COURT FILE NO.: FS-14-00392247 DATE: 20190307
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
XIA DAI Applicant
– and –
JIANMIN DING Respondent
Evan Chang, for the Applicant
William Murray, for the Respondent
HEARD: September 24-28, October 1-5, 29-30, November 13-15, 2018, January 9, 11, 2019.
C. Gilmore, J.
OVERVIEW
[1] This is a case about disappointment in both life and love. The applicant told the court she waited 17 years to be with the man she had always loved, only to be physically and emotionally abused by him and left adrift in a country in which she had no job and minimal English skills.
[2] For his part, the respondent told the court of being pursued by the applicant whom he finally agreed to marry. For him, it was convenient as they worked together and he had hopes the relationship would work out in the long term. He, too, was disappointed to find out that when the applicant finally arrived in Canada she was cold, distant and demanding. He was devastated that he had been used by the applicant as a means for her and her daughter to come to Canada from China and for nothing else.
[3] In the claims before the court, the applicant seeks spousal support, a division of property and a restraining order. The applicant left the respondent’s home on July 31, 2016. They have had no contact since that date.
[4] The respondent seeks a divorce or, alternatively, a declaration that the marriage was a sham. If the marriage is found to be valid, the respondent claims an unequal division of net family property given what he says was the short length of the marriage. His position is that the applicant is not entitled to either compensatory or non-compensatory spousal support.
[5] The parties’ evidence at trial, as in so many family cases, was diametrically opposed on essential facts. Each party feels wronged and resentful about the other. As such, neither party was willing to compromise on any issue and this lengthy trial was necessary to determine the parties’ claims.
BACKGROUND FACTS
[6] The parties are both aged 55. Both were born in China. Despite taking some LINK courses, the applicant has trouble with English. She required a Mandarin interpreter throughout the trial. The respondent’s English is better than the applicant’s, likely because he has lived and worked in Canada much longer. However, he too required the services of a Mandarin interpreter.
[7] The applicant told the court that she is no longer taking English courses but is engaged in self-study only. She felt she was “too old” to master English and has resigned herself to low paying jobs as a result. At times during this judgment the applicant is referred to as “Peony.” She testified that that is an English name that she has adopted.
[8] The applicant completed high school plus two years of technical training in China. Once she was working, she attended university-level adult education and obtained a diploma in business administration. The applicant worked at a glass factory from 1983 to 1998. In 1998 she began work at a logistics company where she stayed until 2002.
[9] In 2001, the applicant, with the financial assistance of her mother, started her own company: Shanghai Haojile Trade Co. Ltd. (“Hojer”). Hojer worked with the respondent’s company in Canada, Canasia, to import Canadian food products into China. Hojer was dissolved in early 2011. The applicant’s evidence was that she gave considerable financial assistance to the respondent’s business, especially in Canasia’s early development years. Further, she testified that she paid for all of the respondent’s expenses when he came to visit her in China including entertaining his Chinese clients and helping to support his family.
[10] After Hojer was closed in 2011 the applicant worked selling shoes until she immigrated to Canada in 2012. She earned the equivalent of $600 per month CDN at that job.
[11] The respondent worked at the same glass factory as the applicant from 1982 to 1984. That is where they met. Between 1984 and 1986 the respondent worked as a courier at a friend’s business. In 1986 he began working at a shipping company: Sino Trans. Sino Trans paid for the respondent to upgrade his education and obtain a diploma in logistics. He moved up the ladder at Sino Trans until he became a manager of over 300 employees. He ended his employment there in 2002 when he immigrated to Canada.
[12] The parties met in China in 1983 while they were working at the glass factory. The applicant’s evidence was that they became lovers but after a year the relationship broke down because her family did not approve of the respondent. However, the parties still kept in touch until 1986 or 1987 although they were no longer in a relationship. The respondent denies that the parties were ever in a relationship while at the glass factory. They were merely co-workers who did not stay in touch after he left the factory in 1986.
[13] The applicant married her first husband in 1988 and divorced in October 1995. According to the applicant there were no children of her first marriage. The respondent married his first wife in 1994 and divorced in 2004.
[14] According to the applicant, the parties reconnected in the early 1990’s and by 1995 their relationship became serious. By 1995 they were a couple and she would reside with the respondent at his apartment in Shanghai for two to three days each week when he visited China.
[15] The respondent did not agree. He told the court that the parties did meet again in 1995 but only at a social gathering of former employees of the glass factory. He met her a few more times at other social gatherings but they did not date. He conceded that he was intimate with the applicant once during this period. He became very drunk while at a friend’s house. When he awoke, the applicant was sleeping beside him in bed. He says he was too drunk that evening to remember if they had sex, but they may have.
[16] The respondent immigrated to Canada in 1992 with his brother and mother. His evidence was that after immigrating to Canada his relationship with the applicant remained the same. They were friends who had contact once or twice a year and they had many mutual friends.
[17] According to the applicant, after the respondent immigrated to Canada in 1992, he came to China to visit her for up to three months in most years. The respondent did not agree. His evidence was that his trips to China were business-related. In fact, after he immigrated he did not return to China for several years. There were long stretches when he did not visit China and, even when he did, he and the applicant never lived together as a family. They continued as friends.
[18] The parties married in China in February 2005. The applicant’s evidence was that the marriage was a joint decision and one which was natural given how long they had been together. Once again, the respondent’s evidence was different. His evidence was that he married the applicant at her insistence so that she could add his name to her mother’s household registration (“Hukou”) and receive additional compensation from the government. Part of the compensation for the demolition of her mother’s apartment was based on the number of household members on a given deadline date. That date was approaching and the applicant wanted to take advantage of the opportunity. The respondent’s evidence was that he was unsure about getting married because he had only been divorced for a year. However, he carried through with the marriage despite his misgivings and based on the applicant’s insistence.
[19] Between the date of marriage (February 18, 2005) and the date the applicant immigrated to Canada in September 2012, the respondent went back to China twice, once in 2005 for three months (June to September) and again in 2009 for three months (April to July). He did not see the applicant again until she arrived in Canada in September 2012.
[20] The applicant has a very different version of her life with the respondent after their marriage. Her evidence was that the couple wrote and called frequently when the respondent was in Canada. When he was in China, they were together often. She helped him with his business in China and often met with his clients. She paid for many of his expenses when he came to China including the cost of entertaining his clients and friends.
[21] In 2012 the respondent sponsored the applicant and her daughter to come to Canada. The respondent testified that the applicant initiated discussions about immigration in 2006 and was insistent that he help her and her daughter come to Canada. The applicant’s evidence was very different on this point. She told the court that it was the respondent who wanted her and her daughter to come to Canada. She was somewhat ambivalent about the idea of immigration, but it was the respondent who was the driving force behind it.
[22] The applicant and her daughter arrived in Canada in September 2012 and began to live with the respondent in his home at 16 Catherwood Court (“16”) in Toronto. The reunification of the parties in September 2012 was not successful. The facts diverge significantly as to why. The applicant complained that the respondent was an abusive alcoholic. After he assaulted her in March 2013, the marriage crumbled and the parties were living separate and apart in the Catherwood home from July 2013 until the applicant and her daughter left on July 31, 2016.
[23] According the respondent, he was completely duped by the applicant who barely acknowledged him on her arrival to Canada. She refused to sleep with him or treat him as her spouse. He and his mother cooked for the applicant and her daughter with barely a thank you in return. He maintains the marriage was a sham and that he was used by the applicant to gain entry to Canada for her and her daughter.
[24] During the four years that the applicant lived at Catherwood her evidence painted a picture of a woman who was essentially enslaved by her husband. With no money, no friends and little English, she was forced to live the life he dictated. According to the applicant, following the assault in March 2013, the parties agreed to separate after a family meeting in July 2013. The respondent asked her to sign a separation agreement in September 2013 and offered to pay her $50,000 by way of an all-inclusive settlement. When the applicant refused, the respondent began a campaign of harassment and intimidation to force the applicant and her daughter out of the house. The applicant testified that she called the police several times during this period due to the respondent’s behavior.
[25] On May 22, 1996 the applicant gave birth to her daughter Shuting (“Shuting”) Dai. Shuting is now 22 years old. She lives with the applicant and is in her third year at the University of Toronto. The applicant maintains that Shuting is the biological child of her and the respondent. The respondent disputes this. Each party presented documents at trial in support of their position. At the beginning of trial, the applicant withdrew her claims for child support and s.7 expenses for Shuting.
[26] Shuting’s evidence was that she had always thought of and treated the respondent as her father. However, after his assaultive and abusive behavior towards her mother when she came to Canada, she has essentially disowned him. She refused to submit to a DNA test to determine parentage. She testified that this would be useless since she wants nothing more to do with the respondent.
[27] The respondent’s evidence was that he was unable to have children with his first wife for medical reasons. After consulting a doctor, he and his first wife tried in vitro fertilization on several occasions but without success. As such, when the applicant told him that she was pregnant with her child, he had doubts. His evidence was that he never treated Shuting as his own child either in China or Canada for this reason.
[28] The respondent and his brother, Jian Hong Ding (“Jian”), jointly own 16 which they purchased in 2007 for their joint benefit and to house their mother. The respondent also solely owns the neighbouring property at 18 Catherwood Court (“18”). The respondent’s position is that he owns 18 in trust for Jian who could not qualify for a mortgage on his own at the time of purchase. 16 was re-financed in order to purchase 18.
[29] The respondent and his mother continue to reside at 16. Jian and his family live at 18. The applicant and Shuting now reside together in a small basement apartment. The respondent was ordered to pay spousal support of $1,250 per month commencing August 1, 2016. The July 6, 2016 court order which requires the respondent to pay support stipulates that such payments “may or may not be credited to the respondent for support or property division as the court sees fit.”
[30] The applicant owns a condominium in Shanghai (“the Shanghai condo”). The condo was purchased in 2007. The applicant’s evidence was that the Shanghai municipal government required her mother’s home to be demolished in 2004. In return, her mother received certain compensation in 2007 which she used to buy the condominium. A few years later, her mother sold another property and paid out the mortgage on the Shanghai condo.
[31] According to the applicant, the condo was purchased as a gift for Shuting, but at the time of purchase Shuting was still a minor and title could not be put in her name alone nor could she hold a mortgage and title was therefore placed in the applicant’s name. As such, the applicant claims that she owns the condo in trust for Shuting. The applicant did not provide any valuations for the property, nor any written trust agreement. The respondent disputes there is any trust interest in the condo in favour of Shuting and seeks an equalization of the value of the condo.
[32] In 2000, the respondent incorporated his company Canasia. He began to supply the applicant’s company Hojer with food products in 2002. Through Hojer, the applicant would sell the products in China. The respondent’s evidence was that he continued to supply Hojer with imported food products up to as late as 2009. The applicant’s evidence differed on this point. She testified that she had to shut down Hojer in 2011 because the respondent provided inferior food products which did not pass inspection.
[33] The respondent started another business, namely Aces Logistics (“Aces”), in 2002. This is the logistics business which the respondent continues to operate out of his home. According to the respondent, this business had nothing to do with Hojer, nor did the applicant ever do work for Aces. The applicant provided evidence which contradicted this position. The applicant’s position was that she helped the respondent with both of his businesses. In fact, she paid expenses for his businesses in China which affected Hojer’s profitability.
[34] The applicant seeks an equalization of the value of Aces. Ms. Bonnie Prussky gave expert evidence about the value of Aces.
[35] The parties have been in litigation since 2013. They have never been able to settle any issues as there is extreme distrust between them. From the applicant’s perspective she waited ten years for the respondent so they could marry and she could be with him. After they married she lived another seven years seeing the respondent only sporadically while they lived on different continents. When she was finally able to come to Canada, she was met with disappointment when the respondent abused her both physically and emotionally.
[36] The respondent also feels betrayed. He built up his business in Canada over many years so that he could bring his wife to Canada and they could finally live like a normal couple. He was disappointed when he discovered that he was being used only as a sponsor for immigration purposes and that the applicant had no intention of living with him as his spouse.
[37] It is hoped that this judgment will allow the parties to move forward with their lives and put behind the bitterness that has consumed them post separation.
CREDIBILITY
[38] Much of this case turns on credibility as the parties’ versions of various important fact scenarios are completely polarized. A judge has the overriding authority to determine credibility upon weighing all the factors. Considerable weight is placed on the extent to which the testimony is consistent with other, undisputed and proven facts in the case, but no one factor is determinative. Assessment of credibility is not a scientific process and involves a consideration of many relevant factors.
[39] Recent family law decisions in G (J.M) v. G (L.D), 2016 ONSC 3042, and Christakos v. De Caires, 2016 ONSC 702, summarized some aspects of the credibility assessment as set out in Novak Estate, Re, 2008 NSSC 283 at paras. 36-37:
(a) The ability to consider inconsistencies and weaknesses in the witness’ evidence, which includes internal inconsistencies, prior inconsistent statements, inconsistencies between the witness' testimony and the testimony of other witnesses.
(b) The ability to review independent evidence that confirms or contradicts the witness' testimony.
(c) The ability to assess whether the witness' testimony is plausible or, as stated by the British Columbia Court of Appeal in Faryna v. Chorny, 1951 CanLII 252 (BC CA), 1951 Carswell BC 133, it is “in harmony with the preponderance of probabilities which a practical [and] informed person would readily recognize as reasonable in that place and in those conditions”, but in doing so I am required not to rely on false or frail assumptions about human behaviour.
(d) It is possible to rely upon the demeanour of the witness, including their sincerity and use of language, but it should be done with caution (R. v. Mah, 2002 NSCA 99 [at paras.] 70-75).
(e) Special consideration must be given to the testimony of witnesses who are parties to proceedings; it is important to consider the motive that witnesses may have to fabricate evidence. R. v. J.H., 2005 CanLII 253 (ON CA), [2005] O.J. No.39 (OCA) [at paras.] 51-56).
(f) There is no principle of law that requires a trier of fact to believe or disbelieve a witness’ testimony in its entirety. On the contrary, a trier may believe none, part or all of a witness’ evidence, and may attach different weight to different parts of a witness's evidence. (See R. v. D.R., [1966] 2 S.C.R. 291 at [para.] 93 and R. v. J.H. supra).
The Applicant’s Credibility
[40] The applicant was a difficult and defiant witness. She often raised her voice, pointed her finger and acted in an aggressive and confrontational manner towards opposing counsel. The court was required to direct the applicant to answer a question on multiple occasions. The applicant often gave lengthy and non-responsive answers to straightforward questions. Given that this trial ran drastically over the estimated time, the court was forced to repeatedly ask the applicant to think about the question once asked, and then provide an answer that was responsive.
[41] At times the applicant refused to answer certain questions claiming that she had already answered it, it was not relevant or it was none of counsel’s business. Tellingly, at one point during her testimony when she was particularly confrontational, she told opposing counsel that she would give the evidence that benefitted her most, just like any witness would.
[42] There were specific parts of the applicant’s testimony that were concerning with respect to credibility which shall be reviewed in turn below.
A. Late Document Disclosure
[43] The applicant did not disclose certain key documents in this case. She claimed that she did not disclose them because she was not asked to. Clearly, she knew they were important because she asked the court to rely on them to support her position in this trial.
[44] Included in these non-disclosed documents was Exhibit A. This was a copy of her mother’s bank book which the applicant claimed set out the various transfers to her from her mother between 2010 and 2012 totaling 530,000 RMB. The applicant’s evidence was that this debt remains outstanding to her mother and offsets any equity the court may find she has in the Shanghai condo.
[45] Exhibit A emerged from a briefcase which the applicant kept with her during most of her testimony. She pulled it out of the briefcase during an emotional part of her evidence and waved it about while stating in a loud voice that she could prove that she owed her mother money.
[46] The difficulty with Exhibit A is that it is completely unreliable as its provenance is unproven and it is hearsay. No original was provided nor was the applicant’s mother called as a witness. The only connection between this document and the applicant’s testimony is that the withdrawals highlighted by the applicant add up to the debt set out in her 2016 financial statement.
[47] It would be highly prejudicial to the respondent to give Exhibit A any weight, given its late disclosure. Further, this document was not mentioned in any of the disclosure lists provided by the applicant’s counsel nor did the applicant mention it at her Questioning in June 2016. As such, the court cannot rely on this document as proof of the applicant’s alleged debt to her mother.
[48] Exhibit 34 is a summary of agency fees which the applicant testified that Hojer paid on behalf of the respondent’s company from 2004 to 2006. Her evidence was that when she received goods in China from the respondent’s company, she had to pay certain levies, taxes and fees before the goods could be sold. Those fees were paid in U.S. dollars. The totals in Exhibit 34 were over $58,000 USD. The applicant told the court that she had more records of agency fees and that she paid out more than $100,000 USD on behalf of the respondent’s company during the time that Hojer was operating. She advised that she had proof of this and once again reached into her briefcase to pull out what appeared to be various receipt stubs. The witness was not permitted to refer to those documents and was told by the court that she was not allowed to access any further documents from her briefcase that had not been previously disclosed to the respondent.
[49] Once again, Exhibit 34 was a document which had never been disclosed to the respondent and came out of the applicant’s briefcase when she decided she needed it during the course of her testimony. It is important to understand as well that during the applicant’s questioning in June 2016 she gave an undertaking to produce all of the records she had in her possession that related to Hojer. Clearly she did not produce all of the records she had.
[50] While the agency fee list was marked as Exhibit 34, the court was clear that a determination must be made as to what weight should be given to it, given its late disclosure.
[51] The entire point of disclosure in a civil proceeding is to ensure that the other party understands the case it has to meet. Disclosure may also foster settlement. In this case, if full disclosure of all of the agency fees had been provided with back up documentation, the respondent may have been in a better position to determine if the applicant had sufficient profit from Hojer to purchase the Shanghai condo from her own financial resources as he alleged. If the disclosure demonstrated that much of Hojer’s profit was eroded by the payment of agency fees, the respondent may well have accepted that the applicant was forced to borrow money from her mother for expenses.
[52] Disclosure which is provided at trial after five years of litigation requires close examination by the court with respect to why such documents would be concealed from the respondent and the motives of the applicant in doing so. It can be inferred that the applicant simply did not want the respondent to know she had the documents thus creating surprise and confusion at trial.
[53] Clearly, this is not how the trial process is meant to work. Further, the applicant was represented by counsel, underwent questioning, swore multiple financial statements and appeared to understand the importance of document disclosure. The court can only infer that the applicant engaged in a deliberate course of conduct to gain an advantage in this litigation.
[54] Given all of the above, Exhibit 34 should be given no weight in this proceeding and treated in the same manner as Exhibit A.
[55] The applicant has always taken the position that Shuting is the respondent’s biological child. The respondent does not agree. Shuting has refused to undergo DNA testing. In her own testimony, Shuting was clear that she has known no other father than the respondent. After the events in March 2013, Shuting testified that she no longer wanted anything to do with the respondent. She and her mother simply wanted to live in peace. In her view, DNA testing was not necessary, as the respondent was no longer part of her life.
[56] The applicant’s trial documents included a notarial certificate confirming that Shuting was born on May 22, 1996 in China. The applicant was asked why she had not produced a birth certificate setting out the names of the biological parents. The applicant testified that she had the birth certificate at home and could bring it to court. It was suggested to her that she had not produced Shuting’s birth certificate because it would show the applicant’s ex-husband as her father.
[57] The applicant brought the birth certificate to court on October 2, 2018 and it was marked as Exhibit 40. The birth certificate clearly sets out the applicant’s ex-husband’s name as the Shuting’s father. The applicant denied that the late disclosure of this document should be interpreted negatively. She testified that she would have disclosed it if asked to do so. In any event, she told the court that she had to put her ex-husband’s name on the birth certificate because the respondent was not divorced at the time of Shuting’s birth and therefore it would not have been permitted in China to put his name on the birth certificate.
[58] While the applicant gave clear reasons why her ex-husband’s name appeared on the birth certificate, it was difficult to understand why such a relevant document had not been produced earlier when it had been in the applicant’s possession all along. The inference was that the applicant did not want to produce it as it did not help her case, especially during the time before trial when she maintained her claim for child support.
B. The Applicant’s Sworn Financial Statements
[59] The applicant swore three financial statements in this proceeding: October 19, 2013, September 14, 2016 (Exhibits 35 and 36 respectively) and August 19, 2018 (contained in the trial record).
[60] In the 2013 financial statement, the Shanghai condo is included as an asset on the date of separation but with a 0 value and a notation that it is “not the subject of this proceeding.” There is no reference to Shuting’s ownership interest. It is not listed under the “excluded property” section. The alleged debt owed to the applicant’s mother does not appear at all.
[61] In the 2016 financial statement the Shanghai condo appears as an asset on the date of separation with a value of $71,429. Ownership is noted as “joint” but there is no reference to the other owner. The debt owed to the applicant’s mother appears in the amount of $88,333 CDN. The Shanghai condo is not listed under the “excluded property” section.
[62] In the 2018 financial statement, the Shanghai condo is listed as an asset on the date of separation. There is no reference to the applicant’s ownership interest and the value is shown as “tbd.” The loan to the applicant’s mother is shown as $88,333 CDN. There is no reference to the Shanghai condo under “excluded property.”
[63] The various financial statements filed by the applicant raise several issues with respect to her credibility as follows:
a. The applicant was insistent at trial that the she held her interest in the condo in trust for Shuting and, as such, her share should be excluded. However, such an exclusion is never mentioned in any of her sworn financial statements. Her 2016 financial statement states that the ownership is “joint.”
b. The applicant provides three different values for the condo in her financial statement. In the 2013 statement the value is noted as 0. In 2016 her share of the value is shown as $71,429. In the 2018 statement the value is noted as “tbd” but no appraised value was ever disclosed.
c. The debt allegedly owed to the applicant’s mother is also treated inconsistently in the financial statements. It does not appear at all in the 2013 statement but is listed in both the 2016 and 2018 statements.
[64] Based on all of the above, it is difficult to assess the applicant’s position with respect to either the Shanghai condo or the debt she says is owed to her mother. In 2013 her financial statement indicated that the condo had no value and she did not owe her mother anything. In 2016 her interest in the condo and the debt to her mother were both listed (but without any corroboration). By 2018, there was an indication that an appraisal may be available for the condo but no appraisal was ever introduced at trial. The debt to her mother was listed at the same amount as in the 2016 statement.
[65] I find that the financial statements sworn by the applicant in this proceeding lend themselves to the respondent’s contention that the applicant has provided inconsistent and uncorroborated positions throughout this litigation. That is, her position on the critical issues is a moving target putting the respondent in a difficult position with respect to how to properly respond.
C. The Shanghai Judgment
[66] The applicant issued her application in this proceeding in November 2013. The respondent filed his answer in January 2014. For reasons which are not clear to the court, the respondent issued a claim for a divorce and an equalization of the property owned by the applicant in Shanghai on July 25, 2014. This is the same relief he sought in his Superior Court answer. Both of the respondent’s claims made in the Chinese proceeding were dismissed. With respect to the claim for property division, the court found that the property was owned by the applicant prior to marriage and therefore not subject to division in Chinese law.
[67] The applicant’s position is that the respondent’s claim in China was issued solely to harass her and cause her expense. The respondent’s position is that he received advice from his Chinese lawyer to start a proceeding in China so he followed that advice.
[68] The trial related to the respondent’s claims was held in Shanghai in 2015. Neither party appeared. Submissions were made by their respective counsel. According to the parties, it is not unusual to proceed in this manner in China. A certified translation of the resulting judgment was provided to the court as Exhibit 44.
[69] The applicant’s testimony was that she hired and instructed Shanghai counsel to assist her in responding to the respondent’s claims. However, there are a number of facts recited in the Shanghai judgment which are significantly inconsistent with the applicant’s position on the issues in this trial. These can be found in the court’s summary of the applicant’s position in the Shanghai proceeding. The most notable are as follows:
“The foundation of their emotional tie in the marriage is still strong…they have always been dating each other since junior high school graduation, and they started to live together after vocational school graduation.”
“The foundation of their emotional tie is stable. It is impossible for them to have been separated since the Respondent’s [applicant in this proceeding] arrival in Canada all the way back to September 2012 to today.”
“Even though there are some issues in their relationship, their bond is not broken, and it is still possible for them to restore good terms.”
“The Respondent has indicated that if the Applicant [respondent in this proceeding] will make some change, she is willing to forgive some of the Applicant’s mistakes, to resolve the conflict through forgiveness, to mend and improve the relationship through her efforts.”
[70] The Shanghai court felt that, given the applicant’s counsel’s submissions, there was still a possibility for the marriage to work and they declined to grant a divorce.
[71] The timing of all of this bears examination. The applicant’s evidence was that in March 2013 she was brutally assaulted by the respondent. By July 2013 they were separated and living apart in the same house. By November 2013 the applicant had issued her claim in this proceeding.
[72] Thus, her response to the respondent’s 2014 claim is inconsistent with both her pleadings and her evidence at trial. That is, how could she have ended the relationship in Canada and issued a court proceeding based on marriage breakdown, but submit to the Shanghai court that her emotional tie to the respondent was stable?
[73] The applicant’s position was that she gave her Shanghai lawyer all of the material facts. However, some of his submissions were simply wrong. For example, the applicant agrees that the parties never lived together after vocational school nor did their relationship commence in high school. After she received the judgment, she called her lawyer and asked him to correct these facts in the judgment. He told her not to worry, she should focus on the result which is the one she wanted, that is to dismiss the respondent’s claim for a divorce.
[74] The applicant was cross-examined about the inconsistencies in the Shanghai judgment and her position in this case. Her responses were puzzling. For example, she told the court that even after issuing her claim, she was willing to try to improve the relationship in 2014. She later changed her mind when the respondent started to bully and harass her. This is completely inconsistent with the applicant’s evidence about her mindset after the assault on March 23, 2013. After this event, the applicant’s evidence was that she no longer slept with the respondent. They were separated as of September 2013 and she barely spoke to the respondent or his family.
[75] It is difficult to accept that the applicant’s Shanghai counsel could be wrong about so many things. The more logical explanation is that the applicant told him to say whatever it took to ensure the respondent’s claims were dismissed. This is consistent with the applicant’s attitude in this trial, such as telling the court quite bluntly that she would give whatever evidence benefited her.
D. Credibility Issues Raised by the Respondent
[76] The respondent suggested that the applicant married him in a rushed ceremony in February 2005 for two reasons. First, so she could list him on her household registration and receive additional compensation in relation to the demolition of her mother’s home, and second, so she could immigrate to Canada as soon as possible.
[77] With respect to the household registration and as per my findings in relation to the status of the marriage set out below, I accept the applicant’s evidence that she was not able to register the respondent as a member of her mother’s household because he did not have a Hukou in China. Based on the evidence at trial, one must be a registered member of a household in China in order to be recognized as a member of that community and receive certain benefits. A person who is a citizen of another country is not entitled to a Hukou. By the time of the demolition, the respondent had immigrated to Canada and was no longer entitled to Hukou status. While the applicant’s spousal status and the name of her spouse were required to be inserted into the household registration document,,that did not mean the respondent was part of the household with respect to the benefits which flowed from Hukou status.
[78] The applicant was candid that she did try to have the respondent registered as part of her mother’s household but he did not fit within the legal requirements, notwithstanding that he was her spouse. She conceded that she tried to register him because if she had been able to do so, the compensation would have been increased and she and the respondent needed money for their import/export business.
[79] I also accept the applicant’s evidence with respect to her sponsorship to Canada by the respondent. It made sense that if the applicant’s sole reason for marrying the respondent had been to immigrate to Canada, she would have started the procedure right away. That did not happen. I accept that starting in 2009 attempts were made by the respondent to have the applicant and her daughter come to Canada for an extended visit to see if they liked it. After several attempts to obtain a visitor’s visa failed, the respondent initiated a sponsorship application.
[80] The applicant did not arrive in Canada until September 2012, some seven and a half years after her marriage to the respondent. The first application for a visitor’s visa was not made until 2009. The chronology points to circumstances in which the applicant did not appear to be in a rush to immigrate to Canada.
[81] The applicant was also cross examined about her evidence that between 1997 and her immigration to Canada, the respondent visited her in China for three months each year. In her letter to Immigration Canada dated June 6, 2015, the applicant stated “He used to return to China every year for 3 months to stay with me in his residence in Shanghai….” At trial, the applicant testified that in 1996 and 1997 the respondent did not come back for any three-month visits.
[82] The applicant was cross-examined at length about the respondent’s visits to China. His passports were put to her as Exhibit 31 (Tab 27). Those documents revealed that there were often long gaps when the respondent did not return to China. For example, he was not in China between October 1999 and December 2001 and there was another two and half year gap between 2006 and 2009 when he did not visit. The applicant conceded that the passports must be right.
Conclusions Regarding the Applicant’s Credibility
[83] I find that the applicant’s evidence must be approached with caution and in general should be given little weight. In relation to the specific aspects of the assessment of credibility I note the following:
a. The applicant made it quite clear during her testimony that she would say what she needed to say to benefit her case. As such, the reliability of all of her testimony is tainted.
b. The late disclosure of key documents demonstrates a troubling course of conduct which bolsters the respondent’s argument that the applicant failed to disclose all relevant documents in her possession. Further, the applicant was aware of the relevance of undisclosed documents but chose to retain them until she determined they might help her. Disclosure of documents at trial after five years of litigation resulted in unfairness and prejudice to the respondent in trying to meet the case against him.
c. The applicant provided inconsistent evidence. Her three financial statements and the significantly different facts recited in the Shanghai judgment support this.
d. The applicant was insistent that the respondent was Shuting’s biological father. This position was maintained throughout the trial despite the following concerns:
i. Shuting refused to participate in DNA testing.
ii. Shuting’s birth certificate listed the applicant’s first husband as her father.
iii. The applicant’s immigration application included a document (Exhibit 48) which was a signed declaration that the applicant’s first husband was Shuting’s father.
iv. In reply, the applicant told the court that she had had an abortion in 1998. Her evidence was that it was the respondent’s child but she did not feel she could handle another child on her own without the respondent’s support. This was the first time anyone had heard this evidence. It is not contained in the applicant’s application, nor did it come out in her examination, cross-examination or her questioning. This evidence directly contradicts that of the respondent with respect to his fertility issues. The timing of this evidence is concerning and frankly suspicious given the applicant’s documentary evidence, failure to disclose documents, and penchant to provide self-serving evidence as needed.
v. The respondent’s evidence at trial in which he insisted he had never treated Shuting as his daughter either before or after she arrived in Canada.
vi. The applicant withdrew her claim for support for Shuting (s. 7 expenses for post-secondary education) at the commencement of trial with no prior notice.
vii. The concern of course is that without DNA evidence, and in the face of the documents presented at trial, it is difficult to maintain the position that Shuting is the respondent’s daughter. A reasonable inference is that the applicant insisted on this untenable position for the sole purpose of claiming support for Shuting.
e. The applicant’s demeanour at trial, while not the sole consideration in an assessment of credibility, cannot go without comment. The applicant gave evidence over a period of six days. Even during her evidence in chief the applicant had trouble directing herself to the question asked. At first, the court attributed this to interpretation issues or nervousness. However, over time it became clear that it was a tool used by the applicant to obfuscate when she did not want to directly answer a question. Not only did this tendency add to the length of the trial, but it left a clear impression with the court that the applicant wished to skirt the truth when it was convenient to her.
THE CREDIBILITY OF THE RESPONDENT
General Observations
[84] The respondent was also a less than ideal witness. Overall, I find that his evidence was neither reliable nor credible. When faced with any inconsistency with respect to his own documents, his invariable answer was that he did not prepare the document, his lawyer did. He trusted his lawyers (he has had three) and did not question what they put into the documents he signed or swore. If the contents of the documents were inaccurate, it was through no fault of his own.
[85] With respect to disclosure, as will be detailed below, the respondent, like the applicant, also failed to provide key documents. His invariable answer to questions on that issue was that no one ever asked him for the document(s). If they had, he would have produced them. When faced with questions about unanswered undertakings from his Questioning in June 2016 the respondent was adamant that it was not his obligation to follow up. If the undertaking was not answered it was because his lawyer never asked him for the documents.
The Respondent’s Actions Post September, 2013
[86] The respondent denied that he had deliberately turned off the applicant’s access to the internet. He told the court that he relied on the internet for his logistics business. That made sense. What did not make sense was why he reacted so casually when the internet went down or that he did not try to fix it himself by unplugging the router and then plugging it back in. It seemed strange that the police would have had to suggest this simple fix to him.
[87] The concern of course is that one of two things were happening post March 23, 2013. Either the applicant was completely over-reacting to the lack of internet, a broken stove, no hot water and the many other things she complained of, or the respondent instigated a deliberate course of conduct to make the applicant leave when she would not sign the September 2013 settlement agreement.
[88] The respondent was bitter and resentful about the applicant’s lack of financial contribution to the household throughout the almost four years she lived at 16. He testified that she “didn’t even pay for a bar of soap.” This bitterness permeated his testimony.
[89] At some point in June 2015, the respondent wrote to Canadian immigration authorities complaining that the applicant had married him only to obtain sponsorship to Canada and that she should be sent back to China. The applicant was very upset when she received a letter from Citizenship and Immigration Canada on June 2, 2015 alleging that she had “entered into a marriage of convenience and travelled to Canada solely for the purpose of obtaining permanent resident status in Canada and not to continue your relationship with your spouse/partner.” The applicant provided a detailed response on June 6, 2015, denying the allegations and outlining the problems she had experienced with the respondent’s behaviour, including her version of the events which occurred in March 2013.
[90] I find that this letter and its devastating effect on the applicant was part of the respondent’s campaign to have the applicant leave his home. I find as well that part of his motivation in sending this letter was the hope that the applicant and her daughter would be sent back to China and he would not have to support them. The respondent denied this contention and couched his actions as being the “correct” thing to do. However, if he truly believed his own complaint, he would not have waited almost two years to contact the authorities.
[91] While the applicant’s evidence must also be approached with caution, I find that, consciously or not, the respondent’s actions post September 2013 were directed at forcing the applicant to leave. His evidence was that the date of separation was the date the applicant arrived in Canada. This colours all of his testimony. He refused to admit the marriage lasted a single day once the applicant arrived in Canada. That position is simply not borne out by all of the evidence.
The Shanghai Court Proceedings
[92] Another difficulty with the respondent’s evidence (as with the applicant’s) was the explanation about the Shanghai court proceeding. The respondent issued his Answer with a claim for divorce and equalization of net family property on January 21, 2013. He then issued a claim in Shanghai for exactly the same relief. When he was not successful in obtaining the divorce at the hearing in 2015, he issued another claim for the same relief. The divorce was ultimately granted by the Shanghai court on July 28, 2017.
[93] The respondent was cross-examined about why he had made the same claim in two different jurisdictions. He insisted that he did so because his lawyer in China told him to and that he was hoping that he could get a divorce faster in China. Yet, at his questioning in June 2016, some three years after the start of this litigation, he made no complaint about how long it would take to obtain a divorce in Canada when asked why he had made the same claim in two jurisdictions.
[94] Respectfully, the respondent’s position makes no sense. What makes more sense is the applicant’s submission that the respondent initiated these claims knowing that hiring a lawyer and travelling to China to deal with the claims would cause the applicant financial hardship and considerable stress.
[95] In the Shanghai judgment from 2015 (exhibit 33 and 44) the respondent’s lawyer is recorded as submitting that the parties met in 1982, fell in love and kept in touch for many years after. They meet one another again after marrying different people. They decided to divorce their former spouses because of their emotional affection and form a new family.
[96] This submission contradicts the respondent’s evidence in this trial concerning the beginning of the relationship and the reason for the marriage. The respondent testified that he never gave his Chinese lawyer this information. Like the applicant, he called his lawyer in China and asked him to correct it but his lawyer told him it did not matter at that point. The respondent then speculated that perhaps his lawyer had given the Chinese court a form of standard submissions used in all divorce cases.
[97] Remarkably, in the Shanghai divorce judgment dated July 28, 2017, similar problems arose. On that occasion, the respondent was present in court with his lawyer. The applicant did not attend. In reciting the background facts, the court stated that the parties fell in love in 1982. The respondent testified that when he received the written copy of the judgment, he told his lawyer this was an error. The respondent speculated that the court was perhaps referring to the facts used in the 2015 judgment.
[98] It is unsettling that both Shanghai judgments incorrectly described the parties’ relationship, and that their respective Chinese lawyers either acted without their instructions or wrongly recorded them. This court’s concern is that the coincidence is far too striking. A reasonable inference would be that both parties were telling the court/their lawyers what they thought they needed to in order to get what they wanted, whether that information was true or not.
Credibility Issues Raised by the Applicant
[99] The respondent attempted at every turn to downplay his relationship with the applicant. He denied they had been more than work colleagues for many years after they met at the glass factory yet he wrote her a letter in 1984 expressing that he wished she was with him and that since she could not be, he would write her name in the mountains.
[100] He denied that he and the applicant were a couple, yet was shown in family-style pictures at the applicant’s brother’s wedding in 1997 or 1998. I agree with the applicant’s counsel that it would seem unusual for both the respondent and his brother (who was the best man) to be invited to the wedding of the applicant’s brother and participate in family photo opportunities if he was simply a friend.
[101] In re-examination, the respondent’s brother stated that it was the applicant who asked him to be her brother’s best man and that the fact that he was present for a family photo did not mean he was part of that family. With respect, none of this makes much sense. The more believable inference is that Jian was asked to be the best man and the respondent was invited to the wedding because the two families were close as a result of the relationship between the applicant and the respondent.
THE EVIDENCE OF SHUTING DAI
[102] Shuting Dai is 22 years old. She came to Canada with her mother in September 2012 when she was 16 years old. She started school in Grade 10 in Canada. She is now in her third year of psychology at the University of Toronto. Shuting is sometimes referred to as “Diana” in this judgment; this is an English version of her name which she has adopted.
[103] Shuting recalled that the respondent was the only father she ever knew. He would return to China almost every summer for up to three months. During those times, she and her mother would move to the respondent’s apartment in Shanghai. Sometimes the respondent’s younger brother or mother would stay with them too. When the respondent was not in China, Shuting lived with her mother and maternal grandmother. However, their apartment was very small and could not have accommodated the respondent when he visited.
[104] Shuting remembered that the respondent initially treated her and her mother very well. He would cook for them sometimes as well. She also recalled that the respondent would get drunk and argue with her mother. At times, he slept in until noon and she and her mother had to accommodate his schedule.
[105] Shuting testified that her mother never lived with any other man. She called the respondent’s mother “grandmother” and thought of her as her paternal grandmother. When the respondent was in Canada, Shuting would send him cards, letters and emails. She referred to Exhibit 6, which was a birthday card sent by her to the respondent dated July 1, 2008. In the card she addressed him as “old papa” and signed it “Your daughter Diana.” It was suggested to Shuting that “old papa” is used in Chinese as a form of respect or endearment for an older person who is not necessarily a father. She denied this and told the court she always addressed the respondent as “father” or “papa.”
[106] She also referred to emails sent between her and the respondent in October 2008 filed as Exhibit 42. In these emails, the respondent addresses Shuting as “good daughter” and she signs off the emails as “your loving Diana” and “your loving little mouse daughter.” Shuting’s evidence was that the cards and letters filed were only a sample of their communication, which also included weekly phone calls and emails. When she was small, her mother helped her with the cards and emails.
[107] Shuting was aware that her mother and the respondent were involved in a business together. She had a clear memory of jam, nuts and mineral water being imported to China. She recalled helping out in the warehouse by labeling food products. She knew that her mother was “always emailing” her father about business and that up to 10 times a year her mother would pay for meals for her father’s client and friends. Shuting knew this because she went to those gatherings and either saw her mother discretely arrange for payment at the restaurant or give money to her father in advance.
[108] As a result of this litigation, Shuting became aware that her mother’s ex-husband’s name was on her birth certificate and not the respondent’s. She did not seem concerned by this and explained that in order to have a Hukou so she could go to school, a father and mother’s name had to appear on the birth certificate. Since the respondent was not divorced at the relevant time, her mother’s ex-husband’s name was required on the birth certificate. Shuting appeared to have fully accepted her mother’s explanation for this.
[109] Shuting was shown various photos depicting her, her mother and the respondent on trips together. She had difficulty remembering the details of the trips because she was young, but she did recall that her mother paid for the trips and that friends and relatives came with them on the trips. She would stay in a room with the other women and the respondent would stay in a room with the men.
[110] Shuting recalled one trip where her father became very drunk and verbally abused her mother in front of others. She and her mother went to the train station to take the train back to Shanghai but the respondent found them at the station and begged forgiveness. Shuting recalled this incident because she remembered she felt hurt and that she was frightened and trembling under her bed quilt while her parents argued.
[111] Shuting’s evidence was that it was the respondent who encouraged her and her mother to immigrate to Canada. He was the one who raised the issue constantly and her mother ultimately agreed. Shuting was not really involved in the decision to immigrate to Canada. That decision was made by her mother and the respondent.
[112] When they arrived in Canada, they lived at 16. She and her mother had a bedroom on the third floor and the respondent’s bedroom was next to theirs. She slept with her mother because she was timid and afraid of the dark. Sometimes she would wake up in the night and her mother would be gone. She knew her mother was in her father’s room because it was next door and she could hear them talking.
[113] After they arrived in Canada, things went well for a short while. The respondent listed his name as Shuting’s father and contact person on her school registration for the first two years she went to school in Canada.
[114] However, things began to decline after several months because of the respondent’s drinking. When drinking, he would swear at her mother and other family members. His drinking and behaviour became worse until an incident on March 23, 2013 which Shuting remembered very clearly. The respondent’s friend James and his wife had been invited for dinner. Shuting and her mother were asking James about his opinion regarding which university Shuting should attend. The respondent became belligerent and insisted that Shuting needed to go to work and not attend university.
[115] The respondent had been drinking and started yelling at the applicant. She asked Shuting to go upstairs when the argument escalated. Shuting came back out of her room in time to see the respondent kicking the applicant. He then pushed her head against the wall and then got on top of the applicant and continued to assault her. Shuting was terrified. James and the respondent’s younger brother had to forcefully pull the respondent away from the applicant. Shuting had her cell phone with her when she witnessed this incident. She audio recorded some of it (over an hour) but did not take photos or a video. Her evidence was that she regrets not calling the police but she knew that there was an ongoing attempt to try to resolve her parent’s differences within the family and she and her mother did not want to lose face.
[116] The audiotape of the assault incident was not disclosed to the respondent prior to trial. On re-examination of Shuting, counsel for the applicant sought to have the audio recording introduced into evidence. The court requested that counsel listen to the recording first to see if they could come to an agreement concerning its contents. Counsel agreed that the recording revealed a heated argument but there was nothing on the recording that could confirm that an assault had taken place.
[117] Later that year, Shuting recalled another incident in which the respondent had been drinking. He rushed at her and mother swearing and yelling that he would have them killed. Shuting’s evidence was that her mother did not call the police about either the assault or the death threat. She was concerned about saving face and family shame. She told the court that reporting such an incident in China would be frowned upon and possibly lead to criticism of the family of the woman reporting the incident. In their culture is preferred that such matters be dealt with internally by the family.
[118] After the assault and the threatening incidents, the respondent continued to drink and act aggressively towards Shuting’s mother. By July 2013 there was no communication with the respondent by either Shuting or her mother. The period between July 2013 and the date of the departure of Shuting and her mother was a difficult time for them. Shuting’s evidence was that the respondent cut off the home phone line. She and mother were afraid of the respondent. They were concerned about what might happen if their cell phones did not work. Shuting assisted her mother in drafting a letter in English which they hand delivered to their neighbours (see Exhibit 37).
[119] The letter set out as follows:
We are the mother and daughter who live at 16 CATHERWOOD COURT. After we came to Canada on September 12, 2012 and started living in father’s house with torture and abuse, we finally go to Court and apply for divorce, but the danger is still around us. They had already cut our home phone. So please, if you or your family hear us screaming or cry for help, please call 911 immediately.
We really need your assistance and help!
Thank you very much,
Peony Dai and Diana Dai
Aug.16.2014
Our Phone Number:
Peony Dai: 647-739-9939
Diana Dai: 647-710-6800
[120] After this letter was delivered, one of the neighbours called the police. As well, Shuting’s evidence was that the respondent cut off the household Wifi several times. As Shuting needed the Wifi to complete school assignments, and the respondent refused to speak to them, her mother called the police. The police came and discovered that the respondent had disconnected the router. The police requested that he reconnect it.
[121] The police were also called by either Shuting or her mother when the respondent turned off the hot water. On each occasion when the police attended, neither Shuting nor her mother reported the assault or threatening incidents. The audio recording of the assault incident was never given to the police.
[122] Shuting has always refused to provide a DNA sample in order to determine if the respondent is her biological father. Her reason is that she wants nothing to do with the respondent, given the way he treated her mother. As the child support claim has been withdrawn, she says such a test is not necessary in any event.
Shuting’s Credibility
[123] At times, Shuting’s evidence was compelling and credible. At other times, it was clear that she was simply attempting to bolster her mother’s case either because she had been told to do so or because she felt she had to.
[124] In terms of credibility, Shuting had a vivid memory of the respondent’s more egregious behaviour. Her descriptions of the assault, the threat and the respondent’s drunken rages rang true. The picture she painted of being powerless to stop the respondent, being “terrified” of him and his wide-eyed crazy rages were forceful and believable.
[125] The difficulty with Shuting’s evidence was her memory of many other events. She could provide virtually no details of her life with the respondent when he came to visit in China. This was the case notwithstanding the fact that he was in China from October 1998 to July 1999 (a period of almost ten months when Shuting was three), December 2001 to January 2002 (a period of one month when Shuting was five), April to June 2003 (a period of three months when Shuting was seven), October 2004 to February 2005 (a period of four months when Shuting was nine), June 2006 to September 2006 (a period of four months when Shuting was ten), and finally from April to July 2009 (a period of four months when Shuting was 13). Shuting was unable to describe her daily life with the respondent while he was living in China other than where they lived, the fact that he helped with the cooking occasionally and that she became afraid when he drank too much and yelled at her mother.
[126] As well, Shuting’s evidence diverged from that of her mother on several key points as follows:
a. The applicant did not testify that she lived with the respondent when he came to China. Her evidence was that as of June 1995 she stayed at the respondent’s apartment two to three days a week when he visited China. Further, Shuting was not living there. The applicant would bring her for visits on weekends only. The respondent’s evidence on the living arrangements was very different from either the applicant’s or Shuting’s. His evidence was that neither Shuting nor the applicant ever stayed at his apartment in Shanghai when he visited China until after their marriage in 2005. After 2005 the applicant would visit him once every two weeks and she would occasionally bring Shuting. Shuting never stayed overnight.
b. Shuting’s evidence was that her mother’s business closed down so that they could immigrate to Canada. The applicant’s evidence was that she was forced to close her business in 2011 when the respondent sent her food products that did not pass inspection in China. The respondent’s evidence was that he stopped sending food products to the applicant in 2009. He was not clear why she closed her business but denied that it had anything to do with the quality of the products he exported to her.
c. While Shuting’s memory was that the respondent visited China during the summer, this is not borne out by evidence of his passports. It is clear that some of his visits occurred during the regular school year. The evidence of both the respondent and the applicant was that the applicant’s mother’s home was quite far away from the respondent’s apartment; a commute that could take up to two hours. The evidence was also consistent that Shuting’s school was not far from where she lived and that her maternal grandmother often took her to school when she was too young to go on her own. Unless Shuting was missing weeks of school at a time, she would have had to commute two hours each way to get to school if she was indeed living with the respondent. Her mother’s evidence seems more logical. That is, that Shuting was living at home during the week when she was in school.
[127] Overall, it is difficult to fully accept Shuting’s evidence. At best, her evidence is confirmatory of the toxic situation which existed between the parties from 2013 to 2016. At its worst, it attempts to bolster the applicant’s evidence but does not succeed on key points such as the parties’ living arrangements when the respondent visited China.
WAS THE MARRIAGE A SHAM?
[128] The respondent seeks a declaration that the marriage is a sham, thereby relieving him of any obligation to pay spousal support or an equalization payment. The applicant does not agree. Her position is that, while the marriage did not work, that does not mean it was a sham.
[129] Because a marriage is a voluntary union for life, it is not a status that can be imposed on an individual without their consent. In principle, the absence of consent should render a marriage null and void, regardless of what factor that precludes the consent: Davison v. Sweeny, 2005 BCSC 757 at para. 8. However, judicial decisions have differed as to the factors that influence whether an individual consented and/or whether it will result in a finding that a marriage is void or only voidable.
[130] Fraudulent misrepresentations that induce a person to marry will not undermine consent, except where the misrepresentations lead to an operative mistake. The standard of finding fraudulent misrepresentation is high and courts will generally not engage in a line of inquiry into the minds of the parties with respect to their subjective motivations or expectations. Marriage will be invalidated “not because of the presence of fraud but rather because of the absence of consent”: Said v. Said, 1986 CanLII 822 (BC CA), 1986 Carswell BC 375 (B.C. C.A.) at paras 25-26. Misrepresentations as to the character or personality traits of a spouse do not constitute fraud in proceedings to annul a marriage: Julien D. Payne and Marilyn A. Payne, Canadian Family Law at p. 27.
[131] As observed in the decision Kokkalas v. Kokkalas (1965), 1965 CanLII 422 (SK QB), 50 D.L.R. (2d) 193 (Sask. Q.B.), at p. 194, “no degree of deception can avail or set aside a contract of marriage duly celebrated by consenting parties with the capacity to enter into the marriage”.
[132] From a legal standpoint, the intention of the parties to contract marriage is all important, however their motive for doing so is irrelevant: K.J.W. v. M.D.W.W., 2003 BCCA 292. As Justice Wilson provided in Fernandez (Alarcio) v Fernandez (1983), 1983 CanLII 3644 (MB QB), 34 R.F.L (2d) 249 (Man. Q.B.) at p. 254-254, “while the purely sham marriage is of no effect…generally the mental reservations or motives of the parties, or one of them, will not serve to destroy the validity of a marriage”.
[133] Courts in Ontario and other provinces have concluded that a marriage is not invalidated by reason only that it was entered into solely as a device to evade immigration regulations. Where both parties voluntarily enter into a marriage of convenience, the marriage is valid and cannot be annulled, but divorce may still be available under the Divorce Act: Payne v. Payne at p. 30. This applies even where one spouse has married for the sole purpose of acquiring citizenship unbeknownst to the other sponsoring spouse who thought they were entering into a genuine marriage: Grewak v. Kaur, 2011 ONSC 1812 at para. 5, citing Iantsis (Papatheodorou) v. Papatheodorou (1970), 1970 CanLII 438 (ON CA), 3 R.F.L. 158 (Ont. C.A.). A finding of collusion, however, would bar the granting of a divorce: Payne v. Payne at 30. In Kaur v. Brar (2003), 2003 CanLII 2452 (ON SC), 35 R.F.L. (5th) 380 (Ont. S.C.), the court determined that given the circumstances of the parties’ marriage, it was unable to conclude that there had been no collusion. Evidence showed that the parties clearly married for the sole purpose of immigration fraud. A divorce judgment was refused at that time and the matter was referred to the Ministry of Immigration and Citizenship.
[134] Based on the above, the questions to be determined with respect to whether the marriage was a fraud are as follows:
a. What were the parties' intentions in entering the marriage?
i. Did the applicant marry for the sole purpose of immigration, without intending to remain married to the respondent?
ii. If so, was the respondent's consent to the marriage procured by misrepresentation or fraud?
iii. If there was misrepresentation or fraud, was the respondent an active participant?
[135] I find that the answers to all of the questions must be no as will be explored below. As such, the applicant’s claims for support and equalization of net family property remain outstanding.
[136] In this case, there is no issue with respect to the validity of the marriage or the consent of the parties entering into it. Unfortunately, both were disappointed in the outcome. From the applicant’s perspective, she married her long-time lover. She helped him with his business and devoted herself to him despite many long absences. She had many hopes and expectations for her immigration to Canada and the chance to finally be together with the respondent. Unfortunately, all of those hopes were dashed when the respondent’s drunken rages and assaultive behaviour drove the applicant to commence this application.
[137] From the respondent’s perspective, he says he was completely duped. He married the applicant so she could put his name on her mother’s household registration and receive more compensation from the demolition agreement. He did not really want to get married because he was recently divorced and only thought of the applicant as a friend. But he decided to help her out. Later, when she insisted that he sponsor her and her daughter to come to Canada, he again helped her out. He was ready to make the relationship work but was shocked and disappointed when the applicant completely ignored him but expected him and his mother to cook, clean and support her and her daughter while in Canada.
The Hukou Issue
[138] Much evidence was heard at trial about this issue. The respondent’s position is that the parties married just before he left China on February 18, 2005 so that the applicant could meet the deadline to include his name on her mother’s household registration and receive additional compensation (which was determined based on the number of people in the household). The marriage was a rushed affair with no formal celebration or banquet for this reason.
[139] The applicant refutes this. Her evidence was that the parties were 42 years old at the time of the marriage. They had both been married before and did not feel the need for an elaborate ceremony or celebration. In her cross-examination the applicant told the court that after the registration of their marriage, the couple simply returned to the respondent’s apartment. Curiously, in her reply evidence she told the court that they hosted a dinner after the ceremony at a hotel to which 40 people were invited.
[140] The applicant’s evidence was that, while the respondent’s name appeared on the Hukou as her spouse, he was not listed as a member of the household. This is because in 2007 he was not a resident of China and therefore not permitted to be listed the Hukou. I accept the applicant’s evidence on this point. That is, it makes some sense that a non-resident of China could not be registered as a household member for compensation purposes.
[141] In any event, even if the parties agreed that part of the reason for their marriage was to ensure that the respondent was listed as member of the applicant’s household, that on its own would not be sufficient to find the marriage was a sham.
The Immigration Issue
[142] As with most key issues in this case, the parties’ evidence on the facts leading up to the applicant’s immigration and what transpired is significantly divergent.
[143] It is important to examine the applicant’s evidence regarding the immigration issue as the respondent contends that the applicant never intended to be in a relationship with him and married him solely for the purpose of having him sponsor her to come to Canada. I do not find that this was the case. A number of pieces of evidence point to the applicant having a long term and significant connection to the respondent which would lead to the conclusion that the applicant also wanted the marriage to work.
A. The Parties’ Business Relationship
[144] The applicant and respondent worked together. While the respondent attempted to downplay this relationship, I accept that he exported food from Canada through Canasia which the applicant then distributed and sold on his behalf in China.
[145] Although the respondent insisted that the applicant had nothing to do with his logistics business, Aces, I find that there was a connection there. Exhibit 24 is a series of emails between the parties in 2008 and 2010. I accept that these are examples of their business communication. Further, the applicant’s letter to Citizenship and Immigration Canada dated June 6, 2015 sets out that she was finding customers for and solving cargo transportation issues for Aces.
[146] The applicant testified that she paid over $100,000 USD in agency fees on behalf of the respondent’s businesses. She attempted to bolster that evidence with Exhibit 34, a list of agency fees which she claimed she had paid between 2004 and 2006. Unfortunately, the late disclosure of this document and other issues related to the applicant’s credibility do not permit the court to rely on this as evidence. However, even without this evidence I am satisfied that the parties had significant business connections.
[147] For example, if the applicant had no connection to Aces as the respondent testified, why did she have the email address peony@aceslogistics.ca? Why would she be emailing the respondent back and forth regarding quotations, pricing and invoicing? Further, the tone of their emails cannot be ignored. While the content was business related, they addressed one another as “Wife”, “Tearfully grateful hubby,” and “darling.” The respondent’s evidence was that it was normal for him to use endearments such as this when addressing the applicant.
[148] The obvious conclusion is that the applicant was involved in both Canasia and Aces because the parties were both business partners and spouses.
B. The Parties’ Relationship Prior to Coming to Canada
[149] There were many photos, cards and letters introduced into evidence to support the applicant’s position that the parties’ relationship was both long term and committed. The respondent again downplayed this evidence, pointing out that the trips they went on were always with friends or relatives or even going so far as to submit that the cards, letters and some of the photos were compiled solely to bolster the applicant’s push to immigrate to Canada.
[150] The applicant produced a letter sent to her by the respondent in 1984 (Exhibit 2). The respondent denied that the letter could be characterized as communication between lovers. He testified that he wrote the letter to the applicant as a friend. The respondent was asked about the line in the letter in which he writes, “How I hope you can be here but it is not realistic, so I could only write your name amongst the peaks of Huangshan to express my feelings.” He responded that he wrote to many friends in this way. Whatever the intention of the respondent in the letter, it directly contradicts his evidence that he and the applicant were only acquaintances from work and that they had no communication for many years after 1983.
[151] The applicant produced a letter written to her by the respondent in December 1994 (exhibit 3) asking if she missed him and sending her a New Year’s message with longing and greetings as well as greetings to her mother and brother. The respondent was asked if his first wife (whom he married in 1994) knew that he was writing the applicant such letters. He insisted that they continued to be friends at that time and that the letter did not suggest he had any romantic interest in the applicant.
[152] The next letter in evidence was to the applicant from the respondent in February 1996 after learning of her pregnancy. The letter is filled with the fears of a newly informed father: is the applicant working too hard? Is she taking care of herself? Will he have enough money and time to be a good father? In the end he suggests that it might be best if she aborts the baby given his lack of employment and the fact of being newly divorced. He ends the letter by saying he missed the applicant deeply. The respondent also mentions in the letter that he spent $400 in January 1996 talking to the applicant by phone. The tone of these letters (exhibits 3 and 4) and frequency of communication certainly suggest more than a friendship and certainly suggests that at point the respondent considered that he was the father of the unborn child.
[153] It should be mentioned here that this letter is confusing given the respondent’s evidence that he was medically unable to have children. He explained that this is why he did not have children with his first wife. If this were indeed the case, why was it not mentioned in the letter? More importantly, why did he not mention this important fact in his Answer when defending the applicant’s claim for child support?
[154] The respondent insisted that he and his first wife had fertility problems which lead them to try in vitro fertilization. This was also unsuccessful. The respondent did not provide any documentary evidence to confirm his alleged fertility problems.
[155] The respondent’s brother Jian testified that he knew his brother had always wanted a child but that his former wife had fertility problems. According to Jian, his brother told him he was not sure whether he was Shuting’s father or not.
[156] Jian testified that he has known the applicant for decades. After he immigrated to Canada, he and his brother sometimes traveled back to China together. He agreed that his brother and the applicant started a close friendship with the applicant in the 1980’s. He would not concede that they were romantically involved prior to their marriage.
[157] Jian was shown photograph 13(j). He agreed that he had been the best man at the applicant’s brother’s wedding many years ago and that he was part of a family wedding photo which included the applicant, her mother, Shuting, the respondent, the applicant’s brother and his bride.
[158] Jian did not dispute that his brother had remained loyal to the applicant throughout their long distance relationship between 2005 and 2012.
[159] Various other birthday and New Year’s cards from the respondent to the applicant (sent after 2005) showed a clear spousal relationship with the respondent signing off as “your Hubby” and addressing the applicant as “Dear Wife.” His birthday card sent in November 2007 recites as follows:
“For the memories of yesterday, for the happiness of today, for the promise of all
tomorrows….I love you.”
[160] Exhibit 13 was a series of photographs about which there was significant evidence at trial.
[161] The photos in Exhibit 13a) and d) were wedding photos taken in a photo studio in 2009. The applicant wanted them taken as their wedding had been a small civil ceremony with no guests or banquet. The respondent went along with it. The applicant testified that it was not unusual to have such photos taken where the studio provided costumes and formal attire.
[162] The respondent’s position was that the wedding photos were taken at the applicant’s insistence purely to support her immigration application. However, the evidence is clear that the applicant’s immigration application was not made until several years after the wedding photos were taken. If the relationship was as strained and distant as the respondent would have the court believe, he could have simply said no to participating in the photo shoot.
[163] The photos in exhibit 13b), c), e), f), g) and h) depict the parties on various trips and outings. Shuting is present in some of the photos. The applicant’s evidence was that Shuting was as young as six in some of the photos. The parties and Shuting look very happy and relaxed in the photos. In several of the photos, the respondent has his arm around the applicant and Shuting.
[164] While the respondent insists that these trips were taken with other family members and friends, I am uncertain what difference that makes. The fact is that the respondent did not dispute the validity of the photos. Once again, they depict a situation which was far more harmonious and integrated than the relationship described by the respondent.
[165] Photos in exhibit 13(j) and (k) show the applicant and respondent with Shuting and other friends at what appears to be a family birthday celebration at a restaurant. The respondent denied that his participation in such milestone events meant that he and the applicant were a couple. He insisted that they were just good friends.
[166] The respondent was asked about photographs contained in Exhibit 13(i) and (j). Those photos were taken at the wedding of applicant’s brother in the late 1990’s. The respondent and his brother were in attendance. The respondent was directed to several photos which were suggested to be “family” type photos in which he was shown with the applicant, Shuting, the applicant’s mother, his brother, the applicant’s brother and his new wife at the wedding. The respondent’s brother was the best man at the wedding. The respondent denied that these photos had any significance and suggested that many other group photos were taken without him. The respondent provided no photos of his own. These photos tend to corroborate the applicant’s position that the parties’ lives and families were intertwined as a result of their committed relationship.
[167] Interestingly, the respondent did not provide any photos to demonstrate that he had a relationship other than the one with the applicant. For example, he did not divorce his wife until 1994 but did not provide photos of him with her or her family to contradict that he had another relationship during the time prior to marriage. In fact, there was no evidence from either party that they were with romantically involved with other partners other than their previous spouses.
[168] The respondent insists that the parties never lived together as man and wife while in China. He rarely visited with her family and went to her new apartment (after the demolition) only twice after she moved into it in 2007. Remarkably, he testified that all of the photographs in exhibit 13 and all of the cards, letters and correspondence between the parties (and Shuting) were created by the applicant in order to assist her immigration application.
[169] With respect to the immigration document, the respondent referred to the applicant as his wife and Shuting as his daughter in both the visitor’s visa application and the immigration application. Exhibit 46 was a Letter of Invitation dated June 12, 2009. The respondent hoped to have the applicant and Shuting visit Canada during the summer of 2009. In the letter he states:
I’m writing this letter as the invitation to my wife: Xia Dai and my daughter: Shuting Dai to pay a visit to Canada from 04/07/2009 to 30/08/2009. During this period they will stay in my house, I will pay all their expense during their stay in Canada.
Further on in the letter he states: “My wife Xia Dai and I have fallen love to each other for more than 15 years.”
[170] An “Agreement Letter” is attached to the Letter of Invitation in which both parties agree (as mother and father of Shuting) that the visit is agreed to by both parents. There is also a “List of Inviter’s Household” and a “Guarantee Letter” attached to the Invitation. In both of those documents, Shuting is also referred to as the respondent’s daughter.
[171] The respondent testified that the Chinese versions of the documents are different. Further, all of the documents were drafted by an immigration consultant hired by the applicant. He simply signed them as requested. Of note is the applicant’s evidence in reply which was that no immigration consultant was ever hired by either party.
[172] The respondent was shown Exhibit 56 which was a handwritten guarantee letter in English intended for the same summer visit in 2009. That document also refers to his wife and daughter Shuting. The respondent said that, although the document was in his handwriting, the immigration consultant told him what to write. The respondent was asked why he would refer to Shuting as his daughter when his position has always been that she is not. He insisted he was not lying in the visa documents, he was following the immigration consultant’s instructions so that the visa would be approved.
[173] Further, the respondent wired money to the applicant to help her with the cost of attending an immigration interview in Beijing at the Canadian consulate.
[174] While the relationship may not have been a traditional spousal one, I find that the respondent’s attempts to downplay or minimize it are not borne out in either the documentary evidence, his brother’s evidence or his own evidence.
The Parties’ Post Immigration Relationship
[175] Based on the evidence of both parties, they wanted to make the relationship work after the applicant immigrated to Canada. The respondent hoped that the parties could work and live together as a couple. He was ready to settle down but was very disappointed when the applicant would neither talk to him nor share a bed with him.
[176] The applicant had a very different version of what happened upon her arrival. Her evidence was that she came to Canada because the respondent wanted to be reunited with her and to help him run his business. The applicant was almost 50 when she arrived in Canada. She found the adjustment a challenging one, having never visited Canada or travelled outside of China prior to her immigration. The applicant spoke little English and found it a difficult language to learn. She was disappointed with the respondent’s drinking and shocked at the way the respondent treated her when he was drunk. Complaints about the respondent’s drinking habits were not new. They had been raised by Shuting in her evidence when describing the respondent’s behaviour prior to her immigration to Canada.
[177] The parties had different versions about the applicant’s behaviour upon her arrival to Canada. The respondent testified that she was cold and unappreciative. The applicant’s position was that she tired from the transatlantic flight she had ever been on. The direct flight from Shanghai was long and exhausting. She conceded that she was not at her best at this initial meeting.
[178] The respondent insisted that the cold welcome he received was significant as it was representative of a cohabitation that simply did not exist once the applicant arrived in Canada. While the respondent was clearly disappointed that he was not greeted with the affection and enthusiasm he thought he deserved, I do not rely on this single event as corroboration that the separation occurred on the day the applicant arrived in Toronto.
[179] While both the applicant and Shuting agree that things went smoothly for the first few months after their arrival, it is true that the arrangement quickly went downhill to the point where the parties were separated but still living within the same home less than a year after the applicant’s arrival.
[180] Interestingly, at his Questioning on June 22, 2016 the respondent described the marriage as deceitful, but not fake. It was suggested to the respondent that this meant that the marriage had been good at one time but that it deteriorated. At trial, the respondent said he had no recollection of saying this in 2016.
[181] The respondent’s main concern appeared to be the financial burden placed on him by the applicant and Shuting. He complained bitterly that the applicant never once asked him about how much it cost for household utilities.
Analysis
[182] I find that while each of the parties may have had different expectations and reasons for entering into the marriage, they both understood and consented to it.
[183] Further, the applicant did not enter into the marriage solely for the purpose of immigrating to Canada. In any event, even if she did and the respondent’s evidence on this point is accepted in its entirety, this alone would be insufficient to void the marriage.
[184] As well, the respondent’s consent to the marriage was not obtained by misrepresentation or fraud. I accept that the parties had known one another for at least 10 years prior to their marriage. On the respondent’s own evidence, the applicant did not even begin discussing immigrating until 2006, a year after their marriage. I accept that the applicant was very much in love with the respondent and had been for many years. She had endured a long distance relationship for 10 years and after both parties’ divorces were finalized she was finally able to marry the respondent. I accept the applicant’s evidence that since she and the respondent met again in 2005, she has not been with any other partner despite many long absences from China by the respondent prior to her immigration.
[185] While the respondent may have felt the marriage took place too soon after his divorce or that that marriage was being used in part to increase the demolition compensation, he was not deceived on these issues. He knew exactly what he was getting into.
[186] The issue of sexual intimacy is in dispute. It is difficult to accept that no sexual intimacy occurred at all when both parties appear to agree that there was a certain level of socializing and joint lifestyle up to the March 2013 incident. In any event, I accept that there had been some form of sexual intimacy prior to 2012 even if there was none after.
[187] It cannot be ignored that the respondent sought a divorce in both Canada and China. If he took the position that the marriage was a sham, why did he not seek a divorce on that basis? The issue of a sham marriage does not appear to have been mentioned in either the Chinese or Canadian court material.
[188] I agree with the applicant’s submissions that nothing turns on the fact that the parties did not have a large wedding or banquet. They were in their 40’s, both divorced, and poor. I accept that applicant’s evidence that a small dinner with friends followed the registration of the marriage. This would not be unrealistic given the parties’ circumstances.
[189] Given all of the above, the respondent’s request to have the marriage declared a sham is dismissed.
THE DATE OF SEPARATION
[190] The respondent’s evidence was that the date of separation was the date the applicant arrived from China: September 12, 2012. The applicant’s application indicates that the date of separation was July 2013. A further date of separation of February 2013 was also referred to as a result of the order of Kiteley, J. from July 2016. Because the parties could not agree on a date of separation, the court suggested using a mid-point for valuation purposes. As such, the valuations provided by the respondent for net family property purposes reflect three different dates.
[191] The respondent’s position was that the applicant wanted nothing to do with him from the moment she arrived in Canada. She would not share his bed and she spent all of her time with her daughter. When the respondent invited friends or family over, the applicant and her daughter would stay in their room. They would come down for meals but return to their room directly after. The respondent had no interaction with Shuting at all. Shuting only spoke to her mother.
[192] The respondent testified that the applicant performed no domestic services for him. She did not do errands or laundry for him. She did not do any of the cooking or contribute to the cost of groceries, household supplies or ongoing expenses.
[193] After the incident on March 23, 2013 the applicant did not speak to the respondent. They lived in the same house until July 2016 but had no communication. By July 2013 the applicant and Shuting were buying their own food and eating separate meals.
[194] In September 2013, there was a family meeting to attempt to settle the issues between the applicant and the respondent. The respondent offered to pay the applicant $50,000 to settle her claims and leave his house but she refused. He did not believe he was permitted to change the locks so he let her stay until an agreement was reached in court that she had to leave on July 31, 2016.
[195] After the March 23, 2013 incident, the relationship between the parties became difficult. By July 2013 they no longer spoke to one another. In 2014, the applicant brought a motion for exclusive possession of the bedroom that she shared with Shuting. The respondent would not consent. The court ordered that the applicant was permitted to put her own lock on her bedroom door. The respondent then put a lock on his own bedroom and the basement.
[196] According to the respondent, the applicant never paid rent between September 2013 and the date she left on July 31, 2016.
[197] The respondent was shown two photos taken of him with the applicant in February 2013 at 16 Catherwood. The couple appear happy in the photo and the applicant has her arms around the respondent in one of the photos. This would have been around the time of the parties’ wedding anniversary.
[198] The respondent testified that the photographs of him and the applicant date stamped February 19, 2013 are altered and not real. He does not recall anyone ever taking photos of them as a couple once the applicant arrived in Canada. The respondent’s evidence was that he knew the photos were not real because the date stamp was in typewritten characters as if entered from a keyboard. Date stamps from digital cameras are in digital format; that is, they are square like numbers on a digital clock. The respondent conceded that it was possible that the date stamp in that format could have been from a cell phone.
[199] The applicant’s evidence was that Shuting took the photos and that they represented the state of their relationship around the time of their anniversary in February 2013. While not without their problems, she and the respondent were still a couple.
[200] I do not accept that the photos were altered. I accept that these photos were taken prior to the March 2013 incident and are reflective of the parties’ affectionate but troubled relationship at that time. This type of rather astonishing allegation was not the first of its kind to be made by the respondent in this trial.
[201] The respondent gave his version of the events of March 23, 2013. He told the court that there was a bitter argument when he told the applicant in front of his friend James and his wife that it was not necessary for Shuting to have a university education. Canada needed more skilled workers, and there were opportunities for trade school or college graduates. The applicant was apparently insulted by this and began to yell at the respondent. She went to her bedroom with Shuting and slammed the door. The respondent followed her and pushed open the door. A further argument ensued. They went downstairs and the applicant said she would kill herself. She was suicidal and began to bang her face into the wall and then into the respondent’s chest. James, his wife and the respondent all tried to calm her. She scratched the respondent’s face and showed him the scars on her wrists from when she was suicidal during her first marriage.
[202] The respondent denied that he kicked the applicant or banged her head against the wall. He did agree with the applicant that everything changed after this incident. The parties no longer communicated. Neither party introduced any photographs which would corroborate injuries suffered by the applicant.
[203] Jian corroborated his brother’s version of the events. He testified that he was there when the incident occurred. He agreed that this his brother had been drinking. His evidence was he and brother’s efforts were focused on calming the applicant. His brother never hit or punched her. At one point Jian tried to take away some scissors from the applicant and received a cut on his neck from his struggle with the applicant.
[204] The accounts of the events on March 23, 2013 by the two parties in this proceeding could not be more different. The applicant describes a vicious assault by an enraged and drunken spouse. The respondent describes an argument started by the applicant who was hysterical and suicidal.
[205] Shuting’s observations of this same event were compelling and also starkly different from those of the respondent. She described the respondent savagely beating and kicking her mother.
[206] However, this incident must be put into perspective. The court is not being asked to determine whether the applicant was assaulted. No criminal charges have ever been laid, nor was the event reported to police. What comes from this incident (whatever occurred) is that it was a turning point in the parties’ marriage. Nothing was the same thereafter and there is no doubt they were estranged from that point. After the March 2013 incident, the applicant and Shuting basically stayed in their room, even installing a hot plate to cook their own meals apart from the rest of the family.
[207] The respondent gave other evidence to bolster his position that the date of separation was September 12, 2012. This included evidence of several allegations about incidents which occurred after the March 23, 2013 incident. He told the court that the applicant called the police because she said the respondent deliberately refused her access to the internet. The respondent’s evidence was that there were technical difficulties the day the outage occurred. The respondent continued to pay for the applicant’s internet service but technical difficulties did occur from time to time that related to his service provider and not to him.
[208] The respondent told the court that the applicant called the police to complain he had shut off the hot water in the house while she was taking a shower. The respondent’s evidence was that his mother had been doing laundry that day and likely used all the hot water.
[209] The applicant complained that the respondent deliberately shut off the electricity to the range and would not allow her access to the garbage bins in the garage. The respondent had a different version. He said that the applicant broke the stove and the washing machine several times. He paid for the repairs. She was not used to North American appliances or things such as central air conditioning. When he tried to show her how to use them, she claimed he was being disrespectful.
Analysis
[210] It is impossible to reconcile the accounts of the events of March 23, 2013 and the parties’ conflicts in the ensuing months. The evidence is completely contradictory other than some alignment of the evidence as between the applicant and her daughter and the respondent and his brother. However, as mentioned above, there is a concern about this alignment because of Shuting’s closeness to her mother in all things and further, that the audio recording in Shuting’s possession does not verify that any assault occurred, only an argument.
[211] In the end, it is not necessary to reconcile the contradictory accounts of these events. It is clear that nothing was the same with these parties after March 23, 2013. The other conflicts relating to circumstances such as a lack of hot water, no internet service, a broken stove, and no access to the garage all arose after March 2013 and mostly in relation to the complete lack of communication between the parties.
[212] Oswell v. Oswell (1990), 1990 CanLII 6747 (ON SC), 74 O.R. (2d) 15 (Ont. H.C.), remains the leading case with respect to the factors to be considered in determining the date of separation where spouses continue to occupy the same premises. In summary, the factors are as follows:
There must be physical separation.
There must be withdrawal by one or both spouses from the matrimonial obligation with the intent of destroying the matrimonial consortium.
The absence of sexual relations is not conclusive but a factors to be considered.
Other matters to be considered are the discussion of family problems and communication between the spouses, presence of absence of joint social activities, and the meal pattern
Although the performance of household tasks is also a factor, help may be hired and for these tasks and greater weight should be given to those matters that are peculiar to the husband and wife relationship outlined above.
[213] The factors should be considered in turn, keeping in mind that they are not exhaustive and that each case in which the date of separation is contested has its own unique set of facts. Applying the Oswell factors to the evidence in this case, I find that the date of separation was on March 23, 2013 for the following reasons:
a. The evidence about whether the parties had sexual relations between September 12, 2012 and March 23, 2013 is contradictory. What is clear is that there were no sexual relations or communication after March 23, 2013.
b. While it is conceded that both parties’ expectations were not met when the applicant first arrived in Canada, there did appear to be some joint outings and the parties represented themselves as spouses to others. This ended after March 23, 2013 when the parties began to live separate lives.
c. According to the applicant, she cooked and cleaned for the respondent. According to the respondent, the applicant performed no domestic duties. The truth is likely somewhere between these two polarized positions. There is no doubt, however, that after March 2013, the applicant cooked and cleaned only for herself and her daughter.
d. The respondent supported the applicant financially but after March 23, 2013 this support was indirect. After March 23, 2013, he paid the household expenses and paid for her internet. He stopped paying for her cell phone after she issued her application in November 2013. The applicant began to work in June 2013. At that point it appears that she began to pay for food for her and Shuting.
e. After March 23, 2013 the parties did not communicate. The lack of communication was so severe that the applicant took to calling the police rather than asking the respondent directly why there was no hot water or why the stove would not work. Both parties were clear in their evidence that they barely spoke to one another after March 23, 2013.
f. While the respondent did not force the applicant to leave his home after March 23, 2013, he certainly made it clear that he would have preferred that she left. He offered her $50,000 to leave in September 2013. He stopped paying for her cell phone. He co-existed with the applicant and Shuting but only because he thought he had to. The fact that the applicant remained in the same home as the respondent for more than three years after March 23, 2013 is of little relevance in this case and does not persuade this court that the date of separation should be any different or later than March 23, 2013.
THE PROPERTIES IN SHANGHAI
[214] In 2004, the applicant’s mother received a notice that the home she was living in was to be demolished by the Shanghai city government. In 2007 her mother received certain compensation in relation to the demolition, including title to a pre-construction apartment unit. There was no clear evidence about how much compensation the applicant’s mother received but it was close to $2 million Renminbi (“RMB”). As of October 2018 $1.00CDN was worth 5.36RMB.
[215] According to the applicant, her mother divided the compensation into shares for distribution to her family. She used the applicant’s share and that of Shuting to purchase the Shanghai condo. The condo was purchased in May 2007 for 710,000 RMB. The applicant’s mother paid a deposit of 230,000 RMB and the applicant took a mortgage for 430,000 RMB. The applicant denied the suggestion that she used her profits from Hojer to buy the condo.
[216] The applicant was asked to provide proof that the 230,000 RMB was paid by her mother. She told the court she had no such proof because the bank book belonging to her mother, which showed this transaction, had been cancelled many years ago. It would have been too expensive for the applicant to try to track down this information and have it translated. She testified that she did make enquiries by phone to a lawyer in China but that only confirmed it would have been too time consuming and expensive to attempt to find the document.
[217] A copy of the Agreement of Purchase and Sale for the Shanghai condo was produced. The applicant signed the agreement as “the person entrusted.” The applicant’s evidence was that this meant she was the person entrusted to hold title for her daughter Shuting who was only 11 years old at the time the condo was purchased. However, there were issues as to how this portion of the Agreement of Purchase and Sale was translated. According to a different interpreter (the interpreter assisting the court on October 2, 2018), the notation beside the applicant’s signature could also be translated as “authorized person.”
[218] The applicant explained that she and her mother have the right to live in the condo but title was arranged this way to ensure the gift went to Shuting as her mother intended. Title was also registered in this manner to avoid the high estate tax tariff payable if the applicant’s mother left the condo to Shuting in her will.
[219] The condo mortgage was paid out by the applicant’s mother on June 21, 2011 in the amount of 370,000 RMB. According to the applicant, her mother sold the pre-construction apartment she had received as part of the demolition compensation package and used that money to pay out the mortgage.
[220] The applicant relied on Exhibit “A” to confirm the amount of the mortgage payout plus other amounts lent to her by her mother which she testified she must pay back. Exhibit A was a copy of certain pages of the applicant’s mother’s bank account for the period of June 2007 to June 2014. The applicant highlighted various withdrawals between 2010 and 2012 which totaled 530,000 RMB. The applicant’s evidence was that these various amounts were lent to her by her mother to pay expenses including mortgage payments on the condo and the cost of travelling to Beijing for an immigration interview. The applicant’s financial statements sworn October 19, 2013 and August 19, 2018 do not show this amount as a debt owing on date of separation. In her financial statement sworn September 14, 2016 there is a “family loan owed to mother” in the amount of 530,000RMB converted to $88,333 CDN.
[221] There were many problems with Exhibit A. First, it was not disclosed to the respondent prior to trial. Second, the applicant’s mother did not testify to verify that the account book was hers or that the alleged debt was owed to her. While the first page of the account book does show the applicant’s mother’s name at the top, the document was a photocopy. No original was ever produced.
[222] The circumstances under which the document was produced at trial also require some comment. As explained above in relation to the assessment of the applicant’s credibility, during the course of her cross-examination, the applicant produced Exhibit A. She had not disclosed this document to the respondent’s counsel previously but it was clear that she intended to rely on it to prove that she owed her mother money.
[223] The applicant did not produce a valuation for the Shanghai condo on date of separation. Her evidence was that she was never asked for one. The respondent disputes this. The respondent’s evidence was that an appraisal was requested by his lawyer both by letter and in open court on multiple occasions.
[224] The applicant testified that she asked her mother what she thought it was worth in 2013 and her mother said about 1 million RMB. The applicant insisted that even if her share was worth 500,000 RMB, the loan amount owed to her mother exceeded that, so her share was worth nothing.
[225] The applicant’s financial statement sworn September 14, 2016 discloses an apartment in Shanghai which is jointly owned. The value is listed as $71,429 CDN. There is no indication as to where this value was obtained.
[226] Without a value for the Shanghai condo, the respondent tried to obtain information on his own. Unfortunately, he could only obtain information from Chinese web sites through friends. While this evidence was not admissible due to hearsay concerns, the respondent was adamant that he does not agree that the total value of the Shanghai condo would be approximately $142,000. He testified that it would be worth much more than that as real estate prices in Shanghai have increased drastically over the last 10 years.
[227] The respondent always lived in the same apartment in Shanghai before he came to Canada. His mother’s name was on the lease. It was suggested to the respondent that although the government may have actually owned the apartment building, he and/or his mother had rental rights to it which could be sold and that he continued to retain those rights on the date of separation.
[228] The respondent denied this. He was firm that upon immigrating to Canada, the law in China at that time required him to give up his Hukou and his identification number. He has no rights to any property in China.
[229] There was no evidence to confirm any of the applicant’s contentions about the respondent’s alleged rights to sell the lease or rental rights to his apartment in Shanghai and even less evidence about what those rights (if they existed) would be worth. I reject entirely the applicant’s position that some value should be attributed to the respondent’s long abandoned apartment in Shanghai. I equally reject the applicant’s submission that in the alternative both parties should be given a $0 value for their properties in Shanghai.
Analysis
[230] The applicant seeks to have her interest in the Shanghai property excluded from her net family property on the basis that she holds it in trust for her daughter as a gift from her mother.
[231] The difficulty with the applicant’s position is that there is not a scintilla of corroboration for any of it. First, there is no trust document to confirm the applicant’s position. Her signature on the Agreement of Purchase and Sale as the “person entrusted” could also be translated as the person “authorized” to sign the document.
[232] There was also no evidence from the applicant’s mother that the condo was intended to be a gift to Shuting. Shuting’s evidence was that she was unaware of the arrangements related to the condo. She was eleven years old at the time it was purchased and she told the court that such decisions were made by the adults in her life at that time, without her input. The only evidence that the condo was meant to be a gift to Shuting was the applicant’s insistence that it was so at trial.
[233] The applicant insisted that she did not have the money to buy the condo but that the money came from a portion of her mother’s apartment demolition compensation. There is no proof of this. The applicant was operating Hojer in 2007. By all accounts the business was earning a profit at that time. It is equally possible that the money for the condo came from the applicant’s personal resources.
[234] Finally, the applicant provided no evidence related to the value of the condo except for some hearsay evidence about what her mother thought the condo might be worth in 2013. The applicant produced no valuation for the condo because she testified she was not asked for one. I do not accept that this is the case. The respondent was represented by counsel. It is implausible that counsel would not insist on a valuation of the applicant’s most significant asset. I accept the respondent’s evidence that an appraisal of the Shanghai condo was requested many times, without response.
[235] Unfortunately, the respondent had no reliable evidence available to support his position that the Shanghai condo was worth more than the applicant’s estimate.
[236] It is the applicant’s onus to prove the value of all assets and debts listed in her financial statement as well as any exclusions. I do not find that the applicant the condo was intended as a gift to Shuting and therefore excluded from her net family property on trust principles. Further, there is no reliable evidence that the applicant was holding a 50% share of the condo in trust for Shuting. As such, the full value of the condo must therefore be included as the applicant’s asset for net family property purposes
[237] Without any other evidence available, the court is reluctantly forced to use the value of her share as set out in her 2016 financial statement or $71,429.00 x 2 = $142,848.
[238] As for the respondent’s alleged saleable rental rights to his former apartment in Shanghai, there is insufficient evidence to determine if such rights existed. Even if they did, there was no reliable evidence as to the value of such rights.
The Debt Owed to the Applicant’s Mother
[239] There is some evidence to support that the sum of $88,333 CDN was withdrawn from the applicant’s mother’s bank account between 2010 and 2012. There is no evidence as to what this money was used for. The applicant testified that it was a loan from her mother and used for her personal expenses.
[240] There are evidentiary difficulties with the provenance of the bank book, its authenticity and its late disclosure. I have determined above that as a result of those difficulties, no weight should be given to that documentary evidence.
[241] That leaves only the applicant’s evidence as to the status of the debt. Given this court’s concerns with the credibility and reliability of the applicant’s evidence, the debt cannot be considered a deduction for net family property purposes and it will not be included as a debt in the applicant’s net family property.
The Respondent’s Businesses and Income
[242] The respondent started his business Canasia in 2001. His evidence was that he supplied Hojer with Canadian food products. In 2002 he started another company, Aces Logistics, which was unrelated to Canasia although both operated from the same numbered company (1491868 Ontario Inc. or “149”) which was incorporated on September 7, 2001. Aces provides services to trading companies for air and sea transportation.
[243] Canasia ceased operation in 2006. The respondent was asked why this did date did not correspond to the date when Hojer ceased operations in 2011 since Canasia only dealt with Hojer. The respondent was unsure but denied that it was because of any substandard food products he may have supplied to Hojer.
[244] The respondent’s evidence was that the numbered company was owned jointly by him and his brother. However, this was not borne out by the corporate tax returns filed for the tax years ending 2011, 2012 and 2013 which listed the respondent as the sole shareholder of the company. The respondent and his brother are listed as equal shareholders on the 2014 corporate return. The respondent closed down 1491868 in July 2014 and incorporated a new numbered company namely 1909828 Ontario Ltd. (“190”). The 2016 corporate tax return for 190 shows the respondent as the sole shareholder.
[245] In his affidavit sworn April 1, 2014, the respondent deposed in paragraph 10 that he and his brother were the directors of 149 until the respondent resigned as a director in 2012 and his brother became the sole owner. In re-examination, the respondent testified that his first lawyer prepared this affidavit for him and reviewed the concepts with him in Mandarin. He is unable to adequately understand the English version as English is not his first language. He told the court that paragraph 10 was incorrect. He confirmed his mother and sister-in-law are the owners of the new numbered company.
[246] The applicant’s evidence was that she spent significant time working for Aces until Hojer ceased operations. The respondent denied this and insisted that the applicant’s involvement with Aces was minimal and done only as a favour to him as a friend.
[247] The respondent’s brother testified that he began to work for Aces in 2015. He told that the court that the old numbered company was closed and a new one started because his brother could not focus and was very stressed as a result of this litigation and because the old numbered company owed rental arrears to their old landlord. His wife and mother are now the sole shareholders of Aces.
[248] It was put to Jian that the only reason the new numbered company was started was to ensure that financial disclosure from the new company would be limited for the purposes of this litigation. He conceded that his brother did not take a leave of absence or see a doctor concerning his stress. He also agreed that he never mentioned the rental arrears as a reason for starting the new company when he was questioned in June 2016. Jian further conceded that the new numbered company has the same clients, equipment and accounts as the old numbered company. It performs the same functions in all aspects.
[249] When the applicant threatened to make him a party, this caused great dissension between him and his brother. As a result, he did not want any ownership interest in the business. He has been content to remain as an employee.
[250] In his financial statement sworn January 21, 2014, the respondent does not show an interest in any business either on the date of marriage or the date of separation. He explained that he had signed the statement but that his lawyer prepared it and he really knew nothing about it.
[251] The respondent further testified that there were errors in the corporate tax returns with respect to his brother not being listed as a shareholder. This was his accountant’s fault. The respondent knows nothing about accounting.
[252] With respect, the evidence given by the respondent about his businesses was not helpful. First, he testified that he always owned 149 jointly with his brother but could produce no documents to verify this. Then he testified that he resigned as a director of 149 in 2012 and became an employee of 190 in 2014. But the 2016 tax return for 190 shows the respondent having a 100% interest in 190. There is nothing in the corporate return to indicate that his brother or sister-in-law have any interest in 190.
[253] Then the respondent testified that his affidavit was incorrect and that his brother did not become the sole owner of 149 in 2012. When confronted with inconsistencies about his business filings, the respondent was always quick to blame his accountant Mr. Raymond Cheung whom he said he trusted. He gave Mr. Cheung all of his business documents and left it up to him to prepare his personal and corporate tax returns.
[254] Mr. Cheung testified at trial. He has been the family and business accountant for many years. He is familiar with Aces and its iterations as both 149 and 190. He prepares financial statements, T2s and T4s for 190 and completed them for 149 as well. Mr. Cheung confirmed that he reviews the company’s bank statements and cancelled cheques in order to prepare their financial statements.
[255] The respondent was asked why he closed 149 in 2014. At his Questioning on June 22, 2016 he said it was because he was despondent about this court case and lacked the energy to run a business so he wanted his brother to do it. At trial, he testified that the reason he closed 149 was because of a rental dispute with his former landlord. In re-examination the Small Claims Court Statement of Claim related to the rental arrears was put to the respondent. The claim was not issued until 2015.
[256] It was suggested to the respondent that the real reason he closed 149 was that he wanted to divest himself of ownership and income to defeat the applicant’s support claims. The respondent denied this but then went on at length about how the applicant had destroyed his business, his life and his family. Mr. Cheung’s evidence was that there was no difference between Aces when it was 149 and when it became 190.
[257] The respondent testified he knew nothing about the 2016 corporate tax return as it was sent directly from his accountant to his lawyer. In fact, he had never seen until it was presented to him during cross-examination. He did not provide any corporate returns for 2015 or 2017. The respondent testified that in his opinion he was not required to provide them because his lawyer told him that after the date of separation nothing matters. The respondent had no recollection of what the 2015 or 2017 corporate returns said about the shareholders of 190.
[258] His evidence in this area was given in a way that implied that the respondent washed his hands of any responsibility for what was in his tax returns. He could not be blamed for errors, inconsistencies or omissions. He did not understand accounting or tax filing. At his questioning on June 22, 2016 he said that he would contact Mr. Cheung to correct the many errors that had come to light in the corporate tax returns. There was no evidence that he had done so.
[259] Mr. Cheung’s evidence at trial was that he is well aware that the respondent’s mother and sister-in-law are the shareholders of 190. Indicating on the T2 form for several tax years in a row that the respondent was the sole shareholder was an error on his part and likely resulted because he used precedent documents year over year.
[260] The respondent was cross-examined at length about his business revenue and expenses in the 2011, 2012, 2013, 2014 and 2016 corporate returns. The respondent did not provide a detailed breakdown for his operating costs and business expenses despite an undertaking given at his questioning on June 22, 2016 to provide anything in the possession of his accountant with respect to business expenses for Canasia and Aces from 2011 forward. His response was that no one asked him to produce this information and if they had he would have done it. The respondent was shown a letter sent to his counsel on June 28, 2016 setting out a specific request for a breakdown of all business expenses. The respondent testified he had never seen the letter before.
[261] The respondent was asked about why his operating costs and business expenses almost exactly equaled his revenue in the five years of returns produced. In fact, in 2016 his operating costs and business expenses were exactly the same as his revenue. It was suggested to the respondent that Mr. Cheung did this on purpose to ensure that the respondent paid no corporate tax. The respondent testified he knew nothing about this. He just gave his business account statements to Mr. Cheung and relied on him to figure everything out.
[262] Mr. Cheung testified that the all of revenue and expenses were legitimate and that there is a benefit to shareholders in having $0 profit as they do not have to pay corporate tax. He did not see anything wrong in having the revenue equal the expenses.
[263] The respondent was asked about certain charges to his CIBC business account from statements for the period of January 2011 to March 2014. He agreed that payments were made from that account for a BMO Mastercard, a Walmart Mastercard and an American Express credit card. In some cases payments made for those credit cards totaled more than $3,000 per month. The respondent testified that these credit cards were used for business expenses, however, no statements for the credit cards were provided. Payments were also made from the business account for internet service and Enbridge gas. The respondent also conceded that he made payments to his brother of $1,000 per month from this account in 2014 and that he sometimes paid for personal items from his business accounts.
[264] Mr. Cheung gave evidence that he was aware that certain personal expenses were charged on credit cards and paid for by the business. He did not deduct those amounts as business expenses, rather, they were allocated as personal expenses and included in personal income or used to reduce any outstanding shareholder loan. Since the respondent and his brother now operate the business out of their respective homes, he allocates $750 per month as a rental expense for each home ($1500 per month or $18,000 a year). He does not use the traditional proportionate share of mortgage and utilities as a business expense but has decided to use this set amount for each brother in each year. He concedes it is not really scientific and could even be challenged by CRA but he views it as reasonable given the cost of renting a commercial space to operate the business.
[265] The respondent did not produce statements for his any of his business accounts after 2014 despite giving an undertaking at his questioning to do so. The respondent gave his usual response: no one asked him for this information, including this lawyer, or he would have provided it. Mr. Cheung testified he has all of the business account information from 2015 forward in his office. He would have produced it if asked to do so.
[266] The respondent provided a valuation of Aces Logistics dated July 31, 2017. The valuation was prepared by Ms. Bonnie Prussky of ap Valuations Limited. Ms. Prussky valued the company on three possible dates of separation: September 12, 2012, February 28, 2013 and July 31, 2013.
[267] Ms. Prussky is a Certified Business Valuator. Her qualifications as an independent expert were not contested at trial. Based on her findings, she assessed the net fair market value of the respondent’s interest in Aces as $46,555 on September 12, 2012, $31,210 on February 28, 2013 and $18,614 on July 31, 2013. Ms. Prussky’s evidence was that the reason the value of the business declined over the relevant period was due to repayment of shareholder loans due to the respondent.
[268] Ms. Prussky’s evidence was that the business had $0 profit and goodwill over the relevant period. She was asked if it was normal for a business to operate at a loss year over year. Her response was that it depends on the type of business. Sometimes losses are non-cash related such as amortization.
[269] Ms. Prussky testified that her valuation was a “calculation valuation.” This is the most basic form of valuation. In reaching her conclusions in the report, Ms. Prussky relied on working papers and financial statements from the business as provided to her by Mr. Cheung. She did not receive receipts or invoices for any amounts in the financial statements other than rental receipts and T4s to confirm the respondent’s salary.
[270] Ms. Prussky was questioned about the 2016 corporate tax return. In that return, the revenue for 190 is listed as $550,254. The expenses are listed as exactly the same amount. Ms. Prussky was asked if it was unusual to see revenue and expenses as exactly the same amount to the penny. She agreed that it was somewhat unusual but testified that accountants will often “manipulate” numbers so that salaries are other amounts entered to reduce profit below a certain tax threshold or to zero. This type of number manipulation is not unheard of especially for small, privately owned businesses.
[271] The applicant did not retain an expert to provide rebuttal evidence. In cross-examination, hypotheticals were put to her to have her revise her valuation of the business if the profit was greater, or if expenses were inaccurate. Ms. Prussky was unshaken in cross-examination. Her evidence was that answering the applicant’s counsel’s questions would require a re-evaluation, which she was not in a position to provide.
[272] The respondent testified that the company is not doing as well as it has in the past and has frankly never been that profitable. Sales fluctuate both annually and monthly. Monthly gross sales could be as low as $25-30,000 or as high as $150-200,000.
[273] The respondent was asked how he qualified on the refinancing of 18 in 2010. The total mortgage was $750,000 and the respondent earned $37,000 that year.
[274] The respondent would not agree with the suggestion that he told the bank he was earning $100,000 in order to obtain the required approval. He told the court there was no mortgage application. CIBC was aware of his financial situation as he did all of his personal and business banking with them. They just used the information they had. He may have given them some income tax returns but he cannot remember.
[275] The applicant points out that his LOC only went up by $1500 in three years (up to August 2014), his RRSP increased from $17,581 in 2010 to $38,088 in 2014 and that he hasn’t provided any personal bank statements, RRSP statements or personal LOC statements since 2014.
[276] The applicant suggests that the court should draw a negative inference as both Ding brothers refused to produce documents requested of them at their examinations more than 2.5 years ago. She submits that income of $120,000 per year should be attributed to the respondent given the following factors:
a. The respondent and his brother’s deliberate failure to produce relevant and important disclosure related to their personal and business income.
b. The tendency of the Ding brothers to feign ignorance or blame their accountant for anything missing or questionable items.
c. The year-over-year manipulation of the Mr. Ding’s pre-tax corporate income to ensure that his gross revenues and expenses netted out to $0.
d. The lifestyle of the respondent: his ability to pay for two homes, qualify for two mortgages, support his mother and brother, and pay for a car and personal expenses from his business income.
e. The fact that the respondent’s lifestyle has remained the same but the applicant’s is far inferior.
f. The respondent’s intentional closing of 149 in 2014 and incorporating 190 as exactly the same business for the sole purpose of avoiding having to report his business income to the applicant.
g. Mr. Cheung was never asked by the respondent to produce all of the invoices which would have justified the large amount he deducted for “cost of sales” which reduced his profit to $0 annually.
Analysis
[277] There is much contradictory evidence concerning the respondent’s business and his income. I do not find that his evidence is reliable for the following reasons:
a. The evidence of the respondent and his brother is contradictory with respect to why the new numbered company was incorporated. Since exactly the same entity is now owned by the respondent’s mother and sister-in-law (i.e. same customers, same location, same equipment), I do not find that the sole reason for creating the new corporation was to avoid paying the previous landlord. Rather, I find that there was motivation to ensure that the shareholders of the business became non-parties to this litigation.
b. The respondent refused to accept responsibility for any issues related to the reporting of revenue or expenses for the business. Where there were questionable issues (such as revenue and expenses zeroing out) he quickly held his accountant responsible and seemed comfortable defraying any and all responsibility to others.
c. The respondent’s evidence was ridden with comments about how the applicant had ruined his life. Certainly he had incurred debt to prepare for this trial and pay for his expert, Ms. Prussky. He is resentful about that fact and blames the applicant entirely. This tended to colour his testimony.
d. It is clear that the respondent’s reported income has been (at least in the past) the subject of a certain amount of manipulation by his accountant to ensure the lowest possible tax thresholds. While Ms. Prussky found this to be somewhat unusual it was not outside of normal accounting practices.
e. In the past, the respondent charged personal expenses to company credit cards and paid personal expenses from his corporate account. He has been able to make contributions to his RRSP since separation and increased his line of credit by only $1500 in the last three years. However, none of this information was effectively verifiable as the respondent never provided the statements for the business credit cards. He has not provided statements for his personal bank, line of credit or RRSP statements since 2014 despite outstanding requests. Mr. Cheung assured the court that credit card payments made from the business accounts were charged as personal expenses.
[278] I found Mr. Cheung to be overall a reliable witness. I do not find that the rental expense he chose to use for the business was unreasonable and he was quite clear that his accounting was intended to reduce corporate tax for the Ding family. I accept that he “charged back” the personal credit card expenses which resulted in a reduction of the shareholder loan owed to the respondent. He was also quite candid that 149 and 190 are effectively the same entity with different shareholders.
[279] It is unclear whether the respondent has the same degree of control over company spending and expenses now that his mother and sister-in-law are the owners. However, it is clear from the evidence that came out at trial that this is a close-knit family and that the income from Aces effectively supports all of the adults in the two families.
[280] In his financial statement sworn September 20, 2018 the respondent reports income of $24,000 per annum. This is less than minimum wage. I find that the respondent’s T4 income is not representative of the benefits he receives from what is a family business. As such, income above minimum wage should be imputed to him.
[281] I would not add back into the respondent’s income the repayment of the shareholder loan to himself. Cases such as Duffus v. Rempong-Manso, 2017 ONCA 360, make it clear that this would be effectively “double counting” income. Further, in Vincent v. Vincent, 2012 BCCA 186, the court held that the repayment of a shareholder loan is not income but the return of capital.
[282] Rather, income should be imputed to the respondent based on the amount of personal items paid for through the business including utilities, personal credit cards, car payments and support for his family members.
[283] Given all of the above and the respondent’s experience and contacts in the logistics industry, an income of $50,000 is both modest and reasonable in the circumstances.
[284] As for the value of the business, the applicant suggests it should be valued at $120,000 as Ms. Prussky’s analysis was a perfunctory one. No other real reason is given for diverging from Ms. Prussky’s opinion other than she relied on documents which were provided by Mr. Cheung which in turn were provided to him by the respondent and are therefore unreliable.
[285] Ms. Prussky’s credentials as an expert were not challenged by the applicant and I do not find that her analysis was unreasonable in the circumstances. The business had no profit, no goodwill and minimal assets. The shareholder loan continues to decline as the respondent is forced to resort to drawing against it given the lack of profit in the business.
[286] The value given which is closest to the date of separation as found in this judgment is the February 28, 2013 value of $31,210. This is the value to be used for net family property purposes.
16 and 18 Catherwood Court
[287] 16 was purchased by the respondent and his brother in 2007 for $580,000. His evidence was that he put in $20,000 as did his brother and mother in order to buy it. Jian’s evidence was that he put in $30,000 and the respondent and their mother each contributed $40,000. A mortgage was taken out on purchase for $500,000 to $520,000.
[288] Based on mortgage statements produced by the respondent the mortgage balance on December 31, 2012 was $449,897.66 and $442,180.68 on December 31, 2013. The current balance is approximately $400,000.
[289] When 16 was purchased, the respondent, his brother and their mother moved in. In 2009 the respondent’s brother was married and his wife moved in. They had a daughter.
[290] Title to 16 was taken in the respondent’s name jointly with his brother because the intention was that the home would be used by them and their mother for a family residence. Biweekly payments of $699 are withdrawn from Jian’s account to pay the mortgage. The respondent has never made a mortgage payment for 16.
[291] The respondent paid Jian $1,000 per month towards the mortgage and expenses and their mother paid him $500 per month. Jian paid the mortgage, taxes and utilities from his account. In 2015 the respondent stopped giving his brother the $1,000 contribution because he needed funds for this litigation.
[292] The respondent obtained three appraisals for 16 based on the three possible dates of separation. It was valued at $600,000 on September 12, 2012, $700,000 on February 1, 2013 and $700,000 on July 1, 2013. While the respondent felt these values were high, he was willing to defer to the professional appraiser.
[293] Sometime in the summer of 2010, the house next door to 16, 18, became available by way of private sale for $450,000. The respondent’s brother wanted to buy it. He and his wife wanted to have two more children and there was not enough room for them at 16.
[294] His brother applied for a mortgage but the application was not approved as his wife had recently lost her job. As the owner wanted a five day closing, the bank manager suggested refinancing 16 to buy 18. As such, a mortgage for approximately $300,000 and title to 18 were put into the respondent’s name because he was the only one who could qualify for a mortgage at that time. Thereafter, the monthly mortgage payments for 18 came out of the respondent’s bank account. It is undisputed that the respondent has never lived at 18; he has always lived at 16.
[295] After the purchase of 18, almost two years were spent on renovating and improving the interior and then the respondent’s brother and his family moved in. The respondent’s brother and his family had moved to 18 by the time the applicant came to Canada in September 2012.
[296] The respondent testified that within a few weeks of the closing of 18, a Family Agreement was signed (Exhibit 55) by the respondent, his brother, his sister-in-law and his mother. The agreement was prepared by the respondent’s brother on the advice of their real estate agent and dated July 2010. The Agreement authorizes the respondent to act on the purchase and stipulates that:
Should the need arise in future, DONG RONG NIEH, JUE YAO and myself JIAN HONG DING can invoke this agreement to take back the ownership of the said property (18 CATHERWOOD CRT.).
[297] The respondent’s evidence was that he and his brother went to the bank in 2012 to try to have title transferred to Jian. Their former bank manager had been transferred to a new position and they had trouble connecting with the new manager. Ultimately nothing was done. The respondent told the court that when he hired his first lawyer she advised him not to make any changes to the title while this litigation was ongoing.
[298] The respondent was asked why the Family Agreement refers to the possibility of three owners; his mother, his brother and his sister-in-law. He said that the intention was always for 18 to be family owned. The respondent denied the suggestion that the family agreement was prepared after the litigation was commenced and solely to defeat any possible entitlement the applicant may have to an interest in 18. He was firm that the date of the Agreement in July 2010 is accurate and that it was prepared well before the applicant came to Canada. In any event, the respondent’s evidence was that 18 and the applicant are separate and “have no relationship” in terms of the applicant’s equalization claim.
[299] Mortgage statements for 18 were provided which recorded the mortgage balance as $281, 267.54 on December 31, 2012 and $276,488.31 on December 31, 2013. The respondent continues to make the biweekly mortgage payments of $435.28 for 18.
[300] Appraisals were also prepared for 18 on the three possible separation dates. 18 was appraised at $650,000 on September 12, 2012, $660,000 on February 1, 2013 and $660,000 on July 1, 2013.
[301] Jian was asked why he continues to pay the mortgage for 16 when he hasn’t lived there for six years, and the mortgage payments are $400 per month higher than the mortgage payments on 18. Jian told the court that he has no concerns about his brother transferring 18 to him. They work together as a family and his mother still pays him $500 to help out. He has no problem carrying on this way for the time being.
[302] It was suggested to the respondent that the ownership arrangements of both 16 and 18 were reflective of actual contributions and that the trust arrangement was a sham. He responded that he had never thought of it in that way. They are a family and everyone makes contributions. His brother has always paid the mortgage on 16 and he has always paid the mortgage on 18. There is no written agreement between them as to how payments would be divided.
Analysis
[303] Based on the date of separation of March 23, 2013, the $700,000 value for 16 and the $660,000 value for 18 must be used for equalization.
[304] With respect to 18, the applicant submits that the respondent has failed to prove that his brother has any interest in that property. Clearly, the intention was that the respondent and his wife and Shuting were to live in 18. However, when their marriage did not work out, Jian and his family decided to remain there. The applicant points out that both she and her daughter testified that the respondent told them they were all to live at 18 and his brother, his family and his brother would remain at 16. According to the applicant, the respondent stayed on title to 16 because his brother had limited financial ability to become a full owner and because of the respondent’s majority contribution to the property.
[305] The title holding interest of Jian in 16 cannot be ignored. His contributions to the mortgage and other household related expenses are well documented. That is, using the appraised value of 16 at $700,000 and deducting the mortgage balance of $449,897, the equity in the home (approximately) on the date of separation would be $250,103. The respondent’s share of this equity would be $125,051.
[306] As for 18, it is clear that the respondent paid the purchase money for the home, holds title and pays the mortgage. The question to be determined is whether the Family Agreement can be construed to mean that the respondent has no interest in 18 other than his obligation on the mortgage.
[307] There is some need to refer to the principles of trusts. A bare trust is “a trust where the trustee or trustees hold property without any duty to perform except to convey it to the beneficiary or beneficiaries upon demand.”[^1] Such trusts have long been recognized in Ontario:
The usually accepted meaning of the term "bare", "naked" or simple trust is a trust where the trustee, or trustees hold property without any further duty to perform except to convey it to the beneficiary or beneficiaries upon demand. It is true that so long as the trustee holds the property on trust he always retains his legal duties, namely, to exercise reasonable care over the property, either by maintaining it or by investing it; he cannot divest himself of these duties.[^2]
The Court of Appeal for Ontario has clarified the particular powers of a bare trustee:
The distinguishing characteristic of the bare trust is that the trustee has no independent powers, discretions or responsibilities. His only responsibility is to carry out the instructions of his principals — the beneficiaries. If he does not have to accept instructions, if he has any significant independent powers or responsibilities, he is not a bare trustee.[^3]
It is clear that a bare trust can be expressly created through a constituting document. It is equally clear that an express trust must demonstrate the three certainties. An express trust must evince a certain intent to create a trust, in addition to having a certain subject-matter and a certain object.
[308] There are no “magic words” or technical language required to create an express trust provided that the intention to create a trust can be inferred with reasonable certainty from the words or circumstances.[^4] Waters makes clear, however, that the reverse is also true. Words and circumstances that appear create a trust can have no effect if the intention of the settlor is to set up a sham and deceive their creditors. Sham trusts are known to family law.
[309] In Antflick v. Antflick,[^5] a husband sought to shelter assets from his wife through a trust. He exercised control over those assets and paid his debts out of the trust. The court found that the trust was void. In Merklinger v. Merklinger,[^6] a husband settled shares of a cottage holding corporation in trust for his children, but alternatively drew on the property or pleaded trust as it suited him. The court also found that this trust was void. However, in Sagl v. Sagl[^7] the court refused to void a trust which a husband treated as a personal asset controlled by friendly trustees since it could be shown that the trust was “legitimately created after receiving income tax and estate planning advice”.
[310] I do not find that the Family Agreement creates a valid bare trust in favour of the respondent’s brother, mother and sister-in-law for the reasons set out below:
a. I have not found the respondent to be a credible witness. The only evidence as to the provenance of the Family Agreement is from the respondent and his brother. Like Shuting, the respondent’s brother gave evidence that was closely aligned to that of the respondent.
b. The Family Agreement is handwritten and self-serving.
c. There is no evidence to show that the Family Agreement was the result of legitimate tax or estate planning advice.
d. The intention of the Family Agreement is unclear. The powers of the signatories to the agreement to take the property back are conditional “should the need arise.”
e. The attempts to have the property transferred out of the respondent’s name were vague and unclear.
f. The Family Agreement only represents a wish between the parties that a transfer will happen in the future.
g. The only extrinsic evidence about the intention of the Family Agreement is unreliable and does not reflect a valid bare trust.
[311] Based on this approach and in consideration of the applicant’s interest in the Shanghai condo and the respondent’s business interest, the respondent would owe the applicant a net family property payment of $196, 046 based on the Net Family Property Statement attached as Exhibit A to this judgment.
The Applicant’s Claim for Spousal Support
[312] The applicant has been working full time in a factory job at Krostofoam Industry Inc. since 2013. She earns $24,000 per annum. The applicant is unable to advance due to her lack of English skills. She is now 55 years old. She has a very small amount of savings and no assets other than the Shanghai condo. I agree with the applicant’s submissions that it is unlikely she could realistically earn more than minimum wage.
[313] Shuting continues to reside with the applicant and is her dependent while she completes her university education. Whether or not Shuting is the respondent’s biological child does not negate the fact that he sponsored both Shuting and her mother to come to Canada. Further, the abandonment of the claim for support for Shuting does not diminish the fact that part of the applicant’s claim for spousal support is necessarily connected to her daughter’s dependency.
[314] On consent, the respondent agreed to pay spousal support of $1,250 per month commencing August 1, 2016. The consent order went on to say that that the support “may or may not be credited to the Respondent for support or property division as the court sees fit.” Support payments are current. No support was paid prior to August 1, 2016.
The Length of the Relationship
[315] While I have determined that the marriage was not a sham and that the date of separation was March 23, 2013, the issue of the length of the marriage is critical to the issue of spousal support in this case.
[316] The applicant submits that spousal support should be based on a relationship of 18 years (1995 – 2013). The respondent denies that there was any cohabitation prior to 2005.
[317] In Molodowich v. Penttinen, 1980 CanLII 1537 (ON SC), [1980] O.J. No. 1904, the court set out a number of factors to consider in determining whether parties were cohabiting. I summarize them as follows:
a. What were the living/sleeping arrangements?
b. Were the parties faithful to one another?
c. Did they have sexual relations?
d. Did they act as a couple, eating meals together, helping each other, buying gifts for one another on special occasions, discussing plans and personal matters?
e. Did they perform domestic services for one another such as meals, washing, shopping and household maintenance?
f. Did they hold themselves out as a couple to the community and to their family? Did the community view them as a couple?
g. What were their financial arrangements with respect to paying for necessaries and saving for the future?
h. What was their attitude towards children?
[318] The applicant relies on the case of Sternat v. Hell, 2010 ONSC 1522, to establish that the court should consider a flexible approach to the issue of cohabitation even if the relationship might be considered “unusual.” The court should look at the parties’ conduct even if they lived apart.
[319] In this case, there is considerable contradictory evidence about the parties’ relationship between 1995 and 2005. While it is clear that the respondent travelled back to China frequently during this time, the parties diverge on whether this was to visit the applicant and Shuting or solely for business purposes. It is also true that photographs show the parties and Shuting together and happy on vacations and other milestone family events. The respondent contends this only proves that he and the applicant were friends who enjoyed traveling with a group of his friends and family on vacations and does not prove they were a couple.
[320] The issue of dependency during this period is also problematic. It is unclear if either party was supporting the other and what the actual income being earned by their respective businesses was. What is clear is that the parties did not have joint bank accounts (even during the marriage) and did not pool resources or have joint savings.
[321] The respondent’s brother testified that he had known the applicant for decades but he (not surprisingly) denied that the parties were in a serious relationship prior to their marriage. No third party objective witnesses were called to confirm how the parties presented themselves to others.
[322] While the parties did correspond in the period prior to 2005, there were only two exhibits presented to confirm this. One was the 1984 letter (Exhibit 2) discussed above and the other was a letter from the respondent to the applicant in 1986 (Exhibit 3). While these letters are friendly and affectionate, an argument can be made that they do not support that the parties were in a dependent relationship at that time. After 2005 there are a multitude of letters and cards in which the parties address one another as “wife” or “hubby” and talk about their feelings for each other.
[323] Of course, the fact that the parties lived in different countries does not preclude a finding that they were cohabiting. In cases such as Campbell v. Szoke, 2003 CanLII 2291 (ON SC), [2003] O.J. No. 3471, the court found that a couple lived together as common law spouses even though they lived together in Florida for six months of the year and lived separately when they returned to Ontario for the remaining six months. Such findings should be tempered with the concern stated in Macmillan-Dekker v. Dekker, 2000 CanLII 22428 (ON SC), [2000] O.J. No. 2957, in which the court said at para. 22 that “Objective contemporaneous evidence is more probative of the nature of the parties’ relationship than the viva voce evidence of the parties in the midst of acrimonious and bitter proceedings.” Certainly this matter can be described as both acrimonious and bitter.
[324] In the end, given the credibility problems with these parties and the fact that over a 10 year period the respondent was in China a total of approximately 26 months (at various times) I am unable to find that there was a relationship of permanence which would attract the payment of support during this period. In fact, there is some evidence that the applicant was actually earning more income and was in a better position financially than the respondent during that time. The parties worked together and had some form of relationship between 1995 and 2005 but I do not find that it was a relationship of dependency until after the marriage in 2005.
[325] After 2005 matters changed between the parties. There is no dispute that the applicant stayed with the respondent at his apartment in Shanghai for at least part of each week. They cooked together, went out together and represented themselves as a couple to others as they were now both divorced and could publicly declare themselves as a couple after the registration of their marriage. They began to make plans as a couple including a plan for the applicant to immigrate to Canada. Once she arrived in Canada, the applicant was completely dependent on the respondent.
[326] I agree with the respondent’s submission that any award of spousal support should not include a compensatory award because the parties did not permanently cohabit until September 2012.
[327] Given all of the above and for the purposes of calculating spousal support, the period of cohabitation will be from the date of marriage to the date of separation in March 2013 or eight years. Spousal support shall be periodic in nature without a compensatory component.
What is the Respondent’s Income?
[328] The applicant submits that the respondent’s income should be imputed at $120,000 per year for support purposes. The applicant further submits that the respondent’s evidence concerning his income should not be relied upon as he has failed to invoices for his business expenses since 2014 despite his undertaking to do so.
[329] The applicant refers the court to the respondent’s bank statements (those that were produced) which show that the respondent used his business account for personal expenses including household utilities, car payments, credit card payments, realty tax and monthly payments of $1,000 to his brother. As Aces has no business credit cards, the applicant submits that the respondent must have been using his personal credit card for both business and personal expenses thereby intermingling them to the point where it is not possible to parse out what is a business or personal expense.
[330] The respondent called his accountant, Mr. Raymond Cheung, as a witness. Mr. Cheung was not called as an expert witness. Indeed, he has no official accounting designation. He enrolled in CGA program which he never finished and then worked for an accountant for eight years. He told the court he had good mentoring. He went out on his own and prior to his retirement he did bookkeeping, ledgers and some audits. He still works for a handful of clients such as the respondent.
[331] As explained earlier in this judgment, I found Mr. Cheung’s evidence to be reliable overall and I found the respondent’s income for spousal support purposes to be $50,000. I do not accept that his income is as low as the minimum wage set out in his financial statement for the reasons previously given.
Duration and Range of Support
[332] Given the length of the marriage (8 years), the applicant’s dependency and her obligation to provide support and shelter for Shuting, I find that support in the mid-range is appropriate. Given the DivorceMate calculation at Tab “B”, the support owed to the applicant would be $303 per month. Support should continue for the maximum time of eight years given the applicant’s dependency and her circumstances in coming to Canada.
[333] The situation in this case would be appropriate for a lump sum of spousal support given that the respondent has overpaid to date. Further, any ongoing payment of spousal support may require the parties to exchange financial information. This case cries out for a complete and final break between these parties. Using the midrange net present value for a lump sum of spousal support for eight years would result in a payment of $16,311. This should be combined with the equalization payment owed to the applicant with payments made to date being credited against the total amount.
[334] The lump sum of spousal support would be added to the equalization payment of $196,046 for a total of $212,357. Subtracted from this would be credits for payments made by the respondent from August 2016 to March 2019 of $1,250 per month. A review of his Notices of Assessment shows that the respondent did not deduct these payments for tax purposes, therefore the entire amount of $40,000 should be deducted leaving a balance owing of $172,357. If the respondent has not paid any of the required monthly support amounts (as implied by the applicant in her written argument) the credit to the respondent shall be adjusted accordingly.
Restraining Order
[335] The applicant seeks a restraining order against the respondent on the grounds of past threats, violence and harassment she experienced while residing with the respondent.
[336] This request is refused for the following reasons:
a. There was no evidence that the respondent had had any contact with the applicant since she left his home 2016.
b. There is contradictory evidence concerning the conflicts which occurred in the home. As well, I made no specific finding as to what occurred on March 23, 2013 other than it corroborated the date of separation.
c. There were credibility problems with both parties as set out in this judgment. It is difficult to say exactly what the nature of the conflict was between the parties and whether the evidence of the applicant in this regard should be accepted.
d. Imposing a restraining order against the respondent may affect his ability to travel to China in the future.
[337] I am prepared however, to impose a less onerous but likely equally effective non-communication order.
Final Orders
The respondent shall pay spousal support to the applicant by way of a lump sum of $16,311. This represents support at the mid-range of a lump sum net present value based on the applicant having an income of $24,000, the respondent being imputed an income of $50,000 and support continuing at the mid-range for the entire length of the marriage, or eight years.
The respondent shall pay the applicant an equalization payment of $196,046 plus the lump sum of spousal support for a total of $212,357. Subtracted from this amount shall be the payments made by the respondent to the applicant in the amount of $1,250 per month since August 1, 2016 being the sum of $40,000. This leaves a balance owing to the applicant of $172, 357.
In the event that the respondent has not paid all of the $1,250 monthly payments owing as of August 1, 2016, his credit shall be adjusted accordingly.
Upon payment of $172, 357 to the applicant (assuming all monthly payments have been made to March 1, 2019), the respondent will have fulfilled all of his spousal support and property obligations to the applicant forever.
The respondent shall pay the amount in paragraph 4 within 120 days of the date of this order failing which the applicant Xia Dai may move by way of 14B motion on notice and directed to Gilmore, J., to have the respondent’s property located at 18 Catherwood Court in Scarborough Ontario sold on terms and conditions as the applicant may advise, and for a price she may determine to satisfy the amount in paragraph 4, plus any costs that may be ordered by the Court in a subsequent costs order. The applicant may also seek her costs of that 14B motion should this step be required to satisfy the amounts owed to her under this judgment.
The respondent is prohibited from communicating with the applicant except through counsel or a mutually agreeable third party.
There does not appear to be any issue with respect to the validity of the divorce granted to the parties in China and therefore a divorce is not required in Canada.
Costs
- Neither of the parties has had complete success. However, if they cannot agree on costs, they may provide written submissions of no more than four pages (exclusive of any Offers to Settle or Bill of Costs) on a seven day turnaround from the date of this judgment starting with the applicant. Costs submissions are to be provided to my assistant electronically at Patrizia.generali@ontario.ca.
C. Gilmore, J.
Released: March 7, 2019
COURT FILE NO.: FS-14-00392247 DATE: 2018107
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
XIA DAI Applicant
– and –
JIANMIN DING Respondent
REASONS FOR JUDGMENT
C. Gilmore, J.
Released: March 7, 2019
[^1]: Waters et al., Waters’ Law of Trusts in Canada (4th ed., 2012) [Waters] at 2.VIII.
[^2]: Creasor v. Wall (1982), 1982 CanLII 1804 (ON SC), 38 O.R. (2d) 35 (Ont. H.C.), rev’d. on other grounds (1983), 1983 CanLII 1761 (ON CA), 40 O.R. (2d) 644 (C.A.).
[^3]: Trident Holding Ltd. v. Danand Investments Ltd. (1988), 1988 CanLII 194 (ON CA), 64 O.R. (2d) 65, quoting M. Cullity, “Liability of Beneficiaries—A Rejoinder”, 7 E. & T. Q. 35 (1985).
[^4]: Royal Bank v. Eastern Trust Co., [1951] D.L.R. 828 (P.E.I. S.C.).
[^5]: [1980] O.J. No. 1240.
[^6]: (1992), 1992 CanLII 7539 (ON SC), 11 O.R. (3d) 233 (Gen. Div.), aff’d. (1996), 1996 CanLII 642 (ON CA), 30 O.R. (3d) 575 (C.A.).
[^7]: 1997 CanLII 12248 (ON SC), [1997] O.J. No. 2837.