COURT FILE NO.: FS-18-06357
DATE: 20211012
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Thomas Nolawi Applicant
– and –
Selamit Tewelde Respondent
Anthony V.R. Martin, for the Applicant
Ali K. Manavi and Sherri D. Moss, for the Respondent
– and –
Zemam Tesfatsion Respondent
William Hutheson, Agent for the Respondent Zemam Tesfatsion
HEARD: October 7, 2021
PINTO J.
REASONS FOR DECISION
[1] Ms. Tewelde, the respondent in this proceeding brings a motion compelling further disclosure from Ms. Tesfatsion, who is her sister-in-law (i.e. the applicant Mr. Nolawi's sister) and the second respondent in this proceeding. On the day of hearing, I made rulings in respect of disclosure with written reasons to follow. These are those reasons.
[2] Although Mr. Martin attended the commencement of the motion, his client, the applicant, took no position on the disclosure motion between the two respondents. Mr. Martin was excused and did not participate in the motion.
Facts
[3] Mr. Nolawi and Ms. Tesfatsion are named Tenants in Common on the title to the property on Keele Street in Toronto. The applicant and his wife Ms. Tewelde lived in one of three apartments in the property.
[4] In her Amended Answer, Ms. Tewelde seeks:
(a) an order and declaration that the applicant is the true and beneficial owner of the 50% interest held by his sister Ms. Tesfatsion in the matrimonial home;
(b) an order for a constructive and resulting trust in favour of Ms. Tewelde relating to the matrimonial home as against Ms. Tesfatsion and a declaration that Ms. Tesfatsion is holding in trust for Ms. Tewelde the entire interest that Ms. Tesfatsion holds in title to the matrimonial home; and
(c) an order for complete disclosure from Ms. Tesfatsion, including all documents relating to the purchase, down payment, maintenance of and benefits from the property.
[5] Mr. Nolawi and Ms. Tewelde were married on February 14, 2012 and separated on February 25, 2018. There is one child of the marriage but the issues on the motion do not relate to the child.
[6] The applicant claims to have only a 50% interest in the matrimonial home, the other 50% belonging to his sister, Ms. Tesfatsion. This clearly impacts Ms. Tewelde's equalization claim and she argues that she is entitled to full disclosure of relevant evidence. While Ms. Tesfatsion has already provided some evidence, Ms. Tewelde is not satisfied. Ms. Tesfatsion attended questioning and a list of undertakings was made, some of which have now been deemed as refusals. The moving party Ms. Tewelde brings this motion to compel Ms. Tesfatsion to answer certain questions and produce further disclosure.
[7] Ms. Tesfatsion claims to have paid $141,342 towards the purchase of the matrimonial home from the following sources:
(a) $10,000 from her RBC account as a money order on May 20, 2016;
(b) $61,000 being transferred from her BMO account on May 18, 2016;
(c) $15,000 being withdrawn from RBC as a money order on May 24, 2016. The money order was from a loan from her friend Wezenet O'Michael.
(d) $6,000 which she borrowed from her brother and then later paid back to him; and
(e) $49,000 approximately, which she had saved in cash previously and which she deposited into her brother's account over a period of time.
[8] Ms. Tewelde disputes the veracity of these facts largely due to Ms. Tesfatsion's limited financial circumstances. Instead, Ms. Tewelde submits that the real source of the funds was from the applicant in order to defeat Ms. Tewelde's equalization claim.
Analysis
[9] The most basic obligation in family law is the duty to disclose financial information. This requirement is immediate and ongoing: Roberts v. Roberts, 2015 ONCA 450.
[10] While I find that Ms. Tesfatsion had provided some disclosure, due to her involved explanation as to how she obtained the funds to purchase her share of the property, there are additional disclosure obligations arising from her answers: Hill v. Green, 2021 ONSC 6242, at paras. 54-57. The interests in the property, as between the parties in this proceeding are substantial, and the moving party's disclosure request must be examined carefully within the proper context of the litigation, which includes the fact that the applicant and Ms. Tesfatsion are siblings, and not arm's length parties.
[11] At the hearing of the motion, the parties organized their submissions into various categories and I will use the same organization in discussing my decision on the disclosure issues.
2014 - NOA
[12] Ms. Tesfatsion has provided other NOAs, however, she states, in her affidavit, that she has been unable to locate her 2014 NOA.
[13] I ruled that, by producing the other NOAs, Ms. Tesfatsion has acknowledged that the NOAs are relevant. Her current affidavit does not clarify whether she has contacted Canada Revenue Agency to obtain her 2014 NOA. I direct that she make best efforts to provide her 2014 NOA including by contacting CRA and, if the NOA cannot be produced, she explain why.
Mortgage Application
[14] Ms. Tewelde seeks the mortgage application made by Mr. Nolawi and Ms. Tesfatsion. Ms. Tesfatsion has already provided a letter from Community Trust outlining the terms of the mortgage for their jointly owned property. I find that the mortgage application is likely to contain disclosure of what Ms. Tesfatsion said was her financial situation at the material time. This may or may not be consistent with Ms. Tesfatsion's claims in respect of how she was able to purchase her share of the property. Producing the mortgage application is neither unduly invasive or difficult and it should be produced.
Agreement with agent who rents the property
[15] Ms. Tewelde seeks the agreement(s) with the agent who rents the property. Ms. Tesfatsion has provided a single lease agreement. Ms. Tesfatsion argues that the issue is whether she equally contributed to the purchase of the property, whereas the material being sought does not go to that issue. I agree. The material being sought appears to be too remote from the issues in the proceeding and need not be produced.
Police Report
[16] Ms. Tesfatsion refused to produce a police report concerning a robbery or robberies that occurred at the property. Ms. Tewelde argues that a significant dispute in this proceeding is about how much cash Ms. Tesfatsion had saved, allegedly from a community saving scheme. Ms. Tesfatsion has sworn in her affidavit that there was once a robbery at her apartment and cash was stolen. I ruled that the police report should be produced as it may shed light on the amount and origin of cash that was present at the property that was allegedly stolen. Even if the break in occurred after the house purchase, the police report and any discussion of cash at the home could relate to whether or not Mr. Nolawi returned money to his sister and when.
Proof of paying back the $15,000 to Wezenet O'Michael
[17] Ms. Tesfatsion claims she paid back the $15,000 that was loaned to her by her friend Ms. O'Michael. The moving party argues that Ms. Tesfatsion has refused to provide any evidence concerning how repayment occurred although she claimed that it was by "cash, cheque or money order". The responding party argues that, compelling the refusal is unnecessary since Ms. O'Michael herself has provided an affidavit that states "In May 2016 I lent Zemam $15,000 to help her to buy a house with her brother Thomas. She paid me back that money later." The moving party points out that Ms. O'Michael's affidavit does not have a handwritten signature as her name has been printed on the affidavit. I share the moving party's concern over the authenticity and form of the O'Michael affidavit and direct that, if Ms. Tesfatsion intends to rely on this affidavit that a proper version with a handwritten signature be produced.
[18] In any event, whether or not Ms. Michael has sworn a proper affidavit, I find that since Ms. Tesfatsion has stated that she returned the money by "cash, cheque or money order", she should produce any evidence of her doing so. This would go to the veracity of her claim that is was her money, not her brother's, that went into the purchase of her share of the property.
Bank statements for the "joint" TD account with Mr. Nolawi
[19] Following a Case Conference, Diamond J. had already ordered this produced but going back only 3 months. The moving party now seeks the bank statements for a much longer period. The responding party argues that Ms. Tesfatsion has already explained that she had significant amounts of cash in her BMO Capital account and the amounts in other accounts are irrelevant.
[20] I find that, as there are questions in respect of Ms. Tesfatsion and Mr. Nolawi's potential financial transfers, and as Justice Diamond has already ruled that this ought to be produced, it is clearly relevant, and may assist the parties and trier of fact to have a wider picture of the bank statements. I order the bank statements produced within a one year period going back and forward from the date of the house purchase transaction.
Renewals to Toronto Housing Authority
[21] Ms. Tewelde seeks Ms. Tesfatsion's renewals to the Toronto Housing Authority on the basis that such documents are evidence of her assets and income at the material time. Ms. Tesfatsion's lawyer responds that the Toronto Housing renewals are only likely to show Ms. Tesfatsion's low income, a fact already demonstrated by Ms. Tesfatsion's NOAs which, but for the year 2014, have already been produced.
[22] It is unclear to me and there is no affidavit evidence affirmatively stating that the Toronto Housing Authority renewal application only discloses Ms. Tesfatsion's income. On the rationale, once again, that such document(s) may offer evidence of Ms. Tesfatsion's assets at the material time, I direct that such document(s) be produced. It may be that, if Ms. Tesfatsion was required to disclose her assets on the renewal but made no mention of her interest in the property, this could be useful evidence; or, if Ms. Tesfatsion describes her assets in a way consistent with her position in this litigation, it would also be useful evidence. In order to limit the disclosure of unnecessary personal information, I would provide Ms. Tesfatsion with the ability to redact non-financial information. It was not argued before me how many renewals are being sought, or over what time period. If the parties are unable to resolve this issue, they may write to the court.
Costs submissions
[23] The moving party argued that she was largely successful in this motion. Ms. Tewelde is seeking $5,000 plus HST on the basis that full indemnity costs are approximately $7,000 in fees, plus $300 approximately in disbursements, plus HST.
[24] The responding party argues that the moving party's Notice of Motion sought considerably wider disclosure than what was ultimately argued at the motion. The responding party submits that no costs should be awarded now but that the costs issue should be deferred as the merits of the disclosure motion may only be known depending on the relevance and importance of the actual disclosure produced.
[25] Rule 24(1) of the Family Law Rules directs that there is presumption that a successful party is entitled to the costs of a motion. The moving party was largely successful in her disclosure motion. I find that full indemnity costs are not warranted as the responding party's conduct is not deserving of such costs, and no Offers to Settle were exchanged. I agree that, the motion was argued on a narrower basis than the disclosure requested in the Notice of Motion. In all the circumstances, based on the factors identified in Rule 24 (12), I find that costs should be fixed in the amount of $3,500 plus HST to be paid to the moving party respondent, Ms. Tewelde, within 30 days of the release of this decision.
[26] The parties shall provide me with a Draft order in WORD format, approved as to form and content, for my review and signature based on this endorsement. Correspondence with the court shall be through Patricia Generali, the Family Law Assistant, who can be reached via email at Patricial.Generali@ontario.ca.
Pinto J.
Released: October 12, 2021
COURT FILE NO.: FS-18-06357
DATE: 20211012
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Thomas Nolawi Applicant
– and –
Selamit Tewelde Respondent
– and –
Zemam Tesfatsion Respondent
REASONS FOR JUDGMENT
Pinto J.
Released: October 12, 2021