Xue v Sun, 2017 ONSC 3429

COURT FILE NO.: FS-16-413354 DATE: 20170609 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

QI XUE Applicant – and – XIUPING SUN and YIMENG SUN Respondents

Counsel: Eric Shapiro, for the Applicant Kristine J. Anderson and Alexander Turner, for the Respondents

HEARD: April 10, 2017

M. D. FAIETA j.

REASONS FOR DECISION

Introduction

1Qi Xue (“Xue”) commenced this application against his spouse Xiuping Sun (“Sun”) and his stepdaughter Yimeng Sun (“Serena”) on October 25, 2016. He married Sun in December 1999 and they separated in January 2013.

2At a case conference held on April 10, 2017 and in written submissions provided thereafter, Xue asked this Court to order that Serena provide the following financial disclosure:

(a) a sworn financial statement in the prescribed form (Form 13 - Support Claims Only); (b) her personal income tax returns for the years 2014, 2015 and 2016; (c) the corporate returns for her companies for the years 2013, 2014 and 2015, as well as the 2016 corporate returns for her companies as soon as same are filed with the Canada Revenue Agency, but by no later than July 15, 2017; (d) copies of all bank statements in her name (sole or joint with others) from January 1, 2014 to the present; (e) copies of all credit card statements in her name from January 2014 to the present; and (f) copies of all loan and mortgage applications that she has made since January 1, 2014.

3I have dismissed the Applicant’s motion for the reasons described below.

BACKGROUND

4The Application contains the following unsworn statements:

1. When the parties were married the Applicant was 43 years of age with no children. The Respondent Xiuping (hereinafter referred to as the “Wife” was 35 years of age and had an eight year old daughter from a previous marriage, namely the Respondent Yimeng Sun (hereinafter referred to as the “Daughter”). Although the Applicant is not the biological father of the Daughter, he treated her as his own child in every respect.
2. In or around 2008 when the Daughter was 17 years of age, the Applicant and the Wife decided that it would be best for her to be educated in Canada. Therefore, the decision was made for the Applicant and Daughter to move to Toronto on a full time basis for these educational purposes while the Wife would remain in China and run the business in that country.
3. After 2008 the Wife would travel to Toronto two or three times per year for approximately two to four weeks at a time. On the date of separation the parties [ sic ] matrimonial home was the [address omitted] condominium unit that the parties moved into in or around September month of 2010[.] The Applicant continues to reside in this property.
4. The daughter went on to graduate from the University of Toronto in May of 2015. Since her graduation, the Daughter has married and has a child. The Daughter and her family reside in Markham in a property that is jointly owned by the Applicant and the Wife, namely [address omitted, the “House”], which is worth approximately $6,000,000. The [House] was purchased in or around 2010. The Applicant and the Wife tore down the existing structure that was located on the property and build a luxury 12,000 square foot home.
5. The Applicant is seeking a declaratory order that he is the sole owner of the [House] and that same be transferred into his sole name. Alternately, the Applicant is seeking an order for partition and sale of this property.
6. The Applicant and Wife were born into modest living conditions and worked hard as small business people. At the time of their marriage, they each owned one restaurant. Through their joint efforts they built a very large company in China that today owns and operates upward of 80 restaurants and is worth approximately $200,000,000 when converted into Canadian currency. There is also a significant amount of real estate in China that is registered in the Wife’s name.
7. In addition to raising the Daughter, the Applicant also ran business interests in Toronto which were comprised mainly of Dayali which in turn ran two Chinese restaurants in the GTA.
8. In December of 2012 the Applicant and the Wife had an argument as the Wife accused the Husband of having an affair, which was not true and the Husband denied this allegation. The Wife proceeded to advise the Husband that the marriage was in jeopardy as she was under the impression that he was unfaithful to her.
9. The following month (January of 2013) the Applicant travelled to China to visit with his mother and the Wife over the festive Chinese New Year, which he did every year since he moved to Toronto. When the Applicant arrived in China he discovered that she had moved out of their home in Beijing and was living with her brother. He also learned that while he was in China, the Wife had travelled to Toronto.
10. Normally, the Applicant would only spend three to four weeks in China but he decided to remain in that country until the Wife returned home in an attempt to work out their problems. The Applicant remained in China until May of 2013.
11. In March of 2013 the Wife returned to Beijing and at that time, the Applicant met her at her brother’s home and finally convinced her to return to their home in April of 2013. Even though the parties did reside in the same residence in China for that month, they slept in different rooms until the Applicant returned to Toronto two months later. Although the relationship was strained, the Wife induced the Applicant to have hope that, with the passage of time, they would be able to resolve their problems and the Applicant believed this to be the case when he returned to Toronto in May of 2013.
12. Therefore, upon his return to Toronto it was with surprise and great regret that the Applicant discovered that while he was in China, the Wife and Daughter had moved out of the [address omitted] condominium and were living in rented accommodation, the exact location of which was unknown [to] Applicant, although he thinks it was somewhere in downtown Toronto. The Applicant made contact with the Daughter and tried to convince her to return home but she refused. The Daughter remained at this rental accommodation until she moved into the [House] jointly owned by the Applicant and the Wife located at [address omitted] in Markham in early 2015.
13. Despite all of the these issues, the Applicant still wanted to reconcile with the Wife and continued to hold out hope that they could salvage the marriage. The Wife was aware of this fact and used same to her advantage by convincing the Applicant to continue to transfer assets from his name into the name of the daughter under the hope that this would convince the Wife to reconcile with him.
14. The Wife, though, had no intention to reconcile with the Applicant. Instead, she misled and manipulated the Applicant into transferring assets into the Daughter’s name for the express purpose of frustrating his claims pursuant to the Family Law Act, including but not specifically limited to an equalization payment.
15. The Applicant finally realized in early 2016 that there was no chance of reconciling with the Wife when he approached her about participating in the Daughter’s marriage. When he approached the Wife about this possibility she ignored him. That said, he was aware of the date that the Daughter was scheduled to be married and he travelled to China for this purpose. Upon arriving in China he discovered that the wedding date had been changed in order to preclude his attendance at same. It was this event that convinced the Applicant that his efforts at attempting to save his marriage were futile and that the Wife was intent on frustrating his rights to an equalization payment.
16. The Applicant is seeking certificated of pending litigation against assets [including several properties in the Greater Toronto Area] that were transferred into the Respondent Daughter’s name both pre and post separation that should properly form part of the Respondent Wife’s net family property...
17. Assets were placed in the Daughter’s name as early as 2008 when she was an 18 year old student. All of the funds used to acquire all of the assets that were and are in the Daughter’s (and that will soon be acquired by the Daughter) name originated from money that properly belonged to the Applicant or the Applicant/Wife. As such, a purchase money resulting trust has been created in relation to all of the assets (business and real property) that are currently registered in the name of the Daughter.
18. The Daughter is a fiduciary and gave no money in relation to the acquisition of all of the real property and business assets that she currently owns. Instead, The Applicant or the Applicant/Wife advanced the necessary contributions to the Daughter enabling her to acquire same when otherwise she would have had no way to do so. All of the transfers were completely gratuitous.
19. As such, the Daughter is obligated to return or transfer these assets to the rightful title owner, namely the Applicant alone or, in the alternative, to the Applicant and the Wife equally by way of the operation of the presumption of resulting trust.
20. The Applicant has no income at the current time due to being shut out of the day to day operation of the businesses and restaurants. He has not received any income from same in the past three years.
21. The Applicant does not speak English and cannot secure employment.
22. When the construction of the [House] was completed in early 2015 the Daughter moved into same and resides there with her husband and child. Since then the Applicant has been living alone in the [address omitted] condominium.
23. When the Applicant and the Wife first separated the Applicant had access to a company credit card and was able to cover some of his living expenses through access to this credit card. In April of 2015 the Applicant’s ability to use this credit card was eliminated.
24. Until the summer of 2016 the Wife and/or the Daughter were paying the condo fees, realty taxes and utilities associated with the [address omitted] condominium. They stopped doing so approximately three months ago.
25. The Applicant has been forced to borrow money from friends since he and the Wife separated. In total, he owes nine individuals $307,500. The Applicant is no longer able to borrow money from these people who are insisting that he begin to repay this money.
26. The Applicant has also had to resort to selling assets to raise funds with which to cover his living expenses. For example, in or around February of 2016 the Applicant assigned his interests in two condominium units that he had purchased a few years earlier from developers located at [addresses omitted], both of which are located in Toronto.
27. The Applicant realized approximately $240,000 from these asset sales and same went toward partially paying back people the Applicant had borrowed money from and to cover his expenses.
28. The Applicant has a non time limited spousal support claim grounded in need and the principles of compensatory spousal support as the wealth that the Wife has would not have been possible without the hard work and contributions of the Applicant.
29. Until the Respondent and the Daughter make full and complete financial disclosure of their incomes and assets, it is impossible for the Applicant to determine what the appropriate quantum of spousal support should be on a final basis but he will be seeking an interim spousal support in the minimum amount of $10,000 per month.
30. The Respondents have recently sold two of their condominium properties. On September 1, 2016 [address omitted] in Toronto was sold for $888,888 for a profit of approximately $220,000. On September 2, 2016 [address omitted] in Toronto was sold for $265,000 for a profit of approximately $40,000. As such, the Applicant is seeking an order for a full, complete and accurate accounting in relation to these properties (and the properties sold prior to the date of separation) and any others which the Respondents have liquidated since the date of separation, with the proceeds of sale from same being included in the Wife’s net family property for equalization purposes.
31. With the Wife being a non resident of Canada and a full time resident of China, it could be exceedingly difficult for the Applicant to be able to realize on any interim order or final judgment that is rendered against her in this jurisdiction whether same deals with spousal support or property division. For this reason, the Applicant is seeking a vesting order in relation all of the pieces of real estate that the Daughter owns in the Province of Ontario as all of these assets should properly be the assets of the Applicant and the Wife.

5Xue’s Application includes claims for, among other things, (1) a divorce; (2) support; (3) equalization of net family properties; (4) freezing of assets; (5) the sale of family property; and (6) an order declaring that all assets owned by Serena are being held by her beneficially for Xue.

6Serena delivered an Answer dated December 14, 2016. Amongst other things, she states that all of the assets at issue in this Application that are in her name were purchased partially with funds that she generated herself, partially with the assistance of gifts from her grandfather and uncle, and partially through traditional third-party financing. Serena claims the following from Xue: (1) payment of $300,000 in regard to his use and occupation of [the condominium]; (2) a declaration that Serena is the owner of, or has an interest in, the House by way of constructive or resulting trust; (3) an order that the property be transferred to and vest in Serena; (4) alternatively, a declaration that Xue and Sun have been unjustly enriched by Serena and an order vesting the House in Serena by a remedial constructive trust; (5) alternatively, damages in the amount of $4 million for unjust enrichment; and (6) a certificate of pending litigation against the House.

7Sun, through counsel, insisted in December 2016 that she be served with the Application and supporting financial disclosure through the Chinese Central Authority in accordance with the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters. On May 11, 2017, counsel for Sun advised counsel for Xue that counsel for Sun is now prepared “… to facilitate personal service” of the Application and related material and intends to file an Answer and Claim within 60 days. Sun did not provide any submissions on this motion.

ANALYSIS

8Rule 13(1) of the Family Law Rules, O. Reg. 114/99, states:

If an application, answer or motion contains a claim for support, a property claim, or a claim for exclusive possession of the matrimonial home and its contents,

(a) the party making the claim shall serve and file a financial statement (Form 13 or 13.1) with the document that contains the claim; and (b) the party against whom the claim is made shall serve and file a financial statement within the time for serving and filing an answer, reply or affidavit or other document responding to the motion, whether the party is serving an answer, reply or affidavit or other document responding to the motion or not. [Emphasis added.]

9Xue is entitled to the financial information sought from Serena as (1) he has made a claim for support and a property claim (see Rule 13(1) (a)); and (2) Serena has made a property claim (see Rule 13(1) (b)). In my view, this conclusion is supported by the broad language found in Rule 13(1) as well as the even stronger direction from this Court for parties to family law proceedings to make early, voluntary and full financial disclosure: see Manchanda v. Thethi, 2016 ONSC 3776, aff’d, 2016 ONCA 909, leave to appeal dismissed, [2017] S.C.C.A. No. 29.

10Serena submits that Xue is not entitled to the requested financial disclosure because: (1) there is no evidence that the Applicant provided care or support for Serena; (2) the disclosure sought is disproportionate to what is required; (3) a reasonable amount of support is already being provided by Serena to the Applicant; (4) Sun, being the Applicant’s spouse, is the person from whom interim support and financial disclosure should be sought.

Parental Claim for Support

11Section 32 of the Family Law Act, R.S.O. 1990, c F.3 states:

Every child who is not a minor has an obligation to provide support, in accordance with need, for his or her parent who has cared for or provided support for the child, to the extent that the child is capable of doing so. [Emphasis added.]

12No sworn evidence was provided on this motion in relation to whether section 32 of the FLA is engaged. Xue’s Reply Submissions state that the only reason he moved to Toronto was to care for Serena. By contrast, Serena submits that while they lived together, there is no evidence that Xue treated her as his child or that he provided care or support to her. Since she was about 17 years old when they moved here, it seems at least possible that their relationship was not as close as Xue says it was.

13For purposes of this motion, I am satisfied that there is some basis, and at least an arguable case, that Xue provided care or support to Serena and that he has demonstrated a need for support. There is no suggestion that Serena does not have the capability to pay support. Accordingly, Serena is required to make financial disclosure under Rule 13(1) (b). The requested information will address her ability to pay. Further, the requirements of Rule 13(1) (a) are engaged as Xue makes a property claim as well as a support claim.

14Finally, and in any event, Serena has triggered the requirement to make financial disclosure under Rule 13(1) (a) as she has advanced a property claim against Xue.

Is the Disclosure Sought Disproportionate?

15In the event that Serena is ordered to provide financial disclosure to Xue, she submits that the disclosure should be limited to providing a sworn financial statement to determine the extent of her obligation to provide interim support. As noted, the respective claims go beyond those for support and, thus, disclosure should not be limited in the manner submitted by Serena.

16Finally, the arguments that Serena is already providing support to Xue and that Xue should be seeking support only from Sun are not, in my view, material to the issue of whether Serena should provide the financial disclosure sought by Xue.

CONCLUSIONS

17For the reasons given, I have made the orders described above – namely, that Serena provide the financial disclosure requested by Xue and outlined at para. 2 of these reasons.

18The Applicant seeks his costs of this proceeding from Serena. The Applicant shall deliver his costs submissions, maximum two pages, along with an Outline of Costs by June 16, 2017. Serena shall deliver her costs submissions on the same terms by June 23, 2017.