Court of Appeal for Ontario

Date: 2017-02-24 Docket: C60815

Judges: Strathy C.J.O., Laskin and Trotter JJ.A.

Between

Linda Gaye Keresturi Applicant (Appellant)

and

Lewis William Keresturi Respondent (Respondent)

Counsel

Gary Joseph and Ryan Kniznik, for the appellant

Deborah L. Ditchfield, for the respondent

Heard: February 22, 2017

On appeal from: The order of Justice R. John Harper of the Superior Court of Justice, dated June 26, 2015, with reasons reported at 2015 ONSC 3565, and from the costs order, dated October 30, 2015.

Endorsement

Overview

[1] The parties, then in their late 60s and of relatively modest means, went to court to resolve the outstanding financial issues arising from their 40-year marriage. After protracted litigation and a ten-day trial, the judge found in favour of the husband on most issues. He ordered a $140,000 equalization payment to be paid by the wife, dismissed the wife's claim for an unequal division of net family property and ordered costs of $109,248 to be paid by the wife.

[2] We dismissed the wife's appeal with reasons to follow. These reasons address the three grounds of appeal advanced before us.

Rejection of Expert Evidence

[3] The appellant contends that the trial judge's rejection of the evidence of her expert valuator, based on the expert's alleged lack of independence, was tainted by error because the trial judge failed to analyze whether the nature and extent of the expert's connection to the litigation or parties rendered him unable to give fair and independent opinion evidence: see White Burgess Langille Inman v. Abbott and Haliburton Co., 2015 SCC 23, [2015] 2 S.C.R. 182, at para. 49. While the appellant concedes that the trial judge did not exclude the expert's opinion, she says that he effectively did so by giving it no weight.

[4] The issue arose in connection with the valuation of nine pieces of farm equipment owned by the husband. The expert valuators called by the parties gave starkly different opinions. The appellant's expert gave a value of $257,500; whereas the respondent's expert put the value at $83,800.

[5] The trial judge expressed concerns about the neutrality of the appellant's expert. Her expert had been previously retained by the respondent's bank in connection with proceedings against the respondent. As well, the expert's business partner was married to the appellant's sister.

[6] The trial judge referred to White Burgess and admitted the evidence of the appellant's expert. Having done so, he preferred the evidence of the respondent's expert, who gave a thorough and reasoned explanation for his analysis of values. The trial judge's reasons for giving little weight to the appellant's expert included the expert's assumption that the equipment was in good condition, his failure to personally inspect the equipment, and his use of insured values for some of the equipment. In contrast, the respondent's valuator was personally familiar with much of the equipment, and was of the view that many items were old, poorly maintained, and "money pits". In the final analysis, the trial judge accepted the evidence of the respondent's expert in its entirety and gave no weight to the evidence of the appellant's expert.

[7] The weight to be given to the experts' opinions was wholly within the province of the trial judge. While he might have valued the equipment based on some amalgam of their valuations, he was not required to do so and he was perfectly entitled to wholly prefer the evidence of one expert to the evidence of the other. He gave cogent reasons for doing so and we see no error in his decision.

Net Family Property

[8] The appellant argues that the trial judge erred in failing to award her an unequal share of net family property ("NFP") under s. 5(6) of the Family Law Act, R.S.O. 1990, c. F.3 ("FLA"), based on the husband's intentional or reckless depletion of his net family property, largely as a result of his bankruptcy some 30 years earlier in the late 1980s. She claims that this should be regarded as "intentional or reckless depletion" of the respondent's NFP under s. 5(6)(d) of the FLA, so as to make equal division of NFP unconscionable. She also claims that the trial judge erred in principle by undertaking the s. 5(6) analysis before quantifying the amount of the equalization payment. The determination of whether the payment would be "unconscionable" under s. 5(6) can only be made once the amount of the payment has been quantified: Frick v. Frick, 2016 ONCA 799, 132 O.R. (3d) 321, at para. 33.

[9] We do not accept either submission. The trial judge addressed the appellant's assertion that the respondent had recklessly depleted his NFP. He found that the respondent had not intentionally caused the farming losses that resulted in his bankruptcy. A substantial part of those losses were due to a "devastating crop failure" caused by weather in the mid-1980s, which made it impossible for the respondent to keep up his payments to the bank and resulted in his hospitalization for major depression. Lengthy litigation ensued with the bank. The judge concluded that it was not possible, in the circumstances, to second guess the reasonableness of the respondent's actions. The appellant bore the onus of proof on this issue and she simply did not discharge the burden upon her to prove recklessness.

[10] While we acknowledge that the trial judge did not strictly follow the correct approach to the s. 5(6) analysis, we are not satisfied that his failure to do so affected the outcome. The financial issues were not complex. On the one hand, the appellant held title to the matrimonial home, which had equity of approximately $250,000. On the other hand, the respondent owned farm equipment, valued by his expert appraiser at $83,800. It was apparent that if his appraiser's expert opinion was accepted, as it was, there would be a substantial equalization payment from the appellant to the respondent, absent a finding of unconscionability under s. 5(6).

Costs

[11] The appellant says the trial judge's award of costs of $109,248 to the respondent was punitive, based on an error in principle, and plainly wrong.

[12] We do not give effect to this submission. The trial judge gave separate reasons on costs. He considered the relevant principles, including those set out in rule 24 of the Family Law Rules, O. Reg. 114/99 as discussed in this court's decision in Serra v. Serra, 2009 ONCA 395, 66 R.F.L. (6th) 40. In concluding that the respondent was entitled to full recovery of his costs, the trial judge found, among other things, that: (a) the respondent had served and filed two reasonable offers of settlement prior to trial; (b) the appellant had protracted the trial by taking unreasonable and unattainable positions on most of the issues; (c) the appellant failed to agree to facts that should have been agreed to, thereby requiring "massive preparation of documentary evidence"; and (d) the appellant's conduct increased the costs of litigation. These conclusions were available to him on the record.

[13] While the costs were substantial, the appellant has identified no error in principle in the exercise of the trial judge's discretion and we cannot say that the award is plainly wrong: see Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303, at para. 27.

Disposition

[14] For these reasons, the appeal is dismissed with costs to the respondent fixed at $10,000, inclusive of disbursements and all applicable taxes.

"G.R. Strathy C.J.O."

"John Laskin J.A."

"G.T. Trotter J.A."