Court File and Parties
COURT FILE NO.: FS-17-416893 DATE: 2023-09-18 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Maria Moretti Applicant – and – Antonio Moretti Respondent
Counsel: M. Ibghi, for the Applicant G. Van Hoogenhuize, for the Respondent
HEARD: January 30 to February 10, 2023
Reasons for Decision
1Maria and Antonio (“Tony”) Moretti are 64 and 78 years old, respectively. They were married on September 9, 2002 after cohabiting since 1997. The parties separated on March 16, 2016 and were divorced on December 20, 2019. They have one son, Leo, born October 5, 2002. Though he is an adult, the parents agree that he remains a “child of the marriage” under the Divorce Act, R.S.C., 1985, c. 3, because he lives with autism. Leo and his mother Maria live at 118 Gilley Road – once the matrimonial home of Maria and Tony and owned solely by Tony. Tony was ousted from the home after he was charged with assaulting Maria. Maria and Leo also live with Manuel Cardoso, Maria’s ex-husband who pays her $800/month of undeclared rent. Leo is now 20 and continues to live with Maria.
The Issues:
2While much of the trial was rife with irrelevant testimony about guns and altercations between Maria and Tony, the case is a financial one. Maria seeks retroactive and continuing child and spousal support, equalization, and a 50% interest in the matrimonial home. Tony argues that Maria dissipated family assets to the tune of $5 million because of her gambling addiction. This disentitles her to an equalization payment, spousal support, and child support. In addition, he seeks occupation rent from Maria for residing in the former matrimonial home, and damages for breach of trust arising from the misuse of funds that he gave her to his detriment.
Brief Conclusion:
3For the reasons that follow, I dismiss all claims by Maria and Tony as against each other. The only outstanding issue is support for Leo going forward. I require further information on Leo’s circumstances to properly assess what Tony may owe for ongoing child support.
Maria is not entitled to retroactive or ongoing spousal support:
4Maria and Tony separated on March 16, 2016. At the time, Leo was 13. Since separation, Maria has been living at 18 Gilley Road with her ex-husband Manuel, who claims to live in the basement. He pays her $800/month and assists with Leo. In fact, Leo is listed on Manuel’s insurance policy as his stepson. Maria acknowledged in her testimony and pleads in her Amended Application that Tony has paid for all expenses of the property since separation, and he continues to do so. After being forced out of 18 Gilley Road, Tony lived with his mother at 34 Katharine Street – a property he says was gifted to him by his parents but in which his mother had a life interest. His home is unencumbered.
5It appears that Maria is seeking both compensatory and non-compensatory or needs based support. This arises from s. 15.2 of the Divorce Act, which requires the court to consider, among other things, the functions performed by each spouse during the marriage and the length of cohabitation. Paragraph 15.2(6) sets out the objectives of spousal support orders – namely, to recognize any economic advantages or disadvantages to the spouses arising from the marriage breakdown, to apportion between the spouses any financial consequences arising from Leo’s care, and to relieve economic hardship arising from the marriage breakdown. Maria has not proved entitlement to either on a balance of probabilities.
6Maria testified that she met Tony in December 1996 at a coffee shop with her friend. At the time, she was working as a nanny for the Canef family. She also worked for McGregor Socks as a packer. Maria and Tony moved into his parents’ home on Katherine Road in March 1997 and then married on September 9, 2002, shortly before Leo was born. After Leo was born, Maria’s role was to take care of him while Tony continued to operate his concrete business. Maria did earn income during the marriage, doing spiritual readings for clients. The clients would pay her in cash. Maria claims that after 2011 she did not want to continue doing the readings after surviving a surgery to remove a benign tumor in her brain. She then turned to gambling at the casino and believed herself to have become addicted in 2012. From 2016 to 2021, Maria deposited over $2 million into her bank accounts. Deposits during the marriage were close to $3 million. She testified that these were all amounts that others gave her to play the slots because she was so lucky at them. I did not find Maria a credible witness overall, and she has not met her burden of satisfying me on a balance of probabilities that none of the over $2 million dollars in her accounts was money that she earned or won. Ms. Ibghi urged in submissions that Tony has not proven that any of the funds in her account was income. It is for Maria to establish need, not for Tony to disprove it.
7Maria states that for book readings, she only received cash and did not deposit it into the account. She provided no record of how much cash she earned since the date of separation. Maria testified that she did not do readings after separation, but Manuel testified that she continued to do so, until he changed his answer after a court recess. I observed Maria’s facial expressions while Manuel testified that she continued to work. He changed his story after he returned from the break, having been told not to talk to anyone about his testimony. I do not accept the revised testimony and find that Maria continued to earn money from doing spiritual readings for the Portuguese and other communities.
8While Maria could not quantify her earnings from the readings, the Cerqueira family testified at trial about money they paid Maria for her spiritual guidance. Cristina Cerqueira testified, and I accept, that she loaned her parents $500,000, which her mother then paid to Maria for her spiritual guidance. Maria Cerqueira testified that the total amount she paid to Maria was $5 million over the 21 years of knowing Maria. Another figure offered was $3,626,430, reflected in credits to Maria’s TD 1872-6258342 account. Whether $500,000, $5 million, or $3.6 million was attributable to the Cerqueiras, I accept the Cerqueira family’s evidence that they paid Maria large sums of money prior to and up until the beginning of 2017, at which point they stopped seeing her. Maria failed to declare any of this money in her income tax returns. I do not find any of Maria’s tax returns reliable to determine her income during the marriage and post-separation.
9Tony also transferred Maria $450,000, $400,000 of which she then transferred into a mutual fund account, and $50,000 of which she paid Tony back. Tony sold a property at 23 Ingleside to give Maria this money. This money was exclusively for her use. I accept her testimony about what she used the money for – some of it went to pay for Leo’s expenses, but the majority was used to buy herself and her daughter luxury cars. Maria’s testimony was confused and contradictory as to how much she received. Her bank records speak for themselves and show $450,000 total paid to her by Tony. There was also controversy at trial about whether the money was intended for her to rent or buy a property to operate her business and build capital. I will address that issue in discussing Tony’s breach of trust claim. It is uncontested, however, that Maria received this money from Tony during their marriage. I also accept that Tony paid Maria another $180,000 in February 2016, just prior to separation. Tony had to borrow from a line of credit secured against the home to fund the payment. He alone continues to service that loan.
10Even if I reject the exact figures provided by the Cerqueiras, Maria’s bank statements speak for themselves. I reject her testimony and figures that she earned no more than $8000 a year during the marriage or after the date of separation. Her bank accounts reveal the following amounts:
a) 2011 - $46,593.27 b) 2012 - $684,508.68 c) 2013 - $435,065.46 d) 2014 - $1,108,576.27 e) 2015 - $1,268,691.13 f) 2016 - $2,087,068.00 g) 2017 - $136,221.58 h) 2018 - $98,790.69 (relying only on 6 months of records for that year) i) 2019 - $60,360.81 j) 2020 - $44,794.25 k) 2021 - $83,206.73
These amounts exclude cash received from readings and Manuel’s $800/month contribution to the household. There was also evidence that Maria wrote a note to her son from a previous marriage, Oliver Carvalho, that she was renting a room to him for $900/month since January 1, 2018. Either she received this money, or the note was fraudulently written to assist Oliver. This is only one example of how Maria’s financial comings and goings are unreliable, uncertain, unclear, and unbelievable.
11Even if, as Maria testified, the money was deposited from others who wanted her to gamble it for them, the onus was on her to demonstrate which money was from “people” to gamble, what monies were her winnings, and what money came from the Cerqueiras for her services. Her OLG account provides information on her winnings. I do not accept that she used all of it to gamble. I find that Maria had sufficient funds throughout the marriage to compensate her for taking care of Leo and not working outside the home. I have little evidence about what she might have earned had she not given up her work as a nanny or a sock packer. Those jobs yielded no more than $400/week on Maria’s own evidence. Her bank accounts and OLG winnings reveal that Maria had access to money far exceeding what she would have made in those jobs. Maria tendered no evidence on what other jobs she could have done had she not decided to stay home and take care of Leo.
12I do not find that Maria suffered any disadvantage from her role in the marriage, and she suffered no financial disadvantage from the marriage breakdown. From 2016 to the date of trial, Maria’s bank records show deposits of over $2 million while Tony earned a modest average income of $50,000. It was not for Tony to show that the $2 million was income – it was for Maria to show that it was not. She has not done so. If anything, Maria has taken advantage of her marriage to Tony; this includes continuing to live in the home with her ex-husband with all expenses paid by Tony. Going forward, I agree with Tony that Maria has not tendered any medical or vocational evidence to conclude that she is unable to work and entitled to support. This is not a case to apply a 50/50 net disposal income calculation or the “rule of 65” because Maria has not established entitlement.
13I dismiss Maria’s claim for retroactive and ongoing spousal support.
Maria recklessly dissipated family assets and is not entitled to equalization
14Pursuant to s. 7(1) of the Family Law Act, R.S.O. 1990, c. F.3 (the “FLA”), either spouse can apply to equalize family property. The valuation date in this case is March 16, 2016. Maria and Tony have prepared equalization calculations and have provided valuation of assets as required under s. 8(1) of the FLA. There are three issues that impact the calculation and entitlement of Maria to an equalization payment from Tony: i) The date on which Tony was gifted 34 Katherine Street property; ii) the value of Tony’s 1/3 interest in a property in Italy; and iii) whether any equalization payment to Maria is reduced or eliminated due to the improvident depletion of her property through gambling. According to Maria, Tony owes her $509,755.47, which includes the value of both 34 Katherine Road and the Italian property. Tony suggests he owes zero, or payment from Maria to Tony. His net family property (“NFP”) calculation shows that he could owe Maria $283,308.29. I prefer Tony’s figure.
15Even though Tony lives at 34 Katherine Road, both Tony’s parents gifted 34 Katherine Road to Leo in their wills. Tony testified that he is holding another property in trust for Leo. The Semenyk property is included in Tony’s NFP calculation. The Katharine Road home should not be included. I also agree with Tony that he has abandoned the 1/3 interest in his parents’ property in Italy. He explained that others are living there and may have gained property rights through squatting. The property is not worth his effort because of the cost of removing them. It is a modest amount in any event and has little impact on the NFP. It should be excluded from his NFP calculation; although, if it were included, it would only adjust the NFP by $38,381.63.
16Accepting Tony’s NFP calculation of $283,308.29, I reduce Maria’s entitlement to zero because I find that Maria gambled away or otherwise dissipated funds that she could have used to cover family expenses or invest for her and Leo’s future. Section 5(6) of the FLA states that a court may award a spouse an amount that is less than half the difference between the net family properties if the court is of the opinion that equalizing net family property would be unconscionable, having regard to reckless depletion of her net family property and or the fact that one spouse, in this case Tony, incurred disproportionately larger liabilities to support Maria during the marriage.
17In Serra v. Serra, 2009 ONCA 105, 93 O.R. (3d) 161, at para. 47, the Court of Appeal for Ontario stated that to cross the threshold of unconscionability, an equal division of net family properties in the circumstances must “shock the conscience of the court”. In this case, Maria admits to having a gambling problem, but she then failed to take any steps to address it. OLG records from 2012 to 2017 show hundreds of thousands of dollars spent at Woodbine alone. I have accepted evidence from the Cerqueira family that they paid Maria between $3 million and $5 million dollars for her spiritual counselling services. Maria’s TD bank statements show deposits into her account that correlate with the dates and amounts claimed by the Cerqueiras. Those records show deposits of over $3 million into Maria’s account. The amounts one sees running through Maria’s accounts is astonishing. I have already stated that I do not accept Maria’s testimony that all funds came from people who wanted her to gamble for them. The onus was on her to provide reliable and accurate records that distinguished amounts she won, amounts that belonged to others, and amounts that were earned through her readings. I also reject her evidence that all money for readings was in cash and that the readings ended in 2012.
18Maria argues that Tony knew, approved, and encouraged her gambling. Having heard from Tony, I accept his evidence that he did not approve. The fact that he might have driven her there at a time when the extent of the gambling was not obvious does not lead to his condonation. I find that Maria did what she pleased and recklessly depleted funds that could have provided for her retirement and care of Leo. In addition to the gambling, Tony had to sell a property to give Maria $400,000 and take out a line of credit against 118 Gilley to pay her an additional $180,000, as a result of loan repayment obligations she had to friends. He took on a greater burden to assist Maria despite her gambling. Maria’s behaviour shocks this court’s conscience, and an unequal division is warranted. I agree with Tony that given the extent of Maria’s gambling losses, her equalization entitlement is zero. I would come to the same conclusion even if I accepted Maria’s equalization figure.
No constructive trust over 118 Gilley Road
19The parties both testified that after living with Tony’s parents, they moved into 14 Ingleside. From there, Tony sold an apartment that he owned and bought a lot at 118 Gilley Road. He divided the lot into 118 and 120 Gilley Road, with the idea that he would sell one and keep one as the family residence. Maria testified that she helped break the concrete tile floor in the basement of 120, helped pick furnishings, and gave Tony cash for building 118 Gilley when he needed, such as for paying workers. Tony did acknowledge that she would give him cash from time to time. There is no record or reliable quantification of this amount, nor do I believe that it was of any significance to warrant a trust claim. I do not find any basis to impose a constructive trust over 118 Gilley Road. Maria’s participation as described was minor and does not give her an equitable interest in the property. Once 118 Gilley is sold, Tony is entitled to all proceeds.
Tony does not owe retroactive child support
20Leo is now an adult. When his parents separated in 2016, Leo turned 14 in October that year. He remained a minor child of the marriage until October 5, 2020. In this case, Tony admits that he has not paid child support to Leo since separation. However, he has continued to pay all expenses related to 118 Gilley Road, where Leo continues to live.
21In Morden v. Kelly, 2019 ONSC 4620, 30 R.F.L. (8th) 131, Justice Braid set out the principles to consider in determining retroactive child support. At para. 60 of her decision, Justice Braid reminds us that child support is the right of Leo, and he should enjoy the same standard of living he enjoyed when his parents were together. In D.B.S. v. S.R.G., 2006 SCC 37, [2006] 2 S.C.R. 231, at paras. 94-130, the Supreme Court of Canada suggests four factors to consider when assessing retroactive support: i) Does Maria have a reasonable excuse for not pursuing support sooner? ii) Is Tony’s conduct blameworthy? iii) Would Leo benefit from a retroactive award; and iv) would a retroactive award cause Tony any hardship? Providing shelter for Leo is a valued means of support, consistent with the court’s analysis in D.B.S. Jason Lee testified as an expert on valuation and market rent for 118 Gilley Road. He concluded that market rent for the property was just above $3000/month from 2017 to 2023. I found him to be straightforward, professional, and willing to concede points where appropriate. His evidence was not shaken on cross-examination, and I accept his conclusions. In a nutshell, the rent Maria saved in having free accommodation at 118 Gilley more than offsets any retroactive table support Tony may have owed to help maintain Leo’s lifestyle. Maria did not claim any interim child support. Given the monies flowing through her bank accounts, I do not accept that her failure to claim interim support was a result of the stresses and strains of litigation and incidents with Tony. I instead infer that her failure to claim support was purposeful because she knew that free accommodation more than compensated for the $500/month of table support that Leo might have been owed, and she did not want to upset the applecart.
22Maria also claims $19,629.01 in s. 7 expense arrears. Maria’s evidence was unreliable on this claim as well. She provided little or no proof of her payment of the expenses, the largest amount being for Leo’s private school. In any event, this amount is readily offset by the occupation rent that she did not have to pay during her free stay at 118 Gilley Road.
Maria does not owe occupation rent
23Tony agreed in cross-examination that he could not take care of Leo due to his own health challenges. He was content with Leo residing with Maria and Manuel, as well as their daughter Monica at times. He was content with Manuel paying for some of Leo’s expenses and with Manuel and Monica helping to care for him. Tony had free accommodation and had the means to pay support. In my view, it would be unjust to require Maria to now pay occupation rent having also lost entitlement to equalization.
24Forbearance on receiving rent offsets any claim Maria would have for retroactive spousal support and any claim Leo would have on retroactive child support. According to Maria, Tony would owe approximately $29,000 in retroactive child support, $19,629.01 in s. 7 expenses, and $56,023 in spousal support arrears. This totals less than half of the $265,085.00 that Tony claims for occupation rent based on Mr. Lee’s valuation. In my view, taking this approach fairly balances the interests of the parties and the best interests of Leo, who continues to reside with Maria.
No breach of trust
25Tony argues that when he gave Maria the $400,000, it was intended for her to buy or rent a commercial space for her to work from and to pay for Leo’s ongoing expenses. Instead, Maria testified that she only used a small portion to pay for Leo’s expenses. At trial, she agreed that she also used the funds to buy a luxury car for Monica and another for herself. She testified that she used the funds to pay for Leo’s private school. However, consistent with testimony in other areas, Maria did not offer documentary evidence to corroborate her story. Instead, she was impeached with her answer at questioning, where she stated that she used the balance of the funds for gambling. I accept her answer at questioning. It is more consistent with Maria’s overall dissipation of her funds over the years.
26Tony argues that her failure to use the funds as planned amounts to a breach of trust warranting damages. He did not support his position with any case law. I dismiss his claim.
Ongoing child support requires further evidence
27Leo is now 20 and considered a child of the marriage because, as a person living with autism, he remains dependant on Maria. When a child is over the age of majority, the Child Support Guidelines, O. Reg 391/97, s. 3(2) (the “Guidelines”), states the amount of child support payable is either the guideline amount as if the child were younger than the age of majority, or a more tailored amount that considers the conditions, means, needs, and other circumstances of the child. In Lewi v. Lewi (2006), 80 O.R. (3d) 321 (Ont. C.A.), the Court of Appeal for Ontario outlined general principles used to calculate support for an adult child:
i. The court starts with the presumption that it should be calculated in the same manner as for a child under the age of majority; that is, by calculating the applicable Table amount and adding any contribution to s. 7 expenses. This is described as “the standard Guideline approach.” However, the court must then determine whether this approach is “inappropriate” based on the particular facts of the case. ii. If the court determines that the standard Guideline approach is inappropriate, the court must determine the amount of child support that the court considers appropriate, having regard for the conditions, means, needs and other circumstances of the child and the financial ability of each spouse to contribute to the support of the child. The court cannot depart from the standard Guideline approach simply on the basis that the amount determined using the standard approach is inappropriate. iii. Where the court determines that the standard Guideline approach is inappropriate, the analysis should be carried out entirely pursuant to s. 3(2)(b) of the Guidelines and without resort to s. 7. However, in carrying out the s. 3(2)(b) analysis, the court may draw upon the principles set out in s. 7 and other provisions of the Guidelines, and judicial experience in applying them. For example, the court may order that expenses be shared between the parents in proportion to their respective incomes, after deducting the contribution of the child. iv. Section 3(2)(b) requires the court to consider the means of the child along with the means of the parents in determining an appropriate amount of child support. The court has discretion to decide the amount that the child should be required to contribute.
28An adult child who receives ODSP, as Leo does, may deserve the more tailor-made approach contemplated by s. 3(2)(b) of the Guidelines. I accept Justice Braid’s principle in Morden that s. 3(2)(b) should be applied to achieve an equitable balancing of responsibility between the adult child, his parents, and society: at para. 56.
29I agree with Tony that Maria failed to tender sufficient evidence of Leo’s current circumstances to foster a proper analysis. Leo receives monthly ODSP of $896/month and is enrolled in the “Passport Program” that allows him to recover certain expenses up to $5000. Maria has provided some evidence of a monthly budget, but I do not find her figures reliable, especially since Manuel’s insurance covers many of Leo’s expenses, like dental, prescriptions, eyecare expenses, and counselling expenses. Based on her figures, Maria suggests that Tony pay the table amount of $462.
30I agree that Tony will have to continue to support his son either by paying the table amount or more. I am concerned with where the funds will be paid given Maria’s history with money. Currently, Leo’s ODSP payments paid into an account jointly held by Maria and Leo. I am contemplating any monies owing from Tony to Leo to be deposited into an account jointly held by Tony and Leo.
31The parties also have not addressed what will happen now that Tony is at liberty to sell 118 Gilley Road. Where would Leo live? What will be the cost? Would Tony consider keeping the house with some market rent owed by Maria to live there? What are Tony’s plans with respect to passing on the Katherine Road home to Leo?
32Without a clear view of Leo’s future accommodation and specific needs, I cannot fix an amount for child support payable by Tony. The parties shall convene a 30-minute case conference with me through my assistant Jessica.Perri@ontario.ca to address this issue. It can be via zoom.
Costs:
33The parties spent an inordinate amount of time, and no doubt money, speaking to evidence that had no bearing on the financial issues that they raised. I suggest the parties resolve costs. If they cannot, the parties can make brief written costs submissions after I have decided the final issue of Leo’s ongoing support. I will set timelines for that process once child support is resolved or decided.
Justice P. Tamara Sugunasiri Released: September 18, 2023