NEWMARKET COURT FILE NO.: FC-20-1576-00 DATE: 24/01/2022 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Michelle Sloss Applicant – AND – Derek Liscoumb Respondent
David Tobin, Counsel Steven Benmor, Counsel
HEARD: January 19, 2022 via Zoom Videoconference
Ruling on Motion
Introduction
[1] The Applicant has brought a motion seeking the following orders:
a. temporary spousal support payable by the Respondent to the Applicant in the amount of $10,000 per month based on a deemed income of $636,666 per year for the Respondent and an anticipated income of $80,000 per year for the Applicant;
b. spousal support shall commence January 1, 2021;
c. arrears of spousal support are set at $108,392 for the period January 1, 2021 to December 31, 2021;
d. the Respondent shall pay the arrears of spousal support within 30 days;
e. temporary child support payable by the Respondent to the Applicant in the amount of $7,917 per month;
f. table child support shall commence May 1, 2020;
g. arrears of child support are set at $101,436 for the period May 1, 2020 to December 31, 2021 and $21,576 for the period January 1, 2021 to June 1, 2021; [1]
h. the Respondent shall pay the arrears of child support within 30 days;
i. the child support ordered is without prejudice to either party’s right to claim a retroactive adjustment of child support at trial;
j. the Respondent shall secure his child support and spousal support obligations by designating the Applicant as the irrevocable beneficiary of the proceeds of sale of his life insurance policy in the amount of $500,000 or, alternatively, the Applicant shall be entitled to a lien and first charge on the Respondent’s estate in the amount of $775,000; and,
k. costs.
[2] The Respondent opposes the Applicant’s motion.
Procedural Issues
Adjournment
Respondent’s Position
[3] The Respondent requested an adjournment of the motion to trial or, in the alternative, to a date to be scheduled after financial disclosure, questioning, and a Settlement Conference.
[4] The Respondent states that on January 4, 2021, Justice Kaufman directed that this motion may be heard after financial disclosure and questioning, and that neither has occurred.
[5] The Respondent claims that the Applicant has refused to deliver answers to the Request for Information served upon her on about September 20, 2021, and that she has refused to attend for questioning.
[6] According to the Respondent, it would be prejudicial to him to proceed with the motion at this point.
Applicant’s Position
[7] The Applicant opposes the adjournment and states that she has provided all of the disclosure requested by the Respondent except for her 2021 income tax documentation, which she will provide as soon as it is available. The Applicant further states that she advised the Respondent in September 2021 of which dates she would be available for questioning in November 2021, however the Respondent was not available on the dates proposed.
[8] The Applicant claims that she is in desperate need of proper support, that she has been waiting over a year to have this motion heard, and that it has been significantly delayed by the Respondent.
[9] According to the Applicant, it would be prejudicial to her to adjourn the motion.
Analysis
[10] The January 4, 2021 endorsement of Justice Kaufman does not state that the disclosure and questioning must be completed prior to the motion, as the Respondent claims.
[11] Further, when the matter was next before Justice Kaufman on May 10, 2021, he was aware that disclosure was not complete and, presumably, that questioning had not occurred. Nevertheless, he stated that the motion would proceed on June 9, 2021 unless the parties decided to “take another direction”. Shortly after that endorsement, the parties agreed to adjourn the motion to today’s date.
[12] The Respondent argues that this Court does not have sufficient evidence to procced with the motion. This Court disagrees. This Court finds that the parties have exchanged significant disclosure and there is sufficient evidence before the Court to proceed with the motion.
[13] The Respondent argues that the Applicant’s expert evidence is untested and unreliable, however the Applicant is agreeable, for the purposes of this motion, to rely on the Respondent’s expert evidence (with the inclusion of pre-tax corporate income).
[14] The Respondent claims that he did not have sufficient time to respond to the motion, however the timeline for the service and filing of material as set out in the May 5, 2021 endorsement of Justice Himel was well in excess of that provided under the Family Law Rules [2] , and was complied with by the Applicant.
[15] The Respondent requests an adjournment to allow him to testify. It is unclear whether he is asking to adjourn to a motion with oral evidence or adjourn to trial. In any event, this Court declines to hear oral evidence from the Respondent on this motion. The Respondent had the opportunity to put his evidence forward by way of affidavit just like the Applicant. There are no special circumstances that would justify an order for oral evidence on the motion. [3]
[16] The Respondent further claims that it is necessary to adjourn because there is a live issue as to entitlement to spousal support that will need to be addressed. The Respondent had the opportunity address this issue in his affidavit material as has the Applicant, and they have done so.
[17] The Respondent argues that the motion should be adjourned because the parties need to make their children the priority. In this Court’s view, ensuring that proper support is paid for one’s children and to one’s spouse, particularly where that spouse is the primary caregiver for the children, is making the children the priority.
[18] The Respondent suggests that the motion should be adjourned to allow a settlement conference to occur first. Given that this motion has already been delayed by seven months, this Court finds that it is fair, equitable and in the interests of justice that this motion proceed today.
Respondent’s Affidavit sworn January 13, 2022
Respondent’s Position
[19] The Respondent filed an affidavit in response to the Applicant’s reply affidavit sworn January 12, 2022, because it contained “so many errors and inaccuracies that [he] needed to file this additional Affidavit to ensure that the Honourable Court is not misled.”
Applicant’s Position
[20] The Applicant seeks an order striking the respondent’s affidavit sworn January 13, 2022, as it is sur-reply and not allowed under the Rules.
Analysis
[21] During submissions, the Respondent’s counsel alleged the Applicant’s reply affidavit raised new matters at paragraphs 8, 9 and 12. This Court does not find this to be the case. Paragraphs 8 and 9 address the Respondent’s claims that the film industry suffered in 2020 and 2021 which has negatively impacted his income, particularly in 2021. Paragraph 12 addresses the Respondent’s claim that he invited the Applicant to move into his property, which is a large family home, and that he is paying all of the costs of the property.
[22] The Respondent had an opportunity to put his position on the issues forward in his responding affidavit. He does not get another chance to do so in a sur-reply affidavit.
[23] Further, it is contrary to the primary objective for parties and counsel to file excessive material as this requires the Court to spend extra resources, if only in dealing with the issues of whether those extra materials should be considered, rather than spending those resources on another case. Parties do not get more of the Court’s time, simply by piling on the material.
[24] The Respondent’s request to have this Court consider his sur-reply affidavit sworn January 13, 2022 is dismissed and this affidavit shall be struck from the record.
Materials for the Motion
[25] For the motion, this Court reviewed the following materials:
a. Applicant’s Notice of Motion dated December 17, 2021;
b. Applicant’s Affidavit sworn December 17, 2021;
c. Applicant’s Expert Affidavit sworn December 17, 2021;
d. Applicant’s Financial Statement sworn December 17, 2021;
e. Respondent’s Affidavit sworn January 10, 2022;
f. Affidavit of Mary Liscoumb (Respondent’s mother), sworn January 10, 2022;
g. Respondent’s Financial Statement sworn September 21, 2020;
h. Applicant’s Affidavit sworn January 12, 2022;
i. Respondent Affidavit sworn January 13, 2022 (to determine its admissibility);
j. Applicant’s Factum dated January 14, 2022; and,
k. Respondent’s Factum dated January 13, 2022.
[26] The Respondent’s Affidavit sworn January 10, 2022 was 250 pages long (14 pages of narrative and 236 pages of exhibits). The bulk of the exhibits were prior endorsements, dating back to May 14, 2020, most of which were not relevant to the within motion.
[27] The Respondent failed to serve and file an up-to-date, sworn Financial Statement as required by Rule 13(12) without any valid reason. The most recent Financial Statement filed by the Respondent is sworn September 21, 2020.
[28] The Respondent’s conduct in providing excessive, largely irrelevant material (with his Affidavit) while at the same time failing to provide other relevant material (his Financial Statement) is prejudicial to the Applicant and is contrary to the primary objective. The Respondent’s conduct will be a consideration in the costs analysis.
Brief Background
[29] The parties are both 43 years of age.
[30] There is a dispute as to dates of the parties’ relationship. The Applicant claims the parties resided together from about October 2004 to approximately April 30, 2020, or about 15 years. The Respondent claims the parties began residing together in about 2014 and separated on February 6, 2020, about 6.5 years.
[31] There are two children of the parties’ relationship, namely Cash James David Liscoumb, born September 27, 2013, and Sofia Mary Kathy Liscoumb, born April 5, 2015.
[32] Pursuant to the May 28, 2020 temporary Order of Justice Nakonechny, the Respondent has parenting time with the children every Tuesday from 10 a.m. to Wednesday at 7 p.m. and alternating weekends from Friday at 10 a.m. to Sunday at 7 p.m. The children reside with the Applicant at all other times.
[33] Since separation, the Respondent has paid child support of anywhere from $1,204 per month to $2,677 per month.
[34] Since May 2021, the Respondent has paid spousal support in the amount of $1,451 per month.
[35] The Respondent paid the Applicant’s share of the costs of mediation the parties attended last fall in the amount of $9,687.
Issues & Analysis
[36] Although there is already a temporary Order in place for both child support and spousal support, that Order was made on consent and on a without prejudice basis on the adjournment of the motion from the prior date to today’s date. Therefore, the Applicant does not have to establish a material change in circumstances.
[37] The issues to be determined on this motion are as follows:
a. What is the Applicant’s income for support purposes?
b. What is the Respondent’s income for support purposes?
c. What is the appropriate amount of child support?
d. When should the child support payments start?
e. What is the appropriate amount of spousal support?
f. When should the spousal support payments start?
g. What is the appropriate amount of security for the Respondent’s child support and spousal support obligations?
Applicant’s Income
Applicant’s Position
[38] Prior to separation, the Applicant worked outside of the home for periods of time, including as a property lease administrator, a capital project manager, and managing the parties’ rental properties.
[39] Since separation, the Applicant has worked as a project manager with the Royal Canadian Yacht club and in the film/television industry as a props buyer.
[40] In 2020, the Applicant’s Line 15000 income was $69,780, including $14,292 in CERB and government subsidies, and $15,000 in RRSP withdrawals.
[41] The Applicant estimates that her income in 2021 was between $70,000 and $80,000.
[42] The person who routinely employs the Applicant has moved out of the area and as a result she has not obtained the jobs she had hoped to. She estimates that her income in 2022 will be closer to about $50,000.
Respondent’s Position
[43] During the parties 6.5 year relationship, the Applicant was working full-time in the same entertainment industry as the Respondent
[44] According to the Applicant, her income has risen to $80,000. It has never been higher
[45] There is an issue as to funds the Applicant misappropriated from the Respondent’s businesses which will impact on the parties’ incomes.
Analysis
[46] The Applicant’s Line 15000 has been as follows over the last few years:
2018 $83,947 2019 $87,415 2020 $69,780
[47] The Applicant states that her 2019 income included about $4,500 from income splitting with the Respondent which was never paid to her.
[48] The Applicant states that her 2020 income included about $15,000 in RRSP withdrawals she had to make to support herself and the children.
[49] Even if one backs out the income split and RRSP funds from the Applicant’s income, her average income over the period of time in question (2018 to 2020) is about $75,000 per year.
[50] The Applicant states that her income for 2021 will be approximately $70,000 to $80,000.
[51] While this Court recognizes that the Applicant’s employment situation is in transition at the moment, based on her historical income, this Court finds that it would be fair and appropriate to set the Applicant’s income for support purposes at $75,000 on a temporary, without prejudice basis, subject to review and adjustment in the final determination of the support issues.
Respondent’s Income
[52] The Respondent is the sole shareholder of two private Canadian corporations: 1329544 Ontario Inc. (“StormFX”) and Luxury Event Rentals Inc. (“Luxury”).
[53] StormFX is a special effects company.
[54] Luxury rents portable washrooms for private events
[55] The Respondent also earns income from five rental properties.
[56] Both parties have provided income determination reports for the Respondent’s income. The Applicant has provided an initial report from Steven Rayson dated December 17, 2021 (“the Rayson Report”) [4] for the period 2018 to 2020. The Respondent has provided two reports from Anna Barrett, the first dated August 12, 2021 for the period 2018 to 2020, and the second dated December 22, 2021 for the period 2018 to 2021. For the purposes of this motion, the Respondent has provided the Court with Ms. Barrett’s December 22, 2021 report (“the Barrett Report”).
[57] The experts disagree on the Respondent’s income. The expert’s conclusions are summarized below:
Year 2018 2019 2020 2021 Rayson Report Scenario 1 $720,500 $1,091,800 $707,900 Scenario 2 [5] $734,700 $1,207,000 $845,000 Barrett Report [6] Scenario 1 $672,000 $689,000 $612,000 $nil Scenario 2 [7] $96,000 $161,000 $122,000 $109,000 [8]
[58] Both parties’ experts agree that for the period 2018 to 2020, the companies’ pre-tax corporate income was:
Year 2018 2019 2020 2021 StormFX $300,264 $396,530 $469,448 -$79,658 Luxury $189,382 $131,623 $107,039 -$194,174 Total $489,646 $528,153 $576,487 -$273,832 [9]
Applicant’s Position
[59] The Applicant stands by her expert report as to the determination of the Respondent’s income, however, for purposes of this motion she will rely on the Respondent’s expert report, provided the pre-tax corporate income is included.
[60] The Applicant initially proposed to average the Respondent’s income over the last three years based on Ms. Barrett’s August 12, 2021 report, for an income of $636,666 for support purposes. However, after receiving Ms. Barrett’s December 22, 2021 report, the Applicant proposes to average the Respondent’s income over the last three years to $657,000.
[61] The Respondent’s Line 15000 income does not fairly reflect all the money available to the Respondent for the payment of support.
[62] The Respondent is the sole owner and operator of two successful corporations (StormFX and Luxury) with significant pre-tax corporate income.
[63] The Respondent has withdrawn large amounts of money from the corporations to pay family expenses, such as renovations to the family home costing approximately $50,000 and landscaping. The Respondent has also withdrawn significant amounts of money to make investments for the family, including purchasing investment properties in both parties’ names costing approximately $350,000.
[64] Prior to separation, the family lived a very comfortable lifestyle and did not worry about money.
[65] There is no business reason to retain the earnings. Although the Respondent claims to need the money to buy a commercial property for his businesses, he has provided no corroborating evidence of this.
[66] It is fair and appropriate to include all of the companies’ pre-tax corporate income in the Respondent’s income for support purposes because these funds are or ought to be available to the Respondent for support purposes.
[67] Although the Respondent claims that his income in 2021 will be significantly lower than in 2020 and previous years, by 2021, the film industry had already adjusted to COVID reality. Therefore, there should be no reduction in the Respondent’s income in 2021. In addition, the Respondent continued to access significant funds from the corporations for personal expenses in 2021, including approximately $62,250 to pay his family lawyer.
Respondent’s Position
[68] The Respondent’s income as determined by his expert without any pre-tax corporate income is the fairest and most accurate way to calculate his income for support purposes.
[69] The Respondent’s income before COVID-19 was $161,000 (2019) but then the film industry was hard-hit by COVID and many productions were cancelled and not rescheduled. In 2020, his income dropped to $122,000 and then in 2021 it dropped again to $109,000.
[70] On March 1, 2021, the Respondent’s landlord terminated his lease. Since that date he has been storing his vehicles and trailers at various locations until he is able to secure new premises.
[71] Due to the nature of his businesses he cannot rent any commercial space. [10]
[72] Throughout 2021 he was working with realtors to purchase a commercial space to operate his businesses.
[73] He would only be able to purchase a commercial space if he used his companies’ retained earnings to pay the deposit.
[74] Due to his companies’ weak earnings in 2021, he was facing extra challenges securing bank financing.
[75] If he did not secure new commercial premises, his business would collapse.
[76] He will have to use all of his companies’ retained earnings to secure a commercial space. He has entered into an agreement to purchase for the premises at 167 Applewood Crescent, Vaughan, Ontario for $1,720,000. The transaction closes on March 8, 2022. Therefore, there is a business reason for retaining the earnings in the corporations.
[77] During the parties’ relationship, the family never used the money that went into term deposits in the businesses, it was simply not a part of their family spending.
[78] Prior to separation, the family lived modestly. When they ate out, they ate at fast food or reasonably priced restaurants, they travelled on Air Miles and stayed at his parents’ condo in Florida, and they drove old and used vehicles. They did not live extravagantly, as the Applicant suggests.
Analysis
[79] Section 1(d) of the Child Support Guidelines (“CSG”) states:
The objective of the CSG are:
(d) to ensure consistent treatment of parents or spouses and their children who are in similar circumstances.
[80] Pursuant to s. 16 of the CSG, the starting point in determining income for support purposes is the payor’s line 15000 of their TI general income tax return.
[81] The CSG provide for other methods of determining income when s. 16 is not the “fairest determination of that income” [11] , does “not fairly reflect all the money available to the parent or spouse” [12] , or when a Court “imputes such amount of income to a spouse as it considers appropriate.” [13]
[82] Section 18 of the CSG states:
Shareholder, director or officer
- (1) Where a parent or spouse is a shareholder, director or officer of a corporation and the court is of the opinion that the amount of the parent’s or spouse’s annual income as determined under section 16 does not fairly reflect all the money available to the parent or spouse for the payment of child support, the court may consider the situations described in section 17 and determine the parent’s or spouse’s annual income to include,
(a) all or part of the pre-tax income of the corporation, and of any corporation that is related to that corporation, for the most recent taxation year; or
(b) an amount commensurate with the services that the parent or spouse provides to the corporation, provided that the amount does not exceed the corporation’s pre-tax income.
[83] By virtue of the use of the word “may” in section 18 of the CSG, the Court has discretion to add all or part of the corporation’s pre-tax income to a payor’s income if the payor’s annual income, as determined under section 16 of the CSG does not fairly reflect all money available to the payor for the payment of support.
[84] In L.M.P. v. M.D.P., 2021 ONSC 3577 (Ont. Sup. Ct.) at para. 58, MacPherson J. reviewed the case law and concluded that the considerations and questions to take into account by the Court when determining whether to exercise its discretion to attribute pre-tax corporate income can be condensed as follows:
a. Does the Respondent have control over dividend declarations?
b. Is there a business reason for retaining the earnings?
c. Should the Court exercise its discretion and attribute pre-tax corporate income?
[85] As the sole owner of both corporations, the Respondent has control over dividend declarations.
[86] Although the Respondent claims that there is a business reason for retaining the earnings, that is to purchase a commercial property, it is noteworthy that he has provided very little in the way of corroborating evidence of this.
[87] The Respondent has provided nothing to confirm that his previous commercial lease was terminated in March 2021.
[88] The Respondent has provided no corroborating evidence that he has been looking for an alternate commercial property (to lease or buy), other than an unsigned Agreement of Purchase and Sale for the 167 Applewood Property dated December 17, 2021 and a partially signed Agreement of Purchase and Sale for a property at 789 Arrow Road, Toronto, Ontario dated December 23, 2021. It is noteworthy that both of these documents were signed by the Respondent within about the last month.
[89] It is also noteworthy that the Agreement for Purchase and Sale of the Applewood property is dated January 3, 2022, two and a half weeks before this support motion. Further, the Agreement includes a provision for the Respondent to obtain financing for the purchase by February 14, 2022 and that the deposit is refundable without deduction if he is not able to do so. It appears that the Respondent may in fact believe that financing is an option, despite his affidavit evidence to the contrary.
[90] The Respondent has provided no corroborating evidence of his efforts to obtain financing.
[91] The Respondent does not provide any evidence that there is any business reason to retain the earnings in the corporations other than to purchase a commercial property.
[92] It is noteworthy that the retained earnings have increased in each of the three years analyzed by both parties’ experts:
2018 $489,646 2019 $528,153 2020 $576,487
[93] The Respondent claims the retained earnings decreased in 2021 and in fact were $273,832, however, this is based on a partial year (albeit most of the year, being to October 31, 2021), and the Applicant’s expert has not yet had an opportunity to provide his opinion on this issue.
[94] Even accepting the Respondent’s figure for retained earnings in 2021, the opening retained earnings for 2022 should be about $1,540,477 [14] .
[95] This Court finds that there isn’t a business reason to retain all of the earnings in the corporation, however, there is business reason to approximately half of the business earnings to fund the purchase of the commercial property. This determination is subject to review and revision in the final determination of the support issues
[96] In determining whether the Court should exercise its discretion and attribute pre-tax corporate income, this Court is mindful that this is a motion for temporary relief and that neither of the two experts have been questioned.
[97] This Court is also mindful that on a temporary support motion the Court does not embark on an in-depth analysis of the parties' circumstances which is better left to trial. The Court achieves rough justice at best. [15]
[98] This Court finds that during the parties’ relationship the Respondent withdrew significant sums of money from the corporations to pay for personal expenses for the family and he withdrew large sums of money from the corporation to pay for real estate investments in the names of the parties.
[99] This Court further finds that some of the pre-tax corporate income is available to the Respondent for the payment of support and that not including available pre-tax corporate income in the Respondent’s income for support purposes would, in this Court’s opinion, lead to an unfair result.
[100] This Court has determined that $250,000 in pre-tax corporate income should be added to the Respondent’s income in each year starting in 2020 and going forward. This is somewhat less than half of the average of the pre-tax corporate income in the years 2018 to 2020. This Court has not included the Respondent’s projected pre-tax corporate income figure for 2021 as these have yet to be finalized by his expert or reviewed by the Applicant’s expert.
[101] The Respondent’s income for support purposes is therefore set at $372,000 for 2020 and going forward.
[102] This Court recognizes that the Respondent has claimed that his income in 2021 was much less than in 2020, however, this has yet to be finalized by his expert or reviewed by the Applicant’s expert.
Amount of Child Support
[103] On a temporary and without prejudice basis, this Court finds that the children are in the Applicant’s primary care for support purposes. [16]
[103] Based on the Respondent’s income for support purpose of $372,000 and the CSG, the amount of support for two children is $4,741 per month.
[104] This Court recognizes that the Respondent’s income is over $150,000 per year and therefore the table amount may be inappropriate, however, based on the split of net disposable income, as further detailed below in the spousal support section, in this Court’s view, the table amount is a fair and appropriate amount on a temporary and without prejudice basis.
Commencement date for Child Support
[105] This Court has jurisdiction to make a temporary retroactive support order. Subsection 34 (f) of the Family Law Act reads as follows:
Powers of court
- (1) In an application under section 33, the court may make an interim or final order,
(f) requiring that support be paid in respect of any period before the date of the order;
[106] This motion was originally scheduled to be heard on June 9, 2021. It did not proceed because the Respondent had not delivered his income determination report (and did not deliver it until August 12, 2021, when he delivered his first report).
[107] The Respondent represented to the Court at the Case Conference on January 4, 2021 that he had already engaged his expert and that she was working on an income determination report
[108] It was at that Conference that the June 9, 2021 motion date was set. The Respondent has provided no convincing explanation for the delay. The Respondent claims there was some delay in the provision of his disclosure because the Applicant removed some of his financial records from the family home at separation and presumably refused to return them to him. This was denied by the Applicant. In any event, the Respondent would have been well aware of this issue when the matter was case conferenced in January 2021 as the parties separated several months prior.
[109] Had the motion proceeded on June 9, 2021, an order for support would no doubt have been made effective at least as of June 1, 2021 and possibly earlier.
[110] This Court recognizes that the obligation to support one’s child arises when they are born. It is not suspended or somehow put on hold because of the parent’s separation.
[111] This Court also recognizes, the Respondent started paying child support at separation, however, he has underpaid support.
[112] The mother and the children have been disadvantaged by the Respondent’s underpayment of support.
[113] This Court will Order that the child support payments commence January 1, 2021, without prejudice to review and adjustment in the final determination of support.
[114] The Respondent is to be given credit for any child support payments already made pursuant to court order or written agreement of the parties. The Respondent is also to be given credit for $9,687 in mediation fees the Respondent paid on the Applicant’s behalf.
[115] Based on the Respondent’s significant assets, this Court is satisfied that this Order will not create a hardship for the Respondent and that the arrears should be paid in full within 30 days of the date of this Order.
Entitlement to Spousal Support
[116] The statutory framework for an award of spousal support is found at s. 30, 33 and 34 of the Family Law Act. [17]
[117] On a motion for a temporary spousal support order, the support claimant does not have to prove entitlement on a balance of probabilities, rather he or she need only establish a prima facie case for entitlement. [18]
[118] In Politis v. Politis, 2015 ONSC 5997 [19] , Justice Harvison Young reviewed the principles applicable to an interim motion for spousal support at para 14:
On applications for interim support the applicant's needs and the respondent's ability to pay assume greater significance;
An interim support order should be sufficient to allow the applicant to continue living at the same standard of living enjoyed prior to separation if the payor's ability to pay warrants it;
On interim support applications the court does not embark on an in-depth analysis of the parties' circumstances which is better left to trial. The court achieves rough justice at best;
The courts should not unduly emphasize any one of the statutory considerations above others;
On interim applications the need to achieve economic self-sufficiency is often of less significance;
Interim support should be ordered within the range suggested by the Spousal Support Advisory Guidelines unless exceptional circumstances indicate otherwise;
Interim support should only be ordered where it can be said a prima facie case for entitlement has been made out;
Where there is a need to resolve contested issues of fact, especially those connected with a threshold issue, such as entitlement, it becomes less advisable to order interim support.
Applicant’s Position
[119] The Applicant is entitled to support on both a compensatory and a non-compensatory basis.
[120] The parties were involved in a fairly traditional, lengthy relationship. The parties lived a very comfortable lifestyle. Since separation, the Applicant has been unable to become self-supporting and has had to significantly cut back on her budget in an effort to make ends meet.
[121] The Applicant has been depleting assets and incurring debt to support herself and the children and is in dire need of support.
[122] The Respondent continues to run two very successful corporations with combined total retained earnings of about $1,500,000. In addition, he owns several investment properties. The Respondent has the ability to pay support, including arrears of support.
Respondent’s Position
[123] The Applicant is not entitled to spousal support.
[124] The Applicant works in the same industry as the Respondent and last year earned $80,000 which is the most she’s ever earned. This is on top of the support the Respondent is already paying and the free housing he is providing for her.
[125] Under the current Order, the Respondent is already overpaying support and the Applicant is collecting more support than she requires according to her budget.
[126] It would create significant financial difficulties for the Respondent to pay any more support and the Applicant is not in need of more support.
Analysis
[127] This Court finds that the Applicant has established a prima facie case for entitlement based on the following facts:
a. the parties were involved in a relationship of either about 6.5 or 15 years in duration;
b. there are two young children of the parties’ relationship;
c. the Applicant took significant time out of the paid workforce to care for the children;
d. since at least separation, the Applicant has been the children’s primary caregiver;
e. during the relationship and since separation, the Respondent earned significantly more than the Applicant (taking into account monies accumulated by the Respondent as pre-tax corporate income);
f. prior to separation, the Respondent shared the funds in the corporation with the Applicant and the children by virtue of paying for personal expenses such as renovations and landscaping for the family home through the corporation, and by purchasing at least two real properties for the parties with funds from the corporations;
g. prior to separation, the family lived a very comfortable lifestyle;
h. the Applicant had limited assets at separation (apart from some jointly owned properties which appear to be in dispute in these proceedings) and has depleted most of her assets and incurred debt since separation to support herself and the children. The Applicant’s net worth has decreased by $85,000 since separation;
i. the Respondent has significant assets, including solely owned real estate and retained earnings in his two solely owned corporations;
j. throughout the parties’ relationship, they lived a very comfortable albeit not extravagant lifestyle, with regular vacations, fancy cars and meals out.
Amount of Spousal Support
[128] This Court has reviewed and considered the Financial Statements filed by the parties. The Applicant has an actual budget of $5,737 per month and a proposed budget of $20,148 in her Financial Statement sworn December 17, 2021. The Respondent has an actual budget of $3,935 and no proposed budget in his Financial Statement sworn September 21 2020, being the most recent Financial Statement filed by the Respondent.
[129] This Court has also reviewed and considered the Spousal Support Advisory Guidelines calculations provided by the parties.
[130] Based on this Court’s determinations regarding the parties incomes, that is $75,000 gross per year for the Applicant and $372,000 gross per year for the Respondent, this Court finds that the appropriate amount of spousal support is $5,770 per month.
[131] This Court recognizes that the Respondent’s income is over $350,000 per year and therefore the Spousal Support Advisory Guidelines may be inappropriate, however, this payment of spousal support and child support as noted above results in a split of NDI of 43/57 as between the Respondent and the Applicant and is in this Court’s view a fair and appropriate amount on a temporary and without prejudice basis.
Commencement Date of Spousal Support
[132] For the reasons noted above regarding the commencement date of child support, this Court will Order spousal support to commence January 1, 2021, without prejudice to review and adjustment in the final determination of support.
[133] The Respondent is to be given credit for any spousal support payments already made pursuant to Court order or written agreement of the parties.
[134] Based on the Respondent’s significant assets, this Court is satisfied that this Order will not create a hardship for the Respondent and that the arrears should be paid in full within 30 days of the date of this Order.
What is the appropriate amount of security for the Respondent’s child support and spousal support obligations?
[135] Pursuant to s. 34(1) (i) and (k) of the Family Law Act, this Court has jurisdiction to make an order requiring that a spouse who has a life insurance policy designate the other spouse or a child as the beneficiary irrevocably, or that the spouse secure their payment of support by a charge on property or otherwise.
[136] Based on the child support and spousal support amounts provided for above, as well as the ages of the children, and either a 6.5 year relationship or a 15 year relationship, security of $500,000 would be appropriate. This Court will therefore Order that the Respondent secure his support obligations by designating the Applicant as the irrevocable beneficiary of the proceeds of his life insurance police (account number H1529435) in the amount of $500,000. This Order is made on a temporary and without prejudice basis and is subject to review and adjustment in the final determination of the support issues.
Order
The Respondent’s request for an adjournment is dismissed.
The Respondent’s request to have this Court consider his sur-reply affidavit sworn January 13, 2022 is dismissed and that affidavit shall be struck from the record.
The Respondent shall pay the Applicant child support for the children, namely Cash James David Liscoumb, born September 27, 2013, and Sofia Mary Kathy Liscoumb, born April 5, 2015, in the amount of $4,741 per month commencing January 1, 2021. This award of support is based on the Applicant’s income of $75,000 gross per year and the Respondent’s income of $372,000 gross per year. This Order is made on a temporary and without prejudice basis and is subject to review and adjustment in the final determination of the support issues.
The Respondent shall be given credit for any child support payments already made pursuant to Court order or written agreement of the parties, and also with credit for the $9,687 in mediation fees the Respondent paid on the Applicant’s behalf.
The arrears of child support shall be paid in full within 30 days of the date of this Order.
The Respondent shall pay the Applicant spousal support in the amount of $5,770 per month commencing January 1, 2021. This award of support is based on the Applicant’s imputed income of $75,000 gross per year and the Respondent’s income of $372,000 gross per year. This Order is made on a temporary and without prejudice basis and is subject to review and adjustment in the final determination of the support issues.
The Respondent shall be given credit for any spousal support payments already made pursuant to Court order or written agreement of the parties.
The arrears of spousal support are to be paid within 30 days of the date of this Order.
The Respondent shall designate the Applicant as the irrevocable beneficiary of the proceeds of his life insurance police (account number H1529435) in the amount of $500,000. This Order is made on a temporary and without prejudice basis and is subject to review and adjustment in the final determination of the support issues.
The parties are encouraged to try to settle the issue of costs between themselves. If the parties are unable to settle the costs issue, the parties may make submissions on costs in writing to this Court. The submissions are not to exceed two pages in length, excluding their Bill of Costs and any Offers to Settle. The Applicant shall serve and file her submissions by February 3, 2022 and the Respondent shall serve and file his submissions by February 17, 2022. There is no right of reply. If no submissions are received within the time period set out herein, there shall be no award of costs for the motion.
Released: January 24, 2022 The Honourable Justice J. Bruhn
[1] The Court notes there is some overlap in the time periods for which support arrears are claimed.
[2] O. Reg. 114/99, as amended. Any references to the Rules are to the Family Law Rules.
[3] See Riss v. Greenough, [2002] O.J. No. 2772, 29 R.F.L. (5th) 405 (Ont. S.C.J.).
[4] The Applicant’s expert states that this report is initial because he is still reviewing a number of transactions related to the parties’ rental income which may have a significant impact on the Respondent’s income such that his income for support purposes is likely greater than the amounts he has concluded in his report. In addition, this Court notes that the Applicant’s expert has not yet had an opportunity to review the Respondent second report which was served after the Applicant’s expert prepared his initial report.
[5] The main difference between the two scenarios is in scenario 2, the Applicant’s expert has included the benefit from excess capital cost allowance claimed by Luxury. In both scenarios the Applicant’s expert has included all of the pre-tax corporate income in the Respondent’s income for support purposes.
[6] As noted above, this is the second report prepared by the Respondent’s expert. The main difference between the first report and the second report appears to be that in the second report the Respondent’s expert has included personal expenses paid through the corporations.
[7] The difference between scenario 1 and scenario 2 is in scenario 1 the Respondent’s expert has included 100% of companies’ the pre-tax corporate income in the Respondent’s income for support purposes.
[8] The Applicant’s expert has not an opportunity to provide an opinion on the determination of the Respondent’s 2021 income.
[9] The Applicant’s expert has not had an opportunity to provide an opinion on the companies’ pre-tax corporate income in 2021.
[10] StormFX, the special effects business, involves the usage of explosives and other incendiary devices, and Luxury, the portable restroom rental business, involves contact with human sewage.
[11] Section 17 of the Child Support Guidelines.
[12] Section 18 of the Child Support Guidelines.
[13] Section 19 of the Child Support Guidelines.
[14] Calculated by taking the 2021 opening retained earnings figure of $1,814,309 and subtracting the 2021 decreased in retained earnings of $273,832.
[15] Politis v. Politis, 2015 ONSC 5997.
[16] Based on the current arrangement whereby the children are in the Respondent’s care four overnights in each two week period (every Tuesday and every other Friday and Saturday) and in the Applicant’s care the balance of the time.
[17] R.S.O. 1990, c. F.3.
[18] Lamb v. Watt, 2017 ONSC 5838, 2017 CarswellOnt15286 (ONSC), para. 20.
[19] 2015 ONSC 5997.