ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-12-00445622-0000
DATE: 20150722
BETWEEN:
JESSE GOLDMAN
Plaintiff
– and –
LARISA KUDELYA and LUDMILA KHARKHURINA
Defendants
C. Spry and J. Webster, for Jesse Goldman
Ms. L. Kudelya, Self-Represented
Ms. L. Kharkurina, Self-Represented
HEARD: April 29-30, May 1,4,5 2015
June 15, 16, 19, 2015.
S.A.Q. Akhtar J.
I. INTRODUCTION
[1] The parties in this case ask the court to decide an issue which arises out of matrimonial proceedings. The plaintiff, Jesse Goldman, contends that a property located at 295 John Deisman Boulevard in Vaughan (“the Deisman Property”), which is currently in the name of Ludmila Kharkurina, was fraudulently conveyed to her by his former wife, Larisa Kudelya. He asks for a declaration, pursuant to the Fraudulent Conveyancing Act, R.S.O. 1990, c. F.29, that the transfer is void because it was made by the parties with the intention of defeating Mr. Goldman’s claim for any financial relief and calculations in future matrimonial proceedings.
II. FACTUAL BACKGROUND
[2] Ms. Kudelya, and her mother, Ms. Kharkurina, came to Canada as immigrants from Ukraine in 1990 when Ms. Kudelya was 14 years of age. After their arrival, Ms. Kharkurina trained and worked as a mortgage broker. In 1999, the Deisman Property was purchased in Ms. Kudelya’s name for the amount of $252,679.94. A deposit of approximately $168,000 along with a mortgage of $85,000 funded the purchase. The mortgage was discharged on 18 July 2003.
[3] In or around the winter of 2002, Ms. Kudelya met Mr. Goldman, beginning a romantic relationship which culminated in marriage on 12 September 2004.
[4] The relationship, however, began to experience difficulties and ultimately led to a separation. The marital history and the reasons for marital discord are the subject of some controversy, which is detailed below. On 8 October 2009, when the couple were still married, Ms. Kudelya transferred the Deisman Property to Ms. Kharkurina for no consideration. At the time of the transfer, Mr. Goldman was in Spain attending a conference.
[5] The couple separated on 28 January 2010 after Ms. Kudelya discovered Mr. Goldman had been unfaithful. The resulting divorce proceedings were both protracted and hostile. Eventually, at the mid-trial stage, the parties settled their property disputes. As evidenced by minutes of settlement, the increase in value of the Deisman Property from the date of marriage to separation was included in the equalisation formula used to determine the division of property between the parties.
[6] On or about 10 October 2014, the trial judge in the family proceedings awarded Mr. Goldman costs in the amount of $360,000. The court subsequently deducted those amounts owing to Ms. Kudelya by Mr. Goldman in relation to family law proceedings with the resulting balance of $239,331.81 to be paid by Ms. Kudelya.
[7] In seeking payment of costs, the plaintiff brings this application to declare the Deisman Property as belonging to his former wife. By doing so, he seeks to recoup costs from the value of the house which he estimates to be in the $500,000 to $600,000 range. He alleges that the transaction is a violation of s. 2 of the Fraudulent Conveyances Act and should be declared null and void.
III. LEGAL PRINCIPLES
The Fraudulent Conveyancing Act (“FCA”)
[8] Section 2 of the FCA provides that:
Every conveyance of real property or personal property and every bond, suit, judgment and execution heretofore or hereafter made with intent to defeat, hinder, delay or defraud creditors or others of their just and lawful actions, suits, debts, accounts, damages, penalties or forfeitures are void as against such persons and their assigns.
The Statutory Conditions
[9] The conditions to be satisfied under s. 2 are that there be:
A conveyance of real or personal property;
An intention to defeat, hinder, delay or defraud; and
That intention is directed specifically towards creditors or others.
The Badges of Fraud
[10] The “badges of fraud” are indicators that a conveyance of property was made with the intent to defeat or defraud creditors of any financial rights or damages that existed within the property: Indocondo Building Corp. v. Sloan, 2014 ONSC 4018, at para. 53.
[11] In this case, Mr. Goldman relies on several of those “badges” to illustrate Ms. Kudelya’s and Ms. Kharkurina’s intentions when transferring the property. He points to the following:
• Ms. Kudelya lived at 295 John Deisman Boulevard before marriage and stayed there on occasion whilst married
• Ms. Kudelya returned to live at the property after the couple separated
• There was a close relationship between Ms. Kudelya and Ms. Kharkurina
• The transfer was made when matrimonial proceedings were contemplated and the property would be included in the calculation of equalisation payments
• There was no consideration for the transfer
• The transaction was made without Mr. Goldman’s knowledge and kept secret from him
[12] Ms. Spry, counsel for Mr. Goldman, submits forcefully that these “badges” have been proven at this trial. She relies on cases such as Indocondo, Beynon v. Beynon, 2001 ON SC 28147, [2001] O.J. No. 3653 and Koop v. Smith (1915), 51 S.C.R. 554 to argue that once those badges have been established, an evidentiary onus is placed on Ms. Kudelya and Ms. Kharkurina to rebut the allegations. Ms. Spry also relies upon the Indocondo case to assert the requirement for corroborative evidence to rebut an applicant’s case where the transfer takes place between parties in a close relationship.
[13] Upon review of the caselaw, I am not sure I entirely agree with Ms. Spry’s interpretation.
[14] Section 2 of the FCA is designed to prevent parties from vanquishing the legitimate rights of creditors by engaging in fraudulent transactions. I accept that, a matter of practice, it is often difficult for a party making the allegation of a fraudulent conveyance to prove that allegation when the most incriminating evidence is in the hands of the opposing party. The law, however, is designed to be flexible enough to allow a court to draw inferences from behaviour that, on its face, appears to be fraudulent. Even though there is no obligation to do so, parties facing such allegations put themselves at peril if they fail to call evidence to rebut the allegations. I do not accept, however, that if Mr. Goldman establishes a prima facie case, Ms. Kudelya and Ms. Kharkurina must provide evidence that corroborates their position.
[15] In the circumstances of this case, the evidence must be looked at as a whole to determine whether the conveyance was a fraud within the definition of s. 2 of the FCA.
Is Mr. Goldman Estopped?
[16] At the outset of the case, Ms. Kudelya and Ms. Kharkurina applied for a ruling that Mr. Goldman was estopped from bringing this application. They argued the minutes of settlement obtained in the family law proceedings had settled the issue of ownership and Mr. Goldman was not permitted to re-litigate the matter. I disagreed with that position and these are my reasons for so doing.
[17] The test for estoppel approved by the Supreme Court of Canada in Angle v. Minister of National Revenue, [1975] 2 S.C.R. 248 identify the following three conditions to be met:
The same question has been decided;
The judicial decision which is said to create the estoppel was final; and,
The parties to the judicial decision were the same persons or parties to which the estoppel was raised.
[18] Even if those pre-conditions are met, the court has a residual discretion in deciding whether the estoppel ought to be applied: Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, at para. 33.
[19] Res judicata does not apply to the case at bar. The minutes of settlement are simply a private agreement and cannot be used as a basis for res judicata: Goldfluss v. Bortnick, 2014 ONSC 858. Additionally, the conditions required to establish estoppel have not been met. The settlement was not concerned with the question before this court but a determination of how much of the increase in value of the Deisman Property went into the equalisation calculation. There was no decision as to who owned the Deisman Property and whether the transfer to Ms. Kharkurina fell within s. 2 of the FCA. As such, the doctrine of estoppel does not arise.
IV. WAS THE CONVEYANCE OF THE DEISMAN PROPERTY MADE TO DEFEAT MR. GOLDMAN’S ENTITLEMENT?
[20] The parties do not dispute that the Deisman Property was conveyed by Ms. Kudelya to Ms. Kharkurina on 8 October 2009 for no consideration. The central issue in this case is the intention behind that transfer.
[21] Mr. Goldman’s position is that it took place to thwart his ability to include it as part of net equalisation payments under the Family Law Act, R.S.O. 1990, c. F. 3. Ms. Kudelya and Ms. Kharkurina deny this allegation insisting that the Deisman Property was transferred so that the true owner, Ms. Kharkurina, could sell it.
[22] The determination of this case requires the resolution of the following issues:
• Was Ms. Kudelya the true owner of the Deisman Property?
• What was the state of the marriage in October 2009?
• Did Ms. Kudelya and Ms. Kharkurina conceal the transfer from Mr. Goldman?
• Was the transfer conducted to sell the property?
Was Ms. Kudelya the True Owner of the Deisman Property?
[23] Ms. Kudelya’s registration as the title holder of the Deisman Property creates a strong inference that she bought the property or that it was intended that she own it.
[24] Ms. Kudelya and Ms. Kharkurina maintain that title was given to Ms. Kudelya only because Ms. Kharkurina, who wished to purchase the Deisman Property, had no income and was unable to obtain a mortgage. They claim Ms. Kudelya was only the beneficial owner of the property.
[25] Mr. Goldman testified that between February and August 2004 Ms. Kudelya approached him with a view to agreeing a pre-nuptial agreement regarding the Deisman Property. He agreed on the condition that his house, at 12 Sudbury Avenue in Toronto, was also included in that agreement. Consequently, the discussions went no further. Mr. Goldman testified that, as a result of the discussion, he surmised that Ms. Kudelya was the owner of the Deisman Property.
[26] Mr. Goldman’s evidence is somewhat undermined by an affidavit dated 10 February 2011 where, at paragraph 26, he swore to the fact that when he met Ms. Kudelya she was residing at the Deisman Property. He went on: “Ludmila [Kharkurina] remained in the home so I had always understood that she was the owner of the property.” When cross-examined by Ms. Kudelya, Mr. Goldman described the paragraph as “poor syntax”. His interpretation of the paragraph was that it denoted his belief that Ms. Kudelya was the owner. Mr. Goldman’s interpretation does not accord with mine. Paragraph 26, on its face, indicates that Mr. Goldman thought Ms. Kharkurina was always the owner, making that assumption because Ms. Kharkurina continued to reside in the property.
[27] However, I find this inconsistency of little moment as Mr. Goldman’s beliefs about the ownership of the Deisman Property are immaterial. The evidence, as a whole, supports the proposition that Ms. Kudelya was the legal owner. I say this for the following reasons.
[28] First, the Affidavit of Residence and of Value and Consideration sworn by Ms. Kudelya at the time of purchase indicates that she was the transferee in the conveyance. That same document offered Ms. Kudelya and Ms. Kharkurina the opportunity to check a box indicating that Ms. Kudelya was holding the Deisman Property in trust. That box was left empty.
[29] Secondly, the explanation given by Ms. Kudelya and Ms. Kharkurina - that the bank’s refusal meant there was no other way to buy the property - does not bear the ring of truth. There were alternatives to a mortgage, such as Ms. Kudelya acting as a guarantor. Ms. Kharkurina’s response when cross-examined on this point was that she was unaware of that fact or any other means of financing the purchase. I find that answer to be incredible: Ms. Kharkurina had taken courses in how to become a mortgage agent. When cross-examined on 10 April 2012, pursuant to family law proceedings, she was asked how she knew that she was not going to be able to buy a house. Her response was “I was taking mortgage courses and while there I was told how to purchase a house in Canada.” She would clearly have been instructed on alternative methods of finance. Moreover, it would be most unusual for a bank not to advise Ms. Kharkurina of those alternatives.
[30] Thirdly, all mortgage payments came from Ms. Kudelya’s account, including the down payment. There is no documentary evidence suggesting that Ms. Kharkurina made any of these payments. The down payment for the house, approximately $168,000, came from a Guaranteed Investment Certificate purchased in Ms. Kudelya’s name.
[31] Finally, Ms. Kharkurina did not need a mortgage. She testified that she had stored approximately $270,000 in cash at her apartment from 1990 to 1998. That sum exceeded the purchase price of the Deisman Property and could, of itself, have paid for the Deisman Property. Why then was there a need to have Ms. Kudelya purchase the property as title holder? Ms. Kharkurina’s answer was that she intended to use only part of the money in her possession. The remainder, $100,000 was to be used to start a business. I place little faith in Ms. Kharkurina’s evidence, for the reasons set out below.
[32] I found Ms. Kharkurina to be a witness with very little credibility. She was evasive and argumentative. Her testimony was littered with inconsistencies. For example, in the family law proceedings she claimed that, after the purchase of the house, she only had five to seven thousand dollars of her own money, the remainder being approximately forty to fifty thousand dollars of her mother’s money. In her evidence at trial, however, the remnant totalled approximately $100,000 and it belonged entirely to her. When confronted with this discrepancy, Ms. Kharkurina responded by saying that she did not regard the money as her own because it was being kept for her business.
[33] In the family law proceeding affidavit dated 1 March 2012, Ms. Kharkurina stated that the money used to purchase the Deisman Property was given to her by her mother. At trial, however, the money belonged entirely to her, having been accumulated through rental income in the Ukraine and the sale of her Ukrainian house. In the family law proceedings she declared that could not qualify for a mortgage because she was self-employed; at trial it was because she was a student. In the family law proceedings, she learned could not qualify for a mortgage to buy a house through her mortgage courses; at trial, it was the bank employees who informed her of that fact. She testified that inconsistent statements contained in previous family law proceeding affidavits were the fault of her lawyers even though she admitted that she had reviewed the material.
[34] Ms. Kudelya, too, was a witness whose evidence was riven with inconsistencies. In a previous family law proceeding she had sworn an affidavit on 11 February 2011, stating that she had no income at the time of the Deisman Property purchase. At trial, however, she conceded that she was employed and being paid at that time. Ms. Kudelya blamed her previous lawyer for the error. It is worth noting that Ms. Kharkurina made the same error in her affidavit of 11 February 2011.
[35] In her evidence at trial, Ms. Kudelya testified that it was her mother’s idea to put the property into her name. In an earlier family law proceeding, however, she said the idea came from a real estate agent. In seeking to clarify these discrepancies Ms. Kudelya once again blamed the lawyer preparing the affidavit for the errors.
[36] When questioned in family law proceedings on 28 February 2011, Ms. Kudelya testified that she did not know the origin of the money that bought the Deisman Property but she had previously declared, in an affidavit dated 24 January 2011, that the money had been raised by her mother and grandmother’s sale of real property in the Ukraine.
[37] Ms. Kudelya and Ms. Kharkurina were required, by court order, to produce documents relating to the rejected mortgage application by Ms. Kharkurina. None have ever been produced.
[38] Ms. Kudelya sought to explain the absence of these documents by claiming the bank only kept records up for a period of six years after the event. In support of this assertion, Ms. Kudelya produced a letter dated 7 April 2015 from Scotiabank purportedly to this effect. However, it was clear from the letter that she had only asked for items deposited into her account from October 2009. Ms. Kudelya indicated that she had been told verbally that Scotiabank only retained records for six years and therefore would not have retained the application. There was no documentation to support Ms. Kudelya’s testimony that she had ever made the request. When questioned by Ms. Spry, she responded that she could produce the documents “if you would like me to.” I find it is surprising that, knowing the importance of this evidence and with a court order directing the production of the mortgage documents, Ms. Kudelya had not sought and obtained this documentation well before the trial date. Based on the evidence, I find that Ms. Kudelya made no such request.
[39] The documents that were produced and tendered into evidence were ambiguous. They simply detailed large sums of money deposited into Ms. Kudelya’s account. Some of these deposits were made well before the purchase of the Deisman Property. For example, Ms. Kudelya identified an amount totalling $6,500 as received from Ms. Kharkurina. That money, however, was received in November 1999, a year before the purchase of the Deisman Property. In cross-examination, Ms. Kudelya had to concede that the only evidence of where the deposits originated was the oral testimony given by herself and her mother. As noted above, both witnesses had little credibility on this issue.
[40] Ms. Kudelya and Ms. Kharkurina produced very little extrinsic evidence to rebut the strong inference that Ms. Kudelya was the true owner of the Deisman Property. Ms. Kharkurina’s rejected mortgage application alone would have demonstrated some truth to her claim. Not only does it appear that Ms. Kudelya and Ms. Kharkurina did not request this documentation, both Ms. Kudelya and Ms. Kharkurina refused Ms. Spry permission to speak to Mr. Shub, the lawyer who handled the Deisman Property transaction. That refusal is difficult to justify when Ms. Kudelya testified that she had told Mr. Shub that she was going to be the beneficial owner at the time of the purchase.
[41] For the reasons above, I conclude that Ms. Kudelya was more than simply a beneficial owner of the Deisman Property: the property belonged to her.
What Was the State of the Marriage in October 2009?
[42] The parties took diametrically opposed positions on this issue. Mr. Goldman claimed his marriage to Ms. Kudelya was in serious difficulty by October 2009. The couple began to sleep in separate bedrooms a year prior to their break up. Ms. Kudelya had spoken about separation on a number of occasions and the subject of marriage counselling had been raised. It was not pursued because Ms. Kudelya would only attend counselling if it was restricted to “his” issues. Mr. Goldman testified that the couple had some “angry discussions.” In a last ditch attempt to save the marriage, Mr. Goldman invited Ms. Kudelya to join him at an International Bar Association conference in Madrid. Mr. Goldman admitted that the trip had not been a success and he realised the marriage was over. A second trip, this time to the United States for a company break, was also planned. Mr. Goldman indicated that spouses were expected to attend. Ms. Kudelya once again accompanied Mr. Goldman.
[43] The precipitating event for the couple’s separation was Mr. Goldman’s affair with Tricia Staver, a woman that he had met at the airport en route to a business trip in or around Christmas 2009. Ms. Staver did not prove to be the romantic interlude that Mr. Goldman had expected. She turned out to be a con artist who attempted to extort money from him on the basis of his infidelity. Ms. Staver was, in time, rewarded for her criminal efforts with a six month prison sentence and a period of probation.
[44] On 28 January 2010, Ms. Staver called the Goldman residence and spoke to Ms. Kudelya, introducing herself as Mr. Goldman’s girlfriend. Ms. Kudelya met with Ms. Staver who gave her emails and photographs detailing the affair. The result was a turbulent confrontation between Ms. Kudelya and Mr. Goldman who was ordered out of the house. When he returned the next day, he found the Ms. Kudelya had changed the locks preventing his return to his home. After police were called, Mr. Goldman was able to re-enter his house. Shortly thereafter, Ms. Kudelya, without warning Mr. Goldman, packed her belongings and, along with their daughter, moved into the Deisman Property. The marriage was effectively over.
[45] Ms. Kudelya insisted there were no difficulties with the marriage until 28 January 2010. She claims that she was contemplating having a second child with Mr. Goldman. The relationship in 2009 was much the same as it had been in 2006, 2007 and 2008. In her view, the problems with the marriage arose entirely from Mr. Goldman’s affair with Ms. Staver.
[46] I found Mr. Goldman to be a credible witness in his account of the marriage and his attempt to salvage the relationship. I reject Ms. Kudelya’s evidence, however, as it is contradicted by her own previous sworn testimony.
[47] On 28 February 2012, Ms. Kudelya was questioned as part of the family law proceedings. In that hearing, where she was represented by counsel, Ms. Kudelya admitted that there had been arguments between the two over a number of different issues. These included:
- Mr. Goldman spending too much time at work
- Mr. Goldman’s concern at Ms. Kharkurina’s involvement with their daughter
- Ms. Kudelya’s frustration at not being sufficiently appreciated
[48] Ms. Kudelya also conceded at the 28 February 2012 hearing that those arguments were occurring more frequently in 2009. In her words “there were ongoing issues.” Finally, Ms. Kudelya agreed that she had sought counselling because she and Mr. Goldman had an argument concerning Mr. Goldman’s parents staying with them.
[49] This evidence hardly describes a marriage that had “no problems.” Despite Ms. Kudelya’s attempts, at trial, to minimise her family law testimony, I accept that the marriage was in trouble at the time of the transfer of the Deisman Property and that in October 2009, Ms. Kudelya had contemplated the prospect of separation.
Did the Parties Conceal the Transfer from Mr. Goldman?
[50] Having decided that Ms. Kudelya was the legal owner of the Deisman Property and that there was every reason for her to believe in an imminent separation, I turn to the question of whether Mr. Goldman had been notified of the transfer before it occurred.
[51] Mr. Goldman was forthright in his evidence that neither Ms. Kudelya nor Ms. Kharkurina informed him of the conveyance in advance. He only discovered the Deisman Property had changed hands after he and Ms. Kudelya separated. His lawyer came across the transfer when conducting title searches in preparation for the inevitable family law proceedings.
[52] Ms. Kudelya and Ms. Kharkurina, however, claim that Mr. Goldman was fully aware of the transfer. The claimed that Ms. Kharkurina had suffered a fall at the Deisman Property and wanted to “downsize” and buy a smaller house. Ms. Kharkurina told the court that Mr. Goldman had known of her intentions for several months and had actively encouraged her to sell the property. Mr. Goldman was specifically informed of the transfer at a dinner in or around the time of Ms. Kharkurina’s birthday on 13 September 2009. Ms. Kharkurina told Mr. Goldman that she had contacted her lawyer to facilitate the return of the Deisman Property to her so that she could move ahead with plans to sell it. Ms. Kudelya testified that Mr. Goldman was “fine with it.” Although both Mr. Goldman and Ms. Kudelya were to travel to Madrid for the International Bar Association conference, Mr. Goldman went ahead of Ms. Kudelya so that she could attend a lawyer’s office to complete paperwork for the transfer. On 8 October 2009, Ms. Kudelya signed the necessary documents and left for Madrid.
[53] I reject Ms. Kudelya and Ms. Kharkurina account for the following reasons.
[54] The assertion that Mr. Goldman knew of the impending transfer had never been raised in the pleadings in this case. Nor had it been mentioned in any of the affidavits sworn by Ms. Kudelya and Ms. Kharkurina in relation to family law proceedings even when the Deisman Property was referenced. For example, in Ms. Kudelya’s affidavit dated 24 January 2011, paragraphs 58 to 62 dealt specifically with the ownership and transfer of the Deisman Property. Yet Mr. Goldman’s awareness of the transfer was not mentioned. According to Ms. Kudelya this affidavit dealt with interim disbursements in the family law proceedings and she did not think it was important to reference Mr. Goldman’s awareness of the transfer.
[55] In dealing with the absence of the “dinner conversation” in other affidavits and pleadings, Ms. Kudelya maintained her position that Mr. Goldman’s knowledge of the transfer was never mentioned because the affidavits did not deal specifically with the ownership or transfer of the property. She claimed that she was “answering point by point” on Mr. Goldman’s Statements of Claim. She added: “That’s how my lawyer set it up, and that’s how I continued to follow the same format.”
[56] Ms. Kudelya was equivocal about the date of the dinner conversation with Mr. Goldman. At first she was unable to recall the exact date of the dinner or whether it was before or after Ms. Kharkurina’s birthday. Subsequently, she testified that she was certain that it predated the actual birthday.
[57] Ms. Kharkurina, too, was questioned on her failure to refer to this conversation in her affidavit. At first, she explained that Mr. Goldman’s awareness was omitted because the fact was obvious and did not need to be included. When confronted with Mr. Goldman’s affidavit dated 8 April 2010, where he stated that the transfer was kept hidden from him, she continued to maintain that she did not know that the secrecy of the transfer was in issue. Subsequently, she blamed her lawyer for not including it in her affidavit.
[58] Ms. Kudelya and Ms. Kharkurina’s evidence made very little sense. Both were evasive and argumentative when being questioned. Mr. Goldman’s awareness of the transfer was clearly a very live issue and, if Ms. Kudelya and Ms. Kharkurina’s account is true, it would have been referred to it in their pleadings and affidavits.
[59] Whatever doubt remains on the issue evaporates with Ms. Kharkurina’s response to questions in the family law proceedings on 10 April 2012. When asked about the Deisman Property, the following exchanged occurred:
Q: Did he know about your position that you were the owner of the property before the separation occurred?
A: This issue has never been raised in any different manner. It was my house and only mine.
Q: Was the issue of ownership ever raised in a discussion between you and Mr. Goldman?
A: No. [emphasis added]
[60] For the reasons set out, I find that Ms. Kudelya and Ms. Kharkurina never told Mr. Goldman that the Deisman Property was to be transferred to Ms. Kharkurina.
[61] In light of this finding, Ms. Kudelya’s evidence of her delayed departure to Madrid takes on a different complexion. There was no reason for Ms. Kudelya to take a later flight to sign documents that could have been signed either before or after the Madrid trip. There was no evidence given of any urgent reason to transfer the property to Ms. Kharkurina at that time. In fact, as will be discussed shortly, the reasons given by Ms. Kudelya and Ms. Kharkurina for the actual transfer do not stand up to scrutiny. I conclude that Ms. Kudelya waited for Mr. Goldman to leave for Madrid so that she could complete the transfer of the Deisman Property in secrecy.
Was the Transfer Conducted to Allow Ms. Kharkurina to Sell the Deisman Property?
[62] The timing of the transfer of the Deisman Property is of obvious significance. Ms. Kudelya and Ms. Kharkurina testified that the transfer took place because Ms. Kharkurina had suffered a fall and wanted to downsize. The transfer was to allow Ms. Kharkurina to sell the property and buy a smaller house.
[63] I have already found that Ms. Kudelya and Ms. Kharkurina deliberately concealed the transfer from Mr. Goldman This evidence is also rejected for the same reasons.
[64] I would also add that if Ms. Kharkurina really wished to sell the Deisman Property, she could have instructed Ms. Kudelya to do so without the need to take title herself. Ms. Kudelya testified that if her mother had asked her to sign the necessary papers transferring the property to a third party she would have done so. The method of sale would have avoided the duplication of costs arising from the transfer to Ms. Kharkurina. When this was put to Ms. Kharkurina her response was that she did not trust Ms. Kudelya to give her the resulting proceeds of sale.
[65] This explanation makes no sense. The evidentiary record in this trial demonstrates the extremely close relationship between Ms. Kharkurina and her daughter. Ms. Kudelya lived with Ms. Kharkurina up until her marriage and the two stayed in constant contact after she moved out of the Deisman Property. Ms. Kharkurina was very involved with her granddaughter, so much so that Mr. Goldman raised concerns about the relationship. Finally, if Ms. Kharkurina’s account was to be believed, she had entrusted Ms. Kudelya with the Deisman Property in the first place. It is simply not credible that Ms. Kharkurina would, after all these events, be so sceptical of her daughter.
[66] Moreover, despite Ms. Kharkurina’s insistence that the motivation behind the transfer was to sell the Deisman Property, it was never offered for sale. Ms. Kharkurina’s explanation was that the property required renovation before it could be sold. That renovation could not take place because Ms. Kudelya moved back into the house after she separated from Mr. Goldman. Once again, this account lacks credibility. There was a three month period between the time of the transfer and Ms. Kudelya’s return to the Deisman Property.
[67] Ms. Kharkurina’s failure to sell the house is also at odds with her testimony that the catalyst in selling the house had been her increasing difficulty to go up and down the stairs of her house. The fact that Ms. Kudelya and her granddaughter had returned to live with her did not prevent Ms. Kharkurina from buying a bungalow or an apartment which would house all three and alleviate any health issues. Ms. Kharkurina claimed that a bungalow or apartment in the same area would cost more than her multi-level dwelling. Not for the first time I find Ms. Kharkurina lacking in credibility.
[68] I conclude that Ms. Kharkurina never intended to sell the property and that the transfer was intended for one purpose: to avoid the Deisman Property being part of the net equalisation payment in the event of Mr. Goldman and Ms. Kudelya’s separation.
Was Mr. Goldman a “Creditor”?
[69] With respect to the final limb of s. 2 of the FCA, I find that Mr. Goldman was a “creditor” within the meaning of the FCA.
[70] Under s. 5(3) of the Family Law Act, when spouses are co-habiting, one spouse may apply to have the family property divided if there is a risk that the other spouse might deplete that property. One of the effects of the section is to provide a remedy to a spouse to avoid the other spouse divesting themselves of property in order to defeat an equalisation claim. In such circumstances, the first spouse would be a “creditor or other” within the meaning of s. 2: Stone v. Stone (2001) 5. O.R. (3d) 491, 203 D.L.R. (4th) 257. The section also applies to parties who become creditors after the transfer has taken place: Beynon.
Conclusion
[71] Ms. Kudelya was the true legal owner of the Deisman Property. By 8 October 2009, Ms. Kudelya and Mr. Goldman’s marriage had hit rocky waters and Ms. Kudelya knew that there was a real likelihood that they would separate. In order to protect her interests, she transferred the Deisman Property to her mother so that it would not be removed from any calculations in the division of matrimonial property. Mr. Goldman was never informed of the transfer which took place whilst he was in Spain. Ms. Kudelya and Ms. Kharkurina deliberately concealed the transfer from Mr. Goldman and concocted a false account of needing to sell the property to permit Ms. Kharkurina to live in a smaller house.
[72] Mr. Goldman’s application has met the conditions of s. 2 of the FCA.
[73] I order and declare that the transfer of 295 John Deisman Boulevard made by Ms. Kudelya to Ms. Kharkurina on 8 October 2009 is null and void.
Costs
[74] If the parties cannot agree on costs, I invite Mr. Goldman to submit a written application for costs no longer than five pages within 30 days of issue of this judgement. Ms. Kudelya and Ms. Kharkurina will provide submissions of the same length within 30 days thereafter.
S.A.Q. Akhtar J.
Released: July 22, 2015
COURT FILE NO.: CV-12-00445622-0000
DATE: 20150722
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
JESSE GOLDMAN
Plaintiff
– and –
LARISA KUDELYA and LUDMILA KHARKHURINA
Defendants
REASONS FOR JUDGMENT
S.A.Q. Akhtar J.