Court File and Parties
NEWMARKET COURT FILE NO.: FC-22-1347-00 DATE: 20231010 SUPERIOR COURT OF JUSTICE – ONTARIO – FAMILY COURT
RE: Jamila Vadsaria, Applicant -and- Jamil Kassam, Respondent
BEFORE: The Honourable Madam Justice S.E. Healey
COUNSEL: Jeff Rechtshaffen, for the Applicant David Nuri, for the Respondent
HEARD: August 30, 2023
Endorsement
Nature of the Motion
[1] This is a motion for temporary child and spousal support.
[2] As of the date of argument of the motion the case has been in the system for 395 days.
[3] The parties were married on June 24, 2007 and separated, according to the pleadings, on March 15, 2021. In his material filed for this motion, for the first time, the respondent asserts that he has reconsidered his position with respect to the date of separation and now asserts that it is January 3, 2022.
[4] The issue of the date of separation is a triable issue for which there is competing evidence, which I will not deal with on this motion.
[5] There are two children: Elroy Kassam born September 10, 2015 and Judi Kassam born December 20, 2020.
[6] The applicant seeks support orders based on an imputed income to the respondent of $537,628 (USD) converted to Canadian funds and grossed up. She asks for an order for child support in the amount of $17,533 per month commencing September 1, 2023, and spousal support in the amount of $14,250 per month.
[7] The applicant also asks for orders for retroactive child and spousal support. For the period January 1, 2022 to December 31, 2022 she seeks child support in the amount of $17,588 per month and spousal support in the sum of $16,145 per month. A credit would be applied of $30,000 for uncharacterized support paid by the respondent during that period, resulting in a total amount of retroactive support of $374,796.
[8] For the period January 1, 2023 to August 31, 2023 the applicant seeks child support in the amount of $17,533 per month and spousal support of $14,250 per month. A credit would be applied of $7,000 paid by the respondent during that period, resulting in a total amount of retroactive support of $247,264.
Evidence
[9] The applicant’s evidence is that the respondent is a resident of the State of Florida. He emigrated to the United States in 2015 (from where is not stated). Between 2015 and 2018 she split her time between their homes in Toronto and Florida. Since 2018, she and the children have resided in Canada continuously, corresponding to the year in which the parties bought their matrimonial home in Richmond Hill. The respondent regularly came to Canada, and still does, to spend time with the family and now the children.
[10] The respondent’s evidence is that he has been a part-time resident of Florida since 2012 but is not a U.S. citizen. His affidavit suggests that he spent half of his time in Canada up until being arrested on July 2, 2022 due to allegations by the applicant of assault and domestic violence.
[11] Pursuant to an order made February 15, 2023, the respondent now has parenting time every second Sunday to Wednesday. His evidence is that he now has an overall work/life schedule that has been in place for many years, dividing his time between Florida and Toronto, frequently flying between the two locations to spend time with the children.
[12] The applicant has a lengthy career being employed at Canadian Border Services agency before Elroy’s birth. She did not return to that or any other paid employment following her maternity leave. Each party attributes responsibility for that decision to the other spouse. She did, however, return to work in January 2023, explaining that she did so because of the sporadic and insufficient financial support from the respondent.
[13] The applicant does not have a complete understanding of the respondent’s finances. She points to indicators of wealth: she did not work after the children were born and the respondent supported the family; the matrimonial home was purchased without a mortgage; they ate out at fine restaurants and travelled extensively; for junior and senior kindergarten, Elroy attended a private school; they spent an average of $1,500 on Elroy’s first few birthday parties; the respondent sent the applicant $30,000 to buy a new car in 2019; in 2021 the respondent purchased a vehicle for himself, paying cash; the respondent’s current home was purchased in 2020 without a mortgage; for the past three years, Elroy has been attending Holy Trinity private school in Richmond Hill which has an annual tuition fee of approximately $35,000; and Elroy has been involved in many extracurricular activities, some of which, like hockey and swimming, cost over $6,000 per year.
[14] The applicant has deposed that as of the date of separation the family’s annual budget was $127,000 plus the private school tuition.
[15] According to the parties’ most recent financial statements, their real estate assets have not yet been appraised. However, the Richmond Hill house was purchased in 2018 for $1,056,700. The respondent estimates that his home in Florida is worth $810,000 CAD.
[16] The respondent denies this type of spending during the marriage. He relies on a text communication between the applicant sent after separation in which she wrote: “Although you know me well enough I don’t spend anything. Barely if any”. His interpretation of this text exchange is that the applicant has acknowledged that the total monthly financial needs for herself and the children are around $3,000. He specifically denies the allegations of excess spending on activities such as vacations and gifts and asserts that the applicant has exaggerated their lifestyle.
[17] The applicant received some support from the respondent following separation, in an unspecified amount. He began to pay the amount of $3,000 per month in January 2022, which was less than one-third of the amount that she required to financially maintain herself, the children and the household in the manner that was well-established prior to separation. This amount stopped after March, and did not resume until after an unsuccessful mediation in the summer of 2022. The applicant’s evidence is that she has been helped by her mother, but finally applied for, and received, social assistance benefits near the end of 2022.
[18] The applicant has been requesting appropriate support through her counsel since February, 2022.
[19] The applicant returned to work in January 2023 due to the intense financial pressure and registered Judi for full-time daycare at a cost of $645 per month, to which the respondent has not made a specific contribution. She earns $88,767 annually. As soon as she returned to work the respondent stopped paying support in February, 2023. Support resumed as of June 1, 2023 in the amount of $2,000 per month following a settlement conference, and continues to be paid under that order made on a without prejudice basis.
[20] The primary dispute relates to the respondent’s source of income. The applicant alleges that the respondent has owned hotels in Florida. Her evidence is that as of 2022 the respondent owned three hotels: Holiday Inn, Lake Placid; Holiday Inn, Sebring; and Travelodge, Fort Myers. Additionally, he recently sold three additional hotels: Ramada, Lakeland; Travelodge, Orlando and Days Inn, Tampa.
[21] In contrast, the respondent asserts that he is an employee and that his brother Shamez Kassam controls the corporations that operate the hotels. He has filed affidavits from an individual named Martha Coloma, described as the tax accountant for Hotel Lake Placid LLC, Limaj LLC (Jamil spelled backwards) and Kassam Hotel Company Inc., each of which state that Shamez Kassam is the sole shareholder of these corporations on December 31, 2020 according to the tax returns filed.
[22] The applicant asserts that the respondent transferred one or more of his companies into his brother’s name after the date of separation. Shamez Kassam was a licensed pharmacist who had his license revoked by his professional governing body for various infractions including fraud, an allegation not denied by the respondent. Before 2020, Shamez Kassam travelled to Florida no more than once per year for a family vacation. The applicant suggests that the respondent’s allegation that he is simply an employee does not line up with his position that, as a tax strategy, he is required to reside full-time in the U.S. and spend the majority of his time there.
[23] As of the result of the respondent’s assertions, a detailed Request for Information was delivered to his former counsel (the respondent has been represented by five lawyers during these proceedings according to the applicant) to seek information regarding his real estate holdings.
[24] As of the May 11, 2023 settlement conference, the respondent had made no disclosure. Some disclosure was given in July 2023 through Mr. Nuri, which has been inadequate. Although the respondent claims that the Request for Information is far-reaching and disproportionate, it was triggered by the respondent’s post-separation assertions about his limited involvement with the hotels. For example, he has not provided his complete U.S. tax returns from 2017 to 2021, nor customer profiles for the major Canadian and U.S. banks, which would reveal where accounts are held in the respondent’s name. He has refused to produce purchase documents for the hotels which he asserts now employ him (purchased by corporations that he says are controlled by his brother), financial statements for companies owned by him during the marriage, or any loan and credit applications.
[25] The respondent’s evidence is that his current annual income is approximately $105,000, from which he acknowledges that he pays Elroy’s private school fee of approximately $35,000 annually.
[26] While acknowledging that his Orlando home is unencumbered, he states that the property was purchased by borrowing funds from his father and brother. He does not provide any documentary evidence of a debt owing to these individuals, nor an explanation for why their names are not on title.
[27] The respondent asserts that he manages hotels that are owned by his brother. He does acknowledge that he sold a hotel in January 2020 – the Ramada Lakeland - of which he was a 50% owner through a corporation called KT Lakeland Inc. The other 50% was owned by his partner, Ornan Ten Pow. He received approximately $2.5M in proceeds, all of which was then paid to his brother and father to satisfy a debt that he incurred when initially purchasing the hotel. He does not provide any documentary evidence of this debt. As the applicant notes in her evidence, the respondent claimed a capital gain of $2,755,183 in the year prior to separation.
[28] Summaries of the respondent’s U.S. tax returns for 2019 to 2021 have been disclosed. In the years prior to separation, 2019 and 2020, the respondent was listed as an executive, with a taxable income of $1,639,628 USD and $2,908,472 USD, respectively. In 2021 he was listed as hotel manager, with a taxable income of $93,661. In a financial statement sworn October 21, 2022, however, he stated that his 2021 income was $112,461 USD.
[29] The respondent confirms that he is currently paying the private school expense of $35,000, plus $2,000 per month in uncharacterized support.
Analysis
[30] This is a common tale. The parties had a reasonably high standard of living during the marriage, the marriage breaks down, the primary income earner suddenly asserts that he is far less well-heeled than was established during the marriage, and suddenly presents previously unheard assertions about his income earning status, debts and assets. The income earner somehow believes that hiding his wealth or setting up smoke screens will help him to delude the court into believing his narrative. It never works, and leads to protracted, expensive litigation.
[31] The support and tuition amounts paid by the respondent total $66,000 per year in after tax dollars. This of course does not include any of the costs associated with a lifestyle that is clearly out of reach of someone earning only $105,000; for example, twice-monthly return flights between Toronto and Orlando and the operation of two households.
[32] The applicant has provided enough evidence on this motion to demonstrate that the respondent’s business interests are not how he represents them to the court. For example, the respondent claims that he has never had an ownership interest in Kassam Hotel Company Inc., which owned the Travelodge Fort Myers and was subsequently purchased by Kasja Holdings Inc. in 2013. The applicant has included a Consent Judgment signed by the respondent on August 28, 2017, indicating that he was the owner of Kassam Hotel Company Inc. His signature is preceded on a document by the following clause:
By my signature, I, Jamil Kassam, hereby affirm that I am acting in my capacity and within my authority over Kassam Hotel Company, Inc., d/b/a Travelodge Fort Myers, and I have the full authority to bind Kassam Hotel Company, Inc., d/b/a Travelodge Fort Myers to the terms and conditions of this Consent Final Judgment.
[33] The Notary Public who commissioned the document recorded that the respondent personally appeared as President of Kassam Hotel Company, Inc., d/b/a Travelodge Fort Myers.
[34] The respondent’s evidence relating to this document is that he does not know why he identified himself as the owner.
[35] The most compelling and sensible conclusion is that he identified himself as the owner because he was the owner.
[36] According to the respondent’s evidence, Travelodge Fort Myers was sold by Kasja Holdings Inc. in 2022. As the applicant points out, “Kasja” is obviously a combination of the first letters of the respondent’s first name and the first letters of his surname. The applicant has provided evidence in the form of a corporate amendment form, showing the replacement of the respondent as president with his brother on October 2, 2021. The respondent said that he did not receive the proceeds of sale of this hotel, as they belong to his brother.
[37] Similarly, the declaration of a large capital gain by the respondent on his 2020 income tax return would not occur if there was legitimate corporate debt owed to the respondent’s family members, as he alleges.
[38] These are but a few examples that cast sufficient doubt on the truthfulness of the respondent’s evidence for the court to view it with a large dose of skepticism.
[39] The evidence does not permit an understanding of the respondent’s true income, because he has failed to reveal it. He has produced some banking documentation from 2019 for hotels that were sold in 2020, which clarifies nothing other than the incompleteness of his disclosure and the virtual certainty that there are other bank accounts accessible to the respondent, possibly companies involved in the respondent’s work life other than those that he has chosen to reveal, and almost certainly other sources of income available to him beyond what he has chosen to reveal. I do not place any weight on the affidavits from Martha Coloma; the best evidence to support the assertions in that affidavit has been withheld; for example, the corporate tax returns and the shareholder register. He has failed to give the court the information it needs to come up with a support order that fairly reflects his true income. But that cannot stop rough justice from being done; the respondent has not been fair to his spouse and children and the court must intervene.
[40] In these circumstances, imputation of income may be done by the court pursuant to s. 19(1)(d) and (f) of the Child Support Guidelines, O Reg 391/97.
[41] The respondent’s misleading statements about the true status of his income and the lifestyle that the parties lived during the marriage is a factor that the court can consider in imputing income for support: Heard v. Heard, 2014 ONCA 196.
[42] For lack of better source information, Mr. Rechtshaffen has suggested a method for imputing income. It is based on the two bank statements produced by the respondent for 2019. He has suggested that the deposits into the corporate account statements for Fifth Third Bank account ending in *1429 of $1,601,163 be added the deposits from the same period made to Chase Bank ending in *9572 of $204,265. From that total of $1,805,428 an amount of 70%, representing reasonable business expenses, be deducted. This leaves the net figure of $537,628.40 USD, the equivalent of $709,024.33 CAD. This amount should be grossed up for tax purposes.
[43] While tempting to use the methodology suggested by Mr. Rechtshaffen to impute income, I am not satisfied that the bank statements provide a suitable way to gauge the respondent’s current income.
[44] What is compelling is the applicant’s evidence that the family’s budget during the marriage, including tuition for Elroy, was $162,000, as it more closely accords with the lifestyle described by her. This does not include the costs shown in the respondent’s most recent financial statement to operate his own residence in Florida. In that financial statement he lists monthly costs associated with his house at $1,518.75 CND ($18,225 annually), groceries, household supplies and meals at a combined $800 ($9,600 USD or $12,960 CND annually), and gas, entertainment, clothing and gifts at a combined $725 ($8,700 USD or 11,745 CND). Then there are the costs paid by his employer: car loan or lease payments of $415, flights $460, cell phone $80 – totaling $11,460 USD or $15,471 CND annually.
[45] All of this means that there is sound evidence that the respondent currently has access to $220,431(CND) in after tax dollars, at a minimum. This sum is be grossed up by 50% in the absence of more reliable information about the respondent’s taxation, resulting in a gross income $440,862.
[46] It is this amount - $440, 862 CND - that I impute to the respondent as income for 2023.
[47] The applicant has never acknowledged needing only $3,000 per month and the respondent’s mischaracterization of the text message exchange is deliberately misleading. In that exchange, the applicant was letting him know that the $3,000 that he gave to her in March 2022 would not cover the realty taxes in addition to the credit card and other bills.
[48] The applicant has a compensatory support claim as well as a needs-based one. At the time of separation she was caring full time for an infant under the age of one, and had not been in the paid labour force since 2015. It is obvious that to transition from a household entirely and robustly funded by the respondent at the time of separation to one that she had to run without sufficient financial support resulted in economic disadvantage and created financial hardship, forcing a return to work that had not been originally planned by the family. There is a prima facie case made out.
[49] The Supportmate calculations result in a payment of $5,567 monthly in child support and 6,425 monthly in spousal support in the mid-range. These amounts shall commence being paid on an ongoing basis as of October 1, 2023.
[50] I see no reason why that amount should not have been paid from the outset of this year and order retroactive support child and spousal from January to September inclusive in the same amounts set out in the proceeding paragraph. Ongoing child support and spousal has always been a pressing issue in this proceeding, especially before the applicant returned to work. While a final judgment may result in an adjustment to the amounts to be paid for 2023, there has been a clear need for the applicant to have received more support than she did from the date of separation to her return to work. This retroactive order helps to alleviate that inequity until a final determination can be made about the respondent’s income for the year of separation and following. The respondent shall receive credit for the amounts that he has already paid in 2023, attributed to child and spousal support proportionately.
[51] A determination of the respondent’s income for the years before 2023 is beyond the scope of a short motion and so will await trial.
Order
[52] This court orders:
(a) Commencing October 1, 2023, and on the first day of each month thereafter, the respondent shall pay child support to the applicant for Elroy Kassam born September 10, 2015 and Judi Kassam born December 20, 2020, in the sum of $5,567 per month, based on an imputed income of $440,862 CND for 2023.
(b) The respondent shall pay retroactive child support to the applicant in the sum of $5,567 per month covering the period January 1, 2023 to September 30, 2023, less credit for any amounts actually paid by the respondent to the applicant during that period of time (of which 46% of the total shall be attributed to child support).
(c) Commencing October 1, 2023, and on the first day of each month thereafter, the respondent pay spousal support to the applicant in the sum of $6,425 per month, based on an imputed income of $440,862 CND for 2023.
(d) The respondent shall pay retroactive spousal support in the sum of $6,425 per month covering the period January 1, 2023 to September 30, 2023, less credit for any amounts actually paid by the respondent to the applicant during that period of time (of which 54% of the total shall be attributed to spousal support).
Costs
[53] If the parties are unable to agree upon the costs of this motion, they may provide written submissions not exceeding three pages in length not including cost outlines, offers to settle and any authorities on which they rely. The applicant’s are due by October 24, 2023 and the respondent’s by November 3, 2023. Submissions shall be served on the other party and filed with proof of service through the filing office at NewmarketSCJfamily@ontario.ca, with a copy to my judicial assistant at BarrieJudSec@ontario.ca.
Healey J. Released: October 10, 2023