Court File and Parties

COURT FILE NO.: FC1346/21 DATE: 2023/11/29 SUPERIOR COURT OF JUSTICE – ONTARIO FAMILY COURT

RE: Peter Jules Okmanas, Applicant AND: Melinda Okmanas, Respondent

BEFORE: MITROW J.

COUNSEL: Genevieve M. Samuels for the Applicant William J. Doran for the Respondent

HEARD: November 15, 2023

Endorsement

Introduction

[1] This is the applicant’s motion. The applicant seeks an order to deal with the proceeds of sale from the jointly-owned matrimonial home.

[2] The issue on the motion is quite narrow. It relates to the holdback from the respondent’s share of the sale proceeds. The parties have settled the equalization payment issue. They agree that the respondent owes the applicant an equalization payment in the amount of $96,000 and that this amount should be paid to the applicant from the respondent’s share of the sale proceeds.

[3] The main issue regarding the holdback relates to the applicant’s claim for spousal support.

Brief Background

[4] The parties began to cohabit in March 2009. They were married in September 2014 and were separated in September 2021. The parties have one child.

[5] The respondent had brought a motion dated September 25, 2023 for the sale of the matrimonial home. However, the parties signed a listing agreement on October 3, 2023 and the respondent’s motion initially returnable October 11, 2023 was adjourned to November 15, 2023.

[6] The matrimonial home sold for $912,500 with a closing date of February 16, 2024. There is substantial equity in the matrimonial home. In her responding affidavit to the applicant’s motion, the respondent attached, as an exhibit, the applicant’s financial statement sworn May 12, 2022, which indicated that a little over $154,500 was outstanding on the matrimonial home mortgage as of April 1, 2022.

[7] In his brief affidavit in support of his motion, the applicant deposes that $150,000 should be held back from the respondent’s share of the proceeds “… pending final resolution of my claims for spousal support, child support arrears and post-separation adjustment claims.” The applicant provided no details in his affidavit as to how the holdback amount was arrived at. During argument, the applicant submitted that the Spousal Support Advisory Guideline (“SSAG”) calculations had been provided to the respondent’s counsel. Also during argument, the applicant submitted that he was prepared to lower the holdback to $90,000.

[8] It is evident that the bulk of any holdback would be related to a lump sum representing prospective spousal support.

[9] The issue of spousal support is somewhat contentious. The applicant is self-employed as a landscaper. The respondent argues that the applicant’s income is not accurately disclosed in his income tax returns. The applicant’s financial statement sworn May 12, 2022 referred to previously, disclosed an annual income of $27,435. That same financial statement disclosed that the applicant’s line 150 income for 2021 (the year of separation) was $10,051. The respondent argues that as a minimum, income should be imputed to the applicant on the basis of minimum wage.

[10] The respondent is an interior designer and works with builders in designing homes. At separation in 2021, the respondent’s income was $73,237. In 2022, the respondent’s income spiked to a little over $100,000 due to a short-term contract which has ended. In 2023, the respondent’s employer underwent restructuring and the respondent’s job was terminated. The respondent continued to work for another employer part time and received employment insurance benefits for a short period of time. The respondent commenced employment in October 2023 with a new employer earning $34 per hour and working approximately 35 hours per week.

[11] The respondent provides some evidence regarding post-separation adjustments to be made. Each party had been paying expenses relating to the matrimonial home following separation. The respondent deposes that she would have a credit owing to her from the applicant regarding the post-separation adjustments. The respondent further deposes that this credit could be offset against any child support arrears owing by the respondent. It was the respondent’s evidence that after receiving a credit for the matrimonial home expenses, that she would owe $10,000 or less to the applicant. The respondent proposed that $15,000 be held back for “any retroactive child support owing.” The respondent deposes that the parties have a shared-parenting arrangement regarding the child.

Discussion

[12] The applicant’s request for a substantial holdback rests primarily on the basis that sufficient funds should be available to meet a potential lump sum spousal support payment for prospective spousal support.

[13] There is no evidence in the applicant’s affidavit discussing the applicability of the types of factors as discussed in Davis v. Crawford, 2011 ONCA 294 (Ont. C.A.), relied on by the respondent, that may justify an award of lump sum spousal support. For example, at para. 67 in Davis v. Crawford, the discussion provides some examples where lump sum spousal support may be appropriate:

• Terminating ongoing contact between parties and cases involving a short-term marriage;
• Domestic violence or second marriage with no children;
• Providing capital to meet an immediate need of the dependent spouse;
• Ensuring payment where there is a real risk of non-payment of periodic spousal support; and
• Satisfying an immediate award of retroactive spousal support.

[14] In relation to the foregoing factors, which are not exhaustive, it is noted that the “clean-break” principle is not likely to apply as the parties have a child. Regarding a situation where capital is required to meet an immediate need, the applicant will be receiving a substantial payment for his share of the net proceeds plus he will receive an equalization payment from the respondent’s share. There was no evidence adduced suggesting any likelihood or risk that the respondent would fail to pay periodic spousal support if that was ordered.

[15] It was incumbent on the applicant – and he failed to do so – to provide some evidence that may support the likelihood of a lump sum spousal support award at trial.

[16] The applicant’s argument for a holdback in relation to prospective lump sum spousal support rested simply on the basis that statutory provisions enable the court to order that spousal support be paid on a lump sum basis. This ignores the reality that most awards of spousal support are made on a periodic basis. In Davis v. Crawford, supra, at para. 70, while the court did not endorse the submission that lump sum spousal support awards should be limited to “very unusual circumstances”, the court did agree that “most spousal support orders will be in the form of periodic payments.”

[17] For the foregoing reasons, I find that no amount should be held back from the respondent’s share of the matrimonial home sale proceeds for the potential claim of prospective lump sum spousal support. I find to be reasonable the respondent’s submission suggesting a $15,000 holdback on account of adjustments and child support arrears.

[18] I do find also that a sum should be held back for spousal support arrears from the date of separation. During submissions, applicant’s counsel referred to SSAG calculations that were prepared on behalf of the applicant and forwarded to respondent’s counsel, although not filed as part of the motion material. It was the applicant’s submission that spousal support arrears be estimated at $26,000 being $1,000 per month for 26 months. Although no objection was taken by respondent’s counsel to the reference to the SSAG calculations, it would have been preferable for the applicant, at the least, to have summarized the results of the SSAG calculations in his evidence.

[19] Considering the issues surrounding the applicant’s income, including potential imputation of income, I find that a holdback in the amount of $20,000 is reasonable.

[20] Accordingly, the total holdback should be $35,000. The order below reflects the parties’ agreement to divide the net sale of proceeds equally and for the payment of the equalization payment due to the applicant.

[21] At the hearing, argument was focussed on the applicant’s motion. No specific submissions were made as to what to do with the respondent’s motion for the sale of the matrimonial home. On a practical basis, it may be that this motion was largely resolved given that the matrimonial home was listed and sold. The order below provides for this motion to be adjourned.

Order

[22] I make the following interim order:

1. On the completion of the sale of the matrimonial home, all property taxes, mortgages, any other registered encumbrances, outstanding utilities, legal fees and disbursements relating to the sale and all necessary adjustments on the sale shall be paid forthwith, and the remaining net sale proceeds shall be paid forthwith as follows:

   a. 50% of the net sale proceeds shall be paid to the applicant;

   b. The respondent’s 50% share of the net sale proceeds shall be paid as follows:

    i. The sum of $96,000 representing the equalization payment owing by the respondent to the applicant, shall be paid to the applicant;
   
    ii. The balance, less a holdback of $35,000, shall be paid to the respondent; and
   
    iii. The $35,000 holdback is for post-separation adjustments, child support arrears and spousal support arrears, and shall be held in trust by the lawyer acting on the sale of the matrimonial home, or otherwise as may be agreed by the parties in writing, and the holdback shall not be released except on written consent of both parties, or an order of this court.
   

2. The respondent’s motion dated September 25, 2023 shall be adjourned sine die returnable on 7 days’ notice;

3. In relation to the costs of the applicant’s motion, the parties may make written costs submissions within 30 days. The costs submissions shall be limited to 3 pages, minimum font 12, double-spaced, and any references to authorities shall be via hyperlink. In addition, copies of time dockets, bill of costs and offers to settle may also be served and filed in addition to the written submissions. The costs submissions shall be served and filed with the court in the usual manner. If the parties have settled the costs issue, then the parties shall advise the trial coordinator in writing.

“Justice Victor Mitrow” Justice Victor Mitrow Date: November 29, 2023