NEWMARKET COURT FILE NO.: FC-21-641-00 DATE: 20230308 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Welfat Bahous Applicant – AND – John Bahous Respondent

Counsel: Areesha Zubair, Counsel for the Applicant Chloe Van Wirdum, Counsel for the Respondent

HEARD: February 22, 2023

REASONS/RULING

JARVIS J.

[1] The applicant (“the wife”) has brought a motion to impute to the respondent (“the husband”) an unspecified income and for retroactive and on-going spousal support. The relevant portions of her Notice of Motion seek the following relief:

(a) An Order imputing an income to the Husband commensurate with his education, experience, expenses, lifestyle and standard of living, in an amount to be determined and particularized prior to the trial of this action;

(b) An Order for the Respondent to pay the Applicant ongoing spousal support in the amount of $12,868.00 per month commencing April 5, 2021 (when the Application issued) and payable on the 1st day of each month thereafter (or such other start date or quantum as determined by the Court);

(c) An Order for the Respondent to pay the Applicant retroactive spousal support for the period of July 1, 2019 (the Applicant's date of separation) up to and including April 4, 2021 (just before the Application issued), or such other retroactive period as this Court deems reasonable;

(d) An Order that any amounts outstanding pursuant to paragraphs (b) and (c) above or any other orders (including the Order of May 16, 2022) as at the date of the making of the Order shall be paid to the wife within 15 days, plus interest on the outstanding amounts; [1]

(e) An Order that the spousal support ordered under paragraphs (b) and (c) are on a without prejudice basis to the Applicant seeking an adjustment in quantum (particularly after completion of an income valuation), the Applicant's ability to return a motion for increased support without having to establish material change in circumstances and any other position the Applicant may take with respect to spousal support;

(f) An Order that all spousal support payments be secured by a charge on the Husband's property pursuant to section 15.2 of the Divorce Act; [2]

(g) An Order requiring the Husband to maintain the Wife on any health plans or policies.

[2] A Trial Scheduling Conference (“TSC”) was held on January 23, 2023. Himel J. ordered that a five to seven-day trial of the parties’ financial affairs proceed during the court’s forthcoming May 2023 sittings, less than three months away. Directions with respect to disclosure, expert evidence and filing deadlines were given. Despite the imminence of trial, the parties have been unable to resolve the motion.

[3] These are the relevant facts and procedural history:

(a) The parties were married on November 2, 2006. Both were previously divorced. There are no children of the marriage;

(b) They dispute their valuation date; the wife claims that it is in July 2019 whereas the husband claims that is in February 2019. This is a trial issue;

(c) The husband has several business interests, none of which he has had valued even though the wife started this proceeding in April 2021. Pursuant to the Trial Scheduling Order, the husband’s expert report must be delivered by March 31, 2023;

(d) A Case Conference was held on August 6, 2021 (Cameron J.). The parties agreed to respond to the other’s disclosure requests by August 31, 2021, and the matter was adjourned to October 26, 2021 for an urgent motion on the issue of spousal support. Due to the death of the husband’s father, the motion was adjourned by Bird J. to December 22, 2021. Bird J. ordered that neither party was permitted to file additional material;

(e) For the motion returnable on December 22, 2021, the wife disregarded the Order of Bird J. and filed an amended motion and affidavit material seeking Orders relating to disclosure. Bruhn J. declined to hear the wife’s motion and provided directions for the support motion to be heard at a date to be scheduled through the court administration;

(f) On January 26, 2022, Himel J. heard the support motion and made a temporary Order which, among other things, required the husband to pay $50,000 to the wife in two tranches as lump sum spousal support and that he maintain the operating expenses for two residential properties, both owned by the wife. She resides in one property (Mahogany Forest Drive) and the husband resides in the other (Findhorn Crescent). The combined monthly costs total slightly over $7,500 and include (without limitation), as set out in the Order, “the mortgages, lines of credit, utilities, gas, property tax, property insurance internet and telephone.” The lump sum was targeted to cover the ten-month timeframe to the November 2022 trial sittings of the court. Unchallenged by the wife in the motion before this court is the husband’s evidence that the combined monthly costs for the two properties average $7,507 (i.e., $3,073 for the Mahogany residence and $4,433 for the Findhorn residence). None of these expenses was made tax deductible;

(g) On February 24, 2022, Vallee J. made a disclosure Order involving the husband and third parties. Over three and a half hours was spent on a regular motion (which is restricted to one hour). As not all the disclosure relief requested by the wife was able to be considered, the balance of her motion was adjourned to a date to be fixed by the trial coordinator;

(h) A Settlement Conference and a TSC was held on May 16, 2022. Himel J. ordered the husband to pay a further $50,000 to the wife as an “uncharacterized payment”, the determination of which as representing spousal support, interim disbursements or an equalization payment advance being left to final disposition. The wife told the court that she needed funds to complete an expert valuation of the husband’s interests: Himel J. suggested to the husband that he “should consider obtaining his own CBV business and/or income valuation as soon as possible”;

(i) A July 8, 2022 Settlement Conference date was scheduled but subsequently held on August 5, 2022;

(j) At the Settlement Conference Himel J. expressed the court’s disappointment with the parties’ lack of progress, noting that they could expect a May 2023 trial. There remained outstanding disclosure complaints by each party;

(k) On October 3, 2022, the wife brought the spousal support motion now before this court, returnable on November 2, 2022;

(l) On October 11, 2022, Himel J. ordered that a further motion by the wife for disclosure proceed on January 4, 2023:

(m) On November 2, 2022, Bruhn J. adjourned the wife’s spousal support motion to February 22, 2023. The wife had filed supplementary material non-compliant with the Family Law Rules [3] (“FLR”) and was given an opportunity to remedy the situation and have her motion adjourned or to proceed in the absence of the supplementary material. The wife chose the former option;

(n) On January 16, 2023 (the motion for disclosure heard on January 4, 2023) Bruhn J. made a comprehensive disclosure and questioning Order. Much of the disclosure ordered related to the husband and third parties. Costs of $8,000 were awarded to the wife;

(o) As noted, a TSC proceeded on January 26, 2023;

(p) The wife was questioned on January 18 and February 1, 2013. The husband was questioned on January 25, 2023. A continuation of his questioning was scheduled to proceed on February 24, 2023, less than two days after the motion before this court was argued.

[4] The two principal issues before this court are not only whether the court should consider the relief sought by the wife on the eve of trial (which involves an inquiry about the husband’s income and its imputation) but also what award, if any, should be made in the circumstances. It is clear from the procedural narrative set out above that non-disclosure has plagued this proceeding. The husband (in this court’s view) has failed to appreciate in a timely and meaningful way his disclosure obligations (including valuing his business interests). As for the wife, she has brought serial motions, some with merit, others improperly constituted (i.e., the December 22, 2021 and November 2, 2022, motions before Bruhn J.) and, in this court’s view with respect to her request for retroactive support based on imputing income, unrealistic and overreaching in the sense that she is asking the court to embark on, but leave open to the trial judge, the same kind of evidentiary inquiry that the latter will very shortly undertake on a more fulsome basis. For different reasons, some undoubtedly strategic, this case has not progressed (as Himel J. observed) with the celerity it warrants.

[5] In Greco-Wang v. Wang, 2014 ONSC 5366 [4] Kiteley J. observed that “[m]embers of the public who are users of civil courts are not entitled to unlimited access to trial judges.” Referring to Family Law Rule 2.03 (sic) the court emphasized the primary objective of the rules to deal with cases justly and to “giving appropriate court resources to the case while taking account of the need to give resources to other cases.” [5] While Greco-Wang involved trial management, the observations made by Kiteley J. apply all too frequently, and sadly, to the approach taken by many family law litigants and their counsel to disclosure obligations, motions and conference events. In this case, for example, there have been: eleven court events (at least); six events (again, at least) in which disclosure issues have been involved (and they are still at issue in this case); six judges involved (dare I say, at least, again), some such as Bruhn J. repeatedly, and; three settlement conferences (FLR 17(10) requires only one such conference as a pre-condition to setting a trial date, not serial conferences in lieu of evidence-based motions or, just as commonly, auditioning an inadequately prepared theory or litigation position for the next settlement conference or event). Is it any wonder that inaccessibility to the courts by the public remains a common complaint, with delay endemic and financially impossible for all but the more affluent. [6]

[6] In Manchanda v Theti, 2016 ONSC 3777 [7], Myers J. observed that “[i]mplementing a culture shift to enhance access to justice by promoting efficiency, affordability, and proportionality requires the court to re-draw the line between limiting drastic measures and applying the law robustly.” While those comments were made in the context of a motion to strike pleadings for non-disclosure, they apply with equal force in my view to serial motions and conference expectations of family law litigants and their counsel, the former who are required to comply with court Orders and the latter charged with the responsibility to ensure not only that their clients understand their obligations but also that valuable court resources are not wasted. Timely access to the courts to deal with cases efficiently, affordably and proportionally to the issues require focused motions, realistic time estimates and FLR-compliant and thoughtfully prepared conferences.

[7] Asking the court in this case to embark on a complicated inquiry involving a dispute about income imputation on the eve of a trial where expert evidence is needed and questioning is unfinished, but scheduled, is a waste of valuable and stressed court resources. This court has no intention (as requested by the wife in paragraph (a) of her motion) of imputing an income “commensurate with [the husband’s] experience, expenses, lifestyle and standard of living in an amount to be determined and particularized prior to trial” in a regular one-hour motion. That phrase aptly describes what a trial is expected to accomplish on a robust evidentiary record. Paragraph (d) of the Notice of Motion suggests that the wife is really seeking a summary judgment subject to a condition subsequent.

[8] Nor will this court consider a retroactive award of spousal support as requested by the wife despite her disclosure efforts at this stage of the case (i.e., on the eve of trial). That determination can best be made, also on a robust evidentiary record, at trial. But this does not mean that the court cannot consider the parties’ current circumstances since the motion was brought in October 2022 and make some further support award.

[9] In the endorsements made in January and May 2022, it is clear that Himel J. was targeting a November 2022 trial date. Equally, it is inferentially clear that the Orders made not only balanced the disclosure interests of the parties but also, in terms of the funds paid to the wife, recognized her financial needs and the husband’s role as the family’s primary breadwinner.

[10] In the view of this court, the pivotal fact on which the wife’s motion turns, despite this court’s criticism of the overreaching nature of the relief claimed in her motion, is the husband’s failure to recognize that “his financial disclosure obligations arose at and were ongoing from the commencement of [these] proceedings…” [8] Significantly, the husband claims that the value of his business interests involving the companies he operates, or which are associated with the company of which he is president (“the companies”), are excluded from the calculation of his net family property because he and his former spouse signed an Amending Separation Agreement on October 6, 2006 shortly before the parties in this case married on November 2, 2006. That agreement contains terms that the husband held all the shares in the companies in trust for his son from his previous marriage and that he also gifted other shares to his son. The son was nineteen years old. In her pre-motion questioning, the wife acknowledged that while she was aware of the details of the agreement, she was not aware of that part of the agreement about the husband holding shares in trust for his son. There is no evidence of a domestic contract between the parties in this case.

[11] Absent an Order bifurcating a case where an exclusion, or even a gift, from a party’s net family property is claimed (a disposition not sought by the husband in this case and likely unavailable anyway) [9], a party has a positive duty to disclose and, in this court’s view, value all their global assets. There is no order in this case relieving the husband of that fundamental obligation. When dealing with business interests and income from a business or from self-employment it will be the uncommon case that will not require some level of expert assistance, [10] something that Himel J. suggested to the husband in her May 16, 2022, endorsement [11] and about which the husband seems to have casually and only recently acknowledged because there is no evidence of any such effort from him in that regard before the TSC. It was never the wife’s duty to initiate the valuation and income analysis process. In this court’s view, the time has come for the court to aggressively flex its power under Family Law Rule 20.3 to appoint an expert “on its own initiative” so as to implement the “culture shift” observed by Myers J. in Manchanda. It is too late to do that in this case, but liberal recourse to the rule should form part of the court’s arsenal at the early stage of any case, preferably at the case conference.

[12] So what kind of Order should be made in this case, if any? These are the relevant considerations:

(a) The combined effect of the payment terms of the January 26, 2022, Order of Himel J. required the husband to pay about $12,500 monthly, sufficient to get the parties to a November 2022 trial (i.e., $50,000 as an uncharacterized payment for ten months and about $7,500 a month for the operating costs of the wife’s two properties). The Order made by Himel J. on May 16, 2022 that the husband advance a further $50,000 to the wife was intended as the court noted “to enable her to complete the required CBV work”. The court also stated that “[i]n order to make the required payment the husband will arrange for a third party loan” implying (at least to this court) that while the husband’s financial affairs were opaque, there was no ready source of funds available to make the payment. In her reply affidavit sworn on February 15, 2023, the wife says that she used the last part of this payment ($20,000 received in late October 2022) entirely for her legal and expert fees. Her monthly expenses (which do not include her housing costs but do include her cell phone, cable, internet, landline and security system costs) are $6,180;

(b) The husband’s 2020 Notice of Assessment indicates a $314,380 income. His 2021 Notice of Assessment, the year in which the wife began this Application, discloses a $164,290 income. While the wife pointed to the parties’ receipt of other income from another company, the husband explained that the references to him on remuneration statements as a shareholder/owner were mistakes made by the parties’ corporate accountant. His financial statement sworn on February 10, 2023, discloses a 2022 employment income of $180,000 with $310,000 in expenses. About $120,000 of the annual deficit can be explained by a $120,000 change in his savings and debts, leaving at least $20,000 unaccounted;

(c) A review of the parties’ evidence about the husband’s income leads this court to conclude that it is deliberately opaque and that his declared income to Canada Revenue Agency does not fairly reflect his income for support purposes. It is more likely than not that it is closer to $350,000, and quite possibly much higher, but that is speculative at this juncture. In the circumstances of this case, and as already noted, this court will not try to duplicate on the disputed evidentiary record before it what a fulsome inquiry at trial is soon expected to accomplish.

[13] A temporary Order is “not intended to involve a detailed examination of the merits of a case.” [12] That is a task for the trial judge. The entitlement threshold on an interim motion is low. This court will make an Order reflecting the general parameters of the Orders made by Himel J., adjusting for tax efficiencies (the wife disclosed no income in 2022 or to date but claimed that she had borrowed from family to meet her expenses).

[14] Accordingly, the following is ordered on a without prejudice basis:

(a) Effective November 1, 2022, the husband shall pay for the benefit of the wife as and for partial spousal support the mortgage, lines of credit, utilities, gas, property tax, property insurance, internet and telephone for 102 Mahogany Forest Drive accruing from and after the effective date. This term is ordered pursuant to subsections 60.1(2) and 56.1(2) of the Income Tax Act [13] which subsections shall apply to the payments made;

(b) Effective November 1, 2022, the husband shall pay to the wife for the balance of his temporary support obligation the sum of $6,000 a month;

(c) The husband shall continue to be responsible for the carrying costs of the Findhorn property in which he is residing. The payments made by him may be taken into account as a post-valuation date adjustment to any equalization payment that may be determined after trial;

(d) The payments in (a) and (b) shall be tax-deductible to the husband and included by the wife in reporting their total income for income tax purposes;

(e) The foregoing terms shall continue until final disposition of these proceedings, the trial of which this court expects will be held during the May 2023 sittings of this court;

(f) A Support Deduction Order shall issue.

[15] If the parties are unable to resolve costs, the following is ordered:

(a) The wife shall deliver her submissions by March 15, 2023;

(b) The husband shall deliver his responding submissions by March 22, 2023;

(c) Reply (if any) by the wife shall be delivered by March 27, 2023;

(d) The submissions in (a) and (b) shall be limited to three single-sided pages, double-spaced, reply to two pages. All submissions shall comply with the Family Law Rules and CER Practice Direction;

(e) All submissions shall be filed with the court, uploaded to Caselines and shall form part of the Continuing Record;

(f) Offers to Settle, Bills of Costs and caselaw may be forwarded to the judicial assistant and shall not form part of the Continuing Record;

(g) Counsel are to advise the judicial assistant when they have filed their material.

[16] Counsel may forward an approved, and clean, copy of the proposed Order to the judicial assistant for the court’s timely review and issuance in due course.

Justice D.A. Jarvis Date: March 8, 2023

Footnotes

[1] The references to (b) and (c) are to paragraphs 2 and 3 of the wife’s original Notice of Motion and have been lettered here to avoid confusion because paragraph 1 of the Notice of Motion which sought a sealing Order was not argued.

[2] R.S.C. 1985, c. 1 (5th Supp.).

[3] O. Reg. 114/99.

[4] 2014 ONSC 5366.

[5] Greco-Wang, at para. 2; FLR 2(3)(d), as amended.

[6] See, for example, the Remarks to the Canadian Club of London by Winkler CJ., the former Chief Justice of Ontario on April 30, 2008.

[7] 2016 ONSC 3777, aff’d 2016 ONCA 909, leave to SCC dismissed, No. 37405 (April 27, 2027).

[8] Aslezova v. Khanine, 2023 ONCA 153, at para. 13.

[9] See, e.g., Dove v. Dove, 2016 ONSC 4091 at paras. 13-15 and Van Eck v. Pham, 2019 ONSC 1006 at paras. 21 to 23, 32 and 48.

[10] Sharma v. Sunak, 2011 ONSC 7670, at para. 21.

[11] At para. 10 “The husband should consider obtaining his own CBV business and/or income valuation as soon as possible (and taking into consideration the trust documentation issue above).”

[12] Knowles v. Lindstrom, 2015 ONSC 1408 at 8.

[13] R.S.C. 1985, c.1 (5th Supp.).