Court File and Parties
Court File No.: FS-22-00029716-0000 Date: 2024-09-04 Ontario Superior Court of Justice
Between:
Edna Ebrahimi, Applicant
– and –
Mesrobe Mazakian, Kevork Mazakian, and Achrhen Mazakian, Respondents
Counsel:
Sunny Vincent, for the Applicant
Diana Vasilescu, for the Respondents
Heard: August 19 – 20, 2024
Reasons for Judgment
Justice M. Sharma
1The Applicant, Edna Ebrahimi is married to the Respondent, Mesrobe Mazakian. The Respondents, Kevork Mazakian and Achrhen Mazakian are Mesrobe Mazakian’s parents.
2Parties appeared before me on March 20, 2024. I ordered that this matter proceed by way of a 1-day truncated trial on consent of the parties. The parties agreed that given their limited resources, a process other than a typical trial, with its associated cost and delay, was appropriate in this case.
3On the parenting issues, the parties’ consented to me conducting a judicial interview of their children. After I reported back on the children’s views on April 11, 2014, the parenting issues were settled on a final basis on May 5, 2024. The Applicant has primary care of the children, and the Respondent, Mesrobe Mazakian, has limited parenting time on weekends.
4As for the financial issues, on March 20, 2024, I set out a process for a mini or truncated trial that would be heard August 19, 2024. Each side was permitted to have 3 witnesses who would prepare affidavits of their evidence in chief. Each side was to prepare a written opening statement. An exit pre-trial conference would be heard on August 6, 2024.
5Originally, I indicated that I would undertake a brief mediation similar to a binding Judicial Dispute Resolution process. But on August 6, 2024, after reviewing the parties’ affidavits, I decided that mediation would not be productive. On certain issues, there was a binary outcome. I suggested that we move directly into cross-examination on the parties’ affidavits and adjusted the amount of time each witness would give evidence. Brief evidence in chief from the witnesses was to be consistent with affidavits filed, followed by cross-examinations of up to 1 hour.
6On August 6, 2024, I provided the parties with an opportunity to file further and better affidavits. I have now reviewed those further affidavits.
7At the start of this trial, the parties confirmed that mediation would not be productive.
Issues to be decided
a. Respondent’s Income for Support Purposes
8The Respondent is in receipt of Ontario Disability Support Program (“ODSP”) benefits. The Applicant alleges that the Respondent can work and she seeks to impute an income of $140,000 to him for support purposes – both child and spousal support.
b. Spousal Support
9Is the Applicant entitled to spousal support, and if so, what spousal support is payable?
c. Equalization
10The Applicant alleges that the Respondent has hidden marital assets or that the added Respondents (the Respondent’s parents) have sheltered and hidden his income and assets.
11Specifically, the property issues are: (a) the Havelock Property, in which the Added Respondents held legal title, and any property interest the Applicant may have in this property, including the tracing of marital assets into this property; (b) whether the Respondent possesses silver bars that are subject to equalization; and (c) whether the Respondent owns cars or equipment that are subject to equalization.
Credibility
12I have read the affidavits of the witnesses and have carefully considered their evidence given on cross-examination. My assessment of their credibility follows.
13I found that the Applicant’s testimony was largely sincere, but her testimony was based on a theory of this case for which there was no factual foundation or was wrong in law. Her own text message exchanges evidenced swings of anger, desperation, and frustration. It also evidenced her encouraging the Respondent to engage in deception in relation to a prior court proceeding involving the Respondent and his former spouse. This speaks to her motives in this case, and her willingness to deceive the Court.
14I found the evidence of the Respondent’s former spouse, Ms. Jennifer Oliviera, to be of little assistance. She was married to the Respondent from 2000 to 2009. However, like the Applicant, Ms. Oliviera was angry at the Respondent. She accused him repeatedly of being manipulative in his efforts to avoid his financial obligations to her and their children.
15At para. 4 of her affidavit, she states that the Respondent “has never made a contribution to the children’s education or future.” However, the evidence at trial was that consistent with an Order of McLeod J., he made at least one $15,000 payment towards arrears of child support, and other periodic child support payments to Ms. Oliviera into 2022. The Respondent gave reasons, such as his disability, as to why he was unable to continue to abide by this Order.
16At para. 8, she alleges that the Respondent’s accountant is of ill-repute and was used to hide his income, but this is a bald allegation. She provides no facts to support that allegation.
17Whether I find Ms. Oliviera to be credible matters little in the analysis. She had no relevant and material evidence about the specific disputed facts of this case. At most, her evidence sought to malign the character of the Respondent. At best, it was circumstantial, similar fact evidence. I find that its prejudicial effect outweighed its probative value: R. v. Handy, 2002 SCC 56, [2002] 2 SCR 908.
18The only aspect of Ms. Oliviera’s evidence that is fair and helpful in this case were references to transcripts from the questioning of the Respondent, from March 2, 2021, in relation to a Motion to Change he brought in May 2018. His answers, given under oath, can be used at this trial to attack his credibility if it is shown that his answers were not truthful. But the evidence of the witnesses at this trial was largely consistent with the answers the Respondent gave during this questioning.
19For example, with respect to one property – the Merlin property - he said during questioning that the proceeds from its sale was given to pay family. This was consistent with the evidence of the Respondent at trial and of his mother, the Added Respondent, Achrhen Mazakian (“Respondent’s Mother”), that he owed his parents $150,000 for contributions they made to renovations to the Merlin property.
20Another example is a response from the Respondent at questioning that he had been separated from the Applicant for two to three years, during which times he was residing with his parents in Lindsay. However, the consistent evidence at trial was that the Applicant and the Respondent separated regularly, often for several weeks, and would then reconcile. I do not place too much stock in the inconsistency of his answer, given the regular pattern in which the Applicant and Respondent “broke up”.
21For the Respondent, there were three witnesses. The Respondent, the Respondent’s Mother, and the Respondent’s father.
22I found the Respondent to be largely credible. There was one potential inconsistency with his testimony about the sale price of a property located in Richmond Hill at 114 Roseview Avenue (“Roseview Property”). In his affidavit, he states that this property was sold in 2016 for $800,000. However, on cross-examination, he was presented with a GeoWarehouse report showing the home sold in 2016 for $930,000. The Respondent readily conceded that it may have sold for $930,000, and that he could not recall given the passage of time. I accept his explanation, and in any event, the sale price of the Roseview Property has little bearing on the outcome of this trial.
23I found the evidence of the Respondent’s father, the Added Respondent, Kevork Mazakian (“Respondent’s Father”), to be unreliable. I find he was not competent to understand the questions put to him or to answer them. He is 80 years old. He looked very frail. He often would not respond to questions asked of him, or his answers were slurred. Several times, the same question had to be asked of him repeatedly. I questioned his capacity to recollect events accurately. I am not persuaded he had the capacity, at trial, to appreciate what was asked of him or to give coherent or reliable answers.
24The Respondent’s Father swore an Affidavit in this case on July 19, 2024. His counsel stated at trial that, in her view, she was satisfied he was competent when he swore his affidavit. However, given my finding that he was not able to give reliable evidence at trial a mere month after he swore his affidavit, I am not inclined to place any weight on his affidavit evidence.
25The Respondent’s Mother did not give an affidavit on July 19, 2024. This is because she was hospitalized around the time her affidavit was due. She has since been released from the hospital. She swore an affidavit with the Respondent’s Father on August 15, 2024, on certain minor points. She gave oral testimony at trial via Zoom. I had no concerns about her competence to give evidence.
26The Respondent’s Mother was clearly angry with the Applicant. However, based on the evidence she provided I can appreciate why. The Court had to instruct the Respondent’s Mother to only answer questions rather than argue with counsel. She was adamant in her views about funds she had loaned to the Respondent for renovations to the Merlin property, and I found this aspect of her testimony to be credible.
Analysis
1. What is the Respondent’s Income for support purposes?
27I find that the Respondent’s income is limited to the ODSP payments he currently receives. According to his financial statement, he receives $816.30 per month in ODSP benefits. On January 24, 2024, the Respondent was advised that he was approved for ODSP benefits, retroactive to August 1, 2022. I find that his income is limited to this amount.
28In 2013, the Respondent operated his own business as an electrician, under the name Mez’s Quality Electric Ltd. Between 2004 and 2017, the Respondent worked full-time on a project basis installing electric wiring in private custom homes. In March 2013, he worked under his business name, Mez’s Quality Electric Ltd. His evidence at trial was that between 2012 and early 2016, he would earn a gross income between $190,000 and $300,000.
29However, in 2016 or early 2017, the Respondent had a slip and fall where he injured his shoulder. He states that this rendered him unable to perform the tasks and movements required of an electrician, such as reaching over his head for a prolonged period of time, which caused significant pain. He attempted to continue to work but at a reduced capacity. He also received treatments in 2017, but his condition did not improve and instead, progressively worsened.
30By September 2017, he switched from working on private homes to government housing complexes. He testified that he was using apprentices, rather than electricians to assist with projects because they were more affordable. This proved to be too difficult for him to oversee, given his own limitations.
31By October 2017, he states that he suffered chronic anxiety, and pain in his shoulder (from a degenerative joint), back and knee. He provided letters from his family doctor, Dr. Law from October 26, 2017, and March 26, 2018, confirming these conditions. They have prevented the Respondent from working full-time hours and earning his previous income.
32In April 2019, he was treated by a rheumatologist for his shoulder. A letter from this doctor documents the continued pain in the Respondent’s shoulder and that it did not respond well to a steroid injection.
33In May 2019, the Respondent had a functional abilities evaluation with a kinesiologist. The evaluation concluded the Respondent was not able to perform the tasks and movements required of an electrician (stooping, handling, bi-manual fingering, crouching, carrying more than 10 lbs on a constant basis). He was deemed able to perform some of the tasks (walking, stooping, handling, fingering) between 2.7 and 5.3 hours per day, and others on an occasional basis of under 2.6 hours per day (e.g., carrying up to 10 lbs, crouching, kneeling, etc).
34The Respondent states that by 2020, he was unable to work at all. This resulted in him filing a consumer proposal. He states that he has not operated his business or worked as an electrician since then. He acknowledged that he started a new company, Ontario Wide Electrics, based on the advice of professionals assisting him with his consumer proposal, and it was hoped he would be able to return to work. However, Ontario Wide Electrics was subsequently shut down without having conducted any business.
35On November 19, 2021, the parties separated on a permanent basis after the Applicant’s son assaulted the Respondent leaving him unconscious. The Respondent suffered injuries, including a permanent injury to his eye. He states that his mental health deteriorated further, causing severe anxiety and depression for which he receives treatment.
36Today, the Respondent states that he cannot function normally on a day-to-day basis. He suffers daily headaches, body tremors, and shoulder pain. These ailments prevent him from sleeping at night and resulted in a sleeping disorder. The Respondent’s Mother confirmed in her testimony that she has witnessed the Respondent’s inability to sleep at night. Between 2020 and June 2022, he has had panic attacks and seizure like symptoms that have resulted in emergency room visits.
37He is also seeing a psychiatrist, Dr. Gulati, and a social worker, Ms. Jaihindraj. In addition, he has been treated by a physiotherapist in Lindsay. Letters from 2022 and 2023 from these physicians and professionals were submitted in evidence.
38While evidence from these treating professionals ought to have been admitted within their own affidavits and been subject to cross-examination, I admit them as business records to the extent they recount what these professionals observed. To the extent they offer opinions, I place some weight on them because there is consistency among the various letters and as such, there are markers of reliability: R. v. Bradshaw, 2017 SCC 35, [2017] 1 S.C.R. 865. As the parties agreed that we would limit evidence to three witnesses per side for this summary trial, and in keeping with the principle of proportionality, it was necessary to receive this hearsay evidence: R. v. Khelawon, 2006 SCC 57, [2006] 2 S.C.R. 787.
39The Applicant makes a few arguments to assert that the Respondent can continue to work as an electrician. Those arguments are either based on her own belief, or at best, on scant evidence.
40First, she states that one of the reasons why the Respondent’s previous private insurer, RBC, declined disability benefits was because the Respondent was not consistently using a CPAP machine for his sleep apnea. It is the Applicant’s view, despite not sleeping in the same building as him since November 2021, that he continues to refuse to wear the CPAP machine. The Respondent has admitted that he is challenged in using the CPAP machine while sleeping because of discomfort from the mask, and that he continues to search for appropriate masks. However, even if he were to use the CPAP machine consistently, sleep apnea is but one of many conditions from which the Respondent suffers. I am not persuaded that his inconsistent use of the CPAP machine, given his other ailments, would render him capable of working.
41She also relies on a photo of him on a ladder exchanged in a text message on May 22, 2019, as evidence of his continued ability to work. This photo was taken after his shoulder injury. The Respondent explained that after his shoulder injury, he continued to try to work. He testified that he can climb a ladder, but he would not be able to carry heavy items or hoist them up over his shoulder, as an electrician would be required to do. Him being on a ladder in one photo is not inconsistent with his limited capabilities as set out in his functional abilities evaluation. While there is a text from him saying he has been on the ladder all day, his message indicates someone is working with him.
42Next, she relies on numerous text messages exchanged between the parties from 2020 and early 2021, where the Respondent is describing some work he was doing, including providing some assistance at a property his parents owned in Havelock. I place little stock in these messages. They do not provide sufficient contextual information to permit the Court to assess if they exceed what the Respondent said he is physically capable of doing (e.g., how long the Respondent was doing the tasks, what kind of physical labour was involved, who else was there assisting, if anyone). I also note that, repeatedly and in numerous messages, the Respondent indicates that he is exhausted, that “his body is broken”, that he has “a pounding headache”, and “stress my heart races”. This is all consistent with the physical symptoms he describes.
43There is some evidence in the hundreds of pages of text messages attached to the Applicant’s affidavit, which appear to be in or around 2020 or possibly early 2021, which appear to show that the Respondent was searching and sometimes finding used vehicles which he would purchase, fix, and then re-sell for profit. Frankly, the Applicant’s affidavits were poorly prepared. Exhibits were not hyperlinked, they were not attached in chronological order, dates did not appear on many text messages attached as exhibits, and most exhibits were poorly printed and difficult to read. The paragraphs in the Applicant’s affidavit would reference multiple exhibits in the same paragraph to support statements made and it was very confusing to identify how some exhibits supported facts that she was asserting in her affidavits.
44Despite these deficiencies, I am able to discern and find that the Respondent up until the spring or summer of 2021 likely generated some income from purchasing, fixing, and re-selling used vehicles. However, this was prior to November 2021 when the Respondent was assaulted and suffered further injury and mental health challenges. If an income was earned during this period, it appears to have been modest. And in many of these messages he describes himself being exhausted and his “body broken”. In my view, they do not support the conclusion that the Respondent is well enough to return to work. At most, they suggest he can engage in some physical activity but with pain and exhaustion.
45For these reasons, I am persuaded that the Respondent is unable to work due to his current physical and mental health conditions, and that his sole income is his income from ODSP.
46Under s. 19(1)(a) of the Federal Child Support Guidelines, SOR/97-175 (“Guidelines”), this Court may impute income to a spouse it considers appropriate, if a spouse is intentionally under-employed or unemployed, and in other circumstances, including where a spouse has failed to provide income information when under a legal obligation to do so.
47It is the Applicant’s position that the Respondent’s income should be imputed to $140,000. I disagree.
48First, while the Applicant alleges in her affidavit that the Respondent failed to provide requested disclosure, she did not lead evidence of what disclosure was requested and what remained outstanding.
49Second, the principles that govern the imputation of income were described by Madsen J. in Evans v. Evans, 2023 ONSC 3919, at para. 77, citing Drygala v. Pauli (2002), 2002 CanLII 41868 (ON CA), 61 O.R. (3d) 711, at para 23. Notably, a party seeking to impute an income on the other party must establish an evidentiary basis upon which this finding can be made: Homsi v. Zaya, 2009 ONCA 322, 248 O.A.C. 168, at para. 28.
50The onus is on the party seeking to impute an income to make a prima facie case or lay an evidentiary basis for a finding that income should be imputed: Rising v. Hare, 2024 ONSC 1960, at para. 151.
51There is no evidence from the Applicant establishing how the Respondent could be earning a salary of $140,000. For example, she did not identify or provide evidence of potential jobs the Respondent could perform with his physical limitations and skillsets, or the salary range of such jobs. It would be an error in law to arbitrarily fix an income to the Respondent in the absence of such evidence. At best, it is her belief that he can earn an income up to $140,000.
52There was evidence of the Respondent earning an income as high as $300,000, but this was prior to his injury, and prior to the injuries he sustained from the assault in November 2021. I accept there was a period before November 2021 where the Respondent was likely earning modest income from fixing and selling used cars, but any such income was sporadic, limited and unpredictable. The Respondent suffered further injury in November 2021, and there was no evidence of him continuing to engage in car refurbishment after 2021. This evidence of additional earnings prior to November 2021, is too scant and unpredictable to impute income to the Respondent.
53For these reasons, I decline to impute income to the Respondent. I fix the Applicant’s income at $10,884 annually, which represents his ODSP payments. This is below the $12,000 threshold under the Guidelines. As such, I order no child support payable.
54However, I do order the Respondent to provide the Applicant, by May 1 of each year and so long as he has a child support obligation, annual income disclosure pursuant to s. 21(1) of the Guidelines. In addition, I order that he provide an annual letter concerning the status of his ability to return to work from the physicians that treat him for the conditions that prevent him from working. Should he have earned an amount of income the year prior for which child support is payable, he shall commence paying child support on his prior year’s income effective June 1.
Issue 2: Spousal Support
55I am satisfied that there is sufficient evidence of the Applicant having been the primary caregiver of the children. She has not worked since 2016. Therefore, I am persuaded she has entitlement to compensatory support.
56In terms of needs-based entitlement, I am not persuaded that she has demonstrated need. The Applicant’s evidence is that she receives roughly $4,000 monthly, which is comprised of the child tax benefits, Ontario Works, and rental subsidies. She states this is her only source of income. This is modest income, especially for a parent raising two children.
57The Applicant, however, is not working and she offered no evidence of her efforts to find work. She suffered an injury in 2016, but there was no evidence of whether her injury from 2016 prevents her from working today.
58There was some evidence of her earning an income from selling goods online, which is income she did not disclose.
59Furthermore, according to her bank records, she deposited approximately $68,000 in 2021, $75,000 in 2022, and $91,000 in 2023. Therefore, it appears she has undisclosed income, above the limited $4,000 per month that she testified was her only income. As such, I am not persuaded she has needs based entitlement.
60In any event, given my finding with respect to the Respondent’s current income, there would be no spousal support payable.
Issue 3: What equalization payment is owing, if any?
61There are four assets that the Applicant states are subject to equalization but the Respondent denies they exist or that he has a property interest in them.
Silver Bars
62The Applicant asserts that the parties purchased $100,000 worth of silver bars during the marriage, after the Roseview Property was sold in 2016. She states that the Respondent took them. She states that he removed them from the parties’ rental home at 57 Bruce Farm on July 21, 2017.
63The Respondent denies ever purchasing silver bars. At most, he recalls the Applicant purchasing silver coins that she then sold on her own.
64Other than the Applicant’s assertion that the silver bars were purchased and were taken by the Respondent, she provided no documentary evidence to prove they ever existed, or particulars of from whom, or from where they were purchased.
65Given the voluminous text messages between the parties, one would expect that there would have at least been a text message on this issue. There was not. At most, there is a photo of what the Applicant describes as a single gold bar with the couple in the photo and a text message exchange about the Respondent wishing to buy a precious metal melting tool.
66The Applicant says she engaged a lawyer after the separation on July 21, 2017, when the bars were allegedly taken. Her lawyer wrote to the Respondent on August 22, 2017 but this letter makes no mention of silver bars being taken from the home. One would expect that this would be an item that would have been raised.
67The couple also got back together after their 2017 separation. If the bars did exist when they resumed cohabitation, there was no evidence that they existed at the time of their final separation in November 2021.
68Under s. 4 of the Family Law Act, R.S.O. 1990, c. F.3, when determining an equalization payment, the court is concerned with the value of assets owned on the date of marriage and the date of separation. On a balance of probabilities, I am not satisfied that the couple purchased silver bars, or if they did, that the Respondent took them, or if he did take them that they continued to be held by the Respondent on the date of separation, and if he did still hold them on the date of separation, what their value was on that date.
Equipment
69Similarly, the Applicant asserts that there was various tools and equipment in the garage of the Havelock Property that are worth approximately $80,000. The Respondent states that he did not have expensive tools for years, or at the date of separation. He further states that his Father used the garage to store his own mechanical equipment.
70Again, in the absence of any tangible evidence that describes the equipment, the Respondent’s ownership of it and possession of it on the date of separation, or which approximates its value, I am not satisfied that the Applicant has met her burden of establishing that such an asset exists or should be equalized. If such equipment did exist on the Havelock Property and was owned by the Added Respondents, it would not be subject to equalization.
Cars
71There was sufficient evidence from the Respondent that he only owned one vehicle, a 2003 Dodge. He provided proof of sale of another vehicle (2008 Ford Van) on October 13, 2021, and records from Service Ontario, that establish that his former company, Ontario Wide Electric, does not own any vehicles.
72For the same reason given for the other alleged assets she sought to equalize, I am not satisfied she has met her burden of proving that there are undisclosed cars subject to equalization in this case.
Real Property
73The Applicant is seeking division of the Havelock Property, a property in which title was registered to the Added Respondents. Neither the Applicant nor the Respondent have legal title. The Added Respondents sold this property in April 2024, and the Applicant asserts it was an improvident sale.
74There are a series of real estate transactions that occurred which has led the Applicant to assert an interest in this property. These are fully documented along with the parties’ positions in their material. I need not repeat it in the same level of detail.
75Before I describe this issue, I repeat that the equalization scheme under s. 4 of the Family Law Act, requires the Court to examine spouses’ assets on the date of marriage and date of separation, and then equalize the growth in marital assets during the marriage. The approach the Applicant asks this Court to embark on is a historical re-examination of transactions during the marriage to trace where proceeds went, untangle them, and then equalize. This is not the statutory scheme.
76Nonetheless, I consider the Applicant’s arguments because she alleges that the Added Respondents were invisible litigants to whom the Respondent gave marital assets, which were then converted to assets owned by them. In these circumstances, it may be necessary to conduct an audit of where marital assets flowed during the marriage to trace them forward.
77In brief summary, the Applicant and Respondent agree that they purchased a property in Merlin, Ontario in 2012 for $20,000 in which the Respondent was the sole owner (“Merlin Property”). Renovations were done to the property. The Respondent and the Respondent’s Mother say the Added Respondents provided $150,000 in loans to fund the renovation. The Applicant disputes this.
78The Merlin Property was sold in 2017, four years before the parties’ final separation. Net proceeds of the sale were $200,481.62. The Applicant attended a lawyer’s office and signed an Authorization and Direction relating to the sale which suggests that she was aware of the sale, although its legal purpose is unclear.
79The Respondent provided his parents with the net proceeds of sale of the Merlin Property. This is not disputed. However, the Applicant states she did not permit or agree to the Respondent doing so. I agree that the Authorization and Direction she signed in the lawyer’s office does not reference to whom the net proceeds of sale were to be paid.
80The Added Respondents used the money to purchase a property on Williams Street in Lindsay (“Williams Property”). The Respondent’s Mother gave evidence, consistent with that of the Respondent, that the Applicant harassed the Added Respondents to give her half of the net proceeds of sale of the Merlin Property. This was because the Applicant disputed there was a loan owed to the Added Respondents, and because she did not agree to give the proceeds of sale to them. The position of the Respondent and Added Respondents is that they had no obligation to give the Applicant anything; they had been repaid a debt owed to them.
81Reluctantly and to end the Applicant’s harassment, the Added Respondents, decided to sell the Williams Street Property in 2020. From the proceeds of sale, they paid the Applicant $92,498.79. There is no dispute that the Applicant received these funds on June 20, 2020.
82Ultimately, the Added Respondents purchased the Havelock Property in November 2020, with them as the sole owners.
83Despite the Applicant being compensated for (nearly) half of the net proceeds of sale of the Merlin Property, the Applicant continues to assert that the proceeds of the Merlin Property, which were used to purchase the Williams Property, results in the Applicant having some property interest in the Havelock Property.
84It is her theory that the Respondent intermingled and used his funds to allow the Added Respondents to purchase various properties, and therefore, she is of the view that half the value of the Havelock Property belongs to her, and that its sale in April 2024 was improvident.
85This claim is not supported in law or in the evidence.
86First, as confirmed in Karatzoglou v. Commisso, 2023 ONCA 738, 488 D.L.R. (4th) 755, at para. 25, a non-titled spouse cannot assert a trust claim against a third party on behalf of a spouse for equalization purposes.
87Here, the Applicant is asserting that the Respondent has a trust interest in the Havelock Property because, somehow, his assets were used towards its purchase. The Applicant, however, as the non-titled spouse of the Havelock Property, cannot assert the Respondent’s trust claim against his parents for the purposes of equalization. The rationale for this is set out in Morris v. Nicolaidis, 2021 ONSC 2957, at para. 38.
88Second, the evidence of the Respondent and the Respondent’s Mother was that there was clearly a debt owed to the Added Respondents because of loans they made for the renovations of the Merlin Property. As such, the net proceeds of sale from Merlin Property – or at least $150,000 – were due to the Added Respondents.
89It would have been preferable if there was better evidence of this debt. However, even if this debt did not exist and the entire net proceeds of the sale of the Merlin Property was a family asset subject to equalization, the Applicant was made virtually whole when she received approximately $92,000 in 2020 from the Added Respondents when the Williams Property was sold. She got what she wanted in 2020. There was evidence at trial that the parties maintained separate finances during their marriage. Therefore, I find that the Applicant solely retained the benefit of this $92,000.
90And finally, even if there were a valid legal basis upon which the Applicant could claim an interest in the Havelock Property, I reject the Applicant’s argument that the sale of the Havelock Property in April 2024 was improvident. She has not led sufficient evidence of comparable properties for this court to conclude it was improvident. Expert evidence on this issue would be required. This Court cannot look at printouts of other sales in the area to draw the conclusion that the Havelock Property was sold at less than fair market value. Various variables can be at play when comparing properties that are sold, and no evidence was put forward to show they were comparable. I accept that the timing of the sale in April 2024 - while this litigation was on-going - was suspicious. However, it would have been grossly unfair for the Added Respondents, who are both elderly and suffering from their own health issues, to have to wait for the outcome of this litigation to deal with an asset that they solely owned, particularly when the Applicant’s theory was so specious.
Marmora Property
91There was an allegation that the Respondent hid or diverted funds from the sale of another property that he owned in Marmora on March 31, 2021. I am satisfied that the Respondent has satisfactorily explained, with supporting documents, as to how these proceeds were spent. I am not persuaded that he has failed to account for these funds.
92For these reasons, I order that there shall be no equalization payment paid by one party to the other.
93I further dismiss the Applicant’s claim against the Added Respondents.
Divorce
94Either party may file an Affidavit for Divorce, which shall proceed on an uncontested basis.
Evidentiary Ruling
95There was evidence included in the Applicant’s affidavit of text messages sent by the Respondent’s sister, Seta Moore, to the Applicant. Some of this evidence, if true, painted a different picture of the Respondent’s current financial situation. The Respondent objected to the Court considering this evidence because it was hearsay. I agree. It was being adduced for the truth of its content. Ms. Moore could have been summoned to give evidence, and she could have been cross-examined. According to the Respondent, Ms. Moore gave previous evidence in this case, but she later recanted her evidence. Her credibility is suspect and cross-examination of her evidence was necessary.
Costs
96Parties are encouraged to settle costs. If they are unable to agree, they shall deliver cost submissions not exceeding 3 pages. The Respondent and Added Respondents shall deliver cost submissions by September 20, 2024. The Applicant may deliver responding submissions by October 10, 2024. Reply submissions, if any, shall be delivered by October 24, 2024.
Justice M. Sharma
Released: September 4, 2024