Canadian clothing magnate Peter Nygard has surprised his former lover by agreeing to an out-of-court settlement in the middle of what was a rancorous court hearing into child support for their 16-year-old son.
Mr. Nygard, 62, and Kaarina Pakka, 53, have signed a confidentiality agreement not to make public the details of the settlement. It is unknown, therefore, if she persuaded the flamboyant clothing manufacturer, reported to be one of the 100 wealthiest Canadians, with a net worth of $149-million, to ante up the $68,000 a month she was seeking for their son, Mika.
Ms. Pakka could not be reached for comment, but her lawyer, Harold Niman, said she is "very happy with the settlement." She is also pleased to have the matter resolved, he said.
A statement issued from Winnipeg through his public relations consultant last night said Mr. Nygard decided to end the public battle because of his son.
"Mr. Nygard has always taken care of his children," a spokesperson said. The news release also quotes Mr. Nygard's oldest daughter, Bianca, as saying, "Our dad has always taken care of all of us kids, including Mika, financially and otherwise."
Ms. Pakka has disputed that fact in court since the trial began last month. She described at length how Mr. Nygard wanted a "Finnish child," referring to their mutual ancestry. But he ignored the child once he was born, seeing him only twice in his first 3 ½years. She testified that Mr. Nygard also reneged on a promise to support her financially for the first year of Mika's life so she could stay at home with him.
The former flight attendant talked of scrimping and doing without, buying secondhand clothes and furniture for her son, and at times having to borrow money to feed him.
She contrasted that with Mr. Nygard's expensive homes, including one in California, and a lavish estate in the Bahamas.
Court was told that Mr. Nygard's net income in 2002 was $10.2-million. Based on that figure, Ms. Pakka was asking for $68,000 a month for Mika, and $5.5-million in retroactive child support.
Ms. Pakka admitted that some of the money would support her, but she defended seeking the largest child support payment in Canada for one child by saying that Mika deserved to enjoy some of what Mr. Nygard's other six children received.
Ms. Nygard outlined to the court how she would use the $68,000, which translates to $816,000 annually.
She said she needed:
$38,000 annually for vacations for herself and her son;
$940 a month for Mika's lunches and entertainment;
$10,000 a month to put aside for Mika's education and other needs;
$1,000 a month for Mika to buy a Saab for his personal use;
$95 per month for vitamins.
Mr. Nygard has been paying $15,000 a month in interim child support since Ms. Pakka obtained a court order in April, 2002. He had been paying significantly less before that. After a four-year battle, Mr. Nygard agreed in 1991 to pay $1,500 per month. He upped that to $3,000 in 1998.
Mr. Nygard's lawyers told the court that child support of about $8,000 a month was appropriate because anything more would spoil his son and leave his son with a case of "affluenza."
Ms. Pakka told the court that she will use some of the support money to pay for her $65,000 Lexus and for renovations to the $700,000 home she purchased on Oakville's waterfront after she began receiving the $15,000 payments. Court heard that the house has a pool, but that Mika wants a hot tub and a cottage.
Mr. Niman said he and Ms. Pakka were surprised at Wednesday's offer to end the dispute.
There were many issues raised by Mr. Nygard's lawyers -- he did not attend -- that prolonged the trial, Mr. Niman said. One was a constitutional challenge of government child support guidelines that use a parent's net income to calculate monthly support.