COURT FILE NO.: FS-23-00105150-0000 DATE: 2023 08 09

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Qumers WEJDAN and Zahida NOOR

BEFORE: RSJ L. RICCHETTI

COUNSEL: N. Shokar, for the Applicant, Qumers Wejdan; and A.S. Zaslavsky, for the Respondent, Zahida Noor.

HEARD: August 02, 2023, through Videoconference.

ENDORSEMENT

The Motions

[1] There were two motions before this court.

[2] The Applicant/Father brings a motion for:

a) An order that the matrimonial home, located at 632 Kaiser Dr, Mississauga be sold (Matrimonial Home). b) An order that a property located at 463 Cavell Dr. Mississauga be sold (Cavell Property). c) An order that the net proceeds of sale of the two properties be held in trust pending agreement or a court order. d) That the Respondent/Mother be responsible for Matrimonial Home expenses after July 1, 2023.

[3] The Mother brings a cross-motion for:

a) An order that the Matrimonial Home not be sold. b) An order that the Cavell Property be sold, with the net proceeds divided equally between the parties. c) An order that the Father pay child support of $3,117 per month for the two children of the marriage. d) An order that the Father pay spousal support in the amount of $4,110 per month. e) An order that, so long as the Father is required to pay child and/or spousal support, the Husband is to continue to pay all mortgage, tax and insurance payments on the Matrimonial Home.

The Law

[4] There is no real dispute about the law. Sections 21(1) and 23 of the Family Law Act provide as follows:

21(1) No spouse shall dispose of or encumber an interest in a matrimonial home unless,

(a) the other spouse joins in the instrument or consents to the transaction; (b) the other spouse has released all rights under this Part by a separation agreement; (c) a court order has authorized the transaction or has released the property from the application of this Part; or (d) the property is not designated by both spouses as a matrimonial home and a designation of another property as a matrimonial home, made by both spouses, is registered and not cancelled.

23 The court may, on the application of a spouse or person having an interest in property, by order,

(a) determine whether or not the property is a matrimonial home and, if so, its extent; (b) authorize the disposition or encumbrance of the matrimonial home if the court finds that the spouse whose consent is required, (i) cannot be found or is not available, (ii) is not capable of giving or withholding consent, or (iii) is unreasonably withholding consent, subject to any conditions, including provision of other comparable accommodation or payment in place of it, that the court considers appropriate; (c) dispense with a notice required to be given under section 22; (d) direct the setting aside of a transaction disposing of or encumbering an interest in the matrimonial home contrary to subsection 21(1) and the revesting of the interest or any part of it on the conditions that the court considers appropriate; and (e) cancel a designation made under section 20 if the property is not a matrimonial home.

[5] Section 2 of the Partition Act provides as follows:

All joint tenants, tenants in common, and coparceners, all doweresses, and parties entitled to dower, tenants by the curtesy, mortgagees or other creditors having liens on, and all parties interested in, to or out of, any land in Ontario, may be compelled to make or suffer partition or sale of the land, or any part thereof, whether the estate is legal and equitable or equitable only.

[6] Where the property(s) is jointly owned, as it is here, either party has a prima facie right to the sale of the property. The onus is on the party opposing the sale to establish why the property should not be sold.

[7] This onus can be met by the opposing party establishing that the party seeking the sale has engaged in malicious, vexatious or oppressive conduct. See Latcham v. Latcham (2002), 27 RFL (5th) 358 (CA).

[8] In addition, in family law cases, the court engages in a broader analysis to determine whether the interim sale of the matrimonial home will unfairly or substantially prejudice a right of one of the parties under the Family Law Act (FLA). Silva v. Silva 1990 1 OR93 d) 436 (CA).

[9] Often, one party will seek to oppose the sale of the property based on outstanding equalization claims or concerns about maintaining security for support claims. The impact on equalization claims or maintaining security for support claims, where such potential prejudice can be established, can be dealt with by ensuring that the net proceeds of sale are held in trust pending the determination of the FLA claims.

Background

[10] The parties were married on December 29, 2012.

[11] The parties have two children, Isaiah (dob July 7, 2019) and Liyana (dob October 19, 2021; (the Children).

[12] The parties separated on February 6, 2022.

[13] The Mother remained in the Matrimonial Home. After staying with different family members, the Father eventually moved in with his mother and brother and continues to reside there.

[14] The Children primarily reside in the Matrimonial Home. The Father has specified parenting time, generally exercised at his mother’s home where he resides.

Facts and Discussion

The Cavell Property

[15] The Cavell Property was purchased in 2015 for $565,000. It is jointly owned and was to be an investment property for the parties. It is rented to tenants.

[16] The current value of the Cavell Property is approximately $1,100,000.

[17] The Cavell Property is highly leveraged. There is approximately a $492,000 mortgage outstanding. There is approximately a $433,000 Equity Line of Credit also registered against the Cavell Property as security.

[18] As a result of the enormous debt and expenses, the rental income of $4,300 per month does not cover the expenses on the Cavell Property. There is a shortfall to be covered by the parties.

[19] It is unlikely the Cavell Property will result in any significant net proceeds once the expenses of sale (commissions, outstanding expenses, and legal fees) are deducted from the sale price and the two encumbrances on title (including any penalties) are paid.

[20] In fact, there may be some capital gains tax payable by the parties jointly. It is unclear whether and how much given that the Cavell Property was also their principal residence until 2021. But it was also an income property in part.

Matrimonial Home

[21] The Matrimonial Home was purchased by the parties jointly in June 2021 for $1,425,000.

[22] The parties value the Matrimonial Home between $1.5 to 1.6 million dollars.

[23] There is an approximately $1,087,000 mortgage registered and owing against the property with $4,442 per month mortgage payments. The mortgage is currently a locked in mortgage at 2.25%.

[24] The Matrimonial Home is a 3,000 square foot, four-bedroom home (excluding the basement rental unit). The basement is rented for $1,300 per month to tenants.

[25] The parties resided in the Matrimonial Home for 5 months before separation.

[26] As set out below, the Mother alleges there is an alleged $190,000 loan outstanding to her father/business partner which somehow attaches to the Matrimonial Home (although initially used to purchase the Cavell Property) and of approximately $50,000 advance she made to the acquisition of the Matrimonial Home.

[27] The result of these alleges additional loans to be paid from the proceeds of sale of the Matrimonial Home and the current mortgage, even at a sale price of $1,600,000 there appears to be limited amount of equity in the Matrimonial Home ($1.6 million less $1.087 million less $200 thousand less $50 thousand is $263,000). From the sale there would have to be deducted real estate commissions ($80,000), moving, legal and other sale expenses. A rough estimate is that there will be net proceeds of between $125,000 and 175,000. There will not be very significant net proceeds of sale available for immediate distribution to the parties.

The Alleged Loans to the Mother’s Father/Business Partner

[28] The Mother alleges that her father and his business partner, in 2015, loaned the parties approximately $126,000 to purchase the Cavell Property.

[29] The Mother also claims that the parties owe her father and business partner $680 per month interest on this alleged loan. The Mother claims that the total outstanding interest is approximately $64,000 (none has been paid since 2015).

[30] The Mother sought to add her father and business partner to this proceeding, but since no motion was before the court, I declined to deal with this issue.

[31] The Mother alleges that the Cavell Property was, at one point, refinanced and the refinanced funds were used to purchase the Matrimonial Home. Accordingly, the Mother claims that approximately $190,000 is payable to her father/partner if the Matrimonial Home is sold.

[32] I note that no encumbrance has been registered against the Cavell Property nor the Matrimonial Home regarding this alleged loan.

[33] The Father denies the loan to the Mother’s father/business partner exists and alleges the alleged loan document is a forgery.

Loans from the Mother

[34] The Mother also alleges that she invested approximately $50,000 to acquire the Matrimonial Home, which the Mother appears to claim from any net proceeds of the Matrimonial Home.

Isaiah

[35] Isaiah has been diagnosed with Autism Spectrum disorder. Isaiah’s condition requires significant and expensive therapy.

[36] The cost of therapy is disputed but may be up to $5,000 per month. The parties have applied for government financial support for the therapy, but to date the parties have not been approved for funding (nor has the amount been determined if government funding were granted).

[37] Having the financial ability to fund therapy for Isaiah is, in my view, a priority of the parties.

The Father’s Financial Situation

[38] The Father is 39 years old. He is a lawyer. He currently works for a Canadian bank.

[39] The Father earns approximately $236,000 (2021 income). There is no evidence his income is likely to have changed substantially in 2022 or 2023 beyond the cost-of-living type increases. The Father has produced his current pay stub, although the end of year bonus may result in some change in his annual income.

[40] The Father currently resides with his mother and younger brother in a four-bedroom semi-detached home. When the Children visit, the amount of space is limited, with the Father, at times, having to sleep on a sofa. This is not an ideal place for the Father’s parenting time.

[41] The Father alleges he pays approximately $1,000 per month rent to his parents and contributes $5-600 per month in home expenses.

[42] The Father has, to date, not been paying any child or spousal support because of the financial debt associated with the two properties, which he primarily carries. However, I note the Mother has not sought child or spousal support since separation, presumably, in recognition of the Father’s ongoing properties’ expenses.

The Mother’s Financial Situation

[43] The Mother is currently 33 years old. She was a graduate of fashion design.

[44] The Mother resides in the Matrimonial Home.

[45] The Mother is currently unemployed. She left her employment in 2019 at Burberry until she took extended maternity leave.

[46] The Mother had sought and obtained offers of employment from designer companies in the fall of 2022.

[47] The Mother has been offered to return to Burberry in April 2023, her prior employer. The Children would go into full time day care. The Mother would earn approximately $58,000 per annum. The Mother has not commenced this employment, but expects to do so in September 2023.

[48] To date the Mother has received no spousal or child support. Her ability to pay her living expenses for the past 1 ½ years is unclear.

[49] It is unclear whether the Mother receives any income, perhaps a supplement/assistance from the United Kingdom (UK) government. What is clear is that there appear to be money transfers from the Mother’s UK bank account to her right up until late 2022.

[50] Despite not being employed, nor not having received child or spousal support, the Mother’s credit cards shows that she has incurred substantial expenses since separation for luxury items (in addition to significant other online transactions). A few examples:

• $4,000 Burberry in in the month of December 2022;
• $1,300 on perfume in the month of August 2022 plus $759 in the month of May 2023 and $612 in the month of June 2023; and
• More than $600 at a salon in June 2023.

[51] In fact, in December 2022, the Mother’s credit card limit was increased.

[52] The Mother states she wants to buy out the Father’s interest in the Matrimonial Home. The question is realistically how can she afford to do so?

[53] And when the mortgage on the Matrimonial Home gets remortgaged (due to maturity or the Mother acquiring the Matrimonial Home), the interest rate would likely be much higher than the 2.25% it current is. Hence, the carrying cost will increase.

Analysis

[54] To be clear, I have not dealt with parenting time as that issue is not before me. Further, while there was evidence from both parties on this issue, much was either unclear or disputed. I am not persuaded that parenting is relevant to the issues today beyond the fact that both parents currently enjoy some parenting time (including overnight) with the Children.

Sale of the Matrimonial Home

[55] The monthly expenses and to carry the mortgages and Line of Credit for the two properties is approximately $10,000 per month. Currently, these are being paid by the Father.

[56] Some home maintenance expenses have started to go into arrears. The Father says he cannot afford to continue paying them. The Mother says he is doing so deliberately. Given the level of debt and expenses to be covered, I do not accept that the Father is deliberately choosing not to pay certain property maintenance and carrying costs.

[57] The Mother agrees that the Cavell Property be sold. This will reduce the financial burden on the parties and, in particular, the Father who has been paying these expenses. On the other hand, it will also reduce the total income of the parties by $4,300 per month. There will be a net saving to the parties of $1,400 per month.

[58] But the sale of the Cavell Property will not generate significant, if any, net proceeds and may result in some additional tax liability to the parties.

[59] I am not persuaded that a $1,400 per month increase in the “family” income will be sufficient to overcome the serious financial pressures faced by this family.

[60] With this, the question is whether the Matrimonial Home should be sold?

[61] The Mother submits:

a) It would be oppressive and harmful to her and the Children if the Matrimonial Home were to be sold. b) It is premature to order a sale since full and complete disclosure has not been made which will result in substantial child/spousal support arrears and an equalization.

[62] Given the short time the parties lived together in the Matrimonial Home and the substantial debts registered and alleged by the Mother owing upon the sale of the Matrimonial Home, I am not persuaded that the Father is acting oppressively.

[63] Given the Father’s income, the monthly expenses of carrying the Matrimonial Home (even if the Cavell Property is sold), the anticipated costs for Isaiah, the Father’s accommodation and living expenses, the decision to seek the sale of the Matrimonial Home is neither oppressive nor designed to prejudice the Mother.

[64] Even if the Cavell Property is sold, the Mother seeks that the Father pay the Matrimonial Home expenses ($4,000/month mortgage plus all the other property expenses) and roughly $7,000 in support. That position of the Mother makes no financial sense as it doesn’t take into account:

a) Approximately $121,000 per year (just the amount of the mortgage and support payments) would be the vast majority of the Father’s after-tax income. Add to that the Matrimonial Home other expenses, it would leave the Father little or no money for his own accommodations or living expenses. b) The Father would continue to have a joint liability on a $1,100,000 mortgage on the Matrimonial Home (and a further potential $190,000 to the Mother’s father/business partner). c) There is the uncertain potential liability of a capital gains tax on the Cavell Property. d) There are the very substantial expenses for Isaiah’s therapy. Where would those expenses be paid from? e) And the Mother alleges that the Father, despite having carried the debts on the two properties, claims retroactive support from separation ($7,000 X 18 months = $126,000). f) What little equity there is in the Matrimonial Home could not be used for the Children’s expenses or the typical life expenses of the parties.

[65] I reject the Mother’s submission that it is premature to sell the Matrimonial Home because of incomplete financial disclosure.

a) The issues raised by the Mother are entirely speculative. There is no basis (nor does the Mother claim) that the Father’s income has suddenly and markedly changed so as to eliminate or change the nature of the bleak financial picture this family faces. The Mother claims the Father’s 2022 Income Tax Return has not been disclosed nor has he produced bank statements. The Father has produced current pay stubs. But, the Mother says it doesn’t include his year end bonuses – but offers no evidence that they will be substantially different this year than last year. The Father is a T4 employee. b) The Mother says she has “no way of verifying” what amount of the carrying costs of the two properties have been paid off. Yet, the Mother is a joint debtor on these two properties. She could have gone to the mortgage companies and Line of Credit holder and asked for details of the payments and outstanding amounts. She could have gone to the utility companies and the municipality to verify what was paid or not paid with respect to the Matrimonial Home. She chose not to. c) If there was this significant outstanding financial disclosure from the Father, what steps has the Mother taken to obtain this financial disclosure in the last 17 months. None. Now, they are raised as a means to prevent the Matrimonial Home to be sold. But no disclosure will change the amount of the mortgage/encumbrances and the very significant monthly expenses to maintain the properties including the Matrimonial Home. d) The Mother submits the sale of the Matrimonial Home is not “inevitable”. Yet, she puts forward no reasonable financial proposal that would allow these parties to financially move forward with the lives in a meaningful way for themselves and their Children. e) The Mother’s financial disclosure also appears to have some outstanding disclosure such as the significant payments that she receives from the UK and how she can afford to pay the continued expenses of luxury items. The Mother’s position on the financial non-disclosure is inconsistent. She alleges there isn’t full and complete financial disclosure from the Father, but she submits there is sufficient financial evidence to determine the financial viability of keeping the Matrimonial Home, having the Father pay the Matrimonial Home expenses and for the Father to pay spousal and child support. Or describe how the Mother could afford to pay the mortgage and expenses of the Matrimonial Home even with support and her anticipated salary.

[66] The Mother states it would be “extremely difficult financially” for her to find alternate accommodations for herself and the Children. The Mother would have child support and likely some spousal support which could be substantial. The Father does not deny he should pay the Guidelines for child support but cannot do so while continuing to pay the expenses of the two properties. I accept this. The Mother would have her employment income to assist in her new living expenses. The new accommodations may not necessarily be a 3,000 square foot home. Whatever the new accommodations, they have to be accommodations that can be afforded with the income the parties have and still leave sufficient monies to look after the Children’s needs and their own life needs.

[67] The Mother states she wants to buy out the Father’s interest in the Matrimonial Home. But how the Mother could assume a $1,100,000 mortgage and pay the homes expenses, is not explained. Nor is there any credible way that the Mother could do so (and remove the Father’s liability on the Matrimonial Home’s mortgage so he could finance his own property or pass any credit check) on her potential income, even with child and spousal support.

[68] The bottom line is that the parties have over $2,000,000 in debt to financial institutions (plus other maintenance, utilities, taxes…) that need to be serviced, in addition to having to fund the needs of the Children and their own accommodation and living needs. Even with the Cavell Property sold, the debt on the Matrimonial Home and the needs of the Children and living expenses of the parties must be recalibrated to reflect the new reality in light of the separation.

[69] Turning now to the needs of the Children. They do need a stable home environment. But the realistic financial picture doesn’t permit keeping the level of debt the parties have. Having the same home by itself isn’t enough. The Children need a longer-term stable home that the parties can afford. While I accept the importance of a routine and structure for Isaiah (and Liyana too), the parents also need a proper and stable residence during their parenting time, sufficient financial resources to maintain a reasonable life so that they can support the Children financially and emotionally.

[70] Isaiah’s therapy is essential. Waiting and hoping for the government to fully and completely pay for Isaiah’s therapy is not in Isaiah’s best interests.

[71] The Mother accepts the Father’s concerns about his current living arrangement and “how it is inadequate for the children”. But the Mother’s entire focus is that she and the Children should remain in the Matrimonial Home. Having it “all”, which is being suggested by the Mother and ignoring the inadequacy of the Father’s accommodations, is simply not reasonable or in the Children’s best interests.

[72] The Mother submits that the Matrimonial Home is “the only security I have for my claim to equalization of net family property”. There is no merit to this as a basis to deny sale of the Matrimonial Home. The Father works at a bank. He makes a substantial income. He has his immediate family in Ontario. To imply that the Mother needs “security” as a ground to prevent the sale of the Matrimonial Home is without merit.

[73] The other benefit is that a move out of the Matrimonial Home now, for the Children who are very young, will be less of a negative impact at their current age and stage. Friends, a stable school, familiar surroundings become more important as the Children become older and establish friends and a school and this will be more likely and a benefit to the Children if done where the parties are more likely to afford residences long term.

[74] I do accept that when the Matrimonial Home is sold, the Mother may need to access some of the net proceeds from the sale. The Mother will also need to advance her claim for child support and spousal support prior to the closing so as to prevent a “gap” in her financial circumstances. That can be accommodated in the manner set out below.

Interim Spousal and Child Support

[75] At this time, the Father must continue to pay the registered mortgages (approx. $7,700 per month) and ongoing expenses for the two properties, until sold, there is no real ability for the Father to pay support.

Conclusion

[76] The Mother’s cross motion for support is adjourned sine die.

[77] These two properties are to be sold immediately.

[78] The Father shall continue to pay the registered mortgages (approx. $7,700 per month) and ongoing property expenses for the two properties (taxes, utilities, and insurance), until sold and closed.

[79] Once a closing date has been set for the sale of these two properties (or either of them), counsel can write to my judicial assistant, Barbara Zablotny, to arrange for the return of the Mother’s support motion. I will ensure that the Mother’s support motion will be heard on an expedited basis prior to the closing date. This will ensure there is no “gap” in the Mother’s financial situation.

[80] By that time:

a) The Mother’s employment situation may have crystalized, b) Isaiah’s therapy expense application with the government will be clearer, and c) The Father will have provided the alleged outstanding financial disclosure (and if he fails to make the reasonably requested financial disclosure, this too can be brought before me prior to the Mother’s support motion). The same applies to any alleged outstanding financial disclosure of the Mother. I strongly suggest that both parties make full, complete and accurate financial disclosure. d) The financial picture for the parties will have changed markedly and a much better, more accurate assessment of spousal support can be made. e) At that time the Father will, according to his counsel’s statement to the court (and contained in his affidavit), commence paying child support in accordance with the Guidelines.

[81] An Order that the terms of the sale of the Matrimonial Home and the Cavell Property shall be as follows:

a) The parties shall agree on a listing realtor and sign a listing agreement by August 25, 2023, which listing realtor has no past or present connection with the parties or their families or previous involvement with this proceeding. If they cannot agree on a listing realtor, the Mother shall propose three listing agents in the area who have no connection or prior dealings with the parties or their families, and the Father shall select one. If this issue remains disputed, I may be spoken to appoint a listing agent. b) The two properties shall be listed at the price recommended by the listing realtor. c) The parties shall agree on the offer to be accepted. If one wishes to accept the offer and the other does not, I may be spoken to determine whether the offer in dispute is to be accepted. d) The parties shall cooperate in the sale and showing of the properties and maintain the properties in a “ready for viewing” condition. e) The Mother shall cooperate and provide reasonable access to the Matrimonial Home for viewing and shall ensure that the property remains in a state of cleanliness and tidiness for each showing. f) Neither party shall interfere in the listing and showings of the properties for sale. g) The Father shall have access to the Matrimonial Home only upon reasonable notice to the Mother and only while the listing agent is present. h) The parties shall jointly select a real estate solicitor, for the purpose of performing the legal work for the sale of the two properties, who has had no prior dealings with the properties or the parties or their families. i) Upon the sale of each property, any amounts due under the registered encumbrances, real estate commission and usual adjustments (including any outstanding utilities, taxes), including the real estate solicitor’s reasonable fees, can be deducted from the proceeds of sale. Any further amount shall be paid into court by the real estate solicitor to the credit of this proceeding until further order of this court. Either party can bring a motion before me for the payment out of a portion or all of the monies paid into court. j) In the event there are any issues regarding the sale of the properties, either party can arrange an attendance before me to deal with such issues. This may include waving the consent or signature of any party which is obstructing the proper sale of either property.

Costs

[82] Either party seeking costs may submit written submissions, within two weeks, limited to 5 pages PLUS any Offers and authorities.

[83] A party against whom costs are claimed, may submit responding written submissions, within two weeks, limited to 5 pages PLUS any Offers and authorities.

[84] There will be no reply submissions.

RSJ L. RICCHETTI Released: August 09, 2023