SUPERIOR COURT OF JUSTICE - ONTARIO

CITATION: Greco-Wang v. Wang, 2015 ONSC 3444

COURT FILE NO.: FS-10-356335

DATE: 2015/05/29

RE: Maria Greco-Wang

AND: Charles Wang

BEFORE: Justice Moore

COUNSEL: Susan Adam Metzler, for the Applicant

Paul S. Pellman, for the Respondent

DATES HEARD: May 11, 12, 13 and 14, 2015

E N D O R S E M E N T

[1] Maria Greco-Wang (“Maria”) and Charles Wang (“Charles”) met while attending Ryerson University. Maria graduated in 1982 and went on to Teacher’s College and a career as a teacher. She is employed by the Toronto District School Board.

[2] Charles graduated in 1981 and then worked for a drywall firm. In 1994, Charles partnered with John Cigan (“John”) in a drywall installation business, System Drywall. The business prospered over the years and produced opportunities for Maria and Charles to invest in real estate income generating properties and to enjoy a comfortable lifestyle during their years together.

[3] The parties married in 1984. They welcomed two children into their family, Andrew in 1989 and Denise in 1992. The children are now grown, educated and living independently of the parties.

[4] Maria and Charles separated in 2008 and have since resolved substantially all of the issues in this action. Remaining to be determined are property issues relating to the ownership of the matrimonial home and equalization of net family property.

The Matrimonial Home

[5] Maria correctly submits that the law is clear and that the parties do not dispute that a three step process is required in order to determine the property and financial rights and obligations relating to the matrimonial home.

[6] In Rawluk,[1] the Supreme Court pointed out that:

The distinction between a share in ownership and a share in property value through an equalizing transfer of money is more than an exercise in judicial formalism. This distinction not only follows the two-step structure of the Family Law Act, 1986, but reflects conceptual and practical differences between ownership and equalization. Ownership encompasses far more than a mere share in the value of property. It includes additional legal rights, elements of control and increased legal responsibilities. In addition, it may well provide psychological benefits derived from pride of ownership. Where the property at issue is one to which only one spouse has contributed, it is appropriate that the other spouse received only an equalizing transfer of money. But where both spouses have contributed to the acquisition or maintenance of the property, the spouse who does not hold legal title should be able to claim an interest in that property by way of a construct of trust and realize the benefits that ownership may provide. The imposition of a constructive trust recognizes that the titled spouse is holding property that has been acquired, at least in part, through the money or effort of another. The non-titled spouse’s constructive trust interest in this property is distinct from the right to an equalizing share of property value that is derived not from an independent property right but from the status as a married person.

[7] Maria submits, therefore, that first, the trust claim must be dealt with and, second, the calculation must be done in relation to an equalization entitlement and, third, the court will determine whether that equalization calculation is unconscionable having regard to the facts of the case and section 5(6) of the Family Law Act.

[8] Maria also, and quite properly, refers to the Jukosky case[2] as one confirming the three step process or roadmap for this issue in Ontario. In Jukosky, the court refers to and incorporates by reference the words of Cory J (at para. 54 in Rawluk):

A marital relationship is founded on love and trust. It brings together two people who strive and sacrifice to attain common goals for the benefit of both partners. When it is terminated and acquired assets are to be divided, then in this of all relationships the concept of fairness should predominate in making decisions as to ownership. This was the fundamental equitable principle underlying the application of the constructive trust remedy to matrimonial cases. Where the application of the principle would achieve the goal of fairness it should not be discarded unless the pertinent legislation makes it clear that the principal is to be discarded.

[9] The parties’ first home was purchased in 1984. Title was taken in their joint names. They sold that home and jointly purchased another in the late 1980s. Then, in 1994, they sold that second home and used the proceeds to purchase the current home, 11 Graydon Crescent (“Graydon”).

[10] Maria testified that title to Graydon was taken in her name only and that was done intentionally, as the parties intended then and for all purposes for Graydon to be her asset. She added that there was never any expectation or thought or intention that Charles would acquire an interest in the home.

[11] During her cross examination, that position was tested and Maria was moved to agree that title to Graydon was originally in fact taken jointly and both parties mortgaged their interest in Graydon. She eventually agreed that Graydon was transferred to her name when System Drywall was incorporated around 1995.

[12] Maria insisted that there was no discussion between the parties except that they decided together that the matrimonial home was hers and the business was his. There was no written agreement, e-mail or correspondence confirming this. She recalled no further particulars of the decision making process.

[13] Maria has been a close follower of Charles’ business and financial dealings throughout the marriage and this lengthy litigation. It is both baffling and unbelievable that she could hope to demonstrate that Charles would voluntarily give up his interest in Graydon, the parties’ largest asset and one he contributed his income to purchase and maintain during their years of joint occupancy, on the basis of a discussion that Maria barely recalled and chose not to memorialize.

[14] I reject Maria’s version of the circumstances surrounding her acquisition of title in favour of Charles’ evidence. He testified that he was concerned about protecting Graydon from adverse financial outcomes in the event that System Drywall was ever sued. No suit was outstanding at the time and none has been brought since. No creditors’ rights have been impacted.

[15] Charles’ version has a ring of truth and business practicality to it and it was not challenged during his cross examination.

[16] Graydon was worth $910,000 at the date of separation in 2008; it has increased in value since, simply through the operation of market forces, by $715,000 to its current agreed upon value of $1,625,000.

[17] Charles did not intend to gift any increase in value or his equity in Graydon to Maria.

[18] Charles seeks a declaration of a constructive trust in the matrimonial home and that he is entitled to legal and equitable interest in the home. He seeks an order vesting title in the parties’ names as joint tenants and equal owners and an order for the immediate listing and sale of the home, in the event that Maria does not buy his interest out. He submits, and I accept, that in Ontario, resulting trusts are specifically provided for[3] in questions of ownership of property between spouses.

[19] Maria bears the onus of establishing a gratuitous conveyance;[4] she has failed to meet that onus.

[20] Further, and as in the Ludmer[5] case the parties transferred title as they did into Maria’s name out of concerns for possible future business liability claims arising that could imperil the value of “their home”.

[21] And, I agree with the analysis and outcome obtained in Launchbury[6] where a distinction is drawn between the situations where the purpose of defeating existing creditors rebuts a presumption of resulting trust from the case where, as here, there were no creditors and at best an uncertain specter of creditors, a situation where a resulting trust claim is allowed.

[22] Maria insists that a person claiming an equitable remedy, which Charles is claiming for Graydon, must come before the court with clean hands. She submits that he does not and principally that is because not all of the operations of his business were honest. Maria submits that his use of his business asset is reflective of his intention to be a sole owner of the business and that, in turn, reflects the intention that the house was to be solely owned by her. In my view, the clean hands argument cuts both ways and both parties can fairly be criticized for the shortcomings that each point to for the other in terms of their conduct during the course of the marriage and following separation. None rise to the level of importance that they impact the outcome otherwise applicable on the Graydon property ownership issue.

[23] The proven fact is that both parties have taken advantage of the money generated through Charles’ and John’s partnership in the System Drywall business. They enjoyed a comfortable family lifestyle and acquired assets that Maria enjoyed financial rewards from. Maria knew about the operations of System Drywall and how it funded her lifestyle and the family’s asset development and management plans. It does not behoove her to raise clean hands as a shield to the Graydon issue.

[24] Upon the evidence before me, I am satisfied that Charles is entitled to a declaration of constructive or resulting trust giving him a one half legal ownership interest in the matrimonial home. If Maria forthwith decides to buy Charles’ interest in Graydon, she will owe him $812,500 for his share of the home, less $18,332 for his share of the line of credit secured by Graydon and less $46,471 for his share of disposition costs. This is so regardless of any remaining equalization owing by one party to the other.

[25] If Maria determines forthwith that she does not wish to purchase Charles’ interest in Graydon, title shall be immediately changed to reflect joint ownership by the parties and Graydon shall be listed and sold with net proceeds to be shared equally.

Equalization and unconscionability

[26] In Serra,[7] the court determined that post separation changes in value of an asset could be considered for purposes of deciding whether equalizing net family properties would be unconscionable and noted that an unequal division of properties is exceptional and requires circumstances that shock the conscience of the court.

[27] The court went on to explain[8] that the rationale behind the statutory direction in s. 5 of the Family Law Act that net family property is to be shared equally-with the rare exception provided in s. 5(6)-is set out in s. 5(7) of the Act:

the purpose of this section is to recognize that child care, household management and financial provision for the joint responsibilities of the spouses and that inherent in the marital relationship there is equal contribution, whether financial or otherwise, by the spouses to the assumption of these responsibilities, entitling each spouse to the equalization of the net family properties, subject only to the equitable considerations set out in subsection (6).

[28] Staying with the purpose or object of the equalization payment scheme, the court added [para. 56] that the design of the legislation is to promote the goals of certainty, predictability and finality in the resolution of property matters following the breakdown of a marriage. At para 58, the court found no principled reason to confine the word "unconscionable" in 5(6) only to circumstances arising from fault-based conduct on the part of one of the spouses. Although unconscionable conduct is obviously an appropriate consideration in determining whether equalizing net family properties would be unconscionable, the true target of the limited exception to the general rule is a situation that leads to an unconscionable result, whether that result flows from fault-based conduct or not.

[29] In this case, fault-based conduct does not rise to the level of unconscionability required by the legislation. Given the fact that Charles has been found to be entitled to a constructive trust interest in the ownership of Grayden and that the property rose in value through no input, alterations or renovations to it by either party, sharing in the equity of the Grayden property other than equally between the parties is not the appropriate outcome.

[30] The parties have neither argued for nor established a basis for an unequal sharing of other items of net family property; as such, all NFP shall be shared equally.

NFP Issues

[31] Charles and John incorporated a numbered company that carried on their drywall installation business, operating as System Drywall, from 1994 until Charles sold his 50% interest in the business to John in 2010. Charles attended to the financial and business management side of the business while John looked after field operations and projects management. They functioned effectively and prospered equally as a team.

[32] Their business bank accounts required that each partner sign each cheque. John often withdrew cash from System Drywall accounts but shared withdrawals with Charles. There was no evidence that the partners had issues between them until after Charles and Maria separated.

[33] The System Drywall financial management model will not appear in the curricula of M.B.A. programs; it was aggressive and innovative. In some respects it likely crossed lines it should not have. But, Charles and John are to be commended for recognizing their treatment of System Drywall revenue, before reporting it for tax purposes, and making a voluntary report to the Canada Revenue Agency about it.

[34] At the time of Charles’ sale to John, the CRA analysis was still underway. The buy/sell price the partners concluded the sale upon reflected the uncertainty of outcome and potential tax liabilities for System Drywall. Upon the evidence before me, Maria’s skepticism notwithstanding, I find that the sale price was reasonable in the circumstances and that Charles did not deplete the asset for financial gain at Maria’s expense.

[35] Charles has been remarkably candid in his description of his involvement with System Drywall. He described setting up corporate entities for specific jobs and purposes. He set up a numbered company operating as SN Enterprises and another operating as Systems Drywall. Through these entities, System Drywall contracted to provide drywalling for a casino in British Columbia and hired non-union workers and migrant workers for various projects in pursuit of labour cost reductions.

[36] Maria expressed concerns that his intent was to hide income and assets from her but her suspicions were not established in evidence.

[37] Charles waived privilege in order that his corporate lawyer, Mr. Zweig, could testify. Mr. Zweig was involved in the sale of the Mizu Japanese restaurant on March 3, 2008; the net proceeds of $102,000 were paid to System Drywall with Mr. Zweig's letter of March 5, 2008.

[38] Maria suggested that this restaurant and its predecessor, Blue Point Oyster Bar, were part of an investment strategy aimed at depleting her access to his NFP. The investment was genuine and it lost money before the parties separated. The $300,000 that Maria has allocated to Charles’ Other Property list has not been established and must be removed.

[39] Maria questioned the validity of transactions between Charles and Mr. Novic. Maria produced the cheques paid from System Drywall to Mr. Novic for work done. The man testified about his involvement in work for System Drywall and investments that Charles facilitated for him elsewhere.

[40] He testified that he has done work for System Drywall and Axiom[9]. He testified that he was paid by cheque and not in cash. As such, there are no secret cash holdings that Mr. Novic is hiding from Maria’s scrutiny.

[41] Several years ago, Charles asked if Mr. Novic wished to invest in the stock market; he did and he provided Charles with $50,000 cash. He understood that Charles would transfer these funds directly to his friend, Linda Li for investment in stocks on the New York Exchange. He later learned that the investment failed but Charles repaid him in full within one year by cheque.

[42] When Charles began his new business, Axiom Drywall, he asked Mr. Novic for a loan of $200,000 as Axiom did not have a line of credit at that time. Mr. Novic provided the funds. He understood that Charles later received some type of line of credit secured against Charles’ current condominium residence; Charles paid him back by cheque in the amount of $200,000 within several months.

[43] In 2013, Mr. Novic provided Charles with a further loan of $270,000 to assist his business. Charles is repaid $130,000 of that loan by way of two installments.

[44] After separation, Mr. Novic received numerous e-mails from Maria but he did not reply to her. In these, Maria threatened to report him to Revenue Canada. He understood that Maria contacted his bank manager seeking disclosure of details with respect to a bank draft. Mr. Novic found this to be an invasion of privacy and refused to consent.

[45] Mr. Novic testified in his trial affidavit that Charles has never provided him with funds either by cheque or cash in an attempt to reduce his assets or savings and on hearing his evidence, I accept that to be true.

[46] For NFP purposes, the $197,000 that Maria has allocated to Charles’ list must be removed as it has been accounted for through System Drywall. Similarly, the evidence of Charles and Mr. Novic explain the $70,000 invested by the latter through Charles and Ms. Li. That money was paid back to Mr. Novic and there is no basis for it to be included as an amount owed to Charles.

[47] There was questioning about Charles’ financial dealings with Angela Jin and Linda Li. Charles explained these and no contrary evidence was heard. Ms. Jin hired and paid migrant workers for System Drywall. The $204,000 that Maria adds to Charles’ NFP column in this regard must be removed as un-proven. The $75,000 that Maria added to Charles’ NFP column relating to the condo purchased in March 2006 in Charles’ name and transferred in January 2008 to Ms. Jin has been shown to my satisfaction to have involved purchase and carrying cost funding flowing to Charles entirely from Ms. Jin. He took title because she was unwell and unable to qualify for mortgage financing at the time of purchase. Maria’s suspicions have not been established as fact and Charles’ explanations stand.

[48] Maria put forward John’s affidavit evidence[10] as part of her case but chose not to question him to clarify any of it. In the result, I accept John’s uncontested evidence that after the separation it became obvious to John that Maria acted as a person enraged. He pointed to examples, including his attempts to negotiate a business loan to assist System Drywall through a financially challenging business cycle and how Maria changed her demands and interfered with the business’ relations with TD Canada Trust and that she authored emails demanding that John’s wife join her cause.

[49] John concluded by stating that the operation of all of the businesses, including the management of the investment properties that System Drywall revenues purchased through companies that John’s wife and Maria co-owned, were always attended to by John and Charles but:

“Suddenly Maria is claiming for the first time that she is not aware of what has taken place and is demanding control. That is regrettable.”[11]

[50] Maria has been relentless in this litigation in her pursuit of more and better information and documents about the operation of System Drywall and Charles’ financial dealings through and beyond the business. The paper trail, time and expense that her efforts generated have been enormous and far beyond any reasonable definition of proportionality encouraged by the Family Law Rules.

[51] This case generated 28 court appearances before trial. Maria and Charles were sued by John and his wife in connection with the properties that the wives obtained from System Drywall revenues. That litigation settled subject to a confidentiality agreement

[52] The parties jointly retained a business valuation expert, Neil Maisel, in October 2008 to determine the fair value of Charles’ interest in System Drywall as at March 17, 2008 and fair values for Maria’s interest in the investment properties. There followed disclosure demands initiated by Maria so extensive and frequent that the process crumbled with no report delivered.

[53] This all evidenced more than a thirst for knowledge on Maria’s part in order that outstanding family law issues could be understood and resolved; it demonstrated her dogged demand to upturn and examine everything, as though money was no object and that she should be permitted a forensic audit.

[54] Mr. Maisel was later retained by Charles and did report his professional opinions on the value of Charles’ interest in System Drywall as at the date of separation. Maria remains skeptical of the accuracy and completeness of the data he relied upon. This said however, she did not cross examine Mr. Maisel upon the point and he neither wrote in his reports nor testified that he needed more information to support his expert opinions.

[55] Mr. Maisel concluded, based on the information reviewed and subject to the scope of review, restrictions, qualifications and assumptions set out in his report that the fair market value of Charles’ 50% interest as at the valuation date was $295,000.

[56] He explained that for purposes of this assignment, he was guided by the concept of "fair market value", which is generally defined as being the highest price available in an open and unrestricted market between informed and prudent parties acting at arms-length and under no compulsion to act, expressed in terms of cash.

[57] The approach he employed in this case, involves a level of forensic analysis. It relied heavily on verbal and documentary information provided. Mr. Maisel did not accept that using an asset based approach to the System Drywall business valuation would produce a higher business value. In his view, neither of the alternative valuation approaches, an estimate valuation report or a comprehensive valuation report, could apply to this case in any event.

[58] In paragraph 42 of his report, he commented upon information he received regarding a dispute between System Drywall and the union representing its employees, a dispute settled in 2008 which required payment by System Drywall of $270,000. He was aware that part of the payment was to be made after March 31, 2008 and he needed to know if the amount owing after that date had been accrued on the books of the company as at March 31.

[59] As Charles had sold his interest in the company by March 31, 2008, he did not thereafter have access to business books and records. Charles told Mr. Maisel that he believed that the debt had been accrued. But, as a result of information recently received, Mr. Maisel now knows that the debt to the union had indeed been accrued. In the result, the $295,000 that he had described in his original report had to be corrected by about $78,000 by way of adjustment, thereby increasing the original number to $373,000.

[60] He was asked about whether a sale of System Drywall to an independent third party would produce more sale proceeds than the sale to John has. He said that one could never know, since System Drywall shares were never exposed for sale to the open market.

[61] The balance sheet for System Drywall dated March 31, 2008 was received in evidence. Mr. Maisel did not prepare the document but he had seen it and could interpret the meaning and NFP implications of the one entry counsel took him to.

[62] On page 2, a $46,000 "bonus payable" debt shows as owing to Charles. Mr. Maisel was asked to interpret the implication of that bonus; he said the bonus, net of any income tax owing on it, should appear as an asset on Charles’ NFP Statement.

[63] I accept and value the evidence heard from Mr. Maisel, particularly as it was not damaged in cross examination and Maria chose not to call any expert evidence to contradict it. In the result, Charles’ interest in System Drywall will be valued at $398,236 including the adjustments Mr. Maisel testified to, including the unpaid bonus, less 46% for income tax owing upon it.

[64] A recurring theme throughout the trial was that Charles had used an account at the Croatian Credit Union to deplete System Drywall assets. That account was indeed used and used for transactions that Charles and John have reported to CRA about. The evidence at this trial confirms that as much as $5 million passed through the account but only about 1/5th of that amount represented revenue for System Drywall.

[65] The Croatian Credit Union account was closed before separation and the Credit Union is no longer in operation. Maria criticized Charles for not having anticipated Maria’s account disclosure requests but he explained his efforts to my satisfaction. He also explained that some of the money passing through the account was paid for non-union work and other amounts for Chinese migrant workers. He explained the former and was nor cross examined at all about the latter.

[66] Maria has arbitrarily added $9,000 to her calculation of Charles’ NFP on account of money not proven to have been paid for migrant workers. She has not established her claim and that amount must be deducted from Charles’ NFP column. The $31,250 that Maria ascribes to Charles’ NFP for non-union jobs must be removed as well.

[67] There is no basis made out on the evidence to conclude that Charles divested himself of income or assets through the Croatian Credit Union account or otherwise relevant to the determination of NFP values in this case. Maria has allocated $100,000 as funds received by Charles from this account and not accounted for. Charles and John used the account as noted elsewhere in this endorsement for various System Drywall and personal purposes. Maria knew that Charles brought home cash and gave it to her for her own and for family uses. She well knew that the account funded the purchase of properties for her benefit. Her allocation of $100,000 to Charles’ NFP in relation to this account is not warranted.

[68] Returning now to the benefits Maria enjoyed from the revenue generated through System Drywall, the evidence of Mr. Morsillo is important.

[69] Mr. Morsillo is a certified public accountant and has known Charles for over 20 years. He was not employed by Charles but in his professional capacity as an accountant with Nick Morsillo CPA Professional Corporation, he did bookkeeping work for System Drywall and still does. He also does that work for Charles’ new business, Axiom; as such, he still works indirectly for both John and Charles.

[70] Charles and John purchased two commercial properties through numbered companies that their wives were made equal shareholders in. One was a multi-story apartment on Anglesey Drive and another was the property on East Beaver Creek Drive that housed the System Drywall offices.

[71] Mr. Morsillo had understood that the wives contributed financially to the purchase of these properties but learned after separation that funding came not from the wives but from System Drywall revenues.

[72] He understood that the Anglesey building cost about $2.5 million and that the bank put up about $1.6 million. The rest he learned came from System Drywall's Croatian Credit Union account and he concluded therefore that it had to be referred to as a loan from System Drywall rather than a shareholder loan. He asked both shareholders for supporting documentation and there being none he insisted that the financial statements and tax returns be corrected. Marianne Cigan was content but Maria was not.

[73] Maria would not sign off on a revised financial statement. He repeatedly invited her to come to his office, with her own accountant of choice if she wished, to discuss the need for correcting the financial statement. She did not and he was not paid.

[74] Maria insisted that the financial statement remain as originally drafted [showing a shareholder loan funding the purchase].

[75] Mr. Morsillo could not sign off on the revised financial statement without shareholder approval and so the revised draft was "left hanging".

[76] He testified that Maria did eventually file a tax return for 2008, one prepared by Maria Severino of the Collins Barrow accounting firm but he was not consulted about that. Ms. Severino did not testify at trial.

[77] He did not prepare the financial statements for the company the wives owned for the East Beaver Creek property in 2008, as he was not asked to.

[78] Mr. Morsillo’s evidence and the absence of evidence to the contrary support Charles’ evidence as to the funding for these properties from System Drywall revenues.

[79] The two properties were sold following upon the resolution of the Cigan litigation referred to above. Maria received $289,438.50 but funds remain in trust pending resolution of accounting issues. Maria expects to receive little or no more sale proceeds. Her NFP value for these properties is net of $70,000 she paid in legal fees in the Cigan litigation. Given the confidentiality terms of the litigation settlement, the nature and reasonableness of those fees and the reason why Charles should, in effect, contribute toward them has not been established.

[80] For NFP purposes, Maria’s interest in those properties is valued at $289,438.50.

[81] The grand piano that Charles purchased in 1996 remains at Graydon. Maria and the children do not play it but Maria wishes it to remain off NFP lists and to be considered a gift to the children. Charles has added it to Maria’s NFP list with an agreed upon value of $15,580. Charles has not gifted the piano to the children and there is no evidence that either of them want the instrument. It will remain an asset on Maria’s NFP list.

[82] The remaining item in dispute on the NFP worksheets filed at trial is the value of a timeshare jointly owned by the parties. Maria submits that the parties agreed at separation to a value for this item of $25,000. Charles has not testified to the contrary but has placed a $10,000 value on his NFP statement, without explanation. In the circumstances, I will fix the value at $25,000 to be allocated equally between the parties. This allocation will have no net impact on the Equalization payment owing.

Prejudgment interest

[83] Charles seeks an award of prejudgment interest of over $110,000 upon the equalization payment he submits he is entitled to.

[84] The court’s authority to award prejudgment interest is found in the provisions of the Courts of Justice Act.[12] Section 128 of the Act provides that:

128.(1) A person who is entitled to an order for the payment of money is entitled to claim and have included in the order an award of interest thereon at the prejudgment interest rate, calculated from the date the cause of action arose to the date of the order.

[85] Section 130 provides for the exercise of judicial discretion in determining whether or in what amount to award prejudgment interest in the circumstances of a particular case. It reads:

130.(1) The court may, where it considers it just to do so, in respect of the whole or any part of the amount on which interest is payable under section 128 or 129,

(a) disallow interest under either section;

(b) allow interest at a rate higher or lower than that provided in either section;

(c) allow interest for a period other than that provided in either section.

Idem

(2) For the purpose of subsection (1), the court shall take into account,

(a) changes in market interest rates;

(b) the circumstances of the case;

(c) the fact that an advance payment was made;

(d) the circumstances of medical disclosure by the plaintiff;

(e) the amount claimed and the amount recovered in the proceeding;

(f) the conduct of any party that tended to shorten or to lengthen unnecessarily the

duration of the proceeding; and

(g) any other relevant consideration.

[86] The law is clear that awards of money to equalize net family property in family law cases can attract an award of prejudgment interest. In Burgess,[13] the court confirmed that as a general rule, the payor spouse is required to pay prejudgment interest on an equalization payment owing to the payee spouse.

[87] In Vanasse,[14] the trial judge followed Burgess in a case involving a monetary award for unjust enrichment and retroactive support awards. In my view, the Burgess case applies equally to issues of equalization of the value of a matrimonial home.

[88] In the instant case, the unique and important circumstance to be considered is that by operation of market conditions, the parties’ equity in Graydon increased significantly between the date of separation and the date of trial. Both parties benefitted from that increase and in amounts greater than Charles could expect to recover in prejudgment interest had Graydon’s value decreased or remained static.

[89] It seems to me that to award prejudgment interest on top of the award for equalization relating to the matrimonial home would amount to double dipping and, in any event, grant Charles a windfall that is not warranted.

[90] There is no evidence of similar asset value increases in the parties’ net family properties. Maria owns four rental properties and the cottage in Collingwood also appears in her NFP column but she did not obtain separation date valuations for her properties and could not answer questions in cross examination regarding her actual equity in the properties over time and, in any event, that became moot, since the parties agreed upon values for all NFP line items, except for those referred to in these reasons.

[91] As such, the portion of equalization payment award of $390,658.60 shall attract prejudgment interest but the remainder shall not.

[92] The parties separated on March 17, 2008. Between that date and the date of trial, applicable prejudgment interest rates have hovered at or below 1.3% throughout each year except the first. Having considered and weighed all relevant factors, I will allow interest to reflect that reality and fix it at 1.5% throughout.

Disposition

[93] For these reasons therefore, a divorce order shall issue and take effect 31 days after the date of this order.

[94] On consent, there shall be no ongoing or retroactive child support payable to either party for the children of the marriage, being Andrew Wang born on October 30, 1989 and Denise Wang born on July 26, 1993.

[95] On consent, there shall be no ongoing or retroactive section 7 expenses owing to either party for the children of the marriage.

[96] On consent, there shall be no ongoing or retroactive spousal support owing to either party and both parties shall sign a full spousal support release to this effect.

[97] On consent, Maria shall retain her full pension from the Teachers’ Pension Fund and Charles shall have no claim to that pension.

[98] A resulting trust in Charles’ favour is declared with respect to his equal ownership interest in the matrimonial home, municipally known as 11 Graydon Crescent, Toronto, Ontario, L4B 3W1.

[99] Title to the matrimonial home shall be vested in the names of the parties as joint tenants.

[100] Charles shall share in the responsibility of discharging the security lodged against the matrimonial home and any disposition costs when the home is sold.

[101] Unless Maria forthwith purchases Charles’ interest in Graydon for $1,138,355, the home shall be forthwith listed for sale and sold with the net proceeds of disposition to be shared equally between the parties;

[102] Regardless of whether Graydon is sold to Maria or listed and sold on the market, Maria shall pay Charles an equalization payment of $390,658.60.

[103] Maria shall pay Charles pre-judgment interest upon $390,658.60 at the rate of 1.5% per year from March 17, 2008 to date.

[104] Maria shall pay costs in an amount to be agreed upon or assessed. If the parties cannot agree upon costs issues, they may deliver written submission of no more than 3 double spaced pages to be filed in the Family Law office to my attention. Charles’s submissions are due within 15 days; Maria’s responding submissions are due 15 days thereafter. No reply submissions may be delivered.

Moore J.

DATE: May, 29, 2015

[1] Rawluk v. Rawluk, 1990 CarswellOnt 987; 1990 CanLII 152 (SCC), [1990] 1 S.C.R.70, at para. 44

[2] Jukosky v. Jukosky, 1990 CanLII 12332 (ON SC), [1990] O.J. No. 2470

[3] Family Law Act, RSO 1990, c F.3., section 14

[4] Kerr v. Baranow, 2011 SCC 10, 2011 CarswellBC 240 (S.C.C.), at para 17; Family Law Act RSO 1990, F.3, Section 14; and Nussbaum v. Nussbaum, 2004 CarswellOnt 3731 (S.C.J.), at para 15

[5] Ludmer v. Ludmer, 2013 CarswellOnt 1625, paras. 94, 107

[6] Launchbury v. Launchbury, 2001 CarswellOnt 1384 (S.C.J.), para 17, affirmed by Launchbury v. Launchbury 2005 CarswellOnt 1335 (C.A.) para. 3

[7] Serra v. Serra, 2009 ONCA 105, at paras 46 & 47.

[8] Supra, at para 52

[9] Axiom is the drywall business that Charles incorporated and operated after he sold his interest in System Drywall.

[10] Sworn July 15, 2009

[11] Supra, at para 25

[12] Courts of Justice Act, R.S.O. 1990, c. C.43

[13] Burgess v. Burgess, [1995 CanLII 8950 (ON CA)](https://www.canlii.org/en/on/onca/doc/1995/1995canlii8950/1995canlii8950.html), a case involving an equalization issue involving future pension benefits

[14] Vanasse v. Seguin, [2009 CanLII 4237 (ON SC)](https://www.canlii.org/en/on/onsc/doc/2009/2009canlii4237/2009canlii4237.html)

Supra, at paras. 24-26