Court File and Parties

COURT FILE NO.: FS-15-84011 DATE: 20181218 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Alma Botcharova Applicant – and – Andrew Kamstra Respondent --and – Ruby Martinez Respondent

Counsel: Self-represented (for Alma Botcharova) Antal Bakaity, for the Respondent (Andrew Kamstra) Not appearing (for Ruby Martinez)

HEARD: January 10, 11, 12, 16, 17, 18, 19, 22, 25, 2018, February 22, 2018, March 28, 2018 and June 4, 2018

REASONS FOR JUDGMENT

PETERSEN J.

OVERVIEW

Issues in Dispute

[1] This is an Application for divorce and corollary orders. The Applicant, Alma Botcharova, seeks retroactive and ongoing spousal support and an equalization payment. She also seeks a declaration that she held a 50% beneficial ownership interest in the parties’ matrimonial home by virtue of a resulting trust or constructive trust. Legal title to the home was registered in the Respondent Andrew Kamstra’s name alone. It was sold on July 20, 2018 and the proceeds of sale are being held in trust pending the outcome of this proceeding.

[2] For the purpose of determining her entitlement to spousal support and calculating the amount of her spousal support, Ms. Botcharova argues that income should be imputed to Mr. Kamstra beyond that which he declared in his tax returns and disclosed in this proceeding. She accuses him of concealing rental and self-employment income.

[3] Mr. Kamstra does not contest the divorce, but asserts that Ms. Botcharova has no entitlement to past or future spousal support. He argues that an income of $50,000 to $60,000 should be imputed to her because of undisclosed earnings and intentional underemployment. In the alternative, he argues that an income of $30,000 should be imputed to her and, on that basis, a lump sum payment of between $8,000 and $10,000 should be ordered to exhaust his spousal support obligations.

[4] Mr. Kamstra submits that Ms. Botcharova held no ownership interest in the matrimonial home. In the alternative, he argues that, if she was a part owner, then he should be reimbursed for half of the property-carrying costs that he paid over seven years, from the date the parties separated until the date the property was sold.

[5] If Ms. Botcharova’s claim to an equitable ownership interest in the matrimonial home is rejected, she seeks an equalization payment of $160,000. Mr. Kamstra submits that she is only entitled to an equalization payment of $24,144 and that occupation rent payments he made pursuant to pre-trial orders must be returned to him and off-set against that amount.

[6] The disparity in the parties’ calculations of the equalization payment is primarily due to their disagreement over the valuation date to be used for the purpose of calculating their net family properties.

[7] The parties also disagree about the impact of Ms. Botcharova’s bankruptcy on her claims. The impact of the bankruptcy is a preliminary issue that must be addressed prior to considering Ms. Botcharova’s property claims.

[8] Before dealing with the bankruptcy issue, I will briefly outline some relevant background information to provide context for my reasons.

Background

[9] Ms. Botcharova and Mr. Kamstra were married and started living together on July 1, 2000. She had a son from a previous relationship who resided with them. The child is now an adult and lives independently. There are no issues related to that child. The parties had no children together.

[10] Ms. Botcharova moved out of the matrimonial home on July 26, 2011. The parties have lived apart since that date. Mr. Kamstra continued to occupy the matrimonial home until it was sold in July 2018. Ms. Botcharova’s son lived with him in the matrimonial home until January 2013.

[11] Ruby Martinez and her daughter lived in the matrimonial home with Mr. Kamstra from May 2013 until August 2017. She was added as a Third Party Respondent in this matter but neither party is seeking any relief against her. She chose not to participate in the trial.

Impact of the Applicant’s Bankruptcy

[12] On July 17, 2013, Ms. Botcharova filed an assignment in bankruptcy. A trustee was appointed pursuant to the Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3. She was discharged from bankruptcy on April 18, 2014. The trustee was discharged on April 2, 2015, prior to the commencement of this divorce proceeding.

[13] At no time during the bankruptcy proceeding did Ms. Botcharova disclose to the trustee her claimed 50% beneficial ownership interest in the matrimonial home or her claim to an equalization payment from Mr. Kamstra.

[14] In his Answer to this Application, Mr. Kamstra took the position that Ms. Botcharova’s equalization claim was extinguished by her bankruptcy. The parties now agree, however, that the bankruptcy has no impact on her equalization claim. In a letter dated December 4, 2015, the trustee in bankruptcy took the position that the equalization claim was an asset incapable of realization from the date of her assignment in bankruptcy until the date of discharge of the trustee. As such, it was returned to her pursuant to s. 40(1) of the Bankruptcy and Insolvency Act upon the trustee’s discharge in April 2015. She was therefore entitled to advance the equalization claim when she filed her Application for divorce in July 2015, notwithstanding her bankruptcy.

[15] The trustee’s letter is, however, silent with respect to Ms. Botcharova’s claim to a beneficial ownership interest in the matrimonial home. Unlike her equalization claim, it may have been capable of realization during the bankruptcy proceeding. Mr. Kamstra therefore argues that, if Ms. Botcharova held a 50% beneficial ownership interest in the matrimonial home, it was transferred to the trustee by virtue of s.71 of the Bankruptcy and Insolvency Act and was never returned to her.

[16] It is unnecessary for me to decide this issue because I have concluded, for reasons set out below, that Ms. Botcharova did not have any ownership interest in the matrimonial home.

Pre-Trial and Post-Trial Events and Orders

[17] There were numerous motions in this proceeding, resulting in multiple pre-trial interim orders and post-trial orders. I will summarize only those that need to be factored into my final orders.

[18] In September 2014, Mr. Kamstra obtained a private loan in the amount of $62,000, secured as a second mortgage against the matrimonial home. He did this without Ms. Botcharova’s consent and without a court order. He testified that he believed her consent was not necessary because of her bankruptcy.

[19] On December 8, 2015, Snowie J. found that he had violated s.21 of the Family Law Act, R.S.O. 1990, c. F.3. Snowie J. ordered Mr. Kamstra to pay Ms. Botcharova $31,000, representing her half interest in the equity of the matrimonial home. Snowie J. stated that “this payment may be reallocated by the trial judge in his or her discretion or left as an advance on the equalization payment.” An application by Mr. Kamstra for leave to appeal Snowie J.’s order was dismissed by Trimble J. on February 27, 2016.

[20] On December 8, 2015, Snowie J. also ordered Mr. Kamstra to pay Ms. Botcharova occupation rent in respect of the matrimonial home, in the amount of $750/month from May 1, 2013 onward, with arrears totaling $23,250. Mr. Kamstra’s application for leave to appeal this order was also dismissed by Trimble J. on February 27, 2016.

[21] Mr. Kamstra did not comply with these orders until the spring of 2017, after Ms. Botcharova brought a motion for contempt and a motion for an order of sale of the matrimonial home. On March 1, 2017, Price J. issued a consent order requiring Mr. Kamstra to transfer the entirety of his Manulife RRSP funds to Ms. Botcharova by way of spousal rollover. Price J. further ordered that Ms. Botcharova would be entitled to draw down on the RRSP to the maximum annual annuity allowable, with the balance of the funds being subject to a non-depletion / non-utilization order. Based on her income level, it was anticipated that Ms. Botcharova would be able to access $26,750 of the otherwise locked-in RRSP funds. Price J. specified (in a subsequent endorsement dated March 24, 2017) that the trial judge would be able to make the necessary adjustments in determining the ultimate amount of Ms. Botcharova’s entitlement. He also ordered that, if Mr. Kamstra did not immediately begin paying the $750/month in occupation rent ordered by Snowie J. on December 8, 2015, Ms. Botcharova could bring a motion to strike his pleadings and return her motion for an order of sale of the matrimonial home.

[22] Mr. Kamstra transferred his Manulife RRSP funds (totalling $116,128.41) to Ms. Botcharova on April 17, 2017. However, Ms. Botcharova did not access any of the funds, despite an order by Price J. on July 31, 2017 that Manulife distribute $26,750 to her as an annuity for 2017. All of the funds remain locked-in by Manulife.

[23] Mr. Kamstra began paying Ms. Botcharova $750 monthly occupation rent in May 2017. He continued making the occupation rent payments until the home was sold on July 20, 2018, pursuant to my order dated March 28, 2018. The net proceeds from the sale were placed in trust by the parties’ real estate solicitor, pursuant to my order and Trimble J.’s order dated July 19, 2018, with the exception of $3,750 that was paid to Ms. Botcharova for arrears in occupation rent.

[24] On July 25, 2018, the parties resolved a civil action between them with Minutes of Settlement that stipulated (among other things) that Mr. Kamstra would pay Ms. Botcharova $20,000. On August 15, 2018, on consent of the parties, I ordered that $20,000 from the funds held in trust be released to Ms. Botcharova and that $20,000 would be credited against any entitlement that Mr. Kamstra received in this family law proceeding. According to the trust statement of the real estate solicitor, an amount of $259,235.92 remains in trust.

[25] All of the above interim orders will be taken into account when I make my final orders.

EQUALIZATION OF NET FAMILY PROPERTIES

Valuation Date

[26] The first issue for me to decide is the valuation date to be used to calculate the parties’ net family properties. Mr. Kamstra asserts that the valuation date is July 26, 2011. Ms. Botcharova asserts that it should be the date of her Application (July 27, 2015) or, alternatively, a date in September 2014.

[27] The parties agree that the valuation date is, in the circumstances of this case, the date they separated and there was no reasonable prospect that they would resume cohabitation: s. 4(1) of the Family Law Act. They also agree that Ms. Botcharova moved out of the matrimonial home on July 26, 2011 and never returned to live there. They disagree, however, about the date on which there was no reasonable prospect of resumption of cohabitation.

[28] The evidence does not support Ms. Botcharova’s contention that the valuation date should be July 27, 2015. There is overwhelming evidence that the breakdown of the marriage was irreparable by the fall of 2014. Ms. Botcharova retained counsel to write a letter to Mr. Kamstra on October 13, 2014, proposing the negotiation of a separation agreement to resolve their property and support issues. After that date, there was much conflict between the parties. On two occasions, Ms. Botcharova attended the matrimonial home uninvited and the police were called to remove her from the property. Ms. Botcharova’s assertion that there remained a prospect that they would resume cohabitation up until she filed for divorce in July 2015 is simply not credible.

[29] The more difficult question to resolve is whether there was a reasonable prospect of the parties resuming cohabitation between July 2011 and September 2014. The evidence establishes that, when Ms. Botcharova moved out of the matrimonial home on July 26, 2011, she participated in a three week intensive out-patient treatment program at the Centre for Addiction and Concurrent Disorders at Credit Valley Hospital. She testified that she moved out, not for the purpose of ending her marriage, but because she feared she would relapse in her alcohol abstinence if she lived with Mr. Kamstra. He kept and consumed alcohol in the house. She did not move back into the matrimonial home after completing the program. Rather, she rented an apartment and the parties continued to live separately. Her son stayed in the matrimonial home and resided with Mr. Kamstra until January 2013 (with the exception of some months that he spent in Bulgaria).

[30] Ms. Botcharova testified that, after completing the treatment program, she “did not want to go back and live with him,” but they “were not separated in the sense that ‘this is over’”. She claimed that the first time she heard him say “this marriage is over” was in September 2014, when she called him and asked to move back into the matrimonial home. She testified that, in the intervening years, they socialized together; he helped her to set up her apartment in the summer of 2011 and to move apartments in March 2012; he assisted her with the publication of a book that she wrote in 2012; she introduced him to her neighbours; she cooked occasional meals for him and her son, which she brought to the matrimonial home; he attended her one year celebration of sobriety at Alcoholics Anonymous in March 2012; they attended some family gatherings together and they maintained regular contact with each other by email, text and telephone.

[31] Much of this evidence was corroborated by Alicja Watson, a friend of Ms. Botcharova, but only for the initial period after Ms. Botcharova moved out of the matrimonial home. Ms. Watson testified that the parties were living separately but were on good terms in 2011. She spent time with both of them in 2011 at the matrimonial home, in Ms. Botcharova’s apartment and in her own residence. She said she did not see Mr. Kamstra after 2012.

[32] Mr. Kamstra did not deny Ms. Botcharova’s assertions about their interactions post-separation, but he testified that the family functions and home-cooked meals were rare, were at Ms. Botcharova’s insistence and stopped after a short period of time. He confirmed that he attended her apartment a few times to help her out. He said he assembled a dresser for her and bought her some paint for the apartment. He recalled that she attended his family’s Christmas dinner in December 2011. However, he said their communications waned in 2012 and their separation, which had been amicable in the beginning, became acrimonious. She made it clear that she wanted nothing to do with him and that their relationship was over.

[33] Mr. Kamstra testified that their marriage was “pretty well done” as soon as she left the matrimonial home. He testified that their friendly demeanour towards each other in the immediate aftermath of her departure simply reflected an initial lack of animosity, not an indication of any reasonable prospect of reconciliation.

[34] Upon review of all of the evidence, I accept Mr. Kamstra’s submission that there was no reasonable prospect of resumption of cohabitation after Ms. Botcharova left the matrimonial home. Some of Ms. Botcharova’s testimony with respect to this issue was directly contradicted by documentary evidence. She testified that “there was no talk of separation” between them prior to September 2014. Email correspondence reveals that this is not true. Moreover, the correspondence corroborates Mr. Kamstra’s testimony that their interactions had become acrimonious by the end of 2012.

[35] On December 29, 2012, Ms. Botcharova sent Mr. Kamstra an angry email message indicating that she no longer wanted to see or speak to him. On May 4, 2013, she wrote to him to tell him that she had decided to apply for divorce. In a message on June 13, 2013, she proposed to Mr. Kamstra that they “share everything 50%” and said she was going to obtain an appraisal of her vehicles and her flat in Sofia, Bulgaria. In an email exchange on December 1, 2013, she wrote: “I want to divorce you for real: I don’t want to be married to you anymore, get it? I left 29 months ago and it’s time we get it official.” During her cross-examination, Ms. Botcharova tried to dismiss these email messages as “just an emotional outburst”, but they constitute reliable evidence of the state of the parties’ relationship at that time.

[36] Ms. Botcharova claimed that the parties maintained open and regular communication, including discussion about possible resumption of cohabitation, up until September 2014. However, the evidence in the record establishes that Ms. Martinez and her daughter were residing with Mr. Kamstra in the matrimonial home from May 2013 onward. He did not disclose this living arrangement to Ms. Botcharova. These facts are inconsistent with the existence of a reasonable prospect of resumption of cohabitation.

[37] Ms. Botcharova’s position on this issue is simply not supported by the evidence. Moreover, it appears to be a strategic posture that she adopted only after she realized that a valuation date of July 26, 2011 would negatively impact her right to share the increased value of the matrimonial home (through an equalization payment), in the event that her claim to a one-half beneficial ownership interest in the home were rejected.

[38] In her sworn Statement of Affairs relating to her bankruptcy, which she executed on July 15, 2013, she declared her marital status to be “separated” and listed July 26, 2011 as the date of separation. On August 6, 2013, during an examination under oath as part of the bankruptcy proceeding, she was asked about her marital status and responded that she had been separated since July 26, 2011. In her Application in this proceeding, dated July 27, 2015, she listed July 26, 2011 as the parties’ date of separation. She prepared and filed the Application with the assistance of counsel. On August 6, 2015, she registered a designation on title to the parties’ matrimonial home. In her Statutory Declaration to support the designation, she declared that the property was ordinarily occupied by them as a family residence at the time of their separation on July 26, 2011.

[39] When Ms. Botcharova was cross-examined about these sworn statements, she explained that she did not realize, at the time, that the date of separation would be used as the valuation date for equalization purposes. She acknowledged that, when she realized the implications, she changed her position and sought to amend her Application to include July 27, 2015 or, alternatively, September 2014 as the date of separation.

[40] Ms. Botcharova cannot be permitted to manipulate the separation date to gain an advantage in this matrimonial proceeding. The date when the parties had no reasonable prospect of resuming cohabitation is a factual issue that must be determined based on the evidence, without regard for the legal consequences of the determination.

[41] Based on the totality of the evidence, I have concluded that although the parties were initially on good terms, there was no reasonable prospect of them resuming cohabitation after Ms. Botcharova left the matrimonial home on July 26, 2011. The valuation date is therefore July 26, 2011.

Ownership of the Matrimonial Home

[42] The next issue to be determined is whether Ms. Botcharova had a beneficial ownership interest in the matrimonial home, legal title to which was registered in Mr. Kamstra’s name alone. The ownership issue must be resolved before the parties’ net family properties can be calculated: Korman v. Korman, 2015 ONCA 578, 126 O.R. (3d) 561, at paras.25 and 29.

[43] The parties’ matrimonial home was a condominium townhouse on Cedarglen Gate in Mississauga. It was purchased and registered in Mr. Kamstra’s name on October 30, 2009. Ms. Botcharova’s claim to a 50% beneficial ownership interest in the home is based on the doctrines of resulting trust and constructive trust.

[44] In order to assess her trust claims, I must first review the history of the parties’ property ownership prior to the acquisition of the matrimonial home. Most of it is recorded in undisputed documentary evidence. Where the evidence is contested, I have made credibility and factual findings, with reasons set out below.

Rainbow Valley Road Property

[45] When the parties first met, Mr. Kamstra owned a property on Rainbow Valley road in Springwater, Ontario. He had purchased the land a few years earlier and had constructed a house on it, in which he was living. Ms. Botcharova was, at that time, residing with her son in a rented condominium unit at Harbour Square in downtown Toronto.

[46] When the parties married in July 2000, Mr. Kamstra moved into the Harbour Square rental unit with Ms. Botcharova and her son. He rented his house on Rainbow Valley road to tenants who paid him between $1,000 and $1,200/month in rent. The rental income covered the monthly mortgage payment and property taxes for the Rainbow Valley house, with some surplus. However, his uncontested evidence was that there were four to six months when the house was empty and no rental income was generated.

[47] Mr. Kamstra sold the Rainbow Valley house on March 28, 2002 for $210,000. After discharging the mortgage on the property and paying taxes and transactional costs, he netted $85,100 from the proceeds of sale.

Harbour Square Investment Property

[48] The parties purchased an investment property as joint tenants on May 9, 2002. It was a condominium unit in the same complex where they were living at Harbour Square in Toronto. The purchase price was $418,000 and a mortgage loan in the amount of $313,500 was obtained by both of them to finance the transaction.

[49] Mr. Kamstra used the proceeds of sale ($85,000) of his Rainbow Valley property for the down-payment on the condo unit. Ms. Botcharova contributed $15,000 from her personal savings. Mr. Kamstra testified that he returned the $15,000 to Ms. Botcharova “when the mortgage came through”, which Ms. Botcharova denies. There is no documentary evidence of a transfer of $15,000 to corroborate Mr. Kamstra’s claim and it makes little sense because the mortgage was obtained in both of their names. I therefore find, on a balance of probabilities, that Ms. Botcharova contributed $15,000 directly toward the purchase of the Harbour Square condo unit.

[50] Ms. Botcharova initially testified that they co-owned the condo unit from May 9, 2002 until they sold it in the summer of 2006. However, the documentary record establishes (and she conceded during her cross-examination) that title to the condo unit was transferred to Mr. Kamstra on May 12, 2003, approximately one year after it was jointly purchased by the parties. I will return to the issue of this title transfer later in my reasons (see paragraphs 54 and 72-77 below).

[51] The parties did not move into the condo unit that they purchased. They continued to reside (with Ms. Botcharova’s son) in their rental unit and leased the other unit to tenants. Ms. Botcharova testified that the tenants were paying $2,500/month in rent directly to Mr. Kamstra. She stated that he “kept the rental income” for four years. Mr. Kamstra recalled that the tenants were paying him $2,800/month. He testified that this amount represented exactly the monthly mortgage payments and maintenance fees for the property, with no surplus. Ms. Botcharova did not dispute that Mr. Kamstra paid the carrying costs for the investment property, so I reject her insinuation that he hoarded the rental income.

[52] Mr. Kamstra testified that he experienced problems with one of the tenants in the condo unit. He said it cost him nearly $20,000 (presumably in legal fees and lost rent) to get the person evicted. He was not cross-examined on this point and his evidence was not contradicted by Ms. Botcharova.

[53] Ms. Botcharova testified that she paid $1,500 in rent for their living unit for six years (from July 2000 until they moved out in the summer of 2006), without any contribution from Mr. Kamstra. He contested this claim and testified that he gave her money to pay his portion of the rent. Considering that she was (at that time) a full-time Ph.D. student with considerable debt from student loans, who was working only part-time hours as a teaching assistant, I find Ms. Botcharova’s testimony on this point to be implausible. She would not have been able to afford the monthly rent on her own. It is more likely that Mr. Kamstra, who was working full-time, contributed his share of the rent.

Davebrook Road Property

[54] In the summer of 2006, the parties (and Ms. Botcharova’s son) moved to Mississauga. The Harbour Square condo unit was sold on August 2, 2006 for $411,000, an amount that was $7,000 less than they had paid to purchase it in 2002. Mr. Kamstra used the proceeds of sale to purchase a house on Davebrook Road in Mississauga on August 8, 2006 for $401,100.

[55] Ms. Botcharova testified that the Davebrook property was purchased by them jointly and that her name was only later removed from title. However, the documentary record establishes that the house was purchased by Mr. Kamstra and title was registered in his name alone. I do not believe that Ms. Botcharova intended to mislead the court on this issue. She likely confused the transfer of title of the Harbour Square condo in May 2003 with a purported transfer of title of the Davebrook property at some point after 2006. In fact, the Davebrook property was never legally co-owned by the parties.

[56] Mr. Kamstra financed the purchase of the Davebrook property with a mortgage loan in the amount of $300,075. On November 16, 2007, he refinanced the property and secured a larger mortgage loan in the amount of $333,750.

[57] Ms. Botcharova’s consent was required for the refinancing because they were married and the home was occupied by them as their family residence. Her consent is not evidence that she had an ownership interest in the property. Mr. Kamstra testified that he used the additional money to pay for renovations to the home. Ms. Botcharova confirmed that there were renovations done to a bathroom in the house. She said she did not know how much the renovations cost because Mr. Kamstra refused to discuss money with her. The parties agree that he paid for the renovations. I accept his testimony that the equity withdrawn from the matrimonial home was used to finance the renovations.

[58] The evidence establishes that Mr. Kamstra was solely responsible for paying the mortgage and property taxes during the three years that they resided in the Davebrook house. Tenants occupied the basement for much of the time, which generated rental income that Mr. Kamstra used toward the mortgage payments. The tenants paid him between $700-$900/month, although Mr. Kamstra’s uncontested evidence was that there was a period of approximately three months when there was only one tenant paying $350/month. He stated that there were also about four months when the basement was empty and no rental income was generated.

Cedarglen Gate Property

[59] On September 8, 2009, Ms. Botcharova signed an Agreement of Purchase and Sale for a condominium townhouse on Cedarglen Gate in Mississauga. However, when the transaction closed on October 30, 2009, Mr. Kamstra paid the purchase price of $317,500 and title to the property was registered in his name alone. He sold the Davebrook house for $492,000 three days later, on November 2, 2009. He took out a $48,500 bridging loan to finance these transactions. He obtained a mortgage loan in the amount of $258,673 secured against the Cedarglen Gate property.

[60] Ms. Botcharova testified that she did not know “where all the money went” from the equity in the Davebrook property, since Mr. Kamstra only put $60,000 down toward the purchase of Cedarglen Gate. The Funds Summary from the real estate solicitor who handled the transactions shows that $35,740 was used to pay Mr. Kamstra’s credit card debts and $48,522 was used to repay the bridging loan. After taxes, adjustments and transactional fees were paid, Mr. Kamstra received net proceeds of $48,662 and he gave $22,000 to Ms. Botcharova. During her cross-examination, she acknowledged that she received this amount of money from the proceeds of sale of the Davebrook property. Clearly, she knew where at least some of the money went.

[61] The parties lived together, with Ms. Botcharova’s son, in the Cedarglen Gate townhouse from November 1, 2009 until Ms. Botcharova moved out on July 26, 2011. Mr. Kamstra made the monthly mortgage payments throughout the time that they resided together. He also paid the property taxes and property insurance. Ms. Botcharova paid the condo maintenance fees. She also paid a Bell telephone bill. Mr. Kamstra paid for both of their vehicle insurance premiums and for all other utilities.

[62] In an affidavit sworn July 25, 2016, Mr. Kamstra deposed that he paid the condo maintenance fees from the time that Ms. Botcharova moved out (on July 26, 2011) without any assistance from her. He admitted at trial, however, that Ms. Botcharova continued to pay the monthly condo fees up until May 2012. The evidence establishes that she also continued to pay the Bell telephone bill for that time period. Mr. Kamstra assumed responsibility for the condo fees and Bell bill thereafter. He continued to pay Ms. Botcharova’s auto insurance premiums for more than two years after she moved out. She claimed that he cut off her auto insurance without notice, but email correspondence from the summer of 2013 establishes that she demanded that he take her vehicle off his policy.

[63] It is undisputed that Mr. Kamstra continued to make the monthly property tax, property insurance and mortgage payments after Ms. Botcharova moved out. He also made interest-only payments on the second private mortgage loan that he secured in September 2014. With the court’s permission, he refinanced, discharged both mortgages and obtained a new mortgage in the fall of 2015. He remained solely responsible for those monthly mortgage payments, property taxes, property insurance premiums and condo maintenance fees until the townhouse was sold in July 2018.

Doctrine of Resulting Trust

[64] A resulting trust arises when one person transfers property to or purchases property for another person but does not intend to make a gift of the property. The grantor effectively asks for his or her own property back or for the recognition of his or her proportionate interest in the asset that the other person has acquired with that property. The idea is that the beneficial interest in the property “results” back to the true owner: Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, at para. 25.

[65] Traditionally, resulting trusts have arisen in two circumstances: (1) the gratuitous transfer of property from one person to another or (2) the joint contribution by two persons to the acquisition of property, title to which is in the name of only one of them. As the Supreme Court of Canada explained in Kerr v. Baranow, at para.17: “In either case, the transfer is gratuitous, in the first case because there was no consideration for the transfer of the property and in the second case because there was no consideration for the contribution to the acquisition of the property.”

[66] Equity presumes bargains and not gifts: Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, at para.24; Kerr v. Baranow at para.19. The law therefore generally presumes, in cases involving gratuitous transfers of property, that the grantor intended to create a trust, rather than to make a gift. This presumption of resulting trust operates in the context of gratuitous property transfers between married spouses: Family Law Act, s.14; Korman v. Korman, at paras. 26-27 and 29.

[67] The spouse who receives a gratuitous transfer and resists the imposition of a trust bears the onus of displacing the presumption of resulting trust by demonstrating that a gift of the property was intended. Proof of a common intention to create a trust is not required. Rather, the intention of the grantor is the governing consideration: Kerr v. Baranow, at paras.18-29. The relevant time for ascertaining the grantor’s intention is the time of acquisition or conveyance of the property: Pecore v. Pecore, at para. 5.

[68] The grantor’s intention at the time of acquisition or conveyance is a question of fact to be decided on a balance of probabilities. A grantor’s transfer of property with the illegal or improper intention of defeating their creditors is not an automatic bar to a resulting trust claim. The Ontario Court of Appeal has ruled that evidence of intention to defeat creditors can be evidence of a gift, but it is not conclusive: Holtby v. Draper, 2017 ONCA 932, at para. 53. The actual intention of the transferor in relation to the transferee must be determined in each case based on an assessment of all the available evidence: Nussbaum v. Nussbaum (2004), 9 R.F.L. (6th) 455 (Ont. S.C.), at paras. 20 and 32; Schwartz v. Schwartz, 2012 ONCA 239, at para.43; Morgan v. Morgan, [1995] O.J. no.3188, at paras.100-101; Korman v. Korman, at para.38; Holtby v. Draper, at paras. 54-55.

Ms. Botcharova’s Resulting Trust Claim

[69] The first question for me to consider in assessing Mr. Botcharova’s claim is whether the presumption of a resulting trust applies. If it does, I must then determine whether Mr. Kamstra has rebutted the presumption.

[70] With respect to the first question, in Nussbaum v. Nussbaum, Karakatsanis J. (as she then was) stated at para.15:

Under section 14 of the Family Law Act and case law, a resulting trust arises when one spouse contributes money, or property, directly toward the acquisition or improvement of a specific property to a greater extent than is reflected by legal ownership. The spouse’s contribution must be directly traceable into the property.

[71] In this case, Ms. Botcharova is asserting a beneficial ownership interest in the Cedarglen Gate townhouse. She made no direct contribution toward the purchase of that property. She argues that she indirectly contributed to the acquisition of the property with money traceable back to the joint purchase of the Harbour Square condo.

[72] In my view, Ms. Botcharova’s $15,000 contribution to the purchase of the Harbour Square condo in May 2002 is not traceable to the acquisition of the matrimonial home in October 2009. There were too many intervening events to be able to trace the funds. The Harbour Square condo was sold at a loss. The Davebroook property was purchased prior to the matrimonial home and was refinanced and renovated by Mr. Kamstra alone. Furthermore, Mr. Kamstra gave Ms. Botcharova $22,000 from the proceeds of sale of the Davebrook property, thereby effectively returning her original contribution to the Harbour Square property. In these circumstances, the presumption of a resulting trust does not arise.

[73] I have also considered whether Ms. Botcharova’s May 2003 transfer of her proprietary interest in the Harbour Square condo gave rise to a presumption that Mr. Kamstra held 50% of his ownership interest in that property in trust for her. If Ms. Botcharova retained a 50% beneficial interest in the Harbour Square condo, it may be possible to trace that property interest to the purchase of the Davebrook house and ultimately to the acquisition of the matrimonial home on Cedarglen Gate.

[74] The transfer of the Harbour Square condo to Mr. Kamstra’s name alone was done without consideration. This gratuitous transfer gave rise to a presumption of resulting trust. I must therefore determine whether the presumption is displaced by evidence that Ms. Botcharova intended a gift of her interest in the condominium unit to Mr. Kamstra.

[75] The parties disagree about whose idea it was to transfer Ms. Botcharova’s half of the Harbour Square condo to Mr. Kamstra, but they agree on the reason for the transfer. Ms. Botcharova had accumulated significant debt from student loans and they were concerned about potential creditors seeking to encumber the property. At the time, she had not filed for bankruptcy, was not planning to file for bankruptcy and had no judgments or outstanding actions against her. No creditors were actually defeated by the transfer. It was not an unlawful attempt to conceal her assets from creditors but rather a decision to divest herself of her interest in the property, in anticipation that someday she might default on her loans and creditors might then seek to encumber the property in order to collect from her.

[76] Her intention in relation to Mr. Kamstra at the time of the conveyance is the central fact that must be ascertained. Evidence about how the parties treated the property after the conveyance is relevant to this issue. In that regard, the facts of this case are distinguishable from those in Nussbaum v. Nussbaum, in which the court held that a husband’s gratuitous conveyance of property to his wife, with the intention of protecting assets from creditors, did not disentitle him to a beneficial interest in the property. In the Nussbaum case, the wife had acknowledged in an affidavit that the husband had a beneficial ownership interest in the property. Moreover, the court found that both parties continued to treat the property as though it belonged to the husband after he conveyed his interest to the wife. He paid the mortgage. He entered into a lease agreement with tenants and collected and declared the rental income. The court found that the operation of the property supported the conclusion that both parties intended the husband to retain a beneficial interest in the property.

[77] In this case, in contrast, the operation of the Harbour Square investment property suggests that Ms. Botcharova did not intend to retain a beneficial interest after she conveyed her half of the legal title to Mr. Kamstra. She did not deal with the tenants who leased the condominium unit. Mr. Kamstra collected their rent. He alone incurred the costs associated with having one of them evicted. He paid the mortgage, property taxes, property insurance and condo fees.

[78] Based on the totality of the evidence, I am satisfied, on a balance of probabilities that Ms. Botcharova intended to give Mr. Kamstra her proprietary interest in the Harbour Square condo when she transferred title to him in May 2003. This gift defeats the presumption of resulting trust. It is therefore unnecessary to consider whether any beneficial ownership interest in the Harbour Square condo can be traced to the acquisition of the matrimonial home.

[79] Ms. Botcharova’s claim to a beneficial ownership interest in the matrimonial home based on the doctrine of resulting trust is denied.

Ms. Botcharova’s Constructive Trust Claim

[80] Ms. Botcharova also made a claim based on principles of unjust enrichment. At the heart of the doctrine of unjust enrichment lies the notion of restoring a benefit that justice does not permit a person to retain. In order to obtain a remedy for unjust enrichment, something must have been given by the claimant and received and retained by the responding party without juristic reason. The claimant bears the onus of establishing three elements: (1) an enrichment of the respondent, (2) a corresponding deprivation of the claimant, and (3) the absence of a juristic reason for the enrichment: Kerr v. Baranow, at paras.30-31; Moore v. Sweet, 2018 SCC 52, at paras. 35 and 37.

[81] Where unjust enrichment is established, the court may order either monetary or proprietary remedies. The most common proprietary remedy is a remedial constructive trust. Where the claimant can demonstrate a substantial and direct link between her or his contributions and the acquisition, preservation, maintenance or improvement of the property, a share of the property proportionate to the unjust enrichment can be impressed with a constructive trust in her or his favour: Kerr v. Baranow, at para. 50.

[82] In cases involving married couples, however, a constructive trust will rarely be an appropriate remedy. The Ontario Court of Appeal has stated that, “in the vast majority of cases, any unjust enrichment that arises as the result of a marriage will be fully addressed through the operation of the equalization provisions under the Family Law Act”: McNamee v. McNamee, 2011 ONCA 533, 106 O.R. (3d) 401, at para. 66. Subsection 5(6) of the Family Law Act gives the court jurisdiction to vary a spouse’s share of equalized net family properties on the basis of unconscionability. This variation will in most cases provide an adequate remedy for any unjust enrichment.

[83] It is unnecessary for me to consider whether a constructive trust remedy would be appropriate in this case because Ms. Botcharova has not established the elements of unjust enrichment. She alleges that Mr. Kamstra was enriched by the following contributions: (1) labour that she contributed to improve the Rainbow Valley property, (2) a $15,000 down-payment toward the purchase of the Harbour Square condo and (3) payment of monthly condo maintenance fees for the matrimonial home in the amount of $255 from November 2009 until May 2012. For the reasons that follow, I have concluded that none of these contributions resulted in unjust enrichment.

[84] Ms. Botcharova argues that she substantially increased the value of the Rainbow Valley property prior to its sale. During her testimony-in-chief, she stated (incorrectly) that Mr. Kamstra sold the Rainbow Valley property for $220,000. She testified that she and her friends had improved the property’s value from $180,000, representing a $40,000 increase. She provided no detail regarding the nature of the renovation work allegedly performed. She did not dispute Mr. Kamstra’s assertion that the Rainbow Valley property was worth $195,000 on the date of marriage. Her evidence relating to the sale price of the Rainbow Valley property was incorrect. During his examination-in-chief, Mr. Kamstra established that the property was actually sold for $210,000. Ms. Botcharova put to him that she and her friends helped to finish a patio and deck and also completed work on stairwells. She suggested that they thereby improved the value of the property by $20,000. Mr. Kamstra rejected this suggestion and stated that her friends did “a couple of hours of work at most” to help ready the property for sale, with no material improvements made.

[85] There is insufficient evidence to find that the value of the Rainbow Valley property was improved or that Mr. Kamstra was enriched by Ms. Botcharova’s contributions. Her position was internally inconsistent and her testimony about the sale price was contradicted by reliable documentary evidence. In any event, she did not claim to have done substantial repair and renovation work herself. Instead, she attributed much of the effort to her unnamed friends.

[86] With respect to her $15,000 contribution to the down payment for the Harbour Square condo, it was returned to her when Mr. Kamstra gave her $22,000 from the proceeds of sale of the Davebrook house. There was, therefore, no enrichment or deprivation flowing from that financial contribution.

[87] The modest monthly payments made by Ms. Botcharova for condo maintenance fees from November 2009 to May 2012 are not sufficiently substantial to constitute an enrichment of Mr. Kamstra. Moreover, there is a juristic reason for those payments: Ms. Botcharova was contributing toward expenses incurred as a result of her and her son’s occupation of the premises.

[88] For all of the above reasons, I find that there was no unjust enrichment of Mr. Kamstra. Ms. Botcharova’s claim to a beneficial ownership interest in the matrimonial home based on the doctrine of remedial constructive trust is therefore denied.

[89] I have concluded that Mr. Kamstra was the sole owner of the matrimonial home. He did not hold any interest in trust for Ms. Botcharova. Consequently, subject to any payments he owes her (as set out below), he is entitled to the total proceeds held in trust from the sale of the Cedarglen Gate townhouse. He is also entitled to a return of his Manulife RRSP funds (transferred to Ms. Botcharova in April 2017) and to reimbursement of $11,250 in occupation rent that he paid to Ms. Botcharova between May 2017 and July 2018. Ms. Botcharova had no entitlement to occupation rent because she had no ownership interest in the property: Busko v. Israel, 2018 ONSC 5842, at paras. 106-108.

[90] Ms. Botcharova is not obligated to return the $20,000 released to her from the trust funds (pursuant to my order dated August 15, 2018) because that money was owed to her as part of a settlement of another court action.

Calculation of Net Family Properties

[91] The first step in the equalization analysis is to calculate the parties’ respective net family properties. The party whose net family property is the lesser of the two net family properties is entitled to a payment of one-half of the difference: Family Law Act, s.5(1).

[92] “Net family property” refers to the value of all the property that each spouse owned on the valuation date (subject to some exceptions) after deducting: (a) the spouse’s debts and other liabilities on the valuation date and (b) the value of property, other than the matrimonial home, that the spouses owned on the date of the marriage, after deducting the spouse’s debts and other liabilities (other than those related directly to the acquisition or significant improvement of the matrimonial home), calculated as of the date of the marriage: Family Law Act, s. 4(1).

[93] Liabilities at the date of marriage and on the valuation date include any applicable contingent tax liabilities in respect of property: s. 4(1.1) of the Family Law Act.

[94] The onus of proving a deduction in the calculation of net family property rests on the person claiming the deduction: s. 4(3) of the Family Law Act.

Property Owned by Mr. Kamstra on the Valuation Date

[95] On July 26, 2011, Mr. Kamstra owned the matrimonial home at Cedarglen Gate. He submitted an estimate of the property value effective August 1, 2011, which was prepared by a Re/Max real estate agent based on sales of comparable properties around that time. The agent estimated the value to be $330,000. Ms. Botcharova agreed with this estimate.

[96] In his sworn Financial Statements, Mr. Kamstra declared that, on the valuation date, he owned golf clubs valued at $500, a 1996 Springbok fishing boat valued at $3,000, and a 2004 Chevy Colorado Truck valued at $3,500. He supported the estimated value of his truck with the Canadian Red Book valuation effective June 20, 2011, which lists the average value of the make and model of his vehicle as between a low of $2,325 and a high of $4,125. Ms. Botcharova did not dispute any of the values attributed to these items.

[97] Mr. Kamstra declared that he had $1,000 in a personal chequing account and $17,360 in a business account on the valuation date. He produced copies of bank statements to confirm the balances in these accounts at the end of July 2011. He claimed that the value of his two RRSP accounts as of the valuation date were $7,319 (Fidelity) and $64,975 (Manulife). He produced investment statements from 2011 confirming these values.

[98] With respect to household goods and furniture on the valuation date, the parties each owned some and together co-owned other items in the matrimonial home. Mr. Kamstra testified that they divided the contents equally after Ms. Botcharova moved out. He recalled that she took with her a dinette table, chairs, IKEA furniture, carpets and “a bunch of other stuff”. He said he kept a china cabinet, coffee table and some wall hangings. Ms. Botcharova claimed that she left the matrimonial home with nothing. I do not find that to be credible. She moved into an apartment. There is no evidence that it was furnished or that she was required to purchase furniture (other than a dresser) or other household items in order to live there. It is therefore likely that she brought some furnishings and household goods with her.

[99] Ms. Botcharova stated that Mr. Kamstra retained all of the electronics in the matrimonial home, but she did not identify specific items. She provided no evidence as to the value of electronics he purportedly kept. I am therefore unable to attribute a value to that property in the calculation of Mr. Kamstra’s net family property.

[100] Based on the totality of the evidence, I accept Mr. Kamstra’s evidence that the parties divided the household contents roughly equally. Consequently, I will not include the value of any household goods and furniture in either party’s net family property calculation.

[101] Ms. Botcharova testified that, in addition to what he declared in his Financial Statements, Mr. Kamstra also owned, on the valuation date, tools valued at $3,000. This evidence was not challenged on cross-examination and was not specifically contradicted by Mr. Kamstra when he testified. I find the evidence to be credible because Mr. Kamstra has worked as a marine mechanic and kitchen cabinet installer for many years. He presumably requires tools in order to perform those trades.

Mr. Kamstra’s Debts and Liabilities on the Valuation Date

[102] On the valuation date, there was a balance of $247,876 owing on Mr. Kamstra’s mortgage loan. In his sworn Financial Statements, he declared that he also owed $8,337 on a CIBC personal line of credit, $31 on a TD credit card, $1,512 on a CIBC Visa credit card, $978 on a Canadian Tire MasterCard, $98 on a Home Depot card and a total of $112 on two MBNA credit cards. He produced copies of statements from 2011 to establish these debts.

[103] On his Financial Statements, in the list of his liabilities as of the valuation date, Mr. Kamstra included “notional disposition on RRSP” for both of his RRSP accounts. He calculated these contingent tax liabilities at 25% of the value of his RRSPs. He testified that he included these amounts as liabilities in his Financial Statement because he would be required to pay tax on the RRSP funds if he withdrew them.

[104] RRSPs are taxable in full at the date of realization, whether they are cashed out or taken by way of annuity: Sengmueller v. Sengmueller (1994), 2 R.F.L. (4th) 232 (Ont. C.A.); Hawkins v. Huige, [2007] O.J. No. 4894 (Ont. S.C.J.). Their value is therefore only worth the net amount that can be obtained at the time of their realization. Mr. Kamstra is entitled to deduct the future tax liability on the valuation date but he bears the onus of leading evidence to establish the applicable tax rate: Family Law Act, ss. 4(1.1) and 4(3).

[105] He proposed a rate of 25% without leading any evidence as to why that rate is appropriate. He has not been paying income tax at the rate of 25%. He deducts many expenses and declares only part of his actual self-employment income, such that he pays very little income tax. Once he retires and begins to draw from his RRSP accounts, he likely will not be able to evade paying income tax on the amounts withdrawn, but there is no evidentiary basis to believe that he would be taxed at the rate of 25%, a rate that currently applies to income over $43,000.

[106] He is 60 years old and will therefore likely retire in the not-too-distant future. I will therefore assume that the current tax brackets and marginal tax rates can be applied. The combined (Federal and Ontario) tax rate for the lowest tax bracket (up to $43,000) is 20%. Given Mr. Kamstra’s past earnings history and the amount of money in his RRSP’s (approximately $116,000), I find that this is the appropriate tax rate to apply in calculating the contingent tax liability associated with his RRSP’s.

[107] I therefore conclude that the tax liability for his Fidelity account on the valuation date was $1,464 ($7,319 x 0.20). The tax liability for his Manulife account on the valuation date was $12,995 ($64,975 x 0.20).

Mr. Kamstra’s Net Worth on the Date of Marriage

[108] The parties agree that, when they married on July 1, 2000, Mr. Kamstra owned the Rainbow Valley property, which was then worth $195,000. A mortgage was registered on title to the property with an outstanding balance of $115,000.

[109] Mr. Kamstra declared no other assets or liabilities as of the date of marriage, but he testified that he sold most of the furnishings from his Rainbow Valley house when he moved to Toronto to live with Ms. Botcharova after their wedding. I have offset the value of this property against the value of Ms. Botcharova’s household contents (see paragraph 121 below).

[110] Mr. Kamstra therefore had a net worth of $80,000 on the date of marriage.

Property Owned by Ms. Botcharova on the Valuation Date

[111] Ms. Botcharova testified that she owned a 2002 SAAB that was worth $150 on the valuation date. She did not produce any documentation to support this estimate but it was neither contested nor contradicted by Mr. Kamstra.

[112] The only other asset declared by Ms. Botcharova (on the valuation date) was a balance of $5,312 in her chequing account. She produced a Scotiabank statement to corroborate this amount.

[113] Mr. Kamstra accused Mr. Botcharova of failing to disclose an apartment that she owns in Bulgaria. His counsel cross-examined her about an email that she sent to Mr. Kamstra on June 13, 2013, proposing to “share everything 50%” and noting that she “called Abo to send me an appraisal for my flat in Sofia”. When asked about this email, she denied owning any property in Sofia, Bulgaria. She provided an unsatisfactory explanation of what she meant by the words used in her email message. She stated that the flat in Sofia had belonged to her parents and was “supposed to be” inherited by her and her brother when her mother died. She gave no reason for why the inheritance purportedly did not occur and no explanation for why she referred to the property as “my flat” in the June 13, 2013 email.

[114] I am persuaded, on a balance of probabilities, that Ms. Kamstra did, in fact, own at least part of a flat in Sofia on June 13, 2013. There is, however, no evidence upon which I could conclude that she owned any foreign property on the valuation date in July 2011.

[115] As noted earlier, no value will be attributed to household goods and furniture owned by Ms. Botcharova on the valuation date because I have concluded that the parties divided those items equally.

Ms. Botcharova’s Debts and Liabilities on the Valuation Date

[116] Ms. Botcharova disclosed no debts as of the valuation date, even though she owed considerable sums of money on student loans. I can appreciate the logic of why she did not include her loans. The discharge of her bankruptcy in April 2014 relieved her of any ongoing liability to pay them. However, the law requires that her assets, debts and liabilities be valued as of the valuation date. Her student loans were not contingent liabilities on the valuation date. It was not reasonably foreseeable that she would file for bankruptcy two years later and be relieved of her obligation to repay them. Debts on the valuation date should only be discounted if the evidence indicates that is was probable, on the valuation date, that they would not ever have to be repaid: Cade v. Rotstein, [2002] O.J. No. 4460 at para. 58. That does not apply to Ms. Botcharova’s circumstances because it was an unforeseeable event (her bankruptcy) that extinguished her liability to repay the loans.

[117] Ms. Botcharova’s student loans must therefore be included as debts on the valuation date. There is no documentary evidence of the precise balance owing on her student loans on July 26, 2011. The only evidence relating to the loans is dated from 2013. The documentary record establishes that on January 1, 2013, she owed $7,301 on a Canada Student Loan and $46,804 on a Canada-Ontario Integrated Student Loan. On April 1, 2013, she also owed $27,829 on a Scotiabank federal student loan and $15,593 on a separate Scotiabank Ontario student loan. The record also establishes that, by July 2013, when she filed for bankruptcy, she owed the Canada Revenue Agency $34,410 in income tax arrears and had accumulated other debts relating to Highway 407 Express Toll Route charges and an American Express credit card.

[118] There is no evidence that the Amex credit card, 407 ETR and CRA debts existed on the valuation date in July 2011, but the evidence establishes that her student loan debts were acquired prior to the parties’ separation. Those loans were made while she was a student from 1996 until 2005. The total debt owing when she moved out of the matrimonial home on July 26, 2011 may have been greater than the outstanding balance shown on the 2013 statements (i.e., a total of $97,527). However, the 2013 statements constitute the only evidence in the record regarding the amount owed. In the absence of any other evidence, I will use that amount as her total liability on the valuation date.

Ms. Botcharova’s Net Worth on the Date of Marriage

[119] Ms. Botcharova did not own any real estate on the date of marriage in July 2000.

[120] In her Financial Statement, she declared that she owned “general household items” valued at $8,000 on the date of marriage. These items were not particularized in any way.

[121] I have concluded that the household furnishings owned by Mr. Kamstra (in his Rainbow Valley Road house) were likely worth approximately the same amount as the household furnishings in Ms. Botcharova’s Harbour Square apartment. He sold those furnishings when he moved in with Ms. Botcharova after their wedding. The value of his household goods offsets the value of Ms. Botcharova’s household goods on the date of marriage. I will therefore not include any household goods in the calculation of either party’s assets on the date of marriage.

[122] Ms. Botcharova declared that she had approximately $4,500 in savings when she married Mr. Kamstra. This testimony was not supported by documentary evidence, but was not contested.

[123] With respect to her debts on the date of marriage, Ms. Botcharova conceded during her cross-examination that she had accumulated significant student loans before she met Mr. Kamstra. She was a university student from 1996 until her graduation in June 2005. She testified that she received financial aid in the form of student loans throughout her studies. She said she received less after she married Mr. Kamstra because she no longer qualified for financial assistance as a single-mother. I therefore conclude that more than half of her loans were acquired prior to the date of the marriage on July 1, 2000.

[124] There is no documentary evidence of the precise balances owing on her student loans on the date of marriage. I will include an amount of $58,516, equivalent to 60% of the total debt owing on the valuation date. This takes into consideration the fact that more than half of the loans were accumulated prior to the date of marriage.

[125] Ms. Botcharova therefore had a negative net worth of $54,016 when the parties married on July 1, 2000.

Calculations

[126] Mr. Kamstra’s assets and liabilities on the valuation date were as follows:

Property Cedarglen Gate townhouse $330,000 Manulife RRSP $ 64,975 Fidelity RRSP $ 7,319 Business bank account $ 17,360 Personal chequing account $ 1,000 2004 Chevy truck $ 3,500 1996 Springbok boat $ 3,000 Tools $ 3,000 Golf clubs $ 500 Total value: $430,654

Debts Mortgage loan $247,876 CIBC line of credit $ 8,337 CIBC Visa credit card $ 1,512 Canadian Tire MasterCard $ 978 TD credit card $ 31 MBNA credit cards $ 112 Home Depot card $ 98 Fidelity RRSP (notional disposition) $ 1,464 Manulife RRSP (notional disposition) $ 12,995 Total debts: $273,403

[127] Mr. Kamstra’s net family property is therefore calculated as follows:

Value of all property on valuation date: $ 430,654 (minus) total debts on valuation date: -$273,403 (minus) net worth on date of marriage: - $ 80,000 Net family property: $ 77,251

[128] Ms. Botcharova’s assets and liabilities on the valuation date were as follows:

Property Personal chequing account $ 5,312 2002 SAAB $ 150 Total value: $ 5,462

Debts Canada Student Loan $ 7,301 Canada-Ontario Student Loan $46,804 Scotiabank federal student loan $27,829 Scotiabank Ontario student loan $15,593 Total debts: $97,527

[129] Ms. Botcharova’s net family property is therefore calculated as follows:

Value of all property on valuation date: $ 5,462 (minus) total debts on valuation date: - $97,527 (minus) net worth on date of marriage: ($ 54,016) Net family property: ($38,049) = zero

[130] According to s.4(5) of the Family Law Act, if a spouse’s net family property is less than zero, it is deemed to be equal to zero.

Equalization Payment

[131] Ms. Botcharova is entitled to one-half the difference between her net family property ($00.00) and Mr. Kamstra’s net family property ($77,251). Mr. Kamstra therefore owes Ms. Botcharova an equalization payment in the amount of $38,625.50.

MS. BOTCHAROVA’S SPOUSAL SUPPORT CLAIM

General Principles of Spousal Support

[132] A right to spousal support does not automatically flow from the breakdown of a marriage: Gupta v. Gupta, 2012 ONSC 3321, [2014] W.D.F.L. 3074, at para.16. In the absence of a contractual right to support (which does not exist in this case), a spouse who claims spousal support must establish her or his entitlement based on either compensatory or non-compensatory grounds (or both): Bracklow v. Bracklow, [1999] 1 S.C.R. 420, at para. 37.

[133] Compensatory support entitlement arises primarily from the roles of the parties during the marriage. It aims to compensate for advantages and disadvantages that flow from those roles, such as a spouse who sacrifices education or career advancement to care for the parties’ young children or to enhance the other spouse’s career opportunities.

[134] Non-compensatory support entitlement is based on economic hardship that flows, not from the roles adopted by the parties during the marriage, but rather from the breakdown of the marriage. Spouses often become financially interdependent over time. If one spouse is disproportionately economically disadvantaged by the marriage dissolution, she or he may have entitlement to spousal support based on non-compensatory grounds.

[135] Determining a claimant’s entitlement to spousal support requires that I take into consideration the condition, means, needs and other circumstances of the parties, including the length of time of their cohabitation and the functions they each performed during their cohabitation: ss.15.2(4) (a) and (b) of the Divorce Act, R.S.C., 1985, c. 3 (2nd Supp.).

[136] The “means” of the parties encompasses not only their actual incomes, but also their earning capacities: Rilli v. Rilli (2006), [2007] W.D.F.L. 1161 (Ont. S.C.), at para.22.

[137] The “needs” of the parties refers to their post-separation standards of living. L’Heureux-Dubé J. stated in Moge v. Moge, [1992] S.C.R. 813, at para.84, “As marriage should be regarded as a joint endeavour, the longer the relationship endures, the closer the economic union, the greater will be the presumptive claim to equal standards of living upon its dissolution”.

[138] In this case, Ms. Botcharova is making a non-compensatory claim to spousal support. In assessing her claim and in determining the amount of support (if any) to which she is entitled, I must be mindful of the objectives of spousal support set out in s.15.2(6) of the Divorce Act.

[139] Ms. Botcharova relies primarily on the objectives of recognizing economic disadvantages and relieving economic hardship arising from the breakdown of the marriage (ss.15.2(6) (a) and (c)). These objectives focus on the claimant spouse’s post-marital need and aim to relieve against need that is induced by the parties’ separation: Moge v. Moge, at pp. 878-879. Non-compensatory entitlement to spousal support may, however, be established even where a spouse’s need was not induced by the parties’ separation: Kalaba v. Bylykbashi (2006), 207 O.A.C. 60 (Ont. C.A.), at paras.81 and 83. This circumstance arises most often in cases where one ex-spouse is unable to work due to a disability.

[140] Mr. Kamstra argues that, if spousal support is ordered in this case, it should be a modest lump sum rather than periodic payments, to serve the objective of promoting the economic self-sufficiency of the parties within a reasonable period of time: Divorce Act, s.15.2(6)(d).

Imputing Income

[141] In assessing any claim for spousal support, it is necessary to determine the incomes of the two spouses. The starting point for determination of income under the Spousal Support Advisory Guidelines (“SSAG”) is the definition of income under the Federal Child Support Guidelines. The Federal Child Support Guidelines use a gross income measure, meaning income before taxes and other deductions. This same gross income provides the basis for spousal support. This means that (in most cases) if a spouse receives non-taxable or non-taxed income, it needs to be grossed up to the equivalent amount of taxable income: SSAG, s. 6.6.

[142] Generally, the relevant time for determining the incomes of the spouses is the date of the trial. However, where there has been a lengthy period of time between the date of separation and the trial, it may be necessary to examine any post-separation income changes: SSAG, s.6.7.

[143] In this case, six and a half years passed between the date of separation (July 26, 2011) and the commencement of the trial (January 10, 2018). It is therefore necessary to examine not only the parties’ incomes at the time of trial but also their incomes in the years since they separated, to determine whether there have been changes in their incomes.

[144] A spouse’s annual income is generally determined using the sources of income set out under the heading “Total Income” (line 150) in the T1 General form issued by the Canada Revenue Agency: Federal Child Support Guidelines, s. 16.

[145] In this case, both parties argue that line 150 income does not accurately represent the other spouse’s actual gross income. Both parties allege that the other is improperly concealing income to avoid paying taxes. Mr. Kamstra also argues that additional income should be imputed to Ms. Botcharova because she is intentionally underemployed.

[146] I have discretion to impute income to either or both of the parties, provided that the amount is grounded in the evidence: Drygala v. Pauli (2002), 61 OR (3d) 711 (Ont. C.A), at para.44. The SSAG adopt the principles set out in s.19 of the Federal Child Support Guidelines on this issue. Pursuant to s.19(1), I may impute such amount of income as I consider appropriate in the circumstances. Relevant circumstances include (but are not limited to): (i) the spouse is intentionally under-employed, other than where the under-employment is required by the reasonable health needs of the spouse; (ii) the spouse has failed to provide income information when under a legal obligation to do so; or (iii) the spouse unreasonably deducts expenses from income. Subsection 19(2) specifies that the reasonableness of an expense deduction is not solely governed by whether the deduction is permitted under the Income Tax Act, R.S.C., 1985, c. 1 (5th Supp.).

Mr. Kamstra’s Income

[147] Mr. Kamstra is self-employed. He works as a contractor installing kitchen cabinets for Normac Kitchens Ltd. His line 150 income for each year since the parties separated is as follows:

2011: $32,292 2012: $16,527 2013: $18,048 2014: $33,823 2015: $15,474 2016: $53,277

[148] I find that these figures do not represent his actual gross taxable income in each of these years. He would not have been able to afford his standard of living on these amounts of income. He was paying $987 monthly on his mortgage loan in 2011-2013, then he assumed a second interest-only mortgage payment of $620/month in September 2014. He refinanced the mortgages in the fall of 2015, resulting in a single monthly mortgage payment of $1,601. He was also paying $218/month for property taxes throughout that time. He paid $255/month for maintenance fees from May 2012 onward. Those expenses alone – without considering any utilities, insurance, vehicle or daily living expenses – equal or exceed the amount of income that he declared in line 150 of his tax returns in 2012, 2013 and 2015.

[149] His ability to maintain his standard of living is, in part, explained by the fact that many of his personal expenses were covered by his business income and were deducted from his taxable income. On his 2011 income tax return, in which he declared a total income of $32,292, he had a gross business income of $64,793. His Statement of Business or Professional Activities shows that he deducted over $25,500 for unspecified “subcontracts” and “cost of sales”, $5,004 for “purchases”, $5,910 for his motor vehicle, $2,987 for phone and utilities, $577 for meals and entertainment, $887 for travel and $1,496 for a home office, in addition to various other expenses.

[150] In 2012, he had a gross business income of $50,532. He deducted $1,970 for meals and entertainment, $2,103 for travel, and $10,692 for his motor vehicle, among other expenses.

[151] In 2013, he had a gross business income of $62,394. He deducted $25,984 for unspecified inventory purchases, $1,118 for meals and entertainment, $1,709 for phone and utilities, $10,324 for his motor vehicle, and $978 for a home office, among other expenses.

[152] In 2014, he had a gross business income of $57,324. He deducted over $31,000 for unspecified purchases and “cost of sales”, $4,077 for his motor vehicle, and $1,051 for meals and entertainment.

[153] In 2015, he had a gross business income of $39,452. This is the amount he was paid by Normac Kitchens. He deducted over $11,000 for unspecified purchases and “cost of sales”, $1,083 for phone and utilities, $9,463 for his motor vehicle, and $1,585 for his home office, among other deductions. He declared a total income of $15,474 on line 150 of his tax return. However, when he applied for a mortgage on October 5, 2015, he declared to the lender that his income for 2015 was $55,000. In a sworn Financial Statement filed in this proceeding, dated August 28, 2015, he declared an annual income of only $27,999 but claimed yearly expenses in the amount of $55,165.

[154] In 2016, he had a gross business income of $67,734. He deducted over $24,000 for unspecified purchases and “cost of sales”, $2,870 for meals and entertainment, $787 for phone and utilities, $9,731 for his motor vehicle, and $1,620 for his home office.

[155] At the time of trial, Mr. Kamstra had not yet filed his 2017 income tax return. The T5018 form issued by Normac Kitchens shows that he was paid $54,692.56 for his work that year, including HST, which he was required to remit to the government. Discounting 13% for the HST, his gross income for 2017 from his kitchen cabinetry work was $48,400. However, on September 20, 2017, he swore a Financial Statement in connection with this proceeding, declaring an annual income of only $27,999 and claiming yearly expenses totalling $55,219. I will use $48,400 as his 2017 income.

[156] The tax records establish that a significant amount of Mr. Dawkins’s personal expenses are covered by his business and deducted from his taxable income. For example, he has deducted on average $8,366 annually for his vehicle, which is unreasonable, considering the age of the truck (2004). These deductions have afforded him the opportunity to substantially reduce his total taxable income. For the purposes of spousal support, I may impute income to him on this basis. I have concluded that it is appropriate to do so in the circumstances. Based on the sums of the deductions set out in his Statements of Business or Professional Activities for personal expenses, including phone, meals, utilities, travel and vehicle, I will impute the following income amounts to Mr. Kamstra:

2011 $10,361 2012 $14,765 2013 $13,151 2014 $ 5,128 2015 $10,546 2016 $13,388

[157] Ms. Botcharova testified that Mr. Kamstra also earns substantial undisclosed self-employment income as a boat mechanic, which is not reported in his tax returns. She said he had at least 30 clients who paid him cash for this work when they were married. She did not provide any evidence about the amount of his earnings from this work, other than to say that it was a lot of money.

[158] During his testimony, Mr. Kamstra admitted that he earned additional income as a marine mechanic in each of the years since the parties separated, but he stated that Ms. Botcharova was exaggerating the amount of work he performed. He testified that he looks after “a couple or three guys, that’s it” and said it is “more of a hobby than anything else”. Asked to estimate his annual earnings from this marine hobby work, he said it would have been approximately $5,000 in 2011 and 2012, $4,000 in 2013, 2014 and 2015, and $3,000 in 2016 and 2017. He admitted that he is paid cash for this work and has never declared it in his tax returns. In light of these admissions, it is appropriate to impute these non-taxed amounts of income to him for the years 2011 to 2017 inclusive. I will also impute an additional modest amount of $500 annually based on Mr. Kamstra’s admission that he occasionally earns cash doing “odd jobs here and there” for friends, such as building a deck.

[159] Ms. Botcharova submits that Mr. Kamstra also earned rental income from 2013 to 2017 from tenants who were residing with him in the matrimonial home. She discovered that two women were living there in December 2014, when she attended the residence uninvited. Mr. Kamstra acknowledged that Ruby Martinez and her daughter lived in the matrimonial home from May 2013 until August 2017, but he denied receiving any rental income from them.

[160] In his first Financial Statement sworn on August 1, 2015, Mr. Kamstra declared no rental income but disclosed that Ruby Martinez and her daughter were living with him and contributing $100/month towards household expenses. In an affidavit sworn July 25, 2016, he deposed that he was “receiving absolutely no rent from any person whatsoever” for the matrimonial home. He added that he was receiving only “meagre financial contributions” from Ms. Martinez.

[161] His evidence on this point was contradicted by evidence from Ms. Martinez. She swore an affidavit on September 23, 2016, deposing that Mr. Kamstra offered to have her move into his home in May 2013 because her own premises were flooded. She stated that she and her daughter paid “in a range of anywhere from $400 to $700 per month to Mr. Kamstra in cash”, as a contribution towards utilities and groceries. She stated that they had no formal rental agreement and that she was not paying any rent, but rather was living in the Cedarglen Gate townhouse “for exchange of cooking, cleaning, decorating and keeping up the property”.

[162] In a subsequent Financial Statement sworn September 20, 2017, Mr. Kamstra maintained that he had no rental income, but this time he declared that Ms. Martinez was contributing about $400-$700/month towards the household expenses. When cross-examined about this Statement and Ms. Martinez’s affidavit, he testified that the $400 to $700/month was “not actual cash” received, but rather was “in way of keeping house”. This is inconsistent with Ms. Martinez’s sworn statement that she paid him between $400 and $700 in cash.

[163] During the trial, Mr. Kamstra initially testified that he invited Ms. Martinez and her daughter to come stay with him for a while until she “got on her feet”. He said she was eventually supposed to start paying him rent, but it “never panned out”. During his cross-examination, he contradicted his earlier testimony and stated that there was an original verbal agreement for Ms. Martinez to pay him $600/month in rent, but she lost her job and was always short, so he then told her just to contribute by cleaning the house and buying groceries instead of paying rent. He stated that she was paying him some rent in the beginning, “but it petered out”. He claimed that she paid him a total of between $1,000 and $1,200 over the more than four years that she lived in the house.

[164] Mr. Kamstra’s evidence is not credible on this point. It is internally inconsistent and was contradicted by Ms. Martinez’s affidavit. There may not have been a formal tenancy agreement between them but I am satisfied on a balance of probabilities that she was paying him rent while she lived in his home with her daughter, in an amount between $400 and $700 monthly. He did not declare this money as rental income on his tax returns, but that is effectively what it was. There is no evidence that he incurred expenses to be deducted from this rental income. I will therefore impute to him an additional non-taxed income of $550/month (on average) from May 2013 until August 2017 inclusive.

[165] Based on the evidence, I have concluded that it is appropriate to impute the following incomes to Mr. Kamstra for each year since the parties separated:

2011: $15,861 ($10,361 in unreasonable deductions, $5,000 cash income for marine work and $500 cash income for odd jobs) 2012: $20,265 ($14,765 in unreasonable deductions, $5,000 cash income for marine work and $500 cash income for odd jobs) 2013: $22,051 ($13,151 in unreasonable deductions, $4,000 cash income for marine work, $500 cash income for odd jobs and $4,400 in rental income for 8 months) 2014: $16,228 ($5,128 in unreasonable deductions, $4,000 cash income for marine work, $500 cash income for odd jobs and $6,600 in rental income for 12 months) 2015: $21,556 ($10,456 in unreasonable deductions, $4,000 cash income for marine work, $500 cash income for odd jobs and $6,600 in rental income for 12 months) 2016: $23,488 ($13,388 in unreasonable deductions, $3,000 cash income for marine work, $500 for odd jobs and $6,600 in rental income for 12 months) 2017: $7,900 ($3,000 cash income for marine work, $500 cash income for odd jobs and $4,400 in rental income for 8 months)

[166] Pursuant to the Spousal Support Advisory Guidelines, all of the imputed income set out above must be grossed up to account for the fact that Mr. Kamstra was not taxed on it. Using DivorceMate software to calculate the gross up, Mr. Kamstra’s total income for each year since separation is as follows:

2011 = $32,292 (declared income) +$21,977 ($15,861 of imputed income grossed up)

$54,269

2012 = $16,527 (declared income) +$26,245 ($20,265 of imputed income grossed up)

$42,772

2013 = $18,048 (declared income) +$28,807 ($22,051 of imputed income grossed up)

$46,855

2014 = $33,823 (declared income) +$22,359 ($16,228 of imputed income grossed up)

$56,182

2015 = $15,474 (deducted income) +$28,010 ($21,556 of imputed income grossed up)

$43,493

2016 = $53,277 (declared income) +$33,923 ($23,488 of imputed income grossed up)

$87,200

2017 = $48,400 (from Normac kitchens) +$11,442 ($7,900 of imputed income grossed up)

$59,842

Ms. Botcharova’s Income

[167] For the reasons set out below, I have concluded that Ms. Botcharova also did not make full disclosure of her income in this proceeding. She was ordered, on several occasions in the months prior to the trial, to disclose documentation relating to her income and finances, but only partial disclosure was made and much of it was made after the trial commenced. The evidence elicited by Mr. Kamstra’s counsel during the trial established that Ms. Botcharova had earnings that remained undisclosed and that had not been declared in her tax returns. I will impute income to her on that basis.

[168] Ms. Botcharova has a Ph.D. in German studies from the University of Toronto. When the parties married in 2000, she was a full-time university student and was working part-time as a teaching assistant, earning minimal income. She picked up more work as a T.A. after she graduated in June 2005. She maintained steady employment with the University of Toronto, but only part-time hours. She was always the secondary earner in the parties’ relationship.

[169] When the parties moved to Mississauga in 2006, she was unable to obtain a transfer to the university’s Erindale campus. She continued to teach a couple of classes at the university’s downtown campus, but shifted her focus to contract work as a freelance court interpreter for the Ontario Ministry of the Attorney General and for various municipalities. She became accredited as an interpreter of the Bulgarian language in 2006 and later obtained her accreditation for German language interpretation. She began working as a freelance court interpreter in 2006. Her work was sporadic and part-time.

[170] Since the parties’ separation, she has continued her interpretation work. A summary of invoices she submitted to the Ministry of the Attorney General shows that her work for the province was very busy in the 2012, 2013 and 2014 fiscal years, less busy in the 2015 and 2016 fiscal years, and even less busy in the 2017 fiscal year (the Ministry’s fiscal year runs from May 1 to April 30).

[171] Ms. Botcharova submits invoices for all of her interpretation work. She is paid either by cheque or by direct deposit. The Ministry of the Attorney General provides her with a T4A annually, but she does not receive T4A’s from all of the agencies and municipalities for whom she works. Much of her income is therefore self-reported. During her cross-examination, she agreed that it is impossible to verify the accuracy of her self-reported income on her tax returns because she did not disclose complete bank statements from the date of separation to present.

[172] Her annual income since separation, as reported on line 150 of her tax return each year is as follows:

2011: $17,948 (This income includes fees for services in the amount of $9,416 paid by the Province of Ontario, $241 paid by the Town of Caledon and $8,290 paid by the City of Toronto) 2012: $7,125 (This income represents fees paid by the University of Toronto.) 2013: $7,461 (This income represents fees paid by the University of Toronto, the City of Toronto and the Regional Municipality of Durham.) 2014: $7203 (The source of this income is unclear from the record. It may have included income she earned as a German language instructor at George Brown College.) 2015: $6,297 (This income represents fees paid by the Province of Ontario and the Town of Caledon.) 2016: $7,124 (The source of this income is unclear from the record.)

[173] At the time of trial, Ms. Botcharova had not yet filed her 2017 tax return. She testified that she earned approximately $13,000 that year. To corroborate this claim, she submitted invoices showing the fees she was paid for court interpretation services provided to the Cities of Mississauga, Brampton, Toronto, Caledon, Burlington and Sault Ste. Marie, as well as to the Province of Ontario.

[174] The record contains a T4A showing that Ms. Botcharova was paid $9,930 by the Province of Ontario in 2012, but that income was not reported in her tax return.

[175] Ms. Botcharova reported only $7,203 on line 150 of her 2014 tax return, but her Notice of Assessment for that year shows that the CRA calculated her line 150 total income as $8,377.

[176] During her cross-examination, Ms. Botcharova admitted that she worked for a private translation company in 2016. She did not declare this income on her tax returns and had not disclosed it in her sworn Financial Statement in this proceeding. It was uncovered during her cross- examination when Mr. Kamstra’s counsel asked her about entries in her bank statements showing direct deposits from “All Languages” in the amounts of $51.75 on April 8, 2016, $80.50 on May 13, 2016 and $156.75 on May 27, 2016. She acknowledged that these deposits were payments of fees for translation work that she performed. Ms. Botcharova only disclosed bank statements from September 30, 2015 to July 25, 2016, so it is impossible to ascertain precisely how much she earned from All Languages. Because of her failure to make full disclosure of her bank statements, I will infer that she earned twice the amount recorded in the limited bank statements that she disclosed. I will therefore impute additional non-taxed income of $578 to her in 2016.

[177] One of Ms. Botcharova’s friends, Alicja Watson, testified that Ms. Botcharova taught a Saturday class at the German Heritage School from 2012 until the school closed in September 2016. She said Ms. Botcharova told her she was earning $445/month for this teaching assignment. Ms. Botcharova did not disclose this income during this proceeding, but she did not dispute it at trial.

[178] Based on all of the above, it is clear that Ms. Botcharova has engaged in a pattern of significant non-disclosure of income. She did not produce all of the attachments to her tax returns nor all of her bank statements. The lack of evidence makes it difficult to determine her actual income since separation, but her declared expenses can assist with estimating her annual income.

[179] After she left the matrimonial home in July 2011, she was living in an apartment in downtown Toronto and paying $1,700/month in rent. She would not have been able to afford that apartment and daily living expenses had she not been earning a gross income of at least $28,000 in 2011 and 2012. I realize that she was burdened with heavy debt at that time, which ultimately led to her bankruptcy in July 2013, but I still believe that she must have been earning at least $28,000 annually in order to survive and not be evicted from her apartment.

[180] Her son moved in with her in 2013 and contributed to some of their living expenses, but it is still implausible that she survived on less than $7,500 in gross income, which is all that she declared that year. According to Income and Expense Reports filed during her bankruptcy proceeding, she was paying between $850 and $1,000/month in rent in 2013 and 2014 and had other monthly living expenses of between $700-$800/month. She declared an average monthly income of $1,149 between August 2013 and March 2014, which equates to an annual income of $13,788 (almost twice the amount she disclosed on her tax returns). Based on the totality of the evidence, I will impute to her a gross income of $21,000 annually for 2013 and 2014.

[181] She was unable to maintain her apartment after her son moved out in 2015 and ended up living rent-free with friends. She borrowed money from friends to get by.

[182] There is a plausible explanation for a drop in her income in 2015 based on mental health difficulties that impaired her ability to work. Ms. Botcharova testified that she was unable to work throughout most of 2015 because of mental illness. She had a suicide attempt for which she was hospitalized in mid-January 2015. The list of invoices she submitted to the Ministry of the Attorney General shows that she worked as a court interpreter throughout 2015, but she completed significantly fewer assignments, particularly in the first four months of 2015, than she had in previous years. Her work for the Ministry did not pick up in 2016 and 2017. The number of her assignments continued to drop, but she picked up interpretation work for various municipalities.

[183] For reasons explained below, I accept Ms. Botcharova’s testimony that her mental health issues have impeded and continue to impede her ability to work full time hours. I therefore will not impute income to her in 2015, 2016 and 2017, other than what she earned from All Languages and the German Heritage School.

[184] Non-taxed earnings must be grossed up but Ms. Botcharova’s total income in 2015 and 2016 was below the personal deductible threshold for income taxation, so no amounts will be added to her earnings from All Languages and the German Heritage School to account for taxes.

[185] I therefore conclude that Ms. Botcharova’s (imputed) gross income in each year since separation was as follows:

2011 = $28,000 (imputed) 2012 = $28,000 (imputed) 2013 = $21,000 (imputed) 2014 = $21,000 (imputed) 2015 = $ 9,857 ($6,297 declared, plus $3,560 for eight months of teaching at the German Heritage School) 2016 = $ 9,482 ($7,124 declared, plus $578 from All Languages, plus $1,780 for four months of teaching at the German Heritage School) 2017 = $13,000

[186] I note that from May 2017 until July 2018, Ms. Botcharova also received $750/month in occupation rent from Mr. Kamstra. She will be required to reimburse him for the full amount of occupation rent paid, so I will not include it in her income calculations.

Parties’ Post-Separation Standards of Living

[187] Mr. Kamstra argues that Ms. Botcharova’s financial difficulties are self-induced. He submits that she is intentionally under-employed and could be earning much more money if she worked more hours. He disputes her assertion that mental health issues have impaired and continue to impair her ability to work full time.

[188] Intentional under-employment refers to voluntary under-employment. A spouse is intentionally under-employed if she or he chooses to earn less than she or he is capable of earning. The principles of under-employment that were articulated by the Ontario Court of Appeal in Drygala v. Pauli (2002), 61 OR (3d) 711 (Ont. C.A), in the context of child support, apply equally in spousal support cases: Rilli v. Rilli, at para.16. According to those principles, in order to determine what a spouse is capable of earning, the court must consider what is reasonable in the circumstances. Relevant factors include the availability of job opportunities and the age, education, experience, skills, previous earnings history and health of the spouse: Drygala, at paras.45 and 46; Gupta at para.74.

[189] The onus is on Ms. Botcharova to prove that she is not intentionally underemployed: Gupta, paras. 32 and 56. She testified about her job search efforts outside of court interpretation work. She submitted documentary evidence confirming that she applied for multiple job postings for sessional lecturer positions in the Department of German Languages at the University of Toronto every year from 2013 to 2017. During her cross-examination, she acknowledged that she did not apply to lecture at other universities across the province. In my view, it would not be reasonable to expect her to move or to travel long distances in order to secure casual part-time work. I am satisfied that she has made reasonable efforts to obtain teaching assignments without success.

[190] Ms. Botcharova was 51 years old when the parties separated. She is now 58 years old. Although she is highly educated, her skills and experience and the marketability of her degree are limited to language instruction, interpretation and translation work in German and Bulgarian languages. According to both parties’ testimony, her earnings history during the marriage is consistent with her earnings history in the immediate years after separation, up until 2015. Since graduating with her Ph.D. in 2005, she worked part-time hours at a variety of casual free-lance jobs, doing piecemeal work for meagre wages. T4 and T4A slips in the record establish that she earned a gross income of $27,553 in 2010, the last full year that the parties cohabited.

[191] Ms. Botcharova testified that she has suffered from depression and alcohol addiction for years. She said her depression worsened when the parties moved to Mississauga in 2006. The move was Mr. Kamstra’s idea. She felt isolated. She could not find work in Mississauga and had no social network there. She began taking anti-depressant medications, but her mental health did not improve.

[192] She testified that she managed to become sober in March 2011 and has maintained her sobriety since then, but she continues to struggle with depression. After she left the matrimonial home in July 2011, she completed a three-week treatment program. She participated actively in after-care during her recovery, including Alcoholics Anonymous, but she suffered a major mental health set-back in December 2014 after she discovered that Ms. Martinez and her daughter were living with Mr. Kamstra in the matrimonial home. She experienced an emotional and psychological crisis which led to a suicide attempt on January 18, 2015. Mr. Kamstra was aware of her suicide attempt.

[193] Mr. Kamstra testified that mental illness was a “matter of convenience” for Ms. Botcharova during their marriage. He said she had “depression attacks” but he thought she was “faking it” about 50-75% of the time. He acknowledged, however, that she genuinely struggled with depression, anxiety and addiction “on occasion”.

[194] Mr. Kamstra recalled that, when Ms. Botcharova travelled to Bulgaria each year, she would return and “lay around for months, not doing much of anything”. He said she missed work during these periods and would not get out of bed. He was aware that she was receiving psychiatric treatment. He remembered meeting her psychiatrist a couple of times in the fall of 2006. He stated that he did not think she had a drinking problem when they first married, but he acknowledged that she was possibly an alcoholic by the time she moved out of the matrimonial home. He was aware that she entered an addiction recovery treatment program.

[195] Mr. Kamstra’s description of Ms. Botcharova’s mood and symptoms during the marriage is consistent with her claim that she suffered periodic severe depressive episodes that interfered with her ability to work. There is no evidence to support his belief that she was “faking it”.

[196] Ms. Botcharova bears the onus of establishing that her mental health issues have impeded and continue to impede her ability to work full time. She submitted some documentary evidence relating to her illness: a letter from the Addictions and Concurrent Disorders Centre at Credit Valley Hospital dated October 22, 2015, describing the treatment that she underwent; certificates from that same Centre dated November 23, 2011 and May 14, 2012, congratulating her on her completion of different stages of recovery; a Trillium Health Partners receipt for the ambulance that transported her to hospital when she attempted suicide in January 2015; letters from her family physician dated November 16, 2016 and September 30, 2017, confirming her depression diagnosis, her hospitalization in January 2015, and the fact that severe depression affected her ability to work for most of 2015; and a letter from a physician dated November 17, 2016, stating that she has been suffering from intractable long-term anxiety and depression and has been taking different medications to treat her conditions.

[197] Ms. Botcharova did not call the authors of any of these documents as witnesses. Mr. Kamstra did not have an opportunity to cross-examine them on the content of the documents. It would therefore be inappropriate for me to rely on these letters as evidence of Ms. Botcharova’s medical claims and I will not do so. There is, however, ample other evidence to establish, on a balance of probabilities, that she has had depression and addiction for many years, including Mr. Kamstra’s own testimony. Her illness has not precluded her from working, but it has impaired her ability to work full-time hours. It negatively impacted her earning capacity throughout the marriage and since the parties separated. She has nevertheless continued to take on various work assignments and has applied for teaching positions in her field. I am persuaded by the totality of the evidence that she is not intentionally under-employed.

[198] I have calculated the parties’ post-separation gross incomes as follows:

	Mr. Kamstra	Ms. Botcharova
2011	$54,269	$28,000
2012	$42,772	$28,000
2013	$46,855	$21,000
2014	$56,182	$21,000
2015	$43,484	$ 9,857
2016	$87,200	$ 9,482
2017	$59,842	$13,000

[199] There has been a dramatic disparity in incomes between the parties since they separated, with Mr. Kamstra enjoying a markedly more comfortable standard of living. Although he experienced fluctuations in his income and acquired debts after separation, he benefitted from higher self-employment earnings and from rental income from Ms. Martinez for a number of years. He was able to remain in the matrimonial home until July 2018. Ms. Botcharova, in contrast, has had difficulty meeting her daily living expenses and since 2015 has had to rely on the generosity of friends to get by.

[200] Although I have found that Ms. Botcharova did not fully disclose her income, I am persuaded by the totality of the evidence that she has been struggling financially. She was unable to repay her student loans, despite some loan forgiveness, and she ended up filing for bankruptcy in July 2013. She testified that, even after she was discharged from her bankruptcy, she was required to borrow money from friends to support herself. Ms. Watson confirmed that she loaned Ms. Botcharova $3,000 in 2015. When her son moved to Bulgaria in October 2015, Ms. Botcharova was required to leave her apartment because she could no longer afford to pay the rent. She moved in with Ms. Walker and Ms. Walker’s husband, who allowed her to live in their home without paying any rent for several months.

Ms. Botcharova’s Entitlement to Spousal Support

[201] Mr. Kamstra submits that he does not have the ability to pay spousal support, but his income suggests otherwise. He is no longer paying occupation rent and will soon have access to the proceeds from the sale of the matrimonial home, as well as reimbursement of the occupation rent he previously paid. This will enhance his ability to pay spousal support.

[202] Mr. Kamstra argues that Ms. Botcharova has no entitlement to spousal support, regardless of his ability to pay. He submits that she was not disadvantaged by the functions they each performed during the marriage, nor did she compromise her career aspirations or make other sacrifices to support his career advancement. Her support claim is not, however, based on compensatory grounds, so these factors are not relevant. Rather she is advancing a non-compensatory claim based on the financial difficulties and economic hardship that she has experienced since the parties separated. She submits that she is in dire need of spousal support.

[203] Mr. Kamstra argues that they had a short-term relationship with no children. He notes that they largely kept their finances separate during the marriage. He submits that, on these facts, Ms. Botcharova has no entitlement to support even on non-compensatory grounds.

[204] I do not agree with Mr. Kamstra’s submission that the period of the parties’ cohabitation was of short duration. It was of medium duration (11 years). This fact, combined with Ms. Botcharova’s age (51 years old at the time of separation), are factors that favour her entitlement to support. The record establishes that she experienced a drop in her standard of living after the parties separated as a result of loss of access to Mr. Kamstra’s income. She has disproportionately borne the economic fall-out from the marriage breakdown. She has limited ability to achieve self-sufficiency because of her age and health issues. For all of these reasons, I find that she is entitled to spousal support on a non-compensatory basis.

Retroactive Support

[205] Spousal support orders often take effect as of the date of separation, but retroactive support orders are discretionary where, as in this case, there has been a delay in making a support claim. Ms. Botcharova left the matrimonial home on July 26, 2011. She raised the issue of support for the first time in a letter from her former counsel to Mr. Kamstra dated October 13, 2014. She did not commence a claim for spousal support until she filed her divorce Application on July 27, 2015.

[206] Relevant factors to consider in determining whether to order retroactive support include the needs of the recipient spouse, the conduct of the payor spouse, the reasons for the delay in seeking support and any hardship that a retroactive award may occasion on the payor spouse: Kerr v. Baranow, at paras.206-207; Rosenberg v. Gold, 2016 ONCA 565, 132 O.R. (3d) 116, at para.41; Marinangeli v. Marinangeli (2003), 66 O.R. (3d) 40 (Ont. C.A.), cited in Bukvic v. Bukvic (2007), 86 O.R. (3d) 297 (Ont. S.C.), at para.69. Retroactive support should only be ordered if it will not create an unreasonable debt obligation on the part of the payor: Drygala, at para.54.

[207] In this case, Ms. Botcharova has provided no reason for the four-year delay in making her support claim. The evidence does not disclose a legitimate explanation for the delay. An order requiring Mr. Kamstra to pay retroactive support back to July 2011 (the date of separation) would impose significant financial hardship on him, which in the circumstances would be unjust. I have therefore concluded that Mr. Kamstra’s retroactive support obligation will be calculated from November 1, 2014, the first month after he was put on notice by Ms. Botcharova that she was seeking support from him.

Amount and Duration of Spousal Support

[208] In light of the fluctuation in both parties’ incomes since separation, I will average the incomes in the three years prior to 2014 to determine an income amount that is fair and reasonable to calculate support payments: Federal Child Support Guidelines, s. 17(1).

[209] Mr. Kamstra’s average gross income from 2011-2013 was $47,965. Ms. Botcharova’s average gross income from 2011 – 2013 was $25,667. The difference between these two incomes is $22,298. Applying the SSAG “without child support” formula to this difference generates a range of monthly spousal support between $307/month (low) and $409/month (high) for a duration of 5.5 to 11 years from the date of separation.

[210] In my view, Mr. Kamstra’s spousal support payments should be at the low end of the range for amount and at the high end of the range for duration. I have arrived at this conclusion for the following reasons: (1) Ms. Botcharova does not have a compensatory basis for her claim, which militates in favour of a lower amount of support; (2) her non-compensatory claim is primarily based on post-separation need that was not induced by the parties’ marriage or separation, which also militates in favour of a lower amount of support; (3) her mental health conditions, age and the limited marketability of her skills and education militate in favour of a longer period of support because she does not have the ability to achieve self-sufficiency within a short period of time. That said, Mr. Kamstra is 60 years old and should not be required to pay support well into his retirement years arising from a relationship of only 11 years. Indefinite support is not justified in the circumstances of this case.

[211] In all of the circumstances, I have concluded that Ms. Botcharova is entitled to retroactive spousal support from November 1, 2014 to December 1, 2018 inclusive. She is entitled to ongoing monthly support until July 1, 2022, eleven years after the parties separated.

[212] The amount of retroactive spousal support is $307/month for 50 months, which equals $15,350. Had these payments been made periodically, they would have been tax-deductible for Mr. Kamstra and taxable in Ms. Botcharova’s hands. Using DivorceMate software, I have calculated that the after-tax-cost to Mr. Kamstra (based on the income he declared) would have been $11,604. The after-tax benefit to Ms. Botcharova (based on the income she declared) would have been $14,223. The retroactive lump sum owed by Mr. Kamstra must be adjusted to take into consideration the fact that it will not attract these tax consequences. The midpoint between $11,604 and $14,223 is $12,913. I order Mr. Kamstra to pay this amount of retroactive spousal support.

[213] Although there have been changes in both parties’ incomes since separation, I do not believe that the amount of ongoing spousal support should be increased to reflect the parties’ current income levels. Ms. Botcharova’s claim is solely non-compensatory. The marriage was not long term. Ms. Botcharova’s drop in income since 2015 is not related to the marriage or its breakdown. Mr. Kamstra did not begin to enjoy a substantial increase in his income until 2016, long after the parties separated. Moreover, the increase is not stable. He is likely to continue to experience fluctuations in his income. In these circumstances, an increase in the monthly amount of child support is not warranted.

[214] Consequently, commencing January 1, 2019, Mr. Kamstra is ordered to pay Ms. Botcharova $307/month in spousal support on the first of each month, up to and including July 1, 2022.

ADJUSTMENTS AND FINAL ORDERS

[215] For all of the above reasons, I make the following orders and declarations:

(a) Mr. Kamstra was the sole owner of the property on Cedarglen Gate. He did not hold any interest in the property in trust for Ms. Botcharova. She had no proprietary interest in that matrimonial home.

(b) Ms. Botcharova must return to Mr. Kamstra, by way of spousal rollover, the entire balance of the two Manulife RRSP accounts that he transferred to her in April 2017. This must be done within 30 days of the date of this judgment.

(c) Ms. Botcharova owes Mr. Kamstra an amount of $11,250 for reimbursement of the occupation rent that he paid her from May 2017 to July 2018.

(d) Mr. Kamstra owes Ms. Botcharova an equalization payment of $38,625.50 and a retroactive lump sum spousal support payment of $12,913.

(e) The amounts owing are offset against each other, leaving Mr. Kamstra owing a total of $40,288.50 ($38,625.50 + $12,913 - $11,250). Ms. Botcharova is entitled to receive $40,288.50 from the proceeds of sale of the matrimonial home that are held in trust. These funds shall be released to her as soon as she transfers the Manulife RRSPs to Mr. Kamstra.

(f) The remaining amount of the proceeds of sale ($218,947.42) is to be released immediately to Mr. Kamstra.

(g) Going forward, Mr. Kamstra shall pay Ms. Botcharova $307/month in spousal support, on the first of each month, up to and including July 1, 2022. These payments will be deductible for Mr. Kamstra and taxable for Ms. Botcharova.

(h) The divorce is severed from the corollary issues decided in this judgment. Either party may proceed with a written Application for Divorce on an uncontested basis. The parties will share equally the costs of obtaining a divorce.

[216] The parties may make brief written submissions with respect to costs – a maximum of two pages in length, excluding any settlement offers and Bills of Costs. The Respondent shall serve and file his submissions by January 11, 2019. The Applicant shall serve and file her submissions by January 21, 2019. The Respondent may make a brief one page reply within five days of receiving the Applicant’s submissions.

NOTE: If I have made any mathematical errors in the calculations in this decision, either party may bring such errors to my attention within 30 days, by serving notice to the other party and writing to the court. A brief attendance will be scheduled to address any errors, if necessary.

Petersen J. Released: December 18, 2018