COURT FILE NO.: FS-20-015011
DATE: 20210105
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Michelle Francoise Rosanne Ameerali, Applicant
AND:
Miandad Sultan Ameerali, Respondent
BEFORE: Kiteley J.
COUNSEL: Adriana Chimirel and Saisha Mahil, counsel for the Applicant
Ayaz Mehdi, counsel for the Respondent
HEARD: November 26, 2020
ENDORSEMENT ARISING FROM MOTION
[1] This is a motion brought by the Applicant for disclosure, temporary spousal support and other relief. It had been scheduled for 1 hour and, on the basis of the material filed, it appeared impossible to address all of those issues. On my direction, the lawyers prioritized and focused their submissions and the issues were covered, albeit without rendering a decision on that date.
Background
[2] The parties married on October 30, 2010. They separated in September 2018. At least 3 possible separation dates in September are referenced, namely September 18, September 21 or September 24 but for purposes of this motion the differences are immaterial. The parties continued to reside in the rented condominium in Toronto until the Respondent left. In paragraph 1 of her affidavit, the Applicant says he vacated in March 2020. In paragraph 2 of his affidavit, the Respondent says that he left in late November 2019 but he continued paying his share of the rent which was $2000 a month until the lease expired at the end of February.
[3] At the date of marriage, the Respondent was employed by Bell Canada. Subsequently he was employed by Great-West Life in a temporary full-time capacity and, starting July 23, 2018, his status changed to regular full-time. At the date of marriage, the Respondent had an ownership interest in a property on Livingston Road in Toronto. That property was sold in September 2012. During the marriage, the parties resided in the matrimonial home on William Street in Hamilton. The closing of the sale of that property occurred in March 2018. At the date of separation, they lived in rented accommodation in Toronto.
[4] At the date of marriage, the Applicant had a LIRA that she still had at the date of separation. At both dates, the Respondent owned assets he categorized as “pension”, investments and bank accounts.
[5] By any measure, their assets at date of marriage and date of separation were modest.
[6] The Applicant and the Respondent, and their respective counsel, have dramatically different perspectives on the extent to which the Respondent has provided disclosure of his assets and liabilities. The Applicant asserts that the Respondent has played the game of “catch me as you can”. She insists that he is hiding information and has failed to disclose assets valued at $91,370, consisting of his Great West Life Group RPP, the “Shapel” RSP/RIF that she says was valued at $68,000 on the valuation date, the TFSA valued at $13,370, and the Bell Stock valued at, at least, $10,000.
[7] The Respondent asserts that she has asked for “everything under the sun”, that he has given her everything required of him and that her demands have cost him thousands of dollars in professional fees. The Respondent is adamant that he has fully disclosed and indignant that the Applicant has brought this motion. His criticisms can only be described as rude, demeaning, belittling, derogatory and insulting both to the Applicant and to her counsel.
[8] According to the case history, on January 22, 2020, the Applicant filed the Application and a form 13.1 financial statement. On February 27, 2020, the Respondent filed an Answer, a financial statement sworn February 25, 2020 and a Certificate of Financial Disclosure. All of that was filed before the suspension of regular court operations on March 17, 2020. The lawyers did not file any of those materials in the electronic file for this motion. A case conference was held on August 17, 2020.
[9] For this motion the Applicant filed an affidavit sworn November 16, 2020, a form 13.1 financial statement sworn November 16, 2020, a notice of motion and a factum.
[10] The Respondent filed an affidavit dated November 20, 2020, a form 13.1 financial statement dated November 20, 2020 and a factum. I realized after the hearing of the motion that the form 13.1 financial statement had not been sworn by the Respondent. His name was typed on the signature line. He had also not signed the affidavit dated November 20, 2020. At my request, on December 31, 2020, the Assistant Trial Co-ordinator asked counsel for the Respondent to provide signed versions of each document. They were provided later that day. The form 13.1 financial statement indicates on page 2 that the Respondent had attached “all of the following required documents to this financial statement as proof of my income over the past three years, if they have not already been provided”. No documents were attached.
Disclosure issues
[11] In her notice of motion and draft order, the Applicant has asked for the following orders:
The Respondent shall complete a comprehensive pension plan and asset valuation to determine the value of the total assets owned by the Respondent on the Valuation Date and during the marriage. This includes but is not limited to a full investigation of the Bell Shares, Uranium Shares, the Shapel RSP, Group Pension Plans and any other form of asset or investment held by the Respondent.
The above-noted pension plan and asset valuation is to be completed by a jointly-appointed and jointly-retained valuator chosen by the Respondent from a list of three proposed valuators provided by the Applicant.
Respondent shall solely pay for the pension plan and asset valuation.
The pension plan and asset valuation to be commenced no later than December 1, 2020 and be completed on a rush basis. Emphasis added.
A. “Pension plan valuation”
[12] In his form 13.1 financial statement sworn November 20, 2020, the Respondent listed as “pension” at date of marriage the following: SDRRSP-TD $13,899.
[13] The Respondent listed as “pension” at valuation date the following;
Canada Life Registered DC Pension $2,878
SDRRSP-TD $39,241
SDRSP-LIRA – TD $28,085.
[14] The Respondent also listed under “investment” at date of marriage and or date of separation a chequing account, two margin accounts, a cash account, Uranium shares, and a TFSA.
[15] The Respondent provided a report from Kalex Valuations Inc. dated August 11, 2020. In that report, the author reviewed the statements with respect to each of the assets and provided a summary verifying the amounts attributable to each along with the costs of disposition.
[16] The Applicant challenges the Kalex report for a number of reasons, primarily because it was a “calculation” report which is based on documents and information provided by the Respondent and not a more comprehensive analysis. As indicated above, the assets and liabilities of the parties are modest. I am satisfied that the Kalex calculation report based on verification of those assets at the date of marriage and valuation date and the costs of disposition of those assets was reasonable. The author has listed each of the documents relied upon for the calculation. A more comprehensive analysis is not required.
[17] I accept the reasonableness and reliability of the calculations in Schedule 1 as of date of marriage and Schedule 2 as of date of separation. It is not necessary that the Respondent provide any more professional calculations. As the Respondent pointed out, the Kalex report cost him over $9000 and it identified costs of disposition at date of marriage at $1100 and at separation date in the amount of $8600 for a total of $9700. In other words, the cost of obtaining the report was almost equal to the amount of disposition costs that the Respondent is entitled to deduct.
[18] As indicated above in paragraph 7, the Respondent is adamant that he has properly disclosed and indignant that he is being criticized for the quality of his disclosure. The difficulty is that the Respondent contributed to the Applicant’s pursuit of additional information with respect to his “pension” assets. Pursuant to s. 10.1 of the Family Law Act and s. 67.2 of the Pension Benefits Act, a spouse who has an interest in a pension plan to which the Pension Benefits Act applies is required to obtain from the administrator of the pension plan a statement of imputed value. None of his assets are in the category of pension plan that requires such a valuation report. That description in his form 13.1 was not accurate.
[19] The bottom line is that the Respondent has provided disclosure with respect to his retirement assets and he has provided an expert report as to the costs of disposition. The Applicant’s motion in respect of a formal pension valuation was reasonable but is dismissed.
B. “Asset valuation”
[20] As indicated above, Kalex also looked at non-retirement assets including the margin accounts, the TFSA and the uranium shares. I am satisfied that a calculation report on those was reasonable and that the documentation on which the valuator relied is sufficient verification for the conclusions reached.
[21] Again, the presentation of the information by the Respondent contributed to the persistence by the Applicant in seeking more information. In the context of his purchase of the “uranium” shares, at paragraph 26 of his affidavit sworn November 20, 2020, the Respondent makes reference to documents that he produced to demonstrate that the Applicant is “only interested in more paperwork”. At paragraph 36 of his affidavit he conceded that he had completed the application to acquire the shares because
It’s an application I had to make to get these shares as at the time the company was private and the shares could only be sold to accredited investors, I had to put in information knowing it was incorrect to be able to acquire the shares, this is not something I did without the Applicant’s knowledge as she has signed this application as a witness. This application is akin to a credit application.
[22] Based on his evidence, I infer that he had no compunction about completing the document in a misleading fashion. Furthermore, he imputed to the Applicant knowledge of his deliberate misinformation simply on the basis that she acted as witness.
[23] The bottom line is that the Respondent has provided disclosure with respect to his other assets. But the Respondent’s attitude towards his disclosure obligations contributed to the Applicant’s persistence is seeking more disclosure. The motion in this respect was reasonable but is dismissed.
[24] As indicated above, the Applicant took the position that the Respondent had failed to disclose assets valued at $91,370. I am satisfied with the explanations provided by the Respondent and the documentation on which the valuator relied. I am not persuaded that the Respondent has failed to disclose any assets.
C. Other disclosure request
[25] In paragraph 7 of her notice of motion, the Applicant has asked for the following:
An order that the Respondent complete an Equifax Report and shall provide the Report to the Applicant on or before December 15, 2020.
[26] As indicated in paragraph 22 above and in paragraph 36 below, given his blasé approach to the truth and his disclosure obligations, while not relevant to the equalization of net family property which involves a calculation at date of marriage and date of separation, I consider that that is relevant to the Respondent’s current ability to pay spousal support. That aspect of the motion is granted.
Respondent’s date of marriage deduction
[27] In paragraph 8 of her notice of motion, the Applicant has asked for the following:
An Order, or in the alternative, a Direction from this Honourable Court regarding an appropriate date of marriage deduction for the Respondent’s joint-venture property.
[28] The Applicant has not provided any authority for the court to make such an order at a motion. As indicated by the Respondent, typically that is an issue for trial, although in paragraph 3 on page 12 of his factum, he seemed to acquiesce that the court make an order or give direction.
[29] This is partly a disclosure issue and partly a substantive law issue. As indicated above in paragraph 5, these parties are of modest means. In the interest of achieving the primary objective by promoting settlement, I will contribute what I can based on the record before me.
[30] In his form 13.1 financial statement sworn November 20, the Respondent takes the position that, at date of marriage, he had a 33 1/3 “net equity interest” in a residential property on Livingston Road that he valued at $40,000 for which he claimed a deduction.
[31] In her letter dated June 17, 2020, counsel for the Applicant pointed out the following:
. . . it is unacceptable that your client had deposed an “approximately $40,000.00” date of marriage deduction for this Venture Property on his sworn Financial Statement. Your client held a 1% interest in the Venture Property which represented a $2,490 interest on the purchase date and a $2640 interest on the date of marriage. Due to the lack of Trust Agreement or any other official documentation outlining your client’s interest, your client’s Financial Statement must be amended to reflect an accurate date of marriage deduction for this Venture Property.
[32] In his letter dated August 4, 2020, the Respondent’s counsel wrote the following:
We reiterate our position conveyed already, it is most unfortunate that you find our position confusing, as you would appreciate case law and precedents are no substitute for “Common Sense”. There will be no new financial statement provided.
[33] At the case conference held on August 20, 2020, the Respondent was ordered to do the following:
. . . disclose within 45 days additional documents regarding the sale of the property at 28 Livingston Road including all closing documents for the sale of the property, the real estate lawyers’ trust ledgers for the sale, the respondent’s tax return documents relevant to the sale of the property and any capital gains or losses or other income associated to the property.
[34] On October 7, 2020, he provided a copy of the reporting letter dated September 10, 2012 addressed to him and a person named Donna Neil. The transaction closed on September 7, 2012. The sale price was $333,560 (including the deposit). The trust ledger statement indicates that, from the proceeds of sale of Livingston Rd., the lawyer paid $20,489 which is described in the letter to both vendors as repayment of a “bridge loan for the purchase of 25 Gaiety Drive on September 5, 2012”. There is no explanation as to whether the Respondent had an interest in the Gaiety Drive property. The fact that the bridge loan repayment came out of the net proceeds of sale creates an inference that the Respondent acquired an interest in that property. The trust ledger statement indicates that, after the mortgage, the bridge loan and other costs of closing were paid, the sum of $71,694.63 was paid to the two vendors. That would suggest that his half share was approximately $36,000.
[35] In paragraph 31 of his affidavit, the Respondent deposed as follows:
The Applicant has again come up with numbers that are not listed anywhere. The joint-venture property on Livingston Road was purchased 3 years before the marriage and sold 2 years after the marriage. My initial investment in the property was $25,000, I was placed on title as 1% owner. My other partners decided to deal with the mortgage payments and pay me 33% of the net equity after the sale of the property. Because I improperly took funds from my RRSP for this venture the CRA assessed an $8000 penalty which I paid.
The property sold in 2012 and I received $48,000 from which I rightly deducted all the money I invested in the property including the CRA penalty and with a modest increase in the value before marriage I rounded up the amount to $40,000.
The Applicant’s counsel keeps on changing her position on this deduction “Exhibit 12” she has claimed that because I only owned 1% on title my pre-marriage deduction should only be worth $2,640.
I have provided the Real Estate counsels files on these transactions but that has not satisfied the Applicant’s demands for disclosure. There was no capital gains or loss reported as the agreement on this joint venture was between friends.
[36] Based on his evidence, I infer that the Respondent had no compunctions about not complying with legal requirements to report and pay tax on a capital gain. Instead, he cavalierly chose not to comply with the Income Tax Act with respect to investment properties in that he did not report to the CRA his interest in the joint venture and therefore he does not have the appropriate records of investment, costs of the investment, profit and tax attracted.
[37] I agree with the Applicant that the position taken by the Respondent cannot be resolved on the basis of “common sense”. It may be that there is more information or documentation that is available to the Applicant that the Respondent did not file in the electronic court file. For example, I have no idea where the 1% ownership originated. Based on the record before me, it is not reasonable to assume that
(a) he paid $25,000 to acquire an interest 3 years before the marriage;
(b) he was a 1% owner when the letter from the real estate lawyer was addressed to two owners and the inference is that he was a 50% owner;
(c) having received either 50% of the 2012 net proceeds of $71,694, (or approximately $36,000) or 33% of the net proceeds of $71,694, (or approximately $24,000), or $48,000 as indicated in paragraph 32 of his affidavit, that the amount of $40,000 should be attributed to the value of his interest in 2010;
(d) that the CRA imposed a penalty of $8000 because he used funds from his RRSP to acquire an interest in the Livingston property.
[38] Pursuant to the Family Law Act, the legal obligation is on the owner of an asset to prove the extent of ownership and the value of the interest. If the owner of an asset who claims a pre-marital deduction cannot provide reliable evidence of value, or reliable evidence from which inferences might be drawn as to value, then the owner is not entitled to claim a pre-marital deduction. Had he complied with his obligations under the Income Tax Act, he would be able to produce documents that would likely be reliable as a basis of his claimed pre-marital deduction. Having failed to comply, he cannot rely on “common sense”.
[39] On the record before me, I cannot identify what documents the Respondent should be required to disclose in order to get to the bottom of it. It was not a request made in the disclosure aspect of the motion so I do not have a specific request to consider.
[40] As indicated above, the assets at date of marriage and date of separation were modest. If I had sufficient information, notwithstanding the uniqueness of doing so on a motion such as this, I would have made an order fixing the amount of his pre-separation deduction. In order to provide some guidance and reduce the prospect of a trial on this issue, I suggest that the parties approach it as follows. The Respondent should provide reliable written proof of the amount of the investment prior to marriage. That should be taken as the value of whatever his interest was at the date of marriage and that would be the amount of his pre-marital deduction. Under the circumstances, there is no basis for him to claim any increase in value from the date he made the investment to the date of marriage nor any other adjustments.
[41] On the question of the calculation of net family property, I observe that neither form 13.1 is consistent with Part 1 of the Family Law Act. Both need to be more rigorous and accurate.
Temporary Spousal Support
[42] The Applicant is now 41 years old and the Respondent is 43 years old.
[43] In paragraph 4 of her affidavit, the Applicant deposed that, during the marriage, the Respondent advised her that she did not need to work full time. The line 150 income of the Applicant is as follows:
2015
$18504
2016
$ 3681
2017
$16441
2018
$42679
2019
$53367
[44] The Applicant takes the position that, given her inconsistent earning history, demonstrated need, and the fact that she is still attempting to achieve self-sufficiency, she asks for an order for temporary spousal support in the amount of $701 per month that is at the high end of the range and based on her three year average income and his three year average income.
[45] The Respondent concedes that the Applicant is entitled to temporary spousal support. He takes the position that it should be the mid-range of $387 per month based on his income and her income for 2019. In paragraphs 8, 9 and 15 of his affidavit, the Respondent gives his far different version of her employment during the relationship. In paragraphs 3, 4, 5, 11, 12, and 13, the Respondent also provides his comments on her lifestyle and accommodation. For purposes of this motion, I need not resolve those differences.
[46] The key differences are whether the court should use three year averages and the high end of the range.
[47] I do not accept the submission that the court should use the three year average of her income. The fact that in 2017 the Applicant’s line 150 income was $16441 and in 2018 it was $42,679 is irrelevant to what temporary spousal support the Respondent should be required to pay in 2020 and 2021. The three year average may have some relevance in establishing permanent spousal support but not at this stage. Furthermore, I accept the submission that the income for 2019 is her total line 150 income and that the year end bonus of about $3000 ought to be included. Since there is no basis for applying a three year average to her income, there is no basis for considering a three year average for his income.
[48] In general, the court starts with the middle of the SSAG range. I see no reason to depart from that amount.
[49] As indicated below, the Respondent shall pay temporary spousal support in the amount of $387 per month.
[50] In her notice of motion, the Applicant asked for an order for temporary support effective June 1, 2020. The Respondent is entitled to credit for payments made since then.
Costs
[51] As indicated above, the motion was scheduled for 1 hour and there was no time for submissions as to costs. The Applicant asked for costs on a full indemnity basis. In his factum, the Respondent also asked for full indemnity costs.
[52] In an email dated November 30, 2020 to court intake, Ms. Chimirel sent a bill of costs that indicated substantial indemnity costs in the amount of $8,256.75 and partial indemnity costs in the amount of $5,330.01. In her email, counsel wrote as follows:
The Applicant is seeking her costs of this motion given the Respondent’s misrepresentations with respect to his financial disclosure which forced the Applicant to bring said motion. Although the Applicant included submissions regarding her entitlement to costs within her factum and other motion materials, there was not enough time during the motion to make oral submissions on same. We are therefore requesting that the enclosed bill of Costs be forwarded to Justice Kiteley for her perusal.
[53] The email does not indicate that it was sent to counsel for the Respondent or that counsel was otherwise notified that she had made that submission.
[54] Counsel are aware that rule 1.09 of the Rules of Civil Procedure prohibits direct communications to the judge hearing a matter. I have mentioned the email so that the Respondent and his counsel are aware of it. Based on the analysis that follows, the email is not relevant to the decision as to costs.
[55] Pursuant to rule 24 of the Family Law Rules, the first issue on costs is the extent to which each party was successful because a successful party is presumed to be entitled to costs. On disclosure issues, the Applicant was not successful but I have found that the Respondent’s disclosure and attitude contributed to the Applicant’s persistence in bringing the motion and for that reason, the motion in respect of disclosure was largely reasonable. The Respondent was successful on the issue of temporary spousal support. The Applicant was successful on the request for an Equifax report. In other words, success was divided.
[56] The second issue is the offers to settle. Having reached the decisions on the issues raised in the Notice of Motion and made the orders referred to below, I have now reviewed the offer to settle of the Respondent dated November 20, 2020. He had offered to pay temporary spousal support in the amount of $443 per month commencing December 1, 2020. He made reference to other issues that were not involved in the motion and are irrelevant. He made no reference to further disclosure. His offer exceeded the order on the issue of temporary spousal support but I do not consider his success on that one issue determinative. The contents of his offer do not impact the issue of costs.
[57] The Applicant served an offer to settle dated November 17, 2020. It is not in the court electronic file and I do not ask counsel to provide it. I am assuming that the Applicant’s offer proposed a settlement on temporary spousal support and on disclosure that was more favourable than the order. The parties are commended for making offers but they are not determinative.
[58] Pursuant to rule 24(4) of the Family Law Rules, the court can make an order depriving a successful party of costs if that party has behaved unreasonably. The Respondent was successful on temporary spousal support and on resisting most of the orders for disclosure. However, as indicated above, the contents of his material including his attitude toward his disclosure obligations and his disdain for the Applicant and her counsel are unreasonable. To the extent he achieved any success, the Court must deny him costs so as to deter future unreasonable conduct by him and by other parties in other proceedings.
Next steps
[59] At the conclusion of the hearing, I encouraged the parties to participate in mediation, particularly with the court based service now known as Mediate 361. The assets in issue are modest. The claim for spousal support is not complex. I strongly encourage the parties to explore mediation with a lawyer assuming that they do the following:
(a) each party prepare a form 13.1 that reflects this endorsement and is consistent with Part 1 of the Family Law Act;
(b) the parties instruct their lawyers to prepare a combined net family property statement that discloses where the differences lie;
(c) the parties exchange current financial documentation that reflects (i) income for 2020; and (ii) estimated income for 2021;
(d) the parties exchange written offers to settle;
(e) the parties provide to the mediator a copy of this endorsement.
TEMPORARY ORDER TO GO AS FOLLOWS:
[60] Commencing June 1, 2020, the Respondent shall pay to the Applicant temporary spousal support in the amount of $387.00 per month. The Respondent is entitled to credit for payments made from and after June 1, 2020. The Respondent shall pay the arrears no later than January 18, 2020.
[61] Support Deduction Order to issue.
[62] The requests in paragraphs 3, 4, 5, 6 and 8 of the draft order are dismissed.
[63] As requested in paragraph 7 of the draft order, by February 5, 2020, the Respondent shall provide an Equifax Report to the Applicant.
[64] Neither party shall pay or recover costs of this motion.
[65] The parties are referred to 361 Mediate.
[66] This order takes effect immediately without a formal order being signed and entered.
[67] Either counsel may forward an approved draft order to me for signing.
Kiteley J.
Date: January 5, 2021