Ontario Superior Court of Justice

Court File No.: FS-21-102094-00
Date: 2025-04-01

Parties

Between:
Gail Shipclark
Applicant
(Counsel: Andrew Morrison)

-and-

Sacho Neykov
Respondent
(Self-Represented)

-and-

Laptops for Less Inc. & 7754205 Canada Inc.
Respondents

Heard: March 27, 2025

Uncontested Trial Endorsement
Mandhane J.

Overview

[1] The Applicant/Mother and Respondent/Father started co-habiting in 1999, were married on April 3, 2003, and had twin boys on April 29, 2006. The Father ran the couples’ two businesses, while the Mother was mostly a stay-at-home parent. She also gathered the corporate paperwork to send to the bookkeeper each year.

[2] The parties were co-owners and operators of two corporations: Laptops for Less (“LFL”) and 7754205 Canada Ltd. (“775”). They were the only shareholders and officers of the two corporations. The Father was responsible for the day-to-day operations and employed his adult son from a previous relationship (“the stepson”) as a manager of LFL.

[3] LFL sold refurbished laptops. The Mother estimates that LFL earned about 30% of its income from cash sales that were not reported as business income. 775 owned two properties: the warehouse from which LFL operated, and a residential income property. After separation, the residential income property was sold under distress and the proceeds were divided between the parties equally. The second property—the warehouse—is still owned by 775 Canada.

[4] The parties separated on May 1, 2021 after the Father accused the Mother of having an affair with an employee of LFL, and alleged that LFL’s customers were upset and would not do business with LFL anymore. The Mother denies having an affair and any problems with customers. The Mother says that Father has spread these lies to justify his subsequent decision to wind up LFL.

[5] In July 2021, the Father wound up LFL’s operations and transferred them to a company that he jointly held with the stepson, Quantum Computers. LFL stopped reporting any corporate revenues post-separation, and the Mother began to receive emails from former customers that were sent to both LFL and Quantum Computers. The Father claimed that he was now deriving no income from LFL and that he was entirely dependent on the stepson.

The Pleadings

[6] The Mother filed this Application on December 10, 2021. She sought various parenting orders, child support, spousal support, equalization, and a freezing of assets. She asks for financial disclosure to determine the Father’s income for support purposes and the values of his businesses.

[7] The Mother’s Financial Statement sworn February 19, 2025, indicates that she has been collecting CCP Disability benefits since April 2014, and that her gross income from all sources is $13,000. On the other hand, her annual expenses total $92,834 and include all the carrying costs of the matrimonial home, car expenses, and nominal personal expenses.

[8] The Mother has a net family property (NFP) of $651,138.09, which includes her interest in the two businesses, her share of the matrimonial home, her 2014 car, and a life insurance policy with the children as named beneficiaries. While she had some savings on the date of separation, they have been depleted since then and she has incurred more debts.

[9] The Father filed his Answer and Financial Statement on January 13, 2022. He swore that he was self-employed by LFL and that his gross income from all sources was $20,337. He told CRA that he earned between $11,000 and $20,000 annually between 2018 and 2020. Despite his meagre income, the Father’s Financial Statement indicated that his annual expenses were $102,477 (which did not include any amounts for housing or utilities, and was largely comprised of car and personal expenses). The Father swore that he was not aware of the family expenses because “all expenses for the family are paid from the Laptops for Less business account” which he said the Mother controlled.

[10] The Father claimed to have a net family property of $273,947.41, with his only assets being the equity in the matrimonial home and the income property. He did not include any amount for LFL. He said that he had debts totaling over $550,000. Still, the Father’s NFP had increased since separation, largely by paying down his debts—from what income source, it remains unclear.

The Father’s Pleadings Are Struck

[11] The parties attended a case conference before Justice Kumaranayake on January 24, 2023 where the Father was ordered, on a without prejudice basis, to pay interim support based on an imputed income of $44,000, to make detailed financial disclosure about his income and business interests, and to pay costs of $1,000.

[12] The Mother obtained an expert business and income valuation in August 2023 and served this on the Father as part of her settlement conference brief. The parties attended a settlement conference before Justice Doi on September 22, 2023. Justice Doi noted that the Father was not paying child support, had not provided any of the disclosure ordered, had not paid his share for the expert business valuation, and had not paid the costs ordered. Justice Doi gave the Father one month to comply with Justice Kumaranayake’s order after which the Mother could move to have his Answer struck.

[13] The matter returned before Doi J. on November 17, 2023. While the Father had provided some additional disclosure, he was generally non-compliant. He was ordered to pay $1,000 in costs and given “one-last chance to comply” before the matter returned in December 2023 to be spoken to. On December 18, 2023, the Mother was granted leave to bring a motion to have the Father’s pleadings struck. The Father did not file any materials in response to the Mother’s motion to strike.

[14] The Father travelled to Bulgaria in December 2023 and has not returned to Canada since. The parties have not communicated since. The Father has sparse and sporadic communication with the twins. The Mother assumes that the Father is living in the home he inherited from his parents in Bulgaria. The Mother has formed the impression through conversations with other family members, including the stepson, that the Father does not intend to return to Canada ever again.

[15] Doi J. struck the Father’s pleadings on March 5, 2024. Doi J. found that he had not provided basic disclosure, including proof of income from all sources, credit card and bank account statements, and business valuation reports. While Doi J. stated that the missing disclosure was “significant,” he was most concerned about the Father’s failure to disclose his business interest in 251866 Ontario Ltd. This was a corporation that was registered to the Father’s name, used the matrimonial home as its corporate address, that was making deposits between May and August 2021, and was taking out withdrawals as late as March 2023. He found that the Father was forcing the Mother to incur significant financial costs simply to ascertain what assets the Father might have—calling this a “catch me if you can” approach.

[16] The Mother asks me to make a lump award of over $1.2 million dollars, on account of ongoing and retroactive child and spousal support based on an imputed income of $304,000, unequal division of net family property in her favour, and to allow her to sell the matrimonial home and the warehouse to satisfy the Father’s obligations on a full and final basis.

[17] This matter proceeded before me by way of uncontested trial. The Mother took the stand, entered numerous business records as exhibits, and called expert evidence from a business and income valuator. This evidence was not challenged, and, for the most part, I accept it.

The Adverse Inference Available to Me

[18] Where a party fails to meet their financial disclosure obligations, I may draw an adverse inference against them and impute an appropriate amount of income: Federal Child Support Guidelines, SOR/97-175, s. 23; see also Meade v. Meade, para 81. My authority to impute income is discretionary and fact-specific: Levin v. Levin, 2020 ONCA 604, para 12.

[19] As a starting point, I accept the Mother’s evidence that the Father has no intention of returning to Canada, and that this is part of a larger “catch-me-if-you-can pattern” whereby the Father is willing to do anything to avoid his financial responsibilities to the family.

[20] The Father has taken an obstructionist position throughout this litigation:

• First, by winding up LFL’s operations to thwart the Mother’s equalization claim;
• Second, by taking absurd positions in his Financial Statement which suggest that he is no longer earning any income while still paying off his debts;
• Third, by refusing to make meaningful disclosure about his income and business as required by Rule 13 of the Family Law Rules, O. Reg. 114/99 and sections 21 through 25 of the Guidelines;
• Fourth, by absconding to Bulgaria to avoid his financial obligations to the family;
• Fifth, by refusing to pay without prejudice interim child support on a minimal imputed income of $44,000; and
• Sixth, refusing to pay the costs awarded against him.

[21] The Father’s actions to date warrant me making strong adverse inference against him when it comes to determining his income and assets. It is within this context that I deal with the Mother’s claims below.

Income for Support Purposes

[22] The Mother’s income for support purpose is her Line 150 taxable income, which is $11,959 per annum. The Mother asks me to impute income to the Father in the amount of $304,000.

[23] Subsection 19(1) of the Guidelines allow me to impute income in “appropriate circumstances,” including where a spouse is intentionally unemployed or under-employed, where it appears that income has been diverted, or where the spouse has failed to provide the required financial disclosure: s. 19(1)(a)(d)(f). Even still, I cannot select an arbitrary amount as imputed income: Drygala v. Pauli, paras 35, 44. Instead, “there must be a rational basis underlying the selection of any such figure. The amount selected as an exercise of the court’s discretion must be grounded in the evidence” and be “reasonable in the circumstances:” Drygala, at paras. 35, 44. The evidence need not be perfect, but it must be sufficient to allow me to judicially exercise my discretion: Michaud v. Kasali, 2016 ONSC 443, para 41.

[24] I accept the expert’s evidence that the Father’s income from LFL and 775 averaged $254,000 in the years before separation. To arrive at this value, the expert relied on corporate filings, along with the Mother’s estimate as to the percentage of LFL’s business income that was historically derived from cash sales (30%). I accept the Mother’s estimate as to cash income because of her role as the corporate bookkeeper, because she recalled a family lifestyle consistent with this income (i.e. two international vacations per year, and ownership of three properties), and because the Father was served with the expert report which included this assumption and never challenged it.

[25] I also accept the Mother’s evidence that the Father started another business, 251 Ontario, whose operations and revenues are unknown at this point. The Mother relies on six banking transactions from 2021 and 2023 to support a finding that the Father’s income for support purposes should be increased from $254,000 to $304,000.

[26] The Father’s income for the years 2021, 2022, and 2023, shall be imputed at $304,000. I am prepared to find that the Father would have derived income from 251 Ontario before he moved to Bulgaria in 2023, and that the best evidence comes from the selective banking records he chose to disclose.

[27] The Father’s income for 2024 onwards, will be imputed at $254,000. There is insufficient evidence upon which to infer that the Father was still receiving income from 251 Ontario post-2023. The Father moved to Bulgaria in 2023, and there are no transactions before me from after that date. It is quite possible that the corporation is no longer a going concern.

Lump Sum Retroactive and Ongoing Child Support

[28] Immediately post-separation, the twins were minors and lived with the Mother exclusively. They do not have any contact with the Father.

[29] The twins are now adults but still dependents. One of the twins is currently upgrading his high school credits while living at home with the Mother, and has been accepted into a three-year, post-secondary technical program starting in September 2025. The other twin has autism spectrum disorder and is currently in the first year of a four-year program at McMaster University and living on campus. Because of his developmental disability, he will be living in his own apartment for the remaining three years of the program. Both twins will be at home with the Mother during the summer months.

[30] The Father has paid a total of $9,552.00 in support since separation such that significant arrears have accrued. The Mother has had to go into debt and borrow from friends and family to support the children.

[31] The Mother asks me to order that the Father pay a lump sum to account for child support arrears and ongoing support. The Guidelines allow me to make a lump sum award for ongoing support if I am satisfied that the Mother or twins would suffer “undue hardship,” otherwise: Trebilcock v. Trebilcock, 2012 ONCA 452, paras 4-5, referring to s. 10(1) of the Guidelines. Here, I find that ordering monthly support would cause undue hardship to the Mother and the twins because: the Mother has already incurred debt to support the children that must be repaid, she is supporting herself on disability benefits, the Father has not made regular child support payments, the Father understated his income for support purposes, the Father is not working in Canada, the Father is living in a non-reciprocating state (Bulgaria), and because the parties have jointly-owned assets available to satisfy a lump sum child support award.

[32] After accounting for the $9,552.00 the Father has already paid, based on my findings of fact above, the Father shall pay a lump sum child support equivalent to the following:

• From May 1, 2021 to January 1, 2024, table child support for two children based on an imputed income of $304,000;
• From August 1, 2024 to August 2024 (the last time both children were living with the Mother full-time), table child support for two children based on an imputed income of $254,000;
• From September 2024 to September 2025 (when one child was at university), table child support for one child and summer support for one child based on an imputed income of $254,000;
• From September 2025 through September 2028 (when both children will be in post-secondary studies), the Father shall pay summer support for two children based on an imputed income of $254,000;
• Child support will terminate on September 1, 2028.

Section 7 Expenses, Children’s RESPs

[33] The Mother has incurred $12,185.24 in section 7 expenses since separation. In terms of s. 7 arrears, the Father shall pay a lump sum equal to his proportional contribution based on his imputed income in each year ($304,000 in 2021-2023, and $254,000 thereafter).

[34] I accept the Mother’s evidence that one twin’s education at McMaster will cost $97,250.40 for a four-year program. The other twin is planning on enrolling in a three-year program, so I would estimate the total cost to be $72,937.80. Given that there is about $15,000 in their RESPs, the out-of-pocket expenses for s. 7s will be $170,188.

[35] Given my findings about spousal support (see below), the Father shall pay his proportionate share of the ongoing s. 7 expenses (50%) as a lump sum of $85,093.90. For the reasons stated above, I find that it would cause the twins undue hardship if I were to order periodic payment of s. 7s such that a lump sum award is desirable.

[36] I would also order the release of funds from the jointly-held TD RESP accounts to the Mother, which shall be used exclusively for the benefit of the children.

Spousal Support

[37] The Mother has satisfied me that she is entitled to spousal support based on her needs as a person with a physical disability and as compensation for her caregiving role during the marriage: Divorce Act, s. 15.2(6); FLA, s. 33(8). The parties cohabited for approximately 22 years and the rule of 65 applies such that the Mother is entitled to indefinite support until the Father retires.

[38] The Mother and the twins became accustomed to a lifestyle during the marriage that included travel and ownership of multiple properties. Since separation, the Mother has been unable to meet her basic needs without going into debt. Not only did the Father refuse to pay spousal support, he also deprived her of her share of the corporate income by winding up LFL.

[39] From the date of separation (May 1, 2021) until the twins are in the Mother’s care (September 1, 2028), the Father shall pay spousal support at the high end of the range based on his imputed income in the relevant years. An award at the high end of the range is justified because the Mother is disabled, her expenses far exceed her income, she has no access to dental and medical benefits, and she is solely responsible for caring for the children, including one who has autism. The Mother is entitled to the after-tax benefit of such support which would put her in the same position as if the Father had paid monthly support. For 2022, the Mother shall include the amounts that she withdrew from her RRSP as part of her income for the purposes of determining spousal support.

[40] After September 1, 2028, when the Father’s child support obligations notionally end, he shall pay lump sum spousal support based on a 50/50 net disposable income, with his income imputed at $254,000, up to the age of 65. While the Mother asks me to find that the Father will retire at 67 rather than 65, there was insufficient evidence to do so. Her evidence in this regard consisted of bald assertions rather than anything concrete.

[41] I am prepared to order that the spousal support be payable as a lump sum: FLA, s. 34(1)(b). The Mother has incurred debts that she must pay off, the parties have assets to satisfy the order, and I have no confidence in the Father willingly paying support given that he has moved to Bulgaria and taken multiple steps to defeat the Mother’s claim: Davis v. Crawford, 2011 ONCA 294, para 67.

Equalization

[42] “Net family property” is the value of all the property that the spouse owns on the valuation date, after deducting the spouse’s debts and other liabilities, as well as the value of property already owned on the date of the marriage: FLA, s. 4(1). The spouse whose NFP is lesser of the two NFPs is entitled to receive one-half of the difference between them as an equalization payment: FLA, s. 5(1).

[43] Because all the parties’ known assets and liabilities were jointly held, in the usual course, there would be no equalization payment owing. However, the Mother asks me to order unequal division of net family property in her favour in the amount of $166,500. She says that equalization would be “unconscionable” because of the Father’s intention and reckless depletion of LFL post-separation: FLA, s. 5(6)(d).

[44] First, I agree with the Mother that the Father’s Financial Statement is nonsensical and cannot be relied upon to determine his assets. Justice Doi found as a fact that the Father failed to disclose: the income or assets of 261 Ontario, his interest in Allianz Bank in Bulgaria, his TD Mutual Fund account, his US dollar account, and his property interests in Bulgaria.

[45] Second, I also find that the Father purposefully wound-down LFL post-separation to defeat the Mother’s equalization claim (i.e. so there would be no funds available in the corporation to satisfy any future award), and that he started a competing business, Quantum Computers, doing the same work.

[46] Overall, relying on the expert report, I find that the Father’s actions in winding down LFL resulted in a qualifiable loss to the Mother of $150,000: Serra v. Serra, 2009 ONCA 105, para 46; Kuzmanovic v. Kuzmanovic, paras 42-50. Using the mid-point amounts, the expert testified that LFL was worth $348,000 on the date of separation, and $48,000 as of March 31, 2023. As a result, the Mother’s shareholdings decreased in value by $150,000 because of the Father’s reckless post-separation conduct.

[47] The Mother shall be entitled to an unequal division of net family property in her favour in the amount of $150,000.

Post-Separation Adjustments – Carrying Costs of the Home

[48] The Mother produced banking records that show that she has been paying the mortgage, property taxes, and insurance on the matrimonial home. I accept the unchallenged evidence that the Father’s half of the carrying costs of the home totals $41,792.92. That amount shall be a credit towards the Mother for the purposes of equalization.

Sale of the Matrimonial Home

[49] The Mother is a joint owner of the matrimonial home and is presumptively allowed to move for its sale. Given the Father’s refusal to participate in this litigation, the Mother can proceed to sell the home without his participation. The proceeds of sale shall be used to satisfy the awards that I have made.

Sale of Corporate Property

[50] I now turn to the most contentious order sought by the Mother: sale of the warehouse owned by 775. The Mother relies on the corporate oppression remedy, set out in s. 241(1), (2) of the Canada Business Corporations Act, RSC 1985, c C-44, as the basis for me ordering the liquidation and dissolution of 775.

[51] I am satisfied that the Mother and Father are the sole owners of 775 and therefore the sole shareholders who stand to benefit from its sale. I also accept that the Mother needs access to the assets held by 775 to recover the full amount and enforce the support and equalization awards made against the Father.

[52] While I am sympathetic to the Mother, I have concerns about my jurisdiction to sell the warehouse owned by 775 since the Mother did not plead that specific relief in her Application, and she never sought to amend her pleadings. Moreover, the oppressive conduct alleged by the Mother is in relation to LFL and not 775. Indeed, there is no evidence before me that the Father has tried to diminish the value of 775 post-separation. This makes the situation before me distinguishable from: Fuentes v. Camino Construction Inc., 2021 ONSC.

[53] I am not prepared to order the winding up and sale of 775 in the face of the ongoing civil matter. However, I would order that the Father not dissipate any of the assets owned by 775 pending further court order. Moreover, nothing is stopping the Mother from bringing an enforcement action based on my final order and seeking to access the assets of 775 to satisfy judgment.

Divorce

[54] The divorce is severed from the corollary relief. The Mother may apply for a divorce on an uncontested basis.

Costs

[55] The Mother is entitled to full-recovery costs in the amount of $59,057.28. The Mother paid $17,642 in disbursements. Her counsel was also required to attend multiple conferences, and to bring a motion to strike the Father’s pleadings after he refused to attend. While the trial proceeded on an uncontested basis, the Mother was required to give viva voce evidence and to call her expert evidence such that it occupied a full day.

Final Order

[56] On or before April 18, 2025, the Mother shall file and upload to Case Centre a draft Final Order and supporting divorce mate calculations based on my findings of fact herein. Counsel shall also send the draft final order to my attention at: scj.csj.general.brampton@ontario.ca.

[57] I remain seized pending issuance of my final order.

Released: April 1, 2025

Renu Mandhane