COURT FILE NO.: FS-17-00416494-0000
DATE: 20190124
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ILDIKO SUSAN VASARHELYI
Applicant
– and –
JUSTIN EDWARD BORGES
Respondent
Self-represented and acting in person
Self-represented and acting in person
HEARD: January 18, 2019
REASONS FOR DECISION
DIAMOND J.:
Overview
[1] On January 18, 2019, I presided over a one day trial to determine the relatively narrow issue of whether the respondent Justin Edward Borges (“Justin”) is liable to the applicant Ildiko Susan Vasarhelyi (“Susan”) for the sum of $23,618.00 as a remaining equalization payment.
[2] Susan and Justin both gave evidence, as did Susan’s mother Ilona Oppedisano (“Ilona”) and Susan’s step-father Giuseppe Oppedisano (“Giuseppe”). At the conclusion of the trial, I took my decision under reserve.
[3] These are my Reasons for Decision.
How did we get here?
[4] The parties were married in February 2009, and separated in November 2015. They have two sons.
[5] This proceeding was commenced in March 2017. Among other issues (custody of the children, child support etc.), Susan sought an equalization of all net family property.
[6] Numerous cases conferences and settlement conferences ensued during the lifespan of this proceeding. On April 30, 2018, Justice Gilmore held a settlement conference which resulted in an Endorsement (“the Gilmore Order”) confirming that the parties agreed to settle various issues “on a final basis”. The Gilmore Order provided that Justin would buy out Susan’s interest in the matrimonial home for the all-inclusive sum of $85,000.00. Justin was to be responsible for all legal costs associated with the buy-out.
[7] Paragraphs (f) and (h) of the Gilmore Order are relevant to the issue that I must determine. The contents of those paragraphs are as follows (my emphasis in bold) :
(f) The buy-out amount is net of any loans/gifts from both parties’ parents and the repayment of those amounts is resolved.
(h) The respondent shall repay to the applicant’s parents his share of the balance of the $50,000.00 loan amount to them.
[8] I note that the words “his share of” in paragraph (h) the Gilmore Order were inserted between the original words “parents” and “the balance”. The Gilmore Order also contemplated a May 30, 2018 closing date, although that deadline was extended by further court Orders.
[9] On September 25, 2018, Justice Sanfilippo heard a motion brought by Susan for, inter alia, an order increasing interim child support. At that time, the buy-out transaction had yet to be completed and Susan had asked for an Order permitting the sale of the matrimonial home. Justice Sanfilippo afforded Justin one final extension to complete the buy-out transaction by no later than October 25, 2018, failing which the matrimonial home would be listed for sale.
[10] As part of his Order, Justice Sanfilippo fixed the value of Ilona and Giuseppe’s loan at $52,000.00, and fixed Justin’s share of that amount as 50%,. Both of those valuations were ordered “for the purpose of completion of the buy-out transaction”, and made on a without prejudice basis explicitly permitting (a) Susan to argue that Justin’s share of the loan was more than 50%, and (b) Justin to argue that the amount of the loan was less than $52,000.00.
The buy-out transaction ultimately closed by the deadline set out in Justice Sanfilippo’s Order. Justin paid Susan the $85,000.00 as required by the Gilmore Order. He also paid Ilona and Giuseppe the sum of $26,000.00 representing what he believed was his 50% share of the outstanding loan.
Summary of Relevant Evidence
[11] Ilona testified that she withdrew $50,050.00 from her line of credit on December 24, 2015 and transferred that sum to Susan and Justin to fund renovations to the matrimonial home. There was some disagreement between Ilona and Justin as to the number of cheques he delivered and paid Ilona to reduce the loan. Ilona gave evidence that she received six cheques in the amount of $450.00 each between December 2016 and May 2017. Justin produced a bank statement showing that two additional cheques for $450.00 each were cashed on June 1, 2017 and June 30, 2017.
[12] In any event, despite (a) the loan accumulating interest since December 2015 and (b) some additional payments received by Ilona in her bank statements, at trial Ilona’s evidence was that she had understood that Justin had assumed full responsibility to pay the entire $52,000.00, and not simply a 50% share. After Justin paid Ilona the $26,000.00 on closing of the buy-out agreement, the balance of the outstanding loan (ie. the other $26,000.00) was paid by Susan from the $85,000.00 payment Susan received from Justin. In Ilona’s eyes, this was not the deal that the parties had made. Ilona took the position that Justin still owed Susan the sum of $23,618.00, which money would be used to reimburse Susan for having paid her 50% share of the loan.
[13] Susan testified that the Gilmore Order does not reflect the actual agreement reached between the parties during the April 30, 2018 settlement conference. Stripped down to its core, Susan’s position is that she never would have entered into the Gilmore Order had she understood that Justin would only be responsible for paying 50% of the loan due to Ilona and Giuseppe.
[14] Justin gave evidence that the terms of the Gilmore Order speak for themselves. He further testified that his parents had loaned the parties approximately $240,000.00 (for a down payment and additional renovation costs), and the Gilmore Order precluded him from seeking any compensation (in the form of equalization or otherwise) from Susan for her share of his parents’ loan. Justin’s evidence was that his parents in fact agreed not to seek payment from him of his share of the $240,000.00 loan in exchange for Justin’s forbearance on his eventual inheritance from his parents’ estate(s).
Decision
[15] The Gilmore Order is a consent order, and, in my view, clear on its face. Paragraph (h) requires Justin to repay “his share” of the balance of the $50,000.00 loan to Ilona and Giuseppe. By any definition, a share (in any amount or percentage) of a payment obligation means the obligation to repay only a portion or some of the total amount. Otherwise, Justin would have agreed or been ordered to simply pay the entire loan.
[16] There is no middle ground being proposed by Susan, nor is there a middle ground available. Justin is either responsible for all of the loan, or half of it. Susan’s position clearly requires the Court to interpret (or potentially vary) the Gilmore Order to mean that Justin was responsible for 100% of the loan.
[17] As part of the resolution of an equalization claim, it is presumed that Justin would be responsible for a 50% share of any liabilities unless explicitly ordered otherwise. Paragraph (h) does not lead to any other conclusion than Justin being responsible to pay his 50% share of the loan.
[18] To the extent that Susan is seeking to vary paragraph (h) of the Gilmore Order, there are no grounds to support such a request. As stated, the Gilmore Order is a consent order. The jurisprudence is clear that a consent order may only be set aside or varied on the grounds of common mistake, misrepresentation, fraud or any other ground which would invalidate a contract.
[19] As held by the Court of Appeal for Ontario in Miller Paving Ltd. v. B. Gottardo Construction Ltd. 2007 ONCA 422, in order to find the presence of common mistake, the following elements must be proven:
(a) a common assumption as to the existence as to the state of affairs;
(b) no warranty by either party that the state of affairs exists;
(c) the non-existence of the state of affairs must not be attributable to the fault of either party;
(d) the non-existence of the state of affairs must render performance of the contract impossible: and
(e) the state of affairs may be the existence, or a vital attribute, of the consideration to be provided or circumstances which must subsist if performance of the contractual adventure is to be possible.
[20] There was no evidence tendered at trial to support the necessary elements for common mistake. There was no evidence to support a finding of misrepresentation or fraud on the part of Justin. There is also no basis to set aside or vary the Gilmore Order on any other ground which could invalidate a contract.
[21] For these reasons, Susan’s request that Justin be made liable to pay an additional $23,618.00 is dismissed.
Costs
[22] I would urge the parties to try and resolve the costs of this trial. If those efforts prove unsuccessful, the parties may exchange written costs submissions (totaling no more than five pages including a Costs Outline) in accordance with the following schedules:
(a) Justin may serve and file his costs submissions within 10 business days of the release of these Reasons; and
(b) Susan shall thereafter have an additional 10 business days from the receipt of Justin’s costs submissions to deliver her responding costs submissions.
Diamond J.
Released: January 24, 2019
COURT FILE NO.: FS-17-00416494-0000
DATE: 20190124
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ILDIKO SUSAN VASARHELYI
Applicant
– and –
JUSTIN EDWARD BORGES
Respondent
REASONS FOR DECISION
Diamond J.
Released: January 24, 2019