COURT FILE NO.: 377/04

DATE: 20060125

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

O’DRISCOLL, JENNINGS AND LAX JJ.

B E T W E E N:

ASTRID VON CZIESLIK

Appellant

(Applicant/Wife)

• and -

ANTHONY AYUSO

Respondent

(Husband)

Allen M. Cooper, for the Appellant

E. Corinne Korzen, for the Respondent

HEARD at Toronto: January 24 and 25, 2006

O’DRISCOLL J.: (Orally)

1The appellant appeals to this Court from the judgment of Stewart J., dated June 11, 2004, after a trial at Toronto, on February 10, 11, 12 and 13, 2004. We have had the benefit of submissions from counsel for each party.

2Counsel for the appellant brought an application to amend the Notice of Appeal. We have considered the application and find no merit in it and dismiss that application. In any event, the application may well have been superfluous.

3As to the grounds of appeal, counsel for the appellant argued that the learned trial judge erred in failing to include in “net family property”, as defined in the Family Law Act, R.S.O. 1990, c.F.3 (as amended) (FLA), the sum of $190,000.00 paid to discharge a mortgage placed on the Quebec Avenue property (owned by the husband). This transaction took place some six years prior to separation. The property was sold to a third party some ten months prior to separation.

4The trial judge dealt with this in her reasons:

44“No allegation is made in the Plaintiff’s Amended Statement of Claim that the mortgage was fraudulent or a fraudulent conveyance or that Ayuso remains the beneficial owner of the proceeds of sale of the Quebec Avenue property. The Plaintiff does not assert that she enjoys the benefit of a constructive trust on all or part of the proceeds that were disbursed to Three R Corporation. In fact, paragraph 10 of the Amended Statement of Claim alleges, and thereby concedes, that the Defendant “gifted or otherwise disposed of some $250,000.00 of family assets without the knowledge or consent of the Plaintiff.”

5The trial judge found that the actions of the husband had been shocking and unconscionable with regard to depletion of family property.

6In light of the state of the record as set out in paragraph [44], the trial judge concluded that she was not able to give effect to the submissions of counsel for the wife. We agree.

7As to the second ground, counsel for the appellant submitted that the trial judge found that the disposition of the mortgage was an intentional depletion of “net family property” under s.5(6) of the FLA. The trial judge found this to be unconscionable. The trial judge went on to consider what powers were available to her under s.5(6) of the FLA and concluded that an unequal division of the property could be directed but limited to the difference in “net family property”.

8The trial judge expressed it this way:

47“Counsel for Ayuso submits that the Court lacks power under the statute to do more than give 100 per cent of the difference in net family properties to the Plaintiff. She argues that the power to direct an unequal division under s.5(6) of the Act is limited to the difference in net family properties and does not include a general power to rearrange family assets.

48That interpretation of the Court’s powers under section 5(6) of the Act is supported by the preponderance of Ontario authorities: see Stone v. Stone, 2001 24110 (ON CA), 55 O.R. (3d) 491 (C.A.), in which Feldman J.A. (at para. 42) states:

“… section 5(6) of the Family Law Act only empowers the court to order an unequal division of the difference in value of net family property. It is not a provision which can be used to set aside previous dispositions of property to third parties. Consequently, any order must be based on the net family property amounts of the spouses as determined under s.4. The order cannot reflect the value of any property which is not part of that net family property value. As a result, although the reckless depletion of assets by one spouse can be used by the court as a factor in assessing unconscionable conduct and making an unequal distribution, the section will only be useful if the spouse who made the transfers of property has sufficient property left on the valuation date to make an order for unequal sharing an effective remedy for the wronged spouse.”

49This same authority, which follows the judgment of the Ontario Court of Appeal in Berdette v. Berdette, 1991 7061 (ON CA), 3 O.R. (3d) 513, has since been applied by Justice Charron in Filipponi v. Filipponi, 1992 14009 (ON SC), 40 R.F.L. (3d) 296 and Justice MacKinnon in Zadegan v. Zadegan, [2002] O.J. No. 2190. I am of the view that this interpretation of the Court’s jurisdiction under section 5(6) of the Act is likewise binding in this case.”

9In view of the decisions of the Court of Appeal for Ontario quoted by the learned trial judge, we see no error in the way that she applied s.5(6) of the FLA. For the foregoing reasons, this appeal is, therefore, dismissed.

10With the concurrence of my colleagues, I have endorsed the back of the Appeal Book and Compendium as follows: “This appeal is dismissed for the oral reasons (recorded) of even date. Costs – We have heard submissions as to costs from counsel. Counsel for the former husband seeks $1,500.00 on the motion and $10,000.00, plus disbursements, plus GST for the appeal. Counsel for the wife suggests a figure of $7,000.00 to $8,000.00, all in. In view of all of the circumstances of the case, we fix costs in this Court at $6,000.00, all in, payable by the appellant to the respondent within 30 days of this date.”

O’DRISCOLL J.

JENNINGS J.

LAX J.

Date of Reasons for Judgment: January 25, 2006

Date of Release: February 7, 2006

COURT FILE NO.: 377/04

DATE: 20060125

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT