SUPERIOR COURT OF JUSTICE – ONTARIO
RE: LemLem Kahsai, Applicant, Represented by J. Alison Campbell
-and-
Kidane Hagos, Represented by William N. Fuhgeh
BEFORE: Justice P. MacEachern
HEARD: September 23, 24, 25, 26, 27, 30, 2019; October 1, 2, 3, 4, 7, 8, 9, 10, 11, 2019; November 25, 26, 2019
Reasons for Judgment
1This trial arises out of the parties' 30-year relationship, during which they had three children together. The parties met in Eritrea in 1975 or 1976, when both were involved in the Eritrean independence movement. They became romantically involved and married. The date of marriage and whether they were married at all was disputed at trial. Their oldest child, SH, was born [redacted] 1980, in Eritrea.
2In 1984, they immigrated to Canada as a family. They settled in Ottawa. They separated in 1985. In 1987, they divorced. SH primarily resided with her mother, Ms. Kahsai, after their separation. Her father, Mr. Hagos, had access. They remained in Ottawa.
3In September 1990, they resumed cohabitation. They lived together until September 22, 2013, when Ms. Kahsai moved out of the family home to Toronto. During this period, they had two more children, CE, born [redacted] 1993, and SA, born [redacted] 1995. At the time of their separation on September 22, 2013, both younger children lived away from home to attend school. SH was 33 years of age and independent.
4After immigrating to Canada, Mr. Hagos developed his own office cleaning business, Shamar Maintenance, and several investment real estate properties. By September 22, 2013, he had accumulated substantial assets. Shamar Maintenance had annual revenues of approximately $750,000. He owned several rental properties in Ottawa. He owned real estate in Atlanta, U.S., through a company known as Hagos Park LLC. The family enjoyed a comfortable lifestyle with many luxuries.
5Mr. Hagos improved his education by taking several post-secondary classes and degrees. Mr. Hagos values education and takes pride in his educational achievements and those of his children. Mr. Hagos was recognized as a leader in Ottawa's Eritrean community and a significant church community member. Mr. Hagos worked long hours outside of the home. His evidence was that he worked seven days a week, 12 hours a day. When he was not working, he was pursuing his education, often taking two or three evening classes each week.
6Ms. Kahsai also worked hard to improve her position and that of her family. She worked several jobs and advanced her education, although not to the extent of Mr. Hagos. She did not work outside of the home for a period after their second and third children were born, from approximately 1993 to 1997. She returned to work out of the house in 1997. She found employment with the federal government, where she remained to the date of trial.
7At the time of trial, Mr. Hagos was 65 years of age; Ms. Kahsai was 63 years of age.
8Ms. Kahsai commenced these proceedings by an Application issued on February 4, 2014. She seeks spousal support, security for spousal support, damages under the doctrine of unjust enrichment and joint family venture, a restraining order, the return of personal property remaining at the family home, and costs.
9Mr. Hagos filed his Answer, dated March 21, 2014, seeking a dismissal of all claims raised by Ms. Kahsai and costs.
10By Justice Shelston's Order released on June 23, 2015, Ms. Kahsai amended her Application on July 8, 2015, to include a claim for spousal support under the Divorce Act.
11Justice Shelston permitted Mr. Hagos to serve and file an Amended Answer by July 31, 2015. He did not do so. At some point, Mr. Hagos served an Amended Answer, which did not merely respond to the claim for support under the Divorce Act but advanced his claim for child support. Mr. Hagos did not, however, file his Amended Answer with the court1.
12Justice Shelston ordered Mr. Hagos to pay without prejudice interim spousal support of $1,500 per month, commencing April 1, 2015. Justice Shelston noted several concerns regarding the Respondent's representations of his income and his limited disclosure.
13There were delays in this matter advancing to trial. The parties were permitted to bring a second motion for interim relief on March 21, 2019, before Justice Labrosse. Justice Labrosse reduced the temporary without prejudice spousal support from $1,500/m to $1,000/m, commencing April 1, 2019. Further disclosure was ordered.
14On July 24, 2019, Justice Labrosse ordered Mr. Hagos to pay Ms. Kahsai $5,000 for the motion costs. Those costs remained outstanding as of the date of trial.
Issues
15The issues to be determined are as follows:
What child support is payable for CE and SA, including contribution towards s.7 expenses?
Is Ms. Kahsai entitled to periodic and/or lump sum spousal support and, if so, in what amount and for what duration?
Should an order be made securing spousal support against Mr. Hagos’ estate and requiring him to maintain life insurance?
Should an order be made securing child support against Ms. Kahsai’s estate and requiring her to maintain life insurance?
Is Ms. Kahsai entitled to share in the equity of 272 Gracewood Crescent and share in the value of property acquired by Mr. Hagos during their cohabitation, under the doctrine of unjust enrichment?
Should a restraining order be made against Mr. Hagos?
Should an order be made for the return of Ms. Kahsai’s personal property?
Preliminary Issues
16Before determining these issues, I address several preliminary matters, review the parties' relationship, address credibility issues, and make findings regarding income and the parties' net worth.
Jurisdiction
17The first issue is whether the child and spousal support are determined under the Divorce Act or the Family Law Act. The parties were married, then divorced, and then reconciled from 1990 to 2013.
18The child support claims in this proceeding concern CE and SA. Both children were born after the parties were divorced. However, CE and SA still fall within the definition of "child of the marriage" under the Divorce Act, which includes a child of two spouses or former spouses. I, therefore, make the orders respecting child support under the provisions of the Divorce Act. If I am wrong, the same orders are made for the same reasons under Family Law Act.
19Concerning spousal support, Justice Shelston dealt with jurisdictional arguments in his decision on the May 11, 2015, interim spousal support motion released on June 23, 2015. He found that the court had jurisdiction to make a spousal support order under the Divorce Act and the Family Law Act. At trial, neither party took issue with Justice Shelston's determination and submitted that I could make an order for support under either legislation.
20I agree with Justice Shelston that even if I did not have jurisdiction to order spousal support under the Divorce Act, I would still have jurisdiction under the Family Law Act. Ms. Kahsai would still qualify as a spouse under the Family Law Act due to their subsequent cohabitation. Ms. Kahsai commenced her Application seeking support immediately after their cohabitation ended.
21The parties agree they divorced in 1987, but neither could provide the court with a copy of the Divorce Order2. Both parties believe the Divorce Order did not include a provision for the payment of spousal support. This is consistent with both parties' evidence that spousal support was not paid after the first separation. I agree with Justice Shelston that even if the Divorce Order was silent on spousal support, a court has jurisdiction to vary the order to provide for spousal support under the Divorce Act if there is a material change.
22Given that I have jurisdiction under the Divorce Act to make an order for spousal support, and due to federal paramountcy, I find it appropriate to order spousal support under the Divorce Act. Assuming that the 1987 Divorce Order was silent on corollary relief, I find that the parties' resumption of cohabitation for the period from 1990 to 2013, and the roles adopted by the parties during that cohabitation, detailed below, constitute a material change in circumstances that warrants a variation in spousal support.
23If I am wrong in my determination, I would make the same award for spousal support, for the same reasons, under the Family Law Act.
Parties' Marriage
24At trial, Mr. Hagos disputed that he had ever married Ms. Kahsai. Ms. Kahsai's position is that they married on January 10, 1980. This is the date pleaded by her in her Application, Amended Application, and was her evidence at trial. Before trial, Mr. Hagos' position, as claimed in his Answer and Amended Answer, was that they married on May 15, 1978. Both parties agree they divorced in 1987.
25I do not accept Mr. Hagos' evidence at trial that they never married. This is because of his previous admissions (in his pleadings and sworn evidence in previously filed affidavits3) that they were married, his participation in the divorce proceeding that resulted in a divorce being issued in 1987, and my significant concerns with Mr. Hagos' credibility, which are set out more fully below. For this trial's purposes, I find that the parties married on January 10, 1980, and were divorced in 1987.
Parties' Relationship
Background
26I find that the parties began their committed relationship in 1978, married on January 10, 1980, separated in late 1984 or early 1985, divorced in 1987, reconciled and resumed cohabitation in September of 1990, and separated again on September 22, 2013.
27Ms. Kahsai's evidence was that they began their committed relationship in 1978, and they were seen as a couple after that date. This is consistent with Mr. Hagos' position in his pleadings that they married in 1978.
28Both were very young when their relationship began. Mr. Hagos was 24 years of age, having been born on January 15, 1954. Ms. Kahsai was 22 years old, having been born on June 5, 19564.
29In 1978, both parties were involved in the movement seeking independence for Eritrea from Ethiopia. Both saw this as being in a state of war. There was tremendous conflict and violence that impacted their lives in Eritrea. They frequently lived apart, being stationed at different locations in the liberation effort. In 1980, Ms. Kahsai moved to a women's and children's camp with SH, while Mr. Hagos remained on the front. In around March of 1982, Mr. Hagos was arrested and imprisoned for approximately one year. The parties reunited in Khartoum, Sudan, in about 1983. They immigrated to Canada as a family in 1984, arriving in Canada on May 17, 1984.
30In his closing submissions at trial, Mr. Hagos' counsel stipulated that the parties had been in a common-law relationship from September of 1990 to September 22, 2013. However, Mr. Hagos' evidence was that they had never been in a committed relationship, either before 1985 or after 1990. Mr. Hagos had his counsel pursue several lines of questioning at trial that were intended to elicit evidence that Ms. Kahsai had many sexual partners. This was in support of his position that Ms. Kahsai was a liar, had a bad reputation, was enriched by him and that they had never been in a committed relationship. I will address further below why I reject this evidence. Concerning the period from 1978 to 1985, I find that the parties were in a committed relationship for the reasons stated above and the totality of the evidence before me, including that the parties had a child together in 1980 and immigrated together to Canada as a family in 1984.
31In Canada, the parties resided together in Ottawa, at an apartment on Lees Avenue, for approximately one year before separating in late 1984 or early 1985. Ms. Kahsai's evidence was that their relationship was difficult after Mr. Hagos was released from prison. They did not communicate well. Ms. Kahsai's evidence was that she wanted to separate very soon after arriving in Canada but remained together because she could not get funding for separate housing.
32Ms. Kahsai testified that Mr. Hagos beat her on one occasion, soon after they arrived in Ottawa. In late 1984 or early 1985, they separated when Ms. Kahsai went to a shelter due to reports of domestic violence. Mr. Hagos moved out of the Lees Avenue apartment, and Ms. Kahsai moved back in.
33There were legal proceedings in 1984/1985 that resulted in the January 14, 1985 Order of Justice Fogarty of the District Court of Ontario. Ms. Kahsai was awarded custody of SH, with reasonable access to Mr. Hagos. Mr. Hagos was required to pay child support of $50 per month. Mr. Hagos was also restrained from annoying, molesting or harassing Ms. Kahsai.
34Mr. Hagos denied ever being abusive or physically violent towards Ms. Kahsai. The restraining provisions in the 1985 Order support Ms. Kahsai's evidence that Mr. Hagos was violent towards her in 1984/85.
35From 1985 to 1990, the parties lived separately, both in downtown Ottawa. Ms. Kahsai moved to a rental apartment on Nepean Street in Ottawa. Mr. Hagos lived in a rented house on Waverly Street. SH resided with Ms. Kahsai but had access to Mr. Hagos on an informal schedule. The evidence of both parties was that their relationship improved during this period when they lived separately.
36The evidence also reflects that during this period, Ms. Kahsai was primarily responsible for SH's care and upbringing, including, being responsible for her childcare arrangements when Ms. Kahsai was working.
37From 1985 to 1990, Mr. Hagos developed a new business, Shamar Maintenance, which provided cleaning services to commercial buildings.
38Both parties had relationships with others during the 1985 to 1990 period. Mr. Hagos fathered a child, BE, with another woman, during this period.
39From 1985 to September of 1990, Ms. Kahsai worked several different jobs and went to school while being the primary parent to SH. Ms. Kahsai worked as an office cleaner, chambermaid, and security guard. Ms. Kahsai had completed grade ten in Eritrea before joining the liberation effort. In Ottawa, she attended school to upgrade her education and English language skills. Ms. Kahsai obtained her high-school equivalency during this period. She completed an office administration course and received a full-time job with PC Services in approximately 1986 or 1987. After about one year, she found a job at Northstar Computers, where she learned to fix computers.
40In around 1988, Ms. Kahsai worked on a contract with Canada Revenue Agency (CRA) on a term basis. She worked in the evenings, from 3:30 pm to 11:30 pm. Ms. Kahsai also studied to obtain her real estate license. Due to the recession, Ms. Kahsai needed to also work at CRA to supplement her income. She worked additional seasonal work for CRA. In 1990, she was working part-time as a real estate agent and part-time at CRA. She estimates her income was approximately $20,000 per year.
41Due to her limited income, which included $50 per month in child support from Mr. Hagos, Ms. Kahsai qualified for subsidized rent and subsidized childcare. Ms. Kahsai's evidence was that these subsidies allowed her to live on little income, and she had few debts, including a small credit card debt of less than $3,000 and a car loan debt that went with her car.
42During this same 1985 to 1990 period, Mr. Hagos began bidding on cleaning contracts through Shamar Maintenance. He was in the early stages of building his business but had a few deals to clean private and government offices. He had approximately ten employees. Mr. Hagos also purchased a rental property at 68 Sweetland, a triplex in the Sandy Hill area, which provided low-income, rooming house type housing.
43In September of 1990, Ms. Kahsai and SH moved into Mr. Hagos' Waverly Street rented home. Ms. Kahsai's evidence was that they reconciled at this point and agreed to resume cohabitation as husband and wife, which they did until separating on September 22, 2013.
44Mr. Hagos' position at trial, as previously noted, was that they were never married (which I reject), were never in a committed relationship (which I reject) and never reconciled (which I also reject). Mr. Hagos' explanation for why Ms. Kahsai moved into his home was because she was heavily in debt, she manipulated him by using their child, he wanted to protect/save his child because Ms. Kahsai was a bad parent, and it was only a temporary arrangement until Ms. Kahsai paid off her debt. Ms. Kahsai denies these allegations.
45From the fall of 1990 to approximately five months before CE's birth on October 19, 1993, when Ms. Kahsai stopped working on her doctor's direction, Ms. Kahsai worked at CRA. Mr. Hagos worked in his business. Ms. Kahsai worked from 7:30 am to 3:30 pm. On her way to work, she dropped SH off at childcare. On occasion, Mr. Hagos cared for SH during the day. Ms. Kahsai worked longer hours during the income tax season and arranged for others to care for SH.
46During this period, and throughout the parties' relationship, Mr. Hagos worked long hours. His evidence was that he worked seven days a week, twelve hours a day. He was rarely home in the evenings, as when he was not working, he frequently took evening courses, two to three evenings a week. Mr. Hagos pursued several post-secondary educational programs and degrees during their relationship. Ms. Kahsai's evidence was that Mr. Hagos was rarely home in the evenings, which was consistent with Mr. Hagos' evidence.
47In September of 1990, the parties lived in a home on Waverly rented by Mr. Hagos. In August of 1991, the family moved into a house (29 Manju) purchased by Mr. Hagos. Both parties were involved in searching for this home. Ms. Kahsai's evidence was that she viewed the home as being "our home" and that it was not unusual in her family for assets to be held in the man's name. Mr. Hagos' evidence was that although Ms. Kahsai was involved in searching for and moving into the new home, it was his home, and she did not contribute to it. It is common ground between the parties that Mr. Hagos paid the down-payment and the mortgage payments on 29 Manju.
48After CE's birth, Ms. Kahsai did not work outside of the home until 1997. The parties' third child, SA, was born on March 20, 1995. After SA was born, Ms. Kahsai remained home because the cost of childcare for two children was more than her income would have been, and she was no longer eligible for subsidized childcare because of Mr. Hagos' income.
49Ms. Kahsai returned to work at CRA in late 1997, initially as a data entry specialist earning approximately $23,000 per year. At that point, her knowledge of computers was obsolete. With assistance from employment insurance, Ms. Kahsai was able to take a six-month network specialist course to upgrade her skills. She went to school in the mornings and did seasonal work for two or three months in the evenings. Ms. Kahsai paid for childcare during the day. Family members, including SH (but not including Mr. Hagos), assisted with childcare in the evenings. In September of 1998, SH went away to school to attend Western University.
50In 2000, Ms. Kahsai began working at Passport Canada in several term positions. She started as a CR 3 in a data entry position and then moved into a CR 4 position. In 2006, she moved into a passport officer position (PM1). Ms. Kahsai became permanent in 2003, which improved her salary, gave her more job security, and increased her benefits, including her pension. Ms. Kahsai continues to work with Passport Canada. She was able to transfer to a position in Toronto after their separation.
51Ms. Kahsai's evidence was that she was responsible for the housekeeping, cooking and parenting. Ms. Kahsai acknowledged that she was assisted with these chores by other women in the home, including Mr. Hagos' cousin, who stayed with them from October of 1992 to 1997. The family frequently ate dinners together and had large breakfast gatherings on weekends. They had frequent house guests, including members of both of their families that stayed for extended periods, which increased cooking, cleaning, and other house chores. Ms. Kahsai's evidence was that these responsibilities continued even when she returned to full-time work. It was difficult for her to juggle these responsibilities, especially the children's appointments, but her employment provided her with family leave and vacation days, which she used to do so.
52It was common ground that Mr. Hagos, and other men in their family, did not clean or cook. Mr. Hagos' view was that Ms. Kahsai was a bad housekeeper and parent, did little around the home, and to the extent that she did do anything, it benefitted only herself and her family. I reject this evidence for the reasons more fully set out below in the discussion on credibility.
53In 2012, the parties moved into 272 Graceland, a large new four-bedroom home purchased in Mr. Hagos' sole name. Ms. Kahsai was involved in locating this home and the design choices. Ms. Kahsai again viewed this property as "our home." She did not contribute financially to its down-payment or the mortgage payments. Mr. Hagos' evidence was that the home was his sole property, and Ms. Kahsai, who he repeatedly described as a parasite, made no contribution to it.
54Ms. Kahsai described Mr. Hagos as always having a difficult side and a charming side. Their relationship had a positive side, but also a very negative and contentious side. By their separation in September of 2013, Ms. Kahsai described Mr. Hagos as angry all the time, frequently making derogatory comments towards her and comments that she found threatening. She feared Mr. Hagos, left home, and moved to Toronto.
55Ms. Kahsai also gave evidence that she contributed to Mr. Hagos' businesses and real estate properties. During the period from 1985 to 1990, Ms. Kahsai provided some modest assistance by typing Mr. Hagos’ proposals for a cleaning contract. After 1990, Ms. Kahsai helped in Shamar Maintenance when there was a shortage of cleaners. She was not paid for this work. Ms. Kahsai cleaned RCMP huts when Mr. Hagos had a contract to do so at several government embassies and government houses. This was while Ms. Kahsai was working at CRA. It took her a few hours to do each week. Ms. Kahsai's evidence was that she was never paid as an employee of Shamar for this work. Ms. Kahsai cleaned Mr. Hagos' rental units at 68 Sweetland when new renters moved in, which she reported was frequent due to the high turnover, rooming house type of accommodations. Ms. Kahsai's evidence was that she collected rent at 68 Sweetland, fixed lights/changed lightbulbs, and did showings. Ms. Kahsai's evidence was that she did this without being paid because she viewed the property as a family investment. Ms. Kahsai assisted with Shamar's payroll, office administration, and correspondence. If Mr. Hagos was not available, he forwarded Shamar's calls to the house for Ms. Kahsai to answer. Most of this assistance was provided in the 90’s and early 2000’s, before Mr. Hagos hired more office staff. Ms. Kahsai saw herself as integral to Sharmir's operations and was shocked when Mr. Hagos described her role as irrelevant after their 2013 separation.
56Mr. Hagos denies that Ms. Kahsai made any contribution to his business endeavours. He agrees that Ms. Kahsai cleaned the RCMP huts but claimed that she was paid for this work. He denied any other involvement in Shamar Maintenance or his rental properties.
57During their relationship, the parties enjoyed a comfortable lifestyle, with many luxuries, particularly after the two youngest children were born in 1993 and 1995. Both children attended private school at times. The family travelled together to attend family celebrations. They supported many family members from both sides who stayed with them for extended periods. They moved into a new four-bedroom home when they moved to Graceland. Mr. Hagos purchased a used Mercedes for CE when she was in high school. Mr. Hagos continued to provide generous financial support to the children after separation.
58There was a dispute at trial about who paid for family expenses during their relationship and what Ms. Kahsai did with her income. Ms. Kahsai's evidence was that she did not pay rent, heat or hydro. Still, she paid for small improvements and incidentals for their homes and expenses related to caring for the family, including childcare, most of the groceries, clothing for the children, phone, TV-cable, and children's activities such as piano lessons, ballet lessons, guitar lessons.
59Mr. Hagos' evidence was that Ms. Kahsai used her money for only her purposes, while he paid all the family's expenses. I reject this evidence. Mr. Hagos had a pattern of presenting Ms. Kahsai as separate and apart from the family. He repeatedly ignored, minimized, and maligned her contributions to the family. I find that Ms. Kahsai made significant contributions to their family financially with her income and other non-financial contributions, including childcare and house care.
Credibility
60There were significant issues of credibility in this trial. I preferred the evidence of Ms. Kahsai. Mr. Hagos was not a credible witness.
61Mr. Hagos' evidence lacked logical consistency on many points. For example, Mr. Hagos' position at trial that the parties were never married and were never in a committed relationship was contradicted by his position in his pleadings, his sworn evidence in previously filed affidavits, that he immigrated to Canada with Ms. Kahsai as a family, his participation in the 1987 divorce proceedings, and the content of his "truth-telling" letters that he widely distributed to members of their community and family in the fall of 20135. His position that the parties did not reconcile in 1990 was inconsistent with his income tax filings that reported being in a common-law relationship with Ms. Kahsai, the evidence of many witnesses as well as his admission that they shared a bedroom and had sexual relations during the period from 1990 to 2013 and that that the parties had three children together. Mr. Hagos' position that Ms. Kahsai manipulated and took advantage of him by having two children after 1990 was inconsistent with his role in these pregnancies.
62Mr. Hagos filed numerous sworn financial statements in these proceedings that contained different representations values for the same periods of time. His explanation was to blame his lawyers for preparing the statements, which is also an explanation he gave for his pleadings containing repeated references to their marriage. These explanations were not consistent with Mr. Hagos swearing the financial statements under oath.
63Mr. Hagos' evidence lacked plausibility on many points. For example, Mr. Hagos was very critical of Ms. Kahsai's parenting, claiming she was abusive and neglectful. Yet, he continued to leave the children in her care while he was outside the home for long hours, working or attending school. The bulk of Mr. Hagos' evidence related to Ms. Kahsai's alleged promiscuity was based on Ms. Kahsai telling him that she had male friends or seeing Ms. Kahsai speak to other men. Instead of demonstrating that Ms. Kahsai was promiscuous, Mr. Hagos' evidence on this point instead showed his coercive and controlling nature that imposed one standard on Ms. Kahsai and another standard on himself, as well as his need to try to demonize and humiliate her before her family and the community when she refused to reconcile with him.
64Mr. Hagos' evidence was exaggerated on many points. He presented Ms. Kahsai as not doing anything in the home, always sleeping on the couch in front of the TV, and not caring for the children properly, or even caring for the children at all. He described her as a parasite, manipulating and taking advantage of him in all respects. He presented their separation in September of 2013 as a "grand plan" to mistreat him. When responding to allegations that he had been abusive towards Ms. Kahsai, Mr. Hagos' provided only a general denial, without detail, and relied heavily on his assertion, repeated several times at trial, that Ms. Kahsai was incapable of being abused because she had military training (while failing to account for his military training). Significantly, Mr. Hagos was unable to say anything positive about Ms. Kahsai except that she presented herself favourably, an attribute which he quickly related to his allegation that she was a conniving liar. Throughout Mr. Hagos' testimony, he took credit for all of the family's successes and blamed Ms. Kahsai for all of its challenges. For example, when a child got into trouble, Mr. Hagos blamed Ms. Kahsai for neglect without accounting for his absence. Several times in his evidence, Mr. Hagos referred to finding cereal in his son's room and blamed Ms. Kahsai for failing to feed the children properly, again without accounting for his role. Mr. Hagos repeatedly attacked Ms. Kahsai for any failure concerning the home and the children. Rather than discounting Ms. Kahsai's position, Mr. Hagos' evidence in this regard affirmed that Ms. Kahsai was primarily responsible for homecare and parenting.
65In his evidence, Mr. Hagos was motivated to present himself as a saviour, while Ms. Kahsai was the villain. Mr. Hagos was consistent in attacking Ms. Kahsai's character from every possible angle. In Mr. Hagos' view, Ms. Kahsai was stupid, uneducated, financially irresponsible, promiscuous, had a poor reputation, had no friends, did not contribute anything to the family, was a parasite, and was a bad and neglectful parent. Mr. Hagos' "truth telling" letters provide an example of this approach. Similar content was distributed widely by Mr. Hagos after their separation.
66The evidence of others also contradicted Mr. Hagos' evidence. Most significantly, his evidence was contradicted by the parties' oldest child, SH. SH reported that her mother had a substantial role in their household, primarily responsible for childrearing, and care of the house, including groceries and cooking. SH's evidence was consistent with Ms. Kahsai's evidence regarding her role in the family. SH's evidence contradicted Mr. Hagos' evidence of Ms. Kahsai's role.
67SH's evidence was balanced, consistent and plausible. I found her to be very credible in a difficult situation. I did not find, as Mr. Hagos alleged, that she was motivated by having an axe to grind against Mr. Hagos because of a lawsuit he had filed against her. That lawsuit had little relation to the outcome of the issues in dispute in this proceeding. SH also gave evidence that was very positive about Mr. Hagos in many respects – she recounted fond memories of both of her parents and credited her father with raising her to place a high value on education and to believe that her opinion mattered. SH presented as an intelligent, successful, thoughtful, and caring individual who loved both of her parents very much but was pained by Mr. Hagos' attacks on her mother, which turned into attacks on SH when she challenged him. SH described her father as vindictive when crossed and that his love was conditional on whether one acted as directed by him. This description was consistent with how Mr. Hagos presented at trial6.
68Mr. Hagos' lack of financial disclosure also diminished his credibility concerning his financial situation. Despite several orders requiring financial disclosure, undertakings given at his questioning, requests made by experts retained by both parties, and Mr. Hagos' obligation to provide financial disclosure under the Family Law Rules. This included failing to provide critical financial records for his business.
69In his testimony, Mr. Hagos frequently exhibited a glee-like demeanor in educating the court on Ms. Kahsai's failings. One of the positions Mr. Hagos had in the Eritrean Liberation Movement was in the indoctrination office. His testimony included repeated illustrations of his skill in this area and was consistent with his view that his conflict with Ms. Kahsai was a war. Mr. Hagos' conduct also echoed his warnings to Ms. Kahsai that if she did not reconcile with him and end this litigation, he would destroy her.
70The above illustrates significant shortcomings in Mr. Hagos' credibility. Overall, I found Mr. Hagos to lack credibility and place little weight on his evidence.
71I found Ms. Kahsai to be significantly more credible. There were some limitations in Ms. Kahsai's evidence. She often confused dates, but this was a theme throughout the evidence of both parties and, to some extent, understandable when reviewing over 30 years of history. Ms. Kahsai also became argumentative with Mr. Hagos' lawyer during an extensive cross-examination. In contrast to Mr. Hagos, however, Ms. Kahsai presented a more balanced, consistent and plausible account of their relationship, including several positive statements about Mr. Hagos. Ms. Kahsai's evidence was not a character assassination of Mr. Hagos, in the manner that Mr. Hagos' evidence was on her. Overall, I found her evidence to be consistent and plausible and supported by SH's evidence, which I also found credible.
72Other witnesses gave evidence at the trial on the nature of the parties' relationship. Raja Osman was called as a witness by Ms. Kahsai. Ms. Osman knew both parties from Eritrea. She described Ms. Kahsai as genuine, compassionate, and kind. She knew of the parties' relationship when they were in Eritrea and after 1990 in Ottawa. She perceived them as a couple after 1990 and "fully reconciled" in a marriage-like relationship. Ms. Osman did not reside in Ottawa, although she visited the parties several times, during which she saw Ms. Kahsai doing the cooking and being responsible for the household chores. Ms. Osman's evidence was consistent with Ms. Kahsai's evidence, although her observations were limited given she resided in a different city and visited infrequently.
73Bruce Barry was called as a witness by Mr. Hagos. Mr. Barry worked for Shamar Maintenance from 2005 to 2017. His evidence was that he did not know of Ms. Kahsai contributing to the business operations. However, he was also firm that he did not know about events before 2005, and he did not interact with any Shamar employees at job sites other than the location at which he was working. Although I found Mr. Barry credible, his observations were limited due to the period involved. He rarely went to Shamar's office and did not interact with employees at other job sites. Mr. Barry's evidence did not contradict Ms. Kahsai's evidence on her role in the business, which was that the bulk of her contribution was in the 90s, and she had little involvement in the period covered by Mr. Barry.
74Saba Hailu was called as a witness by Mr. Hagos. Ms. Hailu is from the Eritrean community. She lived in Ottawa from 1987 to 1990 and knew Ms. Kahsai during this period. She did not visit Ottawa after 1990. Ms. Hailu's evidence had limited relevance because her observations were limited to the 1987 to 1990 time period. She gave evidence that was intended to support that Ms. Kahsai was selling sexual services between 1987 and 1990. I reject this evidence in its entirety. At best, the evidence was that Ms. Kahsai was involved in discussing the nature of phone sex in approximately 1988. This is not evidence that Ms. Kahsai worked as an escort, as Ms. Hailu and Mr. Hagos asserted. Ms. Hailu also testified that she heard a man say that Ms. Kahsai worked as an escort – this is hearsay and inadmissible. It is also difficult to understand how this evidence is relevant, particularly when the parties did not reconcile until 1990.
75Ms. Hailu testified that she did not see Ms. Kahsai do any work with Shamar Maintenance. Ms. Hailu's observations were again limited to the time from 1987 to 1990 and were consistent with Ms. Kahsai's evidence that she did not contribute before their reconciliation.
76Ms. Hailu testified that she saw her sister, Aster Kidane (and Ms. Kahsai's friend), pick up SH and care for her after school until Ms. Kahsai picked her up. This evidence was intended to support Mr. Hagos' position that Ms. Kahsai was a bad mother and provided little parenting. Instead, this evidence confirmed that Ms. Kahsai was primarily responsible for SH's caregiving and that she made appropriate childcare arrangements for SH when needed.
77Aster Kidane was called as a witness by Mr. Hagos. Ms. Kidane is from the Eritrean community. She is a relative of Mr. Hagos and remains friendly with him. She was a close friend of Ms. Kahsai until 2004. Ms. Aster Kidane ended the friendship when she called Ms. Kahsai at Christmas time in 2004, and Ms. Kahsai did not have time to speak to her. Ms. Aster Kidane lived in Ottawa from 1984 to 2004. Ms. Aster's Kidane's evidence was intended to support Mr. Hagos' position that Ms. Kahsai had bad habits, is promiscuous, is financially irresponsible, was a poor parent, worked as an escort, and did not contribute to Shamar Maintenance. But on many points, Ms. Aster Kidane's assertions were not supported by her evidence. For example, Ms. Aster Kidane's evidence that Ms. Kahsai was of bad character because she dated several men in 1987 and 1988, had a conversation about phone sex in 1988, and that Ms. Kahsai had a pager7 during this same period, does not prove that Ms. Kahsai was of bad character or engaged in selling sex. This issue also demonstrated Ms. Aster Kidane's alignment with Mr. Hagos, who escaped any criticism for dating women during the same period, including fathering a child with another woman to whom he was not married.
78Overall, I found that Ms. Aster Kidane was aligned with Mr. Hagos and motivated by this alignment to denigrate Ms. Kahsai's character. In many instances, rather than denigrating Ms. Kahsai's character as Ms. Aster Kidane intended, her evidence supported Ms. Kahsai's position. For example, Ms. Aster Kidane's evidence concerning parenting was that she often helped with childcare when Ms. Kahsai needed help. Rather than denigrating Ms. Kahsai's parenting role, this evidence supported that Ms. Kahsai was primarily responsible for childcare, with limited assistance from Mr. Hagos. Another example is Ms. Aster Kidane's evidence that she did grocery shopping with Ms. Kahsai "every Friday" and was at Ms. Kahsai's home every weekend to help her with cooking and cleaning, which supported Ms. Kahsai's position that she was primarily responsible for house care, including grocery shopping and cooking. Ms. Aster Kidane's evidence that Ms. Kahsai and Mr. Hagos were not in a committed relationship was also inconsistent with her evidence that she observed that they shared a bedroom, that in around 1998 Mr. Hagos told her that his "marriage" was in trouble, that they travelled together, and that "they stayed together" and "were together" when she left Ottawa in 2004.
79About Shamar Maintenance, Ms. Aster Kidane's evidence that Ms. Kahsai was never involved with the business and never worked for Mr. Hagos was inconsistent with Mr. Hagos' evidence that Ms. Kahsai worked for him to clean RCMP huts.
80Dawit Kidane, Mr. Hagos' brother, also gave evidence. Mr. Dawit Kidane lived with the parties from October 1991 to October 1994. He had little contact with Mr. Hagos between 1994 and 1997 and cut off all contact with Mr. Hagos after 1997 until reconciling with him after the parties' separation. Mr. Dawit Kidane stated this was because he disliked Ms. Kahsai. After all, she was a liar, financially irresponsible, and of bad character. Mr. Dawit Kidane's dislike for Ms. Kahsai was well known in the family and not in dispute. His evidence was of limited value for this reason and because of the time he was in the home. His main point was that Ms. Kahsai did very little house care and parenting. Almost all the domestic chores (including practically all parenting) were done by his cousin, Udit, who lived with them from approximately October of 1992 to the summer of 1996. But CE was not born until October of 1993, and Mr. Dawit Kidane moved out of the home in October of 1994. His observations about parenting were only made during a short time, during which period he admitted that Ms. Kahsai was breastfeeding. Mr. Dawit Kidane's observations about who did what chores in the home were also limited by his evidence that he did not spend very much time at home – he attended school for most of the day from Monday to Friday, took night classes in 1994, sometimes stayed outside of the house on weekends, and also worked on weekends. Mr. Dawit Kidane was only home during the evenings when he was not taking night classes. I find that Mr. Dawit Kidane's evidence that he only saw Ms. Kahsai sleeping on the couch, every night, in front of the TV, exaggerated and an unreliable indicator of her contribution to the household8.
81When Mr. Dawit Kidane was asked to acknowledge a favourable point to Ms. Kahsai, his response was vague and avoidant. For example, when he was asked if Ms. Kahsai and Mr. Hagos shared a bedroom, a fact to which several witnesses attested, his response was, "I don't know. That is their business". He also purported not to know if Mr. Hagos worked long hours and took night courses9. Mr. Dawit Kidane was firm and absolute that Ms. Kahsai "never, ever" worked in Mr. Hagos' business, but this contradicted Mr. Hagos' evidence that Ms. Kahsai worked cleaning RCMP huts.
82The impression created by Mr. Dawit Kidane's evidence was that he had been given a script to follow, and he was unresponsive to any areas that diverged from the script. I found his evidence lacked credibility.
83I end this review of the parties' credibility by highlighting the threat made by Mr. Hagos to Ms. Kahsai in the fall of 2013, repeated to SH and many members of their family and community in his "truth telling" letters – that if Ms. Kahsai did not reconcile with him and drop these legal proceedings, he would destroy her. Mr. Hagos' evidence at trial supported that this was precisely what he was attempting to do. Mr. Hagos' saw himself as being in a "war" with Ms. Kahsai. He would say anything to accomplish this objective.
Ms. Kahsai's Income
84Ms. Kahsai's income was as follows10:
2009 - $52,587;
2010 - $59,212;
2011 - $63,942;
2012 - $56,183;
2013 - $52,251;
2014 - $59,472;
2015 - $57,494 (not including $13,500 in spousal support);
2016 - $54,688 (not including $18,000 in spousal support);
2017 - $62,240 (not including $18,000 in spousal support);
2018 - $58,440 (not including $18,000 in spousal support).
Mr. Hagos' Income
85Mr. Hagos' income was disputed. He earned income from Shamar Maintenance, the rental of 39 Manju, and the rental of Carmen and Blake properties. Mr. Hagos sold Sweetland in 2011. Hagos Park LLC, a real estate investment company that held properties in Atlanta, was sold in 2016 but operated at a small loss.
86In Mr. Hagos’ personal income tax returns11, he reports his income to be as follows:
2011 - $152,125 (including approximately $40,000 in net rental income, and $110,678 in taxable capital gains from the sale of Sweetland);
2012 - $57,063 ($37,500 taxable dividend plus $20,400 net rental income);
2013 - $55,000 ($37,500 taxable dividend plus $18,000 net rental income);
2014 - $101,460 ($35,400 taxable dividend, $15,600 net rental income, plus $50,459 RRSP income);
2015 - $54,615 ($29,500 taxable dividend, $3,515 net rental income, plus self-employment income of $21,600);
2016 - $40,428 ($17,550 taxable dividend, $7,404 net rental income, self-employment income of $10,200, plus CPP income of $5,274);
2017 - $17,139 ($3,510 taxable dividend, $3,298 net rental income, self-employment income of $5,000, plus CPP income of $5,406).
87Mr. Hagos did not provide his income tax return for 2018.
88Mr. Hagos filed several sworn financial statements in this proceeding with contrasting income information:
In his financial statement sworn December 5, 2013, he reported his income as $122,970 in 2012 and that his current income was $274,920/yr. He also said he received $1,637 per month in benefits paid for by his business that was not included in this income;
In his financial statement sworn March 31, 2014, he reported his current income as $250,920/yr;
In his financial statement sworn October 13, 2017, he reported his current income as $190,788/yr, although for the first time, he noted that this included his gross rental income;
In his financial statement sworn May 18, 2018, he reported his current income as $191,106/yr. He again noted that this included his gross rental income;
In his financial statement sworn March 11, 2019, Mr. Hagos reported the same income on his May 18, 2018 statement;
In his financial statement sworn September 3, 2019, Mr. Hagos reported his income as $180,906/yr. He again noted that this included his gross rental income.
89Each party called expert evidence on the issue of Mr. Hagos' income. The qualifications of each party's expert were admitted.
90Mr. Hagos' expert was J.C. Desnoyers. Mr. Desnoyers provided an initial report dated December 15, 2015,12 that Mr. Hagos' income was:
2012
2013
$88,000
$70,000
91This opinion was based on Mr. Hagos' reported income on line 150 of his income tax returns, adjusted for the dividend gross-up, plus $10,000 of unreported rental income for Manju, and adding back in the capital cost allowance claimed on the Carmen and Blake properties.
92Mr. Pittman provided a report dated December 6, 201613. Mr. Pittman's review included a review of the business ledgers, which Mr. Desnoyers did not do. Mr. Pittman's opinion was that Mr. Hagos' income was:
2012
2013
2014
$192,835
$180,699
$121,383
93Mr. Pittman made the same adjustments as Mr. Desnoyers but also added other amounts. Mr. Pittman added amounts paid to the children as they appeared to be paid for income splitting purposes. Mr. Pittman added 50% of Shamar's automobile, meals and entertainment expenses, and 10% of Shamar's office expenses, with a gross-up, because these were assumed to be personal. Mr. Pittman added amounts for the management fee Shamar paid to Mr. Hagos which were not fully disclosed by Mr. Hagos in his personal tax returns.
94In response, Mr. Desnoyers provided a further report dated May 23, 2018,14 in which his opinion on Mr. Hagos' income was dramatically different than his first report. In his second report, Mr. Desnoyers' opinion was that Mr. Hagos' income was:
2012
2013
2014
2015
2016
2017
$186,000
$174,000
$117,000
$94,000
$79,000
$67,000
95The difference in Mr. Desnoyers' opinion was that he followed Mr. Pittman's approach, except that he did not include expenses related to the Hagos Park LLC investment in his calculation of available income.
96Mr. Pittman provided an update to his report on September 23, 201915. Mr. Pittman's opinion was that Mr. Hagos' income was:
2012
2013
2014
2015
2016
2017
$192,835
$180,699
$142,990
$124,578
$113,941
$76,136
97In response, Mr. Desnoyers provided an updated report dated October 8, 2019,16 that Mr. Hagos' income was:
2012
2013
2014
2015
2016
2017
$186,182
$174,157
$117,354
$94,078
$103,408
$75,813
98The differences in Mr. Desnoyers' and Mr. Pittman's final reports arise from three areas.
99The first difference was estimating the net income for the rental of Manju for 2014, 2015 and 2016. Mr. Pittman included $10,000 per year for each of these years, based on Mr. Hagos' declared net rental income for Manju in his 2017 income tax return. Mr. Hagos did not report any income for Manju in his 2014, 2015, or 2016 income tax returns. Mr. Desnoyers did not include any income for Manju for 2014, 2015 and 2016 because Mr. Hagos told him that the property was not rented from July 2014 to June 2015. Mr. Hagos did not provide Mr. Desnoyers, or the court, with supporting evidence to confirm that Manju was not rented in this period. Although the parties had initially tried to sell Manju after moving to Gracewood, Mr. Hagos told Mr. Desnoyers that he earned $10,000 in net income from Manju in 2013. Mr. Hagos did not report this income on his tax return. Mr. Hagos did not testify on this issue at trial. Mr. Hagos has significant credibility issues, as detailed above. While I believe Mr. Desnoyers' evidence that Mr. Hagos told him Manju was not rented from July 2014 to June 2015, this evidence is not reliable for the truth of its content. I find that Mr. Hagos' income should include rental income from Manju in 2014, 2015 and 2016 as set out in Mr. Pittman's report.
100The second difference is whether Shamar Maintenance expenses related to Hagos Park LLC should be added to Mr. Hagos' income. The experts agree that Shamar paid expenses related to property owned by Hagos Park LLC. The experts agree that these expenses should be attributed to Hagos Park LLC. or Mr. Hagos personally. Mr. Hagos did not provide copies of Hagos Park's financial statements or U.S. tax returns to Mr. Pittman or the court.
101Mr. Pittman included the Hagos Park expenses in Mr. Hagos' income. Mr. Desnoyers did not include them in his income. Mr. Desnoyers excluded the expenses because he reasoned that the expenses would have otherwise been deductible from income by Mr. Hagos personally, like carrying expenses related to an investment. Mr. Pittman disagreed. Mr. Pittman reasoned that these expenses were not proper Shamar expenses and should be added to Shamar's available income attributed to Mr. Hagos personally. Even if Mr. Hagos used the funds to pay expenses belonging to Hagos Park, this would not become a carrying charge but a capital investment, which was not deductible from income.
102I find Mr. Pittman's argument more persuasive. I am also not prepared to give Mr. Hagos the benefit of any doubt on this expense, given his failure to provide financial statements for Hagos Park and the other concerns about his financial disclosure detailed herein.
103The third difference is what portion of the professional fees paid by Shamar Maintenance in 2014 and 2015 should be added into Mr. Hagos' income as being for personal use. Shamar's professional fees increased after separation. In the absence of other information, Mr. Pittman assumed that the increased amount was for personal use, while Mr. Desnoyers did not. Mr. Hagos did not explain either to the experts or at trial why Shamar's professional fees increased after separation. Several cancelled cheques from Shamar Maintenance to Mr. Hagos' matrimonial lawyers were in evidence at trial, and it was not disputed that Mr. Hagos' paid personal expenses through Shamar. Mr. Hagos did not call his accountant to testify how these personal professional fees were recorded in Shamar's books or explain why the professional fees increased. Mr. Hagos has the onus to prove that expenses deducted from his business are legitimate business expenses, and he is the one who controls the information to do so. He has not done so. I find that the amount to be added for personal professional expenses should be as set out in Mr. Pittman's report.
104Given my determination of these issues, by including Manju income of $10,000 per year (per Pittman), including the Hagos Park expenses (per Pittman), and including the professional fees (per Pittman), the expert reports reconcile to provide these incomes for Mr. Hagos:
Year
2012
2013
2014
2015
2016
2017
Income assuming financial statements are accurate
$192,835
$180,699
$142,990
$124,578
$113,941
$76,136
105However, the above incomes are only accurate if Shamar's financial statements, upon which these figures are based, are reliable. If Shamar's financial statements are wrong, both experts testified Mr. Hagos' income would be different. The experts agree that Shamar's financial statements were unreliable17. In his reports, Mr. Pittman stated that Shamar's financial statements were unreliable because "it was virtually impossible to determine how the amounts in the financial statements tie into the Microsoft Excel monthly spreadsheets that purport to summarize the bank and other transactions." Mr. Pittman testified that the starting assumption of Mr. Desnoyers' report, that the financial statements would not change if subject to audit, was a stretch given the financial statements' unreliability. There was no correlation between the ledgers and the financial statements. Mr. Desnoyers summarized the concerns with Shamar's financial statements in this way, "The big issue is whether the reconciliation was done properly." "I can't match the ledgers with the financial statements." "If I took the general ledgers and tried to build the financial statements, I would have different numbers." Mr. Pittman echoed this, stating, "I am pretty sure the financial statements would be different if we did that," referring to reconciling the financial statements properly with the source documents.
106Mr. Desnoyers also testified that it is not common to have financial statements that cannot be reconciled. Shamar is not a small operation – it is a corporation that has total revenue of approximately $750,000 per year. The state of Shamar's financial statements and accounts was highly unusual.
107Despite these concerns, Mr. Hagos did not call his accountant who prepared the financial statements to give evidence in support of Shamar's financial statements or to explain his accounting practices. How Shamar's financial statements were created, including how expenses paid on behalf of Mr. Hagos were accounted for in Shamar's financial statements, is a significant area18. This is important because the evidence at trial was that Shamar paid for almost all of Mr. Hagos' personal expenses. There were numerous instances of cheques paid to family members for non-business expenses19. Both Ms. Kahsai and Mr. Hagos testified that Shamar paid for family expenses. The cancelled cheques provided for Shamar recorded support cheques to the Family Responsibility Office, legal expenses paid to Mr. Hagos' matrimonial lawyers, tuition and rent payments for the children's schooling, and utility expenses. Some of these were recorded in Shamar's ledgers, but others were not. Some appear to have been recorded to Mr. Hagos' shareholder account, but others were not.
108Mr. Hagos used Shamar as his personal bank account, withdrawing funds when needed. Mr. Hagos' evidence at trial was that Shamar did not pay him a salary and, instead, personal expenses paid by Shamar were assigned as income to him by his accountant. Mr. Hagos also testified that he put money into Shamar, which was also used to pay his expenses. But Mr. Hagos did not produce evidence to support this, except for a series of select cheques payable by him to Shamar, disclosed at trial for the first time20.
109Mr. Desnoyers' evidence at trial was that if Mr. Hagos put money into Shamar, it would only change the conclusions on his income depending on how the amounts were recorded in Shamar's accounts. This brings us back to the issue of how the financial statements were prepared. In the absence of other evidence to explain how these cheques were recorded in Shamar's accounts, I cannot draw any conclusions about Mr. Hagos' income from these cheques. I also note that all but one of the cheques recorded payments made in 2018 and 2019 - any funds invested into Shamar by Mr. Hagos in 2018 or 2019 do not impact the conclusions regarding his income for the years 2012 to 2017.
110The concerns with Mr. Hagos' financial disclosure extended beyond his corporate financial statements. Notably, Mr. Desnoyers' agreed that Mr. Hagos' income was significantly higher than Mr. Hagos represented in his income tax returns and financial statements once presented with Mr. Pittman's reports. Mr. Desnoyers accepted most of Mr. Pittman's conclusions and adjusted his opinion to reflect these. Mr. Desnoyers' approach, as confirmed in his reports, was to assume that the data Mr. Hagos provided to him was correct. When Ms. Kahsai's expert was able to show the data was faulty through a review of limited sample data, Mr. Desnoyers adjusted his conclusions.
111In fairness to Mr. Desnoyers, this is what he was retained to do. Mr. Desnoyers was not hired to conduct an audit of Mr. Hagos' financial statements or question their content. Mr. Desnoyers was clear in his evidence and reports that his mandate was to accept the information provided to him by Mr. Hagos without question. Mr. Pittman, in contrast, did question Mr. Hagos' income tax returns and financial statements, which included an overview of Mr. Hagos' ledgers, which lead to a review of selected items. Mr. Pittman only reviewed some items in detail, had incomplete information, and found several personal expenses, including payments to children and unreported management fees paid to Mr. Hagos. Mr. Desnoyers adjusted his calculations of Mr. Hagos' income when Mr. Pittman's was able to find additional undisclosed income. The only exception to this was the undisclosed rental income from Manju, which Mr. Desnoyers included in his original report.
112This process fell well short of Mr. Hagos' obligation to make full and frank disclosure of his income. This reflects badly on Mr. Hagos. Mr. Hagos repeatedly misrepresented his income in the expert report process. Mr. Hagos started the process by low-balling his income and then waited to see if the other side would discover undisclosed income. This happened again and again. Mr. Hagos’ income for 2012 went from $88,000 to over $185,000; his income for 2013 went from $70,000 to over $174,000; his income for 2016 went from $79,000 to over $100,000; his income for 2017 went from $67,000 to over $75,000.
113Mr. Desnoyers' was candid in his evidence before the court that Mr. Hagos had not transparently relayed accurate information about his income. Mr. Desnoyers relied on information provided to him by Mr. Hagos but then agreed that Mr. Hagos' income was significantly higher when presented with Mr. Pittman's review. For example, Mr. Desnoyers' testified that Mr. Hagos initially told him that none of the expenses deducted by Shamar were personal, which turned out not to be true. Mr. Desnoyers testified that Mr. Hagos said that the management fees were paid to him and other supervisors, which turned out not to be true. The conclusion I draw from this is that Mr. Hagos misrepresented his income, including his own expert.
114Mr. Hagos also failed to provide requested financial disclosure, including disclosure that he had been ordered to provide. Mr. Hagos did not provide his 2018 income tax return or information for his income in 2019 for the year to date. Neither expert provided an opinion on Mr. Hagos' 2018 income because he did not provide his personal income tax return for 2018 or Shamar's financial statement for the year ending January 31, 201921. I find that Mr. Hagos was selective in what financial information he disclosed, only disclosing information that he viewed as supportive of his position. This includes the copies of selected cheques from Mr. Hagos to Shamar that he produced for the first time at trial22.
115What is the result of Mr. Hagos' misrepresentations and lack of credibility related to his income? Ms. Kahsai's position was that I should impute additional income to Mr. Hagos so that his income would be found to be what it was in 2013 when they separated. She argues that Mr. Hagos intentionally reduced his income by ceasing Shamar's operations after separation. An adverse inference should be drawn due to Mr. Hagos' misrepresentations of his income and disclosure issues. In the alternative, she seeks that I impute an income to him of no less than $100,000 per year.
116Mr. Hagos's evidence was that Shamar had "practically" closed its operations in 2016, except for a few minor contracts, one of which, with Rideauwood, ended in mid-2018. This was not consistent with Shamar's financial statements. The financial statements from 2014 to 2016 reported an annual income of approximately $750,000 per year. Revenue decreased in 2017 but was still significant at $542,091. Mr. Hagos did not provide Shamar's financial statements for 2018 but did provide internal information that revenue decreased to approximately $127,000.
117Mr. Hagos testified that the reduction in Shamar's revenue was because he lost several large contracts and had difficulty getting new contracts because of increased competition. He could not recall, however, bidding for any contracts in 2017 or 2018. Mr. Hagos also testified that he was content not to earn more income because he only had to support himself, and he could live frugally.
118I accept that part of the reason for Shamar's reduced revenue was that it lost contracts, and there was increased competition. But I also find that part of Mr. Hagos' reduction in income was voluntary because he did not bid for new contracts, and in doing so, he was motivated by his view that he did not have a support obligation to Ms. Kahsai and his desire to minimize any support obligation that was imposed on him.
119Mr. Hagos' was 65 at the time of trial. I am prepared to accept that his age supports a finding that some reduction in his efforts to pursue income by bidding on new contracts is reasonable. But I do not find that his age, particularly given the other evidence before me, makes it reasonable for Mr. Hagos to cease his efforts to earn income to the degree that he has done so.
120I do not accept Mr. Hagos's evidence that his income was reduced due to various health issues. Mr. Hagos did not introduce admissible medical evidence that supported his claim that medical issues caused a reduction in his income. He did not call expert evidence at trial on this issue. He did not file a medical report in accordance with the rules.
121Mr. Hagos sold the Hagos Park property owned in Atlanta, U.S., in 2016 or 2017, but this property operated at a loss, which means that its sale was positive for Mr. Hagos' income.
122Mr. Hagos continues to earn rental income for the rental of Carmen, Blake, and Manju properties.
123Given all these factors, I find that imputing income to Mr. Hagos's of no less than $100,000 per year is warranted. This income applies for years after and including 2017. The reasons for imputing this income level include drawing an adverse inference against Mr. Hagos due to the misrepresentations that he made on his income, his lack of credibility, his failure to provide evidence to reconcile Shamar's financial statements, his failure to provide Shamar's Maintenance's financial statements for the year ending January 31, 2019, his failure to provide income information for 2019 to the date of trial, and my finding that part of Mr. Hagos' reduction in income was voluntary because he did not bid for new contracts. In doing so, he was motivated by a wish to avoid a support obligation to Ms. Kahsai.
Net Worth
124At separation, Ms. Kahsai had a 2008 BMW vehicle, a pension through her federal government employment valued at $210,530 (before tax), nominal savings, and some debt from her creditor proposal. Considering the notional tax liability on her pension, her net worth was approximately $185,000. Her net worth was in a similar position at the trial date, except that her pension had increased in value (which was not calculated), and her car's value was reduced. All this net worth was accumulated during the parties' reconciliation period from 1990 to 2013.
125Mr. Hagos' net worth at the date of separation was made up23:
272 Gracewood, $635,000, with a mortgage of $505,000;
416 Blake, $675,000, mortgage of $384,720;
392 Carmen, $818,000, mortgage of $412,383;
29 Manju, $339,000 mortgage of $86,500;
Hagos Park, net proceeds of sale $307,625, but Mr. Hagos claimed a related contingent liability of $300,000
a 1991 BMW and a 2008 Mercedes;
approximately $122,000 in savings;
other debt claimed at $350,000.
126In total, Mr. Hagos reported that at the date of separation, he had assets totalling approximately $2,948,000 and debts of $2,106,000, resulting in a net worth of $842,000. His net worth had improved at the date of trial to be approximately $936,000.
127The value of Mr. Hagos' assets was disputed at trial. Ms. Kahsai lead evidence24 that supported that the values for Mr. Hagos' real estate, particularly the Carmen and Blake properties, were significantly undervalued. Mr. Hagos' had the onus of proving the value of his rental properties. He did not do so. Mr. Hagos' evidence on the value of these assets was unreliable and lacked credibility. Mr. Hagos did not provide expert opinion evidence on the properties' value, nor did he have the properties appraised. Mr. Hagos provided different values for the properties in his previous sworn financial statements, without a reasonable explanation for why his sworn evidence on the values changed. In financial statements sworn over four years, Mr. Hagos valued the Carmen property higher, at $900,000. Mr. Hagos' blamed his previous lawyers for these differences and insisted that the values in his September 3, 2019 statement were correct because they were based on the MPAC values. Mr. Hagos' did not introduce the MPAC assessments into evidence at trial. He also did not present any evidence about how MPAC arrived at its assessment values. This evidence is not reliable nor credible.
Issue #1: What child support is payable for CE and SA, including contribution towards s.7 expenses?
128Both parties claimed child support from the other in their pleadings, although Mr. Hagos' claim was not included in his original Answer, and his Amended Answer was never filed with the court. But I find that both parties had notice from the outset of these proceedings that how they should be sharing the children's expenses needed to be addressed.
129At trial, Ms. Kahsai did not seek an order for child support, taking the position that the amounts owed between them for child support should set-off each other off evenly. Mr. Hagos sought orders requiring Ms. Kahsai to pay him child support for the summer months of 2014 to 2016 for CE and SA and 50% of the s.7 expenses that he paid.
130At separation, SA was attending Ryerson in Toronto, and CE was attending McGill in Montreal.
131I find that CE continued to be eligible for child support under the Divorce Act until May 1, 2015, when she completed her degree at McGill. CE remained in Montreal in the summer of 2015 and travelled to Brazil in the fall of 2015, where she worked. Mr. Hagos continued to provide financial assistance to CE after May 1, 2015, including when she pursued post-graduate degrees. Still, I find that he did so voluntarily, primarily because she continues to be in his favour.
132I find that SA continued to be eligible for child support under the Divorce Act until May 1, 2017. SA completed his schooling in the spring of 2017 and did not receive any financial support from Mr. Hagos after May 1, 2017.
133Therefore, the period in issue for the child support claims is September 22, 2013, to May 1, 2015, for CE, and September 22, 2013, to May 1, 2017, for SA. During these periods, both children lived away from home to attend university, except for May 2014 to October 2014 when SA lived with Ms. Kahsai in Toronto.
Child Support in the Summers of 2014, 2015 and 2016
134Mr. Hagos is not entitled to table child support for CE and SA during the summers of 2014, 2015 and 2016 because I find that the children did not live with Mr. Hagos for these summers. The children visited Mr. Hagos in Ottawa from time to time, including stays of a few weeks. But I find that the children continued to reside in Montreal (CE) or Toronto (SA) during the summers.
135CE remained in Montreal during the summer. The records from McGill indicate that she took courses during the summer. Concerning SA, Mr. Hagos' evidence was that, for the period from the fall of 2013 to April 2017, he paid SA's expenses from September to April. He did not pay SA's expenses in the summer because his position was that SA could return to Ottawa and live with him. Mr. Hagos took the position that he was entitled to child support for SA during the summers of 2014, 2015, and 2016 because SA could have lived with him in the summers. But SA did not live with Mr. Hagos during the summers. Ms. Kahsai's evidence was that SA lived with her in the summer of 2014, from May to October of 2014. Ms. Kahsai's evidence was that SA remained in Toronto in the summers of 2015 and 2016, returning to Ottawa only for a few weeks. Mr. Hagos' evidence did not contradict that Ms. Kahsai's evidence on this point – instead, Mr. Hagos testified that he could not recall where SA lived in the summers of 2014, 2015, or 2016. He did remember that SA visited him in April of 2015 and visited for a few weeks in May/June of 2017.
136Accordingly, I find that Mr. Hagos is not entitled to child support from Ms. Kahsai for CE (for the summer of 2014) or SA (for the summers of 2014, 2015 and 2016).
Section 7 Expenses
137Both parties contributed directly to various expenses for SA and CE. Mr. Hagos paid most of these expenses. Ms. Kahsai paid SA's tuition for 2015/2016 $3,623. Ms. Kahsai also provided cash to SA and CE to assist with their expenses.
138Mr. Hagos' evidence on the expenses that he claimed contribution to was unclear, confusing, and lacked credibility. He presented hundreds of pages on the children's expenses. Many of the same expenses were inserted several times. Mr. Hagos included expenses for CE after she had completed her first degree at the end of April 2015, was not attending full-time school, and was working. Mr. Hagos provided a list totalling these expenses, but this list included many duplicates and expenses incurred after the child ceased being entitled to child support and was not reliable. Many of the expense documents were cheques paid from Shamar Maintenance, which raises Shamar's financial statements' unreliability and how these expenses were recorded. Several expenses claimed by Mr. Hagos were not s.7 expenses.
139Mr. Hagos has the burden of proving the s.7 expenses for which he claimed contribution. Mr. Hagos did not meet this burden on many of the expenses claimed. I have not included any s.7 expenses for which payment is dated before the parties' separation on September 22, 2013. I have not included s.7 expenses for CE, for which payment is dated after May 1, 2015, when she completed her first degree. I have not included expenses evidenced only by a bank withdrawal slip or a bank entry for a cash advance. I have not included incidental expenses because both parents provided the children with cash payments from time to time, which I find were voluntarily supplied as gifts. I have not included expenses that appear to be duplicated. I have not included CE's dental expenses because the dates on the dental invoices were after May 1, 2015. I have not included CE's car expenses because Mr. Hagos did not establish that it was reasonable and necessary for CE to have a car while attending school in Montreal.
140I accept that Mr. Hagos gave each child a monthly allowance of approximately $250 per month during the school terms. There were cheques showing payments of $300, $250 and $200 per month. I have used $250 per month because I was not provided with cheques for all months, and there was evidence that there were times when Ms. Kahsai did not provide this financial support to SA. I find that $250 per month for the months each child was in school is a fair estimate given the evidence before me.
141SA lived in residence in the 2013/2014 school term, and a significant portion of the residence expense was paid before separation. I have not included it below.
142I accept that Ms. Kahsai paid SA's rent during the school terms from October 2014 to April 2017.
143I have also considered that Ms. Kahsai supported SA from May to October of 2014 and paid SA's tuition in September of 2015 of $3,623.
144I accept that the following s.7 expenses were paid by Mr. Hagos during the period in issue25:
- SA
o 2013 (September 23, 2013, to December)
Ryerson (cheque dated September 25, 2013) of $2,545
Ryerson fee $500 November 4, 2013
Cheque for $850 in December of 2013 marked as being for Tuition
Monthly allowance $250 per month for 3 months = $750
Total $4,645
o 2014
Ryerson March 2014 -$200
Ryerson fall 2014 tuition - $1,800
Rent at $980/m for 3 months = $2,940
Monthly allowance $250 per month for 8 months = $2,000
Total $6,940
o 2015
Ryerson winter 2015 tuition $2,711 (January 20, 2015)
Rent at $980/m for 4 months = $3,920
Rent at $1,125/m for 4 months = $4,500
Monthly allowance $250 per month for 8 months = $2,000
Total $13,131
o 2016
Rent at $1,125/m for 4 months = $4,500
Rent at $980/m for 4 months = $3,920
Monthly allowance $250 per month for 8 months = $2,000
Computer $600
Total $11,020
o 2017 (to May 1, 2017)
Rent at $980/m for 4 months = $3,920
Monthly allowance $250 per month for 4 months = $1,000
Total $4,920
CE
o 2013 (September 23, 2013 to December)
McGill payments - $689
Monthly allowance $250 per month for 3 months = $750
Rent at $775/m for 3 months = $2,325
Total $3,764
o 2014
McGill payment - $6,062
McGill payment - $5,232
Monthly allowance $250 per month for 8 months = $2,000
Rent at $775 per month for 12 months = $9,300
Total $22,594
o 2015 (to May 1, 2015)
McGill payment - $4,436
Monthly allowance $250 per month for 4 months = $1,000
Rent at $775 per month for 4 months = $3,100
Total $8,536
145Ms. Kahsai owes Mr. Hagos her proportionate share of these expenses. Mr. Hagos owes Ms. Kahsai his proportionate share of SA's 2015/2016 tuition expense of $3,623 and child support for May to the beginning of October 2014 when SA resided with her. After my analysis of spousal support, I have calculated the amounts owed.
146I have also factored in the tax credits related to these post-secondary expenses. Mr. Hagos did not provide support calculations and did not address the tax credits related to the children's s.7 expenses he paid. His tax returns reflect that he claimed tax credits for these expenses (line 324) in 2013, 2014, 2015 and 2016. Mr. Hagos' tax documents provided to the court for 2017 did not include line 324, but I assume he claimed the tax credit in 2017. Ms. Kahsai claimed tax credits in 2015 for the school expenses she paid.
Issue #2: Is Ms. Kahsai entitled to spousal support and, if so, in what amount and for what duration?
Entitlement
147I find that Ms. Kahsai is entitled to spousal support on a compensatory and needs basis. The parties began their committed relationship in 1978, married on January 10, 1980, separated in late 1984 or early 1985, divorced in 1987, reconciled and resumed cohabitation in September of 1990, and separated again on September 22, 2013.
148Throughout the parties' relationship, Ms. Kahsai was primarily responsible for rearing the parties' three children. This continued even when she also worked outside of the home.
149Throughout the parties' relationship, Ms. Kahsai was primarily responsible for housekeeping and the family home's general operation, including cooking, grocery shopping, maintenance and repair.
150Mr. Hagos was economically advantaged by Ms. Kahsai's contributions during the relationship, mainly due to her being primarily responsible for childcare and housekeeping, which allowed Mr. Hagos to spend long hours building his business and improving his education.
151Ms. Kahsai was economically disadvantaged during the relationship as a result of her role. While Ms. Kahsai made advances in her career and education, this was significantly less than the advances made by Mr. Hagos, and her ability to make these advances was mainly not due to Mr. Hagos' support.
152Although I accept that Mr. Hagos can at times be a charming and supportive individual, I find, based on the evidence before me, that he repeatedly and consistently marginalized, undermined, minimized, and villainized Ms. Kahsai in a manner that was very harmful and destructive towards her.
153Ms. Kahsai was significantly financially disadvantaged due to the relationship breakdown. She cannot afford the comfortable lifestyle that the parties shared up to separation and that Mr. Hagos continues to enjoy after separation. As an example, Ms. Kahsai resides on her own in a small apartment in Toronto. Mr. Hagos continues to enjoy occupancy of the four-bedroom family home.
154The parties' financial positions are markedly different. At the time of separation, Ms. Kahsai's net worth was approximately $185,000, mostly made up of her pension from employment. In contrast, Mr. Hagos' net worth was at least $840,000, and more if the value of his rental properties was higher than he declared.
155Ms. Kahsai did not receive any support after the parties' separation on September 22, 2013, until interim spousal support began to be paid commencing April 1, 2015.
156Ms. Kahsai seeks indefinite periodic spousal support or a lump sum.
Quantum of Support
157Ms. Kahsai filed several support calculations. Mr. Hagos did not provide any support calculations.
158Ms. Kahsai's calculations are based on the parties' length of marriage/cohabitation period being 28 years, which deducts the five-year period they were separated from 1985 to 1990. During this five-year separation period, however, Ms. Kahsai's income-earning ability continued to be impacted by the relationship given her childrearing obligations. She received little child support from Mr. Hagos during this period ($50 per month). At the same time, Ms. Kahsai's childrearing and the limited child support he was paying allowed Mr. Hagos to invest his time and money into building his business. These factors favour using 33 years for the support calculations. However, the calculations do not change whether a period of 33 years or 28 years is used. The SSAG ranges reduce by a few hundred dollars per month if a period of cohabitation of 23 years is used26. I find it inappropriate to use a cohabitation period of 23 years in the SSAG calculation. This would not reflect the economic consequences flowing from Ms. Kahsai's childrearing obligations before 1990. It is appropriate to use a length of marriage/cohabitation period of 28 years in the SSAG calculations27.
159I have adjusted Ms. Kahsai's support calculations to reflect my child support findings, including the s.7 expenses and my conclusions on Mr. Hagos' income. Copies of the revised SSAG calculations are attached to these reasons.
160The SSAG calculations provide ranges for child support, considering the child support and s.7 expenses. The parties' respective net disposable incomes (NDI) are approximately 50-50% at the high range. Spousal support at the high range is appropriate because I find that Ms. Kahsai has a strong compensatory claim to child support given the role she adopted during the parties' relationship, the parties ages, the length of their relationship, and the economic consequences that flowed from their relationship which overwhelmingly were in Mr. Hagos' favour.
161In 2014, I adjusted the support calculation to include Mr. Hagos' obligation to pay child support to Ms. Kahsai for SA for the five months that he resided with her (May through September 2014). Mr. Hagos' income in 2014 was $142,990. The table amount payable for one child for that income is $1,211 per month. For five months, this child support totals $6,055. When divided out over 12 months, this is $505 per month.
162Accordingly, I find that for October, November and December of 2013, Mr. Hagos shall pay Ms. Kahsai spousal support of $5,049 per month. For the same period, Ms. Kahsai shall pay Mr. Hagos $3,139, in total, to contribute to the children's s.7 expenses.
163In 2014, Mr. Hagos shall pay Ms. Kahsai spousal support of $2,098 per month, plus child support of $505 per month for SA ($6,055 for the year of 2014). Ms. Kahsai shall pay Mr. Hagos $947 per month to contribute to the children's s.7 expenses, for a total contribution of $11,364 for the year (12 X $947).
164In 2015, Mr. Hagos shall pay Ms. Kahsai spousal support of $2,114 per month. Ms. Kahsai shall pay Mr. Hagos $743 per month to contribute to the children's s.7 expenses, for a total contribution of $8,914 for the year (12 X $743).
165In 2016, Mr. Hagos shall pay Ms. Kahsai spousal support of $2,169 per month. Ms. Kahsai shall pay Mr. Hagos $398 per month to contribute to the children's s.7 expenses, for a total contribution of $4,771 for the year (12 X $398).
166In 2017, Mr. Hagos shall pay Ms. Kahsai spousal support of $1,448 per month. Ms. Kahsai shall pay Mr. Hagos $163 per month to contribute to the children's s.7 expenses, for a total contribution of $1,959 for the year (12 X $163).
167In 2018 and 2019, Mr. Hagos shall pay Ms. Kahsai spousal support of $1,733 per month.
168For the period after December 31, 2019, I find that a lump sum spousal support should be paid and that a lump sum of $330,000 is reasonable and appropriate.
169Given the length of the relationship, the parties' ages, the roles adopted during the relationship, the relationship's economic consequences, and Ms. Kahsai's strong compensatory claim to support, Ms. Kahsai is entitled to indefinite spousal support for her lifetime, subject only to a material change. I have considered the SSAG calculations that provide ranges for a lump sum, which I have attached hereto. The sum of $330,000 is at the midpoint of the after-tax costs and benefits the high range of support, which I find reasonable.
170Mr. Hagos has the ability to pay this lump sum. There is significant equity in his real estate properties, even assuming they are valued at the amounts he provides. There is over $300,000 of equity in his residence, approximately $250,000 in Manju, $400,000 in Carmen, and $300,000 in Blake. Mr. Hagos has the ability to pay the lump sum without undermining his future self-sufficiency.
171The purpose of this lump sum award is to address Ms. Kahsai's ongoing need for spousal support given her financially disadvantaged position after the parties' relationship over 33 years and to provide her with an immediate capital payment to address her immediate financial situation. Due to their 1987 divorce, Ms. Kahsai is not entitled to an equalization payment that would have otherwise addressed part of this disadvantage and provided immediate capital to assist with her needs. However, this lump sum payment is not a transfer of assets under the support payment guise. Its' purpose is to address Ms. Kahsai's ongoing and immediate entitlement and need for support.
172I have weighed the perceived advantages of making a lump sum award against the perceived disadvantages of making such an order. If a lump sum is not paid, there is a real risk that Mr. Hagos will attempt to continue to litigate the issue of spousal support, and thereby continue his campaign of non-disclosure, misrepresenting his income, attacking Ms. Kahsai's character in the community, and pursing lengthy, expensive litigation in his war against her. Given Mr. Hagos' conduct in this litigation and his motivation to avoid his support obligation to Ms. Kahsai, there is also a real risk that ongoing periodic spousal support will not be paid and will be difficult to enforce against him.
173These benefits outweigh the difficulties inherent in calculating an appropriate lump sum. I have also considered the parties’ ages, and the possibility that their financial situations may change in the future. I have considered that Ms. Kahsai stated she will likely retire in 2021, and her income will be reduced to her pension income. I have considered that Mr. Hagos' will have the ability to continue to earn rental income from his investment properties even after paying this lump sum.
174In weighing the advantages and disadvantages of a lump sum, I find that the benefits of a lump sum, particularly from ending the litigation between the parties and Mr. Hagos’ conduct within this litigation, and securing a support payment to Ms. Kahsai, outweighs the disadvantages.
Issue #3: Should an order be made securing spousal support against Mr. Hagos’ estate and requiring him to maintain life insurance?
175Ms. Kahsai seeks an order requiring Mr. Hagos to secure the spousal support payments by maintaining life insurance. Mr. Hagos did not disclose in his financial statements that he had a life insurance policy.
176I did find that it is appropriate for the above spousal support payments to be secured until paid in full. Mr. Hagos shall secure the above spousal support payments by maintaining life insurance coverage on his life if life insurance is available to him at a reasonable cost. He shall designate Ms. Kahsai as the irrevocable beneficiary in the amount of the spousal support that remains unpaid. If Mr. Hagos does not have life insurance, he shall provide security by registering a charge on his properties for the outstanding spousal support.
177Mr. Hagos shall be entitled to apply to the court to reduce the security from time to time to reflect the amount of spousal support that remains outstanding.
178There shall also be an order that the above spousal support payments shall be binding on Mr. Hagos' estate.
Issue #4: Should an order be made securing child support against Ms. Kahsai’s estate and requiring her to maintain life insurance?
179Mr. Hagos sought an order requiring Ms. Kahsai to secure her obligation to pay child support. Given my findings that CE ceased to be entitled to child support as of May 1, 2015, and SA ceased to be entitled to child support on May 1, 2017, Ms. Kahsai is not required to secure a child support obligation or to designate Mr. Hagos as the beneficiary of her life insurance.
Issue #5: Is Ms. Kahsai entitled to share in the equity of 272 Gracewood Crescent and share in the value of property acquired by Mr. Hagos during their cohabitation under unjust enrichment doctrine and joint family venture?
180Ms. Kahsai seeks an order granting her damages for unjust enrichment. The amount of damages she seeks is 50% of the equity in Gracewood (being $64,878), Manju (being $126,2424.88), Blake (being $145,139.68), and Carmen (being $202,808.50). Ms. Kahsai’s position is that her contribution unjustly enriched Mr. Hagos during the relationship and that she is entitled to a remedy based on a joint family venture.
181Mr. Hagos denies that he was unjustly enriched by Ms. Kahsai and takes the position that, if anything, she was unjustly enriched by him. This argument largely rests on his view, which I have rejected, that Ms. Kahsai did not make any positive contributions to him, the family, or the children throughout their relationship and was a parasite.
182I find that Mr. Hagos was unjustly enriched by Ms. Kahsai arising from a joint family venture. However, the spousal support I have awarded is intended to compensate Ms. Kahsai for her contributions in the relationship, the role she adopted, the disadvantage that accrued to her, and the advantage accrued to Mr. Hagos. Spousal support is based on high range spousal support that approximately equalizes the parties' net disposal incomes. I find that the spousal support award adequately compensates Ms. Kahsai for the unjust enrichment, such that I would not make a further order for damages.
183Unjust enrichment requires three elements to be satisfied – an enrichment, a corresponding deprivation, and an absence of juristic reasons for the enrichment. Once these three elements are satisfied, the right to relief is made out, and the issue becomes the nature of the remedy. Domestic services can satisfy the necessary elements to establish an unjust enrichment28.
184Mr. Hagos was enriched by Ms. Kahsai's domestic services during the period from 1990 to 2013 when she was primarily responsible for the house care, including grocery shopping and cooking, and childrearing. This allowed Mr. Hagos to focus his energy on building his businesses and upgrading his education.
185There is an issue regarding how much of Mr. Hagos' net worth was accumulated during the period that the parties were separated from 1985 to 1990. Mr. Hagos claimed that he had accumulated $210,000 in net worth by 1990. This was based on the value of 68 Sweetland, which Mr. Hagos purchased in 1988. Mr. Hagos' valued 68 Sweetland at $500,000 in 1990 and stated it had a $150,000 mortgage on it. But he admitted at trial that this value was "pure speculation" and he could not account for how he had accumulated $350,000 in equity in the one or two years since he purchased it, while he was making a level of income that allowed him to pay $50 per month in child support. Mr. Hagos' figures for his assets are unreliable and not credible. I am prepared to acknowledge that Mr. Hagos had some positive net worth in 1990, maybe even as high as $50,000, but the rest of his net worth was accumulated in the 23 years from 1990 to 2013, during which Ms. Kahsai’s contribution enriched him.
186Ms. Kahsai suffered a corresponding deprivation. She was out of the workforce from 1993 to 1997 due to childrearing, which delayed her career advancement and her building her employment pension. Ms. Kahsai continued to be responsible for the household even after returning to work, which I find created an ongoing impairment to her career. I also find that Ms. Kahsai contributed a disproportionate amount of her income to the family expenses, given her income in proportionate to Mr. Hagos’. The result was that Ms. Kahsai could not accumulate savings other than her pension during their relationship, while Mr. Hagos accumulated significant wealth.
187There was evidence at trial about whether Ms. Kahsai had made a direct contribution to the real estate properties and Shamar Maintenance. I find that Ms. Kahsai did help out with the rental properties and Shamar by helping out from time to time when needed, particularly in the 90’s and early 2000’s, but her main was through her responsibilities for the home and childrearing.
188I accept Ms. Kahsai's evidence that there was no juristic reason for the enrichment. Ms. Kahsai viewed their reconciliation as returning to a husband and wife relationship. She viewed them as a family and made contributions to benefit the family as a whole.
189The unjust enrichment arises out of a joint family venture. They had mutual effort. They reconciled for 23 years. They had two more children together. Ms. Kahsai was primarily responsible for parenting their three children but also assisted with Mr. Hagos' other son, who visited regularly. Both were committed to the children's success and the success of the family. However, the assets were held in Mr. Hagos' name, Mr. Hagos controlled more financial resources, and they did not share bank accounts. There was still significant financial integration between them. Both contributed their income to the family's needs. They supported family members of both parties to travel to Canada and stay with them for long periods. They travelled as a family. Ms. Kahsai was out of the workforce for a time due to childrearing. Ms. Kahsai used holiday time and family leave for family purposes.
190I also find that both parties intended to engage in a joint family venture. Ms. Kahsai certainty did. Mr. Hagos denies that he ever intended to be in a partnership or committed relationship with Ms. Kahsai, but his denials are not credible. I agree that Mr. Hagos never saw Ms. Kahsai as his equal. There are probably few people whom he would. I also agree that Mr. Hagos always intended to control the family, including the family finances. But this does not mean that he did not intend to be in a family venture with Ms. Kahsai. Mr. Hagos was in a marriage-like relationship with Ms. Kahsai. This is how he held the family out to the world and acted within it. Mr. Hagos was controlling and demeaning towards Ms. Kahsai, but Mr. Hagos expected Ms. Kahsai to fulfill her family role, which amounts to a joint family venture.
191The focus of an unjust enrichment claim arising from a joint family venture is to address the inequitable sharing of wealth accumulated during the relationship due to joint efforts. Ms. Kahsai invited me to focus on sharing the wealth on an asset by asset basis, calculating damages based on sharing equity in the real estate properties. I do not find that this is an equitable way to assess damages because it ignores the assets accumulated by Ms. Kahsai (the value of her pension) and Mr. Hagos' other debts. In determining the damages for the unjust enrichment, I have considered the parties' net worth accumulated during the period from 1990 to 2013, the period of the unjust enrichment. During this period, Mr. Hagos accumulated approximately $800,000 to $900,000 in net worth. These figures are conservation given the concerns with Mr. Hagos’ disclosure, noted above. Ms. Kahsai accumulated approximately $185,000 (her pension). I have also considered that Mr. Hagos uses much of his net worth to generate his income, from which I have ordered spousal support.
192But I find that compensatory spousal support at the high range paid as a lump sum in an amount that reflects spousal support for Ms. Kahsai's life expectancy reasonably compensates Ms. Kahsai for her contribution to Mr. Hagos' accumulations of wealth. For this reason, I do not grant a separate award of damages for unjust enrichment.
Issue #6: Should a restraining order be made against Mr. Hagos?
193I find that Ms. Kahsai has a reasonable basis to fear for her safety. Mr. Hagos' anger at Ms. Kahsai was evident at trial. He seeks to humiliate and destroy her. He views himself as being at war. His conduct is threatening and psychologically abusive, in a coercive, controlling manner.
194Pursuant to s.46 of the Family Law Act, I order:
Mr. Hagos shall abstain from associating or communicating directly or indirectly with Ms. Kahsai except through counsel concerning these proceedings, including the orders made herein;
Mr. Hagos shall not attend within 500 metres of Ms. Kahsai’s place of residence, place of employment, or any place Mr. Hagos knows Ms. Kahsai to be.
195Ms. Kahsai sought an order restraining Mr. Hagos from disbursing any e-mail regarding Ms. Kahsai, which "might" be identified as abusive, harassing, insulting, demeaning, or which "might" have a negative impact on Ms. Kahsai’s position. This order is too broad, and I am not prepared to make it.
Issue #7: Should an order be made for the return of Ms. Kahsai’s personal property?
196Ms. Kahsai sought an order permitting her to attend at the Gracewood residence to remove her remaining personal property. I order that she be allowed to do so within 30 days of this decision's release. Mr. Hagos shall not be present at the home when Ms. Kahsai attends for her belongings, but he may have an agreed upon third party present. Arrangements shall be made through Ms. Kahsai's counsel. Any disputes arising from the return of her personal property shall be returned before me.
Final Order
197The parties may submit a draft order reflecting the above terms to my attention for signature.
198Post-judgement interest shall be payable following the Courts of Justice Act.
Costs
199If the parties cannot agree on this trial's costs, the Applicant (Ms. Kahsai) may file submissions concerning costs on or before March 1, 2021. The Respondent (Mr. Hagos) may file submissions concerning costs on or before March 22, 2021. The Applicant may file a brief Reply on or before April 1, 2021. Both parties' cost submissions shall be no more than ten pages in length (Reply limited to three pages), plus any offers to settle and bills of costs, and shall be spaced one point five spaces apart, with no less than 12-point font.
Dated: January 25, 2021 Justice P MacEachern
Footnotes
- The court records confirm that Mr. Hagos did not file his Amended Answer with the court.
- I was provided with a copy of a January 14, 1985 order of Justice Fogarty of the District Court of Ontario. This order was made under the Family Law Reform Act, 1978 and the Children’s Law Reform Act. It provides for Ms. Kahsai to have custody of the oldest child, SH, with reasonable access to the Respondent. It required Mr. Hagos to pay child support of $50 per month and restrained Mr. Hagos from annoying, molesting or harassing the Applicant. It did not grant a divorce and is not the Divorce Order.
- Exhibit 32 Mr. Hagos’ affidavit sworn March 18, 2015
- There was a dispute about Ms. Kahsai’s year of birth at trial. Ms. Kahsai’s Canadian documents report her date of birth as June 5, 1958. Her evidence is that she was born on June 5, 1956, and explains the error as arising from a conversion error from the Eritrean calendar. Mr. Hagos ’s evidence was that she was born in 1956. Accordingly, I have used 1956 as her year of birth.
- Exhibits 3 and 4
- The “truth telling” letters (see Exhibits 3 and 4) illustrates Mr. Hagos’ vindictiveness, and Mr. Hagos’ evidence at trial that attacked almost every aspect of Ms. Kahsai and included several similar hurtful attacks on SH. Another example that illustrates this is Mr. Hagos’ own evidence that he continues to provide significant financial support to CE, who is still in his favour, whereas he was highly critical of SH and SA, who have fallen out of his favour.
- I reject the assertion that just because someone carries a pager, they worked as an escort. But in any event, Ms. Kahsai’s evidence was that she had a pager for her work for a period.
- Mr. Dawit Kidane also admitted that Ms. Kahsai worked outside of the home prior to CE’s birth in October of 1993, which involved her leaving for work early in the morning.
- Mr. Hagos’ own evidence was that he worked 12-hour days, seven days a week and frequently took night courses.
- Based on Ms. Kahsai’s income tax returns, filed as Exhibits.
- Exhibits 37 to 43
- Exhibit 49
- Exhibit 49
- Exhibit 49
- Exhibit 49
- Exhibit 48
- Both experts testified that they, together, spoke to Mr. Hagos’ accountant together, but the information provided by the accountant could not explain how the financial statements were reconciled. Mr. Pittman testified that he asked the accountant to provide the source sheets to show how the financial statements were calculated on two occasions, over a two-year period, but the information provided did not match the financial statements.
- Personal expenses paid for Mr. Hagos by Shamar could have been recorded as business expenses (which would have been improper), or income to him, or a draw on his shareholder account.
- See for example, Exhibits 33, 34, 35
- Exhibit 45 At trial. Mr. Hagos produced, for the first time, a series of cheques payable by him to Shamar. These cheques totaled $129,000. The cheques produced were not cancelled cheques and bank records showing the cheques were cashed were not introduced at trial. All the cheques were dated in 2018, except for one cheque for $20,000 dated November 16, 2017, and four cheques totalling $24,000 dated in 2019. Except for the cheque dated in 2017, all the cheques related to time periods after the period covered in the experts’ reports, which means that they are not relevant to determination of Mr. Hagos’ income from 2012 to 2017. Mr. Hagos did not produce Shamar’s financial statements for 2018 and 2019. These cheques were meaningless given Mr. Hagos’ failure to provide Shamar’s financial statement for the year ending January 31, 2019 or provide other evidence to show how these cheques were recorded in Shamar’s accounts.
- On March 21, 2019, Justice Labrosse ordered H to provide extensive disclosure that included Shamar Maintenance’s 2018 financial statements (for the year ending January 31, 2019) when available, along with the workbook used to generate the financial statements. This was not provided by the time of trial.
- Exhibit 45.
- Mr. Hagos’ financial statement sworn September 3, 2019
- Exhibit 20 and related oral testimony
- Exhibits 28, 29 and 30
- A period of 23 years would be based on the period from the parties’ reconciliation in 1990 to their separation in 2013.
- See Whalen-Bryne v. Bryne, 2017 ONCA 929
- Sorochan v Sorochan 1986 23 (SCC), [1986] 2 SCR 38