M.N.C. v. R.E.K.
NEWMARKET COURT FILE NO.: FC-20-1681-00
DATE: 20220613
SUPERIOR COURT OF JUSTICE – ONTARIO – FAMILY COURT
RE: M.N.C., Applicant
AND:
R.E.K., Respondent
BEFORE: The Honourable Mr. Justice G.A. MacPherson
COUNSEL: C.M. Hibberd/C.M. Armes, Counsel for the Applicant
Respondent – Self-represented
HEARD: May 19, 20, 24, 25, 26, 27, and June 2, 3, 2022
REASONS FOR DECISION
Relief Requested
[1] The Applicant requests the following relief:
(a) retroactive and ongoing child support;
(b) section 7 expenses, retroactive to the date of separation;
(c) reimbursement for expenses on the Horsley Court property pursuant to the Trust Agreement signed January 20, 2009;
(d) life insurance to secure child support in the face value of $500,000;
(e) security for future child support; and
(f) a restraining Order pursuant to section 46 of the Family Law Act.
[2] The Respondent requests the following relief:
(a) spousal support;
(b) equalization of net family properties;
(c) a declaration that the Respondent has a trust interest in the Applicant’s pension;
(d) a declaration that the Respondent has a trust interest in 31 Carrick Avenue, 148 Lottridge Street, and 83 Cope Street; and
(e) an Order that the provisions of the Trust Agreement dated January 20, 2009 are beyond the limitation period.
Background Facts
[3] The parties were never married.
[4] The parties cohabited as a couple from December 2003 until January 3, 2019. The Respondent, at trial, stated that the separation was not January 3, 2019 although he confirmed that date in his pleadings. The parties continued to live under the same roof, following the end of their relationship, until October 2021.
[5] There are two children of the relationship namely, E.J.K. born in 2000; and E.A.K. born in 2005.
[6] Pursuant to the Order of Justice Jarvis dated January 14, 2022, the Applicant has final decision-making responsibility and the children reside primarily with her. Parenting time operates in accordance with the wishes of the child, E.A.K.
[7] The Applicant is 54 years old. She has a BA from York University and a B.Ed also from York University. While teaching full-time, she went to school part-time to obtain her Masters which she completed in 1999. In 2002 she completed her qualifications toward becoming a principal. The Applicant has been gainfully employed continuously throughout the relationship. She is currently a Centrally Assigned Principal for Elementary Teaching with the Toronto District School Board.
[8] The Applicant states that she was able to achieve this level of success as a result of the support of her family including her aunt who came from Jamaica to assist with child-care. All of her qualifications were obtained prior to cohabiting with the Respondent. E.J.K. was born in 2000 although the parties did not reside together until 2003.
[9] The Respondent is 57 years old. He completed some courses at the University of Toronto but did not complete a degree. Early on in the relationship the Respondent worked in sales. After a few years, however, he went into business for himself selling apparel to schools and organizing community events.
Credibility
[10] The Respondent’s evidence throughout the trial was problematic.
[11] It is noteworthy that the Respondent arrived on the first day of trial without following court Orders, without a single exhibit and without a pad of paper or a pencil. He did not know what claims he made. He was completely disorganized. In his cross-examination he did not answer the simplest of questions without first attempting to answer with a distraction or a diversion.
[12] Throughout his testimony the Respondent was evasive. When presented with current evidence of his incorporated companies, the Respondent would insist, without evidence, that the documents were not accurate. The Respondent would insist that companies were closed when they were listed as active. The Respondent would dispute who was on the Board of Directors for his corporations when a corporate search said otherwise.
[13] The Respondent blamed his former counsel for his lack of disclosure, arguing that he provided all of the financial documentation to them. The Respondent offered no confirmation of dates he provided the documents, despite being asked to do so. Of course, the Orders required the Respondent to provide the disclosure to the Applicant. When the Respondent was asked if he filed a complaint against his former law firm with the Law Society of Upper Canada, he said he had not. The Respondent has been representing himself since March 2022. He confirmed that he obtained his file from his former counsel. There was no explanation why, after he assumed carriage of his own file, that the disclosure issues continued.
[14] There was precious little financial disclosure provided for the two corporations that the Respondent acknowledged, prior to trial, having an interest in – Merek and Sports Horizon. The Respondent did not provide bank accounts, as ordered; credit card statements, as ordered; nor the financial details of his companies. There were no ledgers, articles of incorporation or much information at all. The Respondent also did not provide his full personal Income Tax Returns and Notices of Assessment, as ordered.
[15] The Respondent swore a Financial Statement on June 8, 2021. Surprisingly, it was the only one he filed in this case. In that Financial Statement he did not disclose his new company, Hazelnut Corporation. He swore an affidavit on Jan 11, 2022 deposing that there had been no changes to his financial situation. He did not provide any financial information on Hazelnut: there were no financial records, bank statements or general ledgers. Indeed, when reviewing his Financial Statement sworn June 8, 2021, the only business interest he disclosed in it was Sports Horizon. The Respondent did not provide HST returns for his corporations.
[16] When asked if his company, Sports Horizon, had a website, surprisingly, he did not know. When presented, in cross-examination, with the website that stated Sports Horizon has organized several events in the Caribbean…the Respondent appeared confused.
[17] Most concerning, however, was the series of questions asked during cross-examination of the Respondent, which can best be summarized as going something like this:
Q: Mr. K., apart from Merek, Sports Horizon, and Hazelnut are there any other companies that you have an interest that you have not disclosed?
A: No
Q: On March 31, 2022 you incorporated another company 1000162162 Ontario Inc.?
Q: Mr. K., apart from Merek, Sports Horizon, Hazelnut, and 1000162162 Ontario Inc. are there any other businesses that you have an interest that you have not disclosed?
A: No
Q: On April 6, 2022 you incorporated 6ix Destinations Partners Inc.
Q: Mr. K., apart from Merek, Sports Horizon, Hazelnut, 1000162162 Ontario Inc., and 6ix Destinations Partners Inc. are there any other businesses that you have an interest that you have not disclosed?
A: No
Q: What about Aurora Black Community Corporation where you are listed as one of three incorporators of the corporation?
Q: Mr. K., apart from Merek, Sports Horizon, Hazelnut, 1000162162 Ontario Inc., 6ix Destinations Partners Inc., and Aurora Black Community Corporation are there any other businesses that you have an interest that you have not disclosed?
A: No
Q: What about the corporation listed in the Barbados as Mavericks Sports Club Inc. where you have been a director since April 2021?
Q: Mr. K., apart from Merek, Sports Horizon, Hazelnut, 1000162162 Ontario Inc., 6ix Destinations Partners Inc., Aurora Black Community Corporation, and Mavericks Sports Club Inc. are there any other businesses that you have an interest that you have not disclosed?
A: No
Q: What about the corporation listed in the Barbados as R.F.G. Unistance Inc. where you are listed as an officer?
[18] The Respondent always had a tall tale for each of those businesses. Some, he said, were closed (despite corporate searches indicating they were active); and some, he said, were not yet incorporated (despite the corporate search stating otherwise). Regardless of their status, the Respondent never provided an adequate explanation as to why they were not disclosed, despite court Orders to do so.
[19] The Applicant’s testimony, on the other hand, was consistent with the evidence filed. She answered questions easily. Her testimony came across as straightforward. She provided full disclosure.
[20] For all of these reasons I have determined that the Respondent’s evidence lacked credibility. I simply cannot trust the evidence that the Respondent provided. As such, I prefer the evidence of the Applicant in areas where the evidence of the two are in conflict.
Restraining Order
[21] Pursuant to section 46 of the Family Law Act, a court may make an Order restraining a person from communicating with their former spouse or attending within a specified distance of one or more locations.
[22] The threshold question to determine if a restraining Order should be ordered is as follows: Does the Applicant have reasonable grounds to fear for her own safety or for the safety of any child in her lawful custody?
[23] The Applicant states that the Respondent’s behaviour, following the separation, was erratic, threatening, intimidating and antagonizing. The parties were living separate and apart under the same roof from separation in January 2019 through October 2021. The Applicant described incidents between the Respondent and the Applicant (as well as E.J.K.) that occurred on August 8, 2021 and August 9, 2021. The Applicant described yelling and intimidation resulting in the police attending the home. A temporary restraining Order was granted by Justice Sosna on September 27, 2021. Since that time there has been calm.
[24] The current circumstances are very different than they were at the time the temporary restraining Order was made. The parties are no longer living under the same roof. The parties consented to a parenting arrangement that includes parenting time as arranged between the Respondent and the children. In her testimony the Applicant stated that she wanted the restraining Order to continue so that the Respondent would not harass her.
[25] There is no doubt that the Applicant considers the Respondent a nuisance. She has made it clear that she wants nothing more to do with him. However, I am not satisfied, on the evidence before me, that the Applicant currently has reasonable grounds to fear for her safety or for the safety of either of the children.
Equalization of Net Family Properties
[26] As stated, the parties were never married.
[27] Pursuant to section 1 of the Family Law Act, a spouse is defined as two persons who, a) are married to each other, or b) have together entered into a marriage that is voidable or void, in good faith on the part of a person relying on this clause to assert any right.
[28] As the parties were never married and never entered into a marriage that was voidable, the Respondent’s claim for an equalization of net family properties is dismissed.
[29] The Respondent’s request for a declaration that the Respondent has a trust interest in the Applicant’s pension fails as there was no evidence lead at trial on the issue and, quite frankly, he has no entitlement to it.
Trust Agreement
[30] In 2003 the parties purchased 25 Chippingwood Manor, Aurora for $291,000.
[31] In 2008 the parties sold Chippingwood Manor. At closing there were executions against the Respondent for unpaid credit cards and lines of credit of approximately $25,000 which were paid from the sale proceeds.
[32] In 2008, 26 Horsley Court was purchased with the sale proceeds from Chippingwood Manor. The purchase price was $488,193 and a mortgage of $350,099 was registered on title. The property was registered in the Applicant’s name alone. There was evidence that the Respondent did not want the property registered in his name as he was credit proofing himself. Regardless, the evidence was persuasive that the Respondent did not qualify for a mortgage as a result of debts owed to Canada Revenue Agency, debts owed to TD Bank, and the Respondent’s poor credit rating.
[33] On January 20, 2009 the parties entered into a Trust Agreement. The agreement was prepared by a lawyer, signed and witnessed. The Trust Agreement indicated that the Applicant, the sole registered owner of 26 Horsley Court, Aurora, was holding a 50% beneficial ownership interest in the property for the Respondent. The Trust Agreement further stated that: “The Beneficial owner acknowledges that he shall be responsible for 50% of all expenses, losses, charges, encumbrances and liabilities in connection with the property.” The Trust Agreement itself is vague. There are no provisions contained in the agreement to explain what would happen if the Respondent did not pay his 50 % share of the expenses.
[34] The parties maintained separate bank accounts. Initially the parties’ expenses were shared. Eventually, however, the evidence showed, the Respondent started being short of cash. The parties then agreed that the Respondent would pay the taxes and the utilities as he was not contributing to the mortgage. The taxes went into arrears. In 2013 the parties returned from a vacation and the gas had been turned off as a result of non-payment. The Applicant paid the arrears and the reconnection fee. Over time the Applicant paid more and more of the utilities as the Respondent was always waiting for this big contract or another with actual remuneration just out of reach. The evidence shows that by 2014 the Applicant was paying for almost everything. In 2015 the water was turned off for lack of payment. The Applicant paid the arrears and the reconnection fee.
[35] The Respondent’s income was unknown to the Applicant as the parties kept their finances separate. In 2015 the Applicant started receiving calls from collection companies regarding the Respondent.
[36] The Applicant’s evidence is persuasive and that is: she paid approximately $265,164 of the Horsley Court expenses including the mortgage, taxes and utilities from 2014 onwards. The Respondent, on the other hand, made only $9,000 in contributions. The Applicant, therefore, claims the Respondent owes her $124,582 (half of the expenses) pursuant to the Trust Agreement.
[37] When the Applicant was asked what efforts were made to collect from the Respondent, the Applicant testified that she kept telling the Respondent to get a job and pay his share. She did not commence enforcement proceedings and she did not present a spread sheet to the Respondent at any time tracking the expenses that were accumulating. The first time there was a demand for a calculation was when the current Application was filed on December 10, 2020.
[38] I am not persuaded that the Applicant had any expectation she would be reimbursed. Indeed, were it not for the parties’ separation, I do not believe that there would have been a demand. It is noteworthy that in 2015 the Applicant provided the Respondent with $15,600 from her line of credit for the purchase of a Lexus for the Respondent’s use. Why would she do so, if there was any expectation of payment under the Trust Agreement for repayment, when the Respondent was already in arrears?
[39] It is noteworthy that the Applicant requests a reimbursement of this $15,600 expense. I decline to do so as there is no loan agreement between the parties and I am not even a little inclined to go back seven years and start apportioning appropriate expenses for this unmarried couple. As stated, there is no equalization in this case by virtue of the parties’ common law status. The court is not even a little inclined to, retroactively, weigh in on what might have been a more appropriate division of expenses between two common law parties.
[40] In respect of the Trust Agreement, pursuant to Section 4 of the Limitation Act, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.
[41] The Application was filed December 10, 2020. The Application claims an accounting of funds not paid pursuant to the Trust Agreement a full six years after the claim was discovered. As the claim is well outside the Limitation Act, and no steps were taken to collect on the expenses, the Applicant’s claim fails.
Trust Interest in 31 Carrick Avenue, 148 Lottridge Street, and 83 Cope Street
[42] It is noteworthy that at all times during the relationship, the parties maintained separate financial accounts and there was no co-mingling of funds.
Cope Street
[43] On April 1, 2019 the Applicant and her brother, Conrad, purchased an investment property known municipally as 83 Cope Street. It is noteworthy that this property was purchased after the parties separated. Although the Respondent, in his pleadings, claimed a beneficial interest in the Cope Street property, in his testimony he withdrew his claim for an interest in the property.
Carrick Avenue and Lottridge Street
[44] The Applicant purchased 31 Carrick Street on March 15, 2016 for $345,000. The Applicant purchased 148 Lottridge Street on October 14, 2016 for $300,000.
[45] Both of the aforementioned properties were registered in the name of the Applicant as the sole title holder. Both properties were subject to a mortgage.
[46] The Respondent claims a trust interest in the properties.
[47] A resulting trust is created when one party contributes money or money's worth to the acquisition or maintenance of a property in circumstances where there is a common intention that the non-titled person will have some beneficial ownership interest in the property. The elements of common intention and contribution are necessary to establish the claim.
[48] The Respondent did not make a financial contribution to the purchase of either of the properties. Indeed, he assumed absolutely no liability for the purchase of the properties by way of an encumbrance. It is noteworthy that the parties did not enter into a Trust Agreement setting out the beneficial ownership in these properties as they did in 2009 with the purchase of 26 Horsley Court.
[49] If I was to accept the evidence of the Respondent, regarding his non-financial contributions, they were, at the very best, nominal. The Respondent did place some Kajiji ads looking for tenants; he did attend at the Landlord and Tenant Board several times; and he may have communicated with the City of Hamilton regarding the zoning violation on Carrick. However, his contributions were so nominal that it would be a giant leap to conclude that these activities in any way enriched the Applicant. To the contrary, the evidence was clear that the actions of the Respondent were, often, to the detriment of the Applicant particularly in respect of the Respondent’s interactions with tenants. Further, the Respondent did not allege any express or implied agreement that he would receive an interest in the property in exchange for his nominal contributions. The Respondent’s evidence of common intention to hold the property in trust as a result of his modest non-financial contributions simply does not exist. On the basis of the facts before me, the resulting trust claim fails.
[50] A constructive trust does not require a common intention. It is designed to compensate a party for injustices that would result from the retention of property, in whole or in part, by one party when another has contributed to the value of the property. In order to establish a constructive trust interest in a property, the tripartite test first set out in Becker v. Pettkus, 2000 CanLII 20578 (ON CJ), [2000] O.J. No. 4736 (O.C.J.) at para 10 is instructive:
a. enrichment of the defendant;
b. corresponding deprivation of the plaintiff; and
c. absence of juristic reason for the enrichment.
[51] The basis of unjust enrichment is the retention of an inappropriately disproportionate amount of wealth by one party, when there is a clear link between the claimant's contributions to the joint venture and the ultimate accumulation of wealth (see: Kerr v. Baranow, 2011 SCC 10, [2011] 1 SCR 269, at para 81).
[52] Perhaps, as a result of the Respondent not fulfilling his obligations under the Trust Agreement re: 26 Horsley Court and, perhaps, as a result of the Respondent’s inability to earn an income, the Applicant assumed all liability for the purchase of the two properties. The Applicant paid for the properties, made all mortgage payments, and made all payments for renovations and maintenance. The Applicant also hired a project manager for part of the time she owned the properties. It is noteworthy that the parties were a couple for only two years of the six years the Applicant has owned the properties. It is also noteworthy that any contribution made by the Respondent stopped in the spring of 2018.
[53] The Applicant testified that she repeatedly instructed the Respondent to stay away from the properties and the tenants but, the Respondent did not follow the instruction. I am satisfied, on the evidence before me, that the Respondent made no financial contribution to the properties of any real significance and he made no meaningful non-financial contribution to the properties that would in any way contribute to an increase in the value of the investment properties. Accordingly, on facts before me, the constructive trust claims fail.
Respondent’s Income
[54] As stated, the parties maintained separate finances. The parties maintained separate bank accounts and each of the parties was responsible for their own personal expenses.
[55] The Respondent’s income was unknown to the Applicant for many years. Indeed, it is still unknown to her.
[56] On June 14, 2021, Justice Sutherland ordered the Respondent to provide disclosure. The disclosure ordered included: his Income Tax Returns and Notices of Assessment for 2017, 2018, 2019 and 2020. The Respondent did not comply.
[57] On June 14, 2021, Justice Sutherland ordered the parties to respond to Requests for Information. The Respondent did not comply by responding to the Applicant’s Request for Information.
[58] On June 14, 2021, Justice Sutherland ordered the Applicant to provide an accounting pursuant to the Trust Agreement. She did so. The Respondent was ordered to respond with his position on the calculation. The Respondent did not do so.
[59] On January 14, 2022, Justice Jarvis made an Order for financial disclosure. Specifically, he ordered the Respondent to comply with the Order of Justice Sutherland dated June 14, 2021 and to provide documentation underlying his efforts to obtain the information required in that Order. The Respondent failed to comply.
[60] On April 12, 2022 Justice Jarvis ordered the Respondent to provide witness “will say” statements. With one exception, the Respondent did not comply.
[61] As stated, the Respondent did not provide business accounts, bank statements, corporate accounts, business Financial Statements, or business credit cards for the companies, Sports Horizons, Merek, and Hazelnut. The businesses were involved with the manufacturing and selling of sports equipment and organizing cultural and sporting events. The Respondent has contacts in the US, Barbados and Canada.
[62] The Respondent filed no updated Financial Statement for the trial. The only Financial Statement he filed was sworn June 8, 2021. In that statement, his income listed is TBD and he identifies $45,000 in annual expenses.
[63] The Respondent did file Corporate Tax Returns for Sports Horizon. He filed his taxes on May 17, 2022, only two days before the commencement of this trial, and recorded historical income as follows:
(a) 2013 - no income;
(b) 2014 - no income;
(c) 2015 - no income;
(d) 2016 - no income;
(e) 2017 - no income;
(f) 2018 - no income;
(g) 2019 - no income;
(h) 2020 – no income; and
(i) 2021 - no income.
[64] Despite the dearth of financial information, the Respondent testified that his historical earnings were as follows:
(a) 2009 - $30,000 net income;
(b) 2010 - $60,000 net income;
(c) 2011 - $45,000 net income;
(d) 2012 - $45,000 net income;
(e) 2013 - no income;
(f) 2014 - no income;
(g) 2015 - no income;
(h) 2016 – the Respondent could not recall;
(i) 2017 - the Respondent could not recall;
(j) 2018 - the Respondent could not recall;
(k) 2019 - $28,000;
(l) 2020 - $28,000 (CERB and employment with Instacart);
(m) 2021 - $18,000- CERB; and
(n) 2022 – no income.
[65] Despite his testimony, under cross-examination the Respondent conceded that he had historical earnings of:
(a) 2014 - personal income of $40,661;
(b) 2015 – his Notice of Assessment reflected income of $49,028 and then his Notice of Reassessment reflected an income of $1,440;
(c) 2016 - his personal Income Tax Return claimed income of $1,281. He conceded that he sold apparel to York Public School that was not reflected because, he said, it was minimal;
(d) 2017 - he was selling apparel to York region. Again, he agreed that there was some income not reflected as it was minimal;
(e) 2018 - the Respondent conceded that he sold some golf bags but his income was minimal;
(f) 2019 - he testified that he was doing festival work but had no income;
(g) 2020 – he worked for Instacart and received CERB. The Respondent provided a tax summary. The Income Tax Return shows income of $26,597. There was professional income of $23,011 - with expenses of $16,000. Of course, the full tax return with the expenses outlined, although ordered, was never provided; and
(h) 2021 - CERB.
[66] It is noteworthy that there is not a shred of financial documentation for 1000162162 Ontario Inc., 6ix Destinations Partners Inc., Aurora Black Community Corporation, Mavericks Sports Club Inc. nor R.F.G. Unistance Inc. Of course their existence was not disclosed by the Respondent. It was only on cross-examination that their existence was made known. The Respondent not only refused to provide disclosure, he concealed the very existence of these corporations by: a) not listing them in his Financial Statement; and b) denying, when asked, if he had other business interests.
[67] Section 21 of the Child Support Guidelines, states:
Income Information
Obligation of applicant
- (1) A parent or spouse who is applying for an order for the support of a child and whose income information is necessary to determine the amount of the order must include with the application,
(a) a copy of every personal income tax return filed by the parent or spouse including any materials that were filed with the return for each of the three most recent taxation years;
(b) a copy of every notice of assessment and reassessment issued to the parent or spouse for each of the three most recent taxation years;
(c) where the parent or spouse is an employee, the most recent statement of earnings indicating the total earnings paid in the year to date, including overtime, or, where such a statement is not provided by the employer, a letter from the parent’s or spouse’s employer setting out that information including the parent’s or spouse’s rate of annual salary or remuneration;
(d) where the parent or spouse is self-employed, for the three most recent taxation years,
(i) the financial statements of the parent’s or spouse’s business or professional practice, other than a partnership, and
(ii) a statement showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to, or on behalf of, persons or corporations with whom the parent or spouse does not deal at arm’s length;
(e) where the parent or spouse is a partner in a partnership, confirmation of the parent’s or spouse’s income and draw from, and capital in, the partnership for its three most recent taxation years;
(f) where the parent or spouse controls a corporation, for its three most recent taxation years,
(i) the financial statements of the corporation and its subsidiaries, and
(ii) a statement showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to, or on behalf of, persons or corporations with whom the corporation, and every related corporation, does not deal at arm’s length;
(g) where the parent or spouse is a beneficiary under a trust, a copy of the trust settlement agreement and copies of the trust’s three most recent financial statements; and
(h) in addition to any information that must be included under clauses (c) to (g), where the parent or spouse receives income from employment insurance, social assistance, a pension, workers compensation, disability payments or any other source, the most recent statement of income indicating the total amount of income from the applicable source during the current year or, if such a statement is not provided, a letter from the appropriate authority stating the required information. O. Reg. 391/97, s. 21 (1); O. Reg. 446/01, s. 7; O. Reg. 25/10, s. 5.
Obligation of respondent
(2) A parent or spouse who is served with an application for an order for the support of a child and whose income information is necessary to determine the amount of the order, must, within 30 days after the application is served if the parent or spouse resides in Canada or the United States or within 60 days if the parent or spouse resides elsewhere, or such other time limit as the court specifies, provide the court, as well as the other spouse, an applicant under section 33 of the Act or the order assignee with the documents referred to in subsection (1). O. Reg. 391/97, s. 21 (2).
[68] Pursuant to section 16 of the Child Support Guidelines, the starting point in determining income for support purposes is the payor’s line 150 of their Income Tax Return.
[69] The Child Support Guidelines provide for different methods of determining income when the starting point is not the “fairest determination of that income”[^1] does “not fairly reflect all the money available to the parent or spouse”[^2] or when a court “imputes such amount of income to a spouse as it considers appropriate.”[^3]
[70] Section 19(1) of the Federal Child Support Guidelines, SOR/97-175 reads as follows:
Imputing income
19 (1) The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include the following:
(a) the spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of a child of the marriage or any child under the age of majority or by the reasonable educational or health needs of the spouse;
(b) the spouse is exempt from paying federal or provincial income tax;
(c) the spouse lives in a country that has effective rates of income tax that are significantly lower than those in Canada;
(d) it appears that income has been diverted which would affect the level of child support to be determined under these Guidelines;
(e) the spouse’s property is not reasonably utilized to generate income;
(f) the spouse has failed to provide income information when under a obligation to do so;
(g) the spouse unreasonably deducts expenses from income;
(h) the spouse derives a significant portion of income from dividends, capital gains or other sources that are taxed at a lower rate than employment or business income or that are exempt from tax; and
(i) the spouse is a beneficiary under a trust and is or will be in receipt of income or other benefits from the trust.
[71] As stated, the Respondent has not provided full disclosure.
[72] The Income Tax Returns and the only sworn Financial Statement filed by the Respondent do not reflect accurately the Respondent’s income or expenses. As was clear in cross-examination, even in the one Financial Statement filed, some expenses were listed as monthly, when they were annual, and his income - often listed as zero, does not reflect the income the Respondent did receive. For example, the Respondent advised the Applicant of lucrative contracts including $90,000 with the Toronto District School Board. The Respondent staged and arranged a cultural festival through the Town of Aurora and Barbados Tourism although no income is noted. He sold golf bags, although he notes no income or expenses. When asked why these sales were not included in his Income Tax Returns the Respondent erroneously suggested that he did not have to claim income if his gross earnings were under $30,000 per annum.
[73] The Respondent has not disclosed his bank account or credit card statements. The Respondent has not provided his bank account information nor full Financial Statements for each of his companies. He has not provided all Income Tax Returns and Notices of Assessment for personal Income Tax Returns filed.
[74] The Respondent set up no fewer than two corporations in 2021 and two more in 2022. At the beginning of the trial three companies were known. At the end, the final tally is eight companies. The Respondent has provided absolutely no financial information regarding most of these businesses.
[75] I draw a negative inference on the Respondent’s lack of disclosure; the Respondent’s concealing many of the corporations that he started; and the Respondent’s refusal to comply with court ordered disclosure.
[76] The Applicant states that as a result of the Respondent’s lack of disclosure an adverse inference should be made. She asks the court to impute income to the Respondent in the amount of $100,000 per annum.
[77] The Respondent has, historically worked in sales. By his own account, he was successful at it. The Respondent states that he is working with the Barbados Hall of Fame and he has a number of other opportunities that are coming down the pipeline. One such initiative is selling a drink mix called Blue Rave Cocktail. Although he testified that his lawyer and accountant are negotiating with the LCBO and Whole Foods USA, the details are completely unknown to the Respondent.
[78] Can the Respondent work? Of course he can. Has he tried? Not even a little bit.
[79] It appears that the Respondent greatly embellishes his abilities and contacts. From the evidence presented it appears that the Respondent is heavy on bluster and light on success. The Respondent testified, though, that within the next 12 months he should be self sufficient and would likely be able to generate over $100,000 in annual income.
[80] Regardless, as a result of the Respondent’s lack of financial disclosure, his concealing of business interests, and his own testimony, I must impute an income to the Respondent and I have determined that the amount of $100,000 per annum is appropriate. The Respondent has experience in sales. The Respondent has experience in deliveries. The Respondent appears to be physically strong and able. By his account the Respondent was successful in sales. He has set up eight corporations to facilitate his sales businesses in Canada, Jamaica and Barbados.
Applicant’s Income
[81] The Applicant earned $156,054 with the Toronto District School Board in 2021.
Spousal Support
[82] Section 33(1), 33(8) and (9) of the FLA state:
Order for support
33 (1) A court may, on application, order a person to provide support for his or her dependants and determine the amount of support. R.S.O. 1990, c. F.3, s. 33 (1).
Purposes of order for support of spouse
(8) An order for the 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, if this has not been done by orders under Parts I (Family Property) and II (Matrimonial Home). R.S.O. 1990, c. F.3, s. 33 (8); 1999, c. 6, s. 25 (5); 2005, c. 5, s. 27 (9).
Determination of amount for support of spouses, parents
(9) In determining the amount and duration, if any, of support for a spouse or parent in relation to need, the court shall consider all the circumstances of the parties, including,
(a) the dependant’s and respondent’s current assets and means;
(b) the assets and means that the dependant and respondent are likely to have in the future;
(c) the dependant’s capacity to contribute to his or her own support;
(d) the respondent’s capacity to provide support;
(e) the dependant’s and respondent’s age and physical and mental health;
(f) the dependant’s needs, in determining which the court shall have regard to the accustomed standard of living while the parties resided together;
(g) the measures available for the dependant to become able to provide for his or her own support and the length of time and cost involved to enable the dependant to take those measures;
(h) any legal obligation of the respondent or dependant to provide support for another person;
(i) the desirability of the dependant or respondent remaining at home to care for a child;
(j) a contribution by the dependant to the realization of the respondent’s career potential;
(k) Repealed: 1997, c. 20, s. 3 (3).
(l) if the dependant is a spouse,
(i) the length of time the dependant and respondent cohabited,
(ii) the effect on the spouse’s earning capacity of the responsibilities assumed during cohabitation,
(iii) whether the spouse has undertaken the care of a child who is of the age of eighteen years or over and unable by reason of illness, disability or other cause to withdraw from the charge of his or her parents,
(iv) whether the spouse has undertaken to assist in the continuation of a program of education for a child eighteen years of age or over who is unable for that reason to withdraw from the charge of his or her parents,
(v) any housekeeping, child care or other domestic service performed by the spouse for the family, as if the spouse were devoting the time spent in performing that service in remunerative employment and were contributing the earnings to the family’s support,
(v.1) Repealed: 2005, c. 5, s. 27 (12).
(vi) the effect on the spouse’s earnings and career development of the responsibility of caring for a child; and
(m) any other legal right of the dependant to support, other than out of public money. R.S.O. 1990, c. F.3, s. 33 (9); 1997, c. 20, s. 3 (2, 3); 1999, c. 6, s. 25 (6-9); 2005, c. 5, s. 27 (10-13).
[83] Compensatory support arises from career dislocation; an economic disadvantage as a result of the roles adopted in the relationship; or when a spouse conferred a substantial career enhancement opportunity on the other spouse.
[84] There is no evidence that the Respondent is entitled to compensatory support. The Applicant has excelled at her career. However, prior to the parties’ cohabitation, the Applicant had obtained her BA Honours Degree, her Education Degree, and was a full-time teacher with the Toronto District School Board. The Applicant obtained her MA in Education and her principal qualifications prior to cohabiting with the Respondent. Early on in her career, the Applicant’s paternal aunt, Perley Williams, moved to Canada from Jamaica to help care for E.J.K. while the Applicant was at work. The Applicants’ parents also provided assistance with child-care in the evenings.
[85] The Respondent, by contrast, did not finish his degree. His education is therefore, incomplete. He has been unable or unwilling to obtain a full-time job that would consistently provide a contribution to the family finances. Despite signing a Trust Agreement, he did not fulfill his obligation to pay one half of the expenses. His actions resulted in utilities being in arrears and disconnected leaving the Applicant to clean up the financial calamity. The evidence was clear that the Respondent did not take on any significant child-care responsibilities that, as a result, in anyway impeded him economically. Rather, the evidence was clear that in almost everyway, the Respondent was a burden – financial and otherwise – in the relationship. Consequently, there is no compensatory claim here.
[86] Non-compensatory support arises whenever a lower income spouse experiences a significant drop in standard of living after the breakdown. The Respondent’s entitlement would occur as a result of him no longer having access to the Applicant’s income. As stated, I draw an adverse inference from the Respondent’s lack of financial disclosure.
[87] The parties cohabited for 16 years. There are two children. The parties exited the relationship with the Applicant earning $160,000 per annum and the Respondent earning, by way of imputation, $100,000 per annum.
[88] It is noteworthy that, from January 3, 2019 (the date of separation) through to October 18, 2021, the Applicant paid for the majority of the expenses, a period of two years, nine months. I have taken this into account.
[89] After the parties no longer cohabited, the Respondent purchased a BMW at the end of March 2022 for $50,000 and another BMW in April 2022 for $13,000. Those purchases leave the Respondent with a grand total of four vehicles: 1 Lexus, and three BMWs. As stated, the Respondent’s only Financial Statement was sworn June 8, 2021. There is no current financial information. The expenses contained in that single Financial Statement are erroneous. The Respondent has simply not demonstrated financial need. For all of these reasons, the Respondent’s request for spousal support fails.
Child Support
[90] Sections 33(7) and (11) of the FLA state:
Purposes of order for support of child
(7) An order for the support of a child should,
(a) recognize that each parent has an obligation to provide support for the child;
(b) apportion the obligation according to the child support guidelines. R.S.O. 1990, c. F.3, s. 33 (7); 1997, c. 20, s. 3 (1).
Application of child support guidelines
(11) A court making an order for the support of a child shall do so in accordance with the child support guidelines. 1997, c. 20, s. 3 (4).
[91] The child, E.A.K. is under the age of majority, being only 16 years old. He is currently in high school completing Grade 11. E.A.K. has a further year of high school before his post secondary education. E.A.K. is involved in both hockey and baseball. The Applicant has not requested a retroactive contribution towards these expenses.
[92] The child, E.J.K., is attending Humber College on a full-time basis. E.J.K. is completing a degree in Journalism and has two more years until he graduates. E.J.K. remains a financial dependent and is living full-time with the Applicant Mother. E.J.K. is required to travel for his classes and requires a vehicle for transportation, which the Applicant contributes to by paying for his insurance and contributing to his gas expenses. At separation, E.J.K. was attending college in the United States on a partial baseball scholarship, which costs were paid for by the Applicant.
[93] As stated, I impute income to the Respondent annually in the amount of $100,000. The parties separated January 2019. As there was no evidence that the Respondent provided any child support to the Applicant or for the maintenance of the children, I have commenced child support on January 1, 2019.
[94] Commencing January 1, 2019 and on the first of every month thereafter, the Respondent shall pay child support to the Applicant in the amount of $1,471 based on an imputed income of $100,000. As of May 31, 2022, the arrears of child support total $60,311. This amount shall come out of the funds held in trust and be a credit to the child support obligation.
Section 7 Expenses
[95] Section 7.1 of the Federal Child Support Guidelines, SOR/97-175 states:
Special or extraordinary expenses
7 (1) In a child support order the court may, on either spouse’s request, provide for an amount to cover all or any portion of the following expenses, which expenses may be estimated, taking into account the necessity of the expense in relation to the child’s best interests and the reasonableness of the expense in relation to the means of the spouses and those of the child and to the family’s spending pattern prior to the separation:
(a) child care expenses incurred as a result of the custodial parent’s employment, illness, disability or education or training for employment;
(b) that portion of the medical and dental insurance premiums attributable to the child;
(c) health-related expenses that exceed insurance reimbursement by at least $100 annually, including orthodontic treatment, professional counselling provided by a psychologist, social worker, psychiatrist or any other person, physiotherapy, occupational therapy, speech therapy and prescription drugs, hearing aids, glasses and contact lenses;
(d) extraordinary expenses for primary or secondary school education or for any other educational programs that meet the child’s particular needs;
(e) expenses for post-secondary education; and
(f) extraordinary expenses for extracurricular activities.
Definition of “extraordinary expenses”
(1.1) For the purposes of paragraphs (1)(d) and (f), the term extraordinary expenses means
(a) expenses that exceed those that the spouse requesting an amount for the extraordinary expenses can reasonably cover, taking into account that spouse’s income and the amount that the spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate; or
(b) where paragraph (a) is not applicable, expenses that the court considers are extraordinary taking into account
(i) the amount of the expense in relation to the income of the spouse requesting the amount, including the amount that the spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate,
(ii) the nature and number of the educational programs and extracurricular activities,
(iii) any special needs and talents of the child or children,
(iv) the overall cost of the programs and activities, and
(v) any other similar factor that the court considers relevant.
Sharing of expense
(2) The guiding principle in determining the amount of an expense referred to in subsection (1) is that the expense is shared by the spouses in proportion to their respective incomes after deducting from the expense, the contribution, if any, from the child.
Subsidies, tax deductions, etc.
(3) Subject to subsection (4), in determining the amount of an expense referred to in subsection (1), the court must take into account any subsidies, benefits or income tax deductions or credits relating to the expense, and any eligibility to claim a subsidy, benefit or income tax deduction or credit relating to the expense.
[96] As stated, the Applicant earns approximately $156,000. The Respondent is imputed an income of $100,000. Accordingly, the section 7 expenses of the children shall be apportioned 60% Applicant and 40% Respondent.
[97] The following section 7 expenses are reasonable and necessary: E.J.K.’s tuition; E.J.K.’s car insurance (to travel to school); E.J.K.’s cell phone; E.A.K.’s cell phone, E.A.K.’s hockey, E.A.K.’s basketball and any medical, dental and healthcare costs not covered by the Applicant’s plan. The Respondent’s share of these expenses, dating back to the date of separation, are listed below.
[98] The Respondent’s 40% share of E.J.K.’s Erie Community College is CDN $2,280.
[99] The Respondent’s 40% share of E.J.K.’s Humber College is CDN $2,984.
[100] The Respondent’s 40% share of E.J.K.’s car insurance is CDN $3,371.
[101] The Respondent’s 40% share of E.J.K.’s cell phone is CDN $1,152.
Life Insurance
[102] The Applicant requests an Order that the Respondent obtain and maintain life insurance with a face value of $500,000 as security for child support.
[103] An insurance policy with a face value of $150,000 is sufficient to cover the obligation.
Security for Child Support
[104] The Applicant requests an Order for security for child support.
[105] Pursuant to section 34(1) (k) of the Family Law Act, the court may make an order requiring the securing of payment by a charge on property or otherwise.
[106] Pursuant to section 12 of the Child Support Guidelines, the court may require in the child support order that the amount payable under the order be paid or secured, or paid and secured, in the manner specified in the order.
[107] The Respondent has a pattern of not following court Orders.
[108] The Respondent has a pattern of not disclosing his income.
[109] The Respondent put the Applicant through a very expensive process – a trial – to establish his income and the children’s entitlement. She arrived at court with five volumes of documents to be relied upon to satisfy her claims. As stated, the Respondent, on the other hand, arrived at court without a piece of paper or a pencil.
[110] Under these circumstances, I am persuaded that security for child support is appropriate. There is currently $180,203.03 being held in trust. I am also persuaded that a portion of these funds must also remain in trust until the costs of this trial, the final claim, are apportioned.
Order
Commencing June 1, 2022 and on the first of every month thereafter, the Respondent shall pay to the Applicant monthly child support for the children, E.J.K. and E.A.K., in the amount of $1,471 based on an imputed income of $100,000.
The Respondent shall pay to the Applicant child support arrears from January 1, 2019 through May 31, 2022 fixed in the amount of $60,311. This amount shall be satisfied from the Respondent’s net proceeds of the sale of Horsley Court currently held in trust.
Commencing June 1, 2022, the Respondent shall pay to the Applicant 40% of the following section 7 expenses: E.J.K.’s tuition; E.J.K.’s car insurance; E.J.K.’s cell phone; E.A.K.’s cell phone, E.A.K.’s hockey, E.A.K.’s basketball and any medical, dental and healthcare costs not covered by the Applicant’s plan.
The Respondent shall pay to the Applicant section 7 arrears from January 1, 2019 through May 31, 2022 fixed in the amount of $9,787. This amount shall be satisfied from the Respondent’s net proceeds of the sale of Horsley Court currently held in trust.
$50,000 of the funds currently held in trust shall remain in trust as security for the Respondent’s child support payments and proportionate share of section 7 expenses.
The remaining funds being held in trust, $60,105.03, shall remain in trust until costs, the final claim in the application, are resolved and the Respondent provides the Applicant with confirmation of his life insurance policy as is set out below.
The Respondent shall maintain a policy of life insurance on his life with a minimum face value of $150,000.
The Respondent shall name the Applicant as the sole irrevocable beneficiary of $150,000 of the policy proceeds, in trust for the children, E.J.K. and E.A.K.
The Respondent shall at all times maintain the policy in good standing and shall ensure there is no gap in coverage.
The Respondent shall provide the Applicant with proof of compliance with the insurance provisions within 30 days of this Order.
Upon death of the Respondent, any policy proceeds not required to satisfy the child support obligation owed by the Respondent to the Applicant shall be paid to the estate and distributed according to law.
Upon the death of the Respondent, any shortfall in the policy proceeds required to satisfy the support obligation owed by the Respondent to the Applicant shall be binding upon the Respondent’s estate.
The Applicant’s claim for a restraining Order is dismissed and the temporary restraining Order made by Justice Sosna on September 27, 2021 is terminated.
The Applicant’s claim for enforcement and indemnity pursuant to the Trust Agreement dated January 20, 2009 is dismissed.
The Respondent’s claim for an equalization of net family properties is dismissed.
The Respondent claim for a share in the Applicant’s pension is dismissed.
The Respondent’s claim for a beneficial interest in 31 Carrick Avenue, 148 Lottridge Street, and 83 Cope Street is dismissed.
The Respondent’s claim for both compensatory and non-compensatory spousal support is dismissed.
SDO to issue.
If the parties cannot agree on the issue of costs regarding this trial, I shall consider the request for costs. The Applicant shall serve on the Respondent and file electronically, through the Trial Coordinator, her written submissions, limited to five pages, exclusive of the Bill of Costs and Offers to Settle within 20 days of the date of this decision. The Respondent shall serve on the Applicant and file electronically, through the Trial Coordinator, his written submissions, limited to five pages exclusive of the Bill of Costs and Offers to Settle within 10 days thereafter. There shall be no right of Reply.
Justice G.A. MacPherson
Date: June 13, 2022
[^1]: Section 17 of the Child Support Guidelines [^2]: Section 18 of the Child Support Guidelines [^3]: Section 19 of the Child Support Guidelines