisfied the onus in Goddard, supra. In my view, the applicant has not done so.

[88] Unlike the respondent, the applicant has provided virtually no details relating to the current financial status of the companies she owns and the assets she may have acquired in the Dominican Republic since 2015. While she has provided a list of debts she owes to various individuals, there is no accompanying loan documentation. Most troubling is a lack of corroboration of her credit status – the missing (although ordered) Equifax report or any communication from a bank or other financial institution that it will not advance funds to her.

[89] The “claimant’ seeking this exceptional order must demonstrate their impecuniosity, beyond a bald statement that advance of monies from the other party are necessary to “level the playing field”. I find that the applicant has not provided the above-noted essential evidence which would allow a court to order payment of interim disbursements or for the respondent to advance, prior to the closing of the “matrimonial home”, a portion of the applicant’s entitlement to equalization.

Sale of the Matrimonial Home

[90] As noted above, the respondent does not require an order of partition of this residence, as it is registered in his name alone. The respondent has persuaded that this property should be sold without delay based on the financial needs reported by both parties.

[91] For the reasons outlined in paragraphs 46 to 52 above, it would not be prudent to leave undetermined the rights of the parties or their designates to attend or enter this property. It will be necessary for the respondent to maintain the home appropriately in order to facilitate its marketing and sale. Consequently, the respondent shall have exclusive possession of the matrimonial home.

[92] This property must be sold as soon as possible – in a market with new and unusual challenges. The respondent shall have permission to list the home for sale immediately without the necessity of the applicant’s written consent, although he must inform and provide copies of any and all listing agreements. As the applicant may have some difficulty in attending in Canada and the parties allege that the communication between them is threatening and abusive, the necessity of the applicant’s consent to any agreement of purchase and sale is hereby dispensed with.

[93] The applicant has shown an intent to obtain a critique or second analysis of the respondent’s income and business valuation. She will need funds for these disbursements and legal fees but these, in my view, must be proportionate to the amounts in issue and the likelihood of a positive financial recovery.

[94] Consequently, from the net proceeds of the matrimonial home sale, the applicant shall be entitled immediately to a $100,000 payment made out to her as an advance on her entitlement to an equalization of net family property. The respondent may also receive $100,000 from the net proceeds of sale. The balance shall be retained in trust by the solicitors acting on the sale, unless the parties agree in writing otherwise.

Costs

[95] The respondent has been more successful on the cross-motions than the applicant and is presumptively entitled to some of his costs. If, within 21 days hereof, the parties cannot agree on the issue of costs, the respondent shall serve and file by email to my judicial assistant, costs submissions of no more than four typewritten pages, exclusive of any offers to settle and a cost outline. Within 21 days thereafter, the applicant shall serve and file responding costs submissions, of similar length and format. Any brief reply submissions shall be served and filed within 10 days thereafter.

[96] Considering the circumstances created by the COVID-19 emergency, this Endorsement on cross-motions is deemed to be an Order of the court that is operative and enforceable without any need for a signed or entered formal typed order.

[97] The parties may submit a formal order for signing and entry once the court re-opens; however, this endorsement is an effective and binding Order from the time of release.

The Honourable Justice M.A.C. Scott Released: April 16, 2020