COURT FILE NO.: 05-FD-305300FIS

DATE: 20121219

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

SETSUKO STEFANOU

Phyllis Brodkin, for the Applicant

Applicant

• and -

GEORGE STEFANOU

George Corsianos, for the Respondent

Respondent

HEARD: October 15-19, 22-24, 2012

MESBUR J

Introduction and general background to this trial:

[1] George and Setsuko Stefanou lived a very comfortable life together for twenty five years. Mr. Stefanou retired in 1993 at the age of forty one, and from then until the parties separated in 2004 they spent their retirement years sailing in Europe on their yacht, or residing in a comfortable property in Mr. Stefanou’s birthplace on the Island of Rhodes in Greece.

[2] During the marriage, Mr. Stefanou worked as an electrical engineer for Litton Systems, primarily on assignments outside of his home base of Toronto. These assignments included about two years in Nova Scotia, eighteen months in Israel, and seven years in Germany. Ms. Stefanou accompanied him on all these assignments. After the move to Nova Scotia, she did not work outside the home.

[3] The parties separated in September of 2004 when Ms. Stefanou left the parties’ home in Rhodes. First she travelled to Japan, her homeland, and spent about a month there. She then returned to Toronto where the parties had initially made their home when they married in 1979. She commenced this matrimonial proceeding here on April 11, 2005.

[4] When Ms. Stefanou began this application in April of 2005 Mr. Stefanou had already started a claim for divorce in Greece on February 15, 2005. His lawyer sent a copy of the divorce documents to Ms. Stefanou’s lawyer as a courtesy. They were written in Greek which neither he nor Ms. Stefanou speaks or reads. They did not have the documents translated. Formal service on Ms. Stefanou was effected by pinning the court documents to the door of the parties’ former family home in Rhodes. Mr. Stefanou, who was living in the house at the time, was well aware his wife was not living there and had returned to Canada. Nevertheless, this type of service was deemed proper service under Greek procedure. Ms. Stefanou did not respond to or participate in the Greek proceedings.

[5] Immediately after she initiated this application, Ms. Stefanou moved without notice on April 12, 2005 to freeze Mr. Stefanou’s banking and investment accounts in Canada. The motion was prompted by her discovery that Mr. Stefanou had removed significant funds from one of the parties’ joint accounts, and she took the position this was evidence of his dissipating assets and showed a risk of further dissipation.

[6] Ferrier J granted the ex parte request for a freezing order. After Mr. Stefanou was served, the parties continued the order on consent. While there have been payments out on consent from some of the frozen accounts to each of the parties over the last seven years, the bulk of the money in the accounts remains frozen.

[7] Ms. Stefanou’s action in seeking ex parte relief, and her suggestion Mr. Stefanou had improperly removed funds has coloured this entire application, even though Mr. Stefanou has long since provided an explanation for the removal of the funds. Mr. Stefanou described the ex parte order as the “main issue” in this case. He said it was like being accused of being a thief of his own money. In fact, when he testified about this issue, he became quite agitated and apologized to the court for raising his voice. Clearly, in Mr. Stefanou’s mind, being “accused” of taking funds from the account has tarnished his honour and integrity, and he will never forgive Ms. Stefanou for this.

[8] Mr. Stefanou’s initial response to his wife’s application for divorce, equalization and support was to challenge Ontario’s jurisdiction to hear it. He took the position the Ontario courts lacked even jurisdiction simpliciter. The court ordered a trial of the jurisdiction issue. By the time the trial came on before Herman J in late 2007 Mr. Stefanou conceded Ontario had jurisdiction simpliciter, but took the position the courts of Greece were the more convenient forum to determine the issues in this case.

[9] At the trial before Herman J, Mr. Stefanou pointed to the fact that except for a property in Greece, all the parties’ assets were held jointly. This included all their investment accounts (with the exception, of course, of RRSPs which had to be held individually), bank accounts and their yacht. He said that since these assets would be divided equally between the parties, the only real issue related to the property in Greece and whether his removal of funds from one of the bank accounts and transferring the money to his brother in law was properly the repayment of a loan. Mr. Stefanou took the position that the evidence concerning the value of the Greek property, and the parties’ contributions to it was the most complex issue, and since that evidence was all in Greece, Greece was therefore the most convenient forum.

[10] In reasons released in February, 2008, Herman J agreed. She stayed Ms. Stefanou’s application here, and determined that Greece was the most convenient forum for the parties’ litigation to be adjudicated. Ms. Stefanou appealed.

[11] Almost immediately following Herman J’s decision, Mr. Stefanou commenced a new proceeding in Greece. In the new Greek action he took a completely contrary position to the one he had taken before Herman J. In Greece, he said that his wife had contributed nothing to the marriage, and as a result he was entitled to 100% of all the assets accumulated during the marriage, including 100% of all the joint assets and 100% of any assets registered in Ms. Stefanou’s name alone. Within two weeks of Herman J’s decision, Mr. Stefanou also commenced a defamation suit in Ontario against both his wife and her then lawyer. He claimed Ms. Stefanou’s response to a “Notice to Conjugal Partner” sent by the Chief Firearms Office of Ontario constituted defamation. That suit is still outstanding.

[12] At the appeal on February 5, 2009 Ms. Stefanou sought to introduce the new Greek proceedings as fresh evidence. The Court of Appeal admitted the evidence, and on the basis of it immediately allowed the appeal, with reasons to follow. The court lifted the stay of the Ontario application ordered the trial to proceed in Ontario.

[13] The Court of Appeal delivered its reasons on March 5, 2009. In considering the issue of the fresh evidence, MacPherson JA, writing for a unanimous court, accepted Ms. Stefanou’s position that Mr. Stefanou’s Greek application demonstrated a “glaring inconsistency between the husband’s current position in the Greek legal proceedings and the position he took before the trial judge in the Ontario proceedings”. The Court of Appeal found that Mr. Stefanou had made new claims about the marriage and made representations that directly contradicted what he had told the trial judge.[^1]

[14] The court went on to hold: “The difference between the husband’s position about the marriage and property issues before the trial judge in Ontario in December 2007 and his position about those same issues in his April 2008 application in the Greek court is, in my view, quantitatively significant and, quite frankly, qualitatively shocking.”[^2] The court then enumerated what it saw as the shocking differences between the two positions Mr. Stefanou had taken. In the result, the court lifted the stay of Ms. Stefanou’s application here, reinstated the case and concluded Ontario is the appropriate forum for dealing with the property issues in this case. Although Mr. Stefanou apparently considered seeking leave to appeal the Court of Appeal’s decision to the Supreme Court of Canada, he did not pursue that avenue.

[15] Because the parties’ last common habitual residence was in Greece, it is the law of that country that governs the parties’ matrimonial property rights. The Family Law Act [^3] deals with conflict of laws in section 15 which reads:

The property rights of the spouses arising out of the marital relationship are governed by the internal law of the place where both spouses had their last common habitual residence or, if there is no place where the spouses had a common habitual residence, by the law of Ontario.

[16] As a result, in determining the parties’ property rights, I must apply the internal laws of Greece.

The issues:

[17] As I have said, in deciding the property issues, it is the law of Greece that applies. The property issues, however, are not the only ones at play in this lawsuit. Ms. Stefanou also claims spousal support. This issue also raises some interesting legal issues.

[18] When Ms. Stefanou commenced this action, she and Mr. Stefanou were still married. She claimed, among other things, a divorce, equalization and spousal support. Shortly before, Mr. Stefanou had commenced a proceeding in Greece in which he claimed a divorce, but no other relief. The Greek court granted the divorce. It became “irrevocable” under Greek law on January 18, 2008. The issue is whether, in the face of a foreign divorce, the Ontario court retains any residual jurisdiction to order spousal support in circumstances where the originating process in Ontario under which the applicant claimed support predated the granting of the foreign divorce. Ms. Stefanou concedes that since the parties are no longer spouses, the jurisdiction to order support under the Family Law Act is spent, since its support provisions apply only to spouses, as opposed to former spouses.

[19] These two issues therefore frame the broad themes this case raises. I must address them in the context of the facts as I find them. My fact finding process includes, of course, my factual findings concerning the laws of Greece. These findings will be based on the expert evidence I heard at trial.

[20] In order to put the facts into context, I will first outline my findings concerning the law of Greece, and then will apply that law to the facts of the case.

The law of Greece:

[21] Greece is a civil law country. For the purposes of marital property division Chapter IV of the Hellenic Civil Code governs. Each party called an expert to assist the court in determining Greek law. Ms. Stefanou called Mr. Kounoupis, an American trained lawyer of Greek origin who is also licensed to appear before the courts of Greece. About a fifth of his practice is devoted to family law in particular, but his general area of expertise is dealing with conflict of law issues between America and Greece. He has provided expert testimony in the United States about Greek law. He mentioned he has testified, for example, about the validity of a Greek divorce in America.

[22] Mr. Stefanou relied on the expert evidence of Ms. Despina Stiropoulou. She is a lawyer practicing in Athens, having been admitted to the Athens Bar Association in 1993. Her practice is about 60% family law. She has never provided expert evidence to a foreign court before, or, indeed, to any court in Greece. She does, however, practice family law extensively in Greece.

[23] Each expert was permitted to give opinion evidence on the law of Greece. One of the difficulties that presented itself is that there are no authorized English translations of either the Hellenic Civil Code or of the various cases the experts referred to. The translations were clumsy and ungrammatical. Even the English version of the Hellenic Civil Code that was provided to me contains numerous grammatical errors. I have no idea of who the translator of the Code was, or whether the translation accurately translates the various provisions of the Code into English legal terminology.

[24] As to the legal cases, although the translations were done by translators, I have no confidence they accurately captured the nuances of the written decisions in Greek. In fact, Mr. Kounoupis commented on the poor quality of the translations. He is extremely fluent in both Greek (his mother tongue) and English. He has testified as an expert before American courts on the meaning of Greek laws. He practices in both American and Greek courts, in both the English and Greek languages. Ms. Stiropoulou speaks English well, but does not practice law in English, as opposed to Mr. Kounoupis. She has never testified as an expert on Greek law before, and certainly not before a common law court. For these reasons, I found Mr. Kounoupis’ comments on the translations and their limitations credible.

The expert evidence

[25] In essence, the experts do not really disagree on the fundamental framework of Greek matrimonial property law. The general principles can be summarized as follows:

a) Married persons are separate as to property;

b) Married persons both have a joint obligation to contribute to the needs of the family. The contribution consists of personal work, income and property. We might describe this as “work, money or money’s worth”. Each party’s contribution is made according to that party’s resources, or, as one might put it, that party’s ability to contribute;[^4]

c) This general principle of separation of property is modified by Article 1400 of the Hellenic Civil Code.

d) Article 1400 of the Hellenic Civil Code is entitled “Claim to Participate in the Increments.” It introduces a “legitimate legal but rebuttable presumption”[^5] that each spouse has made a one third contribution to the increase in the value of property of the other spouse. This entitles a spouse to a monetary claim to one third of the incremental increase in the value of the other spouse’s property between the date of celebration of the marriage and the date of division;

e) This presumption is based on the assumption that the non-titled spouse has contributed more to the marital relationship and the property than what would be viewed as the bare minimum requirement of each spouse to contribute.

f) A party may assert that he or she is entitled to more than 1/3 of the increment in the other party’s assets because of his or her contribution to the property. If a party takes that position, he or she bears the burden of proving the assertion;

g) Similarly, a party may assert that the other party is entitled to less than 1/3 of the increment in his or her property because the other party made a contribution of less than the minimum requirement. If a party takes that position, then again he or she bears the onus of proving it. Mr. Kounoupis described this as a particularly heavy onus. Ms. Stiropoulou did not disagree. She described the 1/3 entitlement as a “pillow” for the non-titled spouse to “lie on”;

h) Gifts received from third parties during the marriage are excluded from the calculation of a spouse’s property at the date of division. Increases in the value of those gifts are not excluded. Similarly, if the gift has been spent between the date of receipt and the valuation date, there is no exclusion;

i) To calculate the increase in property, or “increment”, the court must look at the difference which exists between the value of a party’s property at two points in time, namely (a) the time of the celebration of the marriage and (b) the time the claim to participate in the increments arises. I will refer to this latter date as the “valuation date”.

j) For the purposes of this case, the date the claim to participate in the increment arose was on the date that the Greek divorce became irrevocable, namely January 18, 2008. Therefore, the valuation date for the purpose of this case is January 18, 2008.

[26] Parties may choose to opt into a joint property regime instead of the presumptive 1/3 rule. Article 1430 of the Civil Code provides that parties may do so. The experts differ on whether a properly registered notarial deed is necessary to create a joint property regime, or whether a notarial deed is only necessary to evidence the agreement in order to set it up against third parties. Much turned on the accurate translation of the Greek words for “contract” as opposed to “agreement”, and whether the joint regime is “created by” or simply “drawn up by” a notarial deed. There is apparently no case law on this issue, presumably because there are no cases where the parties actually disagree on whether they are in the joint regime or not.

[27] The issue is not really important because here Ms. Stefanou does not suggest she and Mr. Stefanou had a joint property regime in their marriage. She simply asserts the property registered in their names jointly is owned equally by them, and that she is entitled to one third of the incremental increase in Mr. Stefanou’s property, and he is entitled to one third of the incremental increase in her property.

[28] As far as joint accounts are concerned, Mr. Kounoupis testified that if parties have a joint account, they are presumed to own it equally unless a party can show that the money belongs to a third party, or that the other party would be unjustly enriched by finding the joint owners own the account equally. Only then would a court explore the source of the funds in the account. As Mr. Kounoupis explained, if there is evidence the parties intended to have joint ownership then they own the property jointly.

[29] Mr. Kounoupis went on to explain that under Greek law, gifts are gifts, and gifts between parties are not excluded from the calculation of the increment. Ms. Stiropoulou did not contradict this.

[30] Therefore I conclude that first I must determine the incremental increase in each party’s property between the date of celebration of the marriage and valuation date. I must exclude from the calculation any assets either party acquired by gift or inheritance. Each party is then entitled to one third of the incremental increase in the other’s property. Here, since it is Mr. Stefanou who seeks a different disposition, he must persuade me, on the balance of probabilities, that he is entitled to more than 1/3 of Ms. Stefanou’s incremental increase, and she is entitled to no share of his incremental increase.

Factual findings:

The parties’ backgrounds and how they met

[31] Ms. Stefanou is Japanese by birth. She is one of four children, having two sisters and a brother. They all continue to live in Japan. She is now 64 years old. Ms. Stefanou completed high school in Japan as well as a college course in floral arts. She applied for landed immigrant status in Canada from Tokyo, and arrived in Canada on December 31, 1972.

[32] On her arrival in Canada, Ms. Stefanou settled in Ottawa where she began to work in a Japanese restaurant. She also studied sociology at Carleton University in Ottawa.

[33] Ms. Stefanou relocated to Toronto in 1975. While she was working as a room service cashier at the Bristol Place Hotel she met Mr. Stefanou. She said he was working in the hotel as a room service waiter.

[34] Mr. Stefanou is 60. He was born on the Island of Rhodes, in Greece, and completed his primary and secondary education there. His father was a teacher, and a man of some prominence in the community.

[35] Mr. Stefanou came to Canada in 1970 when he was about 18. He viewed Canada as a place where he could build a brighter future for himself. Initially, he lived in Woodstock with a family friend and went back to high school to study the Ontario grade 13 curriculum. He said his primary reason in doing so was to study calculus, which had not been part of the mathematics curriculum in Greece. He felt calculus was important to his future plans.

[36] Mr. Stefanou did well in grade 13, and was able to continue his studies in Toronto at Ryerson Polytechnical Institute. After a year at Ryerson, he moved to the University of Toronto where he studied engineering. During his studies he worked in a tavern, and saved enough money to go into some kind of jewellery business with a friend.

[37] Mr. Stefanou confirmed that he and Ms. Stefanou met at the Bristol Place in 1975. She moved into his apartment for a short period of time, but soon moved out into accommodation she shared with some other young women.

[38] Mr. Stefanou graduated from the University of Toronto in 1976. At the university he had become acquainted with a gentleman names Kostos Milionis. The two of them started a business together. In order to do so, Mr. Stefanou sold his share of the jewellery business to his partner, and used the proceeds to start the enterprise with Mr. Milionis. They began to build custom electronic systems. Their firm was called Doric Electronic Laboratories.

[39] Mr. Stefanou testified that Ms. Stefanou began to work at Doric. Because it was in its early stages, the company could not afford to pay her much. When Ms. Stefanou requested a raise, they could not pay it. As a result, Ms. Stefanou took some typing lessons in order to upgrade her skills, and secured a position with a Brazilian trade company.

[40] Ms. Stefanou worked at the trade company for a period of time, but when that business closed, she obtained a job with Panasonic, working as an assistant to the executive assistant to the president.

Mr. Stefanou’s prior marriage

[41] While he was living in Woodstock, Mr. Stefanou met a young woman named Patricia. They married one another on June 30, 1971. Ms. Stefanou described this marriage as one of convenience, lasting about “15 minutes”, to enable Mr. Stefanou to obtain landed status in Canada.

[42] Although longer than 15 minutes, the marriage was very short. While Mr. Stefanou described the marriage to Patricia as being of some length, the divorce petition he filed to dissolve it shows the parties separated on March 30, 1972, thus cohabiting for only nine months. It is striking that in the Petition for Divorce Mr. Stefanou did not even know his wife’s birth date. It is also striking that the marriage took place about three months after Mr. Stefanou’s nineteenth birthday, and almost exactly a year after he first came to Canada. All these factors suggest to me there may be some truth to Ms. Stefanou’s suggestion there was an element of convenience to Mr. Stefanou’s first marriage.

[43] I raise the issue of Mr. Stefanou’s prior marriage not because it has any particular relevance to the issues in this case, but rather as an example of each party’s tendency to overstate the facts from his or her point of view, in order to bolster his or her case.

The parties marry

[44] The parties married on January 12, 1979. At this time, Mr. Stefanou was still working at Doric, and Ms. Stefanou was with Panasonic. According to CPP records, neither was earning a great deal of money. In 1978, Mr. Stefanou’s pensionable earnings were $9,464 and Ms. Stefanou’s were $4,963. The following year, Mr. Stefanou’s were $11,700 and Ms. Stefanou’s were $7,828.

[45] Before they married, they discussed finances. They decided they should have joint bank accounts, since this was the way each of their parents had governed their own financial affairs. Ms. Stefanou described her husband as very ambitious. I believe her. She testified that he was anxious to save as much as possible, and become a millionaire. Although Mr. Stefanou denies this, I believe this was the impression he gave his wife. It is borne out by their spending habits and acquisition of assets prior to Mr. Stefanou’s retirement.

The parties’ assets at the date of marriage

[46] As I have mentioned, while Mr. Stefanou was still studying at the University of Toronto, he began a jewellery business with a friend. He later sold his interest in order to form Doric Electronic Laboratories with Mr. Milionis.

[47] Mr. Stefanou sold his interest in Doric to Mr. Milionis sometime after the marriage. I have no hard evidence of what the sale price was, or indeed when it was sold. Ms. Stefanou thought the sale price might have been about $10,000. Mr. Stefanou said was more like $15,000. At trial, he took the position it was worth $15,000 at the date of marriage. Since Mr. Stefanou valued this asset at the date of marriage at $10,000 in his first financial statement, I find this to be the more likely value for this asset and fix its value at $10,000.

[48] Mr. Stefanou testified he had a house full of furniture when he and Ms. Stefanou married. She, on the other hand, suggested he had nothing more than a bed, a table and a few chairs. Again, my sense is that each party is exaggerating: Ms. Stefanou underestimating what Mr. Stefanou had, and Mr. Stefanou exaggerating. I have no evidence of what the value of Mr. Stefanou’s household contents might have been at the date of marriage. He bears the onus of proving value. I am not satisfied he has met his burden, and conclude his household contents had only nominal value.

[49] Mr. Stefanou also takes the position he had a car worth $9,000 at the date of marriage. Again, I find this hard to believe. Mr. Stefanou testified he had purchased a new vehicle in 1974. He suggests it was worth $9,000 at the date of marriage, some four years later. Again, I have no evidence at all as to likely value – not even a “Black Book” value for the vehicle. Without any evidence, I really cannot ascribe any value to the car.

[50] The last asset Mr. Stefanou says he had at the date of marriage is a bank account in Greece. Mr. Stefanou has produced a statement from the bank, showing a balance of $18,000 in June of 1987. Mr. Stefanou says he had this money at the date of marriage. Again, I cannot accept this, particularly in light of Mr. Stefanou’s evidence that the account was opened when he was seven years old, with some prize money he received from a contest. He said that his father put money into the account from time to time over the years.

[51] I have no doubt the account existed at the date of marriage. I cannot conclude, however, that the balance in 1979 was the same as it was in 1987. The account grew from nothing to $18,000 over the space of 28 years, from the time Mr. Stefanou was seven, in 1959, to 1987. Over twenty eight years, the account grew to $18,000. Absent any other evidence, I conclude it grew evenly over that time period, at a rate of $643 per year. Using this formula, I conclude it more likely than not the account had about $12,860 in it at the date of marriage.

[52] From all of this, I conclude the total value of Mr. Stefanou’s assets at the date of marriage was $10,000 for Doric and $12,860 for the Greek bank account, for a total of $22,860.

[53] Although Ms. Stefanou suggests she had some savings of about $2,000 when the parties married, she concedes she has no documentary evidence at all to support her claim. She therefore says I should calculate her date of marriage assets at zero. I accept her submission.

The financial plan: frugality or profligacy?

[54] Ms. Stefanou testified that her husband was very focused on saving and accumulating wealth. She said that after their first year together, Mr. Stefanou suggested that they no longer give birthday gifts to one another, but instead save the money for their future. He did not deny this.

[55] Ms. Stefanou said that in the early years of the marriage in particular the two of them worked very hard to save as much money as they could. She was working for a Brazilian company and then for Panasonic. At Panasonic she was earning about $7,800 while Mr. Stefanou’s records show he was earning just under $12,000.

[56] Mr. Stefanou testified that when he and Ms. Stefanou got married he turned his former bank account with the CIBC into a joint account. Both he and Ms. Stefanou felt this was the typical and appropriate way to manage their finances. Both sets of parents had done exactly the same thing. Mr. Stefanou testified that he wanted accounts in both names in case anything happened to him. From this I infer he intended Ms. Stefanou to receive the entire joint accounts if he were to die. This suggests to me a clear intention to share the accounts equally.

[57] Both parties continued to work and pool their resources in the joint account.

The parties buy a house

[58] The parties purchased their first home in Mississauga in 1979. According to Mr. Stefanou the down payment was about $15,000, which he said came from his sale of his interest in Doric to his partner. They financed the balance of the purchase price with a mortgage. Ms. Stefanou said the monthly mortgage payments were about $650 a month, and this was roughly her net monthly income then. This is confirmed in large part by the statement of her CPP Pensionable Earnings statement which shows her 1979 income at $7,828. Her husband’s pensionable earnings for the same year were $11,700. Ms. Stefanou said with both their incomes, they were able to pay both the mortgage and the rest of their living expenses.

[59] Mr. Stefanou took the position that all the money for the purchase of the house and the carrying costs essentially came from him. The evidence simply does not bear this out. The parties’ respective pensionable earnings were in a ratio of less than 3:2 in favour of Mr. Stefanou in the first year of the parties’ marriage. They had only one bank account, which was a joint account. They both deposited their salaries into this account. Thus, Ms. Stefanou made a significant financial contribution to the acquisition of the house, and the eventual repayment of the mortgage.

Mr. Stefanou joins Litton

[60] Ms. Stefanou encouraged Mr. Stefanou to pursue a more traditional job in engineering instead of continuing with Doric. Mr. Stefanou testified that his wife pored over engineering magazines and pointed out to him that engineering jobs with companies that had projects overseas paid very well. She suggested Mr. Stefanou apply for positions like this. He agreed.

[61] Mr. Stefanou worked with a placement firm to develop his resume, and then sent it to a number of engineering firms. He was offered a number of jobs, one of which was with Litton. The Litton job would require him to accept assignments away from Toronto. Ms. Stefanou encouraged Mr. Stefanou to accept the job with Litton. He did. Litton proved to be an excellent choice.

[62] Initially, Mr. Stefanou became involved in building test equipment. Eventually Litton sold the test equipment to the military and Mr. Stefanou had to travel to train military personnel. His first posting outside of Toronto was in Nova Scotia. He initially spent several months in Nova Scotia training Canadian military personnel, while Ms. Stefanou remained in Toronto at her job with Panasonic. Litton then asked Mr. Stefanou to relocate to Nova Scotia since the company had a large project there for the armed forces dealing with long range patrol aircraft. Mr. Stefanou accepted the offer.

[63] Since Mr. Stefanou had to move to Nova Scotia, Ms. Stefanou obviously wished to join him there. The couple were newlyweds, and very much wanted to start a family. Ms. Stefanou quit her job with Panasonic in order to make the move. The parties decided that during the assignment in Nova Scotia they would rent out their house.

[64] Ms. Stefanou says she took care of the original rental. Mr. Stefanou says he made a power of attorney in favour of his brother in law in order to take care of the house during their absence. Whether Ms. Stefanou arranged for the original tenant or the brother in law did it is of no moment. The first tenant was reliable and paid rent on time. At the end of that tenancy, however, the brother in law found a replacement tenant. It turned out that this tenant was not a particularly good one, and the brother in law had difficulty collecting the rent from him. Ms. Stefanou confirmed that her brother in law took over the difficult task of trying to collect the rent and manage the property.

Nova Scotia

[65] Mr. Stefanou relocated to Nova Scotia for the assignment before his wife did. Ms. Stefanou testified that when she arrived, Mr. Stefanou was living in a trailer he had purchased. To the contrary, Mr. Stefanou said the two of them were put up in a hotel initially, but Litton did not want to continue to pay for a hotel, and that is when he purchased the trailer. Again, it is not particularly relevant what order these events occurred in over thirty years ago. Mr. Stefanou said housing was difficult to come by, and that is why he bought the trailer. Eventually, the parties were able to rent a farm house where they set up their home.

[66] The farmhouse had a rabbitry on the grounds. This was excellent for Mr. Stefanou who has always had a hobby of raising birds. The rabbitry was a perfect location for him to do so. During the time in Nova Scotia, Mr. Stefanou raised and sold his birds. Ms. Stefanou kept careful track of all the money the bird sales fetched.

[67] Ms. Stefanou said their initial plan was to live as frugally as possible so they could save as much money as possible and pay their mortgage off quickly. Because the posting was outside Toronto, Mr. Stefanou was entitled to an allowance for daily expenses in addition to his salary. Ms. Stefanou kept detailed records of everything the parties spent money on, from toilet paper to Tampax, and from dog and bird food to groceries, liquor and entertainment. She even tracked the cost of a pregnancy test. She told me, and I believe her, that the plan was to save as much of Mr. Stefanou’s salary as possible, and try to live on the expense allowance. Her records bear this out, and show she was able to put aside nearly $22,000 in the ten month period from August 1980 until the end of May 1981.[^6]

[68] Ms. Stefanou did not work outside the home in Nova Scotia. She says she applied for a position on the army base, but did not get the job. She says this embarrassed her husband, and he did not want her to apply for anything else. He takes the position she simply did not want to work, but applied for work only to qualify for employment insurance benefits. Whatever the reason, Ms. Stefanou has not worked outside the home for wages since the move to Nova Scotia. I heard no evidence whatsoever that Mr. Stefanou disagreed with this, or encouraged her to return to the workforce at any time after. What is clear, however, is that during the time in Nova Scotia, Ms. Stefanou contributed her unemployment insurance income toward family expenses. What is also clear is that during the time in Nova Scotia the parties were trying to start a family, but were having difficulties doing so. I note that in Ms. Stefanou’s spending records in Nova Scotia she recorded the cost of a pregnancy test.

[69] Ms. Stefanou testified that Mr. Stefanou had a low sperm count, which contributed to their fertility issues. Mr. Stefanou pointed out that Ms. Stefanou had a problem with one of her fallopian tubes, and this was a contributing factor as well. In fact, while the parties were living in Nova Scotia, Ms. Stefanou had surgery to correct her problem. Even so, they were still unable to conceive. This was clearly very painful for the parties and still is. As Ms. Stefanou put it, their plan when they married was to have a house, a dog and a family. She said they got the house and the dog, but sadly were never able to have children.

Return to Toronto and sale of the matrimonial home

[70] Following the posting to Nova Scotia, the parties returned to Toronto. They decided to sell their home in Mississauga, and ended up selling to their former tenant. By this time, they had paid off the original mortgage on the property. They gave the purchaser a short term vendor take back mortgage. They realized a profit on the sale. As a result of the sale, they had some significant funds, and began to invest.

[71] Through her former job at Panasonic, Ms. Stefanou had met an investment advisor. She and her husband met with him, and set up the first of their joint investment accounts. Mr. Stefanou is very interested in investments, and although he belittled his wife’s involvement in their investment strategy, I accept her evidence that they often discussed the type of investments they would make. As was the case with their bank accounts and title to their home, the investment account and all further investment accounts would be held in their joint names.

[72] When they first returned to Toronto after the Nova Scotia posting, the parties stayed in a hotel. It was around this time, sometime in 1981, that Mr. Stefanou’s boss advised him the machine he had worked on in Nova Scotia had been purchased by the Israeli army. Initially, Mr. Stefanou became one of the instructors for training courses for Israeli personnel. When the time came to ship the machine to Israel, Mr. Stefanou accompanied it. It was then, in the summer of 1982 that the parties relocated to Israel.

[73] Mr. Stefanou explained that it was “obvious” they would need a car in Israel, so he purchased a Renault vehicle in Canada for pick up in France. This way the purchase would be tax free.

[74] The parties flew to France, went to the Renault factory to pick up the car, and then proceeded to drive toward Israel. Mr. Stefanou testified his wife wanted to buy some china, and so they went to Limoges to do so. He suggested she purchased a one hundred piece set, which they arranged to ship to Israel. According to Mr. Stefanou the china cost between $4,000 and $5,000. He points to this purchase as an indicator of his wife’s extravagant and demanding habits.

[75] It is true the parties purchased china in Limoges. Ms. Stefanou produced the original invoice for it. The china is made up of a 44 piece set of china, a 13 piece cake service and twelve cups and saucers. The total cost was 6,379 francs, or the equivalent of about $1,100 Canadian. While this is not an insignificant sum, Mr. Stefanou again exaggerated both the cost and the quantity.

[76] Mr. Stefanou also testified that his wife was insistent on visiting a place that was famous for cameo jewellery. He said she was very anxious to acquire a piece, and therefore they did so. She did not deny this.

Israel

[77] Eventually the parties arrived in Israel. As was the case in Nova Scotia, Litton put them up in a hotel while they looked for accommodation. Then the parties located a home to rent in a suburb of Tel Aviv. Again, while they lived in Israel Ms. Stefanou did not work outside the home. She said that she did not have a work permit, and it would not be easy to obtain one, particularly given security issues in the country at the time. Mr. Stefanou did not present any evidence to refute this.

[78] As she had done in Nova Scotia, Ms. Stefanou kept detailed records of all the money spent on the household in Israel. Again, the goal was to save as much as possible. That said, the parties did not live a particularly constrained life. They took diving lessons, and were able to dive in the coral reefs in the Red Sea off the southern coast of Israel. Ms. Stefanou took day trips to various historical sites in Israel and Egypt. They made friends. Ms. Stefanou entertained often. She said she felt it was important for her to do so because her husband is somewhat shy and retiring, and she thought it would benefit his career.

[79] Mr. Stefanou suggested that his wife did very little of value in Israel. He took the position she had a maid to assist her with housework, and otherwise spent her time pursuing her hobbies and enjoying life. Ms. Stefanou’s records show that in the entire time the parties were in Israel, she employed a maid on three occasions, each time around a particular entertaining obligation.

[80] Ms. Stefanou testified, and I believe her, that she took care of the house, the shopping, the meals and entertainment while Mr. Stefanou pursued his work. Marketing was more complicated than it had been in Canada, both because Ms. Stefanou did not read or speak Hebrew, she did not drive a car at the time and also because of cultural differences. She would have to do her marketing almost daily, usually taking a bus because she did not drive. If a friend was driving to one of the Arab markets, Ms. Stefanou would go along. She found these markets less expensive.

[81] Ms. Stefanou commented on the political situation in Israel, and the daily danger she faced. She said on one occasion she missed her bus – and later learned it had been blown up by a suicide bomber.

[82] Nevertheless, the parties were very happy in Israel. Mr. Stefanou found his work challenging and interesting. He described it as the best assignment of his career. The assignment was originally for a six month period, but Mr. Stefanou was invited to continue for two additional six month periods. He said he was the only Litton employee to do so. He was clearly very proud of his performance in Israel, and was obviously successful there.

[83] Mr. Stefanou takes the position that his success was entirely and solely dependent on his own skills, and had nothing to do with anything his wife provided or did. I disagree. A supportive spouse who maintains a comfortable welcoming home with home cooked meals is always an asset, particularly I would think in a relatively small social group of expatriates. Mr. Stefanou was obviously very focussed on his job, meaning Ms. Stefanou was left to take care of all the other tasks to maintain their home as a comfortable place for Mr. Stefanou to return to each day.

[84] After the third Israeli contract ended, the parties returned to Toronto.

Buying a condo and beginning the Rhodes project

[85] The parties remained in Israel until 1985. While they were there Mr. Stefanou learned from his father that he could pay the Greek government a sum of money and essentially “buy out” his obligation to serve in the Greek military. Mr. Stefanou had left Greece without fulfilling his military service, and had been unable to return to Greece because of this.

[86] On learning about this new programme, the parties arranged for Ms. Stefanou to go to Greece and provide Mr. Stefanou’s father with the requisite funds to make the payment to the Greek government. After that, Mr. Stefanou was finally able to return to Greece. The parties made their first trip to Greece in 1982.

[87] After Mr. Stefanou’s Israel assignment ended the parties went to Greece, to the Island of Rhodes where Mr. Stefanou had grown up. They visited Mr. Stefanou’s mother’s house there – an old and dusty house, built in 1826. Ms. Stefanou described it as inhabitable, while Mr. Stefanou described it otherwise, but conceded it was not a modern house. Both parties loved the property and the location.

[88] When the parties returned to Toronto after the Israel project ended, they initially stayed in a hotel. Mr. Stefanou felt the condominium market presented a good investment opportunity, and so the parties purchased a condominium for $54,000 in the parties’ joint names. They used part of the proceeds from the sale of the Mississauga house to pay for it. They moved into the condominium, but did not stay too long because Mr. Stefanou’s next assignment came up.

Germany

[89] Mr. Stefanou’s next posting was in Germany. He explained that he became involved in the next generation of the project he had been working on in Israel. First Litton wanted to send him to Cold Lake Alberta. He was not interested because the incentives and salaries were not as lucrative as for jobs overseas. Ms. Stefanou was unenthusiastic because of the weather. After some negotiations, Mr. Stefanou was able to secure a posting to Baden Baden in Germany.

[90] When the parties realized they would be going to Germany, they decided to sell their condominium. They were able to sell for $62,000, again realizing a profit. The proceeds were deposited in the parties’ joint account at CIBC.

[91] In Germany Mr. Stefanou’s work was on the Canadian Forces Army base. The parties eventually found a house to rent, but had to vacate because the house was sold. They then moved to another rental property. Both properties were off the base. While in Germany Ms. Stefanou did not work outside the home. Mr. Stefanou suggests she could easily have found work. Ms. Stefanou said her husband was treated as an equivalent to an officer. She said that any jobs on the base for spouses were to be given to enlisted men’s wives, and as a result she was not able to find a job. She did offer some flower arranging classes from time to time and made a little pocket money.

[92] In all the parties were in Germany for seven years. During that time they spent Mr. Stefanou’s holiday time in Rhodes. They became very attached to his mother’s property there. Although traditionally such properties are handed down from mother to daughter, Ms. Stefanou was able to speak to her sister in law who was happy to receive a city property instead of this country one. As a result, Mr. Stefanou ended up with the country property in Rhodes. The transfer was effected through the device of adverse possession. According to both experts, this method of property transfer is frequently used in Rhodes. There is no real question that this property came to Mr. Stefanou through gift or donation.

The “villa” in Rhodes

[93] The house in Rhodes was on a fairly large piece of land. Mr. Stefanou divided the property into three lots, with the idea that he might sell off some of these lots. He has not done so. Instead, the parties embarked on a long term project renovating and enlarging the original inherited house. The parties agree that the value of the inherited house when Mr. Stefanou received it was $27,063. They also agree that its value at the date of valuation was $31,583. Thus, the sum of $31,583 must be included in Mr. Stefanou’s increment when it comes to calculating the increase in the value of his assets.

[94] Initially, the parties fixed up the old house, and then began to plan for the addition. Ms. Stefanou said it was she who met with and instructed the architect, and made all decisions concerning the new house. Mr. Stefanou denies this, and says it was he who took responsibility for everything to do with the new construction.

[95] The architect testified that both Mr. Stefanou and Ms. Stefanou came to his office to talk about the project and to give him instructions about what they wanted. He said he took information from both of them. As he put it, the house was for the family, and since Ms. Stefanou was the wife, he had to listen to her, because the house was not just Mr. Stefanou’s house.

[96] Ms. Stefanou described the process of planning and building the new house. She said she helped her husband when she could, and participated actively in the choice of all the finishes. The parties purchased everything for the kitchen and bathrooms in Canada, and shipped everything by container to Rhodes.

[97] Ms. Stefanou presented some photographs of the property, taken before the parties separated. I have no idea when they were taken, other than they must have been shot sometime between 1990 when Mr. Stefanou acquired the Rhodes property and September of 2004 when the parties separated. I say this because Ms. Stefanou has not returned to the property since the parties separated.

[98] These photographs show a lovely, well appointed property, with a panoramic view of the Aegean Sea, beautiful gardens, and a large aviary. Gardening is Ms. Stefanou’s passion, and raising birds has been Mr. Stefanou’s hobby since he was a small boy. At one point they had peacocks roaming the grounds. Ms. Stefanou refers to the property in Rhodes as a villa.

[99] Both parties loved the Rhodes property, and spent virtually all their vacation time there. Even though Ms. Stefanou does not speak Greek, she still loved being there.

[100] As to the value of the villa, this is a complex issue. First, it is comprised of two buildings, one the old inherited house, and the other the addition or extension the parties built. Second, the entire structure, both old and new, is built on inherited land.

[101] Although the parties agree that Mr. Stefanou owned the villa in Rhodes at the valuation date, they do not agree on its value on that date. Each party commissioned an expert report on the value. Neither expert testified. Both reports were written in Greek, and were translated. It is very difficult to determine the true value of the property on the valuation date in the face of this limited evidence. Nevertheless, I must do the best I can.

[102] Ms. Stefanou’s expert valued the land at €60,000 in 2008 and at somewhere between about € 38,000 and € 50,000 in 1990 when Mr. Stefanou acquired the property.

[103] Ms. Stefanou’s expert valued the new building (using a cost to build analysis) at € 235,000 in 2008. It is unclear to me when exactly the expert came to see the property. Whenever it was, the appraiser did not enter the premises. Ms. Stefanou provided him with photos of the property which he appended to his report. He appears to have relied on the photos as accurately representing the state of the property’s interior, and seems to have taken them into account in coming to his conclusion regarding value.

[104] As I have said, I have no idea when the pictures were taken, but assume they must have been taken before the separation, since Ms. Stefanou has not returned to the property since then. Thus, the photos represent the state of the property at least four years before the date of valuation.

[105] Mr. Stefanou’s expert also approached valuation by separating out the land, the old house and the new house. His valuation is dated 17 May, 2012 from which I infer he must have inspected the property at or around that time. Thus, his valuation was done nearly four year after the date of valuation. Again, that makes the valuation somewhat limited because of the passage of time. Mr. Stefanou’s appraiser commented on the significant state of disrepair in the property, and the cost to correct many deficiencies. Again, I have no idea of the state of the property on the valuation date.

[106] Mr. Stefanou’s appraiser valued the land alone in 2008 at € 59,040, or roughly the same as Mr. Stefanou’s appraiser. He did not provide a value for the land in 1990 when Mr. Stefanou acquired it.

[107] As to the buildings, Mr. Stefanou’s appraiser valued the old house at €18,000. He went on to state that the new house was worth €137,468 before taking into account necessary repairs (such things as proper heating and insulation, sewage connection and so on). He suggested the necessary costs and needed works came to €64,000 making the net value of the new house alone €73,468.

[108] Taking all these factors into account, I conclude that Ms. Stefanou’s expert has overvalued the property, and Mr. Stefanou’s expert has undervalued it. Given that Ms. Stefanou’s expert looked at photos that predated the valuation by four years, and Mr. Stefanou’s expert inspected the property nearly four years after the valuation, I assume the midpoint between their valuation figures would be reasonable. Therefore, before considering any necessary repairs, I would fix the value of the new property at € 186,000 at the date of valuation.

[109] I have no doubt that some repairs would have been necessary at the date of valuation, but assume they would not have been as comprehensive as the expert determined nearly four years after the fact. I make this assumption because Mr. Stefanou testified that he has not had enough money to maintain the property and keep it up properly since the separation. I conclude that repairs of about € 36,000 would have been required at the date of valuation.

[110] The parties have agreed that the appropriate exchange rate to be used at the valuation date is 1.5047 Canadian dollars to 1 Euro. I therefore conclude the following are reasonable estimates of value for the various components making up the villa in Rhodes:

a) Land value in 2008 at date of valuation: € 60,000 = $90,282

b) Land value in 1990 when Mr. Stefanou acquired it: € 50,000 = $75,235

c) Value of old house at date of valuation: $CAD 31,583

d) Value of old house when acquired $CAD 27,083

e) Value of new house at date of valuation: € 150,000 = $227,705

The yacht

[111] While the parties were living in Germany they took up sailing lessons. They enjoyed it very much. Mr. Stefanou, having grown up on the Island of Rhodes, described himself as “a child of the sea”. In 1990 or so, the parties began to attend boat shows in Hamburg and Dusseldorf. The idea of boat ownership started to percolate. Mr. Stefanou says his wife was pressuring him to purchase a yacht. He said, however, that he hardly needed any pressure, since he loves the sea, and loved the idea of sailing. Ms. Stefanou said the boat was more her husband’s idea. From their evidence I conclude it was a joint decision to buy a yacht.

[112] The parties ordered the yacht from a French boat builder. Once it was complete they registered it in Canada. It is registered in their joint names. The purchase price was about $200,000 Canadian. They agree it is currently worth about $100,000.

[113] When the yacht was ready, the parties picked it up and sailed it to Rhodes.

The decision to retire

[114] When the assignment in Germany ended in 1993, Mr. Stefanou looked at his future prospects with Litton. He testified that the company wanted to send him to Cold Lake, Alberta. Neither party was enthusiastic. Mr. Stefanou said Ms. Stefanou had led him to believe she would be inheriting two million dollars from her father’s estate, and this led to the decision to retire. He suggested that Ms. Stefanou said they would have no need of the money, since she would inherit this large sum. Mr. Stefanou said it was the prospect of this money that fuelled the decision to retire. He also testified that Ms. Stefanou promised her inheritance would pay for the yacht.

[115] I do not accept either argument. Ms. Stefanou’s father had died three years before, and there was no sign of any money at that point from the estate. It seems to me the decision had far more to do with Litton downsizing and wanting to redeploy Mr. Stefanou to an unpleasant location than anything else.

[116] At this point in their lives, the parties had significant savings, a yacht and a retirement home in Rhodes. The parties’ finances do not appear to have suffered significantly after Mr. Stefanou’s retirement. At the time of separation they still had combined assets worth close to $2 million.

[117] If the prospective inheritance from Japan were such a driving force behind the decision to retire, surely if the money were not forthcoming from Japan, Mr. Stefanou would have returned to work. He was only forty-one years old when he retired. It seems to me he could easily have found an engineering job if the lack of his wife’s inheritance were really a problem. He did not.

[118] Similarly, if the yacht was dependent on the inheritance, the parties could easily have sold it. They did not. Instead, the parties lived the good life for the next decade. I conclude therefore the decision to retire was not driven by Ms. Stefanou’s potential inheritance. Rather, it was part of the parties’ overall financial plan throughout their marriage.

The end of the marriage

[119] Ms. Stefanou describes the marriage becoming difficult after Mr. Stefanou retired. She said he became a “money monster”, being more and more frugal all the time. She said, for example, that he insisted the toilet not be flushed until both of them had urinated in the morning. Mr. Stefanou did not deny this, but did point out that water can be scarce on the island, and he would ask his wife not to water her garden too much as a result. Ms. Stefanou said her husband would even complain if she purchased higher end toilet paper. She found his attitude to spending increasingly difficult and frustrating. Ms. Stefanou also described her husband as aggressive as well as miserly.

[120] Mr. Stefanou saw his wife as financially demanding. Money was clearly becoming a problem between them. Sometime in around 2002 they began to discuss a marriage contract as a possible solution to their conflict. The essence of the proposed contract was that they would divide all their money equally and then each could manage his or her half as he or she pleased, without having to account to the other. Although they began negotiations with counsel in Toronto, they never concluded them.

[121] They continued to sail and reside in Rhodes. Ms. Stefanou says that on one voyage they argued about an anchorage, resulting in a quarrel that became somewhat physical. Mr. Stefanou denies it, and denies ever being physically aggressive with his wife. I have no doubt there was an argument and altercation of some sort between the parties.

[122] Although the marriage was clearly in decline after this incident the parties nevertheless travelled to the Athens Olympics together. They had planned the trip for some years, and it appears neither was prepared to miss the Games on account of their growing marital discord. They stayed at a relative’s apartment in Athens, saw various sporting events, and happily cheered for Greece.

[123] On their return home to Rhodes, Mr. Stefanou wanted to continue sailing. Ms. Stefanou did not. Mr. Stefanou told her he would sail without her. This would be the first time he had embarked on a solo sailing voyage. According to Mr. Stefanou, his wife told him he could not because the yacht was half hers, and if he did, he would have to pay her rent for his use of her part of the boat. In response, Mr. Stefanou said he would call the police if she interfered with his plan; she countered with a threat to call the Coast Guard. Notwithstanding this exchange of threats, Mr. Stefanou went sailing without Ms. Stefanou. Whatever the real situation, this solo sailing trip really marked the end of their marriage.

[124] When Mr. Stefanou returned to Rhodes in September of 2004, he found Ms. Stefanou gone, and what he described as “everything” removed from the house. I find this difficult to believe, since Ms. Stefanou left Rhodes and went immediately to Japan by air. She could hardly have taken furniture with her, and there was no evidence from anyone else of the home being stripped. I have no doubt, however, that she took as much as she could reasonably transport with her. Again, each party has overstated his or her position, with Mr. Stefanou insisting his wife stripped the house bare, and Ms. Stefanou saying she left with virtually nothing.

[125] After spending about a month in Japan, Ms. Stefanou returned to Canada. Shortly after, Mr. Stefanou made a trip here too. He testified that as usual, he stayed with his sister and brother in law in Toronto, but Ms. Stefanou remained in a hotel. This embarrassed him, and to him signalled the end of the marriage. He returned to Greece, and Ms. Stefanou stayed in Toronto. She has lived here ever since.

[126] Sometime over the next several months, Ms. Stefanou obtained statements from some of the joint accounts. On reviewing them, she saw that Mr. Stefanou had removed over $100,000 from them. She was concerned, and consulted counsel. He immediately started this application, and moved without notice for an order freezing the husband’s assets. Ferrier J granted the order.

[127] After the motion returned on notice, the freezing order was continued on consent. Over the years the parties have agreed to payment out of various sums of money. It is now clear Mr. Stefanou’s withdrawal of funds was to repay his brother in law for some money he had borrowed.

[128] Now that the Court of Appeal has decided Ontario is the proper forum for this lawsuit, the case finally came to be tried before me. I will now turn to the application of the law to the facts as I have found them.

Application of the law of Greece to the facts as found:

[129] I begin by identifying and valuing each of the party’s assets at the date of celebration of the marriage. I will then identify and value each of the party’s assets at the date of valuation, namely January 18, 2008. I will deduct from the value of each party’s assets at the valuation date the value of any those assets that came to the party as a result of gift or donation. The gifted or donated assets are deducted at the value they had at the date of donation. This exercise will yield each party’s increment in value during the course of the marriage.

Valuation of property at the date of marriage

[130] As I have already set out above, I have determined Mr. Stefanou had assets worth $22,860 at the date of marriage, and Ms. Stefanou had assets worth zero.

[131] Mr. Stefanou, however, had debts at the date of marriage. He had a student loan and a Chargex bill. Ms. Stefanou testified, and I believe her, that she paid off her husband’s Chargex after the date of marriage. The spending journals she kept in their time in Nova Scotia shows recurring monthly payments toward Mr. Stefanou’s student loans. While I am satisfied some loans were owing at the date of marriage I have no idea what they were or how much was owed. In the same way as I ascribe no value to Mr. Stefanou’s furniture or vehicle at date of marriage, I ascribe no value to the debts, since I have no convincing evidence of the value of any of them.

[132] I therefore conclude the net value of Mr. Stefanou’s assets at the date of marriage came to $22,860.

Value of property at the valuation day

[133] There is really no quarrel between the parties concerning the value of the bank accounts, investment accounts, RRSP accounts or the yacht at valuation date.

[134] The parties agree Ms. Stefanou’s assets at valuation day comprised the following, subject to Mr. Stefanou’s arguments that he is actually the beneficial owner of them:

Asset:

Diamond ring

Investor’s Group RRSP

Investor’s Group spousal RRSP

Sail Boat “Delight 1” (1/2)

PH North #3364460

BMO chequing

BMO savings

Ameritrade No 772817254 (1/2)

TOTAL

Value: ($CAD)

$ 5,400.00

$ 238,349.87

$ 13,705.70

$ 50,000.00

$ 337,885.38

$ 3,754.63

$ 11,709.67

$ 115,297.99

$ 776,103.24

[135] The parties agree Mr. Stefanou’s final property comprised the following. They agree on all the values except the villa and the land on which it sits in Rhodes. I have inserted the values I have determined for these disputed items:

Asset:

Investors Group RRSP

Sail boat “Delight 1” (1/2)

PH North

BMO Investorline

Ameritrade No 772817254 (1/2)

Villa in Rhodes (new part)

Old house forming part of villa

Two Inherited lots in Rhodes

Land on which villa and old house are built

TOTAL

Value: ($CAD)

$ 149,415.33

$ 50,000.00

$ 401,735.84

$ 25,114.71

$ 115,297.99

$ 227,705.00

$ 31,583.00

$ 6,000.00

$ 90,282.00

$1,097,133.80

[136] Mr. Stefanou claims, however, that certain inherited or gifted money or property form part of his final property and should be deducted from it.

Gifted or donated property and contributions

[137] The critical time to look at gifted or donated property is at the date of valuation. In order to be excluded, those assets must still be in existence at the date of valuation. If they are, the owner is entitled to exclude the value of the gift at the date of receipt from his or her increment. As is the case in Ontario, the party claiming the “exclusion” bears the onus to show the gifted assets existed at the date of valuation, and to prove their value.

[138] The parties agree that the original Greek house came to Mr. Stefanou by gift or inheritance from his mother. The experts agree that on the Island of Rhodes the commonest way to accomplish such an intergenerational transfer without consideration is through an unopposed claim to adverse possession. This is how Mr. Stefanou acquired the property in Rhodes. The parties agree that the value of the inherited house was $27,083 when Mr. Stefanou inherited it in 1990, and it was worth $31,583 on the valuation date. Mr. Stefanou is entitled to subtract the initial value of the inherited house from the calculation of his assets at valuation date. As Mr. Kounoupis explained it, Mr. Stefanou is not entitled to exclude the growth in the value of the gifted property, but simply its value when he received it. Therefore the sum of $27,083 must be subtracted from the final value of Mr. Stefanou’s property at the valuation date.

[139] Mr. Stefanou also inherited the land on which the old and new parts of the villa are built. As I have determined above, the land alone was worth $90,282 at the date of valuation. It was worth $75,235 when he inherited it. The sum of $75,235 must therefore be subtracted from the final value of Mr. Stefanou’s property.

[140] Mr. Stefanou also claims an exclusion of $126,107 as monetary gifts from his parents. He has presented no evidence of where those funds were at valuation date, or how or if they were segregated from other money. The claim for this exclusion is dismissed.

[141] Mr. Stefanou also claims an exclusion for the sale proceeds of $45,095.60 from the sale of an inherited lot in Rodini, Rhodes, as well as proceeds of $34,450 from another inherited lot. The money from the sales apparently went into the joint accounts at some point. It does not appear to have been segregated from any other money. Again, Mr. Stefanou has failed to identify these particular funds at the valuation date. He bears the onus of doing so, and has not met his burden. The claim for this exclusion is also dismissed.

[142] Last, Mr. Stefanou claims exclusion for two parcels of agricultural land in Greece, with a total value for the two of $6,000. While Ms. Stefanou takes the position Mr. Stefanou has provided no supporting documentation, I accept Mr. Stefanou’s evidence that he inherited the parcels, continued to hold them at the valuation date, and $6,000 is a reasonable approximation of their value.

[143] In total, therefore, Mr. Stefanou is entitled to deduct a total of $108,318.00 from his final property.[^7] Mr. Stefanou’s final property is therefore $988,815.80.

[144] Ms. Stefanou’s father died in 1990. After lengthy mediation or litigation proceedings in the Japanese courts, Ms. Stefanou inherited a parking lot and some cash in Japan. At the date she received the assets, they were valued at CAD$215,211.08. She claims she still retained the value of $120,000 at the date of valuation. I am not persuaded. First, Ms. Stefanou conceded she has no records to confirm she still had this money in January of 2008. Second, she testified that the parking lot in Japan stood as collateral for money she had borrowed from her sister. When the parking lot was eventually sold, Ms. Stefanou’s sister received all the proceeds. I therefore conclude that Ms. Stefanou has not met her onus to show that she still retained the inherited property at the date of valuation. Therefore, Ms. Stefanou’s final property is $776,103.24

[145] Mr. Stefanou also claims he contributed $90,000 to Ms. Stefanou’s costs in pursuing her claims to her late father’s estate, and somehow seeks to be reimbursed for this. He has provided no proof. I therefore reject this claim.

Calculation of the increment

[146] Since Mr. Stefanou’s property at the date of marriage was $22,860, and the final value of his property at the date of valuation was $988,815.80 the incremental increase in the value of his property is $965,955.80.

[147] Since Ms. Stefanou’s property at the date of the marriage was zero and the value of her property at the date of valuation was $776,103.24, the incremental increase in the value of her property is $776,103.24.

[148] Prima facie, each party is entitled to 1/3 of the increment in value of the other. This is the claim Ms. Stefanou makes. To the contrary, Mr. Stefanou suggests that first, Ms. Stefanou is not entitled to any share of his increment in value and second, he is entitled not only to 1/3 of her increment in value but rather to 100% of the increment. Mr. Stefanou takes the position that his wife did nothing during the course of their marriage, making not even the minimum required contribution to their marriage, and that as a result he is entitled to 100% of all the assets in either his name, Ms. Stefanou’s name or their joint names.

[149] As I understand Greek law, Mr. Stefanou bears the onus of showing that Ms. Stefanou made essentially no contribution to the marital partnership.

Has Mr. Stefanou met his onus?

[150] In my view, Mr. Stefanou has failed to meet his burden. I say this for a number of reasons.

[151] During the first year or so of the marriage Ms. Stefanou was working full time and contributing all her income to the family enterprise. She thus made a significant contribution to the parties’ acquisition of a home, and their quick discharge of the mortgage on it. The house, in turn, formed the seed money for all their later investments.

[152] Ms. Stefanou accepted her husband’s wish to accumulate as much wealth as possible in as short a period as possible. In order to do this, each made sacrifices – spending as little as possible in order to save. Ms. Stefanou’s frugality and excellent household management, both while she was working outside the home, and after the move away from Toronto, enabled the parties to save at a critical time in their relationship. It was during the first years of the marriage, through the time in Israel that this was most prevalent. I see Ms. Stefanou’s contribution in this fashion as easily showing she made a significant direct financial contribution to the family’s acquisition of assets over and above the minimal requirement imposed on her by Greek law.

[153] Ms. Stefanou also contributed indirectly. She took complete responsibility for the household, and did everything to manage the home. She did the marketing, she cooked and cleaned. She entertained frequently. I believe her when she says she had dinner parties for Mr. Stefanou’s colleagues and friends almost every weekend. Although Mr. Stefanou suggested she had maids to help her with housework on a routine basis, I do not believe it. I accept Ms. Stefanou’s evidence that she had help only on occasion, and only when she entertained at large parties. This is confirmed by the detailed records she kept of their spending in both Nova Scotia and Israel.

[154] I also accept Ms. Stefanou’s evidence that she assisted in the building of the house in Rhodes. While I have no doubt Mr. Stefanou did the bulk of the physical work, Ms. Stefanou helped him as best she could. Mr. Stefanou testified in chief at the first trial that his wife helped him to pour the concrete for the new building.

[155] Ms. Stefanou was also involved in meeting with the architect when the initial designs were drawn. Although she overstated her involvement, the architect did confirm that he consulted with her in coming to the final plans. Ms. Stefanou also participated in choosing the fixtures and finishes as well as the furnishings for the property. All of this enhanced the value and comfort of the property.

[156] Ms. Stefanou has also been very supportive of her husband’s career. She has followed him all over the world, from rural Nova Scotia to Israel in conflict, to Germany. Mr. Stefanou always had his work and his colleagues in each location; by contrast, with each move Ms. Stefanou had to uproot herself, and make a new home for her and her husband, and develop a new social circle for them. While Mr. Stefanou belittles his wife’s contribution, I find it was significant. Her role enabled him to concentrate entirely on his job and income earning, while she bore all the responsibility for maintaining a comfortable home life for them.

[157] As to the jointly held assets, Mr. Stefanou testified under oath before Herman J that these were indeed jointly owned and would be divided equally between him and his wife. From this evidence, and his statements before me I infer the parties always intended each to have a joint beneficial interest in them. I am also satisfied that Ms. Stefanou made an equal contribution to their acquisition by virtue of her early financial contributions, coupled with her contributions of work and household management.

[158] I am satisfied Ms. Stefanou is easily entitled to one third of the increment in Mr. Stefanou’s assets, and he has failed to establish a greater interest in her increment. For these reasons I conclude Mr. Stefanou has failed to meet his onus.

[159] Therefore each party is beneficially entitled to one half of the joint assets, and each is entitled to 1/3 of the other’s increment.

Each party’s entitlement

[160] Because I have determined that each party is entitled simply to 1/3 of the other’s property increment, Ms. Stefanou must pay Mr. Stefanou one third of $776,103.24 or $258,701.88. Mr. Stefanou must pay Ms. Stefanou one third of $965,955.80, namely $321,985.26. As a result, Mr. Stefanou shall pay Ms. Stefanou the net difference, namely $63,284.18.

[161] The yacht is jointly owned, but is located in Greece. The parties agree that the likely current value of the boat is about $100,000. Ms. Stefanou has no ability to sell it from here, and Mr. Stefanou has no ability to sell it since it is in their joint names. Mr. Stefanou has had the exclusive use of the boat since 2004, but has also had the cost of maintaining it since then. I would make no adjustment on account of either. Mr. Stefanou may either continue to use it or can more easily dispose of it than Ms. Stefanou. Therefore, Ms. Stefanou will forthwith transfer her interest in the yacht to Mr. Stefanou and he will, in exchange, immediately pay her the sum of $50,000, after which he may deal with the vessel as he wishes.

Spousal support:

[162] The issue of spousal support raises two issues. First, does this court retain jurisdiction to order support in the face of a foreign divorce, and second, if there is jurisdiction, is Ms. Stefanou entitled to spousal support? Here, Ms. Stefanou’s claim for spousal support is advanced under the Divorce Act.[^8] She commenced her claims for divorce, spousal support and equalization under the Family Law Act on April 11, 2005. Mr. Stefanou had launched his claim in Greece for a divorce in February of the same year. The divorce trial was heard on October 20, 2005. Ms. Stefanou did not participate. The divorce was granted in Greece on May 11, 2006 and became “irrevocable” on January 18, 2008.

[163] Although Ms. Stefanou did not actually receive the divorce documents by way of initial personal service on her, her lawyer here received a copy of the divorce papers from Mr. Stefanou’s counsel on February 28, 2005, long before the hearing, and long before the divorce was granted. Ms. Stefanou chose not to have the documents translated. She chose to ignore the Greek proceedings. She took no steps to stay the Greek proceedings, unlike Mr. Stefanou who took that action against Ms. Stefanou’s claim here.

[164] That is the context in which I must look at whether Ontario has jurisdiction to entertain Ms. Stefanou’s claim for corollary relief.

Jurisdiction

[165] The Ontario Court of Appeal has held that an Ontario court cannot vary a support order obtained in divorce proceedings in another country [^9] nor does it have jurisdiction to hear and determine corollary relief commenced under the Divorce Act after a valid divorce has been obtained in another country. [^10] The difference between those two cases and this case is that here Ms. Stefanou made her claim for spousal support before the divorce order was granted in Greece.[^11] The question is whether one determines jurisdiction at the time the application is first made or when the court hears and determines the claim.

[166] Mr. Stefanou relies on Rothgiesser and Okmyansky as well as Nicholas v Nicholas [^12] to support his position that the Ontario court has no jurisdiction once the foreign court has granted the divorce. Nicholas was a forum non conveniens case dealing with whether corollary issues should be dealt with in Trinidad or in Canada. In that respect, it was very similar to the issues Herman J decided here at the first trial. In Nicholas the Court of Appeal did not deal specifically with whether Ontario retained jurisdiction to deal with corollary relief, but rather which jurisdiction was the more convenient forum. It concluded the Ontario action should be stayed and the action proceed in Trinidad, particularly because the Trinidad divorce judgment was only a decree nisi and the Trinidad court had specifically retained jurisdiction to deal with corollary relief.

[167] While there is no case specifically on point with the facts and chronology of this case, it seems to me that Rothgiesser and Okmyansky are the seminal decisions that must inform the result here. In both these cases the Court of Appeal analysed the jurisdiction under the Divorce Act to claim corollary relief. Here, the corollary relief sought is spousal support. The Divorce Act permits a claim for spousal support to be made in either a divorce proceeding or a corollary relief proceeding. In the former, the applicant may claim a divorce alone, or a divorce and spousal support and/or custody and child support. In a corollary relief proceeding, a former spouse may seek spousal support and/or custody and child support. The current wording of the Divorce Act gives jurisdiction in a corollary relief proceeding to a court in which either former spouse is ordinarily resident at the commencement of the proceeding, or where both former spouses accept the jurisdiction of the court.[^13]

[168] In Rothgiesser the court dealt in part with the prior wording of section 4 of the Divorce Act which provided that only the court that had granted the divorce had jurisdiction in a corollary relief proceeding. That wording was changed in 1993 to the current wording, reflected above. Okmyansky considered the new wording in section 4(1) and concluded that Parliament would only enact a provision dealing with support following a foreign divorce if it signalled its intention clearly, and only after considering it in the context of private international law. The court was not persuaded Parliament had done so in section 4(1). The court concluded that corollary relief is “incidental to the granting of the divorce. If a divorce was not granted in Canada, it is difficult to see how the making of a support order could properly be viewed as ‘corollary relief.’”[^14]

[169] Okmyansky specifically held that a spouse divorced by a foreign court could not commence an application for corollary relief in Ontario. Ms. Stefanou urges me to distinguish Okmyansky on the basis that here the application was made before the foreign divorce was granted. She says that I should therefore look at the time the claim was made as determining jurisdiction.

[170] It seems to me I cannot do so in light of the Court of Appeal’s comments about corollary relief being incidental to the granting of a divorce under the Divorce Act. If the divorce is not granted pursuant to the Divorce Act, then there is no divorce to which corollary relief may be incidental. This was the conclusion of the Court of Appeal. That conclusion binds me. I therefore fail to see how this court has any jurisdiction to grant corollary relief in the face of a foreign divorce, regardless of whether the claim for corollary relief was commenced before or after the foreign divorce.

Entitlement

[171] Even if I had determined I had jurisdiction to order spousal support in the circumstances of this case, I would not have done so.

[172] At the end of the day, each of the parties will have assets of similar, but not identical value. Neither has been employed for decades –Ms. Stefanou since 1980 or so, and Mr. Stefanou since 1993. As a result, neither has any particular ability to earn income apart from investment or Canada Pension Plan income. Ms. Stefanou has already applied for and obtained a division of CPP pension credits. Each party has his or her share of the assets that will form the basis of their investment income. I see no unmet need for support on Ms. Stefanou’s part, or any ability to pay on Mr. Stefanou’s part.

[173] Ms. Stefanou suggests she has a claim for compensatory support. In my view, the division of property adequately compensates Ms. Stefanou for her contributions to the marriage. Therefore, I dismiss Ms. Stefanou’s claims for spousal support on both the basis of lack of jurisdiction or entitlement.

Conclusion:

[174] On the issue of property rights Ms. Stefanou is entitled to a payment of $321,985.26 from Mr. Stefanou and Mr. Stefanou is entitled to a payment of $258,701.08 from Ms. Stefanou. To satisfy these reciprocal obligations, Mr. Stefanou will therefore pay Ms. Stefanou the sum of $63,284.18, which will be paid from Mr. Stefanou’s share of the frozen assets. Since neither party has had access to the bulk of his or her assets since separation and the funds have remained invested, I do not see this as a case for pre-judgment interest.

[175] Upon Ms. Stefanou delivering to Mr. Stefanou a transfer of her interest in the boat “Delight 1”, Mr. Stefanou will, in exchange, immediately pay her $50,000. This amount will also be paid from Mr. Stefanou’s share of the frozen accounts.

[176] Ms. Stefanou’s claim for spousal support is dismissed.

[177] If the parties are unable to agree on the costs of the action, they may make brief written submissions to me. Ms. Stefanou’s are to be delivered within two weeks of the date of these reasons, with Mr. Stefanou’s to follow within two weeks of service. Submissions will include particulars of each lawyer’s year of call, actual billing rate to his or her client, and details of any settlement offers that might bear on the issue of costs.

[178] Once Mr. Stefanou has made the payments required above, and once the issue of costs has been determined and the costs paid, the freezing order will be lifted, and the remaining funds in the frozen accounts will be paid to the parties.

MESBUR J

Released: 20121219

COURT FILE NO.: 05-FD-305300FIS

DATE: 20121219

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

SETSUKO STEFANOU

Applicant

• and -

GEORGE STEFANOU

Respondent

REASONS FOR JUDGMENT

Mesbur J.

Released: December 19, 2012

[^1]: Stefanou v Stefanou, 2009 ONCA 204 at paragraph 20 [^2]: Ibid, paragraph 21 [^3]: R.S.O. 1990, c. F-3, as amended [^4]: See Article 1389 of the Hellenic Civil Code [^5]: Opinion of Mr. Kounoupis [^6]: Exhibit 3, tab 4 [^7]: $27,083 + $75,235 + $6,000 = $108,308 [^8]: R.S.C. 1985, c. 3 (2nd Supp.) as amended [^9]: Rothgiesser v. Rothgiesser (1999), 2000 CanLII 1153 (ON CA), 46 O.R. (3d) 577 (O.C.A.) [^10]: Okmyansky v. Okmyansky 2007), 2007 ONCA 427, 86 O.R. (3d) 587 (O.C.A.) [^11]: Although she made the claim after the divorce was commenced in Greece, and after she knew it had been commenced there. [^12]: [1995] O.J. No. 28 (Ont. Gen.Div.), affirmed (1996) 94 O.A.C.21 (O.C.A.) [^13]: Divorce Act section 4(1) [^14]: Okmyansky note 9 above at paragraph 38