Court File and Parties

COURT FILE NO.: FS-18-000576

DATE: 20210205

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: SYLVIA WHITESIDE, Applicant

AND:

DEVIN GOVINDASAMY, Respondent

BEFORE: Justice Lorne Sossin

COUNSEL: Philip Viater and Lyna Perelman, Counsel, for the Applicant

Frank Mendicino, Counsel, for the Respondent

HEARD: October 2 – November 6, 2020

REASONS FOR JUDGMENT

OVERVIEW

[1] This trial concerned the resolution of various financial relationships between the applicant, Sylvia Whiteside, and the respondent, Devin Govindasamy.

[2] Most of the trial was devoted to issues affecting the equalization of net family property between the parties, including several corporate entities.

[3] A separate, civil action was also consolidated with this application. Mr. Govindasamy and his corporate co-plaintiffs brought the civil action against Ms. Whiteside and her corporate co-defendant related to alleged business losses.

[4] Following the parties’ separation in 2015, Ms. Whiteside issued the application for divorce on February 15, 2018.

[5] Notwithstanding several attempts at mediation, the parties were unable to resolve the issues in dispute.

[6] The trial was initially scheduled for the spring of 2020 but adjourned on March 2, 2020 until the fall of 2020. It began on September 30, 2020.

[7] On September 21, 2020, Faieta J. issued a trial management endorsement setting out the logistics for the trial to proceed via Zoom. Faieta J. also ordered that Mr. Govindasamy provide answers to Ms. Whiteside’s outstanding requests for information.

[8] The parties jointly retained a business valuator, Jason Kwiatkowski, of Valuation Partners Ltd., to assess the parties’ business assets. As a result, the values of the key business assets in this litigation are generally not in dispute.

[9] The parties take diverging positions, however, on each other’s net family property calculation. The gap between the parties, therefore, is significant.

[10] The parties also took opposing positions on the issues of spousal and child support.

[11] The trial was heard via Zoom over a period of 12 days between October 2-23, with final written submissions received on November 6, 2020.

[12] There has been a significant erosion of trust between the parties. Notwithstanding the parties’ difficult relationship, however, counsel worked effectively together to narrow the issues for trial and ensure the trial proceeded as smoothly as possible in the circumstances. I am grateful for their efforts.

[13] For the reasons that follow, I find neither party was entirely successful on all the key issues to be determined at trial, though Ms. Whiteside prevailed in more of her positions than Mr. Govindasamy, especially with respect to the equalization of net family property, and to a lesser extent, spousal support.

[14] Additionally, I find that Mr. Govindasamy’s civil action must be dismissed.

[15] I turn first to a review of the factual background in this case. Next, I address the legal issues, including the equalization of net family property, the eligibility of Ms. Whiteside for spousal and/or child support, and the disposition of the parallel civil action.

Family & Employment Background

[16] Many key facts in this litigation are not in dispute.

[17] The parties started living together in May 1991. They were married on August 17, 1991.

[18] The parties separated on August 25, 2015.

[19] There are three children of the marriage, namely, Kieran (born in 1998) (“Kieran”); Justin (born in 1995) (“Justin”); and Meera (born in 1993) (“Meera”) (collectively “the children”). The children are now independent adults.

[20] Mr. Govindasamy is an entrepreneur and educator in the field of physiology, and holds a Ph.D. in Exercise Physiology.

[21] Mr. Govindasamy is the sole officer, director, and shareholder of Custom Rehab and Assessments Canada Ltd. (“Custom Rehab”), a business he started in 1995. Custom Rehab provided independent medical assessments and rehabilitation services for auto insurance providers.

[22] Subsequently, Mr. Govindasamy took a majority stake in a physical therapy services business, Physio and Massage Institute (“PMI”).

[23] Mr. Govindasamy also incorporated Jukeme Holdings Ltd. (“Jukeme”), a holding company for a variety of investments.

[24] At the time Custom Rehab was incorporated, the parties lived in Barrie, Ontario.

[25] Ms. Whiteside worked as a hospital-based speech pathologist. In 1997, she left this position to work for Custom Rehab.

[26] Ms. Whiteside continued working as a speech pathologist at Custom Rehab, taking maternity leave after the birth of each of her three children.

[27] In 2002, Ms. Whiteside stopped working for Custom Rehab and took two years off to be a full-time mother, though she continued receiving a salary from Custom Rehab.

[28] In 2004, Ms. Whiteside started a private speech therapy practice.

[29] At that same time, Ms. Whiteside incorporated Syldev Investments Ltd. (“Syldev”) as a vehicle for investing the proceeds of a substantial inheritance, which she received from her parents.

[30] In 2013, Ms. Whiteside was diagnosed with Multiple Myeloma, a serious bone marrow cancer.

[31] Ms. Whiteside has undergone multiple surgeries and been hospitalized several times. She has not been able to work regularly since 2013.

[32] Mr. Govindasamy wound up the operations of Custom Rehab and PMI in 2018 and has not worked full time since then.

[33] Currently, both Mr. Govindasamy and Ms. Whiteside rely on investment income as their primary source of support.

ANALYSIS

[34] The main issues in this case are the following:

1. What is the proper equalization of the net family property?

2. Is there an ongoing and retroactive obligation for spousal support?

3. Is there a retroactive obligation for child support or s. 7 expenses?

4. Is Ms. Whiteside liable to Mr. Govindasamy for any damages arising from the civil action?

[35] Before discussing these specific issues, I address two concerns of general application. The first concern relates to Ms. Whiteside’s allegations that Mr. Govindasamy has failed to meet his disclosure obligations, notwithstanding her numerous attempts to seek such disclosure.

[36] As a result, Ms. Whiteside argues negative inferences should be drawn wherever this lack of disclosure is relevant to the determination at hand.

[37] The second concern relates to the broader question of credibility and its significance for Mr. Govindasamy and Ms. Whiteside as the two key witnesses in the trial.

Disclosure Issues

[38] Ms. Whiteside argues that Mr. Govindasamy’s disclosure has been deficient or missing in several important areas, notwithstanding repeated requests for disclosure and court orders directing Mr. Govindasamy to respond to those requests.

[39] Mr. Govindasamy takes the position that he had not failed to disclose relevant documents and had instructed his lawyer and accountant to provide whatever documents were requested. However, a range of documents that had been requested months before were provided only on the eve of trial, or in some cases in the midst of the trial.

[40] For example, Mr. Govindasamy’s investment holding company, Jukeme, holds shares in a numbered company, which in turn holds shares in another numbered company. Ms. Whiteside requested information about these holdings in as early as November 2016, and repeated this request for information in frequent correspondence thereafter, but Mr. Govindasamy only provided the requested information on the eve of trial.

[41] In other cases, the requested information was not provided at all, including a range of bank statements and a summary of the personal expenses that Mr. Govindasamy’s companies (Custom Rehab, Physio, and Jukeme) incurred and paid between 2012 and 2017.

[42] Ms. Whiteside’s affidavit details the long history of complaints about Mr. Govindasamy’s failure to meet disclosure obligations. She states, “Devin’s NFP calculation is complicated by his non-disclosure in the face of many requests. His disregard for the law on disclosure in family law cases is so profound that he acts as if he is above the law.”

[43] In Leitch v. Novac, 2020 ONCA 257, 150 O.R. (3d) 587, at para. 44, leave to appeal refused, [2020] S.C.C.A. No. 194, the Court of Appeal reiterates the significance of non-disclosure in family court as a metastatic cancer of family law:

As the Supreme Court suggested in Leskun v. Leskun, 2006 SCC 25, [2006] 1 S.C.R. 920, at para. 34, nondisclosure is the cancer of family law. This is an apt metaphor. Nondisclosure metastasizes and impacts all participants in the family law process. Lawyers for recipients cannot adequately advise their clients, while lawyers for payors become unwitting participants in a fraud on the court. Judges cannot correctly guide the parties to a fair resolution at family law conferences and cannot make a proper decision at trial. … In sum, nondisclosure is antithetical to the policy animating the family law regime and to the processes that have been carefully designed to achieve those policy goals.

[44] The consequences of failing to disclose or a pattern of inadequate disclosure may vary.

[45] For example, in Blatherwick v. Blatherwick, 2015 ONSC 2606, 8 E.T.R. (4th) 30, Ricchetti J. declined to admit a revised expert report that was introduced at trial. The revised expert report included previously undisclosed financial documentation dealing with the valuation of certain companies. In explaining his decision not to admit the report, Ricchetti J. reiterated the above excerpt from Iannarella to emphasize the importance of full and complete disclosure to civil litigation and trial fairness. He also referred to the Family Law Rules, O. Reg. 114/99, which incorporate by reference the disclosure requirements of the Rules of Civil Procedure, R.R.O., Reg. 194. Rule 19 of the Family Law Rules makes it clear that timely and full disclosure of every document relevant to an issue in the case is the rule. If a party does not produce the document, and it is favourable to the party’s case, that party may not use the document except with leave of the court: at paras. 12-13 of Schedule C (Admissibility Ruling).

[46] In Katz v. Nimelman (2007), 2007 51340 (ON SC), 46 R.F.L. (6th) 392 (Ont. S.C.), at para. 65, aff’d 2009 ONCA 445, the court drew an adverse inference against the wife at a trial throughout which “disclosure was a continuing thread.” The court concluded that the wife took unreasonable positions in response to requests for disclosure, and drew an adverse inference due to her failure to disclose. The adverse inference went to her credibility, and any doubt resulting from the inadequacy of her disclosure was resolved in her husband’s favour: at paras. 74, 81.

[47] Ms. Whiteside states that Mr. Govindasamy’s pattern of non-disclosure was “exhausting, stressful and expensive.”

[48] Ms. Whiteside argues an adverse inference against Mr. Govindasamy is appropriate with respect to disputed areas in the determination of Mr. Govindasamy’s recent income and net family property.

[49] Ms. Whiteside’s concerns are legitimate. I found Mr. Govindasamy’s answers on cross-examination about his compliance with disclosure obligations at times evasive and non-responsive.

[50] In these circumstances, I find adverse inferences may be warranted on those matters for which the parties take contrary positions and Mr. Govindasamy’s disclosure has been inadequate.

Credibility Issues

[51] Credibility is a central issue in this case given the diverging narratives each party gave in their testimony at trial.

[52] Credibility may be assessed in different ways: for example, through internal inconsistencies in a witness’s evidence, prior inconsistent statements, inconsistencies between the testimony of different witnesses, independent evidence that confirms or contradicts a witness’s testimony, or whether the witness may be motivated to fabricate evidence, among other considerations: Betancourt v. Rowe, 2019 ONSC 4755, at para. 16.

[53] Findings of credibility must be made within the context of the evidence as a whole.

[54] Further, a trier of fact may believe or disbelieve a witness’s testimony in part or in its entirety. Therefore, a trier may believe none, part, or all of a witness’s evidence, and may attach different weight to different parts of that evidence: Betancourt, at para. 16.

[55] I find Ms. Whiteside generally to be a credible witness. She responded to questions clearly and directly. There are specific areas, however, where her testimony appears at odds with the record, as referred to below.

[56] With respect to Mr. Govindasamy’s testimony, I find aspects of his accounts to be credible and supported by other evidence in the record, while other portions of his testimony strain credulity. Further, as indicated above, his testimony is undermined in some areas by a lack of disclosure and forthrightness in answers to direct questions.

[57] Generally, I accept Ms. Whiteside’s claim that Mr. Govindasamy had a “controlling” personality during the marriage, and that she permitted him to take certain roles in her financial affairs as a means of placating him and avoiding further tension.

[58] I find Mr. Govindasamy genuinely believes the truthfulness of his testimony. In other words, when he states that all the businesses he and Ms. Whiteside owned or operated were part of a “family business”, I find he is accurately conveying his beliefs. It is the reliability of these statements, not their genuineness, that the evidence calls into question.

[59] For the most part, my findings below are based on the parties’ testimony as it is supported by the record. In most cases where the narratives diverge, the record supports one perspective over another. Where this is not the case – for example, where Ms. Whiteside claims she agreed to certain arrangements because of Mr. Govindasamy’s controlling nature and her fear of conflict with him – I find Ms. Whiteside’s account more credible.

[60] With these comments on disclosure and credibility concerns in mind, I now turn to the determination of the proper equalization of the net family property.

Issue 1: What is the Proper Equalization of the Net Family Property?

[61] The valuation date for purposes of the equalization is the date of separation, August 25, 2015. While some aspects of the equalization are not in dispute, overall, the gap between the parties on the proper equalization of net family property is substantial.

[62] Ms. Whiteside argues that she is owed $1,877,925.10.

[63] Mr. Govindasamy argues that he is owed $596,748.49.

[64] The Family Law Act, R.S.O. 1990, c F.3 (“FLA”), s. 5 provides:

Equalization of net family properties

Divorce, etc.

5 (1) When a divorce is granted or a marriage is declared a nullity, or when the spouses are separated and there is no reasonable prospect that they will resume cohabitation, the spouse whose net family property is the lesser of the two net family properties is entitled to one-half the difference between them.

[65] However, s. 10 of the FLA provides that questions of title must be settled before the property can be equalized: Korman v. Korman, 2015 ONCA 578, 126 O.R. (3d) 561, at para. 29; Rawluk v. Rawluk, 1990 152 (SCC), [1990] 1 S.C.R. 70, at pp. 90-91.

[66] Questions of title may not always be resolved by simply looking to legal title; even if a party does not hold legal title, they may advance a claim that they hold beneficial ownership in the property through a resulting or constructive trust.

[67] A resulting trust exists when a party makes a financial contribution to the initial purchase of a property, but then gratuitously transfers their title (i.e. transfers their title for nothing in return) to the other party, with the intention that the transferee holds the transferor’s title for the transferor’s benefit. In other words, one party contributes to the purchase of the property but then transfers their interest in the property to the other party for them to hold “in trust” for the transferring party: Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, at paras. 16-19.

[68] When dealing with a matrimonial home, s. 14 of the FLA creates a presumption of a resulting trust when there has been a gratuitous property transfer from one party to the other: Korman, at paras. 26-27. However, as Cromwell J. has observed, “the presumption of resulting trust … is neither universal nor irrebuttable”: Kerr v. Baranow, at para. 20. Accordingly, when the presumption applies, the party holding the interest may rebut the presumption by showing that the gratuitous transfer was a gift and there was no intention for them to hold the transferred interest for the other party’s benefit.

[69] A constructive trust may arise where there was no financial contribution to the initial purchase of the property or gratuitous transfer of any interest, but where the party holding title to the property would be “unjustly enriched” (i.e. would unfairly benefit) if they were permitted to retain full ownership and benefit over the property. It is premised on the idea that one party contributed a benefit to the property, and it would be unreasonable in law or equity to allow the other party to retain that benefit. Accordingly, a constructive trust is a remedy for unjust enrichment.

[70] As the Supreme Court explained in Kerr v. Baranow, at para. 50: “Where the plaintiff can demonstrate a link or causal connection between his or her contributions and the acquisition, preservation, maintenance or improvement of the disputed property, a share of the property proportionate to the unjust enrichment can be impressed with a constructive trust in his or her favour”.

[71] There is no presumption of a constructive trust in the FLA, therefore, the party making a claim for a constructive trust has the burden to establish that unjust enrichment exists. Only then may a court impose a constructive trust to remedy the unfair benefit.

[72] Kerr v. Baranow, at para. 32, articulates the three elements to an unjust enrichment claim: (1) an enrichment; (2) a deprivation; and (3) the absence of a juristic reason for the enrichment. To obtain a constructive trust as a remedy, the claimant must also demonstrate a “sufficiently substantial and direct” link, “causal connection”, or “nexus” between the party’s contributions and the relevant property, and that a monetary award would be insufficient in the circumstances: at paras. 51-52.

[73] Different equalization issues arise in the context of the main assets owned by the parties. For this reason, I will consider each asset individually.

(a) 100 Clarinda Dr.

[74] The parties purchased their first matrimonial home in 1992 at 117 Peel St. in Barrie. The purchase price was approximately $150,000.00 with a $20,000 deposit. The balance of approximately $130,000 was financed through a bank. Title for this property was taken jointly.

[75] The parties resided in this home until 1999 when it was sold for approximately $180,000.00.

[76] The parties purchased a second matrimonial home on November 10, 1999 at 21 Blue Ridge Rd. in Toronto. The purchase price of this home was $410,000.00. Title was once again taken jointly, although Ms. Whiteside testified that a portion of the funds for this home came from an inheritance she received after her mother passed away in October 1999.

[77] The parties also used the net proceeds from the sale of the Peel St. property and the balance was financed through a TD Canada Trust mortgage of approximately $240,480.00. This home was sold in 2002 for approximately $550,000.

[78] In 2002, Ms. Whiteside purchased the current matrimonial home at 100 Clarinda Dr. in Toronto, for a purchase price of $935,000.

[79] Ms. Whiteside was responsible for the financial contributions toward the purchase of the matrimonial home, and title for the property was only in Ms. Whiteside’s name.

[80] Ms. Whiteside gave evidence that, “[a]s of the date of separation, [the matrimonial home] was the home where we resided. It was mortgage free because for the most part (if not all) I paid for the matrimonial home with my inheritance and from proceeds of sale from prior matrimonial homes for which I paid for with my parent’s inheritances and gifts.”

[81] In October 2019, Ms. Whiteside sold the matrimonial home for $2,280,000.00. At the time, the home had no mortgage or encumbrances. Ms. Whiteside received $1,696,537.00 from the proceeds of sale to purchase her new residence, together with an additional $100,000.00 to cover the deposit. The balance remains in trust with her real estate solicitors.

[82] 100 Clarinda Dr. was appraised at the date of separation at $1,800,000.00.

[83] Mr. Govindasamy claims he has a resulting or constructive trust interest in 100 Clarinda Dr., which therefore should be valued at the actual sale price of the home.

[84] Ms. Whiteside opposes Mr. Govindasamy’s equitable claim.

[85] In his claim for a resulting trust, Mr. Govindasamy highlights that the parties’ previous two matrimonial homes were owned jointly on title. He argues that Ms. Whiteside admitted under cross-examination that she never asked Mr. Govindasamy to enter into a contract or sign any document that she was using money from her inheritance to protect the funds in the matrimonial home. According to his evidence, title for the matrimonial home was put in Ms. Whiteside’s name solely in order to limit Mr. Govindasamy’s personal liability in any potential claims against his companies.

[86] Mr. Govindasamy relies on the Court of Appeal’s judgment in Holtby v. Draper, 2017 ONCA 932, 138 O.R. (3d) 481, leave to appeal refused, [2018] S.C.C.A. No. 43, for the proposition that a transfer can take place between spouses to defeat creditors without defeating a resulting trust claim.

[87] However, there is no clear evidence to support Mr. Govindasamy’s claim that his name was kept off title solely to shield him from potential creditors.

[88] Furthermore, while a transfer of property to protect it from creditors is not a bar to finding a resulting trust, the presumption of resulting trust does not arise in this case because there was no transfer at issue, gratuitous or otherwise. Ms. Whiteside purchased the matrimonial home solely with her inheritance funds. The decision to put the matrimonial home in Ms. Whiteside’s sole ownership is consistent with that evidence. Accordingly, absent a financial contribution to the initial purchase of the property and a gratuitous transfer, a resulting trust cannot exist.

[89] In essence, the bulk of Mr. Govindasamy’s claim rests on unjust enrichment and the corresponding remedial constructive trust. As mentioned above, there are three elements to an unjust enrichment claim: (1) an enrichment; (2) a deprivation; and (3) the absence of a juristic reason for the enrichment: Kerr v. Baranow, at para. 32.

[90] Jarvis J. further explained the process for establishing an unjust enrichment claim in Knight v. Knight, 2018 ONSC 4027, at para. 31:

The claimant has the burden of proving an unjust enrichment claim. Once the claimant has proven enrichment and deprivation and has met the primary burden that the case falls outside of existing, recognized common law, equitable or statutory obligations, the recipient of the benefit must satisfy the court that based on the parties’ reasonable expectations and public policy considerations the recovery claim must fail.

[91] In Manchanda v. Thethi, 2019 ONSC 1749, Monahan J. explored the policy and the legal concepts of trust claims in matrimonial homes. The parties disputed the equalization of net family property, and the wife advanced a claim for constructive trust in the matrimonial home. After a detailed analysis, Monahan J. dismissed the wife’s claim for a constructive trust, at paras. 43-44 and 48-49:

I begin with the observation that Canadian courts have relied on common law concepts of unjust enrichment and constructive trust in order to provide a legal remedy where property divisions in family law cases based solely on legal title would be manifestly unfair. However, as Cromwell J. observed in Kerr v. Baranow, by the 1980’s provincial legislatures had put in place comprehensive matrimonial property statutes governing property and financial issues on marriage breakdown. Unmarried persons in domestic relationships were required to continue to look to the common law in order to address situations where one person’s contributions to the acquisition of property were not reflected in legal title. But that was no longer the case for married spouses, who were expected to resolve financial and property issues on the basis of the applicable legislative scheme as opposed to the common law.

The principle that married parties should look to the applicable statutory scheme, as opposed to the common law, in resolving property issues on marriage breakdown has been endorsed by Ontario courts on many occasions. For example, in Martin v. Sansome, Hoy A.C.J.O. noted that the [FLA] is “a detailed statutory scheme for resolving issues arising out of marital breakdown.” The overall policy of the [FLA], and specifically the equalization provisions in section 5, is that property accumulated by the parties during marriage should be equally divided between them upon marriage breakdown. Moreover, as Hoy A.C.J.O. observed in Martin v. Sansome, “the express purpose of the equalization provisions of the FLA is to address the unjust enrichment that would otherwise arise upon marriage breakdown.” Thus, as the Court of Appeal had earlier concluded in McNamee v. McNamee, “in the vast majority of cases, any unjust enrichment that arises as the result of a marriage will be fully addressed through the operation of the equalization provisions under the [FLA].”

Martin v Sansome did acknowledge that there may be rare or exceptional cases where monetary damages for unjust enrichment arising out of marriage cannot be adequately addressed by the equalization provisions of the [FLA]. But this is not one of those rare or exceptional cases. [Footnotes omitted.]

[92] In this case, I find Mr. Govindasamy has not met his burden to show contributions to the purchase or maintenance of 100 Clarinda Dr. so as to demonstrate a constructive trust interest in this matrimonial home.

[93] Therefore, I accept the value of the matrimonial home as Ms. Whiteside’s property on the date of separation for purposes of calculating net family property is $1,800,000.00.

(b) The Blue Mountain Chalet and Household Contents

[94] Mr. Govindasamy was the owner on title for the family chalet and matrimonial home located at 117 Carmichael Cres. in The Blue Mountains (the “Blue Mountain chalet”).

[95] The Blue Mountain chalet was sold on November 15, 2018 for $860,000.00, including its contents. The real estate solicitors currently hold the net proceeds of sale, totaling $849,822.00.

[96] A certified appraiser valued the Blue Mountain chalet at $695,000.00 as at the date of separation, being August 31, 2015.

[97] There is some dispute as to whether Mr. Govindasamy disclosed the appraisal to Ms. Whiteside. For this reason, and because Ms. Whiteside was denied an opportunity to obtain her own appraisal of the property, Ms. Whiteside claims the sale price should be used, rather than the appraised value at the time of separation.

[98] I am not able to resolve whether Mr. Govindasamy in fact provided the appraisal to Ms. Whiteside. It appears the appraisal may have formed part of a mediation disclosure package, but Ms. Whiteside’s position is that she did not receive it.

[99] In this case, I accept the value of the chalet as appraised at the time of separation.

[100] For purposes of net family property, the Blue Mountain chalet will be valued at $695,000.00.

[101] Ms. Whiteside claims that the furniture, art, and other household contents at the chalet were worth $50,000.00, and that an adverse inference ought to be drawn against Mr. Govindasamy as he failed to produce an inventory of the contents of the chalet or details on the value ascribed to the contents when sold.

[102] Mr. Govindasamy gave evidence that Ms. Whiteside attended at the chalet and had the opportunity to remove items of value. Ultimately, the Blue Mountain chalet was sold with its contents. It is not possible to determine what portion of the sale price reflected the value of the contents.

[103] Mr. Govindasamy was asked by Ms. Whiteside for an accounting of the contents of the chalet on April 20, 2018 and again on September 18, 2019. No answer was forthcoming.

[104] Absent better evidence of the value of the household contents at issue in the chalet, I agree an adverse inference is warranted.

[105] Therefore, I would accept the value of $50,000.00 for household goods and furniture in the Blue Mountain chalet.

(c) Mr. Govindasamy’s Residence

[106] Mr. Govindasamy’s primary residence is at 20 Silver Birch Ave. in Toronto. He purchased the property in 2015.

[107] Mr. Govindasamy testified that he purchased his residence after separation, and that he made a $100,000.00 down payment on the home.

[108] On cross-examination, Mr. Govindasamy testified that the deposit must have come from Jukeme, which is where he obtained the funds for the balance of the purchase price.

[109] Ms. Whiteside claims that the $100,000.00 down payment should be included in the net family property calculation.

[110] Mr. Govindasamy was unable to show that this down payment did not include comingled assets of the marriage. Therefore, the $100,000.00 down payment will be included as part of Mr. Govindasamy’s contribution to the net family property at the date of separation.

(d) Mr. Govindasamy’s Cars and Bicycles

[111] Mr. Govindasamy has several cars and personal items whose values are disputed, including a 2013 Mercedes GLK, a 1967 Volvo 1800S, two high-end bicycles (a Cervelo and a Madone), and personal art.

[112] Mr. Govindasamy testified that the values in his net family property statement relied on the Black Book value of $30,000.00.

[113] Ms. Whiteside claims that the Mercedes should be valued at $46,330.00.

[114] I find the actual value lies somewhere between these two positions. Taking the mid-point of the difference between these positions yields a value of $38,165.00. This is the value which will be applied to the calculation of net family property.

[115] Mr. Govindasamy testified that the Hagerty Valuation Tool placed the insured value of the Volvo at $7,500.00. He produced the Hagerty report.

[116] Ms. Whiteside states extensive work was done to refurbish the Volvo. Ms. Whiteside relied on values obtained from a website which led her to claim the car’s value should be $28,500.00.

[117] Again, I am satisfied the mid-point between these positions, $18,000, is the appropriate value for purposes of calculating net family property.

[118] With respect to the bicycles, Mr. Govindasamy testified that the bicycles might fetch approximately $4,000.00 if sold.

[119] Ms. Whiteside relied on a website for new bicycles to determine a value of $32,299.99.

[120] In this case, the evidence of both parties as to the value of the bicycles is weak. Based on what evidence there is, including the age of the bicycles, I ascribe a value of $8,000.00 for the bicycles.

(e) Bank and Investment Accounts

[121] The parties have a number of bank and investment accounts that must be added to the calculation of net family property.

[122] These consist of various TD accounts in each party’s name, whose value is not in dispute.

[123] The parties agree that Mr. Govindasamy held an investment account with Walton International Ltd. with a balance of $153,940.00.

[124] Ms. Whiteside alleges that Mr. Govindasamy held an additional Walton account with $250,000.00, which has since grown to $300,000.00.

[125] Mr. Govindasamy testified that he has disclosed all of his accounts and has no other Walton account beyond the account valued at $153,940.00.

[126] I accept on the basis of the record before me that there was only one Walton account.

[127] For purposes of the calculation of net family property, I accept Mr. Govindasamy held accounts valued at $362,782.39, while Ms. Whiteside held accounts valued at $1,243,857.16.

(f) Corporate and Investment Interests

[128] At the heart of the dispute between the parties is a series of corporations that hold real estate and commercial and investment interests.

[129] I examine each of the corporate interests in turn.

i. Custom Rehab and Assessments Canada Ltd.

[130] Custom Rehab was incorporated on April 30, 2004. It provided independent medical assessments and rehabilitation services for auto insurance providers.

[131] Mr. Govindasamy is the sole officer, director, and shareholder of Custom Rehab.

[132] Custom Rehab was a successful business, employing approximately 40 people at its height.

[133] In or about the spring of 2007, Custom Rehab moved its operations to a commercial property at 6 Brentcliffe Rd. in Toronto, owned by Syldev (the “Brentcliffe property”). As a tenant of the Brentcliffe property, Custom Rehab paid Syldev $9,000.00 a month in rent to occupy the second floor.

[134] Custom Rehab was valued at $1,757,000.00 at the time of separation. This valuation is not in dispute.

[135] Although its corporate structure still exists, Custom Rehab is no longer operating.

[136] Custom Rehab lost its main client in the summer of 2017. By the Fall of 2017, Custom Rehab was no longer able to pay the rent on its space in the Brentcliffe property to Syldev.

[137] In October 2017, Custom Rehab unilaterally reduced the rent paid to Syldev from $10,180.00 to $4,200 for September 2017 and October 2017 rent

[138] Counsel for Ms. Whiteside advised Mr. Govindasamy that Custom Rehab was in breach of its contract with Syldev.

[139] On November 1, 2017, Custom Rehab was no longer operating out of the Brentcliffe property.

[140] Apart from completing some residual client work, Custom Rehab was wound down by the end of 2017.

[141] Ms. Whiteside alleges that Mr. Govindasamy intentionally sabotaged Custom Rehab, thereby reducing its value.

[142] The circumstances of Custom Rehab’s winding up are central to the civil action Mr. Govindasamy has brought against Ms. Whiteside and Sydev. I address each party’s allegations in that context in addressing the civil action below.

[143] For purposes of calculating net family property, I accept the valuation of Custom Rehab as $1,757,000.00 at the time of separation.

ii. Physio and Massage Institute

[144] Mr. Govindasamy’s 51% share in PMI is valued at $116,000.00. This valuation is not in dispute.

[145] Mr. Govindasamy’s partner in PMI was Alicia Hagedorn, who is a physiotherapist.

[146] Ms. Hagedorn and Mr. Govindasamy became associated sometime in 2003/2004 and agreed to start a new business venture. They entered into a shareholder’s agreement by which Mr. Govindasamy owned 51% of PMI, while Ms. Hagedorn owned 49%.

[147] The business was initially located on Eglinton Ave. E. in Toronto. Like Custom Rehab, in or about the spring of 2007, PMI moved its operations to the Brentcliffe property, occupied its ground floor, and paid $9,000.00 in monthly rent to Syldev.

[148] Mr. Govindasamy was responsible for marketing and business matters, while Ms. Hagedorn was responsible for clinical and management operations.

[149] There was some commingling of PMI and Custom Rehab resources, including a shared bookkeeper and the use of some shared computer equipment.

[150] Both Ms. Hagedorn and Mr. Govindasamy each testified at the trial that their business relationship went smoothly until Mr. Govindasamy’s separation from Ms. Whiteside.

[151] After Mr. Govindasamy and Ms. Whiteside separated in 2015, Ms. Hagedorn and Mr. Govindasamy no longer met regularly.

[152] During the winding down of Custom Rehab in the Fall of 2017, relations between Mr. Govindasamy and Ms. Hagedorn deteriorated.

[153] Ms. Whiteside alleges that Mr. Govindasamy undermined the business operations of PMI, thereby reducing its value. Ms. Hagedorn’s testimony largely supports this view.

[154] In November 2017, Mr. Govindasamy unilaterally reduced the rent PMI paid to Syldev.

[155] PMI’s bank accounts were frozen in 2018, resulting in further difficulties managing the day-to-day operations of the business.

[156] Mr. Govindasamy took over PMI’s finances. According to Ms. Hagedorn, this shift resulted in several destabilizing situations, including delayed payroll cheques.

[157] Mr. Govindasamy’s relationship with Ms. Hagedorn broke down completely in the spring of 2018.

[158] Mr. Govindasamy and his counsel met with Ms. Hagedorn in May 2018.

[159] Ms. Hagedorn testified that she was asked to sign an agreement by which she would be prevented from occupying the Brentcliffe property space in the future. She declined.

[160] The outcome of this meeting was a decision to wind down PMI. PMI left the Brentcliffe property in June 2018.

[161] I accept the valuation of Mr. Govindasamy’s 51% share in PMI as $116,000.00 at the date of separation.

[162] I decline to make any finding as to the allegation by Ms. Whiteside that Mr. Govindasamy intentionally sabotaged PMI’s value, particularly as the responsibility for the demise of PMI is the subject of separate litigation between Mr. Govindasamy and Ms. Hagedorn.

iii. Jukeme Holdings Ltd.

[163] Jukeme is an investment-holding company, which Mr. Govindasamy incorporated in Ontario on September 16, 2009. Mr. Govindasamy is the sole officer, director, and shareholder of Jukeme.

[164] Mr. Govindasamy uses Jukeme as a vehicle for investing in other businesses.

[165] Jukeme holds investments and assets of $3,378,701.00, including investments in Liahona Mortgage Investment Corporation (“Liahona”), holding company 2119392 Ontario Inc., and various TD bank and investment accounts.

[166] Jukeme has liabilities of $960,000.00 comprised mainly of a debt owed to Custom Rehab.

[167] At the date of separation, Jukeme was valued at $2,815,000.00. This valuation is not in dispute, and I accept it for purposes of the calculation of net family property.

iv. Syldev Investments

[168] The valuation and disposition of Syldev for the purposes of calculating net family property is disputed. Though Ms. Whiteside is the sole shareholder, director, and officer of Syldev, Mr. Govindasamy claims a resulting or constructive trust in Syldev’s ownership interest in the Brentcliffe property.

[169] Unlike for matrimonial homes, there is no presumption of a resulting trust interest in alleged matrimonial property, such as the Brentcliffe property. Therefore, the burden falls on Mr. Govindasamy to establish the basis for the resulting trust interest.

[170] Syldev was originally incorporated in February 2004. According to Ms. Whiteside, it was first organized with Ms. Whiteside as the sole shareholder and both parties serving as directors. In 2006, however, Syldev was reorganized as a corporation in which Ms. Whiteside was the sole officer, director, and shareholder.

[171] Mr. Govindasamy’s position is that he was a shareholder in the initial 2004 incorporation. However, as the volume of business in Custom Rehab and PMI increased, he gratuitously transferred his shares to Ms. Whiteside to protect his 50% interest in Syldev from potential liability and creditors.

[172] In 2006, Syldev purchased the Brentcliffe property for $1.2 million. The transaction closed in March 2007.

[173] The funds for the purchase came from three sources: a $50,000.00 deposit from Ms. Whiteside; a $694,500.00 mortgage with the Royal Bank of Canada; and personal funds from Ms. Whiteside’s inheritance, in the amount of $483,197.32.

[174] Mr. Govindasamy testified that the Brentcliffe property was renovated after it was purchased, so that it could be leased as office space. His evidence is that Ms. Whiteside was repaid for the funds that she contributed for the renovations through the Syldev account, which received over $1 million of above fair market value rent.

[175] Mr. Govindasamy testified that he dedicated substantial personal time in managing the Brentcliffe property. He stated that he engaged the real estate broker, negotiated the terms of the agreement of purchase and sale, and negotiated the terms of the RBC mortgage, which Custom Rehab and he (in his personal capacity) guaranteed.

[176] Mr. Govindasamy further gave evidence that he arranged all the contractors and trades for the improvements to the property. He stated that he managed the property and was responsible for all maintenance as well as arranging for bookkeeping services for the operation of the property. He installed a fence to prevent trespassing and rented the space on the fence for advertisement.

[177] Additionally, Mr. Govindasamy stated that he arranged for his companies, Custom Rehab and PMI, to occupy the Brentcliffe property as tenants at above-market-value rents. His evidence is that the rents Custom Rehab and PMI paid were intentionally inflated so that Ms. Whiteside could recover the capital she advanced for the purchase.

[178] Mr. Govindasamy also testified that he arranged to discharge the mortgage, which was originally at $694,500.00, and that he paid the mortgage in full in 2012 with $520,000.00 of capital funding from his company, Jukeme.

[179] In 2019, the Brentcliffe property was sold for $2,400,000.00, with no mortgage or encumbrances. Through Syldev, Ms. Whiteside received half of the net proceeds and the other half is being held in trust by the real estate solicitors pending the outcome of this litigation.

[180] Applying the same standards for establishing a resulting or constructive trust as set out above, I find Mr. Govindasamy has not demonstrated any trust interest in Syldev’s ownership of the Brentcliffe property.

[181] First, I do not accept Mr. Govindasamy’s claim for a resulting trust.

[182] Mr. Govindasamy’s account as to his original status as a shareholder in Syldev is not persuasive, as the evidence at trial confirmed that Ms. Whiteside was the only shareholder of Syldev at the time of incorporation.

[183] Mr. Govindasamy provided no funds for the company, and it is uncontroverted that Ms. Whiteside was the sole shareholder, officer, and director at the date of separation.

[184] While Syldev and Jukeme entered into a transaction to discharge the RBC mortgage, this transaction represented a commercial loan.

[185] Accordingly, Mr. Govindasamy made neither a financial contribution nor a gratuitous transfer, as required for a resulting trust.

[186] Second, Mr. Govindasamy’s claim for a constructive trust fails as well.

[187] I reject Mr. Govindasamy’s claim of “sweat equity” on behalf of Syldev through the management of the Brentcliffe property.

[188] While Mr. Govindasamy clearly involved himself in the operation of Syldev at various times, I find Ms. Whiteside’s testimony that this involvement reflected Mr. Govindasamy’s unilateral intervention in Ms. Whiteside’s business affairs to be credible.

[189] In other words, I find that Mr. Govindasamy’s role with Syldev was not a reflection of an agreement between Ms. Whiteside and Mr. Govindasamy that he perform a managerial function for Syldev. The fact that he inserted himself into the affairs of Syldev cannot form the basis of a trust interest in the business.

[190] For these reasons, I find that Syldev is Ms. Whiteside’s property and is not encumbered by any constructive or resulting trust interest on behalf of Mr. Govindasamy.

[191] Syldev was valued at $1,121,000.00 as at the date of separation. This valuation is not in dispute, and I accept it for purposes of the calculation of net family property.

v. Accent Clear

[192] Accent Clear is a speech language business that Ms. Whiteside incorporated in 2013.

[193] This venture coincided with Ms. Whiteside’s cancer diagnosis and it does not appear ever to have created significant revenues for her.

[194] For example, Accent Clear’s net income in 2014-2015 was $1,272.00.

[195] Accent Clear’s valuation of $10,738.00 for purposes of the net family property calculation is not in dispute.

(g) Debts and Liabilities on the Date of Separation

[196] Very little trial time was devoted to the issue of the parties’ debts and liabilities on the date of separation.

[197] The parties agree on several debts and liabilities on the date of separation, including contingent income tax on RRSPs, disposition costs on RRSPs and investments, and the disposition cost of Syldev.

[198] There is a gap between the parties with respect to the disposition costs of Custom Rehab, PMI and Jukeme.

[199] Ms. Whiteside seeks to rely on certain calculations to which Mr. Govindasamy agreed in his response, dated September 14, 2020, to requests to admit, dated February 18, 2020.

[200] Mr. Govindasamy appears now to adopt different calculations, which would significantly increase the disposition costs of Custom Rehab and Jukeme, and to a lesser extent, PMI.

[201] I find the calculations put forward by Ms. Whiteside are reasonable and supported in the record.

[202] On this basis, I accept Ms. Whiteside’s debts and liabilities on the date of separation in the amount of $654,147.23, and Mr. Govindasamy’s debts and liabilities on the date of separation in the amount of $1,059,593.13.

(h) Net Value of Property and Debts on Date of Marriage

[203] The parties agree that on the date of marriage, Ms. Whiteside had total property in the amount of $24,000.00, while Mr. Govindasamy had debts in the amount of $25,000.00.

(i) Ms. Whiteside’s Inheritance and Excluded Property

[204] The calculation of net family property under the FLA excludes certain assets and properties, including inheritances received after the date of marriage.

[205] Section 4(3) of the FLA provides that the onus of proving an exclusion is on the person claiming it. When excluded property changes form, the party seeking to establish exclusion must demonstrate that the new property originated in the excluded property, and that the claimant maintained ownership of the property: see e.g. Belgiorgio v. Belgiorgio (2000), 1994 17076 (MB QB), 10 R.F.L. (4th) 239 (Ont. S.C.), aff’d (2001) 2001 32756 (ON CA), 23 R.F.L. (5th) 74 (Ont. C.A.).

[206] As the Court stated in Oliver v. Oliver, 2012 ONSC 718, at para. 96, the standard for proving tracing of inherited funds is a “common sense” approach to determine if there is a sufficient link between funds for which an exclusion is sought to the inheritance.

[207] Ms. Whiteside inherited $2,388,261.59 from her parents in October 1999. Each parent’s Will excluded sharing the inheritance income with Mr. Govindasamy.

[208] Ms. Whiteside claims her inheritance is excluded from the calculation of net family property. She testified that the inheritance funds were spent on the matrimonial home or the family, or invested in properties and businesses.

[209] In particular, Ms. Whiteside gave evidence that she incorporated Syldev as an investment vehicle for her inheritance, and that the inheritance funds held in Syldev always remained under her control. Of her total inheritance, she invested $1,200,000.00 into Syldev.

[210] In her affidavit, Ms. Whiteside stated, “It was always my intention to treat my inheritance specially and not comingle with [Mr. Govindasamy] (albeit the matrimonial home for which there may be no exclusion) and spending money on family expenses. This is why all of my investments were always in my name and my name alone.”

[211] Ms. Whiteside provided an exhibit to her affidavit tracing all of the funds received as inheritances and where these funds are invested or held today. The funds are distributed between Syldev, bank and investment accounts in Ms. Whiteside’s name, and the proceeds of the 100 Clarinda Dr. sale.

[212] Ms. Whiteside acknowledges that the inheritance funds invested in the matrimonial home at 100 Clarinda Dr. cannot be excluded from the calculation of net family property, but does seek the exclusion of Syldev as well as the bank and investment accounts which can be traced to the inheritances.

[213] Mr. Govindasamy’s evidence is that the parties treated all funds as family resources, whether they came from Ms. Whiteside’s inheritance or from profits from Custom Rehab, PMI, or Jukeme. He testified that, in his mind, all these funds were comingled, and assets could be and were moved between business, corporate, investment, and individual accounts.

[214] Mr. Govindasamy testified that the names of the companies reflect this family-resources approach to all the assets: “Syldev” was a combination of the first names of the parties, while “Jukeme” represented the combination of the three children’s first names. Accordingly, he argues the amount of Ms. Whiteside’s inheritance that was invested through Syldev should not be excluded from the net family property calculation.

[215] Mr. Govindasamy acknowledged that the Brentcliffe property was purchased with funds from Ms. Whiteside’s inheritance and an RBC mortgage. However, he submits that the mortgage was discharged using funds from Jukeme, which is further evidence the family funds were all comingled.

[216] Generally, Mr. Govindasamy’s position is that the flow of funds back and forth between Custom Rehab, PMI, Syldev, and Jukeme were all transactions among related family businesses based on a shared goal of maximizing revenue for the family.

[217] I reject Mr. Govindasamy’s characterization of Syldev. While Mr. Govindasamy interacted with Syldev in a number of ways, including being involved with the mortgage for the Brentcliffe property and installing Custom Rehab and PMI as tenants, on balance, applying a “common sense” approach, I am satisfied that Ms. Whiteside has met her burden of showing that Syldev was created as and remained a vehicle for investing her inheritance funds.

[218] Therefore, the valuation of Syldev at the date of separation, $1,121,000 (less disposition costs and capital gains in the amount of $254,170.00) remains excluded from the calculation of net family property for purposes of equalization under s. 4(2) of the Family Law Act.

[219] I further find that, based on the tracing evidence in the record, that the inheritance funds invested in Ms. Whiteside’s investment and bank accounts, including $466,212.00 in Liahona, and $946,772.80 in one TD investment account, and $14,200.00 in a second TD account, qualify as excluded assets under s. 4(2) of the Family Law Act.

[220] Ms. Whiteside alleges that Mr. Govindasamy misappropriated $86,658.71 of her inheritance funds. She alleges he transferred the funds from Syldev to a TD account, and then used these funds to purchase RRSPs and a Mercedes Benz car, and remodel his other car.

[221] Mr. Govindasamy contested these allegations.

[222] The parties presented insufficient evidence on these transactions to allow a finding with respect to the allegations that Mr. Govindasamy removed these funds improperly and without consent.

[223] As a result, these amounts are not included in the sum of inheritance funds excluded from the calculation of net family property for equalization.

[224] Therefore, I find a total of $2,301,602.88 will be treated as excluded property for Ms. Whiteside.

(j) Calculation of Equalization of Net Family Property

[225] In light of the findings above, I make the following calculations of equalization of net family property:

Ms. Whiteside

Mr. Govindasamy

Matrimonial Home (100 Clarinda Dr.)

$1,800,000.00

Blue Mountain Chalet

$695,000.00

Household Goods & Furniture

$50,000.00

Silver Birch Residence (down payment)

$100,000.00

Cars & Bicycles

$64,165.00

Investments

$1,243,857.16

$362,782.39

Corporate Holdings

$1,131,738.00

$4,645,000.00

Property on date of separation

$4,175,595.16

$5,888,087.39

Less Debts and Liabilities on date of separation

$654,147.23

$1,059,593.13

Less Property on the date of the marriage

$24,000.00

Less Debts and Liabilities on the date of the marriage

$ 0.00

$25,000.00

Less Value of property (i.e. funds from inheritance) excluded from NFP

$2,301,602.88

Net Family Property

$ 1,195,845.05

4,803,494.26

Equalization Payment

$1,803,824.61

($1,803,824.61)

[226] Based on this calculation, Ms. Whiteside is entitled to an equalization payment from Mr. Govindasamy in the amount of $1,803,824.61.

Issue 2: Is There an Ongoing and Retroactive Obligation for Spousal Support?

[227] Addressing spousal support requires a determination of first whether Ms. Whiteside is entitled to spousal support, second, if so, whether she is entitled to lump sum support, and third what the quantum of support should be.

(a) Is Ms. Whiteside entitled to spousal support?

[228] Ms. Whiteside argues that she is entitled to spousal support in the amount of $3,382,197.00. She further argues that spousal support should be paid by way of a lump sum payment.

[229] Mr. Govindasamy argues that Ms. Whiteside should not be awarded spousal support, given the significant wealth she has accumulated as a result of inheritances and investments.

[230] In Bracklow v. Bracklow, 1999 715 (SCC), [1999] 1 S.C.R. 420, the Supreme Court of Canada recognized that there are three conceptual grounds for entitlement to spousal support: (1) compensatory; (2) non-compensatory; and (3) contractual. The third ground is not relevant here.

[231] Compensatory support is premised on contributions of one spouse to the other spouse during their relationship. That contribution may arise out of the roles that the parties assumed. Those roles may confer an advantage on one party (say career enhancement) and a disadvantage to the other (say a spouse giving up, delaying or impairing a career to assume a caregiving role during the relationship). Further a spouse may make a financial contribution to the other's career (such as supporting the spouse through their schooling).

[232] Non-compensatory support is based on need and ability to pay. The basis of this claim for support is the relationship itself and the financial interdependence arising from that relationship. A claim to spousal support can arise on this basis where there is no basis for compensatory support, as a complement to a claim for compensatory support.

[233] Mr. Govindasamy has not been under any court order to pay spousal support from the date of separation to the date of the trial.

[234] Ms. Whiteside brought one motion on May 10, 2018, for relief including spousal support, which the parties settled on consent. As part of the settlement of that motion, Mr. Govindasamy agreed to make an “uncategorized” lump sum payment of $150,000.00.

[235] In order to determine an entitlement to spousal support, the overarching criterion is what is reasonable having regard to the “conditions, means and other circumstances of the parties”: Plese v. Herjavec, 2020 ONCA 810, at para. 14.

[236] The factors to consider in this determination of spousal support are set out in s. 15.2(4) of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.). They include: (a) the length of time that the spouses cohabited; (b) the functions performed by each spouse during the cohabitation; and (c) whether there were any orders, agreements or arrangements relating to the support of either spouse.

[237] In this case, the marriage lasted 14 years, from 1991 to 2015. Over some of this time, the parties collaborated closely, both in running the household and in business activities.

[238] However, once Ms. Whiteside pulled back from her commitments to Custom Rehab in 2002, she became primarily responsible for the household and child care while Mr. Govindasamy became primarily responsible for the business activities and the primary income earner and director of investments.

[239] While Ms. Whiteside received only modest income over the period after 2002, she continued to be the beneficiary of significant inheritance income.

[240] Mr. Govindasamy argues that Ms. Whiteside has not needed spousal support since the parties’ separation in 2015 as she earned interest and income from investments of over $1,800,000.00. Since the sale of the Brentcliffe property, Ms. Whiteside has had access to approximately $1,200,000.00 and the bulk of the net proceeds from the sale of the matrimonial home, which she used to purchase her current residence for approximately $1,600,000.00.

[241] Similarly, Ms. Whiteside highlights Mr. Govindasamy’s significant investment and real estate holdings, including his residence which he purchased in 2015 for approximately $1,500,000.00, and the various investment holdings in Jukeme, valued in 2020 at $2,919,071.00.

[242] Investments aside, there is no doubt there is a significant income disparity between the parties over the years of the marriage and since the date of separation in this case.

[243] I turn first to Ms. Whiteside’s income. Based on her tax returns, Ms. Whiteside’s income for the 2015-2019 period is as follows: 2015 - $124,681.00; 2016 - $80,600.00; 2017 - $83,600.16; 2018 - $76,313.00; and 2019 - $63,827.00.

[244] A significant portion of this reported income originated in monthly payments from Custom Rehab. Those payments for the years in question are as follows: 2015 – $83,700.00; 2016 - $80,600.00; 2017 - $64,985.00; 2018 - $27,569.00; and 2019 - $33,139.82.

[245] With respect to Ms. Whiteside’s income from Custom Rehab during the period after she left her regular role with the company, Ms. Whiteside submits these funds were merely part of Mr. Govindasamy’s income-splitting scheme. Without the income splitting, she states that her earnings for the years in question would have been: 2015 - $41,981.00; 2016 - $20,114.00; 2017 - $18,615.00; 2018 - $48,744.00; and 2019 - $30,690.00.

[246] Mr. Govindasamy, by contrast, testified that the funds Ms. Whiteside received from Custom Rehab was employment income, and that Ms. Whiteside continued providing value to Custom Rehab in an advisory capacity throughout this period.

[247] Further, Mr. Govindasamy confirmed that keeping Ms. Whiteside on the payroll was necessary to ensure she remained entitled to health insurance during her cancer treatment. Ms. Whiteside receives extended health benefits with a Chamber of Commerce Group Insurance plan through Custom Rehab. Custom Rehab pays $430.00 per month for the insurance.

[248] Ms. Whiteside argues that for spousal support purposes, her income should be imputed to exclude the salary paid to her by Custom Rehab, as these payments constituted income splitting by Mr. Govindasamy rather than genuine salary for employment.

[249] I accept this submission. There is no objective evidence of services rendered by Ms. Whiteside to Custom Rehab during these years.

[250] For the years 2018 and beyond, Ms. Whiteside’s position is that her income from investments will be approximately $30,000.00.

[251] Mr. Govindasamy was earning a high income prior to the winding up of Custom Rehab. His income for the three years just prior to the winding up of Custom Rehab are as follows: 2015 - $511,000.00; 2016 - $587,000.00; and 2017 - $576,000.

[252] His income dropped precipitously after 2017, and was supplemented only by part-time employment as a sessional instructor.

[253] Ms. Whiteside argues that Mr. Govindasamy is intentionally underemployed and has actively concealed what income he does earn, including income from a new business venture, the Centre for Cannabis & Cognitive Function Ltd.

[254] Ms. Whiteside’s spousal support calculations impute income to Mr. Govindasamy after 2017 at the level of $558,000.00 (based on the three-year average between 2015-2017).

[255] I reject the imputing of income at this level for Mr. Govindasamy.

[256] I do not accept that Mr. Govindasamy is intentionally underemployed, nor is there a basis in the record to conclude that he is concealing income. Therefore, for purposes of the calculation of spousal income, I accept Mr. Govindasamy’s income for 2018 was his reported income of $128,437.00, and for 2019 was $182,155.00.

[257] Mr. Kwiatkowski, the jointly retained expert, prepared a report on Mr. Govindasamy’s income for purposes of support in 2016, which he updated in 2017. He found Mr. Govindasamy’s average income in the 2013-2017 period was $446,000.00.

[258] Even accepting this lower level of reported income for 2018 and 2019, Mr. Govindasamy’s five-year average income in the 2014-2019 period would be approximately $397,000.00, above the $350,000.00 income ceiling of the Spousal Support Advisory Guidelines (“SSAG”).

[259] The objectives of spousal support under s. 15.2(6) of the Divorce Act are the following: (a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown; (b) apportion between the spouses any financial consequences arising from the care of any child of the marriage; (c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and (d) insofar as possible, promote the economic self-sufficiency of each spouse within a reasonable period of time.

[260] With these objectives in mind, I make the following findings.

[261] Both spouses had significant assets at the time of separation. Mr. Govindasamy’s assets were primarily business and investment related, while Ms. Whiteside’s assets primarily resulted from inheritances and real estate holdings.

[262] Ms. Whiteside ceased full-time work, first because of child care responsibilities, and later because of her illness. While this lack of income created economic challenges, these were mitigated by the monthly payments and ongoing health insurance that Ms. Whiteside continued to receive from Custom Rehab.

[263] While I would not describe Ms. Whiteside’s situation either upon separation or today as economic hardship, it is apparent that her lifestyle and financial security have deteriorated to some extent as a result of the breakdown of the marriage.

[264] I accept Mr. Govindasamy’s evidence that winding up Custom Rehab and PMI’s operations substantially negatively affected his income but it is also the case that he retains significant investment holdings and returns, which in part are a reflection of his higher income he earned over the course of the marriage.

[265] Taking into consideration the objectives of spousal support, and the evidence in this trial, I conclude that Ms. Whiteside is entitled to spousal support from Mr. Govindasamy.

(b) Is Ms. Whiteside entitled to spousal support in the form of a lump sum payment?

[266] Spousal support may be paid on a periodic basis or as a lump sum payment. Sections 34(1)(a) and (b) of the FLA provide as follows:

Powers of court

34(1) In an application under section 33, the court may make an interim or final order,

(a) requiring that an amount be paid periodically, whether annually or otherwise and whether for an indefinite or limited period, or until the happening of a specified event; [and]

(b) requiring that a lump sum be paid or held in trust.

[267] Section 15.2(1) of the Divorce Act reads as follows:

Spousal support order

15.2(1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse

[268] The Court of Appeal set out the principles governing lump sum spousal support in Davis v. Crawford, 2011 ONCA 294, 106 O.R. (3d) 221, at paras. 62-69:

In any event, the purpose of an award must always be distinguished from its effect. Any lump sum award that is made will have the effect of transferring assets from one spouse to the other. The real question in any particular case is the underlying purpose of the order: Willemze-Davidson, at para. 32.

Similarly, it is well accepted that an important consideration in determining whether to make a lump sum spousal support award is whether the payor has the ability to make a lump sum payment without undermining the payor’s future self-sufficiency.

Under s. 33(9) of the Family Law Act, “[i]n determining the amount and duration, if any, of support for a spouse … in relation to need, the court shall consider” among other things:

(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;

(d) the respondent’s capacity to provide support. [Emphasis added in Davis]

These statutory provisions make it clear that ability to pay is an important consideration in making an award of spousal support, including lump sum spousal support.

Most importantly, a court considering an award of lump sum spousal support must weigh the perceived advantages of making a lump sum award in the particular case against any presenting disadvantages of making such an order.

The advantages of making such an award will be highly variable and case-specific. They can include but are not limited to terminating ongoing contact or ties between the spouses for any number of reasons (for example, short-term marriage; domestic violence; second marriage with no children, etc.); providing capital to meet an immediate need on the part of a dependent spouse; ensuring adequate support will be paid in circumstances where there is a real risk of non-payment of periodic support, a lack of proper financial disclosure or where the payor has the ability to pay lump sum but not periodic support; and satisfying immediately an award of retroactive spousal support.

Similarly, the disadvantages of such an award can include the real possibility that the means and needs of the parties will change over time, leading to the need for a variation; the fact that the parties will be effectively deprived of the right to apply for a variation of the lump sum award; and the difficulties inherent in calculating an appropriate award of lump sum spousal support where lump sum support is awarded in place of ongoing indefinite periodic support.

In the end, it is for the presiding judge to consider the factors relevant to making a spousal support award on the facts of the particular case and to exercise his or her discretion in determining whether a lump sum award is appropriate and the appropriate quantum of such an award.

[269] Ms. Whiteside’s limited life expectancy, medical situation, and potential medical expenses beyond insurance coverage create urgency to her financial needs.

[270] In this case, given Ms. Whiteside’s modest income and the unlikelihood of her being able to earn future income in light of her illness, she will likely need to live off income from investments.

[271] Ms. Whiteside is facing the prospect of very significant, potential costs and impact as her illness progresses. Her physician testified that if her current medication fails, she could be required to spend approximately US$1,000,000.00 for alternative medication in the U.S., which is not supported on her current insurance. Given the dire nature of Ms. Whiteside’s health situation, this is a case where the division of property itself has not achieved all of the goals of spousal support.

[272] I find Ms. Whiteside’s health situation, combined with the goal of allowing a full break of ties between the parties, meets the threshold for a lump sum rather than periodic payment of spousal support.

[273] While Mr. Govindasamy’s income has declined, he has a number of assets within the Jukeme portfolio of investments, currently valued at $2,919,071.00, from which a lump sum payment may be drawn.

(c) What is the appropriate quantum of spousal support?

[274] With respect to quantum, Ms. Whiteside argues for an amount on the high side of the SSAG. Her position is due in part to the illness from which she suffers, which both constrains her ability to earn income, and may result in significant expenditures on medication and treatment in the future.

[275] In Bracklow v. Bracklow, 1999 715 (SCC), [1999] 1 SCR 420, the Supreme Court considered the issue of how an illness or disability of a spouse might affect an award of spousal support. The Court highlighted that as part of an analysis of non-compensatory support, the fact that one spouse was able to be self-sufficient upon the breakdown of a marriage while the other faced debilitating illness properly formed part of the determination of spousal support. McLachlin J. (as she then was) held for the Court (at para. 48):

[48] To permit the award of support to a spouse disabled by illness is but to acknowledge the goal of equitably dealing with the economic consequences of marital breakdown that this Court in Moge, supra, recognized as lying at the heart of the Divorce Act. It also may well accord, in my belief, with society’s sense of what is just. The Report of the Scottish Law Commission, Family Law: Report on Aliment and Financial Provision (1981), at pp. 111-12, a thoughtful analysis of the rationale and policy considerations of spousal support and illness, states:

Financial provision on divorce is not . . . simply a matter of abstract principle. It is essential that any system should be acceptable to public opinion and it is clear from the comments we have received that many people would find it hard to accept a system which cut off, say, an elderly or disabled spouse with no more than a three-year allowance after divorce, no matter how wealthy the other party might be.

Divorce ends the marriage. Yet in some circumstances the law may require that a healthy party continue to support a disabled party, absent contractual or compensatory entitlement. Justice and considerations of fairness may demand no less.

[49]… [A] review of cases suggests that in most circumstances compensation now serves as the main reason for support. However, contract and compensation are not the only sources of a support obligation. The obligation may alternatively arise out of the marriage relationship itself. Where a spouse achieves economic self-sufficiency on the basis of his or her own efforts, or on an award of compensatory support, the obligation founded on the marriage relationship itself lies dormant. But where need is established that is not met on a compensatory or contractual basis, the fundamental marital obligation may play a vital role. Absent negating factors, it is available, in appropriate circumstances, to provide just support. (Emphasis in original)

[276] In this case, Ms. Whiteside is not now experiencing the kind of economic hardship that was at issue in Bracklow. I must consider how the remaining funds from her substantial inheritance ensure some cushion against hardship, both now and in the future.

[277] Additionally, I also must take into consideration that Ms. Whiteside will be receiving a substantial injection of funds as a result of the equalization of net family property set out above.

[278] The fact that a spouse has received substantial assets as a result of equalization, however, does not defeat a spousal support claim: Parton v. Parton, 2018 BCCA 273, at para. 42. There may be cases where property division addresses the objectives of spousal support and thus eliminate or reduce the need for a spousal support award, but in others it may not.

[279] The SSAG have a ceiling of $350,000.00 for the payor’s income. Above the ceiling, spousal support cases require an individualized, fact-specific analysis; Zapfe v. Zapfe, 2019 ONSC 4065, at para. 32, citing Carol Rogerson and Rollie Thompson, SSAG Revised User’s Guide, at ch.11(b); and Halliwell v Halliwell, 2017 ONCA 349, at para. 120.

[280] The SSAG’s range for support is based on 1.5-2% of the difference between the spouses’ gross income for each year to a maximum range of 37.5-50% for marriages of 25 years or longer.

[281] Ms. Whiteside’s SSAG high range calculations would result in a range of monthly support obligations in the 2015-2020 period ranging from $14,340.00 to $19,433.00. Ms. Whiteside used these calculations as a basis for her initial claim for lump sum spousal support of $3,382,197.00.

[282] Ms. Whiteside also submitted alternative calculations based on a lump sum payment reflecting support obligations between the present and when Mr. Govindasamy turns sixty-five in twelve years and reaches retirement age. If support were calculated on this basis, from the date of separation, the lump sum support payment, after tax, would be $1,560,096 at the high range, and $1,383,552 at the mid-range.

[283] As stated above, these calculations are premised on imputing the average income for Mr. Govindasamy from the 2015-2017 period for the years after 2017, on the basis that Mr. Govindasamy has been intentionally underemployed since 2017, and has concealed income. I do not accept this premise, and therefore, a calculation of lump sum spousal support must also take into consideration Mr. Govindasamy’s current, lower income level.

[284] Mr. Govindasamy argues that this case is not susceptible to a formulaic approach. He argues in his closing submission, “It is submitted, that in determining support in high income cases it is not simply plugging in the figures in DivorceMate and the output is the answer. There are considerations that should be taken into account when the income exceeds $350,000.00 and the more difficult it becomes… The respondent does not dispute the Applicant’s entitlement to spousal support but submits that the Applicant does not have need of spousal support based on her income and assets.”

[285] In this case, considering the current and prior income differential between the parties, the funds provided to Ms. Whiteside by Custom Rehab through income splitting, Mr. Govindasamy’s uncategorized payment of $150,000.00 on consent to settle the May 2018 motion, Ms. Whiteside’s considerable investment and real estate holdings, together with the significant equalization payment which she will receive, I find that the lump sum of $750,000.00 in spousal support is fair and reasonable in the circumstances, reflecting both compensatory and non-compensatory aspects of Ms. Whiteside’s entitlement to spousal support.

[286] Therefore, I find Ms. Whiteside is entitled to a lump-sum spousal support award in the amount of $750,000.00.

Issue 3: Is There a Retroactive Obligation for Child Support or s. 7 Expenses?

[287] In addition to spousal support, Ms. Whiteside submits that Mr. Govindasamy is liable for child support and s. 7 expense arrears.

[288] There are three children of the marriage, each of whom is now an independent adult.

[289] Kieran lived with Ms. Whiteside between 2015 to May 2018. He lived with Mr. Govindasamy from November 2018 until he found his own apartment a few months later. Kieran moved back with Devin from June 2020 to August 31 2020. He now attends the University of Guelph and lives in an apartment with support from Ms. Whiteside.

[290] Meera lived with Ms. Whiteside from 2015 until May 2016. She lived with Mr. Govindasamy during holidays while attending Queen’s University between May 2016 and May 2017. In June 2017, Meera began her master’s degree at Ryerson University, for which she received a scholarship, and moved to her own apartment.

[291] Justin lived for short periods of time with each parent between 2015 and 2020. He now attends University of Waterloo and resides in Cambridge, and spends holidays with Mr. Govindasamy.

[292] According to Mr. Govindasamy, there were RESP funds of approximately $50,000.00 available for tuition fees.

[293] Additionally, Mr. Govindasamy states that Ms. Whiteside’s late father established a trust fund for the children’s education, the full extent of which has yet to be disclosed.

[294] Ms. Whiteside argues that the Federal Child Support Guidelines (the “Guidelines”) provide a clear formula for the payment of support. Under this formula, Ms. Whiteside calculates that Mr. Govindasamy owes arrears of child support and s. 7 expenses in the amount of $333,777.00.

[295] Ms. Whiteside bases her view on where the children have lived after leaving the matrimonial home.

[296] Her principal claim for child support covers the period between the date of separation in August 2015 until May 2018 when Kieran lived with her.

[297] Her claim for s. 7 expenses is broader. Ms. Whiteside gave evidence that she spent more than $200,000 on the children between the date of separation and date of trial. She traced $194,620.49, which she claims as special or ordinary expenses for the children. These expenses include the following: tuition; rent and furnishings; school supplies; car and car-related expenses, including insurance and driving school; bicycle; tutoring; and psychological services.

[298] Ms. Whiteside submits that all of the categories claimed as s. 7 expenses for the children were reasonable and necessary. They were part of the children’s lifestyle or contemplated before separation.

[299] Subtracting funds Ms. Whiteside accessed from a joint banking account and RESP funds from the $194,620.49, she submits that Mr. Govindasamy would owe his proportionate share of the remaining $110,548.49.

[300] At trial, Mr. Govindasamy claimed he also paid expenses for the children, including a line of credit for Justin’s educational expenses.

[301] The documentation provided by Ms. Whiteside consists of a table providing a breakdown of various payments to postsecondary institutions for tuition, psychology service providers, car insurance, and transfers labeled as intended for rent, clothing, a bed and other furnishings, together with supporting documentation from bank statements, cheques and receipts.

[302] The statutory framework for special or extraordinary expenses is under s. 7 of the Guidelines:

Special support guidelines

7 (1) In a child support order the court may, on either spouse’s request, provide for an amount to cover all or any portion of the following expenses, which expenses may be estimated, taking into account the necessity of the expense in relation to the child’s best interests and the reasonableness of the expense in relation to the means of the spouses and those of the child and to the family’s spending pattern prior to the separation:

(a) child care expenses incurred as a result of the custodial parent’s employment, illness, disability or education or training for employment;

(b) that portion of the medical and dental insurance premiums attributable to the child;

(c) health-related expenses that exceed insurance reimbursement by at least $100 annually, including orthodontic treatment, professional counselling provided by a psychologist, social worker, psychiatrist or any other person, physiotherapy, occupational therapy, speech therapy and prescription drugs, hearing aids, glasses and contact lenses;

(d) extraordinary expenses for primary or secondary school education or for any other educational programs that meet the child’s particular needs;

(e) expenses for post-secondary education; and

(f) extraordinary expenses for extracurricular activities.

Definition of “extraordinary expenses”

(1.1) For the purposes of paragraphs (1)(d) and (f), the term extraordinary expenses means

(a) expenses that exceed those that the spouse requesting an amount for the extraordinary expenses can reasonably cover, taking into account that spouse’s income and the amount that the spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate; or

(b) where paragraph (a) is not applicable, expenses that the court considers are extraordinary taking into account

(i) the amount of the expense in relation to the income of the spouse requesting the amount, including the amount that the spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate,

(ii) the nature and number of the educational programs and extracurricular activities,

(iii) any special needs and talents of the child or children,

(iv) the overall cost of the programs and activities, and

(v) any other similar factor that the court considers relevant.

Sharing of expense

(2) The guiding principle in determining the amount of an expense referred to in subsection (1) is that the expense is shared by the spouses in proportion to their respective incomes after deducting from the expense, the contribution, if any, from the child.

Subsidies, tax deductions, etc.

(3) Subject to subsection (4), in determining the amount of an expense referred to in subsection (1), the court must take into account any subsidies, benefits or income tax deductions or credits relating to the expense, and any eligibility to claim a subsidy, benefit or income tax deduction or credit relating to the expense.

Universal child care benefit

(4) In determining the amount of an expense referred to in subsection (1), the court shall not take into account any universal child care benefit or any eligibility to claim that benefit. [Emphasis in original]

[303] In Titova v. Titov, 2012 ONCA 864, 299 O.A.C. 215, at para. 23, the Court of Appeal held that when determining whether an expense should be considered reimbursable under s. 7 of the Guidelines, the court must determine whether the expense is in the child’s best interests and reasonable in relation to the means of the spouses and those of the child and the family’s spending pattern prior to separation.

[304] With respect to the children’s regular expenses, on the record before me, I find the adult children moved between the parents’ homes and to their own residences with enough frequency during the period in question after the date of separation that it is not possible to ascertain which parent clearly paid more towards the children’s regular expenses than the other.

[305] In D.B.S v. S.R.G., 2006 SCC 37, [2006] 2 S.C.R. 231, the Supreme Court discusses the circumstances in which a court should or should not order retroactive child support. The Court states, at para. 95:

It will not always be appropriate for a retroactive award to be ordered. Retroactive awards will not always resonate with the purposes behind the child support regime; this will be so where the child would get no discernible benefit from the award. Retroactive awards may also cause hardship to a payor parent in ways that a prospective award would not. In short, while a free-standing obligation to support one's children must be recognized, it will not always be appropriate for a court to enforce this obligation once the relevant time period has passed.

[306] In this case, Mr. Govindasamy has not been under any court order to pay child support from the date of separation to the date of the trial.

[307] As set out above, Ms. Whiteside brought one motion on May 10, 2018, for relief including spousal support, which the parties settled on consent. Following the settlement of that motion, Mr. Govindasamy agreed to make an “uncategorized” lump sum payment of $150,000.00. Mr. Govindasamy submits that it was not unreasonable for him to have believed that this sum reflected a payment toward either child or spousal support.

[308] In D.B.S. v. S.R.G., at para. 109, the Supreme Court held that payments beyond what is required by statute may be considered in the determination of whether retroactive child support is appropriate:

Finally, I should also mention that the conduct of the payor parent could militate against a retroactive award. A court should thus consider whether conduct by the payor parent has had the effect of fulfilling his/her support obligation. For instance, a payor parent who contributes for expenses beyond his/her statutory obligations may have met his/her increased support obligation indirectly. I am not suggesting that the payor parent has the right to choose how the money that should be going to child support is to be spent; it is not for the payor parent to decide that his/her support obligation can be acquitted by buying his/her child a new bicycle: see Haisman v. Haisman (1994), 1994 ABCA 249, 22 Alta. L.R. (3d) 56 (Alta. C.A.), at paras. 79-80. But having regard to all the circumstances, where it appears to a court that the payor parent has contributed to his/her child's support in a way that satisfied his/her obligation, no retroactive support award should be ordered.

[309] In this case, I am not prepared to conclude that either party has outstanding obligations with respect to retroactive child support or s. 7 expenses.

[310] I come to this decision based in part on Mr. Govindasamy’s $150,000.00 uncategorized payment to settle the 2018 motion, and the lack of complete information as to whether and how each of the parties contributed to the children’s extraordinary expenses before they became independent adults.

Issue 4: The Civil Action

[311] Mr. Govindasamy and several of his companies issued a statement of claim against Ms. Whiteside and Syldev on November 29, 2018.

[312] In December 2018, the Brentcliffe property was sold for $2.4 million.

[313] This civil claim alleges that Mr. Govindasamy has a resulting or constructive trust interest in the Brentcliffe property, or in the alternative an equitable mortgage over the Brentcliffe property, and that Ms. Whiteside and Syldev are liable for $1.2 million on the basis of unjust enrichment.

[314] The claim also alleges Ms. Whiteside and Syldev are liable for the damages Custom Rehab suffered when Ms. Whiteside evicted Custom Rehab from the Brentcliffe property.

[315] Mr. Govindasamy retained Mr. Kwiatkowski to prepare a “damages report” in relation to the civil claim. In a motion heard on October 23, 2020, I determined that this report was not admissible as an expert report, as Mr. Govindasamy failed to comply with the disclosure requirements of r. 20.2(5) of the Family Law Rules.

[316] As set out above, the test for unjust enrichment was affirmed by the Supreme Court in Kerr v. Baranow and has three elements: (1) an enrichment; (2) a deprivation; and (3) the absence of a juristic reason for the enrichment.

[317] The claimant has the burden of proving an unjust enrichment claim by showing that there is both an enrichment and corresponding deprivation.

[318] Mr. Govindasamy must show that Ms. Whiteside through Syldev was enriched by the overpayment of rent and that, through Custom Rehab, he suffered corresponding losses.

[319] Mr. Govindasamy alleges that Custom Rehab and PMI overpaid rent to Syldev during their occupancy by approximately $1,200,000.00.

[320] Regarding the trust claims, Mr. Govindasamy alleges that he contributed to various improvements to the Brentcliffe property and served as property manager for the property during the period Custom Rehab was located there. He argues that he is entitled to $10,000.00 annually as compensation for these services.

[321] Mr. Govindasamy alleges that Custom Rehab provided bookkeeping services for Syldev without compensation. These bookkeeping services should be valued at $8,000.00 annually.

[322] Mr. Govindasamy’s claim rests primarily on the above-market rent Custom Rehab allegedly paid to Syldev.

[323] Mr. Robert Rumley, Mr. Govindasamy’s financial advisor, testified at trial that he advised Mr. Govindasamy that the rent was over market rates, but he understood the companies were paying above-market rent so Syldev could bring down the mortgage more quickly.

[324] Ms. Hagedorn, testifying as to the rent PMI paid, stated the rent seemed high to her at the outset, but remained constant, and at some point during the rental period, became aligned with market rents in the area.

[325] Syldev also funded renovations to the Brentcliffe property at a cost of $350,000.00, which Mr. Govindasamy claims to have coordinated, in order to customize the space for the Custom Rehab and PMI. These renovations to the Brentcliffe property could have justified higher rents as well.

[326] In the absence of expert evidence on the market values for rent at the Brentcliffe property over the entire period in question, however, I am not prepared to find that the rent Custom Rehab agreed to pay Syldev was so significantly above market value as to constitute a deprivation on the part of Mr. Govindasamy or an enrichment of Ms. Whiteside through Syldev.

[327] The managerial and bookkeeping functions Mr. Govindasamy may have performed were at his own initiative, and there is no evidence that he and Ms. Whiteside agreed he would perform these roles for Syldev, or that Syldev would have retained professional services to perform such roles if Mr. Govindasamy had not performed them.

[328] Further, had Syldev paid for the professional managerial or bookkeeping services Mr. Govindasamy claims he performed, this added cost likely would have been passed on to the tenants of the Brentcliffe property in the form of higher rent, which would have fallen to Mr. Govindasamy to pay on behalf of Custom Rehab and PMI as tenants. Therefore, both the benefit to Ms. Whiteside and Syldev and corresponding deprivation to Mr. Govindasamy of the services he states he performed is uncertain.

[329] Accordingly, Mr. Govindasamy’s claim for unjust enrichment fails.

[330] Mr. Govindasamy also seeks a declaration of an equitable mortgage over the Brentcliffe property.

[331] The requirements of an equitable mortgage were set out in Elias Markets Ltd., Re, 2006 31904 (ON CA). Writing for the Court, MacFarland J.A. held (at paras. 63-65),

[63] An equitable mortgage is distinct from a legal mortgage. “An equitable mortgage is one that does not transfer the legal estate in the property to the mortgagee, but creates in equity a charge upon the property”: A.H. Oosterhoff & W.B. Rayner, Anger and Honsberger: Law of Real Property, 2d ed. (Aurora, Ont.: Canada Law Book) at 1643.

[64] The concept of an equitable mortgage would seem to find its foundation in the equitable maxim that “equity looks on that as done which ought to be done”. Historically, the courts of equity mitigated the rigour of the common law, tempering its rules to the needs of particular cases on principles of justice and equity. The common law courts were primarily concerned with enforcing the strict legal rights of the parties, whereas equity was a court of conscience; it would step in to prevent an injustice that would otherwise arise from the strict application of the law.

[65] In essence, the concept of an equitable mortgage seeks to enforce a common intention of the mortgagor and mortgagee to secure property for either a past debt or future advances, where that common intention is unenforceable under the strict demands of the common law.

[332] The evidence shows that Jukeme provided funds in the amount of $520,000.00 to Syldev to discharge the RBC mortgage. It appears that Jukeme has not repaid this loan to Syldev.

[333] In her evidence, Ms. Whiteside acknowledged the transaction, though she stated that Mr. Govindasamy took this step unilaterally, without her knowledge or consent.

[334] I accept Ms. Whiteside’s evidence that the action by Jukeme to advance funds to discharge the RBC mortgage did not represent any common intention to transfer an interest in the Brentcliffe property to Mr. Govindasamy.

[335] Therefore, I do not find a basis for an equitable mortgage.

[336] However, the loan from Jukeme to Syldev to discharge the mortgage does appear to represent a debt which ought to be paid.

[337] Ms. Whiteside argued in her closing submissions that, “The only evidence before the court is that this was a loan from Jukeme. The set off between the alleged loan and the hundreds of thousands that Devin dissipated from Syldev over the years is likely a wash.”

[338] Mr. Govindasamy relies on this loan as evidence of his interest in Syldev, but Mr. Govindasamy produced little evidence about the loan, its terms or efforts by Jukeme to seek repayment.

[339] Absent evidence of terms of a loan agreement that have been breached, or evidence that Jukeme has sought repayment of this loan, and that Syldev has refused to repay it, I am not prepared to order that it be repaid through this action.

[340] If repayment of this loan is pursued, Ms. Whiteside would also have the opportunity to substantiate the claim that this debt may be set off against other assets of Syldev allegedly removed by Mr. Govindasamy without Ms. Whiteside’s knowledge or consent.

[341] Finally, I turn to the question of whether the plaintiffs have suffered damages through the actions of Ms. Whiteside and Syldev.

[342] Mr. Govindasamy argues that Custom Rehab incurred losses that resulted from Ms. Whiteside evicting Custom Rehab from the Brentcliffe property.

[343] Ms. Whiteside alleges that Mr. Govindasamy self-inflicted any damages relating to Custom Rehab, as he intentionally let the business decline.

[344] In August 2017, Custom Rehab’s largest client, Economical Insurance, gave notice that it would no longer be providing Custom Rehab with referrals for assessments. Apparently, this decision did not relate to performance concerns but rather to the fact that Custom Rehab could not provide national service while other providers could.

[345] Based on the testimony of former Custom Rehab employee, Alekos Soriano, Ms. Whiteside argues that Custom Rehab could have attempted to establish a national scope of operations to retain Economical and seek out new clients.

[346] Mr. Soriano held roles in report editing and quality assurance for Custom Rehab. He gave evidence that Mr. Govindasamy appeared less engaged in Custom Rehab after his separation from Ms. Whiteside. He also testified that Mr. Govindasamy could have done more to retain Economical.

[347] Mr. Govindasamy submits that Mr. Soriano is not credible with respect to what is required to run a successful business in the field. On cross-examination, Mr. Soriano conceded that he had tried to launch his own business after Custom Rehab was wound up, but was not successful.

[348] Ms. Whiteside alleges that Mr. Govindasamy intentionally allowed Custom Rehab to fail to reduce his assets for purposes of this family litigation.

[349] Mr. Govindasamy’s evidence is that he tried to salvage Custom Rehab by presenting a financial proposal to Intact Insurance, but the proposal was not accepted. Mr. Govindasamy also testified that he met with the owners for Quick Driver, which resulted in a few referrals for assessments.

[350] By the end of November 2017, Custom Rehab had completed all of the assessments that Economical had referred. From that point forward, Custom Rehab’s income was reduced to almost nil.

[351] In October 2017, Custom Rehab paid Syldev $4,200 for September 2017 and October 2017 rent. The regular rent had been $10,180.00 per month since January 2017.

[352] Ms. Hagedorn testified at trial that Mr. Govindasamy similarly reduced the rent paid by PMI to Syldev, and adopted a vindictive attitude toward PMI as it became caught up in the dispute between Mr. Govindasamy and Ms. Whiteside.

[353] Ms. Whiteside stated that she did not have the means to pay the bills and Mr. Govindasamy’s unilateral decision to reduce the rent paid by Custom Rehab and PMI caused her “immense stress.”

[354] On October 11, 2017, counsel for Ms. Whiteside advised Mr. Govindasamy that Custom Rehab was in breach of its contract with Syldev.

[355] According to Ms. Whiteside, on November 1, 2017, Mr. Govindasamy moved Custom Rehab out of the Brentcliffe property without notice or warning. He did not pay any rent for Custom Rehab from that point on, nor did he pay any of the arrears Custom Rehab owed Syldev from the September to November 2017 period.

[356] That same day, on November 1, 2017, Mr. Battiston, then litigation counsel to Mr. Govindasamy, advised counsel for Ms. Whiteside that a Certificate of Pending Litigation would be sought for the Brentcliffe property if there was any attempt to sell the property.

[357] Mr. Govindasamy alleges that Custom Rehab was evicted from the Brentcliffe property. He gave evidence that this eviction prevented him from having access to Custom Rehab’s offices and therefore precluded his attempt to try to re-establish an income stream from Custom Rehab by recruiting new clients.

[358] I find that Mr. Govindasamy’s testimony regarding the challenges that Custom Rehab suffered after losing Economical is credible. I accept his account of why Custom Rehab could not simply choose to expand to national reach to compete for Economical and other clients for whom this reach would be an important factor.

[359] I do not accept that Mr. Govindasamy intentionally sought to undermine Custom Rehab to frustrate Ms. Whiteside’s family law claims.

[360] I also reject Mr. Govindasamy’s claim that Ms. Whiteside’s decision not to permit Custom Rehab to remain in the Brentcliffe property caused the company to suffer damages by preventing Custom Rehab from attracting new clients.

[361] I find, that by the fall of 2017, the Custom Rehab’s situation was a fait accompli. By this point, the company as a going concern was no longer feasible. This state of affairs no doubt had a number of causes, from too great a reliance on a single client to its lack of national scope.

[362] Whatever the full matrix of causes, however, for purposes of this trial, I find that Mr. Govindasamy did not intentionally cause Custom Rehab’s demise.

[363] Similarly, I find that Ms. Whiteside did not cause Custom Rehab’s demise by requiring Custom Rehab to meet its rental obligations to Syldev for the space in the Brentcliffe property.

[364] I find that, after Custom Rehab unilaterally reduced the rent paid in the fall of 2017, Syldev acted reasonably when it informed Custom Rehab that it was in breach of its rental obligations.

[365] I find that Mr. Govindasamy decided Custom Rehab would leave the Brentcliffe property on November 1, 2017, of his own accord and based on his own business judgment.

[366] For these reasons, I find that Mr. Govindasamy has not established a trust or beneficial interest in the Brentcliffe property, nor has he established that he or the corporate plaintiffs are entitled to a remedy for unjust enrichment or damages against the co-defendants, Ms. Whiteside or Sydev.

[367] Therefore, Mr. Govindasamy’s claim is dismissed.

Prejudgment Interest

[368] Ms. Whiteside seeks an order for prejudgment interest of all amounts owing herein. Pursuant to s. 128 of the Courts of Justice Act (“CJA”), R.S.O. 1990, c. C.43, a person entitled to the payment of money is entitled to claim interest at the “prejudgment interest rate” calculated from the date the cause of action arose (i.e. the date of separation) to the date of the order.

[369] Section 127(1) defines how the prejudgment interest rate is calculated.

[370] I find Ms. Whiteside is entitled to an order for prejudgment interest on the amounts to which she is entitled in accordance with s. 128 of Courts of Justice Act, retroactive to the date of separation being August 25, 2015.

DISPOSITION

Order to Go as Follows:

[371] For these reasons, I order the following:

a) Mr. Govindasamy will pay to Ms. Whiteside an equalization payment in the amount of $1,803,824.61;

b) Mr. Govindasamy will pay to Ms. Whiteside a lump-sum spousal support payment in the amount of $750,000.00;

c) prejudgment interest, in accordance with s. 128 of Courts of Justice Act, retroactive to the date of separation being August 25, 2015; and

d) Custom Rehab will continue to provide health insurance to Ms. Whiteside during her lifetime, or until such time as Mr. Govindasamy can make reasonable alternative arrangements to provide equivalent health insurance for Ms. Whiteside.

[372] To satisfy a portion of these obligations, all funds currently being held in trust following the sales of the matrimonial homes at 100 Clarinda Dr. and the Blue Mountain chalet, and the Brentcliffe property, will be released immediately, and will be used to provide funds for the equalization of net family property set out above.

[373] Ms. Whiteside seeks a freezing order with respect to Mr. Govindasamy’s assets to ensure the judgment is satisfied. I do not find a basis for such an order in any recent conduct (such as a corporate restructuring to shield assets), nor has Ms. Whiteside moved for any interim freezing orders in the past.

[374] I also decline to make any order in relation to Mr. Govindasamy’s life insurance policy as potential security for the payment of his obligations.

[375] If the parties cannot agree on costs, Ms. Whiteside may provide brief costs submissions (not in excess of five pages, together with a bill of costs) within 21 days of the release of this judgment, to be followed by brief costs submissions from Mr. Govindasamy (of the same length) no later than 14 days after the receipt of Ms. Whiteside’s submissions. Brief reply costs submissions from Ms. Whiteside, if necessary, may be submitted seven days after the receipt of Mr. Govindasamy’s submissions.

Sossin J.

Released: February 5, 2021