Court File and Parties
COURT FILE NO.: FS-16-410685 DATE: 20200727 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Weidong Pei Applicant – and – Mu Chen Respondent
Counsel: Self-Represented (Applicant) Self-Represented (Respondent)
HEARD: January 6, 2020
Reasons for Decision
HOod J.
Background
1The parties married on December 30, 1996. They have two children – a daughter who is now 17 and a son who is now 10. In April 2016 the applicant father (AF) moved out of the matrimonial home on Wilfred Avenue in Toronto, although his position is that they actually separated on January 31, 2014 and they chose to live separate and apart under one roof for the benefit of the children.
2On February 8, 2018 Justice Goodman made a comprehensive temporary order as to parenting. The parties, however, have reached an agreement of their own, which varies from Justice Goodman’s order as to custody and parenting time.
3While the AF has had counsel from time-to-time, the respondent mother (RM) has chosen for the most part to act on her own behalf.
4On November 30, 2018 Justice Paisley made an order requesting the involvement of the Office of the Children’s Lawyer (OCL) and for a Voice of the Child Report. The OCL chose not to get involved.
5A Trial Management Conference (TMC) was eventually set for September 9, 2019. The AF attended. The RM did not. At the TMC Justice Shore adjourned the matter to October 7, 2019, peremptory on the RM. Justice Shore also ordered that if the RM failed to attend or participate that the AF could ask the court for an order permitting him to proceed on an uncontested basis.
6On October 7, 2019 the RM chose again not to attend the TMC. Justice Nakonechny ordered that the matter proceed to an uncontested trial on January 6, 2020. Justice Nakonechny also ordered that while the RM could not give evidence she could make submissions as to custody and access issues relating to their children and any other issues with leave of the trial judge.
7While scheduled for a half day trial the uncontested trial took a full day of evidence and submissions.
Parenting
8The AF testified that their daughter spends most of her time with the RM and their son splits his time between the two of them, based upon the AF’s work schedule, being with the RM when the AF is working and with the AF on his off days. The AF testified that he and the RM have also worked out the arrangements as to holiday time with both children.
9Their son is with the RM during the day on Tuesday, Wednesday, Thursday, and Saturday and has overnights with the RM on Monday, Wednesday, Friday and Sunday. The AF picks up their son on Tuesday and Thursday evenings either from his Taekwondo classes at 7:30 p.m. or from the matrimonial home at Wilfred Avenue at 8:00 p.m. and the AF then has their son overnight returning him to school on either Wednesday or Friday morning. On Saturday the AF picks up their son from Wilfred Avenue at 8:00 p.m. and returns him to the RM on Sunday at 7:00 p.m. On Mondays and Fridays the AF sees their son after school returning him to the RM at 7:00 p.m. On Mondays the AF also sees their son at lunchtime and brings him his lunch at school.
10The AF picks up their daughter every Monday, Tuesday, Wednesday, and Thursday morning at 8:00 a.m. from Wilfred Avenue and takes her to her school. He also picks her up on Monday after school and takes her home to the RM. He testified that it was up to his daughter as to whether she sees him over the weekend, including whether she joins him and her brother on Friday, Saturday or Sunday night for dinner.
11The AF testified that while somewhat complicated, as far as their son was concerned, their son seemed to be happy with the parenting schedule and neither he or his son wished to change it. While the AF would have preferred that their daughter spend more time with him, such as during Sunday, when he also had parenting time with her brother, the AF testified that he recognized that she was, at the time of the trial 16, and would make her own decisions.
12The AF also testified that he and the RM have been able to agree upon how to divide and deal with March break, Christmas holidays, and summer holidays and that no order is needed in relation to them.
13The AF testified that he and the RM have had joint custody of the children since the order of Justice Goodman and that so far all decisions have been made jointly and without any issue between them. The only matter that the AF wished to change was that of dental care. Being a successful dentist for over 15 years and teaching at the University of Toronto’s Faculty of Dentistry for over 8 years the AF asks that he be given the final decision with respect to dental care if the parties were unable to agree.
14When the AF finished his evidence I asked the RM whether she had any questions that she wished to ask him about access or custody. She stated that she “dare not ask him any questions”. When asked to elaborate as to why this was she chose not to advise the court. During closing submissions however she stated that she did not want the AF to have the sole decision making authority with respect to their children’s dental care. When asked why, she refused to provide a reason other than stating that the children can make good decisions as to their own lives, so no custody order as requested was required. While that may very well be the case with their daughter, their son is only 10 and choices as to dental care should not be left up to him. Accordingly, I order that the AF and RM have joint custody of their children with the exception that the AF shall have the final decision making authority with respect to dental care if the parties are unable to agree.
Equalization
15The AF testified that the parties separated on January 31, 2014. He also called a witness who testified that during the summer of 2014 he was told by the AF, at a summer party, that he had separated from the RM. The RM did not seek leave to make any submissions as to the date of separation. Accordingly, based upon the evidence before me and without any contrary submissions, I find that the parties separated on January 31, 2014.
16The AF provided a Net Family Property Statement with a valuation date of January 31, 2014 and a Financial Statement dated December 16, 2019. They were marked as Exhibits 8 and 6 respectively. He also provided a Certificate of Financial Disclosure dated March 3, 2017 marked as Exhibit 5 with back up documentation for the values, including appraisals of the parties’ numerous real estate holdings.
17Based upon the AF’s Net Family Property Statement and the values contained in it I find that the AF owes the RM a total of $1,445,798 for the purposes of equalization.
18The AF asks that the equalization payment be reduced by $11,872, representing an alleged overpayment of child support and by a further $196,496, representing payments made by him which the AF says were, for among other things, s. 7 expenses, flights to China for the RM and children, expenses for the various properties and the payment of the RM’s credit cards. The AF filed Exhibit 9 consisting of a series of emails between the parties which the AF submitted was an acknowledgement by the RM that the $196,496 should be credited to him in any equalization. With these two deductions the AF submits that he owes $1,237,429 in equalization.
19In order to pay this amount the AF suggests a number of resolutions, through the transfer of properties to the RM and the payment of the balance. The AF also made a proposal as to how the matrimonial home should be dealt with - the RM could buy out his interest in cash or he could buy out the RM’s interest through the transfer of properties, one owned entirely by him and one owned jointly with the respondent, along with some cash.
20Before considering whether the equalization amount should be reduced as suggested by the AF I must first consider his income and what is the appropriate spousal and child support, even though the trial is uncontested.
21The AF is a very successful dentist. The AF filed his certificate of financial disclosure as Exhibit 5. At Tab 4 of Exhibit 5 was a report from Levitt Valuations Inc. dated March 1, 2017. It was also included as part of Exhibit 10 by the AF. It was prepared for the AF’s then counsel in order to determine his adjusted income for support purposes under the Federal Child Support Guidelines. Clearly, the report considered s. 18 of the Guidelines. The AF’s own experts found the AF’s income for support purposes to be as follows:
2013 $775,905 2014 $750,916 2015 $815,289
22At trial the AF called his current accountant, Mr. Ming, to give evidence of the AF’s income for 2016, 2017, and 2018. Mr. Ming prepared a schedule of the AF’s adjusted income for support purposes which was marked as Exhibit 4. Using the same line items as the Levitt report Mr. Ming calculated the AF’s income for support purposes to be as follows:
2016 $699,248 2017 $639,062 2018 $745,707
23One of the major differences between Mr. Ming’s schedule and that of the Levitt report was a $70,000 income figure which had been added to the AF’s adjusted income for 2013 to 2015 inclusive. This was a salary paid to the RM from the AF’s dental corporation as a means of income splitting for the family. Having separated in 2014 this was no longer paid to the RM between 2016 and 2018.
24There was no calculation of the AF’s adjusted income done for 2019. The AF did however file a Financial Statement sworn December 16, 2019 as Exhibit 6 which stated that his monthly income was $62,142.25 so that his total annual income was $745,707, which was the same as his income from 2018. In other words, the AF through his evidence acknowledged that although he did not have his accountant prepare anything for 2019 that his income for 2019 was the same. Without any other evidence I am prepared to accept the AF’s income for 2019 to be this amount.
25The AF argued however that his income for support purposes should be less than what his own accountant and former expert calculated it to be. He argued that it should be his line 150 income plus adjustments and only half of the attribution of pre-tax corporate income from his dental corporations. However, the AF provided little evidence as to why his income should be less than the adjusted income, as found at Tab 4 of Exhibit 5 and as found at Exhibit 4. He testified that he should be allowed to minimize his income by 50% so that if he was unable to work he would have a financial cushion within the corporation in order to cover his expenses.
26He has been a successful dentist for over 15 years. He testified that in 2017 he was unable to work for two weeks due to a bad back. That was the only example given by the AF of his inability to work. The AF has produced calculations from his former experts and his current accountant from 2013 to 2018 inclusive. His dental corporations have shown steady and generally increased income from year-to-year and an increase in retained earnings from approximately $2.5 million in 2013 to approximately $4.5 million in 2018. That is in my view more than sufficient for any unexpected expenses.
27In my view the evidence at Tab 4 of Exhibit 5 and Exhibit 4 is to be preferred over the AF’s argument as to why his income should be less. There was little evidence, other than as mentioned above, as to why the AF’s income should be less than what was calculated by his former expert and current accountant. There was no evidence to the corporation’s viability, banking covenants, economic upturns or downturns, industry capitalization levels, future growth plans, or the specific capitalization requirements for this particular corporation.
28I find the AF’s income for support purposes to be as follows:
2014 $750,916 2015 $815,289 2016 $699,248 2017 $639,062 2018 $745,707 2019 $745,707
29I accept based upon the AF’s evidence that the RM’s income from the receipt of rent from one of the investment properties owned by the AF, and the RM, 42 Clairtrell Road, is $69,600 per annum from 2016 forward, having been bought in December 2015. This amount is to be used for the calculation of child and spousal support purposes until this property is sold.
30If these income amounts are used rather than the AF’s suggested income then he has underpaid child support. For example, in 2016 using his suggested income of $441,559 his monthly child support payment, based upon the Divorcemate calculation provided was $4,701. Using his actual income of $699,248 results in a monthly child support payment of $8,673, by my calculation, which is a monthly difference of $3,972 or an annual difference of $47,664. If the same is done for 2017 his child support of $5,103 based on his income of $456,306 becomes $7,296, based on an income of $639,062, which is an annual difference of $26,316.
31I am not prepared to find that the AF father overpaid child support. If anything it was underpaid. However, there is no claim before me from the RM for retroactive child support.
32Similarly, I am not able to say on the evidence provided that the RM admitted to being overpaid $196,496. The AF, as set out herein, has underpaid child support. He has most likely underpaid spousal support and I am unable from my review of Exhibit 9 to conclude that the equalization amount should be reduced by $196,496. Also, while not specifically claimed by the RM, as the trial was unopposed and she made no submissions, there is also the issue of pre-judgment interest on the equalization payment. Arguably, pre-judgment interest is owing from separation which would add to the equalization amount or alternatively reduce the alleged overpayment. No argument was made by the AF on this issue. At an interest rate of 1% the figure for pre-judgment interest on $1,445,798 for 6½ years approximates $94,000.
33Taking all of the above into consideration I find that the equalization amount to be paid by the AF to the RM is $1,445,798 and is not to be reduced as asked for by the AF.
34How this is to be paid is up to the parties. I am not prepared to make an order transferring various properties between the parties in order to facilitate equalization.
35No time frame was proposed for the equalization payment to be made, most likely because the AF wanted to re-arrange the various properties first. The parties will also have to reach an agreement with respect to the matrimonial home and the Parkview Avenue and Clairtrell properties, which are jointly owned.
36The parties are to resolve the equalization payment and the transfer between themselves or sale of the various properties within 60 days of the release of these reasons. If unable to do so, the parties may request me for a motion or further hearing.
Spousal Support
37The AF has been paying spousal support and acknowledges that the RM is entitled to support. There is therefore no question of entitlement. The AF submits that I impute an income to the RM of $50,000 per annum. She worked full-time before the birth of their second child. While she has been out of the workforce since 2009 she has a BSc, a MBA, and a CPA designation. I believe an income of $50,000 per annum is not unreasonable considering the RM’s degrees and prior working history.
38The AF did not testify or make submissions as to when this income should be imputed to the RM. Based upon his Divorcemate calculations provided he used the $69,600 rental income for the purposes of the RM’s income. If he had added the imputed income of $50,000 then the child support payment would have been less. He did however seem to take this into account when considering what spousal support to pay the RM, although this is speculation, as he gave no evidence on this, other than he paid monthly spousal support of $3,510. For support purposes the RM’s income shall be $69,600 per annum, until the Clairtrell Road property is disposed of. Thereafter her income will be, as submitted by the AF, $50,000 per annum.
39As the AF testified, he can and should pay spousal support. He testified that the amount of $3,510 is based on the mid-range amount of $7,553, using his income of $456,306 for 2017, and the RM’s income of $69,600 based on the receipt of rent from one of their jointly held properties on Clairtrell Road. He then deducted approximately $4,000 from this mid-range amount. There was no evidence from the AF as to why the deduction was approximately $4,000 as opposed to some other figure.
40As I previously found, the AF’s income is greater than what he has claimed it to be for support purposes. I was not provided with any calculations using the correct income amounts. However, I was not asked by the AF to order a spousal support amount to be paid to the RM. If I had been asked, I would have used an income of $745,707 for 2019. I also would have had to consider the impact of the equalization payment of $1,445,798 and the value of the matrimonial home and the jointly held properties and made a finding as to what the RM’s income was.
41Nor was I asked to make an order as to spousal support, either retroactive or future by the RM. The trial was uncontested. She did not seek leave to make any submissions over retroactive or future support. The one submission she did make was that she was not going to take any spousal support from the AF. She however was not prepared to tell me why. She did say that she had and would continue to return the spousal support payments to the AF. Accordingly, in the circumstances presented, I make no order as to spousal support. The AF is free to continue to pay what he thinks is appropriate and the RM is free to continue to return it.
42Order to go as follows:
a) the parties are to have joint custody of the children and all decisions with respect to the children are to be made jointly with the exception of the children’s dental care, where the AF is to have the final decision if the parties are unable to agree; b) the parenting time is to be in accordance with paragraphs 9 and 10 herein, and there is no order as to March break, Christmas holidays, or summer holidays; c) the AF is to pay an equalization payment of $1,445,798 to the RM; d) the AF and RM are to resolve the timing and amount of the equalization payment and the transfer between themselves or sale of all the properties both jointly held and otherwise within 60 days of today’s date. If unable to do so I may be spoken to, to arrange a motion or further hearing; e) the AF is to pay the RM set-off child support in the amount of $8,575 based upon the current respective incomes of $745,707 and $69,600. The AF will continue to pay the s. 7 expenses of the children in their entirety. Currently they amount to $1,300 per month; f) no order is made with respect to spousal support; and g) no costs were asked for by the AF so there will be no order as to costs.
Hood J.
Released: July 27, 2020