COURT FILE NO.: FC-12-1007-00

DATE: January 5, 2017

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: NORA HOFFER Applicant

AND

MAREK BALINSKI Respondent

BEFORE: Madam Justice Tracy Engelking

COUNSEL: Richard Shanbaum, for the Applicant

Martin J. Prost, for the Respondent

HEARD: November 28, 29, 30 and December 1, 2016

Reasons for Judgment

[1] This is an application brought by the Applicant wife, Nora Hoffer, in which she is seeking an order for an unequal division of the net family property or, in the alternative, an order for compensatory spousal support. The Respondent husband, Marik Balinski, has filed an Answer in which he disputes the wife’s claims. Mr. Balinski is seeking to have certain properties excluded from the calculation of his net family property, the result of which would be an equalization payment being owed to him by Ms. Hoffer.

Legal Issues in the Case

[2] The issues identified over the course of the trial were relating to;

1. The value and division of some household chattels;

2. The exclusion of Mr. B.’s share of the settlement of suit in the United States of America relating to the death of Mr. B’s sister to which he came into possession in 2005;

3. The comingling of funds from the settlement with other funds in the parties’ Edward Jones joint investment account;

4. The existing debts at the date of marriage; and,

5. Whether the facts supported compensatory spousal support or an unequal division of the net family property.

Background Facts Relevant to the Issues

[3] The facts relating to the couple’s relationship are that they met in about June of 1996, and they began to cohabitate in or about November of 1996. At the time of the cohabitation, Mr. Balinski was writing a PhD. Thesis in Philosophy, and was in receipt of Employment Insurance. Ms. Hoffer was employed as a billing coordinator for a pharmaceutical marketing company earning about $25,000.00 per year. Mr. Balinski had a credit card debt and a student loan, though the values of same at the time are disputed.

[4] The parties married on December 27, 1999. Between the date of cohabitation and the date of the marriage Ms. Hoffer continued to improve her employment circumstances in that she began, with the assistance of her employer, to take classes towards obtaining certification as a CGA. In 1998, Ms. Hoffer received a promotion and moved to the company’s head office as an accounts receivables analyst, at which time her income increased somewhat. In 1999, Ms. Hoffer got another promotion with her employer and her income increased to approximately $35,000.00 per year.

[5] In 1997, Mr. Balinski began working part-time at a call centre, which he did until sometime in 1998. He also taught one philosophy class per semester between 1998 and 2000, and worked in a retail sales and other small jobs for part of that time. In 1999 Mr. Balinski;s source of income was in the form of student loans through OSAP. Mr. Balinski successfully defended his thesis and obtained his PhD. in 2000.

[6] As of November 3, 1998, the balance of the federal portion of Mr. Balinski’s student loan was $18,983.00. As of February 2, 2000, the balance of the provincial portion of Mr. Balinski’s student loan was $11,286.97. As of January 1, 2001, the balance of the federal portion of the loan was the same, $18.983.00, and the balance of the provincial portion of the loan had been reduced to $7486.97. It was Mr. Balinski’s evidence that he didn’t exactly recall but that he thought that a policy of debt release from the time must have applied to him, as this would explain the reduction in the provincial portion of the loan from $11,286.97 to $7486.97 between February of 2000 and January of 2001. Thus, at the time of the marriage, December 27, 1999, Mr. Balinski was carrying student loans of $30,269.97, which was subsequently reduced to $26,469.97. Ms. Hoffer testified that Mr. Balinski also had a VISA credit card debt at that time of about $20,000.00, while Mr. Balinski did not recall any significant credit card debt. He indicated that if his loan monies were delayed he would have used his credit card to pay his expenses, but that once the student loan money was received he would pay down the credit card.

[7] Ms. Hoffer conversely testified that she subsequently obtained a line of credit and paid Mr. Balinski’s VISA credit card debt with it, and that they then both worked to pay down that line of credit.

[8] In 2000, Ms. Hoffer obtained a position as a financial analyst with a company called MCAP, and her income increased to $45,000.00 per annum with additional year-end bonuses. Mr. Balinski continued to search for a tenured track position and did a few small projects that did not bring much money into the marriage, so much so that Ms. Hoffer claimed Mr. Balinski as a dependent on her income tax return for the year 2001.

[9] In May of 2002, Mr. Balinski obtained employment with Citizenship and Immigration Canada as a clerk. Ms. Hoffer continued to work towards her designation as a CGP. Mr. Balinski was accepted into a part-time Masters of Public Administration program at Queen’s University, which he commenced in September of 2002. At some point in late 2002 or early 2003, as a result of a reorganization by her employer, Ms. Hoffer was laid off from MCAP. She obtained a severance package and she found employment in Ottawa at the Canadian Public Health Association as a finance officer on a specific project whereat her income was $44,000.00 to $45,000.00 per year. Mr. Balinski indicated that he did not agree with this move to Ottawa as the couple had a good apartment in Toronto, he was employed in Toronto and he was still doing his Masters of Public Administration Program part-time at Queens. In fact, Mr. Balinski believed that the marriage was ending at that time, as Ms. Hoffer moved to Ottawa and he stayed in Toronto. However, if the couple had in fact split, they reconciled and Mr. Balinski obtained employment at the Indian Residential Schools Office, and moved to Ottawa. .

[10] Ms. Hoffer finished her designation as a CGA in May of 2003, and later then obtained a job with Export Development Canada at which her income increased substantially to approximately $60,000.00 per year.

[11] From the date of the marriage, the parties maintained a joint bank account with the Toronto Dominion bank from which they conducted their household business. Both parties contributed to it, and both could freely withdraw money from it. Ms. Hoffer consistently earned more than Mr. Balinski, and she testified that she consequently contributed more to the joint TD account. Mr. Balinski, however, maintains that he contributed to it consistently as well, in the earlier years from his EI income, student loan income or part-time employment income, and from 2003 until he went back to law school from his fulltime income with the government. The parties also maintained a joint line of credit with TD and they arranged for Mr. Balinski to be a second card holder on Ms. Hoffer’s VISA credit card.

Edward Jones Joint Investment Account

[12] In 2005, Mr. Balinski, his parents and his brother received a settlement from a law suit in the United States relating to the tragic death of Mr. Balinski’s sister on December 24, 2001. On June 23, 2005, Mr. Balinski’s ¼ share of the settlement was paid into his personal US investment account #36BWZ9B with Edward Jones. On June 24, 2005, Mr. Balinski transferred $39,884.00 into an Edward Jones RRSP for Ms. Hoffer, and $41,798.00 into an Edward Jones RRSP for himself. Finally, and on June 24, 2005, the sum of $ $492,642.00 US was converted into $629,324.44 CAN and transferred by Mr. Balinski into an investment account with Edward Jones held jointly with Ms. Hoffer (the EJ joint investment account). Attached to this account was a joint “margin” account, meaning an account for borrowing secured by the main investment account.

[13] On August 2, 2005, an additional $36,360.00 CAN was deposited into the EJ joint investment account. The testimony of Ms. Hoffer, which was acceded to by Mr. Balinski, was that this money emanated from a gift of $30,000.00 US to Ms. Hoffer from Mr. Balinski’s mother, father and brother, representing a gift of $10,000.00 US from each of them in recognition of her help and hard work in relation to the family’s law suit over the death of Mr. Balinski’s sister. Her testimony was that all four, including Mr. Balinski, had agreed to gift her $10,000 US each, and that Mr. Balinski’s “gift” was already in the EJ joint investment account. Mr. Balinski’s testimony was that there was a promise of the gift of $10,000.00 US from him, but that it had never been executed and that he no longer had an interest in gifting it to her. Mr. Balinski testified further that over the course of the marriage he had “gifted’ much more than the previously promised $10,000.00 US to Ms Hoffer, and that she had essentially “come out ahead” in that regard.

[14] The parties were both working at the time that the settlement was received by Mr. Balinski, and they continued to do so until Mr. Balinski made the decision to go to law school in 2008. Mr. Balinski supported himself through law school by a combination of student loans and reliance on the EJ joint investment account funds.

[15] The parties separated on June 12, 2011, shortly after Mr. Balinski graduated from law school.

Chattels

[16] With respect to the chattels retained by the parties, Mr. Kent Mayhew was tendered by Ms. Hoffer as an expert in the appraisal of furniture and fine art. Mr. Balinski objected to Mr. Mayhew being qualified as an expert, and after argument, I qualified Mr. Mayhew as such an expert. I did so after allowing Mr. Balinski’s counsel an opportunity to review copies of emails exchanged between Mr. Mayhew and Ms. Hoffer’s counsel on the basis of Rule 53.03 (2.1), paragraph 3 of the Rules of Civil Procedure, as Rule 1(7) of the Family Law Rules permits me to do. I found that Mr. Mayhew was qualified on the basis of his significant experience in his family’s business, known as “Elisabeth Antiques Appraisal Service and Appraisal Ottawa”, periodically since its’ inception in 1965, but specifically since 1998, including based on Mr. Mayhew’s testimony that he had appraised approximately 200 paintings a year since 1998. Mr. Mayhew had provided an Appraisal report dated April 20, 2016, and at the request of counsel for Ms. Hoffer, an Addendum dated November 6, 2016. Mr. Mayhew’s report provided as follows:

6. The dining room chair and tables were valued at $1275.00 as a set;

7. The Danish teak coffee table and end table were valued at $320.00 together;

8. The tribal style carpet 57”x40”was valued at $175.00;

9. The tribal style carpet 85”x53” was valued at $100.00;

10. The bedroom set was valued at $720.00;

11. The ceiling fan was valued at 80.00;

12. The Vince Bomberry sculpture piece was valued at $175.00;

13. The Leszek Sokol 11.5”x27” painting was valued at $325.00; and,

14. The Leszek Sokol 11.5”x19” painting was valued at $275.00.

[17] Mr. Mayhew testified as to his method of appraisal and confirmed in cross examination by Mr. Balinski’s counsel that appraisals of items for estates or divorces are customarily done to ascertain what one could expect to get for the item if it had to be sold immediately. In other words, they are to determine the market value of the items, which are consistent with the “auction value” as opposed to the “gallery value”. Mr. Mayhew testified that the auction value is normally 10 to 20% of the gallery value. No evidence was called on behalf of Mr. Balinski to contradict Mr. Mayhew’s opinion evidence, and I accept it with respect to the value of the items appraised as listed above.

[18] The parties also had differing evidence with respect to the value of the boats they jointly owned, referred to respectively as the “Albacore wooden boat” and the “International 14 Dinghy”. Mr. Balinski’s evidence was that the Albacore was worth only $1200.00, representing the value of its parts, and gave a value of $500.00 to the dinghy. Mr. Balinski indicated that he sought an opinion from a Mr. Luis Perez of the Patagonia Boat Works (for whom he once worked) regarding the value of the Albacore. Mr. Perez was not called to testify as to his opinion, but his written estimate of the market value of the Albacore was entered and market as Exhibit 2J to the proceedings. Ms. Hoffer, on the other hand, believed that Albacore to be worth approximately $6000.00 and the International 14 to be worth $1000.00. Based on the parties’ respective testimony, I find that the value of the Albacore is likely closer to the estimate of Mr. Perez and would assign it a value of $2000.00. Although asked by Ms. Hoffer to obtain an estimate of the value of the dinghy, Mr. Balinski did not do so. I thus assign the value of $1000.00 to the International 14 Dinghy.

Exclusion

[19] The main issue in this case is in relation to Mr. Balinski’s claim that his share of the settlement that his family received from the US law suit relating to the death of his sister, or whatever remained of it at the time of separation, should be excluded from the calculation of his net family property pursuant to Section 4 (2) of the Family Law Act, R.S.O. 1990, c. F.3. as amended.

[20] Mr. Balinski testified that there was an understanding from the outset that the money in the EJ joint investment account was his, and that he retained all decision making and control over it. Ms. Hoffer’s testimony was that from the outset she understood all of the money in the joint EJ investment account to be “family money” for their shared benefit. Both parties rely in support of their respective positions upon Section 14 of the Family Law Act, which provides as follows:

14. PRESUMPTIONS – 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 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).

[21] Ms. Hoffer relies specifically on the presumption that the money was owned as joint tenants, and Mr. Balinski relies specifically on the ability to rebut that presumption by “evidence to the contrary”.

[22] The evidence was uncontroverted that the original payment was made to Mr. Balinski exclusively, by money transfer in US funds to his personal US investment account (#36BWZ9B) with Edward Jones. It was clear at the time of the transfer that the money belonged to Mr. Balinski, and Mr. Balinski alone. It is also uncontroverted that on June 24, 2005, the sum of $ $492,642.00 US was converted into $629,324.44 CAN and transferred by Mr. Balinski into an investment account with Edward Jones held jointly with Ms. Hoffer. What is controverted is whether that action results in Mr. Balinski being limited to excluding only one half of that property, or what remained of it, from his net family property calculation.

[23] Mr. William Bagnell was called to testify by Ms. Hoffer. Mr. Bagnell was employed as an Advisor with Edward Jones from 1998 until 2012-13, at which time he joined Investment Planning Council, another financial planning and investment firm. Mr. Bagnell described his role as helping clients achieve their financial goals. Mr. Bagnell testified that Ms. Hoffer and Mr. Balinski came to see him in 2005 to discuss some financial planning, and he was advised by them that Mr. Balinski was going to be in receipt of a significant inheritance at that time. Mr. Bagnall testified that he recommended to Ms. Hoffer and Mr. Balinski that they open a joint investment account as there were some taxation and estate planning advantages to same. Mr. Bagnell testified that both Ms. Hoffer and Mr. Balinski understood what he was recommending, and that they accepted and acted upon his recommendation. Mr. Bagnell indicated that he explained the terms of the account to both, and that they signed the Account Authorization and Acknowledgement Form, a copy of which was identified as Exhibit 1A in the Trial.

[24] Mr. Bagnell was very clear in both examination-in-chief and cross-examination that the parties would have been aware that putting the money into a joint investment account meant that they owned it jointly, and that either owner of the account could conduct business on the account. This included buying or selling securities, doing internal transfers to RRSP’s or TFSA’s, doing external transfers to another personal bank account so long as an Electronic Fund Transfer (EFT) form was on file, or requesting that a cheque be directly issued. Mr. Bagnell indicated that neither party had provided any instructions seeking to place any limitations on the other’s ability to take actions on the account.

[25] Based on Section 14 of the FLA thus applying, the onus is on Mr. Balinski to rebut the presumption of joint ownership. As is indicated in Kosterewa v. Kosterewa, 2008 CanLII 51929, at paragraphs 16 and 17, the Court must look at what was intended at the time of the creation of the account, and in order to rebut the presumption, Mr. Balinski must show that he did not intend to benefit his wife at that time.

[26] Mr. Balinski testified as to his clear intention at the time that the money was deposited into the joint account, and that was that he followed the advice of Mr. Bagnell as it related to tax and estate planning, but that the money was his and that he was to remain in full control of it. Mr. Balinski testified further that he had an understanding with Ms. Hoffer to this effect, and that both Mr. Bagnell and Ms. Hoffer “betrayed” him and breached that understanding when Ms. Hoffer withdrew $50,000.00 without Mr. Balinski’s knowledge or consent after the separation had occurred. Mr. Balinski was so upset with this “betrayal” that he immediately arranged to liquidate and withdraw all of the remaining funds in the Edward Jones Joint Investment account, notwithstanding that there was a significant penalty to do so.

[27] Mr. Balinski testified that as far as he was concerned, notwithstanding that the money had been deposited into a joint account, he was still in full control of it, and it was for this reason that only he had executed the Electronic Fund Transfer document (EFT), a copy of which was marked as Exhibit 2E to the trial, which permitted him alone to have money electronically transferred from the joint EJ investment account to his own Canada Trust account. It was Mr. Balinski’s evidence that any money that came out of the joint EJ investment account as cash came to him, and that he would then determine for what it would be used. Mr. Balinski indicated that he was generous with that money, gifting some of it to Ms. Hoffer for retirement purposes and agreeing to use it for family purposes, including for a down payment on the couple’s matrimonial home, vacations, vehicles and other needs. However, Mr. Balinski was clear that decisions to use it or not were his. Mr. Balinski also testified that he understood clearly that he was gifting to Ms. Hoffer one half of the down payment on the matrimonial home, because it was a matrimonial home, notwithstanding that he was providing the full down payment for same, and that he was fine with that.

[28] Mr. Balinski’s evidence with respect to his intentions at the time of the creation of the account was consistent with some other steps that he took at the same time. First, on June 24, 2005, Mr. Balinski transferred $39,884.00 into an Edward Jones RRSP for Ms. Hoffer prior to transferring the remaining funds from his personal US investment fund into the joint account. In other words, he “gifted” $39,884.00 to Ms. Hoffer immediately upon receipt of the funds. He similarly transferred $41,798.00 into an Edward Jones RRSP for himself. Clearly, Mr. Balinski gave Ms Hoffer the money for her RRSP, which raises the question of why he would make a specific gift of it if he was intending to gift her one half of the total settlement.

[29] Second, as I have indicated above, only Mr. Balinski executed the EFT document, and unless a cheque was requested by one of the joint account holders, which would be payable to both, the only way cash was coming out of the account was through Mr. Balinski. Although the request to transfer funds to Mr. Balinski often came from Ms. Hoffer, perhaps even most often, the funds went only to Mr. Balinski.

[30] Interestingly, Mr. Bagnell testified that either joint account holder could sign an EFT and direct funds to his or her own personal accounts, but the evidence revealed that Ms. Hoffer did not execute an EFT, and did not have funds from the joint EJ investment account transferred electronically to her personal account at TD or to the parties’ joint household account at TD. Similarly, either account holder could request that a cheque be issued, however between the date of deposit in 2005 and the date of separation in 2011, Ms. Hoffer never requested same.

[31] Based on Mr. Balinski’s evidence as to his intention at the time of the creation of the joint account, and on the actions of both he and Ms. Hoffer in and around the time of the transfer, I find that Mr. Balinski did not intend to gift his wife with one half of the money he received from the settlement of the law suit pertaining to his sister’s demise. Further, I find that the subsequent conduct of the parties, and more particularly Ms. Hoffer, is consistent with the evidence of Mr. Balinski as to his intention at the time the joint account was created.

[32] Ms. Hoffer testified that the couple agreed that they would use funds from the joint investment account primarily for retirement purposes. Ms. Hoffer did have a RRSP and a TFSA with Edward Jones and could and did instruct Mr. Bagnell to do internal transfers of money from the joint investment account to them. However, the testimony of both Ms. Hoffer and Mr. Balinski was that Ms. Hoffer would never transfer money to her own RRSP or TSFA without first consulting with Mr. Balinski. Mr. Balinski’s testimony was that he would approve or “ok” any transaction that Ms. Hoffer was proposing before she would do it. Ms. Hoffer testified that she was not seeking Mr. Balinski’s approval, but was only informing him, as her spouse, of what she was going to do.

[33] Ms. Hoffer created a chart outlining spending from the EJ joint investment account, which was entered as Exhibit 1F, wherein she outlines where money from the EJ joint investment account went. The only transfers made which appear to have been truly directed by Ms. Hoffer, after consulting or advising Mr. Balinski, were as follows: $10,700.00 to her EJ RRSP on February 2, 2007; $8,300.00 to her EJ RRSP on February 6, 2008; $4701.05 to her EJ Tax Free Savings Account (TFSA) on February 2, 2009; $2060.00 to her EJ RRSP on February 3, 2010; $5000.00 to her EJ TSFA on July 21, 2010; and $3014.00 to her EJ RRSP on February 10, 2011. In other words, they were all consistent with the expressed initial intention that a use originally agreed to and approved of for the funds by Mr. Balinski was for retirement savings purposes. Although according to Mr. Bagnell, Mr. Balinski’s approval would not be required by Ms. Hoffer to transfer funds, I find that she sought and received it for these agreed upon purposes. Why Ms. Hoffer would do if she thought the money was hers remains unexplained.

[34] The second unexplained conduct of Ms. Hoffer, if she thought one half of the money in the joint investment account was hers, was that around the gift she received from Mr. Balinski’s mother, father and brother. Ms. Hoffer was adamant that she received a gift of $10,000 US from each of them, as well as from Mr. Balinski himself. Mr. Balinski agreed that Ms. Hoffer received a gift of $30,000.00 US from his mother, father and brother, which in fact he instigated because Ms. Hoffer was expressing discontent to him that notwithstanding all of her hard work in relation to the law suit pertaining to his sister, she was getting nothing. Mr. Balinski testified that he too was going to give Ms. Hoffer $10,000.00 US for the same reason, but that he never did.

[35] On August 2, 2005, an additional $36,360.00 CAN was deposited into the EJ joint investment account. The testimony of both was that this was the converted amount of the gift Ms. Hoffer received from Mr. Balinski’s parents and sibling. Ms. Hoffer insisted that the other $10,000.00 US was given to her by Mr. Balinski and was already in the account. Ms. Hoffer testified to the hard work she had done for the family, and the fact that she had uncovered an essential witness, in a manner that suggested that she felt she deserved the gift she received. Ms. Hoffer’s testimony as to her being deserving of the gift, and believing that an additional $10,000.00 US was given to her by her husband, was completely inconsistent with her believing that she was a half owner of the entire amount of the settlement that was transferred into in the EJ joint investment account.

[36] Also inconsistent in this regard was Ms. Hoffer’s testimony as to why she withdrew $50,000.00 from the joint investment account by cheque post-separation. Ms. Hoffer testified that she was taking what was owed to her. When she was cross-examined on this point, Ms. Hoffer testified that she was taking what she thought was still owed to her over and above the value of the house, which she believed she would keep, and which would be a trade-off against the remaining value of the joint investment account . However, to that point, in August of 2011, there had been absolutely no discussion, let alone agreement, between the parties on what would transpire with the house, and Ms. Hoffer’s evidence in this regard seemed revisionist and self-serving. On the totality of the evidence led, the more likely scenario is that Ms. Hoffer withdrew $50,000.00 from the joint investment account to retrieve what she thought was her money, not “family money”, namely the original $36,360.00 CAN from Mr. Balinski’s parents and sibling, and the $10,000.00 US or approximately $12,000.00 CAN she believed she was gifted by Mr. Balinski. This, in fact, appears to be confirmed in two email exchanges; the first is between Ms. Hoffer and Mr. Bagnell on or around July 12, 2011, wherein Ms. Hoffer is inquiring how to discern what her extra $10,000.00 US would be worth at that time. It is at page 17 and 18 of the Respondent’s Revised Document Book. The second is an email from Ms. Hoffer to Mr. Balinski dated August 26, 2001, wherein she states to Mr. Balinski in relation to the $50,000.00 she took: “I did this because this represents the gift you and your family gave me when Ania’s insurance settlement was settled” (emphasis added). In addition, when Mr. Bagnell called Ms. Hoffer after she had removed the $50,000.00 to advise her that Mr. Balinski liquidated the funds and EJ was closing the account, Ms. Hoffer responded that Mr. Balinski could do whatever he wanted, presumably with what was left of his money.

[37] Ms. Hoffer’s testimony with respect to the money that came out of the joint investment account in cash, which she approximated to total be about $100,859.86, was also inconsistent with the evidence as to Mr. Balinski’s intention at the time the account was created. Ms. Hoffer stated that it was her belief that the money was “family money” to be used freely for family purposes, which included vacations to Poland and the US, among other things. I have already indicated that Mr. Balinski’s evidence was that the money came through him, and that he generously agreed to use it for the family. Because Ms. Hoffer could have signed an EFT document and never did, or could have asked for a cheque to be issued for cash and never did, and because she consistently consulted with Mr. Balinski about what the money would be used for, I find that to be the case, that Mr. Balinski was the ultimate decision maker as to what purposes his money would be put.

[38] In addition to transfers of money for these purposes, there was a period of approximately 14 months while Mr. Balinski was attending law school where $2000.00 per month was being transferred out of the EJ joint investment account. Ms. Hoffer testified that this was “family money” going into the joint TD account for family expenses. Mr. Balinski testified that, in fact, like all other money coming out of the EJ joint investment account, this $2000.00 per month was transferred to his personal TD account and from there he would make contributions to the household income. Ms. Hoffer was continuing to contribute portions of her paycheck to the joint household account and Mr. Balinski was contributing from the joint investment account because he did not otherwise have an income at that time, beyond a student loan.

[39] Notwithstanding that he was in school fulltime, Mr. Balinski testified that he continued to put money towards the joint household expenses. Mr. Balinski created a summary based on his bank statements, a copy of which was entered as Exhibit 2L, and which indicated that over the three years of law school, 2008 to 2011, Mr. Balinski estimated that he spent $27,072.78 on school, $37,297.27 on joint household expenses and $14,281.00 in expenses which were unclear. I find that Mr. Balinski’s contributions were consistent with him dedicating some of his money towards the household expenses, just as Ms. Hoffer contributed her money, via her paycheck, to the household expenses.

[40] Both parties also testified as to money that went back into the EJ joint investment account. Ms. Hoffer’s testimony seemed to be given to create the impression that she was freely taking money out and putting money in as a joint tenant of the account. I have already made findings with respect to the money coming out. The money going in, but for the $36,360.00 CAN in August of 2005, appears to be limited and earmarked for specific purposes which confirm that the parties kept their money separate, and/or paid each other back when required. An email exchange between Ms. Hoffer and Mr. Balinski dated June 16, 2011 and contained at page 9, Tab 4 of Mr. Balinski’s Revised Document Book (which was entered into the Trial as Exhibit 2 in its’ entirety), evinces that this is the case. Ms. Hoffer indicates that she paid $5100 that she had saved for dental work into the EJ joint investment account and she was requesting that Mr. Balinski pay it back to her. Mr. Balinski’s evidence was that he borrowed that money from Ms. Hoffer while it was idle to reduce or avoid interest on the margin account, and that the arrangement was that he would pay it back to her when she needed it for her surgery. This evidence is consistent with what actually happened. It was unclear to me whether that money was the $4845.00 and $350.00 that were deposited in September of 2009, or the $5000.00 that was deposited in April of 2011. Whichever it was, it was paid back to Ms. Hoffer in full upon her request. Both parties clearly understood that money to be Ms. Hoffer’s, as opposed to a family contribution to the buildup the joint investment account. The only other deposit into the account was $1000.00 in April of 2011, and no specific evidence was led with respect to it.

[41] Additionally, while I note that both parties would concede that it made more sense for Mr. Balinski to claim the income earned on the EJ joint investment account on his income tax, given that he was the lower income earner, the fact of the matter is that he did, and Ms. Hoffer did not.

[42] Finally, in evidence were some post-separation communications between Ms. Hoffer and some third parties which are demonstrative of Ms. Hoffer’s understanding of Mr. Balinski’s intention at the time the account was created. The first is dated “28/08/2011” and it is from Ms. Hoffer to a Sophia Weber wherein Ms. Hoffer advises Ms. Weber: “I asked our financial advisor for $50 from the joint account yesterday. If he finds out about that, all hell will break lose [sic].” A second is to Ms. Weber wherein, when discussing money and accounts, Ms. Hoffer states: “I doubt he’d even have a thought of going into that. If he does, I’ll get the money back from his account – I still have my name on that at least” (emphasis added). The third is from Ms. Hoffer to Mr. Bagnell in or around July 12, 2011, wherein Ms. Hoffer states: “I also wanted to mention that you should prepare yourself for a temper tantrum from Marek if he ever figures out that I am in fact entitled to half the funds in the joint account. I don’t remember if he ever told you that he wanted to retain control over the funds, but I am sure he will content [sic] that he did – you better check your notes. He will definitely get very upset and claim that you deprived him of control of his money…though I know for sure that was never you[sic] intention. I distinctly remember you telling us to put it into a joint account for tax purposes. I have every intention of maintaining our client relationship, but I am not so sure of Marek’s intentions after he realizes what putting that money into both our names has resulted in” (emphasis added). The fourth one is from Ms. Hoffer to her brother, Akos Hoffer, undated, wherein she states: “I took $50k from the joint account and will reinvest it in my own name only. I did this based on what I was advised to do to protect funds so he can’t spend them or borrow against them. He still thinks he is entitled to all the insurance money. I keep forgetting that” (emphasis added). And further on in the same communication, Ms. Hoffer states: “…and he doesn’t know that I am entitled to half his cash as of yet” (emphasis added). These communications are at Tab 5 of the Respondent’s Revised Document Book at pages 15, 16, 18 and 19-20 respectively. While Ms. Hoffer took issue with how Mr. Balinski came to be in possession of these communications, they all nevertheless demonstrate that Ms. Hoffer clearly understood Mr. Balinski’s initial intention and continuing belief, regardless of to what she thought she might have been entitled after the fact.

[43] I, therefore, find that Mr. Balinski has successfully rebutted the presumption contained in Section 14 of the Family Law Act.

Co-Mingling

[44] As I have outlined above, the only funds which appear to have been added to the account after the original deposit on June 24, 2005, are the $36,360.00 indisputably belonging to Ms. Hoffer in August of 2005, $5195.00 in September of 2009, $5000.00 in April of 2011 and another $1000.00 in August of 2011. Ms. Hoffer testified that deposits made to the EJ joint investment account were from the TD joint account and were periodic “good investments” when she had money to spare. Mr. Balinski testified that money deposited in to the EJ joint investment account was usually to reimburse the margin account for some use made of it. We do know that at least $5100.00 was paid back to Ms. Hoffer by Mr. Balinski post separation for the loan to the margin account of her savings for dental work. That leaves a total of $6095.00, the purpose of the deposit of which remains unclear. Because some part or all of that may have been reimbursements to the margin account, I do not propose to separate it out from the total. Rather I propose to apply a pro rata approach similar to that set out in Wolfe v. Wolfe, 2003 Carswell Ont. 3192; 2003 CanLII 18219 (ON SC), 43 R.F.L. (5th) 223. The inherited funds in this case thus made up 100 % of the EJ joint investment account, which consisted of the original investment of $492,642.00 (after RRSP contributions were made) belonging to Mr. Balinski and, as of August 2, 2005, the additional $36,360.00 belonging to Ms. Hoffer. Applying a pro rata approach in the manner set out by Misner J. in Wolfe, I find that Mr. Balinski is entitled to exclude 93.1% and Ms. Hoffer is entitled to exclude 6.9% of the EJ joint investment account balance at the date of separation, which was $345,116.16. Given that Mr. Balinski requested that the entire balance be liquidated without regard to the significant penalty that would attract, I do not propose that Ms. Hoffer be required to deduct any portion of the penalty from her share. Rather, Mr. Balinski will be required to deduct the entire penalty of $12,376.00 from his share. Mr. Balinski may also, of course, exclude his RRSP which can be traced to the original settlement, less the notional cost of disposition at 18.2%, and his TFSA that can be traced to the original settlement.

Debts at the Date of Marriage

[45] In her Net Family Property Statement dated May 15, 2016, and contained at Tab 6 of the Supplementary Trial Record, Ms. Hoffer claimed that Mr. Balinski had a $30,000.00 Student Loan debt and a $20,000.00 VISA debt at the date of marriage. Mr. Balinski, in his Net Family Property Statement dated November 10, 2016, and contained at Tab 5 of the Supplementary Trial Record, indicated that he had a 1992 Mazda worth $3000.00 and a Student Loan debt of $26,470.00 at the date of marriage. Mr. Balinski thought that $3000.00 was a reasonable estimation for a 7 year old car in 1999, as it was sold by his parents in 2002 for $500.00. I had no evidence to suggest otherwise.

[46] As I have indicated in the Backgound Facts above, documentary evidence exists which indicates that at the time of the marriage, December 27, 1999, Mr. Balinski was carrying a student loan of $30,269.97, which was subsequently reduced to $26,469.97. Given it is the latter amount for which he was ultimately responsible, I find that Mr. Balinski’s student loan debt for the purposes of his NFP is $26,470.00.

[47] With respect to the VISA debt, Ms. Hoffer testified that she obtained a line of credit and paid off Mr. Balinski’s credit card debt with it and then they both worked to pay off the line of credit. Mr. Balinski testified that he did not recall having a credit card debt of $20,000.00 in addition to his student loan debt. Rather he indicated that he would have used his CIBC VISA to live off of until he was in receipt of his student loans, and then would pay the VISA down with the money received from his loans. Mr. Balinski provided authorization to Ms. Hoffer to obtain information in this regard from CIBC, however, she was unable to do so as records were no longer available from that time period. There is thus no documentary evidence remaining of any such debt, however, I find based on the evidence of both that there was likely some debt that Mr. Balinski brought into the marriage in the form of his CIBC VISA, and I would set that at $10,000.00, being the midway point between the $20,000.00 Ms. Hoffer claims and the $0 Mr. Balinski claims.

Amended Application

[48] Finally, pursuant to an order of Mr. Justice Phillips dated November 26, 2015, Ms. Hoffer amended her Application dated March 16, 2012 by adding a new Paragraph 7 as follows:

The Applicant is requesting an unequal division of the net family properties pursuant to Section 5(6) b and h of the Family Law Act due to the fact the Respondent incurred a student debt which was $79,500.00 at the date of separation which the Applicant should not be responsible for. This loan was incurred to pay the cost of the Respondent attending Law School during the marriage. The Respondent left the marriage two months after graduating. In the alternative the Applicant is requesting compensatory spousal support. (Underline denotes the amendment)

[49] Ms. Hoffer’s Amended Application can be found at Tab 1 of the Supplementary Trial Record. While Ms. Hoffer has made the claim for compensatory spousal support in the alternative, in keeping with the existing case law, I will deal with the two claims separately.

Unequal Division of the NFP

[50] On the facts of this case, I cannot find that the test for “unconscionability” under Section 5(6) of the FLA has been met. Section 5(6) of that Act provides that the Court may award a spouse an amount that is more or less than half the difference between the net family properties if the court is of the opinion that equalizing the net family properties would be unconscionable, having regard to,

a) A spouse’s failure to disclose to the other spouse debts or other liabilities existing at the date of the marriage;

b) The fact that debts or other liabilities claimed in reduction of a spouse’s net family property were incurred recklessly or in bad faith;

c) The part of a spouse’s net family property that consists of gifts made by the other spouse;

d) A spouse’s intentional or reckless depletion of his or her net family property;

e) The fact that the amount a spouse would otherwise receive under subsection (1), (2) or (3) is disproportionately large in relation to a period of cohabitation that is less than five years;

f) The fact that one spouse has incurred a disproportionately larger amount of debts or other liabilities than the other spouse for the support of the family;

g) A written agreement between the spouses that is not a domestic contract; or

h) Any other circumstance relating to the acquisition, disposition, preservation or maintenance or improvement of property.

[51] In Serra v. Serra 2009 ONCA 105 the Ontario Court of Appeal held at paragraph 47 that “the test for “unconscionability” under s. 5(6) is exceptionally high. The jurisprudence is clear that circumstances which are “unfair”, “harsh” or “unjust” alone do not meet the test. To cross the threshold, an equal division of net family properties in the circumstances must “shock the conscience of the court””.

[52] On the contrary, having found that Mr. Balinski’s intention was clear at the time the EJ joint investment account was created, I find that he contributed significantly to Ms. Hoffer’s financial well-being over the life of the marriage. Mr. Balinski contributed a total of $63,958.00 to Ms. Hoffer’s RRSP between 2005 and 2011, and $9701.05 .00 to her TSFA between 2009 and 2010. Mr. Baliniski, according to Ms. Hoffer’s calculations, also contributed an extra $100,000.00 (beyond his specific contributions to the household expenses) to family expenses for such things as vacations, furniture and outfitting their boats. He additionally paid down a loan on Ms. Hoffer’s car, and provided the down payment for the matrimonial home, all from the settlement funds he received in 2005.

Spousal Support

[53] Section 15.2(4) of the Divorce Act, R.S.C. 1985, c.3(2nd Supp), as amended, directs the court hearing a spousal support claim to take into consideration “the condition, means, needs and other circumstances of each spouse”, including;

a) The length of time the spouses cohabited;

b) The functions performed by each spouse during cohabitation; and

c) Any order, agreement or arrangements relating to support of either spouse.

[54] Section 15.2(6) of the Act sets out the objectives of a spousal support order by indicating that an order made under subsection (1) that provides for the support of a spouse should:

a) Recognize any economic advantages or disadvantages to spouses arising from the marriage or its breakdown;

b) Apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;

c) Relieve any economic hardship of the spouses arising from the breakdown of the marriage; and

d) In so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.

[55] I similarly cannot find on the facts of this case that Ms. Hoffer was disadvantaged by the marriage, or that Mr. Balinski was unduly advantaged by the marriage or its breakdown. Both testified as to the arrangements they had between them from time to time regarding how much each would contribute to the regular family expenses, including rent, food and other necessities. During periods where Ms. Hoffer was making significantly more than Mr. Balinski, those amounts were not equal, but both contributed according to their capacity. Ms. Hoffer was adamant that she and she alone paid for the mortgage on the home, however, she paid it from the joint TD account to which Mr. Balinski contributed according to his ability, whether he was reliant on EI, employment income, student loans or funds from the EJ joint investment account. Each paid their way for the most part. There were no children of the marriage and therefore no disproportionate responsibilities for child care. There was no adverse effect on Ms. Hoffer’s career trajectory, and she was, in fact, able to improve it by obtaining her certification as a CGA during the life of the marriage. There additionally appeared to be no particular change in lifestyle when Mr. Balinski went back to school in 2008, or at the breakdown of the marriage. Additionally, Ms. Hoffer has always been and continues to be self-sufficient.

[56] And while Mr. Balinski brought debt into the marriage, his evidence was that he paid it from the funds he received from the settlement of his family’s law suit shortly after he was in receipt of it. Indeed, on June 27, 2005, Mr. Balinski received a cheque in the amount of $55,000.00 which he indicated he used to pay down his remaining, and possibly some of Ms. Hoffer’s, debt.

Conclusion

[57] The parties can revise their NFP statements according to the within findings, and arrive at the proper calculation of a division of the net family property. Should there continue to be disagreement in respect of those calculations, submissions can be made in writing to me within 30 days of this decision.

Costs

[58] If there are no further submissions with regard to the appropriate division of net family property, written submissions with respect to costs can be made by the party seeking same within 15 days of this decision. The responding party will have 15 days after receipt of same to respond, followed by 10 days for reply. If there are further submissions with regard to the appropriate division of net family property, submissions with respect to costs will commence with the same time frames after final decision has been rendered.

Madam Justice Tracy Engelking

Date: January 5, 2017

COURT FILE NO.: FC-12-1007-00

DATE: January 5, 2017

ONTARIO

SUPERIOR COURT OF JUSTICE

RE: NORA HOFFER Applicant

AND

MAREK BALINSKI Respondent

BEFORE: Madam Justice Tracy Engelking

COUNSEL: Richard Shanbaum, for the Applicant

Martin J. Prost, for the Respondent

reasons for judgment

Madam Justice Tracy Engelking

Released: January 5, 2017