COURT FILE NO.: FS-21-00026090-0000
DATE: 20220420
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
HEATHER MARGARET MCARTHUR
Applicant
– and –
LOC PHU LE
Respondent
Sheila Gibb and Batya Berman, for the Applicant
Kristen Normandin and Joanna Hunt-Jones, for the Respondent
HEARD: March 29, 2022
papageorgiou j.
[1] The Applicant Heather McArthur (“Heather”) brings a motion for spousal and child support as well as section 7 expenses as against the Respondent Phu Le (“Jay”) as well as a preservation order in respect of two properties pursuant to section 40 of the Family Law Act, R.S.O. 1990, c. F.3. She asks that income in the amount of $650,000 be imputed to Jay.
[2] Jay disputes that income should be imputed to him or that Heather has established an entitlement to spousal support. He is agreeable to paying child support but claims that he recently lost his job. He also seeks imputation of income to Heather.
Conclusion
[3] For the reasons that follow, I am imputing income to Jay in the amount of $400,000 as well as income to Heather in the amount of $50,000; I am awarding Heather child and spousal support on the basis of these imputed incomes. I am also making the preservation order sought by Heather.
Background
[4] Heather and Jay met during the summer of 2019. They began cohabiting in Jay’s condominium at 524-75 Portland Street (the “Portland Condo”) in October 2019.
[5] On September 14, 2020 their son J.D.L. was born (the “Child”).
[6] Heather and Jay separated on January 1, 2021 when Jay moved out.
[7] Heather and the Child have continued to reside in the Portland Condo. Jay has parenting time on Tuesdays, Thursdays and Sundays.
Child Support
[8] Jay has an obligation to pay Table Child support but there is a dispute as to his income.
Jay’s Employment Income
[9] Jay’s position is that he has been employed as a manager at Solution Process Serving Ltd. He asserts that his annual income has been as follows:
| Year | Income |
|---|---|
| 2018 | $27 |
| 2019 | $83,478 |
| 2020 | $83,938 |
| 2021 | $140,400 |
[10] There is no explanation as to why Jay’s income would have increased so much in 2021, particularly as this pay raise occurred after their separation when Heather began questioning Jay’s ability to meet his expenses in light of his claimed income.
[11] By affidavit dated March 11, 2022, Jay indicated that he had been terminated as of March 7, 2022. There is no explanation in the termination letter as to why he was terminated but he believes it is related to criminal charges laid against him by Heather. There is no evidence that his employer knew about these charges, not even any hearsay evidence from Jay related to what his employer knew.
[12] It is also odd that he would be terminated summarily right after receiving such a large pay increase in 2021, and a few short weeks before the spousal support motion would be heard.
[13] Heather’s counsel argues that this termination (even if bona fide) is irrelevant because Jay has significant sources of unexplained income outside of his employment. She seeks to impute income to Jay based upon section 19(1) of the Federal Child Support Guidelines, SOR/97-175.
[14] The imputation of income requires a rational and solid evidentiary foundation grounded in fairness and reasonableness: Drygala v. Pauli (2002), 2002 CanLII 41868 (ON CA), 61 O.R. (3d) 711, at para. 44.
[15] Where there are significant discrepancies in the payor’s evidence, the onus is on the payor to provide an explanation: see Abbas v. Albohamra, 2020 ONSC 591 where the court stated, at para. 52:
In reviewing the evidence, I agree with the trial judge there was a significant discrepancy between Mr. Abbas’ declared income, his lifestyle and his expenditures. When such a discrepancy is present, the onus is on the individual purporting their income to be a certain amount to explain that difference.[^1]
Lifestyle Analysis
[16] Heather says that Jay’s main source of income is cash from undisclosed sources. She says that he would give her stacks of cash to pay her expenses. She describes a lavish lifestyle which included expensive trips where they flew business class and stayed in 5 star hotels.
[17] Heather has done a comprehensive lifestyle analysis of Jay’s spending which shows that Jay’s average net spending is $346,860. When this is grossed up this equates to gross income of $663,000.
[18] Heather relies upon the following cases where courts have held that it is appropriate to gross up net spending when calculating income for the purposes of spousal support: Adams v. Campbell, 2003 CarswellOnt 3276 at 79; Gonabady-Namadon at paras 22-25 and 40-44; Hayward v. Hayward, 2015 ONCJ 212, at para. 27; and Li v. Wong at paras 3-7.
[19] This lifestyle analysis was based upon: a) Jay’s average monthly spending on his American Express, BMO Mastercard and TD Visa in 2020 which totaled $177,900; b) actual expenses for the Portland Condo according to his budget; c) his claimed monthly costs not included in his credit card spending; d) his Lamborghini and Audi down payment and lease payments; and e) cash which Heather says he gave her after separation for a Range Rover lease payments and a nanny.
[20] Heather says this analysis is conservative because it does not include any other spending reflected in his bank account debits and many cash expenses which she did not have receipts for, payments for the condo where he currently resides, and unexplained large deposits in his account.
[21] Counsel for Jay argued that Heather’s lifestyle analysis was inadequate because it was based upon charts prepared from disclosure which Jay provided, but the actual credit card statements are not before me. If Jay had wished to challenge these charts as not being accurate calculations based upon the disclosure which he provided, he could have done so with his own analysis and charts.
[22] Having declined to address Heather’s lifestyle analysis with his own evidence on these calculations, or his own analysis, I am not persuaded by Jay’s argument as to the sufficiency of Heather’s evidence on these issues.
[23] In any event, as will be seen there is backup in the record which supports the fact that Jay has a lavish lifestyle which could not be supported by his claimed employment income.
[24] The following are examples of some of the things that Jay purchased, supported with receipts.
| Brand/Item | Cost | Date | Jay's Position |
|---|---|---|---|
| Christian Dior | |||
| Baby hat | $480 | June 2021 | Not disputed |
| Baby woven | $690 | June 2021 | Not disputed |
| Women’s Coat | $4,200 | October 2020 | Not disputed |
| Men Tee Shirt and Top | $1,100 | October 2020 | Not disputed |
| Women’s shoes | $1,550 | October 2020 | Not disputed |
| Women’s Pullover | $4,500 | October 2020 | Not disputed |
| Apple phone | $1,699 | September 2020 | |
| Chanel | |||
| Item of clothing described as “Tennis” | $1,150 | June 2020 | Not disputed |
| Item of clothing described as “Sac Cordon” | $4,100 | June 2020 | Not disputed |
| Moncler | |||
| 4 items | $5,435 | November 2020 | Not disputed |
| Tiffany jewelry | $14,385 | undated | Admitted |
| Rimowa Luggage | $5,960 | undated | Admitted |
| Rolex watch | $30,000 and no receipt | Disputed |
[25] The following are examples of restaurant bills paid by Jay:
| Restaurant | Cost | Date | Jay's Position |
|---|---|---|---|
| Marbl | $1,095 | June 2019 | Not disputed |
| Jacob’s & Co | $2,952 | June 2019 | Not disputed |
| Jacob’s & Co | $1,498 | July 2019 | Not disputed |
| Jacob’s & Co | $1,717 | December 2019 | Not disputed |
| Kasamoto | $2,098 | February 2020 | Not disputed |
| Restaurant Club Colombia in Switzerland | $2,276 | December 2019 | Not disputed |
[26] In my view, these are not the kinds of expenditures which someone with Jay’s claimed income would ordinarily make.
[27] Jay also disputes that he ever gave Heather large amounts of cash. However, there are cash transfers from Jay noted on some of Heather’s bank statements which is evidence that he did. As well, as will become increasingly more apparent, the persuasiveness of Jay’s overall position in this motion is not strong compared to Heather’s. He has made many bald allegations, provided questionable explanations for his lifestyle, and has not provided sufficient independent support for his assertions. Heather’s evidence is by far more supported by independent evidence, more plausible and more believable.
Jay’s Explanation for his Expenditures
[28] Jay explains his ability to make the expenditures set out by Heather as follows. He has childhood friends who are much wealthier than him which has given him access to luxury goods that he could not otherwise afford. He says that he has repaid some of this money. There is no independent evidence of this.
[29] Regarding the large restaurant bills, Jay says that they often had dinners with large groups and while he paid the total bill, he then collected funds from the other parties with them at the dinners. There is no independent evidence in support of this.
[30] Heather has provided photographs of Jay wearing 5 luxury watches which she values at $700,000. Jay claims that a wealthy friend lends him pieces and they do not belong to him. It makes little sense that this friend would periodically exchange one borrowed luxury watch for another. As well, Jay does not deny the value of these watches.
[31] With respect to Heather’s evidence that he drives two luxury cars including a Lamborghini ($3,000 monthly lease) and Audi ($630 monthly lease), Jay explains that the Audi was co-leased with a friend and there is documentary proof in support of this. He says that another friend made all the payments on the Lamborghini even though it was leased in his name but there is no independent evidence of this. Jay says that after his friend passed away, he returned the Lamborghini to the dealership.
[32] Jay relies upon caselaw where courts have held that gifts should not generally be included in imputed income: Bak, at para. 75; F.B.M. v. B.F., 2019 ONSC 708, at para. 45. However, for a court to reach that conclusion there must be proof of a gift. The only thing Jay has provided is bald allegations.
[33] He also alleges that he has been able to afford his lifestyle because of the sale of a restaurant in 2018 for $100,000, but $100,000 is not anywhere close to explaining all of Jay’s purchases.
[34] There are other problems with Jay’s evidence regarding his income and his spending. His own sworn budget contains monthly expenses totaling $10,993 ($131,926 annually) which far exceeds his line 15000 income. His Financial Statement does not show any debts which would assist him with these expenses. As well, his credit card spending for 2020 alone totals $177,000. Most of his credit card bills are paid in some manner which is not reflected as a debit to his bank account statements produced; Heather has calculated that there are $280,000 in unaccounted payments to Jay’s credit cards from September 2019 to June 2021.
[35] As well, most of the credit card payments are in large round numbers which is consistent with Heather’s evidence that she witnessed him make payments by depositing cash at an ATM or with a teller. Finally, the amounts set out in Jay’s claimed budget are well below his actual spending. For example, while he claims he spends $300 per month for clothes, his actual average spending per month in 2021 and 2020 on such items were $8,000 and $3,148 respectively. There are similar problems with other entries.
[36] In my view, Heather has provided persuasive evidence and Jay has failed to provide reasonable explanations supported by sufficient evidence as to the discrepancy between his claimed income and his spending. See the following cases where courts have imputed income to a payor in similar circumstances: Li, at paras. 3-7, 10; Adams, at para. 79; L. (J.T.), at para. 90; Gonabady-Namadon, at paras. 22-25, 40-44.
[37] I am satisfied on a balance of probabilities that income should be imputed to Jay and that Heather has provided sufficient evidence as to his lifestyle spending to support imputation of income.
[38] However, I have concerns about the quantum of income which Heather seeks to impute in part because the credit card analysis is based upon his 2020 spending in the amount of $177,000. His spending for the first six months of 2021 was approximately $60,000 which equate to $120,000 annually. As well, Jay did provide evidence that he sold his business for $100,000 in 2018 and these funds could have been used to supplement his spending. Finally, he has provided evidence as to his loss in income from his job which appears to be approximately $140,000.
[39] Jay cites cases where courts have been cautious in imputing income on a contested record: Lowe v. Lowe, 2020 ONSC 5224, at para 40; Rushton v. Cuff, 2020 ONSC 490, at paras. 23-24; at para 18; Bohn v. Bohn, 2002 BCSC 1410, [2002] B.C.J. No. 2368, at para. 17-19.
[40] Jay also cites Ierullo v. Ierullo, 2006 CanLII 33301 (Ont. C.A.) in support of his argument that this court should not impute income based upon conflicting affidavit evidence. However, Ierullo is not at all similar to this case; it was an appeal of a motion to change where a judge had ordered the cessation of spousal support in circumstances where the Court of Appeal concluded there was no basis to accept one spouse’s evidence over another’s. Importantly, the decision was a final decision whereas this is an interim motion and in any event, I have found Heather’s evidence more persuasive.
[41] In all the circumstances, and taking into account some of the contested evidence which cannot be independently verified, I am imputing $400,000 in income to Jay. I am satisfied that there is a rational basis to impute this amount, supported by sufficient evidence.
Table Child Support Based Upon Jay’s Imputed Income
[42] Table Support based upon income of $400,000 is $3099.
[43] Jay argues that he should not have to pay Table Support because this would be excessive and inappropriate in the circumstances. He relies upon section 4 of the Child Support Guidelines, Jung v. Johnson, 2015 ONSC 6734, [2015] O.J. No. 6916, at paras. 29, 30 and Ruel v. Juodis, 2005 CarswellOnt 1630, at paras. 21-26.
[44] These cases are not comparable. In Jung, the Table Support would have been $50,000 and the child support budget provided by the mother was well below that. In Ruel, the father had demonstrated that the child’s needs would be met by a significantly lower amount. As well, in discussing this issue, the judge in Ruel referenced the Court of Appeal decision in R. v. R., 2002 CanLII 41875 (ON CA), 58 O.R. (3d) 656 (C.A.) at para. 18 where the court said that the table amount is presumed to be the appropriate amount. The court stated:
Child support should meet a child’s reasonable needs. For children of wealthy parents, reasonable needs include reasonable discretionary expenses. A paying parent who claims the table amount is inappropriate must, therefore, demonstrate that the budgeted child expenses are so high that they “exceed the generous ambit within which reasonable disagreement is possible”, in short that the budgeted expenses are unreasonable. Table amounts that so far exceed a child’s reasonable needs that they become a transfer of wealth between the parents or spousal support under the guise of child support will be inappropriate.
[45] In my view, Jay has not rebutted the presumption that the Table amount is the appropriate amount. Heather’s financial statements set out sufficient expenses which are for the Child (including comparable accommodation to where he currently lives, food and other categories).
[46] As well, given their income disparity and Jay’s ability and propensity to support the Child in a lavish way (e.g. he bought the Child a hat from Christian Dior for $700), it is appropriate that Table support be paid to ensure that the Child enjoys a similar standard of living when with Heather.
Entitlement to Spousal Support
[47] An order for support of a spouse should: a) recognize the spouse’s contribution to the relationship and the economic consequences of the relationship for the spouse; b) share the economic burden of child support equitably; c) make fair provision to assist the spouse to become able to contribute to his or her own support; and d) relieve financial hardship.
[48] There are three conceptual grounds for support: a) compensatory; b) non-compensatory or “need”; and c) contractual: Damaschin-Zamfirescu v. Damschin-Zamfirescu, 2012 ONSC 6689, [2012] O.J. No. 5586, at para. 25.
[49] On a motion for interim spousal support, the following governing principles are applicable: a) The Applicant’s needs and the Respondent’s ability to pay assume greater importance; b) An interim order should be sufficient to allow the Applicant to continue living at the same standard of living enjoyed prior to the separation, if the payor’s ability to pay warrants it; c) The court achieves rough justice at best - and does not embark on an in-depth analysis of the parties’ circumstances; c) The court should not unduly emphasize one of statutory considerations above the others; d) The need to achieve self-sufficiency is often of less importance; e) Interim support should be ordered within the range suggested by the SSAG unless exceptional circumstances indicate otherwise; g) Interim support should only be ordered where it can be said a prima facie case for entitlement has been made out; and g) Where there is a threshold issue, it becomes less advisable to order interim support.
Driscoll v. Driscoll, 2009 CanLII 66373 (ON SC), 2009 CarswellOnt 7393 (Ont. S.C.), at para. 14; Damaschin-Zamifirescu, at para. 24; Wilkins v. Wilkins, 2018 ONSC 3036, at para. 78; Demers v. Demers, 2019 ONSC 6111, at para. 17.
Analysis
Heather’s Position
[50] The basis upon which Heather claims entitlement is as follows:
a. Prior to cohabitation, Heather was financially independent. She had a concierge business working for individuals as a personal assistant. Her work was referral based and included services like personal shopping, gift selection, planning vacations, caring for pets, driving, etc. She had one main client who paid her approximately $5,650 per month. She had one other client for a two month period. She also had some irregular assignments.
b. Shortly after they began cohabitation, Jay told her that she did not need to work and that he would take care of her. He advised that it made more sense for her to focus her energy on him. He wanted her to be available for his needs and travel at all times.
c. Accordingly, she stopped working for her main client as of October 2019, although she did continue to provide services to the occasional “low maintenance” clients. Heather’s summary of her receipts from clients for 2019, 2020 and 2021 supports the decrease in income from clients beginning October 2019 and then beginning to increase again after she and Jay separated.[^2]
d. After the Child was born, she devoted the majority of her time to his and Jay’s care relying on his promise that he would always look after her. Jay says he was working fulltime. Someone had to be caring for the Child during the day and seeing to his needs; even if Jay had some flexibility, by process of elimination, it had to be Heather.
e. Since the separation, Heather has been attempting to resume her business. However, it has been difficult and stressful for a number of reasons including Jay’s refusal to pay support, contribute to the Child’s nanny and cutting off the internet which caused her to lose the only client she had. It is undisputed that Jay refuses to pay spousal support or the costs of nanny.
f. Heather says her gross business income for the last 3 years was as follows:
| Year | Gross Business Income |
|---|---|
| 2019 | $88,294 |
| 2020 | $18,274 |
| 2021 | $27,413 |
g. As of December 2021, she only has one client; she drives this client’s child to and from school. This is supported by a private detective who Jay retained to surveil Heather.
h. She has been searching for and applying for jobs without success.
i. As will be further discussed below, she cannot currently meet her expenses.
Jay’s Position
[51] Jay alleges that Heather’s application for spousal support amounts to an attempt to extract a financial windfall from their short cohabitation. He alleges that Heather presented herself as self-made and independently successful when they met, and that she was living a lavish lifestyle herself at the time. Within a few months she made it clear that she expected to be “kept” in a certain lifestyle. By the time he realized her outsized expectations, she was already pregnant.
[52] However, Jay did not provide sufficient or compelling independent evidence regarding these claims.
[53] For example, in support of the proposition that Heather was previously able to purchase high-end clothing, he appended a listing from VSP Consignment (between 2019 and 2020) in respect of clothing which he says Heather had sold through a consignment store. This evidence does not assist him. Most of the clothing on this list is men’s clothing. Heather says that she sold these items on behalf of her clients. The women’s clothing listed here is generally not of the caliber of designer clothing purchased by Jay and included women’s clothing from stores including Zara, Wilfred, North Face and Club Monaco; these are not similar to Christian Dior or Chanel which is where Jay purchased clothing. As well, even if I accept that the women’s clothing was Heather’s, the fact that she sold clothing that she purchased from stores like these supports the conclusion that she was not previously living a lavish lifestyle.
[54] Jay also points out that when they met, she was living in the same condo building as him. That may very well be; however, there is often a significant range in the kind of units in a building. Jay provided no evidence that Heather’s previous accommodations were similar to the Portland Condo which he valued in his financial statement to be worth $1,000,000, that she owned any such previous condominium, or of the price she would have been paying to lease it.
[55] He also insinuates that she is currently working as a high-priced escort earning thousands of dollars for individual encounters.
[56] Jay hired a private detective to surveil Heather from at least December 9, 2021 to January 28, 2022. The private detective’s report shows Heather driving a child to and from school, picking up groceries, and doing other errands. The report suggests that she attended at a hotel with a massage table on one occasion; however, Heather has provided text messaging that shows that that day she dropped her car off to be washed at this hotel as she had previously done in the past. She says that Jay was aware that she generally had her car washed at this hotel. I note that Jay has refused to produce the contents of the detective’s file for Heather’s examination.
[57] In any event, the detective report is consistent with Heather’s evidence that she does not currently have any significant income from her concierge business or from any other business and that her one current client has hired her to drive a child to and from school.
[58] Jay has also done some analysis of Heather’s income based upon her personal and business bank records in support of his claim that she has no need and that she earns significant funds. I will address this argument in the section regarding whether income should be imputed to Heather. I foreshadow that I did not find his analysis compelling and that Heather has provided reasonable explanations for the issues raised by Jay.
[59] I am satisfied that Heather’s financial resources do not permit her to pay her expenses or maintain a standard of living close to one that approximates the one she enjoyed during her relationship with Jay. As such I am satisfied that Heather is entitled to interim spousal support on a needs basis. I am also satisfied that Heather has provided sufficient evidence to demonstrate that she was disadvantaged by roles adopted by the parties during the relationship and that despite her best efforts she has been unable to get her concierge business up and running or obtain alternate employment. See Zahelova v. Wiley, 2019 ONSC 5024 where a court in similar circumstances found entitlement.
[60] In making this finding, I acknowledge the relationship was short, that she is young at 33 and has no physical impairments. However, even if she was able to keep a few clients when they commenced cohabitation, slowing down her business followed by having a child would have impaired her ability to earn sufficient income. The case relied upon by Jay, Demers v. Demers, 2019 ONSC 6111, involved a couple with no children, and there was no evidence that one party bore a disproportionate share of running the household or was subordinating their career. These are not the facts here.
Imputation of Income to Heather
[61] Jay seeks to impute income to Heather. While Heather provided her analysis up front in a sworn affidavit, Jay’s analysis appears only in his factum served days before the motion.
[62] In my view, this method of presentation is unfair; it did not permit Heather to respond with her own sworn evidence addressing his concerns, something that Heather permitted Jay to do by providing her lifestyle analysis as to his income up front. As well, it is far less compelling because it is not sworn evidence.
[63] With respect to the method of analysis, while Heather looked at Jay’s spending, Jay considered inflows into Heather’s personal and business bank accounts. He includes all e-transfers into her account which he believes are from clients and represent business income, ATM deposits which Heather says included funds from him, and CERB replacements to which she is no longer entitled. He calculates her income in 2021 to be $134,039. If I deduct the CERB payments and other deposits into her account which include ATM deposits and foreign currency deposits listed on his summary, this reduces his calculation to approximately $66,000.
[64] In Heather’s first affidavit dated February 17, 2022 Heather had already provided a detailed analysis of her business and personal bank account statements which specifically identified where monies deposited into her account came from (“Heather’s Summary”) including withdrawals from her RRSP/Savings Account, loans from third parties and her business, transfers from Jay, sale of used clothing through consignment stores, government funds, income from clients, and tax refunds. I note that there were some minor discrepancies which Heather corrected.
[65] Heather’s Summary is plausible and believable for the following reasons. Deposits identified as payments from Jay or loans are in large round numbers. Government deposits are specifically noted as such on the bank statements. Deposits which Heather identifies as from the sale of used clothing are in irregular amounts which makes sense. Deposits from clients are also in irregular amounts which makes sense. As well, Heather says that Jay cut off support in October 2021. Afterwards, her summary shows large loans in the total amount of $25,000 in November and December 2021 which are also reflected on her bank statements. This also makes sense and is consistent with her narrative.
[66] Jay also argues that Heather’s failure to disclose the CERB payments on her October 2021 financial statement constitutes dishonesty of such a magnitude so as to disentitle her to support. I did not find any of the case law Jay referred to would support this proposition. R. v. Khan, 2021 ONSC 8550 was an appeal of an arbitral award where the claimant had failed to provide a current financial statement prior to the hearing which the judge felt shielded a full inquiry into his finances. Ross v. Ross, 2005 CanLII 63818 (Ont. Sup. Ct.) was a trial decision where the court was able to finally determine the issue of support on a full record. These are not the facts here. It appears to me that this was simply a mistake as the CERB payments would have been apparent from Heather’s tax returns.
[67] I am satisfied that Heather has provided a reasonable explanation regarding inflows into her accounts, which Jay alleges were income, with sufficient documentary support for the purposes of this motion.
[68] Nevertheless, given the concerns raised by Jay, I am imputing income of $50,000 to Heather which she advised she was consenting to. There is a rational basis for this as well. If I accept all the calculations in Jay’s factum as to e-transfers from Heather’s clients as well as government deposits to which she will still be entitled, this totals approximately $50,000. Therefore, in my view, this approximates Jay’s best case evidence at this point as to Heather’s income--if she was not able to deduct any business expenses.
Quantum of Spousal Support
[69] Section 33(9) of the Family Law Act sets out the factors applicable for the determination of spousal support.
[70] Heather has provided a financial statement dated February 2022 which sets out her current actual expenses in the amount of $9,266 as well as her anticipated expenses when she moves out of the Portland Condo in the amount of $16,294. Her anticipated expenses include $2,400 in nanny expenses which should be dealt with as a section 7 expense such that her anticipated monthly expenses pursuant to her financial statement are $13,894.
[71] I note that these anticipated expenses include the following items which could be considered expenses relating to her claimed lavish lifestyle with Jay: housing costs in the amount of $4,200, lease payments in the amount of $2,000, clothing, hair care and beauty in the amount of $1,430, and private dog training in the amount of $400 per month.
[72] A Divorcemate calculation using imputed income of $400,000 to Jay and $50,000 imputed to Heather shows a range of spousal support from a low of $7,340 to a high of $9,789 with a minimum duration of 4 years and a maximum duration of 17 years based upon their cohabitation for 1.5 years. I note that the case law specifically directs that interim awards should be within the SSAG ranges.
[73] Taking into account the short length of cohabitation, Heather’s young age, the fact that she is ramping up her business again, the need for her to move, the fact that she does not have any significant assets while Jay does, the fact that Heather is healthy as well as his imputed income and their lavish lifestyle while cohabiting, I am fixing temporary support at the mid-range of $8,553.
[74] Although this may seem inadequate given that this amount will be taxed and her current listed monthly expenses are more than this, it must be remembered that part of Heather’s expenses set out in her financial statement are for the Child. These include food, accommodation, clothing, and activities. She will be receiving $3,099 in child support for these expenses which is not taxable.
[75] I am satisfied that in all the circumstances, this quantum of spousal support will permit Heather to live in similar accommodations, and keep making the car payments for the Range Rover which I view as part of Jay’s and Heather’s lifestyle which courts have directed should be maintained on an interim motion. It may not be sufficient for her to maintain her expected extravagant clothing, hair and beauty, and pet grooming budget, but there are still disputed issues as to the extent of their lavish lifestyle which are best resolved at trial.
[76] As a final point on this issue, Jay argues that it is inappropriate to make a spousal support order because there is such uncertainty as to entitlement and other issues, and that any errors cannot be corrected at trial. Jay has provided no authority for the proposition that where a prima facie case of entitlement has been found, it should be denied on the basis that it may never be repaid if the trial court ultimately determines there is no entitlement.
[77] The child is only 1 and Jay will be paying child support for many years. Heather’s counsel offered that if an adjustment were later required, it could be made from child support which Jay will owe Heather in the future.
[78] As well, there are ongoing security concerns for Heather living in the Portland Condo which must be addressed immediately and she needs support to be able to move. Heather says Jay has problems with anger and coercive control including physical, financial and emotional abuse. She says that he has given her a black eye, thrown her clothes outside the condo, punched walls, choked her, and regularly berated and yelled at her in front of the Child. In October 2021, Jay also smashed Heather’s phone, took her computer and threatened her. She fled to the concierge, called the police and Jay was criminally charged. There are bail conditions which prevent him from communicating directly or indirectly with Heather or attending at the Portland Condo except for the purposes of child visitation arranged through a third party.
[79] Heather reports that despite a restraining order she has seen Jay walking around the condo grounds when it is not his parenting time, and that she found her car with a flat tire which she perceives to be a message.
Section 7 expenses
[80] Heather seeks an order that Jay pay 70 % extraordinary expenses. The only current expense is for a nanny which Heather says is $2,400 per month. She says he paid this during the relationship and for some months after separation. Jay objects to paying for a nanny for reasons which do not make sense. He says that Heather had no responsibility for domestic tasks when they were together; she had an employee Kristy who worked as a housekeeper/personal assistant. He believes that the people who Heather hires as nannies are in fact providing housekeeping services and assistance to Heather in her business and that childcare is only secondary.
[81] I do not find Jay’s submission and evidence on this issue persuasive. Heather is the primary caregiver and for her to work as Jay wants and as she must, there must be childcare in place. Nannies often perform housekeeping services. Jay’s evidence regarding his suspicions on what the nanny’s primary focus would be is bald in any event.
[82] He also argues that his parenting time on Tuesdays, Thursdays and Sundays gives Heather generous time to pursue her work without childcare. I find this assertion offensive. Would Jay be able to, or be expected to be without childcare if he worked full time and the Child lived primarily with him?
[83] He also asserts that the right of first refusal Heather and he agreed to on February 10, 2022 regarding his ability to care for the Child whenever she must leave for more than four hours means that he can care for the Child when Heather has to work. This is not a long terms solution which will permit either Heather or Jay to be employed fulltime and makes no sense in this case.
[84] However, I agree that Heather has failed to properly particularize this issue with documentary support.
[85] I am directing that Heather furnish Jay with particulars of who the nanny is, when the nanny will work, the nanny’s duties and the nanny’s salary. As well, she shall furnish him with contact details and he should be permitted to contact the nanny to confirm these details. If any dispute remains after this information has been furnished as to whether Jay shall be responsible for a portion of this section 7 expense, the parties may appear before me for further argument on the issue.
Retroactive Child Support
[86] With respect to retroactive child support, in S. (D.B.) v. G. (S.R.), 2006 SCC 37, [2006] 2 S.C.R. 231, at para. 5 the Court directed that courts should strive for a holistic view of circumstances before them and decide each case on the basis of its particular factual matrix. The court must consider the following four factors, none of which are determinative:
a. The recipient’s excuse for not seeking support sooner;
b. The payor’s conduct in relation to his or her support obligation;
c. The needs and circumstances of the child; and
d. The hardship to the payor of a retroactive award.
[87] Jay argues that he has satisfied his past child support obligations by having paid $4,200 in respect of the Portland Condo since the separation (approximately $3,200 mortgage and the balance for taxes, fees, etc.). Although Heather makes the point that Jay’s payments were essentially paying off his mortgage, I am not prepared to make an interim retroactive award of child support in the circumstances. Even if the payment of $4,200 benefitted Jay by reducing the principal of his mortgage, it also provided support to the Child as it gave the Child a place to live. As well, there is no evidence before me as to how much of the mortgage payments paid were in respect of principal or interest. Given Jay’s age, I am inferring that he purchased this condo somewhat recently and that the bulk of the payment he makes do not reduce his principal significantly.
Retroactive Spousal Support
[88] Heather seeks retroactive support as of September 1, 2021 when she says Jay stopped providing support.
[89] Factors which govern an award of retroactive spousal support include: a) The extent to which the claimant established past need (including any requirement to encroach on capital) and the payor’s ability to pay; b) The underlying basis for the ongoing support obligation; c) The requirement that there be a reason for awarding retroactive support; d) The impact of a retroactive award on the payor and, in particular, whether a retroactive order will create an undue burden on the payor or effect a redistribution of capital; e) The presence of blameworthy conduct on the part of the payor such as incomplete or misleading financial disclosure; f) Notice of an intention to seek support and negotiations to that end; g) Delay in proceeding and any explanation for the delay; and h) The appropriateness of a retroactive order pre-dating the date on which the application for divorce was issued.
Bremer v. Bremer, 2005 CanLII 3938 (Ont. C.A.)
[90] There was no argument made by Heather in her factum regarding retroactive support although she did seek her spousal support order dating back to September 1, 2021. I requested further submissions on this issue.
[91] Heather argues that she has been forced to deplete her RBC Direct Investment Savings Account and her RRSP account in order to fund her expenses including the expenses that Jay had previously been paying such as Internet, veterinary expense, her Range Rover lease, and child-care expenses. For 2021, she says these withdrawals totaled more than $26,000. She also cashed in another investment account in the approximate amount of $6,424 and took a shareholder loan from her company. She took personal loans from friends in the amount of $25,000 and has sold personal items receiving approximately $10,000 for these. She has also received the COVID small business loan which must be repaid.
[92] Jay argues that retroactive support is inappropriate and should be left to trial for a variety of reasons including: a) the payments made by Jay since separation are not fully quantified and need to be accounted for and credited against any support order made; b) both parties contest the other’s income; c) disclosure has not been completed and at the date of the motion there was a pending Order for each of the parties to provide additional financial disclosure and questioning. She relies upon Leonard v. Leonard, 2021 ONSC 1966 at para 27; Abdur-Rashid v. Abdur-Rashid, 2021 ONSC 1117 at paras 45-49, Mohamed v. Mohamed, 2020 ONSC 6567 at para 8; McGuire v. Jean, 2011 ONSC 5235 at para 15.
[93] I am satisfied that there is an underlying basis for support, that Heather has had to encroach on capital to support herself, that there was no delay in her requesting support and that there has been blameworthy conduct on Jay’s behalf. This includes misleading or incomplete financial disclosure as to his means for the reasons set out above. However, I also accept Jay’s argument that there are reasons to be cautious in this case in making a retroactive award.
[94] In all the circumstances, I am satisfied that retroactive spousal support should be awarded but that it should only commence February 1, 2022 to take into account Jay’s concerns.
Preservation Order
[95] Pursuant to section 40 of the Family Law Act, the court may make a preservation order to preserve or restrain the depletion of a party’s property in order to protect the other party’s entitlement to support. The court must consider whether there is a real risk that a party’s claim for support could be defeated if a preservation/non-dissipation order is to made: Ross v. Reaney, 2003 CarswellOnt 2240, at para. 25; Fraser v. Fraser, 2017 ONSC 3774 at para 58; Cummings v. Cummings, 2020 ONSC 3093 at paras 77-84; Bronfman v. Bronfman, 2000 CanLII 22710 (Ont. Sup. Ct.), at paras. 22, 28.
[96] In this case, I have found a prima facie entitlement to support. Jay has demonstrated his unwillingness to support Heather and the Child commensurate with his means. His means do not appear to arise from a conventional job where income can be garnished by the Family Responsibility Office; there are considerable concerns as to where his income comes from. He has already claimed that significant expenses are paid by friends without any independent proof. Given that his main income source appear to be cash from unknown sources, I agree in all the circumstances that there is a real risk that he will divest his assets and render himself judgment proof.
[97] As such I will be making a preservation order in respect of the Portland Condo and his TD Direct Investing TFSA Accounts as security for his child and spousal support obligations.
[98] If the parties cannot agree on costs they may make written submissions no longer than 5 pages: Heather within 5 days and Jay within 5 days thereafter.
[99] Therefore, this court orders on an interim and without prejudice basis that:
a) Pursuant to section 40 of the Family Law Act Jay shall preserve the property municipally known as 24-075 Portland street in Toronto, Ontario, and is restrained from transferring, encumbering, dissipating or depleting said property as well as his investment account described in his financial statement;
b) Pursuant to sections 31, 33 and 34(1)(f) of the Family Law Act, Jay shall pay spousal support to Heather in the amount of $8,553 based upon imputed income of $400,000 pursuant to section 19 of the Federal Child Support Guidelines, SOR/97-175 commencing February 1, 2022;
c) Pursuant to sections 31, 33 and 34(1)(f) of the Family Law Act, Jay shall pay child support in respect of the Child in the amount of $3,099 based upon imputed income of $400,000 pursuant to section 19 of the Federal Child Support Guidelines commencing May 1, 2022;
d) Support Deduction Order to follow; and
e) This matter shall be expedited to a trial commencing no later than December 1, 2022.
Papageorgiou J.
Released: April 20, 2022
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
HEATHER MARGARET MCARTHUR
Applicant
– and –
LOC PHU LE
Respondent
REASONS FOR JUDGMENT
Papageorgiou J.
Released: April 20, 2022
[^1] See also Bak v. Dobell, 2007 ONCA 304, 86 O.R. (3d) 196, at paras 41-43; Li v. Wong, 2010 ABCA 296, [2010] A.J. No. 1151, at paras 3-7, 10; Adams v. Campbell, 2003 CarswellOnt 3276, at para. 79; L. (J.T.) v. L. (R.G.), 2010 BCSC 1233, 13 B.C.L.R. (5th) 363, at para. 90; Gonabady-Namadon v. Mohammadzadeh, 2009 BCCA 448, 98 B.C.L.R. (4th) 23, at paras. 22-25, 40-44; Wu v. Sun, 2011 BCCA 239, 18 B.C.L.R. (5th) 219, at paras. 20, 23.
[^2] I note that the first half of the summary of her income mistakenly appears as part of Exhibit D to her first affidavit and then continues at Exhibit E.