Court File and Parties

Court File No.: 20-72248/20-637906 Date: 2022-02-25

Superior Court of Justice - Ontario

Re: Sukhvinder Kang, Applicant And Resham Dhillon, Respondent

Before: Justice L. Sheard

Counsel: Hilary Book and Lia Boritz, counsel for the Applicant Richard P. Startek, counsel for the Respondent

Heard: January 10, 2022, Via Videoconference

Reasons for Judgment

Overview – Litigation History

[1] The following two applications were before me on January 10, 2022:

1. an Application commenced in Toronto by Sukhvinder Kang (Ms. Kang), concerning a property known municipally as 78 John Stiver Crescent, Unionville, Ontario PIN # PIN 03044-0274 (LT) PCL 32-1, SEC 65M2512; LT 32, PL 65M2512, S/T LT429274; Markham, Ontario (“the Stiver Property”) (the “Kang Application”); and
2. an Application commenced in Hamilton, Ct. File No. 20-72248, by Resham Singh Dhillon (Mr. Dhillon), against Ms. Kang concerning a property known municipally as 30 Gatcombe Cir., Richmond Hill (“the Gatcombe Property”) (the “Dhillon Application”).

[2] By Order dated November 16, 2020 in the Dhillon Application, Justice Skarica ordered that: a) the Dhillon Application be heard together with the Kang Application; b) all evidence in respect of the Dhillon Application and the Kang Application be filed in Hamilton using the court file number for the Dhillon Application; c) that all evidence filed in the Dhillon Application be deemed to have been filed in respect of the Kang Application; and d) the parties adhere to a timetable.

[3] At the outset of this hearing, counsel were invited to make submissions as to whether the Applications could be determined on the paper record, if a determination of the issues would require the court to weigh the evidence, evaluate credibility, and draw reasonable inferences from the facts.

[4] There is a substantial paper record before the court that includes: affidavits sworn by the parties, their two adult children, and by Ms. Kang’s father, Udham Kang (“Mr. Kang”); transcripts of the cross-examinations of the parties and Mr. Kang on their affidavits; and answers to undertakings. The parties also filed factums and briefs of authority.

[5] With the consent of the parties, the Kang Application proceeded before me on January 10, 2022, on the paper record. I reserved my decision, which is set out in these reasons.

[6] Counsel for Ms. Kang submitted that the Dhillon Application could also proceed on a paper record, but counsel for Mr. Dhillon disagreed, submitting that a trial was required to resolve credibility and factual disputes.

[7] I identified a separate concern respecting the Dhillon Application: the alleged beneficial owners of the Gatcombe Property were not named as parties to the Dhillon Application, and it was not clear that all had been put on notice of the Dhillon Application.

[8] By endorsement dated January 10, 2022, I ordered that the Dhillon Application proceed by way of a trial of the issues and pursuant to the directions contained in my endorsement.

Kang Application: Nature of the Proceeding and Relief Sought

[9] The Kang Application is brought pursuant to s. 3 of the Partition Act, R.S.O. 1990, c. P-4 as amended.

[10] S. 3(1) of the Partition Act contemplates a proceeding by way of application and reads:

Any person interested in land in Ontario, or the guardian of a minor entitled to the immediate possession of an estate therein, may bring an action or make an application for the partition of such land or for the sale thereof under the directions of the court if such sale is considered by the court to be more advantageous to the parties interested. R.S.O. 1990, c. P.4, s. 3 (1) .

[11] Rule 38.10 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 provides that on the hearing of an application, the presiding judge may grant the relief, or dismiss or adjourn the application, in whole or in part, or order that the whole application proceed to trial.

[12] Ms. Kang seeks an order that the Stiver Property be sold and the net proceeds of sale be divided equally between her and Mr. Dhillon, subject to: i) an accounting by Mr. Dhillon of rental income he collected from the Stiver Property; and, ii) payment by Mr. Dhillon of amounts Ms. Kang claims to be owed pursuant to a consent order, dated July 9, 2004, issued in the United Kingdom (the “UK”), by Deputy District Judge Grannum, which embodied the parties’ agreement with respect to the division of property and payment of child support (the “Consent Order”).

[13] Mr. Dhillon opposes the relief claimed by Ms. Kang on a number of grounds and asserts that:

1. Ms. Kang has no possessory interest in the Stiver Property and, therefore, she has no right to request a partition or sale of the Stiver Property pursuant to the provisions of the Partition Act;
2. Ms. Kang’s claim is barred pursuant to the Real Property Limitations Act of Ontario, R.S.O. 1990, c. L.15 (the “RPLA”), as it is brought more than 32 years after the purchase of the Stiver Property;
3. Ms. Kang’s claim is also barred pursuant to s. 15 of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B., as it is brought beyond the ultimate 15-year limitation period;
4. Ms. Kang and/or her family improperly took the net rental income on the Stiver Property for a period of 31 years; and,
5. Mr. Dhillon is the sole legal and beneficial owner of the Stiver Property.

Overview

The Parties

[14] Ms. Kang and Mr. Dhillon are former spouses of each other and the parents of two daughters, Navpreet Kaur Dhillon, born in 1992 (“Navpreet”), and Armapreet Kaur Dhillon, born in 1995 (“Armapreet”).

[15] In 1987, Ms. Kang and Mr. Dhillon entered into an Indian commitment ceremony in the UK, following which, they moved to Canada. They were married in 1989 and lived together in Canada from 1988 to late 1991, when they returned to the UK, just prior to the birth of Navpreet. The parties separated in 1996 and were divorced in the UK in 2004.

[16] Aside from a brief return to Canada in 1997-1998, Ms. Kang, Navpreet and Armapreet have lived in the UK. Aside from that brief Canada sojourn, followed by three years in Kuwait from 1998-2001, Mr. Dhillon also lived in the UK. In 2019, Mr. Dhillon returned to Canada, where he now lives.

The Stiver Property Dispute

[17] The Stiver Property was purchased in 1988 and title was registered in Mr. Dhillon’s name. Ms. Kang asserts that Mr. Kang provided the down payment on the Stiver Property, and that she and Mr. Dhillon were to be equal beneficial owners.

[18] The parties cohabited in the Stiver Property until they returned to the UK in 1991. After that, property managers were hired to rent out and manage the expenses of the Stiver Property and the Gatcombe Property. The Stiver Property remained a rental property until 2019, when Mr. Dhillon moved into it with his current spouse.

[19] In 1994, Ms. Kang and Mr. Dhillon were sued with respect to the Gatcombe Property (the “Munyal Litigation”). As a result of the Munyal Litigation, liens were registered against both the Stiver Property and the Gatcombe Property. The Munyal Litigation came to an end in 2017, and the registrations against the two properties were discharged by court order made May 1, 2018 and removed from title on May 13, 2019.

[20] In 2002, Mr. Dhillon petitioned Ms. Kang for divorce in the UK. The Consent Order embodies the parties’ agreement as to the division of property and Mr. Dhillon’s child support obligations. According to Ms. Kang, Mr. Dhillon has not made the payments required of him pursuant to the Consent Order and owes her money in respect of property division and child support.

[21] Shortly after the Consent Order, on July 19, 2004, Ms. Kang and Mr. Dhillon gave written authorization to Ursula Stewart to manage their properties in Canada. According to Ms. Kang, Ms. Stewart retained an accountant, Howard Back, to prepare tax returns to report the income earned on the Stiver Property and the Gatcombe Property. The net income was reported in Mr. Dhillon’s name and the income taxes were funded from the rental income. Recent examples of this practice can be seen in Canadian Income Tax Returns signed by Mr. Dhillon on June 25, 2018.

[22] In September 2015, Ms. Stewart resigned. From late 2015 to August 2018, Ms. Kang assumed responsibility for the rental of the Stiver Property and payment of related expenses, including income taxes reported by Mr. Dhillon.

[23] Ms. Kang provided an accounting of her management of the Stiver Property for that period. There is no other accounting with respect to the management of the Stiver Property before this court.

[24] Ms. Kang asserts that the Stiver Property could not be sold while subject to the liens registered in the Munyal Litigation. The order granting the discharge of the Munyal liens was dated May 1, 2018, following which, Ms. Kang communicated with Mr. Dhillon about selling the Stiver Property and dividing the proceeds. Ms. Kang also sought to recover from Mr. Dhillon’s one-half share of the net sale proceeds, the monies owing to her pursuant to the Consent Order.

[25] Ms. Kang asserts that in July 2018, Mr. Dhillon acknowledged Ms. Kang’s interest in the Stiver Property and that it should be sold, and the net sale proceeds divided. However, Mr. Dhillon’s position changed in August 2018, when Mr. Dhillon took over collection of the rents and asserted that he was the rightful owner of the Stiver Property.

[26] In November 2019, Mr. Dhillon and his current spouse began living in the Stiver Property. Mr. Dhillon has not provided an accounting of his management of the Stiver Property from and after August 2018.

Factual Findings on the Evidence

[27] As noted above, the materials filed on the Kang Application and the Dhillon Application were combined. As a result, the evidence and factums related to both Applications. However, except where the evidence is relevant to issues in the Kang Application, in these reasons, I do not refer to evidence that relates solely to the Dhillon Application.

[28] There are many facts that are not disputed. However, where the parties disagree on the facts, I have identified the disagreement and, where appropriate, I have made a factual finding, and have explained the basis of the finding.

[29] Where a credibility assessment was required for a factual finding, I have considered whether the evidence put forth is such “which a practical and informed person would readily recognize as reasonable in that place and in those conditions”: R. v. Kiss, 2018 ONCA 184, at para. 30, citing Faryna v. Chorny.

Ownership of the Stiver Property

(a) Source of down payment

[30] The parties agree that Ms. Kang’s father, Mr. Kang, advanced funds for the down payment on the Stiver Property, but the source of the funds is disputed.

[31] Ms. Kang says that the monies came from Mr. Kang personally; that he wanted to help Ms. Kang and Mr. Dhillon to purchase a home. That is also the sworn evidence of Mr. Kang. I accept this evidence.

[32] Mr. Dhillon agrees that the funds were advanced through Mr. Kang, but claims that the source of the funds was rents collected by Mr. Kang on 25 Sir Harry’s Road (corrected by Ms. Kang to be 57 Sir Harrys Road), Edgbaston, Birmingham, England (“Sir Harrys”), a property then owned Mr. Dhillon’s father, Darshan Singh Dhillon.

[33] I do not accept Mr. Dhillon’s evidence on this point. In reaching that conclusion, I have considered that:

(1) apart from his bald assertions, Mr. Dhillon put forth no supporting documentary or other evidence;

(2) Mr. Dhillon was inconsistent in his evidence. In his affidavit sworn December 24, 2020, he stated that the funds came from Mr. Dhillon’s father who owned Sir Harrys. At para. 4, Mr. Dhillon states that after his grandmother’s death in 1990, Mr. Kang was asked to manage Sir Harrys, and collected rent on behalf of Mr. Dhillon’s father. In his amended affidavit, sworn March 9, 2021, Mr. Dhillon states that his grandmother died in 1980, following which Mr. Kang was asked to manage Sir Harrys and collected rent on behalf of Mr. Dhillon’s father.

In his amended affidavit, Mr. Dhillon asserts that the down payment for the Stiver Property was advanced from rent that had been collected by Mr. Kang on Sir Harrys in those eight years (1980 to 1988).

In cross-examination, Mr. Dhillon waivered in his assertion that the down payment money from Mr. Kang had been funded from rents collected on Sir Harrys. At p. 24 of the transcript Mr. Dhillon states: “The money for the down payment came from my father, whether it came from the sale [of Sir Harrys] or from the rent, but it came from my father”. Mr. Dhillon conceded that he had no evidence to corroborate that assertion;

(3) Mr. Dhillon says that in 1991, Sir Harrys was transferred to Mr. Dhillon (after the purchase of the Stiver Property) and that Mr. Kang continued to collect the rent on Sir Harrys but failed to turn it over to Mr. Dhillon. Mr. Dhillon offers no explanation as to why he would have allowed that to happen, nor does he offer any evidence that he objected to that arrangement, if, indeed, it took place; and,

(4) Ms. Kang produced a rent statement dated 31/10/92 which shows that rent collected on Sir Harrys, was not by Mr. Kang, but by a property manager, Bigwood Ltd., and deposited to the credit of Mr. R [Resham] Dhillon. Faced with that evidence, Mr. Dhillon simply denied that he received the funds.

Sale of Sir Harrys

[34] Mr. Dhillon’s evidence respecting the sale of Sir Harrys is also problematic.

[35] Mr. Dhillon acknowledges that he authorized Mr. Kang to sell Sir Harrys in 2000. However, he alleges that he did not receive any of the net sale proceeds, and that they were dispersed in a manner contrary to Mr. Dhillon’s authorization and direction. Again, Mr. Dhillon does not explain how, or why, Mr. Kang would be permitted to sell Sir Harrys and convert the sale proceeds to his own use or purposes.

[36] Ms. Kang offers a different explanation as to what happened to Sir Harrys. Her explanation is both plausible and consistent with the documentation related to the parties’ divorce in 2004.

[37] In her affidavit sworn January 28, 2021, Ms. Kang states that in 1992, following the birth of Navpreet, Mr. Dhillon’s father gifted Sir Harrys to her and to Mr. Dhillon.

[38] Ms. Kang states that when they returned to the UK, she and Mr. Dhillon lived at her parents’ home. When she and Mr. Dhillon separated, he left the Kang family home, but Ms. Kang and the two children remained there. Ms. Kang stated that in 2000, Mr. Dhillon suggested that she and the children move into Sir Harrys. Ms. Kang did not wish to do so and in 2000, Mr. Dhillon agreed that Sir Harrys could be sold to help fund the purchase of a home at 30A Augustus Road, Edgbaston, Birmingham, England (“Augustus”) for Ms. Kang and the children.

[39] Ms. Kang says that Sir Harrys was sold, and the net proceeds applied toward the purchase of Augustus, however, additional mortgage financing was needed to complete the purchase of Augustus. Ms. Kang’s family assisted her with the financing and, when the mortgage was paid off, title to Augustus was transferred to Ms. Kang as sole owner.

[40] As discussed in greater detail below, Mr. Dhillon petitioned Ms. Kang for a divorce in 2002. In 2004, the parties consented to an order resolving their matrimonial property and child support claims. In cross-examination, Mr. Dhillon acknowledged that had the net sale proceeds of Sir Harrys been used toward the purchase of Augustus, Mr. Dhillon waived any claim to Augustus by virtue of the Consent Order.

(b) Purchase of the Stiver Property

[41] Title to the Stiver Property was put into Mr. Dhillon’s name; However, Ms. Kang says that she was always intended to be, and still is, a 50% beneficial owner of the Stiver Property.

[42] Based on the evidence before me, I conclude that Ms. Kang is a 50% owner of the Stiver Property.

[43] Without repeating all the evidence, in concluding that Ms. Kang is a 50% owner of the Stiver Property, I have considered the following evidence:

(i) Collection of Rental Income

[44] I have found, as a fact, that the down payment on the Stiver Property was paid by Mr. Kang personally.

[45] Mr. Dhillon acknowledges that, except for when he and Ms. Kang were living at the Stiver Property (1988 to 1991), from and after 1991, he paid none of the expenses associated with the Stiver Property.

[46] The evidence supports the finding that expenses related to the Stiver Property (including the legal costs to defend the Munyal Litigation) were funded from the rental income earned on the Stiver Property and/or the Gatcombe Property.

[47] In his affidavit sworn March 9, 2021, Mr. Dhillon asserts that the Kang family received all of the rents from the Stiver Property for nearly 30 years. While I do not need to make a factual finding on this issue, I note that Mr. Dhillon provides no documentary evidence to support this assertion nor does he explain how or why such an arrangement could have or would have occurred, particularly after his 2004 divorce, without his consent or acquiescence.

[48] Mr. Dhillon’s evidence, that he received no income from the Stiver Property for 30 years, is inconsistent with his assertion that he is the sole beneficial and legal owner of the Stiver Property.

(ii) The Consent Order and Statement of Information

[49] Mr. Dhillon petitioned for divorce in 2002. The parties then entered into negotiations to resolve property and child support issues. By letter dated December 19, 2002, Ms. Kang’s lawyers confirmed the parties’ agreement respecting the Stiver Property that: 1) its net proceeds of sale would be shared on a 50:50 basis, after deducting all costs and expenses paid or incurred by Ms. Kang and/or her family, including, among other things, the legal costs and expenses relating to the Munyal Litigation; and, 2) any accrued and future rental income would belong to Ms. Kang.

[50] As mentioned above, the Consent Order issued in the divorce proceedings was issued on July 9, 2004. Mr. Dhillon is the Petitioner and Ms. Kang, the Respondent. The Consent Order begins with the following paragraphs:

A. UPON the Petitioner and the Respondent agreeing that the terms of this Order are accepted in full and final satisfaction of all claims for income, capital and pension sharing orders which either may be entitled to bring against the other in any jurisdiction, howsoever arising.

B. AND UPON the parties having agreed that the net sale proceeds of the property known as 78 Stiver Crescent, Unionville, Ontario, Canada, will be shared between them in equal shares and that as from the date of this Order, any expenditure incurred that is not covered by rental payments received from today, shall be borne equally between the parties. (Emphasis added)

[51] At the time of the Consent Order, Mr. Dhillon also provided Ms. Kang with a “Statement of Information for a Consent Order” in which he listed his “capital resources”. The list includes three properties. Two properties are shown to be in Mr. Dhillon’s “sole name”. However, with respect to the Stiver Property, Mr. Dhillon states that he has a “50% joint interest”.

[52] Ms. Kang states that she has the other 50% “joint interest”.

[53] Mr. Dhillon objects to this court relying on the Consent Order or the Information Statement as evidence of his agreement or acknowledgment that Ms. Kang has a 50% interest in the Stiver Property. He says that he agreed to the terms of the Consent Order without legal advice, or, at least, without the legal advice he needed or should have asked for, and that he was under duress.

[54] As will be seen below, the evidence does not support Mr. Dhillon’s claims.

[55] Mr. Dhillon’s assertion that he was under duress when he agreed to the Consent Order is set out in para. 34 of his affidavit sworn December 24, 2020, as amended by his affidavit sworn March 9, 2021, where Mr. Dhillon states:

The United Kingdom Order was on consent. It was drawn up by the Respondent and her counsel. The Respondent knew that I had met someone and wished to remarry. I was threatened with either signing the Consent Order with no legal advice or not obtaining a divorce. I had been threatened by the Respondent's family in the past and agreed to sign anything at that point in order to remove myself from the Kang extended family.

[56] Mr. Dhillon’s claims are seriously undermined by the letter produced by Ms. Kang, sent by Mr. Dhillon’s divorce lawyers to Ms. Kang’s lawyers, dated April 16, 2004. The letter reads, in part, as follows:

We enclose the Consent Order duly signed and our client’s Statement of Information.

You will note that our client intends to re-marry … a Stefaunia Scott from the United States.

We trust your client will have no objection to the Consent Order proceeding.

Obviously, it is imperative that we apply for the Decree Absolute without further delay and unless we hear from you to the contrary by 4 o’clock pm on Monday 19 th April we will proceed to apply for the Decree Absolute on Tuesday 20 th April.

[57] This letter shows that Mr. Dhillon was represented by counsel in the divorce proceedings; it conflicts with his claim that he did not have legal advice or that these documents were prepared by Ms. Kang’s lawyers, and that he had no choice but to sign them.

[58] In cross-examination, when confronted with this evidence, Mr. Dhillon acknowledged that he had received “some advice” but claimed that “when it came to the consent order my legal people on my side were not with me.” Mr. Dhillon asserted that he had to sign the Consent Order or he would not get the Decree Absolute that he needed to carry on with his life. Mr. Dhillon stated that he was in front of the judge when he was asked to sign the documents and to agree to the conditions presented to him.

[59] Mr. Dhillon also acknowledged that he was pushing his solicitors to get the divorce through and asserted that his own lawyers were “pushing” for him to get his divorce through. Mr. Dhillon claims that he was not aware of what he needed to do or that he should have pushed his own lawyers. Notwithstanding those allegations, Mr. Dhillon acknowledged that he never complained about his lawyers to any professional organization; that he agreed to the terms of the Consent Order and never sought to vary it or set it aside.

[60] Based on Mr. Dhillon’s own evidence, I conclude that the Consent Order embodied the terms to which he had agreed and was based on his Statement of Information. Apart from his assertion of duress exerted by the Kang family, made by Mr. Dhillon for the first time in 2020, there is no other, or independent, evidence that might undermine the validity or bona fides of the Consent Order or the Statement of Information.

[61] The clear and obvious inference to be drawn from the Consent Order and the Statement of Information is that Mr. Dhillon acknowledged and agreed that he had only a 50% interest in the Stiver Property and that Ms. Kang the other 50% interest.

(iii) Events on and after 2015

[62] On cross-examination, Mr. Dhillon agreed that prior to 2020, when the Applications were commenced, Mr. Dhillon had never told Ms. Kang that she was not entitled to an interest in the Stiver Property.

[63] In September 2015, Ms. Stewart resigned as property manager. By email of September 20, 2015, Ms. Kang wrote to Mr. Dhillon. She advised him that Ms. Stewart had resigned and that the house was empty. Ms. Kang advised that she would be in Canada between September 22 and 26, 2015 and would “have to sort out an agent to look after the properties”. Ms. Kang also said that if Mr. Dhillon needed anything from the basement, he was welcome to attend, noting that at some point they would have to empty the basement. Ms. Kang says that her email is referring to the basement of the Stiver Property, where she still had personal possessions stored from when she and Mr. Dhillon lived there. Ms. Kang invited Mr. Dhillon to join her to retrieve his personal property.

[64] Mr. Dhillon responded to this email with his own which reads, in part:

Hi Shin,

I am already going to Canada from October 16 to October 31. I can check it then.

If you want me to do anything whilst I’m there I will.

Only thing I am missing is my Canadian Citizen Card.

Am home now if you want to call.

[65] In cross-examination Mr. Dhillon acknowledged that when he came to Canada, he did not visit “the property”, he did not speak to Ms. Stewart, and he left management of the Stiver Property to the Kang family.

[66] Ms. Kang says that in late 2015, she and her brother, Jagdeep Kang, travelled to Canada to find a new tenant for the Stiver Property, meet with new potential property managers, with Ms. Stewart, and with the accountant who had been preparing the tax returns over the years. Ms. Kang was unable to obtain a breakdown of income and expenses.

[67] I accept the evidence of Ms. Kang and of Mr. Dhillon that neither sought an accounting from the other with respect to the income and expenses related to the Stiver Property prior to 2015.

[68] As noted above, Ms. Kang assumed responsibility for renting out the Stiver Property and paying the related expenses. Paragraph 59 of Ms. Kang’s affidavit sworn November 27, 2020, contains a summary of income and expenses for the Stiver Property from November 2015 to August 2018, showing a net profit of $19,915.

[69] After the order was granted discharging the Munyal liens, the parties engaged in an email exchange respecting the sale of the Stiver Property. The liens were ultimately removed from the title to the Stiver Property on May 13, 2019.

[70] Mr. Dhillon’s emails to Ms. Kang are informative and are reproduced below (attachments are referenced, but not reproduced here):

On 25 Jun 2018, at 17:49, Resham Dhillon < resham_dhillon@hotmail.com > wrote:

Hi Shin

Please find attached the signed documents as requested.

I do realise that the taxes and maintenance of the property has been handled by the family, but none of these major expenditures were ever shared with me. If you have a list of the expenditures then could you forward me details of what was done and when? I also did not not know that the place was unrented for any period of time. (sic)

I would like us to sell the house and split the proceeds. So when I will see what we can do to put the property on the market.

Do you want me to do that, as I can go to Canada and put it on the market. I can keep you posted as to which Real Estate Agent is used.

Has the lien been removed from the house yet?

Take care.

Resham

Resham Dhillon

resham@reshamdhillon.com

+44 7584 666636

<78 John Stiver Tax 3 - 2018-06-25.pdf>

<78 John Stiver Tax1 - 2018-06-25.pdf>

<78 John Stiver Tax2 - 2018-06-25.pdf>

<Grant Thornton 2018-06-25.pdf>

[71] Ms. Kang says that Mr. Dhillon’s email was referring to the Stiver Property. Mr. Dhillon disputes that and says that the “house” he was referring to was the Gatcombe Property. In support of her submission, Ms. Kang asks the court to note that the attachments referenced in the email relate solely to the Stiver Property.

[72] In Mr. Dhillon’s email of July 3, 2018, Ms. Kang says he is clearly referring to the Stiver Property. Mr. Dhillon’s email of July 3, 2018 is reproduced below:

From: "Resham Dhillon" Resham@reshamdhillon.com

To: "sukhvinder.kang@talk21.com" sukhvinder.kang@talk21.com

Sent: Tuesday, 3 Jul, 18 At 15:50

Subject: Re: Tax Return Documentation

Hi Shin

Now that the taxes have been filed, can you answer some of the following questions?

1. Has the lien been removed?
2. Is the property rented at the moment?
3. Who is managing the property in Canada? After Penny and Ursula, so one must have managed the property?
4. What is the rental income.
5. Who has a set of keys to property as I would like to go see it for myself?
6. Could I get a key to the room in the basement to see if there is anything that is worth keeping after 26 years?

As is said in my previous letter, I would like to take my share out of the property so we can either sell it or if you want, you could opt to buy my share.

Thanks

Resham

[73] The uncontradicted evidence is that Ms. Kang and Mr. Dhillon only lived in the Stiver Property; they never lived in the Gatcombe Property, which was rented from the time of its purchase. Ms. Kang states, and I accept, that when Mr. Dhillon is asking for a key to the room in the basement, he was referring to the basement of the Stiver Property where the parties had stored personal items when they left the Stiver Property in 1991.

[74] I also accept Ms. Kang’s assertion that in his July 3, 2018 email, Mr. Dhillon is acknowledging that he and Ms. Kang share ownership of the Stiver Property.

[75] Taken together, the emails, the Consent Order, and the Statement of Information all strongly support my conclusion that Ms. Kang and Mr. Dhillon are equal co-owners of the Stiver Property. However, while that evidence is sufficient to allow me to reach that conclusion, there is other evidence that supports my factual finding. Evidence, for example, that Mr. Dhillon signed documents in 2017 relating to the Gatcombe Property, and the circumstances surrounding his signing adds to the already overwhelming evidence, that Ms. Kang and Mr. Dhillon shared ownership of the Stiver Property.

[76] In short, it is evidence from Mr. Dhillon that leads me to conclude that at all material times, he knew and acknowledged that, although his was the sole name on the title, beneficial ownership of the Stiver Property was shared equally between him and Ms. Kang.

Accounting of Rents and payment of Amounts owing under the Consent Order

[77] As noted above, neither party has put forward an accounting with respect to rents collected and expenses paid relating to the Stiver Property prior to November 2015. It is reasonable to assume that if such evidence were available, it would have been produced. Without that evidence, I am unable to make any findings with respect to monies that may be due and owing to either party with respect to rents collected on the Stiver Property between 1991 and November 2015. There might also be applicable legal issues - estoppel and limitation periods – that would also need to be addressed, were such claims to be pursued by either party.

[78] The Consent Order sets out the lump sum and interest payments to be made by Mr. Dhillon, the last of which was to be made within 10 years of the date of the Consent Order, and the periodic child support payments to be made by Mr. Dhillon for the support of Navpreet and Armapreet.

[79] Ms. Kang says that Mr. Dhillon did not make the payments required of him under the Consent Order. She also acknowledges that she did not take Mr. Dhillon to court to enforce the Consent Order. Ms. Kang explains that she had a good relationship with Mr. Dhillon and that he initially promised to pay her when he got a job, and later orally agreed to pay her out of the proceeds of the sale of the Stiver Property.

[80] Mr. Dhillon acknowledges that he did not make all the payments required of him under the Consent Order but says that his financial obligations under the Consent Order, or a portion of them at least, were satisfied from the net income earned on the Stiver Property and the Gatcombe Property.

[81] I find Mr. Dhillon’s assertion is little more than speculation: on cross-examination, Mr. Dhillon conceded that he had no knowledge of how much rent was collected on the Stiver Property or what was left over after expenses were paid.

[82] Based on the evidence before me, I am unable to determine whether there was an oral agreement between the parties that the proceeds from the sale of the Stiver Property would be applied against amounts owing by Mr. Dhillon under the Consent Order. For this reason alone, I would deny this relief to Ms. Kang.

[83] In addition, there are other reasons for denying that relief to Ms. Kang. Firstly, absent an application to enforce a foreign order, this court does not have jurisdiction to enforce the Consent Order. Secondly, the Consent Order was made almost 16 years prior to the commencement of the Kang Application. The delay in seeking to enforce the Consent Order is an issue that must be determined by a court on an appropriate application. Neither issue is addressed in the materials before me.

[84] I make no finding with respect to whether the Consent Order could be enforced, were an appropriate application to be brought, and/or whether Ms. Kang might enforce payment from to Mr. Dhillon’s share of the net sale proceeds of the Stiver Property.

Accounting of rents from November 2015 to the current date

[85] As co-owners of the Stiver Property, Ms. Kang and Mr. Dhillon are equally entitled to the possession of it and equally entitled to share in the net rental income earned from it.

[86] I accept Ms. Kang’s evidence as to the expenses that she paid from the rental income earned on the Stiver Property and that she has provided a proper accounting for the period November 2015 to August 2018.

[87] However, there was no evidence from Mr. Dhillon as to the rent he collected or the expenses he paid after he assumed control over the Stiver Property in August 2018, for which Ms. Kang is entitled to receive an accounting.

[88] With respect to his occupancy of the Stiver Property from and after November 2019, I find that Mr. Dhillon is liable to pay Ms. Kang rent in an amount equal to 50% of the rental income that would otherwise have been earned on the Stiver Property, after deducting Ms. Kang’s 50% of the usual expenses that were paid from rental income, notional and impugned.

The Law and analysis

Entitlement to an order that the Stiver Property be sold

[89] Based on my factual findings, I conclude that when title was placed in the name of Mr. Dhillon in 1988, the intention of both Mr. Dhillon and Ms. Kang was that each would have a 50% beneficial ownership in the Stiver Property.

[90] When she resolved her property claims at the time of the parties’ divorce, Ms. Kang accepted and relied on Mr. Dhillon’s acknowledgement that she was a 50% owner of the Stiver Property.

[91] Moreover, in 2018, Mr. Dhillon acknowledged that he and Ms. Kang shared ownership of the Stiver Property and that, with the Munyal liens discharged, he was ready and willing to sell the Stiver Property and to share the proceeds with Ms. Kang.

[92] In the face of my findings on the evidence, to allow Mr. Dhillon to retain 100% ownership of the Stiver Property because his name is on the title, would unfairly enrich him to the deprivation of Ms. Kang, for which there is no juristic reason: Silva v. Bettencourt.

[93] As a 50% equitable owner, Ms. Kang has a prima facie right to partition or sale of the Stiver Property: Davis v. Davis, [1953] OR 23.

[94] Partition or sale of the Stiver Property should be ordered unless there is a sufficient reason to refuse to do so. The onus is on Mr. Dhillon to demonstrate sufficient reasons for refusal: Silva v. Bettencourt.

[95] One reason to refuse to order the sale of the Stiver Property would be if to do so would cause hardship to Mr. Dhillon of such a nature as to amount to oppression: Greenbanktree Power Corp. v. Coinamatic Canada Inc..

[96] Mr. Dhillon has provided no reason to refuse to grant Ms. Kang’s request for an order directing the sale of the Stiver Property. To the contrary, in his 2018 emails, Mr. Dhillon supported the sale of the Stiver Property and dividing the proceeds with Ms. Kang.

[97] The fact that after agreeing to its sale in July 2018, Mr. Dhillon then chose to move into the Stiver Property in November 2019, does not meet the test set out in Greenbanktree. There is no evidence that, in seeking to sell the Stiver Property, Ms. Kang has acted vexatiously, oppressively or with malice. The same cannot be said of Mr. Dhillon.

[98] Mr. Dhillon moved into the Stiver Property after receiving correspondence from Ms. Kang’s lawyers in April 2019, if not earlier, confirming their instructions to enforce the Consent Order and to proceed with the sale of the Stiver Property.

[99] Mr. Dhillon cannot now rely on his occupancy of the Stiver Property as a basis to resist or delay its sale.

Limitation periods

[100] Mr. Dhillon submits that Ms. Kang’s claim is barred pursuant to section 4 of the Real Property Limitations Act, R.S.O. 1990, c. L.15 (the “RPLA”) which states as follows:

No person shall make an entry or distress, or bring an action to recover any land or rent, but within ten years next after the time at which the right to make such entry or distress, or to bring such action, first accrued to some person through whom the person making or bringing it claims, or if the right did not accrue to any person through whom that person claims, then within ten years next after the time at which the right to make such entry or distress, or to bring such action, first accrued to the person making or bringing it. R.S.O. 1990, c. L.15, s. 4 .

[101] The limitation period in the RPLA is subject to the discoverability principle: Pioneer Corp. v. Godfrey, 2019 SCC 42, at para 34; Khan v. Taji, 2020 ONSC 674 at paras 62 – 77; Wong v. Wong, 2019 ONSC 3927, at paras 145 – 146.

[102] The delay in selling the Stiver Property is fully explained: title to the Stiver Property was subject to the Munyal lien, which was not deleted from title until 2019. Mr. Dhillon’s email of July 3, 2018, inquiring as to whether the lien had been removed, supports that conclusion.

[103] I accept Ms. Kang’s submission that the Stiver Property could not be sold until the Munyal lien was removed and, accordingly, her claim to enforce its sale did not accrue until, at the earliest, May 1, 2018, when the Munyal lien was discharged by court order. The Kang Application was commenced on March 12, 2020, well within the 10-year limitation period found in the RPLA.

[104] Ms. Kang also submits that her claim against Mr. Dhillon could not have been “discovered” until August 2018, when, after initially agreeing to sell it, for the first time, Mr. Dhillon refused to cooperate in selling the Stiver Property or to recognize Ms. Kang’s interest in it.

[105] I accept Ms. Kang’s submissions and agree that her cause of action could not have been “discovered” until August 2018, which is the date from which any limitation period should run.

Ultimate Limitation Period

[106] Mr. Dhillon submits that Ms. Kang’s claim is also barred pursuant to of the Limitations Act, 2002, c. 24, Sched. B, the relevant portions of s. 15 are set out below:

15 (1) Even if the limitation period established by any other section of this Act in respect of a claim has not expired, no proceeding shall be commenced in respect of the claim after the expiry of a limitation period established by this section.

General

(2) No proceeding shall be commenced in respect of any claim after the 15th anniversary of the day on which the act or omission on which the claim is based took place. 2002, c. 24, Sched. B, s. 15 (2).

Day of occurrence

(6) For the purposes of this section, the day an act or omission on which a claim is based takes place is,

(a) in the case of a continuous act or omission, the day on which the act or omission ceases;

(b) in the case of a series of acts or omissions in respect of the same obligation, the day on which the last act or omission in the series occurs;

(c) in the case of an act or omission in respect of a demand obligation, the first day on which there is a failure to perform the obligation, once a demand for the performance is made. 2002, c. 24, Sched. B, s. 15 (6); 2008, c. 19, Sched. L, s. 2 (1).

[107] In my view, for the purposes of the limitation period under the Limitations Act, the “act or omission” that would commence the running of the limitation period occurred in August 2018, when Mr. Dhillon resiled from his long-standing acknowledgement and agreement that Ms. Kang was a 50% owner of the Stiver Property.

[108] In addition, while my conclusions above as to the commencement of the limitation periods are sufficient, were I required to do so, I would also have found that Mr. Dhillon’s acknowledgment in his email of July 3, 2018 would have renewed or revived the limitation period, had they expired.

[109] I conclude, therefore, that Ms. Kang’s claims are not statute-barred.

Disposition

[110] Ms. Kang’s application is granted, in part, and the following is ordered:

A. Ownership and sale of the Stiver Property

1. Ms. Kang is hereby declared a 50% beneficial owner of the Stiver Property.
2. Unless the parties, in writing, agree otherwise, the Stiver Property shall be sold on the following terms: a. It is to be listed for sale forthwith and, except as is otherwise provided in these reasons, the net proceeds of sale shall be divided equally between the parties, after payment of the expenses usual to a sale, including, but not limited to, real estate commission and legal fees. b. The parties shall promptly sign a joint listing agreement with a licensed real estate agent and shall sign any other documents reasonably required by the listing agents or the lawyer acting on the sale. If they cannot agree on an agent, and/or on a lawyer to act for them on the sale, then Ms. Kang may enter into a listing agreement without Mr. Dhillon’s approval or authorization and shall retain a real estate lawyer of her choice to act on the sale. c. The parties shall take reasonable steps to list and market the Stiver Property as recommended by the licensed real estate agent with whom they (or Ms. Kang) have a listing agreement. If Ms. Kang has, by the terms of this order, assumed carriage of the sale of the Stiver Property, she, or her agents, shall provide Mr. Dhillon with reasonable advance notice of entry to the Stiver Property, and Mr. Dhillon shall cooperate with the showing of the Stiver Property so as to achieve its effective marketing and sale. d. The parties shall choose a closing date that takes into account that Mr. Dhillon is living in the Stiver Property, but, in any event, absent the parties’ agreement otherwise, shall not exceed 90 days from the date of acceptance of the offer. e. All offers to purchase must be sealed and received by a bid deadline date, as determined by the listing agents, but not less than four weeks from the date the property was listed for sale. No offers to purchase that are received after the bid deadline date may be considered. f. All offers to purchase shall be opened at the same time after the bid deadline has passed; and, g. The parties, or their agents, shall be entitled to attend the opening of the offers.

B. Accounting of Rent

3. Mr. Dhillon shall be entitled to a credit for his 50% share of the net income earned on the Stiver Property for the period from November 2015 to August 2018, as per the accounting provided by Ms. Kang.
4. Ms. Kang shall be entitled to an amount equal to 50% of the net rental income that was, or would have been, earned on the Stiver Property from and after August 2018, to the date on which Mr. Dhillon vacates the Stiver Property, or the closing of its sale: whichever comes first.
5. The rents and expenses claimed and charged shall be based on the rents and expenses earned and paid as reported by Ms. Kang, subject to an increase in the rental income as may have been permitted by law on and after Mr. Dhillon assumed control of the property in August 2018, and adjusted, as required, to reflect that Mr. Dhillon is occupying the Stiver Property.
6. If the Stiver Property is vacant prior to the closing of its sale, the carrying costs shall be paid from sale proceeds.

C. Claims for payments owing under the Consent Order

7. Ms. Kang’s claim for an order that any amounts that may be due and owing to her under the Consent Order from Mr. Dhillon’s share of the net sale proceeds of the Stiver Property is dismissed, without prejudice to Ms. Kang’s right to seek to enforce the Consent Order in this jurisdiction and, among other things, in that proceeding, to seek an order for a hold-back of any portion of the net sale proceeds of the Stiver Property to satisfy that claim.
8. While it is hoped that the parties will cooperate in the completion of the sale of the Stiver Property and the accounting ordered above, if required, the parties may move for further directions from a judge of this Court.

Costs

[111] Ms. Kang has had considerable success and is presumptively entitled to expect to be awarded costs in respect of the Kang Application.

[112] I would urge the parties to try to agree on costs, but if they cannot do so, then costs submissions may be made as follows:

1. within 14 days of the date of the release of this decision, Ms. Kang shall serve and file her written costs submissions, not to exceed 3 pages, double-spaced, together with a draft bill of costs and copies of any pertinent offers; and
2. Mr. Dhillon shall serve and file his responding submissions of no more than 3 pages, double-spaced, together with a draft bill of costs and copies of any pertinent offers, within 7 days of the service upon him of Ms. Kang’s costs submissions;
3. reply submissions, if any, may be delivered within 7 days of delivery of Mr. Dhillon’s costs submissions and shall not exceed one page, double-spaced.

[113] If no submissions are received within 21 days of the date of the release of this decision, the parties will be deemed to have resolved the issue of the costs and costs will not be determined by me.

L. Sheard J.

Date: February 25, 2022