COURT FILE NO.: FS-16-85582 (Brampton)
DATE: 20210702
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Adel Gergis
Applicant
-and-
Mariana Michael
Respondent
Adel Gergis, acting in person
Menreet Salama, for the respondent
Heard: March 19, 2021 by video conference; additional written submissions received March 29, 2021.
Chown J.
REASONS FOR DECISION
[1] The applicant husband brings this motion to vary interim spousal and child support.
[2] A preliminary objection was raised by the respondent. She argues that this matter is stayed by virtue of the applicant’s status as an undischarged bankrupt.
Motion Materials
[3] The applicant, acting in person, has submitted electronic materials that are in pieces, inconsistently named, not named in accordance with the practice direction, not bookmarked, and with no index. He submitted many different pdf documents for use in the hearing including duplicates, partial duplicates, and overlapping versions of some of the exhibits. The materials also referred to affidavits that were previously filed in this matter. English is a second language for the applicant. His written materials are at times difficult to understand. His affidavits are frequently repetitive with small additional details added in each retelling. As a result, it was difficult to develop a coherent understanding of the history of this matter and applicant’s responses to the respondent’s evidence. This is not intended as a criticism of the applicant, but merely an observation to help explain the lengthy wait for this decision.
Background
[4] The parties were married in Egypt on August 27, 2007. After the marriage, the applicant sponsored the respondent to come to Canada and live with him. In 2008, the respondent arrived in Canada.
[5] The applicant is qualified in Canada as a pharmacist and has worked in this capacity for many years.
[6] The respondent is qualified in Egypt as a physician; however, she has been unable to obtain certification in Canada as a physician.
[7] The applicant and the respondent have one child together who was born in October of 2010.
[8] The respondent makes serious allegations against the applicant. She says he committed fraud and forged her signature. Specifically, she says that the applicant sold the matrimonial home without her consent while she was in Egypt attending her brother's wedding. She left for Egypt on November 30, 2015. She says in her affidavit that the applicant “was in full agreement and signed a consent for Maria to be absent from school until March 21, 2016,” the anticipated return date. The respondent deposes that, as part of the sale of the property, the applicant presented a false statement that he was not a spouse and that the property was not a matrimonial home. She says the house was sold for less than fair market value. The respondent further states that the applicant fraudulently sold her car by forging her signature on the ownership, and he disposed of the contents of the matrimonial home, most notably her jewelry, her medical certificates, and her textbooks.
[9] The applicant responds to this by saying that the respondent and their child left for Egypt on November 30, 2015, on a one-way ticket. He says she told him she would be in Egypt for at least 15 months so that she could requalify as a physician there, which would help with obtaining her licence to practice in Canada. She asked him to confirm the absence of their daughter from school for one year but to seek to enrol her in French school for the following year. The applicant says he supported the respondent in her efforts to obtain credentials as a physician in Canada, including providing funding of over $30,000 towards courses and licencing exams, which she was unable to pass. He claims to have discovered from an old cell phone used by the applicant that she had committed adultery. He claims he made this discovery while she was in Egypt. He had an Egyptian lawyer serve the respondent in Egypt with an application for a simple divorce. The materials are not clear, but I believe this was the current Ontario proceeding, and not a proceeding commenced in Egypt. He said a 2007 pre-marriage agreement confirmed they agreed to have the matrimonial home in Egypt. The translation of the “agreement” makes it appear that the document is more like a marriage registration than a pre-nuptial agreement, but it does reflect some agreed terms on certain issues such as dowry. The document says that the parties “agreed that the matrimonial home is located at Hadaeq Kafr Eldawar.” It does not suggest that this was permanent, and the evidence does not indicate who owned that property at the time of marriage in 2007, or in 2016. Further, it is not clear from the materials that the phrase “matrimonial home” has the same significance in this translated document that this phrase has in Ontario under the Family Law Act. The applicant denies that he certified in the sale documents that he was not a spouse. He acknowledges saying that the property was not a matrimonial home, it being his view that it was not the matrimonial home. The house was in his name only. He says the respondent returned to Canada unexpectedly. He says he obtained fair market value for the home, and he has provided a list of other properties that he says sold for comparable amounts. He says he set aside approximately half the net proceeds for the respondent.
[10] With respect to the sale of the car, the applicant says it was jointly owned. He traded it in. It was worth only $1,000 on the trade in. The alleged forgery was reported to the police by the respondent. The police investigated and took no action against the applicant. The applicant has provided copy of the ownership for the vehicle. He denies forging the applicant’s signature.
[11] The applicant has provided records relating to a complaint made by the respondent to the Ontario College of Pharmacists which the College found to be unfounded.
[12] The circumstances raise credibility concerns for the applicant, and to some extent for the respondent, but these will be difficult to resolve without a trial.
[13] The applicant has remarried and now has two children from this second marriage.
Relevant Procedural History
[14] In April of 2016, the respondent brought an urgent motion seeking interim child support, interim spousal support, and an order that the remainder of the sale proceeds from the sale of the matrimonial home be paid into court. Justice Bloom granted the motion and made an interim order for child support of $1,000 per month and spousal support of $2,000 per month.
[15] The issue of divorce was severed in these proceedings and a divorce order was granted in December 2016.
[16] In February of 2017, the applicant brought a motion to reduce the support payments and the respondent brought a motion to increase them. At the time, the applicant was employed by his own corporation, and managed a pharmacy owned by others, Glenderry Pharmacy. Glenderry Pharmacy paid the applicant’s corporation. The applicant then paid himself from his corporation. He also paid his parents’ wages and/or dividends.
[17] Given the complex employment picture, the applicant’s income for support purposes was in dispute. The applicant arranged for an income report to be prepared. Justice Bielby found that the applicant’s parents, who were then in their 60s and 70s, were being paid by the corporation beyond fair market value for their service. Justice Bielby attributed all the monies that had been paid to the parents as the applicant’s income. He increased child support to $1,161 per month and increased spousal support to $3,055 per month.
[18] In June of 2018, the applicant brought a motion to vary Justice Bielby’s order. The applicant’s materials were deficient because he had not filed a sworn financial statement or his corporate financial statements or tax return for 2017. Justice Price adjourned the motion at the applicant’s request “in the face of what would likely have been a dismissal of the motion.”
[19] It appears the motion to vary was adjourned to August of 2018 and then adjourned again to October of 2018. By then, the applicant was in arrears of support and the respondent brought a motion to enforce the arrears. The matters were in front of Justice Bloom on October 16, 2018, and Justice Trimble on October 18, 2018. The motion to vary was determined to be a long motion. Justice Trimble noted that the applicant owed $4,026 total in support arrears and $2,000 in costs and declined the applicant’s request for relief from payment of this amount. He set a timetable for the motion to vary support, making it returnable on June 5, 2019. He ordered that until the applicant paid support arrears of $4,026, he could have no further access to the court.
[20] A statement from FRO suggests that the applicant was not in arrears from November of 2016 until approximately the time of the motion. Thereafter, his arrears began to climb.
[21] By the time of the June 5, 2019 hearing, the applicant was self-represented. He had not paid the $4,026 as ordered. Justice Bloom dismissed the motion to vary for non-compliance with the order of Justice Trimble.
[22] On June 14, 2019, the applicant made an assignment in bankruptcy. His statement of affairs shows he owed support of approximately $25,000. It lists unsecured liabilities of approximately $62,000, including costs in these proceedings of $6,500.
[23] In August of 2020, the applicant received a first notice to suspend driver’s licence from FRO. He brought a motion for a refraining order. As part of the resulting order, he was required to bring a motion to vary his support obligations within 20 days. The result was this motion.
[24] As of December of 2020, the applicant owed almost $78,000 in support. He was paying $500 per month towards his support obligations pursuant to the refraining order. On December 23, 2020, the applicant paid the $4,026 that was owing.
Compliance with Order of Justice Mossip
[25] Further to my endorsement dated March 19, 2021, counsel for the respondent has confirmed that the applicant has provided the signed authorizations required by Justice Mossip’s order dated August 23, 2019.
Preliminary Issue – Stay of Proceedings Due to Bankruptcy
[26] The respondent argues that “the automatic stay of proceedings as outlined in the Bankruptcy and Insolvency Act [BIA] applies.” This argument is based on an incorrect reading of Beattie v. Ladouceur, [2001] O.J. No. 4852, 2001 CanLII 28166 (Ont. S.C.).
[27] Proceedings over support are not stayed by the BIA. The automatic stay of proceedings applicable to the applicant’s creditors arises from s. 69.3 of the BIA, which says in part: “on the bankruptcy of any debtor, no creditor has any remedy against the debtor or the debtor’s property, or shall commence or continue any action, execution or other proceedings, for the recovery of a claim provable in bankruptcy.”
[28] However, s.69.41(1) of the BIA says, “Sections 69 to 69.31 do not apply in respect of a claim referred to in subsection 121(4).” Subsection s.121(4) refers to “a claim in respect of a debt or liability referred to in paragraph 178(1) … (c).” Section 178(1)(c) refers to “any debt or liability arising under a judicial decision establishing … support.” Put simply, because of s. 69.41(1), the automatic stay in s. 69.3 does not apply for support claims.
[29] The respondent argues s. 69.41(1) is overcome by s. 69.41(2)(a), which says: “Notwithstanding subsection 69.41(1), no creditor with a claim referred to in subsection 121(4) has any remedy, or shall commence or continue any action, execution or other proceeding, against … property of a bankrupt that has vested in the trustee.” The respondent argues that all the applicant’s property is vested in the trustee and therefore the action cannot continue without an order lifting the stay of proceedings. She argues that this case is distinguishable from Beattie on the basis that source of the support payments in Beattie was the debtor’s federal pension, which did not vest in the trustee.
[30] The logic of this argument is deeply flawed. If it were correct, then in most personal bankruptcies, s. 69.41(1) would have no meaning. In Beattie, Justice Polowin decided that the stay did not apply due to operation of ss. 69.3(1), 69.41(1), 121(4) and 178(1) of the BIA. It is only after deciding that these sections of the BIA did not stay the support claims that Justice Polowin went on to reject the argument that section 69.41(2) stayed the proceeding. The respondent in that case, Mr. Ladouceur, had argued that his federal pension was the source of the support payments and it had vested in the trustee, so there could be no remedy against the pension. Justice Polowin rejected this argument because the pension did not vest in the trustee.
[31] In the case before me, s. 69.41(2) is inapplicable because no one is pursuing any remedy against property that is vested in the trustee.
[32] The law is succinctly described in the following passage from Lloyd W. Houlden, Geoffry B. Morawetz & Dr. Janis P Sarra, Bankruptcy and Insolvency Law of Canada, 4th ed (Toronto: Thomson Reuters Canada, 2009, loose-leaf), Online: WestlawNext Canada (date accessed 1 July 2021), at F§139:
A claim for spousal or child support, whether for periodic payments or a lump sum, under an order or agreement made before the date of the initial bankruptcy event in respect of the bankrupt and at a time when the spouse or child is living apart from the bankrupt is a provable claim: s. 121(4).
There is no stay in respect of such a claim: s. 69.41(1); however, the creditor cannot take any action against property of the bankrupt that is vested in the trustee or against amounts that are payable to the estate of the bankrupt under s. 68: s. 69.41(2).
Alleged Error
[33] The applicant asserts that Justice Bielby erred in determining support. His complaints for the most part would have been something to address in an appeal, not in a motion to vary. His one reasonable argument arises from Justice Bielby’s decision to attribute monies that had been paid to the applicant’s parents as the applicant’s income. He says that Justice Bielby relied on a SSAG calculation prepared by the respondent’s then counsel, which improperly grossed up the amounts paid to the applicant’s parents before adding it back to the applicant’s income. He says this had the inappropriate effect of increasing the applicant’s income for the support calculation. The alleged “mathematical error” was pointed out to the respondent’s then counsel, with no favourable response.
[34] An error of this nature is the kind of thing that could be addressed in a motion to vary, if it was an error. However, the applicant has not provided: the evidence from the original motion; the impugned SSAG calculation; the correspondence between his then lawyer and the respondent’s then lawyer; or any other evidence from which I could determine whether an error occurred or assess its effect.
[35] There is no basis in the evidence to find that any error was made.
Change of Circumstances
[36] Before the court will vary an existing interim support order, the moving party must show a change in circumstances.
[37] The applicant says the change in circumstances is patent: he lost his job and his income; he has gone bankrupt. Further, he says the respondent has had enough time to work towards self-sufficiency and join the workforce.
[38] The respondent argues the change in circumstances is not proven. She argues the court should not accept the applicant’s evidence about his employment and income. She points to the fraud and forgery allegation as evidence that the applicant lacks credibility. She argues that a pharmacist should be able to earn far more than the applicant claims he is earning. She has provided advertisements for pharmacist positions. She says the demand for pharmacists must not have been reduced by the pandemic – if anything demand must have increased because pharmacies now give vaccinations. She says the applicant is deliberately underemployed.
[39] The respondent has raised concerns directed at the relationship between the applicant and Glenderry Pharmacy. She questions whether there is truly an arm’s length relationship between the new owners who took over the pharmacy and the applicant. The applicant has answered these concerns in his affidavit material.
[40] The applicant states his income seriously declined after 2015, driven by significant reductions in the price of prescription drugs and other pressures in the pharmaceutical industry. He says that to meet his support obligations, he worked in the Glenderry Pharmacy 5½ days a week and took additional work as a relief pharmacist 1½ days a week. Despite this, his arrears steadily increased. As of June 2019, he owed about $21,000 and was paying $2,000 a month.
[41] The applicant states that he worked extremely long hours when work was available. Now, he can only find temporary casual pharmacist positions, despite efforts to obtain full time work. He drove from his home in Milton (later Mississauga) to locations as far south as Niagara and as far north as Huntsville for a day’s work when available.
[42] The applicant has provided two letters from Glenderry Pharmacy, signed by Sara Mikhaeil, stating that the applicant is no longer working there and his last shift there was on February 28, 2020. The letters are a little odd because they look unprofessional – they are not on letterhead and many words which should be capitalized are not. However, the respondent has not challenged the letters by, for instance, attempting to contact Sara Mikhaeil to confirm or refute their contents.
[43] The applicant says his business bank account reflects the reduction of drug prices and the resulting reduction in revenue. The account first went into overdraft in May 2017. It has not been out of overdraft since July of 2017. He describes that his line of credit has been effectively maxed out since December 2016. He was unable to obtain additional credit.
[44] The applicant’s assignment in bankruptcy in June of 2019 is fully supported with documentation in the record.
[45] The applicant stated that he ceased operating his company in February of 2020 and thereafter began working on a contract basis as an individual. He has provided a letter dated December 15, 2020 from his accountant to the Ministry of Revenue, Client Accounts and Services Branch, requesting that his corporation be dissolved. He has provided copies of requests to Canada Revenue Agency that the HST account and corporate income tax account for the company be closed. He has provided records to show that his RRSP account was depleted and closed.
[46] The applicant deposes that he now only does relief work through placement agencies. He has provided a June 15, 2018 letter from one of the relief agencies which states that the average wage of a relief pharmacist in the GTA has dropped from $55/hr plus mileage as of 2009 to $35/hr all inclusive as of 2018. He describes that his hourly wage is now sometimes as low as $23.03 per hour, whereas he previously would earn over $55 per hour working for agencies to supplement his income from Glenderry Pharmacy.
[47] The applicant deposes that he now gets limited hours and must travel to obtain those hours. He described, and the records appear to confirm, that he would sometimes take four hour shifts at pharmacies located an hour from his home.
[48] The applicant further states that he has applied for multiple pharmacy positions but has not been able to obtain more secure employment.
[49] The applicant did receive the Canada Emergency Response Benefit (CERB).
[50] The applicant has provided an “invoices report,” which he affirms is a list of funds he received in 2020 from relief pharmacist work and from the CERB. This list appears to conform to the other available documentary evidence. It shows his 2020 income was $33,500. The applicant’s income tax records for 2020 were not available as of the date of the hearing of this motion.
[51] While there are some concerns about the applicant’s credibility, he has presented compelling evidence that his income is limited as described by him. His income level from 2018 forward is far less than was the case in 2015 through 2017. On the available evidence, I accept that there has been a change in circumstances warranting a change in the support arrangements.
Quantum of Support
[52] It is necessary on an interim basis to make determinations of an appropriate amount of support on a “rough justice” basis.
[53] I roughly assess the applicant’s income as follows: 2018: $75,000; 2019: $52,500; 2020: $33,500. The applicant ought to be able to obtain more lucrative employment soon. I am mindful of the barriers to employment that exist in Canadian society for a professional with limited skill in written English and who speaks with a heavy accent. The barriers to employment for both parties may be significant. However, the applicant is a qualified pharmacist in good standing with the College of Pharmacists. For 2021, I will base the interim support calculation on $50,000 for the applicant.
[54] The respondent indicates in her affidavit that in 2019 she worked as a Physician’s assistant five hours per week, at first on an “assessment basis,” and then on a paid, as-needed basis, earning $15.00 per hour. She was let go from this position since the pandemic and at the time of the motion had been unable to find other employment. She is also a full time caregiver to their child who was remote schooling through most of the pandemic.
[55] The respondent did receive the CERB. As the applicant notes, to qualify for the CERB she must have earned at least $5,000 in the 12 months preceding the application.
[56] The respondent did not put any information regarding her total income for any year in her motion materials, despite knowing that the applicant was seeking to vary his support payments. It is appropriate in the circumstances to infer that she did earn income. In 2020, she would likely have received $14,000 from CERB, plus any other income she may have earned.
[57] For purposes of coming up with a calculation leading to fair and appropriate numbers for support, I would attribute $10,000 in income to her for 2019, and $15,000 in income to her for 2020 and forward.
[58] The applicant and the respondent were married for 9 years. At the time of the separation, the respondent was a complete dependant of the applicant. The applicant’s argument for support on a compensatory basis is significant because: she left a physician career in Egypt; she has been unable to qualify as a physician in Canada; and she has assumed the role of primary caregiver for their child. On the other hand, the applicant did support her in her efforts to become qualified as a physician in Canada, including providing significant financial support for this purpose.
[59] I would vary the monthly support as follows, effective June 1, 2018:
| Time Period | Child Support | Spousal Support | Total |
|---|---|---|---|
| Jun to Dec 2018 | $700 | $1,600 | $2,300 |
| 2019 | $484 | $500 | $984 |
| 2020 | $287 | $0 | $287 |
| 2021 | $461 | $100 | $561 |
[60] The arrears of child support are to be reduced accordingly.
[61] The applicant has paid interim spousal support for six years now. One would not anticipate that indefinite spousal support would be payable in the circumstances of this case.
[62] I am not able to determine whether the applicant has overpaid support based on these varied amounts. If he has overpaid, he may stop paying spousal support until the overpayment is fully depleted. However, he may not discontinue child support without an agreement between the parties or a further court order.
[63] Until further court order or agreement between the parties, the parties shall prepare their tax returns within the time required each year and shall promptly provide a copy of their tax returns to each other. They shall also promptly provide each other with copies of any notices of assessment received from CRA.
[64] If costs are sought by the applicant, he may provide written submissions on costs within 14 days. The respondent may respond within 10 days of receiving the applicant’s submissions.
[65] A copy of these reasons will be provided to the case management judge.
“Justice R. Chown”
Released: July 2, 2021