Court File and Parties

COURT FILE NO.: FS-14-82107-00 DATE: 2020 07 13 SUPERIOR COURT OF JUSTICE – ONTARIO

RE: IOANA AURORA MOUZAYA, Applicant and JIHAD MOUZAYA, Respondent

BEFORE: Justice L. McSweeney

COUNSEL: Applicant, for herself F. Hassaan, agent for the Respondent

HEARD: By teleconference hearing at 2 p.m. on June 18, 2020

Endorsement

1These are my reasons for decision in a family law motion to determine the final disbursement of funds from the sale of the parties’ matrimonial home. This motion was heard by teleconference. Both parties attended the teleconference hearing, as did F. Hassaan, who appeared for the Respondent.

2As the Superior Court of Justice has advised the bar and the public, at this time of remote operations due to COVID-19, the only materials available to the judge hearing a given matter are those filed electronically for that specific appearance.

3In hearing this motion and reaching my decision, I have reviewed only on materials filed by the Respondent. The Applicant confirmed that she has filed no materials.

Background

4The following relevant facts are not in dispute.

5This motion is brought by Jihad Mouzaya, the Respondent husband. He and Ioana Aurora Mouzaya, the Applicant wife, were married in 1993.

6Their three children were born in 2004, 2007 and 2008. The parties separated in October 2013. The Applicant was the primary caregiver during the marriage, and the Respondent was the higher income earner. The children’s primary residence was with their mother from separation until November 2018. Since that time their primary residence has been with their father.

7The matrimonial home was sold on August 30, 2019. The Respondent’s counsel, Ms. F. Hassaan, acted for both parties on the sale. The proceeds of sale (hereinafter the “funds in trust”) are currently held in trust for the parties by the Law Office of Fay Hassaan, P.C.

8The parties had settlement discussions before and after the sale of their home. The Applicant had counsel early in the discussions, but was unrepresented by the time the house was sold. At that time, Ms. Hassaan was acting for the Respondent. Settlement proposals were exchanged on all issues including custody, child support, spousal support and equalization of property. No agreement was reached.

9In October 2019, the Respondent filed a motion which his affidavit described as being brought to resolve “custody of the children, to terminate child support payable by me to the Applicant, to receive child support from the Applicant, and for distribution of proceeds held in trust from the sale of the Matrimonial Home”.

10On November 1, 2019, the date scheduled for the motion, the parties negotiated a final settlement. The parties’ settlement agreement resolved the issues of retroactive child support, ongoing child support, and termination and release of spousal support.

11Ms. Hassaan represented the Respondent husband in the settlement negotiations. The Applicant wife had some assistance from duty counsel.

12Their settlement was incorporated on consent into a final order of Baltman J. dated November 1, 2019. The only remaining issue, specifically how much each party should receive from the funds in trust, was adjourned.

13This issue was returned by motion on February 18, 2020 before Bloom J. He adjourned it to March 3, 2020, peremptory on the unrepresented Applicant, to give her time to consult Legal Aid Ontario.

14On March 3, 2020, the Respondent’s counsel argued that he should receive an additional $22,293.39 from the Applicant’s share of the sale proceeds. Bloom J. noted on his endorsement that the Respondent’s evidence was insufficient to prove the expenditures claimed. He directed a further adjournment until March 17, 2020 to permit the Respondent husband to file further evidence “supporting the sum he seeks by way of explaining the history of the orders as to payment of monies and any further relevant materials” and giving the Applicant time to file a response.

15The adjournment to March 17, 2020 was peremptory on both parties. The motion was not heard on that date due to the suspension of regular court operations as a result of the health risks posed by COVID-19.

16The costs of both adjournments on February 18 and March 3, 2020 were reserved.

17On June 18, 2020, I heard this motion via teleconference.

Issues Not in Dispute

18The parties agree on all items relating to the disbursement of funds except the issue of whether the Applicant owes the Respondent a further payment of $22,293.39 as reimbursement for 50% of the carrying costs he paid for the matrimonial home after separation.

Entitlements and Deductions from Funds in Trust

19As a starting proposition, the parties agreed that proceeds from the sale of their jointly owned matrimonial home will be shared equally. They will each be responsible for their own post-separation borrowing against the home’s equity, and for payments required to fulfil the terms of the Baltman J. consent order.

20Interim disbursements: Each party’s share has been reduced, on consent, by interim disbursements from the funds in trust totalling $50,000. These payments were made to each party on November 5, 2019 ($30,000.00) and March 16, 2020 ($20,000.00).

21Lump sum spousal support: The $10,000 lump sum spousal support owing to the Applicant pursuant to paras. 20 and 21 of the Baltman J. order shall be paid to her from the Respondent’s share of the sale proceeds.

22Legal Aid Ontario lien: The sum of $15,076.55 was paid on closing to discharge a Legal Aid Ontario lien which secured a loan advanced for the exclusive benefit of the Applicant.

23Parties’ secured line of credit: What was described in Ms. Hassaan’s reporting letter to the parties following the sale of their matrimonial home as “previous first mortgage” with the TD bank was a secured home equity line of credit. It was paid out in full upon closing in the amount of $50,055.73.

a. Of the total amount, only $10,055.73 was a joint debt. The Respondent borrowed $40,000 for his exclusive use after separation. This amount was repaid on closing as part of the retirement of the $50,055.73 balance on the home equity line of credit.

b. To be clear, only $10,055.73 of the sale proceeds were paid to retire joint indebtedness of the parties. Repayment of the remaining $40,000 is deducted solely from the Respondent’s share of the proceeds as it was a post-separation withdrawal for his exclusive use.

Calculation of Final Disbursements (Excluding Disputed Carrying Costs)

24The following figures are taken from the Respondent’s evidence and rely primarily on Ms. Hassaan’s reporting letter to the parties following the sale of their home. The Applicant filed no evidence disputing these figures, which I therefore accept.

25At the time of closing, Ms. Hassaan received $285,437.41 in trust from the purchaser. From these funds, Ms. Hassaan made the following payments to retire joint debts of the parties:

a. To TD bank for the joint portion of line of credit debts on first mortgage: $10,055.73;

b. To TD bank to discharge the second mortgage: $26,594.54;

c. As final payment to the real estate broker: $585.38; and

d. To Ms. Hassaan’s firm to pay her account for representation of both parties on the sale of their home: $1,209.50.

26The amount remaining net of the above payments was $246,992.26. Of this amount, each party was entitled to 50%, which is $123,496.13.

27The parties agree that the following two amounts, referenced earlier, were paid for the benefit of only one of them and should therefore be deducted from their respective shares:

a. The payment of $15,076.65 to discharge the Legal Aid Ontario lien should be deducted from the Applicant’s share. This deduction reduces her share from $123,496.13 to $108,419.48.

b. The payment of $40,000 to TD bank to repay the Respondent’s post-separation withdrawal from the joint line of credit should be deducted from the Respondent’s share. This deduction reduces his share from $123,496.13 to $83,496.13.

28A further deduction of $50,000 from each party’s share reflects the interim payments already disbursed to them as described earlier. After $50,000 is subtracted from each party’s share, the Applicant’s share is reduced to $58,419.48, and the Respondent’s share is reduced to $33,496.13.

29From the Respondent’s share, a spousal support payment of $10,000.00 is to be paid to the Applicant as per paras. 20 and 21 of Baltman J. order. This payment increases the Applicant’s share to $68,419.48, and correspondingly reduces the Respondent’s share to $23,496.13.

30Therefore, if the funds in trust were to be paid out only on the basis of agreed deductions and entitlements, the resulting entitlements before the payment of any costs owing by either party would be as follows. From the $91,915.61 held in trust, the Applicant wife’s share would be $68,419.48. The Respondent’s share would be $23,496.13.

The Issue in Dispute: Carrying Costs

31The Respondent claims he is entitled to a payment of $22,293.39 “on account of expenses paid by [him] for the period of 2015-2019 arising from the carrying costs of the matrimonial home over and above his 50% share”.

32Following Bloom J.’s direction of March 3, 2020, the Respondent filed further evidence showing that he paid the amount claimed. The Applicant led no evidence contradicting the payments claimed.

33I find that $22,293.39 represents 50% of the carrying costs as claimed. The Respondent has therefore met his onus to establish that he incurred the expenditures for which he seeks reimbursement.

34The remaining question is whether the evidence establishes that the Applicant has an enforceable obligation to reimburse the Respondent for that amount.

35Counsel for the Respondent argues that this issue of carrying costs was part of the November 1, 2019 motion brought by the Respondent. It was not resolved in the parties’ settlement agreement and consent order, and is therefore an outstanding issue which has not yet been addressed.

36The Applicant wife made submissions on her own behalf. While she confirmed her agreement with the other entitlements and deductions set out above, including her sole responsibility for the Legal Aid lien, she argued vehemently that she does not owe the further amount of $22,293.39.

37In her submissions, the Applicant emphasized her role during the marriage, specifically that she had raised the parties’ three children as their primary caregiver. She submitted that deducting $22,293.39 from her share of the funds was not part of what she agreed to, and would be unfair to her.

38The Applicant also submitted that the fees claimed by Ms. Hassaan were too high. On this point, it was not clear to the Court whether the Applicant was opposing the fees charged by Ms. Hassaan for completing the matrimonial home sale transaction for both parties, or her bill of costs.

39To the extent that the objection was to the former, Ms. Hassan’s bill to the parties for their joint representation by her on their home sale was $1,209.50. The Applicant filed no evidence that this was an unreasonable fee. I find that this amount is a reasonable bill for the services rendered by Ms. Hassaan on the parties’ home sale transaction.

40With respect to the bill of costs filed by Ms. Hassaan with the Respondent’s motion, the court did not hear costs submissions on the teleconference hearing due to lack of time. At the conclusion of the teleconference, I advised both parties that they would have an opportunity to make cost submissions in writing.

Analysis

41I have reviewed the evidence filed by the Respondent on the motion and listened carefully to the submissions of both parties.

42The Respondent has met his onus to show that he paid the carrying costs of $22,293.39. Having shown that he incurred this expense, he must point to an enforceable obligation requiring the Applicant to pay him this amount.

43The parties’ settlement agreement, incorporated into the Baltman J. consent order, contains no agreement by the Applicant that she still owes, or may owe, a carrying cost payment of $22,393.39 to the Respondent. Nor does it expressly defer that issue for resolution at a later date.

44Counsel for the Respondent argues that the settlement agreement contemplates further amounts being owed by the Applicant. She relies on the language in the spousal support release which states as follows:

“As a result of the terms of this Agreement, and upon completion of the property settlement set out in this Agreement, Jihad Mouzaya and Aurora Mouzaya are financially independent of each other and release his or her rights to spousal support from the other, now and forever.” [emphasis added]

45The only “property settlement” in the agreement to which this language could refer is the $10,000 one-time lump sum payment by the Respondent to the Applicant for spousal support. It makes sense, as a matter of interpretation, that the spousal support payment is the property settlement which must be completed in order for the Respondent to be able to rely on the comprehensive release to resist any future spousal support claims.

46I find on this point that the language of the parties’ agreement and consent order do not support the Respondent’s interpretation of the “property settlement” phrase. The only amount owed in consideration for the spousal release is payable by the Respondent, being the $10,000 spousal support payment. It would not make sense for the Applicant to be obliged to pay $22,293.39 to the Respondent, and him to pay her only $10,000, a significant net benefit to him, given that he is the party benefiting immediately from the spousal support release.

47Counsel for the Respondent also argues that para. 26 of the consent order contemplates the Respondent’s continuing claim for the carrying costs. That paragraph reads, “The balance of motion adjourned to a date, TBD.”

48The Respondent did not file his notice of motion from the November 1, 2019 attendance. I am therefore unable to confirm what relief claimed in the motion, if any, was outstanding after the settlement was reached on that date.

49However, I observe that the Respondent’s own evidence refers to his payment of all the carrying costs of the matrimonial home after separation. Further, he references these payments as the reason he was not ordered to pay spousal support following separation, as well as the reason he should not be required to pay any retroactive spousal support as part of any settlement.

50Specifically, the Respondent states as follows in his affidavit dated October 22, 2019, which he filed for the November 1, 2019 court attendance:

“I continued to pay all of the expenses of the matrimonial home for that [post separation] time period, including additional expenses for the benefit of the Applicant. As such, no support was ordered for that time period.” [emphasis added]

51Counsel for the Respondent filed a letter she wrote to the Applicant’s then counsel, dated April 26, 2019, making the same point in response to the Applicant’s claim for retroactive spousal support:

“…before attempting to determine spousal support arears, I refer you to my Client's affidavit dated December 19, 2018 wherein he clearly disputes your claim he has failed to pay your client [i.e. the Applicant] Spousal Support since the date of separation.

My Client states there are no court orders requiring him to pay spousal support since he was paying 100% of the expenses for the Matrimonial Home. My Client provided spreadsheets listing the expenses he paid in 2015, 2016, 2017 and 2018 …” [emphasis added].

52The Respondent’s position that he did not owe spousal support arrears at the date of the parties’ settlement, specifically because he had been carrying 100% of the matrimonial home costs since separation, is consistent with parties’ settlement terms. The settlement agreement and consent order make no mention of any spousal support arrears. The only payment the Respondent is required to make in order to be released from “any future obligation to pay spousal support”, is the lump sum of $10,000.

53I find on the evidence that any obligation the Applicant may have had for the matrimonial home carrying costs was discharged by treating it as partial consideration for the full release from spousal support secured by the Respondent as part of their final consent order.

54I note further that the agreement and release language relied on by the Respondent were drafted by the Respondent’s counsel. The Applicant was unrepresented in court on November 1, 2019, though she had some assistance in court from duty counsel. Her unrepresented status is underscored by the term in the final order which dispenses with the requirement that she approve it as to form and content.

55Given that the Respondent’s counsel prepared the settlement materials and order, even if I had found ambiguity in the settlement terms, the doctrine of contra proferentem would have applied to resolve the disagreement in favour of the Applicant and against the party who drafted it.

56Respondent Counsel also pointed the Court to settlement positions and proposals which pre- and post-date the order of Baltman J., as evidence that the Applicant agreed to reimburse the Respondent for the carrying costs he seeks. The Applicant did not object to the inclusion of these proposals in the materials.

57I reviewed the settlement proposals in the record. In my view, these settlement documents are not admissible against the Applicant to establish any obligation on the Applicant that was not included in the parties’ final agreement and consent order.

58I note, however, that the settlement correspondence between the parties’ counsel (when the Applicant was still represented), is more consistent with the Applicant’s than the Respondent’s position that the carrying costs were resolved as part of the consent order.

59I reach this conclusion on the basis of the Respondent’s evidence showing that the last settlement position taken by the Applicant while she still had the assistance of counsel. At that time, Applicant’s counsel advised the Respondent that his client, Ms. Mouzaya, would agree to pay 50% of carrying costs as part of an overall settlement in which her spousal support entitlement was recognized to be over $39,000.00.

60In the consent order, the Applicant ultimately accepted a total of $20,000 as consideration for giving a release of spousal support ($10,000 credited to Respondent for payments already made on her behalf, and $10,000 funds from his share of funds in trust).

61There is substantial consistency between the position proposed on the Applicant’s behalf by counsel, and the settlement she agreed to on November 1, 2019. That is, the settlement figures are consistent with the carrying having been waived in exchange for a comparable deduction in spousal support. This supports the Applicant’s position that the carrying cost claim was resolved in the parties’ settlement of November 1, 2019.

62By contrast, the Respondent’s position that reimbursement of the carrying costs is still owing to him would see the Applicant receive $22,293.39 less than she thought she agreed to in the Baltman J. consent order.

63For all the reasons above, I find in favour of the Applicant on this issue. The Respondent’s claim for a further the deduction of $22,293.39 from the Applicant’s share of the funds in trust is denied.

64Therefore, the parties’ entitlements to the remaining funds in trust, prior to deduction of any costs are $68,419.48 to the Applicant and $23,496.13 to the Respondent.

65I have reached my decision based solely on an interpretation of the terms of the parties’ settlement agreement and the resulting consent order. However, this conclusion is also supported from a fairness perspective.

66On the evidence filed, I find that the Applicant’s interpretation of the settlement agreement is more reasonable to both parties given the duration of their marriage, the significant disparity in their incomes, and the traditional roles assumed during their relationship. These factors would indicate a compensatory basis for the Applicant’s spousal support entitlement.

67In these circumstances, the position taken by the Respondent on this motion is that after she has given him a spousal release in exchange for $20,000, the Applicant still owes him $22,293.39 for carrying costs – is effectively double-dipping. For the Court to give effect to such an interpretation of the parties’ bargain would, on the facts I have found, be unfair to the Applicant and would raise

68Questions about the conscionability of that bargain.

Conclusion

69Of the funds in trust, the Applicant is entitled to $68,419.48 and the Respondent is entitled to $23,496.13.

70The Respondent’s claim for a reimbursement of carrying costs in the amount of $22,293.39 is dismissed.

71I advised the parties at the conclusion of the hearing that they would have an opportunity to make cost submissions in writing.

72In the result, the Applicant Ms. Mouzaya was successful on the disputed issue and is presumptively entitled to her costs.

Order

THIS COURT ORDERS THAT:

73Of the $91,915.61 funds remaining in trust, the Applicant Aurora Mouzaya is entitled to $68,419.48 and the Respondent Jihad Mouzaya is entitled to $23,496.13.

74From these amounts shall be deducted any costs I may find are owing by either party to the other for this motion, including the costs reserved to me from the February 18 and March 3, 2020 adjourned appearances.

75The Law Office of Fay Hassaan, P.C. shall continue to hold the full amount of the funds in trust, namely, $91,915.61, pending my further direction.

76I am seized of the issue of disbursal of the funds in trust. No funds are to be disbursed without my authorization.

The following timeline shall apply to cost submissions:

77By July 17, 2020: cost submissions of both parties to be served by email, and filed to my attention by email via the Superior Court of Justice Brampton at: BramptonSCJCourt@ontario.ca

78By July 24, 2020: If either party wishes to file a response to the other’s position on costs, they must serve their response by email and file it in the same manner.

79Page limit: All submissions, including responding submissions, are limited to three (3) pages, double spaced, exclusive of bill of costs, dockets, and any relevant offers to settle. Ms. Hassaan is directed to file dockets in support of any costs claimed on behalf of the Respondent. Statutory and case law referred to shall be hyperlinked within the text of the submissions and not filed separately.

80When the courthouse is fully re-opened to the public, each party shall file with the SCJ Brampton Trial Office a copy of all the material he or she delivered electronically for this motion, with proof of service, and pay the appropriate fees.

81This endorsement is effective as an order of the court when it is made. No other or formal order is required.

82Once my costs decision has been made, I will order disbursal of funds accordingly.