COURT FILE NO.: FS-19-94732-00

DATE: 2023 10 26

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: JEFF DE FARIA, Applicant

AND:

ANNA NEDELTCHEVA, Respondent

BEFORE: The Honourable Justice Mirza

COUNSEL: Steven Benmor, for the Applicant

John W. Bruggeman, for the Respondent

HEARD: Trial: February 7 to 9 and May 29 to June 2, 2023

E N D O R S E M E N T

INTRODUCTION

[1] This is my reasons for judgment in the family law trial of the Applicant, Jeff De Faria, and the Respondent, Anna Nedeltcheva.

[2] The parties were married on August 20, 2011.

[3] They separated on October 1, 2018.

[4] They share two children from their marriage, a son, born in 2015, and a daughter, born in 2017.

[5] The children reside with their parents on an equal basis.

[6] The parties were able to resolve most of the parenting issues. I will deal with them as required.

[7] At the conclusion of the trial, the financial issues remained in dispute.

[8] The parties consented to have the Applicant’s claim – for a refund of the deposit for the first unsuccessful attempt to purchase the matrimonial home joined as part of these proceedings. On May 11, 2023, a consent order was granted to transfer CV-21-00663613-0000 to Brampton and add this matter to the divorce proceeding in Brampton under Court File No. FS-19-00094732-0000.

[9] The reasons will refer to an agreed statement of fact (ASF) and affidavits that were filed by the parties.

FINANCIAL ISSUES

Delma Property

[10] 52 Delma Drive is a residential property that is a focal point of the financial issues in this trial. The Applicant’s parents, Tony and Maria De Faria, financially assisted the Applicant to purchase this home prior to marriage for $350,000 on September 22, 2009.

[11] The Applicant submits that he should be granted a date of marriage deduction for the property, 52 Delma Drive, in the amount of $440,000.

Private Mortgage for Purchase

[12] The Applicant’s parents provided the Applicant with $329,068.55 towards the purchase of the Delma Drive home. This amount was registered as a mortgage on title.

[13] The Applicant paid a $25,000.00 deposit.

[14] The loan from his parents in the amount of $329,068.55 was secured by way of charge/mortgage bearing registration number AT2182514, dated September 22, 2009. No interest was charged.

[15] During cross-examination, the Applicant’s father, Tony De Faria, testified that the full amount of the mortgage was owing when registered.

[16] Experienced real estate counsel Bob Aaron handled the real estate transaction. Mr. Aaron testified that he has been counsel to the De Faria family for several years. The Applicant’s father, Tony, is a long-standing client of Mr. Aaron. Mr. Aaron provided real estate and estates planning advice to Tony and Mary De Faria. He has assisted Tony and Jeff in the past. He described that he has a good relationship with the family. He refuted that they are friends, or that they have more than a good professional relationship.

[17] With respect to the mortgage charge, Mr. Aaron’s affidavit, Exhibit 15, at paras. 10-11 states:

10. The Applicant advised me his parents agreed to provide him with a personal loan and that I was to register a Charge on title in favour of his parents, which I registered as Charge/Mortgage instrument AT2182514. It was my advice that the mortgage be registered for $329,066.55 for estate planning purposes.

11. Sometime in April 2011, the Applicant advised me that he had paid off the loan from his parents and wanted to discharge the Charge held by them. The Applicant also advised me (he) intended to sell the home. I advised him that we could discharge his parents’ Charge at the same time as its sale.

Gift and Remaining Loan

[18] In this ruling, I will respectfully refer to the parties and their family members by first name for simplicity and to avoid confusion.

[19] The Applicant’s father Tony co-owns a construction company with his brother, called Finesse. Tony stated that on the date that Jeff received the keys to the home at 52 Delma there was a celebration at the property involving champagne during which Tony and Mary told Jeff that they would forgive $200,000 of the principal outstanding on the mortgage he owed them.

[20] Tony claims that this gift from him and his wife was an early inheritance. He told Jeff that $200,000 of the $329,000 mortgage was a gift.

[21] Tony testified that his daughter, Alhana Stevens, was present, and she too was told that she would receive a $200,000 early inheritance as a gift when she was ready to buy a property. The Respondent was not present for this discussion.

[22] The Applicant’s sister, Alhana, testified that she recalled the meeting where she and her brother were told by their parents of an early inheritance in the amount of $200,000. She said she believed that it was at their parents’ home. She stated that it was before the parties were married. The Respondent was not present.

[23] The $200,000 gift was intended to be a joint gift from Tony and Mary De Faria.

[24] Mary De Faria, the Applicant’s mother, did not testify. There was no evidence before the court of when Mary considered the gift to have been delivered.

[25] The Applicant, Jeff, states in his affidavit, Exhibit 1, at paragraphs 65 to 69, that between October 2009 and March 2011, he paid off the entirety of the balance of the mortgage. In other words, by August 20, 2011 (date of marriage) the mortgage was paid off.

[26] The Applicant states that he paid off the balance by working large renovation projects and paying his parents back in cash instalments. He testified that this renovation work was in addition to his full-time job. He agreed that to pay off the mortgage of $129,000 in 14 months would require, on average, monthly payments of $9,000. He said he would make cash payments of $10,000 to $20,000, paid directly to his father.

[27] No documents were submitted to corroborate the extra income earned by the Applicant or the payment transfers to his parents.

[28] Tony and Alhana testified that Jeff made payments to Tony in large quantities of cash at the parent’s home.

[29] The Respondent remembers the issue of the gift and mortgage on 52 Delma differently. She says that Tony gifted the $200,000 amount to the couple after marriage, at a time when they were looking to buy a larger and more expensive home to accommodate the next step in their family.

[30] The Applicant’s parents’ generosity at that juncture permitted the couple to increase their budget to buy a larger home where they could grow their family and remain longer-term.

[31] The Respondent’s parents, Lada and Igor Nedeltcheva, testified and their affidavits were filed. See Exhibits 41 and 42. Lada has a M.A. in economics and worked as an anti-money laundering specialist. Igor has a M.A. in electronics and served in the Canadian Armed Forces in IT.

[32] The Respondent’s parents both stated that they were grateful for the gift by the Applicant’s parents, post marriage. They were so taken by the gesture that they met with the Applicant’s parents with Jeff and Anna to say thank you, at a property called Highgate. This was a house the couple were interested in buying (but did not) after their budget increased due to the gift.

[33] The $200,000 gift meant that the Applicant could use the additional equity resulting from the gift and the sale of 52 Delma towards the purchase of their next home ­– a larger more expensive home.

[34] The Respondent’s parents were cross-examined and it was suggested to them that they were motivated to claim the gift was received after marriage to improve their daughter’s ultimate ability of repaying her debts. This included their contribution of $575,000 to help her buy her current home. They agreed that they helped their daughter with the use of their retirement savings to buy her current home, but denied the suggestion of an improper motive.

[35] The Respondent said that after marriage, to her knowledge, the Applicant only paid his parents back about $15,000. The Respondent believes that the Applicant made approximately $15,000 in payments towards the balance of $129,000 owing to his parents. In her view, this would explain the $115,000 payout in 2012 to the parents for the remaining mortgage.

Renovation Loan

[36] It is an agreed fact that Mr. Aaron's firm provided the Applicant's parents with a certified cheque in the amount of $115,00.00 dated August 8, 2012. (See ASF at para. 60).

[37] The Applicant stated that after he paid back the mortgage owing to his parents of approximately $129,000 (factoring the gift), he obtained a loan from his parents in the amount of $115,000 to pay for a home renovation for 52 Delma.

[38] In the Applicant’s affidavit, Exhibit 1 at paragraph 68, he states:

68. The Respondent moved into my home when we got married. It was my hope that we could raise a family in this home. But the Respondent complained about its size and its condition. So I decided to renovate the home to improve its condition and make it more comfortable for us as a family. To do this renovation and pay for the trades and materials, I needed a loan. So I again approached my parents. Altogether, they loaned me $115,000 to complete the renovation to 52 Delma Drive.

[39] In his trial testimony on February 8, 2023, the Applicant said that he did not recall the exact amount of the renovation loan but that he was offered “maybe another 100,000 as a loan.” (Transcript, February 8, 2023 at p. 29). The Applicant said that his parents gave him cash to pay the contractors. There were no receipts or bills. The work was done by people they knew.

[40] No receipts, photographs, names or other particulars were submitted to the court in relation to the following significant renovation work purportedly completed including: removal of the Oil Furnace, installation of a Natural Gas HVAC System, removal of a supporting wall and beam and installation of a new wall, laying of ceramic tiling and the re-wiring of the electrical system and installation of pot-lights.

[41] Jeff testified that he discussed the renovation with the Respondent. He did not recall specifically discussing with her the loan from his parents. When confronted with his transcript from examination questioning (prior to trial) on February 24, 2022, he accepted that he said at that time he did not recall.

[42] Jeff testified at trial that due to the age of the 52 Delma home when acquired, he did a light renovation before marriage such as new curtains, paint, and moved some small things around. The larger renovation requiring the loan was after marriage.

[43] Jeff said that this $115,000 loan was an additional loan from his parents, separate from the mortgage. He stated that there was no agreement for this loan with his parents. He did not explain why there was no mention of this loan in writing to Mr. Aaron.

[44] In cross-examination, Jeff was asked about a possible inconsistency in his testimony during examinations for discovery, in particular, at question 259, where he stated that he did a full gut renovation on the first floor, renovated the kitchen, and re-painted the whole house – before marriage and the cost was around 100k. His counsel noted that later in examinations, he said it was after marriage and had mispoke. Jeff agreed that he made the comments but maintained that the renovation was after marriage.

[45] The Respondent testified that the significant renovations were completed after marriage. She estimated that they cost far less, around $25,000. She did not submit any invoices, receipts or documents.

[46] To her knowledge, only light renovations were done prior to their marriage. The Applicant, his father, and contacts did the work for less. She estimated it cost around $25,000. The couple paid for supplies. They used a contractor for the furnace installation. The Applicant and his father did the beam work.

[47] She testified that she was not told by the Applicant at the time that he obtained a renovation loan from his parents.

[48] She did not believe the renovation work costed $115,000 based on the parties’ contribution to pay for supplies and the labour contributions from the Applicant’s family and contacts to the renovations.

Private Mortgage Discharge

[49] Real estate counsel Mr. Aaron stated that Tony took a charge on the property for the full $329,000 for estate planning purposes.

[50] This estates plan or general context was never explained to the court. When questioned by counsel for the Respondent, Mr. Aaron asserted his client, Tony’s privilege.

[51] The 52 Delma house was sold for the price of $440,000. The closing date was August 8, 2012.

[52] The mortgage was discharged by counsel, Mr. Aaron, on July 25, 2012.

[53] Mr. Aaron testified and said that he recalled receiving instructions from Jeff to discharge the mortgage earlier and before the property closed.

[54] Mr. Aaron said that when Jeff reached out to tell him to discharge the mortgage, they discussed if Jeff intended to sell the home in the near future. Jeff told him that was his intention. As a result, he advised the Applicant to wait until the home was sold to discharge the mortgage.

[55] At trial, Mr. Aaron’s recollection of the 52 Delma real estate file was challenged by counsel for the Respondent.

[56] Mr. Aaron acknowledged that his overall memory about files was subject to limitations due to the passage of time, the hundreds of files he completed per year, and reliance on the contents of this file to refresh his memory.

Q. Right. All right, do you have an independent

recollection of the Delma purchase?

A. Independent of what? Of my affidavit or does

this stand out in any way as an unusual transaction?

Q. Exactly, the latter?

A. Well, let’s put it this way, over hundreds or

thousands of deals in my career, I would have to refresh my

memory of any particular transaction and now that I have

refreshed my memory to some extent in providing my files to Mr.Benmor, yes, I now recollected more than I would if I hadn’t

reviewed the matter.

Q. Right, and so that’s effectively what I was

asking is that before you prepared the affidavit you reviewed

whatever files you had relating to this to refresh your memory,

right?

A. Yes, that’s correct. Did it, did it stick out

as an unusual transaction? No.

February 9, 2023 Transcript at pp. 23

[57] On cross-examination, Mr. Aaron testified that Jeff was bound by the full mortgage registered. Mr. Aaron agreed that Tony and Mary De Faria could enforce the entire amount, including the $200,000 alleged gift, against 52 Delma until it was properly discharged.

[58] Mr. Aaron testified that he was not 100% certain that he had a conversation with Jeff in which Jeff claimed that he had paid off the loan from his parents and wanted to discharge the charge in 2011 as opposed to April of 2012.

MR. BRUGGEMAN: Q. All right, sir, I've got a

question about paragraph 11 of your affidavit, do you have that

in front of you?

A. Yes

Q. Right. You say there some time in April of

2011 the applicant advised you he’d paid off the loan from his

parents and wanted to discharge the charge held by them and, “The

applicant also advised me that he intended to sell the home.”

Are you absolutely certain that this conversation took place in

April of 2011 as opposed to April of 2012?

Because it was in 2012 that the Delma property and

the Kingston Court property were being dealt with so that’s why

I'm trying to get some clarification as to the, as to the year.

A. At the time I prepared this affidavit and

instructed Mr. Benmor to create it, my recollection was April

2012. Am I a hundred percent certain that it wasn’t – sorry,

April 2011. Am I a hundred percent certain that it wasn’t April

2012? No, but to the best of my recollection it was April 2011.

See Transcript of the proceedings on February 9, 2023, cross-examination of Bob Aaron at p. 47 B656

[59] Mr. Aaron's firm provided the Applicant's parents with a certified cheque in the amount of $115,000 dated August 8, 2012.

[60] The purpose of this pay-out is in dispute.

[61] A mortgage statement for discharge purposes dated July 23, 2012, stated the “undersigned charge acknowledge that the principal amount outstanding under our first mortgage on the property is $115,000.” [emphasis added].

[62] It was signed by Tony and Mary De Faria. (see Exhibit 8).

ISSUES

[63] The 52 Delmar property requires a determination of:

a) When the Applicant’s father delivered or transferred to the Applicant a gift in the sum of $200,000 to reduce the mortgage.

b) Whether the $129,000 balance was paid back (in full or part) by the Applicant.

c) The purpose for a $115,000 payment to the Applicant’s father upon closing of the Delma property.

[64] Other issues are:

a) Whether the Applicant’s first $110,000 deposit regarding the unsuccessful 4482 Kingston Road property transaction should be forfeited?

b) Whether the Applicant’s income should be imputed at a higher amount than his line 150 income.

c) The value of disputed property in the NFP.

d) Whether there should be spousal support.

e) Parenting order particulars

THE LAW OF GIFTS

[65] The parties agree that the Applicant received from his parents a gifted amount of $200,000 against the $329,000 mortgage registered on 52 Delma Drive.

[66] However, they disagree when this happened. The timing impacts equalization.

[67] The court heard competing versions in oral testimony from witnesses from each side. They relied on their recollection from ten years ago. The lawyers’ files, are the central documents or records.

[68] In McNamee v. McNamee, 2011 ONCA 533, the Court of Appeal defined a gift in the family law context:

[23] Although the term "gift" is not defined in the Family Law Act, a gift, generally speaking, is a voluntary transfer of property to another without consideration: Black's Law Dictionary, 7th ed. (St. Paul, MN: West Group, 1999), at p. 696; Birce v. Birce (2001), 2001 CanLII 8607 (ON CA), 56 O.R. (3d) 226, [2001] O.J. No. 3910 (C.A.), at para. 17. A transfer of property by contractual agreement involves a mutual exchange of obligations ("consideration"), but a transfer by way of gift involves a gratuitous, unilateral transaction: Mary Jane Mossman and William Flanagan, Property Law: Cases and Commentary, 2nd ed. (Toronto: Emond Montgomery Publications, 2004), at p. 439. As McLachlin J. observed in Peter v. Beblow, 1993 CanLII 126 (SCC), [1993] 1 S.C.R. 980, [1993] S.C.J. No. 36, at p. 991-92 S.C.R., "[t]he central element of a gift [is the] intentional giving to another without expectation of remuneration".

[24] The essential ingredients of a legally valid gift are not in dispute. There must be (1) an intention to make a gift on the part of the donor, without consideration or expectation of remuneration, (2) an acceptance of the gift by the donee and (3) a sufficient act of delivery or transfer of the property to complete the transaction: Cochrane v. Moore (1890), 25 Q.B.D. 57 (C.A.), at pp. 72-73 Q.B.D.; Mossman and Flanagan, supra, at p. 441, Bruce Ziff, Principles of Property Law, 5th ed. (Toronto: Carswell, 2010), at p. 157.

[25] Some authorities have sought to refine or qualify these elements in various ways, but they remain the substance of a [page409] valid gift. Here, the trial judge found two qualifications to be significant. First, he concluded, correctly, that the donor must divest himself or herself of all power and control over the property and transfer such control to the donee….

[69] In Teixeira v. Estate of Markgraf et al., 2017 ONCA 819 at para. 41- 49, the Court of Appeal emphasized the delivery requirement to give legal effect a gift:

[40] The delivery requirement has been a part of the modern law of gifts since the seminal case of Irons v. Smallpiece (1819), 2 B. & A. 551. The delivery requirement is an important distinguishing feature of gifts as compared to other methods of transferring property, such as by contract. As Mossman and Flanagan note in Property Law: Cases and Commentary, at p. 442:

The delivery requirement marks an important difference between contract law and the law of gifts. A contract involves an exchange of promises. A gift, a unilateral promise, does not. Contract law will enforce an exchange of promises (a "bargain" promise) with expectation damages. On the other hand, the law of gifts attaches no significance to a unilateral promise to pay in the absence of delivery.

[41] The delivery requirement in the law of gifts continues to serve several important functions. It forces a would-be donor to consider the consequences of their expressed intention to make a gift and it furnishes tangible proof that a gift has in fact been made: see Bruce Ziff, Principles of Property Law, 6th ed. (Toronto: Carswell, 2014), at pp. 161-62. See, also, Philip Mechem, "Requirement of Delivery in Gifts of Chattels and of Choses in Action Evidenced by Commercial Instruments" (1926), 21 Ill. L. Rev. 341, at pp. 348-52. [page649]

Indicia of delivery

[42] The most obvious form of delivery is the actual physical transfer of the subject matter of the gift from the donor to the donee such that the gift is literally given away: see Ziff, at p. 161.

[43] However, in certain circumstances, such as where the item is unwieldy, courts have acknowledged that constructive delivery will suffice. In these cases, the critical questions have been whether or not the donor retained the means of control and whether all that could be done had been done to divest title in favour of the donee: see Ziff, at p. 165.

[44] Ultimately, in order for a gift to be valid and enforceable, the donor must have done everything necessary and in his or her power to effect the transfer of the property: Kavanagh v. Lajoie, 2014 ONCA 187, 317 O.A.C. 274, at para. 13.

Gifts by cheque

[45] A gift of cash can be readily effected by delivery to the donee. But a gift of money by cheque can be problematic, due to the nature of a cheque. A cheque is not money. Nor is it a transfer of property. It is a direction by the drawer (the bank's customer) to the drawer's bank to pay a sum of money to the payee: Bernard (Re), [1911] O.J. No. 792, 2 O.W.N. 716 (Div. Ct.), at p. 717 O.W.N. The direction can be revoked by the drawer at any time -- for example, by a "stop payment" order, referred to in s. 167 of the BEA as "countermand". Under s. 167, the bank's authority to pay the cheque is terminated by countermand or when the bank receives notice of its customer's death: McLellan v. McLellan (1911), 25 O.L.R. 214, [1911] O.J. No. 30 (Div. Ct.), at p. 216 O.L.R.; Beaumont (Re), [1902] 1 Ch. 889, at p. 894.[^1]

[46] For these reasons, a gift by cheque is not complete when the cheque is given to the donee. It is only complete when the cheque has been cashed or has cleared: see Ziff, at p. 166. Thus, in Campbell v. Fenwick, 1934 CanLII 109 (ON CA), [1934] O.R. 692, [1934] O.J. No. 285 (C.A.), a cheque given to the donee three days before the donor's death and cashed a day before her death was found to be a valid inter vivos gift of the amount of the cheque. [page650]

[47] In Swinburne (Re), above, a case strikingly similar to this one, the Court of Appeal for England and Wales held that the death of the donor ruins a gift inter vivos by way of cheque if the cheque is not deposited before the donor dies. There, the donor had given the defendant a cheque shortly before her death. The bank refused to honour the cheque because of concerns about the validity of the signature. Before anything else could be done, the donor died. On the date the cheque was presented, the donor had insufficient funds in her current account, on which the cheque was drawn, but sufficient money to cover the cheque in her deposit account. In light of evidence given by the bank that it might honour a cheque in such circumstances, the court considered the case as though the whole amount was in the current account.

[48] Nonetheless, the court held that a gift inter vivos was not made out. In reaching this conclusion, Warrington L.J. wrote, at p. 44 1 Ch.:

[I]n order to make an effectual gift inter vivos there must be an actual transfer of the subject of the gift or of the indicia of title thereto. A cheque is not money. It is not the indicia of title to money. A cheque is nothing more than an order directed to the person who has the custody of the money of the [donor] requiring him to pay so much to the person in whose favour the cheque is drawn.

ANALYSIS RE: GIFTS and LOANS

[70] The objective facts are that the mortgage of $329,000 remained registered on the 52 Delma property after marriage and until 52 Delmar was sold. The sale was pursuant to an agreement of purchase in sale in May 2012, closing in August. The registered mortgage amount was removed in July 2012.

[71] The Applicant’s parents were paid out $115,000 pursuant to a “Mortgage Statement for Discharge Purposes” signed and dated July 23, 2012 (Exhibit 8). This mortgage statement clearly stated it applied to the first mortgage.

[72] I find that until the Mortgage Statement for Discharge purposes was executed by Tony De Faria and Mary De Faria on July 22, 2012, and the Mortgage Discharge was registered on July 25, 2012, the $200,000 gift was not completed.

[73] It is not necessary to engage in a lengthy credibility analysis on this issue despite the different versions of the parties. This is because of the objective facts and the legal consequence of the gift not being effected by the Applicant’s parents until after the marriage; and the mortgage remaining registered until the sale of Delma in July 2012. Both events occurred after the date of marriage.

[74] According to Tony De Faria, prior to July 22, 2012, he and his wife verbally expressed an intention to gift the $200,000 to their son but they did not relinquish their control over that amount. They did not deliver the gift. They had full authority to retract or modify the amount if they wished at any time. The $200,000 was still registered on title as part of the mortgage owing.

[75] Further, the gift was from both parents together and either were free to change their respective minds. They had retained the means of control over the gift and mortgage until it was discharged.

[76] Counsel Mr. Aaron confirmed that the mortgage controlled by Tony and Mary was fully enforceable against Jeff after registration on September 22, 2009 and until properly discharged in late July 2012.

[77] In an email dated July 10, 2012 attached as an exhibit to Mr. Aaron’s affidavit, Mr. Aaron’s clerk writes to Jeff stating that “it appears that there is a private mortgage on 52 Delma Drive to your parents.” The clerk asks for the parents’ contact information to obtain a payout statement.

[78] On July 12, 2012, the clerk writes to Tony requesting a payout statement for discharge purposes with the words “as of August 7, 2012 for the mortgage you are holding against the said property.” (see CaseLines at H705)

[79] Tony De Faria responds that

“I’m not sure what I need to do, to provide you with “a payout statement.”

Mary and I have agreed that Jeff owes us $115,000 of the balance of the mortgage we hold.” [emphasis added].

[80] The email from Mr. Aaron’s clerk confirms that the mortgage is registered, has not been discharged and therefore not ceased.

[81] The email response from Tony that there is a mortgage amount owing to him and his wife, confirms that the original or first mortgage amount may be subject to a reduction but there is still a significant mortgage owing of $115,000.

[82] In the emails, there is no mention of a gift of $200,000.

[83] There is no indication that the original mortgage for 52 Delma is paid off and this debt pertains to a subsequent loan for renovation work.

[84] All of this evidence establish that the gift was not completed until after marriage and the mortgage amount owing of $115,000 was still owing to the Applicant’s parents.

[85] These objective facts applied to the law largely settles this issue of when the gift was completed.

[86] That said, for the sake of clarity with respect to the competing versions, I accept the evidence of the Respondent and her parents, Lada and Igor, that the Applicant’s father gifted the $200,000 amount after marriage to help the parties buy a new home, the Kingston Road property, at a time when they were looking for a larger home to accommodate the next step in their family planning.

[87] The Respondent’s parents were both credible in their recollection. I do not find that they had a motive to lie based on the prospect of their daughter getting a higher equalization payout from the family law proceedings.

[88] The timing when the Applicant’s parents gave the gift to the couple was a special moment. Igor and Lada met with the Applicant’s parents to express gratitude for their generosity of the gift to help the parties buy a more expensive home.

[89] The Respondent’s evidence that she and the Applicant needed more resources to buy a larger home is credible and supported by the circumstantial evidence.

[90] They sold 52 Delma and eventually moved into a larger home, the Kingston Road property. This Kingston Road home cost $635,000. The increase in their budget to buy this home was enabled by the gift being crystallized after marriage. The Applicant’s parents’ delivery of the $200,000 gift at this critical time in their lives provided them with the ability to buy a more expensive home.

[91] The Respondent’s evidence is corroborated by and is consistent with the paper trail in the real estate file.

[92] The documents are clear. The mortgage was registered for the full amount of $329,066.55, without factoring a gift. The Applicant’s sister, Alhana Stevens’, evidence that the parents communicated the intention but the gift was not actually granted to her until later is consistent with the parents maintaining control over their gift to their son until they were ready to deliver or perfect it legally. Ms. Stevens’ evidence is that in 2009 her parents decided to give her and Jeff an early inheritance of $200,000 as a gift. She clarified that she did not receive the gift in 2009, they just told her about it. She said her parents said this at that time because Jeff was ready to purchase his home. However, she is not able to say when the gift to Jeff was perfected.

[93] Mr. Aaron testified that he was told by Jeff of Tony’s intention to give him a gift of $200,000 but he did not know if the gift was actually given.

[94] Notably, Mr. Aaron received a cheque for the 52 Delma property transaction in the amount of $329,066.55. He registered a mortgage for that exact amount in favour of the parents. There is no deduction or notation in the file for any intended purported gift.

[95] He was questioned about whether there was a conflict of interest for him to represent the parents’ estates plan and take their instructions to register a higher mortgage than what he now claims was in fact true due to the purported gift. He said he explained the circumstances to Jeff and he agreed to register the mortgage for $329,066.55 in favour of the parents.

[96] Mr. Aaron agreed that Jeff was bound by the mortgage amount of $329,066.55 until such time that it was removed. In other words, Tony and Maria retained the full authority to enforce the full amount of $329,066.55 until the charge was removed. See February 9, 2023, Transcript, Cross-examination at p. 27-36.

[97] I do not accept the Applicant and Mr. Aaron’s evidence that the Applicant asked him to discharge the mortgage in April 2011 and Mr. Aaron advised him he could wait until the home was sold.

[98] First, Mr. Aaron’s recollection was not reliable. He said he remembered this discussion from over 13 years ago but when challenged if it was 2011 or 2012, he was less certain. Also, he could not recall other important aspects of discussions with Jeff such as advice about enforcement of the mortgage. See Transcript, February 9, 2023 at pp. 41-43, 47.

[99] Mr. Aaron has no contemporaneous notes to support these important discussions occurred and that he received these instructions. He has no notes at the times of the purported conversation with Jeff to hold off on discharging the mortgage. He also has no notes of this particular instruction at the time the transaction to sell 52 Delma and the discharge of the mortgage was completed. He said he recalled the sequences of instructions over years, because when reviewing the file in 2022, he saw at the time, the mortgage was still outstanding and this triggered his recall. This is despite acknowledging earlier that he completes a very high volume of real estate files each year, he relies on the file contents to refresh his memory, and this case did not have unusual features in his view.

[100] Second, his notes in the file indicate the contrary. His assistant Ms. Serbana contacted Jeff and asked him if there was money owing for a private mortgage. The parents confirmed in writing on July 23, 2012 that there was a first mortgage. See Exhibit 8. The document refers specifically to the principal amount owing for the first mortgage. There is no mention of a renovation loan. There is no documentation that the mortgage was paid earlier in combination with a $200,000 gift.

[101] It would be expected that if Mr. Aaron had a distinct recollection of this important part of the property ownership, at least at the time the transaction was completed, that he would note this circumstance and the giving of advice in the file or a docket or some other reliable method. He would have reflected the mortgage was previously paid off and that he advised against discharging it until the home was sold. That would be professionally responsible to transparently reflect the accurate circumstances should a dispute subsequently arise.

[102] I also do not accept that the $115,000 payout to the parents from the proceeds of sale were for a renovation loan from the parents, used to pay various contractors.

[103] It is reasonable to expect that the $115,000 mortgage amount reflected in Mr. Aaron’s own file would be explained accurately. In particular, that this was in relation to a renovation loan owed to the parents as purported by Jeff. Instead, the document states that it is in relation to a first mortgage.

[104] Mr. Aaron testified that he did not know if the $115,000 was for the balance owing on the mortgage or some other loan. Later he said it was for the renovation loan after being referred to paragraph 16 of his affidavit where he said the Applicant directed him to pay his parents $115,000 from the sale proceeds for renovation costs they recently gave him. He did not recall when this conversation took place other than that it was before closing. See Transcript, February 9, 2023 at p. 43; 53.

[105] Even though the Respondent was his client as well, he did not discuss discharging this other loan with her.

[106] I do not accept the Applicant’s position that he paid back the entirety of the $129,000 owing to his parents in about 14 months by working extra construction jobs. The Applicant’s version that he worked on large renovations on top of his full-time job to pay off this significant amount is not credible. He had a full-time job at the time and other responsibilities.

[107] The Applicant’s claims are not supported by any reliable documentary evidence. No receipts or records were produced that demonstrated this magnitude of additional income earning work, particularly in a short window of time. Further, the Applicant did not provide any reasonable particulars such as the addresses or locations where the construction work was completed. No individuals that assisted him in this effort were identified. No tax returns were submitted that confirmed this additional income either.

[108] The Applicant’s sister, Alhana, and the Applicant’s father, Tony, did not provide particulars of the dates and amounts paid back to Tony.

[109] Alhana’s evidence is vague on this point. She testified that she saw her brother give their father envelopes as repayment and she heard he did jobs for “friends and stuff.” She was not able to describe the quantum of funds observed or circumstances in reliable manner.

[110] Tony claimed that Jeff gave him large sums of cash from this additional work. The lack of particulars is problematic. There was no evidence tracking the repayments, even in general. For example, Tony did not indicate that he paid back a certain amount within a year. There are no receipts or records to substantiate such a large payback over a short period of time.

[111] The Applicant’s position is also inconsistent with the contents of Mr. Aaron’s file pertaining to the mortgage. In contrast, the timing of the mortgage discharge and pay out to the Applicant’s parents upon the sale of the Delma property are consistent with the Respondent’s version of events.

[112] I accept the position of the Respondent that the Applicant paid off only around $15,000 of the mortgage owing to his parents for 52 Delma. This is consistent with her observations, their personal circumstances, the evidence of his income, and the absence of evidence to substantiate he earned more from side jobs.

[113] I also accept the Respondent’s position that she and her husband did not obtain a renovation loan from the Applicant’s father in the amount of $115,000 after marriage.

[114] There is no mention in the documents submitted of Tony De Faria stating that his son owes him $115,000 for a renovation loan. Instead, the document refers specifically to a mortgage.

[115] Similarly, there is no email from Jeff De Faria stating there is an outstanding loan and not a mortgage. This is despite the inquiries made by Mr. Aaron’s assistant to Tony and Jeff for clarity.

[116] A plain reading of the language in the emails stating that there is a mortgage, and a response that the mortgage amount owing is $115,000 must also be read in combination with the particular language in the mortgage statement.

[117] This clear evidence contradicts the position of the Applicant that the $115,000 amount represents a distinct and subsequent renovation loan.

[118] It is also contrary to Jeff’s evidence that the mortgage was paid off earlier.

[119] I have considered that the Applicant and his father’s position is that the $115,000 is a loan and that they erred in not being clearer by adopting language that it was a mortgage. However, I cannot accept this alternative explanation when there is not valid documentary evidence of an earlier discharge of the mortgage followed by a renovation loan.

[120] I also accept the evidence of the Respondent’s father and mother that the home went through a mild renovation prior to marriage. The further and more substantial renovation was after marriage. Their evidence on this issue is credible. It was not undermined in cross-examination.

[121] With respect to the gifted amount, it stands on different legal footing than a mortgage that is paid out over time.

[122] Non-arm’s lengths gifts stated orally between parents and children that are not fully executed and where the donor does not relinquish control over the asset are vulnerable to modification if inter-personal circumstances change.

[123] I disagree with the Applicant’s submission that this is analogous to a situation such as where a Bank provides a mortgage to a customer, and over time the recipient of the mortgage, pays down the mortgage, such that the actual amount owing (after payments are factored) can be recovered by the Bank through enforcement remedies. See Mortgages Act, R.S.O. 1990, c. M.40 at section 20-22.

[124] In cases of where the mortgage is paid down in part, then enforcement of the amount owing will be subject to proof of payments.

[125] The facts of this case are distinct from that situation. The issue in this case remains whether this was a completed gift or not.

[126] There was no cessation of the mortgage charge that included the $200,000 until Tony and Maria had clearly and unequivocally delivered and relinquished control of these funds, according to law.

[127] The Land Titles Act, RSO 1990, c L.5, discusses the registration of charges and the cessation of the charge at sections 93 and 102 to 103. They establish that the cessation of the registered charge occurs when it is noted on the register. Until then, the charge remains at law.

[128] In conclusion, pursuant to section 4(3) of the Family Law Act, R.S.O. 1990, c. F.3. I find that the Applicant has not met his onus of proving a date of marriage deduction of $440,000 for 52 Delma. Based on my findings, the parties shall consult and submit the correct amount in a draft order.

2. Deposit for the Purchase of the Sale of the Matrimonial Home

4482 Kingston Court Property

Whether the $110,000 deposit for the failed purchase of 4482 Kingston Court on November 2, 2020, should be forfeited?

[129] The matrimonial home located at 4482 Kingston Court in Mississauga was jointly owned during marriage.

[130] On October 18, 2019, Justice Baltman ordered the sale of the matrimonial home with the following terms at para. 2(8):

[131] The parties entered in an agreement where Jeff would purchase the home, buying out Anna’s interest. The transaction was for the Applicant to purchase the matrimonial home for $1,200,000 on August 4, 2020, with a closing date of November 1, 2020. See Exhibit 11. The Applicant provided a deposit of $110,000.

[132] The Agreement of Purchase and Sale (APS) had two clauses that dealt with adjustments.

[133] Clause 18 of the APS reads:

18. Adjustments: Any rents, mortgage interest, realty taxes including local improvement rates and unmetered public or private utility charges and unmetered cost of fuel, as applicable, shall be apportioned and allowed to the day of completion, the day of completion itself to be apportioned to Buyer.

[134] Clause 26 of the APS states:

26. Agreement in Writing: If there is conflict or discrepancy between any provision added to this Agreement (including any Schedule attached hereto) and any provision in the standard pre-set portion hereof, the added provisions shall supersede the standard pre-set provision to the extent of such conflict or discrepancy. This Agreement including any Schedule attached hereto, shall constitute the entire Agreement between Buyer and Seller. There is no representation, warranty, collateral agreement or condition, which affects this Agreement other than as expressed herein. For the purposes of this Agreement, Seller means vendor and Buyer means purchaser. This Agreement shall be read with all changes of gender or number required by the contact.

[135] Further, the language in Schedule A to the APS states:

The buyer agrees to pay the balance of the purchase price, subject to adjustments, to the Seller on completion, of this transaction, with funds drawn on the lawyer’s trust account in the form of a bank draft, certified cheque or wire transfer using the Large Value Transfer System.

[136] At the time of closing of this transaction, the parties disputed the meaning of adjustments in the APS and Schedule A.

[137] The Applicant submitted that Schedule A included adjustments and equalization including costs awards pursuant to the family law proceedings.

[138] This was in addition to the terms of the order of Justice Baltman that referenced property taxes, utilities, real estate commissions, legal fees and disbursements etc.

[139] The Respondent disagreed that “Adjustments” in “Schedule A” referred to equalization and costs. It only referred to the items in the order, which were standard terms.

[140] The sale of the house did not close, at least in part, due to this dispute.

[141] The Applicant did not seek clarification from the court about his interpretation of adjustments before the closing deadline.

[142] Since the deal did not close as per the deadline of November 2, 2020, the Applicant wanted the $110,000 deposit returned.

[143] The Respondent asserted she is entitled to retain half of the deposit. It is forfeited due to the Applicant’s breach of the contract. In this non-arm’s length transaction for the sale of the matrimonial home, the total deposit would be shared equally by the sellers, the Applicant and Respondent.

[144] On January 8, 2021, after the deal did not close, the Applicant brought a motion before Justice Bloom seeking an order to sell the home to him.

[145] Justice Bloom found that Justice Baltman’s order remained regarding the disposition of funds from the proceeds of sale. Justice Bloom’s endorsement stated that he would not address any remedies of the parties regarding the purchase and sale agreement, such as in relation to the disposition of deposit monies, since that matter was not before him.

[146] The Applicant claimed that he was relying on the advice of his real estate lawyer Mr. Aaron not to close the deal in the circumstances.

[147] Counsel, Mr. Aaron, testified that he advised the Applicant not to close the first deal for the purchase of the 4482 Kingston Court home for $1,200,000.

[148] In his affidavit, Exhibit 15, Mr. Aaron stated that the Applicant advised him that he and the Respondent were separating and that the Respondent owed him an equalization payment, court-ordered costs, and that he owed her a one-half share of the net proceeds of the sale of the property. Since the parties could not agree on the final adjustments at closing, including for the equalization payment and court-ordered costs to be included, the transaction did not close.

[149] Mr. Aaron testified that he interpreted the APS at paragraph 18 with paragraph 26, such that Schedule A supersedes the printed APS form.

[150] He believed that Schedule A was prepared by the real estate agent but acknowledged that he did not make inquiries as to what it meant. He said the real estate agent’s opinion was irrelevant. He interpreted the wording of the APS based on his experience that “adjustments” referred to all money owing between husband and wife. He agreed that if it was up to him, he would not have worded it the same way and would have included the words equalization and post-separation adjustments specifically.

[151] He believed that the language “subject to adjustments” was included and intended for the equalization and post-separation adjustments between husband/Applicant and wife/Respondent, as he put it: “the money that Anna owed Jeffery and Jeffrey owed Anna.” He said it was the only possible interpretation of Schedule A. See Transcript, February 9, 2023 at pp. 64-69.

[152] The house later sold pursuant to a subsequent deal at a higher price. In cross-examination, Mr. Aaron admitted that the second sale transaction between the parties for the 4482 Kingston Court home for $1,353,000 and APS of February 10, 2021, did close successfully on March 10, 2021, with the exact same Schedule A wording. See Exhibit J to Mr. Aaron’s affidavit, Exhibit 15; and ASF at para. 69.

[153] Mr. Aaron also agreed that Justice Baltman’s order of October 18, 2019, at paragraph 8 included language that is consistent with the standard language in the APS at paragraph 18.

[154] Still, Mr. Aaron said that the second sale was a different situation because it was pursuant to a court order of Justice Baltman which directed what would happen to the funds.

[155] Upon further cross-examination, Mr. Aaron was pointed to the fact that Justice Baltman’s order, dated October 18, 2019, pre-dated the first sale that was to close November 1, 2020. Regardless, Mr. Aaron said that his evidence stands that the order of Justice Baltman contemplated the second agreement of purchase and sale between the Applicant (buyer) and Respondent (seller). See Transcript, February 9, 2023 at pp. 74-75.

[156] Mr. Aaron was then shown the endorsement of Justice Bloom that indicated he did not have jurisdiction to change Justice Baltman’s order to have the money paid into trust. He agreed that he considered Justice Baltman’s order at the time of the first deal.

[157] Mr. Aaron eventually said that he made that decision at the time of the first deal that the Respondent was in breach of the APS based on his interpretation that Schedule A meant subject to all adjustments between the parties.

[158] He acknowledged that his interpretation and advice to the Applicant is one of the reasons the deal did not close. He sent an email to the Respondent’s real estate counsel, Mr. Marok, referencing an NFP calculation he received from the Applicant’s family counsel. The email stated the Applicant, Jeff, pays the Respondent $47,543.74 to buy the home, not $1,200,000. See Exhibit 16.

[159] He refused to acknowledge that his interpretation of adjustments was incorrect, stating that he read Justice Baltman’s order in combination with the APS and Schedule A. The second deal was informed by Justice Bloom’s order. This deal came after the first deal and did not close. Transcript, February 9, 2023 at pp. 78-85.

[160] Mr. Aaron testified that there were other reasons the deal did not close. In his view, the Respondent’s counsel failed to properly tender.

[161] In his affidavit, Mr. Aaron cited a number of deficiencies that contributed to his advice to the Applicant not to close. He stated:

31. Mr. Marok, the real estate lawyer for the Respondent, faxed me a letter on November 2, 2020 purporting to deliver the closing documents to me to complete the sale transaction. However, the documents Mr. Marok provided were signed only by the Respondent, and not by the

Applicant, as the joint owner and co-vendor, and so the closing documents were not complete.

35. Mr. Marok’s deliveries to me were missing this critical electronic version of the draft Transfer, along with an executed paper printout of an Acknowledgment and Direction containing written instructions to Mr. Marok to carry out the title Transfer, which is necessary to register an ownership change electronically.

36. Mr. Marok failed to confirm that the Acknowledgment and Direction had been signed and electronically transmitted to me through the Teranet registration system to effect the closing.

37. Lastly, there was no Re-Direction of funds, Document Registration Agreement, or undertaking to hold back the funds in his trust account.

38. For the foregoing reasons, I formed the opinion that this did not constitute proper tender.

39. Given that Mr. Marok failed to properly tender, it was my advice to the Applicant that the Respondent was in breach of the agreement and therefore there would be no concern that he could be held liable for not completing the transaction, and there therefore his deposit would be due to him for her failure to properly tender.

[162] Mr. Aaron said that he did not recall if he had funds available sufficient to close the deal. He would have updated counsel for the Respondent, Mr. Marok, if they had their documents ready.

[163] The Respondent’s real estate lawyer Mr. Vipandeep Singh Marok testified. He is an experienced real estate lawyer.

[164] Mr. Marok was retained by the Respondent. He had no prior relationship with the parties. He did not represent the Applicant.

[165] He testified that he did not have the Applicant sign documents because the Applicant had his own counsel, Mr. Aaron.

[166] He stated that he did not interpret the language in Schedule A for the first deal pertaining to “adjustments” to include equalization and court ordered costs. There was no specific language to indicate that it was to be interpreted more broadly as argued by the Applicant.

[167] He accepted that a Schedule to an Agreement can provide additional terms that supersede the standard terms. Clause 18 in the Agreement is a standard clause that already dealt with adjustments.

[168] However, in this case, the Schedule A was effectively the same. In his view, it did not include additional terms or specific language about family law adjustments or equalization. In other words, the Schedule A did not add anything to the contract.

[169] Mr. Marok stated that his client, the Respondent, was prepared to close the deal but the Applicant was not. This was communicated to Mr. Aaron.

[170] Mr. Marok sent the acknowledgment and direction signed by his client to Mr. Aaron. See Exhibit 40. The sale did not close on November 2, 2020.

[171] Mr. Marok prepared the statement of adjustments. See Exhibit 39.

[172] The sale price was 1.2 million. With a deposit of $110,000, realty taxes and standard adjustments, the net balance due on closing was $1,088,785.

[173] He was aware of Justice Baltman’s order that a single lawyer was to jointly represent the buyer and seller. See Justice Baltman’s order, October 18, 2019 at para. 2(4).

[174] However, Mr. Marok determined that he could not represent both parties based on professional responsibility requirements to not represent both parties, particularly in a non-arm’s length transaction. He determined it would not be appropriate to represent both sides. The Applicant had his own counsel so this was a suitable solution.

[175] On November 3, 2020, Mr. Marok, wrote to Mr. Aaron stating that his client failed to close the deal and the deposit was forfeited. See Exhibit 17.

[176] On February 10, 2021, the Applicant, again, purchased the matrimonial home, this time for a price of $1,353,000. There was a second deposit of $110,000. This deal closed March 10, 2021.

ANALYSIS OF THE DEPOSIT and FORFEITURE

[177] Overall, I find that based on the totality of circumstances, the Applicant’s deposit of $110,000 for the first transaction for 4482 Kingston Court that did not close shall be forfeited to the Respondent. The Respondent is entitled to half that amount given this is a jointly owned home and non-arm’s length transaction.

[178] This analysis requires the court to determine did the Applicant breach the contract? And if so whether relief should be granted in relief of forfeiture.

[179] The starting point is that the APS is a valid contract and governs the transaction in dispute.

[180] Both parties entered into it freely. There was no power imbalance. No unfairness. No misrepresentation. The language of the contract is clear.

[181] The Applicant, guided by his counsel, was wrong to associate Justice Baltman’s order and Schedule A as requiring post-separation family law adjustments and equalization. This was not reasonable. The order did not refer to family law post separation adjustments or equalization. It referred to standard terms.

[182] Absent an express agreement between the parties, it did not make sense that post-separation adjustments or equalization would be included in Schedule A. These areas were clearly in dispute between the parties and to be determined in litigation. The Applicant erred by interpreting Schedule A’s reference to adjustments to mean more.

[183] I recognize that the Applicant relied on the advice of his experienced counsel. This was understandable given Mr. Aaron’s legal expertise, position of trust, and his history with the De Faria family. However, it does not excuse the Applicant’s decision and fundamental breach given his own knowledge of the contested issues and family litigation.

[184] I do not accept that the deal did not close because the Respondent failed to tender. Based on the materials before me, Mr. Aaron’s claims of a set of deficiencies that amounted to a failure to tender, was not communicated to real estate counsel for the Respondent at the time the deal was to close.

[185] In my view, this secondary set of issues is not the real reason the deal did not close. The real reason the deal did not close was because of Mr. Aaron’s erroneous interpretation of Justice Baltman’s court order and Schedule A requiring family law adjustments and equalization.

[186] Based on Mr. Aaron’s email correspondence dated October 27, 2020, at 5:52 p.m., Exhibit 16, Mr. Aaron is explicitly stating that he is “signing the documents with Jeff tomorrow.” This raises some concerns about his position in his affidavit that he had an issue that Mr. Marok did not have the Applicant sign some documents. After all, Mr. Aaron was Jeff’s counsel and that was his responsibility, particularly in this context of two parties that had ongoing family law disputes, were engaged in buyout of the matrimonial home and required independent counsel.

[187] The main problem is that Mr. Aaron’s email states that the Applicant is not paying the purchase price of $1,200,000 and provides a revised and far lesser amount of about $47,000 based on adjustments pursuant to a draft NFP provided by family counsel, Mr. Benmor. Mr. Aaron takes this position after Mr. Marok sent him a copy of Justice Baltman’s order.

[188] Mr. Aaron does not mention in this email or other correspondence submitted, that he has issues with the tender. In his affidavit for this trial at paras. 35 to 37, he claims there was not an electronic version of the draft Transfer, executed paper printout of an Acknowledgment and Direction with counsel’s instructions and electronically submitted and re-direction of funds, document registration agreement or undertaking to hold back the funds in his trust account.

[189] I observe that no expert evidence was adduced about the second category of deficiencies submitted by Mr. Aaron. That said, based on my above noted findings, this is not determinative of this issue.

[190] In my view, the Respondent, the co-seller in this case, was ready, willing and able to proceed and close, whereas the Applicant, buyer/co-seller, had decided that without the family law adjustments demanded included, the deal would not close.

[191] The Applicant’s decision to demand the additional adjustments, that were not ordered by the court order and clearly disputed in the family proceedings, caused the deal not to close.

[192] Mr. Marok said that his client was ready to proceed to close the deal and that the transaction did not close due to the Applicant’s counsel’s position on the adjustments. I accept this evidence. This position is consistent with the correspondence. See Exhibits 16 and 17.

[193] Ultimately, the Applicant’s conduct amounted to a decision not to close on improper grounds.

[194] Even if the second set of deficiencies claimed by the Applicant existed, I find that the Applicant’s counsel already drew a line in the sand by stating on October 27, 2020 the position that the Applicant was intent on paying a far less and NFP adjusted amount than the purchase price for the home.

[195] In that context, it did not make sense for further procedural steps to be taken to complete the deal given the Applicant’s position. I also observe that Mr. Aaron testified that he was unable to confirm he had the funds in trust to close.

[196] I am not satisfied that if the additional family law related adjustments had not been demanded by the Applicant, the secondary set of issues claimed, even if they existed, could not have been dealt with professionally between experienced counsel.

[197] In Di Millo v. 2099232 Ontario Inc., 2018 ONCA 1051, the Court of Appeal found that tender is not required for a party seeking to enforce their contractual rights when the other party has made it clear, express or implied, that they will not close and repudiated the contract:

[45] For a party to be entitled to specific performance, the party must show he or she is ready, willing and able to close: Time Development Group Inc. (In trust) v. Bitton, 2018 ONSC 4384, at para. 53; see also Norfolk v. Aikens (1989), 1989 CanLII 245 (BC CA), 41 B.C.L.R. (2d) 145 (C.A.). While tender is the best evidence that a party is ready, willing and able to close, tender is not required from an innocent party enforcing his or her contractual rights when the other party has clearly repudiated the agreement or has made it clear that they have no intention of closing the deal:McCallum v. Zivojinovic (1977), 1977 CanLII 1151 (ON CA), 16 O.R. (2d) 721 at p. 723 (C.A.); see also Dacon Const. Ltd. v. Karkoulis, 1964 CanLII 252 (ON SC), [1964] 2 O.R. 139 (Ont. H.C.).

[46] In McCallum, at p. 723, this court explained that the renunciation of a contract may be express or implied:

The renunciation of a contract may be express or implied. A party to a contract may state before the time for performance that he will not, or cannot, perform his obligations. This is tantamount to an express renunciation. On the other hand a renunciation will be implied if the conduct of a party is such as to lead a reasonable person to the conclusion that he will not perform, or will not be able to perform, when the time for performance arises.

[47] The purchaser in McCallum made it clear that he did not intend to complete the transaction on the closing date and this renunciation relieved the vendors from the obligation to tender.

[48] The principles around the requirement to tender are summarized succinctly by Perell J. in Time Development Group, at paras. 56-57:

Tender … is not a prerequisite to the innocent party enforcing his or her contractual rights. Tender is not required from an innocent party when the other party has clearly repudiated the agreement. Numerous cases have held that the law does not require what would be a meaningless or futile gesture. Moreover, when there is an anticipatory breach, the innocent party need not wait to the date for performance before commencing proceedings for damages or in the alternative for specific performance of the agreement. [Citations omitted.]

[49] Thus, when a party by words or conduct communicates a decision not to proceed to closing, the other party is released from any obligation to tender in order to prove he was ready, willing and able to close: see Kirby v. Cameron, 1961 CanLII 203 (ON CA), [1961] O.R. 757 (C.A.);Kloepfer Wholesale Hardware v. Roy, 1952 CanLII 8 (SCC), [1952] 2 S.C.R. 465.

[198] I accept Mr. Marok’s evidence that he expected Mr. Aaron to have his client sign documents as required. This was reasonable in the circumstances. It is also consistent with Mr. Aaron’s own language that he intended to do so, as noted in Exhibit 16.

[199] I agree with Marok’s position that paragraph/clause 18 of the APS is a standard clause and that Schedule A is the same. Importantly, in this case the Schedule A does not add to the standard adjustments in a residential real estate transaction.

[200] Overall, I find that the Applicant breached the APS contract by insisting that the family law adjustments be part of the calculation of the proceeds from the sale. The Applicant’s counsel misinterpreted Justice Baltman’s order and Schedule A, which when read in combination, required the proceeds of sale to be held in trust and not subject to family law adjustments and equalization.

[201] As a result, the Respondent is entitled to retain the deposit pursuant to the breach of the APS. The APS was properly entered into by the parties. There was no power imbalance. The Applicant tried to derail the deal by insisting on adjustments that were triable issues.

Should there be equitable relief?

[202] Section 98 of the Courts of Justice Act provides simply that "[a] court may grant relief against penalties and forfeitures, on such terms as to compensation or otherwise as are considered just."

[203] The Respondent was authorized by the contract to keep the deposit due to the Applicant’s breach.

[204] In Varajao v. Azish, 2015 ONCA 218, the Court of Appeal endorsed the test of:

1. whether the forfeited deposit was out of all proportion to the damages suffered; and

2. whether it would be unconscionable for the seller to retain the deposit.

[205] This is also referred to as the test in Stockloser v. Johnson, [1954] 1 Q.B. 476, [1954] 1 All E.R. 630 (C.A.).

[206] In Uber Technologies Inc. v. Heller, 2020 SCC 16, the Supreme Court affirmed that unconscionability has two elements: inequality of bargaining power, stemming from some weakness or vulnerability affecting the claimant, and an improvident transaction. An inequality of bargaining power exists when one party cannot adequately protect their interests in the contracting process. A bargain is improvident if it unduly advantages the stronger party or unduly disadvantages the more vulnerable. In essence, the question is whether the potential for undue advantage or disadvantage created by the inequality of bargaining power has been realized. Unconscionability targets unfair bargains resulting from unfair bargaining. Uber Technologies Inc., at paras. 62 to 75.

[207] In this case, the quantum of the deposit was agreed to and standard. The same amount was part of both APS.

[208] With respect to the first part of the test there is no evidence that the Respondent suffered any damages. The house later sold for a higher price between the parties.

[209] However, this does not end the analysis. A finding of unconscionability is exceptional. See Redstone Enterprises Ltd. v. Simple Technology Inc., 2017 ONCA 282, at paragraphs 24-30.

[24] The point is well made in Union Eagle Ltd. v. Golden Achievement Ltd., [1997] UKPC 5, [1997] A.C. 514 (P.C.) by Lord Hoffmann for the Judicial Committee of the Privy Council [who] said, at p. 519 A.C.:

[I]n many forms of transaction it is of great importance that if something happens for which the contract has made express provision, the parties should know with certainty that the terms of the contract will be enforced. The existence of an undefined discretion to refuse to enforce the contract on the ground that this would be "unconscionable" is sufficient to create uncertainty. Even if it is most unlikely that a discretion to grant relief will be exercised, its mere existence enables litigation to be employed as a negotiating tactic.

[25] I would agree that the finding of unconscionability must be an exceptional one, strongly compelled on the facts of the case.

[26] Can unconscionability be established purely on the basis of a disproportionality between the damages suffered and the amount forfeited? While in some circumstances a disproportionately large deposit, without more, could be found to be unconscionable, this is not such a case.

[27] As to quantum, Newbury J.A. quoted, at para. 24 of Tang, the statement of the Privy Council in Workers Trust & Merchant Bank Ltd. v. Dojap Investments Ltd., [1993] A.C. 573, [1993] 2 All E.R. 370 (P.C.), at p. 578 A.C.:

In general, a contractual provision which requires one party in the event of his breach of the contract to pay or forfeit a sum of money to the other party is unlawful as being a penalty, unless such provision can be justified as being a payment of liquidated damages, being a genuine pre-estimate [page381] of the loss which the innocent party will incur by reason of the breach. One exception to this general rule is the provision for the payment of a deposit by the purchaser on a contract for the sale of land. Ancient law has established that the forfeiture of such a deposit (customarily 10 per cent of the contract price) does not fall within the general rule and can be validly forfeited even though the amount of the deposit bears no reference to the anticipated loss to the vendor flowing from the breach of contract.

[210] When there is no gross disproportionality in the size of the deposit, the court must consider other indicia of unconscionability. In Uber Technologies Inc., supra, and in Redstone supra, at para. 30, the appellate Courts have summarized that the analysis is context specific and that courts may consider a list of non-exhaustive factors, such as inequality of bargaining power, a substantially unfair bargain, the relative sophistication of the parties, the existence of bona fide negotiations, the nature of the relationship between the parties, the gravity of the breach and the conduct of the parties.

ANALYSIS OF FORFEITURE RELIEF

[211] In my view, the facts of this case do not support a finding that it would be just for the Applicant to be granted relief. Similarly, it would not be unjust for the Respondent to keep the deposit for the first transaction, of which half would be her share.

[212] Although in some circumstances a disproportionately large deposit, without more, could be found to be unconscionable, I find that this is not such a case. There is no evidence that this amount, less than 10 percent of the purchase price, was unreasonable.

[213] The standard contract was entered into between the parties freely, there was no power imbalance, or unfairness. They both had counsel. In addition, the Applicant had family law and real estate counsel that conferred with one another. The Applicant was not in a relatively weaker or vulnerable circumstance.

[214] The Applicant made the wrong decision not to close. From the family proceedings and disputes known to the parties, it is reasonable to infer that at the time he was aware that this conduct would add to the litigious issues between the parties and further complicate their circumstances.

[215] The Applicant’s misconduct resulted in the first deal not closing. The Applicant’s breach of the contract was significant by improperly requiring adjustments and equalization. This was clearly not part of Justice Baltman’s order or stated in the Schedule A. As noted above, this is the primary reason the deal did not close. The Applicant also did not establish that they had the funds to complete the deal.

[216] The Applicant’s breach of the contract was serious. Although the Applicant was relying on experienced counsel’s advice at the time, he still had to instruct his counsel to not close the deal fully cognizant of the equalization areas in dispute with the Respondent. The decision was clearly wrong and a breach of the contract.

[217] Justice Baltman’s order is from October 2019. This transaction was over a year later. There was no agreement for any adjustments or equalization. The Applicant was attempting to use disputed adjustments and equalization to pay only $47,543.73 for a $1.2 million home. The Respondent’s counsel was ready to proceed to close the deal.

[218] The decision not to close and insist on such a low payment was unreasonable in the circumstances.

[219] To proceed in this manner negatively impacted the Respondent in her ability to move on financially as this was a primary asset of the parties. The first deal was signed as per the APS dated August 4, 2020, closing November 1, 2020. The second deal was entered into February 10, 2021, and closed March 10, 2021. The time between the agreements was 6 months and 4.5 months between closings.

[220] The increase in price the Respondent ultimately received from the second transaction is relevant but that is only one factor. In this case, where both parties owned the property, she is receiving $55,000 or half of the deposit, which is fair and equitable.

[221] Finally, the first deal was not improvident. It did not unduly advantage a stronger party or unduly disadvantage the more vulnerable party. There was no potential for undue advantage or disadvantage created by unequal bargaining power that was realized.

[222] The Applicant entered into an APS two times on identical terms with the same deposit amount. There was a price change for the second transaction due to a change in the market value. He clearly had the financial strength to buy out the property and ultimately did so on March 10, 2021.

[223] The forfeited deposit shall be paid to the Respondent in the amount of $55,000.

PROPERTY VALUES IN DISPUTE

Acura Vehicle

[224] The Respondent claims a date of marriage deduction for a 2003 Acura vehicle.

[225] It is her onus to prove the value of the vehicle on a balance of probabilities.

[226] The Respondent submitted a Red Book value of $6,575.00 . A repair receipt from Costco, dated June 24, 2014, was also tendered to support that the vehicle was in use three years after marriage. The kilometers noted on the vehicle are 173,433. See Exhibit 29.

[227] At trial, the Respondent stated that she sold the car around 2014 in a private sale for $6,500 cash. She said the Applicant was with her at the time of the sale. Jeff was not cross-examined on this point by Respondent’s counsel.

[228] The Applicant opposes the requested deduction value of $6500 and submits that the car was scrap value. He did not specify a number for the purported scrap value.

[229] Further, the Applicant submits that Respondent did not list this car in her first Financial Statement sworn May 24, 2019. Rather, she filed a new Financial Statement before trial listing the car and claiming its value to be $8,750.

[230] The Applicant says the court should not accept the Red Book value and no valuation or expert evidence was called. Also, the Respondent did not provide a Bill of Sale, proof of deposit or evidence from MTO. She also testified that “Jeff went with me” for the sale. However, her counsel chose to not cross-examine the Applicant on this statement.

[231] The Red Book value can be admissible circumstantial evidence of the value of the vehicle in combination with reliable testimonial evidence.

[232] However, I agree with the Applicant that the absence of any financial record or bill of sale is problematic. So too is the Respondent’s initial failure to include this vehicle in her financial statement. Also of concern is that once claimed, the vehicle value was set at a higher value than the amount testified to.

[233] These numerous discrepancies and omissions detract from the credibility and reliability of the Respondent’s claim that the vehicle sold for $6,500.

[234] The parties do not dispute the existence of the vehicle and that it was sold during marriage. The court is in a difficult position of having to assign a numerical value to the vehicle notwithstanding that the parties' positions as to the vehicle's value are problematic and unreliable.

[235] As a result, I will permit a deduction for the vehicle in the amount of $5,000. I am satisfied on a balance of probabilities that the 11-year-old Acura vehicle held some value when it was sold. This value was more than “scrap value”, (which was not defined) and likely less than the amount purported by the Respondent.

JEEP Vehicle

[236] The Applicant had the loan for this vehicle in his name.

[237] After separation, he continued to pay the loan except for a final payout, as of the valuation date, of $2,014.34.

[238] Since the debt was in the Applicant’s name it shall be on his side of the NFP.

[239] The Respondent had the beneficial use of the vehicle. She received the insurance payout after it was damaged. Accordingly, the value of the vehicle should be on her side of the NFP.

[240] There shall be a post-separation adjustment in favour of the Respondent for the Jeep loan payment of $2014.34.

Diamond Ring

[241] The Respondent claims a platinum diamond ring valued at $12,010 as a date of marriage deduction. She said that she bought the ring prior to marriage.

[242] The Respondent was cross-examined about the ring’s valuation. It was not noted in her financial statement of May 24, 2019.

[243] The Respondent stated that the ring was stored at her parents and then stolen from her parents’ home due to a break in. After separation, she left the ring in their home in anticipation of taking a holiday. She was concerned her home would be broken into.

[244] Instead, after the ring was stored at her parents’ home, that home was broken into and she claims the ring was stolen. However, she or her parents were unable to collect from the insurer for this property.

[245] In the total circumstances, I would not grant this deduction. I am not satisfied that the value of the ring has been established on a balance of probabilities.

[246] It was pointed out in cross-examination that the appraisal document for a ring submitted as the one in issue, was in the mother’s name. The appraisal at Tab 22 of the Respondent’s materials is in the name of “Lada Ned.” The circumstances under which this appraisal was obtained were not clarified. It was not explained why this document was in the mother’s name. The fact that the insurer did not cover the ring was not adequately explained either by the Respondent or her parents. No police report or other information was presented.

[247] The evidence was not persuasive on a balance of probabilities that the Respondent owned this ring at the purported value.

[248] However, I expect that if any private agreement between the parties existed with this regards to the engagement ring, that it will be dealt with professionally by their counsel. During the trial, it was submitted that there was a private agreement in place but the value of the diamond ring noted above was in dispute.

INCOME IMPUTATION

[249] Before reviewing the Respondent’s claim for child and spousal support, I shall deal with the parties’ incomes.

[250] The Applicant earned the following annual incomes:

a) 2017: $111, 583

b) 2018 to 2021” the Applicant’s income was $83,743. He said it dropped when he stopped receiving bonuses due to the change in his role.

c) His partial annual income, as of August 21, 2022, was $60,894.79.

UNDEREMPLOYMENT CLAIM

[251] There are two issues:

a) Whether the Applicant was underemployed.

b) Whether the funds given to the Applicant from his parents are income.

[252] The onus is on the person requesting a finding of underemployment or imputation of income to establish an evidentiary basis for such a finding.

[253] Once underemployment is established, the onus shifts to the payor to show one of the exceptions of reasonableness. For example, a parent can take jobs with less money to accommodate child needs or personal circumstances, as long as the decision is reasonable.

[254] The Applicant submits that there is no underemployment. He has been employed full-time since 2004 by his family’s construction business, Finesse, that is owned by his father and uncle. He is one of 26 employees. Before separation, he was employed as a foreman, but after separation he moved to the position of a scheduling manager so that his schedule could accommodate his parental responsibilities.

ANALYSIS OF UNDEREMPLOYMENT

[255] I find that the Applicant is not deliberately underemployed. He has made adjustments to his job role and schedule to be an active father to his children after separation. The parties share parenting.

[256] Prior to separation, the Applicant travelled more often for work. He worked as a foreman on locations away from home.

[257] I accept the Applicant’s evidence that based on the change in parenting circumstances such as the Applicant no longer residing with the Respondent and having increased parenting responsibilities that he travels less for work and has taken on a different and more active daily parenting role.

[258] However, I am still required to determine if there is income to be imputed based on additional deposits to the Applicant’s bank.

UNEXPLAINED INCOME

[259] The Respondent submits that there are unexplained deposits of significant amounts in the Applicant’s banking records from 2018 to 2021 that amount to income.

[260] The Applicant admits that he received funds from his parents for child care and legal fees, without particularizing the amounts received, but objects to them being imputed income. The Applicant says the funds he received from his parents are loans.

[261] The deposits submitted by the Respondent as unexplained amounts are:

2018: $3,960.00

2019: $29,593.59

2020: $57,254.89

2021: $40,262.75

[262] The Respondent seeks an order imputing income for the Applicant of an additional $30,000 per year from 2018 to 2021.

[263] Alternatively, it is submitted that the Applicant’s income should be imputed at $111,583 from 2018 onward. This is to reflect that his income has been supplemented by consistent contributions by his parents.

[264] The Applicant submits that the parents’ contributions are loans. He claims that the funds he received from his parents for legal fees should not be imputed income.

PLASP Child Care

[265] The Applicant submits that the grandparents’ payments for PLASP child care to the Applicant are gifts to the grandchildren. They are not income.

[266] The bank records reflect deposit amounts between $656.85 or 658.80, two times per month, with some gaps that are consistent with child care expenses. For example, in 2021, from January to July, there are payments twice per month of $656.85. In 2020, the bank records reflect that from January to May a $658.80 payment was made twice per month. In the same year, a payment of $656.85 was also made twice per month from June to December. In 2019, records from October to December reflect deposits of $658.80, twice per month. There are no records from January to October 2019.

[267] The Applicant does not dispute that these are deposits to pay for PLASP child care. The Applicant submits that the deposits are like a trust to the grandchildren. It’s not income to the parent.

[268] The Applicant’s father, Tony, testified that he has only made limited gifts of a few thousand dollars to his son.

[269] He testified that the additional funds given to his son for PLASP and legal fees are loans. However, he did not specify an amount owing or provide supporting documents.

[270] The Respondent submits that they are not loans and are income.

Legal Fees

[271] The Applicant submits that the additional large deposits reflected in his bank statements are funds provided by his parents for legal fees. They are not income. They are situational and not recurring.

[272] The Applicant’s counsel submitted that they were legal fees but was reluctant to confirm out of concern of giving evidence. Particulars were not provided to the court. Amounts were not isolated and confirmed with invoices.

[273] The Applicant’s father, Tony, says that the funds for legal fees are loans.

[274] No loan particulars were explained.

[275] Below is a summary of large deposit amounts:

2019:

• May 7: $7,210.04

• May 24: $6,000

• August 26: $4,000

• October 8: $4,000

• November 12: $2,500

2020:

• January 31: $1,140

• February 26: $5,000

• April 29: $3,451.44

• August 11: $7,000

• August 18: $7,000

• November 4: $7,000

• November 30: $6,000

• December 4: $6,000

2021:

• February 16: $10,000

• March 1: $7,000

• March 9: $5,700

• May 13: $6,730

Additional Unexplained Deposits

[276] There are also some additional unexplained deposits that the Respondent submits are income.

[277] They are generally lesser amounts from about $20 to $550. I will not list all of them.

[278] The Applicant did not recall what these other deposits were for when asked at trial.

ANALYSIS OF UNEXPLAINED DEPOSITS

[279] In Chao v. Chao, 2017 ONCA 701, the Court of Appeal sets out the factors that must be considered in a resulting trust/property claim when determining whether advances were intended as gifts or loans.

a) whether there were any contemporaneous documents evidencing a loan;

b) whether the manner for repayment is specified;

c) whether there is security held for the loan;

d) whether there are advances to one child and not others or advances on equal amounts to various children;

e) where there has been any demand for payment before the separation of the parties;

f) whether there has been any partial repayment; and

g) whether there was an expectation or likelihood of repayment.

[280] Where a party receives regular gifts from his or her parent, the court may impute the amount of those gifts as income for support purposes: Bak v. Dobell (2007), 2007 ONCA 304, 86 O.R. (3d) 196 (C.A.), at para. 75; Korman v. Korman, 2015 ONCA 578, 126 O.R. (3d) 561, at paras. 47-51, 62-65, 67; Marello v. Marello, 2016 ONSC 835.

[281] In Malkov v. Stovichek-Malkov, 2017 ONSC 6822, at paras. 69-73, Justice McGee found that when “gifts” to the husband (e.g., payments for housing, utility costs, realty taxes) take on the appearance of a long-term subsidy as if the spouse was a beneficiary of income or benefits from an unwritten trust, the advances bend towards income. In Kkabbazy v. Esfahani, 2012 ONSC 4591, at paras. 77-87, the court imputed income to the husband based on evidence that he typically received and expected to receive funds “as needed” to support his lifestyle from his family. In Teitler v. Dale, 2017 ONSC 248 (), at paras. 41-67, the court imputed income to the husband despite his assertion that the funds advanced from his parents were loans and not gifts. He had adduced no evidence that he had repaid any part of the alleged loans and his expenses were far in excess of his asserted income.

[282] In Bak v. Dobell, supra at paragraph 75, the Court of Appeal set out the factors a court will consider in determining whether it is appropriate to include receipt of gifts as income:

• the regularity of the gifts; the duration of their receipt;

• whether the gifts were part of the family's income during cohabitation that entrenched a particular lifestyle;

• the circumstances of the gifts that earmark them as exceptional;

• whether the gifts do more than provide a basic standard of living;

• the income generated by the gifts in proportion to the payor's entire income;

• whether they are paid to support an adult child through a crisis or period of disability;

• whether the gifts are likely to continue;

• and the true purpose and nature of the gifts.

[283] I find that the Applicant’s income should be imputed at $111, 583 from 2019 onward. First, the additional deposits in the Applicant’s bank records are in effect income. Second, these amounts are recurring over several years.

[284] The Respondent established on a balance of probabilities that the total funds deposited are substantial, consistent, and recurring into the Applicant’s bank accounts. They strengthen his financial resources. Further, there is no credible evidence that they are loans.

[285] The Applicant conceded the source of the PLASP funds are from his parents. He did not satisfactorily respond to the claims that the total deposits were essentially income. He did not demonstrate that some or part of them were loans or discrete gifts.

[286] Tony’s evidence that they were loans are inconsistent with the quantum of funds contributed.

[287] Also, there was no credible and reliable evidence submitted to demonstrate there was an expectation the funds given to his son, for any purpose, were to be paid back. Tony did not claim they were gifts or provide a persuasive explanation. I am not satisfied that the PLASP contributions were a trust to the children or alternatively, a loan. Further, I do not find that the purported legal fee payments were given to Jeff as a loan. There is nothing to substantiate that the amounts paid were a loan.

[288] Tony’s testimony did not establish that he knew of the actual amounts, partial or in total. There are no communications submitted that discuss the funds are intended to be a loan and that repayment was expected or sought. There was no evidence any repayment has been made, even in part.

[289] I find that the payments made by grandparents to their son to pay for the children’s PLASP and Legal Fees are income to the father for those years to which they were applicable.

[290] The PLASP support by the grandparents is generous and helped the parties, but must be legally recognized as income to the father.

[291] With all due respect, I am not satisfied that the other purported deposits are for legal fees. The requisite evidence was not provided. I cannot simply accept counsel’s submission as evidence. Jeff did not explain this circumstance adequately. No invoices (with redactions for privilege as necessary) were tendered. Again, they were not shown to be loans.

[292] Even if these deposits are with respect to legal fees, these are significant payments to the son for personal expenses that permit him to divert his income to other facets of his life. In the end, he benefits financially from these contributions.

[293] By the Applicant’s parents making considerable contributions to his bank account, only the Applicant benefitted financially. This situation permitted the Applicant to use his employment income for other personal purposes.

[294] The imputation of income to $111,583 is fair to deal with the overall annual additional deposits into the Applicant’s bank account over the three years. It also provides a stable amount going forward so that the parties know where they stand. The imputation adheres to the paramount obligation that child support be based on accurate income information. This will be subject to continuing disclosure obligations.

[295] The imputed amount is also more consistent with Jeff’s projected income for 2022 since he had earned $60,894.79 by the end of August 2022.

ANALYSIS OF SUPPORT

CHILD SUPPORT

[296] The parties agree that they shall have equal parenting time.

[297] This has existed since November 2019.

[298] After separation and prior to the court order, the parties could not agree on a parenting schedule for the children of the marriage, namely, their son and daughter.

[299] From October 1, 2018 to November 2019, the children resided primarily with the Respondent. The Applicant wanted shared parenting time, but this was not agreeable to the Respondent.

[300] The Respondent seeks child support for this period. The Applicant has not paid child support since separation, October 1, 2018. I am advised that he did pay the mortgage on the matrimonial home until it was sold. He seeks 50% of those funds as a post-separation adjustment.

[301] Justice Baltman heard the parenting motion on October 18, 2019.

[302] As a result of the contested motion, Justice Baltman ordered a shared parenting schedule and that the Respondent pay costs of $7,500.

[303] I find that child support is covered during the time the Applicant exclusively paid the mortgage costs for the matrimonial home. As a result, the Applicant shall not be entitled to post-separation adjustments for this time.

[304] Based on the shared parenting arrangement there shall be set-off child support from the date the Applicant stopped paying the home carrying costs. It is my understanding that the Applicant’s payment of the carrying costs were from November 2020 to March 2021, and ended when he bought the Kingston home. Otherwise, in the draft order to be submitted, the parties shall apply the correct date for set-off child support, based on the parties’ accurate income information, starting from when the Applicant stopped paying the carrying costs for the home.

SECTION 7 EXPENSES

[305] On consent, section 7 expenses shall be shared proportionate to the parties’ income.

[306] The parties disagree on the process for the children to participate in extra-curricular activities outside of school. The Applicant submits that the parties should both agree on activities to be considerate of their own schedules. The Respondent submits that each child may be enrolled in up to four programs per year, consent to which shall not be unreasonably withheld.

[307] The Applicant testified that the mother puts the children in programs without notice or consent. The Respondent testified that the Applicant withholds consent and is inconsistent in taking the children to scheduled activities.

[308] I have considered the parties’ positions. I am satisfied that the appropriate outcome is that each child may be enrolled in up to three activities per year with notice and consent of the other parent to be sought 15 days in advance and not unreasonably withheld. This may be adjusted based on consent to increase (or decrease) the activities as the children progress. The parties shall be respectful of each other’s work and personal obligations when scheduling activities for the children.

SPOUSAL SUPPORT

[309] The Respondent seeks spousal support on a needs and compensatory basis.

[310] Spousal support is to relieve economic hardship that results from the marriage breakdown. The focus of the inquiry when assessing spousal support after the marriage has ended must be the effect of the marriage in either impairing or improving each party's economic prospects. Moge v. Moge, [1992] 3 SCR 81. See para. 44.

[311] Pursuant to section 15.2(6) of the Divorce Act, R.S.C., 1985, c. 3 (2nd Supp.) an Order that provides support of a spouse should:

(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.

[312] The court is directed to look at the economic circumstances of each spouse’s role during the marriage in determining support. I must consider if there has been economic disadvantage to the claimant based on all of the circumstances.

[313] In the overall circumstances, I am not satisfied that spousal support is justified.

[314] The parties were married for about 7 years from August 20, 2011, to October 1, 2018. They are both around 37 years old.

[315] Their son was born June 8, 2015 and their daughter March 5, 2017.

[316] As discussed, the Applicant works in his family’s construction business as a manager of operations. When he met the Respondent, he worked in labour and then moved up to foreman. As a foreman, he worked away from home on projects during the week, returning on weekends to be with his family. After separation, he took a demotion in pay and worked as a scheduling manager to spend more time with the children.

[317] The Respondent earned a BSC from University of Toronto in 2009, and certificate in human resources program in 2010. When the parties met in 2007, the Respondent worked part-time. She continued to work part-time after marriage. As noted, the parties had two children and separated 3 years thereafter.

[318] I accept that the mother was the primary caregiver for their 1- and 3-year-old children prior to separation. I recognize that this set of circumstances involved sacrifices to her re-entering the work force while she cared for her young children. Her income in 2015 was $16,292; in 2016: $21,769; in 2017: $24,325. Her testimony was brief in this regard that she worked part-time before and for a period during the marriage.

[319] Shared parenting was sought after separation and has now been the status quo for the past several years.

[320] I find that when examining the totality of evidence, this is not a case where based on the roles adopted during the marriage the Respondent has been economically disadvantaged. There is not an existing economic dependence, disadvantage, or hardship that must be addressed. Also, this is not a case where the Applicant put the Respondent in a position of debt during the marriage, causing hardship.

[321] The parties earn a similar income over the past several years, where any disparity can be addressed without spousal support.

[322] Her income since 2019 establishes the earning potential and positive trajectory. Since separation, she has a successful career and is financially self-sufficient. Her income from 2019 to 2021 consistently rose, between $74,476 to $81,580. There was a dip in 2022 and her income was $72,916. Her anticipated future income was not explained. Her three-year average income is $76,324.

[323] The Applicant’s reported income for 2018 was $83,743 after the loss of bonuses and reduced role to accommodate parenting. In 2019, his income was $77,656. In 2020: $84,343. In 2021: $86,280. His three-year average income was $82,760.

[324] For the reasons noted above, the Applicant’s imputed income is higher. The disparity is about $30,000 per year. This is deserving of consideration.

[325] However, according to the Divorce Mate calculations submitted by the Respondent, after child support is factored based on the imputed income, the spousal support amount is zero. This reflects that equitable distribution can be achieved in many ways including by child support, by the division of property and assets or by a combination of property and support entitlements.

[326] This is not a case where the record demonstrates that the Respondent did not pursue education and career paths or opportunities that would be more lucrative than her current salary and benefits. That said, I recognize she made sacrifices that plausibly impacted her career. I have tried to consider where she would be financially and career-wise absent the time she spent focused on caring for the couple’s young children.

[327] With respect, on this record, there is not evidence that the Respondent’s financial advancement has been impaired as a result of subordinating her career to that of the Applicant’s or from adopting a less lucrative career path in order to accommodate the needs of the family.

[328] It has not been established that the Respondent’s ability to earn income has been hampered. There is not proof of economic hardship resulting from the end of the marriage. The parties are self-sufficient.

[329] I am satisfied that this is one of the rare cases discussed in Moge, where the parties were able to make financial adjustments during the separation and continue on with their respective lives. There has been a clean break and the parties are financially independent. The parties enjoy a similar standard of living enjoyed prior to separation, living in their own independent homes, with stable employment, and shared parenting. There is not economic disadvantage as a result of the marriage.

[330] I also observe that both parties have been financially aided by their parents to purchase their homes to reduce their expenses and live at a similar standard as during the marriage. Both of the parties’ parents spoke about helping their children but the Court did not receive documentary proof of any formal debts or interest arising from the parental contributions, even if the parties intend to repay some or all of the contributions back.

[331] With respect to whether support was previously sought, after separation and since October 1, 2018, there was no motion brought for interim spousal support.

[332] I am advised that this is because the Applicant was paying the mortgage for the matrimonial home until it was sold in February 2021. However, spousal support was not sought since then either. This is circumstantial evidence that there has been financial independence.

[333] I have also considered the existence of gaps or limited information in the record. The Respondent did not provide particulars to establish financial hardship due to the end of the marriage or advance this with particulars.

[334] I find that retroactive spousal support is not justified since the Applicant paid for the matrimonial home mortgage expenses until it was sold in February 2021.

POST-SEPARATION ADJUSTMENTS

[335] I decline to grant the Applicant a post-separation adjustment for 50% of the mortgage and carrying cost payments for the matrimonial home. This is because of the reasons noted above and that child and spousal support was not paid during this time.

PARENTING ORDERS ANALYSIS

[336] The parties were able to resolve much of the parenting disputes.

[337] A draft order that indicated the limited areas that were unresolved was submitted.

[338] I will review only those areas. Where helpful, I have included the specific language each party respectively seeks.

[339] On consent, they can adjust the terms as needed in writing.

Holiday Schedule

[340] The parties had a disagreement about how to treat long-weekends and Halloween. The father wanted the children to remain with the party that they are with for the additional day/ holiday. The mother wanted the children to stick to the parenting schedule.

Applicant’s Version:

a) On each of Family Day, Good Friday, Easter Monday, Victoria Day, Labour Day, Thanksgiving, Canada Day, Halloween, Remembrance Day and any Civic Holiday, the children shall remain with the party with whom the children are with before that date for the additional 24 hour period in accordance with the regular parenting schedule set out above, unless both parties agree to a change in such schedule in advance and in writing at least 7 days beforehand.

Respondent’s Version:

a) Family Day, Good Friday, Easter Monday, Victoria Day, Labour Day, Thanksgiving, Canada Day, Halloween, Remembrance Day, and the Civic Holiday, shall be celebrated as per the regular parenting schedule set out above, unless both parents agree otherwise, at least 7 days in advance, in writing.

[341] I agree with the Applicant’s position on this point. It is beneficial to the children to spend the long-weekend and Halloween with the parent whose care they are with at the commencement of that weekend. Both parents and children will benefit from this arrangement equally over time and shall be permitted to plan accordingly.

Right of First Refusal

[342] The parties disagree about the wording of the right of first refusal. The Applicant requests that the parent responsible for the children that is unable to care for them for an overnight, shall notify the other parent of the alternate caregiver.

[343] The Respondent submits that when the parent responsible for the children cannot care for them overnight or longer, a right of first refusal shall be given to the other parent.

Applicant’s Version:

a) If a party who is scheduled to have the children in his/her care in accordance with the regular parenting schedule is unable to care for them for an overnight or more, that party shall be responsible for choosing the alternate caregiver. In such case, that party will notify the other party in writing of the name and cellular telephone number of the alternate caregiver.

Respondent’s Version:

a) If a parent who has the children is unable to care for them for less than one day, that parent shall be responsible for choosing who shall look after the children. If they wish, they may request that the other parent care for the children in their absence, but they are not required to do so. Both parents agree to allow the other parent who has responsibility to choose a caregiver, using their own judgment regarding the care of the children. Both parents shall communicate to the other where the children shall be cared for in their absence.

If a parent who is scheduled to have the children is unable to parent or care for them for an overnight or more, that parent shall first provide the right of first refusal to the other parent before arranging for an alternate caregiver. In such a case, that party will notify the other in writing of the name and cellular telephone number of the alternate caregiver.

[344] I agree with the Respondent’s position on the right of first refusal terms. When a parent that has responsibility for the children is unable to care for them overnight or longer, the other parent shall have the right of first refusal as proposed above. This is reasonable to ensure the children are with their mother or father, as a first option, when the other is unable to care for them.

Relocation

[345] The parties disagree on the kilometre restriction for relocation. The Applicant requests a 20 kilometres limit from the children’s school. The Respondent submits a 10 kilometres limit.

Applicant’s Version:

a) Neither party shall move the children’s residence more than 20 kilometres from St. Matthew’s School at 280 Kingsbridge Garden Circle, Mississauga L5R 1L3 without the other’s prior written consent or court order.

Respondent’s Version:

a) Neither parent shall move the children’s residence more than 10 km from St. Matthew’s School without the other’s prior written consent or court order.

[346] In my view, the middle ground of a 10 kilometres limit, until the children finish middle school is appropriate. After the children complete middle school, a wider limit of 20 kilometres is fair to accommodate the parents and recognize the children’s increased maturity and flexibility as they grow.

Post-Secondary Education.

[347] The Applicant submits that when a child is admitted to college or university, the parties and child will discuss the various options available to them including but not limited to attending college or university while living at home, attending college or university while living on campus, the cost of either option and any available RESP’s, scholarships or student grants/loans and will cooperate in ensuring that such child may complete such post-secondary education with success. Should the parties be unable to resolve the financial issues then they shall attend mediation before returning to court.

[348] The Respondent submits that when a child moves away for post-secondary education, the parties will review the amount of child support (table amount and section 7 expenses) to contribute to all related expenses.

[349] I observe that the children are still young at ages 8 and 5. Post-secondary education is not imminent. The circumstances may change by the time they attend higher education.

[350] However, I appreciate the parties want finality. I agree both positions have merit in that they seek consultation and a fair assessment of the means and support issues. Still some flexibility is appropriate.

[351] In my view, the following terms are appropriate:

Upon a child’s admission to college or university, the parties and child will discuss the options including but not limited to attending college or university while living at home, attending college or university while living on campus, the cost of either option and any available RESP’s, scholarships or student grants/loans and will cooperate in ensuring that such child may complete such post-secondary education with success.

Child support and section 7 expenses shall continue to be paid until post-secondary education is completed or the child is financially independent, whichever comes first, subject to any agreement that factors an adjustment based on time when either child is living away from home to attend school.

Should the parties have a dispute about support and section 7 expenses, they shall attend mediation prior to attending court, costs for mediation to be shared proportionate to their income,.

Children’s Passports

[352] The parties disagree on the language regarding the possession and sharing of the children’s passports. The Applicant seeks alternate, even numbered years with release to the other parent with notice. The Respondent seeks custody of the passports, to keep them current, and to release them when requested.

Applicant’s Version:

In even numbered years, the Applicant shall be the custodian of the children’s passports and, in odd numbered years, the Respondent shall be the custodian of the children’s passports. The party in possession of the children’s passports shall release the passports to the other party at least 7 days prior to travel. That party shall return the passports to the custodian party upon his/her return. Either party may apply for the renewal of the children’s passports and the other party shall cooperate and forthwith sign the applications. Each party may keep a photocopy of the children’s passports.

Respondent’s Version:

The Respondent shall apply for Canadian passports for the children and maintain them current while they remain children of the marriage. The Applicant shall forthwith sign any passport application provided to him by the Respondent. The Respondent shall provide the Applicant with a photocopy of the children’s current passports.

If the Applicant plans a vacation outside of Canada with the children, the Respondent shall release the passports to the Applicant at least 7 days prior to travel. The Applicant shall return any passport to the Respondent within 7 days of their return to Canada.

[353] I find that the Respondent’s position is best, to ensure safe custody, continuity, and keeping the passports up to date. An added clause that neither party shall unreasonably withhold the passports from the other parent is wise.

Travel

[354] The parties disagree about travel outside of school holidays and parenting times. The Applicant seeks flexibility. The Respondent is concerned that the children will miss school or there will be disruption.

Applicant’s Position

If either party plans a vacation outside Canada with the children, the traveling party shall provide the other party with a draft travel consent authorizing the children to travel and the non-traveling party shall promptly sign and return the travel consent to the travelling party within 7 days of such request.

If either party travels with the children outside of Ontario, then they shall notify the other party in writing in advance of such travel including the departing and retuning dates.

Respondent’s Version:

If either parent plans a vacation outside Canada with the children, the traveling parent shall provide the other parent with a draft travel consent, authorizing the children to travel, for the non-traveling parent to execute within seven 7 days of receipt. The non-traveling parent shall promptly sign and return the travel consent to the travelling parent. Unless agreed upon in writing in advance, any travel by either parent with the children outside Canada or the United States shall only occur during the holiday parenting schedule unless otherwise agreed by the parents in writing.

If either parent plans an overnight trip outside of Ontario with the children, that parent shall notify the other parent of such plans in writing at least 48 hours in advance of the trip.

[355] I find that the Respondent’s version is appropriate with the addition, that consent of the parent whose permission is sought shall not be unreasonably withheld. There will be occasions, when either parent may wish to take the children out of school for travel and this request may be reasonable. This should be reasonably negotiated between the parties. For example, a trip every other year for one week outside of the holiday or parenting schedule is not unreasonable unless it conflicts with a critical educational or vital scheduled activity.

Records and Right to Information:

[356] The parties disagree on the language with respect to records retention and right to information.

Applicant’s Version:

The children’s legal documents, such as their passports, SIN cards, birth certificates, immunization records, and OHIP cards shall be held by the Applicant in even numbered years and by the Respondent in odd numbered years. Each party will have photocopies of all such documents. If a party requires any such original document for travel or other valid reason, the party in possession of such document shall release it to the other party at least 7 days in advance. That party shall return the document to the custodian party immediately thereafter.

Respondent’s Version:

The children’s legal documents, including their passports, SIN cards, birth certificates, immunization records, and OHIP cards shall be held by the Respondent. Photocopies of all documents shall be provided by the Respondent to the Applicant. If the Applicant requires the documents for travel or other valid reason, the Respondent shall provide the documents at least one week in advance and the Applicant shall return the documents to the Respondent within one week after no longer needing the documents.

[357] Although I recognize the notion of equal possession times is fair, for the purposes of consistency it is appropriate that the documents remain with one parent. I find that this will be the Respondent. This is easier to facilitate sharing and retention as the years pass. When documents get pushed back and forth between parents, the prospect of inconsistency and loss is heightened. Again, there will be the added language that requests shall not be unreasonably withheld.

DIVORCE

[358] The Divorce shall be severed and proceed on an uncontested basis in writing.

DRAFT ORDERS

[359] Based on my findings and the amounts in the ASF, the parties shall consult and prepare a joint draft order with the updated calculated amounts, and family responsibility orders as required, and submit them to my judicial assistant within 14 days.

LEAVE TO ADDRESS THE COURT

[360] The parties may file submissions consisting of no more than two pages on any mathematical or clerical corrections to these reasons they wish to call to my attention, provided any requested correction or clarification is consistent with my findings of fact. The parties shall seek to negotiate them on consent.

COSTS

[361] The parties shall consult to determine any common ground on costs.

[362] They shall exchange their bill of costs and submissions on the following timetable:

[363] The Applicant, father, shall serve and file their bill of costs and submissions of not more than 10 pages in total within 14 days of receipt of this ruling.

[364] The Respondent, mother, shall serve and file their bill of costs and submissions of not more than 10 pages in total 7 days thereafter.

[365] The Applicant shall provide any reply of up to 2 pages 5 days after receiving the Respondent’s submissions.

[366] The Court reserves the right to have the parties appear to address any areas requiring clarification.

Mirza J.

Released: October 26, 2023

COURT FILE NO.: FS-19-94732-00

DATE: 2023 10 26

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

JEFF DE FARIA,

Applicant

Steven Benmor, for the Applicant

• and –

ANNA NEDELTCHEVA,

Respondent

John W. Bruggeman, for the

Respondent

ENDORSEMENT

Mirza J.

Released: October 26, 2023

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