Court File and Parties
COURT FILE NO.: FS-19-00094161-00 DATE: 2022/03/04
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Shahinda Lokhandwala Applicant Imran Khan, Zarinataj Khan, Ishaq Khan, Respondents 0932293 B.C. Ltd. and 9633880 Canada Inc.
BEFORE: Bloom, J.
COUNSEL: Sarah Boulby and Kenneth Fishman, counsel for the Applicant Deborah Perkins-Leitman and Jonathan Robinson, agents for the Respondent, Imran Khan
HEARD: February 4 and 23, 2022 by Zoom
ENDORSEMENT
I. INTRODUCTION
1Following the release of my written reasons for judgment on December 3, 2021, the Applicant and the Respondent, Imran Khan, sought a telephone conference with me to set out steps to consider issues relating to the form and content of a final order, including correcting what were alleged to be errors in my reasons.
2I directed the holding of a hearing of those matters under FLR 25(7) and (19).
3Having heard the parties, I shall now address the following 3 issues: (1) the Applicant’s motion under FLR 25(19)(b) regarding paragraph 73 of my reasons respecting the amount of a debt owed by the Applicant and Imran Khan to the Applicant’s brothers; (2) Imran Khan’s motion under FLR 25(19)(b) and (c) regarding my calculation of retroactive spousal support; and (3) the content of the formal order.
II. THE AMOUNT OF THE DEBT TO THE APPLICANT’S BROTHERS
4In paragraph 73 of my reasons it is clear, as argued by the Applicant, that I erred by misapprehending that the financial statement of the Applicant dated April 8, 2021 stated that the valuation date quantum of the debt under discussion was $325,000 Canadian. In fact, the Applicant’s financial statement asserted, as argued by the Applicant, a valuation date value of $650,000 Canadian.
5The Applicant argues that I should correct this error; and that it has no practical effect, since I found that the Applicant and Imran Khan shared the debt equally.
6Imran Khan argues that I should simply make no finding as to quantum of the shared obligation, or alternatively explicitly state my intention not to affect by my decision ongoing litigation by the Applicant’s brothers in respect of the debt. The Applicant and Imran Khan are defendants in that action, which bears file number CV-20-0000-3977-0000 in this court. Imran Khan further argues that the documentary evidence at trial for the loan does not support a finding of $650,000, and that my reasons at paragraph 72 rely upon that evidence. I should also note that Mr. Khan makes his arguments based on my finding that the shared debt existed; and that he is not conceding that it did exist.
7The Applicant cautions me against allowing the Respondent to use this motion to retry the case. She also argues that she at trial never argued that the documentary evidence established a total of $650,000; and that my findings on other issues should not be affected by the correction of the quantum. Finally, she argues that the separation of the case at bar from the debt action contemplated that I might make a finding of quantum.
8I have concluded that I should simply correct paragraph 73 of my reasons to substitute $650,000 for $325,000 under FLR 25(19)(b) to correct my error in misapprehending the evidence. Incidental to the correction are consequent changes in the figures at paragraph 92 of my reasons reflecting that each of the two parties owed $325,000 not $165,000 on valuation date; those are simply apparent mathematical corrections. However, as the parties agree, there is no change to my finding on the equalization payment to be made by Imran Khan to the Applicant.
9In my view, it would be unwise to restrict my findings based on a concern about a possible impact on the debt action. There is in law no reason that I should unduly restrict the exercise of my jurisdiction and function to decide the equalization issue. No order of this court or other legal stricture so mandates. I leave to the court deciding the debt action the application of any rules of law bearing upon the impact of my findings on that action.
III. THE AMOUNT OF THE RETROACTIVE PAYMENT FOR SPOUSAL SUPPORT
10The Respondent, Imran Khan, moves under FLR 25(19)(b) and (c) to change my order in respect of retroactive spousal support for the period November of 2018 to February of 2021. For that period I ordered that he pay the Applicant a lump sum of $700,000, including retroactive spousal and child support.
11Mr. Khan argues that that sum reflects an error by failing to take into account the income tax consequences on the parties which would have occurred had he paid the appropriate amount of spousal support on a timely periodic basis.
12Specifically, Mr. Khan uses a calculation based on a mid-point of the marginal income tax rates of himself and the Applicant; and justifies that approach on authority and what he contends was the Applicant’s acceptance of that approach in her closing submissions at trial.
13Mr. Khan argues that, if that approach is used, I should l also take into account the hardship he would experience in making the retroactive lump sum payment as I did in paragraph 153 of my reasons. The result, he submits, would be a lump sum order of $600,000 rather than the $700,000 sum ordered in my reasons.
14The Applicant argues that the lump sum award in question was an exercise of a discretion which applies to the making of retroactive spousal support awards; that this discretion does not require the taking into account of tax consequences as contended on this motion by Imran Khan; that the exercise of this discretion is not reviewable under FLR 25(19)(b) which applies only to slips such as calculation errors; that the exercise of this discretion is not reviewable under FLR 25(19)(c) which applies only to matters not decided such as failure to address the issue of child support; and that the issue of tax consequences now argued by Imran Khan was not the subject of argument at trial.
15I have concluded that neither FLR 25(19)(b) or (c) provides jurisdiction to make the changes to my order sought by the Respondent, and I dismiss his motion in that regard. I shall now explain my reasons for that conclusion.
16FLR 25(19) provides:
Changing order — fraud, mistake, lack of notice (19) The court may, on motion, change an order that, (a) was obtained by fraud; (b) contains a mistake; (c) needs to be changed to deal with a matter that was before the court but that it did not decide; (d) was made without notice; or (e) was made with notice, if an affected party was not present when the order was made because the notice was inadequate or the party was unable, for a reason satisfactory to the court, to be present. O. Reg. 151/08, s. 6.
17In Holman v. Holman, 2015 ONCA 552 at para. 4 and footnote 1, Justice Tulloch held that FLR 25(19)(b) was appropriate for the correction of calculation errors. In Telford v. Waite, 2021 ONSC 2264 Justice Mackinnon, consistent with this line of reasoning, holds that FLR 25(19)(b) applies to the correction of typographical and mathematical errors, not errors of law.
18Similarly, I see FLR 25(19)(c) as available to address matters which were before the court but not addressed, such as the issue of equalization. The provision is not available to review an exercise in discretion.
19The issue of how I was to quantify a lump sum payment for retroactive spousal support was clearly a discretionary decision. It was subject to principles governing the exercise of that discretion, including considerations that I could take into account. The decisions in Ludmer v. Ludmer, 2014 ONCA 827 and Racco v. Racco, 2014 ONCA 330 support that characterization of the discretion in question.
20In the exercise of my discretion, inter alia, I accorded Imran Khan a reduction of $207,067.81 in the amount of my retroactive award for both child support and spousal support based on his difficulty in paying the retroactive lump sum award. I cannot review the exercise of my discretion under FLR 25(19)(b) or (c), including the application of that reduction.
21I would also be remiss if I did not note that, while both parties did in written materials refer to net payments for retroactive support, there was neither written nor oral argument of the type Imran Khan makes on this motion as to how the netting process should take place. This consideration does not factor into my decision to dismiss his motion. It does, however, give me comfort in assessing the fairness of the result of the motion.
IV. THE SETTLING OF THE FORMAL ORDER
22The Applicant and Imran Khan had only put in issue paragraphs 2,4, and 5 of the draft order provided by the Applicant on January 14, 2022 on Caselines. The only issues raised were the ones I have decided on the motions before me under FLR 25(19). I have now reviewed that order and have put it in final form as set out in Appendix A to this endorsement. In doing so I have also made the following corrections: the representation by counsel of the parties at trial; the specification that the order in paragraph 2 is only made against Imran Khan; and the insertion of 2% postjudgment interest in paragraph 12. I have signed the order in that form and sent it to the appropriate court officials for processing and release.
V. COSTS
23I shall receive written submissions as to costs on the motions under FLR 25(19) and the settling of the formal order. Those submissions are to be no more than 3 pages, excluding a bill of costs.
24The Applicant shall serve her submissions on all Respondents and file them, within 14 days of my release of this endorsement. Each Respondent shall serve and file their submissions within 14 days of service of the Applicant’s submissions on them. There shall be no reply.
Bloom, J.
DATE: March 4, 2022