Court File and Parties

COURT FILE NO.: FS-21-101830-00 DATE: 2023 01 11

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

O.K., Applicant Shawn M. Philbert, for the Applicant

- and -

M.H., Respondent Kenna Bromley, for the Respondent

HEARD: November 23, 24 and 25, 2022. Written Closing Submissions completed December 23, 2022.

REASONS FOR DECISION

MCGEE J.

Overview

[1] This Trial of an Issue determines whether the parties’ Separation Agreement dated April 1, 2015 (“the Agreement”) should be set aside pursuant to section 56 (4) of the Family Law Act, R.S.O. 1990, c. F.3. If it is set aside, then I must also determine the parties’ separation date.

[2] For the reasons set out below, I find that the parties’ Agreement must be set aside because it is a sham Agreement. When the Agreement was signed, the parties were not living separate and apart, had not formed the intention to separate, and neither Dr. K nor Ms. H intended to be bound by the terms of the Agreement.

[3] The Agreement identifies the date of separation as July 15, 2013 but the parties did not live in separate residences until December 18, 2019 when Dr. K was charged with assault. The charge was later withdrawn. Dr. K maintains that the parties separated in 2013 as stated in the Agreement, or in the alternative, that they separated on December 18, 2019.

[4] Ms. H acknowledges that the parties lived in separate residences after December 18, 2019 but argues that they reconciled in February 2020 after meeting with their Imam and thereafter, lived together in separate residences. She asks the court to find that they did not separate on a final basis until either May 29, 2021 when Dr. K left the country, or on July 16, 2021 when she received a notice letter from his family law counsel.

[5] Dr. K currently resides in New Zealand and participated in this hearing by videoconference. Ms. H remains in the former matrimonial home in Brampton, Ontario with the parties’ two children ages 15 and 11.

[6] I find that the parties’ date of separation for FLA purposes is December 18, 2019.

[7] The next step in this proceeding is to determine Dr. K’s child and spousal support obligations since the date of separation, the equalization payment owing to Ms. H and the sale of the home.

[8] As set out in my endorsement of November 25, 2022, the Case Conference previously scheduled for 2:15 p.m. on March 1, 2023 is hereby converted to a Settlement Conference. Parties are to serve and file their Net Family Property Statements and Offers to Settle by February 15, 2023. Dr. K may participate in the Settlement Conference by videoconference.

Statutory Framework

[9] Domestic contracts are enforceable instruments that resolve the legal issues arising from the end of a relationship, and in the case of cohabitation and marriage contracts, domestic contracts govern the future rights and responsibilities of parents and/or former spouses.

[10] A Separation Agreement is a form of domestic contract. Section 54 of the FLA provides that two persons who cohabited and are living separate and apart may enter into an agreement in which they agree on their respective rights and obligations.

[11] To be enforceable, domestic contracts must comply with the formalities set out in section 55 of the FLA. Those formalities include that the parties have capacity or standing to enter into the domestic contract, that the contract is made in writing, signed by the parties, and witnessed.

[12] As a general and longstanding policy, courts prefer to maintain certainty and finality by enforcing duly executed domestic contracts. Parties are not required to have had independent legal advice, or to have negotiated on perfect information for a domestic agreement to be enforceable. Parties are allowed to make their own bargains.

[13] There are exceptions. Section 56 of the FLA speaks to provisions in a domestic contract that may be set aside or disregarded by the court such as unreasonable terms with respect to child support, parenting terms that are not in a child’s best interests or terms that are intended to act as barriers to a spouse’s remarriage within his or her faith.

[14] Section 56(4) of the FLA specifically sets out when a court may, on application, set aside a domestic contract, or a provision in it:

a) if a party failed to disclose to the other significant assets, or significant debts or other liabilities, existing when the domestic contract was made;

b) if a party did not understand the nature or consequences of the domestic contract; or

c) otherwise in accordance with the law of contract.

Positions of the Parties

[15] This Trial of an Issue was organized on June 20, 2022 and determines Ms. H’s claim to set aside their Agreement pursuant to section 56(4) of the FLA. Counsel agreed at the start of Trial that I must also determine the parties’ date of separation should the Agreement be set aside.

[16] Ms. H offers multiple and often contradictory reasons why the Agreement should be set aside. She testified that she did not appreciate what document she was signing on April 1, 2015 or she did, but did not understand its terms, that she did not receive legal advice, or was misled by that advice, that she did not receive financial disclosure, or she understood what the document was and that by signing it, she thought that she was helping her husband with a business issue; or she did not know anything of what was happening but signed the document because she assumed he knew best, and/or she had no agency within her marriage.

[17] In the alternative, she argues that she did understand the terms in the Agreement, but the parties reconciled after the Agreement was signed, thereby voiding its provisions. Her alternative argument is directly contradicted by her filing of Income Tax Returns as separated for the taxation years of 2015 to 2019, a very late discovery in this litigation. Throughout, Ms. H has refused to produce her full Income Tax Returns while under a legal obligation to do so.

[18] After apologizing on the second day of Trial that she had her Returns, but had left them at home, I ended the court day early and ordered Ms. H to bring her full Income Tax Returns and attachments, and corresponding Notices of Assessment to court. She brought documents to the court after hours, but she only produced to counsel the regular tax forms available online for 2015 to 2018, and only the Notice of Assessment for 2019. Nothing else was received.

[19] Dr. K urges me to find that the April 1, 2015 Separation Agreement is enforceable and as a result, any litigation between the parties is at an end, but perhaps, for the amount of ongoing child support to be paid and his claim for increased parenting time.

Credibility of the Parties

[20] Regrettably, I found neither party to be credible.

[21] In making this finding, I have separated credibility from reliability. Credibility has to do with a witness’s genuine efforts to tell the truth in a wholesome manner, not leaving out details that could mislead the listener. Reliability relates to the parties’ ability to accurately observe, recall, and recount events in issue. A credible witness may not be reliable despite his or her best efforts to tell the truth, but should a witness prove not to be credible, then his or her evidence cannot be found to be reliable absent corroboration.

[22] Dr. K’s evidence was not credible because it lacked nuance and logical consistency. Every answer was designed to fit the narrative of an enforceable Separation Agreement even when elements of the narrative made no sense. For example, there was no evidentiary basis for a July 15, 2013 date of separation. Neither was there any basis for his assertion that a well documented and photographed family trip to Turkey in 2018 was not the joyous time that it appeared to be; but instead, was his vacation with the girls. He described Ms. H as an unwelcome intruder who had not permitted the girls to travel with him unless she was included.

[23] Ms. H’s evidence lacked credibility because it was endlessly contradictory. Every assertion put to her in cross examination was denied, even facts that assisted her case. She refused to answer questions directly, approaching each as if it were a trap. She was evasive and deflected when asked to explain logical inconsistencies created by her own evidence, and throughout this proceeding she has failed to disclose documents in her control that would corroborate her assertions.

Relevant Background Information

[24] In April of 2015 the parties had been married for almost 11 years and were living in the matrimonial home. Title to the home was and continues to be registered to Dr. K alone. The parties had some modest savings. In 2015, their daughters, now 15 and 11 were only 8 and 4 years of age.

[25] Ms. H had worked sporadically in IT, Customer Service and at a medical office to help supplement the family’s income; but her primary role during the marriage was in the home. She had her own bank account and was continuing her education through community college and English language courses. She stood as a titled owner of real property for a beneficial owner who was a family friend. She was a named shareholder within one or more companies controlled by her father and/or her husband.

[26] Dr. K holds a MD from the Damascus University Facility of Medicine. He went on to earn an MBA from Kaplan University in the States from 2011 to 2013. His resume indicates that he was enrolled in the Naturopathic CCNM/Canada program during the same period, finishing in March of 2015. Ms. H testified that her husband developed various corporate pursuits during the marriage, but that his main focus was to qualify as a physician in Canada. He was successful in doing so.

[27] In 2016 the family as a whole celebrated Dr. K’s acceptance to the department of Family and Community Medicine at the University of Toronto as a Family Medicine Resident. Anticipating continued success, the couple looked for a larger home as demonstrated by emails between them dated April 15, 2017 and January 21, 2018. When he completed his Residency in 2018 the family spent a month in Turkey, just before Dr. K started practising as a family physician at the Marketplace Medical Centre in Milton, Ontario.

[28] The marriage was not without its problems, but the parties continued to live together at 104 Cedar Lake Crescent, Brampton until December 18, 2019 when Dr. K was charged by the police for assault. Three times he recited “I divorce you” and he then left the home, staying in a series of temporary residences until he was able to secure an apartment in Milton close to his place of work. Ms. H’s brothers were the complainants on the assault charge, which was later withdrawn on Ms. H’s urging.

[29] The parties met with their Imam in February 2020 and Dr. K confirmed his intention to end the marriage. Ms. H did not accept the end the of the marriage. She campaigned directly and indirectly through others to compel Dr. K to return to the marriage. She involved their daughters and interfered at his place of work.

[30] Text messages and emails placed into evidence by Dr. K show Ms. H using their daughters to ask for money and to pressure their father into returning to the marriage. A number of texts from the girls are heartbreaking, such as when a daughter asks her father if he can come to see her, and when he says yes, the daughter asks if “mama can come too.”

[31] Without notice, Dr. K left Canada on May 29 2021, citing ongoing harassment by Ms. H and her extended family. For the next period, his whereabouts were unknown. In July he retained his present counsel who invited Ms. H to resolve the issues arising from the parties’ separation in a letter dated July 16, 2021. Later that summer Dr. K disclosed that he had secured employment as a physician in New Zealand. He has never returned to Canada and states no intention to do so.

[32] Dr. K issued this Application on October 27, 2021. He gives only his lawyer’s address on the style of cause and states under Family History that he resides in Brampton. The Application gives the date of separation as July 15, 2013. He makes claims for a divorce, decision-making responsibility, parenting time and child support under the Divorce Act, and decision-making responsibility, parenting time, child support, exclusive possession of the home under the Family Law Act as well as the repayment of post separation expenses such as phone bills, car insurance, credit card payments and house expenses made directly or indirectly to Ms. H since 2013.

[33] He also asks for a restraining Order, that the Agreement be enforced and, in the alternative, that any claim by his former spouse for an equalization payment be statute barred.

[34] Dr. K asserts in this Application that the parties were living separate and apart under the same roof of the matrimonial home from July 15, 2013 to December 18, 2019. This assertion accords with claims that he made in an Application issued July 17, 2018 that was never served. The 2018 Application states Dr. K’s address as 104 Cedar Lake Cres., Brampton and in a similar manner, sets the date of separation as July 15, 2013. This earlier Application assert that Dr. K is the children’s primary caregiver and preferred parent. Ms. H only discovered the unserved Application when she sought a fee waiver to file her Answer in this proceeding.

[35] Ms. H seeks Orders for a divorce, decision making responsibility, parenting time, spousal support, and child support under the Divorce Act in her January 17, 2022 Answer; and an equalization payment, exclusive possession of the home and the setting aside of the April 1, 2015 Agreement under the Family Law Act. She states the date of separation as May 29, 2021 when Dr. K left the country despite acknowledging that her spouse left the home on December 18, 2019.

The April 1, 2015 Separation Agreement

[36] Dr. K retained Muhammad Usman Ali to prepare a Separation Agreement in March of 2015. Both parties signed it on April 1, 2015: Dr. K at his counsel’s office that morning, and Ms. H at her counsel, Ms. Javairia Junaid’s office where he took her late in the afternoon. Their signatures were each witnessed by their respective counsels, and the counsels each signed a Certificate of Independent Legal Advice.

[37] The Agreement sets the parties’ separation date as July 15, 2013. Specifically, at paragraph 2 of the Agreement under the heading “DATE OF SEPARATION” the Agreement reads that “[t]he parties agree that they will be living separate and apart from each other from July 15, 2013.” That statement, expressed in the future tense, is repeated in the following section titled “BACKGROUND.” At paragraph 9 of the Agreement under the heading “EFFECTIVE DATE” it states that the Agreement will take effect on April 1, 2015.

[38] The parties are described as having shared custody of their daughters who will primarily reside with their mother. The girls, then 8 and 4 years old are to visit and stay overnight with their father “whenever they wish to.” The parenting section goes on to detail telephone access and notice for visits.

[39] Starting on April 1, 2015, child support was payable by Dr. K to Ms. H in the amount of $100 per month until the girls reached the age of majority. This section goes on to read “Wife in any circumstances is not required to pay child support. Husband will pay child support according to the Federal Child Support Guidelines.” Dr. K’s income is not given.

[40] No Spousal Support was payable by either spouse to the other, now or in the future, with each declaring that he or she was financially independent of the other and fully capable of providing for his or her own financial needs. A full release as to spousal support followed.

[41] The Husband’s ownership of 104 Cedar Lake Crescent, Brampton is acknowledged at paragraph 10 of the Agreement and “as part of the settlement of the equalization of their net family property, the Husband and Wife agree to the following:

a. The Wife is abandoning and releasing any past, present, or future interests, rights or claims of any kind whatsoever which she had, has, or may have to any increases in equity or value of the matrimonial home;”

b. The Husband shall have exclusive possession of the said matrimonial home and the Wife shall be deemed to have released all of her rights pursuant to Part II of the Family Act;

c. Upon signing this Agreement, the Husband shall be solely responsible for the monthly mortgage, tax, home insurance and utility payments and other carrying costs on the matrimonial home;

d. The Wife currently owns a property located at 56 Queensmill Court, Richmond Hill valued at $570,000. The Wife, in lieu of her share in the matrimonial home, shall have exclusive possession of the said property and the Husband shall be deemed to have released all of his rights pursuant to Part II of the Family Act.”

[42] Each party affirms that neither has a RRSP, and that each will keep any RRSP purchased in the future.

[43] The parties each acknowledge that they have been fully advised of their rights and entitlements, and that the terms of the Agreement are in full satisfaction of same. Releases as to each other’s Estate, Spousal Support, and a General Release follow, as does a standard clause that voids the provisions in the Agreement should the parties reconcile for a period in excess of 90 days.

[44] It is stated that either party may file a petition to the court for divorce on the grounds of marriage breakdown, seeking no relief aside from divorce. The parties further agree that the divorce will proceed on an uncontested basis, that the terms of this Agreement shall not be incorporated with the divorce judgement, and that the Agreement will survive the divorce.

[45] Finally, there are standard terms that each of the parties has fully disclosed to the other his or her significant assets, debts and other liabilities existing at the time of this Agreement. Each party acknowledges having received independent legal advice, understanding his or her rights and obligations, and signing voluntarily. Each party affirmed that the terms of the Agreement are reasonable, and its provisions adequate.

Analysis

The April 1, 2015 Agreement is a Sham Agreement

[46] This Trial was primarily argued as a section 56(4) FLA claim, that is, that the Agreement should be set aside because there was significant non-disclosure and/or Ms. H did not understand the nature of the Agreement or its consequences, or that it should otherwise be set aside in accordance with the law of contract.

[47] As the evidence before me unfolded, it became clear that the actual legal issue was whether the April 1, 2015 Agreement was a Separation Agreement as provided in section 54 of the FLA.

[48] Former spouses are presumed to have entered into their domestic contract in good faith unless demonstrated otherwise. Here, there is no dispute that the Agreement is labelled and structured as a Separation Agreement, that it was signed voluntarily and that the form of the contract meets the criteria set out in section 55 of the FLA. But nonetheless, for the reasons set out below, I am not satisfied that the Agreement was a Separation Agreement as contemplated in section 54 of the FLA.

[49] A sham is something that is not what it is purported to be. A sham separation agreement is a document that purports to be domestic contract but is not, because neither party intends to use the contract for its stated purpose. Its actual purpose as demonstrated by the parties’ subsequent use of the contract need not be improper for the agreement to be set aside. So long as the parties were not separated at the time of its execution, did not intend to be separated and did not intend to be bound by the terms of the agreement, it is a sham. A sham separation agreement is not enforceable.

[50] I find that the April 1, 2015 document is a sham Agreement because Ms. H and Dr. K were not separated at the time that they signed the Agreement, did not intend to separate, nor did they intend to be governed by its terms. Nothing changed in their day-to-day life, but for their tax filing status which permitted Ms. H as a separated spouse to continue to be eligible for significant tax credits and benefits despite her husband’s dramatic increase in income after he qualified as a family physician.

[51] I am satisfied that Ms. H never intended to release her entitlement to spousal support or her claim of equalization should the parties actually separate. She did not consider herself bound to the terms of the Agreement which required her and the children to immediately move out of the family home with nothing more than $100 a month in child support. As late as July 2021, Ms. H was still asserting her status as married, reconciled to a spouse who had not yet returned home.

[52] Neither did Dr. K act in any manner that was consistent with the terms of the Agreement. He did not require his spouse to vacate the home, he did not give notice for any parenting time, he did not parent independently or pay child support, and he never applied for a divorce.

[53] Because I find that the parties entered into a sham Agreement, I need not fully address every assertion raised by counsel in their closing submissions, except as they are relevant to my determination. Specifically, I need not determine whether the parties reconciled after signing the Agreement or whether the limitation period for a claim of equalization should be extended.

[54] Neither do I need to address whether Ms. H received independent legal advice from Ms. Javairia Junaid, against whom she has now made a Law Society complaint. I make no comment on the Law Society process, nor do I place any weight on the fact that Ms. H has made a complaint. Ms. Junaid did not testify, and in any event, the absence of independent legal advice is never dispositive within a section 56(4) FLA claim.

Limited Language Skills

[55] Ms. H was assisted throughout the trial by court certified Arabic translators. Her evidence in chief was by way of a translated affidavit, and her cross examination was conducted in Arabic. At multiple points in her testimony she asserted that she had not known what document she was signing because her English was poor. From time to time, when her answers became entangled, she would state that she did not understand what was being asked.

[56] Dr. K rejects any complaint by his former spouse that her English skills are limited. He tendered her work history, her c.v. and English education credentials.

[57] The Trial took place seven years after the signing of the April 2015 Agreement, so I have no evidence as to whether Ms. H’s present language facility informs her ability to have understood the Agreement in 2015. I am satisfied that Ms. H was fully able to participate in this Trial.

[58] Ms. H raced through much of her oral testimony, switching between Arabic and English as she talked over the cross examiner and the translator. My efforts to slow her speech, and my requests that she respect the role of the translator and the court reporter were constant. By her own admission, Ms. H fully understood the questions put to her in English and in her rush to speak, she would often switch languages, leaving the translator behind. At one point I asked her whether she still needed the translator because it appeared that the more excited she became, the more frequent she would switch to English.

[59] Ms. H answered my concern by apologizing and emphasizing how important it was to her to be understood, so on important points, she preferred to speak English.

No Change in the Day to Day Lives of the Parties Consistent with a Sham Agreement

[60] Ms. H testified that the couple went for dinner after she signed the Agreement. Nothing changed between them. They continued to live in the same home and to sleep in the same bed. They remained faithful to one another. They attended Mosque together, wore their wedding rings and their family and friends treated them as a couple, as they did each other. They continued to celebrate anniversaries and birthdays, attend family events, and vacation together, including their month-long trip to Turkey in 2018.

[61] I accept her evidence in this regard as it is corroborated by photos and videos, many of which are time stamped or can be dated by reference to the age of their daughters.

[62] Dr. K asserts that the parties were separated when they signed the Agreement and that he started living in the basement on July 15, 2013.

[63] I do not find this statement credible. The video evidence and photographs tendered by Ms. H clearly show the home as having a parking level floor (a basement) that consists of the garage, storage areas, stairs up to the main floor, and one large room to the back of the home with a door to the outside. In the 2022 video, the large room has two desks, a wall mounted TV/Monitor and a treadmill. In prior years, a bed and a desk could have easily fit into the back room of the basement, but there is no kitchen or washroom in the basement that would permit independent living.

[64] Attached to Dr. K’s September 15, 2022 reply affidavit is a photograph of a bathroom vanity which he states is located in the basement. I cannot verify the location of the bathroom from the photograph and on this point, I prefer the video evidence of Ms. H which is a seamless video tour of the whole of the garage floor/basement.

[65] Ms. H also entered into evidence videos of Dr. K reading bedtime stories to the girls in the master bedroom on April 26, 2015 and December 18, 2016. A plethora of pictures from after April 2015 show Dr. K involved in every aspect of family life from birthday celebrations to unloading the dishwasher.

[66] When shown the videos and pictures of continued family life in the upper floors of the home, Dr. K consistently answered that he participated in family life in the main floors of the home because it was in the children’s best interests to do. He offered no explanation for the pictures and videos of them as a couple, or the texts between them in which they organize the mundane incidents of everyday life. When asked why they continued to eat out as a family, and to vacation as a family, he would answer that it was in the children’s best interests to do so. With respect to the family trip to Turkey in 2018, he testified that he wished to take the girls on a trip to Turkey and that their mother would only consent if she travelled with them. Because it was in his daughter’s best interests to travel, he agreed to bring their mother.

[67] I do not find these statements to be credible. The chronicles of the parties’ daily joint life are cohesive. At no time did Dr. K have a parenting schedule or give notice for parenting time as provided for in the Agreement. Prior to December 2019, his parenting time was not separate from joint family time.

[68] Dr. K does not explain why he never sought to enforce the exclusive possession provision in the Agreement which would have separated the households. Neither does he explain why he never proceeded to obtain a civil or religious divorce in accordance with the Agreement.

[69] He acknowledges having never paid the $100 per month in child support. His counsel urges me to find that he paid well in excess of that amount each month because he continued to pay all the household accounts for the matrimonial home.

[70] The continued payment of household expenses is not a proxy for table child support. To the contrary, the non payment of child support, and the ongoing payment of all household and family expenses is compelling evidence that the parties did not separate, as is the following:

a. At no time prior to February 2020 did the parties meet with their Imam to attempt a faith-based reconciliation as occurred after their physical separation on December 18, 2019.

b. Both parties continued to reside at 104 Cedar Lake Crescent, Brampton until December 2019, and each used 104 Cedar Lake Crescent as their only address until 2020. Neither party had another residence, nor resided elsewhere until Dr. K obtained his Milton apartment.

c. Ms. H did not move out from 104 Cedar Lake Crescent, nor was she asked to move out until this Application issued in 2021.

d. Their banking arrangements did not change until 2020.

e. How the parties conducted their finances did not change. According to Ms. H, she was never permitted to be involved in the family finances and Dr. K provided no evidence that his mastery of the household finances lessened after April 1, 2015. He paid all the home and car expenses as well as all of the children’s expenses.

f. Ms. H neither enforced the payment of child support, nor sought an increase. In April of 2015, $100 a month was the table child support amount for two children on annual income of $12,160. Dr. K admits in his October 27, 2021 Application that his 2018,2019 and 2020 annual income averaged $222,096.

[71] Although useful for tax purposes, the existence of the Separation Agreement was from time to time a nuisance. When Ms. H went to renew the children’s passports for the 2018 trip to Turkey, she had to apply as a separated parent and show that she had custody of the children. Her evidence in this regard was exceedingly evasive.

[72] I am ultimately satisfied by Government of Canada documentation that she attached the parties’ Agreement to the children’s passport applications. Doing so demonstrates that in 2018 she had a copy of the Agreement in her possession and that she was well aware of her representation to government officials that she and the children’s father were separated.

No Financial Disclosure Consistent with a Sham Agreement

[73] The parties agree and the evidence shows that there was no exchange of financial disclosure prior to signing the Agreement, despite Dr. K stating otherwise in his July 2018 Application. There were no drafts of a proposed Agreement exchanged or discussion of its terms prior to execution. Neither Ms. H nor her counsel had even seen the Agreement prior to signing it.

[74] Dr. K’s counsel argues that if there was significant non-disclosure as contemplated by section 56(4)(a) it was orchestrated by Ms. H. He points to the discovery on her 2017 Income Tax Return of a RRSP redemption (in the face of an Agreement confirming that neither party held an RRSP,) and Ms. H’s failure to initially disclose that she was a shareholder in a corporation.

[75] I reject these submissions as highly improbable. The RRSP was a spousal RRSP that would have been purchased by Dr. K, and it was he who brought to Ms. H’s attention the fact that shares were held in her name. Dr. K does not assert that the Agreement should be set aside because he was duped into releasing his claim for an equalization payment. To the contrary, he was the spouse who owed an equalization payment by virtue of being the titled owner of the matrimonial home.

[76] Any assertion that the parties’ respective net family properties were roughly equivalent in 2013 or 2015 is non-sensical. The 56 Queensmill Court property registered in the name of Ms. H in 2015 was sold in 2017, and the net sale proceeds of $17,112.74 were paid to the beneficial owner, Bedig Agob. Ms. H retained no value or interest in the property. Her minority shareholding was for the sole purpose of distributing dividend income.

Change in the Tax Status Consistent with a Sham Agreement

[77] Dr. K filed his 2015 Income Tax Return as separated and he continued to file as separated through to 2018. He does not explain why he filed his Returns as married in 2013 and 2014 while stating in this proceeding that he separated in July of 2013.

[78] In 2019 and 2020 he filed as single, despite never applying for a divorce. In 2021 he again filed as separated. He stated his address to be 104 Cedar Lake Cres Brampton on all his personal Returns for the taxation years up to 2021. After 2019 his corporate tax returns used his address in Milton.

[79] Ms. H also changed her tax filing status to separated in 2015. She continued to file as separated until 2020 when she filed as married. Counsel advise that this Return has not been assessed and is problematic because in completing the spousal portion, Ms. H did not include her spouse’s surname and guessed at his income. At trial, she blamed the obvious errors on the face of her Return on her accountant. There is no evidence that the flawed T1 form shown to counsel was the same T1 form as was filed with the CRA.

[80] Ms. H has never made her full Tax Returns available to the court despite being under a legal obligation to do so. As stated earlier, it was only near the close of Trial that she made her Regular form available from 2015 to 2018. Those Returns confirm that she filed her Returns as separated. For the taxation year of 2019, she has only provided her Notice of Assessment. Nothing for 2021 has been disclosed.

[81] In filing as separated, Ms. H preserved her receipt of Child Tax Credit, GST credits and other tax credits and benefits, as well as social benefits that would have otherwise been lost as the family income dramatically increased over the next few years. She may also have qualified for tuition assistance that might not otherwise have been available. [^1]

[82] Ms. H deposed in her August 25, 2022 affidavit that the family’s Child Tax Credit cheques were sent by mail, but that she never received them. She states that only Dr. K had access to the mail, that she never deposited a Child Tax Credit payment to her account, and in any event, that she never prepared her own Tax filings prior to 2020.

[83] Throughout this proceeding, she has refused to produce her banking statements which would confirm the lack of deposits, as well as her full Income Tax Returns. She does not explain how she knew that the family was receiving Child Tax Credits that she now asserts must have been deposited to another account without her knowledge. The parties have never had a joint bank account. As the lower earning spouse, only she would be eligible to receive the Credit.

[84] To support her assertion, Ms. H attaches to her August 25, 2022 Affidavit a letter from the CRA dated August 26, 2021. The CRA acknowledges her inquiry as to the payment of GST/HST credits from April 5, 2018 to April 5, 2019, Child Tax Credit dated February 20, 2018 and June 20, 2019 and Ontario Trillium Benefit dated February 9, 2018 to May 10, 2019; and asks that she return an information form so that they can investigate.

[85] The CRA undertakes two courses of action: if the original Child Tax Credit cheques were cashed, they will provide to her copies of the original cheques. If they were not cashed, the CRA will replace the cheques.

[86] Ms. H gives no further evidence of the response received from the CRA in her affidavit sworn a year later, or at Trial. Instead, the next paragraph in her affidavit (which forms her evidence in chief) deflects to a cultural and religious explanation of why she must not question the authority of her husband, attaching an audio file in Arabic (not translated) as evidence of her lack of agency in her marriage.

[87] I am sensitive to Ms. H’s assertion of subservience and obligation within the marriage. It is possible that she was not directly involved in the misrepresentation to CRA that she was separated from 2015 to 2019, but her refusal to produce her banking records, the full Tax Returns for taxation years in question and the CRA’s response to her information form leads me to conclude that she was knowingly involved. She has shielded the very evidence that would prove her assertions.

[88] More importantly, Ms. H has taken no steps to correct her tax filings since going on record in this Application that she was not separated during the taxation years of 2015 to 2019. Tax arrears arising from a reassessment are a date of separation debt.

[89] Meanwhile, Dr. K seizes upon his former spouse’s probable receipt of Child Tax Credits as proof that the parties separated in 2013 and justification for why an Agreement that saves him from spousal support and a payment of equalization should be enforced.

[90] I do not find either party to be credible on the question of how Child Tax Benefits and other tax benefits and credits continued to be paid after the parties’ household income exceeded the eligibility threshold.

Conclusion

[91] Ms. H asks that the parties’ April 1, 2015 Separation Agreement be set aside pursuant to Section 56(4) of the FLA. I have found that she did understand the nature and consequences of the Agreement because she subsequently used the Agreement to her advantage for tax purposes or knowingly participated in her former spouse using it for tax advantage. Her inconsistent testimony, her refusal to disclose documents that would corroborate her claims and her failure to correct her tax filings prevent me from finding that she was unknowingly involved.

[92] Had Ms. H tendered evidence supporting her assertions, I would have fully considered her claim to set aside the Agreement pursuant to section 56(4) of the FLA. It is a claim with substantial merit.

[93] The two paths: the finding of a sham agreement and the setting aside of a domestic contract pursuant to section 56 of the FLA come to the same end: an unenforceable Separation Agreement. The difference is whether both parties have participated in the mischief, or one party alone bears the cost of having duped the other. It is a difference with a distinction.

[94] Order to issue that the April 1, 2015 Separation Agreement is set aside.

Date of Separation

[95] I reject Dr. K’s proposed July 15, 2013 date of separation for the same reasons as those supporting the setting aside of the Agreement. In the alternative, he asks for a December 18, 2019 date of separation.

[96] A date of separation does not require concurrence. Only one spouse need form the intention to separate, and I am satisfied that Dr. K considered the marriage at an end on December 18, 2019. Although it speaks to nothing but his intention, he recited an Islamic talaq divorce on that date, also known as a bare talaq divorce. Relevant to this decision, the parties never again lived together or mutually represented themselves as a married couple.

[97] Ms. H resists this date of separation. She argues that the parties reconciled after meeting their Imam in February of 2020 and in effect, that they lived together in separate residences for the following 18 months until Dr. K left the country on May 29 2021. Alternatively, she asks that I set July 16, 2021 as the date of separation, the date when she received a notice letter from his family law lawyer.

[98] The most helpful and comprehensive list of the principles and considerations relevant to a finding that parties have separated can be found in Justice Chappel’s decision of Al-Sajee v Tawfic, 2019 ONSC 3857. Justice Chappel sets out the relevant factors which include whether the parties were in separate residences, kept items at the other’s residence, withdrew from the matrimonial relationship, changed their expectations as to each other’s role in the relationship, changed the management of their finances, or their accountability to each other for daily activities or routines, such as eating meals together, sharing household chores and participating in social or religious activities.

[99] As set out in Al-Sajee supra, former spouses need not be wholly absent from each other’s lives. Communications necessary to parenting, attendances with the children for family events, activities and even family vacations are relevant but not determinative to a date of separation, as is occasional intimacy and expressions of support through difficult times.

[100] In sharp contrast to the period from April 2015 to December 2019, there are no pictures, emails or texts showing a joint family life after December 2019. Dr. K tendered detailed evidence within a residency chart documenting his AirBnB and hotel attendances until he was able to obtain his Milton residence. The parties spent no overnights at each other’s home. I am satisfied that at no time after December 18, 2019 did Dr. K signal, or act upon any desire to return to the marriage.

[101] Neither did the parties share any common pursuits or intermingle their financial, social, or personal affairs after December 18, 2019.

[102] Ms. H confirmed in her testimony that the parties separated their finances in January 2020. For the first time, she independently managed her own finances, filed her own Tax Returns, operated her own bank account, and paid her own bills.

[103] The fact that Ms. H did not accept the end of the relationship does not affect the legal date of separation. There are some texts between the parties in which the parents appropriately planned events for, or around the children. These communications were admirable attempts to co-parent and not as suggested by Ms. H, evidence of a reconciliation.

[104] I am left with no doubt that the parties separated on December 18, 2019. Order to issue accordingly

Costs

[105] I urge counsels to resolve the issue of costs. If they are unable to do so, I will receive Ms. H’s submissions on or before January 27, 2023, Dr. K’s response by February 3, 2023 and any reply by February 10, 2023. Submissions are limited to six pages exclusive of a Bill of Costs and any Offers to Settle. Reply is limited to three pages. Caselaw is to be hyperlinked within the body of the submissions.

McGee J. Released: January 11, 2023

[^1]: Attached as exhibit T to her August 25, 2022 Affidavit was a Second Career Application for Financial Assistance which Ms. H tendered as proof that she represented herself as a spouse after 2015. It is undated and unsigned. The form asks for a benefits payment of $41,975 on monthly household income of $2,000, and expenses of $3,121.20 for four people. If submitted after 2018 in the draft form presented, it would have been a significant misrepresentation of the family’s annual household income.