Court File and Parties

COURT FILE NO.: FS-21-26787-0000 DATE: 20240430 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: SAMEER MERCHANT Applicant – and – SADAF AMIR ALI Respondent

Counsel: Ari Rubin, for the Applicant Self-represented Respondent

HEARD: November 20 - 23, 2023

VELLA, J.

Reasons for Decision

Introduction

1The parties were married on September 23, 2006 in Pakistan.

2They have one child. All parenting and support issues have already been settled on a final basis.

3They were separated on May 26, 2021. This date was chosen by the Respondent Wife, and the Applicant Husband agreed to it at trial.

4The parties were divorced by Kraft J.’s order on May 29, 2023.

5The parties are Shia Imami Ismaili Muslims (“Ismaili Muslims”). This is relevant to some of the issues raised.

6Both parties are professional chartered accountants and are working as such in Ontario.

7The only issue for trial is the equalization of net family property (“NFP”). This issue is comprised of several sub-issues regarding proper exclusions, attributions, and valuations of specific items.

8The parties filed a joint Form 13C: Comparison of Net Family Property Statements, which was entered as an exhibit. Many of the items listed in this form are not contested. This trial focussed on the contested matters. Notably, the parties agreed on the values of their two jointly owned properties. They have agreed that the Applicant will assume the property in Calgary municipally known as 93 Skyview Point Green (“Skyview Property”), and the Respondent will assume the property in Calgary municipally known as 160 Auburn Bay Avenue (“Auburn Bay Property”).

9The Respondent was self-represented at trial, though she had legal representation in the past. I allowed her to testify with the aid of a chart she prepared that essentially listed the issues, positions of the respective parties, her key points, and references to the documents she intended to rely upon. The chart also outlined her version of her NFP and the orders she sought.

10The Applicant initially voiced concerns about the chart, but these were dealt with by my instruction to the Respondent that she was not to simply read the statements from her chart. It would not be fair to expect the Respondent, because she is self represented, to have memorized all her testimony. This would place her at an unfair disadvantage to the Applicant, who has his lawyer to organize his examination-in-chief, ask questions, and present the documents he intends to adduce into evidence. [1] In my view, this process enabled the Respondent to follow a road map of sorts while giving her testimony from memory in an organized manner – this also made the court process much more efficient. The “outline of evidence” was marked as a lettered exhibit and was provided to the Applicant to review before the Respondent testified.

11The two parties gave viva voce evidence. They each had one witness and produced trial affidavits for them. The witnesses were led very briefly in examination in chief, and then cross examined virtually (as they were out of province, and in one case, out of country).

Issues:

12The issues to be resolved are as follows: [2]

(a) Are the pieces of jewellery gifts to the Respondent and excluded or are they subject only to a date of marriage deduction? If the jewellery is not wholly or partly excluded, what is the value of the jewellery at date of marriage and date of valuation (separation)?

(b) Should the Respondent’s Pakistani Habib Bank investment certificates be valued as at date of separation with accrued interest or date of trial, and at what currency exchange rate? Should the parties bare equal responsibility for the Respondent’s decision to cash these certificates prematurely, resulting in a penalty and loss of accrued interest?

(c) Does the Respondent have a beneficial ownership interest in the Behbood Savings Certificates held in her father’s name?

(d) Were certain funds provided by the Respondent to her sisters legitimate gifts or an intentional or reckless depletion of her funds to remove them from her NFP?

(e) Should the Respondent’s religious Dasond obligations be listed as a debt?

(f) Has the Respondent proven that she owes her brother money by way of a loan?

(g) What is the net family property for each of the parties, and what is the resulting equalization payment?

(h) Is the Respondent’s claim for dower contained in the Pakistani marriage contract properly before the court?

(i) What are the post separation adjustments?

13For the reasons that follow, I have made the following findings:

(a) The items of wedding jewellery were not gifted to the Respondent after the date of marriage. She is entitled to a date of marriage value deduction but not an exclusion for those items. However, certain items of jewellery gifted by her mother after the date of marriage are excluded from her NFP.

(b) The Respondent’s Habib Bank investment certificates are valued as at the date of separation with accrued interest. The Applicant does not share the penalty or loss of accrued interest caused by the Respondent’s premature cashing of these certificates.

(c) The Applicant did not prove that the Respondent’s father holds the Behbood Savings Certificates in trust for the Respondent, nor was a trust interest in these Certificates properly plead.

(d) The funds provided by the Respondent to her sisters were initially gifts, however her decision to transfer the gift of $105,000 rejected by her sister, Dilshad, to her other sister, Saleema, was a reckless depletion of her funds and will be attributed as her asset under her NFP for purposes of calculating an unequal division of property.

(e) The Respondent’s religious Dasond obligation is not a secular debt, however, it was a legitimate expenditure of her funds.

(f) The Respondent has not proven that the money given to her by her brother was a loan. It will be treated as a gift for NFP purposes.

(g) The parties will prepare a new joint NFP incorporating the court’s findings.

(h) The subject of the dower arising from the parties’ Pakistani marriage contract is not before the court in this proceeding.

(i) The post separation adjustments are deferred on consent to the parties to agree upon based on the court’s findings. They will report to the court once they have determined the post separation adjustments and the new joint NFP.

Equalization of Net Family Property

14Section 5(1) of the Family Law Act (“FLA”) sets out the presumptive formula for determination of equalization of net family properties:

5. EQUALIZATION OF NET FAMILY PROPERTIES

(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.

Issue #1: The Jewellery

15Section 4(2) of the FLA defines Excluded Property, in material part, as follows:

The value of the following property that a spouse owns on the valuation date does not form part of the spouse’s net family property:

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

16The Applicant claims that the Respondent owns gold jewellery in the sum of $91,800 as at the date of valuation. The Applicant further claims that any jewellery that was gifted was done so on the date of marriage and is therefore only subject to a date of marriage deduction based on the values stipulated in two forms signed by the respective parties’ families, called a Dowry Form (from the Respondent’s family) and the Presentation Form (from the Applicant’s family). He also claims that some jewellery was bought by the Respondent herself from family funds.

17The Respondent claims that this gold jewellery is not worth $91,800 because that amount was based on retail purchase prices from appraisals she obtained and not the value of used jewellery. She asserts that the jewellery’s resale value is approximately $24,000. She also claims that the Applicant double counted some of the jewellery items. In any event, her principal argument is that all the gold jewellery was gifted to her by the Applicant and his family, or her mother and her own family and should therefore be excluded. She denies she bought any of the jewellery for herself.

18The Applicant’s evidence is that he based the valuation of approximately $72,000 worth of the jewellery on appraisals the Respondent obtained on June 16, 2022, from Toronto Jewellery House (“Toronto Jewellery House Appraisals”). None of these appraisals were entered into evidence as exhibits as will be explained later.

19The Applicant produced invoices for four pieces of jewellery bought after marriage and prior to moving to Canada, in the sum of 236,000 Pakistani Rupees (“PKR”). His testimony is that the Respondent bought these items, and therefore, they are part of her NFP. He states that, as these items were bought after the date of marriage, they are not included in the jewellery gifted to the Respondent on the date of marriage. The approximate value of this non-wedding jewellery is $19,200 as at the date of valuation, according to his own estimate.

20The Applicant deducted $4,900 as the value of jewellery the Respondent received as gifts in honour of their wedding as the date of marriage deduction.

21The Applicant called his father, Kamaluddin Merchant, as a witness. Mr. K. Merchant confirmed in his affidavit that the Ismaili tradition is that the bridegroom’s side of the family gifts jewellery, clothing, and other items to the bride on their wedding day. The groom’s family executes a presentation form stipulating the value of each category. He also confirmed that the bride’s side of the family gives similar gifts to the bride and stipulates the value of them in writing. In other words, the jewellery provided to the Respondent for her marriage was a wedding gift to her. He stated that the value of the jewellery his family gifted is reflected on the presentation form he signed. The form states the value as 55,000 Pakistani Rupees or “PKR”, which Mr. K. Merchant estimated to be about $250 CAD on September 23, 2006 (the date of marriage).

22Mr. K. Merchant was combative and argumentative with the Respondent under cross examination. He often asked her questions instead of answering questions.

23He stated that he has no idea how much her family gifted to her on the occasion of her marriage. He stated he has no idea how the figure of 55,000 PKR for the wedding jewellery gifted by his side of the family and stated on his presentation form was arrived at. He doesn’t remember how many grams of gold the jewellery weighed. He acknowledged that her family’s dowry form stipulated that they gifted her 272,000 PKR in jewellery.

24I do not place much weight on Mr. K. Merchant’s testimony. He did not present as a credible witness.

25In her testimony, the Respondent categorized the gold jewellery she has in her possession into three “buckets”:

(a) Jewellery gifted by the Applicant and his family on the wedding date;

(b) Jewellery gifted by her mother and family on the wedding date; and

(c) Jewellery gifted by her mother to her in the years following the wedding.

26All the jewellery was purchased in Pakistan with PKR and brought to Canada. The Applicant did not dispute this.

27The Respondent’s evidence is that she received gold (and precious stone) jewellery from her side of the family as wedding gifts in the sum of $17,339; gold jewellery from the Applicant’s side of the family as wedding gifts in the sum of $3,612; and gold jewellery gifted to her by her mother after the wedding and during the marriage in the sum of $3,385. This amounts to a total of $24,336 CAD (valued as at date of valuation). She claims this property is excluded under s. 4(2) of the FLA because it was gifted just before the marriage crystallized.

28The Respondent relies on the presentation form and dowry form to substantiate her claim that most of her gold jewellery given at the time of the wedding was indeed gifted to her by the two families.

29She based her value of this jewellery as at June 20, 2021 on an appraisal done by Gemological Services on November 15, 2023. The jewellery was appraised at $24,336. The appraisal, however, was based on the price per gram of gold content after the refining process for recoverable gold was melted down (22 karat jewellery). It was not an appraisal of the jewellery intact and with stones. Therefore, it is undervalued. The appraisal letter was also not admitted into evidence, as the author of the report was not called and there was no consent. However, the Respondent confirmed that she accepts these amounts as the value of the jewellery, albeit on a per gram basis only. The Applicant did not dispute the accuracy of these appraisals but rejected the premise that the gold jewellery should be valued on the basis of melting down the gold.

30The Respondent testified that she personally went with her mother-in-law and chose the items that were gifted to her by the mother-in-law (and not the Applicant himself). There were three jewellery sets/items gifted to her by the mother-in-law as wedding gifts.

31The Respondent’s mother and relatives gifted her five jewellery items and sets, including a wedding necklace and wedding bangles, a gold set, a wedding bracelet, ring, grey bangle, and a blue stone jewellery set. These were valued at 272,000 PKR according to the dowry form, and they were brought to Canada.

32After her wedding, her mother also bought her four pieces of jewellery from Pakistan totalling $3,385 CAD. She explained that the reason why her name appeared on the invoices reflecting these purchases is because it is normal practice in Pakistan for a jeweller to prepare receipts in the name of the person to whom the jewellery is gifted. She relied on another invoice from the same jeweller (Soneri Gems) that was made out to her niece but was bought by her brother. She produced a copy of the bank transfer her brother sent the jeweller for the purchase of this jewellery, evidencing his payment for his daughter’s jewellery, to substantiate the “normal” practice.

33Furthermore, she testified that the Applicant added four pieces of jewellery in the amount of $17,215, which she claims duplicates the jewellery she already disclosed. Thus, it should be deducted from his calculation. She also testified that some of the jewellery she has in her possession and has not disclosed is only costume jewellery.

34The Respondent did not put the Toronto Jewellery House Appraisals into evidence through the author of those appraisals and did not attempt to tender them for the truth of their content. They were entered as lettered exhibits. However, the Respondent confirmed that she accepted the appraised value for each of these items at retail but that they did not reflect the resale value of used jewellery.

35I accept the Respondent’s testimony that it was common practice in Pakistan for the jewellers, and this jeweller (Soneri Gems) in particular, to make the invoice in the name of the recipient of the jewellery when it is being gifted. There is no evidence to contradict her testimony. Her mother is, sadly, deceased, and hence her potential evidence is unavailable.

36The Respondent has discharged her burden of proof under s. 4(3) of the FLA with respect to the jewellery gifted to her by her mother following the date of marriage. Accordingly, this jewellery, in the sum of $3,885, is excluded from her NFP pursuant to s. 4(2)1 of the FLA.

37This leaves the remaining jewellery that was gifted to the Respondent on the date of marriage, as evidenced by the presentation form and the dowry form.

38While the Respondent submits that the jewellery was gifted before the marriage crystallized and therefore is excluded, this is not supported by the FLA. The Act states that the gift must have occurred “after the date of marriage” to be excluded. In this case, the date would be on or after September 24, 2006. There is no suggestion that this jewellery was gifted after the date of marriage. Therefore, this jewellery is not excluded. However, the Respondent is entitled to a deduction for the value as at the date of marriage.

39The Applicant produced four documents by jewellers from Pakistan reflecting jewellery purchased after the marriage that he claims should constitute part of the Respondent’s NFP and entered them into evidence. The first document was an “estimate” from Agha Jewellers dated October 11, 2007, estimating the worth of one pair of earrings as 24,000 PKR. (The document did not contain a detailed description of the jewellery other than stating grams of gold.) The second document is from Agha Jewellers dated October 11, 2007, and is labelled “Estimate”. It is a handwritten document that only reflects numbers and does not contain a description of the jewellery other than stating “1 L set.” The document appears to show a value of 35,000 PKR. The third document is a “Cash Memo” from Prince Jewellers dated June 2, 2010, for “Sadaf”. It includes a calculation of 132,000 PKR but does not contain a description save “Two Kada 22KD-M” (two 22 karat bangles). The fourth document is “Estimate (approx.)” from Soneri Gems dated May 16, 2013, listing “one ring” with a “net weight [of] 9.800”, and an estimated cost of 48,000 PKR. The Applicant explained that he happened to have these documents in his possession by happenstance.

40The Respondent states that these items have been double counted with the wedding jewellery or were gifted after the date of marriage by her mother. In a disclosure letter dated December 2, 2011, signed by the Applicant and addressed to the Canadian immigration authorities, the Applicant stated that the jewellery brought to Canada had an estimated value of $15,973 CAD as of June 17, 2011.

41The Respondent explained that the first three jewellery items in the 2007 and 2010 estimates were gifted to her by her family as wedding presents. The documents reflected estimated values in 2007 and 2010 and were used for purposes of immigration (the parties originally landed in June 2011). She testified that the 2013 estimate was for the ring her mother purchased for her. She takes the position that this jewellery is worth $17,215 CAD, whereas the Applicant valued this jewellery at $19,200. The difference between the estimates appears to be in the currency rate exchange used.

42The Applicant points out that the exact number of grams of jewellery outlined in the estimates do not correspond to the pieces of jewellery in question. Therefore, he maintains the estimates must be referring to different items. He did not, however, provide any description of the alleged additional pieces of jewellery he claims the Respondent had in addition to the wedding jewellery and jewellery bought by her mother after the wedding.

43I accept the Respondent’s position and find on the evidence that these items are already either accounted for in the wedding jewellery or was gifted by the mother.

44The onus is on the Respondent to prove the value of the jewellery on the date of marriage and the date of valuation pursuant to s. 4(3) of the FLA because the jewellery is in her possession: Pulitano v. Pulitano, 2010 ONCA 64.

45As observed by the Court of Appeal in Pulitano, that onus might be discharged by the owner spouse’s testimony of the estimated value (absent credible contrary evidence): at para. 5.

46I do not accept the Respondent’s appraisals that are based only on the value of the gold content of the jewellery after a refining process. These appraisals undervalue the gold and gold and stone jewellery she received on the date of marriage.

47On the other hand, the Respondent had appraisals of the current value of the jewellery by the Toronto Jewellery House, but she failed to call the author of the appraisals. During her testimony, she stated that she was not relying on the appraisals “for the truth of their content”. Nonetheless, she accepted that these were authentic appraisals done at her behest for the litigation. The Applicant accepts these appraisals as accurately setting out the value as at the date of valuation. It does not lie in the Respondent’s mouth to obtain the appraisals and then decide not to rely on them, in the absence of any other credible evidence regarding their value. There is no evidence to support the Respondent’s position that the Toronto Jewellery House Appraisals reflect the retail value, and not the resale value (which she argues would be lower) or value of the jewellery it their “as is” condition. She is not disputing the accuracy of these appraisals but rather their applicability.

48It is the Respondent’s burden to prove the value of this jewellery on the valuation date. I am drawing an adverse inference against her in light of her failure to admit these values as the proper valuation in the face of the appraisals she obtained and produced (even though she called them “retail values”) or call the appraiser to testify. I find that the Toronto Jewellery House Appraisals reflect the proper valuation as at the date of separation.

49As no contrary evidence was presented, I am fixing the value of the wedding jewellery on the date of marriage as 327,000 PKR, or $6,187 CAD. This value is in accordance with the stipulated amounts in the presentation form and dowry form, and the currency exchange rate in 2006. In doing so, I reject the Respondent’s speculation that the Applicant’s family understated the value of the jewellery they gifted her on September 23, 2006. It does not make sense that the family would understate the value of their gifts to the bride, and there is no evidence to support this.

50I am fixing the value of the wedding jewellery on the date of separation/valuation at $58,635 [3] based on the Toronto Jewellery House Appraisals, recognizing that these appraisals were done approximately one year after the date of separation. In making this finding, I am relying on the viva voce testimony of the Applicant and Respondent, both of whom referenced these appraisals as accurate in terms of a “retail” value of the subject jewellery in June 2022 (meaning the fair market value).

51This means that the value of the wedding jewellery, after deduction for date of marriage valuation, is $52,448 ($58,635 minus $6,187). This amount falls into the Respondent’s NFP as at the date of valuation.

Issue #2: The Habib Bank Certificates

52The Respondent admits she held Habib Bank Certificates (the “Habib Certificates”) during the marriage. She opened an account with the HBL Bank in Pakistan in August 2011 and deposited 4,300,000 PKR between August 2011 and October 2012. With these funds, she purchased 5-year fixed term certificates with interest rates ranging between 13.75 and 15 percent.

53At the time the original certificates matured, there was a total of nearly 2 million PKR in accrued interest. This amount was reinvested with the original principal amount of 4.2 million PKR in 2017 for a term of ten years.

54The parties concede that interest accrued throughout these term certificates would not be payable until maturity and would be lost if the certificates were terminated prior to their respective dates of maturity.

55In 2017, after the original certificates matured, the principal and accrued interest came due and were deposited into the Respondent’s Habib Bank savings account. The amounts were then reinvested, along with further 4,200,000 PKR, into ten-year fixed term certificates at an interest rate of 8.75 percent. Again, the interest accrued but was not payable until maturity. Again, if the certificates were cashed prematurely, all interest would be lost.

56The Respondent confirmed that she terminated the successor Habib Certificates and cashed them out in 2023, before the ten-year terms expired. The value she calculated for the Habib Certificates was $26,180 CAD. This was capital only, as she lost the interest as a consequence of her premature encashment.

57She confirmed that as a result of cashing the Habib Certificates, she lost all of the accrued interest and incurred a penalty. She also confirmed that as of the date she cashed in the Habib Certificates, they were earning 8.7 percent interest and would have matured in 2027.

58Under cross examination, she conceded that she had not disclosed either the HBL savings account or the Habib Certificates on her initial sworn financial statement. She stated that she did not have access to those accounts at the time and therefore she believed they need not be listed. The HBL savings account had been deactivated, and the Habib Certificates were not liquid.

59She testified that in 2016 she asked her brother to renew and/or withdraw some of the matured amounts, but he was unable to because the account was in her name. Eventually, in 2017 her brother was able to negotiate with the bank officials to renew the certificates, but he could not withdraw any funds.

60She cashed in the Habib Certificates because she thought she had to in order to have them included in the equalization and available for an equalization payment. Her position is that they should be equalized based on the amount of funds they generated when she cashed them in less the taxes and penalty, which she submits should be borne equally by the parties.

61After cashing in the Habib Certificates, she deposited the resulting 6.3 million PKR (as at the date of separation) in her HBL Advantage account. This amount is in addition to the 736,562 PKR she had in the HBL savings account as at the date of separation.

62The Respondent objects to the Applicant’s “arbitrary” calculation of interest on the Habib Certificates from 2017 to May 2021 (the date of separation), which adds approximately 2.5 million PKR to the principal sum of 6.3 million PKR. She also disagrees with the Applicant’s use of the exchange rate as at date of separation, 126 PKR to $1 CAD, to value the certificates. Rather, she submits that these certificates should be valued using the exchange rate on a date close to trial. These balances are still held in Pakistan, and there are maximum cash limits on converting the amounts into CAD dollars or transferring the PKR currency to Canada. She used the rate of 210 PKR to $1 CAD as of November 15, 2023. Therefore, any fluctuations in the balance of the Habib Certificates due to the fluctuating currency rate should be borne equally by the parties.

63She also incurred a penalty by the Habib Bank of 778,457 PKR for premature encashment, as well as withholding taxes at the rate of 36 percent (her own notional assessment).

64The Applicant submits that this is wrong. She was not obliged to cash in the Habib Certificates for equalization. Furthermore, for equalization purposes, the currency exchange rate is the one in effect on the date of valuation. The subsequent decrease in the currency exchange rate does not rise to the bar of unconscionability.

65In addition, notwithstanding that the interest was not payable until maturity, the interest was accruing. Therefore, the capital amount of the Habib Certificates plus interest accrued at 8.75 percent to the date of valuation is the correct value. This amount should comprise the Respondent’s NFP for equalization. Also, he is not obliged to share in the penalty the Respondent incurred as a result of her unilateral (if misguided) decision to cash in those certificates prematurely.

66The Applicant is correct. The Respondent was not obliged to cash in her certificates for equalization purposes, and the correct value of those certificates is the capital plus accrued interest as at the date of valuation. Furthermore, the currency exchange rate to be used is that in effect as at the date of valuation. The fact that the Respondent cannot readily access these funds does not deprive the Applicant from having them form part of the Respondent’s NFP and thus included in equalization of the net family property.

67The court has discretion to alter the equalization of the Habib Certificates from a 50/50 division if the result would otherwise be unconscionable. In this case, I agree with the Applicant. The Respondent’s voluntary conduct caused the loss of interest and the assessment of penalty. Furthermore, the Respondent did not seek an unequal division of the Habib Certificates. Rather, she sought that equalization be based on the amount she actually realized on the date of her premature pre-encashment of the certificates on a 50/50 basis.

68Contrary to the Respondent’s submissions, the fact that the PKR’s currency exchange rate decreased by about 37 percent since the date of separation, thereby devaluing her current bank balance, is not sufficient, in the circumstances of this case, to warrant unequal distribution pursuant to s. 5(6)(h) of the FLA: see, Lo v. Lo, 2011 ONSC 7663, 15 R.F.L. (7th) 344, at paras. 227-38.

69In Lo, the value of the husband’s pension of $173,530.60 at the date of separation had decreased by about $47,097.65 as a result of market forces. The resultant drop was through no fault of either party. Citing the lead Court of Appeal case Serra v. Serra, 2009 ONCA 105, 93 O.R. (3d) 161, the court noted that “circumstances which are ‘unfair’, ‘harsh’ or ‘unjust’ do not meet the test [of unconscionability]”: at para. 47. The decreased value from a depreciating PKR does not shock the court’s conscience.

70The value of the Habib Certificates at the date of valuation, including accrued interest, was $69,216 CAD (reflecting the currency exchange rate at the date of valuation). This sum will be added to the Respondent’s NFP for equalization purposes. From this, a notional tax of 36 percent as a liability will be deducted. [4]

Issue #3: The Habib Bank Savings Account

71The only issue here is whether the Respondent’s balance in her savings account should be valued for equalization purposes using the currency exchange rates as at the date of valuation (as submitted by the Applicant) or the date of “settlement” (as submitted by the Respondent). The Respondent explained that by date of settlement she meant the date that she prematurely terminated the Habib Certificates.

72The FLA clearly states that the date of valuation in this case is the date of separation. There is no valuation date prescribed by this statute that would accommodate the Respondent’s position.

73Accordingly, I accept the Applicant’s calculation that the agreed upon outstanding balance of 736,562 PKR should be valued at $5,800 using the exchange rate as at the date of valuation This amount will be added to the Respondent’s net family property.

Issue #4: The Behbood Saving Certificates

74Behbood Certificates are investment certificates issued in Pakistan that function like guaranteed investment certificates.

75The Applicant produced copies of 55 Behbood Certificates with purchase dates between December 2006 and January 2009 with a value as at date of separation, according to him, of $71,417 CAD.

76These certificates are all in the name of the Respondent’s father, Amir Ali. However, the Applicant claims that the Respondent used her own funds to purchase these certificates and placed them in her father’s name because senior citizens can obtain a higher rate of interest in Pakistan.

77He points to the fact that the December 2, 2011 immigration disclosure letter references Behbood Savings Certificates amounting to 2.474 million PKR, or approximately $29,500 CAD, in December 2011. He says that Amir Ali’s Behbood Certificates are one and the same as the certificates disclosed to the immigration authorities.

78The Applicant testified that the Respondent’s father was retired and on a limited pension income. As such, he could not afford to purchase Behbood Certificates. He testified that when they moved to Uman, the Respondent sent money to her parents for their own use, as well as money of her own to be invested in her father’s name. He noted that the Respondent did not produce evidence of her father’s income and financial capacity when asked at questioning.

79However, the father’s financial and income records are not under the Respondent’s control. Therefore, I decline to draw an adverse inference against her. Furthermore, the Applicant did not bring a motion compelling third-party disclosure (acknowledging it may or may not have been enforced by the court in Pakistan).

80The Applicant claimed that these certificates were produced to the immigration authorities. However, the copies he provided were neither certified nor stamped as having been received by the immigration authorities, unlike certain photographs of jewellery that were submitted and stamped by the immigration authorities. I am prepared to draw an adverse inference against him for having failed to produce true copies of the Behbood Certificates as certified and stamped by the Canadian immigration officials (which he claimed were in his possession).

81The Respondent explained in her testimony that she has never seen the December 2, 2011 letter to the Canadian Immigration authorities produced by the Applicant until it was produced on November 7, 2023. She denies the authenticity of this letter and notes that it is not stamped by Canada Border Services Agency, unlike the jewellery pictures that were stamped by this agency in June 2011. She notes that she was not copied on this letter either.

82In cross examination, the Respondent denied that her father ever gave her Behbood Certificates. She answered that he gifted her other savings certificates. The Applicant put a portion of her questioning transcript to her, starting at question 224. In this passage, the Respondent agrees that her father gave her a gift of Behbood certificates in 2007 or 2008 valued at 650,000 PKR and that matured in or around 2013. However, she denied that those certificates were held in trust for her. Rather, the money was used to pay expensive hospital bills in Pakistan. Under cross examination, the Respondent maintained that the savings certificates given by her father were not Behbood Certificates. While this passage damages the Respondent’s credibility, the cross examination seems to suggest that Amir Ali did not hold the subject Behbood Certificates in trust for the Respondent.

83In cross examination, the Respondent’s sister, Saleema Salim, confirmed that her father has never gifted her any savings certificates or financial sums. In other words, he does not hold Behbood Certificates or any other savings certificates in trust for Saleema. This testimony is in harmony with the Respondent’s assertion that the Behbood Certificates are owned by her father, and that she has no beneficial interest in them.

84Furthermore, it appears that the Behbood Certificates have matured. There is no evidence that the resultant proceeds are currently in any of the Respondent’s accounts not already accounted for in the Habib bank accounts.

85Further, and in the alternative, the burden lies on the Applicant to prove that the Respondent owns a beneficial interest in the Behbood Certificates or put differently, that her father is holding the certificates in trust for her, and they existed at the date of valuation. Neither party summonsed Mr. Ali to testify. The Applicant has not discharged his burden of proof and persuaded me that the Respondent’s father is holding Behbood Certificates in trust for her as at the date of valuation, and/or that her monies were used to purchase these certificates and she has a beneficial interest by way of a resulting trust.

86The Behbood Certificates that were produced in the name of her father, Amir Ali, are not part of the Respondent’s NFP.

Issue #5: Monetary Gifts by Respondent to her Sisters

87The Respondent made certain gifts of funds to her sisters before separation.

88At issue are monetary gifts the Respondent gave her sisters between February, May and November 2021. They total $121,000.

89The Applicant submits that these monetary gifts constitute an intentional or reckless depletion of the family assets with a view to removing them from the Respondent’s NFP. He testified that he discovered that the Respondent had cashed out her RRSP and TFSA accounts in March 2021. They were worth about $140,000. She then transferred $16,000 (in various transfers) to Saleema and $105,000 initially to her other sister, Dilshad Kanji, and after a dispute that money was gifted to Saleema.

90The timing of these transactions is important, says the Applicant, because they were having difficulties in their marital relationship by February 2021. They had been attending at the Ismaili arbitration board to resolve their marital difficulties. He blames their marital discord on the Respondent and accuses her of having an extra-marital affair. He testified that he caught her “red handed” in a car with a mutual friend in December 2020. She denied having an affair. Because the male friend’s wife did not believe that her husband and the Respondent were having an affair, the Applicant decided to reconcile with the Respondent. However, he testified that in 2021 the Respondent told him she did not want to be with him anymore. She began depleting her accounts at this time until May 2021. In June 2021, he saw her bank statement, which showed she only had $200 remaining. He testified that “hundreds of thousands of dollars disappeared”.

91When the Applicant asked the Respondent to provide the past three years’ worth of financial and banking statements in 2021 for disclosure before the Ismaili arbitration board, she refused, and he started this application. When he received her financial disclosure, he discovered that the Respondent made eight transfers between February 24 to May 14, 2021 to Saleema, totalling $16,000. Furthermore, on March 29, 2021, she withdrew all her funds from her TFSA ($56,800) and her RRSP ($66,964). On March 2, 2021, she withdrew $20,000 from her RBC Day to Day Account.

92The Respondent claims that these transfers of money were genuine gifts and that there was a pre-existing history of the siblings supporting each other financially. She readily acknowledges that she made the transfers of funds to her sisters, as claimed by the Applicant.

93With respect to the Respondent’s transfer of $105,000 to her sister, Dilshad, in and around March 2021, the Respondent testified that Dilshad had asked for assistance to relocate to Montreal, where she had found a new job opportunity. At this time, Dilshad had been unemployed for over a year. Dilshad requested help for a downpayment deposit on a condominium unit in Montreal.

94The Respondent testified that at this time she believed that she and the Applicant were interested in buying a house for themselves in Toronto. They were renting the house they lived in. She claimed to share a few listings of potential houses for sale with the Applicant but then received no interest from him.

95The Respondent testified that they were not yet separated and in fact had reconciled in early March 2021. She claimed that the Applicant sent an email to the Ismaili arbitration board confirming the reconciliation.

96As the Applicant was not interested in buying a house and incurring debt, the Respondent decided to help her sister with a downpayment.

97According to the Respondent, two key incidents occurred between March 2021 and May 2021 which led to the ultimate marital breakdown.

98The first incident was the Respondent’s decision to buy a car in March 2021. She did this because the Applicant refused to add her to the car insurance with their existing vehicle. She explained the Applicant was never supportive of her driving, and she had to take driving lessons to gain her licence. She bought a Honda by taking out a loan from her own account. The Applicant was unhappy when she bought her car, as she did not tell him of her intention in advance.

99The second incident occurred in April 2021. She reduced the limit on their joint line of credit. This upset the Applicant, and the parties had a significant argument. Her position was that if he wanted to continue to borrow money (as he had against the joint line of credit), he should be solely responsible for those debts on his own personal line of credit. She said after this argument, despite her efforts to continue with reconciliation, the Applicant made it clear he wanted to separate and reached out to the Ismaili arbitration board again. The arbitration board advised that there would have to be a mutual decision to re-engage in the process.

100The Respondent testified that most of the time, the parties’ arguments focussed on unequal allocation of expenses. She wanted to keep their son in private school, and the Applicant used this as an excuse for not buying a house. The Applicant was not supportive of having their son in private school.

101The Respondent continued to try to engage the Applicant’s interest in buying a family home. She produced a text message dated March 15, 2021, which indicated that the real estate agent was inquiring whether she had interest in buying a condominium unit since prices were increasing.

102In May 2021, the Respondent attempted one more time to entice the Applicant to buy a home for them. She shared listings, but the Applicant indicated he wanted a separation. Therefore, on May 26, 2021, they went back to the Ismaili arbitration board and confirmed their decision to separate.

103From May to August 2021, they stayed in the same rented house, but slept in different bedrooms. In June 2021, the Applicant stated that he would be terminating the lease effective September 1, 2021, so the Respondent had to find new accommodation. The Respondent reached out to the Ismaili arbitration board for help, and they suggested she get legal advice.

104On September 1, 2021, she moved into her sister, Dilshad’s, condominium unit in Toronto.

105One evening, in October 2021, she was expecting the Applicant to return their son from an outing, as it was her parenting time. She discovered that the Applicant had gone out for dinner with Dilshad and their son. Her response was to contact the police. Soon after the police arrived at Dilshad’s unit, her son was dropped off. However, Dilshad became embarrassed that the neighbours saw the police being called to her unit. She feared her reputation would suffer.

106On the other hand, the Respondent was not happy that Dilshad was having dinner with the Applicant. The Respondent felt that Dilshad was being disloyal to her and should be on her side. This incident resulted in arguments between them and a breakdown in the sibling relationship. The sisters subsequently cut off communication, and Dilshad blocked the Respondent’s phone.

107Dilshad informed Saleema that she no longer wanted the money from the Respondent. Saleema passed on this message to the Respondent, and the Respondent’s response was that Saleema should just keep the money to pay her own debts.

108The Respondent added that when she cashed in her RRSP in the sum of $66,963.95, the sum of $20,089 was deducted as personal income tax. She gave the net sum to Dilshad, and ultimately, Saleema. The bank statement and T4RSP bears out the amount withdrawn and tax deducted.

109In addition, she produced an email exchange between Saleema and Dilshad dated October 9 and November 14, 2021 relating to the transfer of these funds from Dilshad to Saleema.

110Under cross examination, the Respondent acknowledged that she had never gifted a sum in the range of $100,000 before. She acknowledged that she made this gift in the face of owing a $17,000 loan to her brother, which is still outstanding. She stated that her brother was not angry with her for doing this. She maintained her position that the money was a gift to Dilshad and then to Saleema, and she had no expectation of being repaid. She maintained that from March up to the date of separation on May 26, 2021, the parties were still attempting to reconcile. It was her bona fide intention to reconcile until the Applicant indicated his desire to separate, and the parties went back to the Ismaili arbitration board in May to inform of the permanent separation.

111She acknowledged that Dilshad did not swear an affidavit or come to testify on her behalf, as they were still not on speaking terms as at the date of trial.

112She acknowledged that in May 2023 she purchased a home for $540,000 with only five percent down and that she did not list this purchase on an updated sworn Financial Statement. She also did not produce her mortgage documentation because, she explained, the home is a post-separation asset. She explained that she raised the five percent via a tax refund in April 2023, a two-month deferral of private school tuition, and a bonus received in August 2022. She explained that the mortgage payments equate to what she was previously paying in rent.

113She testified that she used a 36 percent notional tax rate for disposition of her assets (e.g., her RRSP).

114Saleema verified the Respondent’s version of events and identified the email exchange under cross examination. Saleema confirmed that she received $105,000 from Dilshad in November 2021 and confirmed the November 21, 2021 email between herself and Dilshad regarding this money. She confirmed her understanding in 2021 was that the Respondent had gifted this money to Dilshad to buy a condominium unit; the incident involving the Applicant and their son having dinner with Dilshad, and the resulting and ongoing fall out between Dilshad and the Respondent.

115Saleema testified that she reached out to the Respondent in February 2021 indicating she needed money because her credit cards and line of credit were at their limit, and she had no money. She was still an international student, and her student visa restricted the number of hours she could work.

116Under cross examination, Saleema confirmed she had gifted some jewellery to the Respondent at the time of marriage. She clarified that gifts were given during the three to four days leading to the wedding ceremony, but these ceremonies are considered part of the wedding.

117She testified that she is now working on a post doctorate at the University of Calgary. She did not pay rent to the parties when her family previously stayed with them, but she did contribute to expenses. She became financially independent in August 2022 when she started her post doctorate.

118She explained that between 2018 and 2022, she was earning about $20,000 a year. Her husband earned between $20,000 and $22,000, as his formal qualifications were not recognized in Canada. She had to pay her son’s tuition of $18,000 and her own tuition of $16,000 – they were both international students. She only brought about $12,000 CAD from Pakistan from the sale of their apartment there. She said she, in turn, gave that $12,000 to the Respondent in 2019 to pay for the Respondent’s son’s private school fees.

119She confirmed that, despite the past financial struggles, the first time she asked for money from the Respondent was in 2021. And it was a gift. She received $16,000 prior to May 26, 2021 and a further $4,000 after separation in 2021.

120She conceded that she still had a little credit left on her credit card in April 2021.

121She explained that she has now spent the $105,000. She used about $20,000 to $25,000 to pay her debts, and she kept the rest in her account for a while. She then used some of the remaining money for her son’s marriage and to pay off a large loan of $50,000 to $60,000. The rest she used for a deposit on a house she bought in Calgary in June 2023.

The Test – Intentional or Reckless Depletion of Net Family Property Assets

122The Applicant submits that the Respondent’s gift of funds to her sisters was unconscionable, and it justifies an unequal division of the net family property by effectively attributing the gifted monies back to the Respondent’s NFP. The Applicant relies on s. 5(6)(d) of the FLA:

(6) Variation of Share: 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,

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

123The Applicant relies on Serra. In that case, at para. 47, the Court of Appeal affirmed that “[t]he threshold of ‘unconscionability’ under s. 5(6) is exceptionally high. As stated above, 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’.”

124The Applicant also relies on A.A. v. Z.G., 2015 ONSC 4397. In that case, the court found that a contingent income tax liability asserted by the husband, which was based on $460,000 in funds he had illicitly withdrawn from the family business, was unconscionable. The court denied the husband’s claim that this contingent tax liability should be borne equally by the parties under an equalization, at para 274:

In exercising my discretion, I am not prepared to reward the husband for his indiscreet actions by bringing this debt into the equalization formula. If in the end, I find the wife should not be responsible for this debt, I would make an unequal division of the net family property so that the husband pays any debt attributed to the wife […] to now burden the wife with this debt, long after it was incurred and without her knowledge or approval, would more than be unfair and unjust. To do so would shock the conscience of the court.

125The real issue here is whether the gifts of cash to the Respondent’s sisters were bona fide gifts, or an intentional or reckless depletion of the Respondent’s assets.

126I must assess the credibility of the Applicant, the Respondent, and Saleema. In doing so, I must look at the surrounding circumstances and determine whose version of events makes the most sense. The primary surrounding circumstances informing this assessment are:

(a) The timing of these transactions relative to the date of separation;

(b) The magnitude of the financial transactions in the context of the parties’ financial circumstances;

(c) Whether there was any history of financial support being given to family members; and

(d) The transparency, or lack thereof, of these particular gifts.

I also considered the demeanor of the parties, while recognizing the frailties of placing too much emphasis on demeanor.

127It was apparent throughout the course of the Applicant’s testimony that he is still very bitter about his perceived lack of fidelity on the part of the Respondent. Several times, he gratuitously mentioned that she had engaged in an illicit sexual affair, seemingly to disparage her reputation. This tainted his credibility in my view. He appeared bent on exacting vengeance against the Respondent.

128The Respondent testified in a straightforward manner. She was organized and generally answered questions directly, though at times she appeared defensive under cross examination. It is clear that she failed to fully discharge her disclosure requirements in a timely manner. She engaged in a “document dump” just in advance of trial. This consisted of documents that she wished to rely on and some which had been the subject of outstanding disclosure requests. She also did not originally disclose her HBL accounts, though she said she did not think she had an obligation to since she could not access those accounts at the time she prepared the financial statement and the Applicant knew of them.

129Saleema testified in a straightforward manner as well. She did not embellish her evidence and was not shaken under cross examination. When it was pointed out to her that she had around $3,000 available credit on her credit card at the time she received funds from the Respondent, she did not become defensive. She was able to account for spending the $105,000 and $16,000 gifts.

130Furthermore, either party could have called Dilshad as a witness. Her evidence might have supported or contradicted either party’s position. It is notable that while Dilshad and the Respondent are not on speaking terms, the Applicant had a good relationship with her after the separation.

131Where the evidence between the Applicant and the Respondent and Saleema differs on this issue, I accept the evidence of the Respondent and Saleema.

132The Applicant did not suggest that the sisters conspired to divert funds from the Respondent to deprive him of a share of those gifted funds under equalization.

133The Applicant and Respondent had a history of financially supporting Saleema and her family in Canada. They sponsored her to come to Canada on a student visa and provided financial assistance to her. This included providing shelter at their matrimonial home. They did not expect to be repaid for their financial assistance.

134Under cross examination, the Applicant somewhat begrudgingly agreed that the parties had sponsored Saleema in June 2014 on a student visa to come to the University of Calgary. They lived in Alberta at the time. He also confirmed that they had given her some financial support and signed a financial guarantee letter in support of their sponsorship. Furthermore, he confirmed that Saleema lived with them until 2018, when they moved to Toronto.

135Both the Respondent and Saleema confirmed that the Respondent transferred the total sum of $16,000 to Saleema. Saleema added that after May of 2021, the Respondent gave her another $4,000, for a total of $20,000.

136I find that Saleema was having financial struggles in 2021 based on her status as an international student and her husband having to take low paying jobs because his degree was not recognized in Canada. The fact that the Respondent gifted a further $4,000 to Saleema for similar small debts after the date of separation lends credibility to the explanation that the Respondent was providing Saleema financial assistance both before and after that date.

137In my view, the transfer of the cumulative amount of $16,000 to Saleema does not meet the bar of intentional or reckless depletion of the Respondent’s bank accounts with a view to lowering her NFP. There was a history of the parties supporting Saleema financially and by providing her and her family with shelter as she pursued her academic studies and developed a life in Canada with her husband. Furthermore, these transfers were relatively modest in the context of the Applicant’s and Respondent’s respective incomes. Both are chartered accountants, and both were earning substantial incomes. For example, in 2022, the Applicant and Respondent each earned just over $200,000 in employment income and bonuses.

138I do not have direct evidence from Dilshad. However, the Applicant did not challenge the Respondent’s evidence that at the time she was gifted money, Dilshad had been unemployed for over one year and was intending to move to Montreal to take up an employment opportunity.

139At the time of the gifts, the parties’ marriage was in trouble. The Applicant had lost faith in the Respondent after he saw her in a car with another man. However, he agreed that they did agree to reconcile after that incident. The attempts to reconcile were ultimately unsuccessful. However, the Applicant did not dispute the Respondent’s testimony about the two incidents that ultimately led to the final separation. Nor did he dispute the timing of his decision to approach the Ismaili arbitration board to advise that there was no chance of reconciliation. It was with this last event that the parties had no reasonable prospect of reconciliation, and hence they agreed that May 26, 2021 is the date of separation

140In my view, the gift of $105,000 to Dilshad was a legitimate gift and not made with the intention to deplete the NFP, nor was it recklessly made. There was a legitimate purpose for the intended use of these funds. Furthermore, the Respondent’s siblings have a history of financially supporting one another when in need, without expectation of repayment.

141However, I have difficulty with the Respondent’s explanation for why she simply gifted the same money to Saleema after Dilshad ultimately rejected the gift. Saleema did not ask for this money and did not indicate that she was in need. While Saleema had debts, she also had some means, and when she needed financial assistance from her sister, she asked for it.

142By November 2021, the parties were separated. The legitimate gift to Dilshad had been rejected and could have been returned to the Respondent. The Respondent maintained control of that money. The Respondent’s decision to let Saleema keep the money was reckless and resulted in a reckless or intentional depletion of her NFP.

143Accordingly, the sum of $105,000 will be attributed back to the Respondent’s NFP as at the date of separation resulting in an unequal division of the net family property. It would be unconscionable within the meaning of s. 5(6)(d) of the FLA, in these circumstances, not to adjust the equalization payment to include the rejected gift of money. The balance of the funds from the RBC TFSA account and RRSP accounts are not attributed back to the Respondent’s NFP. The balance of the RRSP account, after the tax deduction, and TFSA funded the $105,000 transfer.

Issue #6: Dasond

144Each party regularly pays an amount of money, Dasond, to their mosque. This is charitable contribution.

145The Applicant claims that the Respondent withdrew $20,000 from her RBC Day to Day account on March 2, 2021 and this was improper. He submits that it should be attributed back to the Respondent’s NFP.

146The Respondent claims that this sum reflected a back payment of Dasond. During the many months their mosque was closed during COVID-19, she did not pay her Dasond. She is claiming $10,500 as a debt she owed for Dasond as at the date of separation.

147She described the Dasond as a moral and legal obligation that is taught to Ismaili Muslims as their sacred obligation since birth.

148The Applicant agrees that each party contributes money to their mosque by way of Dasond, though he contributes less than the Respondent. However, he does not believe the withdrawal from the Respondent’s bank in March 2021 was for Dasond because it would have been too much for one payment.

149The Respondent demonstrated that between July 2018 to May 2021 she paid $80,000 for Dasond. The amount of the various withdrawals was not consistent.

150Under cross examination, the Respondent clarified that while she withdrew $20,000 in March for her Dasond, the $10,500 liability she claimed was the extent of her obligation for Dasond as at the date of separation. She confirmed that she voluntarily chose to pay 25 percent of her salary as Dasond but maintained that the requirement to pay Dasond is not a choice but an obligation as an Ismaili Muslim.

151Under cross examination, the Applicant admitted that Dasond is Ismaili charity. He pays 12.5 percent of his net pay on a monthly basis. He acknowledged that Dasond is a moral obligation. He included Dasond on his initial sworn financial statement, but then removed it based on legal advice that it was not a legal obligation.

152I accept the Respondent’s explanation that she withdrew a total of $20,000 in March 2021 for outstanding Dasond, and that $10,500 was her Dasond obligation as at the date of separation. There is no doubt that both parties pay Dasond regularly, although in different amounts. This was not a recent practice but a long-standing one.

153The Applicant relies on Kozel v. Kozel (1980), 21 R.F.L. (2d) 65 (Ont. S.C.) for the proposition that a moral obligation is not a debt or liability for purposes of equalization under the FLA. In Kozel, at p. 67, the court confirmed that a moral obligation to pay a debt attributable to the acquisition of a family asset is not a “circumstance relating to the acquisition, disposition, preservation, maintenance, improvement or use of property”: Family Law Reform Act, 1978, SO 1978, c 2, s. 4(4)(f).

154While Kozel is somewhat dated and dealt with a different subsection under the former legislation, I agree with the general proposition that a moral debt obligation is not a legal liability or debt for purposes of equalization of net family property under the FLA. Dasond is not a contractual or other legally enforceable obligation. In this sense, it is a voluntary payment, and the quantum is chosen by the payor, who may or may not follow the general guidelines for suggested Dasond payments.

155Notwithstanding the moral and religious obligation that Dasond represents to practicing Ismaili Muslims, it is not a debt in the secular sense for calculating NFP.

156Accordingly, this does not qualify as a debt at the date of separation and will be removed from the Respondent’s NFP.

157However, the payment was a legitimate expenditure, in an amount that binds the Respondent’s conscience and is consistent with her habit. It was also consistent with the Applicant’s own monthly payments of Dasond in an amount that binds his conscience. Accordingly, the $20,000 will not form the Respondent’s asset as at the date of separation. It will be removed from her NFP.

Issue #7 – Loan from the Respondent’s Brother

158The Respondent claims that she owes $16,768.98 to her brother and is a debt. She testified that in November of 2015 she borrowed 135,000 PKR (or $16,697 CAD) for the downpayment of the Auburn Bay property. This was transferred from her brother’s office Dubai account in three tranches.

159She explained that the downpayment was $36,534, which was funded as follows: $16,768 from her brother; $13,126 from the parties’ joint line of credit; and $6,640 from her own pay.

160The Respondent tendered an email from her brother dated November 26, 2015, forwarding an email chain from another person in his Dubai office who, in turn, apparently confirmed that the transfers were made to the Respondent in the sum claimed. However, as this email was produced the day before her testimony (at 4:15 p.m.) and the email was not translated into English, it was not admitted into evidence.

161Under cross examination, she confirmed that she advanced the above referenced gifts of money to her sisters without first paying off her brother and that he was not angered by her decision.

162I am satisfied that the brother advanced the claimed amount of money to the Respondent to use as part of a downpayment for the Auburn Bay property. However, the Respondent has not proven that this was a loan.

163Indeed, as stated above, the historical pattern in the Respondent’s family is that family members gift each other money when members are in financial need.

164Furthermore, she has not proven any of the indicia for establishing the likelihood of a loan set out in Chao v. Chao, 2017 ONCA 701, 99 R.F.L. (7th) 281, at para 54:

(a) There are no contemporaneous documents evidencing a loan (the email chain ruled inadmissible only demonstrates a transfer of money was made, not the characterization of the transfer);

(b) There is no evidence of any payment schedule or terms of repayment;

(c) There is no evidence that the brother holds any security for the money sent;

(d) There was no demand for payment before or after the separation of the parties;

(e) There was no partial repayment of this sum;

(f) There is no evidence of expectation or likelihood of repayment, except from the Respondent.

165Critically, there is no evidence from the brother whatsoever. Hence, the court is left without any evidence from the alleged lender, including what his intention was at the time he transferred funds to the Respondent. The Respondent failed to explain this gap in the evidence.

166Accordingly, the Respondent has not proven that the money her brother gave her is a loan. It will therefore be removed as a debt from the Respondent’s NFP.

Issue #8: What is the equalization of net family properties in this case?

167I have modified the assets and liabilities on the joint comparison of net family property statements in accordance with my findings. I have attached Exhibit 5, the “Comparison of Net Family Property Statements” as an appendix to these Reasons for ease of reference.

168The changes are as follows.

169Under “(b) General Household Items and Vehicles”: the value of the Respondent’s gold jewellery is $58,635 and included in her NFP, and the BMW is deleted from the Applicant’s NFP (the Honda remains as is).

170Under “(c) Bank Accounts and Savings, Securities and Pensions”:

a) The sum of $2,980 as the Applicant’s RRSP (Sole) 8562 shall be removed;

b) The Respondent’s Habib Investment Certificates are valued at $69,216;

c) The Respondent’s Habib Bank (savings) account is valued at $5,800;

d) The Behbood Certificates are removed from the Respondent’s net family property;

e) The Respondent’s RRSP and TFSA accounts shall be valued at $66,964 and 56,800 and included in the Respondent’s net family property;

f) The e-transfers the Respondent sent to the sister (Saleema) in the sum of $14,000 (found to be $16,000) is removed from the Respondent’s net family property.

171Under “2. Value of Debts and Other Liabilities on Valuation Date: Debt and other Liabilities”:

a) The BMW loan is removed from the Applicant’s liabilities;

b) The Respondent’s notional tax for the RRSP and pension is valued at 36% ($12,238.00) and the other entries for notional tax for both parties shall be 36% rather than 25%

c) The Dasond in the sum of $10,500 is removed from the Respondent’s debts;

d) The Respondent’s claimed loan from her brother in the sum of $16,768.98 is removed from her debts;

172Under “section 3: Net Value of Property and Debts on Date of Marriage”:

a) The Respondent’s jewellery is valued at $6,187.00.

173The parties will prepare a new joint net family property statement reflecting these modifications. The rest of the items were agreed upon. The parties will submit the new net family property amount and equalization payment to me for inclusion in the judgment. If there are any disagreements, a case conference may be convened before me. However, this should be formulaic.

174This calculation will also be subject to resolution of the post-separation adjustments. It is also subject to the Applicant paying the Respondent $15,000 in arrears of s. 7 expenses, as agreed.

Issue #9: Is the Respondent’s Claim for her Dower Before the Court?

175The Respondent produced a copy of a marriage contract between the parties executed in Pakistan. The Applicant consented to its admission as an exhibit.

176The Respondent claims that she is entitled to the sum of 500,000 PKR from the Applicant on demand by way of a dower.

177The Applicant objects and submits that the Respondent failed to raise the enforceability of the marriage contract in her pleadings or at any time prior to trial. This issue arose for the first time during the trial.

178I agree that the marriage contract is not properly before the court. To allow the Respondent to make this claim for her dower now is a classic example of trial by ambush.

179Furthermore, the court would have to decide the validity and enforceability of the marriage contract.

180Accordingly, I am declining to make a ruling on the validity or enforceability of the marriage contract. This is without prejudice to the Respondent’s ability to advance a claim for a dower based on this marriage contract, and without prejudice to any defences or answers the Applicant may have.

Issue #10: Post-Separation Adjustments

181In closing submissions, the Applicant submitted that, after factoring in the $15,000 he owes for arrears of s. 7 expenses (ordered to be set off against equalization), he will owe the Respondent the net sum of $7,870. He claims that based on the carrying costs of the Skyview Property (which he manages), he has incurred $67,060 in debt since the date of separation. He deducted $48,000 in rent, gained between the date of separation to November 1, 2023. [5] Therefore, the deficit incurred on this property is $19,060.

182The Respondent paid $350 in property taxes and $3,000 in mortgage payments per month for the Auburn Bay property. She collected $3,200 in rent per month until October 31, 2022, for a total of $57,600. She collected 3,300 in rent per month until November 1, 2023, for a total of $97,200.

183The Respondent advised in closing submissions that she too has experienced a deficit from the Auburn Bay property. She expressed a willingness to resolve the post-separation adjustments after trial.

184The Applicant is also content to have the post-separation adjustments deferred to after trial.

185I am content to allow the Respondent and Applicant resolve the post-separation adjustments and report back to me, so that the net equalization payment can be determined. In the event the parties cannot resolve the post-separation adjustments, they may request a case conference before me, at which time I will receive further oral submissions (or writing, if on consent).

Disposition and Costs

186The application is granted in part, subject to the above findings.

187The parties are to report to me with respect to the calculation of the net family property equalization payment and post-separation adjustments.

188If costs and the applicable prejudgment interest cannot be agreed upon, then the Applicant shall deliver his costs outline and written submissions within ten days. The Respondent shall deliver her costs outline and responding written submissions within ten days thereafter. The written submissions shall not exceed five double-spaced pages each.

Justice S. Vella

Released: April 30, 2024

COURT FILE NO.: FS-21-26787-0000 DATE: 20240430 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: SAMEER MERCHANT Applicant – and – SADAF AMIR ALI Respondent

Reasons for Judgment

Vella J.

Released: April 30, 2024

1Initially, the Respondent wished to rely on a much more detailed document that was more akin to a script of her proposed evidence and would lead to simply reading it into the record. This was not permitted.

2Over the course of the trial, the parties agreed to exclude the Applicant’s BMW (as an asset and corresponding debt) from the Applicant’s net family property.

3In closing submissions, the Applicant stated that the Respondent produced valuations totalling $72,050 from the Toronto Jewellery House, but the appraisals submitted as lettered exhibits only total $58,635 by my calculation. Also, I have not deducted the ring bought by the Respondent’s mother in the sum of $3,885 from these appraisals, as I did not see a Toronto Jewellery House appraisal for it. The intention is to include the value of the total Toronto Jewellery House Appraisals identified at trial, with the exception of the ring.

4At trial, the Applicant noted that he had deducted 25 percent as a notional tax. However, he was prepared to assume a notional tax rate of 36 percent, as used by the Respondent, if the same rate applied to him, which it shall.

5The Applicant states that he received $1600 per month for the last three months, until November 1, 2023, at which time the rent increased to $1900 per month.