COURT FILE NO.: FS-20-00000066-00
DATE: 2021 10 04
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Ersilia Dolores Gaetano Applicant
-and-
Sam Allan McDadi Respondent
BEFORE: Bloom, J.
COUNSEL: Harold Niman and Jen-Yii Liew, for the Applicant
Sheila Gibb and Stephanie Romano, for the Respondent
HEARD: 2021/09/29
E N D O R S E M E N T
I. INTRODUCTION
[1] The Applicant brings a motion for an order for interim spousal support in the amount of $94,427.00 per month commencing March 1, 2021 without prejudice to her claim for spousal support retroactive to the date of separation, and for an order for interim disbursements on a without prejudice basis.
II. BACKGROUND FACTS
[2] The parties separated on September 12, 2019 after a relationship of over thirteen years, during which they cohabited eleven- and one-half years.
[3] The Applicant is now 47 years old.
[4] During their relationship they enjoyed a lavish standard of living financed by the Respondent; the Applicant has been completely financially dependent on the Respondent since 2009. The Applicant assisted him in his business interests and took care of their domestic needs. She did not pursue her own career, which had been in management of an automobile dealership.
[5] On November 25, 2020, the parties entered into a without prejudice agreement under which, inter alia, the Applicant received $80,000.00 not characterized as to purpose. Those funds have been exhausted by expenditures for this litigation and other purposes.
III. GOVERNING LEGAL PRINCIPLES
A. Interim Spousal Support
[6] S. 33(8) to s. 33(10) of the Family Law Act govern spousal support:
Purposes of order for support of spouse
(8) An order for the support of a spouse should,
(a) recognize the spouse’s contribution to the relationship and the economic consequences of the relationship for the spouse;
(b) share the economic burden of child support equitably;
(c) make fair provision to assist the spouse to become able to contribute to his or her own support; and
(d) relieve financial hardship, if this has not been done by orders under Parts I (Family Property) and II (Matrimonial Home). R.S.O. 1990, c. F.3, s. 33 (8); 1999, c. 6, s. 25 (5); 2005, c. 5, s. 27 (9).
Determination of amount for support of spouses, parents
(9) In determining the amount and duration, if any, of support for a spouse or parent in relation to need, the court shall consider all the circumstances of the parties, including,
(a) the dependant’s and respondent’s current assets and means;
(b) the assets and means that the dependant and respondent are likely to have in the future;
(c) the dependant’s capacity to contribute to his or her own support;
(d) the respondent’s capacity to provide support;
(e) the dependant’s and respondent’s age and physical and mental health;
(f) the dependant’s needs, in determining which the court shall have regard to the accustomed standard of living while the parties resided together;
(g) the measures available for the dependant to become able to provide for his or her own support and the length of time and cost involved to enable the dependant to take those measures;
(h) any legal obligation of the respondent or dependant to provide support for another person;
(i) the desirability of the dependant or respondent remaining at home to care for a child;
(j) a contribution by the dependant to the realization of the respondent’s career potential;
(k) Repealed: 1997, c. 20, s. 3 (3).
(l) if the dependant is a spouse,
(i) the length of time the dependant and respondent cohabited,
(ii) the effect on the spouse’s earning capacity of the responsibilities assumed during cohabitation,
(iii) whether the spouse has undertaken the care of a child who is of the age of eighteen years or over and unable by reason of illness, disability or other cause to withdraw from the charge of his or her parents,
(iv) whether the spouse has undertaken to assist in the continuation of a program of education for a child eighteen years of age or over who is unable for that reason to withdraw from the charge of his or her parents,
(v) any housekeeping, child care or other domestic service performed by the spouse for the family, as if the spouse were devoting the time spent in performing that service in remunerative employment and were contributing the earnings to the family’s support,
(v.1) Repealed: 2005, c. 5, s. 27 (12).
(vi) the effect on the spouse’s earnings and career development of the responsibility of caring for a child; and
(m) any other legal right of the dependant to support, other than out of public money. R.S.O. 1990, c. F.3, s. 33 (9); 1997, c. 20, s. 3 (2, 3); 1999, c. 6, s. 25 (6-9); 2005, c. 5, s. 27 (10-13).
Conduct
(10) The obligation to provide support for a spouse exists without regard to the conduct of either spouse, but the court may in determining the amount of support have regard to a course of conduct that is so unconscionable as to constitute an obvious and gross repudiation of the relationship. R.S.O. 1990, c. F.3, s. 33 (10); 1999, c. 6, s. 25 (10); 2005, c. 5, s. 27 (14).
[7] In applying s. 33 to determine interim spousal support, the court does not conduct an in depth determination of quantum. The Moving party must establish a reasonable case.
[8] The Spousal Support Advisory Guidelines can be taken into account for incomes over $350,000.00 but they are not to be applied automatically. Rather the appropriate principles are to be applied in a case specific analysis.
B. Interim Disbursements
[9] FLR 24(18) authorizes a motion for interim disbursements:
PAYMENT OF EXPENSES
(18) The court may make an order that a party pay an amount of money to another party to cover part or all of the expenses of carrying on the case, including a lawyer’s fees. O. Reg. 418/18, s. 1.
[10] The principles that apply to the exercise of that power are set out by Justice S. B. Sherr of the Ontario Court of Justice in Samis (Guardian of) v. Samis, 2011 ONCJ 273, [2011] O.J. No. 2381 at paragraph 100:
100 The principles that courts have been applying to determine whether to order interim disbursements pursuant to this subrule are set out in Stuart v. Stuart, 2001 CanLII 28261, 24 R.F.L. (5th) 188, [2001] O.J. No. 5172, [2001] O.T.C. 965, 2001 CarswellOnt 4586 (Ont. Fam. Ct.), as follows:
The ordering of interim disbursements is discretionary: Airst v. Airst, [1995] O.J. No. 3005; Hill v. Hill (1988), 1988 CanLII 4710 (ON SC), 63 O.R. (2d) 618 (H.C.J.) and Lossing v. Dmuchowski, [2000] O.J. No. 837.
A claimant must demonstrate that, absent the advance of funds for interim disbursements, the claimant cannot present or analyze settlement offers or pursue entitlement: Hill v. Hill (1988), 1988 CanLII 4710 (ON SC), 63 O.R. (2d) 618 (H.C.J.) and Airst v. Airst, [1995] O.J. No. 3005.
It must be shown that the particular expenses are necessary: Lossing v. Dmuchowski, [2000] O.J. No. 837.
Is the claim being advanced meritorious? Lynch v. Lynch (1999), 1 R.F.L. (5th) 309 and Randle v. Randle (1999), 1999 ABQB 954, 3 R.F.L. (5th) 139.
The exercise of discretion should be limited to exceptional cases: Organ v. Barnett (1992), 1992 CanLII 7433 (ON SC), 11 O.R. (3d) 210 (Ont. Gen. Div.).
Interim costs in matrimonial cases may be granted to level the playing field: Randle v. Randle (1999), 1999 ABQB 954, 3 R.F.L. (5th) 139.
Monies might be advanced against an equalisation payment: Zagdanski v. Zagdanski, 2001 CanLII 27981 (ON SC), 55 O.R. (3d) 6, 2001 CarswellOnt 2517.
The court must consider which of these principles adhere to the primary objective of the Family Law Rules.
The court interprets the new Family Law Rules to require the exercise of the discretion in rule 24(12) on a less stringent basis than the cases that call for such only in exceptional cases. The discretion should be exercised to ensure all parties can equally provide or test disclosure, make or consider offers or possible go to trial. Simply described, the award should be made to level the playing field.
An order under subrule 24(12) should not immunise a party from cost awards. The order is to allow the case to proceed fairly and should not be such that a party feels a licence to litigate.
Certainly, the proof of the necessity of interim disbursements would be critical to the successful claim. The claimant must clearly demonstrate that the disbursements are necessary and reasonable given the needs of the case and the funds available. In particular, if an expert is the subject of a requested disbursement, the claimant must demonstrate there is a clear need for the services of said expert.
The claimant must demonstrate that he or she is incapable of funding the requested amounts.
The claim or claims being advanced in the case must be meritorious as far as can be determined on the balance of probabilities at the time of the request for disbursements.
The order for interim disbursements should not be limited to cases where it would be taken out of an equalisation payment. There are cases where there would not be an equalisation payment. The litigants could be a child suing a parent, an elderly parent suing an adult child or a family that has not acquired assets. It may be that a party with a minimal income stream and no liquid assets needs disbursements to test evidence that might lead to him or her resisting an equalisation order. The levelling of the playing field should not be limited to those with an expected equalisation payment.
[11] As is apparent from principle 9 cited by Justice Sherr, principle 5 has been overtaken by principle 9.
IV. ARGUMENTS OF THE PARTIES
A. Arguments of the Applicant
[12] The Applicant argues that, based on her standard of living with the Respondent during their cohabitation, her needs, and his income, she is entitled to an order for interim spousal support of $94,427.00 monthly commencing March 1, 2021.
[13] She rejects any effort to impute income to her on this interim motion, and in that regard contends that she has been out of the work force for 12 years.
[14] In her oral reply the Applicant argued that, if there was doubt about the income of the Respondent, then I should average the amounts set out in the opinions of the parties’ experts, take guidance from the Spousal Support Advisory Guidelines, and make an order having regard to those considerations.
[15] With respect to her claim for interim disbursements, the Applicant seeks the amount of $200,000.00; she has particularized the expenditures included in that sum at paragraph 104 of her factum as being outstanding and future amounts to be paid for her legal and expert professionals in this proceeding.
[16] She points to the high conflict nature of this proceeding, and the need to level the playing field where the Respondent benefits from his wealth to be able to fund his side of the litigation.
[17] She notes that a significant aspect of her claim in the proceeding is for relief based on a joint family venture. She contends that her claim in this proceeding, including that aspect of it, satisfies the merits element of the test for interim disbursements.
B. Arguments of the Respondent
[18] The Respondent does not contest entitlement of the Applicant to an interim order for spousal support, but argues that the appropriate quantum is $25,000.00 monthly.
[19] He argues that the Applicant’s evidence of her needs based on her budgets improperly reflects certain expenses; those include in his submission, inter alia, rent free accommodation provided to her brother at a home she owns and an unwarranted expenditure of rent for her personal accommodations.
[20] The Respondent concedes that expert evidence is needed to quantify his own income, but rejects the expert evidence tendered by the Applicant as analytically flawed.
[21] The Respondent argues that the Applicant has unreasonably refused to re-enter the workforce. He makes this submission in support of imputation of income to her or simply as bearing on the reasonableness of her position as to interim spousal support.
[22] On the issue of interim disbursements, the Respondent argues that the Applicant has not discharged her onus to prove entitlement. He contends in that regard that her equitable claims lack merit unlike her claim for spousal support, and that she has not provided specificity with respect to the disbursements subject of her motion.
V. ANALYSIS
A. Interim Spousal Support
[23] I am satisfied that the Applicant has discharged her onus of proof and established a reasonable case for spousal support in the sum of $72,000.00 monthly.
[24] The expert evidence on the income of the Respondent adduced by the parties is complex. I cannot on the record before me make an exact determination of the Respondent’s income or impute income to the Applicant; a trial will be necessary to address those matters.
[25] I accept that the expert evidence of the Applicant on the issue of the Respondent’s income supports at least the interim spousal support sum of $72,000.00 monthly. Indeed, based on an application of the Spousal Support Advisory Guidelines and her expert’s evidence, the Applicant contended that support awards could be justified in a wide range including $94,427.00 monthly and $76,335.00 monthly.
[26] I have applied the principles earlier set out in this ruling, and, in particular, I have looked to the means of the parties and their lavish lifestyle during cohabitation. I have also been particularly mindful of the needs of the Applicant. She has put forward in her financial statement of August 4, 2021 a statement of monthly expenses of $84,588.50; I find that sum excessive even having regard to the standard of living of the parties during cohabitation. I do not, however, accept the Respondent’s contention that $13,219.06 would be appropriate. I have taken into account in my support calculation a budget appropriate to the amount I have awarded.
[27] I, therefore, order that the Respondent pay the Applicant on an interim basis spousal support of $72,000.00 monthly on the first of each month commencing March 1, 2021. The parties are also ordered to cooperate with the appropriate court officials for the issuance of a Support Deduction Order.
B. Interim Disbursements
[28] I find that in accordance with the principles reviewed earlier in this ruling that the Applicant has established entitlement to an order for $200,000.00 in interim disbursements to be paid by the Respondent within two weeks from the release of this ruling.
[29] In particular, I find that those funds are demonstrably necessary for the funding of her claims against the Respondent in this high conflict proceeding. The Respondent has a great deal of wealth to fund his case. The playing field needs to be levelled so that the proceeding is fairly litigated.
[30] The Applicant has demonstrated that the funds are needed to pay present or future costs of her legal representatives and expert witness.
[31] Further, her claim for spousal support is admitted by the Respondent to satisfy the test of meritoriousness on the motion for interim disbursements.
[32] I find that on the record before me her equitable claims also pass that test. The web of complex economic evidence relating to those claims justifies interim disbursements, so that the Applicant can put forward a comprehensible case to a trial court based on a general theory of joint family venture.
VI. COSTS
[33] I have reviewed the costs submissions of the parties. In my view, based on the substantial success of the Applicant, she is entitled to an award of costs of $27,000.00 inclusive of fees, disbursements, and applicable taxes, payable by the Respondent within 30 days. I make that order.
Bloom, J.
DATE: October 04, 2021
COURT FILE NO.: FS-20-00000066-00
DATE: 2021 10 04
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Ersilia Dolores Gaetano
-and-
Sam Allan McDadi
BEFORE: Bloom, J.
COUNSEL: Harold Niman and Jen-Yii Liew, for the Applicant
Sheila Gibb and Stephanie Romano, for the Respondent
ENDORSEMENT
Bloom, J.
DATE: October 04, 2021