COURT FILE NO.: FS-19-019407
DATE: 20201116
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
SVETLANA ZAHELOVA
Applicant
– and –
DAVID ALEXANDER WILEY
Respondent
Harold Niman and Richard Niman, for the Applicant
Heather Hansen and Lesley Burke, for the Respondent
HEARD: March 10, 2020
REASONS FOR DECISION
HOOD J.
Nature of the Motion
[1] This is a summary judgment motion brought by the respondent husband (“RH”) for a variety of relief. In his amended notice of motion the RH asks for a finding that the parties separated on August 5, 2018. The applicant wife (“AW”) says that they separated on February 20, 2019. The RH further asks that all of the AW’s claims relating to spousal support and any requirements of his to value his income or provide disclosure in relation to his income be dismissed on the ground that there is no entitlement to spousal support. Alternatively, he asks if there is an entitlement to spousal support that it has been satisfied so that there is no further entitlement. The RH also asks that if his motion for summary judgment is dismissed that he be ordered to pay $14,694 per month rather than the $25,000 per month ordered by Justice Shore in her reasons of September 3, 2019 in order “to account for a fair tax treatment of the support … given the Respondent’s current source of taxable income.”
[2] As the argument unfolded before me, less emphasis was placed by the RH upon the requirement that I find the parties separated on August 5, 2018. This was due to the argument that, regardless of the date of separation—whether August 5, 2018 or February 20, 2019—the RH had paid more than enough in spousal support resulting from the breakdown of the marriage.
[3] While the RH still wanted a determination of the date of separation in order to “move the matter forward,” it was, in his view, not a necessary determination for the purposes of support. It was his position that even if he and the applicant separated in February 2019 at best they had a two-year relationship, which at most would result in two years of support and that he had paid enough. This was despite the motion being heard in March 2020—approximately one year from the AW’s suggested date of separation.
[4] The AW’s position is that the summary judgment motion was ill conceived and not a good use of judicial resources. As this motion, even if successful, would not fully dispose of the action, it should be dismissed.
Decision
[5] For the following reasons, I find that the parties separated on February 20, 2019 and I dismiss the RH’s motion for summary judgment in relation to spousal support. The entitlement to, and the amount and duration of spousal support—including whether it has been satisfied—are matters that should go to trial along with the property issues, including equalization. In making this order I am not precluding the RH from bringing a further motion on the issue of the amount of interim support due to his alleged inability to deduct support payments from his taxable income, in the event the parties are unable to reach an agreement on this issue.
Key Facts
[6] The parties agree that they met and began dating in January 2017. They also agree that the RH entered into a lease agreement for the Shangri-La Residences in Toronto with the AW as tenant of an apartment and the RH as the guarantor on March 31, 2017. The lease was for two years at a cost of $9,250 per month. The parties further agree that they married on February 7, 2018.
[7] As described by the RH, he and the AW had a pretty flexible living arrangement. Sometimes the parties were together in the RH’s home in Oakville, Ontario, sometimes the parties were together in the Shangri-La apartment, sometimes they were separate and sometimes they travelled together.
[8] They also agree that the AW wanted to have a child. In order to facilitate this the RH had a previous vasectomy reversed in the summer of 2017 and the AW began in-vitro fertilization in late 2017, continuing into 2018.
[9] They further agree that in August 2018 the parties went on a three-week trip to Europe, along with the RH’s three children from his first marriage and the RH’s mother.
[10] The parties returned to Canada on August 2, 2018 and attended a wedding together on August 5, 2018.
Date of Separation
[11] The RH takes the position that after this wedding they separated. The RH says that the cause of the separation was an incident that took place in Paris during the trip to Europe. The AW wasn’t questioned about this alleged incident and the evidence came out on the RH’s subsequent questioning. One of the alleged participants in the incident provided an affidavit denying it ever happened.
[12] The AW’s position is that while the RH told her at the August 5 wedding that he wanted to work on their relationship and was unsure about their relationship. This, she says, was not unusual for them.
[13] Her position was that it was only on February 20, 2019 during a meeting she had with an interior designer at a home in Oakville purchased by the RH to be their matrimonial home that the AW realized the relationship was over. The interior designer told the AW there were no plans to add a child’s room to the home on the RH’s instructions. The AW still wanted a child and only now did it become clear that he did not. At that point she knew the relationship was over.
[14] This was the RH’s motion to have the court determine the date of separation. As presented to me there were only the two choices: August 5, 2018 and February 20, 2019. The RH wanted a determination of the date of separation in order to deal with the date for equalization so that the parties could make proper disclosure, and as part of his argument regarding spousal support.
[15] Being a motion for summary judgement, both parties have an obligation to put their best evidentiary foot forward on the motion. Being the RH’s motion for summary judgment for a finding that the separation date was August 5, 2018, it was his burden to prove separation as of that date. The AW’s response could have been to simply argue that the burden had not been met and to have the motion dismissed but she chose instead to file evidence in support of her date of separation and to ask the court to determine that the date was February 20, 2019. It was no different than the AW bringing her own motion for summary judgment seeking her date of separation. I have the power to grant judgment for or against the moving party, the RH, on a summary judgment motion. This was also what the parties asked me to do.
[16] In putting their best foot forward, the court must assume the parties have put before it all the evidence that will be available for trial. The court may, where appropriate, draw an adverse inference from the failure of a party to provide the evidence of any person having personal knowledge of contested facts.
[17] The RH filed four affidavits from himself and the AW filed two affidavits from herself for this motion. There was also an affidavit from a third party filed by the AW denying the alleged incident in Paris. The AW argues that there was no affidavit from any of the RH’s children to support his evidence that he told them that he had separated on August 5, 2018 and that an adverse inference should be drawn because of this. Other than this one aspect, no party suggested there was more evidence to present. I do not accept that an adverse inference should be drawn against the RH from the failure to provide an affidavit from his eldest daughter to confirm he had told his three children he had separated from the AW. The AW in her own affidavit of September 20, 2019, at paragraph 58, acknowledges the RH had told one of his children prior to the February 20, 2019 separation date that the parties had ended their relationship.
[18] Nor did either party suggest that there was a risk in proceeding with this determination. Partial summary judgment is reserved for issues that may appropriately and readily be bifurcated without creating a material risk of inconsistent outcomes, and that may be dealt with expeditiously and cost-effectively: see Butera v. Chown, Cairns LLP, 2017 ONCA 783, at paras. 27 – 34.
[19] As already indicated, neither party suggested there was a risk in bifurcating this single factual issue and deciding which of the two suggested dates was the date of separation. I have also turned my mind to this and considered the possibility of a risk of inconsistent outcomes in relation to how the date of separation may be used at trial. While the date of separation impacts on equalization it only does so for the purpose of being the equalization date. It does not impact upon the equalization process itself nor how the equalization should be carried out. Nor does it impact upon entitlement to spousal support. It may impact upon the quantum and duration of support by adding six months to the length of the relationship, but that is not an inconsistent outcome. It is simply a finding of fact that no longer has to be considered a live issue for trial. The finding of a fact as to the timing of an event is not the same as granting or dismissing a cause of action or an entire issue between the parties. I see no risk of an inconsistent finding or outcome at trial flowing from the determination of the date of separation on a presumed complete record such as here.
[20] The parties agree that the test for the date of separation is the objective determination of the date the parties separated with no reasonable prospect or expectation of resuming cohabitation. Both parties rely upon Warren v. Warren, 2019 ONSC 1751, and say it supports their respective position.
[21] At paragraph 7 of Warren, a list of objective factors is set out to assist the reasonable person in determining whether there has been a separation with no reasonable prospect of resuming cohabitation. It has to be an objective determination. A relationship requires two people and sometimes one of the parties does not understand or accept the relationship is over. On the other hand, sometimes one of the parties may harbour a secret resolution that the relationship is over but has not made it clear to the other of this fact. It must also be remembered that the purpose of the separation date is to set a date at which time the parties ceased being one entity for financial purposes—a couple—and became another, a separated couple: see Strobele v. Strobele, [2005] O.J. No. 6312, at paras. 29 – 32.
[22] The main point in Warren and in all the cases cited is recognition that each relationship is different. Because of this, the list of factors set out in Warren at paragraph 7 is only that: a list. It is not as if one factor takes precedence, or that a certain combination of factors is necessary, or a majority of factors will decide the issue.
[23] The AW in her affidavit evidence states that the RH ended their initial relationship in January 2018 by email and then changed his mind one month later. The couple married two weeks after the RH’s divorce was finalized. The RH continually changed his mind as to where they were going to permanently live, from Rosedale, to Houston, to Oakville. He continually changed his attitude about the IVF process although he didn’t make it definitive until February 2019. The trip to Europe in July 2018 was a last-minute, spur-of-the-moment affair. He continually changed his mind about agreeing to a post-nuptial agreement. He agreed to see a marriage counsellor and then changed his mind. In November 2018, he said he wanted to separate and in December 2018 said he wanted to work on their relationship. They had Christmas brunch together and in January and February 2019 had sexual relations. He sent her numerous emails and texts in January and February 2019 that could be described as loving. The text of December 20, 2018 where he allegedly said he thought of the AW as his wife was not provided by the AW in her evidence.
[24] The AW’s evidence suggests that the RH was a mercurial individual subject to sudden and rapid changes and flights of fancy.
[25] The RH in his affidavit evidence and in his questioning stated that he stayed at the Shangri-La apartment infrequently and, when in Canada, primarily lived at his home in Oakville. They cancelled the purchase of the home in Houston and cancelled their second wedding celebration. They did discuss reconciliation in late 2018 and early 2019 but never reached agreement due to her unreasonable financial demands. At the end of December 2018, he tried to initiate discussion of possible reconciliation, but she “refuted” these attempts. After December all of their reconciliation discussions were hypothetical only, in that a lot of work was required in order to reconcile.
[26] Considering the Warren factors, the parties were always to some extent physically separated. They had their respective residences and both stated that, despite being married, they were not always together. In September and October 2018 he was, for the most part, travelling on business. This was not unusual and was in keeping with their historical relationship. They did continue with sexual intimacy and, as stated in Warren, “the frequency of sexual intercourse matters less … than the identity of the person with whom it occurred.” I agree. They continued to communicate and discuss their problems. Both agree on this. While not, perhaps, having the same amount of vacations as before, this was understandable as the RH was travelling on business after the return from Europe. They did celebrate important days like Christmas as a couple, in their own way. There was little evidence from either party as to their conduct towards their respective friends and family. The RH continued to pay for the AW’s expenses beyond August 5, 2018 and into the spring of 2019. The RH did not indicate on his 2018 tax return that he was separated. He later said it was an inconsistency that needed to be fixed. No steps were taken by either party towards the legal termination of their relationship between August 2018 and February 2019. In fact, they were more involved in discussions as to how to fix their relationship. They agreed to try counselling. They discussed how to reconcile. They discussed a post-nuptial agreement. The on-again off-again nature of their relationship and marriage was not unusual. It was the pattern they had had since its beginning. The RH had previously ended the relationship in January 2018, then changed his mind and they were married in February 2018.
[27] While there were some events, such as the cancellation of the Houston home purchase, and the cancellation of the second wedding celebration that could be viewed as supporting the fact that the parties had separated on August 5, 2018, I view these events as just more of the same and reflective of how the parties carried on their relationship. The actual wedding was cancelled and then re-set. They got married with very few knowing. They never really lived together. The RH called the relationship “pretty flexible.” AW’s counsel described it as tumultuous. It was a different relationship than most. I do not see these two events as being indicative of anything different than that.
[28] The RH attempts to argue away the numerous affectionate emails and texts between him and the AW in late 2018 and early 2019 by saying they are out of context and do not really support the suggestion they had reconciled or there was a reasonable chance they would. It seems he is trying to argue the communications do not support a later separation date because he really did not mean what was said, despite that a third party might glean the opposite from the communications. His argument is that because he inwardly did not want to reconcile there was no reasonable chance they would.
[29] This is an untenable argument. If the RH felt there was no reasonable chance of reconciliation or that they had in fact separated he should have said so. He cannot have it both ways—sending communications that suggest one thing but now saying they really should not be interpreted that way. This is even more untenable when one considers paragraph 16 of his first affidavit sworn August 7, 2019 and contrasts it with his later affidavit of September 27, 2019. At paragraph 16 he states that there are texts and messages that he is trying to retrieve, and he knows “that there are messages between Llana and I that clearly state that we were in agreement that we separated in August 2018.” [Emphasis added]. The actual texts and messages were produced in the affidavit of September 27, 2019. Having reviewed them I see no clear agreement between the parties that they had separated in August 2018. None were highlighted in this subsequent affidavit. None were highlighted in argument before me as being a clear agreement. Nor in reviewing all of them can the argument be made that some are out of context.
[30] On all the evidence I find that the parties separated with no reasonable prospect or expectation of cohabitation on February 20, 2019.
Spousal Support
[31] The RH argues that the court should dismiss the AW’s claim to spousal support on a summary judgment basis, either holding that she has no entitlement to spousal support or that it has now been satisfied, so that there is no further entitlement.
[32] One of the difficulties with this argument was alluded to earlier in these reasons. Partial summary judgment is reserved for issues that may be appropriately and readily bifurcated from the main action without creating a material risk of inconsistent outcomes, and for issues that may be dealt with expeditiously and cost-effectively.
[33] The RH is asking the court to dismiss the entire issue of spousal support between the parties, and to insulate any inquiry into his income as being irrelevant once the support claim is dismissed. As an alternative, the RH argued for a mini-trial or a trial of the issue as to whether the AW was entitled to spousal support or, alternatively, that it had been satisfied. It is hard to see how this later suggestion would result in any saving in expense, or time, or judicial resources. All that would happen would be two trials as opposed to one. The matter will still be proceeding to trial on equalization, even if I do determine support. Much of the same ground will be covered. His income is intertwined with his business interests which will be looked at for purposes of equalization.
[34] This motion has caused the main action to be delayed. Even if it had ended in a decision in the RH’s favour on spousal support it would not finally determine the action. The matter would still proceed to trial where there could be both duplicative and inconsistent findings. It clearly has been expensive, with multiple affidavits, examinations, and the preparation of compendiums, factums, and books of authority. But while the record before me was large it will not be as expansive as the record at trial which will provide the trial judge with all the evidence, not just some. It is difficult to see how the motion before me, relating to the issue of spousal support, has served the objectives of proportionality, efficiency, and cost effectiveness.
[35] Questions of property and equalization are proceeding to trial. Both parties acknowledge this. I also agree with the AW’s argument that the question of spousal support should not be considered until equalization has been determined. The value of the RH’s assets and liabilities at separation is necessary for the proper consideration of AW’s claim for spousal support. The division of assets and any resulting equalization payment must always precede any support analysis: see C.M.G. v. R.G., 2013 ONSC 961 at para. 15.
[36] The RH argues that addressing property issues before spousal support does not apply in this case. He argues that any equalization will only diminish the need for spousal support and the order of determination suggested by the AW only arises in situations where there is no equalization and where support must be increased to take this into account.
[37] I disagree, for a number of reasons. There is no assurance in this case or in any other, other than perhaps a few exceptional ones, that what may be anticipated to occur will in fact happen. The current statement of assets and liabilities may not turn out to be accurate. It may change over time. While an equalization amount may be calculated, by the time it is to be paid the payor may be unable to do so and the income to be generated may only be theoretical. The condition, needs, means and other circumstances of each spouse may have changed between the two events. How much better to have the trial judge hear all the evidence and make the determination as to property and support at the same time knowing exactly what the situation is rather than bifurcating matters now. In family law everything is inter-related and interdependent. To try to isolate and determine spousal support and equalization as “separate” issues is not only not cost-effective and not a good use of judicial resources, but creates a potential for inconsistent findings and outcomes. While not an exact comparison, it would be like fixing child support before determining parenting time or incomes.
[38] This order of determination also reflects the considerations that any judge must take into account when making a final determination of spousal support—the condition, needs, means and other circumstances of each spouse. What are the economic advantages or disadvantages arising from the marriage or its breakdown? While not a factor here, what is the apportionment of the financial consequences of the care of children? Is there post-marital need? Is there economic hardship arising from the breakdown of the marriage that requires relief? What order will, in so far as practicable, promote the economic self-sufficiency of each former spouse within a reasonable period of time? All of the objectives must be considered. Economic variables of divorce do not lend themselves to the application of any single objective: see Moge v. Moge, 1992 CanLII 25 (SCC), [1992] 3 S.C.R. 813, at paras. 52 – 53 and 109 – 112.
[39] No one factor should be fixed on to the exclusion of the others. While some factors may be more important than others, in each case, the court cannot proceed at the outset by fixing only one variable. The amount and duration of support will vary with the circumstances and particular facts of each case and the factors set out above: see Bracklow v. Bracklow, 1999 CanLII 715 (SCC), [1999] 1 S.C.R. 420, at para. 53.
Deductibility of Support
[40] On September 3, 2019, Justice Shore ordered a monthly spousal support payment of $25,000 commencing April 1, 2019.
[41] In the amended Notice of Motion, dated November 1, 2019 for the motion initially returnable November 14, 2019, the RH added this request for relief: “to account for a fair tax treatment of the support ordered … given the Respondent’s current source of taxable income.”
[42] By this point, the AW had filed two affidavits, the RH had filed three affidavits, and lengthy questioning of the RH had taken place. In the RH’s factum the statement is made that he is a resident of the United States for tax purposes and, as a result, is unable to deduct the support payments. This appears to differ from the amended Notice of Motion which refers to the RH’s source of income as opposed to his residency.
[43] The issue was not argued before me, but from the portions of his questioning referred to me by the AW, it certainly appears to be a live issue as to where the RH actually resides. Nor was there any evidence, readily apparent to me, as to how the figure of $14,694 per month was arrived at. The affidavit of March 4, 2020, filed just before the motion was heard, makes brief reference to the issue of tax deductibility but, arguably, what is said is hearsay and contravenes s. 14(19) of the Family Law Rules.
[44] This issue could either be decided upon agreement, a motion with proper evidence, or at trial, all without prejudice to any future order as to entitlement, quantum, or duration of spousal support.
Order
[45] Order to go as follows:
(a) this court finds that the parties separated on February 20, 2019;
(b) paragraphs 3, 4 and 5 of the amended Notice of Motion dated November 1, 2019 are hereby dismissed; and
(c) paragraph 6 of the amended Notice of Motion dated November 1, 2019 is dismissed without prejudice in accordance with these reasons.
[46] The parties shall attempt to reach an agreement on costs. If unable to do so, the AW may file brief written submissions, not to exceed three typed double-spaced pages, together with a Bill of Costs and any necessary documents, such as offers to settle, within three weeks of today’s date. Any responding submissions, subject to the same directions, are to be filed within three weeks of service of the AW’s submissions. There are to be no reply submissions. The submissions are to be to my attention c/o Patrizia.Generali@ontario.ca.
Released: November 16, 2020
COURT FILE NO.: FS-19-019407
DATE: 20201116
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
SVETLANA ZAHELOVA
- and –
DAVID ALEXANDER WILEY
REASONS FOR JUDGMENT
Hood J.
Released: November 16, 2020