COURT FILE NO.: FS-18-001058

DATE: 20210920

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Sarah Hughes

Applicant

– and –

Christopher James Vicente

Respondent

Counsel:

Sender Herschorn, for the Applicant

HEARD: In Writing

M. Kraft, J.

Corrected REASONS FOR JUDGMENT

[1] The Applicant (“Sarah”), who is 37 years old, and the Respondent (“Christopher”), who is 40 years old, began cohabiting in the summer of 2003. They separated on October 10, 2017, after a 14-year relationship. There were never married.

[2] There are three children of their relationship, Cassius Von Hughes Vicente, born January 2, 2002 (currently, age 19); Sophia Traphina Hughes Vicente, born October 1, 2006 (currently, age 14); and Kobe Santana Hughes Vicente, born May 1, 2008 (currently, age 13).

[3] This is an uncontested trial proceeding pursuant to the order of Leiper, J., dated April 6, 2021. In particular, Sarah seeks relief against Christopher in connection with properties that were owned jointly by the parties and in connection with property in which she claims an interest by way of joint venture. Christopher’s pleadings were struck by Leiper, J. and he was not permitted to receive any notice of the particulars of the trial or to participate in the trial or make submissions. In support of the relief being sought by Sarah, she filed a Form 23C: Affidavit for Uncontested Trial, sworn on August 31, 2021; a Financial Statement, sworn August 31, 2021; and a Letter from opposing counsel, Andrew Green, dated September 2, 2021.

[4] Attached as Exhibits to Sarah’s Form 23C, among other things, are Christopher’s Answer, dated April 15, 2018; a Settlement Conference Brief filed by Christopher, dated May 15, 2019; a Net Family Property statement, filed by Christopher, dated May 15, 2019; an affidavit in Christopher’s name, sworn on January 7, 2020; and an unsworn financial statement prepared by Christopher, dated January 7, 2020. Although Christopher’s Answer, Financial Statement, and Affidavit, sworn on January 7, 2020, were struck, Sarah relied on some of the information contained in these documents in support of her claims. To the extent that I refer to information from any of Christopher’s filed documents in these Reasons and Judgment, they were evidence put forward by Sarah.

[5] A brief history of the litigation is necessary to give some context as to the circumstances that led to Christopher’s pleadings being struck.

Litigation History

[6] Five months after the parties’ separated, on March 12, 2018, Sarah’s served her Application, a Form 35.1 and Financial Statement on Christopher.

[7] On April 25, 2018, Christopher’s served his Answer. Sarah served and filed her Reply on April 27, 2018.

[8] On June 18, 2018, the parties attended a case conference before Goodman, J., at which they entered into a consent order that, among other things, required them to exchange the following financial disclosure:

a. The parties were to exchange Requests for Information (“RFI”) within ten days;

b. The parties were to provide affidavits of documents, and a Certificate of Financial Disclosure within 30 days of receiving the RFI from the other party. Each party was to explain in detail why a requested document cannot/will not be produced; and

c. The parties were to exchange sworn, updated and annotated financial statements and net family property statements (even though the parties are not married) within 30 days (“Order #1”).

[9] Christopher failed to comply with Order #1; he did not serve a sworn affidavit of documents or Certificate of Financial Disclosure within 30 days of receiving Sarah’s RFI, date July 4, 2018.

[10] On September 18, 2019, a continuation of the case conference before Goodman, J. was scheduled to take place. The parties consented to adjourn the conference, in accordance with a consent order, the terms of which included “the parties may request additional disclosure from each other. Disclosure shall be completed prior to October 26, 2018.” Although the Court was provided with a copy of this order, no information was given as to whether either party complied with the terms of this order.

[11] On November 16, 2018, the parties continued their case conference before Goodman, J., at which a further order was made requiring that:

a. The parties provide any outstanding disclosure to each other as soon as possible;

b. Christopher complete the necessary steps to have his Toronto District School Board (“TDSB”) pension valued; and

c. If the disclosure ordered was not produced by either party, the complying party was given leave to bring a motion to strike the non-complying party’s pleadings (“Order #2).

[12] Christopher failed to comply with Order #2; he failed to provide the outstanding disclosure and did not complete the necessary steps to obtain the Family Law Value of his TDSB pension.

[13] On May 22, 2019, a further case conference was held by Paisley, J., at which he ordered Christopher to complete his financial disclosure (“Order #3). Christopher failed to comply with Order #3.

[14] On January 14, 2020, Sarah brought a motion seeking, among other things, an order that Christopher produce documentary disclosure in accordance with the orders of Goodman, J., dated June 18, 2019 and Paisley, J., dated May 22, 2019 respectively, and that each party receive a release of $100,000 from the net proceeds of sale from the sale of the parties’ jointly owned property located at 1156 Woodbine Avenue (“Woodbine property”). Nakonechny, J., among other things, ordered that

a. Christopher serve a sworn Affidavit of Documents (Form 30A) and a signed Certificate of Financial Disclosure listing all the documents he has produced within 30 days, along with a current sworn financial statement;

b. The disclosure Christopher was to produce included the items listed on both Schedule “A” and “B” attached to Sarah’s Notice of Motion, dated December 16, 2019, and if Christopher was not able to obtain the requested disclosure he was to set that out specifically with an explanation in his Affidavit of Documents;

c. Christopher was to produce all documents from Mr. Remy Bournignon on which he intends to rely at trial and any banking or other documents regarding his claim that Sarah owes him $40,000 for renovations to the home and any documents relating to the alleged $18,000 loan to Sarah in the Affidavit of Documents;

d. Christopher was to serve Sarah’s lawyer with a list of witnesses he intends to call at trial, with Will Say Statements containing an outline of the relevant evidence each witness will give, within 45 days;

e. Counsel for Sarah was to confirm that the required Financial Services Commission of Ontario (FSCO) pension forms were sent to OMERS to value Christopher’s TDSB pension within 7 days and if required, Christopher was to contact OMERS to confirm they have received the necessary documents to value his pension and a status of the valuation;

f. No further conferences were to be scheduled until the ordered disclosure was completed and questioning had taken place, after which the parties were free to schedule a Settlement Conference or Trial Management Conference; and

g. Christopher was ordered to pay Sarah costs of the motion in the sum of $9,000, to be deducted from his share of the net proceeds of sale from the Woodbine property. (“Order #4).

[15] Christopher failed to comply with Order #4; he failed to (a) serve a detailed, signed and annotated financial statement and Certificate of Financial Disclosure; (b) serve an Affidavit of Documents; (c) provide detailed reasons as to why the requested documents could not or would not be provided by him; (d) provide an explanation in the Affidavit of Documents as to why he could not obtain documents that were not in his possession; (e) provide all documents from Mr. Remy Bournignon on which he intends to rely at trial; (f) produce bank or other documents to verify the $40,000 for renovations he claims Sarah owes him; (g) produce any documents relating to the alleged loan he gave Sarah for $18,0000; and (j) serve Mr. Herschorn with a list of witnesses he intends to call at trial with Will Say Statements.

[16] On April 6, 2021, Sarah brought a motion to strike Christopher’s Answer, Financial Statement and Affidavit, sworn on January 7, 2020, on account of his failure to comply with the four prior financial disclosure orders. Christopher did not attend, nor did he file any material or explanation for his failure to make disclosure in accordance with the orders of Goodman, J., Paisley, J. and Nakonechny, J. On April 6, 2021, Leiper, J. struck Christopher’s pleadings and scheduled an uncontested trial for September 13, 2021. Christopher was to be given notice of the trial date but was not permitted to participate. Christopher was also ordered to pay Sarah’s costs of the motion in the sum of $1,900, to be released from his share of the balance of net sale proceeds from the Woodbine property, currently held in trust by ATP Lawyers.

[17] Pursuant to the Order of Leiper, J., the uncontested trial was heard by me on September 13, 2021, partially in person and partially in writing. Sarah gave oral evidence in support of her claims against Christopher and in addition, relied on her filed sworn Form 23C, affidavit for uncontested trial, sworn on August 31, 2021. I reserved my judgment. These reasons set out my findings and disposition of the matters at issue.

Specific Relief Sought by Sarah

[18] Sarah seeks to be paid the total sum of $359,199.76 from Christopher on account of three properties they jointly-owned and two assets in which she claims an interest by way of joint venture, particularized as follows:

a. Sarah seeks an order that she receive her 50% share of the balance of the net proceeds of sale from the sale of 1156 Woodbine Avenue, Toronto ON M4C 4C9 (“Woodbine property) in the sum of $91,028.28, which property was jointly owned by the parties, plus the sum of $21,966.34, to be paid from Christopher’s 50% share of the net sale proceeds from the Woodbine property, as reimbursement to her for 50% of the judgment against Christopher she paid off to remove the writ from title on the closing of the sale of the Woodbine property;

b. Sarah seeks an order that she receive her 50% share of 2513419 Ontario Inc., operating as Brick Farm Breakfast, which corporation is jointly owned by the parties, in the sum of $62,500, to be paid out of Christopher’s share of the net proceeds of sale from the Woodbine property;

c. Sarah seeks an order that she receive the sum of $127,888.49 from Christopher, which represents her 50% share of the net proceeds of sale from the sale of 214 Oak Park Avenue (“Oak Park property”), which property was jointly-owned by the parties and was sold about a year prior to the parties’ separation;

d. Sarah seeks an order that Christopher pay her 50% of the sale proceeds from their joint venture, Ziggy, in the sum of $16,500, which was sold prior to the parties’ separation;

e. Sarah seeks an order that Christopher pay her 50% of the value of his TDSB pension, in the lump sum of $39,316.65; and

f. Sarah seeks costs of this uncontested trial.

Brief Factual Background

[19] The parties began cohabiting in the summer of 2003. They separated in August, 2017. They continued to reside together in their jointly owned home until October 10, 2017, when Christopher was charged with assaulting Sarah.

[20] The assault charges against Christopher were stayed and the bail conditions which were in place, are no longer applicable.

[21] Sarah and Christopher are the parents of 3 children, Cassius, age 19;, Sophia, age 14; and Kobe, age 13. Sarah has no contact with the 3 children. The three children reside with Christopher in a property located at 672 Coxwell Avenue, Toronto, that he inherited from his father. Sarah has not advanced a claim in relation to this property.

[22] According to Sarah, during the parties’ cohabitation, she and Christopher pooled all of their money, resources and efforts in a series of joint ventures, on the basis of a 50/50 partnership. She deposes that the parties deposited their income into joint bank accounts; they behaved as if they were married and shared everything equally.

[23] Throughout the marriage, Sarah worked in various managerial positions at grocery stores; she worked as a manager of a café; the department head of a grocery store and the deli manager at Valu Mart for 8 years. Sarah also worked as the deli manager at Independent City Market and quit her position after 9 months so that she could work at the restaurant the parties’ jointly-owned, known as Brick Farm Breakfast.

[24] On December 31, 2011, Christopher’s father died. According to Christopher’s Answer, he inherited sole title to 672 Coxwell Avenue (where he currently resides with the children) and the sum of $300,000. Sarah makes no claim against 672 Coxwell Avenue or the inherited funds Christopher received.

[25] From 2002 until March 2016, Christopher worked as a custodian for the TDSB, earning about $50,000 a year. According to Sarah, Christopher took sick leave from the TDSB in 2016.

[26] Again, in mid-2017, Sarah left her employment position to work in the parties’ jointly-owned restaurant, known as Brick Farm Breakfast.

[27] Christopher resumed part-time employment with the TDSB from about February 26, 2018 until June 2018. He also began running the Brick Farm Breakfast restaurant in February 2018, when Sarah stopped working there.

[28] Sarah is currently employed as a manager at Pape Market Foodland. She earned $68,000 of income in 2020.

[29] Christopher is self-employed and claims to be working part-time, continuing to run the Brick Farm Breakfast.

[30] In the family law proceedings, Christopher was represented by Jane Mukongolo until October 25, 2019, when she filed a notice of change in representation. Christopher has been acting in person in since then. Throughout these proceedings, Sarah has been represented by Sender Herschorn.

Sarah’s Position

[31] The relief being sought by Sarah involves property claims in relation to property that was either jointly owned by the parties or property in which Sarah has no titled interest, but in which she claims an interest by virtue of a joint venture.

[32] Again, it is Sarah’s position that during the cohabitation, the parties pooled their resources, money and efforts into a series of joint family ventures, as follows:

a. The parties purchased their family home, the Woodbine property, and owned it jointly, first, as joint tenants and secondly, as tenants in common, until the property was sold;

b. The parties incorporated a company, 2513419 Ontario Inc. (“251”) in or about May 2016, for the purpose of purchasing a business they intended to operate together. They are equal shareholders of the company. In May 2017, 251 purchased a restaurant, Brick Farm Breakfast, and the parties operated this restaurant together until October 10, 2017, which Christopher’s bail conditions prevented him from attending the restaurant.

c. The parties purchased a residential property, as an investment, located at 214 Oak Park Avenue. East York (“Oak Park property”) on September 30, 2014 for $665,000. The parties held title to the Oak Park property jointly. In or about the Fall of 2016, the parties sold the Oak Park property for $730,752.10. The Trust Ledger statement provides that Sarah and Christopher received net proceeds of sale of $255,776.98. According to Sarah, these monies were deposited into the parties’ joint bank account and Christopher withdrew her 50% share of the Oak Park property proceeds from their joint account without her knowledge or consent, prior to separation. Sarah also deposes that Christopher never accounted for the Oak Park property proceeds. According to Christopher, the net proceeds of sale from the Oak Park property were used to purchase the Brick Farm Breakfast restaurant (of which Sarah owns 50%) and the balance was used toward family expenses as neither party was working for a period of time.

d. Christopher was a 50% partner in a restaurant, known as Ziggy, with a third-party, Abdul Aziz Ahmad. Sarah left her employment to work at Ziggy; cooking, paying the bills, hiring the staff and running the restaurant. After about 9 months, Ziggy was sold at a profit. Christopher never shared the profits or proceeds of the restaurant with Sarah. Sarah now claims an interest in these proceeds, including any assets acquired with these proceeds, on the basis that the parties were involved in a joint venture and that a remedy of unjust enrichment should be awarded.

e. Christopher has a pension from his employment at the Toronto District School Board (“TDSB”). Although a Family Law Value was not obtained by Christopher an estimate of his OMERs pension dated November 28, 2018 was produced. Based on an assumed termination date of November 30, 2018, the estimated commuted value of Christopher’s pension is $78,633.30. Sarah claims a half-interest in Christopher’s pension on the basis that the parties were involved in a joint venture and that a remedy of unjust enrichment should be awarded.

[33] According to Sarah, the parties worked toward common goals and pooled their efforts and teamwork to accumulate wealth during the relationship. They decided to have children and raise them together and they cohabited for about 14 years. In addition to the properties they held jointly, Sarah gave up her employment positions to work in the parties’ joint ventures to enable Christopher to continue his employment at TDSB and to continue to grow his pension. Based on their joint family venture, Sarah seeks to share in the accumulated wealth in Christopher’s pension and in Ziggy, which are two assets in which Sarah does not have a title interest. With respect to the Woodbine property; 251/Brick Farm Breakfast and the Oak Park property, Sarah was a titled owner and simply seeks to receive her half-interest in the value of these assets.

Analysis

1156 Woodbine Avenue

[34] On February 8, 2008, the Woodbine property was purchased by Christopher and his late father, Peter Mangan.

[35] On March 18, 2013, title to the Woodbine property was transferred into Christopher’s sole name. On that same day, Christopher transferred his interest in the Woodbine property into the names of both him and Sarah, as joint tenants.

[36] On February 25, 2014, the parties arranged for a mortgage in the sum of $310,000, for which they were jointly liable, in favour of Alterna Savings and Credit Union Limited.

[37] On February 20, 2018, after the parties’ separation, Sarah severed the joint tenancy and the parties continued to hold their interests in the Woodbine property as tenants in common.

[38] In August 2019, the Woodbine property was sold. Just prior to the closing date, the parties’ jointly-retained real estate lawyer, Angi T. Panzaru, of ATP Lawyers, discovered a writ on title, relating to a judgment obtained by TD Canada Trust against Christopher, in his sole name, of $38,903.96.

[39] Copies of emails between Mr. Herschorn and Ms. Mukongolo, attached to Sarah’s Form 23C, confirm that despite being asked to explain the details of the judgment and to be provided with a copy of the judgment, Christopher refused to do so. Sarah has no knowledge as to the circumstances that led to a writ being registered on title to the Woodbine property.

[40] Christopher would not complete the sale of the Woodbine property unless Sarah agreed to satisfy the outstanding judgment from the Woodbine property sale proceeds. Sarah agreed to do so on the condition that Christopher reimburse her for doing in the future. The final amount of the writ, including costs and interest was $43,932.68. Sarah seeks an order that Christopher reimburse her for 50% of this cost, being $21,966.34, from his half-share of the Woodbine property net sale proceeds.

[41] The Trust Ledger Statement from ATP Law Office, dated August 15, 2019, provides that the net proceeds of sale from the sale of the Woodbine property amounted to $381,386.34. These proceeds have been held in trust by ATP Law Office since the closing of the Woodbine property. They are invested in a GIC.

[42] As set out above in the litigation history, on January 14, 2020, Nakonechny, J. ordered that each party receive the sum of $100,000 from the net sale proceeds from the Woodbine property and that the balance of the proceeds of sale remain held in trust. As at August 24, 2021, the balance of the net sale proceeds being held in trust by ATP Law Office is $182,056.56.

[43] As indicated above, (a) Sarah seeks an order that she receive her half-share of these net sale proceeds, in the sum of $91,028.28 and (b) an order that she be reimbursed by Christopher for having paid 50% of the judgment registered on title solely against him in favour of TD Canada Trust in the sum of $21,961.84 (50% of $43,923.68) from his half-share of the balance of the net sale proceeds from the Woodbine property. These amounts total $112,990.12.

[44] Given that the Woodbine property was jointly owned by the parties and that Sarah paid one-half of the sum required to remove the judgment against Christopher, which was his sole debt and responsibility, I order that ATP Lawyers release the sum of $112,990.12, plus interest to Sarah, being her half-share of the balance of the sale proceeds of $91,082.28, along with the sum of $21,961.84 (50% of the judgment against Christopher), to be paid out of Christopher’s half-share of the Woodbine property proceeds. The payment to Sarah of $112,990.12, will leave a balance of $69,066.44, plus interest, in the Woodbine property net sale proceeds, which is notionally what is left of Christopher’s half-share.

2513419 Ontario Inc. operating as Brick Farm Breakfast (“BFB”)

[45] The parties incorporated 2513419 Ontario Inc. (“251”) on April 12, 2016. The Certificate of Incorporation provides that both Christopher and Sarah are named Directors; Christopher, as President and Sarah, as Secretary. They were each issued 100 common shares in 251.

[46] In May 2017, 251 purchased the Brick Farm Breakfast (“BFB”), a restaurant which the parties have operated since then. According to Christopher, he invested the sum of $90,000 in set-up costs for BFB. Sarah does not dispute this.

[47] According to Sarah, the parties jointly operated and worked at BFB until October 10 2017, when Christopher’s bail conditions arising from the assault charge prevented him from being near Sarah. As a result, from October 10, 2017, until March 2018, Sarah ran BFB solely. She deposes that she had to stop running BFB because she was not receiving financial support from Christopher and she was responsible for looking after the children and could not manage all of these responsibilities. Christopher took over the management and operations of BFB in March 2018 and continues to operated BFB today.

[48] Christopher’s position in his Answer provides that he estimates BFB has a value of less than the initial funds he invested to start the restaurant of $90,000. In his affidavit, sworn on January 7, 2020, which again, was struck by Leiper, J. but which Sarah attached as an exhibit to her Form 23C as evidence to support her claims in this uncontested trial, Christopher deposed that he earns approximately $96,000 a year from BFB, but his overhead is about $70,000 a year, leaving his profits to be $26,000. His latest unsworn financial statement lists that Christopher’s income is $96,000 a year.

[49] Throughout these proceedings, Christopher refused to obtain a valuation of BFB. His position was that a valuation is not required as there is no value in the business, based on the fact that (a) Sarah abandoned working at BFB in March 2018 and claimed it was not profitable; and (b) he tried to sell the business for $150,000 and received no offers to purchase it.

[50] Given Christopher’s refusal to value the business, Sarah retained Steve Rayson of SDR Valuations Inc., to calculate the fair market value of 251, operating as BFB, as at July 31, 2021. Steven Rayson’s valuation report is attached as Exhibit 6 to Sarah’s Form 23C, sworn on August 31, 2021, and provides that the fair market value of Sarah’s 50% interest in BFB is $62,500.

[51] Mr. Rayson’s valuation report provides that the value of the business and operating assets represents the fair market value of the operations on an enterprise basis. Mr. Rayson deducted Christopher’s original investment in the business estimated at $90,000. The resulting en bloc fair market value of BFB, as at July 31, 2021, was calculated by Mr. Rayson, to be in the range of $112,000 to $137,000, with a mid-point of $125,000. Sarah’s 50% interest in BFB, therefore is 50% of this amount, or $62,5000. Mr. Rayson calculated the contingent taxes to be $9,000.

[52] I have reviewed Mr. Rayson’s report. I am mindful of the fact that there are some limitations to the report: Firstly, Christopher refused to participate in the valuation report and, as such, Mr. Rayson was only able to rely on the information provided to him by Sarah; Secondly, there is no external accountant involved with BFB, with whom Mr. Rayson could consult; and Thirdly, Mr. Rayson notes in the Limitations in Scope of Review section of his report that if he “were provided with traditional accounting records, such as financial statements, corporate tax returns, tax notices of assessment, general ledgers, adjusting journal entries and trial balances, the valuation conclusions noted in [his report] may change”.

[53] Christopher, however, was given ample opportunity to value BFB and to participate in this valuation report and chose not to do so. Accordingly, I accept the evidence of Mr. Rayson as to the value of BFB, as it is the best evidence available to the court.

[54] Mr. Herschorn received correspondence from a lawyer, Andrew D. Green, on September 2, 2021, in which Mr. Green advises that he has been newly retained as counsel for Christopher. Mr. Green’s letter, among other things, sets out that Christopher is aware of the upcoming uncontested trial date of September 13, 2021 and that BFB has been “a financial disaster…given the tension between the parties and then COVID”. Mr. Green further advises that (a) there is approximately $17,000 of HST owing by BFB; (b) a CEBA Loan of $60,000 that was obtained; and (c) Sarah remains on the lease.

[55] Once Justice Leiper struck Christopher’s pleadings, he lost his right to participate in these proceedings. Mr. Herschorn brought Mr. Green’s letter to the attention of the Court, but the information contained in Mr. Green’s letter is not evidence. I find that it is not appropriate for Christopher to have, in any way, attempted to participate in this uncontested trial by having Mr. Green send Mr. Herschorn a letter, in which Mr. Green attempts to remind Mr. Herschorn of his duties under the Rules of Professional Conduct relating to the administration of justice. Mr. Herschorn properly advised the court that he had received a letter from a newly retained lawyer on Christopher’s behalf, and provided a copy of the letter to the Court. However, I decline to consider the information in Mr. Green’s letter, dated September 13, 2021, as evidence the Court has considered in this uncontested trial. Christopher was given many opportunities to participate in this proceeding. He chose not to do so. He chose not to value his interest in 251 and/or BFB. This left Sarah in the unenviable position of retaining a chartered business valuator on her own, at her own expense, to determine the fair market value of her 50% interest in 251, with limited financial documentation. The Court has no evidence on the record regarding HST owing by BFB or regarding a CEBA loan that may or may not have been obtained. As such, these alleged debts cannot be considered by the Court. Again, Christopher had ample opportunities to bring these issues up with Sarah and to make proper financial disclosure. He failed to do so.

[56] Given that 251, which operates at BFB, is a jointly-owned corporation, I order Christopher to pay Sarah the sum of $62,500 less contingent tax costs of $9,000, for a net total of $53,500, for the redemption of her half-interest in 251, to be paid out of his remaining share of the net proceeds of sale from the Woodbine property. In response to a question asked by the Court, Sarah testified that she is willing to sign any documentation necessary to transfer her shareholdings to Christopher so he can own 251 outright. Since Christopher is operating BFB on his own and he will have the benefit of being a full owner of the corporation, once payment is made to Sarah in accordance with the terms of this Order, I order Christopher to direct a corporate lawyer to prepare the necessary documentation to effect Sarah’s transfer of her 50 common shares in 251 to him upon his payment to her of $53,500, along with a release of her interest in 251 and/or BFB; a release from the lease signed by 251 and/or BFB; and a complete release from any further liabilities Sarah may have as a result of being an office and director of 251.

214 Oak Park, East York (“Oak Park property”)

[57] On September 13, 2014, Sarah and Christopher purchased the Oak Park property as joint tenants, as an income-producing, investment property for $665,000.

[58] Sarah deposes that Christopher managed this investment and the Oak Park property made a profit every month. The Oak Park property sold and the transaction closed in October 2016, about one year prior to separation for $730,752.10. The Court was not provided with the exact date of the closing of the sale transaction. However, the Trust Ledger Statement, dated September 30, 2016, prepared by the real estate lawyer, James Naumovitch, provides that the net proceeds of sale were $254,130.20 + $1,646.78, for a total of $255,776.98, paid to Christopher and Sarah.

[59] Sara deposes that Christopher deposited the Oak Park sale proceeds into a joint account and then withdrew the net proceeds of sale from the parties’ joint bank account without her knowledge or consent. Sarah further deposes that Christopher never accounted to Sarah as to what he did with these funds. Sarah claims did not receive any monies from the sale of the Oak Park property. Sarah, however, did not produce copies of the joint bank account statements into which she deposes the Oak Park sale proceeds were deposited. It was clearly within Sarah’s control to provide the Court with copies of joint bank account statements but she did not do so.

[60] Sarah requested financial disclosure from Christopher about the Oak Park net sale proceeds, including where the funds were deposited and when the funds were withdrawn, from the outset of these proceedings. She made this request in her first Request for information, dated July 4, 2018 and continued to ask for this information throughout. Christopher was ordered to produce this disclosure and Sarah claims that he did not do so. However, it appears that Christopher did provide some disclosure from his bank accounts to Sarah, as evidenced from the Index to a Financial Production brief sent to Sarah, which index she attached as an Exhibit to her Form 23C. Sarah, however, did not attach copies of Christopher’s bank statements which were produced, as exhibits to her Form 23C. As such, the Court is not in a position to analyze or determine what of the net sale proceeds from the Oak Park property sale of $255,776.98 were deposited and allegedly subsequently withdrawn from the parties’ bank accounts. There is no way for the Court to know for certain if there remained sale proceeds at the time the parties’ separated or today. It was open for Sarah to provide the court with this information and disclosure. She did not do so.

[61] Christopher’s position in his Answer (again, which Answer was struck but which Sarah put forward as evidence to support her claims), is that the profits from the Oak Park property sale were used by him to support the family. There is no evidence on the record provided by Sarah or Christopher that any of the funds from the sale of the Oak Park property in 2016 exist today.

[62] Sarah, does rely on a Settlement Conference (“SC”) brief filed by Christopher dated May 22, 2019 (attached at Tab 5 of Sarah’s Form 23C), in which he states at paragraph 32(m)(ii), that “in October 2016, the month the money [the Oak Park property net sale proceeds] was deposited the balance was only $160,752.69 and by separation in October 2017, the balance was only $4,506.73”. Essentially, the information in Christopher’s SC Brief suggests that notwithstanding the information in the Trust Ledger that Christopher and Sarah received $255,776.98 as net proceeds of sale from the Oak Park property, only $160,752.69 was deposited. This means $95,024.29 was used for other purposes. It is mere speculation if the Court assumes that these were the monies used by Christopher to purchase BFB or whether Christopher repaid himself money he had used to pay a deposit for the Oak Park property or, whether, subsequent to the closing of the sale of the Oak Park property, $95,024.29 was used to pay off accounts receivable or debts owing by BFB.

[63] In essence, Sarah attached a SC Brief from Christopher that raises issues regarding her entitlement to one-half of the Oak Park property net sale proceeds because of the parties’ alleged agreement that Christopher would be repaid the down payment he made to purchase the Oak Park Property, which amount is not disclosed. Further, the paragraph in the SC Brief (Para. 32(m)(ii)) upon which Sarah relies in support of her position that she is entitled to one-half of the $255,776.98 of the net sale proceeds from the Oak Park property, sets out that Christopher’s position was that the net proceeds from the sale of the property were used toward the purchase and running of BFB, which is an asset that was held jointly by the parties through 251, a company of which they are equal shareholders. In addition, paragraph 32(m)(ii) of Christopher’s SC brief, the paragraph upon which Sarah has relied, at least in part, also sets out that Christopher had provided a financial disclosure brief which, at Tab 5, contained bank statements which would provide evidence of the withdrawals he made from the bank account into which the proceeds of the Oak Park property had been deposited. Therefore, it is simply incorrect that Christopher did not account for the Oak Park property net sale proceeds. He clearly did so in his SC brief.

[64] Sarah seeks an order for 50% of the net proceeds from the Oak Park property sale which was a jointly held property in the sum of $127,888.49. It seems obvious that Sarah could have provided the Court with the bank statements Christopher attached at Tab 5 of his financial disclosure brief in support of her position that she did not receive (directly or indirectly) any of the proceeds from the sale of the Oak Park property. Sarah make a decision to attach Christopher’s SC brief as an exhibit to her Form 23C for her own purpose, which was to confirm that the property had been jointly owned and that the net proceeds of sale were paid into a bank account. In fact, Mr. Herschorn wrote a letter to the Court on September 13, 2021, again referring to paragraph 32(m)(ii) of Christopher’s SC Brief. Having chosen to rely on paragraph 32(m)(ii) of Christopher’s SC brief it was incumbent on Sarah to explain in the face of the balance of the paragraph why she would be entitled to 50% of $255,776.98 or 50% of the $160,752.69. Further, BFB is still jointly owned by the parties thus, money paid out of the Oak Park property net sale proceeds to acquire or run the restaurant cannot be said to have been paid out with no benefit to Sarah since prima facie they would have benefitted Sarah, which is contrary to statements sworn to in her Form 23C.

[65] I decline to make the order Sarah seeks in terms of being paid 50% of the $255,776.98 on account of her half-interest in the Oak Park property based on the record of evidence before me. Sarah shall be given a chance to provide evidence to support her position that she did not receive the benefit of any of the Oak Park property net sale proceeds which can be done by her submitting copies of the bank statements produced by Christopher in his Financial Production brief and/or by submitting copies of the parties’ joint bank account statement into which she deposes the Oak Park property net sale proceeds were deposited. Sarah shall have 45 days to do so. If Sarah is unable to do so through a review of the bank statements to which Christopher refers in his SC Brief, then she ought to indicate what she has been unable to do so. Further, if BFB, the restaurant jointly owned by Sarah and Christopher, received benefits from the net sale proceeds from the Oak Park property, then she ought to explain why she should not have been treated as having received half of that benefit since she is a half-owner of that business.

Ziggy

[66] In mid-to late 2009, Christopher purchased a restaurant, Ziggy, as joint owner with a partner, Abdul Ahmed. According to Christopher, he used his sole funds of about $20,000 to $30,000 to purchase this restaurant; Ziggy was operated by Abdul Ahmed, with assistance from Christopher; and Sarah was an employee of Ziggy and earned an hourly wage working there.

[67] Ziggy was only open for operation for about 6 months. Ziggy was sold in 2010 at a similar price for what it was purchased, with a minimal profit of about $3,000.

[68] Sarah’s position is that she was not simply an employee of Ziggy but, rather, her role was much more expansive and more similar to that of an owner. Specifically, Sarah deposes that she was the cook, paid the bills, hired the staff and helped run Ziggy. She acknowledges that she was paid an hourly wage but Sarah deposes that she always understood that Christopher’s investment in Ziggy was a joint family venture, such that she was 25% owner of Ziggy. According to Sarah it was always the parties’ joint intention that they would share in the profits of Ziggy, just as they shared in the labour needed to operate the business. Further, Sarah disputes that Christopher used his sole funds of $20-$30,000 to purchase his interest in Ziggy. Accordingly, Sarah seeks to be paid the sum of $16,500 for her half interest in Ziggy, which she claims is 50% of the initial investment of $30,000 plus the profit of $3,000.

[69] Unlike 251 and/or BFB, Sarah is not a joint-titled owner of Ziggy. Her claim, with respect to the Ziggy proceeds, is based on a joint family venture claim.

[70] Again, the court has no evidence that any of the funds from the sale of Ziggy in 2010 exist today, nor is there evidence that any proceeds from the sale of Ziggy are traceable into an asset that continues to exist today or that existed on the date of separation. The sale of Ziggy took place 7 years prior to when the parties’ separated and 11 years ago. The Court cannot go back in time to determine what happened with the Ziggy proceeds. Accordingly, I decline to order that Christopher pay Sarah any sum of money on account of her alleged half-interest in Ziggy.

Christopher’s TDSB pension

[71] During the parties’ cohabitation, Christopher was employed by the TDSB for 10.34 years.

[72] Based on how the parties’ functioned as a family unit; the fact that they divided their responsibilities for child care; they jointly pooled their incomes; Sarah gave up various positions of employment to assist in their joint projects such as Ziggy and BFB, while Christopher continued to work at TDSB and contribute to his pension, Sarah deposes that she always understood, based on their joint expectations and based on statements Christopher made to her, that she would share in the accumulated value of his pension. It is Sarah’s evidence that it was the joint intention of the parties that while Christopher accumulated years of pensionable income, Sarah gave up prospects of obtaining employment acquiring her own pension, in return for raising the parties’ children; contributing all of her earned income toward the family’s finances and expenses; giving up employment positions to work on various projects and restaurants; and while she permitted Christopher to pursue business opportunities for the family to which she contributed with her labour.

[73] Despite being ordered to do so, Christopher either failed to submit the necessary FSCO forms to the TDSB to have the Family Law Value of his pension calculated or failed to provide Sarah with a copy of the Family Law valuation of his TDSB pension.

[74] However, in one of his disclosure briefs, Christopher’s provided an OMERS Pension Estimate from the TDSB assuming his date of termination was November 30, 2018. The OMERs Pension Estimate is the only evidence before the Court that provides the estimated commuted value of Christopher’s pension earned to an assumed termination date (November 30, 2018), and provides that the value is $78,633.30.

[75] Sarah seeks an order that she receive 50% of the lump sum cash value of Christopher’s pension in the sum of $39,316.65 and that Chris keep the pension, intact, for his future. The OMERs Pension Estimate provides that if Christopher chooses to transfer the commuted value, he can only transfer approximately $62,375.22 of the $78,633.30 to a LIRA and that any commuted value amount over the limited will be paid to him in cash and income tax will be deducted. Accordingly, I order Christopher to either pay Sarah the sum of $39,316.65, or to transfer this sum from his TDSB into a LIRA in Sarah’s name, with Sarah having the option to chose what she prefers within ten days of this order

Costs

[76] There are two outstanding costs orders that Christopher has not paid. The first is the January 14, 2020 costs order of Nakonechny, J. in the amount of $9,000 and the second is the April 6, 2021 costs order of Leiper, J., in the amount of $1,900. These two costs orders total $10,900 and were ordered to be paid out of Christopher’s half-share of the Woodbine property sale proceeds. To date, Sarah has only received the costs ordered by Leiper, J. in the sum of $1,900.

[77] In addition, Sarah seeks an order for the payment of all other legal fees, disbursements and applicable taxes that she has paid in these court proceedings and which were not included in the above two court orders. She has submitted a Bill of Costs for the period from January 2018 to October 2019, and then for the present time to September 13, 2021. There appears to be no Bill of Costs submitted for the preparation of and attendance at the motion before Nakonechny, J. on January 20, 2020, or for the preparation of and attendance at the motion to strike Christopher’s pleadings before Leiper, J. on April 6, 2021, which indicates that, apart from these two earlier costs orders, Sarah has incurred a total of $38,744.22 in legal fees and disbursements. She seeks recovery of this amount on a full indemnity basis.

[78] The successful party in family law litigation has no automatic right to full recovery of their costs.[^1] However the Rules do provide for an entitlement to full recovery of costs in specific circumstances, including bad faith.[^2]

[79] Christopher’s refusal to comply with his disclosure obligations rises to the level of bad faith. I therefore find that Sarah is entitled to recovery of her costs incurred in relation to this trial, namely, those incurred following the motion before Leiper, J. in April 6, 2021, on a full indemnity basis.

[80] I have reviewed the hourly rates of the lawyers and law clerks involved in this matter, as well as their docketed time for the relevant period, and find all of it to be reasonable. I therefore award Sarah her costs on a full-recovery basis for the period “Present to September 13, 2021”, in the amount of $24,597.42, being legal fees of $16,701.90 ($14,780.50+HST of $1,921.40), which represents 37.43 hours for Sender Herschorn’s time, at a rate of $350 an hour = $13,100.50 and 9.6 hours for a law clerk, Deanna Beckford, at a rate of $175 an hour = $1,680, plus disbursements of $7,895.52.

[81] For the period of time prior to the April 6, 2021 motion before Leiper, J., the total hours spent in legal fees amounted to $14,678.70, being $12,990 + $1,688.70 HST. This time is calculated as follows: (a) Sender Herschorn spent a total of 19.1 hours, at a rate of $375 an hour = $7,162.50; (b) Pamela Favotto, a law clerk, spent a total of 11.3 hours, at a rate of $175 an hour = $1,977.50; and (c) Sonia Mederios, a law clerk, spent a total of 22 hours, at a rate of $175 an hour = $3,850.

[82] Sarah did not attach Offers to Settle to her Bill of Costs. The Court has no evidence as to whether Offers were made by her or Christopher that may have impacted on the costs award.

[83] Costs must always be proportional to what is at stake in the case, and to the unsuccessful party’s reasonable expectation as to what costs he may face if he or she is unsuccessful.

[84] I find that in addition to the costs of this trial after April 6, 2021, a costs award in the sum of $8,500, inclusive of HST and disbursements, for the period of time from January 2018 to October 2019, represents a fair and reasonable amount of costs.

[85] Accordingly, I order Christopher to pay Sarah costs in the total sum of $33,097.42, within 30 days.

Method of Payment from Christopher to Sarah

[86] As outlined above, ATP Lawyers are holding the total sum of $182,164.56 in trust for the parties, representing the balance of the net proceeds of sale from the Woodbine property. I find that ATP Lawyers shall be directed to pay 100% of the net proceeds of sale to Sarah which payment is in satisfaction of some of Christopher’s obligations under this order, but not all. In addition to Christopher’s half-share of the net proceeds of sale from the Woodbine property being paid to Sarah, Christopher shall pay Sarah an additional sum of $68,847.62. The sums owing to Sarah by Christopher under this order are particularized in the below chart for illustration purposes:

Due to Sarah

Description of amounts owing to Sarah by Christopher under this Order

$91,028.28

A total of $182,056.56 of net sale proceeds are held in trust from the Woodbine property sale

$21,961.84

Reimbursement to Sarah for paying off the judgment against Christopher and to remove the writ from title to the Woodbine property to close the transaction

$9,000

Costs order of Nakonechny, J., dated January 14, 2020

$53,600

Payment to Sarah for her 50% interest in 2513419 Ontario Inc /BFB

$39,316.65

Payment to Sarah for 50% of the lump sum value of Christopher’s TDSB pension

$33,097.42

Costs of the uncontested trial

$248,004.19

Total sum due to Sarah under the terms of this Order = $248,004.19

($91,028.28): Her ½ share of Woodbine

($91,028.28): from Christopher’s ½ share of Woodbine

($65,947.63): to be paid by Christopher directly

Disposition

[87] Order to go as follows:

a. The respondent, Christopher James Vicente, shall pay the total sum of applicant Sarah Hughes, shall receive the sum of $248,004.19, paid to her on account of her half-interest in the following assets, and from the following sources:

i. ATP Lawyers shall release the entirety of the net proceeds of sale from the sale of 1156 Woodbine Avenue, Toronto, ON, M4C 4C9, in the sum of $182,056.56, being held in their trust account to the applicant, Sarah Hughes, which is in satisfaction of the following amounts owing to the applicant by the respondent, Christopher James Vicente:

1. $91,028.28 represents the applicant’s half-share of the balance of the net sale proceeds from the Woodbine property;

2. $21,961.84, plus interest, from the respondent’s half-share of the Woodbine property sale proceeds to reimburse her for paying off the judgment against respondent and removing the writ from title.

3. $9,000, plus interest, from the respondent’s half-share of the Woodbine property sale proceeds, in satisfaction of the two costs orders under the Order of Nakonechny, J., dated January 14, 2020 and the Order of Leiper, J., dated April 6, 2021;

4. $53,600, plus interest, from the respondent’s half-share of the Woodbine property sale proceeds, to redeem the applicant’s 100 common shares being her 50% interest in 2513419 Ontario Inc. and Brick Farm Breakfast;

5. The respondent shall prepare the necessary corporate documentation for the applicant to execute to release her interest in 2513419 Ontario Inc. (“251”) to him and for the applicant to be released from the lease agreement held by 251/BFB and any other liabilities connected with 251/BFB, upon her receipt of the sum referred to in (4.) above. The applicant shall sign any and all necessary corporate documentation presented to her by the respondent to effect the transfer of her shares in 251 to the respondent;

6. $39,316.65, plus interest, from the respondent, Christopher James Vicente, to pay the applicant 50% of the lump sum estimated commuted value of the respondent’s pension plan with OMERS. Alternatively, the applicant, at her sole option, may elect to receive the sum of $39,316.65 transferred into a LIRA in her name. Of the $39,316.56 owing by the respondent under this subparagraph, $6,466.44 of this sum shall be paid from the balance of the respondent’s half-share of the net proceeds of sale from the Woodbine property and the balance of $32,850.21 shall be paid by the respondent directly to the applicant.

ii. The respondent shall pay the applicant the sum of $33,097.42 as costs of this uncontested trial within 30 days;

iii. The applicant shall have 45 days to provide evidence to support her claim that she is entitled to receive one-half of the net proceeds of sale from the sale of the jointly-owned property located at 214 Oak Park Avenue, East York, ON M4C 4M8, which will require that she adduce evidence to support her claim that she nor Brick Farm Breakfast/2513419 Ontario Inc., which company is owned 50% by her, did not receive the benefit of any of the Oak Park property net sale proceeds. She shall file this evidence on Caselines with a letter to the Trial Coordinator that she has done so.

iv. The applicant’s claim against Ziggy restaurant shall be dismissed.

v. The Applicant and her counsel shall ensure that the Respondent receive a copy of these Reasons by email, by courier and by regular mail through Canada Post. The Applicant’s counsel shall telephone the Respondent and advise him of the Court Order that was made today.

Released: September 20, 2021

Amended Reasons Released: September 24, 2021

Corrected Reasons Released: February 28, 2022

M. Kraft, J.

[^1]: Beaver v Hill, 2018 ONCA 840, at para. 13.

[^2]: See Rule 24(18).