Court File and Parties

COURT FILE NO.: FC1328/18 DATE: 2023/07/06

ONTARIO

SUPERIOR COURT OF JUSTICE

FAMILY COURT

BETWEEN:

Rola Shbib Applicant

Alla Kikinova, for the Applicant

- and -

Husam Almadani Respondent

Wanda Corston, for the Respondent

HEARD: May 15, 16, 17, 18, June 12, 2023

TOBIN J.

Introduction

1The parties are before the court requesting orders related to the equalization of their net family property and child support.

2This case started in 2018, shortly after the parties separated. They were able to resolve all issues concerning parenting well before this trial commenced. A partial final order dated May 31, 2022 setting out the parties respective decision-making responsibilities and parenting times was granted by Justice Henderson.

3In these reasons, I will refer to the applicant as the “wife” and the respondent as the “husband”, for the sake of clarity.

Issues

4The issues to be decided in this case are:

1. What assets and debts did the parties have at the date of separation and date of marriage? What were the values of these assets and debts? This issue requires a determination of who was the beneficial owner of certain assets: the husband or his sister.
2. Are there any post-equalization adjustments required?
3. What amount of child support should the husband pay to the wife for the three children in her primary care? This issue involves a determination of the respondent’s income for child support purposes.

Credibility

5The parties gave conflicting evidence about assets the husband owned, or did not own, in Saudi Arabia and Canada.

6The wife claimed that (1) the husband’s Saudi assets and in particular, a company called Joud Metals Est. were held in the name of his sister, (2) he was the beneficial or true owner of this company and (3) this arrangement was necessary because only Saudi citizens could operate a business in that country. The sister was a Saudi citizen, the husband was not. The wife’s evidence is that the husband feared that his sister could claim his assets as her own and that was a motivating reason for the family’s move to Canada – he wanted to have his assets in his name.

7The husband claimed that his sister did own Joud Metals Est. His evidence was that his sister started the corporation from money received from a divorce settlement. As well, his evidence was he worked for his sister and that relationship continued when the husband came to Canada with the wife and their children. The plan was for the husband to invest his sister’s Joud Metals Est. money in Canada through a company he would start in Canada called Joud Canada Trading Inc.

8My findings with respect to facts related to the husband’s assets, will depend, in part, upon an assessment of the parties’ credibility.

A. Legal Considerations

9Both parties rely upon the tools available for assessing credibility as set out in Novak Estate (Re), 2008 NSSC 283, at paras. 36-37 ¹ as follow:

[36] There are many tools for assessing credibility: a) The ability to consider inconsistencies and weaknesses in the witness's evidence, which includes internal inconsistencies, prior inconsistent statements, inconsistencies between the witness' testimony and the testimony of other witnesses. b) The ability to review independent evidence that confirms or contradicts the witness' testimony. c) The ability to assess whether the witness' testimony is plausible or, as stated by the British Columbia Court of Appeal in Faryna v. Chorny, 1951 CarswellBC 133, it is "in harmony with the preponderance of probabilities which a practical [and] informed person would readily recognize as reasonable in that place and in those conditions", but in doing so I am required not to rely on false or frail assumptions about human behavior. d) It is possible to rely upon the demeanor of the witness, including their sincerity and use of language, but it should be done with caution (R. v. Mah, 2002 NSCA 99 ¶¶ 70-75). e) Special consideration must be given to the testimony of witnesses who are parties to proceedings; it is important to consider the motive that witnesses may have to fabricate evidence. R. v. J.H., [2005] O.J. No.39 (OCA) ¶¶ 51-56).

[37] There is no principle of law that requires a trier of fact to believe or disbelieve a witness's testimony in its entirety. On the contrary, a trier may believe none, part or all of a witness's evidence, and may attach different weight to different parts of a witness's evidence. (See R. v. D.R., [1966] 2 S.C.R. 291 at ¶ 93 and R. v. J.H. supra).

10In addition to these tools, I also take into account the summary of legal considerations contained in Frenkel v. Frenkel, 2023 ONSC 2682 ², and in particular at paras. 5-9 as follows:

[5] One of the most valuable means of assessing witness credibility is to examine the consistency in their evidence. Inconsistencies may emerge not just from a witness' oral testimony, but also from things said differently at different times, or from omitting to refer to certain events at one time while referring to them on other occasions: R. v. M. (A.), 2014 ONCA 769, 123 O.R. (3d) 536 (“R. v. M.”), at paras. 12-14.

[6] That said, inconsistencies vary in their nature and importance. Some inconsistencies may, on closer examination, not materially impair a witness' credibility or reliability. In other cases, however, an inconsistency on a matter central to the litigation, or a series of inconsistencies even on apparently minor issues, may call into serious question the credibility or reliability of a witness' testimony. These concerns are much more serious if a witness is found to have lied under oath, or to have relied on false documents, which may well cause the trier of fact to question or reject the entirety of a witness' testimony.

[7] A trial judge is not required to review and resolve every inconsistency in a witness' evidence, nor to respond to every argument advanced by counsel. That said, a trial judge should address and explain how they resolved major inconsistencies in the evidence of material witnesses: R. v. M, at para. 14. See also R. v. Williams, 2018 ONCA 138, at para. 33.

[8] A trial judge is not required to summarize specific findings on credibility by issuing a general statement as to "overall" credibility. It is enough that a trial judge has demonstrated a recognition, where applicable, that the witness' credibility was a live issue: R. v. R.E.M., 2008 SCC 51, [2008] 3 S.C.R. 3, at para 65.

[9] The applicable standard of proof, as in all civil cases, is proof on a balance of probabilities: F.H. v McDougall, 2008 SCC 53, [2008] 3 S.C.R. 41, at para 48. I must scrutinize the relevant evidence with care to determine whether it is more likely than not that E. or S. took the cash and precious metals from the three safes in the apartment.

Facts

A. The parties immigrate to Canada

11The parties met in 2006. The wife was living in Syria. The father was living in Saudi Arabia. They married in Syria on April 18, 2007. Immediately after they married, the parties lived together in Jeddah, Saudi Arabia. While in Saudi Arabia, they became the parents of three children who are now 15, 11, and 9.

12Though they lived in Saudi Arabia, neither party was a citizen of that country. Both held Syrian citizenship.

13In 2017, the parties and their children were able to immigrate to Canada under a privately sponsored refugee program. They were sponsored as refugees by the applicant’s cousin, Lana El Kadri.

14In order to immigrate to Canada under the program, the parties had to provide proof of funds, the amount of which the parties did not agree. According to the wife, in the amount of $25,000; according to the husband, $27,000; and according to a statement of agreed facts filed in this case (para. 20, Caselines A234) $30,000. Whatever the actual amount was, these funds were provided by the husband.

15The parties and their children arrived in Canada on or about February 28, 2017.

16When they left Saudi Arabia, the husband took the cash equivalent of $40,000 CDN with him. I accept his evidence that he left with this amount of money as it was the sum allowed by Saudi authorities - $20,000 CDN per person. The wife’s evidence was that the husband stashed cash in a backpack and elsewhere in their belongings as they were leaving. She did not know how much cash was taken out of the country by the husband.

17The husband had funds to pay for first and last month’s rent for a rental unit. Once in Canada, the husband supported the family financially. The wife remained at home with their children.

18On April 16, 2017, the husband incorporated a company under the Canada Business Corporations Act called Joud Canada Trading Company (sometimes called “Joud Canada” or “the Canadian Company”). The husband held 90% of the shares in Joud Canada while the parties lived together. Sometime after the separation, the husband transferred 49% of the shares to Joud Metals Est. Joud Canada engaged in the business of buying, fixing up, and then renting and selling real property. The wife’s evidence was that she assisted the husband in this enterprise by cleaning homes after they were renovated. The husband’s evidence was the wife never helped him and that “she never worked one hour during our 11-year marriage.” I do not accept the husband’s evidence in this regard. I prefer the wife’s specific recollections. The wife’s knowledge of the husband’s business affairs is more consistent with her having helped than the husband’s bald assertion that she did not.

19In the first year of operation of the business approximately four or five properties were bought and sold through Joud Canada. The husband’s evidence, which I accept, was that he made between $40,000 and $50,000 from these transactions.

20In addition to the real estate transactions, the husband also bought and sold used cars through Joud Canada.

B. The parties’ separation

21On May 30, 2018, the parties separated.

22The circumstances of the separation were unusual. According to the wife, the husband told her he wanted to marry another person in addition to her. The wife did not like that plan.

23At a dinner with friends, the subject was again discussed. In response, the wife told the husband that if he wanted to get married, she would go to court to “ask for half of your money.”

24Two or three days after this dinner, the husband told the wife that he wanted the two of them to see a lawyer so that she could “not have any right to [his] money.” It was at this point that the wife “asked for a separation.”

25I accept the wife’s evidence pertaining to the circumstances surrounding the separation as described by her. The wife was not cross-examined on this testimony. The husband did not give or call evidence with respect to these events and conversations. The wife’s evidence gives context to her claim that the husband is trying to hide assets from her by claiming they belong to his sister.

26Following the separation, the husband remained in the matrimonial home for approximately two months. When the husband did leave, he took the car keys out of the wife’s purse along with her and the children’s passports and birth certificates. He also messaged their landlord to advise that the wife would now be responsible for the rent.

27For the first three months following the separation, the husband’s evidence is that he paid the monthly rent of $1,700 and utilities in the amount of $400 per month for the matrimonial home. I accept this evidence. However, the husband’s evidence was not clear whether these payments were made while the parties lived separate and apart under the same roof or after he moved out of the matrimonial home. The wife’s pleadings acknowledge that these payments were made between June 2017 and September 2017.

28The children remained in the wife’s care following the separation.

C. Litigation begins

29On October 15, 2018, the wife started this case.

30The first temporary order was made on February 5, 2019, by Hebner J. It gave effect to a consent endorsement request filed by the parties. This order defined the husband’s parenting time with the children. It also required him to pay child support to the wife in the amount of $833.20 per month starting February 1, 2019. The support was calculated based upon the husband having income of $41,600.

31The husband has paid child support to the wife in accordance with this order since it was made.

32Subsequent to the separation, the wife enrolled in Fanshawe College to upgrade her English translation skills. In August 2019, she completed an eight-month course and earned a certificate of academic proficiency. In September 2019, she enrolled in King’s College where she hopes to earn a BA in approximately two more years, and then plans to enroll in a one-year master’s program.

33The husband continued operating the car business until June 2022.

34The husband has a professional degree from Jordan in industrial engineering and metallurgy. He was unable to pursue a career in this field in Canada as he could not secure an entry level or apprentice position. He has not been employed since June 2022 though he is still responsible for the real estate holdings of Joud Canada.

35At present, the husband is taking a real estate course through Humber College. He anticipates being able to work as a real estate agent within weeks. He is supported financially by his partner who is employed with a good job. He also had some savings which he used to meet his financial obligations.

Issue # 1: Equalization of Net Family Property

A. Legal considerations

36The Family Law Act, R.S.O. 1990, c. F.3, prescribes how the parties are to deal with their property as a result of their separation: they are to equalize their respective net family properties.

37Net family property is defined at s. 4 of the Family Law Act as follows:

“net family property” means the value of all the property, except property described in subsection (2), that a spouse owns on the valuation date, after deducting,

(a) the spouse’s debts and other liabilities, and

(b) the value of property, other than a matrimonial home, that the spouse owned on the date of the marriage, after deducting the spouse’s debts and other liabilities, other than debts or liabilities related directly to the acquisition or significant improvement of a matrimonial home, calculated as of the date of the marriage.

38Valuation date is defined at s. 4 of the Family Law Act as follows:

“valuation date” means the earliest of the following dates:

1. The date the spouses separate and there is no reasonable prospect that they will resume cohabitation.

39Section 5 of the Family Law Act provides that upon parties separating with no reasonable prospect that they will resume cohabitation, the spouse whose net family property is the lesser of the two net family properties, is entitled to one - half of the difference between them.

40In order to determine a party’s net family property, it is necessary for the court to decide questions of ownership and value of property and debts. In this regard, the court can be called upon to determine whether a spouse or a third party is the true or beneficial owner of the property in question.

41In this case, the wife has put in issue the true or beneficial ownership of a Saudi corporation called Joud Metals Est. It is registered in the husband’s sister’s name, but the wife claims that she holds it for the benefit of the husband.

42Also in this case, the parties disagree about the value of other assets and debts.

43The person who claims ownership of an asset or indebtedness has the onus of establishing the value of the asset or debt as of the date of separation or marriage, on the balance of probabilities.

B. Household contents

44In the net family property statement relied upon by the husband at trial, he claimed that the wife retained household contents on the date of separation valued at $22,500 and that he retained nothing of value. No explanation was given how this amount was arrived at by the husband except for a bill from a furniture company dated June 13, 2017 in the amount of $3,456.72.

45In his signed net family property statement dated November 25, 2019, the husband noted with respect to household contents that they had been divided. In his signed net family property statement dated two years later on November 14, 2021, he claimed that household contents had not yet been divided between the parties. Further, he claimed that he retained household contents as of the date of separation valued at $2,000.

46The wife claims that the parties’ household contents were divided following separation.

47In the wife's financial statement sworn October 11, 2018, she noted that with respect to household contents, the issue was “N/A” and did the same again in her financial statement sworn December 23, 2021. In her financial statement sworn November 9, 2022 she valued her date of separation household contents at $2,000.

48Neither party gave any oral evidence at trial regarding the value or division of household contents at the date of separation. Neither party cross-examined the other with respect to this issue.

49On the basis of the evidence presented, no value will be included in either party’s net family property statement on account of household contents at the date of separation. The net effect of this determination is that the parties are found to have retained household contents of equal value following their separation. The only consistent evidence provided through their respective net family property statements was that at one time they each claimed to have retained $2,000 in household contents.

C. Vehicle

50The wife valued the husband’s vehicle at $28,950 as of the date of separation. The husband valued this vehicle at $28,000. Neither party provided independent evidence of the value of the vehicle at the date of separation.

51The husband’s counsel acknowledged that in earlier financial documents, he valued his vehicle at $28,950. For the purposes of trial, he simply rounded it down to $28,000.

52As was the case with respect to household contents, neither party gave any oral evidence with respect to the value of the vehicle at the date of separation and neither party was cross-examined in respect to this issue.

53I find that the value of the husband’s motor vehicle at the date of separation was $28,950 as he had earlier sworn to in his financial statement of November 14, 2021. ³

D. Husband’s RBC checking account #...219

54The wife claims that on the date of separation, there was $224,308.01 in the husband’s bank account number ending in “… 219.” In support of this valuation, she relies upon an account history prepared by the bank which verifies this amount as being on deposit on May 31, 2018. It is described as the balance forward. I find that this was the amount on deposit in that account at the end of business the day before, which was the date of separation.

55The husband acknowledges that he had this sum in his account on the date of separation. His evidence is that the amount on deposit on the date of separation did not belong to him. It was the property of Joud Metals Est., the Saudi corporation owned and controlled by his sister. His evidence was:

1. He received the money advanced by Joud Metals Est. to Joud Canada, so that the latter could invest these funds.
2. He did not know that he should not deposit business funds into his personal account. He did so to save the $10 fee charge by the bank to certify funds when withdrawn.

56Determining whether the sum on deposit in the husband’s account on the date of separation was his or Joud Metals Est. requires the court, in part, to assess the credibility of the parties in relation to this issue.

i. The evidence of the wife and her witnesses is consistent

57The wife claims that the money advanced from Joud Metals Est. belonged to the husband as he was the true and beneficial owner of that company. She bases this claim on the following evidence:

• The husband told her that the monies in Joud Metals Est. was his.
• As the parties lived together for 11 years, she knew everything about his finances, because he told her.
• She was also aware of the husband’s dealings with the Saudi company when he was in Canada through conversations the husband had with his friend Iyad, who came to visit them in 2018. They discussed Saudi business.
• Joud Metals Est. was held by the sister as the registered owner, but for the husband’s benefit because only Saudi citizens can own a business in that country. His sister was a citizen. He was not.
• It was the wife’s observation that the sister was not involved in the business.
• The wife saw the husband manage the company. He assigned all the roles in the company. He told people what to do. He had experience in that industry.
• The husband kept the corporate stamps in his possession when they were in Saudi Arabia. At first these stamps were in their home and when the husband rented an office, he took them there.
• On occasion, the husband had the wife pretend to be the sister when dealing with the bank.
• The company was named after their daughter Joud.
• The husband was afraid that his sister would take his money and not give it to him.
• When they lived together, there were no loans between the husband and Joud Metals Est.
• The husband told her that he was going to close Joud Metals Est. once he was established and had transferred his Saudi money to Canada.

58The wife called her brother, Mohamed Shabib as a witness. This witness gave evidence that he had knowledge of the family’s finances from interactions with the husband and family. The husband told him that in Saudi Arabia he had his own business. Once they moved to Canada, the brother was in contact with the family on a weekly basis. They had several discussions about finances. The husband told the brother that he brought large sums of his finances from Saudi Arabia to invest here. These large sums came in chunks. He was told that there were assets of approximately “one million.” The brother specifically remembers sitting after lunch one time and being told by the husband that he had brought over half of the money and the other half would be brought over soon to purchase properties and for investment. The husband told him that he was using RBC as his bank. He also said that the husband would be an employee of the corporation because the money came into the corporation and there would not be tax on it. When asked why the husband would share this information with him, he said, because they “were family and had no issues, problems or concerns.”

59In cross-examination, Mr. Shabib acknowledged that he was supportive of his sister during the separation. He also agreed that he did not see any documents. This witness did not think the husband was bragging because it was “not part of our culture at all.”

60I found this witness to be credible. He had the opportunity to observe the events he described. He had no difficulty in remembering the events he described. He did not change his testimony during direct and cross-examination.

61The husband did not give any evidence about the conversations between Mr. Shabib and him.

62The wife also called Lana El Kadri. She assumed financial responsibility in connection with the parties’ refugee application. She was concerned about the father’s ability to meet his financial obligations. However, she became aware that he sent the money needed to make the refugee application being approximately $27,000 to $30,000. This money was held by the church and to be paid out over the first year the parties were in Canada. By providing these funds, the husband alleviated Ms. El Kadri’s concern about his finances and her financial responsibility.

63According to Ms. El Kadri, the husband told her he heard about the sponsorship program and wanted to know if he qualified. He also told her that he lacked stability in Saudi Arabia to have the financial freedom that he would have if he came to Canada. He had built up a company, but it was in his sister’s name. He was not comfortable with that legal situation. He had fear and worry that it could be lost because his name was not on the file. He also told Ms. El Kadri that he was confident that there would be no issues with him coming to Canada because he had an entrepreneurial spirit. He was going to bring some money and start a business in Canada. He did not provide a specific figure. Following the family’s arrival in Canada, Ms. El Kadri did not have concerns about their finances. He promptly repaid whatever monies that Ms. El Kadri had advanced. He was able to pay first and last months rent.

64The father denied that he ever had these conversations with Ms. El Kadri.

65I find that the evidence given by Ms. El Kadri in the context of the financial responsibility she was assuming is more plausible than that of the father’s evidence that he did not have any discussions with her about his finances.

66Where Ms. El Kadri’s evidence differs from that of the husband regarding the conversations concerning his finances and reasons for coming to Canada, I prefer that of Ms. El Kadri.

67I accept her evidence that the husband told her he was coming to Canada because he lacked the financial stability in Saudi Arabia and that coming to Canada would give him some financial freedom. I also accept her evidence that the husband told her that he had built up a company in Saudi Arabia but that it was in the sister’s name. I also accept her evidence that he told her that he feared his money could be lost because it was not in his name. I accept that he explained that he had put the assets in his sister’s name because she was a Saudi citizen, and he was not. Finally, I accept her evidence that it was the husband’s plan to bring his money to Canada to start a business.

68Ms. El Kadri’s evidence is consistent with the evidence given by the wife and the wife’s brother on these matters.

ii. Husband’s bank records

69There is some evidence supporting the husband’s position that the monies on deposit in his bank account did not belong to him.

70The husband’s evidence was that prior to separation, he would deposit sale or Joud Metals Est. loan proceeds into his personal account so that he did not incur bank fees of $10 when “pulling a certified cheque” from the business account. He also testified that when funds were needed to purchase a property, he would transfer funds from his personal account to the real estate lawyer.

71In the bank document relied upon by the parties as disclosing the amount of the husband’s personal account at the date of separation, there are two transfers to Joud Metals Establishment: (1) June 12, 2018 for $25,045 and, (2) June 26, 2018 for $75,000. These transfers are not consistent with the wife’s evidence that he wanted to transfer all of his Saudi assets to Canada.

72This evidence is consistent with the husband’s assertion that he was acting, at least to some extent, for the benefit of Joud Metals Est. However, these appeared to be the only two amounts transferred by the husband to Joud Metals Est. Both transfers occurred after the date of separation. Another concern is that there is no evidence that the Joud Metals Est. account to which the funds were transferred, was in Saudi Arabia or Canada or elsewhere. There is also evidence, which I accept, that while in Saudi Arabia the husband dealt with the bank on behalf of Joud Metals Est.

73During the period starting March 6, 2017 and ending on the date of separation, it appears that Joud Metals Est. sent $738,089.21 to the husband. All but four amounts were deposited to the husband’s personal account. The four other amounts were deposited to Joud Canada. Prior to the separation, there were no monies paid to Joud Metals Est. by the husband or Joud Canada.

iii. Evidence of the husband’s accountant

74The evidence of the husband’s accountant was not helpful in determining whether the husband was the true or beneficial owner of the Joud Metals Est. monies.

75I find that the accountant was a credible witness. He did not in any way attempt to mislead the court. However, I do not find his evidence reliable in relation to the issue of ownership of Joud Metals Est. or the monies it sent to the husband.

76The accountant prepared accounting documents for the husband on a Notice to Reader basis, later called a Compilation Engagement Report. These financial statements and the husband’s tax returns prepared by the accountant’s firm were prepared based on information and documents provided by the husband. The terms of engagement with the accountant did not require the information to be audited. The accountant relied upon the information provided by the husband. The accountant was not required to perform procedures to verify the accuracy or completeness of the information provided by the husband.

77I accept the accountant’s evidence that the financial statements and loan payable document he prepared substantially reflect the information provided to him by the husband.

78In the loans payable document prepared by the accountant, it was recorded that the $25,045 loan repayment occurred on April 18, 2018. This was before the separation occurred. However, on the RBC statement this payment to Joud Metal Est. is shown as having taken place on June 12, 2018, a date shortly after the parties separated. During submissions, the husband’s counsel acknowledged the error.

79It is for these reasons that the post separation accounting preformed by the accountant is not determinative of who was the beneficial owner of the monies sent to the husband by Joud Metals Est.

iv. The Memorandum of Understanding

80The husband relies upon a Memorandum of Understanding (exhibit #16) which proports to explain the relationship between him, an Ontario corporation, and Joud Metals Est. This memorandum sets out that three parties will buy and sell real estate in Ontario. It also provides that Joud Metals Est. will own 49% of the Ontario corporation. The plan was for the Ontario corporation to borrow money from Joud Metals Est. ⁴ The husband would be employed as a property manager at the rate of $20 per hour as soon as the company had funds. The husband also agreed to personally guarantee the loans made by Joud Metals Est.

81This document gives rise to several concerns. It is not dated. It is not signed. It is in English. However, the husband’s evidence is that his sister, the person in whose name Joud Metals Est. is registered, does not communicate in English.

82The husband’s evidence is that initially there was an exchange of emails with the Saudi company about how to structure the business in Ontario. He described it as a casual exchange of emails. The husband did not explain why these emails were not produced. They could have established when these email exchanges took place. These emails that were written are within his control. In cross-examination, when asked about these emails, the husband’s answers were evasive.

83Despite the Memorandum of Understanding providing that the husband was not to use funds advanced for personal purposes without written approval, the husband did just that. The husband did not provide evidence of prior written approval for the expenditure of funds for personal reasons.

84When the company was incorporated, 90% of the shares were issued to the husband and 10% to Iyad Qamhiea despite the Memorandum of Understanding that Joud Metals Est. was to own 49% of the shares. This transfer of shares to Joud Metals took place after the parties separated.

v. The loan agreements

85The husband put in evidence 13 loan agreements between Joud Metals Est. and himself purporting to evidence the loans made. In these documents the husband was the borrower and not the guarantor as envisioned in the Memorandum of Understanding.

86The husband described the process for making these loan agreements. The agreements were emailed to him in Word format and in Arabic. He would print and then sign the agreement then send it back to Saudi Arabia where it was put on letterhead. At one point he was sent five or six of these documents at one time through FedEx.

87Not all advances claimed to be loans were documented in this fashion. The husband claims that there were 21 advances.

88The accountant’s evidence was that he reviewed loan documents for all of the loans he included in the financial records. The husband’s evidence is that he produced to the wife and the court all of the loan agreements he had in his possession. He did not explain the discrepancy between the number of loan agreements that would have been reviewed by the accountant as compared to the loan agreements produced in this court case.

89I must also take into account the wife’s evidence, which I accept, that she was aware of the husband’s dealings and that before they separated there were no loans from Joud Metals Est. She submits that these documents were prepared after the parties separated.

90The husband did not put into evidence the emails that were received and returned containing the terms of the loan agreements. These documents could have established when they were sent. These documents were within the husband’s control.

vi. Husband’s sister was not called as a witness

91The husband did not explain why he did not call his sister to testify about matters pertaining to the true ownership of Joud Metals Est.

92An adverse inference may be drawn against a party for failure, without adequate explanation, to call a relevant witness which would be expected to support the party’s case against the other party. The court may, and I do, infer that the witness was not called out of fear that she would not have supported that case.

vii. Onus

93It is the husband who has the onus of establishing that the sum of $224,308.01 in his personal bank account on the date of separation was not his.

viii. Conclusion

94When I consider all of the foregoing, I find that the husband has not met his onus. Where the wife’s evidence differs from that of the husband in relation to ownership of these funds, I accept the evidence of the wife for the reasons set out above.

95I find that on the date of separation, the sum of $224,308.01 in the husband’s personal account was his property for the purpose of determining his net family property.

E. Husband’s checking account USD #...576

96The husband claims that the value of monies on deposit into his account in Canadian dollars on the date of separation was $15,915.03. The wife’s conversion into Canadian dollars in respect to this account was $15,892.83. Based on the conversion table provided, I find the wife’s calculation to be accurate.

F. Joud Canada Trading Inc.

97The wife claims that the value to be attributed to the husband’s interest in Joud Canada Trading Inc. at the date of separation is $4,404 being its Total Equity as set out in its December 31, 2017 Balance Sheet prepared by the husband’s accountant. This amount corresponds to the total shareholder equity figure (line 3620) shown in the corporation’s December 31, 2017 corporate tax return’s balance sheet. Both documents include $300,000 as the amount owing to husband/shareholder.

98The husband values his interest in the corporation at $51. This amount is based on the husband owning 51 of the 100 shares issued and subscribed for at a dollar per share. These shares were issued April 15, 2017.

99Neither party had this asset valued as at the date of separation.

100The parties did not provide caselaw to address the evidentiary situation of there being no evidence of the asset value at the date of separation. After oral submissions were made, I asked the parties to address this issue by way of written submissions, which they did.

101Caselaw on this issue begins with Menage v. Hedges (1987), 5 A.C.W.S. (3d) 178 (Ont. U.F.C.). At paragraph 44, the court notes that the Family Law Act does not state who bears the burden of establishing the value of net family property. However, the scheme of the Act and disclosure rules were in force to ensure full and fair disclosure. This was the case in 1987 and remains so today. The court held that the onus of proving value is on the owner, on the balance of probabilities: see also Nemetz v. Reiter-Nemetz, 2022 ONSC 2825, at paras. 63 – 64.

102In Sheikh v. Sheikh, at para. 110, the court held that the failure to provide credible evidence to support a value may result in a value being assigned which is less advantageous to the party claiming the asset.

103The husband’s accountant testified that he was not asked to value the husband’s interest in the corporation at the date of separation. The husband did not give evidence why it was not valued as of that date. His evidence was that the company had no value because it owed money to Joud Metals Est. – the company that funded Joud Canada Trading Inc.’s operation.

104The value of $51 ascribed by the husband has no relationship to the assets, debts, or income of the company at the date of separation. In any event, at the date of separation, the husband held 90% of the outstanding common shares in the company. The transfer by the husband of 39 shares to Joud Metals Est. did not take place until December 17, 2018, a date after the date of separation.

105Counsel for the husband provided no authority that the method of valuation proposed by him was reliable, reasonable, or appropriate.

106The wife’s valuation was based on the total equity held by the company six months before the date of separation.

107Exhibit 15 – 35 is Joud Canada’s 2018 financial statement. It contains a comparison of the 2017 and 2018 year-end balance sheets as of December 31. On December 31, 2017, the total equity is disclosed as $4,404. Due to the husband on that date as a shareholder was $300,000. By December 31, 2018, the total equity in the company was ($54,771.68). The husband owed the company $23,483.77. Over that same year, the debt owed by Joud Canada to Joud Metal Est. went from zero to $706,532.

108The parties did not take advantage of the time they had from the date this case was started until the date of trial to marshal reliable evidence of value. The husband must bear the responsibility for this. He failed, without good reason, to provide a proper valuation of the company. By Order of Thomas J. dated November 25, 2019 the husband was ordered to use his best efforts to provide a net worth value of his business. In submissions, his counsel stated he did not have the money to obtain this valuation. I cannot find that to be the case because the husband did not give that as an excuse in his evidence. He did not give evidence of the best efforts taken. His behaviour in this regard was unreasonable.

109On the evidence before me, I am not able to determine the precise value of the husband’s interest in Joud Canada on the date of separation. However, it would not be in keeping with the Preamble of the Family Law Act which in part provides that “…it is necessary to provide in law for the orderly and equitable settlement of the affairs of the spouses upon the breakdown of the partnership …” if the husband were to benefit from his failure to provide a value of this asset as of the date of separation.

110I am left attempting to calculate the husband’s net family property based on the best evidence tendered. I am mindful that the value of the husband’s interest in Joud Canada will be based on financial data that was compiled for a date five months before the date of separation, and where the corporation remained active during that five-month period. Nonetheless, the best evidence of the husband’s interest in Joud Canada, as close to the date of separation as the evidence allows me to determine, is $4,404 being the corporation’s Total Equity as set out in its December 31, 2017 Balance Sheet prepared by the husband’s accountant. ⁵

G. Money owed to the husband by Joud Canada

111I do not have evidence of the advances the husband made to Joud Canada as of the date of separation. I accept that the evidence discloses that Joud Metals Est. sent $738,089.21 to the husband prior to separation. However, I do not have evidence of what amount was held on the date of separation except that which was on deposit in the husband's personal account.

112On the same basis that it would not be in keeping with the Preamble to allow the husband to benefit from his failure to provide a value of this asset as of the date of separation, I find that the husband was owed $300,000 by Joud Canada for the purpose of calculating his net family property. The same reasoning applied with respect to the calculation of the husband’s interest in Joud Canada as a shareholder applies to the determination of this asset. The amount of $300,000 is the amount reflected in the corporation’s December 31, 2017 Balance Sheet as owing to the husband.

H. Joud Metal Est.

113As stated earlier in these reasons the husband claims that he has no interest in Joud Metal Est., rather it belongs to his sister. He was merely an employee. On the other hand, the wife claims that the husband is the true or beneficial owner of Joud Metal Est. and its value should be included in the husband’s net family property calculation.

114I agree with the wife that on the evidence presented in this case the husband has a beneficial interest in Joud Metal Est. The reasons for this finding are set out above in respect to ownership of the monies held on deposit by the husband in his RBC bank account “# …219” at the date of separation.

115I agree with the wife’s submission that it appears that the husband deliberately avoided providing disclosure of this value and this left her in a difficult position in attributing a value to his business.

116Unfortunately, the wife was not able to provide me with a calculation of the value of Joud Metal Est. at the date of separation. In her net family property statement dated June 1, 2023 and relied upon by her in this trial, she stated that the value of Joud Metal Est. was “unknown.” While I do draw an adverse inference against the husband due to his failure to produce relevant documents and call his sister as a witness on the issue of ownership, at best the evidence supports a finding that the $300,000 referred to above came from Joud Metal Est. and it has been accounted for.

I. Husband’s Car Loan on date of Separation

117The wife disputes the validity of this claim because the husband did not provide any loan documents.

118During the trial, the husband did not provide any oral evidence regarding a car loan he owed at the date of separation. The only evidence of the debt is that it is claimed in his net family property statement and financial statement both dated May 13, 2023. No loan agreement evidencing the loan nor loan statement as of the date of separation was provided by the husband.

119In the husband’s sworn financial statement of November 21, 2018, he deposed on that date he owed $13,425.68 to RBC on account of a personal loan. The monthly payment was shown as $488.83. However, in his three financial statements sworn November 13, 2019, November 14, 2021, and November 10, 2022, the husband did not disclose any personal or car loan debt as of the date of separation.

120In his net family property statements filed in 2019 and 2021, the RBC loan is shown as of the date of separation.

121Despite not addressing the loan in his oral evidence, or providing loan documents, it was referred to in some of his earlier court documents.

122Though the evidence is thin, I find that the husband has established on the balance of probabilities that he owed at least $13,425.68 to RBC on the date of separation.

J. Husband’s date of marriage property and debts

123The husband claims that on the date of marriage, he owned general household items and vehicles valued at $39,500. He also claimed that he had bank accounts and savings totaling $28,779.

124I find that the husband has not met his onus in proving these properties or their values at the date of marriage. He offered no oral or documentary evidence regarding these properties. This claim is unlike the one made in respect to the car loan for which there was an associated asset – the car – which was acknowledged by the wife.

K. The calculation of the parties’ net family properties and equalization payment

125Based on those values agreed to by the parties and the findings made in these reasons with respect to disputed assets and debts, I have calculated the equalization payment owing by the husband to the wife as at the date of separation in the amount of $288,746.81 together with pre-judgement interest under the Courts of Justice Act, R.S.O. 1990, c. C.43, from the date of separation.

Assets – date of separation

	Wife	Husband
Vehicle		$28,950
RBC checking account		$224,308.01
RBC U.S. account		$15,892.82
SABB CUC account		$3,985.08
RBC account #...708	$275.17
RBC account #...235		$197.39
RBC Global Assets		$20,000
Joud Canada Trading Inc		$4,404
Joud Canada Shareholder loan		$300,000
Joud Metals Est. – not proved
Total:	$275.17	$597,737.30

Assets – date of separation

	Wife	Husband
Visa #...169		$1,375.29
Car loan		$13,425.68
WM Mastercard		$767.54
Notarial Tax on Mutual Fund		$4,400
Total	Nil	$19,968.51

Property and debt at Date of Marriage: $0.00

Total net family property: $597,737.30 - $19,968.51 = $577,768.79 - $275.17 = $577,493.62 ÷ 2 = $288,746.81 ⁶

Issue # 2: Post equalization adjustments

126In his financial statement sworn May 13, 2023, the husband claimed five post equalization adjustments. The only one not otherwise dealt with in these reasons is his claim that the wife took $4,400 from the joint bank account. The husband did not give oral evidence regarding this claim. He did not specify which account he referred to nor when the monies were supposedly taken. The husband’s counsel acknowledged that no evidence was provided with respect to this claim. There shall be no adjustment regarding this post equalization claim.

Issue # 3: Child Support

127The wife asks that income be imputed to the husband in the amount of $54,700 based on his 2021 income when determining his support after January 1, 2022 forward.

128The husband asks that his ongoing child support obligation be based on his actual 2022 income of $22,387.

A. Facts

129The husband operated a used car dealership and bought and sold real estate through Joud Canada. He continues to manage the real estate business. His income as disclosed in his T1 general form has been as follows:

• 2019 - $43,452.93
• 2020 - $42,040
• 2021- $54,700
• 2022 - $22,387.13

130The husband stopped selling used cars in June 2022 because he claimed it was hard to source them. This also made used cars expensive to sell. He stopped taking any income from Joud Canada at that time.

131The corporation continues to have real estate assets, but the husband’s plan is to sell them by the end of this year. Even though there is more work to be done “to wrap up” this company, he has not taken a salary from it.

132Despite having no ongoing income, the husband has paid child support as ordered in the amount of $833.20 per month.

133In order to meet his ongoing financial obligations, the husband has used his savings, borrowed from a couple of friends, and relies on the financial support of his partner. His partner is employed and has an annual income of $90,800.

134Though trained as an engineer in Jordan, the husband has not been able to obtain employment in this field in Canada.

135At present, the husband is enrolled in a real estate course through Humber College. He expects to be “fully registered” as a real estate agent within weeks and already has possible clients.

B. Legal Considerations

136The issue of child support is to be decided under provincial legislation as the parties seek a final order and want to delay the granting of a divorce.

137The husband’s obligation to pay child support to the wife for their three children is found in the Family Law Act, ss. 31(1), 33(1), and 33(11). These sections provide as follows:

Obligation of parent to support child

31 (1) Every parent has an obligation to provide support, to the extent that the parent is capable of doing so, for his or her unmarried child who,

(a) is a minor;

(b) is enrolled in a full-time program of education; or

(c) is unable by reason of illness, disability or other cause to withdraw from the charge of his or her parents

Order for support

33 (1) A court may, on application, order a person to provide support for his or her dependants and determine the amount of support.

Application of child support guidelines

(11) A court making an order for the support of a child shall do so in accordance with the child support guidelines.

138The amount of child support to be paid by the husband will be determined under the provincial Child Support Guidelines, O. Reg. 391/97, (“CSG”). The amount will be determined by reference to the number of children under the age of majority – 3, and the husband’s income: CSG, s. 3(1)(a).

139The husband’s income at first instance, is determined having regard to his sources of income set out under the heading “Total income” in the T1 General form issued by the Canada Revenue Agency and is adjusted in accordance with Schedule III: CSG, s. 16.

140This income determination is subject to the court’s ability to impute income to him if the court considers it appropriate to do so in the circumstances: CSG, s. 19(1).

141In this case, the wife claims income should be imputed to the husband on the basis that: (1) he is intentionally unemployed without acceptable excuse: s. 19(1)(a), and (2) he failed to provide income information when under a legal obligation to do so: s. 19(1)(f). In this case, what he failed to provide was his 2022 income tax information.

142In Drygala v. Pauli (2002), 61 O.R. (3d) 711 (Ont. C.A.), at para. 23, the court set out a three-part test to determine whether income should be imputed. This test is as follows:

1. Is the spouse intentionally under-employed or unemployed?
2. If so, is the intentional under-employment or unemployment required by virtue of his reasonable educational needs?
3. If the answer to question #2 is negative, what income is appropriately imputed in the circumstances?

143In determining whether a parent is intentionally unemployed, Drygala held that there is no need to find a specific intent to evade a child support obligation. The court need only determine if the parent chooses to earn less than they are capable of earning.

C. Discussion

144I find that the husband chose to earn less income than he is capable of earning and continues to do so.

145It was the husband’s choice to stop taking any salary from the Canadian corporation even though it still has assets and ongoing activity. The husband’s evidence is that he intends to take the steps needed to wind down the company by the end of this year. This implies that there is still work to be done in connection with this company. He was paid for this type of work in the past.

146The husband chose to stop buying and selling used cars. His evidence was that it was hard to secure cars and they became more expensive. It does not necessarily follow that the business was no longer viable or that it could not carry on with fewer sales. There is no suggestion in the evidence that the business could not generate some income.

147The husband did not suggest that he had to stop carrying on work for the corporation “by virtue of his reasonable educational needs.”

148The amount of income to impute cannot be arbitrarily selected. There must be a rational basis for imputing a specific amount of income.

149In Drygala, the court held that the exercise of the court’s discretion must be grounded in the evidence (para. 44).

150The court must consider what is reasonable in the circumstances: Drygala at para. 45. It is open to the court to find that some or all of the monies received by a parent from third parties can be considered when determining imputed income (para. 47).

151In this case, the husband has been able to pay his child support obligations of $833.20 per month. This child support amount was based on the husband having an annual income of $41,600.

152In the husband’s financial statement sworn May 13, 2023, he discloses that he has monthly expenses of $5,426 (being $65,121 per annum) to which his partner contributes $3,700 per month. These expenses do not include the child support obligation he has been meeting.

153While the husband did not provide his 2022 income tax return, he did provide a T4 statement.

154I find that on this evidence, it is appropriate to impute income to the husband in the amount of $41,600 for the year 2022 and ongoing. The husband demonstrated an ability to pay child support at this income despite being intentionally unemployed for almost a year.

155The husband has described himself as entrepreneurial and is actively pursuing a career in real estate sales. I also take into account that the husband plans to sell the remaining assets in Joud Canada. His evidence is that there will be a profit to which he will be entitled to a share.

Child support from date of separation to date of trial

156The wife asks that the husband’s child support be adjusted to reflect his actual and imputed income as of the date of trial. She claims that the husband has underpaid child support in the amount of $12,485.

157The husband concedes that it is appropriate to readjust his child support obligation but adds that he should be given credit for all payments made by him. His position is that he underpaid child support from the date of separation until trial in the amount of $981.

2018

158The wife’s evidence is that after the parties separated, the husband did not contribute towards the support of the children except to the extent of $800.

159For the period starting June 1, 2018 and ending January 31, 2019 (the month before child support was ordered) she asks for child support in the amount of $833.20 per month based on income of $41,600. In effect, this would have the Hebner J. order reach back to the date of separation. The amount claimed by the wife for this period is $5,032.40 (being $833.20 per month x 7 months - $800).

160The husband’s evidence is that he paid $6,300 for the benefit of the wife and children after the separation. He did this by paying three months rent at $1,700 per month and three months of utility bills at $400 per month.

161I accept the wife’s evidence with regard to the child support paid before the court order was made. I do so because in the Statement of Agreed Facts filed in the trial record, the parties agreed that:

For the period June 2018 until February 2019 the respondent paid approximately $800 for child support.

2019

162In 2019, the husband’s actual income of $43,452.93. He started paying child support of $833.20 per month in February 2019 based on income of $41,600. The monthly table amount he should have paid was $863.43. The monthly shortfall was $30.23 – being $332.53 for the year.

2020

163In 2020, the husband’s actual income was $42,040. He paid $833.20 each month. The actual table amount for child support payable was $840.64. The monthly shortfall was $7.44 – being $89.20 for the year.

2021

164In 2021, the husband’s actual income was $54,700. He paid $833.20 per month. The actual table amount of child support payable was $1,074.42. The monthly shortfall was $241.22 – being $2,894.64 for the year.

2022 and 2023

165As I imputed income to the husband from January 1, 2022 of $41,600 and he paid the required child support, there is no shortfall for that period.

Summary

166In summary, the shortfall of child support due is:

• 2018 - $5,032.40
• 2019 - $332.53
• 2020 - $89.28
• 2021 - $2,894.64
• Total - $8,348.85

167These arrears of $8,348.85 are to be paid by the husband to the wife forthwith.

Order

168For these reasons the following order shall issue:

1. The husband shall pay to the wife an equalization payment of $288,746.81 together with pre-judgement interest under the Courts of Justice Act from the date of separation.
2. Commencing on the first day of July, 2023, and on the first day of each month thereafter the husband shall pay to the wife for the three children of the marriage $833.20 based on the husband’s imputed annual income of $41,600 and cl. 3(1)(a) of the provincial Child Support Guidelines.
3. The husband shall pay forthwith to the wife arrears of child support to June 30, 2023, fixed in the amount of $8,348.85.
4. The divorce is split from the other issues in this case and may be sought in the usual manner.
5. The parties are encouraged to settle the issues of prejudgment interest and costs. If they are not able to do so on the wife shall serve and file her submissions on these issues within 10 days of the release of these reasons. The husband shall serve and file his submissions on these issues within 10 days of the receipt of the wife’s submissions. The submissions shall be limited to five pages double-spaced, and 12-point font together with a bill of costs any offers to settle. The parties are reminded to comply with rule 24(12.2) which provides that “a party who opposes a claim for costs respecting fees or expenses shall provide documentation showing the party’s own fees and expenses to the court and to the other party.” If submissions are not provided within the timeframe ordered, the issues shall be deemed settled.

“Justice B. Tobin”

Released: July 6, 2023

Notes

Footnotes

1. 1The factors set out in Novak Estate (Re) were adopted in Ontario in Meilleur v Aqui 2022 ONSC 2990, which was cited by the wife, and J.M.G. v. L.D.G. 2016 ONSC 3042 which was cited by the husband.
2. 2This case was not cited by counsel but was reviewed with them during submissions. Counsel were given time and the opportunity to make submissions having regard to this case.
3. 3I also note that in his financial statement sworn November 13, 2019, the husband swore that the value of his automobile was $29,500 at the date of separation.
4. 4The Memorandum of Understanding did not explain how it was that the husband received almost all the money sent and which was put into his personal account.
5. 5I have not reduced this value by the nominal share registered to a third party.
6. 6If I have made any omissions or arithmetic errors, counsel shall arrange to speak to the matter before me as arranged through trial coordinator.