ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Syed Muneeb Hussain Bukhari
David Martin, for the Plaintiff
Plaintiff
- and -
Nadia Muneeb Bokhari a.k.a. Nadia Saqlain, Muhammad Amer Chaudhary and Syer Azadar Hussain Bukhari
Shahzad Siddiqui, for Nadia Saqlain;
Syed Azadar Hussain Bukhari, In Person
Defendants
HEARD: December 10 and 11, 2014
REASONS FOR JUDGMENT
Justice D.L. Edwards
Introduction
[1] On September 30, 2010, Nadia Bokhari (“Nadia”) took title to 63 Hiscock Boulevard, Scarborough, Ontario (“property”).
[2] Syed Muneeb Hussain Bukhari, (“Muneed”), sues Nadia, his ex-spouse, claiming that he has a 50% interest in the property.
[3] He argues that his funds were used for 50% of the down payment.
[4] He also names his brother, Syed Azadar Hussain Bukhari, (“Azadar”) as a defendant, but makes no claim against him.
[5] Azadar cross-claims against Nadia asserting that he owns a 50% interest in the property pursuant to trust declarations.
[6] Nadia disputes both claims.
Undisputed Facts
[7] Nadia and Muneed were married in 2005 in Pakistan and divorced in Canada in 2008.
[8] There was one child of the marriage.
[9] On September 30, 2010, the property was purchased; title to the property was registered in Nadia's name.
[10] From February 2011 onwards, Nadia paid all of the expenses of the property, including mortgage payments, property taxes, home insurance and utilities.
[11] At the time of closing, Nadia and Muhammad Chaudhary executed a trust declaration, stating that Muhammad Chaudhary had a 50% interest in the property (“Chaudhary Trust”).
[12] At no time has Chaudhary lived in the property, paid any expenses of the property, or paid any mortgage payments.
Credibility of the Parties
[13] I did not find the parties to be credible.
[14] On several issues Nadia’s testimony was contradicted, either by third party evidence, or her own testimony at discovery. In each case she was steadfast in maintaining her testimony at trial, ignoring any inconsistency.
[15] Azadar’s testimony was not believable. He maintains that he purchased a 50% interest in the property from Chaudhary for investment purposes, yet he provided no evidence of due diligence, or any understanding of the value of that interest.
[16] Azadar testified that he became aware of the Chaudhary Trust in October 2011 when Chaudhary offered to sell the interest to him. He said that he had no communication with his brother about this purchase. Nor did he have any communication with Nadia, who was the occupant of the property, prior to his purchase of the interest.
[17] It is difficult to understand how one could purchase something for investment purposes without undertaking due diligence to determine basic issues regarding that investment such as the value of that interest, the balance of the mortgage, or the carrying costs. He testified that he was willing to pay his share of the mortgage, and yet there is no evidence that he had any understanding what that entailed, nor did he have any information about the equity in the property.
[18] Muneed’s testimony was, in large part, uncorroborated generalities. Also, on a number of points, such as whether Nadia worked or not, the third party evidence is inconsistent with his testimony. On the critical point of the source of the down payment, bank records contradict his testimony.
[19] As I did not find the parties credible, my findings of fact are restricted to where there is corroborating evidence.
Muneed’s Claim
[20] Muneed claims that his money was used for 50% of the down payment and that Nadia holds title to the property in trust for his 50% beneficial interest.
[21] In essence, his position is that, although they were divorced, in an attempt to reconcile, he gave in to her demand that she have total control of his finances. He asserted that, as she was not working, his income supported the family and was used for 50% of the down payment to purchase the property.
[22] Muneed must prove his claim on a balance of probabilities; Nadia need not disproof the claim.
Living Arrangements after Divorce
[23] There was considerable testimony regarding whether Muneed and Nadia lived together as husband and wife after their divorce.
[24] Muneed testified that, although they were divorced through the courts, he did not consider himself divorced because they did not have a religious divorce. He believed that he remained married until Nadia remarried; even then, he thought that he needed to consult religious scholars to determine whether he was divorced.
[25] Their living arrangement is only relevant to the issues in dispute insofar as it helps explain Muneed’s position regarding why his money was used to purchase the home, but title was registered in Nadia’s name. It could also be a factor in determining credibility.
[26] Muneed testified that, even after divorce, they lived together until February 2011, and he paid the mortgage payments on the property until that time.
[27] However, Muneed did not provide any corroborating evidence to support his position that he paid the mortgage payments until February 2011. I find that Muneed has not proven that he paid the mortgage payments until February 2011.
[28] Anand Bhavsar testified that he rented his basement to Muneed and Nadia between May 2009 and December 2009. He stated that they held themselves out to be a family, although Muneed was gone for seven to ten days at a time for work.
[29] Nadia disputes that they continued to live together after their divorce in 2008. She denied living together as a family, but did not deny that Muneed was there from time to time, stating that he was their child’s father and she could not prevent him from visiting. Also, Muneed was her cousin.
[30] Anand Bhavsar is an independent, unbiased witness, whose testimony I accept. I reject Nadia’s evidence that she and Muneed never lived together as man and wife after their divorce. I find that Nadia and Muneed lived together between May 2009 and December 2009. This is an example of where I found Nadia’s evidence to not be reliable.
[31] Muneed testified that they went to Pakistan as a family in 2008 for four months and when they returned to Canada they lived together in a basement apartment in Brampton.
[32] Nadia acknowledged travelling to Pakistan after the divorce with their daughter and Muneed because her brother had died. Muneed went with her for two reasons. As he was her cousin, Muneed was also her brother’s cousin. Also, because Nadia did not have sole custody of their daughter, she could not take her to India alone. She denied living together with him in India.
[33] In the absence of other corroborating evidence, I make no finding as to whether they lived together after their divorce and prior to February 2011, with the exception of the period between May 2009 and December 2009.
[34] Due to my findings below regarding the source of the funds for the down payment, I need not make any further findings of fact related to their post-divorce living arrangements.
Purchase of the Property
[35] The financial details for the closing of the purchase of the property are muddy. Neither party had clear records to support their position for the source of the funds for 50% of the down payment.
[36] Muneed’s position, in general, was that, as Nadia had no source of income, his income was funnelled through a corporation and withdrawn by Nadia. She deposited these funds into her personal accounts. This money, plus some funds that he borrowed, was used for his share of the down payment.
[37] Muneed’s position rests largely upon his assertion that Nadia had no source of income. He testified that, until he moved out of the property in February 2011, she never worked; she was a “house wife”.
[38] The parties agree that a total down payment of approximately $22,000 was required for the closing.
[39] Muneed testified that he provided approximately $10,000 for the down payment and Chaudhary provided $11,381.20. The two Royal Bank drafts given to the real estate lawyer for the closing of the purchase of the property are marked as Exhibit 3. Chaudhary’s portion is reflected in one of these bank drafts.
[40] Muneed stated that his $10,000 was composed of $5,000 from his income that Nadia transferred out of the corporation into her personal account, and $5,000 of borrowed funds: $4,000 from a friend and $1,000 from his brother.
[41] He points to deposits on August 24, 2010 into Nadia’s TD Canada Trust account of $1,000 and $4,000 to support his testimony that he borrowed those funds. However, on the same day $5,007.50 was transferred out of that account. This is one month before the closing. He had no explanation for this transfer.
[42] There is no evidence that these funds were used to fund the down payment.
[43] Further, on September 7, 2010, there is a deposit of $5,000 into Nadia’s TD Canada Trust account, and on September 14, 2014 a bank draft in the amount of $5,007.50 was drawn on the same account. Finally, the $5,000 bank draft given to the real estate lawyer is a Royal Bank draft, not a TD Canada Trust draft. This bank draft is the second bank draft payable to the real estate lawyer that forms Exhibit 3.
[44] Muneed had no explanation as to the source of these funds, other than to state that Nadia had no income; therefore, these monies must have come from his income.
[45] Muneed was unable to trace the funds to corroborate his position; there was no clear flow of the funds from the corporate account to Nadia’s account and finally to the real estate lawyer.
[46] Nadia testified that she paid the $11,000 down payment from money that she earned at Popeye Chicken and cash that she brought from Pakistan. She also testified that she earned money from a catering business.
[47] Her T4 slip for 2011 shows income from a corporation carrying on business as Popeye Chicken of $5,600.00. She testified that this was an adjustment for 2010 income because the owner left. There is nothing on the T4 slip indicating that it is an adjusted slip for 2010 income. In the absence of corroborating evidence, I am not prepared to accept Nadia’s testimony. I find that this T4 slip represents income earned in 2011 and not 2010.
[48] However, Nadia’s 2010 income tax assessment shows total employment income of $1,931; gross income from her catering business of $35,000; and a net catering income of $9,740.
[49] Muneed testified that Nadia had no source of income in 2010; that she was a housewife; and that any money that she had was money that he earned. I do not agree. I find that Nadia had income in 2010. I need not determine whether she did indeed bring cash from Pakistan.
[50] It is important to remember that Muneed must prove his case on a balance of probabilities; Nadia need not disprove it.
[51] I do not accept that the deposits into Nadia’s account at TD Canada Trust of $1,000 and $4,000, which Muneed testified were borrowed from his brother and friend, were used for the down payment. He has not shown that these funds were the source of the $5,000 Royal Bank draft given to the real estate lawyer for the closing of the purchase. Nor has he proven the source of the remaining portion of his share of the down payment.
[52] Muneed has failed to prove on a balance of probabilities that his money was utilized for his share of the down payment.
[53] I dismiss Muneed’s claim that he has a 50% interest in the property.
Azadar’s Claim
[54] Azadar is a defendant. However, no relief is claimed against him. He has cross-claimed against Nadia, claiming a 50% interest in the property through the Chaudhary Trust.
[55] During submissions and cross-examination, counsel for Nadia suggested that the limitation period had expired on Azadar’s claim, asserting that Muneed named Azadar as a defendant so that he could cross claim in this action.
[56] Nadia did not plead a limitation defence, and no request to amend the pleadings was made. Further, there is no evidence on this issue. This defence fails.
Chaudhary Declaration
[57] Nadia’s counsel concedes the validity of the Chaudhary Trust. However, in her testimony, Nadia continues to deny signing, or ever seeing the document. According to her counsel, the validity of the document was conceded because she had no proof to dispute it.
[58] This position is better appreciated when one understands Nadia’s capacity for English. When Nadia testified, she utilized the services of an interpreter, and testified that she had no ability to read English. Her understanding of any document written in English that she signed is based upon the explanation given to her. All real estate documents, including The Chaudhary Trust, were explained to her by Chaudhary at the real estate lawyer’s office. The real estate lawyer only spoke English.
[59] Azadar testified that he purchased Chaudhary’s interest and produced a Declaration of Trust, dated October 26, 2011, signed by Muhammad Chaudhary and acknowledged by Azadar. In that Declaration, Chaudhary declares that he held his 50% interest in the property in trust for Azadar.
[60] No evidence was called to dispute this declaration of trust.
[61] Based upon the two trust declarations, I find that Azadar has a 50% interest in the property.
Rights and Obligations under the Chaudhary Trust
[62] Nadia asks that, if I find that Azadar has an interest in the property, I perform an accounting, and require Azadar to pay 100% of the costs of the property from the date of acquisition, including costs that Nadia states she incurred to renovate the basement. This is based upon her counsel’s interpretation of the two declarations.
[63] Azadar states that his lawyer wrote offering to pay his obligations. As Nadia refused to accept this offer, he asserts that he should not have to pay for any past obligations.
[64] He refused to clarify what his understanding of those responsibilities were; rather, he maintained the position that he was obligated to pay whatever Chaudhary was obligated to pay. This position is consistent with his lack of understanding of the details of his investment.
[65] Were I required to make findings on these positions, I would have not accepted either position. However, for the reasons set out below, I make no finding on this issue.
[66] The Chaudhary Trust forms the basis for the rights and obligations of Azadar. Unfortunately, the document is vague; it does not clearly describe those rights and obligations. Further, I have very little evidence upon which to make a determination of the meaning of the Chaudhary Trust.
[67] I have the uncontested evidence that, notwithstanding the terms of the Chaudhary Trust, Chaudhary did not make any mortgage payments. As well, the parties agree that Chaudhary never lived in the property.
[68] Muneed testified that he agreed with Chaudhary that, in return for waiving his obligation to pay half of the mortgage payments, Chaudhary waived his right to occupy the premises. Chaudhary did not testify.
[69] I have previously found Muneed to not be a credible witness and I am not prepared to accept his uncorroborated testimony. Also, I do not accept that, because Chaudhary did not live in the property, this testimony is corroborated. The vagueness of the document makes it unclear as to whether he had the right initially.
[70] Beyond that evidence, there is no evidence that would assist me in interpreting the Chaudhary Trust.
[71] Many questions arise under the Chaudhary Trust. They include:
• Under the terms of the original document, did Chaudhary have the right to occupy the property?
• Was the trust orally amended? Did Chaudhary waive the right to occupy in return for not being required to pay his share of the mortgage payments?
• What obligations has Azadar assumed by signing the acknowledgment of trust?
• Under the terms of the Chaudhary Trust is Chaudhary, (and now Azadar), entitled to cash out his equity in any way, such as by requiring the property to be sold?
• When the property is sold, how are the proceeds distributed? Should Nadia receive a credit for any payments made by her, such as property taxes, utilities, insurance premiums, capital improvements and/or the mortgage payments in whole or only the principal payments? Must she account for any rent received from the basement apartment, and/or notational occupation rent for her use of the property?
[72] These questions, and likely more, must be determined, but only after the matter is properly pleaded and the appropriate evidence is before the court.
[73] I find that I am unable to answer those questions based upon the relief sought and the evidence before me. The parties require an interpretation of the Chaudhary Trust, not just an accounting.
Summary
[74] In summary:
(i) I dismiss Muneed’s claim;
(ii) I declare that Azadar has a 50% interest in the property; and
(iii) I order Nadia to transfer the said interest to Azadar.
[75] I order that the Certificate of Pending Litigation be removed from title.
[76] Nadia and Azadar require a court interpretation of the Chaudhary Trust, together with any amendments thereto.
[77] Until a court further clarifies their rights and obligations under the Chaudhary Trust, or the parties otherwise agree, I order than the status quo shall continue:
(i) Nadia shall have exclusion possession of the property and shall pay all expense of the property including the mortgage payments, without prejudice to an accounting of such payments once an interpretation of the Chaudhary Trust has been obtained; and
(ii) Neither party shall encumber or sell their respective interest in the property.
[78] I make no other order as to the rights and obligations of Nadia and Azadar under the Chaudhary Trust.
[79] If the parties cannot agree upon costs, the parties shall provide cost submissions not to exceed three pages (not including any offers to settle or bill of costs). Counsel for Nadia and Azadar shall provide their submissions within 15 days. Submissions in response shall be made within 15 days thereafter, with reply submissions, if any, within seven days thereafter.
Justice Edwards
Released: January 5, 2015
COURT FILE NO.: CV-11-5122-SR
DATE: 20150105
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Syed Muneeb Hussain Bukhari
Plaintiff
- and –
Nadia Muneeb Bokhari a.k.a. Nadia Saqlain, Muhammad Amer Chaudhary and Syer Azadar Hussain Bukhari
Defendants
REASONS FOR JUDGMENT
Justice Edwards
Released: January 5, 2015