Court File and Parties

COURT FILE NO.: F5-16-410775 DATE: 2019-01-15 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

MEHMET KARA Applicant – and – AYSE ERKURT Respondent

Counsel: Cemal Acikgoz, for the Applicant Brian I. Cintosun, for the Respondent

HEARD: December 3, 4, and 5, 2018

Reasons for Judgment

DIETRICH J.

[1] This matter involves the breakdown of a very short marriage, at least in terms of cohabitation.

[2] The husband, Mehmet Kara, was a citizen of Turkey. The wife, Ayse Erkurt, was a citizen of Canada. They met on Facebook in 2011. In 2012, Ms. Erkurt travelled to Turkey to meet Mr. Kara. Subsequently, the couple became engaged and Ms. Erkurt returned to Turkey in 2013. They were married there in a civil ceremony on July 10, 2013.

[3] Following the marriage, Ms. Erkurt returned to Canada and immediately began the process of sponsoring her new husband so that he could immigrate to Canada. Mr. Kara arrived in Canada on November 11, 2014. A second, larger and more elaborate, wedding reception was held for them in Toronto on May 23, 2015. Until Ms. Erkurt purchased a condominium in September 2015, the couple lived with her parents.

[4] Their union was short-lived. The parties separated on April 27, 2016, a mere seven months after they began cohabitating in the condominium as their matrimonial home.

[5] On June 15, 2016, Mr. Kara brought this application for a divorce, spousal support and equalization of net family properties.

[6] At trial, Mr. Kara pursued the equalization of net family properties and the divorce.

Issues

[7] The issues in this matter are as follows:

1. What is the equalization amount payable?
2. If Ms. Erkurt owes an equalization amount to Mr. Kara, should there be an unequal division of the net family properties?

Issue 1: What is the equalization amount payable?

[8] The philosophical basis for an equalization of net family properties is that, in Ontario, marriage is considered an economic partnership. On marriage breakdown, each spouse is entitled to share equally in the value of the assets they have acquired during the marriage.

[9] Under the Family Law Act, R.S.O. 1990, c. F.3, each spouse is required to calculate the value of his or her net family property in accordance with the provisions of that Act. Once the net family property amount for each spouse is calculated, generally, the spouse with the larger net family property pays the other spouse an equalization payment equal to one-half of the difference between the two amounts.

[10] Based on the evidence before the court, and for the reasons that follow, I find that the equalization payment is $3,660.57.

Mr. Kara’s Net Family Property

[11] Mr. Kara’s Net Family Property Statement, submitted at the conclusion of the trial and signed by him on December 7, 2018, shows that, on the valuation date, he owned one chequing account with a value of $9,000.

[12] The bank records in evidence show that Mr. Kara had two bank accounts at the valuation date. One had a balance of $3,340.70 and the other had a balance of $8,440.32. These valuation date balances were put to Mr. Kara in his cross-examination and he did not deny that they were correct. Accordingly, I find that he had $11,781.02 in his bank accounts at the valuation date.

[13] Mr. Kara failed to include a car among his valuation date assets in his December 2018 Statement. However, in each of his sworn Financial Statements (Property and Support Claims) dated June 14, 2016, August 2, 2016 and November 26, 2018, he included a vehicle with a value of $4,000 among his assets owned at the valuation date. At trial, he testified that he purchased a car late in the marriage, that he owned it at the end of the marriage and that it had a value of about $4,000. I find that Mr. Kara did own a car on the valuation date, with a value of $4,000.

[14] The total value of Mr. Kara’s property at the valuation date is therefore $15,781.02.

[15] Mr. Kara claims a deduction of $5,000. He testified that he had this amount of money on the date of marriage, but offered no evidence in support of this deduction. He produced no bank or other records in support of any amount held in an account, or elsewhere, by him at the date of marriage. This deduction does not appear on any sworn Financial Statement (Property and Support Claims) he filed with the court in this matter. In his testimony, he admitted that Ms. Erkurt paid for his airfare to come to Canada following their marriage and also paid all the expenses relating to his immigration. I find that Mr. Kara has not proven that he had $5,000 at the date of marriage and, accordingly, this deduction is denied.

[16] I find that Mr. Kara’s net family property is therefore $15,781.02 and not $9,000 as he submits.

[17] I did not find Mr. Kara to be an impressive witness. He was often inconsistent in his testimony and on several occasions he provided a different answer in cross-examination than he had in chief. For example, in chief, he claimed to have purchased $8,000 worth of building supplies from places like Home Depot and other stores in order to renovate the kitchen at the matrimonial home and make other repairs. He had no receipts to prove any of these purchases. In cross-examination, he claimed that, in fact, the building supplies were purchased by his boss, a contractor, whom he later reimbursed. Once again, Mr. Kara produced no receipts or evidence of reimbursement. Ms. Erkurt testified that the kitchen cabinets installed by Mr. Kara and his boss at the matrimonial home were cast-off cabinets from a home in Toronto that Mr. Kara and his boss were hired to renovate.

[18] Mr. Kara also testified that the couple, and Ms. Erkurt, in particular, acquired a significant amount of gold during the marriage. He testified that the gold included gifts from the wedding guests in Turkey, gold purchased by him to present to his bride at the wedding, and gold purchased by him to bring to Canada for Ms. Erkurt when he emigrated from Turkey. Throughout his testimony, he was inconsistent in his description of the gold items that were either gifted or purchased by him as well as the value of the gold. Mr. Kara testified that all of the gold was given to Ms. Erkurt and that she put it in a safety deposit box at the TD Bank. Mr. Kara’s testimony was so inconsistent and incongruent that I find it impossible to conclude with any confidence that there was any gold at all apart from a gold bracelet he gave to Ms. Erkurt on her wedding day. Again, he was unable to produce any photograph or receipt for any of the gold he claimed to have purchased and given to Ms. Erkurt apart from the bracelet.

[19] Ms. Erkurt denied having been given any gold by Mr. Kara apart from the bracelet on which she put a value of about $100. Mr. Kara adduced no concrete evidence of having brought any gold to Canada. When questioned on whether he paid duty in Canada on the gold he allegedly brought with him from Turkey, Mr. Kara testified that he did not declare the items because he did not wish pay the tax.

[20] The lack of any corroborating evidence leaves me with a strong finding of a lack of credibility for this evidence, and the result is a complete dismissal of it.

[21] Further, when asked whether Mr. Kara declared, for Canadian income tax purposes, the income he earned for construction jobs or painting done for cash, he testified that he did not because he did not wish to pay tax on this income. In his cross-examination, Mr. Kara also admitted that he was collecting unemployment benefits in Canada at the same time as he was attending school and working part-time, which is not permitted.

[22] Mr. Kara also claimed to have paid a number of expenses relating to the wedding in Canada including the fee for the reception hall and the costs of the musicians, the photographer and the limousine. He estimated that these expenses amounted to $3,500 but he could not produce any receipt and had no specific recollection about what any one item had cost. Ms. Erkurt denied that Mr. Kara paid these expenses and produced copies of her own credit card statements to show that many of the wedding expenses were paid by her. Once again, Mr. Kara’s evidence falls far short of the standard of proof and is therefore not helpful.

Ms. Erkurt’s Net Family Property

Assets including the matrimonial home

[23] Ms. Erkurt’s Net Family Property Statement, submitted at the conclusion of the trial and signed by her on December 6, 2018, shows that, on the valuation date, she owned assets with a total value of $249,928.75, comprised of a condominium property at 1 Four Winds Drive in the City of Toronto ($245,000 - $6,921.25, being 50% of the commission fee on disposition of the condominium), furniture and household goods ($2,000), a car ($4,000) and a bank account ($5,850). The December 2018 Statement shows debt at the valuation date comprised of mortgage debt owing to the Royal Bank of Canada ($169,755.94), a loan owing to Seyfi Tomar ($21,500) and a credit line loan used to purchase appliances at Leon’s ($8,000).

[24] The principal asset owned by Ms. Erkurt is the matrimonial home. The parties are agreed on its value ($245,000) and the value of the mortgage ($169,755.94) on the valuation date, resulting in equity of $75,244.06.

[25] From this equity, Ms. Erkurt seeks to deduct disposition costs relating to the condominium of $6,921.25. She arrives at this figure by claiming a commission fee plus HST of $13,842.50 and dividing it by two. This deduction was not argued at trial and only raised in Ms. Erkurt’s closing submissions. The court was given no authority in support of the deduction. If the evidence were that the condominium is to be sold imminently, the deduction may have some merit, but this is not the evidence. The evidence is that Ms. Erkurt’s parents have moved into the condominium and are assisting her in paying the condominium expenses so that she may keep it. Accordingly, this deduction is denied.

[26] In addition to this equity, Ms. Erkurt owned a car, a bank account and household furniture on the valuation date. The value of her bank account was $5,850, which is not disputed. She submits that the value of her car was $4,000 and the value of the household furniture was $2,000 on the valuation date.

[27] Mr. Kara submits that Ms. Erkurt’s car should have a valuation date value of $8,000 as opposed to $4,000. According to his December 2018 Statement, he arrives at this number by taking the value that Ms. Erkurt submitted as the price she paid in May of 2013 ($15,000) and depreciating the value by $6,000 or $2,000 per annum. Mr. Kara provided no expert or other evidence in support of this rate of depreciation and did not argue the point at the trial, but rather included this calculation in his December 2018 Statement. Given that Mr. Kara did not challenge Ms. Erkurt’s valuation date value at the trial or provide any basis for his depreciation calculation, I accept the value Ms. Erkurt provided, which is consistent with the value she provided in each of her August 3, 2016 and November 26, 2018 sworn Financial Statements (Property and Support Claims) submitted to the Court.

[28] It is undisputed that Ms. Erkurt purchased appliances for the matrimonial home at Leon’s for $10,217.52, including a washer, dryer, refrigerator, microwave oven, stove and a smart television. She paid the tax upfront and took out a line of credit to pay the balance. She also purchased some furniture at Modani for $3,385.80 and paid for it using her credit card. At the valuation date, Ms. Erkurt included the value of the used appliances (other than the television, purchased for $1,299 plus tax) in the value of the condominium as they would be sold as part of it and were included in the appraised value. She valued the used furniture and television at $2,000, being a little less than fifty percent (50%) of their cost. Mr. Kara submits that the value of the furniture should be $10,217.52. He arrives at this value by taking the total value of these purchases of appliances and furniture ($13,603.32) and depreciating it by 1/3.

[29] On a balance of probabilities, I am satisfied that the value of the appliances (excluding the television) would have been included in the appraisal for the matrimonial home and should not be double counted as furniture owned by Ms. Erkurt on the valuation date. The appraisal specifically refers to the dryer and there is no reference to the exclusion of appliances. This leaves the television (purchased for $1,299 plus tax) and the furniture (purchased for $3,385.80). It is common knowledge that used furniture and electronics fetch very little on the open market and fifty cents on the dollar would be a stretch. I am satisfied that a valuation date value of $2,000 for these items is fair and reasonable.

[30] The total value of Ms. Erkurt’s property on the valuation date is therefore $256,850.

Liabilities

[31] There is a minor discrepancy between the parties in the value each ascribes to the amount owed by Ms. Erkurt to Leon’s on the valuation date. Mr. Kara submits that the loan at the valuation date was $7,309.09, which I believe is a typographical error. Ms. Erkurt submits that the outstanding loan was $8,000. Based on the documentary evidence before the court, the loan value on the valuation date was $7,509.09 and I find the valuation date amount to be that amount.

[32] The most contentious issue between the parties relates to an alleged loan made by a real estate broker, Seyfi Tomar, to Ms. Erkurt. This loan remained outstanding on the valuation date. Ms. Erkurt submits that she borrowed $21,500 from Mr. Tomar so that she could purchase the matrimonial home. Mr. Kara disputes the loan.

[33] Ms. Erkurt testified that without the $21,500 loan from Mr. Tomar she would have been unable to obtain bank financing to close the purchase of the matrimonial home. She had already committed to the purchase in a binding agreement of purchase and sale when she discovered that the down payment required by the bank would be twice her budgeted amount.

[34] Each of Ms. Erkurt and Mr. Tomar testified about the loan at trial and they were largely consistent in their evidence. Mr. Tomar and Ms. Erkurt are part of the same Turkish community in Toronto. They both immigrated to Canada from the same city in Turkey. They share the same faith and cultural background. Mr. Tomar knew her family and attended her wedding. He also knew Mr. Kara, Mr. Kara’s employer and the employer’s business partner.

[35] The evidence is that Ms. Erkurt entered into the agreement of purchase and sale on July 22, 2015 and agreed to pay a purchase price of $215,000. She understood that the required down payment would be 10% ($21,500). She had saved that amount. However, in order to obtain mortgage financing from the Royal Bank of Canada, she needed to make a down payment of 20% ($43,000). She testified that she did not have an additional $21,500 and that Mr. Kara did not offer any financial assistance notwithstanding that he was employed and earning an income.

[36] Because Ms. Erkurt would not have financing in place to close the transaction on August 25, 2015, as she had agreed to, Mr. Tomar negotiated for a later closing date to allow Ms. Erkurt to obtain financing. Mr. Tomar testified that the vendors required an additional deposit of $5,000 to extend the closing to September 14, 2015, and that he agreed to lend Ms. Erkurt the $21,500 so that the transaction could close. He testified that in making this loan he was aware of the need to comply with applicable regulations, including FINTRAC. Accordingly, he made an interest-free personal loan to Ms. Erkurt and not a mortgage loan.

[37] Mr. Tomar also testified that he made this personal loan because Ms. Erkurt is a member of his community and in that community the members look out for each other and help each other, especially the younger members, to succeed. He testified that he had made loans to other members of the community from time to time for similar reasons.

[38] The documentary evidence supports Mr. Tomar’s evidence that he personally paid the $5,000 additional deposit directly to the vendors’ solicitors by banker’s draft. His bank records, admitted into evidence, show $5,000 having been withdrawn from his account by banker’s draft on August 11, 2015. In addition, Mr. Tomar wrote a cheque to Ms. Erkurt for $10,000 on September 8, 2015, and that cheque was deposited into her bank account on September 9, 2015. A copy of the cheque and the deposit slip were admitted into evidence.

[39] Also admitted into evidence were copies of three cheques, each dated after the valuation date, each in the amount of $5,000, payable to Mr. Tomar from Ms. Erkurt in repayment of the loan. In his closing submission, Mr. Kara accepts that Mr. Tomar had made a loan to Ms. Erkurt of $15,000, but continues to dispute the additional loan of $6,500.

[40] The evidence relating to the remaining $6,500 loan is not as compelling as the evidence relating to the $15,000 loan but there is evidence to show that, on a balance of probabilities, Mr. Tomar lent Ms. Erkurt at least an additional $6,000 to assist with the purchase. Mr. Tomar’s evidence was that shortly before the closing he gave Ms. Erkurt $6,500 in cash. He testified that he had this cash readily available because he had just completed stucco work on a residence for which he was paid in cash. He testified that, while he had sold his interest in the stucco business, which he had built up prior to becoming a real estate agent, to his business partner, he still did some work for the company from time to time.

[41] A review of Ms. Erkurt’s banking records shows that on September 10, 2015 she made two deposits into her bank account, one for $1,000 and one for $5,000. Ms. Erkurt testified that these deposits represent $6,000 of the $6,500 cash lent to her by Mr. Tomar. She testified that she had received $6,500 by way of additional loan from Mr. Tomar but only deposited $6,000 in the account because the $500 was needed to cover other expenses. Based on the evidence before the court, on a balance of probabilities, I accept that Mr. Tomar made a loan in the amount of $6,000 in addition to the $15,000 loan for a total loan of $21,000.

[42] On balance, I found Ms. Erkurt to be a truthful witness. Her testimony regarding the loan from Mr. Tomar was not clear initially, but became clear in reply questioning following her cross-examination. It was apparent that the breakdown of the marriage has been very difficult for Ms. Erkurt and she was at times quite emotional in her testimony. Nonetheless, I find she was forthright and responded honestly to attempts to impeach her credibility.

[43] When challenged on a point, such as the expenses she paid for the couple’s wedding, or the details surrounding the purchase of the matrimonial home and how she financed it, her recall was good, her testimony largely consistent and her explanations made sense. I have no reason to doubt the accuracy of the material parts of her testimony.

[44] In light of any assessment of the credibility of Mr. Kara and Ms. Erkurt, to the extent that there is a direct conflict between their respective testimonies, I prefer and accept the testimony of Ms. Erkurt.

[45] I also found Mr. Tomar to be a credible witness. From his testimony, it is evident that Mr. Tomar, also an immigrant to Canada from Turkey, is a hard-working community-minded man. Before becoming a real estate broker, he built up a profitable stucco business and he also held the position of union agent for the Labourers International Union of North America.

[46] Mr. Tomar was genuine in his testimony and his responses to questions had the ring of truth to them. Mr. Tomar was truthful in his testimony and in cross-examination he agreed that he too had an interest in the closing of the condominium purchase because he would receive a 5% commission. He also testified that if the transaction had not closed and Ms. Erkurt had lost her deposit, there could have been damage to his reputation as a real estate broker.

Deductions

[47] Pursuant to the Family Law Act, the onus of proving a deduction from net family property is on the person claiming it. Ms. Erkurt’s December 2018 Statement reflects her claim for total deductions of $45,611.81, comprised of the value of her car ($15,129) and her TD bank account balance ($30,482.81) at the date of marriage.

[48] Ms. Erkurt submits that her bank balance at the time of marriage was $30,482.81. Mr. Kara submits that the balance was then $20,482.81. Ms. Erkurt’s bank records in evidence show that around the time or her marriage, on July 31, 2013, her bank balance was $20,482.81 and on August 19, 2013, shortly after the marriage, her bank balance was $30,482.81. Ms. Erkurt explains that the $10,000 difference represents the repayment of a $10,000 loan she made to her brother prior to the marriage. There is no evidence before the court to corroborate her testimony on this loan. Accordingly, I find that Ms. Erkurt’s bank balance at the time of marriage was $20,482.81.

[49] Mr. Kara’s 2018 Statement shows a date of marriage value of $15,000 for Ms. Erkurt’s car while hers shows a value of $15,129 at that time. I have used the $15,000 value as this is the value shown on Ms. Erkurt’s sworn Financial Statements (Property and Support Claims) submitted to the Court. This deduction is also consistent with Ms. Erkurt’s testimony at trial.

Equalization Payment

[50] For the above-noted reasons, and based on the following calculation of the net family property of each of the parties, the equalization payment is $3,660.57.

Category	Mr. Kara	Ms. Erkurt
Value of Property on the Valuation Date
Bank accounts	$11,781.02	$5,850
Car	$4,000	$4,000
Condominium		$245,000
Furniture		$2,000
TOTAL	$15,781.02	$256,850
MINUS Debts and Liabilities on the Valuation Date
Mortgage	$0	$169,755.94
Loan from Mr. Tomar		$21,000
Loan re Leon’s purchases		$7,509.09
TOTAL	$0	$198,265.03
MINUS Assets on the Date of Marriage
Bank account	$0	$20,482.81
Car		$15,000
TOTAL	$0	$35,482.81
TOTAL NET FAMILY PROPERTY	$15,781.02	$23,102.16
EQUALIZATION PAYMENT (1/2 the difference)		$3,660.57

Issue 2: Should there be an unequal division of the net family properties?

[51] As noted, under the Family Law Act, the spouse with the greater net family property is required to pay the spouse with the lesser net family property one-half of the difference. However, the court has discretion to award an equalization payment that is an amount other than the difference between the two numbers. Section 5(6) of the Family Law Act provides that the court may award a spouse an amount that is more or less than half the difference between the net family properties if the court is of the opinion that equalizing the net family properties would be unconscionable, having regard to, a number of factors, including that the amount of the equalization payment is disproportionately large in relation to a cohabitation period that is less than five years: see section 5(6)(e).

[52] Ms. Erkurt submits that she should not be required to pay Mr. Kara an equalization amount based on one-half of the difference between the net family property amounts. Her submission is based on the fact that the marriage lasted less than five years, their period of cohabitation was a brief 17 months, and that her marriage to Mr. Kara was not a real marriage because Mr. Kara did not marry her with the intention of staying married to her but, rather, with the intention of gaining permanent residence status in Canada.

[53] While a shorter marriage may be grounds for an unequal division in some cases, the section only applies if the “unconscionability” threshold is met and one spouse would receive a “disproportionately large” equalization amount in relation to the cohabitation period. In this case, Mr. Kara is entitled to an equalization payment of $3,660.57. I do not find this amount to be disproportionately large in relation to the cohabitation period, notwithstanding that each of the parties is of fairly modest means.

[54] Further, in order for the court to exercise its discretion in this regard, an equal division of the net family property in the circumstances must be “unconscionable”. As set out in MacDonald v. MacDonald (1997), 33 R.F.L. (4th) 75 (Ont. C.A.), the equalization must “shock the conscience of the court”. This is indeed a high threshold. I accept that Ms. Erkurt is very disappointed that the marriage failed. I also accept her evidence that Mr. Kara told her that he did not wish to be married to her and only used her as a means to immigrate to Canada. However, I do not find that this evidence in and of itself meets the threshold. As Feldman J.A. stated in Ward v. Ward, 2012 ONCA 462, 111 O.R. (3d) 81, at para. 25, referring to the trial judge’s reasons, “the intent of the section is not to alleviate every situation that may be viewed as in some ways unfair or inequitable, because equal sharing should occur in most cases.”

Disposition and Costs

[55] Ms. Erkurt shall make an equalization payment to Mr. Kara of $3,660.57. The payment shall be made within 10 days of the costs of this matter having been determined, having regard to any settlement offers made, and paid to the party to whom the costs are awarded.

[56] Once the equalization amount and the costs have been paid, the Applicant, Mr. Kara, shall proceed to obtain a divorce on an uncontested no-cost basis within 90 days of the last of those payments.

[57] On the subject of costs, success in this matter is divided. Based on the parties’ respective December 2018 Net Family Property Statements, Ms. Erkurt submitted that she is entitled to an equalization payment of $4,496.05 [^1] from Mr. Kara; and Mr. Kara submitted that he is entitled to an equalization payment of $18,258.37 from Ms. Erkurt. Neither party succeeded in their claim but each was successful in defeating claims made by the other in support of his or her net family property calculation. I strongly encourage the parties to reach an agreement on costs. Should they be unable to do so, Mr. Kara may make written submissions on costs (not exceeding two pages in length (including a costs outline or bill of costs) within 14 days of the release of these reasons and Ms. Erkurt may make written submissions on costs within 14 days thereafter. There shall be no reply submissions.

Dietrich J.

Released: January 15, 2019

[^1]: There is a mathematical error on Ms. Erkurt’s December 2018 Statement regarding the total value of her property on the valuation date. It is shown as $238,078.75 as opposed to $249,928.75. When I adjust for this error, Ms. Erkurt’s calculations result in an equalization payment owing to her by Mr. Kara of $5,360.55.