ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 6161/10

DATE: 2012-10-15

BETWEEN:

CATHERINE THERESA URQUHART

Applicant

– and –

WILLIAM PATRICK URQUHART

Respondent

D. John Kirby, Counsel for the Applicant

George F. McFadyen, Counsel for the Respondent

HEARD: September 7 and 10, 2012

DESOTTI, J.

A. The Facts

[1] The parties were married on May 29th, 2004 and separated on October 28th, 2008 after an argument over the expenses incurred by applicant’s son’s use or misuse of a cell phone. Although the parties lived under the same roof until the applicant purchased a home in June of 2009, I accept the evidence of the respondent, husband, that the applicant and he were living separate and apart under the same roof effective as of October of 2008. She slept in the master bedroom and he slept in the other bedroom.

[2] I note that the applicant and a number of witnesses affirmed that the applicant was looking for a home in early January of 2009 and perhaps looked at her friend’s son’s home even earlier than the January time frame. Nevertheless, because this marriage was less than five years and a second marriage for both parties, I have been asked to consider whether the stark calculations of the net family property should be modified and reduced because of the inequities of the NFP division pursuant to section 5 (6) (c),(d), (e) and (h) of the Family law Act.

[3] This question posed by counsel for the respondent husband seems attractive on its face but in the analysis of the issue, that query or consideration has nothing to do with the reality of the parties’ circumstances before me. The better question is, can a parties depletion of, dissipation of, or her inexplicable loss or concealment of a significant cash asset in a outrageously short period of time cause me to impute a sum that should have been present at the time that the parties separated as a Valuation Day asset of the improvident party?

[4] In this sense, I note that the matrimonial home, which was purchased by the respondent prior to marriage in the amount of $220,000.00 and for which he chose to place in joint names on July 15th, 2005, as per the persistent request by the applicant wife, is now valued, for the purpose of determining net family property, in the amount of $271,000.00.

[5] The applicant wife, whose home was destroyed by fire just days before the marriage, received from her insurers a significant amount of monies for loss of her possessions and then after the home was rebuilt and sold, a further significant amount of monies from the sale of the home.

[6] The applicant received some $83,000.00 for the home’s contents, and approximately net $90,000.00 from the proceeds of the sale of the home. The applicant has established that she provided two sums of $5,000.00 to her two children and another loan of $4,000.00. She also purchased a motor vehicle for $25,000.00, which was later refinanced and paid $5,000.00 towards the purchase of windows for the home and approximately $200.00 for paint for some of the rooms in the home.

[7] She also purchased some furniture, which the respondent indicates was approximately $1,300.00 for a glass curio cabinet, $3,200.00 for two love seats and $5,000.00 for a bedroom suite and lamps.

[8] I find as a fact that the respondent husband paid for all of the expenses of the home including taxes and groceries and put on a new steel roof in the amount of$15,000.00; paved the driveway for $7,000.00; a tool shed for $2,500.00; a new dock ($13,000.00); paid the balance of the windows in the amount of $2,600.00; paid $200.00 for his wife’s painting efforts; paid for the wooden floors, and paid for a built in stove and dishwasher.

[9] In addition, he also rebuilt the chimney in the amount of $750.00; paved the driveway for $7,000.00; paid for new hardwood floors in the amount of $1,100.00; built a new tool shed for $2,500.00; built a Tiki hut in the amount of $6,000.00; blew in insulation in the attic in the amount of $550.00 and put in two stairs and a swing ladder onto the dock in the amount of $300.00 and $1,100.00 respectively. He also provided his wife with $5,000.00 just prior to their trip to Ireland as he did not want her to look for work prior to this trip.

[10] When the applicant finally found a home to move into after the parties had separated, the respondent husband provided her with a down payment of $20,000.00 to be applied towards anything owing in the division of net family property, and $750.00 per month or presently $12,500.00 again to be determined by this court as either a spousal support payment or a sum of monies again to be applied towards any money owing by way of a net family property payment.

[11] Finally, the respondent paid off the applicant’s credit card in the amount of $2,181.00, loaned her $800.00 to start up a ring business that never got off the ground and he also paid the cost of the preparation of the parties’ income taxes.

[12] The Applicant indicated that she provided $60,000.00 towards the renovations of the home but although she has all her TD bank records, she has not and cannot demonstrate any of those expenses. Most importantly, she indicates that she used all of her monies over the past four and a half years as life style expenses.

[13] The respondent is and was concerned that the applicant regularly attended at the Casino and may have spent her money at that location. Although the applicant does acknowledge that she attended at the Casino with her mother, the applicant denies the assertion that she inappropriately dissipated these funds. However, the applicant cannot account for this extraordinary expenditure of these monies and frankly her counsel made no effort to try and account for her life style expenditures as an explanation.

[14] Looking at the evidence of actual expenditures by the wife on renovations, furniture, gifts, her motor vehicle, and loans to her children, I find that the sum of $48,700.00 was spent by the applicant. Assuming that she also spent some monies on clothing and meals outside the home, perhaps this can account for another $15,000.00 or $20,000.00.

[15] Even with this significant assumption and the actual expenditures reflected in the furniture and renovations, this does not account for in excess of $90,000.00 in net proceeds from her home and the $83,500.00 value of the contents. As I previously indicated, during the course of this trial, there has been no effort to account for this dissipation of financial resources, although I infer that counsel for the applicant would have been most aware that this concern was at the forefront of the concern raised by counsel for the respondent. Nevertheless, the money is apparently no longer available but where it has gone is a mystery to everyone.

B. Analysis

[16] In reviewing the N.F.P., there is an obvious anomaly in the division of assets, with the applicant about to receive a windfall either based on the division of the value of the matrimonial home in the amount of $135,500.00 or the mandated sale of the matrimonial home with the net proceeds after certain deductions divided equally.

[17] I reviewed carefully the N.F.P. statements of both parties and accept most of the values as assigned by the counsel for the respondent. However, I have assigned a sum of $135,500.00 on the applicant’s side of the N.F.P. to reflect her joint interest in the property. This amount based on the applicant’s actual gifted ownership of the property must be placed on her side of the ledger.

[18] Most importantly, given the fact that the respondent has been only relying on his retained earnings accumulated in his former business in order to sustain himself, I find with little difficulty that his payment to his wife of the sum of $750.00 per month that was left for determination by the trial judge was not spousal support but a lump sum payment towards whatever sum is determined to be payable from the respondent to the applicant by way of an equalization payment.

[19] There are some differences in the values of the motor vehicles and the household goods and furniture but excepting for a difference of approximately $20.00 on the applicant’s Lambton Financial bank account ($1,260.00 versus $1,280.00), the only major differences are the car loan of the applicant of $14,600.00 on the date of separation, which I do accept, and the value of the 1997 Pontiac of the applicant of $9,000.00, of which there is no evidence supporting this asset on the date of marriage and thus do not accept.

[20] The applicant has provided supporting evidence of her two bank accounts on the date of marriage of $121.14 with the TD bank and the sum of $4,697.49 with Lambton Financial Credit Union. I will not deal with the other debts and liabilities of the applicant on the date of marriage because eventually the home that was destroyed was rebuilt and sold with any liabilities discharged from the net proceeds.

[21] In reviewing then the N.F.P. of the respondent with the aforementioned changes, I would put the following on the respondent‘s asset side on Valuation Day:

½ interest in the matrimonial home $135,500.00

Furniture $5,000.00

Dodge Caravan $12,000.00

Royal Bank $2,332.00

RBC RRSP $189,413.00

RBC GIC $41,000.00

Corporate Account 487676 Ontario Ltd. $155,973.00

Total Value of Property on Valuation Day $543,218.00

Debts on Valuation Day (Tax on RRSP of 25%

on $189,413.00) $47,353.00

Total Debts $47,353.00

[22] Other than the matrimonial home, the net value on the date of marriage of property after deducting debts or other liabilities on the date of marriage (this excludes those debts relating directly to the purchase of or significant improvement to the property) as follows:

Furniture $40,000.00

Dodge Caravan $3,800.00

RBC chequing account $9,571.00

RBC RRSP $164,894.00

RBC GIC $30,000.00

Corporate Account $421,747.00

Total $670,012.00

Tax on RBC RRSP of 25 % on $164,894.00 $25,000.00

Total of Net Property owned on date of marriage $628,789.00

Total of Debts and Liabilities on Valuation Day $47,353.00

Totals of V-Day Debts and Liabilities + Property

owned on date of marriage $676,142.00

[23] Net Family Property is the Total Value of Property on Valuation day ($543,218.00) minus the Total Valuation day Debts and Liabilities + Property Owned on the Date of Marriage ($676,142.00), which equals a minus value or zero.

[24] With respect to the applicant wife, the most significant problem occurred three days prior to her marriage when her own and all its contents were destroyed in a fire. Each of the parties has treated this situation differently in their assessment of the applicant’s net worth prior to marriage.

[25] The respondent has placed a value of $68,880.00 as insurance proceeds on the applicant’s side of the equation and placed the entire value of the matrimonial home on his client’s side of the equation. Regardless of whether I find any circumstances that would attract either the consideration of section 5 (6) (c), (d), (e) or subsection (h), as previously stated, I do not agree that the value of the matrimonial home should be wholly on the respondent’s side of the equation nor do I agree that the applicant’s net value in the home and contents were merely the $68,880.00 as stated in the respondent’s N.F.P.

[26] The applicant on the other hand used an inflated value for the matrimonial home and then placed half of this inflated value ($187,500.00) on the applicant’s asset side at valuation day, then counsel valued the lot separately at $40,000.00, the insurance proceeds to rebuild the home at $110,058.15 and the contents of the household contents destroyed in the fire at $73,414.00. In addition at Tab 10 of the applicant’s N.F.P., there is a further payment to the applicant of $20,000.00 as expenses even though three days after the fire, she was living with the respondent at his residence and/or on the parties’ honeymoon.

[27] Furthermore, and contrary to what is indicated in the N.F.P. of the applicant, Tab 10 indicates that the payment for the contents of the home was not $73,414.85 but $83,503.32 plus the $20,000.00 in living expenses and the building payment of $108.148.00 and not $110,000.00. In addition, there was both a mortgage at the time of marriage on the property of $49,020.00 and an outstanding loan at Lambton Financial Credit union of $27,550.75.

[28] In returning to the values and debts at the time of marriage of the applicant, I think the fairest way of assessing the value of the assets of the applicant is to consider the insurance proceeds as an inchoate asset that was triggered by the fire that destroyed the home. The actual recovered value or asset was the net proceeds of the sale of the home or $90,000.00 plus the value paid to the applicant for its contents or $83,503.00 plus an additional $20,000.00 in expenses occurred.

[29] I am not sure whether the outstanding loan at the Lambton Financial Credit Union was paid out of these total net proceeds but infer that it was based on what I see that was present at Tab 12 of the applicant’s N.F.P., which seems to indicate and outstanding balance to the Credit Union of $27,550.75 at the date of the marriage irrespective of the outstanding mortgage of $49,020.00.

[30] If I am right in that determination, then from the total monies received from the applicant’s insurer of $193,503.00 [$90,000.00 (net after the discharge of the mortgage of $49,020.00) + $83,503.00 (contents)+ $20,000.00 (expenses)] we would deduct $27,550.00 as the outstanding loan with the Credit Union leaving a balance of $165,953.00 as a net sum received from the eventual sale of her home, her loss of contents in the home, the discharge of the mortgage and the expenses provided to her after the fire.

[31] To be as fair as I possibly can be, I am not prepared to consider the $20,000.00 in expenses received by the applicant spouse from the insurer as part of the net proceeds from the fire loss. Undoubtedly, she was provided these expense monies to replace many assets lost in the fire and I would infer that she did not receipt those expenditures.

[32] In addition, she did say she had to replace clothes and other articles and there is no real inventory of what was replaced. From this sum of $165,953.00, I will thus deduct the sum of $20,000.00 leaving a balance of $145,953.00 as the applicant’s net asset at the date of marriage.

[33] Turning now to the applicant’s N.F.P. and using the aforementioned net figure as the value of the applicant’s assets at Valuation Day:

Matrimonial home $135,500.00

Furniture (I accept this value as reflected in the

respondent’s N.F.P.) $2,500.00

Dodge Magnum (I accept the applicant’s value of this

motor vehicle, which coincidentally is the same value

that I fixed for the respondent’s Dodge Caravan) $12,000.00

Chequing Account TD Bank $1,260.00

Total Net Value of Property Owned at Valuation Day $151,260.00

Debts of Valuation Day

Car Loan $14,600.00

Total Debts on Valuation Day $14,600.00

Net Value of Property on Date of Marriage

Net Cash from Insurance Proceeds and the Sale of

Property on Gibson lane $145,953.00

($165,953.00 - $20,000.00 in expenses received from insurer)

Debts and other Liabilities $14,600.00

Total Value of Excluded Property $160,553.00

[34] Net Family property is the Total Value of Property on Valuation Day ($151,260.00) minus the Total Valuation Day Debts and Liabilities + Property Owned on the Date of Marriage ($160,553.00), which equals a minus value or zero.

[35] In choosing to value the inchoate insurance proceeds of the applicant after the fire destroyed her home and contents and then the net proceeds of the ultimate sale of the Gibson Lane property thereafter as pre-marriage assets, I concluded that this was a clearer way of determining the net worth of the applicant’s assets prior to marriage.

[36] In any event, the end result of this approach is the same zero value. Most importantly, even if I am wrong in this approach, the home that existed some three days prior to the marriage was rebuilt and then sold. I do not in those circumstances feel that it would be appropriate to add the building replacement value as an asset and then the lot of $40,000.00 as separate and distinct value as counsel for the applicant has done in his N.F.P.

[37] The value of the home and lot was better determined in my view, by the eventual sale of this property and its eventual net proceeds. While I am unable to determine why the pre-marriage value was approached in this fashion by counsel for the applicant, obviously, this meant in the final analysis of his filed N.F.P. that the respondent would receive $13,219.72 as his equalization payment after the value of the matrimonial home was stated to be at $375,000.00 and the applicant’s share to be at $187,500.00.

[38] Both counsel determined, although using different values, that the respondent’s N.F.P. was zero but placed different values with respect to certain assets and liabilities and in particular the value of the home and the respective interests in same. The applicant’s zero determination by the court does not result in any resolution of the matter save and except to magnify net effect of providing the applicant her half interest in the matrimonial home.

[39] Again for the purpose of this trial and based on the unchallenged appraised value of the home at $271,000.00, which was an increase in value from its original purchase price of $220,000.00, she will receive a significant amount of monies assuming that the home is in fact not sold and her interest is bought out by the respondent. To put this in context, even if I subtract the $32,500.00 paid to the applicant as a down payment, her ½ interest in the property would be $103,000.00 ($135,500.00 - $32,500.00).

[40] The respondent spent a great deal of his money to significantly and materially upgrade this property. I find as a fact that he spent the following monies:

a) $15,000.00 steel roof

b) $13,000.00 for dock

c) $2,600.00 balance of windows

d) $6,000.00 for a Tiki Hut

e) $750.00 repair of chimney

f) $550.00 blown insulation

g) $1,400.00 for two sets of stairs ($300.00 and $1,100.00)

h) $7,000.00 paved driveway

i) $2,500.00 tool shed

j) $1,100.00 hardwood floors

[41] The total of those renovations was $49,900.00. From this sum will be deducted the renovation contributed by the applicant for the new windows of $5,000.00 and the $200.00 contributed by the applicant in the purchase of paint, which totals $5,200.00. The net amount or $44,700.00 was spent by the respondent out of the monies he had received from his retained earnings.

[42] Absent any consideration for the provisions of section 5 (6) of the Family law Act, the applicant wife would be entitled to $103,000.00. Even if I subtracted the respondent’s contribution to the elimination of the applicant’s credit card debt of $2,181.00 and the $800.00 for the ring enterprise loan or a total of $2,981.00, this would still leave the respondent owing the sum of $100,019.00.

[43] In the result, again absent any consideration for section 5 (6) of the Family Law Act, I would crystallize the applicant’s ownership interest and not equalization interest at $100,019.00. As Justice Galligan lamented in his decision in Berdette, this does not accord with “my sense of fair play”.

[44] Counsel for the applicant wife has referred me to section 14 of the Family law Act and the decisions of the Ontario Court of Appeal in Berdette v. Berdette (affirmed by the Supreme Court of Canada) and Rawluk v. Rawluk of the Supreme Court of Canada as indicative of the proposition that the aforementioned acknowledged gift of the transfer of the home into joint names on July 15th, 2005, forecloses any consideration of the provisions of section 5 (6) of the Family Law Act.

[45] Counsel for the applicant affirms that there is nothing to equalize as both parties are at zero equalization or at least at zero equalization after my completion of findings of the parties respective N.F.P.s.

[46] In Berdette, the Ontario Court of Appeal considered a decision of Justice Granger on the issue of unconscionability and whether section 5 (6) should be considered when one party gifted to the other party properties (home and cottage) in joint names. What is clear is that the parties were married in 1976 and separated in 1984. The matrimonial home was purchase in 1979 and put into joint names and the cottage was purchased in 1982 and as well was placed in joint names.

[47] Galligan J. A. started out in his review of Justice Granger’s decision with the following introduction at paragraph 3:

The particular result arrived at in this case is not one which accords with my sense of fair play.

[48] There was no question on the facts in that case that the husband relied totally on the substantial income his spouse provided from an estate inheritance and worked little or at all, He also did little to assist in the child rearing responsibilities but left those responsibilities primarily with his wife.

[49] However, one important factual distinction, when one considers many of the other decisions analysing s. 5(6) of the Family Law Act, was that while the husband could be described as lazy, lacking ambition, and without much redeeming positive characteristics, he never depleted any assets, nor did he unfairly hide any assets that he may have acquired.

[50] The Court of Appeal then went on to consider the Supreme Court decision in Rawluk v. Rawluk and the passage at pages 93/93 as follows:

Under the Act a court is, as a first step, is required to determine the ownership interests of the spouses. It is at that stage that the court must deal with and determine the constructive trust claims. The second step that must be taken is to perform the equalization calculations. Once this is done, a court must assess whether, given the facts of the particular case, equalization is unconscionable. The s.5 (6) analysis, even if it could be considered, would be a third step - - a last avenue of judicial discretion which might be used in order to bring a measure of flexibility to the equalization process. This step in the process, if it could be used, would have to be kept distinct from the preliminary determination of ownership.

[51] Ultimately, in Berdette, the court concluded that since ownership was not in issue, the question of the applicability of section 5 (6) was not an appropriate consideration. They went on to state in a most definitive manner at paragraphs 35 and 36as follows:

I think it must be taken as settled that the considerations which could lead a court to find unconscionability under 5(6) can have no bearing on the issue of ownership of property, which is fundamental to the determination of net family property under s. 4 (1). Therefore, those considerations could have no bearing upon whether, on valuation day, the respondent was a joint owner of the two properties with the appellant. Thus the trial judge could not have applied those considerations to deprive the appellant of joint ownership in the properties, which had been given to him as a gift.

My second reason for holding that s. 5(6) does not apply in this case is that there is no difference between the net family properties of these parties.

[52] On the facts of the case before the Appellate Court, there was, after the equalization analysis, no difference between the two net family properties. There was, as stated in that decision, “no lesser of the two” as defined in the definition of entitlement found in section 5 (1) of the Act. The reshuffling or change of ownership either because of a fraudulent conveyance or undue influence or the retention of a revocation right was not available to the gifting spouse.

[53] This is precisely the situation that is present on the facts of this case. The respondent spouse has admitted he has gifted a ½ interest of the matrimonial home to his wife and now seeks to undo this reality because of the obvious unfairness in the ultimate result after the separation of the parties.

[54] In support of this position, counsel for the respondent has provided me with the decisions of Serra v. Serra, Von Czieslik v. Ayuso, Laing v. Mahoud, Thompson v. Thompson, and Kucera v. Kucera, in an attempt to persuade me that value of property through ownership that has not been attained through fraud, undue influence, or the revocation of the right to this ownership, may still be impacted by the provisions of s. 5 (6) when a court determines the issue of an equalization payment.

[55] In reviewing these cases, I have focused primarily on the two Court of Appeal of Ontario decisions of Serra and Von Czieslik as ownership, at least with respect to the matrimonial home, was not in issue and in joint names. In Kucera for example, there was a very short marriage and the home was in the petitioner husband’s name, which obviously skewed the equalization payment.

[56] In the Serra decision, the Ontario Court of Appeal determined that the provisions of section 5 (6) could be relied on to redress ‘an unconscionable result’ whether or not that result flowed from fault based conduct or not. In that case, the precipitous drop of the value of the shares and assets of the husband’s textile business after Valuation Day would make an equalization payment that did not take into account, through no fault or conduct of the husband, an unconscionable result.

[57] Without the consideration of s.5 (6), the resulting equalization payment would provide the appellant’s wife with an unfair windfall and result. The Court thus reduced the equalization payment accordingly.

[58] The Court of Appeal also commented that the decision in Von Czieslik that suggested that the provision of s. 5 (6) seemingly targeted only fault based conduct was not totally accurate in light of the other provisions of the section namely (c), (e), (f), and (g) and the general basket provision found in (h). Furthermore, they concluded at paragraph 55 that the general basket provision found in subsection (h), therefore, should not be restricted to only reflect fault based factors.

[59] What the Court did conclude, following the absolute ground-breaking decision in Von Czieslik, was that s. 5(6) could be relied on to consider post valuation date declines in the market worth of an asset under the new heading unconscionable result. The Court decidedly disagreed with the contrary view held by Justice Backhouse in LeVan v. LeVan.

[60] Most importantly, they concluded that even when the threshold of unconscionability is high at paragraph 49:

It does not follow that because the threshold is exceptionally high the factors to be taken into account in assessing whether the threshold has been crossed should not include post-separation changes in the value of a spouse’s asset and the circumstances surrounding that change.

[61] Clearly in the aforementioned decision, ownership considerations were not the issue but the ultimate equalization payment under section 5(1) based on the distorted result of the reduced value of the shares of the company. This unconscionable result triggered the section 5 (6) determination. In short, the provisions of section 5 (6) could readjust an equalization payment in circumstances that did not reflect an issue of fault and directly impacted actual Valuation Day assets.

[62] In Von Czieslik, the Ontario Court of Appeal changed the interpretation of section 5 (6) of the Family Law Act. Up to that point, previous decisions had determined that a court could only direct an unequal division where there was s difference in net family property and did not include a general power to rearrange family assets.

[63] To put this dramatic change in the clearest light, in the earlier Ontario Court of Appeal decision of Stone v. Stone, a 2001 decision that was relied upon by both the trial judge and the Divisional Court in Von Czieslik, at paragraph 42, Justice Feldman stated as follows:

... section 5(6) of the Family Law Act only empowers the court to order an unequal division of the difference in value of net family property. It is not a provision which can be used to set aside previous dispositions of property to third parties. Consequently, any order must be based on the net family property amounts of the spouses as determined under s. 4. The order cannot reflect the value of any property which is not part of that net family property value. As a result, although the reckless depletion of assets by one spouse can be used by the court as a factor in assessing unconscionable conduct and making an unequal distribution, the section will only be useful if the spouse who made the transfer of property has sufficient property left on valuation date to make an order for an unequal sharing an effective remedy for the wronged spouse.

[64] Both the trial judge and the Divisional Court in Von Czieslik relied on this passage and the decisions in Berdette v. Berdette, Justice Charron decision in Filipponi v. Fillipponi, and the decision of Justice MacKinnon in Zadegan v. Zadegan, to conclude that this possible readjustment of Net Family Property values could not be addressed using the various factors under s. 5(6) unless there were sufficient assets remaining after the N.F.P. calculations.

[65] However, the Court of Appeal in Von Czieslik took a marked departure from that consistent conclusion. The Court held, after analysing the plain words of the section, they concluded at paragraph 25 as follows:

Thus a plain wording of the provision does not support the respondent’s argument that s. 5(6) only allows for reapportionment of the difference between the parties’ net family properties.

[66] At paragraph 29 they continued:

A reapportionment of net family property under 5 (6) is not a declaration about ownership of property, but only about distributing the value of the parties net family properties to redress unconscionable conduct.

[67] Later there was severe criticism levelled at the narrow focus of previous decisions, which restricted ‘unconscionability’ to only the differences in the parties’ net family properties. At paragraph 37, the Court went on to say:

To the extent the court below and other courts have interpreted earlier decisions of this court to arrive at a contrary result, they have been in error.

Finally, and more significantly, the Court concluded at paragraph 58:

If the difference between the parties’ net family properties is zero, a court may still award more or less than that amount subject to the restriction that the payment ordered cannot exceed the total value of the payor’s net family property.

[68] In the result, the appellant wife received the total value of the respondent’s husband’s net family property of $74,385.00.

[69] In a review of all the decisions dealing with the issue of unconscionability, the threshold is significantly high. Nevertheless, the respondent is not, however, without any recourse in these circumstances. As stated, I have concluded that no rational explanation was provided by the applicant to account for the precipitous depletion of her assets, primarily in cash, within the four and half years of her marriage.

[70] There is a certain irony that within this short time frame and forgetting for the moment the $20,000.00 in expenses that the applicant received from her insurer, that somehow she spent or disposed of over $145,993.00. I have been provided an explanation for $44,200.00.

[71] The amounts of $14,000.00 were provided to her children and $5,200.00 was provided to the respondent as the applicant’s contribution to the cost of the windows and the paint for the matrimonial home ($19,200.00). This would or should have left her with $126,793.00 less the $25,000.00 for her motor vehicle or $101,793.00.

[72] From this sum I could deduct, $1,300.00 for the glass curio, $3,200.00 for the two love seats and $5,000.00 for the bedroom furniture. This would leave a net balance of cash on hand of approximately $92,293.00

[73] This significant disappearance of monies, cash on hand, is even more problematic when we factor in the reality that the applicant also received $5,000.00 in cash by the respondent as a gift just prior to the parties’ departure to Ireland and the fact that the applicant was gainfully employed from September 23rd, 2008 to September 17, 2010.

[74] In addition, to the $5,000.00 paid to the applicant as a gift, the respondent, as already stated, paid off her Credit Card of $2,181.00 and from the applicant’s testimony at the discovery, the respondent gave her a further sum of $2,500.00 to start up a ring business and from the respondent’s evidence provided her with only $800.00 for the same ring business.

[75] Her income from FedEx for the two years she worked there was said to be approximately $32,700.00 per annum before she was either terminated or had a medical emergency of post traumatic stress after revisiting the death of her niece in the Canadian Armed Services during the Afghanistan War.

[76] Where did the cash go? Was it improvidently depleted as believed by the respondent on gambling or has it been purposefully concealed? Whatever is the answer, the onus was on the applicant wife to delineate in some fashion where the money went. I have traced some of these monies but I cannot piece together where or how the rest of the money or cash on hand was consumed.

[77] Without any doubt some monies was used on life style, although I had the distinct picture and conclusion that the respondent was footing most if not all of the bills. Even her friends were dismayed at the applicant’s disparaging comments about her husband, which I perceived was an understanding by them that he was not the described burden as lamented by the applicant wife.

[78] I have already discounted the $20,000.00 in expense money provided by the applicant’s insurer after the fire. I am prepared to consider deducting a further $20,000.00 or just under $5,000.00 a year for the four and a half years of marriage as a ‘life style’ reality. This would leave an amount of $72,293.00 that has not been accounted for nor explained by the applicant. I would go further, there has been, from my perspective, a purposeful avoidance of the issue entirely.

[79] However, I still cannot account for her net income from employment at FedEx. Even if I discount this gross income to a net amount of $1,000.00 per month. This does not account for $24,000.00 net income over those two years ($12,000.00 + $12,000.00).

[80] In these unusual circumstances, and absent any attempt at any plausible explanation, I conclude that the applicant wife should have had $96,000.00 ($72,293.00 + $24,000.00) in cash assets at the date of separation (Valuation Day).

[81] In my view, any increased value in the matrimonial home from the purchase price of $220,000.00 to the agreed to appraised value of $271,000.00, I attribute to the net $44,700.00 renovation expenditure by the respondent husband.

[82] In considering whether the payment to the respondent wife of $100,019.00 would reflect a threshold of unconscionability as reflected in s. 5 (6) as discussed and analysed in the aforementioned decisions, I am decidedly of the view that it would.

[83] In turning to the V- Day values, I would conclude that the value of the matrimonial home, absent the extensive renovations of the respondent husband, would be or should be fixed relying on the decision in Serra and the s.5 (6) analysis at the $220,000.00 purchase price and not the new enhanced appraised value of $271,000.00. This value would be thus divided by two leaving an amount of $110,000.00 less the $32,500.00 already provided to the applicant wife and thus a balance of $77,500.00 owing.

[84] From this amount, I would also deduct the loan of monies for her ring enterprise of $800.00 and the payout of her Visa debt of $2,181.00, leaving a new balance of $74,519.00.

[85] In addition, the purposeful failure of the applicant wife to account for the disappearance or dissipation of the significant amount of monies that she had on hand shortly after her marriage is an enumerated heading under s.5 (6) (d) and thus I would fix her assets on hand at Valuation Day as an imputed cash asset of $96,000.00.

[86] Thus her Valuation Day asset values should include the aforementioned amount, which would increase her asset value from $151,260.00 to $247,260.00. When we now deduct the total value of excluded property of $160,553.00, we now have a positive balance of $86,707.00. Thus the respondent would be entitled to $43,353.00 of this new Net Family Property amount.

[87] In addition, the respondent has paid all of the taxes on the matrimonial home of which the applicant wife has claimed her half interest without assisting in the payment of the property taxes on the home. As per the financial statement filed, the respondent husband is paying the sum of $184.00 per month towards these taxes from January 2009 to present or ($2,218.00 for 2009 + $2,218.00 for 2010 + $2,218.00 for 2011 + (9 x $184.00) $1,656.00 for 2012 or a total of $8,310.00. From this sum, the applicant wife should have provided the respondent husband with the sum of $4,155.00.

[88] In these circumstances, and relying on the reality that the respondent husband has gifted the applicant wife with her half interest in this home (s. 5.(6) (c), I do not believe it would be appropriate to consider occupancy rent due by the same respondent husband. In the result the respondent husband shall be allowed to reduce his ultimate payment to the applicant wife of $4,155.00.

[89] The end result is that the respondent now would only be required to pay the applicant a further sum of $27,011.00 ($74,519.00 - $43,353.00 equalling $31,166.00 – the taxes of $4,155.00) to satisfy the applicant’s interest in the matrimonial home. In this regard, I will allow the respondent 45 days to satisfy this interest of the applicant wife, failing which I am ordering the sale of the matrimonial home.

[90] Should this sale be necessary, the respondent husband would be entitled to all the net sale proceeds except the aforementioned $27,011.00 payment to the applicant’s wife.

[91] In these circumstances, and mindful of degree of success of the respondent husband and the purposeful obtuseness of the applicant wife on an apparent and necessary evidentiary matter (depletion of cash assets), I am awarding costs to the respondent husband on a partial indemnity basis fixed at $5,000.00 inclusive of disbursements and G. S. T.

“Justice J.A. Desotti”

** ___________________________________**

The Honourable Mr. Justice John A. Desotti

Released: October 15, 2012

CASES CONSIDERED

Serra v. Serra, 2009 ONCA 105, 93 O.R. (3d) 161; Von Czieslik v. Ayuso, 2007 ONCA 305, [2007] O.J. No. 1513; Laing v. Mahmoud, 2011 ONSC 4047, [2011] O.J. No. 3060; **Thompson v Thompson, [1993] O.J. No. 2658; **Kucera v Kucera, [2005] O.J. No. 1514; Berdette v. Berdette [1991] S.C.C.A. No. 36; Rawluk v Rawluk, 1990 152 (SCC), [1990] 1 S.C.R. 70; **Spikula v. Spikula ***(2008), *58 R.F.L. (6th) 55, 2008 51783 (Ont. S.C.); **Belgiorgio v Belgiogio ***(2000), *10 R.F.L. (5th) 239, 2000 22733 (Ont. S.C.); **Delorme v. Delorme ***(1993), ***1993 16065 (ON SC)**, 45 R.F.L. (3d) 387, [1993] O.J. No. 4217 (Ont. Gen. Div.); **Peter v. Deblow, **1993 126 (SCC), [1993] 1 S.C.R. 980, 44 R.F.L. (3d) 329; **Caines v Caines ***(1984), ***1984 4790 (ON SC), 42 R.F.L. (2d) 1, [1984] O.J. No. 2219; **Clayburn v. Clayburn, ***(1997), ***1997 12243 (ON SC), 29 R.F.L. (4th) 12, ***(1997) O.J. No. 2560 (CJ(Gen. Div.)); Fitchett v Brown, [2009] O.J. No. 4972, **2009 CarswellOnt 7220 (SC); **Futia v Futia ***(1990), ***1990 12240 (ON SC), 27 R.F.L. (3d) 81, 1990 CarswellOnt 259 (ON SC); **Dovicin v Dovicin ***(2002), *29 R.F.L. (5th) 281, [2002] O.T.C. 362 (SC); **Linov v. Williams, [2008] W.D.F.L. 241, 2007 7407; **Murphy v Murphy ***(1987), ***1987 8279 (ON SC), 17 R.F.L. (3d) 422, [1987] O.J. No. 1729 (Ont.Dis.Ct.); **Reeson v. Kowalik ***(1991), ***1991 12833 (ON SC), 36 R.F.L. (3d) 396, 1991 CarswellOnt 34 **(ON CJ (Gen. Div)); Roseneck v Gowling, ***(2002), ***2002 45128 (ON CA), 62 O.R. (3d) 789, 223 D.L.R. (4th) 210 (C.A.); **Sarcino v Sarcino ***(1999), *90 O.T.C. 19, [1999] O.J. No. 902 **(C.J. (Gen.Div.)); Ward v. Ward, 2012 ONCA 462, 111 O.R. (3d) 81

COURT FILE NO.: 6161/10

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

CATHERINE THERESA URQUHART

APPLICANT

-AND-

WILLIAM PATRICK URQUHART

RESPONDENT

REASONS FOR JUDGMENT

DESOTTI, J.

** Released: October 15, 2012**