Introduction
The court in Yu v. Xiao dealt with the complex issue of awarding spousal support when the payor’s income is unclear. The wife argued support should be based on an income of over $1 million, while the husband argued his income was not high enough to continue to support her. As a result, Justice Himel had to analyze the wife’s entitlement, and the husband’s finances to reach a conclusion.
Background
The parties were married in 1990, divorced in 2005, and remarried in 2007. The husband stated that the parties date of separation was June 27, 2019, but his Income Tax Return listed him as married until 2022. The parties share one adult child.
The family immigrated to Canada in 2010 with a declared net worth of $5,000,000, however the wife argues that their global net worth was much higher than that. After immigrating, the husband became the sole or majority shareholder and sole director of various corporations. The husband worked for at least one of these seven corporations, called ‘projects’ in the case, and his family empire. Meanwhile, the wife was a stay at home spouse.
Post separation, the husband continued to pay the mortgage, insurance and other expenses relating to the matrimonial home. He also paid for the wife’s expenses and car lease. However, he ceased to do so in February of 2023, arguing he could no longer afford the payments.
As a result, the wife sought temporary spousal support among other financial claims against the husband.
Analysis
Justice Himel was clear in that the wife was in dire financial circumstances. She was no longer able to maintain the standard of living she was accustomed to and had encroached upon her savings and capital. She was disadvantaged from the marriage in several ways. For example, the wife was previously a physician in China before the family immigrated but spent the remainder of their decade’s long marriage as a stay at home spouse solely supported by the husband’s income.
As such, Justice Himel determined entitlement to support, and the only issue left was to address quantum. The wife argued the husband had a vast income and net worth from his involvement in multiple corporations, while the husband argued that these interests were actually held by his father, who supported him.
Justice Himel found the husband’s evidence as to his income and inability to pay spousal support as contradictory. For example, the husband signed a personal net worth statement in 2022 listing his income as $1,660,000, with over $3 million in other assets. However, in an Affidavit sworn in 2023, the husband lists his income as being approximately $40,000. Other documents listing his income such as his Income Tax Return and sworn Financial Statement also list similarly low numbers.
The husband argued that the personal net worth statement was incorrect, something he did not realize because of the language barrier. However, the husband swore an Affidavit and attended the motion both without an interpreter.
Likewise, his expenses did not match such a small income. The husband is now remarried, and he provides support for his new spouse and children. This support includes car payments, trips to China, and expensive activities like camp for his younger children.
Based on this evidence, Justice Himel found that the husband’s income would have to be at least $550,000 to pay all these expenses. Imputing this income, the mid range of spousal support would be $20,000, which was ordered for the wife. Justice Himel also ordered that the husband comply with a previous Request for Information regarding his finances.
The wife also sought an Order that the husband continue to pay for the mortgage and insurance on the matrimonial home. The matrimonial home is solely in the name of the husband, who allowed the wife to maintain possession. As such, any liability for the home remains on the husband, who can choose to do what he wants. Likewise, as the wife is now receiving spousal support, she can make the payments herself. As a result, Justice Himel did not order the husband to continue these payments.
Conclusion.
In conclusion, the court in Yu v. Xiao found that the wife was entitled to spousal support. The wife was entitled to spousal support given how she was disadvantaged from the marriage. The quantum of her support was based on an analysis of the husband’s true income, which was ultimately much higher than he let on. Contrary evidence allowed Justice Himel to conclude that the husband’s income had to be at least $550,000, if not more, and ordered spousal support in the amount of $20,000.00 per month based on this.