Introduction

[1] The issues raised in this case largely result from a significant delay in resolution between separation and trial. Had the matter been resolved quickly, the equalization process under s. 5 of the Family Law Act, R.S.O. 1990, c. F.3 (“FLA”), would have met the needs of both parties.

[2] The parties separated in May 2008. On the date of separation, the applicant, Antonella Cerenzia (now Antonella Colasanti), owned the matrimonial home located at 406 Greennock Drive, Maple, Ontario, which was then worth between $470,000 and $535,000.

[3] Unfortunately, the matter was not resolved quickly and the matrimonial home has since increased in value substantially; according to one appraisal, it is now worth approximately $800,000. The respondent, Rob Cerenzia, as the non-owning spouse, normally would not benefit from that increase in value. Because of this delay, this litigation has turned into a conflict about ownership rather than value. The majority of trial time was spent on that issue.

[4] Also in issue at trial was a mortgage on the property in favour of Ms. Colasanti’s father. The mortgage, in the amount of $150,000, was placed on the home when it was transferred to Ms. Colasanti. Mr. Cerenzia argues that this mortgage is a sham and should be ignored for valuation and equalization purposes. Mr. Cerenzia also claims occupation rent payable by Ms. Colasanti from the date of separation..

[5] The trial in this matter took two days, with a further day for submissions. Much of the evidence at trial concerned the issue of Mr. Cerenzia’s contributions to the home, his state of belief as to ownership of the home when the parties married, and the financial contributions Mr. Cerenzia and his parents made to the home upon the parties’ marriage.

[6] In her submissions, Ms. Mitchell, on behalf of the applicant, pointed out that Mr. Cerenzia had not requested a resulting trust declaration in his Answer and Claim by Respondent. It was her position that his claim for an ownership interest in the home was limited to a constructive trust based upon unjust enrichment.. It is surprising that this issue was only raised in final submissions, subsequent to trial, considering that the parties both led evidence on the resulting trust issue at trial.

[7] The issues of custody and access were originally hotly contested and consumed most of the parties’ energy and resources during the litigation. For a time, the oldest son, Eric, refused to see his father. The parties managed to settle these issues, as well as ongoing child support just prior to trial by way of a consent dated April 21, 2015. The only remaining issues at trial were the the issues concerning the matrimonial home, retroactive child support, and occupation rent.

[8] For the reasons set out below, I have ordered as follows:

a. Mr. Cerenzia’s claim to an ownership interest in the matrimonial home, either by way of constructive trust or resulting trust, is dismissed;

b. Mr. Cerenzia’s claim for occupation rent is dismissed;

c. The mortgage shall be deemed to be an encumbrance on the home, but only to the extent of $100,000.

d. The applicant owes the respondent an equalization payment in the amount of $205,693.32;

e. The respondent owes the applicant retroactive child support in the amount of $6,412;

f. The respondent shall have judgment against the applicant in the net amount of $199,281.32.

g. The respondent shall have pre-judgment interest in that amount at the rate of 1.3 percent per annum from the date of separation.

Background

[9] Ms. Colasanti and Mr. Cerenzia were married on July 27, 1996. They had two children: Eric, born on September 15, 1998, and Stephen, born on July 24, 2002.

[10] Ms. Colasanti purchased the home at issue in this litigation solely in her name, just over seven months prior to the date of marriage on December 15, 1995. The home subsequently became the parties’ matrimonial home.

[11] The parties are at odds over the circumstances of the home’s purchase. There is no real issue that Ms. Colasanti’s parents, Nunzia and Cosimo Colasanti, transferred the home solely into her name in late 1995. From that point onward, their stories diverge.

[12] Ms. Colasanti says that prior to her marriage, she wished to purchase a home as an investment. Her father, Cosimo Colasanti, who testified at trial, owned 406 Greenock Drive in Maple, Ontario, along with his late wife. He testified that he had purchased the home as an investment for $320,000 in 1992, and that the property was worth $350,000 in 1996. This was the price at which he agreed to sell the property to his daughter. He says that he had a mortgage on the home for about $200,000. As part of the purchase, his daughter obtained a mortgage from CIBC for the same amount to pay off his existing mortgage. The property was transferred to Ms. Colasanti by her parents on December 15, 1995, and the CIBC mortgage for $200,000 was registered on the same day.

[13] According to testimony by Ms. Colasanti and her father, the balance of the purchase price was to be paid by the registration of a second mortgage back to Ms. Colasanti’s parents, Cosimo and Nunzia Colasanti, in the amount of $150,000. That mortgage was not registered until January 10, 1996. The mortgage back provides that it is payable on demand and bears no interest. It is common ground that no payments have been made on account of this mortgage since its registration.

[14] Ms. Colasanti says that this transaction was strictly between her and her parents. She says that she purchased the home as an investment and never intended to use it as a residence. She testified that her husband had nothing to do with its purchase, and they only decided to live there when they determined that they could not buy a suitable home as newlyweds. She says that the home needed a lot of work and that it did not meet their needs at the time; however, they had no choice because they could not find another home that could meet their needs.

[15] Mr. Cerenzia denies this account. He says that the parties always intended to move into the home and that Ms. Colasanti insisted upon purchasing their future matrimonial home from her parents. His recollection was that the home was purchased for $300,000. He based that belief on what his wife told him at the time. He says that he and Ms. Colasanti made a down payment of $100,000 with the balance secured by the mortgage to CIBC. He said that he always thought that he was an owner of the home, if only by virtue of the fact that the parties were married. Crucially, he testified that he knew nothing about the $150,000 mortgage given back to Ms. Colasanti’s parents, and only became aware of it from his first lawyer after the parties separated in May 2008.

[16] He says that he was also surprised to later discover that he was not an owner of the property. He testified that he only discovered this fact when he separated from Ms. Colasanti. However, the abstract of title indicates that Mr. Cerenzia registered a designation of the home as a matrimonial home under the FLA on September 17, 2007, about ten months prior to separation. This seems to indicate that he had some idea of who owned the home about 9 months prior to separation.

[17] Subsequent to the purchase of the home, the parties were married in an expensive wedding ceremony. Again, the parties were conflicted about the details of the wedding, who paid what expenses, and whether any monetary wedding gifts were put towards the home. The parties specifically disagree as to who paid the costs of the wedding and how much money was spent. From the evidence, however, I make the following findings regarding the wedding and the wedding gifts received by the parties:

a. The wedding cost about $50,000. After the wedding the parties spent about $20,000 on a honeymoon to California, and about $15,000 on furniture, for a total of $85,000.

b. The initial costs of the wedding appear to have been borne by Ms. Colasanti’s parents, who gave her a Visa card to spend on the the wedding expenses.

c. The parties received wedding gifts of approximately $20,000.

d. It appears that some friction arose from the fact that Mr. Cerenzia’s parents paid nothing toward the wedding, but they promised to provide a wedding gift after the wedding. One evening subsequent to the date of marriage, they came over and provided a cheque to the parties. The parties differ as to the amount of the cheque, but not the amount of the gift. The gift was $50,000, as reflected by a demand promissory note that the parties were asked to sign on August 15, 1996. However, Ms. Colasanti testified that she specifically recalls that the cheque was $42,000, because Mr. Cerenzia’s parents had provided Cosimo Colasanti, Ms. Colasanti’s father, $8,000 to directly reimburse him for one half of the hall rental. Mr. Cerenzia and his father, who also testified at trial, both say that the parties received a $50,000 cheque and that there was no deduction for the hall rental.

e. After the wedding, the purchase of furniture, and the honeymoon, there was a surplus deposited into the joint account which was, in the words of Ms. Colasanti, to “get us started.” That surplus can be quantified at about $35,000.[^1]

[18] A great deal of effort went into arguing how the mortgage was paid down on the home. The parties agree that the $200,000 mortgage in favour of CIBC was paid off within about six years and was fully discharged in April 2003. Both parties take credit for this. Ms. Colasanti says that she worked as a supply teacher and then as a teacher, and it was her income and efforts that resulted in payment of the mortgage. Mr. Cerenzia says that he worked as an apprentice in refrigeration mechanics and that his income was roughly equal to that of Ms. Colasanti throughout this time. He also says that the surplus from the wedding, largely resulting from the gift from his parents, was used to pay off the mortgage. Ms. Colasanti denies this point.

[19] If the parties were diligent in paying down the mortgage to CIBC, that was not the case concerning the mortgage to Ms. Colasanti’s parents. No payments were made towards that mortgage throughout the marriage. Cosimo Colasanti testified that he would ask his daughter from time to time for repayment of the loan, and she would ask him to wait, telling him that she did not have that type of money. That assertion is surprising, considering the fact that the parties were able to pay off the CIBC mortgage in short order, later paid off a line of credit used to fund renovations to the home, and ended the marriage holding mutual funds in the amount of $140,195.16, which the parties divided between themselves.[^2]

[20] Had he been asked, I am sure that Mr. Cerenzia would have suggested that he was not diligent about repaying the second mortgage on the property because he knew nothing about it until after the date of separation.

[21] Mr. Colasanti, who is now the owner of the mortgage by right of survivorship,[^3] said that his daughter will repay the mortgage through his estate. He says that his daughter was the only one of his three children who received an interest-free loan to purchase a home, and that his will provides that she will have to repay the $150,000 to his estate when he dies. That repayment would then be distributed between his three children, who are his sole beneficiaries. He did not have a copy of his will at the trial.

[22] The parties each gave differing testimony as to the work performed on the home. As noted, the home needed extensive renovations, which were performed throughout the marriage. Ms. Colasanti testified that the parties repaired the floor, and put in a kitchen and a fireplace. Some landscaping was done and a deck was added. Ms. Colasanti said that the parties took out a $50,000 line of credit; they used about half of that on renovations, and it was later repaid in full.

[23] Ms. Colasanti testified that her husband contributed almost nothing in “sweat equity” towards the renovations. Most of the work was done by her father and contractors paid through the line of credit. Mr. Cerenzia’s account differs on this point. He said that he helped knock out walls and construct the deck. In any event, extensive renovations were done to the home. It is common ground that the line of credit was used to pay the contractors and that it was later repaid well prior to separation.

[24] According to Mr. Cerenzia, the parties separated largely because Ms. Colasanti was abusive to him, calling him fat and threatening separation on an ongoing basis. Mr. Cerenzia began to spend extensive periods of time at the gym and took steroids to lose weight. He met his new partner at the gym, and eventually the marriage broke down when he got a tattoo that his wife did not agree with.

[25] The separation was difficult for both the parties and their children. When the parties separated in May 2009, Mr. Cerenzia left the home. On December 12, 2011, there was an altercation when Eric refused to go on an access visit with his father because he had found out about his father’s new partner. The parties engaged in a pushing and shoving match in the presence of the children and the police were called. Both parties were charged with assault. Ms. Colasanti says that the charges against her were withdrawn, but that Mr. Cerenzia was convicted of assault. Mr. Cerenzia says that he has been barred from the home since then.

[26] Custody, access and issues of ongoing child support were settled, leaving the property issues to be determined at trial. In addition, Ms. Colasanti claims retroactive child support to the date that Mr. Cerenzia began paying child support on July 1, 2010. Mr. Cerenzia also claims occupation rent; he says that he has been barred from the home since December 2011, and that he is entitled to collect occupation rent. That claim, of course, depends on whether he is found to have an ownership interest in the home.

Analysis

[27] As noted, the majority of the evidence concerned the home. However, there was also evidence as to the payment of expenses after the date of separation, and whether Mr. Cerenzia owed child support after that date.

[28] The issues raised by the evidence at trial and submissions by counsel are as follows:

a. Does Mr. Cerenzia have a claim in equity to a trust interest in the matrimonial home;

b. Is Ms. Colasanti entitled to include the mortgage registered against the matrimonial home in favour of her father, Cosimo Colasanti, as a debt owing on her net family property statement;

c. Is Ms. Colasanti entitled to a claim for retroactive child support from Mr. Cerenzia;

d. Is Mr. Cerenzia entitled to occupation rent for the period of time from the date of separation to trial?

[29] I shall deal with each of these issues in turn. Some issues, such as the issue of resulting trust, will be dealt with as part of the equalization analysis. It is obvious as well that the claim for occupation rent stands or falls on whether Mr. Cerenzia has an entitlement to a proprietary interest in the home.

Does Mr. Cerenzia have a claim in equity to a trust interest in the matrimonial home?

[30] The parties spent much of their time at trial on the issue of ownership, but the real issue under this heading is the remedy available to Mr. Cerenzia. As a married couple, their separation is governed by the FLA. Under the statute, Mr. Cerenzia is entitled to the equalization of property. This includes the value of the matrimonial home. The FLA does not preclude the operation of claims of unjust enrichment alongside equalization payments. However, in order to assert a trust interest in the home by way of unjust enrichment, the court must determine first whether Ms. Colasanti was unjustly enriched, and second, whether a monetary award would suffice to remedy the injustice.

[31] The specifics of how to deal with this type of claim were set out by the Ontario Court of Appeal in the case of Martin v. Sansome, 2014 ONCA 14, 118 OR (3d) 522. Martin involved a farm property that was transferred to the appellant husband shortly after the date of marriage. The farm property and the matrimonial home located thereon were subject to equalization upon separation. Presumably because the farm property[^4] would be excluded from the husband’s net family property, as it was the subject matter of a gift and an advance on the husband’s inheritance, the wife claimed a remedy against it in constructive trust. Were the entire farm subject to the wife’s ownership claim, the husband would have been unable to deduct its value as a gift or inheritance.

[32] The fact that parties in this case are married and entitled to equalization of property does not preclude a finding of unjust enrichment or a constructive trust remedy: see Rawluk v. Rawluk, 1990 CanLII 152 (SCC), [1990] 1 S.C.R. 70. In Martin, however, the Court of Appeal made it clear that the equalization scheme under the FLA generally addresses issues of unjust enrichment arising from a marriage relationship, and that this was, in fact, the purpose of the equalization scheme. Generally, an equalization payment under the FLA suffices to address equitable issues. Only in extraordinary circumstances where such an award would be unconscionable should a court go beyond that remedy to provide for a proprietary remedy: Martin at para. 66 and Straub v. Straub, 2012 ONSC 3819, 32 R.F.L. (7th) 415, aff’d 2013 ONCA 721, 2013 CarswellOnt 16102 at para. 107.

[33] Based on this, in Martin, Hoy A.C.J.O. provided the framework for determining these types of questions. At para. 48, she stated the following:

[W]here unjust enrichment is established, the first remedy to consider is always a monetary award. A court will impress a proprietary remedy – normally a constructive trust on property – only if the plaintiff satisfies it that a monetary award would be insufficient in the circumstances and that there is a sufficiently substantial and direct link between his or her contributions and the acquisition, preservation, maintenance or improvement of the disputed property.

[34] According to Martin, therefore, I must engage in a two part analysis of Mr. Cerenzia’s claim to the home:

a) I must first determine whether the evidence supports a claim for unjust enrichment in favour of the claimant. This may be based upon a joint family venture within the meaning of Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269.

b) Once this finding is made, I must determine whether a monetary award would be sufficient to remedy the issue of unjust enrichment. In doing so, I must quantify the equalization payment owing to the claimant spouse, taking into account his right to an unequal division of net family property within the meaning of s. 5(6) of the FLA (Martin at para. 66). Only if I find that a monetary award under the applicable legislation does not address the respondent’s claim for unjust enrichment should I go beyond the respondent’s right to an equalization payment, and declare an actual ownership interest in the matrimonial home.

(a) Was the applicant unjustly enriched concerning title to the matrimonial home?

[35] The principles of unjust enrichment were set out and determined in Kerr. At para. 32 of that case, Cromwell J. stated, “Canadian law ... permits recovery whenever the plaintiff can establish three elements: an enrichment of or benefit to the defendant, a corresponding deprivation of the plaintiff, and the absence of a juristic reason for the enrichment”. At the heart of the matter is the fact that the court is intent upon “restoring a benefit which justice does not permit one to retain” (para. 31).

[36] A common situation of unjust enrichment in family law cases occurs where one spouse leaves the partnership with a markedly greater share of the value of the assets generated by way of a joint family venture. Such an unjust enrichment is defined by Cromwell J. in Kerr as occurring where the “contributions of both parties over time have resulted in an accumulation of wealth … when one party retains a disproportionate share of the assets which are the product of their joint efforts” (para. 60).

[37] There are a number of hallmarks of a joint family venture. Cromwell J. suggested a joint family venture may be found where there can be found:

a) Mutual effort;

b) Economic Integration;

c) Actual Intent;

d) Priority of the family

[38] There is little doubt that a married couple working toward common goals constitutes a joint family venture, based upon these criteria.

[39] The matrimonial home is the only asset in issue in this case. Because it is held solely by the wife and has appreciated significantly after the date of separation, much of the evidence was directed towards the question of whether the respondent made direct or indirect contributions to the acquisition or improvement of the home. Mr. Cerenzia attempted to show that the wedding gifts given to both parties went to pay down the mortgage and that he had contributed “sweat equity” to the renovations carried out on the home. Ms. Colasanti, on the other hand, gave testimony that there was little left from the wedding gifts and that it was her income that went to pay down the CIBC mortgage on the home. She testified that Mr. Cerenzia did little or nothing toward the renovations on the home and that the renovations were paid for from a line of credit that was later paid in full.

[40] Mr. Cerenzia also gave evidence that he thought that the home had been purchased by both of them prior to marriage. He also testified that he always thought that the home was in both their names until he was disabused of that notion after separation.

[41] I have made a finding that there was a surplus after the wedding of about $35,000. There was no evidence that these funds were actually applied to the mortgage on the home. However, there is little doubt that the mortgage was paid in full by April 2003, less than eight years after the home was purchased. The evidence also confirms that about $25,000 was advanced through a line of credit to pay for extensive renovations on the home. That line of credit was also paid in full prior to separation.

[42] I do not find, as advocated by Ms. Colasanti, that it was only through her efforts that these loans were paid in full during the marriage. Both parties worked. In the early years of marriage, Ms. Colasanti worked as a supply teacher, while Mr. Cerenzia apprenticed as a refrigeration mechanic. Neither party could tell me exactly what their incomes were, but the evidence of both parties confirms that they both worked hard towards building their respective careers and paying off the debt on the home. There is no need to trace exactly where the funds came from to pay off the mortgage, as the parties pooled their resources throughout the marriage. When the marriage ended, all of their money was being deposited into a joint account. Ms. Colasanti confirmed that the mortgage was paid off from a joint account into which all of the parties’ income was then being deposited. Although Ms. Colasanti says that she was saving sums of money that she used to pay the mortgage, there is little doubt that she was able to do this because Mr. Cerenzia was also paying his income into that joint account.

[43] As such, I find that there was a joint family venture, and both parties contributed jointly toward the reduction in debt registered against the home and the renovations later done on the home. Ms. Colasanti was unjustly enriched by retaining sole title to the home.

[44] However, this finding does not give rise to an automatic constructive trust in favour of Mr. Cerenzia. The next issue is whether a monetary award will serve the interests of justice or whether extraordinary circumstances exist that warrant granting a proprietary award in favour of the husband.

(b) Is a monetary award adequate in this case to address the unjust enrichment in the wife’s favour?

[45] To deal with this issue, I must first determine Mr. Cerenzia’s equalization entitlement under s. 5 of the FLA. A number of issues were raised in this context, including the husband’s resulting trust claim in the home, the value of the home, and the issue of the mortgage in favour of Ms. Colasanti’s father.

(i) Resulting Trust

[46] In determining an equalization claim, the court must first inquire into the respective ownership interests in the matrimonial home. The husband’s ownership interest in the home, either through legal title, or equitable trust interest, is relevant to the amount of the equalization payment or monetary award to be made to him. Implicit in a claim for equalization of property is the issue of whether a party has a trust interest in the matrimonial home that would affect the equalization of the parties’ net family property. This is evident from the recent case of Korman v. Korman, 2015 ONCA 578, 126 O.R. (3d) 561, in which Cronk J.A. confirmed that “under the [Family Law] Act, questions of title must be settled before property can be equalized” (para. 29).

[47] Ms. Mitchell, on behalf of the applicant, raised the issue that Mr. Cerenzia did not specifically claim a resulting trust against the home in his pleadings. She argued strenuously that he should not be permitted to make this claim without having specifically pleaded that issue in his Answer.

[48] As I stated above, I was surprised at Ms. Mitchell’s objection after a trial during which the respondent raised the issue of his interest in the home, and addressed his specific contributions to the home in his testimony. The fact that the respondent was making a claim against the home by way of resulting trust was not news to anyone sitting through that trial. Ms. Colasanti also specifically gave testimony as to her husband’s lack of direct contribution to the home, testifying that he did not assist in the renovations and that it was her income, not his, that went to reducing the mortgage.

[49] This is similar to the situation in Fratric v. Fratric, 2010 ONCA 761, 269 O.A.C. 38. The Court of Appeal upheld the trial judge’s determination that there was no prejudice to any party where evidence towards proof of a resulting trust was addressed by both parties during trial, notwithstanding the claimant’s failure to address that issue in his pleadings. In that case, the lack of prejudice obviated the need to amend or specifically plead the issue, as both parties came to trial fully aware that the claimant was making a trust claim against the matrimonial home arising from his direct contributions to the home. That is similar to the present case where both parties testified as to this issue. In fact, the wife gave testimony about this issue prior to the husband’s presentation of his case later during the trial.

[50] As such, considering the evidence at trial and the respective claims for equalization of property, it is open to me to consider whether Mr. Cerenzia has an interest in the home by way of resulting trust.

[51] Mr. Cerenzia spent a great deal of energy asserting that he always thought that he had an interest in the home and that the home was held in both parties’ names. When cross examined on this issue, specifically whether he had been involved in the closing or the signing of any documentation, he testified that he thought that the fact the parties were married also meant that he was a joint owner of the home.

[52] In giving this testimony, the husband appears to be relying upon an argument that there was a “common intention” that the home was to be placed in both names, which the applicant only reneged upon later as the marriage broke down. This is the only way the intentions of the parties might be relevant to a resulting trust interest. However, that concept of implied common intention was eliminated in Kerr at para. 29: Cromwell J. made it clear that “the resulting trust arising solely from the common intention of the parties… no longer has a useful role to play in resolving property and financial disputes in domestic cases.” That is presumably because the parties’ joint contributions to the acquisition of assets can be addressed through a claim of unjust enrichment arising from a joint family venture, as noted above. As such, Mr. Cerenzia’s belief that he was an owner of the home by reason of the marriage relationship may explain his actions in paying down the CIBC mortgage, but it cannot form the basis of a trust interest in the home.

[53] Rather, a resulting trust claim must be based upon a specific contribution of funds to the acquisition of the asset, causing the interest in the home to “result” back to the contributing party by way of a trust interest in the home. If someone advances funds to purchase an asset, it is presumed that the property purchased by the funds results back to the person advancing the funds by way of resulting trust. This type of claim is recognized by s. 14 of the FLA which reads as follows:

The rule of law applying a presumption of a resulting trust shall be applied in questions of the ownership of property between spouses, as if they were not married, except that,

a) the fact that property is held in the name of spouses as joint tenants is proof, in the absence of evidence to the contrary, that the spouses are intended to own the property as joint tenants; and

b) money on deposit in the name of both spouses shall be deemed to be in the name of the spouses as joint tenants for the purposes of clause (a).

[54] However, the present case is distinguishable from cases in which the down payment for the property can be traced to a specific source but the property was placed in the name of one spouse for business or other purposes. For example, in Launchbury v. Launchbury, 2001 CanLII 28182 (Ont. S.C.J.), 15 R.F.L. (5th) 106, aff’d 2005 CanLII 10640, 12 R.F.L. (6th) 393 (Ont. C.A.), the funds to purchase the property came from a joint account, but the property was placed solely in the wife’s name for business and professional purposes. In that type of case, the presumption of a resulting trust exists because the claimant has proven on the balance of probabilities the means by which the asset was originally acquired. In Launchbury, the down payment dictated where title to the property should have been directed at the time of the conveyance to the titled spouse.

[55] This is evident from the analysis in the recent case of Korman, where Cronk J.A. confirmed that Kerr stated that “a traditional resulting trust may arise in the domestic context where, as here, there has been financial contribution to the initial acquisition of a property and a subsequent gratuitous transfer of title to the property” (para. 27). [Emphasis added.] The focus of a resulting trust claim is the transaction that placed the property into the hands of the titled spouse, rather than subsequent circumstances whereby the mortgage was paid down or improvements made to the home.

[56] In the present case, the claimant is relying upon funds he contributed to the home after title was placed in the wife’s name. There is little doubt, regardless of what Mr. Cerenzia believed at the time the property was conveyed to the wife, that the purchase price of the land was covered by the $200,000 mortgage to CIBC and the subsequently registered mortgage back in favour of Mr. Colasanti and his late wife. Assuming the latter debt remains enforceable, the only person who will be liable to Mr. Colasanti for that debt is the applicant wife. As will be seen, I intend to find that Ms. Colasanti is still liable for and will have to repay at least a portion of that debt.

[57] All of these transactions took place well prior to the date of marriage, and well prior to Mr. Cerenzia’s parents’ post-wedding gift that was purportedly to be applied towards the purchase of the matrimonial home. Contributions made after the fact are the subject matter of a claim by way of unjust enrichment and not resulting trust. For the latter to apply, the specific transaction transferring the asset into one party’s name is reviewed to show where title should have gone at the time title was acquired.

[58] Moreover, the evidence is equivocal at best as to the contributions actually made to the property. I have found that both parties jointly contributed to the payment of the mortgage and the later line of credit used to pay for the renovations. However, there was little or no evidence that the $35,000 surplus that the parties realized after their marriage was specifically put towards paying off the mortgage on the home, despite Mr. Cerenzia’s father’s intentions. I am unable to quantify the exact amount that Mr. Cerenzia’s income contributed towards payments on the home, as neither party testified exactly what their respective incomes or home-related expenses were. At another time, this set of facts may have been sufficient to find a common intention resulting trust. However, that is no longer part of the tool chest of family law judges determining questions of title between spouses. The sole issue now to be considered is whether there exists an unjust enrichment, the remedy for which must be determined once the equalization payment has been calculated.

[59] I have already found that there was unjust enrichment arising from the disproportionate retention of assets by the wife upon the breakdown of the marriage. I do not find that Mr. Cerenzia contributed in any way to the initial acquisition of the property. As such, I do not find that Mr. Cerenzia has an interest in the matrimonial home by way of resulting trust or that the presumption of resulting trust is applicable in the present case.

(ii) Mortgage in Favour of Mr. Colasanti

[60] The mortgage in favour of Ms. Colasanti’s parents was registered in January 1996, about six months prior to the date of marriage.

[61] Since their marriage, the parties have made no payments on account of this mortgage. Mr. Cerenzia says that he was not even aware of the mortgage and accordingly, he made no payments on account of it. Ms. Colasanti told her father she was financially unable to do so, even though she applied funds diligently to the parties’ other financial obligations, including the first mortgage, the line of credit and their mutual fund account.

[62] There is little issue that Mr. Colasanti would now have difficulty enforcing the mortgage if he were intent on doing so, because the mortgage is likely statute-barred. Section 23(1) of the Real Property Limitations Act, R.S.O. 1990, c. L.15, provides that a mortgage cannot be enforced after ten years has elapsed from when action could be taken on the covenant. This is so even in the case of a demand mortgage where, absent payments, the mortgage is due upon its registration and the ten-year limitation period expires ten years after registration: Scaduto v. Lodato, 2006 CarswellOnt 9711 (S.C.) at para. 2.

[63] However, Mr. Colasanti testified that although he knew that he could not and would not enforce the mortgage against his daughter, he intended to do so through his estate. He testified that his daughter had received a benefit that his other two children had not, and that he had included in his will a provision that the mortgage is an asset of his estate to be “split” between his three children. Although he did not bring a copy of the will to court, he was unshaken on this point in cross examination when he confirmed that “all three children will split the $150,000”. I have no reason to disbelieve this gentleman who was honest about the attempts that he had made to collect on the mortgage through the years. I accordingly find that the debt reflected by the mortgage registered in January 1996 will be enforced through the estate of Cosimo Colasanti, and that the benefit of this particular asset of the estate will be divided between all three of his children. The limitations period noted above does not apply, because this debt will be enforced through the operation of Mr. Colasanti’s will, and not through the courts.

[64] Because she will be a beneficiary as well as a debtor of the estate, Ms. Colasanti will receive the benefit of one-third of that mortgage, which Mr. Colasanti unequivocally testified would be split between his three children. Therefore, the ultimate cost to Ms. Colasanti of this mortgage will be $100,000, as she will receive a one-third benefit of this particular estate asset. Interest is not a factor, as there is no interest payable under the mortgage.

[65] As such, I assess the mortgage at two-thirds of its face amount, or $100,000, which shall be included as Ms. Colasanti’s liability for equalization purposes.

(iii) Value of matrimonial home on V-Day

[66] Two appraisals were filed. The parties initially obtained a joint appraisal completed by San Yun Han, indicating that as of April 1, 2009, the matrimonial home was worth $470,000. The respondent presented a second appraisal completed by David Wengar, indicating that the property had a value on that date of $535,000.

[67] Neither appraiser was called as a witness. Therefore, I did not have the benefit of cross examination of either of the two appraisers in this matter.

[68] Appraisal of a property is an inexact art, and it is trite to say that the only truly accurate valuation of a property is a sale on the open market. Both of these appraisers were noted as “candidates” but their appraisals were reviewed by a CRA qualified appraiser. Both appraisals used the direct comparison approach and based their values on three comparable properties within blocks of the subject residence. Both appraisers were aware of a problem of water leakage in the basement, but neither appraiser appears to have permitted that to affect the home’s value.

[69] The applicant attempted to persuade me that the appraisal completed by Mr. Wengar was questionable because his inspection was cursory and was done at night. However, the pictures in the appraisal indicate that he returned during the day to photograph the home. As well, the appraisal indicates that Mr. Wengar had spoken to Ms. Colasanti and was advised of the dampness in the basement.

[70] According to MPAC, the property had an assessed value of $510,000 on January 1, 2008. However, this may have been affected by the 2008 recession.

[71] It is impossible for me to look at the comparable sales in each appraisal and determine which appraiser was more diligent or accurate. I have no way of determining whether the comparable properties are actually reflective of the subject property. My only comment is that Mr. Han took the effect of the 2008 recession on real estate values in the Greater Toronto Area into account in his appraisal. As well, Mr. Han’s appraisal referred to one comparable property that was sold around April 1, 2009, the valuation date used by both parties for the appraisal. Mr. Wenger used comparable properties sold in late 2008, which may have been sold based upon agreements entered into before the recession began in October and November.

[72] The applicant’s lawyer suggested in argument that I take the average between the two appraisals, $502,000, as the value of the matrimonial home. Because neither appraiser testified, I have no evidence by which I can prefer one appraisal over the other. Accordingly, I accept that suggestion, and I find the value of the home to be $502,000 on the date of separation.

(iv) Equalization Payment

[73] Each party has filed a net family property statement. I have used both to complete a net family property statement, attached as Schedule A to this judgment.

[74] The first issue is the date of separation. This is important because I have been requested to value bank accounts as of the Valuation Day, which Ms. Colasanti suggests is May 9, 2009. Mr. Cerenzia stated in his Answer that the family history in the Application, stating the date of separation was May 9, 2009, was correct. However, in his own family history, Mr. Cerenzia inserted April 1, 2009 as the date of separation. Neither party gave any evidence as to the exact date of separation other than Mr. Cerenzia, who said that he was “done” in September 2008, when he refused to remove the tattoo that Ms. Colasanti took exception to.

[75] In light of the original family history contained in the Application that Mr. Cerenzia stated was correct in his Answer, I find that the date of separation was May 9, 2009.

[76] I also have the following comments respecting the two parties’ NFP statements provided to me:

a. The respondent has inserted the present value of the home in his NFP statement. Even if he was found to have an ownership interest, the value to be used for equalization purposes is not the present day value, but the value as of the date of separation, which the parties appear to agree is May 9, 2009. I have inserted the figure of $502,000, which I have found to be the value of the property as of the date of separation.

b. The only real evidence regarding the value of the household contents came from the applicant, who said that the contents were purchased nearly 20 years ago, and that they have gone through two children and a dog. She said that the contents have no value. Mr. Cerenzia gave no evidence as to the value of the contents of the home, and neither party has provided an appraisal. I am inclined to attach a “garage sale value” to the contents, but that would be speculative guesswork at best. The applicant also gave evidence that the respondent took certain items from the home including tools and refrigerant of an unknown value. I am therefore attributing no value for the contents of the home.

c. The applicant claimed that the respondent purchased a motorcycle for $10,000 shortly before separation. The respondent claimed that the motorcycle was purchased in the fall of 2009, after separation. The applicant put to the respondent in cross examination a copy of a bank draft from March 2009, payable to the Motorcycle Superstore. The respondent admitted at that point that the motorcycle was purchased in March 2009, stating that the applicant always “held a grudge”. The bank draft was never made an exhibit, but I am satisfied that the respondent had a motorcycle and equipment worth $10,000 on the date of separation.

d. The applicant gave no other evidence regarding his vehicles, but acknowledged in his net family property statement that he owned a Mustang worth $9,000 that was written off in a post-separation accident in 2009.

e. Neither party gave evidence regarding the wedding ring that the respondent said was worth $2,000 and was in the applicant’s possession on separation. I have no evidence one way or another as to the existence or value of this asset. However, the applicant acknowledged this asset in her April 1, 2015 financial statement, and I have inserted this into the NFP statement.

f. I have taken most of the bank account information from the financial statements of the parties. For example, both parties agreed that they had RRSP accounts, but the applicant’s was not inserted into her net family statement. I have taken the pension amounts from the valuations filed as exhibits. Finally, I inserted a figure of $7,767.30 into the NFP statement for the respondent’s TD Bank account. Although it was held jointly with his father, according his own evidence, it was an account that the respondent solely used and owned.

g. Under debts, as suggested by the applicant, I have inserted a 22 percent notional tax amount on the pensions and RRSPs. I have also inserted the $100,000 value of the mortgage debt that the applicant will pay through her father’s estate. Finally, although the respondent suggested in his materials that the promissory note signed by the parties in favour of his father for the $50,000 wedding gift be inserted on his side as a debt, that was not suggested at trial. It is clear that this debt would be statute-barred. In addition, Mr. Cerenzia’s father testified and did not suggest that this debt would be repaid by his son through his estate.

h. Both parties have claimed a deduction for assets brought into the marriage, but neither party proved these assets or testified respecting those assets at trial. The onus to prove a deduction or exclusion is on the person claiming it (FLA, s. 4(3)). Neither party satisfied that onus, therefore there is no deduction for either party for assets brought into the marriage.

[77] Accordingly, as set out in the net family property statement attached as a schedule to this judgment, the applicant owes an equalization payment of $205,693.32.

[78] The next issue I must consider is whether, in light of this equalization payment, there are any reasons to grant a propriety remedy in order to address the unjust enrichment I found above.

(v) Sufficiency of Monetary Award

[79] Mr. Cerenzia says that a monetary award by way of equalization would not be sufficient for the following reasons:

a. The matrimonial home has increased substantially in value since the date of separation. Although it was worth approximately $500,000 at that time, it is now worth about $800,000, a $300,000 increase.

b. Mr. Cerenzia claims occupation rent for the period of time between separation and the present date. He cannot, of course, claim this, if he does not have an ownership interest in the home.

[80] The case law confirms that, in general, a monetary award under the FLA will satisfy any claim for unjust enrichment arising from a party’s contribution to the acquisition of an asset during the marriage. The intention of the FLA is to address these issues, either through equalization of the parties’ assets or through an unequal division of net family property as set out in s. 5(6).

[81] In Straub, McKelvey J. presided over competing constructive trust claims between married parties. The husband claimed an interest in the increased value of the matrimonial home and the wife claimed an interest in the increased value of the husband’s investment portfolio. In addressing these claims, McKelvey J. distinguished the case from Kerr on the grounds that the parties were entitled to a statutory equalization, which applies only to married couples. He concluded:

In my view, the statutory framework for equalization should be applied routinely, and it will be a rare case where a court will apply the constructive trust doctrines in situations which are governed by the statutory framework. There should be a high threshold before departing from the statutory guidelines. I also feel it is significant that the provisions of the Family Law Act have provisions which allow for an unequal distribution in cases where an equal distribution would be unreasonable. This reinforces my view that the law relating to constructive trusts has little relevance in cases which are governed by the statutory framework (para. 109).

[82] McKelvey J.’s position was confirmed by the Court of Appeal in Martin at para. 60. Hoy A.C.J.O. noted the criteria under which a monetary award would not be sufficient to address an unjust enrichment. This would include an issue of “recoverability”, or alternatively “an attachment to this particular property that cannot be replaced with money.” She specifically excluded from consideration a post-separation increase in value, as “this benefit is clearly a monetary one and cannot be used as a rationale for finding a monetary award insufficient”.

[83] In the normal course, therefore, the increase in value after separation is not a basis for a finding that a monetary award is insufficient to address the claimant’s request based upon unjust enrichment. That is addressed by quantifying a monetary award, including any claim for an unequal division of net family property under s. 5(6) of the FLA.

[84] Furthermore, as I noted at the beginning of this judgment, the issue of the post-separation increase in value was caused, in this case, by delay in resolving this matter. Had the matter been resolved quickly, the increase in the value of the home would not have been an issue. If this was a concern of the husband, I would think that some evidence would be provided as to who was responsible for the delay. However, no blame was attributed to either party. The application was only commenced in January 2012, more than two years after separation, and it was the applicant wife who issued process. As such, assuming an award of pre-judgment interest, the husband cannot now complain that a monetary award is insufficient to address any issues of unjust enrichment.

[85] The same applies to the claim for occupation rent. There were delays in resolution, but the husband does not appear to have suffered as a result of being excluded from the home. First, one of the reasons he was excluded a domestic incident in 2011, in which the police were involved, for which the husband bears at least some responsibility. Second, the husband has been living at his father’s residence. He says that he owes his father rent, but Mr. Cerenzia’s father testified that he has not collected rent from his son and does not intend to do so. Although Mr. Cerenzia suggested in his financial statement from 2012 that he owes money for back rent, he did not quantify this amount in the statement or at trial. He acknowledged that all that he was paying was a portion of the utilities and this was only when he “could” afford to.

[86] The inability to claim occupation rent is therefore not a sufficient reason to find a monetary award insufficient.

[87] As well, I must consider the issue of an unequal division of net family property under s. 5(6) of the FLA. I must first determine whether any of the criteria in s. 5(6) are applicable to the present case. The touchstone of this issue is the finding of an unconscionable result; in other words, does a simple equalization of property “shock the conscience of the court” (Serra v. Serra, 2009 ONCA 105, 93 O.R. (3d) 161 at para. 47).

[88] Although Serra confirms that s. 5(6)(h) can be engaged by post-separation changes in value, that case also confirms that this section requires an extremely high threshold to find unconscionable circumstances. Simple unfairness will not suffice.

[89] I do not find that the discretion of the court under s. 5(6) is engaged by this provision. The significant post-separation increases in the value of the home are troubling for Mr. Cerenzia and may in fact work an unfairness, but they are not unconscionable. There was no explanation for the delay in resolution which permitted the significant increase in the value of the home over the past six years. Mr. Cerenzia was not the person who brought these proceedings. Had he wished to resolve the property issues early on, he could have sought the court’s assistance well before 2012.

[90] The delays in this matter are properly satisfied by an award of pre-judgment interest on the equalization payment: Novakovic v. Kapusniak, 2008 ONCA 381, 52 R.F.L. (6th) 9. As well, as noted above, Ms. Colasanti will be left with at least a portion of the debt on the home. To provide Mr. Cerenzia with an interest in the home would not be fair, considering her obligation to her father’s estate. It is not “shocking” to the court that the applicant be given the benefit of the post-separation increases in value of the home under the circumstances.

[91] Section 5(6) of the Act is therefore not engaged in this matter.

[92] I do not find a proprietary award to be appropriate in this matter. Any claims of Mr. Cerenzia by way of unjust enrichment are satisfied by the equalization provisions of the statute. There shall be an equalization payment in favour of Mr. Cerenzia in the amount of $205,693.32.

[93] As I have determined that Mr. Cerenzia did not have an ownership interest in the home, his claim for occupation rent is dismissed.

[94] I am also going to order that the designation registered as against the matrimonial home be vacated, as I have determined that Mr. Cerenzia is not entitled to a proprietary interest in the home and he has not asserted a possessory claim to the home under Part II of the FLA.

Is there a Claim for Retroactive Child Support?

[95] The parties have agreed to ongoing child support. The applicant claims retroactive child support of $8,968.00. The calculation of child support arrears is set out in Tab 9 of the applicant’s exhibit book. That calculation was adopted by the applicant in her evidence.

[96] There is no issue that the two children resided with Ms. Colasanti after separation and that child support was owed for these two children.

[97] After separation in May 2009, the parties agreed to continue using the joint account that they had always used. Mr. Cerenzia did deposit funds into that account, although he was also using another account. Ms. Colasanti claims no retroactive child support between May and December, 2009.

[98] The respondent lost his job in December 2009, and according to the applicant, ceased depositing funds into the joint account after that date. However, Mr. Cerenzia was re-employed in June 2010. According to the respondent’s Notice of Assessment, his income in 2010 was $64,653.

[99] According to the applicant’s calculation of child support arrears, the respondent was supposed to have paid $1,174 per month during 2010. However, the applicant acknowledged that Mr. Cerenzia’s income was $64,653 in 2010, which would have given rise to base guideline child support in the amount of $961 per month, more than $200 per month less than the monthly amount claimed by Ms. Colasanti. Ms. Colasanti led no evidence regarding any s. 7 expenses of the children and the only reference to s. 7 expenses in the materials were cheques written by Mr. Cerenzia in 2014 and 2015.[^5] I therefore have to assume that Mr. Cerenzia was liable to pay $961 per month in base child support in 2010.

[100] According to the calculation of retroactive child support adopted by Ms. Colasanti when she gave her evidence, Mr. Cerenzia paid $5,700 in child support in 2010. He should have paid $11,532.[^6] This gives rise to a claim for retroactive support for 2010 in the amount of $5,832.

[101] Mr. Cerenzia does not deny that he stopped paying money into the joint account after he lost his job in December 2009. He does not deny the amounts that Ms. Colasanti says he paid in 2010 or in subsequent years.

[102] He does say that he overpaid in 2009 and that this amount should be credited to him on account of the retroactive child support claim. He says that the amount deposited into the joint account was greater than his obligation. However, he did not quantify this overpayment or provide specific evidence of his overpayment.

[103] The initial arrangements made after separation often result in an overpayment of support, because these arrangements are often completed without independent legal advice or any amount of exactitude. The parties are just trying to get through a difficult time.

[104] Moreover, I do not find that Mr. Cerenzia made an overpayment, especially as he was also making significant deposits into his own bank account during the last months of 2009. As such, and considering that the amount of the overpayment was not quantified by the respondent in any meaningful fashion, I do not find there to have been an overpayment to be set off as against the support arrears claimed by the applicant.

[105] Taking into account my adjustment for 2010 above, and taking into account the overpayments of the respondent in 2013 and 2014, as acknowledged by the applicant, I find that the respondent underpaid child support in the amount of $6,412, to be set off against the equalization payment owing by the applicant to the respondent.

[106] Therefore, the net amount owing by the applicant to the respondent is $199,281.32.[^7] There shall be judgment in that amount against the applicant.

[107] As Ms. Colasanti had the use of the home throughout, Mr. Cerenzia is entitled to pre-judgment interest in this matter from the date of separation to date. The rate of pre-judgment interest shall be 1.3 percent, which is the rate in force for the second quarter of the year of separation.

Order

[108] There will therefore be a final order to go on as follows:

a. The respondent shall have judgment against the applicant in the amount of $199,281.32;

b. There shall be pre-judgment interest on that amount in the amount of 1.3 percent per annum commencing as of May 9, 2009;

c. The Respondent’s claim to a trust interest in the matrimonial home is dismissed;

d. The Designation registered by the respondent as Instrument No. YR1055014 as against the matrimonial home municipally described as 406 Greenock Drive, Vaughan, Ontario and legally described as Lot 141, Plan 65M-2592 (PIN 03330-1545 (LT)) is and shall be vacated;

e. The respondent’s claim for occupation rent is dismissed.

[109] The parties may make written submissions as to costs. The applicant is to make costs submissions, followed by the respondent on a ten day turnaround. Costs submissions shall be no more than five pages in length, not including bills of costs and offers to settle.

McDERMOT J.

Released: November 24, 2015

Schedule A ONTARIO

Court File Number

Superior Court of Justice, Family Court

FC-12-039862-00

(Name of Court)

50 Eagle Street West, Newmarket, Ontario L3Y 6B1

Form 13B: Net Family

Property Statement

(Court office address)

Applicant(s)

Full legal name & address for service — street & number, municipality, postal code, telephone & fax numbers and e‑mail address (if any).

Lawyer’s name & address — street & number, municipality, postal code, telephone & fax numbers and e‑mail address (if any).

Antonella Cerenzia

406 Greenock Drive,

Maple, Ontario

L6A 1M6

Karen Mitchell

Counter & Mitchell

12820 Yonge Street,

Suite 102, P.O. Box 2939

Richmond Hill, Ontario L4E 1A8

Tel: 905-773-4301

Fax: 905-773-7439

Respondent(s)

Full legal name & address for service — street & number, municipality, postal code, telephone & fax numbers and e‑mail address (if any).

Lawyer’s name & address — street & number, municipality, postal code, telephone & fax numbers and e‑mail address (if any).

Umberto Jeffrey Cerenzia

1814 Audubon Blvd

Mississauga, Ontario

L4W 3R4

Lisa Kadoory

Kain & Ball Professional Corporation

1290 Central Parkway West

Suite 402

Mississauga, Ontario L5C 4R3

Tel: 905-273-4588

Fax: 905-273-4585

lisa.kadoory@kainfamilylaw.com

My name is (full legal name)

The valuation date for the following material is (date)

May 9, 2009

The date of marriage is (date)

July 27, 1996

(Complete the tables by filling in the columns for both parties, showing your assets, debts, etc. and those of your spouse)

Table 1: Value Of Assets Owned on Valuation Date (List in the order of the categories in the financial statement)

PART 4(a): LAND

Nature & Type of Ownership

(State percentage interest)

Address of Property

APPLICANT

RESPONDENT

Matrimonial Home

406 Greenock Drive, Maple, ON

$502,000.00

Totals: Value of Land

$502,000.00

$0.00

PART 4(b): GENERAL HOUSEHOLD ITEMS AND VEHICLES

Item

Description

APPLICANT

RESPONDENT

Household goods

No value attributed

& furniture

Cars, boats,

Motorcycle (purchased in March, 2009)

$10,000.00

vehicles

1991 Mustang written off in a 2009 accident

$9,000.00

Jewellery, art,

electronics, tools,

sports & hobby,

equipment

Other special

Wedding Ring

$2,000.00

items

Totals: Value of General Household Items and Vehicles

$2,000.00

$19,000.00

PART 4(c): BANK ACCOUNTS AND SAVINGS, SECURITIES AND PENSIONS

Antonella Cerenzia v. Umberto Jeffrey Cerenzia, 2015 ONSC 7305

Case Summary

Introduction

Background

Analysis

Does Mr. Cerenzia have a claim in equity to a trust interest in the matrimonial home?

(a) Was the applicant unjustly enriched concerning title to the matrimonial home?

(b) Is a monetary award adequate in this case to address the unjust enrichment in the wife’s favour?

(i) Resulting Trust

(ii) Mortgage in Favour of Mr. Colasanti

(iii) Value of matrimonial home on V-Day

(iv) Equalization Payment

(v) Sufficiency of Monetary Award

Is there a Claim for Retroactive Child Support?

Order

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Expert Witnesses

Financial Outcomes

Issues

Statutory Provisions 4

Legal Tests 2

Legislation 2