CITATION: Chen v. Lin, 2017 ONSC 7297
COURT FILE NO.: FS-16-411153
DATE: 20171206
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Yee-Shine Stephanei Chen Applicant
– and –
Chun-Yi Lin Respondent
Warren Milne, for the Applicant
Daniel W. Simard, for the Respondent
HEARD: October 30, 31, November 1-3, 6, 2017
C. Gilmore, J.
CORRIGENDA TO REASONS FOR judgment
CORRECTED DECISION: The text of the original Reasons for Judgment was corrected on December 8, 2017 and February 20, 2018 and the description of the correction is appended to the end of the Reasons after the back page.
Overview
1This case involves two main issues: (1) the date of separation and (2) equalization of net family property. The amount of the equalization payment owed and to whom it will be payable will depend significantly on when the separation occurred. The applicant is not pursuing her claim for spousal support. The parties had no children.
2The parties were married on November 21, 2011 in Taipei, Taiwan. They immigrated to Canada in May 2013.
3The applicant/wife’s position is that the date of separation is September 15, 2015, which is when she moved out their home on Tecumseth Street. The respondent/husband’s position is that the date of separation is May 20, 2015, which is the date the husband discovered his wife was having an extra-marital affair with a co-worker and told her he wanted a divorce.
4The wife owned a home at 24 Markham Street, Toronto prior to marriage, which her father (“Mr. Chen”) had purchased from his sister, Alice Pang. Ms. Pang sold her brother the Markham Street property (“Markham”) for $450,000 CDN1. The house sold on June 5, 2015. In December 2015, the husband paid Mr. Chen $400,000 from the Markham sale proceeds. Mr. Chen and the wife originally took the position that Mr. Chen was owed another $400,000 from the Markham sale proceeds. At trial, the wife’s position was that no further amounts were owed for the purpose of this proceeding but that the $400,000 loan was outstanding on the date of separation. The husband’s position is that, as the Markham home belonged to the wife on the date of separation, the full amount of net proceeds for Markham ($804,111.62) should be included as part of the wife’s net family property with no deduction for any loan.
5Of course, if the date of separation is after June 5, 2015, there would be no accounting for the proceeds of Markham as it would have been a matrimonial home owned on date of marriage but sold prior to the date of separation.
6The parties purchased a jointly-owned home at 109 Tecumseth Street, Toronto (“Tecumseth”) on June 1, 2015. The property has been sold for $926,132 and the sale will close on November 30, 2017. The wife moved out of the Tecumseth property on September 15, 2015. The husband claims $9,157.63 for expenses paid on behalf of the wife from the September 2015 to the date of sale. The wife did not dispute this at trial. The net sale proceeds from Tecumseth available to each party will be approximately $260,000. There is a consent order requiring that the sale proceeds be held in trust with each party receiving $20,000 on sale.
7The parties each owned property in Taiwan prior to the date of marriage. There is a dispute with respect to the wife’s property related to both its value and ownership. The husband’s position is that he made a significant contribution to the purchase price of the wife’s condo when she purchased it in 2010 and he claims a beneficial interest in it.
8The husband’s evidence was that he not only contributed to the purchase price but that the parties lived in the condo for three years and the husband paid his share of expenses during that time. The wife’s position is that the husband gave her a gift of two million New Taiwan Dollars (“NTD”) prior to marriage, which is traditional in their culture. Her evidence was that all of that money was used to pay for the wedding and related purchases. She claims that she used her own savings and investments to buy her condo in Taiwan. She also claims that she has paid all of the carrying costs of the condo since its purchase and disputes that the husband had any interest in it.
9The parties are significantly apart with respect to any equalization payment owed due to their positions on the date of separation, the alleged loan to the wife’s father, and the issues related to the wife’s Taipei condo.
Date of Separation
10The parties arrived in Canada on May 6, 2013. They lived with the wife’s aunt, Alice Pang, for about six weeks and then moved the Markham property at the end of June 2013. They sold the Markham property and moved into Tecumseth on June 5, 2015.
Wife’s evidence
11The wife’s position is that the date of separation was September 15, 2015. She concedes that the parties were having problems and that they had an argument on May 20, 2015. The argument related, in part, to the husband’s accusations that the wife was having an affair with a co-worker. However, the husband apologized to her afterwards and even wrote her a love letter via email on May 25, 2015 telling her how much he loved her (Exhibit 3).
12Her evidence was that their relationship did not change after May 20, 2015 until certain significant events occurred in August 2015. Prior to that, the couple still shared the same bedroom and had sexual relations. They ate together, went out socially together, texted one another regularly, saw her aunt once a week for dinner or lunch, and Skyped with her parents in Taiwan two or three times per week.
13With respect to evidence corroborating her position that the date of separation was September 15, 2015, the wife presented a copy of a vehicle ownership from July 14, 2015 (Exhibit 1). It indicated that the parties jointly purchased a Subaru vehicle. The insurance for the Subaru also listed both parties. A Smart Car was purchased in the wife’s name alone around the same time. The husband’s evidence was that the wife made this purchase without his knowledge or agreement but that the funds for the purchase came from their joint account.
14The wife presented evidence that the parties opened a joint bank account and joint investment accounts in June 2015. In cross-examination the wife conceded that it was only the joint investment accounts that were opened in June 2015 after Markham sold. The personal joint bank account was actually opened in 2013.
15The wife provided photographs of a joint outing to a water park in mid-July 2015 and text exchanges between the couple on June 1, 2015 relating to their move to Tecumseth. She referred to an email from the husband in which he suggested various outings for them in July 2015 including Harbourfront, Centre Island and Ripley’s Aquarium.
16The wife referred to an email from the parties’ insurance agent, Tracy Chan, dated July 23, 2015 advising them to combine their house and car insurance (Exhibit 9) and an email from the husband to the wife on August 10, 2015 suggesting they go to the Symposium Café together (Exhibit 10).
17The wife’s evidence was that the husband did not treat her, her aunt or her parents differently after May 20, 2015. She accepted that she and her husband agreed to try and make changes in their relationship, which included improving their communication, after the argument on May 20, 2015. Further, the wife was obligated to work considerable overtime and this was putting stress on the relationship. The parties agreed that she would search for a new job with fewer demands for overtime.
18The wife told the court that their marriage had some challenges but was fine throughout June and July 2015. However, things began to deteriorate rapidly in August 2015. The last time they had sexual relations was on August 8, 2015. The wife wanted to move out and began to look for a place to live on her own in mid-August 2015. She found a place to move to at the end of August and moved out on September 15, 2015. Her evidence was that after a heated argument with the husband in mid-August 2015 she divided her time between Tecumseth and staying overnight at her workplace. At that time, the wife worked for a small company that was located in a two-bedroom condo in a residential building. The wife told the court that she often stayed in one of the bedrooms in that condo when she was required to work overtime, late into the evening.
19The wife was asked about her relationship with her co-worker Haizhou Xu (“Mr. Xu”). She told the court that she met Mr. Xu when she first began working at the company as a 3D artist in 2014. She conceded that Mr. Xu noticed her unhappiness at work and she began to confide in him about her personal problems before May 20, 2015. At the end of August he asked her if she wanted to be with him. She and Mr. Xu moved in together on September 15, 2015. The wife denied that she and Mr. Xu were in a romantic relationship before August 2015.
20The wife was directed to a text conversation between herself and Mr. Xu dated August 24, 2015 in which he asks her when she is coming “home.” She was asked where the “home” was referred to in the email. The wife’s evidence was that Mr. Xu was referring to their workplace in North York. She did not deny that the balance of the text conversation related to her and Mr. Xu signing a lease for a new apartment or condo into which they moved on September 15, 2015.
21In cross-examination the wife was also referred to text conversations between herself and Mr. Xu on August 12 and 13, 2015. Again, Mr. Xu asks when she is coming “home.” She explained that the reference to “home” in the text was again a reference to their workplace condo in North York. She agreed that in this text exchange they said “I love you” to one another.
22In cross-examination, the wife was directed to paragraphs 6, 7 and 8 of her amended application dated March 16, 2017. Those paragraphs are as follows:
The Wife – Applicant suffered daily physical violence. The husband – Respondent would hit his wife causing bruising to her face, arms, knees, and neck; and bang her head against the floor after wrestling her in a “choke-hold” position with the wife – Applicant having troubles breathing, not allowing her to sleep, choking her, banging her head on the floor or wall, and other physical violence.
The Respondent – husband controlled all of the finances and would not allow his wife – Applicant to spend any money, without his consent. If she did not listen to him, he would verbally abuse her and threaten to harm her with violence.
From March to Sept of 2015, the threats of harm, anger outbursts, and intimidation became unbearable and the Applicant – wife started to become afraid of her husband, severely depressed, anxious, and under daily stress.
23When it was suggested to the wife that it seemed odd that she and the husband would be going on outings to a waterpark or cafés if this type of violence was ongoing, the wife clarified that the physical violence described in paragraph 6 was happening only in April and May 2015. The issues in paragraph 7 related only to 2013 and 2014 and the behaviours described in paragraph 8 were ongoing during the period of March to August 2015.
Ms. Pang’s evidence
24The wife called her aunt, Alice Pang, as a witness. Ms. Pang had ongoing contact with the couple when they came to Canada. She was the one who encouraged them to buy the home at Tecumseth as the backyard of that home adjoined her own backyard. She was very close to the young couple. She went to church with them and had lunch or dinner with them once a week.
25Ms. Pang testified that between June and September 2015 she went over to Tecumseth to visit four or five times. She conceded that she did not know who was sleeping there or that the couple was having problems. She knew nothing about the problems until her brother, Mr. Chen, arrived in October 2015 to deal with what was described as a family emergency. The only indication that Ms. Pang had of any problem was that the wife did not come to church with her in the summer of 2015. Only the husband attended with her. She was always told that the wife was too busy.
26It was Ms. Pang’s belief that the wife moved out of Tecumseth in December 2015 because she testified that the wife stopped connecting with everyone and seemed to disappear at that time.
Mr. Chen’s evidence
27The wife’s father, Mr. Chen, gave evidence at trial. He testified that he communicated with his daughter and son-in-law regularly by Skype during their marriage. After the couple immigrated to Canada, much of the discussion concerned the management of the Markham property. He noticed in June 2015 that his son-in-law would often end the conversations because he had to go and pick up his wife at the subway late in the evening. By August 2015 he noticed that his daughter did not seem to be around a lot and her attitude became cold. Often when he called to speak to his daughter no one would answer the phone. By late August or early September, he knew something had changed.
28Mr. Chen told the court that he first learned of his daughter’s separation on September 15, 2015 when she called him and told him that she was moving out. She complained about her husband’s hygiene and sexual habits and told her father that she could no longer tolerate her husband’s controlling behaviour. Mr. Chen booked the earliest flight he could find from Taiwan and arrived in Canada on October 5, 2015. Mr. Chen did not know that his daughter was in a new relationship until she told him in October 2015 that she was dating someone. His evidence was that he did not know where his daughter moved to when she moved out and he still does not know where she lives. He has not told anyone about her new relationship, not even his wife.
29Mr. Chen was asked about receiving a phone call from the husband on May 23, 2015 in which he informed his father-in-law that he was leaving his wife because she was in a relationship with someone else. Mr. Chen denied receiving this call and was adamant that evidence should be tendered to prove that such a call took place.
Ms. Lin’s evidence
30The husband’s sister, Chia-Lu Lin (“Ms. Lin”), was called as a witness by the husband. Her evidence in-chief was given by affidavit sworn October 24, 2017. She was unable to be physically present at trial due to her work commitments but appeared by way of Skype transmission. Her evidence was that she and her brother were very close and communicated regularly via phone and text even after he immigrated to Canada. She recalled receiving a call from her brother sometime in March 2015. He told her that his wife had taken off her wedding ring and he was concerned about the consequences and meaning of that act. They spoke by phone for about an hour.
31Ms. Lin next recalled receiving a call from her brother on May 21, 2015. He described events that had taken place on May 20, 2015. Her brother was distraught over finding out that his wife was having an affair. He wanted to divorce her. The husband told his sister that he had confronted his wife and asked her to choose between him and her lover and she would not provide a clear answer. When the husband said he would pursue a divorce, the wife became emotionally out of control, begged him not to tell her family about the affair and then threatened to kill herself. The husband also told his sister that he intended to call the wife’s father about his decision to divorce the wife. The call to Mr. Chen took place a bit later in May although Ms. Lin was unable to provide an exact date.
32Ms. Lin’s evidence was that after these traumatic events, it was clear to her that her brother did not want to stay married to his wife.
Husband’s evidence
33The husband’s evidence was that in September 2014 he noticed some text messages on the wife’s phone from a co-worker (who was later identified as Mr. Xu) saying he missed her. When questioned by the husband, the wife said it was just a joke. The husband accepted her explanation and moved on. In March 2015 the wife became very angry when the husband was on his phone during dinner. She took off her wedding ring and claimed he did not love her anymore. The argument went on for hours and the husband could not understand the wife’s overreaction. The wife never put the wedding ring back on. The husband was upset and called his sister in Taiwan for advice. The sister agreed that the removal of the wedding ring was concerning.
34Starting in April 2015 up to when they left Markham, the wife was sleeping at her workplace at least two nights each week, allegedly due to overtime demands. On May 19, 2015 the husband was cooking dinner and the wife announced that she was staying at work that night. The husband was angry about how often the wife was away from home overnight so he turned on her old cell phone and saw messages between her and Mr. Xu that lead him to believe they were having an affair. The husband took screen shots of some of the messages and introduced them as Exhibit 46. These messages from early May 2015 show Mr. Xu calling the wife “dear” and when she accidentally pocket dialed him he told her he saved the message so he would know how it felt to be in her pocket.
35The husband immediately demanded to speak to the wife face-to-face about his concerns. He confronted her about the affair and she said nothing for a full half hour. She finally confessed to the affair but said “so what?” This confirmed the husband’s certainty that he wanted a divorce but when he told his wife this she became angry and out of control, hitting her head against the wall and trying to cut herself. He calmed her down and they were both teary for several hours. The husband told her he wanted to be reasonable and pursue the divorce peacefully. He told her he could not be married to someone who was not loyal to him. The husband then called his sister and they talked for several hours. He had always confided in his sister and felt the need to talk to her about what he was going through.
36The husband’s evidence was that after that evening he and his wife never slept together again.
37The next day, May 20, 2015, the parties had an argument at Finch subway station on their way to work. The argument continued by e-mail. The wife came home to Markham on May 21st and May 22nd but the parties slept in separate bedrooms.
38On May 23, 2015 the husband called his father-in-law and told him that his daughter was having an affair and he could not accept her lack of loyalty. He told Mr. Chen that she was emotionally out of control. Mr. Chen told his son-in-law to do whatever it took to keep his daughter calm, even telling her lies. He knew she was very emotional and was afraid she would attempt or commit suicide. The husband explained this is why he wrote the May 25, 2015 “love letter” to the wife and went to the water park with her. He wanted to follow his father-in-law’s instructions and make sure his wife was calm.
39By early July 2015, according to the husband, the wife told him she wanted to try living with Mr. Xu to see whether she wanted to live with him or with the husband. After that she came back to Tecumseth from time to time so things would look normal for her aunt, but she never stayed overnight. She left through the front door so her aunt would not know she was spending the night elsewhere. Eventually even this became too much of an effort and she stopped going to Tecumseth altogether in mid-August. When her father arrived in October 2015 she began spending the night again at Tecumseth but she was not sleeping with the husband. She did this for her father’s sake but after November 5, 2015 she no longer spent any nights at Tecumseth. She visited occasionally to see her father.
Mr. Chan’s evidence
40A former tenant of the husband’s, Mr. Haohasing Chan, gave evidence. Mr. Chan testified that he came to Toronto three years ago from Taipei in order to attend George Brown College. He rented a room at Markham beginning in January 2015. He told the court that he would see the husband and wife almost every night for about 15 minutes as he shared the kitchen at Markham with them. They had casual conversation and he never noticed any arguments between the couple. Excerpts from the wife’s application were read to him with respect to her allegations of physical abuse and threats of harm. Mr. Chan said he did not believe the allegations because the husband was not a violent person and he had never seen interactions like that between the couple.
41Mr. Chan moved into Tecumseth at the end of October 2015. He was contacted by the husband to see if he was interested in renting a room there and a lease was signed. When he moved in, Mr. Chen and the husband were living there. He saw the wife only occasionally.
42During the time that Mr. Chen was there, he would invite Mr. Chan to have a drink with him sometimes in the evening. He told Mr. Chan that he thought the husband was a hard-working and honest person. He also told Mr. Chan that he had spoiled his daughter who had been left to make too many decisions on her own and that his daughter had cheated on his son-in-law and had moved out to live with her lover. Mr. Chan moved out of Tecumseth at the end of September 2017.
The Taiwan Condominium
43The wife owns a condominium (“the condo”) located on Jing-Ping Road in New Taipei City, Taiwan. The condo was purchased in April 2010 and is registered in the wife’s name alone. The wife’s evidence was that she made a down payment of 1.5 million NTD for the condo. Based on an exchange rate of 31.45 NTD to $1.00 CDN in April 2010, the value of the down payment would have been $47,694.75.
44The wife’s evidence is that the husband gifted her two million NTD prior to the wedding, either in late 2009 or early 2010. Throughout the wife’s case, these funds were referred to as the “dowry.” According to the wife, in Taiwanese culture, there is a tradition that the groom pays for the wedding expenses. The wife’s evidence was that almost all of the dowry money was used for wedding expenses. The funds were used to pay for items such as jewelry, photographers, rental cars, clothing, the honeymoon, the diamond engagement ring and wedding rings, and the cost of two wedding receptions, as there were receptions in two different parts of Taiwan for family related reasons.
45Mr. Chen’s evidence was that the wedding and its associated costs were 1.65 million NTD. He and his wife paid the wedding costs out of the dowry money. He testified that his daughter bought the condo with her own money. He managed her stock portfolio and she had made good returns on her investments. In addition to the fact that she had been working for three years, Mr. Chen testified that he and his wife always gave their children an allowance.
46The husband testified that there were not two weddings. Since his family lived three hours away, it was decided that the wedding would be in his home town and that the wife’s parents would host a large engagement party, which they did on September 15, 2011 in Taipei. His parents and family paid for all of the expenses for the wedding but kept the cash wedding gifts received by the couple to defray those costs. The husband paid 80,000 NTD for a bus to take Taipei friends and family to the wedding.
47The husband’s evidence was that the wife’s parents paid for the engagement party. He recalled that her parents told him that the party cost 600,000 NTD but that the couple received 500,000 NTD in cash gifts. The parents kept this money to pay for the cost of the party.
48There was considerable evidence about whether or not the dowry was used to buy the weddings rings and wedding jewelry. Initially, the wife’s evidence was that her parents paid for the engagement and wedding rings and that the husband paid for some of the other wedding jewelry. Later, she testified that the rings were paid for from the dowry money. Her father testified that the money for the engagement and wedding rings came from the dowry money because the husband had only purchased her a cheap crystal ring.
49The husband testified that he had not given the wife any dowry money. Instead, the husband testified that the 2 million NTD were the husband’s contribution to the purchase of the condo. He also gave the wife’s mother 200,000 NTD towards the cost of the 280,000 NTD diamond engagement ring. The husband bought the wedding rings for cash in Taipei after the couple found what they wanted on a website. He also purchased a necklace, bracelet and earrings for her wedding jewelry. He also paid for a trip to Hong Kong for him and the wife, her parents, her sister and her sister’s friend. During this trip, the couple and her parents met with a friend of the wife’s parents who sold him a good quality diamond for the engagement ring.
50Mr. Chen agreed that the husband and wife lived in the condo after it was bought but he could not recall when the husband moved in. He agreed that after the husband moved in, the couple continued to live there until a few months before they immigrated to Canada. He did not think the husband had contributed any money to the purchase of the condo but was not certain of this. He recalled going with his daughter to sign the agreement of purchase and sale. A deposit of 100,000 NTD was paid (about $3125 CDN). He could not recall if the husband was there when the agreement was signed. Mr. Chen was aware that the husband was making a claim for an interest in the condo. His reaction was that the husband must “prove it.”
51The wife was adamant that she did not use any of the 2 million NTD payment for the down payment on the condo. Her evidence was that the funds for the condo’s down payment came from her savings and investments. She had been working for three years by this point and living with her parents, who continued to give her an allowance.
52The wife was asked whether any portion of the dowry money (even $1.00) was used to purchase the condo. After a long pause, the wife denied that any money had come from the dowry to purchase the condo.
53After the parties immigrated to Canada in 2013, the wife’s mother managed the condo on her behalf. The wife’s evidence was that after rental income and expenses there is a loss of about $30 CDN per month on the condo. The husband’s evidence was that the couple agreed to retain the condo rather than sell it when they moved to Canada because Taiwan property values had gone up since they bought it and they thought it would be a good investment.
54The wife’s evidence was that she and the husband lived in the condo for approximately one year after they were married. After being told that the husband intended to produce evidence that the parties lived in the condo for at least three years, she conceded it was possible that she and the husband lived in the condo prior to marriage but she could not recall when they moved in. She was fairly sure the husband did not pay the condo mortgage but she was not sure about who paid for the utilities and other related condo expenses.
55The husband’s evidence was he and the wife decided to buy a property together at the end of 2009 after they had been together for over a year. At the end of November 2009, the husband spoke to the wife’s parents. He told them that he had saved four million NTD, and that he wanted to marry their daughter and use some of his savings to buy a house.
56With the wife’s parents’ permission to go ahead, the couple began to look for a place to live. They looked at five or six condos a month between December 2009 and March 2010. They finally found a three-bedroom condo with a nice view that was near their work and close to the wife’s parents. The purchase price of the condo was 6.95 million NTD.
57The husband produced banking documentation to verify his contributions to the deposit and down payment totalling 2,095,000 NTD toward the condo purchase. This would work out to about $66,613.67 CDN based on the exchange rate in April 2010. The husband made this contribution based on an agreement that he would pay 2/3 and the wife would pay 1/3 of the down payment. Accordingly, the wife contributed 1.45 million NTD. The mortgage was 2.55 million NTD.
58The husband testified that the condo title was put into the wife’s name to avoid additional taxes. Exhibit 43 was tendered by the husband, which was a notice from the Taiwanese government explaining the details of the tax. Based on the translation provided it appears that the government imposed an additional sales tax on properties (other than a primary residence) sold within one year of purchase (15%) or two years (10%), presumably to avoid “flipping.” The husband already owned a condo that he had bought for his mother several years before. He told the court that the parties jointly decided to put the condo in the wife’s name for their mutual tax benefit as she did not own any other property.
59The wife’s evidence was that she was unaware of any tax-saving consequence of putting the condo in her name. Her evidence was that there was no question of putting the condo in anyone’s name but hers because she paid for it.
60The husband told the court that he moved into the condo a week after it closed so he could prepare it for the couple. He purchased a bed, sofa and television and some small renovations were done. The wife moved in around the end of May 2010 when the condo was ready. The wife’s father also helped them install a ceiling fan, put together some IKEA furniture and change some lights. After the wife moved in, they lived in the condo continuously until the end of March 2013 when they moved in with the wife’s parents for a few months before they came to Canada.
61Ms. Lin testified that her brother and his wife lived in the condo for a significant period of time before moving to Canada. Her understanding was that it was their family home, equally shared by them. She understood from her brother that the home was purchased in his wife’s name to save on taxes. Ms. Lin’s evidence was that she was aware that the majority of the funds for the condo came from her brother and that there never any intention that he not have an interest in it.
62Ms. Lin was asked how it was that she knew her brother and then-fiancée moved into the condo in May 2010. She recalled that it was just after the Chinese New Year in January 2010 when his brother told her that he was going to get married and buy a house. In April 2010 the couple told her that they had bought a property and would be moving in together.
63The husband arranged for tenants for the condo when the parties decided to move to Canada. The tenants paid rent of 20,000 NTD. The last information the husband had in 2016 was that the same tenants continued to rent the condo. He was aware, during the marriage, that rent of 20,000 NTD went into the wife’s account each month and the mortgage payment of 15,000 NTD went out each month. He agreed that after the payment of utilities and other expenses, the income and expenses of the condo would be a wash. The husband has not been able to obtain any information about the condo in 2017 as the wife and her parents will not provide it.
64The husband produced income tax returns for 2010, 2011 and 2012, which showed his residential address as the condo for all three of those years. The parties filed joint returns in 2011 and 2012 and the condo is shown as the residential address for both.
65The husband told the court that in December 2015 he had several discussions with the wife and her father about how to settle the property issues between them. Some of those discussions related to an agreement whereby the husband would get half the condo plus some cash. The husband produced some text exchanges between him and the wife from December 8, 2015 (Exhibit 47) in which the wife referred to the condo as “ours” and referred to a 50/50 arrangement.
The Loan from the Wife’s Parents
66The parties arrived in Canada on May 6, 2013. They lived with Ms. Pang for about six weeks and then moved to 24 Markham at the end of June 2013.
67Everyone was aware the Markham property was registered in the wife’s name but that it had been purchased with her father’s funds in March 2007 for $450,000 CDN. The wife’s father put a second mortgage on his home in Taipei and cashed in some Canadian investments he had in order to buy Markham. He made monthly payments to Ms. Pang, his sister, for the balance until the purchase price was paid in full. No mortgage was placed on the property. The wife’s evidence was that Markham was in her name but was intended to be an investment for her parents for their retirement.
68The parties did not pay rent when they moved to Markham. In June 2014, the family wanted the husband to take over the management of Markham in terms of rent and expenses. He found tenants in September 2014 and was able to collect about $1900 a month in rent to defray expenses. The husband produced receipts for renovations done at Markham in 2014, which included tile flooring, a new roof and air conditioning. The cost of the renovations was paid from the couple’s joint account. The husband managed the contracting for the renovations. He provided detailed charts of rental income and all expenses to the court. He testified that it was important for him to report to the wife’s family about this as he wanted to be honest and transparent.
69Markham was sold at the end of March 2015 for $852,000. The couple wanted to buy the property on Tecumseth. Ms. Pang thought it was a good investment and the couple wanted to be closer to her. The couple put down a down payment of $330,000, of which $50,000 came from the parties’ joint account and $280,000 from Ms. Pang, who loaned them the money. The couple paid Ms. Pang back when Markham closed on June 5, 2015.
70The husband moved into Tecumseth on June 5, 2015. After the wife moved out of Tecumseth on September 15, 2015 her pay continued to be deposited into the joint account and the husband paid the Tecumseth expenses from that account. After December 18, 2015 the wife ceased contributing to the joint account.
71The husband continued to collect rent and pay the expenses but there were shortfalls. In November 2016 the husband moved out of Tecumseth. He thought he could stay with friends, reduce his living expenses and try to get more rent for Tecumseth. However, according to the husband’s calculations, the shortfall was $18,315.27 by November 30, 2017 (Exhibit 50). The husband claims half this amount ($9157.63) from the wife in addition to any equalization payment owed to him.
72The wife’s evidence was that she thought that she had been contributing to expenses for Tecumseth throughout 2016. In any event, her view was that whoever was living there should pay the expenses from the rent. If there was a shortfall after the rent was accounted for, she agreed that she should be responsible for half of it.
73In December 2015 the husband paid Mr. Chen $400,000 from the sale proceeds of Markham. The wife’s evidence was that she and her husband agreed to repay her parents $800,000 from the sale of Markham, but after repaying Ms. Pang and paying for commission and closing expenses, there was not enough left to do that.
74During argument, the wife’s counsel submitted that for the purposes of equalization there were no further monies owing to the wife’s parents after payment of the $400,000. The funds from the sale of Markham went into the parties’ joint account. It was not disputed that the $280,000 loan owing to Ms. Pang was paid from the joint account as well as the $400,000 payment to the wife’s father. The husband’s evidence was that he paid his father-in-law the $400,000 due to intense pressure from the wife and her parents. This was denied by the wife and her father.
75One of the main issues for this trial is whether the $400,000 that the husband paid to Mr. Chen was a gratuitous payment or repayment of an actual loan that was outstanding on the date of separation. The husband argues there was no indicia or evidence of a loan. The wife argues that it is uncontested that her father purchased the Markham property and that there was never any intention that she be entitled to all of the proceeds. She and her husband jointly agreed to repay her father the $400,000 in recognition of his contribution to Markham.
Credibility Analysis
The Wife
76The wife was not a good witness. Throughout her evidence she had to be directed on several occasions to answer the question asked. When the question was a critical or difficult one, the wife tended to answer a different question. When directed to answer, she would pause for long periods before answering. At times, the court had to intervene after lengthy periods of silence to ask whether she was thinking about her answer or simply refusing to answer. This type of diversion or hesitation only occurred with respect to questions on the more critical or substantive issues in this case.
77With respect to the wife’s evidence concerning the date of separation, I found her credibility to be lacking. In the face of clear evidence that she was having an extra-marital affair with a co-worker with whom she began to cohabit on and off since as early as April 15, 2015, the wife refused to concede the obvious. Even at trial she was very hesitant to provide any information about her continuing relationship with Mr. Xu.
78Some specific examples of credibility problems with the wife’s evidence are as follows:
a. The wife paused for a considerable amount of time when asked when her relationship with Mr. Xu started. She finally replied that she first began to think of it as a romantic relationship around August 2015. This seemed disingenuous given text messages in early August 2015 in which Mr. Xu was asking her when she was coming “home” and telling her he loved her and text messages in early May 2015 that demonstrated a level of intimacy that was inconsistent with them being simply co-workers.
b. When asked where the “home” was that Mr. Xu referred to in his text messages, she first said North York. She then said she was sure that Mr. Xu meant their workplace, which was a condo in North York. I accept that Mr. Xu likely lived in North York before he and the wife moved in together. It seems improbable that in early August Mr. Xu and the wife were texting one another as if they were a couple (saying “I love you” and asking when the other was coming “home”) if there had not been some history to the relationship well before that time.
c. When asked if she was currently living with Mr. Xu, she told the husband’s counsel that the question was not relevant. The court had to direct her to answer the question. Her resistance with respect to providing information about Mr. Xu was troublesome in the circumstances.
d. I do not accept that after the wife and husband had a heated argument in August 2015 that the wife was spending half her nights at Tecumseth and the other half sleeping at her workplace. Her workplace and Mr. Xu’s place both seemed to be located in North York. I find that as early as May 20, 2015, when the husband confronted the wife about the nights she spent away from home allegedly working, that the wife was spending nights at Mr. Xu’s home. There is evidence that this may have occurred even earlier given that the wife was spending at least two nights a week away from home beginning in April 2015.
e. The wife never mentioned anything in direct examination about physical abuse or emotional abuse as set out in her amended application. It seemed odd that the wife insisted that the relationship between the couple did not change at all in June or July while at the same time relying on pleadings that stated that throughout that period (June-August 2015) the husband’s intimidation became unbearable, he threatened to harm her, and that she was severely depressed. The wife’s stated reason for separation related to complaints about her husband’s hygiene and sexual habits although she gave no particulars about this. Nothing about physical abuse or intimidation was ever mentioned.
f. The evidence of the tenant, Mr. Chan, corroborated the husband’s evidence. Mr. Chan noticed no violence or intimidation of the wife by the husband. His reaction to the wife’s pleadings in this regard was genuine surprise. He never noticed any of this behaviour on the part of the husband and lived in the same house and shared a kitchen with them for the first half of 2015.
g. The wife was disingenuous with both the husband and her father about her new relationship. I accept the husband’s evidence that the wife asked him to keep this information from her family. The fact that she told her father that she was dating someone in October 2015 was clearly not the complete truth. I find that the wife was prepared to say just about anything to keep the reality of her new relationship from both her family and her husband. Mr. Chen told the court that he has not even told his wife that their daughter is in a new relationship some two years later.
h. It is of note that the husband’s evidence was that when he confronted his wife about the relationship with Mr. Xu, she said nothing for 30 minutes. While the wife did not pause for 30 minutes at trial, her reaction was similar. She paused for a period of time before stating that she did not think of the relationship as a romantic one until August 2015. Her demeanour was such that it was clear she was uncomfortable answering any questions about Mr. Xu notwithstanding that they appear to be in a committed relationship, having lived together for more than two years.
i. When asked if she spent even one dollar of her dowry money on the purchase of her condo in Taipei she did not answer the question notwithstanding that it was asked three times. The wife was then directed by the court to answer the question. The wife paused for an unreasonably long time and finally said she had not used any of the husband’s money to purchase the condo. After such a long pause and after requiring direction from the court to answer such a straightforward question, there is a concern about the reliability of the wife’s answer. Her answer was not a naturally responsive one, but rather one she seemed to decide on after much rumination on her part. While it is natural for witnesses to occasionally pause and collect their thoughts, this pause had the air of someone who was attempting to construct an answer rather than answer truthfully.
j. The wife insisted that she paid the down payment for the condo with her own funds yet she provided no proof of this by way of bank or investment statements. Her father also insisted that he managed his daughter’s stock portfolio and that he knew she had money there. Like his daughter, he did not produce any proof of any cashed-in stocks for tracing purposes. The father was aggressive in stating that the husband had to “prove” such things as the telephone call on May 23, 2015 yet the father and the wife provided no proof of the wife’s interest in the condo, the wedding expenditures or their position that the husband only lived in the condo for a year.
k. The wife showed virtually no emotion during her own testimony yet when the husband was giving his evidence she smiled sarcastically at points.
l. The wife was resistant to conceding that she should pay her share of the mortgage, taxes and insurance for Tecumseth after accounting for any rental income. The wife was asked pointed questions on this issue and her answers were not responsive. Only after being directed by the court to answer did she concede that she was responsible for half of the shortfall.
m. The wife’s disclosure was lacking. Her financial statement sworn September 14, 2017 (which she confirmed was accurate) showed a $6000 RRSP and a $20,000 TFSA on date of marriage. She agreed in cross-examination that she had not provided any documentary proof of these pre-marriage deductions. In fact, the documents she provided showed that the accounts had been opened after the date of marriage. Her financial statement also showed that she had $53,472.21 in a Cathay United Bank Account on date of marriage. Neither the Mandarin nor the translated version of the account statements produced to corroborate this showed an account number or identified them as being from Cathay United Bank. Further, the Mandarin version of the date of separation amount shows 119,037 NTD on September 25, 2015 but the translated version has no entry at all for September 25, 2015. The wife had considerable time to review all of her disclosure and obtain proper corroborating documents for the pre-marriage deductions she claimed, yet the financial statement in her Trial Record claimed over $79,000 in uncorroborated pre-marriage deductions.
n. Both the husband and the wife worked at the same company while living in Taiwan. Each was entitled to certain stocks from that company as part of their compensation. The husband disclosed this in his financial statement but the wife did not, even after the documentation was requested.
79The wife’s evidence falls far short of the mark of being either truthful or credible. Her avoidance in answering questions on important points and having to be directed by the court do so was, frankly, astonishing. The wife was apparently determined to say anything that would benefit her, whether there was any truth to it or not. The problems with her disclosure and initial resistance to taking responsibility for the expenses at Tecumseth was disconcerting to say the least. The wife took no steps to resurrect any of these problems in re-examination or by way of reply evidence. Given all of the above, I reject her evidence entirely.
Ms. Pang
80With respect to Ms. Pang, I found her to be a generally credible witness. Regarding the date of separation issues, I find that Ms. Pang simply did not have sufficient information to provide any reliable view on when the parties separated. The wife clearly did not want her aunt to know what was going on and so Ms. Pang quite deliberately had very little information.
Mr. Chen
81The court had concerns with Mr. Chen’s credibility. He was clearly aligned with his daughter although admittedly disappointed with the way in which she ended the marriage. He often glared at the husband in the courtroom. He appeared to view the husband as having reneged on certain informal agreements reached about how to divide the couple’s property.
82A further concern related to comments made by Mr. Chen that Ms. Pang had recited an incorrect number in her evidence the previous day. He advised the court that he was given this information by Ms. Pang’s daughter the night before. Mr. Chen’s direct examination had commenced in the late afternoon of November 1, 2017. He should not have been speaking to anyone about Ms. Pang’s evidence given the order excluding witnesses. Counsel for the husband requested that Mr. Chen’s evidence be struck as a result of this breach. The court declined to strike his evidence but indicated that his discussion with witnesses in this trial would affect the weight to be given to his evidence.
83Mr. Chen occasionally changed his evidence on important points. It is difficult to say whether this was a translation issue or prevarication. On important points, such as whether or not the dowry money paid for all of the wedding expenses, he initially said that he and his wife paid for the entire cost of the wedding. He then said that the wedding cost 1.65 million NTD, which was paid from the 2 million NTD dowry. He later said that the entire 2 million NTD was used for the wedding. The husband’s evidence, which I accept, was that his in-laws told him the wedding cost about 600,000 NTD but they recouped about 500,000 in cash wedding gifts for the couple, which they kept.
84Mr. Chen could not recall when the husband moved into the condo and was not prepared to say that the couple lived there together for three years. Like his daughter, he was often vague about important dates. He refused to concede that the husband had any interest in the condo and aggressively stated he had to “prove it” while at the same time conceding he really had no idea if the husband put money into it.
85Overall, I found that Mr. Chen’s evidence was contrived in many aspects to assist his daughter and often missed the mark when it came to truthfulness. As such, I find that his evidence is unreliable and I reject it entirely.
Ms. Lin
86Ms. Lin gave evidence that entirely supported her brother with respect to both the date of separation and the condo issues. Much of her evidence was based on what her brother told her. Also problematic was a missing date in paragraph 3 of her affidavit. The affidavit stated: “As I recall, my brother and the Applicant moved in together in or around (insert date).” When she adopted the contents of the affidavit as true she testified that the missing date should have been May 2010.
87Ms. Lin required the services of a Mandarin interpreter for her evidence. She was asked how it was she could have prepared and understood an affidavit in English that had not been translated from Mandarin. Her response was that she had made notes about the important events in this case after discussions with her brother. Her brother’s lawyer then put this information into affidavit form. The person who commissioned her affidavit in Taipei translated it for her as well.
88Ms. Lin was an earnest witness. I accept that she was close to her brother and a form of confidante for him in times of emotional difficulty. It seems natural he would turn to her when his wife took off her wedding ring and when he discovered the affair. I accept that he called his sister and confided in her when these traumatic events occurred. I also accept that Ms. Lin was informed of her brother’s intention to buy a property and move in with his fiancée in early 2010. She recalled it was right after Chinese New Year that she received the information. Given Ms. Lin’s close relationship with her brother, it is natural that he would inform her in advance of such significant events as his engagement and the purchase of a home with his fiancée.
89While evidence from family members must always be approached with caution, it should be remembered that Ms. Lin has no financial stake in this matter, unlike the wife or Mr. Chen. Ms. Lin was frank about the fact that she was not present for certain events (like the removal of the wedding ring) but relied on her brother’s accounts of these events.
90I accept Ms. Lin’s evidence about both the condo and the date of separation with respect to its corroborative value in relation to the contested factual circumstances.
The Husband
91The husband was an emotional and teary witness but overall I found him to be reliable and truthful. The husband did not hesitate to answer questions nor was the court required to direct him to answer because he was being evasive.
92Indeed, the husband was very good at remembering important dates and provided corroborative evidence of his positions. The husband was also very fair in that he did not appear to be angry with the wife, only confused about why she had ended the marriage, even going so far as to say that he had perhaps not been a good enough husband. He was genuinely upset about losing his in-laws whom he had loved and regarded as his own parents, and was disappointed that they no longer communicated with him.
93His answers to difficult questions had a ring of truth to them. For example, he testified that he loved his in-laws and when his father-in-law asked him to do whatever it took to keep the wife calm so she would not become overwrought about the separation, it did not seem completely unbelievable that he would follow through with that by doing things such as writing her a love letter or going on a summer outing with her. However, he was convincing about his resolution to pursue a divorce from the wife when it became clear on May 20, 2015 that she was not prepared to give up her lover.
94When the wife left Tecumseth, she contributed to the expenses only until December 2015. She did not seem to be concerned that the husband was left with the responsibility of dealing with the tenants and expenses for the property. The husband did his best to cover the shortfall even though he was receiving no contribution, let alone moral support, from the wife for doing so. He even moved out to try to rent the space he was using in Tecumseth and live more cheaply elsewhere. His sacrifices and diligence in maintaining Tecumseth certainly benefitted him, but they also benefitted the wife in terms of the proceeds.
95In summary, I find that the husband’s evidence was credible and reliable and I accept it. Where it conflicts with that of the wife and her father, I prefer the evidence of the husband.
Analysis
Date of Separation
96Oswell v. Oswell (H.C.J.), 1990 CanLII 6747 (ONSC) remains the leading case with respect to the factors to be considered in determining the date of separation where spouses continue to occupy the same premises. In summary, the factors are as follows:
There must be physical separation.
There must be withdrawal by one or both spouses from the matrimonial obligation with the intent of destroying the matrimonial consortium.
The absence of sexual relations is not conclusive but a factors to be considered.
Other matters to be considered are the discussion of family problems and communication between the spouses, presence of absence of joint social activities, and the meal pattern
Although the performance of household tasks is also a factor, help may be hired and for these tasks and greater weight should be given to those matters that are peculiar to the husband and wife relationship outlined above.
97The factors should be considered in turn, keeping in mind that they are not exhaustive and that each case in which the date of separation is contested has its own unique set of facts. Applying the Oswell factors to the evidence in this case, I find that the date of separation was May 20, 2015 for the following reasons:
a. The wife’s evidence with respect to the September 15, 2015 date of separation has been rejected by this court as it was not credible.
b. The wife was in a relationship with Mr. Xu and admitted this to the husband on May 20, 2015. Her nights away from home and text messages to Mr. Xu going back to early May 2015 make it clear that she had already moved on from the husband.
c. The wife bought her Smart Car in early July with Mr. Xu present (this was not contested) and was making arrangements in mid-August 2015 to rent an apartment with Mr. Xu. They texted one another “I love you” and called one another pet names. There were many indications that this relationship had started far earlier than August 2015, which is when the wife testified that she “started” to think of it as a romantic relationship.
d. Upon the wife’s confession to the affair on May 20, 2015, the husband announced his intention to divorce and separate. He confirmed this intention with both his sister and his father-in-law by phone. That evidence was accepted by this court. His actions thereafter were consistent with wanting to separate, as it was clear that his wife was planning a new life with Mr. Xu. Further, I accept the husband’s evidence that the parties no longer slept together after the arguments on May 20/21 2015.
e. While the parties still communicated, it was perfunctory and in large part due to the husband’s efforts to keep his wife calm given his undertaking to his father-in-law. I find that the love letter, the joint car purchase and the few outings in July were similarly designed to keep the wife from becoming overly emotional. It must be kept in mind that the wife threatened to kill herself and was acting in an extremely irrational manner when the husband first announced his intention to divorce her. There was good reason to placate her.
f. The fact that the parties still had joint investment accounts and a joint bank account are of little significance in this case. First, they jointly owned Tecumseth and were jointly obligated to contribute to those expenses. As for the investment accounts, there was always an issue about how much money, if any, was to be paid to the wife’s father. Those discussions went on until December 2015. The accounts could not be collapsed until that matter was resolved.
g. The wife’s motivation for wanting a September 15, 2015 separation date was quite transparent. She did not want the husband to share the value of the Markham property. A separation date after June 5, 2015 meant she could deduct its value as it would have been a matrimonial home owned on date of marriage but sold prior to the date of separation.
The husband’s claim for a beneficial interest in the wife’s Taipei condo
98The husband claims a beneficial interest in the wife’s condo on Jing Ping Road in Taipei. He provided documentary evidence of his contribution to the deposit and down payment. He also provided documentary evidence (by way of income tax returns) that the parties lived at the property for three years. He gave a believable explanation as to why the condo was placed in the wife’s name and not his.
99In Korman v. Korman, 2015 ONCA 578 at paras 25 to 29 the court discussed the proper approach where a trust claim has been advanced as between married spouses.
[25] The Act [Family Law Act] provides a comprehensive scheme for resolving financial issues following marriage breakdown. Section 10(1) of the Act authorizes a court to determine questions of title between spouses. This includes considering whether legal title actually reflects beneficial ownership. As indicated by this court in Martin v. Sansome, 2014 ONCA 14, 118 O.R. (3d) 522, at para. 47, citing Rawluk v. Rawluk, 1990 CanLII 152 (SCC), [1990] 1 S.C.R. 70, “[b]efore property can be equalized under the [Act], a court must first determine the “net family property” of each spouse. This exercise requires first that all questions of title be settled.” In other words, property entitlements must be determined before they can be equalized.
[26] Section 14 of the Act affirms the presumption of a resulting trust in determining questions of ownership between spouses in the context of gratuitous property transfers. Where the presumption is invoked, the party resisting the imposition of a resulting trust is required to disprove the presumption that his or her spouse is the beneficial owner of an interest in the disputed property.
[27] In Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, at paras. 16-19, the Supreme Court confirmed 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. In these circumstances, the actual intention of the transferor is the governing consideration. See also Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, at paras. 43-44; Schwartz v. Schwartz, 2012 ONCA 239, 290 O.A.C. 30, at paras. 41-42. Further, the intention of the transferor to make a voluntary and gratuitous transfer is an essential ingredient of a legally valid gift: see McNamee v. McNamee, 2011 ONCA 533, 106 O.R. (3d) 401, at para. 24.
[29] …As I have said, under the Act, questions of title must be settled before property can be equalized. By reason of s. 10 of the Act, trust claims – including claims based on constructive or resulting trust – may be advanced prior to equalization. And, crucially, s. 14 legislates a presumption of a proprietary resulting trust. Where the presumption applies, it yields a finding of beneficial ownership in the context of a gratuitous property transfer. The Act contains no analogous presumption of constructive trust.
100Clearly, the first step is to determine title as between spouses as per s. 10 of the Family Law Act. In doing so, the court must examine the evidence with respect to contributions made and whether the husband’s contributions were meant as a gratuitous gift. I find they were not. I accept the husband’s evidence that, as the higher income earner, the couple agreed that he would contribute 2/3 of the purchase price and the wife would contribute 1/3, net of the mortgage amount. The numbers presented by the husband were corroborated and added up to the total purchase price. Further, the husband presented comprehensive and detailed evidence about when the parties moved in, what the arrangements were for ongoing expenses, and when they moved out.
101The wife did not really contest the husband’s evidence in this regard. Instead, she focused on insisting that she paid for the condo herself and that any money transferred to her account by the husband was for the “dowry.”
102I do not accept the evidence with respect to the dowry. Even leaving aside credibility issues, the husband’s version simply makes more sense. His family lived three hours away. To avoid the majority of the guests having to travel so far for the wedding, it was decided to have a large engagement party about a month before the wedding. The wife’s parents hosted this party and recouped most of what they spent from the cash gifts received by the couple. The husband’s parents hosted the wedding at their home and paid for it with the cash weddings gifts received for the couple. As indicated above, Mr. Chen’s evidence about what happened to the dowry money was confused and contradictory. The wife insisted that the dowry money was spent on the wedding but could not provide particulars of this.
103I find that the wife has not disproved the presumption that the husband is a 50% beneficial owner of the condo. She has provided no documentary evidence of her contribution to the property nor did she challenge the husband’s contentions concerning his contributions. She and her father simply insisted that she bought it on her own without any assistance from the husband. In short, there is no evidence that the husband intended to gift the condo to the wife nor am I persuaded that the 2 million NTD deposited to the wife’s account on April 23, 2010 was a gift to the wife meant to be used as she pleased or as a dowry.
104The timing of the payments to the wife are also worth mentioning. The husband’s evidence was that he made a deposit for the condo on March 29, 2010 (140,000 NTD) and contributions to the down payment on April 16, 2010 (670,000 NTD) and April 23, 2010 (2 million NTD). This is all evidenced in the husband’s bank book. The timing of the payments is consistent with the purchase and closing of the condo in late April 2010. The timing of the payment of 2 million NTD is not consistent with it being a dowry. Why would the husband give his intended wife the equivalent of almost $90,000 CDN a year and a half before the wedding? While the evidence was that the groom is expected to give certain gifts to the wife, I accept the husband’s evidence that he did so by paying for the engagement ring and wedding jewelry and giving the wife a further 1 million NTD, which was intended for incidentals and the costs related to the possibility of a pregnancy given that the couple were not using birth control. I also accept the husband’s evidence that the cost of the wedding and engagement party was covered by the “red envelope” cash gifts received by the couple. Given these factual findings, there was no reason for the husband to make such a large payment to the wife in March/April 2010 if it was not meant for the condo purchase.
105There is also the evidence of the husband’s sister and the income tax returns, which corroborate an intention to make the condo the couple’s home and reside there permanently. I find they did so until they changed their plans and decided to immigrate to Canada.
106I agree with the husband’s counsel that the best way to deal with this issue is either to sell the property or to have the wife provide an up-to-date appraisal and mortgage statement for buyout purposes. The property should not be included in the net family property statement given my finding regarding the husband’s interest. He is entitled to half the net value or half the net proceeds of sale as of the date of this judgment, in addition to any equalization payment.
The $400,000 Repaid to the Wife’s Father – A Debt or Not?
107It is uncontested that all of the funds from the sale of 24 Markham went into the parties’ joint account. It is also uncontested that Markham was put in the wife’s name but purchased in 2007 with funds which came from her parents.
108The wife has not pleaded that she held Markham as a bare trustee. After the sale of Markham, there was no evidence that Mr. Chen was asking for any money. Indeed he did not object when funds from the proceeds from Markham were used to repay his sister, Ms. Pang, for the down payment on Tecumseth. Mr. Chen did not demand any money until after the parties separated. To further complicate matters, the husband claims he was forced to pay Mr. Chen the $400,000 by way of threats and intimidation.
109Is the payment of the $400,000 a recognition of Mr. Chen’s contribution to the purchase of the property and properly repaid as a debt? Or, alternatively, were the proceeds of Markham a gift to his daughter that cannot be claimed as a debt existing on the date of separation for equalization purposes?
110Not surprisingly, both Mr. Chen and his daughter wish this amount to be characterized as a debt. Mr. Chen’s evidence was that Markham was purchased as an investment for his retirement. His daughter was a Canadian citizen and so putting the property in her name was easier and resulted in fewer taxes for him. His daughter was only 23 at the time and had no real involvement with the purchase.
111The husband takes the position that there was no debt because there was no indicia of one. There was no promissory note, no demand for payment and no monthly payments. Following the sale of Markham, the proceeds were placed in joint investment accounts and the parties were free to use part of the proceeds to repay Ms. Pang for the down payment for Tecumseth. The husband voluntarily paid his father-in-law $400,000 in December 2015 as a result of pressure from the Chen family. This payment should not be construed as repayment of a debt. Allowing the wife a deduction for this amount would be unfair to the husband given the lack of corroborative evidence of an actual debt.
112In examining the evidence of the parties on this issue, the husband’s evidence in cross-examination was that he thought that paying his father-in-law was the right thing to do because he was old and he used to love him. He did not deny that his father-in-law put a lot of money into Markham and that he asked for it back when he came to Canada in October 2015.
113Ms. Pang’s evidence was that her niece (the wife) was well aware that the money used to buy Markham was not hers and that it belonged to Mr. Chen.
114Mr. Chen’s evidence was that he bought Markham from his sister because she told him it was a good investment and he trusted her. He paid his sister by collapsing certain investments and by putting a second mortgage on his home in Taiwan. Markham was placed in his daughter’s name to avoid the additional taxes payable for foreign ownership.
115Mr. Chen’s sister managed the property for him until 2014 when his daughter and son-in-law took over the management. He asked them to look after certain renovations that needed to be done and to collect the rent. He testified that he received about $12,000 in rental income between 2013 and 2015 and received annual reconciliations from his son-in-law. A sample of those reconciliations were presented to the court and filed as exhibits.
116Mr. Chen testified that when discussions first started about buying Tecumseth, his daughter gave him an IOU for $400,000 in March 2015 (Exhibit 23). His evidence was that his daughter and son-in-law agreed that they owed him $790,000 from the Markham sale proceeds and discussions were held about how this would be repaid in November and December 2015. Ultimately he accepted repayment of only $400,000 because he knew that his daughter and son-in-law did not have the money to pay him more than this amount after the purchase of Tecumseth.
117The IOU is undated but indicated a borrowing date of March 25, 2015 with a maturity date of March 31, 2025 and interest of 2.05% a year. Mr. Chen and his daughter signed the IOU but it is not witnessed. It references that the loan is related to the purchase of Tecumseth. No monthly payments or interest payments were made on the IOU.
118Counsel for wife suggested that the governing authority is Smith v. Smith, [1995] O.J. No. 253, in which the Ontario Court of Justice (General Division) observed that the presumption of advancement applies where property is transferred without consideration from a parent to a child. However, the authority on this question is now Pecore v. Pecore, 2007 SCC 17. Writing for the majority, Rothstein J. held that the presumption of resulting trust applies when a parent gratuitously conveys property to an adult child. The presumption is rebuttable if the party adduces a contrary intention on a balance of probabilities.
119In this case, the husband would have the burden of bringing evidence to support his claim that the $400,000 was a gift rather than a loan that was expected to be repaid. The presumption favours Mr. Chen and the wife’s position that the $400,000 repaid to the father was a debt.
120It is true that the $400,000 paid to Mr. Chen does not have all of the traditional earmarks of a loan. There is no mortgage or promissory note. There are no monthly payments. The IOU is deficient in some aspects. However, considering all of the evidence, I am not satisfied that the husband has adduced a contrary intention on a balance of probabilities for the following reasons:
a. All parties were well aware that Markham was placed in the wife’s name for tax saving reasons given that Mr. Chen was not a Canadian citizen.
b. There was sufficient evidence, and I find as a fact, that all of the money to purchase Markham came from Mr. Chen. I also find as a fact that he intended Markham as a retirement investment and this was known by the husband and the wife.
c. After the husband and wife took over Markham, they provided detailed reconciliations to Mr. Chen and sent him rent money of over $12,000.
d. Mr. Chen was heavily involved in the negotiations for the purchase of Tecumseth including the borrowing of money for the down payment from Ms. Pang. It must be noted that there was no loan document for this transaction which included a significant amount of money ($280,000) and the money was paid back with no questions asked.
e. The emails and texts between the parties post-separation speak to an intention to repay Mr. Chen. In an email in Exhibit 22, the husband says “the goal is to pay back the amount of $790,000 without one penny less or have them to manage the house.” Those were the original discussions, but after repayment of Ms. Pang, there were not enough funds to pay back the whole amount. Mr. Chen was aware of this and only insisted on being repaid $400,000.
f. While the husband testified that he felt forced to pay the $400,000 to Mr. Chen, his position was that he was not obligated to do so. The funds were in a joint account and the wife could have just as easily paid her father or the husband could have transferred half the funds in the joint account to himself. There was no evidence that any such actions were taken. The funds were left in the joint account pending discussions and negotiations with all parties about what was to be paid to Mr. Chen.
g. The IOU is not perfect evidence of a debt but it is some evidence of an intention by the wife to repay her father $400,000.
h. If the wife feels further amounts are owed to her father, she is free to pay them from her share of sale proceeds from Tecumseth.
121Given all of the above, I find that there is insufficient evidence to rebut the presumption of a resulting trust. The loan from Ms. Pang and the $400,000 payment to Mr. Chen shall both be included as deductions for the wife on the date of separation for net family property purposes.
Final Orders
122The Applicant and Respondent are hereby divorced effective as of the date of this order.
123The Respondent has a one-half beneficial interest in the property located in Taiwan (Republic of China) and municipally known as 10F-5, No. 669, Jing-Ping Road, Zhonge District, New Taipei City, Taiwan (R.O.C.) (“Jing Ping Property”).
124The Applicant shall pay the Respondent one-half of the value of the Jing Ping property less half the value of the mortgage and reasonable and valid disposition costs, as valued on the date of this Order (“the payout amount”). The payout amount is to be paid from the Applicant’s share of the net proceeds of sale from the property known as 109 Tecumseth Street, Toronto, Ontario (“Tecumseth Property”) and sufficient amounts shall be held back such that the payout can be effected.
125To determine the payout amount, the Respondent shall obtain an up-to-date appraisal of the Jing Ping property conducted by Honda Appraisers and an up-to-date mortgage statement for the property within 30 days. The applicant shall cooperate fully with respect to allowing access to the Jing Ping property for appraisal purposes and shall sign a direction allowing the respondent direct access to all mortgage information related to the Jing Ping property.
126All other issues concerning, relating and/or pertaining to the Jing Ping property are to be addressed in Taiwan.
127In the alternative to the determination of the Respondent’s share of the Jing Ping property set out above, the Applicant may elect to sell the Jing Ping property and pay the Respondent one-half of the proceeds of sale from her share of the proceeds of sale from the Tecumseth Property or as the parties agree. In the event this option is chosen, the Applicant shall provide the Respondent with all information and documentation in respect of the sale including but not limited to any offers to purchase. If there are any issues regarding the sale process they may be addressed by way of 14B motion to Justice Gilmore.
128An agreed upon sum shall be held back from the Applicant’s share of the Tecumseth proceeds pending an agreement on how to deal with the Jing Ping property.
129The Applicant shall pay the Respondent an equalization payment of $18,585.81 to be paid from the Applicant’s share of the net proceeds of sale from the Tecumseth Property. The equalization payment is calculated as per the net family property statement at “Schedule A” which forms part of this judgment and reflects the findings made in the judgment.
130The Applicant shall pay the Respondent the sum of $9,157.63 representing her share of the expenses for the Tecumseth property post-separation. This sum is to be paid from the Applicant’s share of the net proceeds of sale from the Tecumseth Property.
131The Applicant shall transfer her interest in the 2012 Subaru Forester to the Respondent and sign all necessary documents to transfer the vehicle on a tax-free basis. The value of the Forester as of the date of this Order shall be used to determine the Applicant’s interest in the vehicle and such amount shall be deducted from the equalization payment owing from the Applicant to the Respondent.
132The Applicant shall pay pre and post-judgment interest on the equalization payment owing to the Respondent.
133If the parties cannot settle the issue of costs, they may provide Costs Submissions of no more than three pages (double spaced) exclusive of any Offers to Settle or Bill of Costs. The Respondent’s costs submissions are due within seven days of the release of this judgment and the remaining costs submissions are due on a seven-day turnaround thereafter. Costs are to be provided via email to my assistant at natasha.mirabelli@ontario.ca. If no costs are received within 35 days of the release of this judgment, costs shall be deemed to be settled.
C. Gilmore, J.
Released: Wednesday, December 6, 2017
CITATION: Chen v. Lin, 2017 ONSC 7297
COURT FILE NO.: FS-16-411153
DATE: 20171206
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Yee-Shine Stephanei Chen Applicant
– and –
Chun-Yi Lin Respondent
CORRIGENDA TO REASONS FOR JUDGMENT
C. Gilmore, J.
Released: Wednesday, December 6, 2017
CITATION: Chen v. Lin, 2017 ONSC 7297
COURT FILE NO.: FS-16-411153
DATE: 20171206
A corrigenda explanation to Judgment dated December 6, 2017
CORRECTIONS MADE ON DECEMBER 8, 2017: The equalization payment amount indicated in paragraph 129 was deleted and the correct amount of $18,585.81 was substituted as per the revised Schedule “A” to the judgment. The corrected paragraph reads as follows:
129The Applicant shall pay the Respondent an equalization payment of $18,585.81 to be paid from the Applicant’s share of the net proceeds of sale from the Tecumseth Property. The equalization payment is calculated as per the net family property statement at “Schedule A” which forms part of this judgment and reflects the findings made in the judgment.
CORRECTIONS MADE ON FEBRUARY 20, 2018: An amendment was made in paragraph 69 to reflect that Markham closed on June 5, 2015. At paragraph 97 subsection g, the date of June 5, 2015 was amended to reflect the correct year of 2015. The corrected paragraphs read as follows:
69Markham was sold at the end of March 2015 for $852,000. The couple wanted to buy the property on Tecumseth. Ms. Pang thought it was a good investment and the couple wanted to be closer to her. The couple put down a down payment of $330,000, of which $50,000 came from the parties’ joint account and $280,000 from Ms. Pang, who loaned them the money. The couple paid Ms. Pang back when Markham closed on June 5, 2015.
97g. The wife’s motivation for wanting a September 15, 2015 separation date was quite transparent. She did not want the husband to share the value of the Markham property. A separation date after June 5, 2015 meant she could deduct its value as it would have been a matrimonial home owned on date of marriage but sold prior to the date of separation.
Release date of the corrected judgment: February 20, 2018.