COURT FILE NO.: FS-19-11972
DATE: 20201215
ONTARIO SUPERIOR COURT OF JUSTICE
M. KRAFT, J.
REASONS FOR ORDER
Nature of Motion
[1] The applicant (“wife”) moves to vary paragraphs 5 and 6 of the Order of Gilmore, J., dated October 4, 2019 (“Gilmore Consent Order”), to ensure that the net proceeds of sale from the sale of 122 Cedar Street, Cambridge, ON, a property owned solely by the respondent (“husband”), continue to be held in trust by a real estate lawyer until further court order or agreement of the parties. In addition, the wife moves for an order that 50% of the net proceeds of sale from the sale of the parties’ matrimonial home be released to her immediately and the husband’s 50% share continue to be held in trust by a real estate lawyer until further court order or agreement of the parties. Finally, the wife moves for an order that the sum of $18,143.30 be deducted from the husband’s 50% share of the net proceeds of sale from the matrimonial home and be added to the amount to be released to her, to reimburse her for post-separation matrimonial home expenses she paid without contribution by the husband.
[2] The wife asserts that if the 122 Cedar Street property sale proceeds and the husband’s share of the matrimonial home sale proceeds are not preserved pending the trial of this case, she will have no security for her child support, spousal support and/or property division claims.
According to the wife, the husband’s conduct since the Gilmore Consent Order which includes terms relating to the husband’s non-payment of support and continual depletion of his assets was made, justifies the orders she is seeking.
[3] The husband cross-moves to vary and reduce his temporary spousal and child support obligations under the Gilmore Consent Order, to reflect his current income. Among other things, the Gilmore Consent Order provides that, based on the husband having an imputed annual income of $401,905 (which is a three-year average of his incomes in 2016, 2017 and 2018), he is to pay child support in the sum of $5,100 a month for the two children of the marriage; spousal support of $4,100 a month; and 100% of the children’s s.7 expenses, including private school tuition.
[4] The husband asserts that he cannot continue to pay child and spousal support in the amounts previously ordered because his 2021 income will not be $401,905, the income on which the Gilmore Consent Order was based but, rather, will be $241,229.46. As a result, he seeks an order that he pay temporary child support for the two children in the sum of $3,172 a month, spousal support of $1,148 a month (mid-range of the Spousal Support Advisory Guidelines, “SSAGs”), that the wife be imputed with an annual income of $42,918, and his proportionate share of the children’s s.7 expenses, including private school tuition.
[5] In support of her motion and in response to the husband’s motion, the wife relies on the following material:
i. Her Notice of Motion, dated November 25, 2020;
ii. Her affidavit, sworn on November 24, 2020;
iii. Her affidavit, sworn on November 27, 2020;
iv. Her affidavit, sworn on December 1, 2020; and
v. Her Factum dated November 30, 2020.
[6] In response to the wife’s motion and in support of his motion, the husband relies on the following material:
i. His Notice of Motion, dated November 24, 2020;
ii. His affidavit, dated November 24, 2020;
iii. His affidavit sworn on November 26, 2020;
iv. His affidavit sworn on November 30, 2020;
v. The affidavit of Tetiana Sabitova, sworn on November 25, 2020; and
vi. His Statement of Law dated November 30, 2020.
[7] One issue was resolved by the parties during the long motion. The wife moved for an order that the husband produce his bank account statements from January 1, 2018 to December 31, 2019, within 45 days. The husband consented to produce this disclosure.
Procedural History
[8] The wife issued an Application on August 19, 2019.
[9] On October 4, 2019, the parties attended their first case conference, before Gilmore, J., at which they entered into Minutes of Settlement which were then incorporated into the Gilmore Consent Order, the terms of which provided as follows:
i. The husband’s interim access schedule to the two children was to be the first, second and fourth weekend of every month, from after Russian School on Saturday, at 4:00 p.m. to Sunday, at 8:00 p.m.;
ii. Neither party was to discuss the litigation with the children or speak negatively about the other in front of the children;
iii. The husband was to pay child support for the two children, in the sum of $5,100 a month, based on an imputed annual income of $401,905 (which was a three-year average of his 2016, 2017 and 2018 incomes). The monthly child support was to commence on October 4, 2019;
iv. The husband was to pay interim “without prejudice” spousal support to the wife in the sum of $4,100 a month starting on October 4, 2019;
v. The husband was to pay 100% of the children’s s.7 expenses, which included private school tuition, swimming, choir and sewing;
vi. The net proceeds of sale from 122 Cedar Street (the property owned solely by the husband which he purchased after the parties’ separated) was to be held in trust by a real estate layer and was only to be released to the husband if he bought another real property in the GTA, in which case the entire amount was to be paid into the trust account of the real estate lawyer acting on the purchase. The entire amount was to be used as a down payment for that new property. The husband was to provide the address of the new property within 24 hours of signing the agreement. The husband was to keep the entire amount invested in the new real property, unencumbered, until a further agreement of the parties’ or further order of the court; and
vii. The husband was not to encumber 122 Cedar Street, Cambridge, ON (“122 Cedar St.”) in any way. A certificate of pending litigation (“CPL”|) was to be registered on the property.
[10] On October 16, 2020, Stevenson, J. made an order placing a CPL on 122 Cedar St. She did so as a result of the wife’s counsel writing to the court about the wife’s concern that the husband might abscond from the jurisdiction and her position that security was needed, to ensure she received the family law relief to which she was entitled.
[11] After the Gilmore Consent Order was made, the husband failed to comply with its terms. On December 12, 2019, the parties attended a case conference before Akbarali, J. at which time they entered into a further consent order as follows:
i. The sum of $30,000 was to be released from the 122 Cedar St. property sale proceeds, to pay the wife arrears of child and spousal support, which had accumulated for October, November and December 2019, plus an additional
$1,500; and
ii. The sums of $4,200 and $5,400 were to be released from the 122 Cedar St. property sale proceeds to satisfy the husband’s obligation to pay the outstanding private school fees for both children for the period September 2019 to January 2020.
[12] On January 10th and 16th, 2020, the parties had a case conference before Shore, J. The case conference dealt primarily with access and the scheduling of a long motion. Both parties had brought motions, which were scheduled to be heard together by way of the long motion on March 31, 2020. The wife’s motion was to deal with the matrimonial home proceeds; the Cedar St. property sale proceeds, and the appointment of the Office of the Children’s Lawyer. The husband brought a motion to vary and reduce his child and spousal support obligations contained in the Gilmore Consent Order and to seek an equal summer schedule with the children. Believing that the long motion would proceed on March 31, 2020, the wife consented to terms, that subsequently, became an order of Shore, J., dated January 10th, 2020, which provided as follows:
i. The husband agreed to be examined by an expert retained by the wife in relation to the husband’s alleged depression and inability to work; and
ii. Pending the hearing of the long motion on March 31, 2020, the husband’s ongoing child and spousal support payments were to be paid out of the Cedar St. property sale proceeds monthly.
[13] The long-motion did not proceed on March 31, 2020 due to the Covid-19 health crisis.
[14] On June 8, 2020, the parties were scheduled to attend the “Return to Operations Court”. to reschedule the long motion. The husband’s new counsel, Ms. Abramian, asked for an adjournment to familiarize herself with the file and the parties agreed to such an adjournment.
[15] The child and spousal support arrears continued to accumulate and, as a result, in July 2020, the wife brought a motion to strike the husband’s pleadings for his failure to pay child and spousal support, as she no longer consented to receiving these payments from the 122 Cedar St. property sale proceeds as per the January 10, 2020, Consent order. By this point, the husband owed the wife child and spousal support arrears of almost $30,000.
[16] The wife’s motion to strike the husband’s pleadings did not proceed until September 2, 2020. The husband made some direct payments toward the child and spousal support arrears in July 2020. On September 2, 2020, Diamond, J. made the following order:
i. The husband was to direct the real estate lawyer by September 3, 2020, to release the amount of $29,800 to FRO to satisfy the accumulated arrears of child and spousal support under the Gilmore Consent Order out of the net Cedar St. property sale proceeds; and
ii. Commencing September 4, 2020 and pending the husband’s motion to vary the quantum of child and spousal support, the husband was to continue to pay child and spousal support pursuant to the Gilmore Consent Order, as follows:
The husband was to pay the amount of $4,000 a month to FRO directly; and
The husband was to direct the real estate lawyer to pay the sum of
$5,500 a month to the wife, out of the Cedar St. property sale proceeds;
[17] I heard the long motion on December 3, 3030. I reserved my decision. My decision and the reasons for it are found below.
Background Facts and Evidence
[18] The parties were married in Hamilton, Ontario, on April 30, 2004. They have two children, Tikhon Hropak, born on August 19, 2005 (age 15) and Vera Hropak, born on December 14, 2008 (age 12).
[19] There is a dispute as to the parties’ date of separation. According to the husband, the date of separation was November 14, 2014. According to the wife, the date of separation was May 1, 2019. Which date is the correct valuation date will be determined by a trial judge who will have a complete record before him/her, as well as the benefit of viva voce evidence.
[20] During the marriage, the wife was the primary caregiver to the children. The husband had a career in computer programming.
[21] Both children attend private school. Tikhon attends Abelard School, with an annual tuition of approximately $24,000. Vera attend Erudite private school, with an annual tuition of approximately $12,000. During the past year or so, the wife had applied for tuition subsidies from both schools and was successful in obtaining a reduction in tuition at both schools. The exact amount of the tuition savings was not specified.
[22] In 2013, the parties purchased the matrimonial home, municipally known as 34 Millsborough Crescent, Toronto, ON. At the time of purchase, title to the matrimonial home was taken in the husband’s sole name. The husband added the wife as a joint registered owner in or about June 2019.
2014 – 2017 Husband Moved to California
[23] Sometime in 2013, the husband incorporated a company, VOTASOFT Corporation, which is involved in software development. The husband deposes that in 2013, his income was approximately $20,000 from Votasoft.
[24] In November 2014, the husband moved to California, having accepted an offer of employment from Western Digital, a company based in California. The wife remained in Toronto with the two children. In June 2015, the husband secured new employment with a different company in California, NVIDIA Corporation.
[25] When the husband began working at NVIDIA, he earned a base salary of $185,000 USD. He was granted a total of 4,200 Restricted Stock Units (“RSU”) at the time that he accepted his offer of employment, a number of which units vested in each year over a four-year period.
[26] While he was in California, the husband regularly came to Canada to see the wife and children. The wife deposes that in December 2015, the husband asked her to move with the children to California. NVIDIA paid for the wife’s and children’s one-month visit to California to find an apartment. After being in California for a month, the wife decided to return to Canada with the children because it would be best for them to remain in their private schools in Canada. According to the wife, once this decision was made, the husband sought and received a transfer to NVIDIA’s offices in Toronto and returned to Canada in the summer of 2016. The husband deposes that, in September 2017, his US work visa expired, and he was transferred to Toronto to work in the NVIDIA’s offices in Toronto. Whatever the reason may have been for the husband’s return to work in Toronto, the parties agree that when he returned, he resided in the matrimonial home.
[27] In 2015, the wife graduated from the Institute of Holistic Nutrition. She started a business, Happy Nutrition. In the Fall of 2017, the wife opened a small store, to sell nutritional
products. She also incorporated a company which leases the store until 2023. The wife deposes that in 2018, she earned no income, and in 2019, she earned $14,086 from this business.
2017- to present
[28] The husband deposes that the income he earned between 2016 and 2018 was as follows:
In 2016, his income was $391,020.80;
In 2017, his income was $211,050.96; and
In 2018, his income was $600,586.86.
[29] The husband deposes that he had two minor contracts through VOTASOFT Corp. between 2017 and 2018 but he ceased taking on further contracts as of February 2018. The husband deposes that when he purchased the Cedar St. property (in May 2019) he did so with cash that he borrowed from VOTASOFT in the sum of $100,000 borrowed against the retained earnings of the company.[^1] It is noteworthy that the husband has not valued this company at either valuation date.
[30] There is a dispute between the parties as to gold and silver bullion that they owned. The wife deposes that, in the Spring of 2019, the husband asked her to bring home the gold and silver bullion, previously kept in a safety deposit box. She did so and the husband put it in the basement of the matrimonial home. The wife left to go to Russia on June 20, 2019 and returned approximately 6 weeks later. The wife deposes that, upon her return to Canada, she could not find the gold and silver bullion in the basement. She believes the husband took it. By contrast, the husband deposes that the wife took it. He deposes that, when he asked her to produce the safety deposit box key and log, she claimed that she lost the key. In the husband’s sworn financial statement, dated January 2, 2020, he deposes that most of the gold and silver bullion was taken by the wife estimated to be worth $200,000. The trial judge will have to decide what happened to the gold and silver bullion on a complete record and with the benefit of viva voce evidence.
[31] The wife deposes that sometime in July 2019 and shortly after separation, the husband became suspicious that she was dating someone. He told her that he had quit his job and he would not pay her child or spousal support. The wife deposes that she believed that the husband had quit his job which is why, when she issued this Application, she sought orders imputing income to the husband, along with a divorce, custody, child support, spousal support and equalization.
[32] The husband denies having told the wife that he quit his job. He deposes that, in or about April 2019, the wife told him that she wanted to move in with her boyfriend and he thus began looking for a new home to purchase. In or about May 2019, he purchased the Cedar Street property. The husband deposes that the Cedar St. property needed to be renovated and that he lived in the basement of the matrimonial home while those renovations were being finished.
[33] According to the wife, on August 7, 2019, the parties had an altercation and the husband tried to kill her. She deposes that the husband chased her, threatened to kill her, pushed her to the floor, sat on top of her, hit her with his fist and restrained her for an hour. The wife reported the incident to the police and the husband was arrested and charged with assault and uttering death threats. The husband denies the allegations entirely. The criminal charges were resolved by way of a peace bond for a 12-month period.
[34] At the parties first case conference on October 4, 2019, the husband expressed a desire to purchase a home in the GTA, to live closer to the children and, as a result, the wife deposes that she agreed to the term that, if the Cedar St. property were sold, the entire net proceeds of sale could be used by the husband to purchase a new home in the GTA, provided that he agreed not to encumber the new property.
[35] Both parties agreed that they entered into the Gilmore Consent Order on October 4, 2019, on the basis of the husband earning the imputed annual income of $401,905. An income of $401,905 corresponds to a child support obligation of $5,100 under the Child Support Guidelines. The husband also agreed to pay temporary spousal support in the sum of $4,400 a month and to be responsible for 100% of the children’s s.7 expenses. The wife deposes that she had compromised and agreed to a lower spousal support figure than SSAGs dictated (which at the mid-range would be of $8,566 a month) because the husband had agreed to pay for 100% of the children’s s.7 expenses, which included the school tuitions.
[36] The husband deposes that his former counsel, Yaroslav Obouhov, who attended the case conference with him, was inexperienced and “was unable to understand the structure of [his] remuneration and convey same to the court” and, as such, “the easiest option to ensure that support began to flow was to take the average of [his] last three years’ income and temporarily base child and spousal support on that averaged income”[^2]. Further, the husband deposes that he was not aware that the wife’s contribution to s.7 expenses was to be based on her income which included the spousal support he paid her.[^3]
[37] The wife deposes that, during the marriage, the husband had expressed a desire on a number of occasions to leave Canada and move to the United States and/or the Ukraine. On October 15, 2019, only 11 days after the case conference, the wife came to learn from the parties’ son that the husband was sending messages on LinkedIn to different recruiters in the Ukraine. in which he indicated that he was moving to Kiyv, Ukraine at the beginning of 2020 and was looking for employment positions. This was extremely concerning to the wife since the husband had represented to her and the Court on October 4, 2019 that he intended to purchase a home in the GTA. The wife deposes that she was also concerned that the husband would leave Canada, given that the criminal charges pending had not been resolved. Based on the wife’s belief that the husband intended to abscond from the jurisdiction, her counsel wrote to the court on October 15, 2020, and Stevenson, J. made the order, dated October 16, 2020, placing a CPL on the Cedar St. property.
[38] On November 29, 2019, the husband retained new counsel, Louise Morin, and a Notice of Change in Representation was served on the wife, with a letter from a doctor, dated October 10, 2019, in which the doctor stated that the husband was unfit to work due to stress and anxiety.[^4] The husband had obtained this medical letter less than one week after the case conference during which he consented to pay child and spousal support on an imputed income of $401,905, but he did not provide the letter to the wife for over 6 weeks.
[39] The husband did not pay child and spousal support to the wife in the months of October, November of December 2019. He claimed that he did not have the income to do so.
[40] The wife deposes that her counsel, Ms. Pribytokova, had advised her and she believes that, on December 3, 2019, counsel for both parties specifically discussed the need for the husband to sell the Cedar St. property for the purpose of the husband complying with his child and spousal support obligations under the Gilmore Consent Order. At that point, the husband’s matrimonial counsel was Louise Morin. The wife deposes that, approximately three hours after the conversation had taken place between Ms. Morin and Ms. Pribytkova, her lawyer received a telephone call from Julian Sakinofsky, a real estate lawyer, advising her that the Cedar St. property had been sold, with a closing date two days later on December 5, 2019. Upon doing a title search, Mr. Sakinofsky had discovered the CPL and asked the wife’s counsel to agree to remove the CPL to allow for the closing of the sale of the Cedar St. property.
[41] The husband had listed the Cedar St. property for sale only weeks after he purchased it. The wife deposes that the Cedar St. property was first listed on MLS but was removed from MLS and sold by the husband on Kijiji. It is noteworthy that, in his affidavit, sworn on November 24, 2020, the husband does not specify when he listed the Cedar Street Property for sale. He simply deposes that he sold the Cedar St. property and the sale closed in December 2019. He deposed that he sold it because he realized he needed to live closer to the matrimonialhome for parenting purposes and that the net proceeds of sale of $299,193.66 were being held in trust by Mr. Sakinofsky.
[42] In summary, despite having consented to the Gilmore Consent Order, the husband did not comply with his obligations to pay monthly child and spousal support. Instead, these support payments came to be paid by the husband out of the Cedar St. property sale proceeds (until the consent order was made Diamond, J. on September 2, 2020) and primarily only after the wife had had to bring two motions.[^5] There is only $194,081 left from the Cedar St. property sale proceeds at this time due to the husband’s non-compliance with the Gilmore Consent Order.
[43] The matrimonial home was sold, and the transaction closed on October 30, 2020. The net sale proceeds of $460,347.71 are being held in trust by the real estate solicitor. The wife entered into a one-year lease agreement with the purchasers of the matrimonial home. As a result, the wife and children continue to live in the matrimonial home.
The Husband’s Income:
[44] Again, as referred to above, the husband deposes that the income he earned between 2016 and 2018 was as follows:
In 2016, his income was $391,020.80;
2017, his income was $211,050.96; and
In 2018, his income was $600,586.86.
[45] The husband deposes that, when he was transferred to the Toronto office of NVIDIA in 2017, his base salary was decreased from $180,000 to $170,000 CAD. He was still entitled to, and did receive, performance-based employee stock options at the discretion of his employer, vested over the course of several years.[^6] These employee stock options are separate and apart from the initial 4,200 RSUs the husband was granted when he signed his offer of employment.
[46] The husband deposes that, for each year from 2016 to 2019, he was granted performance-based employee stock options, as follows[^7]:
In 2016, he was granted 475 employee stock options;
In 2017, he was granted 266 employee stock options;
In 2018, he was granted 200 employee stock options; and
In 2019, he was granted 425 employee stock options.
[47] As outlined above, the employee stock options granted to the husband in any year vested over a period of years. In particular, the husband deposes that the 425 employee stock options he was granted in 2019 will vest completely between March 2020 and March 2023. According to the husband, in 2020, the following number of employee stock options would vest as follows:
106 on March 18, 2020;
26 on Jun 17, 2020;
27 on September 1, 2020; and
26 on December 9, 2020.[^8]
[48] The husband deposes that in 2019, his employment income was $485,744.89, comprised of his base salary of $176,099.92 and the RSUs which vested in 2019, the market value of which totaled $306,903.62.[^9] This income is reflected in the husband’s 2019 income tax return, which was not available at the October 4, 2019 case conference when the parties’ consented to the Order that the husband pay child and spousal support on the basis of him earning $401,905. In other words, the husband received a benefit by being imputed with an income based on his last three years of income set out in Gilmore Consent Order, since, had his then current income been known and used, he would have had to pay the wife more child and spousal support.
[49] Despite having agreed to the terms of the October 2019 Gilmore Consent Order, the wife deposes that the husband did not pay any monthly child or spousal support to the wife from the day of his arrest on August 7, 2019 up until December 26, 2019. As a result, child and spousal support payments under the Order, up to March 2020, were paid out of the Cedar St. property sale proceeds.
[50] In terms of the husband’s 2020 income, he deposes that he his income for support purposes will be $303,068, calculated on the following basis:
As of October 31, 2020, he has received $148,217.74 income on account of vested RSUs, and base salary totaling $292,333.44;
A further $21,156.60 must be added to take into account the remainder of his base salary remuneration between October 31, 2020 and the end of the calendar year;
A further 26 NVIDIA employee stock options will vest on December 9, 2020, which need to be added to the calculation of the husband’s 2020 income. The husband deposes that the value of these 26 employee stock options is $17,500, which assumes a stock price for NVIDIA of $673.07 CAD; and
Taken together therefore, the husband deposes that his total 2020 income will be $330,990.04. However, he explains that $27,992.05 of this income is from a one- time non-recurring gain, which was derived from his employee share purchase plan which was his voluntary purchase of additional shares in NVIDIA which he purchased at a discount. The husband deposes that he opted out of the voluntary employee stock purchase plan on November 1, 2020 since he asserts that does not have the cash flow. In sum, according to the husband, his 2020 income for support purposes is $303,068.
[51] Since, according to the husband, his 2020 income ought to be being treated as $303,068, he claims that he has thus overpaid child and spousal support to the wife. However, the husband is not currently seeking a retroactive adjustment to support. Instead, he asserts that his support obligations going forward, in 2021, be based on what he estimates his 2021 income will be.
[52] For 2021 specifically, the husband deposes that the Court ought to use an income figure of $241,229.46 for him for support purposes. To arrive at this income calculation, the husband calculates that his base salary is $190,000 and that the 107 RSUs granted to him in 2019 will vest in 2021.[^10] Since the value of NVIDIA shares is market-dependent, the market is volatile and there is no certainty about what the shares will yield until they actually vest in 2021, the husband asserts that the Court ought to use an average value of the NVIDA shares in 2021 based on the NASDAQ values for 2020, which is $365.98 USD or $478.78 CAD. Applying this average market value to the 107 RSUs which will vest in 2021, the husband deposes that he
would receive an additional $51,229.46 (107 NVIDIA RSUs x $478.78) to his base salary of 190,000, totaling $241,229.46.
Issues
[53] The two motions give rise to the following four issues:
Has the husband’s income for support purposes changed and, if so, is the husband entitled to a variation of the temporary child and spousal support terms of the Gilmore Consent Order?;
Should the Gilmore Consent Order be changed to address the Cedar St. property sale proceeds such that the will remain in trust pending further court order or agreement of the parties?;
Should the Gilmore Consent Order be changed and an order be made, releasing to the wife her half-share of the matrimonial home proceeds and requiring that the husband’s half-share remain in trust, or should each party receive $100,000 from the sale proceeds and the balance be held in trust pending further court order or agreement of the parties?; and
Should the wife be reimbursed the sum of $18,143.50 from the husband’s half- share of the matrimonial home sale proceeds for matrimonial home expenses, which she solely paid post-separation?
Parties’ Positions
Issue 1 – Variation of Temporary Child and Spousal Support
[54] It is the husband’s position that his 2021 income for support purposes will be $241,229.46 and his corresponding child support obligation under the Guidelines amounts to $3,172 a month for the two children. The husband submits that the wife ought to be imputed with income of $42,918 a year, and that the mid-range of spousal support under the SSAGs produces a spousal support obligation of $1,448 a month. Finally, the husband submits that he and the wife ought to proportionately share the children’s s.7 expenses such that his responsibility for them would be 78.8% and the wife’s responsibility would be 21.2 %.
[55] In terms of the husband’s income for 2021, it is the wife’s position that it is impossible for this Court to predict, with any certainty, what the husband’s income will be. Other than his base salary of $190,000, the value of the RSUs that vest in 2021 will only become known when they vest. Again, the husband proposes that an average value of the NVIDIA shares from 2020 be used of $478.78 a share to estimate his 2021 income. In response, the wife asserts that the average value of the NVIDIA shares ought not to be used because it is clear that the husband received more per share than that in 2020 on average.
[56] The husband bases his 2021 spousal support obligation for the wife on the position that income of $42,918 a year ought to be attributed to the wife. He takes this position because the wife has a naturopathic products store known as Happy Nutrition, as well as two companies, Supplement for Less and Bionaturo Health Centre.
[57] The wife asserts that her naturopathic store, Happy Nutrition, had been collapsing prior to the Covid-19 shutdown. The wife deposes that she registered another business in 2020, known as Bionaturo Health Centre, operating as Compass Health, which provides massage therapy. This business began operating in June 2020. She deposes that she will earn less than $30,000 in 2020 from this business. As a compromise the wife is agreeable to being imputed with an annual income of $30,000 a year.
[58] Were he seeking a variation for 2020, the husband asserts that his 2020 income was
$303,068, which corresponds to a child support obligation of $4,238 a month as per the Child Support Guidelines. Using the mid-range of the SSAGs and, again, imputing the wife with an annual income of $42,918, the husband proposes that he ought to have paid spousal support to the wife in the amount of $2,194 a month a month. On these support figures, the husband proposes that he and the wife should have paid their proportionate share of the children’s s.7 expenses, which would have amounted to the husband paying 80% of these expenses and the wife paying 20%.
[59] The husband asserts that if his actual income of $303,068 had been used for 2020, instead of the average of his 2016, 2017 and 2018 incomes, he would have had to pay less support. At this time, the husband is not seeking a retroactive adjustment of the child and spousal support paid by him in 2020 but it is quite possible that he will be claiming a retroactive adjustment at trial, given the time spent during the course of his motion addressing the overpayment of support.
[60] The wife’s position is that the husband’s calculation of his 2020 income is neither reliable nor accurate. In paragraph 41 of the husband’s affidavit, sworn on November 24, 2020, he deposes that he received $148,217.74 for the RSUs that vested in 2020. According to the husband’s affidavit material, he had 159 NVIDIA shares at that time. Accordingly, that would result in the average value of each share he had being $932.18, which is double the average 2020 NASDAQ value of the NVIDIA shares of $478.78, which is the valuation approach that the husband has used in estimating his 2021 income. Furthermore, the husband has assumed that the RSUs that are scheduled to vest on December 9th, 2020 will do so at a stock value of $673.07, which again, is much higher than the average NASDAQ value the husband proposes that the Court use for his 2021 RSUs.
[61] Moreover, the bank statements, which the husband produced to the wife for 2020, show the transfer from his Charles Schwab brokerage account into his TD USD account of a total of $146,145 USD, or $190,215 CAD, for the period between January 1, 2020 until October 31, 2020, inclusive. These bank statements were attached as Exhibit “E” to the wife’s affidavit, sworn on November 27, 2020.
[62] The wife resists the relief sought by the husband on the following bases:
The husband cannot demonstrate a material change in circumstances in his income, which justifies a reduction in his temporary child and/or spousal support obligations;
While the husband is predicting his 2020 income, until an income tax return is filed, his 2020 income will not be known for certain;
The husband’s calculation of his 2021 income is an estimate only and it would thus be appropriate for the court to continue to use a three-year average of his income, as was agreed to by the parties in the Consent Gilmore Order, to account for the fluctuations in the husband’s incomes from year to year; and
A three-year average of the husband’s 2017, 2018 and 2019 incomes are
$429,799, which is higher, not lower, than the income imputed to the husband in the Gilmore Consent Order. A three-year average of the husband’s 2018, 2019 and his own estimate of his 2020 income is $463,043, which, again, is higher, not lower than the income imputed to the husband in the Gilmore Consent Order.
Cedar St. Property Proceeds
[63] The wife seeks to change paragraphs 5 and 6 of the Gilmore Consent Order so that the balance of the Cedar St. property sale proceeds in the sum of $194,081, are preserved and continue to be held in trust until trial. Currently, paragraphs 5 and 6 of the Gilmore Consent Order allow the husband to access the Cedar Street property sale proceeds to enable him to purchase a residence in the GTA, provided he does not encumber the new property to the extent of the Cedar Street proceeds. In this manner, the Cedar Street proceeds will be secured in a way which will likely result in fewer difficulties for the wife in obtaining payment of any amounts owing to her at trial.
[64] The husband, by his own admission, is residing with his girlfriend in her home in Thornhill. He has no plans to purchase a residence in the GTA, if he ever did. Accordingly, the wife seeks to change the order so that the Cedar Street sale proceeds are preserved by ensuring that what is left of these proceedings continue to be held in trust.
[65] The wife does not trust the husband, given the additional events that have occurred since the order was made:
i. The husband told this Court on October 4, 2019 that he wanted to purchase a residence in the GTA. The husband obtained a medical letter from his doctor, six days later, on October 10, 2020, indicating that he was not fit to work for 4-6 months. Days later, however, the husband was actively seeking and applying for employment positions in the Ukraine;
ii. The husband did not work from October 2019 to May 2020. He told the wife repeatedly during this time that he was not working and, as a result, he could not comply with his support obligations under the Gilmore Consent Order. However, during the husband’s questioning on March 12, 2020, he admitted that he continued to receive his regular pay from NVIDIA. His explanation for this was that “there was some mishap in the human resources department”. The wife maintains that if this were the case, NVIDIA would have asked the husband to return the funds which had been improperly paid to him between October 2019 and February 2020;
iii. During the parties’ case conference on January 10, 2020, the husband agreed to be examined by the wife’s expert in relation to his alleged depression and inability to work. When the wife’s counsel notified the husband’s counsel of the name of the psychiatrist who would be conducting the assessment, the husband immediately allegedly returned to work, rendering the need for the assessment moot;
iv. After the husband’s questioning on March 12, 2020, the husband provided further financial disclosure. From the disclosure received, the wife calculated that over$90,000 was withdrawn from his bank account, prior to her date of separation, and the amount was not disclosed elsewhere in his financial statement;
v. On September 3, 8 and 23, 2020, the husband received $80,000 USD net of taxes from his RSUs, $50,000 USD of which he immediately transferred into a newly incorporated company, known as Acoustic Distillery, which is allegedly owned by his girlfriend. This was only discovered by the wife from a review of the husband’s bank records. During the marriage, the husband talked to the wife about incorporating a company, which he would call “Acoustic Distillery”. The husband owed child and spousal support arrears in September 2020 and represented to the Court on September 2, 2020, that he did not have sufficient income with which to satisfy his support obligations. This resulted in the Order of Diamond, J. on September 2, 2020, that the husband direct Mr. Sakinofsky pay $5,500 a month of his $9,200 monthly support obligation, out of the Cedar St. property sale proceeds. The husband chose to loan $50,000 USD to his “girlfriends” company instead of using this income to satisfy his child and spousal support obligations under the Gilmore Consent Order; and
vi. Even though the husband deposes that his 2020 income was $303,068, a figure with which the wife does not agree, he continuously failed to pay any monthly child and spousal support in 2020 to the wife. Instead, he relied on the Cedar St. property sale proceeds to pay his support obligations. As of the date of the long motion, a total of $104,500 was paid toward child and spousal support out of the Cedar Street proceeds and these proceeds continue to dissipate at the rate of $5,500 a month.
[66] The wife’s concerns have been significantly heightened since October 4, 2019. At that time, she had some concerns, given that the husband had sold the Cedar Street property within days of him obtaining ownership of same, which he disclosed to the wife less than 48 hours prior to the property transaction closing. It is the wife’s belief that, had she not registered a CPL on title to the property she would not have known that the property had been sold
Matrimonial Home Proceeds
[67] The wife is seeking an order that 50% of the matrimonial home proceeds be released to her and the balance continue to be held by the real estate lawyer. She submits that, regardless of which valuation date is used, the husband will owe her an equalization payment on either valuation date. She is concerned that, if the husband were to receive his share of the matrimonial home proceeds, her ability to receive the equalization payment owing to her will be jeopardized
[68] Further, the wife submits that the husband has no financial need to have access to his share or, or even a portion of his share of the matrimonial home proceeds. Paragraph 25 of the husband’s affidavit, sworn November 26, 2020, confirms that he deposes that he has liquid assets of $63,000 and in paragraph 26 he deposes that he has an investment account with a balance of $160,000 USD or $204,800 CAD.[^11] Further, the husband deposes that he will receive another RSU payment on December 9, 2020, which he believes will be about $17,500.
[69] In particular, the wife deposes that, when her date of separation is proven at trial (the 2019 date), the net proceeds of sale of the matrimonial home will end up being released to her since the husband will owe her an equalization payment. Using the husband’s NFP statement which was attached as Exhibit “M” to his affidavit, sworn on November 24, 2020, on his numbers, the husband would owe the wife an equalization payment of $140,420, not inclusive of the wife keeping her 50% share of the matrimonial home proceeds. By the wife’s estimate, she submits that that the husband would owe her an EP in excess of $400,000. She seeks that the husband’s share of the matrimonial home proceeds be preserved under ss. 12 and 34 of the Family Law Act and held in trust until a trial of this matter, as security for her property and support claims.
[70] Again, the wife claims that the husband has not valued a company owned by him, Votasoft, which held significant retained earnings in 2018 of $146,681 plus equipment on her valuation date.
[71] Although neither party was in a position as at the date of this long motion to advise the court as to what the difference was between the equalization payment owing by the husband to the wife on the two valuation dates, they do agree that it will be the husband who owes the wife an Equalization Payment. The wife deposes that her net family property on the husband’s valuation date is $11,455.75.
[72] The husband takes the position that each party ought to receive $100,000 from the matrimonial home proceeds because the balance of the funds will be sufficient security for both parties’ family law claims.
[73] The wife submits that she requires her equity from the matrimonial home sale proceeds now because she has been unable to cover her and the children’s day-to-day expenses. In particular, the wife deposes that she has significant debts, which need to be discharged: her TD Visa balance of $16,698.45; her AMEX has a balance of $16,033.88; her TD Line of Credit which has been drawn on to the extent of $18,000; her other TD Visa balance of $9,596.45; and her Mastercard balance of $7,466.
[74] The wife is also seeking an order that the sum of $18,143.30, which are the payments she made in connection with the matrimonial home, such as the mortgage, property taxes, property insurance and utilities for the period from August 7, 2019 to October 31, 2019, be taken from the husband’s 50% share of the motional home proceeds and paid to her now. The husband submits that this $18,143.30 is a post-separation adjustment which can be dealt with in the overall resolution of the issues between the parties. Further, the husband submits that only 50% of this figure was his responsibility.
Analysis and Evidence
Issue 1- A Change in Temporary Child and Spousal Support:
[75] The husband has moved for a variation of the Gilmore Consent Order. The Gilmore Consent Order was based on the husband earning an imputed annual income of $401,905, which, again, was calculated by averaging the husband’s last three years’ income based on the tax returns available on the October 4, 2019 case conference (2106, 2017 and 2018). This order was consented to by the husband.
[76] Given the structure of the husband’s remuneration, namely, the receipt of a base salary, plus the vesting of RSUs previously granted to him in prior years, he claims that he never had the cash flow necessary to pay and keep his monthly child and spousal support payments under the Order current. The husband has been in perpetual arrears of child and spousal support under the Order from the date of the Order onward. The only manner by which he claimed that he could comply with the order is by paying the support out of the Cedar St. property sale proceeds.
[77] Given that the number of RSUs that vest varies and the market value of the shares fluctuates, the husband’s income varies from year to year, at times, dramatically. Thus, it is not surprising in the least that the parties agreed to use a three-year average to impute the husband’s income when they reached agreement on the husband’s temporary child and spousal support obligations that are set out in the Gilmore Consent Order.
[78] The husband’s evidence is that the lawyer representing him on October 4, 2019 case was “inexperienced” and agreed to use a three-year average of his 2016, 2017 and 2018 incomes because it was the “easiest thing to do” and that he did not understand the husband’s remuneration. These statements are disingenuous. The husband’s 2019 income tax return demonstrates that he actually earned $485,744 in 2019 and not the $401,905 imputed amount agreed to in the Gilmore Consent Order. Accordingly, the husband effectively underpaid child and spousal support in the months of October, November and December 2019, if one were to go back and start determining new support amounts, based on the actual income he earned in 2019.
[79] This cannot fairly be done for 2020, until the husband files his 2020 income tax return, which he could not have done in December 2019. Nor can he do this for 2021. However, surely the husband knew or could easily have determined what he had earned in 2019, up to September 30, 2019. The husband simply blames his lawyer for “his” consent to the court order. Given the significant fluctuation in a party’s income from year to year, a three-year average is often a sensible approach to use to determine a payor’s income. The husband would get the benefit of paying child and spousal support to the wife on an income level that was below what he actually earned in 2019. However, he might have to pay more than he would otherwise have had. The husband should have arranged his financial affairs at the time the Gilmore Consent Order was made such that he would be able to pay the temporary child and spousal support in full at times when he felt that his cash flow from his employment did not comfortably permit him to do it. The husband’s conduct following the making of the Order undermines his position that his counsel simply had not understood the terms to which the husband consented.
[80] Not only did the husband pay nothing between August and October 2019, but he initially alleged that he was unable to work after the October 2019 Gilmore Consent Order was made, which position he appeared to give up when face with a request for an assessment by a psychiatrist. More tellingly, although it was not clear to me when FRO began to garnish the husband’s base salary, he did not pay one cent more to FRO voluntarily until the wife brought a motion in July 2020 to strike his pleadings for his failure to pay support under the Gilmore Consent Order, at which point he made a few voluntary payments but never enough to satisfy the monthly obligations.
[81] Price, J. held in Rowland v. Middlebrook 2013 ONSC 2838 (Ont. SCJ) that “it is not uncommon, where the court anticipates disputes over adjustments to child support, to provide for applications in the interim order for child support itself.” The Gilmore Consent Order does not contain such a provision.
[82] In the present case, the husband asserts that he overpaid support in 2020 and while he is not seeking a retroactive support adjustment, he seeks an order that his prospective temporary child and spousal support obligation, commencing on January 1, 2021, be based on the income he estimates that he will earn in 2021. The difficulty with this argument is that it is impossible to predict, with near or reasonable certainty, what the husband’s 2020 or 2021 income will be.
[83] Applying a formula to calculate what the husband will receive in 2021 once his RSUs vest is problematic, given that they vest at different times throughout the year. That is why dividing the total number of RSUs that vest in a year by the total income received from them is not the correct way to calculate the return, since what matters is the market value of the shares at the time they vest.
[84] In 2020, without knowing what income the final tranche of RSUs would yield when they vested on December 9, 2020, I could not calculate with any certainty what the husband’s 2020 income will be. Even if the husband’s estimate of his financial return of the last tranche of RSUs on December 9, 2020 is accurate ($17,500), I could not say whether the husband has any other class of RSUs that have vested or will still vest in 2020 until he files his final income tax return with CRA. It is impossible for me to know whether the husband opted into his employee share purchase plan in the past. I cannot, with certainty, determine whether as the husband deposes, the capital gain of $27,992.05 earned by him in 2020 is, in fact, “a one-time non- recurring gain”. Further, just because the husband deposes that he opted out of the voluntary employee stock purchase plan on November 1, 2020, I cannot know for certain that he does not have the right opt back into the employee share purchase plan in 2021. His credibility is in serious question.
[85] The husband submits that it was improper to use a three-year average of his incomes when the Gilmore Consent Order was entered into. However, it turns out the husband’s 2019 income was higher than the formula on which the Gilmore Consent Order was based.
[86] The Gilmore Consent Order does not make specific provision for adjustments to child support (let alone, spousal support) based on changes to the husband’s income prior to trial. As in Rowland v. Middlebrook supra, this court is being called upon to exercise its discretion as to whether to make a temporary variation order at this time, based on disputed evidence, which the parties will have a better opportunity to test on cross-examination and opposing evidence at trial.
[87] The courts generally avoid varying interim orders on motions prior to trial unless the circumstances are urgent. Jarvis J., in Pakka v. Nygard 2004 5071 (ON SC), stated as follows:
The variation of an interim order is a difficult area. Policy considerations dictate that such applications be discouraged. They increase the stress and uncertainty of the parties and vastly increase the cost of litigation. To echo the words of Wolder J. in Thompson v. Thompson, [1995] O.J. No. 2106 (Ct. J. (Prov. Div)), such an order sh ould be varied only wh ere the failure to v ary “ would cause the payor to suffer undue hardship or that a continuation of the existing order would be incongruous and absurd.”
[88] I am not satisfied on the evidence before me that there has been a material change in the husband’s income such that, in the circumstances, a continuation of the child and spousal support terms of the Gilmore Consent Order would be incongruous or absurd, or even unfair.
[89] Now that the husband’s 2019 income is known, a three-year average of his 2017, 2018 and 2019 incomes would yield an income of $432,371 for the husband, which is higher than the income imputed to him in the Gilmore Consent Order. Alternatively, even if the court accepts the husband’s estimate of his final 2020 income at $303,468, a three-year average of his 2018, 2019 and 2020 incomes yield an income of $429,799, again, a higher income than that imputed to him in the Gilmore Consent Order. Although I have, for the moment, treated the husband’s income for 2020 as being $303,468 for purposes of this Decision, in order to demonstrate that even on the lower income of $303,468, I would still not change the current order.
[90] It is impossible to know what the husband’s income in 2021 will be given the fluctuation in the value of the NVIDIA shares. This is why when one looks at the husband’s income from 2016 onward, it has fluctuated in the way that it has. Again, in 2016, he earned
$391,020; In 2017, he earned $211,050; In 2018, he earned $600,586. In 2019, he earned
$485,744; and he predicts that he will earn $330,990 in 2020.
[91] What is telling is that the husband’s position is that he will earn about $303,468 in 2020 but asks the court to impute an annual income of $241,229.46 to him in 2021. First, as I have set out in paragraph [83] above in these Reasons, his approach toward estimating the return he will have on the RSU’s he deposes will vest and be paid out in 2021 is not reliable given the income he actually earned from RSU’s in the past (see paragraphs [81 and 82] above). Further, it is by no means clear that the husband will not opt back into the employee share purchase plan after this motion has been resolved. Finally, of great concern, is that the husband estimated the 2021 income using a vesting schedule of employee stock options granted to him in 2019 only. The husband, himself, deposes that the employee stock options granted to him vest over a period of several years. Thus, he includes RSUs granted in 2019 that vested in 2020. It is entirely possible that the husband will receive further income from the vesting of performance- based employee stock options that he was granted in 2017 and 2018 which he has not included as part of his calculation of his estimated 2021 income. Further, it is entirely possible that performance-based employee stock options were granted to him in 2020, which have also not been disclosed, might also affect his 2021 income [the granting of performance-based employee stock options does not appear to be connected to the income earned by the husband in the year in which they are granted]. See paragraphs [44] and [46] above.
[92] I point out that the husband did not mention or rely on any circumstances known to him, which would support a position that his income from employment would likely be less in 2021, such as Covid-19 related factors, which might be relevant in some circumstances. While anything is possible, the approach that the parties took to the payment of temporary child and spousal support cannot be said to be “improper” or unfair.
[93] The husband has asserted that income of $42,918 a year ought to be imputed to the wife when the calculation of child and spousal support is completed. The wife submits that she ought to be imputed with an income of $30,000 from her businesses.
[94] On an income of $401,905 for the husband, even if the court were to impute the wife with an income of $42,918, as sought by the husband and, if the court requires the wife to pay her proportionate share of the children’s private school tuitions, if the husband would be obliged to pay spousal support to the wife at the mid-range of the SSAGs ($6,440 a month), then his net disposable income would be $8,175 a month (see supportmate calculation attached as Schedule “A”). [^12] Under the current Gilmore Consent Order, the husband nets $8,483 a month (see supportmate calculations attached as Schedule “B”) [^13].
[95] Given that I am not satisfied that the husband has demonstrated that in 2020 an income of $303,068 and, more particularly, for 2021, an income of $241,229.46 ought to be imputed to him for support purposes, the effect on the husband of paying 100% of the children’s s.7 expenses and support amount makes no meaningful difference to him. Given my concern about non-disclosure of performance-based employee stock options that may vest and be paid out to the husband in 2021, the same concern arises in respect in 2020. It is not known whether any options vested in 2020, after October 31, 2020, which were granted to the husband in years prior to 2019.
[96] On the basis of the above considerations and the evidence as a whole adduced before me, the husband has not satisfied me that there has been a change in circumstances such that there should be a variation of the support terms of the temporary Gilmore Consent Order.
Issue #2: Should the Court change the Gilmore Consent Order such that the Cedar St. property sale proceeds remain in trust pending further court order or agreement of the parties?
[97] At the time the Gilmore Consent Order was made, the husband had expressly advised the wife and Court that he planned to purchase a home in the GTA so he could live close to the children. This was the husband’s justification in selling the Cedar St. property. Very fairly, the wife consented to an order which contained a term allowing for the release of the Cedar St. property sale proceeds to enable the husband to purchase a home, on the condition that he not encumber that new property, which would preserve the equity as security for her support and/or property claims.
[98] However, after the husband represented to the wife and to the Court that he intended to purchase a new home in the GTA, he also applied for employment positions in the Ukraine. Further, instead of using his income to satisfy his child and spousal support obligations, in early September 2020, he allegedly loaned $50,000 USD to Acoustic Distillery, allegedly his girlfriend’s company. This decision is indicative of the husband placing his own needs ahead of the children’s and wife’s needs and entitlement to support. The husband deposes that Acoustic Distillery is not his corporation but is his girlfriend’s. The husband had no difficulty paying significant monies to his girlfriend’s company while also claiming that he had no money to pay the arrears of child and spousal support he owed. The husband deposes that these monies were a loan to his girlfriend, which she has repaid. The husband has provided no evidence to prove where he deposited these repaid funds.
[99] The wife was left to bring motions before the court to require the husband to comply with the support terms of the Gilmore Consent Order and ultimately, she agreed that the monthly arrears and arrears of the children’s s.7 expenses would be paid out of the Cedar St. property sale proceeds. The wife’s concern is that the husband is paying support out of capital and that he is using his income for his own purposes. She is further concerned that, if the balance of the Cedar St. property sale proceeds are not strictly preserved, there may be no ability on the part of the wife to enforce payment of the equalization payment owed to her without incurring further unnecessary legal expenses. Accordingly, she is seeking an order that the balance of what remains of the Cedar St. property sale proceeds be held in trust pending trial.
[100] The husband has demonstrated that he has no current intention of buying a new residence in the GTA. He is, by his own admission, residing with his girlfriend in her home in Thornhill.
[101] The husband admits that he owes an equalization payment to the wife. The amount of it will be determined at trial. Issues regarding the husband’s assets, on both alleged valuation dates have yet to be determined. Pursuant to s.12 of the Family Law Act, a court can, if it considers it necessary for the protection of a spouse’s interests under Part I of the Family Law Act, make an interim or final order for the safekeeping and preservation of property. Pursuant to this section, it is appropriate in the circumstances for the remainder of the Cedar St. property proceeds, which is $194,081, to be held in trust pending the trial of this matter.
Issue 3: Should the Court order the release to the wife of her 50% share of the matrimonial home proceeds being held in trust while the husband’s 50% share remains in trust? Or should each party receive $100,000 from the respective 50% share and the remaining proceeds be held in trust pending further court order or agreement of the parties?
[102] The total sum of the net matrimonial home sale proceeds currently being held in a real estate lawyer’s trust account, is $460,347. The wife is seeking an order that her 50% share, namely $230,173.50, be released to her now and that the husband’s share remain held in trust pending further court order or agreement of the parties.
[103] Apart from the fact that the wife seeks the release of the funds to pay off debt, substantial legal fees and meet her expenses, the husband has relied on no basis upon which her share of the proceeds, rather than just $100,000 continue to be held.
[104] It is and has been within the husband’s power and control to deliver his outstanding disclosure for the wife to determine with more certainty what the net family property of the parties is on her alleged V-date. In terms of the husband’s valuation date, the wife deposes that she has provided the husband with the disclosure supporting her net family property at his alleged date. Once it can be determined with some certainty what the difference between the equalization payment owed is using the 2014 valuation date as compared to the 2019 valuation date, if excessive funds are being held as security for the wife’s equalization payment, then the husband will be free to bring another motion before the court for the release of his share of the matrimonial home proceeds, if the wife is not prepared to consent to a reasonable order.
Issue 4: Should the wife be reimbursed out of the husband’s half share of the matrimonial home sale proceeds for matrimonial home expenses solely paid by her post-separation, half-of which the husband concedes were his responsibility?
[105] The wife seeks to receive the sum of $18,143.30 out of the husband’s 50% share of the matrimonial home sale proceeds as reimbursement to her for the matrimonial home expenses she alone paid post-separation.
[106] In particular, she paid the mortgage, property tax payments and insurance expenses of the matrimonial home after separation, in the total amount of $18,143.30, from August 7, 2019 to October 31, 2020, inclusive, when the matrimonial home sale closed. The husband did not contribute to any of these expenses.
[107] The husband submits that he should only be responsible for 50% of these expenses, being $9,071.65, and not $18,143.30. The husband does not dispute that the wife is owed these funds but asserts that these are post-separation adjustments which ought to be accounted for in the overall resolution of the issues or at trial.
[108] It is not necessarily the case that the husband would only be responsible for 50% of the matrimonial home expenses paid solely by the wife. These expenses were paid by the wife between August 7, 2019 and October 31, 2020. There is no justifiable reason that the husband has put forward to delay the payment of the amount that he acknowledges he owes her. The amount of $9,071.65 is to be released to the wife without prejudice to her right to claim reimbursement to her of the balance of matrimonial home expenses in the determination of her support or other claims at trial and, without prejudice to the husband’s right to seek credit for the amount released in the determination of the just mentioned claims or claims he makes at trial.
Conclusion and Order:
[109] Based on the foregoing, it is ordered that:
Paragraphs 5 and 6 of the order of Gilmore, J., dated October 4, 2019, shall be deleted and the following shall be substituted for them: “The net proceeds from the sale of 122 Cedar St. Cambridge, Ontario, shall be held in trust by Mr. Sakinofsky until further court order or agreement of the parties”;
The applicant shall receive her 50% share of the matrimonial home sale proceeds, currently being held in trust by Mr. Sakinofsky, in the sum of $230,173.50, immediately. The balance of the matrimonial home proceeds shall continue to be held in trust by Mr. Sakinofsky until further court order or agreement of the parties.
On consent, the respondent shall produce all of his bank account statements from January 1, 2018, to December 31, 2019, inclusive within 45 days;
The child and spousal support terms of the order of Gilmore, J., dated October 4, 2019, shall remain in full force and effect until further court or agreement of the parties.
The applicant shall receive the sum of $9,071.65, out of the husband’s 50% share of the proceeds from the sale of the matrimonial home currently being held by Mr. Sakinofsky, without prejudice to the applicant’s right to claim reimbursement to her of the balance of matrimonial home expenses in the determination of her support or other claims at trial and, without prejudice to the respondent’s right to seek credit for the amount released in the determination of the just mentioned claims or claims he makes at trial.
If the parties cannot agree on costs, a party seeking costs shall provide written submissions of no more than three pages, exclusive of any offers to settle, dockets and bill of costs by December 23, 2020. The party responding to a request for costs shall do so in similar form within 10 days of receipt of costs submissions. Reply submissions, if any, to responding costs submissions shall be no more than 1 page and provided within 5 days of receipt of responding submissions.
M. Kraft, J.
Released: December 15, 2020
COURT FILE NO.: FS-19-11972
DATE: 20201214
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Olga Grass Applicant
– and –
Oleksandr Hropak Respondent
REASONS FOR JUDGMENT
M. Kraft, J.
Released: December 15, 2020
Schedule "A" to Kraft Reasons
Income for Husband at $401,905; income imputed to Wife of $42,918; parties sharing the children's tuition expenses proportionally, H at 73% and W at 27%
Cautions/Overrides
Oleksandr Male, 51, Resident of ON
Income
Child Support (Table) - Oleksandr Hropak's Income over $150,000; CSG Table Amount may be inappropriate.
Employment income (3 year average)
Special Expenses (s.7)
Extraordinary educational expenses (Tikhon's tuition)
Extraordinary educational expenses (Vera's tuition)
401,905
24,000
12,000
SSAG - Oleksandr Hropak's Income over $350,000; SSAG may not apply
Oleksandr Olga Grass
Annual Guidelines Income 401,905 42,918
CSG Table Amount (current) 5,100 0
Olga Grass Female, 46, Resident of ON
Income
Child Support (Table) 5,100 0
Special Expenses (s.7) 3,000 0
Employment income (H's position of income to be imputed to the 42,918
Child Support (s.7 Payment) See Support Scenarios
Spousal Support Advisory Guidelines (SSAG) Monthly $
Children Age Lives with Table Amt Claimed by
Tikhon 15 Olga Grass Yes Olga Grass
Vera 12 Olga Grass Yes Olga Grass Youngest child finishes high school 6 years from the date of separation.
Dependant credit claimed by Olga Grass.
Length of marriage!cohabitation: 0 years Recipient's age at separation: 45 years
"With Child Support" Formula
Required input for duration: Length of Marriage
SSAG Considerations: The results of the SSAG formula must be interpreted with regard to: Entitlement; Location within the Ranges; Restructuring; Ceilings and Floors; and Exceptions.
Support Scenarios Monthly$
A. SSAG low
B. SSAG Mid
C. SSAG High
Gross Income
Oleksandr
Olga Grass
Oleksandr
Olga Grass
Oleksandr Olga Grass
33,492
3,576
33,492
3,576
33,492 3,576
Taxes and Deductions
(12,119)
(2,214)
(11,557)
(2,670)
(10,988) (3,130)
Benefits and Credits
0
351
0
291
0 231
Special Expenses (s.7)
(3,000)
0
(3,000)
0
(3,000) 0
Spousal Support
(5,390)
5,390
(6,440)
6,440
(7,502) 7,502
Child Support (Table)
(5,100)
5,100
(5,100)
5,100
(5,100) 5,100
Child Support (s.7 Payment)
726
(726)
810
(810)
897 (897)
Net Disposable Income (NDI)
8,609
11,477
8,205
11,927
7,799 12,382
adult in household
child in household
shared/summer child in household
Payor's NDI/Contribution
Percent of NDl
42.9%
57.1%
40.8%
59.2%
38.6% 61.4%
CSG Special Expenses Apportioning %
75.8%
24.2%
73.0%
27.0%
70.1% 29.9%
After-tax Cost/Benefit of Spousal Support
(2,505)
3,566
(2,993)
4,160
(3,486) 4,761
v. 2020.10.14 (c) 2020 DivorceMate Software Inc. Page 1 of 1
Schedule "B" to Kraft Reasons
Tools One 2020
r
Gilmore Consent Order: Husband's imputed income of $401,905; Wife with nil income; child support at $5,100 and spousal support at $4,100 a month and H paying 100% of tuition
Cautions/Overrides
Oleksandr Male, 51, Resident of ON
Income
Child Support (Table) - Oleksandr HropDaekc'esmInbceor m13e2020 over $150,000; CSG Table Amount may be inappropriate.
Employment income (3 year average)
Special Expenses (s.7)
Extraordinary educational expenses (Tikhon's tuition)
Extraordinary educational expenses (Vera's tuition)
401,905
24,000
12,000
SSAG - Oleksandr Hropak's Income over $350,000; SSAG may not apply
Oleksandr Olga Grass
Annual Guidelines Income 401,905 0
CSG Table Amount (current) 5,100 0
Olga Grass Female, 46, Resident of ON
No information
Children Age Liveswith Table Amt Claimedby
Tikhon 15 Olga Grass Yes Olga Grass
Vera 12 Olga Grass Yes Olga Grass Youngest child finishes high school 6 years from the date of separation.
Dependant credit claimed by Olga Grass.
Child Support (Table) 5,100 0
Special Expenses (s.7) 3,000 0
Child Support (s.7 Payment) See Support Scenarios
Spousal Support Advisory Guidelines (SSAG) Monthly $
Length of marriage/cohabitation: 0 years Recipient's age at separation: 45 years
"With Child Support" Formula
Required input for duration: Length of Marriage
SSAG Considerations: The results of the SSAG formula must be interpreted with regard to: Entitlement; Location within the Ranges; Restructuring; Ceilings and Floors; and Exceptions.
Support Scenarios Monthly$
A. SSAG low
B. SSAG Mid
C. SSAG High
Gross Income
Oleksandr
Olga Grass
Oleksandr
Olga Grass
Oleksandr Olga Grass
33,492
0
33,492
0
33,492 0
Taxes and Deductions
(11,487)
(1,188)
(11,039)
(1,444)
(10,547) (1,777)
Benefits and Credits
0
487
0
439
0 387
Special Expenses (s.7)
(3,000)
0
(3,000)
0
(3,000) 0
Spousal Support
(6,571)
6,571
(7,408)
7,408
(8,326) 8,326
Child Support (Table)
(5,100)
5,100
(5,100)
5,100
(5,100) 5,100
Child Support (s.7 Payment)
588
(588)
663
(663)
747 (747)
Net Disposable Income (NDI)
7,922
10,382
7,608
10,840
7,266 11,289
adult in household
child in household
shared/summer child in household
Payor's NDI/Contribution
Percent of NDl
43.3%
56.7%
41.2%
58.8%
39.2% 60.8%
CSG Special Expenses Apportioning %
80.4%
19.6%
77.9%
22.1%
75.1% 24.9%
After-tax Cost/Benefit of Spousal Support
(3,054)
5,350
(3,442)
5,931
(3,869) 6,517
Tools One 2020
Schedule B Grass v. Horpak - $401,905 for H, nil income for W, I December 13 2020
Support Scenarios Monthly$
D. $4,100 Spousal
Gross Income
Oleksandr
Olga Grass
33,492
0
Taxes and Deductions
(12,809)
(386)
Benefits and Credits
0
864
Special Expenses (s.7)
(3,000)
0
Spousal Support
(4,100)
4,100
Child Support (Table)
(5,100)
5,100
Child Support (s.7 Payment)
366
(366)
Net Disposable Income (NDI)
8,849
9,312
adult in household
child in household
shared/summer child in household
Payor's NDI/Contribution
Percent of NDl
48.7%
51.3%
CSG Special Expenses Apportioning %
87.8%
12.2%
After-tax Cost/Benefit of Spousal Support
(1,905)
3,681
Husband's NDI is $8,840 - $366 and Wife's NDI is $9,312 + $366
[^1]: Husband’s affidavit, sworn November 30, 2020, at para. 21.
[^2]: Husband’s affidavit, sworn on November 24, 2020, at para. 29.
[^3]: Husband’s affidavit, sworn on November 24, 2020, at para. 32.
[^4]: Wife’s affidavit, sworn on November 24, 2020, at Exhibit “E”.
[^5]: Pursuant to the Order of Akbarali, J., dated On December 12, 2019, $30,000 (the arrears from the date the order was made on October 4, 2019 until December 12, 2019 of $28,500 + $1,500) was paid out of the Cedar St. property sale proceeds; On December 12, 2019, $9,600 was paid from the Cedar St. property sale proceeds as arrears for both children’s private school tuition fees; In April 2020, the husband paid the full amount of support of $9,500 from his income and/or savings; On July 10, 2020, the husband paid $4,400 toward the May 2020 support; On July 13, 2020, the husband paid $4,400 toward the June 2020 support; On July 30, 2020, the husband paid $4,400 toward the July 2020 support; and in September 2020, the sum of $29,800 was paid to the wife from the Cedar St. property sale proceeds to satisfy the support arrears.
[^6]: Husband’s affidavit sworn on November 24, 2020, at para.36.
[^7]: Husband’s affidavit, sworn on November 24, 2020, at para. 37.
[^8]: Husband’s affidavit, sworn on November 24, 2020, at para. 37.
[^9]: Husband’s affidavit sworn on November 24, 2020, at para. 38.
[^10]: Husband’s affidavit, sworn on November 24, 2020 at para 52.
[^11]: Using a USD to CAD exchange rate of 1.28%.
[^12]: If an income of $400,000 is imputed to the husband; an income of $42,918 is imputed to the wife as the husband proposes; if both Tikhon’s and Vera’s private school tuitions are listed as s.7 expenses, then the husband’s proportional responsibility toward these expenses would be 73% and the wife’s proportional share would be 27%. The calculation provides that the husband would be obliged to pay child support pursuant to the Guidelines in the sum of $5,100 a month for the two children. The mid-range of spousal support under the SSAGs amounts to $6,440 a month. This would translate into the wife paying the husband $810 a month for the children’s s.7 expenses since, in this scenario, supportmate arbitrarily treats as a set-off determination of child support, the husband would have net disposable income of $8,206 a month and the wife would have $11,927 a month, after each pays their proportionate share of the tuitions.
[^13]: Under the Gilmore Consent Order, if an income of $401,905 is imputed to the husband; zero income is imputed to the wife; if the husband pays for 100% of Tikhon’s and Vera’s private school tuitions, the calculation provides that the husband would be obliged to pay child support pursuant to the Guidelines in the sum of $5,100 a month for the two children and spousal support of $4,100 a month, the husband would have net disposable income of $8,483 a month (being $8,849 a month less $366 which supportmate arbitrarily treats as the wife’s proportional contribution to the tuitions) and the wife would have $9,678 a month (being $9,312 plus $366 she would not pay the husband for the tuitions).