Court File and Parties

COURT FILE NO.: FS-18-92512-00 DATE: 2020-07-16 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

ALICIA HOA-LAE CHEUNG Applicant – and – SUY LEANG LIM Respondent

COUNSEL: Tyler Teichert, for the Applicant Unrepresented, for the Respondent

HEARD: July 16, 2020, at Brampton

REASONS FOR JUDGMENT

Mandhane J.

INTRODUCTION

[1] This matter proceeded by way of uncontested trial. The Applicant seeks the following relief:

a. A divorce b. A declaration that no equalization payments are payable by either party pursuant to s. 5 of the Family Law Act; c. Costs on a substantial (80%) or full indemnity basis; and d. Post-judgment interest at the rate of 3% per annum.

[2] The Respondent failed to serve and file an answer.

[3] For reasons that follow, I would grant the relief sought by the Applicant.

FACTS

[4] The Applicant relies on a voluminous record as well as her viva voce evidence at trial. I found the Applicant credible and reliable and accept her evidence.

[5] The parties started living together on or around April 2, 2012, were married on August 8, 2015, and separated on February 19, 2017. The Respondent moved out of the matrimonial home on or around October 5, 2017. In total, the parties were together for approximately 4 years and 10.5 months before they began living separate and apart.

[6] There are no children of the marriage, and neither party is claiming spousal support. The only substantive issue is equalization.

[7] Throughout the duration of their relationship, the couple did not combine their finances, each contributing equally to things like groceries, day-to-day expenses, and rent.

[8] The couple never exchanged financial information, before, during or after the relationship. Because the couple chose not to combine their finances, the Applicant never asked the Respondent for financial information because she felt that such matters were private.

[9] After their separation, the Respondent refused to provide any financial information whatsoever to the Applicant and never filed a Net Family Property Statement. Unfortunately, as a result, there is no information before me about the Respondent’s net family property. I accept the Applicant’s evidence that the Respondent’s annual salary is approximately $70,000, which is roughly equivalent to hers. I also accept her evidence that the Respondent likely has other assets and/or income, including a pension.

[10] In 2013, while she was living with the Respondent but before they were married, the Applicant purchased a condominium (“the matrimonial home”). The Applicant received a cash gift of $100,000 from her mother and used it to for the down payment. The Respondent did not contribute any money towards the down payment. The Applicant’s name is on title.

[11] According to the Applicant’s net family property statement, the matrimonial home is currently valued at $592,000 and there is a mortgage of $265,387.31. At all times, the Applicant was solely responsible for paying the mortgage and received approximately $19,738.00 in contributions from the Respondent. The Applicant characterized the Respondent’s payments as being akin to rent. Indeed, she noted that prior to her purchasing the home, both parties would contribute equally to rent, and she viewed the contributions to the mortgage as a continuation of that practice.

[12] The Applicant was solely responsible for maintenance of the home and paid all of the expenses related to utilities, insurance, property taxes and so on.

[13] During the relationship, the Applicant also used her line of credit to loan the Respondent money for his education, dental work and so on. The Respondent still owes the Applicant approximately $25,000.

ANALYSIS

[14] The Applicant relies on s.5(6) of the Family Law Act, R.S.O. 1990, c. F.3. as amended, to support her argument that this court should exercise its discretion to order unequal division of net family property. The relevant provisions state:

s.5(6) The court may award a spouse an amount that is more or less than half the different between the net family properties if the court is of the opinion that equalizing the net family properties would be unconscionable, having regard to, […]

(e) the fact that the amount a spouse would otherwise receive under subsection (1), (2) or (3) is disproportionately large in relation to the period of cohabitation that is less than five years;

(f) the fact that the spouse has incurred a disproportionate larger amount of debts or other liabilities than the other spouse for the support of the family;

(h) any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of the property.

[15] In Serra v Serra, 2009 ONCA 105, 2009 CarswellOnt 513 (Ont. C.A.), the Court of Appeal for Ontario noted that the threshold of “unconscionability” under s. 5(6) is exceptionally high and that, to cross the threshold, an equal division of net family properties in the circumstances must “shock the conscience of the court.” In Medeiros v Medeiros, 2009 ONCA 600, the Court of Appeal noted that the factors set out in s. 5(6) must be considered in light of all the relevant circumstances.

[16] In Kucera v Kucera, Heeney J. considered the situation where a spouse brought the matrimonial home into a short marriage. The court explained the policy rationale underlying s. 5(6)(e) at paras. 18-19:

Marriage is a form of partnership, and it is inherently fair that wealth accumulated during the life of that partnership should be shared equally.

Where the [Family Law] Act potentially becomes unfair is where the special provisions discussed above come into play. This is because the equalization process does not only share wealth accumulated during the marriage, but also shares the value of one specific asset, the matrimonial home, that was accumulated prior to the marriage. In very short marriages, this represents an unjustifiable windfall to the non-titled spouse. So long as the marriage is of a duration of less than give years, s. 5(6) is available to redress that unfairness.

[17] The court went on to consider the following factors in terms of determining whether s. 5(6)(e) was engaged:

• Whether the home was purchased before the marriage, and the contributions of the non-titled spouse;
• Whether the home was improved during the marriage in any way;
• Whether the titled spouse covered maintenance costs, as well as other living expenses for both parties;
• Whether the bulk of the presumptive equalization payment is a result of the value of the matrimonial home;
• Whether the non-titled spouse improved their financial position even without the presumptive equalization payment, including repayment of debts brought into the marriage; and
• Whether there were children.

[18] Applying these factors, the court found that it would be unconscionable to award the wife an equalization payment generated almost entirely from a matrimonial home that the husband had brought into the marriage where: the marriage was short, the husband had acquired the home well before the marriage, and the wife had made no substantial contributions towards the home’s maintenance. The court allowed the husband to exclude the value of the home as of the date of marriage to determine equalization, and further reduced the award by 1/6th on account of the length of the marriage.

[19] Latchman v Sullivan, 2013 ONSC 2536, involved an uncontested trial where the main issue was division of family property. The parties cohabited for 10 years but were only married for 17 months. The wife purchased the home before the marriage but during the cohabitation period, with title solely in her name. The husband did not contribute any money towards the purchase of the home and made minimum contributions to its maintenance. The wife incurred debts for the benefit of the husband during the marriage which the husband never repaid. Based on these facts, the court allowed the wife to deduct the home’s value as of the date of marriage, and credited ½ of the mortgage payments, second mortgage, and truck loan balance made since separation such that the husband owed an equalization payment to the wife.

[20] In Li v Zhao, 2012 ONSC 2121, the matter also proceeded by way of uncontested trial and, like the matter before this court, the husband did not provide any financial information. The court was satisfied that the husband had assets he had not disclosed that were equal to or greater than the mother’s assets. Accordingly, it assumed that their net family property was equal. However, the judge went on to note that, even if he was wrong, he would have not ordered the wife to pay equalization because she incurred a disproportionate larger amount of debt in support of the family.

[21] In Langlois v Le Capelain, 2016 ONSC 1999, the court exercised its discretion under s.5(6) and found that the mother did not have to pay the father the equalization payment that would have otherwise been owing. It noted that the mother’s Net Family Property Statement was impaired by the father’s failure to disclose and file such a statement and found that it would be improper to reward the respondent for his conduct by awarding an equal division of net family property. On this basis the court adjusted the net family property of the parties to be equal.

[22] While I am mindful that it is exceedingly rare for a court to grant unequal property division, this is a case where such a remedy is both warranted and consistent with the case law. Indeed, it would be unconscionable to do otherwise.

[23] In particular, applying the Kucera factors, I find that the Applicant has established that she is entitled to relief pursuant to s. 5(6)(e). The home was purchased prior to the marriage, the Applicant was solely responsible for the mortgage and maintenance of the home, she provided loans to the Respondent for approximately $25,000 during the course of the marriage, and there are no children. While the Applicant admits that the Respondent contributed approximately $11,000 towards mortgage payments, I note that payments were sporadic and seemingly at the sole discretion of the Respondent. Moreover, the Respondent received a benefit from these payments, namely, living rent-free for the entire duration of the couple’s relationship.

[24] I also rely on Langlois v Le Capelain, 2016 ONSC 1999, to find that it would be unconscionable to reward the Respondent with a potentially large equalization payment based on his failure to disclose and file a Net Family Property Statement. While I could impute an annual income of $70,000 to the Respondent and proceed to equalize the net family property, I am not satisfied that his annual income represents the entirety of the Respondent’s assets. While the Applicant could not provide an estimate of his other assets, I accept that at the very least he has a car, a pension and investments.

[25] Based on the foregoing, I am prepared to exercise my discretion under s. 5(6) to adjust the net family property of the parties to be equal such that neither party is required to pay any property equalization to each other.

[26] I also grant the divorce.

CONCLUSION

[23] Order to go as drafted by counsel and signed by this Court.

[24] Based on the Bill of Costs submitted by counsel and submissions, and bearing in mind the conduct of the Respondent, including his refusal to provide an address for service which required a motion for substituted service, I am prepared to order costs on a substantial indemnity basis. The Applicant is entitled to $13,831.22, inclusive of HST and disbursements.

Mandhane J. Released: July 16, 2020