Parente v Parente, 2023 ONSC 3502

COURT FILE NO.: FS-18-294

DATE: 2023 06 09

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Lauren A. Parente (Stewart) v. Nunzio J. Parente

BEFORE: Fowler Byrne J.

COUNSEL: Janet G. Miliaris, for the Applicant

Stephen Kirby, for the Respondent

HEARD: January 20, 2023 and May 11, 2023

E N D O R S E M E N T

[1] The Applicant Mother, Lauren A. Parente, brought this motion seeking an advance of $250,000 towards her disbursements and an advance of $500,000 to be credited against her future judgment.

[2] At the original return date, I ordered that the Mother was entitled to an advance of $75,000 towards her disbursements and an advance of $50,000 towards her equalization payment. That being said, a great deal of disclosure from the Respondent Father, Nunzio J. Parente, was still outstanding, which included appraisals for various properties. Accordingly, I further ordered that previously ordered property appraisals were to be provided on a certain schedule and the Mother was entitled to seek a further advance upon receipt. In addition to the property valuations, I also ordered that the Father provide proof of his ownership interest in these properties, as well as any encumbrances associated with them (see 2023 ONSC 907, at para. 51) . That motion was argued on May 11, 2023 and this is my decision.

[3] At the commencement of the argument on May 11, 2023, the Father advised that one of his properties, located at 55 Winges Road, Vaughan (“Winges”), was sold and was to close shortly. The Father has a fifty percent (50%) ownership in this property. Accordingly, I ordered that after a number of disbursements, the remainder of his proceeds would be held in trust pending the release of this decision.

Background

[4] The parties were married on September 9, 2006, and separated on November 12, 2018. There are three children of the marriage who are now 14, 11 and 9 years old.

[5] In accordance with the order of Justice D.E. Harris, dated June 15, 2021, the Father is paying the sum of $8,000 per month for child support and $8,000 per month in spousal support. This is based on the Father’s estimated annual income of $500,000 to $600,000. This estimated annual income was derived from a draft income report prepared by White & Lewis, dated January 25, 2021, which the Father retained to provide an income report and various evaluations (“Draft Income Report”).

[6] For the better part of this litigation, the Mother has been seeking financial disclosure from the Father. His financial circumstances are not straight forward. A corporation organization chart shows that he has a full and partial ownership interest in four corporations. This chart also shows that the Father has a beneficial interest in the Angelo Parente Family (2014) Trust (“Family Trust”), which was created prior to separation, and which has an interest in at least 12 different corporations. The corporate structure is attached at Schedule “A” to this decision. Many of these corporations have an interest in real property, which are leased out and earn income in their own right. The valuation of these various properties, and the income that the Father derives from them, has been the focus of the Mother’s counsel for at least three years.

[7] The Father has provided evidence that the trustees of the Family Trust, which include his parents, have the absolute and unfettered discretion to determine what amounts are disbursed each year. In his most recent financial statement, sworn April 28, 2023, the Father lists the value of the Family Trust as “TBD”. He also excludes the Family Trust from his net family property, as a gift. The value of the various properties in this Family Trust is estimated to exceed $25,000,000.

[8] Clearly, the Family Trust is property that must be accounted for by the Father. The issue of whether any of the Family Trust can be excluded is an issue left for trial. Up to this point though, the Mother has been trying to ascertain what assets the Family Trust holds and the value of it, so that she can adequately prepare her case.

[9] To date, the Mother has already received a total of $125,000 towards disbursements, $380,000 as an advance against equalization, and a further advance of $101,000 to be credited to her, but for no specific claim. This latter sum was from the sale of a condominium which, at the date of separation, was owned jointly by the parties. Accordingly, only half of this amount could be considered an advance. Accordingly, the total she has been advanced towards an equalization payment is approximately $430,500. Together with her disbursements, she has been advanced the total sum of $555,500 to date.

Law

[10] Although not specifically provided for in the Family Law Act, R.S.O. 1990, c. F.3, this court has jurisdiction to award an advance against equalization: Zagdanski v. Zagdanski, 2001 27981, at paras. 22-38.

[11] Before such an advance is ordered, I should consider the following:

a. Whether there is little or no realistic chance that the amount of the contemplated advance will exceed the ultimate equalization amount;

b. Whether there is some considerable degree of certainty about the right to, and likely minimum amount of, an equalization payment;

c. Whether there is a reasonable requirement for the funds in advance of the final resolution of the equalization issue, including funds to enable the continued prosecution or defence of the action; and

d. Whether there are other circumstances such that fairness requires some relief for the moving party, such as a delay in the action, deliberate or not, prejudicing the moving party by, for example, running of their costs.

See Zagdanski, at para. 39; Firestone v. Pfaff, 2012 ONSC 4909, at para. 24.

Analysis

[12] Financial disclosure by the Father is far from complete. The frustration experienced by the Mother in this regard is laid out in my initial ruling in 2023 ONSC 907. That being said, the financial disclosure has been trickling in, and the Mother is comfortable that the advance requested, in addition to what she has already received, will not exceed what she will ultimately be entitled to.

i. Certainty of the Mother’s entitlement

[13] I will address the first two factors together.

[14] Unfortunately, neither party prepared a net family property statement for my review. Instead, each prepared a financial statement. While both statements are missing some information, the Father’s financial statement is missing significant information. However, using the information contained therein and other evidence provided on this motion, I have prepared a draft net family property statement which represents a minimum of what I believe the Mother will be entitled to by way of equalization. The assets listed on this document are far from final, but they constitute the best information received to date (see Schedule “B”). This is obviously subject to whatever findings the trial judge will make on a full evidentiary record.

[15] Given the lack of financial disclosure by the Father, I am drawing an adverse inference at times. While I acknowledge that the Father has made great strides in the last several months, it does not account for the previous three years when he did not provide this information. The Father has disclosed that he has a 50% ownership interest in 2226670 Ontario Limited (“222”), which is not tied to the Family Trust in any way. Accordingly, I am drawing the following adverse inferences with respect to 222:

a. With respect to Units 23 & 24, 160 Applewood Cres., I was not provided with a valuation for this property by the Father, but was advised that there was a mortgage registered against it for $236,000; the Mother did provide an unsworn opinion by a realtor that these two units were valued at $1,649,200, which valuation the Father did not rebut in this motion-; even if conservatively estimated at $1,500,000, the net value of these units would be $1,264,000, and the Father’s share would be $632,000;

b. With respect to 2620 Rutherford Road, the evidence is that this property was sold for $650,000 in 2021; no information was provided by the Father as to what encumbrances were registered against this property when it was sold, which is something easily attainable by the Father and which he was ordered to do. Accordingly, I am drawing an adverse inference that the sum of $650,000 was the net sum received by the Father, making his 50% share of the sum $325,000; and

c. With respect to Winges, which was sold prior to the return of this motion but scheduled to close afterwards, I have been advised that the net proceeds will be $915,000. The Father argues that his share will be subject to a capital gains tax, but unfortunately he has provided no evidence of what that liability will be. There will be a capital gain, but I am unaware of whether he has capital losses to set off. I have no information if this particular corporate structure is entitled to any advantageous tax treatment. Without that information, I am drawing an adverse inference that there will be no immediate tax consequence to the Father. His share will be valued at $457,500.

[16] There are also other factors to consider. The Father has yet to provide a valuation for his business Salson Electric Limited. As of the date of separation, this was a successful electrical contracting company that employed 30 to 50 people. The Draft Income Report shows retained earning for Salson Electric Limited of $1,763,874, as of December 31, 2017. While this does not equate to a valuation, it shows that there was value in Salson Electric Limited at the date of separation, despite how well the business is doing now. One-half of this value will eventually be added to the Father’s net family property calculation.

[17] In addition, the Father is a full owner of P3 Holdings Limited (sometimes referred to as 3P) (“P3”). This is an investment holding company. In the Draft Income Report, it was determined that in 2018, the shareholder’s equity in P3 was $94,771. Again, while not a valuation for equalization purposes, it shows that there are additional assets that are to be added to the Father’s net family property.

[18] Accordingly, without even considering whether any of the Family Trust will be attributed to the Father, using the various inferences regarding the value of the property owned by 222, and attributing only 25% of the Father’s share of retained earnings of Salson Electric and 25% of the equity attributed to P3, the Mother will be entitled to an equalization payment of approximately $858,000. Even if we deduct what the Mother has already been advanced against equalization, at minimum, she would be entitled to another approximate sum of $427,500 in order to equalize the net family property. If the advances for disbursements were deducted, that still allows the Mother an additional $302,500.

ii. Need for an Advance

[19] The Mother has provided ample evidence of her need for an advance. While her expenses are high, they are not dissimilar to expenses incurred during the marriage. The children reside primarily with the Mother, and she is struggling to maintain suitable housing for them. One child has been removed from private school.

iii. Other Circumstances

[20] There are other circumstances in this case that favour a further advance to the Mother.

[21] In addition, while the treatment of the Family Trust is not yet clear, at minimum there is at least another $25,000,000 in value there. Even if the Father is found to be only a 10% beneficial owner of this Trust, which is not excluded, that adds another $2,500,000 to his net family property.

[22] At this juncture though, it is too early to advance any monies against the Father’s potential interest in the Family Trust. This is not because of the Father’s failure to disclose, but more related to the claim that it is excluded as a gift. The Father’s interest in the Family Trust, is not certain, and thus should not be the subject of an advance.

[23] Finally, and most importantly, the Father has spent the last three years avoiding providing full and frank financial disclosure. Again, he has taken great strides to remedy this over the last six months or so, but prior to that, his failure to provide full and frank financial disclosure has caused great prejudice to the Mother. She has had to incur a significant expense to chase the Father and obtain the necessary disclosure. There is still outstanding disclosure required. There is a long motion scheduled for July 2023, wherein the Mother will be seeking to strike the Father’s pleadings for failure to provide full disclosure.

[24] Just three months ago, the Court of Appeal for Ontario upheld a motion judge’s decision to strike a party’s pleadings for repeated failure to comply with disclosure orders. As stated in paragraph 12 of Aslezova v. Khanine, 2023 ONCA 153:

The obligation to provide financial disclosure in a case such as this does not simply flow from the disclosure order, but also more broadly from fundamental principles of family law. As this court reiterated in Roberts [2015 ONCA 450], at para. 11: “The most basic obligation in family law is the duty to disclose financial information”; and, at para. 13, that “[f]inancial disclosure is automatic. It should not require court orders…to obtain production.” Recent jurisprudence from this court is clear that non-compliance with disclosure orders – and particularly intentional, repeated, and ongoing non-compliance – will constitute exceptional circumstances in which an order to strike pleadings may reasonably be made. [Citations omitted.]

[25] Accordingly, the Father should not be rewarded for failing to disclose his complete net worth on the day of separation. Even if he has a viable argument that would exclude the Family Trust from his net family property, and I am not making a finding on that issue, he still has an obligation to disclose the assets and debts behind the Family Trust. Only then can the trial judge make a proper determination of what should be included.

Conclusion

[26] Bearing in mind these factors, I find that the Mother is entitled to a further advance on her equalization, which I set at $300,000, which is comprised of my conservative estimate of what she would be entitled to, less what she has received to date.

[27] Accordingly,

a. The Father shall advance to the Mother the sum of $300,000 as an advance against her claim, which shall be paid forthwith from the proceeds of sale from Winges;

b. The parties are encouraged to resolve the issue of costs as between themselves; if they are unable, the Mother shall serve her Costs Outline, and any Offers to Settle, and her written costs submissions, limited to two pages, single-sided and double-spaced, on or before June 23, 2023; the Father shall serve his Costs Outline, any Offers to Settle, and his written submissions (with the same size restrictions), on or before July 7, 2023; the Mother may serve and file reply submissions, again with the same size restrictions, on or before July 14, 2023; and

c. The remainder of the funds being held from the sale of Winges shall remain in trust with Mr. Kirby’s office pending the parties agreement or my ruling on costs.

Fowler Byrne J.

DATE: June 9, 2023

SCHEDULE “A”

ONTARIO

Court File Number

Superior Court of Justice, Family Court

FS-18-0294-00

(Name of Court)

7755 Hurontario St., Brampton, Ontario, L6W 4T6

Form 13B: DRAFT Net Family Property Statement

(Court office address)

SCHEDULE “B”

Applicant(s)

Full legal name & address for service — street & number, municipality, postal code, telephone & fax numbers and e‑mail address (if any).

Lawyer’s name & address — street & number, municipality, postal code, telephone & fax numbers and e‑mail address (if any).

Lauren Parente (Stewart)

Respondent(s)

Full legal name & address for service — street & number, municipality, postal code, telephone & fax numbers and e‑mail address (if any).

Lawyer’s name & address — street & number, municipality, postal code, telephone & fax numbers and e‑mail address (if any).

Nunzio Parente

My name is (full legal name)

The valuation date for the following material is (date)

November 12, 2018

The date of marriage is (date)

September 9, 2006

(Complete the tables by filling in the columns for both parties, showing your assets, debts, etc. and those of your spouse)

Table 1: Value Of Assets Owned on Valuation Date (List in the order of the categories in the financial statement)

PART 4(a): LAND

Nature & Type of Ownership (State percentage interest)

Address of Property

LAUREN

NUNZIO

Matrimonial Home

47 Robinson Road, Nobleton, Ontario (sold and proceeds divided evenly)

Nil

Condominium (jointly owned)

1806 – 290 Adelaide Street West (transferred to Lauren post separation who sold for $101,000 net)

$50,500.00

Totals: Value of Land

$50,500.00

PART 4(b): GENERAL HOUSEHOLD ITEMS AND VEHICLES

Item

Description

LAUREN

NUNZIO

Household goods

& furniture

Cars, boats,

vehicles

Jewellery, art,

electronics, tools,

sports & hobby,

equipment

Other special

items

Totals: Value of General Household Items and Vehicles

$0.00

PART 4(c): BANK ACCOUNTS AND SAVINGS, SECURITIES AND PENSIONS

Category (Savings, Checking, GIC, RRSP, Pensions, etc.)

Institution

Account Number

LAUREN

NUNZIO

Various bank accounts and investments as listed on each parties’ financial statement

$3,373.00

$201,500.00

Totals: Value of Accounts And Savings

$3,373.00

$201,500.00

PART 4(d): LIFE AND DISABILITY INSURANCE

Company, Type & Policy No.

Owner

Beneficiary

Face Amount ($)

LAUREN

NUNZIO

No values listed

Totals: Cash Surrender Value Of Insurance Policies

$0.00

PART 4(e): BUSINESS INTERESTS

Name of Firm or Company

Interests

LAUREN

NUNZIO

Remax Luxury Home Prestige Team

Nil

Touch of Prestige Staging

Nil

Lauren Parente Coaching

Nil

Prestige Executive Virtual Assistance

Nil

Salson Electric Limited

50% Owner (As per draft income report – retained earnings of $1,763,874) Attributed 25% of Nunzio’s 50% share of this value, as a conservative estimate

$220,484.00

P3 Holdings Limited

100% Owner (as per draft income report – equity of $97,771)

$24,442.75

Attributed 25% of this stated value, as a conservative estimate

2226670 Ontario Limited

50% Owner

55 Winges Road, Vaughan (sold for net $915,000)

$457,500.00

Units 23 & 24, 160 Applewood Cres., Vaughan (Nunzio provided no value) è Mortgage $236,000
2620 Rutherford Road, Unit B109 Vaughan; sold after separation - no valuation given by Nunzio, but Lauren advised it sold for $650,000 (encumbrances on date of sale not disclosed by Nunzio)

$632,000.00 $325,000.00

2040889 Ontario Inc.

12.4% Owner, which owns:

22.5% of Pennbridge Developments (as per corporate org. chart), which owns 112 Pennsylvania Ave
Valued at $5,000,000
Mortgage with RBC $1,600,000 Therefore net value of 3,400,000 2040889 Ontario Inc. therefore owns 22.5% of that value, or $765,000, and Nunzio personally owns 12.4% of that value, being $94,860

$94,860.00

Totals: Value Of Business Interests

$0.00

$1,754,286.75

PART 4(f): MONEY OWED TO YOU

Details

LAUREN

NUNZIO

Proceeds of sale of 839 Meadow Wood Road, Mississauga

TBD

Totals: Money Owed To You

$0.00

PART 4(g): OTHER PROPERTY

Parente v Parente, 2023 ONSC 3502

Case Summary

SUPERIOR COURT OF JUSTICE - ONTARIO

E N D O R S E M E N T

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Issues

Statutory Provisions 1

Legal Tests 1

Legislation 1