Court File and Parties

Court File No.: FS-13-388644 Date: 2019-03-21 Ontario Superior Court of Justice

Between: Jastinder Manchanda, Applicant And: Sukhvir Thethi, Respondent

Counsel: Evelyn K. Rayson, for the Applicant In person, as observer only (for the Respondent)

Heard: December 10, 11, & 12, 2018; January 28, 2019; February 27, 2019; March 14, 2019

Before: P.J. Monahan J.

Reasons for Judgment

[1] The parties were married on August 8, 2003 when Ms. Manchanda was 45 years old and Mr. Thethi was 41 years old. There were no children of the marriage. The parties separated on June 16, 2013.

[2] Given that the parties did not have any children, the only significant issues in dispute related to property and spousal support. Nevertheless the parties proceeded to engage in high conflict litigation involving countless court attendances and court orders from at least 10 different judges. This eventually resulted in a June 9, 2016 order by Myers J. of this court (the “June 2016 Order”) striking out Mr. Thethi’s pleadings and granting Ms. Manchanda leave to proceed to an uncontested trial. [1]

[3] The evidence phase of the trial took place on December 10 – 12, 2018, followed by closing submissions by Ms. Manchanda’s counsel on January 28, 2019, February 27, 2019 and March 14, 2019. Although one consequence of the striking out of Mr. Thethi’s pleadings was that he was not entitled to participate in the case, I permitted him to attend the proceedings as an observer.

[4] Ms. Manchanda seeks the following relief:

a. an order for equalization;

b. an order for a constructive trust in the matrimonial home;

c. reimbursement of $100,000 she gave to Mr. Thethi shortly after the parties separated in June 2013;

d. an order for lump sum retroactive spousal support;

e. an order granting Ms. Manchanda exclusive possession of the matrimonial home for a period of 120 days after the date of judgment;

f. an order that Mr. Thethi pay the judgment within 120 days, failing which the matrimonial home shall be transferred to Ms. Manchanda in satisfaction of any judgment;

g. a permanent restraining order against Mr. Thethi; and

h. costs on a substantial indemnity basis.

Background

[5] Ms. Manchanda was born in India in 1958 and immigrated to Canada in December 2000. At the time of her immigration to Canada, Ms. Manchanda had completed advanced education in India, including degrees in cultural anthropology and child welfare.

[6] Shortly after arriving in Canada Ms. Manchanda secured employment at a community centre in Toronto. In September 2001 she obtained a position as a child protection worker with a child welfare organization. She worked as a child protection worker with the child welfare organization throughout her marriage to Mr. Thethi, and continues in that position today.

[7] In February 2003, Ms. Manchanda purchased a condominium on Rowntree Road in Toronto for approximately $150,000. However when she and Mr. Thethi were married in August 2003, Ms. Manchanda moved into a property owned by Mr. Thethi located on Edinborough Court in Toronto. Ms. Manchanda and Respondent lived in an apartment on the second floor of Edinborough Court, with separate apartments on the main floor and basement being rented out to generate income. (The Rowntree Road condo was eventually sold by Ms. Manchanda in 2011 for approximately $148,000.)

[8] In addition to obtaining rental income from the apartments at Edinborough Court, throughout the marriage Mr. Thethi generated income through various forms of self-employment.

[9] This included a counselling practice providing counselling/psychotherapy services to individuals, couples and families. The counselling services provided were mainly contracted with government entities and corporations.

[10] Mr. Thethi owns an Ambassador taxi plate and earned income throughout the marriage from driving a taxi. In addition, Mr. Thethi had an ownership interest in a licensed taxi brokerage carrying on business as A4U Ltd. (“A4U”). A4U provides taxicab services, including parcel delivery and airport and limo services. Patrons can utilize the company’s website and mobile app to preorder taxicab services online.

[11] For some period of time during the marriage, Mr. Thethi also operated a business importing and distributing cigarettes from India, carrying on business as East-West Trading Co. However, Mr. Thethi testified that this business was wound up sometime during the marriage as a result of concerns raised by the Ontario Ministry of Health regarding the nature and quality of the imported cigarettes. Ms. Manchanda stated that even after East-West Trading Co. was wound up, Mr. Thethi continued to import cigarettes from India and distribute them, albeit on a more informal basis.

[12] According to Ms. Manchanda, the parties’ June 2013 separation resulted from the fact that Mr. Thethi had commenced a relationship with the tenant who was living in the basement apartment at Edinborough Court.

[13] Ms. Manchanda commenced this proceeding on August 8, 2013. On that date she also obtained an order without notice prohibiting Mr. Thethi from coming within 250 metres of the Edinborough Court property. Ms. Manchanda was further granted exclusive possession of the Edinborough Court property pending the return of the motion on notice. This initial order not only gave Ms. Manchanda exclusive possession, it also prevented Mr. Thethi from collecting rent or doing other chores to manage the two rental units on the property.

[14] The restraining order, along with the order granting Ms. Manchanda exclusive possession, was set aside on December 2, 2013. Ms. Manchanda was granted the right to occupy the top floor apartment at Edinborough Court without interference from Mr. Thethi. Mr. Thethi was permitted to resume managing the two rental units on the property, provided that he deposit all rent received into a specified joint bank account which was only to be accessed with the consent of both parties.

[15] The collection and use of the rental income from Edinborough Court proved to be a major source of conflict and dispute between the parties. Mr. Thethi did not comply with the December 2013 order to deposit rent received into the specified joint account. A subsequent order issued on November 24, 2014 required Mr. Thethi to transfer rents he received into a joint account set up by Ms. Manchanda. This order was also not followed by Mr. Thethi. On June 4, 2015, Mr. Thethi was once again ordered to deposit all rental income into a specific joint account, but again he failed to do so.

[16] The other major source of conflict between the parties was with respect to disclosure. The parties had agreed to a consent order for disclosure on October 1, 2013. However by early 2015 very little disclosure had been provided by Mr. Thethi. On June 4, 2015 Mr. Thethi was ordered to disclose basic documents such as his income tax returns, financial statements, bank account statements, credit card statements, and investment account statements. He was also ordered to disclose his income earned as a taxi driver, as well as through A4U. A variety of other disclosure was ordered, including information with respect to property Mr. Thethi owned in India.

[17] By the time the matter came before Myers J. in June 2016, Mr. Thethi had provided various documents in the form of exhibits to an April 2016 affidavit. However Myers J. referred to this disclosure as a “document dump”, noting that it was so disorganized as to make it largely unusable. Myers J. found that Mr. Thethi had failed to produce more than 30 of the particular documents and document classes specifically ordered in June 2015. Mr. Thethi had not disclosed his full income either as a taxi driver or through A4U, nor had he provided identifiable and verifiable evidence of the value of his assets or liabilities.

[18] Myers J. also noted that Ms. Manchanda herself had failed to provide full disclosure of her assets. In particular, Ms. Manchanda had failed to disclose what had happened to approximately $377,000 that had been in a PC Financial bank account on the date of separation. Ms. Manchanda had stated that the funds in this account had subsequently been withdrawn and used to fund legal fees and living expenses, but no details have been provided.

[19] Myers J. was of the view that, given Mr. Thethi’s failure to comply with numerous orders for disclosure, it would have been futile to make yet another disclosure order; in his view, it was evident that Mr. Thethi had no intention of assisting the court in arriving at a just outcome. Myers J. further concluded that Mr. Thethi’s approach was wilful, as evidenced by the length of time that had passed, the lack of production of even basic financial records, the orders ignored, and the “document dump” strategy that was finally adopted. He did not see how any order other than striking Mr. Thethi’s pleadings was available. He was reinforced in this conclusion by Mr. Thethi’s admitted and continuing refusal to comply with various court orders requiring him to deposit rent money he was collecting into certain joint bank accounts.

[20] The June 2016 Order struck Mr. Thethi’s pleadings and permitted Ms. Manchanda to amend her application to include a claim for a constructive trust in relation to the Edinborough Court property. Myers J. further required that Ms. Manchanda’s trial record include an affidavit disclosing the complete details of Ms. Manchanda’s use and investment of the $377,000 that was in her PC Financial bank account in early 2013.

[21] The June 2016 Order also granted Ms. Manchanda exclusive possession of the property at Edinborough Court pending trial, including the right to exclusively manage the rental units and collect rents from the tenants. All rents collected by Ms. Manchanda were to be deposited into a joint bank account, with the funds in the account to be utilized to pay all expenses associated with the property. Ms. Manchanda was to include in her trial record a sworn accounting of all rents received and expenses paid in respect of the property up to the date of trial. Mr. Thethi was granted the right to withdraw $800 per month from this joint bank account to pay his own rent pending trial, but was not permitted to make any other withdrawals or pay any other expenses from the bank account without the written consent of Ms. Manchanda.

[22] Mr. Thethi was also ordered to pay Ms. Manchanda’s costs on a substantial indemnity basis, in the amount of $18,650.

[23] An appeal of the June 2016 Order was dismissed by the Court of Appeal in November 2016, and Mr. Thethi’s motion for Leave to Appeal to the Supreme Court of Canada was dismissed in April 2017.

Uncontested Trial

[24] At trial, Ms. Manchanda provided viva voce evidence relevant to her claims and filed a variety of other documents and materials, including: (i) a Net Family Property (NFP) statement, which included a comparison between Ms. Manchanda’s NFP and an NFP that had earlier been submitted by Mr. Thethi; (ii) an affidavit setting out an accounting of the rental income she had received from tenants at the Edinborough Court property since the June 2016 Order (the “Rental Affidavit”); (iii) an affidavit setting out the disposition and use of the $377,000 that had been in her PC Financial account prior to the parties’ separation (the “PC Financial Affidavit”); and (iv) a report from Sheree Mann of Froese Forensic Partners Ltd. (“Mann”), calculating Mr. Thethi’s income for the years 2013 to 2015, using information that had been provided by Mr. Thethi as well as publicly available information from other sources.

[25] As will be discussed below, Ms. Manchanda was hampered in her ability to provide complete and/or precise information with respect to Mr. Thethi’s financial affairs due to the limited disclosure that he had provided. I note that where there is an absence of financial disclosure, there is broad discretion for a court to draw reasonable inferences for the purpose of resolving property issues or imputing income. As Kiteley J noted in Meade v. Meade: [2]

Where disclosure is inadequate and inferences are to be drawn, they should be favourable to the spouse who was confronted with the challenge of making sense out of financial disclosure, and against the spouse whose records are so inadequate or whose response to the obligation to produce is so unhelpful that cumbersome calculations and intensive and costly investigations or examinations are necessary.

[26] The comments of Kiteley J. are particularly relevant here. Given Mr. Thethi’s inadequate disclosure, Ms. Manchanda, along with the various valuators or experts she retained, were forced to make certain assumptions or estimates regarding his assets and income. For example, Ms. Manchanda was required to provide valuations, both at the date of marriage as well as on the Valuation Date, of certain properties owned by Mr. Thethi in India; she was also required to calculate Mr. Thethi’s income. These calculations were extremely challenging given the lack of cooperation and involvement of Mr. Thethi.

[27] I have carefully reviewed Ms. Manchanda’s evidence regarding Mr. Thethi’s assets and income, including the methodology and/or assumptions used. Because Mr. Thethi was not participating, I raised numerous questions or concerns, so as to ensure that the positions taken by Ms. Manchanda were reasonable and based on the best evidence available. Through this process, Ms. Manchanda revised or modified a number of her claims. Moreover, as set out below, I have dismissed a number of the revised claims she has advanced. In the result, despite the challenges posed by the absence of Mr. Thethi, I am satisfied that the conclusions I have reached are fair and reasonable to both parties.

[28] I turn now to the findings of fact and law on each of the issues raised in light of the evidence tendered by Ms. Manchanda at trial in support of her claims, as well as the specific obligations imposed upon her by the June 2016 Order.

Claim for Equalization

[29] Ms. Manchanda seeks an order for equalization of the parties’ net family property in accordance with s. 5 of the Act. At trial, she provided a Net Family Property (NFP) statement in which she claimed to be owed an equalization payment of $549,970.42.

[30] Ms. Manchanda provided supporting documentation for most of the assets and values set out in her NFP statement. This included valuations prepared by independent valuators of property owned by Mr. Thethi in India, as of the date of marriage as well as the date of separation. Ms. Manchanda also provided estimates of the value of various other property or assets owned by Mr. Thethi on the date of separation. Subject to my comments below, I find the methodology and assumptions utilized and the valuations provided to be reasonable, and I accept them.

[31] In the course of Ms. Manchanda’s testimony, a number of concerns were identified with her initial NFP statement filed at trial. The most significant concern identified was that Ms. Manchanda had estimated the value of the Edinborough Court property to be $870,000. However this represented an estimate of the value of the home on the date of trial as opposed to on the valuation date of June 16, 2013. Ms. Manchanda was instructed to prepare a revised NFP with the appropriate value for the matrimonial home, as well as taking into account various other comments and concerns identified by the Court at trial.

[32] The Applicant provided a revised NFP statement as part of her closing submissions on January 28, 2019, in which she claimed to be owed an equalization payment of $513,216.46. However this revised NFP statement continued to value the matrimonial home at $870,000. Moreover, while the Applicant had made many of the changes requested by the Court at trial, certain of the changes had not been appropriately made. The Applicant was directed to provide a further revised NFP statement.

[33] Ms. Manchanda provided a further revised NFP statement as part of her supplementary closing submissions on February 27, 2019 (the “February 2019 NFP”). The February 2019 NFP claimed that Ms. Manchanda was owed an equalization payment of $321,966.46. The February 2019 NFP did provide an estimated value of the matrimonial home on the valuation date, and made additional changes to address concerns that had been identified earlier.

[34] I find that the assets and associated values set out February 2019 NFP are supported by independent documentation, to the extent available, or by the testimony of Ms. Manchanda. I accept the February 2019 NFP, subject to the following further amendments:

a. the February 2019 NFP states that the matrimonial home had a value of $624,000 as of the Valuation Date. However in her closing submissions Ms. Manchanda provided a valuation of the matrimonial home prepared by a real estate brokerage stating that as of June 28, 2013, the fair market value of the property was between $580,000 and $600,000. I therefore fix the value of the matrimonial home as of the Valuation Date to be $590,000;

b. on the February 2019 NFP, Ms. Manchanda claimed that as of the date of marriage she had bank accounts and savings of $191,356. She provided limited independent documentation to verify this claim. Moreover, the estimate of her pre-marriage savings included on the February 2019 NFP was the third such estimate provided, with each estimate varying significantly from the other.

At trial, Ms. Manchanda had filed two different estimates of her pre-marriage savings, one stating that she had savings of $152,360, while the second estimated her pre-marriage savings to be $122,229.06. However in her testimony, Ms. Manchanda indicated that the second estimate was a duplicate of the first and should be ignored. She claimed that her savings as of the date of marriage were $152,360.

A third estimate of her pre-marriage savings, using the $191,356 figure, was filed as part of her closing submissions but there was no explanation as to why this estimate should be preferred to the ones filed at trial.

In addition to the substantial variation in the three estimates of pre-marriage savings provided, it is impossible to verify the validity of any of the estimates. At trial, Ms. Manchanda did provide a summary of six different GICs she held at the CIBC on the date of marriage, having a total value of $60,881.26. But Ms. Manchanda testified that she had accumulated additional savings, beyond those reflected in the CIBC GICs, as of that date. She attempted to calculate these savings by describing her assets upon her arrival in Canada in December 2000. She then added an amount which she estimated she had been able to save after her arrival in Canada until her marriage in August 2003, based on her income and expenses at the time.

I recognize the difficulties and challenges inherent in attempting to reconstruct one’s income and expenses for a period more than 15 years in the past. This challenge was compounded by the fact that Ms. Manchanda did not make use of Form 13.1, which would have required her to turn her mind to the normal and expected categories of income and expenses.

While I have no doubt that Ms. Manchanda made a good faith effort to reconstruct her savings from the period prior to marriage, in my view her estimates of her pre-marriage income and expenses were unrealistic and implausible. For example, Ms. Manchanda estimates that between December 2000 and August 2003, a period of over 30 months, she spent a total of just $500 on “personal needs, clothing, snow coat, winter shoes”; $300 for car maintenance for a 12-year-old used car she had purchased for $3000; and $300 on “miscellaneous/gifts/dining out”. She apparently spent nothing for gas, parking, food or groceries, health care, pharmacy, TV, Internet, or numerous other expense categories that would normally have been included in a personal budget.

As for her income estimate, Ms. Manchanda made no provision for deductions for income tax, Canada Pension or Employment Insurance, or for contributions to her employer-sponsored pension.

Despite the unrealistic nature of the estimates provided by Ms. Manchanda, I accept her evidence that she had accumulated meaningful savings as of the date of marriage, beyond that reflected in the CIBC GICs. The question is how to arrive at a figure which is a fair and reasonable estimate of these savings.

I begin with the observation that the estimate of pre-marriage savings included in the February 2019 NFP (namely, $191,356) is at variance with Ms. Manchanda’s testimony at trial. There is no basis in the record for this estimate, and no explanation as to why it should be preferred to her evidence at trial. Accordingly, I attach no weight to the estimate of pre-marriage savings included in the February 2019 NFP.

With respect to the two estimates of pre-marriage savings provided at trial, the lower estimate of $122,229.06 would appear to be more accurate, since it takes into account the fact that Ms. Manchanda made a down payment of approximately $38,000 when she purchased the Rowntree Road condominium in February 2003. Nevertheless, even this lower savings estimate is somewhat unrealistic since, for the reasons described above, it either understates or ignores numerous expected income or expense categories.

Taking Ms. Manchanda’s estimated pre-marriage savings of $122,229.06 as a starting point, and recognizing that absolute precision on this matter is simply not possible, I would address the concerns identified above by simply increasing the living expenses claimed by Ms. Manchanda for the December 2000 to August 2003 period by 50%. This has the effect of increasing her living expenses from $27,208 to $40,812, which reduces her pre-marriage savings by $13,604 to $108,625.06. This is the amount which should be substituted for the $191,356 claimed as bank accounts and savings in Part 6 of the February 2019 NFP.

[35] With these adjustments, Ms. Manchanda’s NFP is increased by $82,731 (i.e. the difference between $191,356 and $108,625) to $456,156.78, while Mr. Thethi’s NFP is decreased by $34,000 (i.e. the difference between $624,000 and $590,000) to $983,358.70. The revised difference between the parties’ NFP’s is therefore $527,201.92, resulting in an equalization payment from Mr. Thethi to Ms. Manchanda of $263,600.96.

[36] In her original application, Ms. Manchanda had sought an unequal division of net family property in accordance with s. 5(6) of the Act. The only possible factor referred to in s. 5(6) which might justify an unequal award in favour of Ms. Manchanda is subparagraph (a), which refers to a spouse’s failure to disclose debts or liabilities existing at the date of marriage. While Mr. Thethi’s pleadings were struck out for failure to provide adequate disclosure, the disclosure in question related primarily to Mr. Thethi’s income and assets during the marriage and after the parties separated. The February 2019 NFP includes a valuation of Mr. Thethi’s debts and/or liabilities existing at the date of marriage based on material gathered by Ms. Manchanda, and no concerns were identified with that aspect of the February 2019 NFP.

[37] More generally, Ms. Manchanda did not suggest that equalizing the parties’ net family properties in the normal manner pursuant to s. 5 of the Act would be “unconscionable”. I note that Ms. Manchanda continued to work throughout the marriage and increased her net family property by more than $450,000. This includes a pension with a value of approximately $260,000 at the time of the parties’ separation. Equalizing the parties’ net family properties results in an equalization payment from Mr. Thethi to Ms. Manchanda of approximately $263,000. I cannot see how this result could be described as unconscionable. I therefore conclude that s. 5(6) has no application, and find that Ms. Manchanda is entitled to an equalization payment from Mr. Thethi of $263,600.96.

Constructive Trust

[38] Ms. Manchanda claims a constructive trust in the matrimonial home at Edinborough Court on the basis of her monetary and non-monetary contributions to the property. The parties’ matrimonial home had been purchased by Mr. Thethi prior to the parties’ marriage in 2003 and he had retained title to the property throughout the marriage. Ms. Manchanda claimed a constructive trust in the property on the basis of various contributions she had made during the course of the marriage.

[39] In support of this claim, Ms. Manchanda testified that she contributed to the maintenance and management of the property. She indicated that she would clean the apartment on the second floor every week, and would regularly clean and maintain common areas of the property. Ms. Manchanda would also work with Mr. Thethi doing gardening and planting on the property. Ms. Manchanda included as part of her evidence a photograph taken in September 2007 showing Ms. Manchanda and Mr. Thethi working together in the front yard of the property.

[40] Ms. Manchanda testified that she would assist in renting the units to tenants when they became vacant from time to time. This included answering calls from prospective tenants, showing the units, and assisting in completing the lease agreements.

[41] Ms. Manchanda also testified that she made a financial contribution to the property. She estimated that on the date of marriage there was an outstanding mortgage of approximately $90,000 on the property. Each year she would contribute between $10,000 and $15,000 to assist in paying down the mortgage. She estimates that she contributed a total of approximately $50,000 by the time the mortgage was completely paid off in 2011 or 2012.

[42] However, for the reasons set out below, I do not find that this contribution is sufficient to justify the imposition of a constructive trust in relation to the Edinborough Court property.

[43] I begin with the observation that Canadian courts have relied on common law concepts of unjust enrichment and constructive trust in order to provide a legal remedy where property divisions in family law cases based solely on legal title would be manifestly unfair. However, as Cromwell J. observed in Kerr v. Baranow, 2011 SCC 10, [3] by the 1980’s provincial legislatures had put in place comprehensive matrimonial property statutes governing property and financial issues on marriage breakdown. Unmarried persons in domestic relationships were required to continue to look to the common law in order to address situations where one person’s contributions to the acquisition of property were not reflected in legal title. But that was no longer the case for married spouses, who were expected to resolve financial and property issues on the basis of the applicable legislative scheme as opposed to the common law. [4]

[44] The principle that married parties should look to the applicable statutory scheme, as opposed to the common law, in resolving property issues on marriage breakdown has been endorsed by Ontario courts on many occasions. For example, in Martin v. Sansome, 2014 ONCA 14, Hoy A.C.J.O. noted that the Act is “a detailed statutory scheme for resolving issues arising out of marital breakdown.” [5] The overall policy of the Act, and specifically the equalization provisions in section 5, is that property accumulated by the parties during marriage should be equally divided between them upon marriage breakdown. Moreover, as Hoy A.C.J.O. observed in Martin v. Sansome, “the express purpose of the equalization provisions of the FLA is to address the unjust enrichment that would otherwise arise upon marriage breakdown.” [6] Thus, as the Court of Appeal had earlier concluded in McNamee v. McNamee, 2011 ONCA 533 at paragraph 66, cited by the court in Martin v. Sansome, at paragraph 64, “in the vast majority of cases, any unjust enrichment that arises as the result of a marriage will be fully addressed through the operation of the equalization provisions under the Family Law Act.” [7]

[45] This conclusion clearly reflects the legislature’s intention, as is evident by s. 5(7) of the Act, which provides as follows:

The purpose of this [equalization] section is to recognize that childcare, household management and financial provision are the joint responsibilities of the spouses and that inherent in the marital relationship there is equal contribution, whether financial or otherwise, by the spouses to the assumption of these responsibilities, entitling each spouse to the equalization of the net family properties, subject only to the equitable considerations set out in subsection (6). (Emphasis added)

[46] As the italicized portion of s. 5(7) indicates, the Act does permit a deviation from the principle of equal sharing of net family properties, but only in cases where an equal sharing would be “unconscionable” in accordance with s. 5(6). As the Court of Appeal held in Serra v. Serra, 2009 ONCA 105, the threshold of "unconscionability" is "exceptionally high". [8] Even circumstances which are “unfair, harsh or unjust alone do not meet the test"; the threshold of unconscionability is crossed only when an equal sharing of NFPs would “shock the conscience of the court.”

[47] This reflects the policy of the legislative scheme, which is to promote certainty, predictability, and finality in the resolution of property matters following the breakdown of marriage. [9] The underlying goal is to enable parties to settle financial issues arising on marriage breakdown fairly and without lengthy litigation. These objectives would be undermined if courts could regularly reach outside of the legislative scheme and graft onto it common law principles which contemplate an individualized assessment of the respective contributions of parties to the acquisition of property during a domestic relationship.

[48] Martin v Sansome did acknowledge that there may be rare or exceptional cases where monetary damages for unjust enrichment arising out of marriage cannot be adequately addressed by the equalization provisions of the Act. [10] But this is not one of those rare or exceptional cases.

[49] A constructive trust is a remedy for unjust enrichment, which requires the plaintiff to establish three elements: an enrichment of or benefit to the defendant; a corresponding deprivation of the plaintiff; and the absence of a juristic reason for the enrichment. [11] Ms. Manchanda has failed to establish any of these three elements. It is true that Ms. Manchanda made significant contributions to the matrimonial home, through contributing $50,000 to paying off the mortgage, as well as cleaning, gardening, and landscaping the property, and dealing with tenants. But that contribution has been more than adequately recognized and compensated through her entitlement to an equalization payment equal to 50% of the value of the property on the date of separation. [12]

[50] Ms. Manchanda argues that her claim for a proprietary interest in the matrimonial home is supported by the Court of Appeal’s decision in Korman v. Korman, 2015 ONCA 578. [13] In Korman, married spouses had acquired a matrimonial home using funds gifted to them by each of their parents, along with accumulated joint savings. The purchase price was paid in full and the property was mortgage free from the time of purchase. Title to the matrimonial home was placed solely in the wife’s name. The husband claimed a 50% interest in the matrimonial home on the basis of a constructive trust.

[51] The Court of Appeal agreed that the husband had a 50% beneficial interest in the matrimonial home, but on the basis of a resulting trust rather than a constructive trust. Cronk J.A. noted that the presumption of a resulting trust in determining questions of ownership between spouses in the context of gratuitous property transfers had been preserved by s. 14 of the Act. Where, as in Korman, there had been a financial contribution to the initial acquisition of the property and a subsequent gratuitous transfer of title to the property, the presumption of resulting trust applies. The evidence at trial failed to disprove or displace the presumption, since it was not established that the husband had intended to unconditionally gift his interest in the property to his wife. The husband therefore retained a one-half beneficial ownership interest in the matrimonial home.

[52] The facts of Korman are clearly distinguishable from those in the case at bar. Here, Mr. Thethi acquired the matrimonial home prior to marriage entirely on his own with no financial contribution from Ms. Manchanda. While Ms. Manchanda did contribute to paying down the mortgage during the course of the marriage, this contribution represented less than 10% of the value of the property on the date of separation. Moreover, Mr. Thethi similarly contributed to paying off the mortgage during the marriage.

[53] This is entirely consistent with the underlying policy of the equalization provisions of the Act, which is that monetary and non-monetary contributions to the family unit are joint responsibilities of married spouses. These joint contributions are recognized through the entitlement of each spouse to the equalization of net family properties, subject only to the equitable considerations set out in s. 5 (6) of the Act. That is precisely what has occurred here, which has resulted in an equalization payment of approximately $263,000 in favour of Ms. Manchanda.

[54] Accordingly, Ms. Manchanda’s claim for a constructive trust in the matrimonial home is dismissed.

Claim for Spousal Support

[55] Ms. Manchanda seeks spousal support for a period of five years following the date of separation, on compensatory grounds. As Ms. Manchanda is not seeking any ongoing spousal support, she requests payment of this past support as a lump-sum.

Entitlement

[56] Ms. Manchanda submits that her entitlement to spousal support is based on the parties’ significant disparity in income. Ms. Manchanda was employed throughout the marriage, and her income fluctuated between $90,000 and $95,000 per year. In contrast, Mr. Thethi earned a significantly higher income. Moreover, Mr. Thethi actively concealed his true income, thereby depriving Ms. Manchanda of the lifestyle that he enjoyed. Mr. Thethi spent lavishly on himself purchasing high-end watches and gold pens.

[57] Section 15.2(4) of the Divorce Act [14] states that in making an order for spousal support, the court shall take into account the “means, needs and other circumstances of each spouse”, including the length of time the spouses cohabited, and the roles each performed during that time. Section 15.2(6) of the Divorce Act states that the objectives of a spousal support award include recognition of any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown, and relieving any economic hardship of the spouses arising from the breakdown of the marriage. All four objectives under the Divorce Act must be considered when assessing entitlement to spousal support. [15]

[58] When considering the compensatory basis for spousal support, courts have endorsed an expansive approach, its purpose being the equitable distribution of economic consequences of the relationship. Courts have recognized that many different circumstances could give rise to compensatory claims, the most common being where one spouse gives up or compromises her education, training or career to raise the children of the marriage or does so to support the education, training or career of the other spouse. Spousal support granted on that basis provides compensation for the loss of economic opportunity resulting from the roles adopted during the marriage. [16]

[59] Ms. Manchanda does not claim that she sacrificed career or other income-earning opportunities in order to assist Mr. Thethi. To the contrary, there were no children of the marriage and she continued her pre-marriage employment with a child welfare organization throughout their 10 year marriage. She also maintained separate bank accounts and accumulated substantial savings and assets, including credits toward a pension with her employer, as described earlier.

[60] Ms. Manchanda’s claim for spousal support is based on the disparity between her income and that of Mr. Thethi at the time of the parties’ separation. The difficulty with this argument is that a mere disparity in incomes does not itself generate an entitlement to spousal support. [17]

[61] It may have been possible for Ms. Manchanda to found a claim for spousal support on the basis of need. At earlier stages of the litigation Ms. Manchanda had filed financial statements suggesting that she had an annual shortfall of revenue to meet expenses of approximately $9000. [18] But Ms. Manchanda provided no such evidence or argument at trial, preferring to rest her claim for support on the basis of the parties’ disparities in income.

[62] In fact, the PC Financial Affidavit suggested that Ms. Manchanda had not encountered any difficulties in maintaining her lifestyle following the parties’ separation. For example, the PC Financial Affidavit discloses that following separation, Ms. Manchanda and a number of friends went on a four-day vacation to Las Vegas, where Ms. Manchanda spent a total of $23,000. In the fall of 2013, Ms. Manchanda made a gift of $25,000 to a niece in order to permit her to attend university in India. She also made a gift of over $5000 to a Yoga Centre in India in late 2013.

[63] I therefore find that Ms. Manchanda has failed to establish an entitlement to spousal support on compensatory or other grounds, and her claim for lump-sum spousal support is dismissed.

[64] However, even if I am in error on this issue and Ms. Manchanda has, or could have, a needs-based claim for spousal support, I would nevertheless decline to award her the support she is claiming. This is because, as described below, she has enjoyed exclusive rent-free possession of the matrimonial home, title to which is held by Mr. Thethi, since the parties’ separation. The value of this benefit received from Mr. Thethi exceeds any entitlement Ms. Manchanda may have had to spousal support.

Calculating Ms. Manchanda’s Potential Claim for Spousal Support

[65] Had Ms. Manchanda established an entitlement to spousal support, the next step in the analysis would have been the determination of the parties’ respective incomes.

[66] Ms. Manchanda submitted the income report prepared by Mann, calculating Mr. Thethi’s income for the years 2013 to 2015. Mann received an Honour’s Bachelor of Commerce Degree from Laurentian University in 1987 and was licensed as a Chartered Public Accountant in Ontario in 1990. She was qualified as a Certified Fraud Examiner from 1994 to 2001 and as a Chartered Business Valuator in 1998. She was certified as a Forensic Investigator in 2008 and in Financial Forensics in 2017.

[67] Mann has over 20 years of experience in relation to investigation, forensic accounting and quantifying economic losses. Her practice has consisted of financial investigation in both criminal and civil matters. She has provided expert testimony in both criminal and civil courts in Ontario and at a provincial Public Inquiry into computer leasing in the city of Toronto.

[68] Mann completed a Form 53 acknowledging her duty to provide evidence that is fair, objective and nonpartisan.

[69] Mann’s experience is particularly relevant in this case given the limited documentation available with respect to Mr. Thethi’s income. Mann was retained for this engagement since it required extensive independent investigations and research, and also would inevitably entail reliance upon various assumptions and estimates, in order to arrive at a reasonable estimate of Mr. Thethi’s income.

[70] After reviewing her qualifications and experience, I qualified her as an expert for purposes of the determination of Mr. Thethi’s income.

[71] Mann noted that she had not interviewed Mr. Thethi, nor was she provided with access to certain supporting documentation that she had requested at an early stage of her engagement in May 2016. She noted that she had been required to make key assumptions in calculating Mr. Thethi’s income, and that these assumptions as well as her overall methodology had been set out in her report.

[72] Mann had been provided with Mr. Thethi’s personal income tax returns for the years 2010 to 2012 and a CRA Summary of Income for 2013. Mr. Thethi did not produce his income tax returns for the years 2013 to 2015. Mr. Thethi’s personal tax returns disclosed that he earned income from counselling services, a taxicab business, and rental income from the rental units at Edinborough Court.

[73] Mann estimated Mr. Thethi’s income from counselling services for the years 2013 to 2015 based on available banking information, a schedule prepared by Mr. Thethi of counselling income/expenses for 2013, and information contained in prior year tax returns. Based on this limited information, as well as certain assumptions set out in the Mann Report, Mann concluded that Mr. Thethi incurred an annual loss of between $2300 and $4400 from his counselling business between 2013 and 2015.

[74] Mann estimated Mr. Thethi’s rental income from Edinborough Court based on the gross rental revenue disclosed on his personal tax returns for the period 2010 to 2012. Mann adjusted these amounts on the basis of information provided by Ms. Manchanda to the effect that Mr. Thethi did not report on his tax returns approximately $7500 of annual rental income earned from the basement unit. Based on available information, Mann estimated the net rental income earned by Mr. Thethi for the years 2013 to 2015 to be $22,500 in gross rents ($15,000 from the main floor and $7500 for the basement unit.) Rental expenses were assumed to be consistent with rental schedules and expenses produced by Mr. Thethi for Edinborough Court for 2013 and 2014.

[75] Mann estimated Mr. Thethi’s income as a taxi driver based in part on evidence provided by Mr. Thethi in his examinations for discovery, with respect to his hours worked, numbers of fares, and mileage driven on a weekly basis. Ms. Mann also researched and gathered publicly available information related to the net income earned by Ambassador taxicab license holders in Toronto. Mann further assumed that Mr. Thethi’s net income from his taxi business would have increased in 2014 due to a change in municipal regulations which permitted Ambassador taxicab license holders to rent out their vehicles for a second shift. She determined his income from his taxicab business to have been $39,700 in 2013; $49,935 in 2014; and $60,000 in 2015.

[76] With respect to income earned through A4U, Mann noted that it was unclear whether Mr. Thethi owned all or only a portion of the company. Mr. Thethi had claimed that he held a 40% interest, with a business partner holding the remaining 60% interest in the company. This ownership structure was consistent with the corporate tax returns of the company. On the other hand, Ms. Manchanda asserted that Mr. Thethi held a 100% ownership interest in A4U.

[77] Given the lack of clarity around the precise ownership structure of A4U, Mann prepared two income calculations, the first assuming that Mr. Thethi had a 40% ownership interest and the second assuming a 100% ownership interest in A4U.

[78] I find that Mr. Thethi had a 40% ownership interest in A4U. This is consistent with the corporate tax returns of the company. Although Ms. Manchanda claimed that Mr. Thethi held a 100% ownership interest in A4U, she did not provide any other evidence to support of this belief. I find as a fact that Mr. Thethi held a 40% ownership interest in A4U and his income should be calculated on this basis.

[79] Mann assumed that Mr. Thethi would have earned income from A4U from merchant processing fees, brokerage fees, and other income/benefits. Mann noted that A4U used a merchant sales processing company to process credit card sales transactions. A4U processed a significant volume of merchant sales transactions in each of the years 2011, 2012, 2013, and to September 2014, with the average dollar value per transaction ranging between $30 and $35. Mann assumed that A4U generated revenue from collecting a merchant processing fee of 7.5%, representing the average processing fees as set out in a report from the City of Toronto.

[80] Mann also assumed that A4U would have earned brokerage fees of $48,000 per year from each of the taxicabs operating in its brokerage. She estimated that there were approximately eight (8) taxicab owners in the brokerage for the years 2012 to 2014, based on the monthly credit card sales processed through A4U’s merchant sales account.

[81] Mann also assumed that Mr. Thethi would have received certain benefits from A4U related to disbursements or personal expenses paid by A4U. Mann further assumed that certain transfers from A4U to Mr. Thethi’s personal bank accounts represented additional income.

[82] Based on these calculations and assumptions, Mann concluded that, assuming Mr. Thethi had a 40% ownership interest in A4U, Mr. Thethi’s A4U income for the years 2013 to 2015 would have been: $48,081 in 2013; $46,531 in 2014; and $44,430 in 2015.

TABLE 1 RESPONDENT’S ADJUSTED INCOME 2013-15 [19]

Source	2013	2014	2015	Average
Counselling	($2,306.00)	($4,400.00)	($2,550.00)	($3,085.33)
Rental	$18,359.00	$17,924.00	$18,146.00	$18,143.00
Taxicab	$39,700.00	$49,935.00	$60,000.00	$49,878.33
Sub-Total	$55,753.00	$63,459.00	$75,596.00	$64,936.00
A4U – 40%	$48,081.00	$46,531.00	$44,430.00	$46,347.33
Income Tax Gross-up	$43,297.00	$49,680.00	$56,752.00	$49,909.67
Total income	$139,136.00 [20]	$159,670.00	$176,778.00	$161,194.33

[83] Mann then compared Mr. Thethi’s income determined in accordance with these calculations with his income reported on line 150 of his personal income tax returns, in order to determine the amount of income that had not been included in taxable income. She grossed up the unreported income using Mr. Thethi’s personal marginal income tax rates effective in each particular year. The unreported income and income tax gross up was added to line 150 income to calculate his estimated income.

[84] In the course of her testimony, an error was identified in the manner in which Mann had calculated the income tax gross up for 2014 and 2015. This error resulted in a significant overstatement of Mr. Thethi’s income for these two years. Mann corrected this error and provided the court with calculations of Mr. Thethi’s income for the period 2013 to 2015 as set out on Table 1 above.

[85] Despite the difficulties encountered in calculating Mr. Thethi’s income without his cooperation or participation, and apart from the calculation error described above with respect to the income tax gross up, I find that the methodology utilized by Mann, and the assumptions she has made, to be fair and reasonable. I accept her final calculations of Mr. Thethi’s income for the years 2013 to 2015 as set out in Table 1.

[86] There is no controversy with respect to Ms. Manchanda’s income, since her income is almost entirely earned as an employee and is reported on her income tax returns. These disclose that her income in 2013 was $88,916; in 2014 it was $87,759; and in 2015 it was $93,165. I accept these income figures for the purposes of spousal support calculations.

[87] Based on the incomes found above, the SSAG suggests that these respective incomes of the parties would result in a midrange spousal support payment from Mr. Thethi to Ms. Manchanda ranging from $782 to $1,219.00 in accordance with Table 2 below. [21]

TABLE 2 SPOUSAL SUPPORT CALCULATIONS

	2013	2014	2015	Average
Resp’s Income	$139,136.00	$159,647.00	$176,778.00	$161,194.00
Applicant’s Income	$88,916.00	$87,759.00	$93,165.00	$89,947.67
Monthly Support	$782.00	$1,048.00	$1,219.00	$1,016.33

Applicant’s Rent-Free Occupation of Edinborough Court exceeds any Spousal Support Entitlement

[88] Ms. Manchanda has occupied the second floor apartment at Edinborough Court on a rent-free basis since the parties separated in August 2013. The main floor apartment at Edinborough Court has been rented for $1300 per month throughout this time. On the evidence before me, I find the second floor apartment is comparable to the main floor apartment. This means that Ms. Manchanda has received a tax-free benefit of $1300 per month from Mr. Thethi since the parties separated.

[89] In addition, Ms. Manchanda has paid all of the expenses associated with the property from rents she has collected from the tenant on the main floor. As the Rental Affidavit indicated, the total expenses for the property have averaged approximately $13,500 per year. On the assumption that approximately 40% of these expenses would have been attributable to the second floor apartment, [22] the annual expenses for the portion of the property occupied by Ms. Manchanda were approximately $5400 per year or $450 per month.

[90] This means that the total benefit enjoyed by Ms. Manchanda through her continued occupation of the second floor apartment at Edinborough Court is approximately $1750 per month, and I so find. [23]

[91] As Table 2 indicates, at best her entitlement to monthly spousal support would have been $1219. Thus the benefit derived from her continued occupation of the second floor apartment significantly exceeds any entitlement that she may have to spousal support. I observe, in addition, that this benefit has been received on a tax-free basis, whereas any spousal support that would have been paid to her would have been subject to income tax.

[92] I therefore find that, even assuming Ms. Manchanda has or could have established an entitlement to spousal support, she has received a benefit from Mr. Thethi which exceeds any such entitlement.

Post-Separation Adjustments: Rental Income

[93] Given my ruling on the constructive trust issue, Mr. Thethi retains full legal title to the property at Edinborough Court. The consequence is that Mr. Thethi is entitled to the rental income generated by the property following the parties’ separation, from both the main floor and basement unit.

[94] The June 2016 Order required Ms. Manchanda to provide an accounting of all rents she received from tenants in the rental units at Edinborough Court, along with expenses paid for maintenance and repair of the property.

[95] Ms. Manchanda provided this accounting in the form of the Rental Affidavit. Ms. Manchanda stated that commencing in June 2016, she had collected a monthly rent of $1300 for the main floor unit. However she was not able to collect any rent from the basement unit since the tenant (the “Basement Tenant”) was involved in a romantic relationship with Mr. Thethi and refused to pay rent to Ms. Manchanda.

[96] Ms. Manchanda had intended to deposit the rents she received from the main floor tenant into the parties’ joint account at CIBC. [24] However upon attending at the CIBC in June 2016 she discovered that Mr. Thethi had refused to consent to her using funds in CIBC Account 7784 to pay expenses. She therefore opened a new account in her own name to which she proceeded to deposit the rents received from the main floor tenant. [25] Ms. Manchanda has provided records for CIBC Account 9096, which indicate that between June 2016 and the date of trial she collected approximately $15,000 annually in gross rents, and paid annual expenses of between $12,500 and $14,500. The balance in CIBC Account 9096 as of December 5, 2018 was $5381.60.

[97] In the latter part of 2016 Ms. Manchanda discovered that Mr. Thethi was receiving rent from the Basement Tenant in the amount of $625 per month, and was depositing it into CIBC Account 7784. Initially, Ms. Manchanda was sending Mr. Thethi a monthly cheque for $800, drawn on CIBC Account 7784, to pay for his rental costs, in accordance with the June 2016 Order.

[98] In early 2017 Ms. Manchanda advised Mr. Thethi that she would no longer provide him with the $800 payment to cover his rent unless he satisfied a number of unpaid costs orders, totaling approximately $45,000. Mr. Thethi did not pay the outstanding costs orders and, as of April 2017, Ms. Manchanda did not provide him with any further cheques to cover his rental costs. Mr. Thethi continued making deposits into CIBC Account 7784 until September 2017, at which point the deposits ceased. Since that time there has been limited activity in CIBC Account 7784, with the balance in the account as of December 5, 2018 being $8194.55.

[99] In May 2018 Ms. Manchanda commenced an application before the Landlord Tenant Board (the “LTB”) to evict the Basement Tenant for nonpayment of rent, as well as for other conduct which had interfered with Ms. Manchanda’s enjoyment of the property. On July 12, 2018, the LTB issued an eviction order and ordered the Basement Tenant to pay Ms. Manchanda arrears of rent in the amount of $6171.84. On August 15, 2018, the Sheriff attended at the premises and evicted the Basement Tenant.

[100] The Basement Tenant initiated a review of the eviction order, but those proceedings were ultimately dismissed by the LTB in late November 2018. As of December 5, 2018, the Basement Tenant had not yet paid the $6171.84 of rent arrears, as ordered by the LTB. When received, Ms. Manchanda intends to deposit these rent arrears into the CIBC Account 7784. Ms. Manchanda also indicated that she was represented before the LTB by a paralegal, whose expenses were paid out of the rental income she received from the property.

[101] Ms. Manchanda was also ordered to account for the rental amounts that she had collected between August and December 2013, when she had been in exclusive possession of the matrimonial home and responsible for the rent collection, in accordance with an August 2013 court order. She provided bank statements indicating that over this five month period of time she collected gross rents of $6250, paid expenses of $1061.90, for a net rent received of $5188.10. This amount is held in a separate CIBC account in Ms. Manchanda’s name. [26]

[102] By way of summary, the Rental Affidavit indicates that as of December 5, 2018 the total net rent held in CIBC Account 7784, CIBC Account 9096 and CIBC Account 2180 was $18,764.25. As the legal owner of Edinborough Court, Mr. Thethi is entitled to these funds, as well as to any other net rental income received by Ms. Manchanda after December 5, 2018.

[103] However, for reasons described below, I decline to order that the funds to be paid to Mr. Thethi. Instead I order that the excess rent in the bank accounts described in the Rental Affidavit be released to Ms. Manchanda, and set off against amounts owing by Mr. Thethi pursuant to this judgment.

Post-Separation Adjustments: Repayment of $100,000 Given to Respondent

[104] Over the course of the marriage, Ms. Manchanda had accumulated a total of approximately $377,000 in a PC Financial bank account. She testified that in the spring of 2013, as their relationship worsened, Mr. Thethi was pressuring her to transfer the funds in this account to him. Ms. Manchanda also became aware of the fact that Mr. Thethi was frequently accessing this account online to monitor the funds in the account. Ms. Manchanda became concerned and fearful over Mr. Thethi’s continued insistence that she transfer the money from this account to him. Accordingly, just prior to the parties’ separation in June 2013, she began transferring funds from this account to other accounts which Mr. Thethi could not access.

[105] Ms. Manchanda stated that after the parties separated on June 16, 2013, the pressure from Mr. Thethi regarding the funds in the PC Financial account intensified. According to Ms. Manchanda, Mr. Thethi stated that the only way he would make efforts to salvage the marriage would be if she transferred funds from this account to him. Ms. Manchanda was still hopeful that the parties could reconcile. Accordingly, in late June 2013 she withdrew $100,000 in cash from this account and gave it to Mr. Thethi. Ms. Manchanda stated that upon receiving the money, he uttered a profanity and left immediately.

[106] Ms. Manchanda’s description of these events was supported by testimony from a friend, Saroj Soni (“Soni”). Soni testified that in early July 2013 she was present with Ms. Manchanda in the second floor apartment at Edinborough Court when Mr. Thethi arrived. Soni noticed that Mr. Thethi was visibly upset, and was demanding that Ms. Manchanda pay him money. She observed Ms. Manchanda counting out a large amount of money in cash, approximately $100,000, and giving it to Mr. Thethi. Ms. Manchanda then suggested that she and Mr. Thethi should sit down and talk. However Mr. Thethi simply swore at Ms. Manchanda and left with the money.

[107] Ms. Manchanda maintains that Mr. Thethi had no entitlement to this $100,000 and it should be returned to her.

[108] I accept the evidence of Ms. Manchanda and Soni regarding the transfer of $100,000 in cash by Ms. Manchanda to Mr. Thethi in late June or early July 2013. I further accept that Ms. Manchanda did not intend to make an outright gift of this money to Mr. Thethi. Instead, she gave it to him in response to his pressure and insistence that she transfer the money to him. Mr. Thethi had indicated that he would only consider attempting to salvage their relationship if she transferred a substantial amount of cash to him. Upon receiving the money, Mr. Thethi ignored these promises, swore at Ms. Manchanda, and left abruptly.

[109] As discussed above, the presumption of resulting trust in the context of gratuitous transfers of property is expressly preserved by s. 14 of the Act. The burden is on Mr. Thethi to displace the presumption of resulting trust that naturally arises in relation to this gratuitous transfer of $100,000. Not only has Mr. Thethi been unable to do so (given that his pleadings have been struck), the evidence of Ms. Manchanda reinforces the conclusion that there was no intention on her part to make an outright gift of $100,000 in cash to Mr. Thethi just weeks after the parties had separated. Moreover, this transfer was a direct result of sustained pressure applied by Mr. Thethi over a period of months, as opposed to a voluntary choice by Ms. Manchanda.

[110] I therefore find that Ms. Manchanda is entitled to be repaid the $100,000 she gave to Mr. Thethi after the parties separated.

Orders in relation to the Matrimonial Home

[111] Ms. Manchanda seeks two orders regarding the matrimonial home pursuant to s. 34 of the Family Law Act.

[112] First, she seeks an order granting her exclusive possession of the matrimonial home for a period of 120 days after the date of judgment. She argues that this will permit her to locate alternative accommodation and to register the judgment against the property.

[113] Ms. Manchanda seeks a second, corollary order that Mr. Thethi pay the judgment within 120 days, failing which the matrimonial home shall be transferred to her in satisfaction of any judgment.

[114] Ms. Manchanda argues that these orders are necessary given the fact that Mr. Thethi has a history of noncompliance with court orders. During the course of the litigation he failed to pay four significant costs orders, failed to provide financial disclosure that had been court-ordered, and failed to comply with orders that he deposit rental income into certain joint accounts. Ms. Manchanda is concerned that Mr. Thethi will not comply with any judgment of the court.

[115] I agree that Ms. Manchanda should be entitled to occupy the second floor apartment at Edinborough Court for a period of time that will enable her to secure suitable alternate accommodation. However, I do not believe this should require 120 days. Given that the litigation has been ongoing for close to six years, she has had ample time to contemplate her living arrangements going forward. I consider that 60 days should be more than adequate for her to arrange alternate accommodation. I therefore order that Ms. Manchanda is entitled to continued undisturbed occupation of the second floor apartment until May 31, 2019, but will vacate the apartment by no later than that date.

[116] Apart from Ms. Manchanda’s occupation of the second floor apartment, it is also necessary to resolve the issue of entitlement to exclusive possession of the property itself going forward. Given that Mr. Thethi is the legal owner of the property, he is presumptively entitled to possession. That said, I recognize that it is necessary to provide for an orderly transition in this matter. I therefore order that Ms. Manchanda’s exclusive possession of Edinborough Court (apart from the second floor apartment) will cease as of March 31, 2019 and Mr. Thethi will resume his possession of the property (apart from the second floor apartment) as of April 1, 2019. This includes the right to collect rents from tenants on the main floor and basement and generally to manage the property, including the payment of all expenses. It follows that Mr. Thethi is not required to pay or account for the rents he may have received previously from the basement apartment, since he is legally entitled to those amounts.

[117] Finally, in order to avoid conflict between the parties during this transition and for such time as Ms. Manchanda occupies the second floor apartment, the parties shall not communicate with each other except through legal counsel. Ms. Manchanda will provide information through her counsel to counsel for Mr. Thethi, so as to enable him to resume possession and management of the property as of April 1, 2019. This should include an accounting of all rents received by her as of March 31, 2019, the manner in which those rents have been utilized, and the excess rent that remains in the three CIBC bank accounts referred to in the Rental Affidavit.

[118] Ms. Manchanda also seeks an order that Mr. Thethi pay the judgment within 120 days, failing which title to Mr. Thethi’s property at Edinborough Court be transferred to her. I recognize that Mr. Thethi has a history of ignoring court orders and there is a concern that he may not comply with any judgment of this Court. The difficulty with the relief sought by Ms. Manchanda, however, is that the property currently has a value of approximately $870,000. This exceeds the amount of the judgment in Ms. Manchanda’s favour. Thus transferring the property to her in satisfaction of the judgment would constitute a windfall to Ms. Manchanda. There may also be third parties with an interest in Edinborough Court, who could be negatively affected by any transfer of the property.

[119] Accordingly, Applicant’s claim that the property at Edinborough Court be transferred to her if Mr. Thethi has not paid the judgment within 120 days is dismissed.

Permanent Restraining Order

[120] Ms. Manchanda originally sought a permanent restraining order against Mr. Thethi in light of his verbal and emotional abuse during the marriage as well as his threatening behaviour since the parties separated in 2013. However, in closing argument Applicant’s counsel conceded that the evidence did not support the granting of such an order. Accordingly, the application for a permanent restraining order is dismissed.

Order for Divorce

[121] Both parties sought an order for a divorce in their originating documents. This judgment resolves all matters associated with the parties’ divorce. Accordingly, leave is granted to either party to take out a divorce order on an uncontested basis.

Enforcement Issues

[122] Ms. Manchanda is rightly concerned over the possibility that Mr. Thethi will not comply with any judgment issued by this Court. I note that there are three costs orders against Mr. Thethi, totaling approximately $45,000, that have not been paid, along with various other court orders that have been ignored by him.

[123] In light of these concerns, I order that the excess rental income that has been collected by Ms. Manchanda, to which Mr. Thethi is otherwise legally entitled, be released to Ms. Manchanda and set off against the amounts owing by Mr. Thethi pursuant to this judgment. These funds are currently held in CIBC Account 7784, CIBC Account 9096, and CIBC Account 2180. The balance in these accounts as of December 5, 2018 was $18,764.25, and may be somewhat higher today.

Disposition

[124] An order will issue as follows:

a. Mr. Thethi shall pay Ms. Manchanda $263,600.96 in respect of the equalization of the parties’ Net Family Property;

b. Mr. Thethi shall repay Ms. Manchanda the $100,000 she transferred to him shortly after the parties’ separation;

c. Ms. Manchanda is entitled to prejudgment interest on the amounts in subparagraphs (a) and (b) from the date of separation, and post judgment interest going forward, with interest calculated in accordance with the Courts of Justice Act;

d. Ms. Manchanda’s claim for a constructive trust in relation to Edinborough Court is dismissed;

e. Mr. Thethi is legally entitled to the excess rental income that has been collected by Ms. Manchanda, held in CIBC Account 7784, CIBC Account 9096, and CIBC Account 2180. The excess rental income totalled $18,764.25 as of December 5, 2018, and may be somewhat higher as of March 31, 2019. However instead of paying out these funds to Mr. Thethi, the excess rental income held in these accounts shall be released to Ms. Manchanda, and set off against the amounts otherwise owing by Mr. Thethi pursuant to subparagraphs (a), (b), and (c), above;

f. Mr. Thethi is not required to pay or account to Ms. Manchanda with respect to rental income he may have received from the basement apartment;

g. Ms. Manchanda’s claim for a lump-sum payment on account of spousal support is dismissed;

h. the applicant shall be entitled to continued undisturbed occupation of the second floor apartment at Edinborough Court until May 31, 2019;

i. Ms. Manchanda’s exclusive possession of the property (apart from the second floor apartment) will cease as of March 31, 2019, and Mr. Thethi will resume exclusive possession of the property (apart from the second floor apartment) effective April 1, 2019. In order to ensure an orderly transition and to avoid conflict between the parties, they shall not communicate with each other except through legal counsel. Ms. Manchanda will provide information through counsel sufficient to enable Mr. Thethi to resume exclusive possession and management of the property effective April 1, 2019;

j. Ms. Manchanda’s request for a permanent restraining order against Mr. Thethi is dismissed; and

k. either party is given leave to take out a divorce order on an uncontested basis.

[125] Ms. Manchanda shall submit a draft order for review by the Court prior to it being issued and entered. Ms. Manchanda shall also submit a statement describing the methodology used in calculating pre-and post-judgment interest payable in accordance with paragraph 124 (c).

[126] Ms. Manchanda shall file written costs submissions, including a Bill of Costs detailing the nature and timing of the work performed by counsel, by April 18, 2019. The Bill of Costs shall not include costs that have been considered in the context of previous costs orders, or otherwise dealt with or disposed of by the court.

P. J. Monahan J.

Released: March 21, 2019

Footnotes

[1] See Manchanda v. Thethi, 2016 ONSC 3776 ("Manchanda v. Thethi 2016").

[2] (2002) R. F. L. (5th) 88 at paragraph 81, cited by Myers J. in Manchanda v. Thethi 2016, at paragraph 8. See generally Bagheri-Sadr v. Yaghoub-Azari, 2011 ONSC 611, at para. 13; Bardouniotis v. Trypis, 2010 ONSC 4466, at para 7-9; Milutinovic v. Milutinovic, 2016 ONSC 4310, at para 20.

[3] Kerr v. Baranow, 2011 SCC 10, [2011] 1 SCR 269 ("Kerr v. Baranow").

[4] See Kerr v. Baranow, at paragraph 1. I note, however, that s. 14 of the Act expressly preserves the common law presumption of a resulting trust in cases of a gratuitous transfer of property. For reasons described below, this presumption is relevant in the context of the $100,000 cash transfer made by Ms. Manchanda to Mr. Thethi shortly after the parties separated in June 2016.

[5] Martin v. Sansome, 2014 ONCA 14, at paragraph 46.

[6] Martin v. Sansome, at paragraph 63.

[7] See McNamee v. McNamee, 2011 ONCA 533 at paragraph 66, cited by the court in Martin v. Sansome, at paragraph 64.

[8] Serra v. Serra, 2009 ONCA 105, at paragraph 47.

[9] Serra, at paragraph 56.

[10] Martin v. Sansome, at paragraphs 66 to 67.

[11] See generally Kerr v. Baranow, at paragraph 31.

[12] I would also note that since Mr. Thethi owned the matrimonial home when the parties married, he could not include the value of the property in calculating his assets on the date of marriage. This meant that Mr. Thethi had to include the entire value of the matrimonial home as of the date of separation in his net family property, without any offset for the fact that he had acquired it entirely with his own funds before the parties married.

[13] Korman v. Korman, 2015 ONCA 578.

[14] Divorce Act, RSC 1985, c. 3 (2nd Supp) (the "Divorce Act").

[15] Moge v. Moge, [1992] 3 SCR 813, at paragraph 53.

[16] See generally Osterlund-Lenahan v. Lenahan, 2014 ONSC 7074 (Ont. S. C. J.).

[17] See Liu v. Huang, 2018 ONSC 3499, at paragraph 176; Fielding v. Fielding, 2014 ONSC 2272, at paragraph 210.

[18] See Manchanda v. Thethi 2016, at paragraph 59.

[19] Given my finding that Mr. Thethi had a 40% interest in A4U, I have only included these calculations in Table 1.

[20] In order to arrive at this income figure, Mann backed out the income reported by Mr. Thethi on his tax return.

[21] I assume that, at best, Ms. Manchanda would have been entitled to spousal support at the mid-range given the uncertain nature of her entitlement to spousal support.

[22] This is the assumption made by Ms. Manchanda in the Rental Affidavit.

[23] This finding is based on a further finding, namely, that Ms. Manchanda has no obligation to pay occupation rent to Mr. Thethi for her post-separation occupation of Edinborough Court. I find that there is no basis for such a claim by Mr. Thethi. A motion for occupation rent by Mr. Thethi was dismissed by Myers J. in his June 2016 Order on the basis that Ms. Manchanda did not have exclusive possession of the property prior to June 2016. Moreover, in ordering exclusive possession of the matrimonial home in favour of Ms. Manchanda, Myers J. also make provision for the payment of $800 per month to Mr. Thethi to cover his own rental costs, in accordance with s. 24(1)(c) of the Act. Thus, even though Mr. Thethi’s pleadings were struck out (thus precluding him from advancing a claim for occupation rent at trial), I conclude that any such claim would have been unsuccessful.

[24] This is account number *****97784 ("CIBC Account 7784"), the account referred to in the June 2016 order.

[25] This is account number *****39096, ("CIBC Account 9096").

[26] This is CIBC account number *****2180 ("CIBC Account 2180").