COURT FILE NO.: FS-18-00003600 DATE: 20220323

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

David Harris Applicant – and – Nazie Malekzadeh Respondent

Counsel: John Sheard, for the Applicant Elizabeth Mourao, for the Respondent

HEARD: October 13, 14, 18, 19, 20, 21, 29 and December 15, 2021

J. Steele J.

Overview

[1] This trial was financially focused. The court was asked to determine incomes for support purposes, the appropriate child and spousal support quantum, and equalization of property. The respondent, Nazie Malekzadeh, asks for an unequal division of net family property and claims a 50 percent interest in the Canterbury Condo (defined below) by way of constructive trust and/or resulting trust, and seeks half of the proceeds of sale of the condo. The applicant, David Harris, claims significant post-separation adjustments.

[2] As discussed below, there are significantly different versions of the financial history leading up to this trial. There are also complex transactions involving donations to a charitable organization, gifts of valuable Indigenous art, and commissions or other payments related to the donations and art gifts. There are many mystery transactions on the parties’ Lines of Credit (defined below) between 2009 and 2017 that will remain a mystery. Ms. Malekzadeh takes the position that Mr. Harris has diverted significant family funds to, among other things, other women and his cosmetic surgeries. Mr. Harris’ position is that Ms. Malekzadeh has sent significant sums of money to her family members and her brother’s business, Julien Armand Inc. (“Julien Armand”) during the marriage and afterwards. Mr. Harris also claims that Ms. Malekzadeh earns an income from Julien Armand and that Ms. Malekzadeh’s 25 percent interest in the company is a valuable asset.

[3] There are very different accounts as to the level of involvement of Ms. Malekzadeh in the operation of the businesses and the financial affairs of the parties. Ms. Malekzadeh says that she was the primary caregiver of the children throughout the marriage and had limited involvement in the businesses or family financial affairs. Her position is that Mr. Harris always oversaw the financial end of the business. Mr. Harris claims that the parties shared parental responsibilities throughout their marriage. He says that the parties were equal participants in the businesses.

[4] For the reasons set out below, I have determined:

a. Mr. Harris shall have annual income imputed to him of $75,000.00 for support purposes. b. Ms. Malekzadeh is not earning income from Julien Armand. Her income for support purposes shall be her income on her T1 general. c. Ms. Malekzadeh assisted in the family businesses, but this was part-time, in support of Mr. Harris, and secondary to her role as the primary caregiver of their children. d. Ms. Malekzadeh is entitled to spousal support on both a compensatory and needs basis. e. The Canterbury Condo was purchased during the marriage using joint funds. Ms. Malekzadeh is entitled to half of the proceeds of sale of the condominium. f. An unequal division of net family property is not appropriate. g. The contested post-separation payments made on the parties’ joint RBC LOC (defined below) were made from joint funds.

Background

[5] The history leading up to the litigation in this case reads as two completely different narratives. There are very few facts that are agreed upon.

The Parties

[6] The parties met in 1994 in Toronto. At that time, Mr. Harris was enrolled in the primary junior teacher’s college program at Lakehead University in Thunder Bay. Ms. Malekzadeh was working full time in retail in Toronto.

[7] Ms. Malekzadeh moved from Toronto to live with Mr. Harris in Thunder Bay in August 1995.

[8] The parties were married on May 25, 1996 and had three children together: Y.H., born on February 16, 1997, L.H., born on October 10, 2001, and A.H., born on September 2, 2009. The eldest child is now independent. L.H. and A.H. reside with Ms. Malekzadeh. L.H. is in her second year at university and A.H. is in grade 7.

[9] The parties moved to Cape Dorset in late summer of 1996 for Mr. Harris to pursue a teaching opportunity. Cape Dorset is a small town of about 1,200 inhabitants in Nunavut (then the Northwest Territories). This is where the parties’ interest in Inuit art was spawned. Their first child (Y.H.) was born in Iqaluit.

[10] The parties moved back to Toronto in 1997.

[11] Mr. Harris and Ms. Malekzadeh separated in March 2013. At the time of separation, the children were ages 16, 11 and 3.

[12] Mr. Harris, age 51, now resides with his common law spouse and their 2 young children (ages 4 and 6) in Moncton, New Brunswick.

[13] Ms. Malekzadeh has faced significant health issues and is currently battling cancer. She is 54 and does not have a post-secondary education.

The Harris Gallery

[14] After the parties moved back to Toronto from Cape Dorset in 1997, the Harris Gallery was established by Mr. Harris and Ms. Malekzadeh as a partnership. It opened on or about November 8, 1998.

[15] In or around 2005, the business continued as a newly created corporation, established as the Harris Gallery Inc. In early 2007, after entering into a licensing agreement with the Museum of Inuit Art (the “MIA” or the “Museum”), Harris Gallery Inc. changed its corporate name to MIA Gallery Inc. (for ease, I have referred to the Harris Gallery throughout as the Harris Gallery irrespective of its iteration at the relevant times).

[16] At the time the Harris Gallery was incorporated Ms. Malekzadeh’s brother, her father and a third party, Randy Lazarus, together took a 25 percent stake in the company (the “Other Shareholders”).

[17] The Harris Gallery was engaged in the business of buying and selling Inuit art.

[18] The Harris Gallery closed permanently in 2016. While the Harris Gallery has not operated for several years, it has still not been dissolved.

[19] Mr. Harris and Ms. Malekzadeh remain in legal control of the Harris Gallery.

The Museum of Inuit Art

[20] The Museum was registered as a charity in 2006 and opened to the public in 2007.

[21] Mr. Harris’ evidence is that in order for the MIA to receive its charitable status, Mr. Harris and Ms. Malekzadeh had to buy out Harris Gallery’s Other Shareholders, which was done in 2005. To do so, Mr. Harris’ evidence is that the parties’ line of credit was used to pay the Other Shareholders $225,000.00, being 25 percent of the appraised $900,000.00 value of the Harris Gallery business at the time. His expectation was that the MIA would eventually buy out his and Ms. Malekzadeh’s shares in the Harris Gallery. The Museum never bought out the parties’ shares in the Harris Gallery.

[22] In 2006, the Harris Gallery and the MIA entered into a licensing agreement pursuant to which the Harris Gallery served as the official gallery of the MIA. Under this agreement, the Harris Gallery would transfer all profits to the MIA and operate as a museum/gallery enterprise. No licensing agreement was produced in evidence at trial.

[23] Mr. Harris’ evidence is that the parties used their Lines of Credit to contribute to building the MIA, and in total they advanced approximately $625,000.00 to the MIA (the “Loans”). His evidence is that, as the MIA operated, the Loans remained unpaid. Instead of repayment, the MIA issued cheques to the parties each year from 2006-2010 to cover the interest on the Lines of Credit due to the Loans.

[24] The other source of contributions to the MIA came from a gifting arrangement described below.

[25] Mr. Harris resigned from the Harris Gallery and the Museum in the spring of 2013.

[26] The Museum closed in 2016.

Olive Consulting

[27] After the parties separated, Olive Consulting and Management Limited (“Olive Consulting”) was incorporated in or around May 2014.

[28] Mr. Harris’ evidence is that Olive Consulting was established for the purpose of paying down debts from the parties’ loans made to the Museum and the Harris Gallery and to provide a structure for the Museum’s purchase of the Harris Gallery.

[29] Olive Consulting operated as a service business, earning service fee income. It did not hold assets.

[30] The business was dissolved in or around November 2018.

Julien Armand

[31] Julien Armand was incorporated on or about July 29, 2011.

[32] Ms. Malekzadeh owns 25 percent of the shares of Julien Armand. The other 75 percent of the shares are owned by Bahar Kiaee, Ms. Malekzadeh’s brother’s spouse. Ms. Kiaee and Ms. Malekzadeh were the original directors of the corporation.

[33] As discussed in greater detail below, the parties diverge significantly on their recollection of Julien Armand.

The Condo at 30 Canterbury Place

[34] On September 21, 2010, Mr. Harris purchased 30 Canterbury Place, Unit 1510 for $499,000.00 (the “Canterbury Condo”). Title to the Canterbury Condo was placed solely in Mr. Harris’ name.

[35] When the parties separated in March 2013, Ms. Malekzadeh and the children continued to reside in the jointly owned family home at 203 Olive Avenue, Toronto (the “Matrimonial Home”). Mr. Harris moved to the Canterbury Condo.

[36] In late 2020 Mr. Harris accepted an offer of purchase and sale on the Canterbury Condo. The Canterbury Condo sold for $850,000.00 with a closing date of January 12, 2021. On closing, the real estate lawyer paid out disbursements including Mr. Harris’ TD LOC (defined below) secured against the Canterbury Condo. Mr. Harris received $436,495.31.

The Lines of Credit and other Financial Transactions

[37] There are two lines of credit that are central to this litigation: Mr. Harris’ personal TD Line of Credit (the “TD LOC”) and a joint RBC Line of Credit (the “RBC LOC”, and together with the TD LOC, the “Lines of Credit”).

[38] At the time of separation, the parties owed approximately $944,500.00 on the 2 Lines of Credit. A significant portion of the debt came from the Loans to the Museum and the Harris Gallery.

[39] From December 2018 to January 2020, the parties jointly retained Matthew Krofchick of Krofchick Valuations to carry out a forensic tracing of the Lines of Credit. After significant time and energy was expended by Mr. Krofchick to try to recreate a 10-year financial tracing of the parties’ lives, Mr. Krofchick advised that he would not provide a report of his work, due to significant missing records and untraceable transactions.

[40] The evidence of the parties is inconsistent as to who had access to the parties’ financial records including the Lines of Credit records. Ms. Malekzadeh’s evidence is that “[u]p to the time of closing [end of 2016], David continued to have full access to the matrimonial home. David took all possessions, paperwork, and contents he wished. I was left with the balance.” Mr. Harris’ evidence is that when the parties separated “[their] documents and records remained in the matrimonial home” and that “[t]he records kept at the matrimonial home held much of the missing information, for example records related to our renovation, or large HST payments made to the government.”

[41] Ms. Malekzadeh, with Mr. Harris’ consent, withdrew $294,000.00 from the RBC LOC in 2016 to be used for the purchase of a condominium for her to reside in with the children.

[42] The Matrimonial Home sold for $2,279,769.00 in late 2016 and the sale closed on January 10, 2017. $600,862.48 of the proceeds of sale of the Matrimonial Home were used to pay and close the RBC LOC. Shortly after closing, $550,000.00 of the proceeds was released to Ms. Malekzadeh and $100,000.00 was released to Mr. Harris.

[43] The amount of the Matrimonial Home sale proceeds that is now remaining in the trust account with Ricketts Harris LLP is $173,477.06. There is also $38,640.00 owing to the parties from Right at Home Realty for commission/deposit overpayments (the trust amount plus the amount owed from Right at Home Realty to the parties = $212,117.06).

[44] Mr. Harris commenced this litigation by filing an application in June 2018. He sought the following relief: a divorce, joint custody of the children, shared parenting time with A.H., child support payable by Ms. Malekzadeh and a proportionate sharing of section 7 costs, spousal support payable by Ms. Malekzadeh to Mr. Harris, and equalization of property.

[45] In her answer, Ms. Malekzadeh sought the following relief: a divorce, joint custody of the children, primary residence of the children, minimum imputation of income of $100,000.00 to Mr. Harris, child support payable by Mr. Harris to Ms. Malekzadeh and a proportionate sharing of section 7 costs, spousal support payable by Mr. Harris, unequal division of property, and a trust claim, if required, to the Canterbury Condo.

[46] At the first case conference, held before Justice Akbarali, among other things, Mr. Harris consented to pay Ms. Malekzadeh ongoing uncharacterized support payments of $2,500.00 per month effective October 1, 2018. The parties also consented to the release of certain funds from the proceeds of sale of the Matrimonial Home as follows: $100,000.00 payable to Mr. Harris as an advance on equalization and, $52,500.00 payable to Ms. Malekzadeh on account of arrears of uncharacterized support.

[47] Mr. Harris has been making the uncharacterized support payments of $2,500.00 per month since that time. He says that he has financed his support payments using his personal line of credit and depleting the majority of his Tax Free Savings Account.

[48] On November 23, 2020, the parties agreed to a final order resolving all parenting issues and permitting Mr. Harris to sever the divorce from the corollary issues.

[49] At the Trial Management Conference, by endorsement dated April 19, 2021, Justice Shore ordered that $100,000.00 from the net proceeds of sale of the Matrimonial Home currently held in trust be released to Ms. Malekzadeh as an uncharacterized amount.

Analysis

1. Disclosure

[50] Mr. Harris takes the position that Ms. Malekzadeh deliberately withheld documents so as to conceal or obfuscate her assets, including her stake in Julien Armand and transactions on the Lines of Credit. He asks the court to draw the appropriate negative inferences.

[51] Mr. Harris submits that Ms. Malekzadeh tended to exaggerate or mislead the court. I disagree. I found Ms. Malekzadeh to be a more reliable witness than Mr. Harris on the whole. Both parties had recall issues at times, which is to be expected given the parties separated almost 10 years ago. With Mr. Harris, there were multiple occasions when documents were put to Mr. Harris that were clearly emails from his account where he would conveniently state that he did not recall sending the emails.

[52] While Mr. Harris accuses Ms. Malekzadeh of not providing information or disclosure, he also failed to do so. As discussed below, Mr. Harris failed to inform the forensic accountant until on or about September 30, 2021 that he just recalled that there was an approximate $375,000.00 deposit made by a foreign client on September 23, 2013 for artwork.

[53] With regard to Julien Armand, I have preferred the evidence of Ms. Kiaee over both the parties, as discussed below. I found Mr. Harris’ evidence related to Julien Armand unreliable. The documents produced at trial supported Ms. Kiaee’s and Ms. Malekzadeh’s narrative that they were the shareholders of Julien Armand on paper only, but the business was operated by their husbands. As a result, I do not accept Mr. Harris’ allegation that Ms. Malekzadeh deliberately withheld documents pertaining to Julien Armand.

[54] As noted above, Mr. Harris states that all the Lines of Credit documents were sent to the matrimonial home, and he did not have access after he moved out. Ms. Malekzadeh’s evidence was that Mr. Harris exercised his child access at the home, and certainly had access to all documents there. I found both Mr. Harris and Ms. Malekzadeh to be at times defensive and combative. There were inconsistencies in the evidence of both witnesses. However, at trial Ms. Malekzadeh was consistent and forthright in her assertion that Mr. Harris continued to have access to the matrimonial home. I do not accept Mr. Harris’ assertion that Ms. Malekzadeh has intentionally not disclosed important documents in her possession. In my view, both parties provided the court and the forensic accountant with the documents they had in their possession or control.

2. Support

[55] Ms. Malekzadeh seeks spousal support and child support from Mr. Harris. Ms. Malekzadeh is currently financially dependent on Mr. Harris. Although Mr. Harris initially sought spousal support from Ms. Malekzadeh, he abandoned this claim. Mr. Harris’ position is now that no spousal support ought to be paid by either party.

[56] Mr. Harris also claims that he has overpaid support as a result of his uncharacterized support payments made over the past several years and seeks an adjustment.

[57] The court’s jurisdiction to make orders for child and spousal support is derived from sections 15.1 and 15.2 of the Divorce Act, R.S.C. 1985, c.3 (2nd Supp).

What are the incomes of the parties for support purposes?

[58] For purposes of both child support and any spousal support, the incomes of the parties must be ascertained. Ms. Malekzadeh requests that income in the amount of $100,000.00 per annum be imputed to Mr. Harris. Mr. Harris requests that going forward child support for A.H. be based on an imputed income of $50,000.00 (or higher, if his T1 general income is higher).

[59] As set out above, Mr. Harris has been paying “uncharacterized” support in the amount of $2,500.00 per month in accordance with the September 19, 2018 without prejudice order of Justice Akbarali. This was based on an imputed income of $75,000.00 on a temporary without prejudice basis. Mr. Harris’ evidence is that he has “still not earned this amount since that time” and that he has “nevertheless made all support payments using [his] line of credit, and by depleting the majority of [his] Tax Free Savings Account.”

[60] When the uncharacterized support payments began pursuant to the order of Justice Akbarali, Mr. Harris also agreed to the release on a without prejudice basis of $52,500.00 on account of arrears of “uncharacterized” support. This amount was based on $2,500.00 per month retroactive to separation. Mr. Harris seeks credit for these support payments, applied against the eventual judgment in this case.

[61] Mr. Harris’ tax returns support his evidence that his reported earnings over the past few years have been limited. Based on Mr. Harris’ tax return, or notice of reassessment, as applicable, his historical line 150 income is as follows:

a. 2013 - $25,587.90 b. 2014 - $104,500.00 c. 2015 - $79,180.00 d. 2016 – nil e. 2017 – $39,536.25 f. 2018 – ($46,465.65) g. 2019 – nil h. 2020 - $41,806.84

[62] Mr. Harris’ position is that for the past years where his income was nil or negative, for child support purposes his income should be deemed to be $50,000.00.

[63] Despite the tax return evidence, it appears that Mr. Harris has earned income that he has not declared for tax purposes. For example, when asked whether he declared the commissions he earned on the sales of Ms. Malekzadeh’s art pieces through an exhibition Mr. Harris coordinated with an unrelated gallery, it was clear that he had not. Similarly, Ms. Malekzadeh had not yet declared the income earned on the sales. It seems that the parties, at least from time to time, dealt in cash and did not keep records.

[64] It is difficult for one party to provide evidence of the other party earning cash income. Cash income may not be reported for tax purposes and may not have a paper trail. Mr. Harris denies receiving cash income. Ms. Malekzadeh called Hans Mueller as a witness at trial. Mr. Mueller is a former customer of the Harris Gallery and an art collector. Between August 2006 to June 2013, Mr. Mueller and his wife, Esther Gonzalez-Mueller, purchased approximately $800,000.00 of art from the Harris Gallery. Mr. Mueller is no longer in contact with Mr. Harris, having had a business fall out with him. Overall, I found Mr. Mueller’s evidence to be forthright, honest and helpful and I have given significant weight to his evidence. Mr. Mueller’s evidence was that Mr. Harris had approached him a few years ago while Mr. Harris was in a professional business relationship with another gallery unrelated to this matter, but which he was clearly trying to undermine. Mr. Harris proposed that Mr. Mueller pay him $100,000.00 under the table for Mr. Harris to put together a catalogue of Mr. Mueller’s art pieces, which Mr. Harris would showcase. This arrangement would have effectively cut out this unrelated gallery. Mr. Mueller refused. I have given significant weight to Mr. Mueller’s evidence and accept that Mr. Harris has sought out opportunities for cash earnings. There is also the issue of the millions of dollars of untraceable transactions on the Lines of Credit. Further, there was an unexplained check written to Mr. Harris by his brother, the CFO of the MIA, for $427,015.06 which was voided.

[65] Mr. Harris currently resides with his common law spouse, Elzbieta, whose income in 2019 was $52,363.08. They recently moved to Moncton, New Brunswick, with their two children. The property in Moncton was purchased for $225,500.00. Mr. Harris’ evidence was that they moved to Moncton for a more affordable home due to financial concerns.

[66] Under section 19 of the Federal Child Support Guidelines, SOR/97-175 (“FCSG”), the court may impute “such amount of income to a spouse as it considers appropriate in the circumstances.” The FCSG enumerate certain circumstances, including where the spouse is intentionally under-employed or unemployed and where it appears that income has been diverted which would affect the level of child support. The circumstances listed in section 19 are not exhaustive, and it is open for a party to ask the court to exercise its discretion under section 19 on a principled basis to impute income where the circumstances require it to ensure that there is a fair and appropriate determination of support: Bak v. Dobell, 2007 ONCA 304, 86 O.R. 3(d) 196, at para. 36.

[67] The test for imputing income in child support cases applies equally for spousal support purposes: Perino v. Perino.

[68] The imputation of income to a party is fact-driven and depends on the unique circumstances before the court (Kinsella v. Mills, 2020 ONSC 4785, at para. 167). Under section 19 of the FCSG, the court has the discretion to determine the amount of income that is imputed. However, in exercising that discretion, the court must have a rational basis for the amount determined to be imputed, grounded in the evidence (Drygala v. Pauli, 61 O.R. (3d) 711, at para. 44).

[69] The court in Drygala stated the following with regard to considerations when imputing income based on under-employment or unemployment, at para. 45:

When imputing income based on intentional under-employment or unemployment, a court must consider what is reasonable in the circumstances. The factors to be considered have been stated in a number of cases as age, education, experience, skills and health of the parent. See, for example, Hanson, supra, and Cholodniuk v. Sears (2001), 2001 SKQB 97, 14 R.F.L. (5th) 9, 204 Sask. R. 268 (Q.B.). I accept those factors as appropriate and relevant considerations and would add such matters as the availability of job opportunities, the number of hours that could be worked in light of the parent’s overall obligations including educational demands and the hourly rate that the parent could reasonably be expected to obtain.

[70] Given the significant uncertainty surrounding Mr. Harris’ actual income, or his underemployment, I have determined that it is appropriate to impute income to him for support purposes of $75,000.00 per annum based on his age, education, employment history, expertise and ability to earn income. As stated above, where there is cash income, the court faces some difficulty in determining the appropriate income to impute. I have considered the fact that Mr. Harris consented, on a without prejudice basis, to payment of interim support at this amount and that he resides with a new partner who has historically worked and contributed to their household. I have also looked at his historical reported income and his acknowledged expenses (approximately $34,000 per annum).

[71] Accordingly, his support payments for 2 children shall be based on $75,000.00 per annum or his actual income, if higher.

[72] Ms. Malekzadeh asks that no income be imputed to her in determining support and that her income on her T1 general be her income for support calculation purposes.

[73] Mr. Harris argues that income ought to be attributed to her because Julien Armand is a live entity and she could be receiving cash from the company. As set out below, based on the evidence at trial, I have determined that there is no value to be attributed to Julien Armand, nor should any income be attributed to Ms. Malekzadeh in respect of her interest in Julien Armand.

[74] Accordingly, Ms. Malekzadeh’s income for support purposes shall be her income on her T1 general.

Spousal Support

[75] Ms. Malekzadeh claims spousal support from Mr. Harris on a compensatory basis and/or a needs basis. It is necessary to first consider whether there is entitlement to spousal support.

i. Compensatory Spousal Support

[76] The evidence was that Ms. Malekzadeh was employed full-time in retail when she met Mr. Harris, who was a university student pursuing his B. Ed. Ms. Malekzadeh gave up her full-time employment and moved to Thunder Bay where Mr. Harris was studying. In Thunder Bay, she worked part-time. The parties moved back to Toronto for a brief period. Shortly thereafter, Mr. Harris received a teaching opportunity in Cape Dorset. Ms. Malekzadeh again left Toronto and moved with Mr. Harris to Cape Dorset. After returning from Cape Dorset, with their first-born child, Ms. Malekzadeh cared for their children and continues to do so. The parties have never had a nanny or had the children in daycare.

[77] The parties jointly opened the Harris Gallery. The parties were equal partners in the business on paper. However, they dispute the extent to which Ms. Malekzadeh was involved in the day-to-day operations and managerial affairs of the Harris Gallery and the MIA. Ms. Malekzadeh’s evidence was that she was the primary day-to-day caregiver to the children and the parent who oversaw their medical and educational needs. She did not deny being involved in sales at the Harris Gallery on a part-time basis, as her time permitted depending on the ages and stages of the children.

[78] Mr. Harris’ evidence was that the parties worked together as partners in the businesses from 1997 until around the time of separation. His evidence was that the parties shared parental responsibilities and split time working in the business.

[79] Ms. Malekzadeh called Alan Harris, Mr. Harris’ father, as a witness at trial. Mr. Harris and his father had a falling out some years ago. Among other things, Alan Harris gave evidence regarding the respective roles of Ms. Malekzadeh and Mr. Harris with childcare and business affairs. I found Alan Harris to be forthright, clear and honest. Where Alan Harris has firsthand knowledge, I have given significant weight to this evidence.

[80] Alan Harris’ evidence was that he had firsthand knowledge of the following:

• “…there is zero confusion that: i. Nazie was the children’s primary caregiver and the one at home day to day looking after the home and the children. ii. David was the one managing the day to day of the Gallery and later on the Museum. iii. Nazie attended at the Gallery as best she could and when the girls were a little older and in school, Nazie would run errands, like banking, as assigned by David.”

• “As it related to the Gallery, from inception, even prior to it opening, David is the one who I saw make all business decisions. David did the purchases, was the contact person for the suppliers and artists, did the hiring and firing and oversaw the finances for the Gallery. David was justifiably proud of his accomplishments, and was certain to stress to me that he was solely responsible for them with no input from anyone else.”

[81] Mr. Harris called Gordon Fox as a witness at trial. Mr. Fox was the chair of the MIA. He is a securities lawyer. Mr. Fox’s wife, who is now deceased, was Mr. Harris’ aunt. Mr. Fox’s evidence was that both parties were involved in the Harris Gallery and the MIA full-time and operated it together, with Ms. Malekzadeh’s position being in art sales.

[82] Mr. Harris also called William Moore. Mr. Moore was the Managing Director of Inuit Art Marketing, a division of The North West company headquartered in Winnipeg, from 1998 through 2010. His evidence spoke to the respective roles of the parties in the MIA and the Harris Gallery. From the evidence, it is clear that Mr. Harris and Mr. Moore have an ongoing relationship in which Mr. Moore has an interest in maintaining positive contact with Mr. Harris. Accordingly, I have given less weight to his evidence.

[83] Mr. Mueller’s evidence, to which I give significant weight, was that if Ms. Malekzadeh was involved in sales, it was at the periphery. He stated that he clearly recalled that “Nazie was not present or involved when Christian Morriseau and Norval Morriseau paintings were discussed.” Mr. Mueller further stated that “[t]here was zero doubt from [his] dealings with David that he spearheaded the Gallery and all business and monetary aspects pertaining to same. It was apparent that David in no manner saw Nazie as a business partner or his intellectual equal.”

[84] Mr. Fox’s and Mr. Moore’s evidence supports Mr. Harris’ position that the parties were equally involved in the businesses. Alan Harris’ and Mr. Mueller’s evidence supports Ms. Malekzadeh’s evidence and position that she was the primary caregiver for the children and Mr. Harris was the primary person who managed the Harris Gallery and the Museum. As mentioned above, I have given significant weight to Mr. Mueller’s evidence and to Alan Harris’ evidence where it is based on his firsthand knowledge.

[85] It is well settled law that a spouse will be required to compensate the other spouse where he or she has “forgone careers and missed opportunities” during the marriage: Bracklow v. Bracklow, [1999] 1 S.C.R. 420. That is, compensatory spousal support is necessary where one spouse suffered an economic loss due to the roles the parties assumed during the marriage so that the other spouse could receive an economic benefit.

[86] Based on all the evidence, I find that Ms. Malekzadeh assisted in the Harris Gallery and the Museum, but this was in support of Mr. Harris and secondary to her primary role as the primary caregiver of their children. I find that during the relationship Ms. Malekzadeh was financially dependent on Mr. Harris and she assumed the primary role as caregiver of the children so that Mr. Harris could focus on his business ventures. Ms. Malekzadeh is entitled to spousal support on a compensatory basis.

ii. Needs Based Spousal Support

[87] Ms. Malekzadeh also claims needs based spousal support. Under section 30 of the Family Law Act, R.S.O. 1990, c. F.3 (the “FLA”), every spouse has an obligation to support the other spouse in accordance with need, to the extent that he or she is capable to do so. The case law is also clear that entitlement to spousal support can arise on a needs basis: Bracklow.

[88] Ms. Malekzadeh has been unable to work for the past couple of years and continues to be unable to work due to her serious health issues, which are not in dispute. She needs support.

[89] Mr. Harris is a 51-year-old educated man, who has a partner who also contributes to the household expenses. Ms. Malekzadeh is a 54-year-old woman with a high school diploma, dealing with grave health considerations. Their two youngest children live with Ms. Malekzadeh.

[90] Ms. Malekzadeh is not working and cannot work due to her current medical issues. She is currently receiving $2,500.00 per month in unspecified support from Mr. Harris.

[91] I have determined that Ms. Malekzadeh is entitled to spousal support on both a compensatory and needs basis.

iii. Amount of spousal support

[92] Under the Divorce Act, the following objectives of a spousal support order are set out (section 15.2(6)):

a. Recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown; b. Apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage; c. Relieve any economic hardship of the spouses arising from the breakdown of the marriage; and d. In so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.

[93] In making an order for spousal support under section 15.2 of the Divorce Act, the court is required to take into consideration the condition means, needs and other circumstances of each spouse, including the length of time they cohabited, the functions performed by each spouse during the time they cohabited, and any order, agreement or arrangement relating to support of either spouse (section 15.2(4), Divorce Act). The order for spousal support may be made for a definite or indefinite period and may impose such terms or conditions as the court deems appropriate (section 15.2(3), Divorce Act).

[94] The Spousal Support Advisory Guidelines provide some guidance. The guidelines provide that there are certain factors that will favour a support award at the higher end of the range for amount and duration. These factors include:

a. A spouse has a strong compensatory claim. b. The recipient’s needs, including where the recipient has limited income and earning capacity. c. A recipient who is older. d. An absence of property to be divided.

[95] Taking into account the factors set out in section 15.2 of the Divorce Act, including the length of the parties’ cohabitation (18 years) and the roles of both spouses during the cohabitation, Mr. Harris shall pay spousal support to Ms. Malekzadeh indefinitely. I have determined that Ms. Malekzadeh’s spousal support should be at the high end of the SSAG. In my view, there are factors here that support an award in the high end of the range. Ms. Malekzadeh needs support. She is currently battling cancer and cannot work. She does not have another spouse who is helping to support her. As mentioned above Ms. Malekzadeh has a strong compensatory claim as she assumed primary responsibility for child-care and home management obligations throughout the parties’ cohabitation.

[96] Mr. Harris shall pay Ms. Malekzadeh monthly spousal support indefinitely at the high end of the range in the amount of $1,418.00 based on Mr. Harris’ imputed annual income of $75,000.00.

Credit re Support

[97] Mr. Harris seeks an order setting the total amount of his child support payable since separation at $101,073.00. He has paid uncharacterized support of $147,500.00. He requests credit of $46,427.00 to be applied toward future child support obligations.

[98] Given that I have determined that Mr. Harris has been earning some cash income and have imputed an annual income to him of $75,000.00, he is not entitled to any such credit. This is particularly so, as he has not been paying spousal support to Ms. Malekzadeh.

Life Insurance

[99] Ms. Malekzadeh asks that Mr. Harris be required to designate her on a life insurance policy to secure payment of the support order.

[100] Under section 34(1) of the FLA the court may make an order requiring that a spouse who has a policy of life insurance as defined under the Insurance Act, R.S.O. 1990, c. I.8 designate the other spouse as an irrevocable beneficiary under the plan. Under section 15.2(3) of the Divorce Act the payor spouse can be ordered to comply with any “terms, conditions, or restrictions in connection with the order as it thinks fit and just” in connection with a support order. In Katz v. Katz, 2014 ONCA 606, 377 D.L.R. (4th) 264 the Court of Appeal confirmed that the provisions of the FLA and the Divorce Act were sufficiently broad so as to permit a court to order a spouse to obtain, not just maintain, an insurance policy to secure payment of an order for support.

[101] As stated by the Court of Appeal in Katz, at para. 74, “where there is no existing policy in place, a court should proceed carefully in requiring a payor spouse to obtain insurance.” As opposed to ordering Mr. Harris to obtain a life insurance policy, I instead include specific language in my order that the support orders herein are binding on Mr. Harris’ estate.

3. Net Family Property

[102] Ms. Malekzadeh submits that she is owed an equalization payment of $296,948.86. However, Ms. Malekzadeh asks the court that the remaining proceeds of sale of the Matrimonial Home currently held in trust by Rickets Harris LLP and the amount owing to the parties from Right at Home Realty, in the total amount of $212,117.06, be paid to her in satisfaction of her equalization claim.

[103] Mr. Harris submits that prior to the issues with the Lines of Credit and the post-separation date adjustments, he would owe Ms. Malekzadeh an equalization payment of $136,595.00.

Differences in Parties’ Respective Net Family Property

[104] The items contributing to the discrepancy between the parties are:

a. The value of the Canterbury Condo at the valuation date for Mr. Harris. b. 2011 Saab value at valuation date for Ms. Malekzadeh. c. “special items” owned by Ms. Malekzadeh at the valuation date. d. Joint RBC bank account – with a balance of $1,731.40 at the valuation date. e. Value of Ms. Malekzadeh’s interest in Julien Armand at the valuation date. f. Supplementary joint RBC line of credit at $10,000.00 at the valuation date. g. Pontiac Firebird car owned by Mr. Harris at the date of marriage. h. Mr. Harris’ debt to OSAP at the date of marriage. i. Mr. Harris’ exclusion of $25,000.00 for an inheritance from Fred Harris’ estate.

[105] At trial each of the items in dispute were addressed. Agreement or concession was reached on the following:

a. The $10,000.00 debt on the supplementary joint RBC line of credit should appear as a $5,000.00 debt for each of Ms. Malekzadeh and Mr. Harris (as opposed to $10,000.00 debt of Mr. Harris). b. Mr. Harris agreed that he had a $19,000.00 OSAP loan at the date of marriage. c. Ms. Malekzadeh agreed that the value to be attributed to the Saab for Ms. Malekzadeh is the number indicated by Mr. Harris as $45,000.00

[106] Based on the evidence, it is also clear that Mr. Harris does not have documents to support the following:

a. That Ms. Malekzadeh had “special items” in the amount of $2,500.00 owned at the valuation date. b. The exclusion of $25,000.00 for an inheritance from Fred Harris’ estate. In addition, Mr. Harris does not address this in his affidavit for trial.

[107] With regard to the joint RBC bank account with a balance of $1,731.40 at the valuation date, Mr. Harris had taken the position that this should be reflected by both parties on the valuation date. However, the evidence is that Mr. Harris kept the money in this account. Accordingly, I find that the RBC bank account with a balance of $1,731.40 is an asset of Mr. Harris’ at the valuation date.

[108] Mr. Harris’ evidence is that he owned a Pontiac Firebird at the date of the marriage (May 25, 1996). Ms. Malekzadeh remembers that Mr. Harris had a Firebird when they moved from Thunder Bay to Toronto, but disputes that he had the car when they married. He produced correspondence with the purchaser of the Pontiac Firebird. The purchaser confirmed that he bought it “sometime during the summer of 1996.” Based on the evidence before me, I find on balance that Mr. Harris owned the car at the date of marriage. In the email exchange, the purchase price for the vehicle is not addressed. Mr. Harris requested a value of $15,000.00 for this marriage date asset. Given that the Hagerty valuation report values the car as at May 2013 between $9,800.00 and $52,900.00, depending on the condition of the car, I find that $15,000.00 is reasonable.

[109] The remaining items, Mr. Harris’ Canterbury Condo and Ms. Malekzadeh’s interest in Julien Armand, are discussed below.

Julien Armand

[110] The parties’ evidence regarding Julien Armand was completely contradictory.

[111] Mr. Harris subpoenaed Ms. Kiaee to give evidence on Julien Armand. Ms. Kiaee is married to Ms. Malekzadeh’s brother and holds 75 percent of the shares of Julien Armand. Ms. Kiaee is a full-time science teacher and has been so for 24 years. Among other things, she testified about Julien Armand and the level of involvement of the various parties. I found her honest and forthright. I have given her evidence significant weight in my assessment of Julien Armand.

[112] Mr. Harris points to Julien Armand as a valuable asset of Ms. Malekzadeh that ought to be included in her net family property. Mr. Harris points to the company’s participation in various industry shows in 2016 and 2018, as well as information from certain third-party websites.

[113] Mr. Harris also argues that Ms. Malekzadeh had the obligation to call her brother as a witness or produce other documents to establish the value of Julien Armand.

[114] Ms. Malekzadeh’s evidence is that Julien Armand was Mr. Harris’ investment and her name was put on as the shareholder on paper. Ms. Kiaee’s evidence supports Ms. Malekzadeh’s position. Ms. Kiaee testified that she also was a shareholder of Julien Armand on paper only. It was her husband, Arash Malekzadeh’s, business. She works full time as a teacher.

[115] With regard to the involvement of Mr. Harris and Ms. Malekzadeh, Ms. Kiaee’s evidence was that originally Mr. Harris provided her husband with a loan of $100,000.00 for the business. Mr. Harris subsequently requested that he wanted shares of the company, which would be in Ms. Malekzadeh’s name. Ms. Kiaee indicated that Mr. Harris subsequently wanted his $100,000.00 back so she and her husband had started to repay the money.

[116] Ms. Kiaee’s evidence was that all business dealings related to Julien Armand were between Mr. Harris and her husband. She and Ms. Malekzadeh were not involved. This is supported by Ms. Malekzadeh’s testimony as well as the numerous emails between Arash Malekzadeh and Mr. Harris regarding the Julien Armand business (and not copying either of Ms. Kiaee or Ms. Malekzadeh).

[117] Julien Armand, although still in existence, is no longer operating and has not been since 2016/2017. Ms. Kiaee’s evidence was that the store location was lost when their landlord evicted them for having a sub-tenant to assist with the rent payments. Further, the company’s bank account was closed by the bank for inactivity.

[118] The evidence at trial included an email dated July 4, 2020 from Julien Armand’s accountant, Mr. Hesamy, wherein he confirms that based on the information and records provided, Ms. Malekzadeh has not received any salary, dividends or other compensation from the company, nor had any dividends or salary been paid to the other director/shareholder of the company. Further, Ms. Kiaee’s evidence was consistent that Julien Armand was not a money-making business. She indicated that any money from Julien Armand to her husband in the early years was just used to keep the company afloat. Ms. Kiaee’s evidence was also consistent with Ms. Malekzadeh’s that Ms. Malekzadeh did not work in the business (and neither did Ms. Kiaee). Even Mr. Harris himself stated, in an email in 2013 to Arash Malekzadeh in reference to Julien Armand: “you understand she never made one penny right?”

[119] On balance, I am satisfied that there is no value to Ms. Malekzadeh’s interest in Julien Armand as at the valuation date, nor is she receiving income from Julien Armand.

Canterbury Condo

[120] The Canterbury Condo was purchased by David Harris, in his name alone, in 2010, at a time when the parties were married. The purchase price was $499,000.00.

[121] The Canterbury Condo was bought pre-separation and using joint family funds. The parties also continued to comingle their finances for four years after separation (as discussed further below).

[122] The Canterbury Condo sold for $850,000.00 on or about December 1, 2020 and closed on January 12, 2021.

[123] Ms. Malekzadeh amended her Answer to seek a trust claim in support of her position with regard to the Canterbury Condo. She seeks an order that Mr. Harris held one-half of the Canterbury Condo in trust for her by way of constructive trust and/or resulting trust and that she is entitled to half of the proceeds of sale of the condominium.

[124] A constructive trust is an equitable remedy that may be appropriate where there has been unjust enrichment. Unjust enrichment arises where the following elements are satisfied: (i) an enrichment, (ii) a corresponding deprivation, and (iii) the absence of a juristic reason for the enrichment: Peter v. Beblow, [1993] S.C.J. No. 36.

[125] Mr. Harris’ position is that the Canterbury Condo’s value at the date of separation was $600,000.00. Mr. Harris states that he has also paid all the carrying costs on the Canterbury Condo since 2013, which amount to approximately $150,000.00. However, given the intermingling of the parties’ finances, and lack of any direct evidence to support this assertion, it is not possible to determine whether he paid the carrying costs or they were paid from the parties’ joint funds for the four years their monies were intermingled.

[126] Ms. Malekzadeh’s position is that the Canterbury Condo’s value ought to be $850,000.00 (what it sold for). Ms. Malekzadeh alleges that joint monies were used to pay for upgrades of approximately $200,000.00 for this property. Mr. Harris agrees that upgrades were made to the property after separation, but states that it was approximately $100,000.00 for the upgrades. There are no invoices for the renovation of the condo and Mr. Harris’ evidence is that the person who did the renovations indicated that he did not wish to be involved in the court proceedings. Similar to the carrying costs, it is not possible to determine whether these upgrades were paid from the parties’ joint funds. Given the multitude of untraceable transactions on the parties’ joint RBC LOC it is probable that the carrying costs and upgrades were paid from this line of credit.

[127] Mr. Harris purchased the Canterbury Condo using joint funds and likely paid for the upgrades using joint funds. Plus, they both paid for its maintenance until at least 2017. If Mr. Harris were permitted to maintain the proceeds of sale of the Canterbury Condo and have a lower value attributed to it for equalization purposes, Mr. Harris would be enriched and Ms. Malekzadeh would suffer a corresponding deprivation. There would be no juristic reason for this enrichment.

[128] Based on the fact that the Canterbury Condo was bought when the parties were together with intertwined finances, the undisputed continued intermingling of monies following the marriage breakdown, and the lack of any invoices for the renovation costs for the condo or other documentary evidence, I have determined that Ms. Malekzadeh is entitled to 50% of the proceeds of sale of the Canterbury Condo. From the time the Canterbury Condo was purchased by Mr. Harris using the parties’ joint funds, he held half of the condo in trust for Ms. Malekzadeh.

[129] Mr. Harris submitted that Ms. Malekzadeh’s condo should also be shared. I disagree. Her condo was bought after the parties separated and was purchased using her share of the proceeds of sale of the matrimonial home. Accordingly, this asset is Ms. Malekzadeh’s and is not shared property (unlike the Canterbury Condo, which was bought during the parties’ cohabitation).

Unequal Division of Net Family Property

[130] Ms. Malekzadeh seeks an award of net family property that is more than half the difference between the net family properties.

[131] Under section 5(6) of the FLA, the court may make such an order where the court is of the opinion that equalizing the net family properties would be unconscionable, having regard to,

a. The spouse’s failure to disclose to the other spouse debts or other liabilities existing at the date of the marriage; b. The fact that debts or other liabilities claimed in reduction of a spouse’s net family property were incurred recklessly or in bad faith; c. The part of a spouse’s net family property that consists of gifts made by the other spouse; d. A spouse’s intentional or reckless depletion of his or her net family property; e. The fact that the amount a spouse would otherwise receive under subsection (1), (2) or (3) is disproportionately large in relation to a period of cohabitation that is less than five years; f. The fact that one spouse has incurred a disproportionately larger amount of debts or other liabilities than the other spouse for the support of the family; g. A written agreement between the spouses that is not a domestic contract; or h. Any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of property.

[132] As set out by the Court of Appeal in Serra v. Serra, 2009 ONCA 105, 93 O.R. (3d) 161, an unequal division of net family property is exceptional. The Court of Appeal states, at para. 47:

[T]he threshold of “unconscionability” under s. 5(6) is exceptionally high. The jurisprudence is clear that circumstances which are “unfair”, “harsh” or “unjust” alone do not meet the test. To cross the threshold, an equal division of net family properties in the circumstances must “shock the conscience of the court”.

[133] Based on the evidence, I have determined that an unequal division of net family property is not appropriate in the circumstances. Although Ms. Malekzadeh alleged in her affidavit that Mr. Harris spent significant family money on cosmetic surgeries and gifts to other women, these allegations were not put to Mr. Harris at trial. He was not asked about the cost of the alleged affairs, the cost of his alleged surgeries or his other alleged spending. The parties’ finances were intertwined. The forensic accountant retained was unable to trace multiple transactions and there were no records in support of many transactions.

Olive Consulting

[134] Olive Consulting was formed in 2014. Mr. Harris’ evidence is that Olive Consulting was incorporated by him and Ms. Malekzadeh to pay down personal debt from certain loans that the parties made to the Harris Gallery and the Museum and provide a structure of the Museum’s purchase of the Harris Gallery.

[135] One of the key factual issues related to Olive Consulting pertains to dividend income from the business paid to Ms. Malekzadeh, Mr. Harris and Y.H. in 2014 and 2015. Ms. Malekzadeh’s evidence is that neither she nor Y.H. received the dividend income from Olive Consulting. Mr. Harris was very evasive when being asked about whether he received the dividend monies that were to have been paid to Ms. Malekzadeh and Y.H.

[136] Mr. Fox’s evidence was critical in deciphering the complexities of Olive Consulting and the art gift arrangement. Mr. Fox described to the court that there are legitimate ways for people who are sourcing donations to charities to earn money. Between Mr. Fox’s evidence and Mr. Mueller’s evidence, I understand the gifting arrangement, and Olive Consulting’s involvement, as follows:

a. David Harris and/or Mr. Fox would identify potential donors for the Museum who were also interested in acquiring art; b. Those donors would make gifts of money/shares to the Museum; c. The donors would receive a receipt for tax purposes in respect of the donation to the Museum, as it is a charitable entity; d. The Museum would use the donations to purchase art for the Museum at fair market value (it is not clear from the evidence whether the art that was purchased was from the Harris Gallery, Mr. Harris/Ms. Malekzadeh, or elsewhere); e. A commission was paid to Olive Consulting; f. Olive Consulting paid dividends to Mr. Harris, Ms. Malekzadeh and Y.H (although Ms. Malekzadeh and Y.H. did not receive the dividend monies), which dividends were taxable to them; g. As a thank you for the donation to the Museum, David Harris (and Ms. Malekzadeh), in their personal capacity, would make gifts of art to these donors. Mr. Mueller’s evidence was that he understood that the Museum would reimburse Mr. Harris/Harris Gallery for the value of these pieces. Mr. Mueller’s evidence was that some of these paintings were not authentic, although he was of the view that Mr. Harris was not aware of this when the gifts were made.

[137] There were no documents produced related to the above.

[138] Based on the evidence at trial, I am satisfied that Ms. Malekzadeh and Y.H. did not receive the dividend income that was allocated to them from Olive Consulting. Ms. Malekzadeh’s evidence was clear that she did not receive this income. Mr. Harris was evasive in answering the questions related to whether the money was actually received by Ms. Malekzadeh and Y.H. The split of the dividend income among the three family members was clearly done for income splitting/tax purposes and were declared as such. However, the dividends from Olive Consulting were not paid to Ms. Malekzadeh and Y. H.

[139] On balance, I find that Mr. Harris used the Olive Consulting dividends (joint funds of the parties), including those that were owing to Ms. Malekzadeh and Y.H., toward payment on the RBC LOC (discussed further below).

4. Post-Separation Adjustments

[140] The most significant difference in the parties’ positions arises from claims for post-separation adjustments.

[141] Matthew Krofchick, a forensic accountant, was jointly retained by the parties to trace transactions on the two Lines of Credit. Mr. Krofchick was unable to produce a report as his findings were inconclusive. He had been asked to determine which party benefitted from the transactions over the period in question. He concluded that the untraced amounts (approximately $5 million, or approximately ½ of the total transactions) were so significant that it was not possible to determine who benefitted. Mr. Krofchick’s letter, dated October 4, 2021, confirmed that:

a. They were jointly retained to trace deposits and withdrawals from the parties’ Lines of Credit from approximately August 2009 to April 2019. b. They reviewed statements for 19 bank accounts encompassing over $10,000,000.00 in transactions. c. They requested information from both parties and their respective financial institutions and were provided with all the information they had on file, which did not include all transaction details. d. The untraced transactions were provided to the parties for their input, but neither party could assist in resolving all of the outstanding transactions. e. The total dollar value of untraced transactions represents approximately $5,000,000.00.

[142] Mr. Krofchick’s letter concluded: “In light of the magnitude of the untraced transactions compared to the traced transactions we are unable to conclusively say which of the parties benefited over the course of period under review.” At trial, Mr. Krofchick’s evidence was that, of the transactions he could trace, Mr. Harris benefitted more than Ms. Malekzadeh. On re-examination, he agreed that given there was about $5,000,000.00 of untraced transactions, it was impossible to say who on the whole would have benefitted more.

[143] As set out above, the parties continued to make transactions through their joint accounts following separation. Ms. Malekzadeh paid day to day living expenses from the RBC LOC. Further, Olive Consulting, was established following separation.

[144] Just prior to trial Justice Faieta directed the parties to circle back with the forensic accountant on a few points. As a result of this, Mr. Harris told the forensic accountant that the monies used to pay down the Lines of Credit between 2013 and 2015 came from:

a. Payment of approximately $375,000.00 from a foreign client for artwork on or about September 23, 2013. b. $371,000.00 of dividend earnings in 2014 and 2015 paid out by Olive Consulting to Mr. Harris, Y.H. and Ms. Malekzadeh (discussed above).

Mr. Krofchick noted in his email that “[b]efore taking into account taxes, this represents almost $750K in money used to pay down the lines of credit from 2013 to 2015.” Based on the settlement conference endorsements, the conversation with Mr. Krofchick occurred on or about September 30, 2021. This almost $750,000.00 had not been addressed by Mr. Harris prior to this date (about 2 weeks before trial commenced).

[145] Mr. Harris claims that, as a result of post separation adjustments, Ms. Malekzadeh owes him $495,436.41. The contested post separation adjustments relate to various transactions on both Lines of Credit.

[146] Mr. Harris’ position is that he personally paid down the joint RBC LOC $504,685.59 between the date of separation and December 31, 2014. This assertion is not supported by the evidence.

[147] There are numerous untraced transactions on the RBC LOC in 2013-2015. Notably between 2013 to 2015 there are approximately $600,000.00 in untraced payments made to the RBC LOC (that did not come from Mr. Harris’ personal TD LOC). Given that Mr. Harris’ reported income in 2013, 2014 and 2015 was $25,587.90, $104,500.00, and $79,180.00, respectively, and the funds did not come from his TD LOC, there is nothing to support his bald assertion that he personally made these significant payments. Ms. Malekzadeh consistently testified that she had nothing to do with the family finances. She did not make the payments. It is not clear where all the funds came from.

[148] However, we do know where $371,000.00 came from. Mr. Harris states that $170,000.00 of this amount [$504,685.59] came from the Olive Consulting dividends (and $334,685.59 from him). But this number is incorrect. As discussed above, $371,000.00 was the amount of the Olive Consulting dividends, which were paid to him, Ms. Malekzadeh and Y.H. (i.e., $371,000.00 payment of joint funds on the RBC LOC). These dividends were paid toward the $504,685.59. Although Mr. Harris executed the transaction to pay the dividends on the RBC LOC (as Ms. Malekzadeh and Y.H. never actually received the dividend money), the payments were made from joint funds.

[149] The dividend earnings from Olive Consulting were for both parties and their daughter. This money was paid by Mr. Harris on the joint RBC LOC, but as these were joint funds, this does not mean Mr. Harris paid the money. Both parties, in effect, made the payments. Given these significant payments on the RBC LOC, the lack of any evidence of direct payments by Mr. Harris in respect of the $504,685.59, and the inconclusive work of Mr. Krofchick, I find that both parties equally contributed to the payments of $504,685.59 to the RBC LOC.

[150] Mr. Harris further claims that he paid another $287,898.98 on the joint RBC LOC in July 2015 using his personal TD LOC. He seeks credit for half of this amount. There is a transaction on Mr. Harris’ TD LOC on or about July 23, 2015 for a bank draft in the amount of $285,930.82. There is also a deposit on the joint RBC Line of Credit on July 27, 2015 for $285,923.32. At first blush, it appears that the bank draft from Mr. Harris’ personal TD LOC was used to pay the joint RBC LOC (less $7.50 transaction fee). Mr. Harris’ TD LOC was paid off in the amount of $373,219.26 from the proceeds of sale of the Matrimonial Home. In the post-separation adjustments, Mr. Harris is deemed to have received $373,219.26 of the sale proceeds for this payment to his personal TD LOC.

[151] However, the issue is that when the parties separated, the balance on Mr. Harris TD LOC was approximately ($372,000.00). Following separation, the only significant deposit to Mr. Harris’ TD LOC was the payment from the foreign art buyer in the amount of $374,635.81, which effectively paid off the TD LOC. The sale to the foreign client was for artwork to be selected at a future date. We have no information on any tax implications. Mr. Harris stated that the foreign client has never received the artwork, despite having paid $374,635.81. The $374,635.81 was deposited in Mr. Harris’ TD LOC on September 23, 2013. Following that transaction on the TD LOC, there were multiple small transactions, then the $285,930.82 CAD bank draft, which was used to pay off the RBC LOC. Effectively the money used to pay off the RBC LOC was from the payment from the foreign art buyer.

[152] Mr. Harris seeks credit for half of the $285,923.32 paid. That is, his position is that Ms. Malekzadeh ought to be responsible for half of the payment made on the joint RBC LOC from his TD LOC. I find that the payment made on the joint RBC LOC from the TD LOC was made using proceeds of sale received from the foreign art buyer. As Harris Gallery was still operating at that time and the parties had their finances still intertwined, I find that Mr. Harris is not entitled to credit for half of the $285,923.32 paid.

[153] I note that there were a number of uncontested advances on the RBC LOC. For example, Ms. Malekzadeh acknowledges that she withdrew $244,000.00 and another $40,007.50 from the RBC LOC.

Disposition and Costs

[154] In the result, therefore:

a. Mr. Harris shall pay Ms. Malekzadeh monthly child support for 2 children in the amount of $1,139.00 per month, based on an imputed annual income of $75,000.00. b. Monthly child support will be adjusted annually, effective July 1, with prospective effect only, in accordance with Mr. Harris’ income for the prior year. In this regard, the parties shall annually provide each other with their T1 General and Notice of Assessment by June 1. Mr. Harris’ income, unless varied by court order or agreement, will at all times be imputed at a minimum of $75,000.00. c. Ms. Malekzadeh will claim all applicable tax credits for the children. d. The parties will proportionately share all special and extraordinary section 7 expenses. e. The parties will maintain the children on any medical and full dental benefit plans available through their employers or privately. The parties agree to transfer the reimbursement due to the other within one week of its receipt and will include all documentation associated with each claim. If the parties do not have benefits, medical and dental (including orthodontic work) shall be treated as a special and extraordinary cost. f. Monthly child support, section 7 special and extraordinary expenses and medical or dental expenses not covered by respective benefit plan ends when the children are no longer children of the marriage pursuant to the provisions of the Divorce Act. g. Mr. Harris shall pay Ms. Malekzadeh monthly spousal support at the high end of the range in the amount of $1,418.00 indefinitely based on an imputed annual income of $75,000.00. To the extent that Mr. Harris’ T1 general income is higher in any year, the spousal support shall be adjusted accordingly. Spousal support will be taxable to Ms. Malekzadeh and deductible to Mr. Harris. h. The spousal support and child support orders are binding on Mr. Harris’ estate. i. The parties shall re-run the calculations for NFP and post-separation adjustments taking into account the above findings. If the parties are unable to agree on the NFP and post-separation adjustments by April 22, 2022, the parties shall notify my judicial assistant and within 15 days thereafter shall provide me with their respective proposed NFPs and written submissions limited to five pages each. I will then make the final determination. j. I would encourage the parties to agree on costs. If they are unable to do so, they shall notify my judicial assistant on or by April 29, 2022 and a conference call shall be convened to work out a timeline for submissions.

J. Steele J.

Released: March 23, 2022

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: David Harris Applicant – and – Nazie Malekzadeh Respondent

REASONS FOR JUDGMENT J. Steele J.

Released: March 23, 2022