Court File and Parties

COURT FILE NO.: CV-17-567678 DATE: 2024-07-15 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

KATHIE DEBREN Plaintiff – and – KEVIN ROMEO DEBREN, also known as KEVIN POWERS, also known as RYAN JAMES, MONTANA MAX DEVELOPMENT CORPORATION, KAWAGAMAJOE DEVELOPMENT CORPORATION and ANNE MARIE LINDQVIST Defendants – and – MONTANA DEBREN Third Party

COUNSEL: J. Daniel McConville and Roshni Khemraj, for the Plaintiff Edward Sullivan, for the Defendants Kevin Romeo Debren, also known as Kevin Powers, also known as Ryan James, Montana Max Development Corporation and Kawagamajoe Development Corporation J. Daniel McConville and Roshni Khemraj, for the Third Party

HEARD: December 11-15, 2023

Reasons for Judgment

VERMETTE J.

[1] The Plaintiff, Kathie Debren, is the ex-wife of the Defendant Kevin Romeo Debren. While Kathie Debren and Kevin Debren got divorced in 1985, i.e., three years after their marriage, they continued living together until 2010 and had two children. Their divorce, like many of their actions over the years, was a sham. Shenanigans abounded in their lives. They both planned bankruptcies in which they failed to disclose significant assets to their respective trustees in bankruptcy. Kathie Debren went bankrupt once and Kevin Debren went bankrupt twice and also made a consumer proposal. Kathie Debren engaged in social assistance fraud. Kevin Debren worked under the table, used a number of aliases and addresses, filed corporate records with names of directors who did not exist, and avoided having his name on anything, including his own children’s birth certificates. While Kevin Debren was the main instigator of all of this wrongful conduct, Kathie Debren was a knowing participant.

[2] Kathie Debren and Kevin Debren are now arguing about a number of things, but mainly about the ownership of a cottage property in which Kevin Debren currently lives. Kevin Debren has dragged the parties’ son into the litigation by bringing a Third Party Claim. The Third Party, Montana Debren, was the registered owner of the cottage property from its purchase in 2004 until he transferred it to Kathie Debren in May 2018, after the litigation was commenced.

[3] Both Kathie Debren and Kevin Debren are lacking in credibility. The documentary record at trial was deficient, likely in part because of the manner in which the parties structured their affairs over the years. Some of the decisions made by the parties in the past have come back to bite them.

[4] Ultimately, I find that Kevin Debren’s various claims in relation to the cottage property should be dismissed, as well as his Third Party Claim against Montana Debren. Kathie Debren is entitled to possession of the cottage property. However, at the request of Kathie Debren’s trustee in bankruptcy, certain terms are imposed with respect to any transfer of the cottage property so as to ensure the full payment of Kathie Debren’s creditors, interest and trustee fees.

A. Factual Background

1. The parties

[5] The Plaintiff, Kathie Debren (“Ms. Debren”), is the ex-wife of the Defendant Kevin Romeo Debren (“Mr. Debren”). Ms. Debren and Mr. Debren have two children: the Third Party, Montana Debren, and Cheyenne Debren, who is not a party to the litigation.

[6] Mr. Debren has gone by various aliases in his life, including Kevin Powers, Ryan James, Romeo Debren and Kevin Debren.

[7] The action was dismissed as against the Defendant Anne Marie Lindqvist on consent on April 8, 2022. Mr. Debren’s evidence is that he had an off and on relationship with Ms. Lindqvist and that they are still friends now. At the time that this action was commenced, Ms. Lindqvist was a director of the Defendant Kawagamajoe Development Corporation (“Kawagamajoe”).

[8] Mr. Debren, Montana Debren and Cheyenne Debren hold shares in the Defendant Montana Max Development Corporation (“Montana Max”). Montana Max is discussed in more detail below.

[9] The only witnesses who testified at trial were Ms. Debren, Montana Debren and Mr. Debren.

[10] I note that Ms. Debren and Montana Debren served a Request to Admit on the Defendants in November 2023. Since the Defendants failed to serve a response, they are deemed for the purpose of this proceeding to admit the truth of the facts mentioned in the Request to Admit: see Rule 51.03(2) of the Rules of Civil Procedure. The Defendants did not seek leave of the court under Rule 51.05 to withdraw any of the deemed admissions, and the three criteria that have to be met to withdraw an admission have not been established based on the evidence before me. See Prince v. Atrium Property Management, 2021 ONSC 3318 at para. 67 and Champoux v. Jefremova, 2021 ONCA 92 at para. 28.

2. 1976-1986 – Marriage, Separation Agreement and Coxwell Property

[11] Ms. Debren and Mr. Debren met in 1976. They got married in August 1982. At the time, they were living in Scarborough in a property that Ms. Debren owned 50-50 with her brother. Ms. Debren’s evidence is that she and her brother each paid 50% of the downpayment, and that she paid the mortgage and all the bills related to the house. Mr. Debren’s evidence is that the money came from their savings and that Ms. Debren’s name on title represented both of them, i.e., Ms. and Mr. Debren. Mr. Debren stated that the property in Scarborough needed a lot of work and that he and Ms. Debren’s brother renovated it from top to bottom.

[12] On August 15, 1984, Ms. Debren and Mr. Debren executed a separation agreement (“Separation Agreement”). Mr. Debren told Ms. Debren that the purpose of the Separation Agreement was to be able to hold separate properties in their names. The purpose of the Separation Agreement was never for Mr. Debren and Ms. Debren to live separate and apart. While Ms. Debren found the request to sign a Separation Agreement upsetting, she went along with it. I note that despite the alleged purpose of the Separation Agreement, i.e., to hold property separately, Ms. Debren is the only one who ever held property. Mr. Debren’s name was never on title.

[13] The Separation Agreement includes the following clauses:

The parties have been living separate and apart from each other since on or about the 15th day of August, 1984, and agree to continue to live separate and apart and to settle by this Agreement all the rights and obligations which they have or may otherwise acquire concerning their property and their respective rights and obligations with respect to maintenance or support from the other.

The Husband and Wife [i.e., Mr. and Ms. Debren] intend this Agreement to be final as to all claims and hereby release all such claims arising out of their marriage. Both parties are aware and acknowledge that each of them may suffer or enjoy drastic changes in their respective income, assets and debts, in the cost of living or in their health, or changes of fortune by reason of unforeseen factors. Nevertheless, the Husband and Wife agree that under no circumstances will any change, direct or indirect, foreseen or unforeseen, in the circumstances of either of them, give either the right to claim any alteration of any of the terms of this Agreement or the terms in any other agreement between them or of the terms of decree nisi of divorce. More particularly, the Wife acknowledges that she may be called upon during the rest of her life to use, either wholly or in part, her capital for her own support and she agrees to do so without any recourse to the Husband at any time;

The Husband and Wife each wish to be able to rely upon the Agreement as the final and binding one, a once and for all settlement of all their differences and affairs to avoid ever engaging in further litigation with each other, whether about matters or causes of actions existing now or at any time.

[14] The Separation Agreement also provides that if a decree of divorce is obtained, all of the terms of the Separation Agreement will continue in full force and effect. Both parties release each other from all obligations to provide support.

[15] The Separation Agreement states that the matrimonial home was a property located on Coxwell Avenue in Toronto, Ontario (“Coxwell Property”). This is incorrect as Mr. Debren and Ms. Debren were not living there in 1984. In the Separation Agreement, Mr. Debren agreed to convey to Ms. Debren all his right, title and interest in the Coxwell Property. The Separation Agreement provides as follows:

The Husband [Mr. Debren] acknowledges that he has no further possessory or ownership rights of any kind in the said former matrimonial home [the Coxwell Property] and hereby specifically releases all of his rights under Part III of The Family Law Reform Act, R.S.O. 1980, Chapter 152.

[16] Despite the terms of the Separation Agreement, Mr. and Ms. Debren did not separate. They continued living together. However, they always kept their finances separate. Ms. Debren’s evidence was that they did not have a joint account.

[17] At some point in 1984 or 1985, Mr. Debren conveyed title to the Coxwell Property to Ms. Debren, in accordance with the Separation Agreement. Ms. Debren did not pay anything in relation to the transfer. The Coxwell Property was Mr. Debren’s family home. It was given to Mr. Debren as a gift for building a house for his father. Mr. Debren’s mother provided video evidence that the Coxwell Property was never intended as a gift for Ms. Debren.

[18] In 1985, Mr. and Ms. Debren moved into the Coxwell Property.

[19] Mr. and Ms. Debren were divorced on November 8, 1985, but they continued living together. Their son, Montana Debren, was born in June 1986 while they were living at the Coxwell Property.

3. 1986 – 1989 – House flipping and purchase of the Madonna Court Property

[20] On February 7, 1986, Ms. Debren and her brother sold the property that they owned in Scarborough. They used the sale proceeds to buy another property that Mr. Debren and Ms. Debren’s brother renovated. The property was purchased under Ms. Debren’s name because she was employed and was able to obtain a mortgage for the property. Mr. Debren admitted that he and Ms. Debren’s brother could not get a mortgage.

[21] Ms. Debren worked full-time for Transamerica Corp. from 1975 until 1990. She started working as a clerk and, at the end of her employment, she was manager of accounting services. Her net salary was between $35,000.00 and $36,000.00.

[22] Mr. Debren’s evidence is that in addition to renovating the property, he and Ms. Debren’s brother were responsible for property management issues and for dealing with tenants. Mr. Debren stated that Ms. Debren was not involved with the renovations and finding tenants, but she would help generally. Her main involvement was to get a mortgage and have the property under her name. According to Mr. Debren, the rent generated by the property was sufficient to pay the mortgage and utilities. Ms. Debren would pay any additional money required.

[23] It is clear from the evidence that additional properties were subsequently bought following the same pattern (renovations and “flip”), but the evidence of Mr. and Ms. Debren is not consistent as to the number and timing of these other purchases. It is unnecessary to resolve this issue for the purpose of this action.

[24] Mr. Debren obtained his real estate licence in 1986. His evidence is that he earned a commission on the sales of the various properties. He stated that his commissions were largely invested back into the properties. Ms. Debren does not remember if Mr. Debren acted as real estate agent when the properties were sold.

[25] The last property in which Ms. Debren, her brother and Mr. Debren were involved was sold at a large profit. Ms. Debren does not remember how the profit was distributed, but she does not think that Mr. Debren received any part of it. She stated that the profit was not split three ways. Her evidence was that Mr. Debren was separately paid for any renovation work that he did. In contrast, Mr. Debren’s evidence was that the profit was divided into three between he, Ms. Debren and her brother. He stated that they each received approximately $125,000.00, but that his portion stayed with Ms. Debren.

[26] In 1988, Ms. Debren bought a property located on Madonna Court in Pickering, Ontario (“Madonna Court Property”). Title was conveyed to her on June 2, 1988. The purchase price was $320,000.00. A mortgage was taken out on the Madonna Court Property for $100,000.00, such that approximately $220,000.00 was paid cash. Ms. Debren’s evidence is that she advanced the funds used to purchase the Madonna Court Property. She stated that she used the profit that she split with her brother and savings that she had in her bank account. She testified that Mr. Debren did not contribute any funds to the purchase of the Madonna Court Property. Mr. Debren’s evidence is that his portion of the profit obtained from the sale of the last property (i.e., $125,000.00) was used for the purchase of the Madonna Court Property.

[27] With respect to the $100,000.00 mortgage, Ms. Debren was the mortgagor and Mr. Debren was a guarantor. Ms. Debren, Mr. Debren and Montana Debren moved into the Madonna Court Property from the Coxwell Property. Ms. Debren’s evidence is that Mr. Debren was not working at that time.

[28] At some point, a second mortgage was registered against the Madonna Court Property in relation to the use of a line of credit. Among other things, Mr. Debren used the line of credit to purchase stock. He lost money on his stock investments. At the time of the sale of the Madonna Court Property, $100,628.20 was owed under the second mortgage.

[29] There is no written agreement between Mr. and Ms. Debren regarding the ownership of the Madonna Court Property.

[30] Mr. and Ms. Debren’s daughter, Cheyenne Debren, was born in September 1989, after the family moved into the Madonna Court Property.

[31] At Mr. Debren’s request, his name does not appear on the birth certificates of both Montana and Cheyenne Debren.

4. 1990-2002 – Mr. Debren’s first bankruptcy, family law proceeding and social assistance fraud

[32] In 1990, after the birth of Cheyenne Debren, Ms. Debren applied for employment insurance benefits. She received employment insurance benefits for one year in 1990-1991. Ms. Debren testified that after exhausting the employment insurance benefits, the family lived off of savings. Mr. Debren believes that he received employment insurance benefits after Ms. Debren did.

[33] Ms. Debren applied for social assistance a few years later, in late 1994 or in 1995. She subsequently received social assistance until 1999. She was receiving approximately $1,200.00 per month. She then did temporary work through an agency until 2000.

[34] On May 17, 1994, Mr. Debren declared bankruptcy under the name Romeo Debren and disclosed that he had $0 in total assets and $190,328.00 in total liabilities. Mr. Debren did not declare that he had any interest in the Madonna Court Property or in the Coxwell Property. The address he used for the purpose of this bankruptcy was the address of Ms. Debren’s sister, not the Madonna Court Property where he resided. Mr. Debren was discharged on February 17, 1995. He has not been in contact with his trustee in bankruptcy since then.

[35] In January 1995, at the request of Mr. Debren, Ms. Debren transferred title of the Coxwell Property to Montana Max. Ms. Debren received no consideration for transferring the Coxwell Property to Montana Max, even though the transfer document refers to consideration in the amount of $80,000.00. She said that she agreed to the transfer requested by Mr. Debren because it was his family home.

[36] Ms. Debren denies that the Coxwell Property was transferred to Montana Max because she wanted to seek social assistance. In contrast, Mr. Debren’s evidence is that the Coxwell Property was transferred for that purpose. According to Mr. Debren, both he and Ms. Debren wanted Ms. Debren to stay at home and she could only qualify for social assistance if she did not have more than one house under her name.

[37] There were tenants at the Coxwell Property. The rent was approximately $900.00 per month.

[38] Mr. Debren’s evidence is that while Ms. Debren was on social assistance, she could barely pay for the mortgage. He stated that the money that Ms. Debren had was spent on the children, car, gas, etc. He also stated that he would come up with money when needed, for instance for the children’s extracurricular activities (soccer, hockey, etc.). Mr. Debren was doing jobs “under the table”. He testified that he would work when it was necessary, and that whenever he needed money, he would go out and do extra work.

[39] Ms. Debren’s evidence is that Mr. Debren did not make any monetary contributions to the expenses related to the Madonna Court Property or with respect to mutual expenses. She testified that she paid for the mortgage, taxes, utilities and carrying costs until the Madonna Court Property was sold. As stated above, Mr. and Ms. Debren had separate bank accounts. Mr. Debren denies that Ms. Debren paid for everything. He stated that they all put their money together, and that Ms. Debren could not pay for everything by herself.

[40] In 2000, Ms. Debren started working for the Ontario Society of Professional Engineers. She worked there until December 2009. Her evidence is that her salary was $33,000.00 at the beginning, and ended below $50,000.00. Ms. Debren does not remember whether these figures are net or gross.

[41] Also in 2000, Ms. Debren started a family law proceeding against Mr. Debren following an incident which ended with Ms. Debren leaving the Madonna Court Property and going to live with her sister for a couple of months. In an affidavit sworn in the proceeding, Ms. Debren stated that she was the sole purchaser of the Madonna Court Property and had personally paid the mortgage and all household bills since she purchased it. She also stated that Mr. Debren had never contributed towards the household expenses because he had been unemployed for most of the relationship between the parties. Ms. Debren further asserted that Mr. Debren had been an alcoholic for many years. Ms. Debren eventually discontinued the proceeding and went back to live with Mr. Debren and their children at the Madonna Court Property.

[42] In early 2000, Mr. Debren started working full time for Rockport Construction as a subcontractor. He earned $18 per hour. He worked for Rockport Construction for five or six years. He subsequently worked for Fernbrook Homes for approximately one year, and then for Mattamy Homes until September 2011. Mr. Debren’s evidence is that before working for Rockport Construction, he did work and odd jobs for clients that he had. Over the whole period, he also sold a few houses (between 5 and 8) using his real estate licence.

[43] In approximately 2002, an issue arose with respect to the social assistance previously received by Ms. Debren. A proceeding was commenced and she was charged with perjury and fraud. According to Ms. Debren, it took approximately one year for the proceeding to be completed. The evidence before me is not clear as to the type (e.g., tribunal, criminal) and the ultimate outcome of the proceeding(s).

5. 2003-2004 – Sale of the Madonna Court Property and Mr. Debren’s second bankruptcy

[44] On May 13, 2003, Ms. Debren entered into an agreement to sell the Madonna Court Property for $450,000.00. That transaction closed on or around July 31, 2003. Ms. Debren received the net proceeds of the sale, which were approximately $290,000.00 after, among other things, the discharge of the two mortgages and of a legal aid lien related to the proceeding commenced against Ms. Debren regarding her receipt of social assistance. On August 15, 2003, Ms. Debren transferred $210,000.00 of the proceeds of sale from the Madonna Court Property to Montana Debren by purchasing a GIC in Montana Debren’s name. Montana Debren was 17 years old at the time. Montana Debren testified that no clear explanation was given to him at the time as to why he was receiving these funds.

[45] Ms. Debren’s evidence is that she decided to sell the Madonna Court Property to pay debts. However, there is no evidence that she did, except for the encumbrances registered on title. She testified that after the closing, she held on to the bank draft before purchasing the GIC for Montana Debren as she wanted to leave Mr. Debren and was looking for a cheaper place to live in the neighbourhood. Ultimately, she decided against leaving Mr. Debren and the entire family moved into the Coxwell Property.

[46] During her cross-examination, Ms. Debren admitted that it was possible that the risk that the government would put a lien on the Madonna Court Property for the money she owed to social services was a factor in her decision to sell the Madonna Court Property. Mr. Debren’s evidence is that this was the reason why the Madonna Court Property was put on sale.

[47] On June 4, 2003, Mr. Debren, under the alias Kevin Powers, declared bankruptcy and swore that his total assets were $0 and total liabilities were $240,793.00. Mr. Debren did not declare an interest in the Madonna Court Property, the proceeds of sale of the Madonna Court Property, the Coxwell Property, or Montana Max. According to Mr. Debren, most of his debts were related to taxes and credit cards. The address he used for the purpose of this bankruptcy was a post office box, not the address where he lived. Bankruptcy records indicate that Mr. Debren’s discharge status is “suspended” and that the effective date is November 21, 2004. Mr. Debren has not communicated with the trustee in bankruptcy since 2004. He could not confirm whether his former lawyer had spoken to the trustee in bankruptcy. In any event, if they did, Mr. Debren was not aware of what, if anything, came out of such communications.

6. 2004-2009 – Purchase of the Wolf Circle Property and Ms. Debren’s bankruptcy

[48] In 2004, Mr. and Ms. Debren looked at cottage properties. One of the properties that they saw was in Dorset, Ontario (“Wolf Circle Property”). Montana Debren purchased the Wolf Circle Property by agreement dated July 17, 2004. Ms. Debren paid a deposit in the amount of $5,000.00. The purchase of the Wolf Circle Property was completed on August 19, 2004 for consideration of $370,000.00. Montana Debren used the proceeds of sale from the Madonna Court Property to purchase the Wolf Circle Property, i.e., the funds in his GIC. In addition, a mortgage in the amount of $175,000.00 was registered against the Wolf Circle Property. Montana Debren was the borrower and Ms. Debren was the guarantor. At that time, Ms. Debren was working full time and Montana Debren was working with his father. Montana Debren joined the Canadian armed forces shortly thereafter, in November 2004.

[49] There is no written agreement between Mr. Debren and Montana Debren and/or Ms. Debren regarding the ownership of the Wolf Circle Property. Ms. Debren’s and Mr. Debren’s evidence is that at the time of its purchase, the Wolf Circle Property was intended to be an inheritance for both Montana and Cheyenne Debren.

[50] Ms. Debren testified that, at first, she was paying the mortgage and carrying costs with respect to the Wolf Circle Property. Montana Debren then started to pay the mortgage because it became too much for her. Ms. Debren’s evidence is that she was also paying for the carrying costs (including taxes and utilities) with respect to the Coxwell Property. Mr. Debren acknowledged that Ms. Debren was looking after the household expenses at the Coxwell Property, including food, insurance, bills, expenses related to Cheyenne Debren, etc., but he said that he may have paid property taxes.

[51] Ms. Debren testified that at some point, she started giving her pay cheques to Mr. Debren, except for a small amount (around $200.00). Mr. Debren then started paying for everything. During her cross-examination, Ms. Debren’s answers showed that she did not know whether Mr. Debren had used his own money to make payments for the mortgage on the Wolf Circle Property or for other expenses. Ms. Debren stated that she did not know what Mr. Debren did with the money that she gave him and what he did with his own money. She did not actually know where the money that was used to pay the mortgage on the Wolf Circle Property came from.

[52] Montana Debren testified that from September 2004 to February 2005, the mortgage payments in relation to the Wolf Circle Property were covered either by him – using the balance of the money in his GIC, i.e., approximately $15,000.00 – or by money provided by Ms. Debren. Montana Debren does not really know where the money came from, but Mr. Debren told him that Ms. Debren was giving him money for the mortgage. Money was deposited in Montana Debren’s account to pay the mortgage. Starting in February 2005, Montana Debren made all the monthly payments for the mortgage until the mortgage was discharged in 2009. Montana Debren also paid for property taxes from 2004 to 2016. His understanding is that Mr. and Ms. Debren made extra monetary contributions to pay the mortgage. Again, he was told that the money came from Ms. Debren.

[53] Montana Debren estimated that between 2004 and 2018, his earned income totaled approximately $1 million. He stated that he earned approximately $65,000.00 in 2009, $70,000.00 to $75,000.00 per year from 2012 to 2015, and $75,00.00 to $80,000.00 per year starting in 2016.

[54] Mr. Debren agreed that Montana Debren took over the monthly mortgage payments within a year of the purchase of the Wolf Circle Property. Mr. Debren’s evidence is that there was a desire to pay the mortgage on the Wolf Circle Property as soon as possible. He stated that he would deposit an additional amount in Montana Debren’s bank account every month. He said that the money came from everybody and that they were a “real team” working together. Mr. Debren testified that he and Ms. Debren had separate bank accounts, they received their salaries in their respective bank accounts, and they put money in Montana Debren’s account. Mr. Debren stated that the payments to reduce the principal of the mortgage came mostly from him as he made the most money, although he acknowledged that Ms. Debren would also give him money that he would put in Montana Debren’s account. He also stated that Ms. Debren paid for other things. However, Mr. Debren was unable to say how much he paid approximately with respect to the mortgage.

[55] On May 31, 2005, Ms. Debren declared bankruptcy. Mr. Debren’s evidence was that this was planned and that prior to May 31, 2005, they used Ms. Debren’s credit cards knowing that she would declare bankruptcy. During her cross-examination, Ms. Debren admitted that it was her intention prior to her bankruptcy to buy assets and not to declare them in her bankruptcy. Ms. Debren declared liabilities in the amount of $128,932.00, and assets in the amount of $4,025.00. She listed twenty different creditors. Most of them were related to various credit cards, but they also included the Regional Municipality of Durham Social Services in relation to the social assistance that she received. Her trustee in bankruptcy was A. Farber & Partners Inc. Ms. Debren was granted a discharge from bankruptcy on March 1, 2006.

[56] The mortgage on the Wolf Circle Property was paid off at some point in 2009. Montana Debren made a lump sum payment to discharge the mortgage – between $20,000.00 and $30,000.00. He had enough money to do so while Mr. and Ms. Debren did not.

[57] In December 2009, Montana Debren took another mortgage on the Wolf Circle Property in the amount of $280,000.00. He did this in order to have funds to buy a house in Edmonton. This was Mr. Debren’s idea. Montana Debren made the payments on this mortgage, except for $130,000.00, as discussed below. Mr. Debren’s evidence is that he and Ms. Debren paid for other carrying costs with respect to the Wolf Circle Property.

[58] Kathie Debren’s contract with the Ontario Society of Professional Engineers was not renewed at the end of 2009.

7. 2010 – Separation of Mr. and Ms. Debren

[59] In 2010, Mr. and Ms. Debren permanently separated. Ms. Debren moved to Alberta on July 1, 2010 and started living with Montana Debren. Until she left Ontario, she did work through an employment agency. In Alberta, she also did work through an employment agency until she secured a full time job in August 2011.

[60] Mr. Debren’s evidence is that at the time of the separation in 2010, Ms. Debren told him that she wanted what her brother got, i.e., $125,000.00. Mr. Debren then told her that he was going to give her more and they agreed on $185,000.00, which was half of the price of the Wolf Circle Property and half of what they had accumulated together up until that point. According to Mr. Debren, they discussed that he would sell the Wolf Circle Property and give her half of the money. They had an understanding that the Coxwell Property would be left to their children and that is why Montana and Cheyenne Debren became directors of Montana Max, as discussed below.

[61] Mr. Debren also testified that he and Ms. Debren agreed that whenever they sold a property, they would give $100,000.00 to Montana Debren because of the money he had spent in relation to the Wolf Circle Property. According to Mr. Debren, $50,000.00 was to come from him and $50,000.00 was to come from Ms. Debren.

[62] Ms. Debren’s evidence is that in 2009-2010 and after the separation in 2010, there were lots of discussions about selling properties and the distribution of proceeds, but she never agreed to anything.

8. Montana Max and its revival in 2012

[63] Montana Max was incorporated on January 14, 1993. Ms. Debren was the incorporator and a director, at Mr. Debren’s request. On August 25, 1995, Ms. Debren ceased to be a director of Montana Max. She was replaced by her sister. Ms. Debren’s sister ceased to be a director in May 1998. She was replaced by Mr. Debren.

[64] Montana Max was dissolved for non-compliance on February 2, 2004. It was revived on January 30, 2012. On February 10, 2012, Montana and Cheyenne Debren were added as directors.

[65] On February 14, 2012, Kevin Debren sent the following e-mail to Montana Debren (it appears from the e-mail that it was also intended for Cheyenne Debren and Ms. Debren) (reproduced verbatim):

Well its official, Montana Debren and Cheyenne Debren and Kevin Debren are now directors for Montana Max Development Corporation Cheyenne Debren will become President of Montana Max Development Corporation Montana Debren will become Vice President Kevin Romeo Debren will stay on in capacity of Chief Executive Officer There is room for one other Director at this time should anyone in the future earn this right in the eyes of the present directors ha ha ha ha ha Like Andrew Perhaps Who Knows. There will only be Two Hundred Shares Issued By Montana Max Development Corporation Cheyenne Debren shall receive 100 shares Montana Debren shall receive 100 shares Proceeding my visit with the lawyer before the end of March Copies of these shares and .the pertaining documents will be mailed to you both I know it is difficult to talk of things to come, I just want to have everything in place before the time shall pass. I as well as your mom if I may speak for her would wish that everything be divided equally amongst you both. From discussions held previously with Kathie and myself Montana shall receive One Hundred Thousand Dollars These monies represent his investment and accruded interest in [the Wolf Circle Property] as well as other monies he has given. These said monies ( One Hundred Thousand Dollars ) shall be paid to him when the cottage is sold. The remainder of the monies will be shared equally by myself and your mom. Montana has benefited in more ways then Cheyenne with monetary gifts and such. I sure your mom and I will some how even this situation out when the time comes that one may do so. Perhaps we will purchase a motorcycle for you Cheyenne ha ha ha. If anyone feels there is an injustment or wishes to add a helpful suggestion or insight which may have been overlook please let me know .. Yours In Good Faith

[66] Mr. Debren provided documents to Montana Debren regarding Montana Max. Montana Max’s Officers’ Register shows that Mr. Debren became President on January 14, 1993; Cheyenne Debren became Secretary/Treasurer on February 10, 2012; and Montana Debren became Vice-President on February 10, 2012. The Shareholders’ Ledger shows that Mr. Debren acquired 100 shares on January 14, 1993, and Cheyenne and Montana Debren each acquired 100 shares on March 21, 2012. [1]

[67] Both Mr. Debren and Cheyenne Debren ceased to be directors of Montana Max in March 2013, leaving Montana Debren as the only director. In November 2016, Montana Debren ceased to be a director of Montana Max and was replaced by “Ryan James”, which is one of Mr. Debren’s aliases. Also in 2016, the registered address of Montana Max was changed to the address of Mr. Debren’s mother. On November 1, 2018, after the litigation was commenced, Ryan James was “replaced” by Kevin Romeo Debren as the director of Montana Max.

[68] Thus, from March 2013 to November 2016, Montana Debren was the sole director of Montana Max. During that time, the company did no business. It held the Coxwell Property and had a bank account.

[69] At some point, Montana Max obtained a $100,000.00 loan. Mr. Debren wanted Montana Debren to be repaid for everything that he had paid for the Wolf Circle Property. Montana Debren agreed. $100,000.00 was put into Montana Max’s corporate account. Mr. Debren took $5,000.00 and Montana Debren took the balance. The loan was secured by a mortgage against the Coxwell Property. Mr. Debren testified that he paid the loan instalments and interest.

9. Mr. Debren’s move to the Wolf Circle Property and renovations

[70] Mr. Debren’s evidence is that he moved into the Wolf Circle Property in 2011 and rented out the Coxwell Property until it was sold in 2016. He said that he was paying for all utilities.

[71] Ms. Debren’s evidence is that she understood that Mr. Debren was living at the Coxwell Property and using the Wolf Circle Property on weekends and during holidays between 2010 and 2016. Montana Debren’s evidence is that he did not know how much time Mr. Debren was spending at the Wolf Circle Property between 2010 and 2013. He knew that Mr. Debren lived at the Wolf Circle Property starting in 2013 because there were renters at the Coxwell Property. However, he was not certain that the Wolf Circle Property was Mr. Debren’s principal residence as he knew that Mr. Debren was also often staying with his mother or with Ms. Lindqvist.

[72] Mr. Debren testified that after moving into the Wolf Circle Property, he redid the roof, the kitchen, the bathroom, the basement and the dock, and he installed a new septic tank. He also had new windows installed. The renovations started in 2012, but he had to pause for a year while he was sick. He started again in 2013 and 2014. Mr. Debren had friends who came to help him with the renovations. There is affidavit evidence of one of Mr. Debren’s friends, John Richardson, that sets out the repairs and renovations with which Mr. Richardson assisted Mr. Debren between 2015 and 2020.

[73] While he had to pay for some of the materials used in the renovations, Mr. Debren did not have to pay for other materials. For example, Mr. Debren testified that the tiles and bathtub used in the bathroom came from Mattamy Homes. Mr. Debren estimates that he paid between $50,000.00 and $75,000.00 for materials. He said that the renovations represented six months of work for him. His friends came to help him on weekends. Some of them may have worked for a total of 30 days. Mr. Debren stated that the renovations have not been completed, but he stopped working on them after title to the Wolf Circle Property was conveyed to Ms. Debren in May 2018.

[74] The only invoice produced in support of Mr. Debren’s claim for the renovations is an invoice dated May 23, 2017 in the amount of $16,736.80 with respect to windows. I note that the date of the invoice is after the litigation started. Mr. Debren stated that Ms. Lindqvist paid approximately $5,000.00 of this invoice and he paid the balance.

10. Post-separation discussions

[75] On July 8, 2013, Mr. Debren sent an e-mail to Montana Debren which reads, in part (reproduced verbatim):

Also let me know about how much money Kathie and You would get when Coxwell would sell. Just tell me what you feel and we will go from there, better to yap about it now and get it cleared up, its a bit touchie i know but in the end we all just want what is ours and whats best for us all For instance I might say that any taxes paid by you should be split by me and by Kathie on the cottage. I know we promised you 100 gggggggggggeeeeesso Kathie would pay for half. etc etc Things like that and dont hold back what you feel is right let me know so we can talk it out and come to an agreement.

[76] Montana Debren responded on July 9, 2013. He sent the following e-mail to Mr. Debren (reproduced verbatim):

Just my first thoughts but we bought the cottage for .... 365$? 375$ i cant remember. the breakdown as i see it at first glance is as follows: Montana – 100$ Kevin – 140 Kathie 140 for a total of 380$ Assuming coxwell sells for 420 lets say that leaves: 40$ left over to cover realtor fee’s and lawyers which if im not mistaken should be around 25$ and the remainder is yours. 15$ for a total of 155 to you. Call it finders and maintainers fee hohoho I dont want to complicate things with taxes and anything else if possible and i also dont mind taking a few dollars off the top of my share to supplement anyone else. So in short 380 split 3 ways(sorta) with the profit minus the selling fee’s going to yourself. Its 11pm so im not so alert right now but this is my first thought so let me know what you think.

[77] Montana Debren testified that he had many conversations over the phone with Mr. Debren about numbers. Montana Debren said that he was trying to start a conversation with Mr. Debren that maybe Ms. Debren could continue at some point. Montana Debren stated that no agreement was ever reached. Ms. Debren was not interested in talking to Mr. Debren about this at that particular time, and Montana Debren made Mr. Debren aware of it. Mr. Debren acknowledged that he knew that Ms. Debren did not want to talk to him, but because she was living with Montana Debren, he assumed that Montana Debren was talking to her. According to Mr. Debren, what was written in Montana Debren’s e-mail dated July 9, 2013 (reproduced above) was what they agreed upon.

11. Mr. Debren’s consumer proposal and sale of the Coxwell Property

[78] On April 19, 2016, Mr. Debren, in the name of Kevin Romeo Debren (a.k.a. Kevin Powers), made a consumer proposal. He was receiving social assistance at that time. The address he used for the purpose of the proposal was the address of the Wolf Circle Property. In the consumer proposal, Mr. Debren disclosed that he had assets of $1,000.00 and total liabilities of $29,900.00. Mr. Debren did not disclose that he had an interest in the Wolf Circle Property, the Coxwell Property or Montana Max. The insolvency trustee for this proposal was MSI Spergel Inc. Mr. Debren testified that he spoke with someone from MSI Spergel Inc. in 2018 or 2019 to make them aware of what he was doing in the litigation. According to Mr. Debren, he “left it in their hands” after telling them what he was prepared to do. There is no independent evidence of any communications with MSI Spergel Inc. or about its position.

[79] On May 1, 2016, at the request of Mr. Debren, Montana Debren signed a resolution of the board of directors of Montana Max to give Mr. Debren authority to sell the Coxwell Property. On May 2, 2016, Mr. Debren caused Montana Max to enter into an agreement to sell the Coxwell Property for $651,500.00. The sale closed on August 4, 2016.

[80] Mr. Debren directed that the proceeds of the sale of the Coxwell Property be transferred to Kawagamajoe.

[81] On August 9, 2016, a few days after the sale of the Coxwell Property, Mr. Debren sent the following e-mail to Montana Debren (reproduced verbatim):

I hope finally we can all move on Kathie will have her monies, Montana has his monies, and Cheyenne is now married Montana without you We would Never have gotten through this all Thank You Very Much from my heart for what you have done for Kathie and for me. l’am very sad for a lot that has happened, I can not change the past but the pain of those mistakes I shall always bear. Life is an education, I have so much to learn and I hope these experiences will help to make me a better person. My proposal to the creditors has been accepted and there is only one more step to address and then once again I can go about a normal financial life. Please Let me know when the cottage mortgages come due and or when you might pay Off the mortgage or transfer the mortgage as I “might” like to put the cottage in my name now that my debts to everyone has been paid. Yours In Good Faith

[82] On August 16, 2016, Ms. Debren sent the following e-mail to Mr. Debren (reproduced verbatim):

Romeo, I’ve been told by our son Montana that our matrimonial home was just recently sold and you’ve offered $135,000 to me as an amount you believe to be just. I believe that I am entitled to more than what you are offering. For all the loving years, circumstances and history that we shared together and as a family for more than thirty years, don’t you think that we put equal blood, sweat and tears into making a life together. From my end, do you remember who put $10,000 on the first house (Bob and I bought) and I held the $40,000 mortgage. Who paid back the $20,000 with interest, to your father? Your father (Danny would be 93 today), signed over the deed of [the Coxwell Property] to me and I in good faith put it into the Montana Max Development Corporation. This is just the start of long list of Storybook events Wytch Developed and transpired over the course of our marriage/divorce/relationship together along with Sean Birch, Kevin/Romeo Powers and ... in rich or for poor, sickness and in health, I was there for you. Arguments, for and against, cases and points can be made but in the end we were a couple and when that ended things should of been split evenly and fairly. They were not. And now am I asking for 60% of the sale of the Coxwell property. You can keep everything else: the 40%, the cottage, your money in stocks, everything. (Note to self: how many years did you collect rent and you sold my boat?). This I feel is still not a fair split but am willing to work with you to finally come to amicable conclusion. We both deserve financial security. This was something which we both strived so strongly for when we were team. Our goal was to be self-sufficient in our latter years but somehow this turned into us both being dependent on our son. At the end of day you always said that you wanted a fair shake ... well I do too. Somehow you’ve forgotten that. Yours in good faith, Kathie.

[83] At some point after the sale of the Coxwell Property, Montana Debren asked his parents to come to an agreement to get him out of their “shenanigans”. This did not happen and he saw himself trapped holding assets.

[84] On November 4, 2016, Ms. Debren sent a letter to Mr. Debren in which she reiterated her request to receive 60% of the total sale price of the Coxwell Property, which she described as their matrimonial home.

[85] At Mr. Debren’s direction, Ms. Lindqvist, as a director of Kawagamajoe, had a bank draft in the amount of $130,507.00 sent to Montana Debren on December 16, 2016. These funds came from the proceeds of sale of the Coxwell Property. Mr. Debren asked Montana Debren to give these funds to Ms. Debren. Mr. Debren’s position was that this amount represented the remainder of the amount owed to Ms. Debren as agreed in 2010 at the time of the separation. Ms. Debren refused to take the money as she thought that she should get more. She told Montana Debren to keep it or to return it to Mr. Debren. Mr. Debren asked for the money back, but Montana Debren held onto it. Montana Debren realized that people were angry and he thought that this might be the only money that Ms. Debren may ever see. Ultimately, in January 2018, Montana Debren used these funds to discharge the mortgage registered on the Wolf Circle Property. However, when he later sold his house in Edmonton, Montana Debren put aside $130,000.00 because he understood that the $130,507.00 was not his money. He testified that the $130,000.00 is in his bank account until a decision is made about it.

[86] At Mr. Debren’s direction, Ms. Lindqvist, as a director of Kawagamajoe, also had a bank draft in the amount of $493,700.00 sent to Mr. Debren’s mother, Nina Maass, on January 26, 2017, after the litigation was commenced. These funds came from the proceeds of sale of the Coxwell Property. Mr. Debren stated that the purpose of doing this was to look after his mother. Mr. Debren was the only beneficiary of his mother’s estate. His mother passed away recently. [2]

12. Commencement of the litigation

[87] The Statement of Claim was issued on January 13, 2017. Ms. Lindqvist was served personally with the Statement of Claim on January 17, 2017.

[88] Mr. Debren alleges that Ms. Lindqvist did not tell him right away about being served with the Statement of Claim.

[89] As stated above, on January 26, 2017, Mr. Debren had Kawagamajoe transfer more than $490,000.00 to his mother. The following day, on January 27, 2017, Mr. Debren caused a document to be filed under the name of Mariang Boluntaryo to replace Ms. Lindqvist as the director of Kawagamajoe. Mariang Boluntaryo does not exist. Mr. Debren used the fictitious name of Mariang Boluntaryo for the new director of Kawagamajoe. Mr. Debren stated that he made this change because Ms. Lindqvist told him that she no longer wanted to be a director of Kawagamajoe. According to Mr. Debren, he still did not know about the litigation at that time.

[90] On July 17, 2017, Montana Debren sent the following e-mail to Ms. and Mr. Debren (reproduced verbatim):

It should come as a mild surprise that i have been a bit distant for some time now and the reason being that i have felt used. I have been sitting between you for almost a decade and i have been holding the majority of the family’s property since the sale of [the Madonna Court Property] 15 years ago. Although i was never comfertable doing any of this i have done whatever ive been asked in the hopes to make a better life for everyone. But these days as you both fight harder for what you think you are owed i am being asked by both of you to do different things, and being told by both of you that its the right thing. That’s manipulation as clear as day. Your my parents, I shouldent be in this position but unfortunately somehow we are here. I’m asking for help. I don’t want to be at odds with either of you. I don’t want Jessica involved and lastly I don’t want to be involved. So i am asking you both to put aside your differences, your lawsuits, your feelings of entitlement to money or property to remove me from this equation. Please get in contact with eachother and figure out how best to remove me from the title of [the Wolf Circle Property] and also distribute the money thats in my savings account. I am closing my bank accounts to both of you as of today in the hopes that you see that im serious. You can also take back the $75000 i have remaining from the $95000 i payed to [the Wolf Circle Property]. I dont need it. I will do whatever it is that you want me to so long as you both agree. So please, for the sake of my relationship with the both of you and mine and Jessica’s, write an e-mail, make a call or get together and find a way to get this property and money out of my name before it ruins any more than it has.

[91] On September 18, 2017, Montana Debren sent another e-mail to his parents (reproduced verbatim):

Here I am again writing to the both of you. It has been an exciting summer but I wanted to take this time to re-emphasize what I said in the last message I sent. (It is attached below). I would again ask that you both get in contact with each other and find a piece of common ground from which to help me out. I am a married man now (Well common-law anyway) and as this phase of my life begins I don’t want to continue to have what is not mine (not that I wanted what’s yours it in the first place). Jessica and I have our own estate, bills, problems and priorities so I again ask of both of you to find a solution, even if its not the one that fixes everything for you, that removes me from your financial lives. This is likely the last e-mail I will write on this subject. I wont force you two to talk if your unwilling. But I am not asking you because its better for either of you to do so or not. I am asking because it is the right thing to do. I am not a business partner, landlord, holding corporation, or a bank. I am your son. Thanks, Montana

[92] Between October 3 and 4, 2017, Mr. Debren evaded service of the Statement of Claim while at the Wolf Circle Property. He was eventually served in the first half of 2018 pursuant to an order for substituted service. Mr. Debren was noted in default on April 17, 2018.

13. Transfer of the Wolf Circle Property to Ms. Debren

[93] On May 1, 2018, Montana Debren transferred title to the Wolf Circle Property to Ms. Debren. Montana Debren used the funds in his savings account to pay off the mortgage on the Wolf Circle Property. These funds included the $130,507.00 that he had received from Mr. Debren after the closing of the sale of the Coxwell Property. Montana Debren did not inform Mr. Debren about the transfer of title to Ms. Debren either before or after the transfer.

[94] Later in May 2018, Ms. Debren asked Mr. Debren to leave the Wolf Circle Property. Mr. Debren refused to leave.

[95] Montana Debren testified that he decided to transfer the Wolf Circle Property to his mother in May 2018 as his wife was expecting a child in June 2018 and he no longer wanted to be involved with his parents’ assets. His mother was living with him and he knew that she had nothing while his father had the money from the sale of the Coxwell Property and he was going to inherit from his mother. Mr. Debren was good for retirement while Ms. Debren was not. Montana Debren thought that if his parents disagreed with the transfer of the Wolf Circle Property, they could solve the issues without him. This is obviously not what happened.

[96] In late June 2018, Mr. Debren moved to set aside the noting in default.

[97] There is evidence before me that in a number of conversations with Bell Canada employees from November 2022 through January 2023, Mr. Debren pretended that he was Montana Debren in his dealings with Bell Canada.

14. Communications between Ms. Debren’s counsel and Ms. Debren’s trustee in bankruptcy and endorsement of Justice Myers dated August 12, 2020

[98] On April 25, 2019, counsel for Ms. Debren contacted Ms. Debren’s former trustee in bankruptcy with respect to this litigation. Among other things, Ms. Debren’s counsel asked the trustee in bankruptcy whether it took the position that the claims in the Statement of Claim were properly claims of the trustee; if so, whether the trustee intended to pursue them; and if not, whether the trustee had any objection to Ms. Debren pursuing these claims.

[99] The trustee in bankruptcy communicated the following position on May 15, 2019:

Please be advised that any proceeds from this action would vest with the Trustee as an asset for the benefit of the general body of proven creditors, however, the Trustee does not intend to pursue the action. The Trustee consents to Katharina Debren pursuing the claim however all proceeds after legal fees are to be turned over to the estate for the benefit of the general body of proven creditors. Please advise how your client wishes to proceeds [sic].

[100] Additional communications were exchanged. The trustee in bankruptcy subsequently took the position that the Wolf Circle Property was not an asset of the estate and, therefore, Ms. Debren “can pursue this action without consent from the Trustee as this does not vest with the Trustee.”

[101] As noted above, Mr. Debren has not contacted his prior trustees in bankruptcy regarding this litigation and there is no evidence that his lawyers did so on his behalf. Mr. Debren testified that he spoke with the insolvency trustee for his consumer proposal, but there is no evidence of the exact information allegedly conveyed by Mr. Debren and no evidence of any position communicated or taken by the insolvency trustee.

[102] On August 12, 2020, Justice Myers made an endorsement in this matter following a motion for summary judgment. His endorsement reads, in part:

This matter is complex factually. The chronology starts in the mid-1980s when the parties engaged in a sham separation to try to claim two principal residence deductions on their properties. Then followed multiple bankruptcies to shed creditors but without disclosing to the trustees or creditors the assorted property rights asserted today. I am amazed and horrified by the overt admissions of multiple federal offences by the parties not to mention civil and perhaps criminal frauds. They included their son in their title flipping games – having him hold title when convenient to avoid disclosure in Mom’s bankruptcy, but flip it back to her to assert against Dad.

I am generally satisfied that both side [sic] lost the rights they assert by failing to disclose them to the trustees. Ms. Debren’s letter from her discharged trustee asserts ongoing rights for the estate. It is a long way from a re-conveyance of a cause of action in her.

Counsel for the parties are on notice that they are both asserting causes of action that their respective clients do not likely own. Moreover a little or minimal disclosure is not a substitute for a re-conveyance of the causes of action after due diligence by each trustee.

Mr. Debren’s claims over an interest in Madonna Court or its proceeds would be an asset in his 1994 bankruptcy. The cottage was bought when he was an undischarged bankrupt in his June/03 bankruptcy, even if he had no interest in the cottage then, the interest he asserts now, due to the value he bestowed (his trust or lien claim), would have been an asset for disclosure in his consumer proposal in April, 2016 in the main.

Ms. Debren’s claim to own Coxwell based on the 1984 sham settlement and a resulting trust in the conveyance to the children’s corporation in 1994 were assets for her May 31/05 bankruptcy. Her protestations that she just did as she was told makes clear that the 1984 separation agreement was a sham as she gave up her supposed property a decade later because her estranged spouse told her to? I don’t think so.

If these parties want legal or equitable relief, they will have to: (a) make full disclosure; (b) get on a witness stand and tell a judge what actually happened in public proceedings; and (c) face whatever consequences may befall them.

I do not strike any claims yet without time for counsel to contact and make proper disclosure to all applicable trustees in bankruptcy. The trustees are potentially parties with interests on that issue. Moreover, I am not satisfied that even if these parties do not own the causes of action that they assert, or some of them, that the court is lacking a residual equitable jurisdiction to allow it to take the substance of the issues into account in assessing the overall balance of interests among the parties. I am not yet satisfied that either Kevin or Kathy owns the cottage 100% and I have almost no insight into how to weigh all the prior machinations and subterfuges in the balance. The [sic] must be much fuller disclosure, principally by Kevin, as to the actual flow of funds (including the Coxwell proceeds). Both parties need to show their sources and uses of funds and explain the real transactions.

[103] On April 15, 2021, counsel for Ms. Debren forwarded Justice Myers’ endorsement dated August 12, 2020 to Ms. Debren’s trustee in bankruptcy. Counsel asked the trustee in bankruptcy whether they would like to be provided with the court materials from the motion before Justice Myers.

[104] No response was received from the trustee in bankruptcy. Counsel for Ms. Debren sent a follow-up letter on June 6, 2023. On June 22, 2023, the trustee in bankruptcy responded as follows: “Please be advised that the trustee takes no position.”

[105] Counsel for Ms. Debren sent the following letter to the trustee in bankruptcy on November 8, 2023:

We have written to you a number of times regarding this matter and I apologize for writing again. As you know we are litigation counsel to Kathie (Katharina) Debren. We wrote to you on April 25, 2019, September 5, 2019, May 12, 2020, April 15, 2021 and June 6, 2023 regarding the bankruptcy of our client Kathie (Katharina Debren) around May 31, 2005. I am writing again out of an abundance of caution to ensure that the trustee’s position is clear for the trial of this action on December 11 to 15, 2023. As you know, the court has raised concerns in this matter (including at a summary judgment motion in 2020) that the cottage property at issue in this lawsuit was held in trust for our client, Kathie Debren, when she declared bankruptcy in 2005. As you also know, it was not considered an asset in Kathie’s bankruptcy. We reiterate that the trustee is welcome to attend the trial to take a position on this matter during the week of December 11 to 15, 2023. We are also available to discuss the matter at your convenience. We appreciate your attention.

[106] Following this letter, further communications were exchanged with the trustee in bankruptcy. Ultimately, the trustee in bankruptcy consented to Ms. Debren pursuing her claim with respect to the Wolf Circle Property provided that she kept the amount of $275,430.02 in trust after any sale of the property for payment to creditors in full, interest and trustee fees. Ms. Debren agrees to keep such funds in trust if there is a sale of the Wolf Circle Property.

15. Claims advanced by the parties

[107] In her Fresh as Amended Statement of Claim dated April 14, 2023, Ms. Debren seeks the following relief:

a. an order that Mr. Debren vacate the Wolf Circle Property; b. a declaration that she owns the Wolf Circle Property and is entitled to possession of the Wolf Circle Property; c. an order for leave to issue a writ of possession for the Wolf Circle Property in her favour and directing the Sheriff to enter, take possession and deliver up possession of the Wolf Circle Property to her; and d. damages of $250,000.00.

[108] In the alternative, Ms. Debren seeks relief with respect to the Coxwell Property in the event that she is not found to be the sole legal and beneficial owner of the Wolf Circle Property.

[109] Mr. Debren counterclaims against Ms. Debren. He seeks a declaratory order that he is the beneficial owner of the Wolf Circle Property, and a mandatory order that Ms. Debren transfer legal title to the Wolf Circle Property to him. In the alternative, Mr. Debren seeks a declaration that he possesses an equitable interest in the Wolf Circle Property on the basis that an implied, constructive and/or resulting trust exists entitling him to ownership of the Wolf Circle Property. In the further alternative, Mr. Debren seeks an order that he be repaid all expenses associated with the improvement and maintenance of the Wolf Circle Property in an amount to be determined prior to trial for unjust enrichment and/or quantum meruit.

[110] Mr. Debren also commenced a Third Party Claim against Montana Debren on November 28, 2018. The Third Party Claim is for:

a. contribution and indemnity for any damages and/or amounts for which Mr. Debren may be found liable to Ms. Debren; and b. special damages, the amount of which is not yet known but will be made available at or before trial.

B. Discussion

[111] I will first deal with Mr. Debren’s claims with respect to the Wolf Circle Property raised in his counterclaim. I will then discuss Ms. Debren’s claims and the Third Party Claim.

[112] Before turning to the parties’ claims, I wish to make a few comments regarding the parties’ credibility.

1. Credibility of the parties

[113] As stated above and as discussed further below, the credibility and reliability of Mr. Debren and Ms. Debren are problematic. In contrast, I have found Montana Debren to be a generally credible witness. These credibility findings have informed my assessment of the evidence in this case.

[114] Ms. Debren tried to downplay her role in and knowledge of all the wrongful conduct in which she and Mr. Debren were involved. She tried to blame Mr. Debren for all the shenanigans and fraudulent conduct. However, based on all of the evidence before me, I find that Ms. Debren was not that naive and that she was a knowing participant.

[115] Some of the explanations that Ms. Debren gave for her conduct (e.g., reasons to sell the Madonna Court Property at that particular time) did not make sense. Further, during her cross-examination, she changed some of the evidence that she had given in chief and acknowledged knowing and participating more than she had previously stated, thereby confirming her lack of candour. I also note that her evidence about financial matters and about paying for everything does not appear to be mathematically possible. In addition, I find that the scenario that she described with respect to the house flipping with her brother was not a realistic one with respect to the role allegedly played by Mr. Debren. Among other things, given the relationship between the parties, I find it very unlikely that Mr. Debren would have been paid separately for his work on the various houses. Finally, Ms. Debren often did not have a good memory of the events, and her evidence on points that were not in her favour – such as her engaging in social assistance fraud – was vague and unclear.

[116] Mr. Debren was a more candid witness than Ms. Debren with respect to the couple’s past wrongful conduct. However, he was evasive and undetailed with respect to more recent events and regarding his sources of income/funds. Further, some of his evidence and explanations did not make sense, including the alleged agreement that he said he reached with Ms. Debren at the time of their separation. Among other things, it would have made no sense for Ms. Debren to ask only for “what her brother got”, i.e., $125,000.00. In addition, Mr. Debren’s evidence that Ms. Lindqvist did not tell him about the action after being served with the Statement of Claim is completely unbelievable in light of the steps taken by Mr. Debren in the days following the service (including removing Ms. Lindqvist as a director of Kawagamajoe and transferring almost $500,000.00 to his mother). Mr. Debren also put forward a forged Shareholders’ Ledger for Montana Max. Finally, Mr. Debren’s general conduct, including his recent conduct dealing with Bell Canada, shows that he does not hesitate to lie and mislead when he thinks that it is in his interest to do so.

[117] I also note that despite the strong wording of Justice Myers’ endorsement, Mr. Debren did not make any effort to contact his trustees in bankruptcy and address the issues raised by Justice Myers. Ms. Debren’s counsel uses this point to argue that Ms. Debren is “better” than Mr. Debren as she contacted her trustee in bankruptcy and is trying to rectify her mistakes. While I agree that contacting Ms. Debren’s trustee in bankruptcy was the right thing to do, I do not accept that Ms. Debren did so because it was the right thing to do. In my view, she did so because it was in her interest to do so in the context of this litigation. I do not accept the argument that she is truly repentant for her past conduct.

[118] Montana Debren was straightforward and candid in his answers. He readily acknowledged his motivations and shortcomings. He generally had a good memory of the events. I accept his evidence.

2. Mr. Debren’s counterclaim – Claims with respect to the Wolf Circle Property

[119] At trial, Mr. Debren’s counsel acknowledged that Mr. Debren’s claims were in equity and not based on an alleged contract. I agree. The evidence before me does not establish the existence of a binding agreement between Ms. Debren and Mr. Debren.

i. No cause of action with respect to the purchase of the Wolf Circle Property

[120] I find that Mr. Debren has no cause of action with respect to the Wolf Circle Property based on anything that happened before November 21, 2004, i.e., the date of his discharge following his second bankruptcy.

[121] Section 71 of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (“BIA”) provides that on a bankruptcy order being made or an assignment being filed with an official receiver, a bankrupt ceases to have any capacity to dispose of or otherwise deal with their property, which immediately passes to and vests in the trustee named in the bankruptcy order or assignment. Section 67(1)(c) of the BIA provides that all property of the bankrupt at the date of the bankruptcy or that may be acquired by the bankrupt before their discharge is divisible among the bankrupt’s creditors. All after acquired assets vest in the trustee in bankruptcy for the benefit of the bankrupt’s creditors. See Lepage (Re), 2016 ONCA 403 at paras. 17-19.

[122] Once property is vested in the trustee in bankruptcy, it does not revert back to the bankrupt on discharge. See Solomon v. Education Fund Services Inc. at para. 17 (Ont. S.C.J.).

[123] Thus, any cause of action that arose prior to Mr. Debren’s discharge and that was known to him prior to his discharge vested in his trustee in bankruptcy, has not reverted to him and remains with his trustee in bankruptcy. Permitting Mr. Debren to proceed with such a cause of action and possibly recover monies that should have been for the benefit of his creditors would defeat the purpose of the provisions of the BIA. See Lichtenfeld v. Conifer Contracting Ltd. at paras. 25-26 (Ont. S.C.J.)

[124] In light of the foregoing, Mr. Debren has no cause of action with respect to any monetary contribution that he may have made to the purchase of the Wolf Circle Property in the summer of 2004 or with respect to any payments that he may have made in relation to the Wolf Circle Property (e.g., for the mortgage) prior to his discharge on November 21, 2004.

ii. No compensation with respect to mortgage payments and renovations

[125] This leaves Mr. Debren’s claims based on his contributions to the repayment of the mortgage and the renovations that he made. During his closing submissions, counsel for Mr. Debren referred to subsection 37(1) of the Conveyancing and Law of Property Act, R.S.O. 1990, c. C.34, which states:

Where a person makes lasting improvements on land under the belief that it is the person’s own, the person or the person’s assigns are entitled to a lien upon it to the extent of the amount by which its value is enhanced by the improvements, or are entitled or may be required to retain the land if the Superior Court of Justice is of opinion or requires that this should be done, according as may under all circumstances of the case be most just, making compensation for the land, if retained, as the court directs.

[126] In my view, this provision does not apply in this case as I am not satisfied that Mr. Debren honestly believed that the Wolf Circle Property was his own property. Mr. Debren knew that Montana Debren was the registered owner of the Wolf Circle Property and pretended to be Montana Debren on a number of occasions when dealing with the Wolf Circle Property. Further, Mr. Debren acknowledged that it was intended at the time of the purchase of the Wolf Circle Property that it would be an inheritance for both Montana and Cheyenne Debren. Mr. Debren also knew that both Montana Debren and Ms. Debren had made monetary contributions towards the Wolf Circle Property, and that they had unresolved claims. This is reflected in, among other things, the e-mail communications between Mr. Debren and Montana Debren in 2013, which also show that the claims in issue were not exclusively tied to the Coxwell Property. To the knowledge of Mr. Debren, these claims were never resolved as Ms. Debren refused the payment proposed by Mr. Debren after the sale of the Coxwell Property. Finally, Mr. Debren knew that he had failed to disclose his assets to his trustees in bankruptcy, including any alleged interest in the Wolf Circle Property and in the funds used to purchase it (i.e., the sale proceeds of the Madonna Court Property).

[127] Mr. Debren’s claims are principally based on unjust enrichment. Mr. Debren had the onus of proving the alleged unjust enrichment and its quantum on a reasonable preponderance of credible evidence, but he failed to do so. Evidence must always be sufficiently clear, convincing and cogent to satisfy the balance of probabilities test: see F.H. v. McDougall, 2008 SCC 53 at para. 46. Mr. Debren failed to prove the payments and contributions that he made to the Wolf Circle Property through appropriate, clear, convincing and cogent evidence. Any amount that this Court would come up with for such contributions would be speculative at best and nothing more than guess-work.

[128] I find that the following principles set out by the Court of Appeal in TMS Lighting Ltd. v. KJS Transport Inc., 2014 ONCA 1 at para. 61 in relation to damages similarly apply to Mr. Debren’ claim for unjust enrichment:

[61] It is also beyond controversy that a plaintiff bears the onus of proving his or her claimed loss and the quantum of associated damages on a reasonable preponderance of credible evidence. Further, as the trial judge recognized in this case, a trial judge is obliged to do his or her best to assess the damages suffered by a plaintiff on the available evidence even where difficulties in the quantification of damages render a precise mathematical calculation of a plaintiff’s loss uncertain or impossible. Mathematical exactitude in the calculation of damages is neither necessary nor realistic in many cases. The controlling principles were clearly expressed by Finlayson J.A. of this court in Martin v. Goldfarb at para. 75, leave to appeal to S.C.C. refused, [1998] S.C.C.A. No. 516:

I have concluded that it is a well established principle that where damages in a particular case are by their inherent nature difficult to assess, the court must do the best it can in the circumstances. That is not to say, however, that a litigant is relieved of his or her duty to prove the facts upon which the damages are estimated. The distinction drawn in the various authorities, as I see it, is that where the assessment is difficult because of the nature of the damage proved, the difficulty of assessment is no ground for refusing substantial damages even to the point of resorting to guess work. However, where the absence of evidence makes it impossible to assess damages, the litigant is entitled to nominal damages at best. [Emphasis added.]

[129] Thus, there is a difference between damages that are difficult to quantify due to their inherent nature and those that elude quantification due to the party’s failure to lead adequate evidence. See ACT Greenwood Ltd. v. Desjardins-McLeod, 2019 ONCA 158 at para. 26 and Paletta International Corporation v. Liberty Freezers London Ltd., 2021 ONCA 383 at para. 63.

[130] In this case, the nature of the contributions alleged by Mr. Debren – mortgage payments and renovations – is not such as to make their quantification difficult. Rather, this is a case where Mr. Debren’s contributions elude quantification because of his failure to lead adequate evidence with respect to both the alleged mortgage payments and the renovations.

[131] Mr. Debren’s statement that he put money in Montana Debren’s bank account that went to pay the mortgage on the Wolf Circle Property is unsubstantiated and not supported by any documentary evidence. It is also contrary to what was told to Montana Debren at the relevant time as to the source of the money, i.e., that it came from Ms. Debren. There is no admissible evidence before me as to Mr. Debren’s income at the relevant time. There is also no evidence before me as to the number of alleged payments, their frequency, their amounts, their source(s), etc. Based on the evidence before me, Mr. Debren has not established on the balance of probabilities that he contributed monies to the mortgage on the Wolf Circle Property, and certainly not a significant amount. Further, the evidence does not allow me to determine what approximate amount (or range of amounts) would have been contributed by Mr. Debren.

[132] As for the renovations, I am satisfied that renovations were made at the Wolf Circle Property while Mr. Debren was living there. Mr. Debren’s evidence in this regard is supported by pictures and the affidavit evidence of Mr. Richardson.

[133] However, the evidence of both enrichment and deprivation (two essential elements of the cause of action in unjust enrichment: see Moore v. Sweet, 2018 SCC 52 at para. 37) is completely inadequate. On the issue of enrichment, there is no admissible evidence before me with respect to the amount by which the value of the Wolf Circle Property may have been enhanced by the improvements /renovations.

[134] On the issue of deprivation, I do not have evidence that is sufficiently clear, credible convincing and cogent with respect to the costs of the renovations. The only invoice that was adduced in evidence has a date that is several months after the litigation was commenced and Ms. Lindqvist was served with the Statement of Claim. Unless there was a demonstrated and time-sensitive need for work to be done on the Wolf Circle Property after the litigation was commenced – and no such need has been established or suggested, I do not accept that Mr. Debren is entitled to compensation for any work done on the Wolf Circle Property while he knew that there was a dispute regarding the ownership of that property.

[135] In addition to the absence of invoice, no proof of payment (cheques, bank records, etc.) for anything has been provided. Further, Mr. Debren has acknowledged that he did not have to pay for some of the materials that he used for the renovations. There is also no evidence or suggestion that he paid the friends who came to assist him with the renovations. As for the time that Mr. Debren spent doing the renovations, I do not have credible and cogent evidence as to how much that time was worth at the relevant time.

[136] Given the state of the evidence, trying to determine the costs of the renovations and any increase in value as a result of the renovations would be an entirely speculative exercise. This is the case even though evidence could have been adduced on these issues.

[137] As stated above, where a claimant fails to adduce the necessary evidence and the resulting absence of evidence makes it impossible for the trial judge to assess damages, that claimant may only be entitled to nominal damages. However, nominal damages are not appropriate where the claimant has demonstrated a substantial loss, even if there is a lack of evidence on quantum: see Cassandro v. Glass, 2019 ONCA 654 at paras. 35 and 40. It is my view that, in this case, a substantial loss has not been demonstrated and that “any further inquiry into the quantum would be disproportionate given the low amounts of damages potentially recoverable”: see Armstrong v. Moore, 2020 ONCA 49 at para. 33. I come to this conclusion principally for three reasons:

a. First, the costs associated with additional discovery and an additional trial would likely exceed any amounts that Mr. Debren may be entitled to, especially in light of the second point below. b. Second, any amount owing to Mr. Debren in relation to the Wolf Circle Property would have to be set off against rent that Mr. Debren should have been paying while living at the Wolf Circle Property, at a minimum since May 2018 when Mr. Debren was asked to leave the Wolf Circle Property by the registered owner, Ms. Debren. There is no admissible evidence before me regarding the appropriate amount of rent that Mr. Debren should have been paying (the only evidence is inadmissible hearsay and opinion evidence). However, if there were to be a new trial to give Mr. Debren an opportunity to adduce better evidence on damages, it would only be fair to give Ms. Debren a similar opportunity to adduce better evidence on the issue of rent. More than six years of rent (at a minimum) would no doubt add up to a significant number. c. Third, the parties have already been given an opportunity by the Court to provide fuller disclosure, but they have not done so. In August 2020, more than three years before the trial, Justice Myers stated that there had to be “much fuller disclosure, principally by Kevin, as to the actual flow of funds”, and that “[b]oth parties need to show their sources and uses of funds and explain the real transactions.” Despite these judicial statements, Mr. Debren did not provide better disclosure and there is no reason that it would be different if he were given yet another chance to do so.

[138] In light of the foregoing, I conclude that Mr. Debren is only entitled to nominal damages/compensation for unjust enrichment. However, Ms. Debren is similarly entitled to a nominal amount for rent. This is the case in light of the principles discussed above: while the evidence of rent is inadequate, I am satisfied that rent would have been owing for at least six years. Thus, Ms. Debren is entitled to set off a nominal amount of rent against any nominal amount owing to Mr. Debren. Given this, I find that Mr. Debren is not entitled to any amount.

[139] I also note that Mr. Debren does not have a valid claim for quantum meruit with respect to the renovations. This is because there is no evidence before me that the renovations were made at the request, or with the encouragement or acquiescence, of Montana Debren and/or Ms. Debren. See Consulate Ventures Inc. v. Amico Contracting & Engineering (1992) Inc., 2007 ONCA 324 at paras. 98-99 and Third World Broadcasting Inc. v. Pakistan International Airlines, 2018 ONSC 7302 at paras. 39-41.

[140] Given my conclusion above, it is unnecessary to deal with the arguments advanced by Ms. Debren based on the clean hands doctrine.

[141] Accordingly, Mr. Debren’s counterclaim is dismissed.

3. Ms. Debren’s claims

[142] At trial, Ms. Debren’s counsel clarified that with respect to the main relief sought by Ms. Debren in her Fresh as Amended Statement of Claim, Ms. Debren is only seeking relief with respect to the Wolf Circle Property and is no longer seeking damages.

[143] At this point in time, Ms. Debren’s ownership of the Wolf Circle Property arises from the transfer of the property from Montana Debren to her in May 2018. Now that Mr. Debren’s claims with respect to the Wolf Circle Property have been dismissed, Ms. Debren’s ownership of the Wolf Circle Property (and, prior to May 2018, Montana Debren’s ownership of the Wolf Circle Property) is not disputed by any party (subject to the claim of Ms. Debren’s trustee in bankruptcy). Similarly, the transfer of the Wolf Circle Property from Montana Debren to Ms. Debren has not been attacked by anyone. Given this, I do not need to deal with the issue of whether Ms. Debren ever had an interest in the Wolf Circle Property prior to May 2018 and whether any such interest survived her bankruptcy or arose after her discharge.

[144] Since Ms. Debren is the owner of the Wolf Circle Property and Mr. Debren does not have any ownership interest in it, Ms. Debren is entitled to: an order that Mr. Debren vacate the Wolf Circle Property; a declaration that she is entitled to possession of the Wolf Circle Property; and an order for leave to issue a writ of possession for the Wolf Circle Property in her favour. Given the dismissal of Mr. Debren’s counterclaim, the outstanding “claim” by Ms. Debren’s trustee in bankruptcy, and the fact that Ms. Debren is the registered owner of the Wolf Circle Property, it is my view that is neither necessary nor appropriate to make a declaration that Ms. Debren owns the Wolf Circle Property.

[145] In light of the terms imposed by Ms. Debren’s trustee in bankruptcy with respect to her ability to pursue this action, I also make the following orders:

a. Ms. Debren is prohibited from selling or otherwise transferring the Wolf Circle Property for a consideration that will generate net proceeds of less than $280,000.00 without leave of the Court; and b. upon transfer of the Wolf Circle Property, Ms. Debren is to either: (i) have her lawyer keep in their trust account the amount of $275,430.02 from the net proceeds of the transfer until further direction by Ms. Debren’s trustee in bankruptcy; or (ii) pay $275,430.02 from the net proceeds of the transfer into court with notice to her trustee in bankruptcy.

[146] Given that this Court has rejected Mr. Debren’s claims with respect to the Wolf Circle Property, there is no need to deal with Ms. Debren’s claims advanced in the alternative with respect to the Coxwell Property.

4. Third Party Claim

[147] The main relief sought against Montana Debren in the Third Party Claim is contribution and indemnity for any damages and/or amounts for which Mr. Debren may be found liable to Ms. Debren. Given that I have not found Mr. Debren liable to pay damages or any other amount to Ms. Debren, there is no claim for contribution and indemnity.

[148] In addition to a claim for contribution and indemnity, the Third Party Claim includes a claim for “[s]pecial damages the amount of which is not yet known but which will be made available at or before trial”. Paragraphs 16-18 of the Third Party Claim specifically refer to the funds transferred to Montana Debren for Ms. Debren. Counsel for Mr. Debren confirmed at trial that Mr. Debren was seeking the return of these funds. It is not clear to me that this constitutes “special damages”, but I will deal with the request for the return for the funds since there is a basis for such request in the Third Party Claim.

[149] I accept that Mr. Debren took steps to have $130,507.00 sent to Montana Debren in December 2016 and that these funds were intended to be given to Ms. Debren. It is acknowledged by all parties that these funds came from the proceeds of sale of the Coxwell Property.

[150] While Mr. Debren may have been pulling the strings with respect to these funds, he has not established a personal right to these funds. Mr. Debren was not personally entitled to the proceeds of sale of the Coxwell Property. Any interest Mr. Debren may have had in the Coxwell Property vested in his trustees in bankruptcy. Further, at the time of the sale, the Coxwell Property was owned by Montana Max, which has three shareholders. I also note that the evidence shows that the $130,507.00 came from Kawagamajoe, not Mr. Debren personally. Neither Montana Max nor Kawagamajoe have brought a Third Party Claim as against Montana Debren.

[151] In light of the foregoing, I conclude that Mr. Debren has not established a personal right to the return of the $130,507.00 amount. [3] No other “special damages” as against Montana Debren have been particularized. [4]

[152] Accordingly, the Third Party Claim is dismissed.

C. Conclusion

[153] I make the following orders:

a. an order that Mr. Debren vacate the Wolf Circle Property; b. a declaration that Ms. Debren is entitled to possession of the Wolf Circle Property; c. an order for leave to issue a writ of possession for the Wolf Circle Property in favour of Ms. Debren; d. an order that Ms. Debren is prohibited from selling or otherwise transferring the Wolf Circle Property for a consideration that will generate net proceeds of less than $280,000.00 without leave of the Court; e. an order that upon transfer of the Wolf Circle Property, Ms. Debren is to either: (i) have her lawyer keep in their trust account the amount of $275,430.02 from the net proceeds of the transfer until further direction by Ms. Debren’s trustee in bankruptcy; or (ii) pay $275,430.02 from the net proceeds of the transfer into court with notice to her trustee in bankruptcy; f. an order dismissing Mr. Debren’s counterclaim; and g. an order dismissing Mr. Debren’s Third Party Claim.

[154] If costs cannot be agreed upon, Ms. Debren and Montana Debren shall deliver submissions of not more than four pages (double-spaced), excluding the bill of costs, by July 29, 2024. Mr. Debren shall deliver his responding submissions (with the same page limit) by August 12, 2024. The submissions of all parties shall also be sent to my assistant by e-mail and uploaded onto CaseLines.

Vermette J. Released: July 15, 2024

[1] There is a second Shareholders’ Ledger that was produced in this litigation, but that was never provided to Montana Debren at the relevant time. In addition to the shareholders mentioned above, the second Shareholders’ Ledger includes an additional shareholder, Nina Maass (Mr. Debren’s mother). It states that Nina Maass acquired 10,000 shares on March 21, 2012. Montana Debren’s evidence is that Nina Maass’ name was not included in any of the documents that he received with respect to Montana Max, and she was never mentioned to him as being a shareholder. I also note that Nina Maass being issued 10,000 shares is completely inconsistent with Mr. Debren’s e-mail dated February 14, 2012. During his closing submissions, counsel for Mr. Debren stated that this second Shareholders’ Ledger is not relied upon in any way and is of no effect. Had this concession not been made, I would have found that the second Shareholders’ Ledger was a forged document based, among other things, on the communications between the parties at the relevant time, the handwriting on the two Shareholders’ Ledgers, and the evidence of both Mr. Debren and Montana Debren.

[2] Mr. Debren stated at trial that his mother changed her will and, in the end, he was not the sole beneficiary of her estate. This evidence, which is not substantiated, is contrary to a deemed admission in the Request to Admit. I also note that Mr. Debren stated in an e-mail that he sent to Ms. Debren on October 4, 2017 that he had a power of attorney over his mother’s health and finances, and that he was the trustee and sole beneficiary of his mother’s estate.

[3] Despite this, I note that Montana Debren has acknowledged that he was not personally entitled to the $130,507.00 payment that was sent to him in December 2016 for the purpose of giving to Ms. Debren. Knowing this, Montana Debren has put aside $130,000.00 which is available in his bank account. Now that the issues between the parties have been adjudicated upon by the Court, Montana Debren will have to consider what to do with this amount, even though there is no proper claim against Montana Debren for this amount before this Court.

[4] While the submissions on this point were not clear, if Mr. Debren was making any claim as against Montana Debren in relation to the $100,000.00 loan taken by Montana Max mostly for the benefit of Montana Debren, Mr. Debren has also failed to establish a personal right to damages in relation to such loan.