



COURT OF APPEAL FOR ONTARIO

CITATION: Makwana v. Bishnu, 2019 ONCA 543

DATE: 20190628

DOCKET: C64355

Sharpe, Trotter and Harvison Young JJ.A.

BETWEEN

Dipikaben Makwana

Applicant
    (Appellant/
Respondent by way of cross-appeal)

and

Sewsankar Bishnu

Respondent
    (Respondent)

and

Surujpaul Bishnu

Respondent
    (Respondent/
Appellant by way of cross-appeal)

and

Howard Melvin Wasserman

Intervener
    and Trustee in Bankruptcy for Sewsankar Bishnu

Gary S. Joseph and Michaela Newman, for
    the appellant

Abba
    Chima, for the respondent, Sewsankar Bishnu

Jameel
    Madhany, for the respondent, Surujpaul Bishnu

Howard Melvin Wasserman, in person

Heard: May 29, 2019

On appeal from the
    order of Justice Thomas A. Bielby of the Superior Court of Justice, dated August
    23, 2017, with reasons reported at 2017 ONSC 4916.

REASONS FOR DECISION

[1]

The parties, Dipikaben Makwana and Sewsankar
    Bishnu, had a romantic relationship and lived together for a relatively short
    period of time in the 1990s. They had a daughter who was born in January 1995.
    Following the breakdown of their relationship, the appellant sought custody, as
    well as child and spousal support. In a judgment rendered in October 1999, the
    appellant was awarded sole custody and child and spousal support. The trial
    judge made adverse findings as to the credibility of the respondent and found
    that he had attempted to conceal his true income. The trial judge awarded
    spousal support at $1,750 per month and child support at $733 per month based
    upon the income he imputed to the respondent of $100,000. The trial judge also
    ordered that the spousal support could be reviewed in three years without the
    necessity of proving a material change in circumstances.

[2]

The respondent did not appeal the judgment but
    failed to comply with the support orders and the order for costs. He filed for
    bankruptcy in 2003 and remains undischarged.

[3]

The appellant moved with her daughter to the
    United States in 2000, and remarried in 2003.  She worked as a computer
    programmer until 2009.

[4]

The respondent brought this motion to vary the
    spousal and child support in October 2011. He brought an earlier motion to vary
    in 2002 but he was not permitted to proceed with any such motion until he paid
    the outstanding costs from trial.  Evidence from a CRA audit showed that the
    respondents income for 1996, 1997 and 1998 was $110,346, $220,706 and $211,040
    respectively but it declined to $59,541 in 1999. From 2002 to 2009, his
    disclosed income was essentially zero. He led evidence indicating that he has
    suffered from physical and mental health issues since 1999 and that he is
    living on social assistance.

[5]

The appellant sought an order setting aside
    certain conveyances made by the respondent as fraudulent. As a result of that
    application, both Surujpaul Bishnu and the respondents trustee in bankruptcy
    were added as parties.

[6]

The motion judge made adverse findings of
    credibility against the respondent but did find that as time passed he
    developed medical problems that impacted upon his ability to earn income. The
    motion judge found that given the appellants employment and remarriage, there
    had been a material change in her circumstances and that spousal support should
    terminate as of December 31, 2002. He refused to vary the amount of spousal
    support ordered by the 1999 judgment up to that point.

[7]

The motion judge ordered that child support
    terminate as of June 30, 2013, at which date the daughter was 18 years old and was
    no longer in full-time attendance at school. He continued the amount ordered by
    the 1999 judgment until December 31, 2003. However, due to the respondents
    health issues and declining income, he reduced the amount of child support from
    2004 to 2009 to $303 monthly, and from 2010 to 2013 to $176 monthly.

[8]

The motion judge dismissed the fraudulent
    conveyance application.

ISSUES

[9]

The appellant submits that the motion judge
    erred by varying the orders for child and spousal support. The appellant,
    supported by the trustee in bankruptcy, also appeals the decision of the motion
    judge dismissing the fraudulent conveyance application.

[10]

Surujpaul Bishnu cross-appeals the application
    judges refusal to award him costs despite the dismissal of the fraudulent
    conveyance application.

ANALYSIS

1.
Child support

[11]

The motion judge appears to have simply fixed
    child support on the basis of what he found the respondents income had likely
    been. He did not consider the factors mandated by
D.B.S. v. S.R.G.
, 2006 SCC 37, [2006] 2 S.C.R. 231. In our view, that amounted to an
    error of law.

[12]

Of particular concern is: (1) whether there is
    a reasonable excuse for the respondents delay in applying for relief; and (2)
    the respondents conduct, including whether he made any effort to comply with
    the order and his compliance with financial disclosure requirements. As we have
    noted, both the motion judge in 2017 and the trial judge in 1999 made adverse
    findings as to the respondents credibility and compliance with disclosure
    requirements. He has a long history of non-compliance with the support order.
    While the respondent did launch a motion to vary in 2002, he failed to proceed
    with that application as he was unwilling or unable to satisfy prior costs
    awards. That, in our view, does not amount to a satisfactory excuse for failing
    to proceed more expeditiously with the application to vary. We are also mindful
    of the fact that the respondents failure to make child support payments may
    have had an adverse impact on the childs wish to pursue post-secondary
    education. On the other hand, the ongoing financial capacity of the respondent,
    including his ability to make payments towards outstanding arrears is a
    relevant factor: see
Gray v. Rizzi
, 2016 ONCA
    152, 129 O.R. (3d) 201, at paras. 57-60.

[13]

The appellant argues that the motion judge erred
    by departing from the amount imputed for the appellants income in the 1999
    judgment, on the bases that there was no evidence to support the new imputation
    and that the motion judge failed to give proper weight to the imputation of
    income in the 1999 judgment.

[14]

While the evidence of the respondents income
    during the relevant period may have been limited, the motion judge was clearly
    aware of the unreliability of the respondent as a witness and of the gaps in
    the evidence and he took this into account when imputing income. Moreover, there
    was some evidence to support his findings as to the respondents income for the
    years following 1999. While the motion judge described the figures he arrived
    at as somewhat arbitrary, he did base the figures on the evidence before him
    which included the respondents income tax returns, information from his occasional
    employer, and medical evidence. In our view, the motion judge also did not err
    in law by failing to pay adequate attention to the income imputed in the 1999
    judgment. There was sufficient evidence that his income had changed
    significantly since that time.

[15]

Taking all these factors into account, it is our
    view that the appropriate order is to maintain the motion judges order
    terminating child support as of June 30, 2013. However, it is appropriate to
    vary that part of the motion judges order reducing the $733 child support
    order from 2004 to 2009 to $303 monthly, and from 2010 to 2013 to $176 monthly.
    In our view, that would unduly reward the respondent for his failure to move
    more quickly, his failure to make any effort to comply with the 1999 order, and
    his failure to comply with disclosure. On the other hand, in view of the motion
    judges findings as to the respondents income and the need to fashion an order
    that is realistic in all the circumstances. For the purpose of fixing the
    arrears, we reduce the monthly child support from 2004 to 2013 from $733
    monthly to $366 monthly.

2.
Spousal support

a)

Alleged error interpreting the review clause

[16]

We do not agree with the appellants submission
    that the motion judge erred by treating the review clause in the 1999 judgment
    as a termination clause. As we read his reasons, he simply took into account
    that the order provided for review after three years with no need to show
    material change in circumstances. The parties were involved in a relatively
    short-term relationship and the appellant was capable of earning an income. The
    1999 judgment clearly contemplated that the appellant would have become self-sufficient
    within three years and this turned out to be the case.  By the end of 2002, she
    was earning a significant income and she had married someone who also earned a
    significant income. The detailed reasons the motion judge gave as to change in
    circumstances indicate that he did not simply treat the review clause as if it
    called for automatic termination of spousal support. It was simply a factor he
    took into account in assessing when to make the change.

b)

Material change of circumstances

[17]

While, as we have stated in relation to the
    issue of child support, the motion judge failed to refer to the
D.B.S.
factors, we do not agree with the submission that that failure
    infected his treatment of spousal support. While considerations similar to the
D.B.S.
factors are relevant to spousal support, spousal support has a different
    legal foundation than child support. There is no presumptive entitlement to
    spousal support:

Kerr v. Baranow
, 2011
    SCC 10, [2011] 1 S.C.R. 269, at paras. 207-208. The circumstances of the spouse
    seeking support is an important factor. The motion judges variation of the
    arrears for spousal support did not rest upon the means or income of the
    respondent but rather on primary question of the appellants entitlement to support
    and the material change of circumstances and to her means and needs. Ultimately
    the Supreme Court has emphasized the need for flexibility and a holistic view
    of each matter on the basis of its particular factual matrix:
Kerr
, at para. 12;
D.B.S.
,
at para. 99.

[18]

We do not agree that the motion judge erred by
    finding that there was a material change in circumstances relating to the means
    of the appellant as of December 2002. There was evidence that the appellant was
    earning a significant income as a computer programmer and that she had
    remarried. The motion judge did not treat the appellants remarriage as an
    automatic change of circumstances. Her tax assessments show an income rising
    from $29,000 in 2003 to $114,000 in 2011. By the time of the application,
    several years had gone by and the motion judge was in a strong position to
    assess the appellants earnings and the significance of her marriage in
    relation to the respondents support obligation. In our view, his order
    terminating spousal support on account of the appellants changed circumstances
    as of December 31, 2002 was justified on this record.

3.
Fraudulent Conveyance Application

[19]

The application judge found that while the
    conveyance by the respondent of his interest in 89 Main Street to Danwantie Jaginarine
    in December 1999, was fraudulent, the subsequent transfer to Surujpaul Bishnu in
    2002 was not. The basis for this conclusion was the factual finding that
    Surujpaul Bishnu acted in good faith and without any knowledge of fraudulent
    intent within the meaning of s. 2 of the
Fraudulent Conveyances Act
, R.S.O. 1990, c. F.29. Section 3 provides that s. 2  voiding
    transfers with intent to defeat, hinder, delay or defraud creditors  does
    not apply where the transferee did not have notice or knowledge of the
    fraudulent intent.

[20]

We see no merit in the submission that the
    motion judge erred in law by finding only that the transferee lacked
    knowledge but failed to consider whether the transferee had notice. This
    proposition does not appear to be supported by the case law. Moreover, the
    motion judges finding that Surujpaul Bishnu acted in good faith amounts to a
    finding that he lacked awareness, whether it be labelled knowledge or
    notice, of any fraudulent intent.

[21]

Nor are we persuaded by the trustees argument
    that as there was no actual sale between Danwantie Jaginarine and Surujpaul
    Bishnu, s. 3 of the
Act

does not apply. The
    mortgage on the property was in default and subject to power of sale. Surujpaul
    Bishnu, acting in good faith, acquired the property by providing valuable
    consideration. He discharged the mortgage and two other charges. No valuation
    evidence was led to indicate that the consideration was grossly inadequate.

[22]

We note as well the application judges finding
    that while Surujpaul Bishnu is the respondents brother, Surujpaul Bishnu has
    been in possession of the property and paid all mortgage and other expenses for
    over 15 years and there is no evidence to suggest that the respondent has or
    expects to have any interest in the property.

[23]

The appellant and the trustee may have a remedy
    against the proceeds of the earlier conveyance that was found to be fraudulent,
    but as the property has been transferred to a good faith purchaser for value,
    they have no remedy against the property or the transferee.

4.
Cross-appeal re costs

[24]

When he rendered his judgment on August 23, 2017,
    the application judge asked counsel to arrange a one-half day appearance to
    argue costs if they could not agree. No appearance was arranged and on October
    11, 2017, the application judge advised counsel that unless he heard from them
    within 10 days, he would assume costs were not in issue. Surujpaul Bishnus
    counsel (not counsel on this appeal) wrote on October 17, 2017 asking for more
    time to make costs submissions. No further submissions were made. Almost three
    months later, on January 15, 2018, the application judge issued an endorsement
    stating that as he had received no submissions and as [m]ore than sufficient
    time has elapsed for submissions on costs, there would be no order as to
    costs.

[25]

We do not accept the submission that Surujpaul
    Bishnu was denied procedural fairness and that the application judge erred by
    refusing to order costs.  The application judge set out a clear procedure to be
    followed for making costs submissions. Months went by and counsel made no costs
    submissions. In these circumstances, the application judge was entitled to put
    an end to the matter and order that no costs award would be made.

DISPOSITION

[26]

Accordingly, the appeal against the variation of
    the child support order is allowed in part. The appeal against the spousal
    support order is dismissed, as is the appeal against the dismissal of the
    fraudulent conveyances application. The cross-appeal as to costs is dismissed.

[27]

There has been divided success on this appeal.
    If the parties are unable to agree as to costs, they may make brief written
    submissions, from the appellant, within 15 days of the release of these reasons
    and from the respondents, within 10 days thereafter.

Robert J. Sharpe J.A.

G.T.
    Trotter J.A.

A. Harvison Young
    J.A.


