) ) SUDHIR PANDYA Applicant – v. –, 2010 ONSC 2026

CITATION : Pandya v. Pandya, 2010 ONSC 2026 COURT FILE NO.: 29152/07 DATE: 2010-04-22 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: ) ) SUDHIR PANDYA Applicant – and – SANGEETA PANDYA Respondent ) ) ) ) ) ) ) ) ) Carmen A. De Facendis, for the Applicant Alexandra Seaton, for the Respondent ) ) ) HEARD: April 1, 6 & 7, 2010 REASONS FOR JUDGMENT HOURIGAN J.

Background [ 1 ] The applicant seeks to vary the child and spousal support payable pursuant to the consent final order of Justice Quigley, dated April 24, 2008, alleging that there has been a material change in circumstances. [ 2 ] The parties were married on August 11, 1984 and separated on or about May 11, 2005. There are two children of the marriage, Sarit (d.o.b. September 10, 1990) and Sonam (d.o.b. November 5, 1991).

Both children are currently studying at McMaster University in Hamilton, Ontario. [ 3 ] With respect to the payment of child support and spousal support the consent order provided as follows: 12. The Applicant shall pay for the support of the children, namely Sarit Pandya, born September 10, 1990 and Sonam Pandya born November 5, 1991, the sum of $5,565.00 per month, retroactive to January 1, 2008 with credit for payments made. The amount of support payable is based on the Respondent earning an income of $458,000 in 2007.

The amount of support shall be adjusted effective March 1, 2009 and on the first day of March each year thereafter to reflect the Respondent’s income in the prior year, pursuant to the Federal Child Support Guidelines, and all maintenance payments shall be paid to the Director, Family Responsibility Office. ******* 16. The Applicant shall pay to the Respondent the sum of $9,000.00 per month as spousal support commencing May 1, 2008. The Respondent shall have a positive obligation to pursue and find employment.

The cessation of child support for one or both children shall trigger the right of either party to request a review of spousal support. Pending the review, the payments are to continue, and all maintenance payments shall be paid to the Director, Family Responsibility Office. Post Order Events [ 4 ] The applicant, age 50, is a doctor specializing in internal medicine. At the time of the order he had recently ended a partnership with certain other doctors. There was litigation following the dissolution of the partnership.

That litigation was resolved in February of 2009 and included a payment by the applicant to his former partners of $40,000. [ 5 ] In addition to the partnership litigation, in or about July of 2008 there were also professional complaints made about the applicant to College of Physicians and Surgeons. Those complaints remain outstanding. The applicant testified that instead of availing himself of free counsel through his insurer to defend himself against these complaints, he retained a lawyer at Gardiner Roberts.

However, according to the applicant, he is only being charged for “office expenses” and not “professional fees”.

[ 6 ] No breakdown of legal costs between the partnership litigation and the professional complaints was provided . It appears that the applicant’s total legal expenses for 2008 were approximately $85,000 and that his total legal expenses for 2009 were approximately $64,000. [ 7 ] According to his notice of assessment for 2008, the applicant’s line 150 income was $259,955. For 2009, the applicant’s line 150 income rose to $432,984. There was also additional income of approximately $100,000 in 2009 resulting from the cashing in of RRSPs by the applicant.

Position of the Parties [ 8 ] The applicant submits that for the period March 1, 2009 to February 28, 2010 child support payments should be retroactively reduced to reflect his actual income for 2008 (i.e. $3,268 per month versus the amount he actually paid, $5,565). He further submits that there has been a material change in circumstances which warrants the retroactive reduction of spousal support to $5,000 per month.

For the period March 1, 2010 to February 28, 2011, the applicant seeks an order that he continue to pay the reduced amount of child and spousal support. [ 9 ] The respondent’s position is that there has been no material change in circumstances and that there should be no adjustment to child or spousal support. In addition, the respondent seeks the payment of certain

section 7 expenses and the repayment of funds defalcated by the applicant from the children’s trust accounts. Preliminary Issue Regarding Spousal Support [ 10 ] The respondent raises a preliminary issue about whether the applicant can seek to vary Quigley J.’s order with respect to the issue of spousal support. She submits that paragraph 16 by its terms allows for a review of spousal support only where there is a cessation in child support. [ 11 ] I disagree.

Both the Divorce Act and the Family Law Act grant wide powers to the court to discharge, vary or suspend spousal support orders where there has been a change in circumstances. Parliament and the legislature recognized that material changes can occur and that the court needs to retain the flexibility to make any necessary adjustments to existing spousal support arrangements to respond to changing circumstances.

There is nothing in the wording of paragraph 16 of the order which explicitly limits the jurisdiction of the court. [ 12 ] The language used by the parties in paragraph 16 of the consent order is much different than the language found in Loit v. Gove [2006] O.J. No. 347 (Ont. Sup. Ct.) aff’d [2007] O.J. 1924 (Ont. C.A.) where the parties explicitly stated in the following terms that there could be no variation proceeding except in the enumerated circumstances: No variation of the aforesaid spousal support shall be permitted save and except in the event that: (

i) the Respondent, Liivi Loit (Mrs.

Gove’s name before her remarriage), for whatever reason, does not receive payment provided for in the January 27 th , 1999 “Employment Agreement” between she and Tracan Electronics Corporation, or (ii) Tracan Electronics Corporation is insolvent, and either party may rely upon this provision as creating an absolute bar to any application that is brought for the purposes of varying the support obligation for any reason other than the fact that the Respondent, Liivi Loit, is not receiving payment provided for in the said “Employment Agreement”. [ 13 ] Accordingly, I reject the submission of the respondent that the court is without jurisdiction to consider a variation of spousal support by reason of the terms of paragraph 16 of the consent order.

If there has been a material change in circumstances, the court retains its discretion regarding variation of the spousal support order. Variation for the Period: March 1, 2009 to February 28, 2010 [ 14 ] In 2008 the applicant’s line 150 income dropped to $259,955 from his 2007 level of $458,000.

While it is impossible to say with precision what exactly lead to this dramatic decline in income, there are a number of factors which I find contributed, including onetime office renovations and legal fees, as well as the fact that for health reasons the applicant reduced his hours of work over a two month period. [ 15 ] Pursuant to paragraph 12 of the consent order, an adjustment should be made to the table amount of child support payable from $5,565 to $3,268 per month for the period March 1, 2009 to February 28, 2010 based on the applicant’s actual income.

Therefore, there has been an overpayment of child support during this period in the amount of $27,564. [ 16 ] The large reduction in income is also a material change in circumstances which warrants a reduction in spousal support payable for the period March 1, 2009 to February 28, 2010. As noted above, the applicant seeks a retroactive reduction to $5,000 per month. However he provided a CHEQUEmate Spousal Support Guidelines Calculator which puts the range of monthly spousal support based on an income of $259,960 in the range of $5,761 to $6,903.

In considering the needs, means and other circumstances of the parties, I find that the low point figure of $5,761 is an appropriate level of spousal support in the circumstances. I am not satisfied that there are any exceptional circumstances which would take the parties out of the operation of the Spousal Support Advisory Guidelines. The result is that during this period the applicant has over paid spousal support in the amount of $38,868.

Variation: March 1, 2010 to February 28, 2011 [ 17 ] The applicant concedes that his line 150 income for 2009 will be $432,984. In addition there will be income of approximately $100,000 from the deregistration of RRSPs.

Despite the increase in income, he submits that that he should continue to pay reduced child and spousal support for the period March 1, 2010 to February 28, 2011. [ 18 ] I have carefully considered the financial circumstances of the parties and concluded that there has been no material change in circumstances and that spousal support should be set at the level provided for in the consent order for this period. [ 19 ] I also find that the table amount is the appropriate quantum for child support.

This is what the parties agreed to in their consent order and, in any event, I am not satisfied that child support payable according to the table is inappropriate. [ 20 ] I reach these conclusions for the following reasons: (

i) The applicant’s income for 2009 is very similar to his income in 2007 which was the income used in entering into the consent order. (ii) The applicant led evidence that his investments are not paying dividends and some limited evidence as to the value of some of his investments.

However, no evidence was provided of any efforts made by the applicant to sell all or part of his interests in these investments. (iii) Throughout 2009 the applicant made a series of expenditures which are not consistent with his position that he is in desperate financial straits, including the purchase of jewellery valued at $8,000, the placing of a deposit of $10,000 on a new Mercedes Benz, a payment of $10,000 toward his wedding expenses despite the fact that his new wife’s family was prepared to pay those costs, multiple trips and the purchase of a new house for $750,000 (his former residence, a townhouse, was worth approximately $450,000). (iv) It is true that in 2009 the applicant was forced to work increased hours and that this increased workload may have an adverse impact on his health.

However, in 2009 he incurred significant onetime expenses (e.g. costs related to his wedding, legal fees from the partnership dispute and a $40,000 settlement payment to his former partners). I am not satisfied that additional hours will have to be worked in 2010 in order to meet his expenses. (

v) The applicant claims that various friends and family members loaned him money in order for him to make ends meet. None of those parties were called to testify and to the extent that there was any documentary evidence tendered in support of these alleged loans it was woefully inadequate. In short, the applicant failed to prove the existence of these loans. (vi) The respondent’s monthly budget is not excessive as is suggested by the applicant. The children are attending university full time but come home every weekend.

In these circumstances, the expenses seem to be quite reasonable. (vii) I am satisfied that the respondent, who is 48 years of age, is making reasonable efforts to re-enter the work force. It must be recalled that this was a long term marriage where the respondent essentially removed herself from the workforce. In addition, the respondent suffers from problems with her back which, according to her doctor, limit the type of work available to her.

She has sought career counselling, applied for jobs, undertaken volunteer work to build her resume and is enrolled in a two year course to train as a law clerk. (viii) Finally, during the course of the trial the applicant submitted that the level of child support should be reduced by reason of the fact that his wife had alienated him from his children. There was little evidence regarding the specifics of the alleged alienating behaviour of the respondent. During the applicant’s cross-examination an email sent by the applicant to Sarit when the child was 15 years of age was put to him.

It is unnecessary to review the contents of that email. Suffice it to say that the email was a remarkable personal attack on the child by his father. If the email is indicative of the nature of the communications between the applicant and his children, it is little wonder that there is, to use the words of the applicant, a “strain in the relationship”. I note that this argument was not raised in the closing submissions of the applicant. In any event, the applicant has not convinced me that the respondent has alienated the children.

Section 7 Expenses [ 21 ] There are two preliminary issues which need to be addressed when considering the issue of

section 7 expenses. [ 22 ] The first issue is the nature of the expenses that can be paid for from the children’s RESP accounts. I accept the submission of the applicant that in the ordinary course RESPs can and should be used for all education related expenses. However, that was not the deal struck by the parties in their consent order. The order provided that: 13. The Applicant shall contribute his proportionate share of the s. 7 expenses, calculated in accordance with s. 7 of the Federal Child support guidelines.

The parties shall agree to s. 7 expenses and in the event of any disagreement the matter shall be determined by arbitration with the arbitrator selected by the parties’ then counsel. The parties shall pay for tuition, fees, books and living expenses (subject to the other terms of this Order), summer school, medical and dental expenses not covered by the plan the Applicant is to provide for the children, for so long as they are eligible for support, dance lessons, car insurance and orthotics. 14.

In relation to the RESPs held by the parties (approximately $56,000.00), prior to calculating the post-secondary education costs of the children. The RESPs shall be allocated equally in the amount of approximately $30,000.00 to each child subject to the child Sarit already receiving a share in 2007. The parties shall pay the children’s tuition and text books from the RESPs. The balance of the post- secondary school costs of the children are to be paid by the parties proportionate to their incomes as per the Federal Child Support

Guidelines. In the event that funds are left over they shall, if available, be applied to post-secondary education or, if not so available, applied to their last year undergraduate costs. [ 23 ] It is clear from the order that the parties agreed that only tuition and books would be paid from the children’s RESPs. The balance of post-secondary education expenses were to be treated as

section 7 expenses and paid by the parties in proportion to their incomes. [ 24 ] The next issue is the availability of RESPs. Evidence was provided at trial that there are accounts with TD Waterhouse and Investors Group. There are no funds left in the TD Waterhouse account and I accept the evidence of the respondent that those funds were used exclusively for Sarit’s education. [ 25 ] Accounts are held in Investors Group in the names of both children.

I accept the evidence of the respondent that the parties agreed that all accounts at TD Waterhouse would be used for Sarit’s educational expenses and all accounts at Investors Group would be used for Sonam’s educational expenses. This was a fair method of dealing with the RESPs and entirely consistent with the order as the amounts held in both institutions were similar. [ 26 ] I find that the sums left in the Investors’ Group accounts are the only available RESPs and that they were intended to be used and should be used only for Sonam’s tuition and books. [ 27 ] The respondent has submitted a list of

section 7 expenses totalling $30,275.02. Of that total $939.22 was incurred in 2008 and $29,335.80 was incurred in 2009 or early 2010. I am satisfied that these are all legitimate

section 7 expenses, that they have all been incurred and that the applicant has not paid for any of the expenses. [ 28 ] The sum of $122.43 incurred in 2010 for text books for Sonam should be paid from her RESP. [ 29 ] I make no reduction for a scholarship that Sarit received in his first year of university. That sum was known to the parties at the time of entering in to the consent order. If it was intended that the scholarship funds be applied to tuition for that year and thus provide a credit for

section 7 expenses, it should have been dealt with explicitly in the order. [ 30 ] There is a total outstanding of $30,152.59 in

section 7 expenses which are not RESP eligible under the consent order. Using the applicant’s 2008 income of $259,960 less spousal support payments of $69,132 (i.e. 12 x $5,761) for a total income of $190,828 and the respondent’s income of $74,710 (i.e. $69,132 in spousal support plus interest income of $5,578) the applicant is responsible for 72% of the 2008 expenses. This equates to $676.24 owing by the applicant to the respondent for the outstanding

section 7 expenses for 2008. [ 31 ] For the

section 7 expenses incurred in 2009 and early 2010 the applicant is responsible for 74% of the total expenses of $29,335.80 or $21,708.49. This percentage was calculated by taking the applicant’s 2009 income of $432,984 less spousal support payments of $108,000 (i.e. 12 x $9,000) for a total income of $324,984 and the respondent’s income of $113,578 (i.e. $108,000 in spousal support plus interest income of $5,578). Trust Funds [ 32 ] The consent order provided for the establishment of trust funds for the children: 5.

From his one-half share of the net proceeds, the Applicant shall pay into a joint investment account at TD Canada Trust the sum of $15,000.00 for each of the children of the marriage. This account shall be managed by TD investment advisor Jim Buckrell in consultation with the parties. The two accounts shall be trust funds for the benefit of the children.

Each child shall be entitled to have the accounts transferred into his or her own name upon attaining the age of twenty-one years. [ 33 ] For reasons unknown, and in clear breach of his fiduciary duties to his children, the applicant elected to remove approximately $47,000 from the trust accounts without consulting with the respondent or the children.

There was no evidence about what use was made of this money by the applicant. [ 34 ] It was common ground between the parties that the applicant has repaid approximately $22,130 and that the applicant still owes the sum of $25,868. [ 35 ] The applicant takes the position that the remaining funds in the trust accounts should be used to pay the children’s educational expenses. [ 36 ] The respondent testified that the intention of setting up the trust accounts was to have money available for the children after they turned 21 so that they could each purchase a car once they completed their first university degree. [ 37 ] My reading of paragraph 5 of the draft order is consistent with the position taken by the respondent.

It appears from the text of the paragraph that the intention of the parties was to provide the trust funds to the children upon their reaching the age of 21; that intention would be defeated if the parties could spend the money from the trust in the interim. Therefore, I find that the trust funds are not available to pay on-going

section 7 expenses. Disposition [ 38 ] The applicant is entitled to a total retroactive reduction for the period March 1, 2009 to February 28, 2010 of $66,432 (i.e. $27,564 for the overpayment of child support plus $38,868 for the overpayment of spousal support). Deducted from this sum is a total of $50,727.73 representing $22,384.73 for

section 7 expenses, plus $25,868 owing to the children’s trust accounts and $2,475 in costs

awarded by Coats J. Therefore, the total amount owing to the applicant by the respondent is $15,704.27. The respondent shall also be responsible for depositing into the children’s trust accounts the total sum of $25,868 forthwith. [ 39 ] There shall be no adjustment to spousal support for the period March 1, 2010 to February 28, 2011. Child support for that period shall be paid at the table amount based on an income of $432,984. I have not included income from the deregistration of RRSPs as this is non-recurring income.

To the extent that there has been an overpayment in child support for the months of March and April of 2010, that overpayment will be repaid to the applicant by means of ten equal monthly reductions in child support payable commencing with the May 2010 child support payment. [ 40 ] If the parties cannot agree on the issue of costs, I will entertain brief written submissions. Costs submissions are due from the applicant within ten days and are not to exceed three pages, plus a bill of costs.

The respondent may file responding submissions not to exceed three pages plus a bill of costs within seven days of the receipt of the applicant’s submissions. Any reply submissions shall be filed within three days of the receipt of the responding submissions and shall not exceed two pages. HOURIGAN J. Released: April 22, 2010 CITATION : Pandya v. Pandya, 2010 ONSC 2026 COURT FILE NO.: 29152/07 DATE: 2010-04-22 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: SUDHIR PANDYA Applicant – and – SANGEETA PANDYA Respondent REASONS FOR JUDGMENT HOURIGAN J. Released: April 22, 2010