ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: FS-10-70885-00
DATE: 2012 -09-18

B E T W E E N:

Ali Pirhosseinlou

Daman S. Aujla, for the Applicant

Applicant

• and -

Ensi Pirhosseinlou

Archana Medhekar, for the Respondent

Respondent

HEARD: Trial May 23, 24, 25, 30, 31, June 1, 4, 5, 6, 7, 2012

REASONS FOR JUDGMENT

Justice M.J. Donohue

Overview

1The parties sought a divorce and a division of the net family property. Mrs. Ensi Pirhosseinlou requested an order for spousal support. The issues of child support, custody and access were severed from this trial as the parties were confident that they would be able to resolve them between themselves.

2Throughout the trial, the parties were referred to as Ensi and Ali. Accordingly, I shall do so in this judgment.

3Ali was born in Iran. He came to Canada and studied to be an aircraft engineer. He obtained a position with Air Canada. He dated Rita Battison for a number of years but broke off with her as he wished to choose a wife from Iran. In 1994, he married Ensi in Iran. They had two children. Rita remained an intimate friend of the family. In 2000, Ali and Rita began on-line trading using credit from a number of credit cards and bank loans.

4In March of 2008, the family was on a cruise where they had a serious fight. On their return home, Ensi left to live with her sister. Ensi returned briefly to live at the matrimonial home in May 2008 and slept in the basement. On June 25, 2008, there was another fight and the police were called. Ensi was taken to a women's shelter. The parties have not reconciled.

Issues

5The issues in this case are:

a) What is the appropriate value of the vehicles and household items as family assets at the date of separation?

b) What debts can be claimed by Ali?

(i) A loan of $600,000.00 from Rita Battison, a family friend;

(ii) Approximately 27 credit card debts;

(iii) A Ministry of Environment fine.

c) Should Ensi be able to have an unequal division of net family property claiming reckless depletion of family property as a result of Ali's involvement in on-line stock trading?

d) May Ali claim reimbursement for half the mortgage principal that he has paid since the date of separation? May Ensi make a corresponding claim for occupation rent for him staying in their three bedroom house these past four years?

e) What reimbursement should be considered on Ensi's credit cards after separation?

(i) Ali claims reimbursement of $2,890.00 in payments he made after separation on Ensi's credit cards, TD Bank Green #6437 and MBNA #5859.

(ii) Ensi seeks reimbursement of $11,000.00 on the TD Bank Green #6437 that was incurred after separation by Ali.

f) May Ensi receive past and future spousal support, and if so, at what amount?

(a) What is the appropriate value of vehicles and household items as family assets at the date of separation?

6The matrimonial home sold June 1, 2012 in the midst of this trial. The net recovery after payment of the Bank of Montreal mortgage, real estate commission and legal fees is $329,903.46. This is not in dispute. Both parties shall be entitled to share this amount equally.

7The rugs and furniture are valued by Ensi at $25,000.00. Ali did not provide evidence of the total value of rugs and furniture. Ali submits that Ensi’s share of the rugs and furniture has been given to her and he retains tools of $3,000.00.

(i) Rugs

8Both parties gave evidence on the estimated value of the six Persian rugs. Ali estimated that the rugs he purchased had a value of approximately $4,100.00. He left Ensi with the two small rugs which he valued at $50.00 each. Ensi suggests all the rugs are worth $10,900.00 based on her discussions with salesmen of such rugs. This is hearsay and cannot be relied upon. Ali gave evidence that he sold rugs at a garage sale for $1,200.00. I accept that he has not shared the four more valuable rugs equally with Ensi. The party that claims an asset must prove the value. Ensi has not provided any reliable appraisal to show they are valued greater than Ali has claimed. I accept that Ali kept rugs valued at $4,000.00 and gave Ensi rugs valued at $100.00.

(ii) Furniture

9When the house sold in the middle of trial, Ensi testified as to what Ali left for her. From a household of furniture, Ali left her the dining room set, two accent chairs, two cabinets, one television and two marble columns. Ali was not called to give reply evidence to the contrary. Ensi valued these items at $2,550.00 out of a total estimate of household furniture of $7,500.00. I find that Ali has the balance of the household goods of $4,950.00.

10I find that Ali has tools, rugs and household goods totalling $11,950.00. Ensi has $2,350.00 worth of rugs and household goods.

(iii) Vehicles

11It was agreed that Ali had three vehicles at the valuation date being a Chrysler ($600.00), a Mercedes ($7,500.00) and a Hummer which Ali valued at $15,000.00. He had purchased the Hummer, used, for $30,000.00 USD only seven months earlier. Neither party provided the court with evidence as to the value of such a vehicle other than their own testimony. Ali discounted its value by 50% due to “gas prices increasing”. I have no reliable evidence to devalue the asset to such an extent in so short a timeframe. I accept Ensi’s estimate that it reasonably had a value of $25,000.00 as of the valuation date.

12I find that Ali had vehicles valued at $33,100.00 at the valuation date and Ensi had none.

(iv) Financial assets

13The documentary evidence shows that the parties had a balance in their joint bank account of $1,620.00 ($810.00 each) and there was an RRSP in Ali's name of $397.12.

14The parties have agreed to an equal division of the pension valued at $147,278.00. I have not included it in the net family property as it will not affect the calculations. I require the parties to file a consent order or future submissions regarding the terms of the division of the pension as set out at the end of this judgment.

(v) E-trade stocks

15There were E-trade stocks the value of which is disputed. Ali claimed he held $2,380.00 as of the valuation date. On cross-examination, he admitted there were 68,000 shares missing from his accounting. We have evidence that the shares were selling at 13 cents in July 2008. This would add an additional $8,840.00 to his stock holdings.

16I find that, at valuation date, Ali held financial assets and E-trade stocks in the amount of $12,427.12. Ensi held a bank account balance of $810.00.

(b) What debts can be claimed by Ali against the family assets?

(i) Loan from Rita Battison

17This history of Rita Battison’s relationship with Ali and Ensi is not disputed. Ali met Rita in 1986 at the CN Tower and they were involved as boyfriend and girlfriend for four years. From 1988 to 1990, Ali ran a car dealership and mechanics shop. Rita worked for free helping as a receptionist.

18Ali broke off his romantic relationship with Rita in 1991 as it was his intention to return home to Iran to choose an Iranian bride. They remained close friends and were like brother and sister thereafter. Rita continued to be an intimate family friend.

19On Ensi's arrival in Canada as a bride, Rita arranged a limousine to take the couple to their hotel. The couple had a Caribbean cruise for their honeymoon and Rita came along to take photographs and video. Ensi's English was not good at first and she did not drive. Rita took her shopping and spent a lot of time with the couple.

20In 1997, Ali and Ensi purchased their first home at 4337 Jenkins Crescent; Rita paid approximately $2,000.00 toward the down payment of $10,000.00 and was on title as well. She was removed from title in 2000 when she and her brother purchased a condo in Toronto.

21Rita still spent her weekends and vacations with the Pirhosseinlou family. She kept clothes in the guest room.

22In 2000, Ali and Rita each opened Bank of Montreal online trading accounts to trade in stocks. Ali traded for both of them. Ali and Rita had long had a joint bank account and this was used for their financial dealings. Ali and Rita also had joint credit cards. Neither had training or advice on trading in the stock market.

23Ali and Ensi moved from Jenkins Crescent to a house on Spinnaker Drive and then in 2006 to the matrimonial home at 1336 Mississauga Road. Rita continued to spend her weekends with Ali and Ensi.

24Both Ali and Rita testified that Ali and Ensi owed Rita either $400,000.00 or $600,000.00 that she loaned them over the 13 year marriage. Ensi testified that she never knew of any such loan and denied it existed. There is no written agreement regarding any of these funds. Ali and Rita said it was “understood”. There is no demand letter or verbal demand for repayment made during the marriage. In 2009 Rita sent an email after the separation (June 25, 2008) saying she could not help them anymore and asked that they pay as best they could. Rita had a lawyer send a demand letter on May 20, 2010 with a demand for $600,000.00 or she would seek legal action in the courts. No action has been filed.

25Rita suggests that the loan has increased now to $700,000.00 as she has continued to give money to Ali. She is on good terms with Ali. She goes to his house to this day to help him and do his accounting.

26When Rita's parents passed away, she had $30,000.00 in a GIC from her share of the inheritance with her brothers. She testified that, from that money, she contributed the $2,000.00 to the parties’ down payment of their first house on Jenkins. This was the reason she was on title. She considered it an investment and felt this contribution entitled her to a one-third share in the equity of the home. Rita stated that she agreed to be removed from title, that her money was never returned to her, and that it was understood that she would continue to share one third in the equity of the parties' future houses. The evidence was not clear from either her or Ali whether they were suggesting this one third of the equity was in addition to her $600,000.00 loan or part of it.

27Extensive evidence was given to show that money has gone from Rita’s personal bank account to a bank account that she shares with Ali and then to Ali's account that he shares jointly with Ensi. Rita’s bank statements and credit card statements showed a mailing address of the parties' matrimonial home. Rita and Ali both testified that the accounting records were so complicated that they had no idea how to demonstrate their calculations. Ali said it was all a “guesstimate”.

28Rita went through some of the records and calculated each year what she thought she had loaned to Ali. One example was for the year 2004 when she suggested that she had loaned $46,430.00. Her evidence was that she began working at CGU Insurance in 2001 for roughly $30,000.00 and her income increased about 2 - 4% each year. Her calculations were that, in 2004, she loaned the parties $46,430.00. That would be greater than her gross salary at that time. No reasonable explanation was given for what resources she had to loan such sums.

29The documentary evidence shows that four of her five credit cards were paid down to nil or low credit balance within days of the date of separation. The evidence is uncontradicted that Ali made the credit card payments for all the cards in their names. There was no forensic investigation done of these ten years of transactions. The totality of the evidence points to Rita and Ali participating jointly in e-trading, sharing gains and losses and liabilities.

30Rita had keys to all three matrimonial houses where the parties lived. At times, she was insured on one of Ali's vehicles. She opened the mail and marked the credit card payment dates down on the calendar as instructed by Ali. She kept track of credit card payments for the three of them as funds needed to be moved from card to card to save their credit ratings. She said she left blank cheques with her signature on them to be used by the parties. Despite being owed, to this day she confirms her credit rating is good as she makes all her minimum payments.

31I do not find this evidence credible in any way. I accept Ensi's evidence that she was not aware of any “understanding” of Rita's loans or investment in their home. I consider it unreasonable for Rita to suggest that her $2,000.00 contribution to the purchase of the first house would compute to a one third interest in the equity of that house and the subsequent two houses. I find that it cannot be determined from the records what funds Rita might have given or loaned to the parties. I find that, as Rita took no steps to document or enforce the loan, her behaviour resembles a family member gifting funds that she truly does not seek to be repaid. I do not accept this proposed debt on Ali's Net Family Property Statement.

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