Zadeh v. Zamani, 2023 ONSC 522

Court File and Parties

COURT FILE NO.: FS-20-20772 DATE: 2023-01-20 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Saba Zadeh, Applicant AND: Babak Zamani, Respondent

BEFORE: Justice Kraft

COUNSEL: Esther Lenkinski, for the Applicant Serena Lien, for the Respondent

HEARD: January 17, 2023

Endorsement

Nature of the Motion

1The applicant (“Ms. Zadeh”) brings a motion for the immediate sale of the parties’ matrimonial home, municipally known as 336 Hollywood Avenue, Toronto ON, on specific terms and for an order releasing one-half of the net proceeds of sale to her forthwith, with the other half to be held in trust pending further court order.

2The respondent, (“Mr. Zamani”) was initially opposed to the motion. His affidavit, sworn on January 12, 2023 provides that “[he] maintains that it inappropriate for the court to order the sale of the matrimonial home until a long motion is brought”. However, during oral submissions, Mr. Zamani advised the court that he agrees to the matrimonial home being listed for sale on the terms proposed by Ms. Zadeh, except for one term. Mr. Zamani does not agree to the release of one-half of the net proceeds of sale to Ms. Zadeh and instead, argues that each party should receive the sum of $200,000 from the net proceeds of sale, with the remainder of the proceeds to be held in trust as security for his property claims both under Part I of the Family Law Act and by way of an unjust enrichment claim. Mr. Zamani did not bring a cross-motion for this relief.

3The two issues to be determined are as follows:

a. Whether the matrimonial home should be listed for sale on all the terms proposed by Ms. Zadeh, the one in dispute relating to the staging of and/or repairs needed to ready the home for sale? and

b. Whether Ms. Zadeh should receive one-half of the net proceeds of sale with the other half being held in trust by the real estate lawyer handling the sale pending further court order or agreement of the parties?

4I find that the matrimonial home should be immediately listed for sale on the terms proposed by Ms. Zadeh and that she should receive 50% of the net proceeds of sale, with the remaining proceeds being held in trust pending further court order. I have also ordered the questioning to take place of both parties, of no more than 3 hours for each party and the parties to schedule a Settlement Conference as soon as possible.

Background

5The parties were married on September 26, 2012. They separated about 7 years later. According to Ms. Zadeh, the date of separation is May 29, 2019. According to Mr. Zamani, the parties’ separated on April 13th, 2020, when he left the matrimonial home.

6The parties have one child, an 8-year-old daughter. She resides primarily with Ms. Zadeh in the matrimonial home. Mr. Zamani has regular parenting time on alternate weekends from Friday, at 5:00 p.m. to Sunday, at 7:00 p.m.; Wednesdays from 4:00 p.m. to 7:00 p.m. and on alternate Mondays, from 4:00 p.m. to 7:00 p.m. when he has not had parenting time on the weekends.

7Ms. Zadeh is a lawyer, employed by the Ontario Power Generation (“OPG”). She earns a base salary of $185,000 a year as well as a performance based bonus. In 2021, her Notice of Assessment listed her total income at $224,267.54.

8Mr. Zamani works for his family business, Zamani Homes Ltd. (“ZHL”), which is in the business of real estate development and sales. His most recent sworn financial statement, sworn on January 13, 2023, indicates that Mr. Zamani is self-employed as a property manager under contract for ZHL and that his current income is $93,240. He swears that he has no other sources of income but he has benefits from his employment related to the use of a company car and a work cellphone. His gross income for 2021 was $64,747. Ms. Zadeh believes that Mr. Zamani has an interest in the family business, the details of which are unknown to her. She produces a newspaper article as an exhibit to her affidavit where Mr. Zamani holds himself out as a partner in his family business, not an employee. She believes that Mr. Zamani has other sources of income that have not been disclosed. Mr. Zamani denies this.

9There is no child or spousal support agreement or order in place. From January 1, 2022 until October 5, 2022, Mr. Zamani paid voluntary child support of $1,525 a month to Ms. Zadeh and one-half of the child’s s.7 expenses. Currently, Mr. Zamani pays $693 a month as child support and $333 a month toward the child’s s.7 expenses for November and December 2022.

10Title to the matrimonial home is registered in Ms. Zadeh’s sole name. It was purchased on May 26, 2014 for $1,200,000. At the time of purchase, there was a mortgage in favour of Toronto Dominion Bank in the sum of $900,000, registered on title. Ms. Zadeh submits that she owned a condominium at the time the parties became married and the net proceeds of sale from her condo were used toward the matrimonial home purchase. This is in dispute. Mr. Zamani argues that the parties did not have funds to make a down payment, he did not qualify for a mortgage so his father loaned the parties $350,000 in total, being $50,000 for a down payment and $300,000 at the time of closing. Upon separation, Mr. Zamani’s father has demanded payment on this loan, which is documented by a promissory note. Ms. Zadeh disputes this loan and argues that it was a gift.

11Ms. Zadeh is paying all of the carrying costs associated with the matrimonial home which amount to $4,250 a month. From June 1, 2020 to April 30, 2021, Mr. Zamani contributed the sum of $2,000 a month toward the mortgage payment for the matrimonial home. Since May 1, 2021, Mr. Zamani has made no contribution toward the parties’ mortgage. It is agreed by the parties that prior to June 1, 2020, Mr. Zamani had contributed $4,000 a month toward the parties’ mortgage.

12Mr. Zamani is re-partnered to a lawyer and they have a child, a son, born in April 2022. He resides in a rental home in the St. Andrews-Windfields area with his partner and child at the rate of $4,000 a month. According to Ms. Zadeh, Mr. Zamani’s current lifestyle is well beyond what he claims to be earning. This is in dispute.

13The parties were negotiating for a period of time directly between November 2021 and November 2022. Negotiations then fell apart and Ms. Zadeh brought this motion. It was not until after she served and filed these motion materials that Mr. Zamani delivered the disclosure that O’Brien, J. had ordered on July 23, 2021.

14Ms. Zadeh argues that she is being financially disadvantaged because she is paying for all of the matrimonial home expenses without receiving adequate support from Mr. Zamani. She has incurred significant personal debt to maintain the matrimonial home. She submits that it is no longer sustainable for her to continue to maintain the home and, as a result, she brought this motion seeking an order permitting her to sell the home immediately, because Mr. Zamani would not agree to its sale now. Instead, Mr. Zamani took the position in his motion material that:

a. the home should be sold but not until the equalization payment (“EP”) could be determined at a long motion;

b. the commission be capped at 4%;

c. the relators should only be engaged for no more than 6 months;

d. the home should be sold without doing any repairs or staging;

e. the sum of $350,000 should be repaid to his father out of the proceeds of sale to repay the debt to him (which debt is disputed);

f. Ms. Zadeh should pay all penalties associated with breaking the mortgage exclusively;

g. Ms. Zadeh should pay for any other adjustments required as part of the sale exclusively;

h. Ms. Zadeh and the child should not move into the home of any of her relatives; and

i. the balance of the proceeds should be held in trust until further court order with neither party receiving any proceeds of sale.

15Based on this position, the motion proceeded before me. As I indicated above, Mr. Zamani’s position on these terms of sale, changed during oral submissions.

Issue One: Whether all of the terms for the sale of the matrimonial home proposed by Ms. Zadeh should be ordered, the one in contention being the staging of and/or repairs needed to ready the home for sale?

16As the sole owner of the matrimonial home, Ms. Zadeh has a prima facie entitlement to sell the matrimonial home and seeks to do so. Ms. Zadeh argues that there is no possible prejudice to Mr. Zamani if the matrimonial home is sold. Despite filing motion material indicating his objection to the timing of the sale of the home and the terms proposed by Ms. Zadeh, Mr. Zamani has ultimately agreed that the matrimonial home can be listed for sale.

17Ms. Zadeh has been advised by her real estate agent that the fair market value of the matrimonial home is approximately $1.98 million. The current balance of the outstanding mortgage is $724,708. If Ms. Zadeh’s real estate agent is correct, there will be equity of about $1,156,292 (or $578,146 for each party), assuming a 5% commission rate once the home is sold. Mr. Zamani argues that the fair market value of the home is $2.2 million. He submits that the equity in the home is about $1,344,000 (or $672,000 for each party).

18Given Mr. Zamani’s agreement that the matrimonial home be listed for sale, I need not determine whether or not the matrimonial home should be sold. Mr. Zamani’s counsel advised the court during oral submissions that her client is agreeable to the following sale terms and conditions proposed by Ms. Zadeh in her draft order:

a. Each party shall be entitled to choose an independent real estate agent with such agents to cooperate on the listing for sale of the matrimonial home;

b. The matrimonial home shall be listed for sale no later than February 15, 2023, unless the parties agree in writing to extend the listing date, or unless the real estate agents recommend a later listing. The matrimonial home shall be kept listed for sale at a price recommended by the real estate agents;

c. The parties shall accept the recommendations of the real estate agents regarding listing price;

d. The parties shall sign the listing agreement on or before January 31, 2023 upon request and shall sign any and all documentation that may be required to list and sell the home, including all legal documents, forthwith upon request;

e. The parties shall accept the first reasonable offer as recommended by the real estate agents and if the real estate agents do not agree then the matter may be referred to a further motion or summary arbitration to an arbitrator agreed upon by the parties;

f. The appliances and fixtures shall be sold with the home;

g. The encumbrances registered against the home, real estate commissions as well as legal fees related to the sale shall be paid from the proceeds of sale of the property;

h. The matrimonial home shall be sold to a third party at arm’s length; and

i. The parties shall endeavour to agree to one real estate lawyer to represent them on the sale of the property and failing agreement, each shall be entitled to choose a lawyer to represent him or her. The fees of the real estate lawyer representing the parties on the sale of the matrimonial home shall be paid as set out above.

19The only term with which Mr. Zamani does not agree is that the parties shall follow the advice of the real estate agents regarding staging or repairs for the matrimonial home. Mr. Zamani argues that the matrimonial home is a tear-down property and, as such, it is not necessary for the parties to engage in the staging of and/or repairing the home before it is listed for sale. Ms. Zadeh proposes that the parties follow the advice of the real estate agents as to whether or not it makes sense to repair and/or stage the home to ready it for sale. During oral submissions, Mr. Zamani appeared to suggest that he was agreeable with following the advice of the real estate agents as to whether or not staging and/or repairs to the home are necessary, subject to the parties determining at some later point in time which of them or in what proportion they are to be responsible for such costs.

20I find that it is reasonable for the parties to follow the advice of the agents in this regard and for the costs of such staging or repairs to be paid out of the net proceeds of sale, after any mortgages or liens registered on title are paid, without prejudice to either party taking the position that the costs associated with the staging of and/or repairs to the home ought to be apportioned differently at trial.

Issue two: Whether Ms. Zadeh should receive one-half of the net proceeds of sale with the other half being held in trust by the real estate lawyer handling the sale pending further court order or agreement of the parties?

21Ms. Zadeh’s position is that 50% of the net proceeds of sale should be released to her immediately and the other 50% of the sale proceeds should be held in trust, pending further order of the court. Ms. Zadeh submits that she requires 50% of the equity from the matrimonial home to purchase another residence for herself and the child. Despite the fact that Mr. Zamani does not have a prima facie right to half of the net proceeds of sale, Ms. Zadeh is prepared to hold half the proceeds in trust as a form of security for his claims.

22Mr. Zamani’s initial position as set out in his motion material, filed, was that neither party should receive any proceeds of sale from the sale of the home. However, during the motion, his counsel made submissions that each party should receive $200,000 from the net proceeds of sale, with the balance of the sale proceeds being held in trust, pending further agreement of the parties or court order.

23Ms. Zadeh argues that Mr. Zamani has not established that he has a prima facie unjust enrichment claim. Further, she argues that even if she is wrong and the facts on the record are sufficient for the court to accept that he has an unjust enrichment claim, Mr. Zamani has not met his onus that his unjust enrichment claim ought to result in him being granted a proprietary interest in the matrimonial home by way of constructive remedy, such that all of the equity from the sale of the home should be held in trust to secure his equalization claim and his equity claim to half the equity in the home.

The Law and Analysis

24Property division for spouses in Ontario is set out in a detailed statutory scheme in the Family Law Act, R.S.O. 1990, c.F.3 (“FLA”). Section 10(1) provides for the determination of questions of title between married spouses, which includes consideration of any beneficial interests in property arising pursuant to the imposition of a remedial constructive trust; Martin v. Sansone, para. 46.

25Rawluk v. Rawluk, [1990] 1 SCR 70, confirmed that the statutory scheme for the equalization of spouses’ property on marriage breakdown does not completely supercede the remedial constructive trust.

26As set out in Martin v. Sansone, 2014 ONCA 14, at para. 58-59,

58As noted above, once unjust enrichment has been found, the court must first consider the sufficiency of a monetary remedy. In most cases, money will be sufficient; the challenge is in calculating the amount. It is only if a monetary award is inappropriate or insufficient, and the plaintiff can also demonstrate [page537] a sufficiently substantial and direct link or causal connection between her contributions and the acquisition, preservation, maintenance or improvement of the property, that the court may make a proprietary award by impressing the property with a constructive trust.

59Kerr, at para. 52, makes clear that the onus is on the plaintiff to establish that monetary damages would be insufficient, and instructs that "the court may take into account the probability of recovery, as well as whether there is a reason to grant the plaintiff the additional rights that flow from recognition of property rights" in determining whether damages would be insufficient in the circumstances.

27Hoy, A.C.J.O, as he then was, stated in Martin v. Sansone,

In my view, if unjust enrichment as the result of a marriage has been found, and it has been determined that monetary damages can suffice, the aggrieved party's entitlement under the equalization provisions of the FLA should first be calculated. Where appropriate, s. 5(6) of the FLA, which provides for an unequal division of net family properties where equalization would be unconscionable, should be invoked.

28In McNamee v. McNamee, 2011 ONCA 522, at para 66, the Court of Appeal held that “in the vast majority of cases, any unjust enrichment that arises as a result of a marriage will be fully addressed through the operation of the equalization provisions under the Family Law Act: see also Brennan v. Lander, 2020 ONSC 1696, at para. 107.

29Ms. Zadeh argues that there is no way for the parties to determine what the other’s net family property is at the time of this motion, given the significant disparity of facts; Questioning has not yet been conducted; and there are so many inconsistencies and conflicts in the written record. Examples of issues in dispute between the parties which impact the calculation of both parties’ net family property are the following:

a. Mr. Zamani has claimed that he has a debt to his father in the sum of $350,000 as at either party’s date of separation. The loan is not secured. At first, Mr. Zamani listed this as a gift on his initial financial statement. Whether this is a legitimate debt which reduces Mr. Zamani’s net family property by $350,000 or some other figure is a triable issue to be determined which would impact Mr. Zamani’s net family property. Without knowing whether this is a legitimate debt, the court cannot know how this impacts the calculation of Mr. Zamani’s net family property and/or the equalization payment.

b. Mr. Zamani has placed values on his jewellery, many watches and Persian rugs which are the same values for the date of marriage, his date of separation and the current date. He has not produced any appraisals for these items nor has he established that these items have the same value over the parties’ marriage. Some of these items, including his wedding band, one Tabriz Persian rug and one Esfhan Persian rug are listed as “TBD”. Accordingly, these are triable issues to be determined which would impact Mr. Zamani’s net family property. Without this information, the court cannot determine the impact of these items on the net family property of Mr. Zamani.

c. Mr. Zamani has listed post-separation adjustments, occupation rent and spousal support from the date of separation as moneys owing to him. The figure is listed as “TBD”. Without knowing this figure, the court cannot determine the impact of these items on the equalization payment.

d. Mr Zamani lists a date of marriage debt to CRA in the sum of $45,000. The evidence he has provided for this items is for a date two years after the date of separation. Again, this is a triable issue. Without knowing this figure, the court cannot determine Mr. Zamani’s net family property.

30As a result of these disputed items, it is not clear at this time, what the equalization payment will be or even what the ranges of the equalization payment may be. This is relevant because Mr. Zamani objects to Ms. Zadeh receiving 50% of the net proceeds of sale because he claims to require these funds as security for his claims.

31In addition to his claims under the FLA for an equalization payment or an unequal division of net family property under s.5(6) of the FLA, Mr. Zamani seeks a constructive trust interest in the matrimonial home. He argues that he made all of the mortgage payments toward the matrimonial home until June 1, 2020, when he left the home and unilaterally reduced the payments to $2,000. It is on this basis that Mr. Zamani claims he has an unjust enrichment claim entitling him to a constructive trust interest in the matrimonial home. I am not persuaded that Mr. Zamani making the mortgage payments toward the house establishes that he has made out a prima facie unjust enrichment claim. Further, before any unjust enrichment claim would be considered, the court would first look to the operation of the property division sections in the FLA to determine which spouse owes the other an EP and then whether or not Mr. Zamani’s unjust enrichment claim can be satisfied by an unequal division of the parties’ NFP. If it were to be determined that an EP or an unequal division of the parties’ net family properties would not address Mr. Zamani’s unjust enrichment claim, only then could a court look to remedies and determine whether a monetary remedy or a remedial constructive trust would be imposed.

32As set out in Goldman v. Kudeyla, 2011 ONSC 2718, at paragraphs 34-38

34A constructive trust is not meant to be a tactical tool within family law cases to change decisions made during marriage. It is, rather, a potent and important remedy to redress inequity when it clearly exists: Abraham-Sherman v. Sherman (1998), 37 R.F.L. (4th) 26 (O.C.J.) In cases involving married parties that inequity can only be considered once the statutory remedies – such as an equalization payment - have been exhausted.

35We must always distinguish between those cases where the cohabiting parties were not married, and therefore were not subject to a statutory scheme for the division of assets, and those cases in which a statutory scheme provides for a fair division of family assets. It is only in circumstances in which the statutory scheme for equalization does not remedy an injustice that a constructive trust may be made out.

36For example, where there has been a deprivation and corresponding enrichment as a result of a change in the value of "family property" after the date of separation a remedy in constructive trust may be appropriate: Rawluk v. Rawluk, [1990] 1 S.C.R. 70. The availability of that remedy is dependent upon a finding of a clear link between the contribution and the property, and the equalization payment is inadequate to address the resulting enrichment of one spouse at the cost of the other.

37The husband’s purchase of the matrimonial home with funds from the sale of his pre-marriage home is clearly remedied through the operation of statute in the form of the pre-marriage deduction. With respect to the assertion that he has made significant post separation contributions, I lack sufficient evidence of those contributions, whether there is any link between them and the value of the home, and whether the post separation value of the home has increased.

38I find that the husband has not established on a prima facie basis that he will succeed on his trust claim. If I am wrong in this, then I am further satisfied that no prejudice results to the husband on the sale of the home. It is agreed that the sale proceeds are to be held in trust pending an agreed initial release. Should the husband succeed in his claim for a constructive trust remedy, the Court can make a monetary award in relation to any post separation increase in value.

Emphasis added

33In the case at bar, I am not persuaded that Mr. Zamani has established on a prima facie basis that he will succeed on his unjust enrichment claim. If the trial judge finds that the EP is inadequate to address Ms. Zadeh’s enrichment by the mortgage payments Mr. Zamani made and/or an unequal division of the parties’ net family properties, then the Court can make a monetary award.

34Ms. Zadeh submits that ensuring 50% of the net proceeds of sale from the matrimonial home are held in trust protects Mr. Zamani’s property claims sufficiently.

35The onus is on Mr. Zamani to show any prejudice to him if half of the proceeds are released to Ms. Zadeh. Toward this end, Mr. Zamani argues that his net family property statement sets out that Ms. Zadeh would owe him an EP of about $400,000, which is money owing to him in addition to what he claims to be owed in terms of a 50% proprietary interest in the matrimonial home. Since Ms. Zadeh did not file a net family property statement, Mr. Zamani argues that the only evidence before the court is that she owes him an EP of $405,056.77. As a result, he seeks an order that after each party receives $200,000 from the net proceeds of sale, the remainder be held in trust as security for his equalization claim and his unjust enrichment claim. Again, I cannot determine on the record before me, what the quantum of the EP is, nor has Mr. Zamani met his onus that he has established an unjust enrichment claim where the remedy would be to grant him 50% of the net sale proceeds from the matrimonial home.

36Essentially, in asking for the net proceeds of sale, less $200,000, to be held in trust, Mr. Zadeh seeks a preservation order. Section 12 of the Family Law Act provides that if the court considers it necessary for the protection of the other’s spouse’s interest under this Part, the court may make an interim or final order a) restraining the depletion of a spouse’s property; and b) for the possession, delivering up, safekeeping and preservation of the property.

37If a spouse resists the release of funds under s.12 of the Family Law Act, where title to a property is held in the name of both spouses, that spouse has the onus to show why a preservation order should be made: Godfrey v. Godfrey, 2019 ONSC 3093, at para. 15. Again, in this case, Ms. Zadeh is the sole legal owner of the matrimonial home and is presumptively entitled to 100% of the proceeds, but agrees to hold 50% of the net proceeds in trust until Mr. Zamani’s claims can be heard at trial.

38The test the Court applies in determining whether to grant a preservation order was set out in Price v. Price, 2016 ONSC 728, as follows:

a. The onus lies on the party asserting that a preservation order is necessary to protect his or her interests under Part I of the FLA, or that his or her claim for support under Part III of the Act would be impaired or defeated unless a preservation order was made, to demonstrate that on the balance of probabilities.

b. The standard that the court should apply is not the high threshold required for the granting of a Mareva injunction.

c. Different decisions apply different standards. Some consider whether there is “a real risk that assets could be dissipated before the equalization claim is determined”: Davis v. Tangredi, at para. 23; others suggest that an order should be made “out of an abundance of caution”: Barbini v. Edwards, 2014 ONSC 6762, at para. 91. The correct standard is the same one to be applied when determining whether to grant an interim injunction:

i. Is there a serious issue to be tried?

ii. Will the moving party suffer irreparable harm if relief is not granted? And

iii. Which party will suffer the greater harm from granting or refusing the remedy pending a decision of the merits?

39Mr. Zamani’s position is that if Ms. Zadeh receives 50% of the net proceeds of sale with the remaining net proceeds of sale to be held in trust, there will be insufficient funds to satisfy his EP and his equitable interest in the home he is claiming. Mr. Zamani relies on a number of cases where an interim sale of a matrimonial home have been deferred because a spouse’s rights in relation to property jointly held by a husband and wife are likely to be jeopardized. All of the cases relied on by Mr. Zamani are distinguishable from the case at bar because they deal with jointly-owned properties. In this case, the matrimonial home is in Ms. Zadeh’s sole name.

40In the decision of Conforti v. Conforti, 2021 ONSC 1767, Chown, J. summarized the legal test applied in ss.12 and 40 applications as follows:

The Test

27Under s. 12 of the Family Law Act, R.S.O. 1990, c. F.3, in an application for equalization or to resolve questions of ownership,

if the court considers it necessary for the protection of the other spouse’s interests …, the court may make an interim or final order,

(a) restraining the depletion of a spouse’s property; and

(b) for the possession, delivering up, safekeeping and preservation of the property.

For support applications, the court has similar authority under s. 40.

28An early leading case interpreting s. 12 is Lasch v. Lasch (1988), 64 O.R. (2d) 464. Justice Granger said at para. 13:

The purpose of an order under s. 12 of the Act is to ensure that there are sufficient assets to make an equalization payment once the court determines such payment and makes an order under s.9 of the Act.

29He said at para. 17:

A restraining order should be restricted to specific assets and there should be an onus on the party seeking the restraining order to prima facie show that he or she is likely to receive an equalization payment equal to the value of the specific assets.

30In that case, the parties had run a joint line of credit up to its limit after separation. The husband had sold a property in his name and was intending to use the proceeds to buy a house. Justice Granger said he was “concerned, having regard to the past history of this case, that the ability of either party to satisfy an equalization payment will be impaired unless I make an order restraining the disposition and/or encumbrance of certain assets.” He made a preservation order accordingly.

31In Batler v. Batler (1988), 67 O.R. (2d) 355 at para. 7, Justice Granger said:

If jointly owned property is sold prior to trial, prima facie the net proceeds of sale should be held in trust pending the determination of equalization to avoid prejudice to either spouse arising from the sale. If the parties agree or if there are sufficient assets to satisfy the potential equalization payment the funds could be dispersed.

32In Bronfman v. Bronfman, decided 12 years later, the wife sought to extend a preservation order she had obtained on an ex parte motion. Justice Sachs applied the test applicable to a request for an injunction by considering: (1) the relative strengths of the parties’ positions; (2) the balance of convenience; and (3) whether irreparable harm may occur if relief is not granted. Paragraphs 26 though 31 of Justice Sachs’s decision are instructive. In particular, she says:

a court will want to consider how likely it is that the plaintiff or petitioner will receive an equalization payment. It will also want to consider the effect that granting, or not granting, such an order will have on the parties. Under s. 12, the agenda is to protect the spouse's interests under the Family Law Act, so that if a spouse is successful in obtaining relief under that Act, there are assets available to satisfy that relief. Relevant to this exercise is an assessment of the risk of dissipation of the assets in existence prior to trial.

31… There are certain cases where the factual record, and the applicable legal principles, make it very clear that a spouse will be entitled to an equalization payment in a particular amount. In such cases, considerable weight will be given by the court to this factor when deciding an interim application under s. 12, and perhaps less weight to the other factors. There are others where the facts and the law are disputed and complicated. ... In such cases, the court will want to go on and give serious consideration to the other factors, being the balance of convenience and the risk of dissipation prior to trial. [Emphasis added.]

33A more recent leading case is Taus v. Harry, 2016 ONSC 219. Justice Gauthier’s held, at para. 35, that the test under s. 12 or s. 40 is the same: “The question to be asked is whether there is a real risk that the applicant's equalization claim and claim for retroactive support could be defeated if the preservation/non-dissipation order is not made.” In that case, equalization had not been determined, with each party saying the other would owe a significant amount. Specifically, the applicant said the respondent would owe her $130,000. Justice Gauthier found no evidence that the respondent was financially irresponsible, and “nothing to suggest that he would take steps to avoid any financial obligation he is ultimately determined to have” (Ibid., at para. 24). She accepted the respondent’s position that $200,000 should be paid out from trust, leaving just $46,400 each secured.

41In the case at bar, the parties’ positions on what sum is owing by Ms. Zadeh to Mr. Zamani is in dispute and cannot be readily assessed on the written record before me. This is not one of those cases described by Sachs, J. in Bronfman, supra, where there is some certainty that one party will owe an equalization payment to the other. There is no certainty in this case that Ms. Zadeh will owe an EP to Mr. Zamani in the sum of about $400,000 as he suggests and therefore, the “considerable weight” the courts give to that fact does not apply.

42In this case, the parties have very different positions concerning the equalization payment. While both parties agree Ms. Zadeh will owe Mr. Zamani an EP, they are vastly apart on the amount of the payment. Further, Ms. Zadeh disputes Mr. Zamani’s claims for an equitable interest in the matrimonial home (claims the motions judge is not in a position to assess).

43Turning to the consideration of the risk of irreparable harm, there was no evidence to support a concern that Ms. Zadeh would hide or deplete assets. Ms. Zadeh has not demonstrated that she is financially irresponsible. To the contrary, she is moving to sell the matrimonial home immediately to reduce her monthly expenses because holding onto the home is not financially sustainable. Ms. Zadeh works full-time.

44Ms. Zadeh is not a flight risk and there is no evidence to suggest that she would hide or deplete her assets. She has delivered financial statements and produced financial disclosure. A spouse is not entitled to security dollar for dollar of what he/she says is his/her best day in terms of property division. There is no evidence on the record that Ms. Zadeh would take any steps to avoid the EP she is ultimately determined to owe Mr. Zamani. I am not persuaded, therefore, that it is necessary for me to hold all of the net proceeds of sale of the matrimonial home in trust.

45Finally, in considering which party will suffer the greater harm from granting or refusing the remedy pending a decision of the merits, I find that Ms. Zadeh and the child will suffer the greater harm if she not permitted to receive 50% of the net proceeds of sale from the matrimonial home than Mr. Zamani. Ms. Zadeh is entitled to find alternate and affordable accommodation. If she is not granted any proceeds from the sale of the matrimonial home, or even if she were granted $200,000 as Mr. Zamani proposes, she will not have sufficient funds to find an alternate home for her and the child. Mr. Zamani’s housing is organized and his financial statement confirms that he shares his housing expenses with his new partner and baby.

46Further, when Ms. Zadeh purchases another property, she will have an asset with which she can obtain additional financing if 50% of the net proceeds of sale from the matrimonial home are insufficient to pay Mr. Zamani an EP.

Miscellaneous Items in Ms. Zadeh’s draft Order

47In terms of Questioning, Mr. Zamani argues that O’Brien, J. held that the questioning should be limited to 3 hours per party and Ms. Zadeh now seeks to have questioning for 1 day for each party. I find that the questioning should be limited to three hours per party.

48In terms of Ms. Zadeh seeking that neither party be free to bring motions without leave of the court, Mr. Zamani argues that this relief is not sought in Ms. Zadeh’s notice of motion nor has she provided any basis for this order. Given that there is a child in this case, I am not prepared at this time to make an order that leave is required before a motion can be brought. I am ordering that the parties schedule a Settlement Conference at the first available date, agreeable to both parties.

Conclusion and Court Order

49This court makes the following order:

a. Pursuant to ss.21 and 23 of the Family Law Act, the parties shall cooperate in the sale of the matrimonial home, known municipally as 336 Hollywood Avenue, Toronto, ON (the matrimonial home) on the following terms:

i. If the parties cannot agree on one real estate agent, they shall each be entitled to choose an independent real estate agent acting for each of them with such real estate agents to cooperate to list the Matrimonial Home for sale;

ii. The matrimonial home shall be listed for sale no later than February 15, 2023, unless the parties agree in writing to extend the listing date, or unless the real estate agents recommend a later listing and kept listed until sold at a price recommended by the real estate agents;

iii. The parties shall accept the recommendations of the real estate agents regarding listing price, staging or repairs for the matrimonial home;

iv. The parties shall sign the listing agreement on or before January 31, 2023 upon request and shall sign any and all documentation that may be required to list and sell the home, including all legal documents, forthwith upon request;

v. The parties shall accept the first reasonable offer as recommended by the real estate agents and if the real estate agents do not agree then the matter may be referred to a further motion or summary arbitration to an arbitrator agreed upon by the parties;

vi. The appliances and fixtures shall be sold with the home;

vii. The encumbrances registered against the Home, real estate commissions, outstanding fees for staging and repairs, as well as legal fees related to the sale shall be paid from the proceeds of sale of the Property, without prejudice to either party’s right to argue that the fees for staging and repairs should be reapportioned at trial.

viii. The Matrimonial Home shall be sold to a third party at arm’s length.

ix. One half of the net proceeds of sale of the Matrimonial Home, including after payment of commissions, costs of sale and staging or repairs, shall be paid to the Applicant, and the balance shall be held in trust pending the final disposition of this action, including any trial or appeals.

x. The parties shall endeavour to agree to one real estate lawyer to represent them on the sale of the property and failing agreement, each shall be entitled to choose a lawyer to represent him or her. The fees of the real estate lawyer representing the parties on the sale of the matrimonial home shall be paid as set out above.

b. Pursuant to the Family Law Rules, the parties shall attend questioning for three hours for each party, which questioning shall be completed by April 30, 2023.

c. The parties shall contact the Family Law Office and schedule the first possible Settlement Conference on a date that is mutually agreeable to each party.

d. If the parties cannot agree on costs, Ms. Zadeh shall submit written costs submissions of no more than 3 written pages within 7 days of the release of this Endorsement. Mr. Zamani shall submit responding costs submissions of no more than 3 written pages within 7 days of being served with Ms. Zadeh’s costs submissions. There shall be no reply submissions.