Najm v. Najm, 2024 ONSC 2053

NEWMARKET COURT FILE NO.: FC-16-50901

DATE: 20240408

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Fareeha Najm

Applicant

– AND –

Saquib Ahmed Najm

Respondent

Aswani K. Datt, Counsel for the Applicant

Kristy A. Maurina/ Alice Parama

HEARD: November 29, 30, December 1, 2, 5, 6, 7, 8, 2022; May 16,17,18, 19, 2023 with written closing submissions by August 21, 2023, and follow-up submissions on March 5, 2024.

REASONS FOR DECISION

JARVIS J.

[1] The issues for trial involve equalization of the parties’ net family properties, a broad range of exclusion claims, unequal division, income determination and spousal support. Pursuant to the Trial Scheduling Order, the direct evidence of the parties and their witnesses was tendered by affidavit, or in the case of their experts, their reports were filed; the evidence of all witnesses was supplemented by oral testimony. The court heard from the parties, their daughter and three experts.

Procedural background

[2] The wife started these proceedings in January 2016. She claimed that the valuation date was September 26, 2015. The husband claimed that the valuation date was September 20, 2005. By Order dated August 7, 2017, Bennett J. accepted the wife’s date.[^1] That Order was not appealed.

Agreed facts/evidence

[3] The following comprise the relevant procedural events in this proceeding and the general facts agreed by the parties[^2] (additional facts and evidence will be noted below when dealing with specific issues):

(a) Both parties were born in Pakistan.

(b) From 1980 to 1982 the wife earned a Bachelor of Arts degree in Psychology/Social Work and following that degree she attended the University of Punjab in Pakistan from 1982 to 1985 where she earned a Masters degree (Clinical Psychology). She did not work before the parties’ marriage.

(c) The husband earned a Bachelor of Science degree from the University of Punjab in 1975 and later qualified as a Chartered Accountant in London, U.K. He returned briefly to Pakistan in 1982 before accepting employment in Saudi Arabia in 1983, working in the finance department of a petrochemical company.

(d) The parties were married on August 31, 1985, in Pakistan. Neither had been previously married.

(e) The wife relocated from Pakistan to Saudi Arabia in January 1986 to live with the husband.

(f) There are two children of the marriage, both adults, neither of whom is a subject of these proceedings. Their first child (a daughter) was born in Saudi Arabia in 1987 and is an attorney working as a commercial litigator living in Atlanta, Georgia. The second child (a son) was born in October 1990 and obtained a master’s degree in business administration (business analytics). He lives and works as a consultant in the United States.

(g) The wife and children were financially dependant on the husband while the parties lived in Saudi Arabia. The children attended private schools. The wife was a homemaker; she was not allowed to work outside of the home but was able to work as a teacher’s assistant between 1997 to 2000 at the children’s school in Jubail, Saudi Arabia.

(h) The parties emigrated to Canada in August 1992 and purchased a residence in Mississauga, Ontario. The husband continued to work in Saudi Arabia (“KSA”) frequently joining the family in Ontario or arranging through his employer for them to visit him in Saudi Arabia. In 1994, shortly after the wife and children obtained Canadian citizenship, the parties sold their Ontario home and the wife and children returned to Saudi Arabia.

(i) The family (including the husband) returned to Canada in 2000. The husband continued his Saudi Arabia work as before but now this involved travelling about 1 1/2 weeks out of every 6 weeks until 2004. The travelling was exhausting. There was some later Saudi Arabia work for about a year afterwards. By that time the husband had already formed his own consulting business (“Missul”: see paragraph 36 below).

(j) From 2002 to 2005 the wife was employed as a proprietor/manager of a fast-food franchise in Mississauga. The unchallenged evidence is that the wife’s earnings were applied to the mortgage payments on the matrimonial home and that when the franchise was sold for a profit the husband retained those funds, but the wife did not know what was done with them.

(k) In early 2005 the husband’s mother was terminally ill. As the wife had a close relationship with both of her husband’s parents, she travelled to Pakistan in late February/early March to care for her and her father-in-law.

(l) The husband’s mother died on or about March 31, 2005.[^3]

(m) Leading up to and following the mother’s death, the parties were experiencing problems in their relationship such that the wife retained a prominent family lawyer who then contacted the husband. The husband also retained an experienced family law lawyer.[^4]

(n) In July 2005 the husband made notes which were entered as evidence. Among other things, the husband noted “Onus of proof-e.g. offshore accounts-say mostly from parents.”

(o) In October 2005, the husband signed a Talak Nama, a religious divorce decree under Sharia law, which he acknowledged in the 2017 motion heard by Bennett J. had no legal effect in Canada.[^5] In November 2005 the husband also changed his Will removing the wife as a beneficiary. There is no evidence that the wife knew about the changes to the husband’s Will until after the parties separated for the final time in 2015. The wife did not change her Will. The husband testified that as of October 14, 2005, he considered himself divorced in his religion. Throughout the trial he referred to the wife as his “ex-wife” even though the parties were not divorced according to Canadian law. A separation agreement drafted by the wife’s lawyer was never signed.

(p) On November 1, 2005, the husband’s father swore a declaration in Pakistan with respect to itemized gifts and their associated values given by him and his late spouse to the husband. This document stated that the gifts were for the husband’s sole benefit and that “all such gifts and any profits there from [sic], in any shape or kind shall not become part of his NET FAMILY property at ANY TIME” (capitals in the original). This declaration was appended to an affidavit that the father swore on July 14, 2006, commissioned by an Ontario lawyer. The husband had engaged the lawyer.

(q) The wife returned to cohabit in the matrimonial home with the husband later in November 2005.

(r) After the parties resumed cohabitation, the husband took his father to another family lawyer (not the one who had been representing him in 2005 and earlier in 2006) where the father signed an affidavit appending the Declaration signed in Pakistan and affirming its truth.

(s) After 2006 the wife worked in various capacities as an executive assistant, a service worker and manager for social services organizations until 2013.

(t) The husband continued his consulting business through which he has continued offering his services on a contract basis. The wife was an equal owner but never participated in its operations.

(u) The husband’s father died on July 11, 2011. He left a Last Will and Testament (“the Will”) dated July 26, 2006, prepared by an Ontario lawyer, which divided his estate into two equal shares in favour of the husband and his brother. The Will contained the prescribed term excluding income from property and any increase in value of inherited property from the equalization provisions of the Family Law Act[^6] (“the Act”).

(v) The wife left the matrimonial home on September 26, 2015, and went to live with friends claiming that the atmosphere in the matrimonial home was toxic; the husband was angry and threatening and had been disrespectful and unsupportive of her for years. He disputed the wife’s accuracy and description of his behaviour.

(w) The wife started these proceedings in January 2016, claiming September 26, 2015, as the valuation date. The husband pleaded that the valuation date was September 20, 2005.

(x) A temporary spousal support Order (on consent) was made by Donohue J. on May 16, 2016. The husband was ordered to pay $4,000 a month to the wife based on his annual imputed income of $140,000 and her annual imputed income of $40,000.

(y) The matrimonial home (jointly owned) was sold on June 15, 2016. Although its net sale proceeds were ordered by Donohue J. to be held in trust, they were fully disbursed by subsequent Orders. Without prejudice payments were made to the wife ($167,377.32), to the husband ($62,377.32), and (with the parties’ agreement) to their daughter ($123,000) to help fund her law school education and related expenses in Georgia.

(z) The husband brought a motion seeking a declaration that September 20, 2005, was the valuation date. Bennett J. ruled on August 8, 2017, that the valuation date was September 26, 2015. That Order was not appealed.

(aa) On January 17, 2018, Bennett J. awarded the wife costs of $36,162.60 payable within thirty days. By October 4, 2018, none of the costs had been paid.

(bb) In 2018, the wife obtained employment as an executive coordinator for a non-profit community support service in Mississauga.

(cc) On October 18, 2018, Bennett J. was scheduled to hear a Long Motion but that did not proceed because the husband had recently discharged his lawyer and sought an adjournment. Bennett J. attributed the delay to the husband who was further ordered to pay the outstanding $36,162.60 costs award within seven days.

(dd) On December 17, 2018, Bennett J. dismissed a motion by the husband to transfer the case to Brampton observing that the husband “once again appears to seek a further delay” and commenting that court operations in Brampton would have involved even more delay than in Newmarket adding “[the husband] needs to understand that this matter cannot be dragged out indefinitely.”

(ee) On March 29, 2019, Bennett J. heard a motion by the wife for a broad range of financial relief. In a lengthy Ruling dated April 15, 2019, Bennett J. ordered (on consent) that an earlier preservation Order he had made on October 25, 2018, continue and (not on consent) that $35,000 be released to each party from the proceeds of sale of the matrimonial home ($15,000 for future “expert’s work” and $20,000 for future legal fees). Bennett J. observed that the husband’s exclusion claims were “somewhat complex.” Since experts had already been retained, they were directed to meet to narrow the differences in their opinions relating to tracing the exclusions claimed by the husband.

(ff) On June 11, 2019, Bennett J. awarded the wife $12,500 in costs for the motions in October and December 2018 and the March/April 2019 motions, payable within sixty days.

(gg) Shortly after Bennett J. clarified the terms in his April Order in late May 2018, the husband brought a motion to strike the wife’s pleadings. It was denied. Bennett J. noted as “disturbing” that the husband had brought the motion in his personal capacity even though he had a solicitor of record, the wife was out of the country caring for the parties’ seriously ill daughter and that “[t]he history of this file reveals that the [husband] has been anything but “punctual” in abiding by previous court orders.” The husband was ordered to pay $2,500 in costs.

(hh) A settlement conference was held on January 7, 2020 (Sutherland J.). A consent Order was made releasing to the parties in equal shares the remaining matrimonial home sale proceeds. Directions were given with respect to the next conference event so that a trial could proceed during the May 2020 sittings. No trial could proceed because the Covid-19 pandemic was declared on March 15, 2020, and court operations were suspended.

(ii) On May 13, 2022, Himel J. issued directions for the trial to start in May 2022. Shortly after the conference, the court was advised that the parties agreed to proceed to mediation/arbitration subject to their agreeing on the choice of mediator/arbitrator. If not, they were directed to proceed to trial in November 2022. The matter was removed from the trial list. On consent, the husband was ordered to pay the upfront costs of the mediation/arbitration, with the arbitrator making the final decision on the ultimate apportionment of costs.

(jj) After the parties had agreed on the choice of arbitrator, the husband discharged his solicitor of record (at least his third) and complained that contrary to the Order made on May 13, 2022, the wife had refused to agree to the choice of mediator/arbitrator and the mediation/arbitration process. Himel J. found the husband in breach of her Order because it was evident that it was the husband who was seeking to resile from its terms. He wasn’t prepared to commit to pay the fees for the mediator/arbitrator. As there was no signed mediation/arbitration agreement, the court gave further directions for the trial. Leave was given to the wife to bring a motion when the trial proceeded to strike the husband’s pleadings if he failed to pay the costs awarded ($1,500) or comply with the other terms of the Order. The husband paid the costs.

(kk) The trial started in November 2022 but was not concluded by the end of the trial sittings so it was continued and concluded during the May 2023 sittings. Written closing submissions were delivered according to a timeline agreed upon by the parties. Brief follow-up submissions were heard on March 5, 2024.

Equalization-The Law

[4] The wife seeks an Order for an unequal division of the parties’ net family properties or, in the alternative, an equalization payment of $2,000,000. The husband claims that the wife owes him an equalization payment of $273,345.79. The principal difference between the spouses’ claims is the exclusions which each has claimed, particularly the husband. Most of these proceedings have involved this issue.

[5] Part I of the Act deals with “Family Property”. Section 5(1) provides as follows:

5. (1) When a divorce is granted or a marriage is declared a nullity, or when the spouses are separated and there is no reasonable prospect that they will resume cohabitation, the spouse whose net family property is the lesser of the two net family properties is entitled to one-half the difference between them.

[6] The term “net family property” is defined in s. 4(1) of the Act.

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

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

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

[7] A spouse may “exclude” the value of certain property owned by them on the valuation date pursuant to s. 4(2) of the Act, the burden of proving which rests squarely on that spouse. The subsections relevant to the issues in this case are the following:

1. Property, other than a matrimonial home, that was acquired by gift or inheritance from a third person after the date of the marriage.

2. Income from property referred to in paragraph 1, if the donor or testator has expressly stated that it is to be excluded from the spouse’s net family property.

3. Not relevant.

4. Not relevant.

5. Property, other than a matrimonial home, into which property referred to in paragraphs 1 to 4 can be traced.

6. Not relevant.

7. Not relevant.

(3) The onus of proving a deduction under the definition of “net family property” or an exclusion under subsection (2) is on the person claiming it.

[8] In addition, where a party seeks an unequal division of net family properties the provisions in s. 5(6) of the Act are engaged:

(6) The court may award a spouse an amount that is more or less than half the difference between the net family properties if the court is of the opinion that equalizing the net family properties would be unconscionable, having regard to,

(a) a spouse’s failure to disclose to the other spouse debts or other liabilities existing at the date of the marriage;

(b) the fact that debts or other liabilities claimed in reduction of a spouse’s net family property were incurred recklessly or in bad faith;

(c) the part of a spouse’s net family property that consists of gifts made by the other spouse;

(d) a spouse’s intentional or reckless depletion of his or her net family property;

(e) the fact that the amount a spouse would otherwise receive under subsection (1), (2) or (3) is disproportionately large in relation to a period of cohabitation that is less than five years;

(f) the fact that one spouse has incurred a disproportionately larger amount of debts or other liabilities than the other spouse for the support of the family;

(g) a written agreement between the spouses that is not a domestic contract; or

(h) any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of property.

[9] As observed in Serra v Serra:[^7]

[37] The steps to be taken when s. 5(6) is engaged are well- established. The court must first ascertain the net family property of each spouse by determining and valuing the property each owned on the valuation date (subject to the deductions and exemptions set out in s. 4). Next, the court applies s. 5(1) and determines the equalization payment. Finally -- and before making an order under s. 5(1) -- the court must decide whether the equalization of net family properties would be unconscionable under s. 5(6), having regard to the factors listed in paras. 5(6)(a) through (h). [Citations omitted.]

[10] The test for unconscionability is a high one. The court in Serra described it as follows:

[47] In this regard, the threshold of "unconscionability" under s. 5(6) is exceptionally high. The jurisprudence is clear that circumstances which are "unfair", "harsh" or "unjust" alone do not meet the test. To cross the threshold, an equal division of net family properties in the circumstances must "shock the conscience of the court." [^8] [Citations omitted.]

Credibility

[11] Each party challenged the other’s credibility. The wife alleged that the husband was vindictive, deceitful and had a history of threats and violence to her and others supportive of her, including friends and other professionals (one of whom, the wife’s therapist, he sued), even a former lawyer for the wife about whom the husband had made a complaint to the Law Society of Ontario (it was dismissed) and the wife’s trial counsel. Mishael Najm, the parties’ daughter, testified that while she was grateful to her father for her upbringing and her first-class education, he was “very short tempered, cruel, unreasonable, controlling, unethical and even demeaning.” On one occasion, if not more, he contacted her before the scheduled May 2022 trial date asking that she persuade her mother to discharge her lawyer. This would have left her mother in a precarious situation financially and probably compromised her desire to emigrate to the United States, something that the daughter had repeatedly, but unsuccessfully, pleaded with her father to cooperate in facilitating.

[12] In addition:

(a) During the parties’ first separation in late 2005/early 2006, the husband had made notes, obviously dealing with family law issues, one of which queried using a 1993 valuation date and another dealing with “onus of proof-e.g., offshore [accounts]-say mostly from parents.”

(b) The husband sued the wife in Small Claims Court. It was dismissed for delay in 2018. The wife alleged this was an example of harassment.

(c) The wife alleged that the husband stalked and videotaped her, even emailing her in derogatory language, once telling her she was “cursed” and to “rot in hell.”

(d) The husband was often in arrears of paying the support Order, sometimes several months, only bringing them current shortly before a court event. In the week or so before the trial started the husband paid support arrears of about $32,000.

(e) The husband disobeyed costs Orders of the court. He was ordered to pay over $36,000 in costs by Bennett J. in January 2018 within sixty days. Ten months later the costs remained unpaid.

(f) In late November 2021 the wife received a letter from the Family Responsibility Office (“FRO”) telling her that the husband had informed it that the support Order had terminated (it had not). The husband did this without the knowledge of his lawyer (not his current lawyer). In cross-examination, the husband said that his contact with the FRO “was a request to my ex-wife who claims that she is my wife for 29 years, that she would have the heart to actually acknowledge and accept that it is very difficult for me to pay her $4,000 [a month] while she is working full-time.” (Italics added).

(g) In June 2022 Himel J. found the husband in breach of her earlier May Order (to which the husband had consented) that adjourned the forthcoming trial so that the parties could explore mediation/arbitration. The husband had agreed to up-front the costs of that process but after the Order was made and the trial adjourned the husband discharged his lawyer and complained that the mediation/arbitration process had been obstructed by the wife. Himel J. found this was false as it was evident that it was the husband who was resiling from the Order (this should be viewed in the context of the husband’s efforts with the daughter to persuade her mother to discharge her lawyer).

(h) Even though the parties are not divorced, the husband referred to his wife throughout his trial evidence as his “ex-wife”. When he contacted the FRO in November 2021 his net worth of almost $3,000,000 (including $1,200,000 of business interests) exceeded the wife’s net worth of almost $960,000 by over $2,000,000.[^9]

[13] In particular, with respect to credibility, the wife alleged that the husband had engaged in a channeling of “family resources through his father, joint accounts with [her], and thus, concocted a scheme to exclude these assets from the net family property calculation.”[^10]

[14] The husband alleged that the wife’s evidence was “inconsistent”, “not credible” and embellished, exaggerated and sensationalized whenever it suited her. He rejected her claims about non-disclosure submitting that this case was a demonstration of what happens when a party is operating under a belief that the other has acted “nefariously.” In response to one of the wife’s non-disclosure allegations relating to a Request for Information in late August 2018, the husband pointed to a timely, detailed response a few months afterwards which also included authorizations for the wife to contact the relevant institutions, but she never did. The wife just didn’t like the answers she was given during the case. He complained that her disclosure was deficient.

[15] As is often observed, the assessment of credibility is not an exact science.[^11] In M.K.-C. v. C.C.,[^12] McGee J. dealt with credibility where there were suggestions that evidence was tailored, ignored or unreliable.

[55] Credibility and reliability are related but distinct concepts. Reliability speaks to the accuracy of the witness’ ability to accurately observe, recall and recount the events in issue. Credibility centres on a witness’s genuine efforts to tell the truth in a wholesome manner, not leaving out details that could mislead the listener. An honest witness endeavors to tell the truth as they experienced it, acknowledging that some of their perceptions may have been flawed.

[56] One of the most valuable means of assessing witness credibility is to examine the consistency in their evidence. Inconsistencies may emerge not just from a witness’ oral testimony, but also from things said differently at different times, or from omitting certain events at one time while referring to them on other occasion. [Citation omitted]

[57] A dishonest witness is not a reliable witness absent corroboration, but it does not automatically follow that a credible witness gives reliable evidence. To provide honest and reliable evidence, a witness must be truthful and alive to their limitations. They must be open to the possibility of alternative perceptions. A credible witness without such insight may inadvertently give unreliable evidence because they are rash, overconfident, or reckless in their pursuit of an outcome.

[58] Ultimately, a court must consider all the relevant factors that go to the believability of the evidence in the factual context of the case.

[16] Credibility assessment is not all or nothing. As noted in Re Novak Estate,[^13]

[37] There is no principle of law that requires a trier of fact to believe or disbelieve a witness's testimony in its entirety. On the contrary, a trier may believe none, part or all of a witness's evidence, and may attach different weight to different parts of a witness's evidence. [Citation omitted]

[17] The wife was a credible witness but often unreliable when it came to the husband’s and the family’s financial dealings, unsurprising perhaps because the husband managed the finances. Her narrative of the parties’ marriage was logical and consistent with the objective facts involving, for example, the parties first and final separations and the events of these proceedings. The husband challenged the wife’s credibility, alleging that it was she who had failed to disclose assets that might impact the financial issues in this case. There were, according to hm, unexplained transactions in her accounts and he undertook a 6-year review (i.e., after 2005) of her salary, Kingsbridge rental proceeds and mortgage payments and her use of the parties’ joint line of credit to suggest that she was untruthful. He also alleged that that she wasn’t making her fair share of contributions to the children’s education and only minimal contributions toward household expenses.

[18] The wife wasn’t working outside the home from 2013 until 2017.

[19] The husband was well-prepared to explain his business activities and, while he disclaimed the wife’s evidence about his financial conduct and treatment of her, he struck out at those who supported her such as her friends, a therapist and her lawyers[^14] even suing her on one occasion in Small Claims Court (the case was dismissed). After she left the matrimonial home, he ended medical coverage for a chronic condition (ulcerative colitis) for which she required medication and he refused to reinstate it even though he knew that she had no income. He would address her in unflattering language. He consistently demonstrated non-compliance with court Orders involving costs. He misled the Family Responsibility Office (“FRO”) about the termination of the spousal support Order. He encouraged Mishael Najm to persuade her mother to fire her lawyer just before the May 2022 expected trial date. He wanted to have the May 2022 trial adjourned and so agreed to proceed to mediation/arbitration, then resiled from that and misled Himel J. about the reasons why the parties did not pursue that route. He was found in breach of the court Order. He didn’t want to pay the costs, spousal support or the up-front costs of the mediation/arbitration because he would need to access taxable assets even though his net worth exceeded that of the wife by over $2,000,000. He consistently disparaged the wife during his testimony (sometimes subtly, other times sarcastically) referring to her as his “ex-wife…for 29 years”[^15] despite the fact that the parties were still married under Canadian law. His effort to “turn the table” on the wife by alleging non-disclosure from her was unpersuasive and not explored in any detail during either parties’ trial testimony.

[20] Except where supported by independent evidence (mostly audit), the husband’s evidence must be approached with great caution particularly with respect to his filling in factual or documentary “gaps” relating to his exclusion claims, many of which were self-serving and elaborately interconnected.[^16] This caution is especially due in the circumstances of this case given the legislative bias against the exclusion of assets from the equalization calculation (see para. 55 below) and also extends to his income evidence which, for reasons which will be addressed later, the court must draw adverse inferences.

[21] Overall, the wife’s evidence is to be preferred to that of the husband.

Equalization-Analysis

[22] Even though the parties experienced marital problems in late 2005/early 2006, they continued to live together and presented themselves as husband and wife. In determining the September 2015 valuation date, for example, Bennett J. comprehensively dealt with the parties’ evidence about their living arrangements and rejected the husband’s position that the parties had separated in late 2005. But what that Ruling didn’t address (as it was not an issue before the court) and what is clear from the parties’ evidence, and supported by the husband’s extensive record keeping after late 2005/early 2006, is that the husband began to arrange his financial affairs, unbeknownst to the wife, to ensure that any after-acquired property would not be subject to the equalization provisions of the Act. He changed his Will. Around the same time, he also arranged with his father to sign a Declaration in Pakistan incorporating the words of exclusion found in the Act and common to domestic contracts and testamentary documents in Ontario where the intent is to avoid the legislation’s equalization regime. It was agreed by the parties that when the father came to Canada in 2006, he suffered from macular degeneration and was losing his sight. His health was deteriorating. The husband arranged for him to see an Ontario lawyer and have the Declaration from Pakistan memorialized by an affidavit. He also signed a Will that made no reference to the wife. The husband made the arrangements with the lawyers. The court accepts that the wife knew none of these things.

[23] The principal differences in the parties’ positions about their net family properties and who owes an equalization payment to the other relate to the value of the exclusions each has claimed and will be addressed below. The parties also disagreed about the values of several other assets and debts for which no exclusion claim was made.

(a) Matrimonial Home

[24] The matrimonial home was sold on June 15, 2016, for net sale proceeds of $352,754.64. Pursuant to the Order of Donahue J. dated May 16, 2016, the parties agreed that the proceeds would be held in trust pending a further agreement by the parties or a court Order for their disbursement. Pursuant to Orders of the court the funds were fully disbursed by January 2020. The wife received $167,377.32, the husband received $62,377.32 and $123,000 was paid to the parties’ daughter for her law studies. The husband claims that the amount paid for the daughter should be equally shared by the parties and that, as the wife received $105,000 more than him, the parties’ net family property statements should reflect what each of the parties actually received.

[25] Two Orders were made disbursing the funds for the daughter. The first Order was made on consent on a without prejudice basis by Graham J. on May 29, 2017. It directed that $60,000 from the husband’s share of the proceeds be released to the daughter and that $60,000 be released to the wife from her share. Another Order was subsequently made that directed that $63,000 be disbursed to the daughter from the husband’s share of the proceeds.[^17]

[26] On July 10, 2018, this court ordered, on consent, that $15,000 be disbursed to the wife without prejudice to each party as to the ultimate allocation of those funds.

[27] On October 25, 2018, Bennett J. directed that $30,000 be disbursed to the wife also on a without prejudice basis. This was not a consent Order.

[28] On April 15, 2019, Bennett J. directed that $35,000 be disbursed to each party and that up to $15,000 of each party’s funds were to be used for future expert’s work and $20,000 for future legal fees. This was not a consent Order.

[29] On January 7, 2020, the parties consented to an Order by Sutherland J. distributing to each of them the remaining proceeds, which amounted to $27,377.32 each.

[30] I am not prepared to allocate the net sale proceeds as proposed by the husband, or make post-separation adjustments in his favour except for the $45,000 disbursed to the wife pursuant to the Orders made on July 10, 2018, and October 25, 2018, for these reasons:

(a) When the Orders disbursing school funds to the daughter were made, the wife was unemployed (2013 to July 9, 2018). She had no income apart from spousal support ($4,000 monthly ordered by Donohue J.) and rental income from her condominium which about matched what she was paying for a property she was renting. Donohue J. had imputed a $40,000 income to the wife and $140,000 to the husband. This was a consent Order.

(b) The wife’s net worth in January 2016 was $528,000 compared to the husband’s net worth of $2,500,000 in February 2016 as disclosed by their respective financial statements. In her August 26, 2018, financial statement the wife’s net worth had increased to $663,650 but $128,000 of that figure related to the increase in value of her rented condominium and land owned in Pakistan. While the husband’s June 29, 2018, financial statement suggests that his net worth was virtually unchanged, the value he recorded for his interest in Safina USA was confusingly opaque in that it represented an unexplained loss of $1,000,000 in the company’s value (of which the husband was half owner). Still, in either scenario, the husband’s net worth exceeded that of the wife by around $2,000,000.

(c) While the disbursement Orders made on July 10, 2018 (consent) and October 25, 2018 (not on consent) did not specify from whose share of the proceeds the funds were to be drawn the situation was different from that involving the daughter. The husband had always been the primary income earner in the family and had earned (often tax free) significantly more than the wife. He was the party better able to fund the daughter’s expenses and, in any event, would have been responsible for almost the entirety of those expenses had a s. 7 Child Support Guideline analysis been undertaken (there is no evidence this was considered when the payments were made).

[31] The net family property statement shall be adjusted to reflect that the wife received $45,000 more from the sale proceeds than the husband.

(b) Shahjamal

[32] Shahjamal was a property owned by the husband’s mother. When she died on March 31, 2005, the property was left to her surviving spouse and her three children (the husband, his brother and sister). The wife claims and the husband disputes that he had an $18,000 investment in this property on the valuation date.

[33] The husband’s trial affidavit evidence is that it was his brother (Jamal) not him, who owned the property on the valuation date although that evidence is contradictory and inconsistent with his disclosure and trial testimony. In his financial statements sworn on February 18, 2016, and June 29, 2018, the husband initially claimed that his interest in his share of the property was worth $18,000 but in the latter statement he noted that the property was jointly owned with Jamal and rented on the valuation date. This asset and its associated value are absent in the husband’s later financial statements.

[34] The husband’s disclosure indicates that the husband’s share was sold in June 2015.

[35] Apart from simply claiming the husband’s ownership of this asset on the valuation date, the wife did not explore the inconsistencies in the husband’s evidence or challenge his disclosure about this property. Given the confusing and contradictory nature of the evidence, I am not prepared to find that the husband retained any interest in this property on the valuation date despite my general reservations about his credibility.

(c) Missul Consulting and Investments Inc. (“Missul”)

[36] Missul was incorporated by the husband in 2002 to provide information technology services in Canada and the United States. The wife was made an equal shareholder with the husband and she remained an equal shareholder on the valuation date even though she never performed an active function in the company. She did not work outside the home; the children were in high school. Missul’s revenues depended on the number and type of service contracts which the husband was able to secure. He would take a monthly draw. Funds not taken would be held in reserve for those times that he was between contracts, those funds being invested.

[37] The husband engaged Jeffrey Feldman (SLF Financial Services Inc) as an expert. He prepared two reports, one on the estimated value of the husband’s business interests (“the FMV business report”) and the other on the husband’s related business and non-business contingent income tax and other disposition costs (“the CTC report”). He provided an Acknowledgment of Expert’s Duty. The wife agreed with Mr. Feldman’s qualifications. The court qualified Mr. Feldman as an expert to provide opinion evidence on the value of the husband’s business interests and the estimated tax and dispositions costs of certain other assets owned by the husband. The wife did not challenge the conclusions reached by Mr. Feldman except to query the discount factor used for estimated disposition costs; she tendered no expert evidence responsive to Mr. Feldman.

[38] Mr. Feldman valued Missul en bloc at $241,000, the husband’s pro-rata interest at $121,000 (implying an equal pro rata value for the wife), and the husband’s estimated net market value of his interest at $69,000, after present-valuing contingent income taxes and disposition costs. A significant component of the company’s value was a net shareholder’s advance of $160,000 (rounded).

[39] The husband proposed that a net value for Missul of $138,000 be attributed to him because it was operated solely by him (with which value the wife agreed) and that he be permitted a full deduction for the $160,000 shareholders’ advance (with which the wife disagreed). The net effect of this would be a $22,000 deduction for the husband in calculating his net family property.

[40] The court has several concerns about the husband’s proposed de jure reorganization of Missul in this case. There was no evidence why the wife continued to be a shareholder of the company after 2005 (the husband’s unsuccessful valuation date) or why she remained so on the 2015 valuation date. The FMV business report notes that it relied on interim financial statements prepared by the company’s “management”, in other words, the husband. The company’s fiscal 2015 report shows a significant consulting revenue increase from $73,375 to $263,000 (gross; net $73,524 to $178,619) yet advances from shareholders (most likely the husband) increased by $60,000. This was never explained by the husband.

[41] The court observes too that the year end for the company is the last day of February which, in this case, would be February 29, 2016, a full half-year after the valuation date after which the company would have another six months to submit its tax returns, well into mid-2016 at the latest. The wife started these proceedings on January 12, 2016, and the Donohue J. (consent) Order dealing with support was made on May 16, 2016 (the husband was imputed with a $140,000 income; his 2015 and 2016 Notices of Assessment indicated incomes of $52,709 and $95,401, respectively). Neither the husband nor Mr. Feldman was pressed to answer any of these questions but given the court’s concern about the husband’s credibility on matters impacting his financial affairs, I am not prepared to have the parties’ net family properties treated other than as reflected by the legal status of Missul that existed on the valuation date.

[42] While Mr. Feldman undertook no comparable estimation for the value of the wife’s interest in Missul on the valuation date, this court will assume that it was not significantly different from that of the husband (despite her not working outside the home). Accordingly, each party will be attributed $69,000 as representing the value of their interest in Missul and $80,000 will be attributed to each of them with respect to the shareholder advances. This should not be interpreted as other than an attribution for calculating the parties’ net family properties.

(c) Various accounts

[43] The wife claimed that the husband owned, and failed to disclose, thirty-nine accounts in Canada, the United Kingdom, Pakistan and the United States. Apart from making this allegation, no evidence was led to confirm, even circumstantially, that husband had failed to disclose accounts. More importantly, even when the husband provided directions authorizing the wife to undertake her own inquiries, there was no evidence that she made the effort. The husband testified, and his disclosure confirmed, that several of the accounts about which the wife complained were transferred internally or externally to another same-institution account(s) or to other institutions, respectively. The husband also testified that he had made voluminous disclosure.

[44] It is one thing to make an allegation and another to prove it. Apart from requesting disclosure and serving, for example, a Request for Information or Request to Admit (which both parties did, often involving admissions dealing with mixed fact and law or law, neither of which kind of requests can very productive nor always helpful if they involve disputes about document authenticity or the interpretation and application of legal principles[^18]), it is not usually wise to expect that a court will invariably draw an adverse inference. In this case, the wife identified a plethora of accounts but made no meaningful effort to direct the court to the documents referencing them and what follow-up inquiries (if any) she made. The court can draw no inference from the wife’s allegations in this regard. This observation though must be tempered by the court’s conclusions relating to the husband’s credibility and his exclusion claims.

Husband’s Marriage date deductions

[45] The husband claims, and the wife disputes, that he owned assets on the date of their marriage worth $345,128. This claim comprises proceeds of land sales in Pakistan ($232,000) and bank accounts and savings ($112,328).

[46] As already noted, the husband’s father signed the declaration in Pakistan on November 1, 2005, which included exclusionary terms not unlike those found in s. 4 of the Act. This was done around the time that the wife returned to Canada and while the parties continued to be represented by family lawyers. The Declaration lists in Schedule “A” transfers of land and cash, some dated before the marriage and most after the marriage. The schedule was titled “Sources of transfers to Lloyd’s TSB Offshore Private Banking, with estimated dates and values.” The disposition of two properties (Canal View, Pakistan 1980) and an apartment (Hammersmith, U.K. 1982) are noted including their associated values in Pakistani Rupees and Pounds (GBP). There are no records supporting these transactions in terms of registered property documents. None was attached to the Declaration and none was tendered at trial.

[47] In his January 6, 2006, financial statement, the husband did not disclose any assets owned on the marriage date but under Part 10 dealing with excluded property he claimed that he had brought $170,000 in securities (Lloyd’s Bank) into the marriage.

[48] On July 16, 2006, the husband took his father to a lawyer where the father signed the affidavit that appended the Declaration as an exhibit.[^19] There is no evidence that any effort was made then or immediately afterwards by the husband to obtain corroborating documentation. Nor is there any evidence that the wife was made aware of this document until after the parties finally separated over nine years later in September 2015. The father died in 2011.

[49] In his financial statement sworn in these proceedings on February 16, 2016, the husband swore that he had no assets or liabilities on the date of marriage.

[50] In his financial statements sworn on June 29, 2018, and March 7, 2020, the husband claimed that he had $112,328 in bank accounts and savings on the marriage date.

[51] In his financial statement sworn on March 15, 2022, the husband claimed for the first time that he had interests in land worth $232,000 on the marriage date and, as before, $112,328 in savings. This was his position at trial. In cross-examination he admitted that he was unable to prove that he owned realty worth $232,000 on the marriage date.

[52] While it is likely that the husband had some net worth when the parties married, it is impossible to determine what that comprised and the relevant value(s) for these reasons:

(a) Apart from testifying that bank records could not be obtained for the marriage date given the passage of time, there was no evidence that the husband owned the identified properties in Pakistan and the U.K. on the valuation date and no evidence that any effort had been made to access government property registration records (which could have provided some, albeit modest, corroborative support) or efforts to contact any professional who may have been involved in the originating transaction.

(b) Throughout the parties’ first separation and these proceedings the husband was represented by experienced family law lawyers. His marriage date net worth, as sworn in successive financial statements, was inconsistent. It was $170,000 in 2006, “Nil” in 2016, $132,328 in 2018 and 2020, and $345,800 in 2022 through six different family law lawyers. It is clear from the evidence that when these statements were sworn the husband understood what the equalization categories for the prescribed form of financial statement meant: there was certainly no evidence that he misunderstood them.

(c) The husband’s admitted at trial that he was unable to corroborate a realty deduction.

(d) In paragraph 17(i) of his trial affidavit the husband proffered a note he prepared summarizing the components of his $112,328 deduction. Among other things, it includes a value for the Hammersmith property and the husband’s estimate of his 1983 to 1985 premarital income from Saudi Arabia (an estimated monthly saving rate of 4,000 SAR[^20]) extrapolated for each year (i.e., 48,000 SAR for 1983 and 1984 and pro-rated at 32,000 SAR for 1985 to the date of the marriage). This is an estimate unsupported by any other independent evidence and does not account, or attempt to account, for any transactions in the account or accounts into which these funds would have been deposited or withdrawn, or the U.K. taxation of these funds on deposit (although there was evidence about offshore Jersey accounts at trial). It appears too that the Hammersmith proceeds are double counted, referenced as part of the Pakistan land sales in the $232,800 figure and then referenced in the calculation of the $112,328 in bank savings.

[53] In my view the husband’s evidence does not rise to an acceptable level of proof. It is inconsistent and contradictory. With some reluctance, the court must deny the husband this deduction. The court will not speculate or default to an arbitrary figure.

Summary of parties’ net worth on valuation date

[54] Not including the parties’ exclusion claims, the wife’s net worth on the valuation date was $595,542 and the husband’s net worth was $2,267,686 (both figures rounded). These values are set out in the Net Family Property Statement (“NFP Statement”) that accompanies these Reasons.

Exclusions/Tracing principles

[55] Both parties claim exclusions to the values of certain assets in calculating their net family property. The wife claims an exclusion of $133,324.50 and the husband claims an exclusion of $1,419,199.88. Each has the onus of proving their entitlement to the exclusion, in other words “tracing” the value of exclusion. As noted by Perkins J. in Goodyer v. Goodyer[^21]:

Tracing is a fault-based concept applied after the fact in family law to a series of transactions that were never wrongful and have not become so by reason of the separation of the spouses. The tracing concept was adopted because the Family Law Act property scheme has a bias in favour of sharing the value of assets in existence at the separation date and a bias against the exclusion of assets from the equalization calculation. Hence the onus on the spouse seeking to exclude assets, and hence the requirement that the spouse seeking to exclude a gift received during the marriage be able to trace it from its original form into assets in existence at the separation.

[56] Tracing is a prospective rather than a retrospective tool; that is, the nature of the transaction by which the asset is acquired determines, at least initially, its exclusionary treatment.[^22] Challenges may arise where, as in this case, the evidence may be unclear about the nature of the transaction giving rise to the asset or where, also as in this case, the asset has changed or been commingled with other assets. Documentary evidence and credibility are critical to the former concern: as for the latter, an exclusion should not be denied if the asset changes form over time. In Ludmer v. Ludmer,[^23] Penny J. observed:

86. Thus, it is not the transformation of the asset that brings tracing to an end. Rather, it is the inability of the beneficiary to prove the necessary connection or nexus between the trust property and the subsequently acquired asset. For example, tracing may reach its limit when an asset is spent or dissipated or where it is used to pay down debt or otherwise becomes comingled with other assets such that the original trust property can no longer be discerned.

87. I have found no case which suggests that the excluded nature of property begins to “peter out” merely because it is exchanged for equally identifiable property or through the effluxion of time. Where there is clear documentary evidence of the transformation of an excluded asset into other identifiable property, the exclusion is preserved.

[57] There are three accepted approaches (or methodologies) to tracing, the “first in, first out rule”, the “pro rata” approach” and the “common sense/sufficient link” approach. Of these approaches, the “first in, first out rule”, commonly called the rule in Clayton’s Case”[^24], is generally disfavoured as being arbitrary and unfair and has been either rejected or narrowed in favour of a more flexible and equitable approach. In Goodyer Perkins J. accepted the “pro rata” approach as more sensible and just in family law cases. That case involved a claim by the husband to exclude several assets from his net family property, including part of a joint investment account set up and totally funded by his late father. After his father died, the husband deposited the funds into a joint account with his wife. Perkins J. pro-rated the value of the exclusion to account for the subsequent transactional changes in the account. In Farmer v. Farmer[^25] Finlayson J. described the tracing approach adopted by Metivier J. in Bennett v. Bennett[^26] as reflecting the “common sense” or “sufficient link” approach.[^27] In Bennett the husband had inherited some money from his mother but apart from the proximity in time between funds being withdrawn from the account holding the inherited funds and the later purchase of a property there was no evidence where the funds went between their advancement and the purchase date. In granting the exclusion, Metivier J. applied what he described was a “common sense and reasonable view” to how the property could have been acquired but for the inheritance.[^28] In Henderson v. Casson[^29] the proximity in time between inherited money and a loan was sufficient to prove the exclusion of the loan.

[58] The choice of tracing approach is discretionary and driven by the evidence.[^30] The application of any approach, with or without combining elements of the other approaches, will depend on several factors such as the nature of a presumptively excluded asset, whether it changed form and value over time or was commingled with other non-excluded assets. Documentary evidence may be absent or inconclusive resulting in a “but for” linkage based on proximity in time or the history and continuity of the asset’s ownership for which viva voce evidence and the claimant’s credibility are critical. The list is not exhaustive. A flexible but principled and non-formulistic, equitable approach is warranted. In this case, all three approaches are engaged.

Wife’s exclusion claims

[59] The wife claims that the following values should be excluded:

(a) A $25,000 USD gift by her father shortly after the parties married.

(b) A $100,00 gift from her mother in 2009 that the wife used to purchase a condominium investment property (Knightsbridge Circle, Mississauga, Ontario).

(a) $25,000 USD gift ($33,314.30 CAD)

[60] The parties agree that the wife’s father made a $25,000 USD gift after they married.[^31] Even though the wife said that the gift was made to her, and the husband said that it represented a dowry, reflecting what he said was a cultural practice prevalent in eastern regions of Pakistan from where the parties’ families hailed, the fact is that the funds were deposited into a joint bank account in the parties’ names. The wife testified that she never “saw” the money; the husband testified that the funds were “probably” used to help fund the purchase of the parties’ first home in Canada in 1994 (Ceremonial Drive), title to which was taken in the wife’s name. The property was sold in 1997.

[61] In an email to the wife dated October 15, 2015,[^32] about three weeks after the wife left the matrimonial home, the husband recalled the circumstances of the gift, writing to her:

I was thinking that with the contribution of 25K at the time of the marriage that we need to deal with it. You may or may not recall I had a previous to the marriage an account with Merrill Lynch Knightsbridge. Just for the record in my own account at Merrill Lynch (sic) had funds from the net proceeds of my apartment in London (Latimer Court), my Honda car sale before I left for Saudi and then the 2 or so years of savings from Saudi Arabia.

We all went together that day in a taxi, you, your father and myself whereby we opened a joint account in your name and mine and your father contributed $25,000 for the family to be in cash.

I do sincerely regret having accepted it and should have insisted that it be given to you.

I would propose that on dividing the common family assets that USD 25,000 be transferred directly to your mother and though it was a gift and not to be returned would like it to return to your mother plus the value which I perceive these funds had for me.

I hope you agree with this suggestion. Thank you.

[62] There is no evidence that this “proposal” was ever acted upon by either party. Nor was there any evidence as to what the husband meant when he wrote that he would like the funds returned to the wife’s mother (her father had died) “plus the value that I perceive these funds had for me.” The wife argues that the husband admitted that he received the funds before marriage, but that submission is inconsistent with her testimony and her reliance on the exhibit as corroborative of her claim.

[63] The wife did not point to any asset to which the gift could be traced. She acknowledged in cross-examination that the funds were “long gone…gone and spent”, adding that the husband had told her once that he had “fed” her with that money.

[64] The evidence does not support the wife’s entitlement to the exclusion claimed. It is denied.[^33]

(b) $100,000 gift

[65] The wife claimed that $100,000 of the value of an investment condominium owned by her on the valuation date should be excluded from her net family property. It was purchased in June 2009 and its deposit and cash payment were funded by a $100,000 gift that the wife said her mother made to her, and an institutional mortgage. The appraised value of the property on the valuation date was $335,000; title was subject to a $159,505 mortgage. The condominium was rented on the valuation date. The wife resides there now.

[66] Tendered by the wife as corroboration of the gift was a “To Whom It May Concern” document dated August 14, 2017,[^34] almost two years after the valuation date, signed by the wife’s mother and commissioned by an Ontario lawyer, the relevant parts of which are the following:

TO WHOM IT MAY CONCERN:

Re: GIFT CONFIRMATION

I hereby confirm that Gift made during the year 2009 of $100,000 Canadian to my daughter Fareeha Mushtaq Najm.

I, Rukshunda Mushtaq mother of Fareeha Mushtaq Najm has freely and voluntarily gifted the above mentioned amount to purchase an Apartment 111- 45 Kingsbridge Circle, Mississauga, Ontario. This gift or any increase in the value of the property is made to her is absolutely for the sole benefit of the Donee and shall not become part of her NET FAMILY property at ANY TIME (emphasis in the original).

[67] No objection was taken by the husband to the exhibit even though the wife’s mother was alive and not tendered as a witness (she was said to be elderly, infirm and living in Pakistan).

[68] Also tendered as corroborative evidence of the wife’s claim was an undated letter from TD Canada Trust regretting that it was unable due to the passage of time to provide actual copies of three late May/early June 2009 cheques allegedly relating to the purchase transaction. The bank letter noted the dates, amounts and nature of the transactions but no particulars about from whom a $100,000 deposit came or to whom a bank draft and cheque were written from the wife’s account.

[69] The wife’s evidence is that she had no other source of funds to acquire the property without her mother’s assistance although the husband pointed out that there were significant disclosure deficiencies with her evidence. The husband’s evidence was that after the parties’ first separation in 2006, the wife opened a separate bank account (TD Canada Trust) into which she deposited funds from unacknowledged sources, a joint line of credit and “Other marital accounts”. The funds in the TD account were modest ($5,317.93) until a $102,614.26 deposit on May 20, 2009. On May 29, 2009, a $93,329.16 bank draft was recorded as a debit. On that same date the trust ledger for the solicitor handling the purchase a few days later confirmed a deposit in the amount of the draft to his trust account.

[70] It is clear from the evidence that the wife could not have afforded the purchase but for the $100,000 deposit. There was no evidence that the wife had available funds of this size to invest. Despite the husband’s detailed analysis of the wife’s financial situation in 2009, he could not point to other assets of the wife from which this amount could have originated. Although the wife did not explain the discrepancy between the $100,000 account deposit and the $93,319.16 draft to complete the purchase, I am satisfied that the funds from her mother were used/linked to the condominium’s purchase. She is entitled to a $100,000 exclusion.

[71] No request was made by the wife to pro-rate the value of the exclusion to the appraised value of the condominium on the valuation date.[^35]

Husband’s exclusion claims

[72] The husband claims that the values of the following assets should be excluded:

(a) $162,590 representing the husband’s share of in an investment condominium owned with his brother located in Miami Beach, Florida (“Collins Avenue”).

(b) $44,917.84 representing a downpayment for the purchase of an investment residential condominium on Albina Way, Mississauga, Ontario (“Albina Way”).

(c) A $46,600 mortgage prepayment on Albina Way.

(d) $27,275 representing a payment made on a TD Canada Trust line of credit (account ending in #4981).

(e) A $45,000 downpayment on Unit 605-88 Palace Pier Court, Toronto, an investment property (“Palace Pier”).

(f) $61,100 representing the net value of vacant land in Lahore, Pakistan (Defense Phase 9).

(g) $86,819 for BMO Nesbitt Burns investment account (***6282).

(h) $106,419 for a BMO Nesbitt Burns trading account.

(i) $25,821.06 relating to a BMO Nesbitt Burns RRSP account (#13107).

(j) $529,431 representing the net value of the husband’s ownership of Safina Investments Inc. Canada (“Safina Canada”).

(k) $299,000 representing the net value of the husband’s interest in Safina Investments Inc. USA (“Safina USA”).

(l) $5,925 held in Rupees (converted) in Meezan Bank, Pakistan (account ending in #686).

(m) $85.84 held in Rupees (converted) held in Meezan Bank, Pakistan (account ending in #687).

(n) $5,076 CDN held in Pakistan Government Bonds (converted from Rupees).

(o) $801.64 held in an HSBC chequing account (ending in #150).

(p) $788.36 USD held in an HSBC chequing HSBC (ending in #306).

(q) $149,958 relating to a shareholder loan owing to the husband from Safina USA.

(r) $329,175 relating to the husband’s half-share of a debt owed by Safina USA to the estate of the husband’s late father of which the husband and his brother were equal beneficiaries.

[73] According to the husband’s evidence, the exclusions fall into five categories:

(a) Three properties in Pakistan (ShahJamal, Parkview and GOR) which were sold by the husband after his father died (the husband and his brother were the beneficiaries of the estate). The husband contends that the sale proceeds can be traced to assets in North America, those being a BMO investment (or trading) account, a TD Canada Trust line of credit in the name of the parties, the Collins Avenue property, Safina USA and the Palace Pier property.

(b) The Defense Phase 9 property in Pakistan that the husband contends was gifted to him by his father during the parties’ marriage and which the husband owned on the valuation date.

(c) Gifts of money to the husband by his father which found their way into the husband’s TD Waterhouse, HSBC and BMO Nesbitt Burns accounts in Canada as well as into the downpayment and prepayments relating to the Albina Way property.

(d) Shares in a company in Safina Canada allegedly established by the husband’s father and, on his death, inherited by the husband and his brother.

(e) Government of Pakistan bonds owned by the husband’s mother which were gifted to him before she died in 2005, which he claims that he held on the valuation date and which he afterwards sold, along with small amounts of money from Pakistan which the husband contends can be traced into other bank accounts (Meezan Bank, Pakistan and HSBC).

[74] Each of the parties retained experts to testify about the husband’s claims.

[75] The husband retained Steven D. Rayson (SDR Valuations Inc.) who undertook a forensic audit of the husband’s documents, tracing from source to the valuation date. During that undertaking Mr. Rayson made certain ownership assumptions which were then incorporated into his opinion. He delivered a report dated April 13, 2020 (the “SDR Report”). This report reviewed only the gross amount of the exclusions claimed by the husband and did not include a review of the notional or contingent tax costs associated with the exclusions. In preparing his report, Mr. Rayson drew upon a chart [“the CPY Chart”] prepared by one of the husband’s former solictors of record and additional sub-schedules prepared by the husband.[^36] He described the methodology he used:

A. Well, the, the whole point of a tracing exercise is to trace the flow of funds from their source to their use and, basically, follow the money. So what I did was, I started with some schedules that Mr. Najm had provided me with that were prepared by a, a law clerk in one of his – for one of his, his previous family law lawyers [the CPY Chart]…The…schedules did change as we progressed with the engagement, but I started with those schedules. And Mr. Najm provided me with supporting documentation for the transactions that were highlighted in those schedules. And so I traced each of the – every time there was a flow of money, I would trace or verify where the amount came from, whether it was from a bank statement or – excuse me – or, or some other source. I would trace it through the bank statements, using the copies of the bank statements that Mr. Najm had provided me, and then I would then trace them to their ultimate use, whether it was a purchase document – a purchase and sale document for a particular property or, if investments, they were put into an investment account, investments were, were purchased with that. And I started my engagement in June of 2019, and I produced a final report in April of 2021 (sic)…during the process, there were instances where the schedules either weren't clear or, or they were incorrect, or they were missing documents. So I worked with Mr. Najm to clarify and, and correct the schedules, and also where there were documents that were missing, I asked Mr. Najm to provide me with the appropriate supporting documentation.

[76] The wife retained Jim Muccilli (Crowe Soberman LLP) as an expert in forensic accounting and business valuations with experience in matrimonial disputes. His qualifications were comparable to those of Mr. Rayson and were not challenged by the husband. Mr. Muccilli provided an Acknowledgement of Expert’s Duty and was accepted by the court to give opinion evidence. He issued three reports and a final summary report critiquing the husband’s tracing analysis. The first report was dated February 19, 2019; it was updated in February 2021 (the second report) after receipt of the Rayson report. Then, after receipt of further responses from the husband, Mr. Muccilli delivered a third report in May 2021. His final report is dated March 9, 2022 (“the Muccilli Report”). It consolidated and superseded the analysis and comments contained in his earlier reports. Mr. Muccilli concluded that he had not been able to fully trace any of the excluded assets claimed by the husband and that the assets/accounts which were examined relating to the Albina Way downpayment and prepayment, Palace Pier and Safina USA properties commingled matrimonial assets.[^37] Mr. Muccilli summarized the major differences between the experts’ reports as follows:

(a) The SDR Report did not complete a full tracing of the original purchase documents by either of the husband’s parents with respect to the gifts/inheritances claimed by the husband. Therefore, it wasn’t certain whether the funds had once belonged to the husband who provided funds to his parents to acquire assets and who then returned them to the husband.

(b) The SDR Report did not fully trace the funds allegedly inherited by the husband from a bank account held jointly with his father.

(c) There didn’t appear to be a full reconciliation linking the sale proceeds of plots of land in Pakistan to the various gifts/inheritances.

(d) The SDR Report didn’t address missing bank statements in accounts which included alleged excluded funds, thus allowing for the possibility that there were intervening transactions and commingling of funds within/between the accounts which would impact a complete “cradle to grave” tracing.

(e) The SDR Report did not appear to consider the intermingling of alleged gifted funds with other unidentified or untraced amounts subsequent to their deposit and ultimate disposition.

[77] Pursuant to the April 15, 2019, direction of Bennett J., the experts (Rayson and Muccilli) met three times to ensure that they were working with the same documents and to address questions arising from their retainers. The husband also attended one of these meetings and answered questions (none of this under oath). Entered as Exhibit 88 at trial was a document dated October 17, 2022, initialled by the experts and identified as Schedule 1 but which was described (perhaps inappropriately) as an “Interim Summary of Experts’ Reports: Tracing of Husband’s Assets” (“the experts’ summary”). This was an updated version of a summary of the same name dated October 21, 2021, but revised to reflect references in the March 9, 2022, Muccilli Report. This summary captured the major differences in the experts’ opinions.

[78] The experts’ evidence at trial focussed on their differences. The experts’ summary was their roadmap; it described the claimed exclusions, ownership percentages (where applicable), compared (with each expert’s report references) the value of the claimed exclusions and the amounts traced and then identified the difference in values. References to amounts being “Unclear” or “n/a” (Mr. Muccilli) were also noted. Mr. Muccilli testified that he was uncomfortable with using “Unclear” but used that term whenever he was unable to do a “cradle to grave tracking” of the husband’s exclusions; in other words, the original source of funds and/or transfer of funds was incomplete, hence unclear.[^38] The reference to “n/a” meant either that the excluded value was nil or that no tracing was undertaken because the value was insignificant such as, for example, the assets in para.72 to (p) above.

[79] All of the husband’s exclusion claims involve one or more of the tracing approaches (mostly the pro rata and common sense/linkage approaches), often in combination and usually interconnected. Complicating the court’s assessment of the husband’s exclusions are the facts that they often span several decades, involve assets (mostly bank accounts) in Pakistan, the United Kingdom (including Jersey), Canada and the United States belonging to the husband, the husband’s parents (some joint with him), missing bank records and companies in Canada and the United States and their bank records. Finally, this court is mindful that the onus of proof rests with the husband and that his expert was doing little more than tracing the various assets for which the husband was claiming an exclusion through their various manifestations based on the CPY Chart prepared for and by the husband. While the charts are extraordinarily detailed and cross-referenced to documents, and the court acknowledges the auditing done by Mr. Rayson (and critiqued by Mr. Muccilli), the opinions of these experts do not relieve the husband of proving the existence and value of the original asset. The husband adopted Mr. Rayson’s report “and in particular the assumptions made throughout as to the source and use of funds.” The fact is that the “assumptions” about source were often those of the husband. Because of this, caution must be had in conflating the audits by the experts with the husband’s legal obligation of proof on a balance of probabilities. Both experts carefully, and wisely, made frequent reference to the absence of source or linking records for several of the husband’s exclusions. The husband’s charts may be a helpful roadmap, but they are not proof.

Collins Avenue

[80] In March 2012 the husband and his brother (“Jamal”) purchased as an investment Unit 511, 6801 Collins Ave in Miami, Florida (“Collins Ave”), a condominium residence. It was sold in December 2015, shortly after the valuation date, for net proceeds of $325,180 (converted from USD). The husband claims one-half of that amount ($162,590) as an exclusion.[^39]

[81] It was the husband’s evidence that his share of the funds for the purchase came from three sources; his sale in February 2011, before his father’s death, of a plot of land in Lahore, Pakistan gifted to him by his father in 1988 (“Parkview”), the sale in October 2011 after his father’s death of his parents’ home in Pakistan (“Shahjamal”: this included adjacent vacant land, “the empty portion”, sold in 2015)[^40] followed in November 2011 by his sale of another plot of land gifted by his father in March 1990 (“GOR”).

[82] None of the sale proceeds could be directly/transactionally linked to the Collins Ave purchase. The husband supported his exclusion by reference to not less than thirty-one transactions spanning twenty-seven years and involving at least eleven accounts owned by his father and him (personally and through his consulting company, Missul, and Safina USA) in Pakistan, Canada and the United States, along with appropriate currency conversions.

[83] Mr. Rayson was satisfied that the documentary record corroborated the value of the exclusion. Mr. Muccilli was unable to determine the source of the funds by which the husband’s parents acquired their properties and expressed concerns that there were various instances where funds withdrawn did not directly correlate to the amounts deposited or there were intervening transactions.

[84] The following observations are important:

(a) The wife contends that the husband was “laundering” (using this in a non-pejorative sense) his Saudi Arabia income through his parents and that this enabled his father to acquire the Parkview and GOR properties in 1988 and 1990, respectively. Both dates are within five years of the parties’ marriage and when they were starting their family. The wife was unable to provide any evidence supporting her allegation involving this property.

(b) The individual transactions are grouped in proximity to specific events despite the passage of years. For example, title to a property would be held for several years showing no activity and when an event such as the Parkview sale occurred proceeds were deposited into one account (in this case HBL) and then transferred to a Meezan Bank (Pakistan) account within weeks and sometimes the following day, the amounts being very close to one another or identical. Funds would then be transferred to Canada. This is not an isolated example.

(c) The wife contended that the husband should have the entirety of the sale proceeds ($244,496.53 USD) attributed to him, but that is inconsistent with the documents relating to the purchase and sale of the property indicating that title was shared with Jamal, the brother. It is also inconsistent with the opinion expressed by Mr. Muccilli.

[85] While not every transaction perfectly correlated to the proceeds ultimately received by the husband the extensive documentary record and proximity in time of the relevant transactions corroborate the husband’s claim. He will be allowed a $162,590 exclusion for Collins Ave.

Albina Way

[86] Albina Way is a residential condominium unit that the husband purchased as an investment on or about June 26, 2009. It was renovated in 2016 and was where the husband was residing at trial (the matrimonial home was sold in 2016). The appraised fair market value of the property on the valuation date was $475,000 and it was subject to a $163,467 mortgage. The husband claims the value of two exclusions, one for a downpayment ($44,918) when he signed the purchase agreement, and the other for a 2012 payment ($46,400) reducing the mortgage principal.

(a) Downpayment

[87] The husband’s father (who lived in Pakistan) owned a TD bank account (#3742). It was opened in June 2005. There is no contemporaneous record showing any deposit of funds to this account or, more importantly, records identifying deposits to the account then or afterwards. On April 1, 2006, he gave the husband authority to operate the account. At some point in 2006 (the date is unknown) the ownership of the account was transferred into the joint names of the father and the husband.

[88] On April 6, 2009, slightly more than three years later, the father signed an Affidavit of Gift Deed (“the Gift Deed”) confirming a $50,000 cash gift to the husband but referencing the #3742 account that had been closed two years earlier (on July 7, 2007). Apart from the document, there was no other evidence explaining how or why the Gift Deed was made or necessitated. Three months later, on June 19, 2009, $45,000 was deposited into a Missul Consulting account (“Transfer from GLI”). On June 24, 2009, the husband made nine $5,000 transfers from his business account to a personal account (TD CAD #2810) and, the next day, transferred $39,918 into the parties’ joint line of credit with TD Bank. On June 26, 2009, he made a $52,058 downpayment on Albina Way from the line of credit. On June 29, 2009, the husband transferred $10,000 from TD CAD #2810 to the line of credit. He claims that $5,000 of that transfer should be added to his line of credit deposit of $39,918 for a total exclusion of $44,918. Simply put, the husband’s position is that he deposited $39,918 and $5,000 into the joint line of credit from the $45,000 in his business account, which amount he claims can be traced to the $50,000 cash gift.

[89] Mr. Rayson commented that he was unable (as was Mr. Muccilli) to confirm from the documentary record that the funds from the husband’s father were the source of the funds used for the downpayment. Both experts noted that the wife was also using the line of credit during this period although, in fairness, there were only two days’ flow-through between the transfer from Missul Consulting and the downpayment.

[90] The husband’s claim to this exclusion must fail for these reasons:

(a) There are no records contemporaneous with the opening of the account or afterwards until it was either closed, made into a joint account with the husband or whatever was in the account transferred into another account or savings instrument.

(b) There is no record of any account from which the alleged $50,000 was withdrawn and no record of any account into which these funds may have been deposited.

(c) The account referenced in the Gift Deed had been closed two or more years before the document was signed.

(c) There was no record for the account from which the $45,000 deposited to Missul was withdrawn.

(d) Given the extensive records which the husband was able to produce for this period for other transactions (including, for example, same period analysis of the wife’s bank accounts), there was no evidence explaining why contemporaneous records linking the $50,000 to the $45,000 were unavailable when records from Missul were.

[91] The serial $5000 transfers from Missul are puzzling and were never explained. Why couldn’t the husband simply write a cheque from his personal account to the real estate solicitor? Not explained. Unlike the Bennett and Henderson common sense or linkage cases where there was uncontroverted evidence about the source of funds giving rise to the exclusion, there is none but guesswork and unanswered questions here. This exclusion is denied.

(b) Prepayment

[92] Albina Way was subject to a mortgage after its purchase. In late July 2012 the husband accessed the parties’ joint line of credit, putting it into a deficit position, and reduced the mortgage principal by $46,400. About a week later he transferred $46,500 from an investment account held with his late father to the line of credit. The husband claims that he is entitled to a $46,400 deduction (subtracting the $100 difference) because the funds transferred had been gifted or inherited.

[93] Corroborating his claim, the husband documented fifteen transactions over a nine-year period between 2003 to 2012 involving more than a dozen accounts and assets in Pakistan (bonds), the United Kingdom, Canada and the United States belonging to his father, his mother, his parents jointly, Saffina USA and himself. The husband claimed that part of the $46,400 came from investments held by his parents in 2003, another part from a transfer made by his father to him in February 2006 (both of which the husband deposited into a Lloyds, United Kingdom, bank account) and the sale in 2010 and 2011 of Government of Pakistan Bonds owned by his mother. The husband said he was unable to produce any of his personal Lloyds’ account statements for the period from 2003 to 2006 due to the passage of time. In November 2008 he authorized the transfer of funds from his Lloyd’s account to a TD Canada Trust account in his name, then to a joint investment account with his father.[^41] The amount transferred was in excess of the funds deposited between 2003 to 2006.

[94] Critically, there are no statements to support the transactions through the husband’s Lloyd’s accounts, for the 2003 parents’ transfer, the 2006 gift alleged from the husband’s father or for 2008 relating to either of those dates. The husband testified that the amount transferred exceeded earlier deposits, not due to account activity, but to appreciation in the value of the contents of the account over the relevant time. While there is some approximation, there is no evidence (i.e., from account statements, etc.) of account activity in that three-year period. In his trial affidavit the husband noted that before the parties married all his Saudi Arabia income was deposited into Merrill Lynch accounts he held in the United Kingdom, that he held other accounts in the U.K. and that his parents maintained, as did he, accounts with Lloyds. As a general comment Mr. Muccilli concluded in his report, and maintained when he testified, that it was unclear “why there are various instances where funds withdrawn do not correlate to the amount deposited (i.e., either they are in excess of funds or are reduced) along with instances of significant time lapses between initial deposits and withdrawal and/or transfers.”[^42]

[95] While it is possible that some of, maybe even all, the funds used for the prepayment derived from excluded sources, it is by no means probable that all the funds did. Given the absence of critical documents, the passage of time, the impossibility of determining a pro rata exclusion (for some of the amount claimed) or a common sense/linkage (for all the amount) and this court’s view about the husband’s overall credibility, his claim for this exclusion must fail.

TD Canada Trust

[96] This account is a line of credit secured against the Albina Way property for which the husband is claiming a $27,375 exclusion. The evidence is that this exclusion relates to the sale of two properties in Pakistan owned by the husband’s late mother, the proceeds of which the husband used to pay down the line of credit before the valuation date. The husband acknowledged in his trial testimony that nothing was owed on the valuation date. In his financial statements sworn on June 29, 2018, March 7, 2020, and March 15, 2022, the husband recorded a “Nil” balance owing on the valuation date but in the 2022 statement added that he “placed funds inherited from [his] mother into the Palace Pier property by paying down the TD Canada Trust line of credit.” (for which a partial exclusion will be allowed: see Palace Pier below).

[97] Mr. Rayson was able to trace the Shahjamal funds into paying off the line of credit. Mr. Muccilli was more circumspect. He noted that he was unable to fully trace the source and application of the funds supporting the exclusion from the documentary record, adding that “…there were instances where the balance in the bank account was effected [sic] by intervening transactions so that the amounts deposited/withdrawn complicate a tracing of alleged excluded assets.”

[98] The bottom line is that the husband used presumptively excluded property to fully retire a debt, some of which may, or may not, have been related to a different property for which an exclusion is also claimed, and allowed. In my view, fully retiring the line of credit debt from inherited funds does not entitle the husband to an exclusion. This claim is denied.

Palace Pier

[99] On June 30, 2015, the husband purchased as an investment Unit 605, 88 Palace Pier Court in Toronto, a residential condominium (“Palace Pier”) for $327,000. It was subject to a $244,065 mortgage on the valuation date. The husband seeks a $3,000 deduction for contingent tax and disposition costs and, in addition, a $45,000 exclusion for funds which he claims can be traced to inherited/gifted property and which amount formed part of a $74,999 downpayment due on closing.

[100] Mr. Feldman calculated the husband’s contingent tax and disposition costs as being $9,000. While the wife disputed the husband’s entitlement to the deduction in principle, she led no evidence impugning Mr. Feldman’s assumptions or calculations. She challenged the exclusion.

[101] The husband’s evidence is that in May 2015 he deposited partial sale proceeds totalling $25,119 (two transfers) from the empty portion (Pakistan) property into, ultimately, the parties’ joint line of credit. He then deposited another $20,439 into the line of credit from a Meezan Bank account he owned in Pakistan into which inherited/gifted property he

claimed could also be traced. He then transferred $45,000 from the line of credit to an account from which he made the $74,999 downpayment.

[102] Mr. Rayson testified that he was unable to confirm the source of the $20,439 deposit beyond a transfer by the husband from the Meezan Bank account. Mr. Muccilli was troubled by the commingling of other transactions in the line of credit account.

A. (Muccilli) The problem is that by the time the second installment comes in, the $11,183 [the first of three deposits made by the husband over a period of several weeks from a personal account into the parties’ joint line of credit] has already been consumed by a number of other transactions that go through the line of credit.

Q. First note, you observed them as personal transactions, like for the matrimonial, or?

A. Yes. It's a line of credit so there are a number of, you know, not well referenced on your bank statement, so I can't tell you exactly what the use of funds were, but there's a variety of amounts and sizes of amounts that came in and out of the account. So again, it's a how do I earmark that particular deposit as being used for the acquisition of, of this particular asset when it's put into a line of credit and commingled with other assets and liabilities and, and expenses.[^43]

[103] The husband did not directly address Mr. Rayson’s inability to confirm the source of the $20,439 deposit, nor did he deal with the concerns expressed by Mr. Muccilli about the intervening transactions in the joint line of credit. While there is good reason to believe that a portion in excess of half of the joint line of credit funds was used for the downpayment, this court is not persuaded that more than $24,561, say $24,560, of the $45,000 exclusion claim has been corroborated.

[104] The husband’s position in claiming a deduction based on an exclusion is inconsistent with the statutory scheme. The Act confers no right to property but rather deals with the sharing of value. It is the net value of the asset (i.e., gross value less contingent liabilities) that is then subject to exclusion. The allowable deductions for an asset must be netted out against its gross value then the appropriate value of the exclusion applied, adjusted where warranted.

[105] Accordingly, an exclusion of $24,560 will be allowed to the value of Palace Pier after deducting its mortgage and contingent disposition costs as calculated by Mr. Feldman.

Defense Phase 9

[106] The husband claims a $61,100 exclusion relating to two plots of vacant land slated for eventual development in Pakistan which were allegedly purchased by the husband’s father in 2008. While the husband was unable to produce evidence about the source of the father’s funds to acquire the plots, the evidence is clear that the father designated/allocated one plot each to the husband and his brother and, at least in the husband’s case, his plot is still owned by him. There is evidence that the husband’s brother paid for ongoing development charges on the basis that he and the husband would balance their accounts later. The wife did not dispute a $61,000 value for the plot from a real estate specialist in Pakistan.

[107] The court is prepared to accept the value of this exclusion. The husband’s ownership of his plot is inconsistent with the wife’s theory that the husband was channeling his or their funds through his father, then rerouting them back to him to corroborate an exclusion. If that was so, then why is there a transaction whereby both the husband and his brother were allocated plots on the same date?

[108] The husband also claims a $25,350 deduction for development charges for his share of the value of this property: in other words, he is claiming that the full value of the property should be excluded and that he is entitled to a deduction on that excluded value.[^44] Surely the development charges reduce the value of his exclusion, not add to it. The husband is not entitled to this deduction for the same reason why the Palace Pier deduction was not allowed (see [104] above). The husband is entitled to exclude the net value of the property in the amount of $37,750 (i.e., $61,100 less $25,350).

BMO Nesbitt Burns investment account (***6282)

[109] The husband owned an investment account with Nesbitt Burns on the valuation date worth $259,209. It had two components, a USD component and a CDN component. Both subaccounts comprised securities which had been transferred from corresponding HSBC and TD Waterhouse accounts in November 2014. The husband seeks two exclusions, one for $83,819 (gross $86,819 less $3,000 disposition costs) and the other for $106,419 (he is not seeking an exclusion for $70,000 (approx.) that he used to make two RSP contributions).

[110] As for the lesser exclusion, the evidence is that the source of the funds used to acquire some of the securities came from the Parkview property sale in July 2011; these funds were deposited into the husband’s HSBC account. Both experts agreed that part of the Parkview sale proceeds was a funding source for the account. Mr. Muccilli also identified proceeds from the GOR and Shahjamal properties as being another sources. Although he had reported that there was only partial tracing for the HSBC account before it was transferred to BMO Nesbitt Burns (hence “Unclear”), Mr. Muccilli acknowledged at trial that “… this one is…traced and…fairly clear.”

[111] The $106,419 exclusion claim is a little more complicated and concerning. This relates to the father’s 2005 TD Waterhouse account to which the husband said that his father contributed and to a joint TD Waterhouse account in the names of the father and him. The account was used to buy and sell mutual funds. After his father died in July 2011, the husband continued to operate the account until it was transferred to BMO Nesbitt Burns ***6282 in late November 2014. The husband testified that this exclusion did not form part of Mr. Rayson’s report, even though Mr. Rayson’s retainer purported to include a review of that account and it was clearly noted that the husband had downward revised the total of his exclusion to $86,819 (gross). Mr. Rayson was never questioned about this, and Mr. Muccilli did not deal with this issue due to the husband’s downward revision. In his closing submissions the husband did not identify this claim as one involving what he described were the “specific exclusions” he was seeking, despite its amount. Conversely, Mr. Feldman noted that it was his understanding that all the funds in the trading account were being claimed as an exclusion and so he calculated the husband’s contingent tax and disposition costs on $178,126 (being the valuation date balance less the $70,000 RSP contributions). Even so, the husband referenced in his submissions the parties’ agreed comparative NFP statement that claimed this exclusion (Exhibit 29).

[112] The husband never explained why he revised his exclusion down to $86,819 or why he continued to advance his larger claim at trial despite the evidence of Mr. Rayson. It is possible, but speculative, that Mr. Rayson was not prepared to confirm the linkage between contributions made by the father (and the husband) and the operation of the accounts by the husband between 2006 and the valuation date over nine years later. On a more granular level, a review of the CPY Chart that the husband prepared and upon which the experts relied for guidance suggests multiple account transactions during this period which involved the father, the husband, the parties’ line of credit, Safina Canada, Missul and, after the father’s death, over thirty margin account transactions which ultimately impacted the funds transferred to BMO Nesbitt Burns.

[113] While there is some evidence of contributions originating with the father, the linkage between them and the ultimate $106,419 exclusion claimed is guesswork given the operative history of the pre-BMO Nesbitt Burns account. At some point in time the identifiable nature of an exclusion will, to borrow Penny J.’s description in Ludmer, “peter out” because it has been so commingled with other assets that its’ identifiable nature is no longer discernible due to the passage of time and intervening events. While cash is more fungible than, say a hard asset, there should be no difference in principle to their treatment. At some point in time the exclusionary identity of the source asset is dissipated. This is such a case.

[114] Mr. Feldman calculated the husband’s contingent tax and disposition costs at $9,000 on the assumption of a significantly higher amount for the husband’s inherited funds ($178,126), which the husband has not claimed, but which he (the husband) has instead suggested should be $3,000 based on the $86,819 HSBC part of the account. The husband shall be allowed an exclusion of $83,819.

BMO Nesbitt Burns RSP (#13107)

[115] The parties agree that the husband owned a Retirement Savings plan account (“RSP”) on the valuation date valued at $133,798. Mr. Feldman described it as a Locked-in Retirement account but the statement in evidence identifies it as a self-directed retirement savings account. The husband claims a $24,150 deduction for contingent tax costs (which Mr. Feldman present-valued based on the husband having an additional income of $50,000 once the plan was in pay) and, in addition, an exclusion of $25,821.06. It is unclear to the court whether the wife disputed the husband’s entitlement to the deduction or Mr. Feldman’s conclusion about it. Either way, she led no evidence challenging Mr. Feldman’s deduction calculation. More likely she was challenging the husband’s exclusion claim, which neither Mr. Rayson nor Mr. Muccilli traced.

[116] Mr. Feldman’s assumption that the husband would have a $50,000 income once the plan was in pay is reasonable in the circumstances of this case. He is entitled to a $24,150 deduction. More problematic is the husband’s exclusion claim.

[117] The evidence is that on May 23, 2006, an $18,000 deposit was made to the husband’s retirement savings account (then with TD Waterhouse) from an account identified as owned by the husband’s father (but which may have been a joint account with the father-the evidence is unclear). This brought the market value of the account to $92,959.44. The husband’s 2006 Notice of Assessment discloses an $18,400 deduction, although the husband was unable to produce any tax returns filed before 2011. In the years after 2006, the husband maximized whenever possible his allowable RSP contributions. For those years from and after 2011 (the first year for which a complete tax return could be produced, although without the accompanying schedules) the husband’s returns disclose a total of $58,080 in RSP contributions (excepting a $9,663 contribution made for 2015 that would likely have been made after the valuation date). None of the returns records any RSP income.

[118] The husband owned two other RSPs on the valuation date administered by two other companies, one having a $13,144.28 value and the other a $6,871 value (a LIRA). None of the post-2006 Notices of Assessment of tax returns discloses into which of the husband’s three retirement savings accounts his contributions were deposited, or even the dates when he opened the two other RSP accounts. In any event it is not an unreasonable inference that the $18,000 contribution in 2006 does not factor into the increase to $133,798 in the market value of the BMO Nesbitt Burns RSP on the valuation date given the aggregate value of post-2006 contributions to all three savings accounts; no pro rata allowance will be made increasing the value of that contribution.

[119] The wife’s position in these proceedings is that the funds that comprised the contribution were really those of the husband and were held in an account set up by him in the name of his father to shield them from any possible equalization claim. The court shares her suspicions. Again, the underpinning issue relates to the funding of the account for which there are no records. The husband simply directed a transfer of funds to his RRSP much like, for example, any account owner might. There was no evidence about any discussions between the husband and his father relating to this transfer.

[120] For reasons not dissimilar to those expressed regarding the Albina Way property, this exclusion must be denied. If, however, I am wrong about this, the fact is that the husband converted the $18,000 into a tax-deductible asset, obtained a tax deduction and would be obliged at some later point in time to convert the RSP into a Registered Retirement Income Fund (“RRIF”) for which tax would be payable, albeit at a presumptively lower marginal rate.

[121] Mr. Feldman was not asked to perform a calculation for the $18,000 being converted into a tax-deductible asset with future contingent costs but some discount would need to be applied to the exclusion to account for these considerations. As observed by Kiteley J. in Shaw v. Shaw[^45] “[t]he calculation of net family property is not a science. It is not predicated on precision to the penny.” Although this part of the analysis is, admittedly, obiter, it would not be unreasonable to reduce the exclusion claim to $13,500 being 75% of the value of the original contribution.

Safina Canada ($618,000)

[122] Safina Canada was incorporated on March 17, 2006, as a real estate holding company. The corporate documents identify the husband’s father as the incorporator. He subscribed for 313,000 common shares, which were recorded as “fully paid” ($313,000). On April 10, 2006, the father transferred 10 common shares to the husband and his brother. When the father died on July 11, 2011, the father’s shares were equally divided between his sons.

[123] Mr. Rayson acknowledged that there were no records corroborating that the father had used his own funds to subscribe for the shares (“Mr. Najm told me that his father subscribed for the shares”). He agreed with the methodology, approach and conclusions adopted by Mr. Feldman in his $618,000 estimate of the gross value for the husband’s interest in Safina Canada. Mr. Muccilli was unable to fully undertake a “cradle to grave” tracing because he had not been provided with sufficient background or information to assess the original source of funds. He noted that it appeared that the cost per subscribed share on incorporation was $1,000 per share.

[124] I am unable to accept the value of this exclusion for the following reasons:

(a) The absence of any documentary evidence corroborating the source of funding for the company when it was incorporated. The husband pointed to the Minute Book as confirming that $313,000 had been paid for the shares by his father, but Mr. Rayson’s evidence did not include any pre-incorporation investigation of funds from the father and Mr. Muccilli couldn’t find any documentation to support the husband’s evidence that it was his father who provided the initial funding. The husband couldn’t either.

(b) Corollary to (a), the absence of any evidence relating, or linking, the funding of the company by or to the husband’s father stands in sharp contrast to virtually all the other documented exclusion claims of the husband.

(c) When the company was incorporated in March 2006, the husband was alive to the concept of “exclusion” in the Family Law Act. By then he and the wife had already been involved with senior family law counsel during their earlier 2005/2006 separation and had sworn financial statements which included property for which each party claimed exclusions. For example, in his financial statement sworn on January 6, 2006, the husband claimed exclusions for part of the Shahjamal and Parkview properties, and his explanatory note with respect to an exclusion for securities with Lloyds Bank confirms his understanding of the concept.[^46]

(d) There was every reason for the husband to take steps in early 2006 to insulate himself financially from any future claim by the wife as evidenced by the religious divorce that he obtained in Pakistan in October 2005, the documents which his elderly father signed that month in Pakistan adopting language from the Act and making a new Will. It is clear that the husband continued his hostility to the wife from his continued reference to her as his “ex-wife” throughout the trial despite the fact the parties had not been divorced in Canada and his not infrequent (but sarcastic) reference to her as his “wife of twenty-nine years.”

(e) The husband testified that the company was incorporated as part of his elderly father’s transition or inheritance plan and that he (the husband) and his brother were “very much involved” with the company. Not only was the father resident in Pakistan but why was it necessary for him to incorporate the company when that could have easily been done by the husband or funds transferred to the husband (for which there might be a record) to undertake property investments in Ontario.

[125] Mr. Feldman valued the husband’s net interest in Safina Canada at $530,000. This was not challenged by either party. The husband is not entitled to the value of this exclusion.

Safina USA

[126] Safina USA was incorporated in the State of Georgia on December 2, 2008, by the husband and his brother for the purpose of investing in real estate. On the valuation date the company owned six residential properties, one in Georgia, and others in Florida. The husband claims $530,000 as an exclusion for the gross value of his interest in the company which, after accounting for contingent income tax and disposition costs of $231,000 as calculated by Mr. Feldman and not challenged (in principle) by the wife, results in a net exclusion of $299,000. The wife’s position is that the value of the husband’s share in the company should be $823,485, that he is not entitled to this exclusion and that, in any event, there was no evidence when the properties comprising the portfolio would be sold.

[127] The husband testified that the company was formed for the exclusive purpose of investing inherited funds. Section 1 of the Operating Agreement dated January 15, 2009, recited that the company “was founded exclusively with the inheritance received [by the husband and his brother] from gifts and estates of their parents” and that the Safina name was chosen to honour their late mother “who’s [sic] bequest made the formation of the Company possible.” Section 2.1 provided as follows:

"2.1 Initial Contributions. The Members initially shall contribute to the Company capital as described in Schedule 2 attached to this Agreement. Initial contributions have been provided by the inheritance of the Members from their father's estate. No initial contribution in excess of the amount inherited from said estate shall be required, nor shall any Initial contribution be required to be made from funds other than those inherited in the estate." Schedule 2 of the Operating Agreement reflects a $1,000 contribution from Mr. Najm and Jamal.

[128] Schedule 2 of the Operating Agreement reflects a $1,000 contribution from Mr. Najm and Jamal.

[129] Mr. Muccilli observed that it was unclear to him how the initial contributions could be identified as amounts inherited from the siblings’ father when he was still alive (and would not pass away until mid-July 2011).

[130] To verify the husband’s exclusion Mr. Rayson traced the siblings’ initial contribution in December 2008 to the company’s U.S. bank account, traced the source of funds used to invest in real estate, and traced the use of funds by the company to pay down loans and advances. He noted that there were other funds advanced to the company which could not be traced to excluded sources. Mr. Muccilli charted the advances and loan payments over the same 2008 to June 11, 2012 (approx.) period.

[131] A number of observations may be made:

(a) Mr. Rayson concluded in his report that the initial contributions to the company’s account came from Safina Canada, which Mr. Muccilli couldn’t confirm. In his trial testimony, Mr. Rayson acknowledged that he “definitely wasn’t able to trace [a portion of the contributions back] to Safina Canada.” Nor was he able to do that with another contribution made by the husband in January 2009.

(b) There were often many sources for the funds advanced to the company. Apart from the unsupported 2008 initial Safina Canada contributions, neither expert nor the husband were able to confirm a documentary trail or linkage between Safina Canada and Safina USA; the advances were traced to accounts owned by the parents (including the Lloyds account for which five years of records were missing) or to the sale of the GOR and Shahjamal properties.

(c) Baraka Real Estate Canada Inc. (“Baraka”) is a company owned by the husband but it was inactive on the valuation date. Baraka loaned $200,000USD to the company on July 6, 2011, to pay down debt. Since Mr. Rayson did not have any bank documents for Baraka and he wasn’t able to completely confirm the funds flowing through its account(s). He and Mr. Muccilli noted that the loan was repaid by Baraka and by the husband between October to December 2011, of which $150,000USD came (appeared to come, according to Mr. Muccilli) from gifted/inherited sources (i.e., the GOR sale proceeds). The point is that there were numerous transactions involving different bank accounts and corporate entities spanning a three-and-a-half-year period for which certain transactions could not, in some instances, be directly linked to the husband’s exclusion claim.

[132] Mr. Rayson was satisfied that the documentary record supported (with a few reservations) the husband’s exclusion claim. Mr Muccilli noted that there were instances “where the balance of the bank account was effected [sic] by intervening transactions so that amounts deposited/withdrawn complicate a tracing of alleged excluded amounts.” Overall, though, the evidence does support that Safina USA was operated for the purpose for which it was intended and largely funded by assets linked in time to property either gifted or inherited such as, for example, the sale of the Parkview, GOR and Shahjamal properties.

[133] Mr. Feldman valued the husband’s en bloc fair market value (50%) of the company at $530,000 less the present value of contingent income taxes thereby resulting in a net value of $299,000.[^47]

[134] The husband also claims a $21,842.72 deduction for overdue taxes on the sale of a property in the Safina portfolio. As before, the husband is claiming a deduction for excluded property. After the deduction is applied to the gross asset value the exclusion should be applied. Accordingly, the husband will be allowed an exclusion of $277,157.28, say $277,157.

Miscellaneous exclusions

[135] The husband claims exclusions relating to bank accounts in Pakistan, Pakistani bonds and HSBC accounts in Canada, the aggregate value of which (converted where applicable from Pakistani Rupees and USD) is $12,767.87. Neither Mr. Rayson nor Mr. Muccilli were tasked with tracing these assets due to their insignificant value. The husband did not address these claims in his trial affidavit except to refer to a document book containing what he contended were supporting documents.

[136] No reference is made in the husband’s February 18, 2016, financial statement to Pakistani bonds (later suggested to be worth $5,076). The other assets were identified as having a “Nil” value on the valuation date. No exclusions were claimed.

[137] In his statement sworn on June 29, 2018, all the claimed exclusions and their values were identified but the HSBC accounts (totalling $1,590) were not claimed as exclusions.

[138] In his March 7, 2020, statement the husband identified all the assets, their values and claimed their exclusion. This was his position at trial.

[139] Notwithstanding the inconsistencies in the husband’s statements with respect to the HSBC accounts, I am prepared to allow his claim to exclude their value as the evidence supports that those accounts had deposited to them funds from land sales in Pakistan.

[140] Similarly, the Meezan bank accounts ($6,010) were the repositories of the proceeds from the land sales.

[141] The exclusion claimed for the bonds is more concerning (eleven bonds issued on January 29, 2003, having an aggregate value of 1,050,000 Rupees or $5,076 CDN). Copies of the bonds (untranslated except for the Rupee value and the name of the holder) were produced. All the bonds identify either the husband’s mother or her and her daughter as the owner(s) of the bond. Handwritten at the top of each bond (presumably the handwriting of the husband but that is uncertain) are references to the husband and his brother or to all three siblings. The husband also produced a 2017 bond in his name alone for $390,472 Rupees; he deposited this value into his Meezan account in September 2017. The husband also produced a 2002 list that he identified as his mother’s handwriting containing a list of testamentary wishes in which some reference was made to certain bonds but not (obviously) to those issued in 2003.

[142] There was also evidence at trial of litigation (or some other dispute) between the siblings involving their late mother’s estate, the details of which were not shared with the court. The fact is, though, that none of the bonds identified the husband as a holder/owner and the evidence is unclear whether his mother intended after 2003 that the bonds be held or shared other than as recorded on their face. The post-issue handwriting added to the bonds naming the husband and one or more of his siblings is not satisfactory evidence of the husband’s ownership or, even if admissible, his mother’s intentions with respect to their ultimate disposition. The husband’s claim for this exclusion is denied.

[143] The husband will be allowed an exclusion of $7,600.87, say $7,600, for the HSBC and Meezan accounts.

Safina USA shareholder loan payable and liability

[144] The husband disclosed, and sought the exclusion of, two debts owed to him on the valuation date, one for $149,998 relating to a shareholder loan payable to him by Safina USA and the other for the husband’s $329,175 half-share of a liability owed to the estate of his late father of which the husband and his brother were equal beneficiaries (an equal amount owing to Jamal), also from Safina USA. Mr. Rayson and, by extension, Mr. Muccilli were not asked to undertake any tracing of either of these assets for exclusion purposes. They were factored into the FMV business report prepared by Mr. Feldman.

[145] As observed by Mr. Feldman the net effect of adding and then excluding the value of these asses is a “wash”; in other words, there is no impact on the husband’s net family property or the calculation of the equalization payment. The wife’s position was never made clear; she disputed the debts as assets and their exclusion but never challenged the testimony of the husband or Mr. Feldman about them. Given my conclusion about the value of Safina USA being excluded in any event, the issue is moot. There will be no adjustment to the calculation of the husband’s net family property dealing with these assets.

Summary of Husband’s exclusion claims

[146] The total value of the husband’s exclusions is $1,070.639.

Net Family property calculation/equalization

[147] The wife’s net family property is $495,542 (rounded). The husband’s net family property is $1,203,047 (rounded). He owes the wife an equalization payment of $353,752 (rounded).

Post-separation adjustments

[148] The husband has claimed a $6,750 debt relating to 1470628 Ontario Ltd. This company was owned by the parties in equal shares with another couple and operated a Subway franchise where the wife worked until the franchise was sold in 2005 or 2006. The parties agree that the husband insisted that the wife’s earnings be applied toward the mortgage on the matrimonial home. The husband managed the business affairs; the wife had little knowledge about them or about the disposition of the net sale proceeds. The franchise was sold at a profit and the proceeds applied to the parties’ joint line of credit.

[149] In late September 2016 the husband received a notice from Canada Revenue Agency which claimed an unreported dividends’ benefit of $13,467.96, which the husband rounded to $13,500. In his June 29, 2018, financial statement the husband recorded that he owed $3,375, i.e., one-quarter of $13,500. In his March 7, 2020, financial statement he recorded the debt as $6,750 on the basis that he had paid it for both couples, that the other couple had reimbursed him $6,750 for their share, and that he had paid $6,750 for both the wife and him in early October 2016, hence he should be credited for her $3,375 share of the parties’ debt. This was his trial testimony too.

[150] The wife disputed this debt but gave no reason. While there was no evidence about the account from which the husband made the payment, it is clear that it was owed and paid and related to a business in which the parties were equal shareholders with the other couple. The husband is entitled to a post-separation adjustment of $3,375. This shall be reflected in the NFP statement as a valuation date debt, noting that the post-separation adjustment is captured by that entry.

Unequal division

[151] The wife seeks an unequal division of the parties’ net family properties in her Application in the amount of $2,000,000 based on the history of the marriage and the husband’s lack of, and/or deceptively selective, disclosure. She asserts that to order otherwise would allow him “to walk away with the entirety of the family assets”. Her claim is nowhere particularized in her pleadings in the sense of linking it to any of the recognized considerations set out in s. 5(6) of the Act except for general allegations about the husband’s conduct towards her and his management of his, and their, financial affairs.

[152] The husband submits that the Act’s equalization regime cannot be challenged where the circumstances relied upon as “unconscionable” arise merely from the application of the statutory scheme.

[153] As already noted, the test for unconscionability is high. In Serra, Blair J.A. observed that “[t]here are not too many words left in common parlance that can be used to describe a result more severe than unconscionable.”[^48] To succeed it is critical that a party claiming relief under s.5(6) of the Act fit their claim into at least one (or more) of the enumerated considerations. In Frick v. Frick,[^49] the Court of Appeal approved the view expressed by Perkins J. in Cosentino v. Cosentino,[^50] a case where the wife based her unconscionability claim (in part) on the husband’s serial infidelities:

46. All of the provisions of section 5(6) are directly linked to the impact on one or both spouses’ debts, liabilities, or property. A general sense of outrage, absent a clear connection to the parties’ debts, liabilities, or property, is not sufficient. … It is the financial result, the result of the usual NFP equalization, that must be unconscionable, after taking into account only the eight enumerated considerations, nothing else….

47. However morally objectionable or emotionally harmful the husband’s conduct may have been in this case, it is only open to the court to respond to it under section 5(6) if it falls within one of the eight clauses of that provision. … Indeed, section 5(6) was very tightly drawn specifically so as to exclude consideration of matrimonial misconduct such as this.

[154] The wife’s generalized unconscionability claim in this case is little different from Cosentino or the many other cases in which relief is sought for allegedly offensive marital conduct. She has failed to sufficiently link, and develop the evidence needed, to the enumerated considerations in s. 5(6) of the Act and, therefore, has failed to discharge her evidentiary onus. Her claim for an unequal division is dismissed.

Spousal support

[155] While the husband acknowledges that the wife is entitled to spousal support,[^51] the parties are unable to agree whether any should be paid and, if so, the amount and its duration. The wife contends that an annual income of $300,000 should be imputed to the husband. This is significantly greater than what he has declared to Canada Revenue Agency, and what he is prepared to acknowledge. She is seeking a monthly award of $9,967 with no review for five years. The husband’s position is that nothing should be paid because he is unable to pay support, wishes to retire and, lastly, the wife’s evidence fails to demonstrate need.

[156] By way of further background to the Agreed facts/evidence about the parties’ work histories (see para. 3 above), each testified about their health issues and their desire to emigrate to the United States. The wife pointed to a diagnosis of ulcerative colitis early in the marriage that was exacerbated by the increasingly stressful relationship between the parties and her several hospitalizations in Saudi Arabia, the United States (Boston), and Ontario. She wanted to emigrate because both the parties’ children lived in the United States, she had no other family in Canada and, given the deterioration in her health, she wanted to live her remaining years with Mishael, the parties’ daughter, in Georgia. As for the husband, he had been diagnosed and treated for prostate cancer in 2007, had a coronary bypass surgery in 2016, was diagnosed with skin cancer in 2017 and was experiencing hearing issues. Around 2007/2008 he had applied for a green card to relocate the family to the United States. However, as he described it, the process was lengthy, and he was only able to be interviewed by U.S. Immigration authorities in April 2022 where he (and not the wife) was granted a green card (she did not attend the mandatory interview for reasons which the parties disputed). Mishael was distressed by his refusal and/or failure to assist her mother and that contributed (according to her father) to a rupture in their relationship. The husband also testified that he had delayed his age 60 retirement to age 65 but neither was possible because of these proceedings and the legal expenses he had to incur (he was 66 years old when the trial started). In furtherance of his retirement, he had enrolled in some art and interior design courses. The wife said that it was unlikely that he would ever stop working. Apart from CPP, neither party had pension interests.

[157] Sections 15.2(1), (3), (4), and (6) of the Divorce Act (the “Divorce Act”) provide as follows:

15.2 (1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse.

(3) The court may make an order under subsection (1) or an interim order under subsection (2) for a definite or indefinite period or until a specified event occurs, and may impose terms, conditions or restrictions in connection with the order as it thinks fit and just.

(4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including

(a) the length of time the spouses cohabited;

(b) the functions performed by each spouse during cohabitation; and

(c) any order, agreement or arrangement relating to support of either spouse.

(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the 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.

The parties’ incomes

[158] The wife disclosed that her 2015 to 2022 incomes were the following:

2015- $3,424 (net rental income).

2016- $39,647 (i.e., $3,466 net rental income and $48,000 support).

2017- $51,917 (i.e., $3,917 net rental income and $48,000 support)

2018- $87,973 (as assessed; includes net rental income and $48,000 support).

2019- $110,758 (as assessed; includes net rental income and $48,000 support).

2020- $100,959 (as assessed; includes net rental income and $48,000 support).

2021- $112,135 ($54,440 employment income, $7,695 net rental income, $48,000 support).

2022- $120,667 (this is an estimation based on the wife’s trial evidence that her employment income had increased to $64,500, she continued to receive $48,000 in support and a rough estimate (by the court) of the same rental income as 2021, there being no evidence that the condominium had been sold or was not tenanted).

[159] Absent support, the wife’s annual income is around $72,600.

[160] The husband’s income over the same 2015 to 2022 period is more complex, comprising his earned, dividend, rental, and capital gains incomes in Canada, the United States and Pakistan involving Missul (including its investments), his non-Missul related income (i.e., his investment, or trading, accounts), income from Safina Canada,[^52] Safina USA, ESNZED Impex Inc. (an inactive company after 2017 in which the husband was a 1/3 owner and which company wholly owned Baraka Real Estate (Canada) Inc., another company that figured into the tracing of the husband’s exclusions), Baraka US LLC, and accounts in, and rental income from, Pakistan. In his trial affidavit, the husband referred to, and adopted, the conclusions reached by another proposed expert (Bruce Noxon, CBV) whom he had retained to undertake an analysis of his income. Mr. Noxon prepared reports for 2013 to 2018, but the husband did not engage him for 2019 and beyond because he said that he didn’t have the resources to pay him. While Mr. Noxon’s 2013-2018 report was delivered in April 2022 (shortly before the anticipated May 2022 trial)[^53] this court made a preliminary ruling that his evidence could not be tendered because Mr. Noxon was never identified as a proposed witness in the Trial Scheduling Order made in October 2021 by Stevenson J. There was no reference to him in the husband’s Trial Management Conference brief and on June 20, 2022, Himel J. had refused to permit the husband to reopen the issues to be determined at trial, to request additional experts or to change the trial’s structure. This Order was not appealed.

[161] While it may have been sensible for the parties to have jointly engaged one expert to conduct an income analysis of both parties’ incomes, this was never done. Even so, the husband’s affirmation of certain conclusions reached by Mr. Noxon (with which the husband’s evidence is that he agreed with the underlying facts, assumptions and findings), and the husband’s evidence about his post-2019 income, cannot be entirely ignored as they are inconsistent with the husband’s declared income for tax reporting purposes and suggest an income greater (and more complex) than what the husband is prepared to acknowledge for spousal support purposes.

[162] The husband’s corresponding 2015 to 2022 incomes comprise the following:

2015- $52,709 (assessed; not included are capital gains and other income adjustments which bring the husband’s adjusted income to $615,518. This figure includes capital gains on the sale of two properties owned by the husband and his brother in the United States which the husband claimed comprised excluded funds. Factoring the exclusion into his income, the husband suggested that his adjusted income was about $100,000).

2016-$95,401 (as reassessed; the husband acknowledged that his adjusted income would be $166,305).[^54]

2017- $83,438 (as assessed; the husband acknowledged that his adjusted income would be $205,619).

2018- $96,881 (as assessed; the husband acknowledged that his adjusted income would be $96,978).

2019- $105,023 (as assessed. Includes rental income. For this year and following years, the husband acknowledged that his Line 150 income as reported would not represent his qualifying spousal support income because he owned Missul which generated his billings).

2020- $100,162 (as assessed).

2021- $113,208 (as assessed; includes net rental income from Palace Pier and OAS and CPP income but does not include net $7,800 USD income through Baraka US LLC from three properties in the United States, net $20,000 USD through Safina USA used to pay down intercompany debt and $5,000 annual rental income from land owned in Pakistan).[^55]

2022- $150,000 (estimated. In his trial affidavit the husband said that he expected to earn about $150,000 in consulting income for the fiscal year ending February 2023. It is not an unreasonable inference that he would have continued to receive Palace Pier, OAS and CCP income as well as income from his US and Pakistan assets as in 2021. Certainly, he did not testify to the contrary.

[163] It is likely, but by no means certain, that the husband’s annual income before 2019 included several of the post-2018 sources of income. In noting that he earned income from assets for which he was advancing an exclusion claim but not including that income as part of his qualifying spousal support income, it is clear that the husband’s position is that none of that income should be considered for support purposes. In Laurain v. Clarke[^56] Price J. held that there was no policy reason that precluded income generated from inherited property being considered for the purposes calculating spousal support. I agree.

[164] Simply put, the husband’s declared line 150 tax return income is not reflective of his available income for support.

Imputation of Income

[165] The imputation of income requires a rational and solid evidentiary foundation grounded in fairness and reasonableness.[^57] As noted by Chappel J. in Laramie v. Laramie:[^58]

[93] The imputation of income to a party is a fact-driven exercise that turns on the unique circumstances of the case before the court…Regardless of the basis upon which income is imputed, the amount of income that the court imputes to a party is a matter of discretion. The only limitation on the discretion of the court in this regard is that there must be some reasonable basis in the evidence for the amount that the court has chosen to impute. [Citations omitted.]

[166] Spousal support is driven by both compensatory and non-compensatory, or needs-based, considerations. While the husband focuses his objection (in part) on the wife’s need, the evidence in this case clearly points to a compensatory basis to the wife’s claim, in other words an equitable distribution between the parties of the economic consequences of the marriage and its breakdown. In Plese v. Herjavec[^59] the Court of Appeal adopted the following explanation from Moge v. Moge[^60] as explaining how a compensatory claim for spousal support should be evaluated:

Although the doctrine of spousal support which focuses on equitable sharing does not guarantee to either party the standard of living enjoyed during the marriage, this standard is far from irrelevant to support entitlement… Furthermore, great disparities in the standard of living that would be experienced by spouses in the absence of support are often a revealing indication of the economic disadvantages inherent in the role assumed by one party. As marriage should be regarded as a joint endeavour, the longer the relationship endures, the closer the economic union, the greater will be the presumptive claim to equal standards of living upon its dissolution.

[167] The wife bears the onus of establishing, prima facie, the evidentiary basis for imputing income to the husband.[^61] In my view, that onus has been met by her on the evidence before the court, but not to the extent of imputing a $300,000 income. Once the onus has been made out, the evidentiary burden shifts to the husband to lead probative evidence regarding his actual income.[^62] He has failed to discharge that onus. In Meade v. Meade,[^63] Kiteley J. dealt with the proof-of-income obligations for a self-employed person such as the husband in this case:

It is inherent in the circumstances of those who are self-employed or who have irregular income and expenses, that they have a positive obligation to put forward not only adequate, but comprehensive records of income and expenses. That does not mean audited statements. But it does mean a package from which the recipient spouse can draw conclusions and the amount of child support can be established. Where disclosure is inadequate and inferences are to be drawn, they should be favourable to the spouse who is confronted with the challenge of making sense out of financial disclosure, and against the spouse whose records are so inadequate or whose response to the obligation to produce is so unhelpful that cumbersome calculations and intensive and costly investigations or examinations are necessary. [Citations omitted.]

[168] The test for imputing income for child support purposes applies equally to claims for spousal support.[^64]

[169] The husband had the obligation, and certainly the means, to provide a more comprehensible picture of his more current income for support determination purposes than he did for the years immediately before trial (i.e., 2019 to 2022). Simply providing prescribed form 13.1 financial statements with income qualifications (such as referring to foreign income not factored into the calculations, for whatever reason), investment account and corporate financial statements and tax returns from three jurisdictions isn’t sufficient in a case like this, particularly given the husband’s chartered accountant accreditation and former practice, and the extraordinary effort he expended to prepare (with one of his former solicitors) the CPY Chart to trace his exclusion claims. His position that his income is $113,209 and will decline in future as he transitions to pursue art/interior design interests is opaque, inconsistent with his affidavit evidence and was never reconciled by his trial testimony. He is not credible. An adverse inference is unavoidable.

[170] When assessing the husband’s income for spousal support purposes, perhaps the most helpful, although unsatisfactory, evidence is his, as follows:

(a) The husband testified that he could earn $20,000 a month in consulting income but paid himself $8,000 a month so as to build up a reserve for those times when he was between contracts.

(b) In his trial affidavit, the husband stated that his consulting income paid through Safina Canada for the fiscal year ending February 2023 would be $150,000. He never qualified this level of income, suggesting (for example) that this was a gross figure, not net of consulting business expenses.

(c) As already noted, the husband’s trial financial statement disclosed, but did not include in its annual income calculation, income earned in the United States ($27,800 in 2021) or income earned from rental property in Pakistan ($4,035 in 2021 but acknowledged to be $5,000 in his 2022 trial financial statement). Using a five-year (2019-2023) average Canada/US forex rate of 1.3% on the US-generated income results in a figure of $36,140 before applying any gross-up. Added to this should be the rent recorded for Albina Way ($5,270 in the husband’s 2021 tax return[^65]), Palace Pier ($3,900 net in 2021 from the 2021 tax return) and from Pakistan ($5,000).

[171] The husband’s income comprises his earned consulting income, rental income from properties in Canada, the United States and Pakistan, investment income (dividends and capital gains) and income from his non-consulting business interests in Canada and the United States. As neither of the parties provided helpful support calculations, the court prepared a calculation which accompanies these Reasons. The wife’s annual income is $72,600. The husband’s imputed income (adjusted for the gross-up) is approximately equivalent to a pre-tax income of $232,500. It is likely that the husband’s historic and current income from all sources has been, and is, higher.

[172] Given the duration of the parties’ marriage, the compensatory basis for the wife’s support, the parties’ ages and respective net worth, there is no compelling reason why the parties should not enjoy roughly equivalent net disposable incomes. Even so, the nature of the husband’s consulting business, his age and health cannot be ignored (nor, of course, should the wife’s circumstances). I do not accept as genuine or credible the husband’s plan to pursue an art /interior design career or hobby. There was no evidence whatsoever that the husband had any such interest during the parties’ cohabitation.

[173] Determining the husband’s income after the valuation date and what spousal support should have been paid, taking into account too the wife’s earnings, is complicated by the fact that neither party considered support scenarios different from those they advanced at trial. The wife wanted spousal support based on a $300,000 income imputed to the husband whereas the husband admitted the wife’s support entitlement but claimed that he was unable to pay anything. It is impossible for this court to arrive at more refined calculations based on the parties’ evidence (or its absence). From a practical standpoint it seems not unreasonable to adopt the incomes imputed in 2016 and to consider that, despite the parties several years of disclosure efforts, there was no motion (at least of which this court is aware) varying the support Order before trial, or, if there was, no variation was ordered in any event. In the seven years before trial the wife’s income gradually increased and plateaued while the husband’s income was higher (sometimes significantly higher) and more variable but never really less than $140,000 to $150,000 on average, and as adjusted. Accordingly, rather than speculate about what incomes different from those imputed (on consent) in 2016 should be applied, the court will accept them and what was paid up to and including the May 2022 trial sittings. That date is chosen because the husband purposely delayed an earlier trial date and was found by Himel J. to have misled the court and breached an Order to which he had consented.

[174] The husband should pay monthly spousal support of $5,500 from and after June 1, 2022. This amount reflects the court’s determination of the parties’ respective incomes and is slightly less that the mid-point range ($5,831) pursuant to the Spousal Support Guidelines.

[175] The wife’s request that the court prohibit the husband from seeking relief to vary support for any reason, including a material change of circumstances, for a period of 5 years is without foundation, or precedent. It is denied.

Divorce

[176] The wife submitted that the court should refuse to grant the husband’s request for a divorce until her green card application to the United States was determined on a final basis. There was no evidence at trial from her about what steps she had initiated on her own to apply after she learned that the husband had attended for an interview without her. Certainly, this was a contentious point between the parties, and between Mishael and her father. But this court has no jurisdiction over issues involving immigration and the grounds for a divorce have been made out. The wife’s request is denied.

Disposition

[177] The following is ordered:

(a) A Divorce Order shall issue.

(b) Pursuant to the Divorce Act, the husband shall pay to the wife compensatory and needs- based spousal support in the amount of $5,500 a month from and after June 1, 2022. This is based on annual incomes imputed to the wife of $72,600 and to the husband of $232,500, respectively.

(c) The $1,500 monthly spousal support in excess of the current temporary Order ($4,000) for June 1, 2022, to December 31, 2022, shall be reduced by 45% (or to a net lump sum payment of $5,775).[^66]

(d) Pursuant to the Act, the husband shall pay to the wife an equalization payment of $353,752 with pre-judgment interest at the rate prescribed by s.128 of the Courts of Justice Act[^67] (second quarter) from and after September 26, 2015.

(e) Pursuant to the Act, the husband’s support obligation shall be a first charge on his estate.

(f) A Support Deduction Order shall issue.

[178] The parties are encouraged to resolve the issue of costs of these proceedings. If they are unable to do so, the following directions apply:

(a) The wife shall deliver her submissions by April 29, 2024.

(b) The husband shall deliver his submissions by May 15, 2024.

(c) Reply (if any) to be delivered by May 21, 2024.

(d) All submissions shall be single page, double-spaced. In the case of (a) and (b) the limit shall be five pages; reply shall be two pages. These submissions shall be filed in the Continuing Record, uploaded to Caselines and a copy of the filed material forwarded to the judicial assistant.

(e) Offers to Settle, Bills of Costs and any authorities upon which a party may wish to rely shall be filed by the above deadlines, uploaded to Caselines and copied to the judicial assistant.

(f) The parties are to advise the judicial assistant when they have filed their materials.

[179] Approved drafts of the Orders may be forwarded to the judicial assistant for issuance purposes.

Justice David A. Jarvis

Date: April 8, 2024

[^1]: Najm v. Najm, 2017 ONSC 4777.

[^2]: A Statement of Agreed Facts (Exhibit #28) was filed after the trial started.

[^3]: The dates of death for the husband’s parents are relevant to his exclusion claims.

[^4]: The parties exchanged sworn financial statements in early 2006. The wife declared a My 18, 2005, valuation date: the husband’s statement left this line blank.

[^5]: The date of the Muslim divorce is October 14, 2005.

[^6]: R.S.O. 1990, c. F.3.

[^7]: 2009 ONCA 105, 93 O.R. (3d) 161, at para.37.

[^8]: Serra, at para. 47.

[^9]: The parties had both sworn updated financial statements four months earlier in March 2022 in advance of a Trial Scheduling Conference.

[^10]: Wife’s written closing submissions, para. 78.

[^11]: Al-Sajee v. Tawfic, 2019 ONSC 3857, 27 R.F.L. (8th) 269, at para. 42.

[^12]: 2023 ONSC 7097: also Smith v. Noel, 2023 ONSC 6682, at para.12.

[^13]: 2008 NSSC 283, 269 N.S.R. (3d) 84, at para 37: also Christakos v. De Cairies, 2016 ONSC 702, at para. 10: and A.E. v. A.B., 2021 ONSC 7302 at paras. 86-88.

[^14]: A complaint about one of the wife’s early lawyers was dismissed by the Law Society of Ontario. The husband had also complained about Mr. Datt to the Law Society. In one exchange during the husband’s cross-examination the husband said that he would be taking his complaint with the “legal society (sic)…farther.” When asked whether that was a threat, the husband answered “There is an epilogue. Is that a threat for you?”

[^15]: This was referencing the wife’s successful claim that the parties’ married cohabitation was twenty-nine years (1985 to 2015) and not the husband’s unsuccessful claim of twenty years (1985 to 2005).

[^16]: One of the husband’s experts (Rayson: see “Husband’s exclusion claims” below) observed that he had to do a “sanity check” when tracing the husband’s exclusion claims.

[^17]: This court cannot find a record of that Order.

[^18]: Itturiaga v. Itturiaga, 2023 ONSC 6368, at paras. 10-11.

[^19]: The Statement of Agreed Facts acknowledges that in 2006 when the father visited the parties in Ontario he suffered from macular degeneration and was losing his sight.

[^20]: Saudi Arabia Riyal.

[^21]: Goodyer v. Goodyer (1999), 1999 20759 (ON SCDC), 168 D.L.R. (4th) 453 (Ont. Gen. Div.).

[^22]: Rosenthal v. Rosenthal (1986), 1986 6320 (ON SC), 3 R.F.L. (3d) 126 (Ont. H.C.), at para.133.

[^23]: 2013 ONSC 784, at paras. 86-87, aff’d 2014 ONCA 827 (except for variation of s. 7 expense calculation).

[^24]: Devayne v. Noble, 35 E.R. 781, (1816) 1 Mer. 572.

[^25]: 2021 ONSC 5913, at paras 71-73. The analysis by Finlayson J. of the various approaches to tracing set out in paras 67-84 of the report is comprehensive as is “Tracing Exclusions in Family Law (2006), 25 CFLQ, Ilana Zylberman and Brian Burke” referenced in the case report.

[^26]: Bennett v. Bennett (1997), 1997 12388 (ON SC), 34 R.F.L. (4th) 290 (Ont. Gen. Div.), aff’d 1999 2583 (ON CA), [1999] O.J. No. 2631 (Ont.C.A.).

[^27]: Farmer, at para.71.

[^28]: Bennett, at para. 86.

[^29]: Henderson v. Casson, 2014 ONSC 720, 42 R.F.L. (7th) 357, at para. 91.

[^30]: Farmer, at para. 81.

[^31]: Exhibit A is a Forex calculation which suggests a Canadian dollar equivalent of $33,324.30, a figure upon which both parties appear to agree.

[^32]: Exhibit 14.

[^33]: The wife’s financial statement sworn on January 12, 2006, makes no reference to this exclusion, only to inherited jewellery.

[^34]: Exhibit 13.

[^35]: The purchase price was $$283,500 and the appraised value, agreed by the parties, was $335,000.

[^36]: The chart comprises thirty-three pages identifying hundreds of intra- and inter-institution transactions over a twelve-year period involving dozens of accounts (and transfers between accounts) belonging to the husband, his parents, the parties’ joint line of credit and at least four businesses and third parties, all cross-referenced.

[^37]: Note 2 to the experts’ summary uses “matrimonial assets” to refer to funds for alleged exclusions which were commingled with the parties’ joint line of credit.

[^38]: This was explained more fully in the 2022 Muccilli Report, p.3 at notes 1 and 2. The words “tracking” and “tracing” were used interchangeably.

[^39]: Mr. Muccilli calculated the value of this exclusion, if allowed, as being $162,745. The husband’s figure will be used.

[^40]: Shahjamal was purchased by the husband’s parents in 1965 and was their matrimonial home, title to which was registered in the mother’s name. The husband’s evidence is that after his mother died in March 2005, the husband and his siblings inherited a portion of the home. The husband sold his share after his father died in July 2011 and the empty portion in 2015. None of this evidence was challenged by the wife. The 2015 sale proceeds were used to discharge the parties’ TD Canada Trust line of credit (see TD Canada Trust below).

[^41]: The funds were converted from USD to CDN and then transferred into a CDN joint investment account in the names of the husband and his father.

[^42]: Exhibit 89A, para.134.

[^43]: Transcript of Mr. Muccilli’s testimony on May 19, 2023, at pp. 96 and 97.

[^44]: The husband claimed this was a debt shared with his brother but he maintained his claim to the full deduction throughout the trial.

[^45]: 2003 64335 (ON SC), 2002 O.J. No.2782 (S.C.).

[^46]: Under the “Details” section of the statement the husband explained that the balance in the Lloyd’s Bank account was $589,000 “…out of which the balance not reflected under savings [i.e., $180,000] was inherited/gifted and $170,000 was brought to the marriage”. Values for the Shahjamal and Parkview properties were also claimed as exclusions because they were “Inherited/Gifted.”

[^47]: During Mr. Feldman’s cross-examination, he was pressed by Mr. Datt to express a view about the husband’s belief that the value of his interest in Safina USA was greater than that he had concluded (i.e., it should be $823,485). Mr. Feldman responded that the husband’s “belief” did not change the fact that he (Feldman) was “working off appraisal values.”

[^48]: Serra, at para. 48, citing Merklinger v. Merklinger, 1992 7539 (ON SC), 11 O.R. (3d) 233, aff’d 1996 642 (ON CA), 30 O.R. (3d) 575 (Ont. C. A.)

[^49]: 2016 ONCA 799, 132 O.R. (3d) 321, at para. 32.

[^50]: 2015 ONSC 271, 55 R.F.L. (7th) 117, at paras. 46 and 49.

[^51]: Statement of Agreed Facts (Exhibit 28, at para. 29).

[^52]: The husband’s evidence is that he began to use Safina Canada instead of Missul after 2018 for his consulting business, but his March 7, 2020, and March 15, 2022, financial statements (prescribed Form 13.1) also identify him as self-employed by “Safina/Zulfi Ltd.” and shows his Albina Way residence as the address of the business.

[^53]: This was a final report. Mr. Noxon had delivered earlier reports in 2017 and 2018.

[^54]: For almost all years the husband’s income comprised employment earnings (third-party and professional income), dividends, capital gains and rental income,

[^55]: The bracketed income references are drawn from the husband’s March 15, 2022, financial statement.

[^56]: 2011 ONSC 7195, 16 R.F.L. (7th) 316, at para. 68: see also Gordon v. Guimont, 2016 ONSC 4569, at para. 68 (this case deals with child support).

[^57]: McArthur v. Le, 2022 ONSC 2110, 73 R.F.L. (8th) 177, at para. 14 citing with approval Drygali v. Pauli (2002), 2002 41868 (ON CA), 61 O.R. (3d) 711 (Ont. C.A.), at para. 44.

[^58]: 2018 ONSC 4740, at para. 93.

[^59]: 2020 ONCA 810, at para 41.

[^60]: 1992 25 (SCC), [1992] 3 S.C.R. 813, 43 R.F.L. (3(d) 345, at p. 870.

[^61]: Homsi v. Zaya, 2009 ONCA 322, 65 R.F.L. (6th) 17, at para. 28.

[^62]: Lo v. Lo, 2011 ONSC 7663, 15 R.F.L. (7th) 344, at para. 57; see also Charron v. Carriere, 2016 ONSC 4719, at para. 66.

[^63]: 2002 2806 (ON SC), 31 R.F.L. (5th) 88 (Ont. S.C.), at para. 81.

[^64]: Rilli v. Rilli, 2006 34451, [2006] O.J. No. 4142 (Ont. Fam. Ct.), at paras 14 and 16: also Perino v. Perino (2007), 2007 46919 (ON SC), 46 R.F.L. (6th) 448, at para. 28.

[^65]: The husband’s trial financial statement indicated that he also earned rental income from occasionally renting out part of his Albina Way residence. Total net rental income in 2021 was about $13,200. This included Albina Way, Palace Pier (net) and rental income from Pakistan.

[^66]: The court assumes that the parties filed their 2022 income tax returns and understands that no tax deductibility will be allowed by CRA for the additional $1,500 support ordered. Since it is unlikely that the parties will cooperate in refiling their 2022 tax returns the court will adjust the support payable to a compromise net mid figure, applying Charron v. Carriere, 2016 ONSC 7523, at paras. 19, 22, 34, and 41-49.

[^67]: RSO 1990, c. C.43. The 2nd quarter rate was 0 .5%.