I. INTRODUCTION

[1] In 2011, after over twenty years of marriage, Renxing Luo (“Mr. Luo”, “Applicant”) and Ping Yang (“Ms. Yang”, “Respondent”) signed a separation agreement. They have been fighting over that agreement ever since.

[2] Mr. Luo wants a declaration that he has complied with the separation agreement. Ms. Yang says he has not. Additionally, Ms. Yang seeks retroactive child support and reimbursement of monies she gave the couple’s daughter to purchase a condo.

II. BACKGROUND

A. The Parties

[3] The following facts are uncontested.

[4] The parties married in China on March 12, 1990. There are two children of the marriage: a daughter, Manshu, and a son, Chen. At the time of trial, Manshu was 33 and Chen was 28.

[5] In 2006 the parties emigrated with their children to Canada. They purchased a matrimonial home at 13 Orchid Court in North York, Ontario (“matrimonial home”, “13 Orchid Court”). Ms. Yang continues to reside there.

[6] The couple also purchased, among other properties, four preconstruction condos in Toronto, and two lots in a shopping center known as Pacific Mall.

[7] Over the years, the parties travelled extensively between Canada and China. This is, in part, because the parties owned two Chinese businesses: Huibei Taihe Electric (“TAIHE”) and its subsidiary Taiyou Paper Company (“TAIYOU”). A third company, Tongjian Pawn/Mortgage (“TJ PAWN”), is 90% owned by TAIHE.

[8] On November 25, 2011, the parties signed a separation agreement in China (“Party A” is Mr. Luo; “Party B” is Ms. Yang). I have reproduced, verbatim, the clauses relevant to this trial:

II: The parties' shares in Hubei Taihe Electric Co., Ltd. shall be altered as follows: Party A shall own 51% and Party B shall own 29% (the shareholder change procedures shall be completed prior to January 26, 2012), Party B shall authorize Party A to exercise shareholders' rights on [her] behalf and to handle all signatures related to company operating activities with the exception of a change of shareholders (for matters requiring the signature of all shareholders, Party A shall sign Party B's name), and neither party may transfer their respective shares to others without the parties' written consent (with Party B signing [her] own name). Party B shall have supervisory authority over the company's operating activities.

III: The real estate in Canada, bloor one (4109) and RCML (3608), shall belong to Party A, and the remaining apartments under Party A's name and the two stores in Pacific Mall shall belong to Party B, with Party A providing unconditional cooperation to any sale or change of name by Party B. The parties' current jointly-owned house at 13 orchid crt shall belong to Party B, and Party A shall cooperate with Party B's handling of the change matters. The remaining mortgage on this property ($930,000 Canadian dollars in total) shall be repaid by Party A. The apartments under Party B's name shall belong to Party B, and any new investments following the execution of this agreement shall belong to the respective parties and shall no longer constitute jointly owned property.

V: The children shall be jointly raised by the parties, who shall take turns to look after them. In the event either party requests a divorce after the children tum 18, the other party shall strictly adhere to this agreement and the parties shall agree to resolve all disputes through negotiation under any circumstances.

VI: The validity period of this agreement shall commence as of the date of the signatures of the parties and witnesses, and shall terminate as of the date of the parties' dissolution of their marriage. As of the effective date of this agreement, the investments, earnings, and debts under the parties' respective names shall be borne by the respective parties and have nothing to do with the other.

VII. The various investment dividends for this year shall be split fifty-fifty, with all dividends thereafter divided in accordance with the respective parties' shares.

[9] In July 2013, Mr. Luo commenced an Application before this Court for a declaration that the separation agreement was satisfied.

[10] A divorce was granted in China on October 19, 2015.

[11] There are numerous Chinese court decisions in relation to the parties. The parties agree that I may accept factual findings in those decisions. I address one such decision in the analysis section of these reasons.

[12] The dispute in this trial involves monies in both Chinese Yuan (RMB) and Canadian dollars (CAD). I take judicial notice of the fact that, as of the date of these reasons, 1 CAD is equivalent to about 5 RMB.

[13] Both parties required Mandarin interpretation. I thank the interpreter, Ann Zeng, for her assistance.

B. Parties’ Positions

i. Mr. Luo

[14] Mr. Luo says that he satisfied every term of the separation agreement. However, Mr. Luo also claims that after the separation agreement was signed, the parties agreed to vary how some of those terms could be satisfied. I discuss these alleged variations in the analysis section of these reasons.

[15] Mr. Luo says that upon separation he owed Ms. Yang $1,267,098 CAD. He claims he paid Ms. Yang over $5 million CAD – an overpayment of approximately $2.3 million. Mr. Luo does not seek the return of this money. He asks for a declaration from this court that he does not owe Ms. Yang anything more.

[16] Mr. Luo denies owing any retroactive child support to Ms. Yang.

[17] Mr. Luo denies owing Ms. Yang any money for their daughter Manshu’s condo.

ii. Ms. Yang

[18] While Ms. Yang initially challenged the separation agreement’s validity, she abandoned that claim prior to trial.

[19] Ms. Yang denies that the parties agreed to vary any of the terms of the separation agreement. She says she has received nothing from Mr. Luo in satisfaction of that agreement. In particular, she says, he:

Failed to transfer to her the full value of her shares in TAIHE as required by Clause II;
Failed to transfer to her the properties listed in Clause III;
Failed to repay the mortgage owing on the Matrimonial Home of $930,000 as required by Clause III;
Failed to pay child support, including under Clause V; and
Failed to pay a dividend to her as required by Clause VII.

[20] Ms. Yang acknowledges that Mr. Luo transferred $535,200 CAD to her between 2011-2013. She says those transfers were for “living expenses” in accordance with the couple’s practice while married. In support of this claim, Ms. Yang argues that the parties did not actually separate when they signed the separation agreement on November 25, 2011.

[21] Ms. Yang acknowledges receiving millions of Chinese RMB from Mr. Luo but states that this was for repayment of loans she made to their Chinese businesses and had nothing to do with the separation agreement.

[22] Ms. Yang claims that Mr. Luo owes retroactive child support from 2013 to 2020. She asks the court to find that the parties agreed that Mr. Luo would pay child support of $250,000 per year. In the alternative, she asks for Mr. Luo’s annual income to be imputed to 10 million RMB and child support calculated accordingly.

[23] Ms. Yang makes one additional claim for funds she advanced to the parties’ daughter to purchase a condo.

[24] In total, Ms. Yang seeks the following monetary relief:

$1,184,593 in lieu of the real property that was to be transferred to her under Clause III of the separation agreement;
$845,816.44 for the outstanding mortgage on the matrimonial home, also required under Clause III;
$1,750,000 in retroactive child support from 2013-2020; and
$200,925.34 for the funds she advanced for a condo for Manshu Luo.

III. ANALYSIS

[25] The facts as I find them are set out in the following analysis.

[26] After discussing credibility and reliability, I address the following issues:

Did Mr. Luo transfer the TAIHE shares pursuant to Clause II of the separation agreement?
Did Mr. Luo transfer the preconstruction condos and Pacific Mall stores pursuant to Clause III of the separation agreement?
Did Mr. Luo pay off the mortgage on the matrimonial home under Clause III of the separation agreement?
Does Mr. Luo owe retroactive child support, including under Clause V of the separation agreement?
Did Mr. Luo pay dividends to Ms. Yang pursuant to Clause VII of the separation agreement? and
Does Mr. Luo owe Ms. Yang for the purchase of Manshu’s condo?

[27] My analysis of each of the above issues includes whether the parties varied the relevant clause of the separation agreement.

Credibility and Reliability of the Witnesses

[28] The majority of my findings in this case turn on credibility and reliability.

[29] Credibility is a primary vehicle for determining the truth of alleged facts. In the words of Justice Diamond, this task can be rendered “unenviably difficult” depending on the narrative put forward by the parties: Konstan v. Berkovits, 2023 ONSC 497, 2023 CarswellOnt 932 at para. 8.

[30] In R. v. Gagnon, 2006 SCC 17, [2006] 1 S.C.R. 621 at para. 20, the Supreme Court of Canada cautioned that evaluating witness credibility is not “a science”.

[31] Traditional criteria used to assess witness evidence includes witness demeanour, inherent probability in the circumstances, and internal and external consistency: Prodigy Graphics Group Inc. v. Fitz-Andrews, 2000 CarswellOnt 1178, 96 A.C.W.S. (3d) 177 at para. 46 per Justice Cameron.

[32] Witness credibility is critical to the burden of proof: Konstan. Where a party has the burden to discharge a legal onus, I must satisfy myself, on a balance of probabilities, of “the credibility and reliability of the evidence in order to be in a position to make the relevant findings of fact”: Konstan, at para. 9.

[33] Credibility differs from reliability. Credibility has to do with whether someone is honest, while reliability concerns whether their testimony is accurate: R. v. Sanichar, 2013 SCC 4, [2013] 1 S.C.R. 54 at para. 19. One may find a witness generally credible yet doubt their reliability. Conversely, a witness who is not credible may still offer reliable testimony.

i. The parties

[34] Mr. Luo refused to answer at least two dozen questions put to him by both his own and opposing counsel. I am entitled to draw an adverse inference when a witness refuses to answer a question, and, logically, the degree of that adversity mounts as those refusals grow in number and scope. As I discuss further in these reasons, Mr. Luo also submitted several documents I do not find to be genuine. Mr. Luo’s demeanour combined with some of the evidence he tendered (discussed later in these reasons) leads me to find that, generally, he was not a credible witness. I also do not find Mr. Luo to be a reliable witness. His testimony was difficult to follow, circuitous and frequently delivered in very long answers. Despite several requests, he declined to modify the length of his answers, posing challenges for the interpreter and the court. I explain my assessment of Mr. Luo’s testimony in more detail in my analysis of the share transfer, real property, and matrimonial home.

[35] I find Ms. Yang more credible than Mr. Luo, because she appeared to make genuine attempts to answer questions put to her. That said, at points where her case was weaker, Ms. Yang fell back on the excuse of poor English, or blamed decisions made by her former lawyer. These attempts to explain away weak elements of her case reduced her overall credibility. Additionally, on certain points, I do not find Ms. Yang reliable. She tends to believe things because she wants them to be true. Chiefly, those beliefs relate to the nature of her relationship with Mr. Luo especially after they signed the separation agreement. I address this point in my analysis of retroactive child support.

ii. The witnesses

[36] Mr. Luo called two witnesses: a man named Hui Chen; and Mr. Luo’s sister, Ting Luo. Both witnesses worked for Mr. Luo.

[37] I do not find either witness credible. I will explain why in my analysis of the share transfer and real property. Briefly, though, when confronted with inconsistent evidence under cross-examination, they would refuse to answer. In addition, their testimony had a rote quality that made it appear rehearsed instead of genuine.

[38] I now turn to the issues in dispute. Because the parties make competing claims, for each issue I explain who bears the burden of proof on a balance of probabilities.

Did Mr. Luo transfer the TAIHE shares pursuant to Clause II of the separation agreement?

[39] Clause II of the separation agreement requires Mr. Luo to transfer to Ms. Yang 29% of his shares in TAIHE:

II: The parties' shares in Hubei Taihe Electric Co., Ltd. shall be altered as follows: Party A shall own 51% and Party B shall own 29% (the shareholder change procedures shall be completed prior to January 26, 2012), Party B shall authorize Party A to exercise shareholders' rights on [her] behalf and to handle all signatures related to company operating activities with the exception of a change of shareholders (for matters requiring the signature of all shareholders, Party A shall sign Party B's name), and neither party may transfer their respective shares to others without the parties' written consent (with Party B signing [her] own name). Party B shall have supervisory authority over the company's operating activities.

[40] Mr. Luo seeks a declaration that he satisfied this clause. Ms. Yang says that he did not. Mr. Luo bears the burden of proof.

[41] The testimony and evidence regarding Clause II are complicated. This is because, while Mr. Luo did make a transfer to Ms. Yang, the parties disagree about whether it was for TAIHE or its subsidiary, TAIYOU.

i. Mr Luo

[42] Mr. Luo testified that, after the parties signed the separation agreement, they varied the terms of Clause II. They agreed that, within 15 days of completing the TAIHE share transfer, Ms. Yang would give Mr. Luo approximately 9 million RMB.

[43] Mr. Luo stated that he made an initial transfer to Ms. Yang of 29% of TAIHE shares on or about January 20, 2012. According to him, everything happened “peacefully”, then, the next thing he knew, Ms. Yang had complained to the Industrial Bureau in China that the share transfer had occurred without her consent.

[44] Mr. Luo testified that because Ms. Yang “reneged”, he never received the 9 million RMB they had agreed to. Accordingly, he reversed the initial share transfer. Then, he said, in 2013 Ms. Luo threatened to disrupt the stability of TAIHE. He did not provide specifics about those threats. Stating that he felt pressured, Mr. Luo decided to transfer 9 million RMB to Ms. Yang after all.

[45] In sum, Mr. Luo’s testimony is that the terms of the TAIHE share transfer were varied after the parties signed the separation agreement. When Ms. Yang breached that variation, Mr. Luo did not seek to enforce the later agreement because of her subsequent threats against TAIHE. The final transfer – which consisted of money, not shares – occurred in 2013.

ii. Ms. Yang

[46] Ms. Yang’s consistent evidence, to Chinese authorities and at this trial, is that the original share transfer executed in January 2012 was not for TAIHE, but for TAIYOU. She alleges that Mr. Luo switched the first page of the transfer agreement so that it falsely read “TAIHE”. (In response, Mr. Luo has always said that Ms. Yang broke into his safe and switched the pages herself.)

iii. Higher People’s Court Decision

[47] At this point, it is useful to turn to the May 20, 2016, Civil Judgment of the Higher People’s Court of Hubei Province (English translation from original Chinese). This is an appeal, initiated by Mr. Luo, of a lower court decision that found Mr. Luo “fraudulently tried to transfer 29% of TAIHE to Ms. Yang having the value of TAIYOU”.

[48] The Higher People’s Court dismissed Mr. Luo’s appeal.

[49] The Higher People’s Court notes that “the parties are responsible for producing evidence to prove the facts on which their claims are based[.]” It states that “[c]onsidering together the analysis of the evidence presented by the parties...the credibility of Ping Yang is more than that by Renxing Luo”, and that “the subject matter of the transfer [was] the equity of TAIYOU” not TAIHE [emphasis added]. The Court went on to find:

a. Ping Yang submitted an original agreement with autographs of both parties on the first and second pages, which are clear and consistent one with the other.

b. The Share Transfer Agreement submitted by Mr. Luo was a photocopy, and the disputed part on the first page did not have the signatures of either party to the agreement. The print on the right half of the first page is “blurred”, and the print on the whole second page is clear.

c. There are “traces of alteration” with respect to date on the photocopy provided by Mr. Luo.

d. Aside from the first page, the text of the agreement is consistent with other agreements executed for TAIYOU, not TAIHE.

e. Renxing Luo’s claim that Ping Yang stole the original documents from his safe and altered them herself “could not be certainly deduced”.

f. Despite the fact that TAIYOU is an almost wholly owned subsidiary of TAIHE, nothing in Chinese law prevented the parties from entering in a share purchase agreement for TAIYOU.

[50] The Court stated that “Renxing Luo’s act of changing the equity registration of TAIHE Electric Co. on his own was corrected in the form of an administrative penalty...and Ping Yang’s shareholding in [TAIHE] was restored to 29%”. The Court declined to overturn that correction or the resulting restoration.

[51] As noted earlier in these reasons, the parties agree that I can rely on the decisions of Chinese courts. I am not bound by those decisions. But I am entitled to find that one or more Chinese courts describe the disputed share transfer accurately and, on the basis of the evidence that was before them, reach plausible conclusions about what happened.

iv. Finding

[52] I find the Higher People’s Court’s account of the purported share transfer persuasive. The Court makes several findings (paragraph 49, above) ultimately leading it to conclude that Mr. Luo’s account of the transfer was not credible.

[53] The Court’s analysis complements my own finding that Mr. Luo’s account is implausible and therefore, cannot be accepted on a balance of probabilities. In particular, Mr. Luo’s account at this trial, set out in paragraphs 42 to 45 of these reasons, raises the following issues:

a. Mr. Luo never explains why Ms. Yang would have agreed to give him back 9 million RMB when the separation agreement clearly states that she is entitled to 29% of TAIHE. Without any explanation, I find his account of the purported variation implausible.

b. Mr. Luo’s explanation of why he failed to take any steps to enforce the variation after Ms. Yang “reneged” on it is also implausible. Mr. Luo has not hesitated to turn to the Chinese courts for relief on other matters between the parties. I am not persuaded that Mr. Luo had a sincere fear that Ms. Yang was threatening TAIHE. Mr. Luo made a bare assertion about this threat without any elaboration. He refused to answer numerous questions about TAIHE and its operations. Mr. Luo provided no evidence that Ms. Yang either could have or did present a threat to TAIHE’s viability, for example by tainting its goodwill or some other kind of retaliation.

[54] I therefore am not persuaded on a balance of probabilities that the parties varied the terms of Clause II. Nor am I satisfied that Mr. Luo executed was a share transfer for TAIHE. Mr. Luo’s claim for a declaration that he satisfied Clause II of the separation agreement is dismissed.

Did Mr. Luo transfer the preconstruction condos and Pacific Mall stores pursuant to Clause III of the separation agreement?

[55] Clause III of the separation agreement states inter alia:

The real estate in Canada, bloor one (4109) and RCML (3608), shall belong to Party A, and the remaining apartments under Party A's name and the two stores in Pacific Mall shall belong to Party B, with Party A providing unconditional cooperation to any sale or change of name by Party B[.]

[56] The parties agree that the term “the remaining apartments” used in Clause III refers to four preconstruction condos in Toronto for which the following deposits were paid:

a. Suite 1502, 38 Grand Magazine Street (“1502”) - $57,288

b. Suite 1102, 5 St. Joseph Street (“1102”) - $94,380

c. Suite 1708, Unit 8, Level 17, Liberty Village (“1708”) - $29,685

d. Suite 1910, 170 Fort York Blvd. (“1910”) - $61,080

[57] The “two stores in Pacific Mall” were prospective storefronts the deposits for which were $118,260.

[58] Thus, when the separation agreement was signed, the total deposit amount for the preconstruction condos and Pacific Mall stores were $360,693 CAD.

[59] The parties agree that none of these properties were ever transferred to Ms. Yang. All of the condos have since been sold. The Pacific Mall storefronts were never built because the project went bankrupt.

[60] The parties’ dispute now is over what, if anything, Mr. Luo owes Ms. Yang.

[61] The parties agree that with respect to Pacific Mall, Mr. Luo was to transfer to Ms. Yang an amount equivalent to his initial deposits on the two stores. Mr. Luo says that he did. Ms. Yang says he did not.

[62] With respect to the preconstruction condos, Mr. Luo says that the parties agreed to vary Clause III so that he did not have to transfer title, but only give Ms. Yang an amount equivalent to the deposits. Ms. Yang says, first, there was no such variation and, second, Mr. Luo transferred nothing to her.

[63] Mr. Luo bears the burden of proof to show that he satisfied Clause III and/or any variation he says the parties made to it. However, Ms. Yang bears the burden of proof for the particular relief that she seeks.

i. The Preconstruction Condos

(a) Condo Letter of Commitment

[64] With respect to the four preconstruction condos, Mr. Luo testified that, after the parties signed the separation agreement, Ms. Yang advised him that she did not want the actual title to the properties, but simply the amount of the preconstruction deposits. He claims to have given her this amount as part of the millions of dollars he transferred to her.

[65] Mr Luo introduced a letter of commitment dated January 15, 2013, that states (English translation from original Chinese):

Here is to certify that two million yuan in total has been received from Mr. Luo Renxing on January 14, 2013 via cash remittance from Xiangcheng Branch, ICBC in Xiangyang City. The above payment is used as the down payment and advance payment of unfinished buildings agreed in the Separation Agreement signed on November 25, 2011 by both parties, which should be transferred from Luo Renxing to me. As I have received the payment of the above unfinished buildings, here I make commitment to not claim for transference of the above-mentioned unfinished buildings from Mr. Luo Renxing to me as agreed in the Separation Agreement signed on November 25, 2011 since the date of signing of this letter of Commitment, because it is also impossible for me to get bank loan to afford the follow-up funds and buy the above-mentioned unfinished building.

[66] Just after the above text are the words “Promisee: Yang Ping” and a signature in Chinese characters, the date, and a stamp.

[67] Mr. Luo called two witnesses: Hui Chen and Ting Luo. Mr. Chen spoke mainly to the letter of commitment for the condos. Ms. Luo spoke to Mr. Chen’s transfers of monies to Ms. Yang.

[68] Earlier in these reasons, I stated that I find that neither witnesses to be credible. I will now explain my finding in more detail.

(b) Testimony of Hui Chen (“Hui”)

[69] Hui testified that he was an employee of Mr. Luo at TAIHE for many years including between 2011 and 2013. Hui was presented with numerous documents in his examination-in-chief. He only acknowledged seeing one of them before: a statement about monies supposedly received for furniture in the parties’ matrimonial home at 13 Orchid. However, when Mr. Luo’s counsel asked Hui whether he had witnessed the parties actually signing this document, clearly expecting him to answer “yes”, Hui answered “no”. He said that he had onlt “inadvertently” viewed the document while he was in the office. Hui testified that he had never been asked to, nor did he, make financial transfers on behalf of Mr. Luo.

[70] On cross-examination, Hui was presented with three documents. These documents, initially submitted by Mr. Luo, are all dated December 20, 2017. As they are in Chinese, the interpreter read them out for the Court. The documents state that Mr. Chen witnessed Ms. Yang signing, respectively:

a. the letter of commitment acknowledging receipt from Mr. Luo of 2 million RMB for “all the deposits and prepayments for preconstruction condos”;

b. the letter of commitment acknowledging receipt from Mr. Luo of 1,027,760 RMB for furniture for 13 Orchid Court; and

c. a letter of commitment acknowledging receipt from Mr. Luo of 12,193,900 RMB for his purchase of 13 Orchid Court, along with Yang’s promise that after the parties’ divorce she would transfer the property back to Mr. Luo.

The three documents have Hui’s name, passport number, and fingerprint.

[71] Hui refused to attest to the validity of any of the documents listed above that bear his name and describe what he supposedly witnessed. He testified that: everything had happened too long ago, he could not remember, and he “did not wish to get involved”.

[72] The documents apparently signed by Hui would have bolstered Mr. Luo’s claims that he transferred a great deal of money to Ms. Yang after the parties separated. Indeed, these documents were initially introduced by Mr. Luo. However, given that Hui disavowed them, they are not reliable.

[73] In his sworn testimony before this Court, Hui was unwilling to repeat and avow the most pertinent parts of his previous statements. I find that his testimony is neither credible nor reliable and must be rejected.

[74] The second witness for Mr. Luo was his sister, Ting. Ting attested to a Chinese-language document issued in her name on June 17, 2013. The document says that between 2011 and 2013, Ting transferred to Ms. Yang a total of $535,200 CAD using other peoples’ names and accounts. When asked why she made serial transactions involving so many people, Ting cited a $50K USD annual limit on foreign transfers out of China. Ms. Yang’s counsel did not dispute this limit.

[75] When asked in her examination-in-chief why she selected (or was told to select) particular accounts for the transfers, Ting at first refused to answer. She said that the money belonged to Mr. Luo, not her. She then said that Mr. Luo asked her to send the various amounts in the course of her employment for him at TAIHE. However, she refused to answer who actually arranged the transfers: her or Mr. Luo. She also refused to answer how the money came to be transferred to the various persons’ accounts in the first place. Ting recognized the transfer slips when put to her, and said she had procured them from the bank, but stated that she did not know their purpose.

[76] Ting said she had transferred even more money to Ms. Yang on Mr. Luo’s behalf but could not be more specific, saying that it had occurred too long ago.

[77] On cross-examination, counsel for Ms. Yang took Ting back to the January 15, 2013 letter of commitment about the condos. Included with this document are the various transfer slips that together made up the total amount purportedly transferred to Ms. Yang for the condos. Because these transfer slips are in untranslated Chinese, I could not read them. However, I rely on the exchanges during Ms. Ting’s cross-examination which were not contested. Ms. Ting acknowledged sending at least one transfer. She refused to speak to its purpose, although the memo line says “education for tuition” which I take to mean tuition expenses for one or more of the children. Ms. Ting said that the bank requires something to be written on this line but does not really care what someone writes. Therefore, she said, a statement on a memo line is not proof of a transfer’s purpose. At least one transfer was from a Chinese account belonging to Ms. Yang. Ms. Ting said that any money in that account did not really belong to Ms. Yang, but to Mr. Luo.

[78] While I have already stated my findings in relation to the TAIHE share transfer required under Clause II, I note that, in her examination-in-chief, Ting stated that she was also briefly present when the parties signed a document concerning a “share transfer”. She stated that she knew “a little” of what the document pertained to, but only roughly. She did not say that she read the document. Counsel for Mr. Luo relied on Ting’s statements to substantiate the claim that Mr. Luo gave Ms. Yang 9M RMB to take over her shares in TAIHE. Ting claims to have assisted in the transfer which was from her brother’s account. Recall that the Higher People’s Court found this transfer to be fraudulent. I have also rejected Mr. Luo’s account of the transfer as not credible.

[79] Counsel for Ms. Yang then showed Ting excerpts from the Higher People’s Court 2016 decision. Counsel pointed to places in that decision where the Court found Ting not credible in a number of respects. Mr. Luo reacted to this line of questioning by calling Ms. Yang’s counsel a “scumbag”, and Ting did not respond.

[80] According to the Higher People’s Court decision, Ting acquired the entire equity of TAIYOU in 2013. When asked about this by Ms. Yang’s counsel, Ting refused to answer.

[81] At this point I will note that in Ms. Yang’s examination-in-chief, she stated that the condo receipt was an obvious forgery. She was unshaken in this assertion.

[82] I find Ting neither a credible nor reliable witness. She was evasive. She refused to answer questions. She frequently said she could not remember events. The only part of her testimony that I find credible is that she was responsible for making several cash transfers to Ms. Yang between 2011 and 2013. The parties agree that these cash transfers totaled $535,200 CAD. I am unable to rely on Ting regarding any of the details about those transfers, or their purpose.

[83] I am not persuaded on a balance of probabilities that the letter of commitment for the condos is genuine. Therefore, I reject Mr. Luo’s claim that the parties agreed to vary Clause III of the separation agreement.

ii. The $535,200 CAD transfer

[84] As stated above, the parties do not dispute that (a) the transfer of the Pacific Mall stores became moot after that project went bankrupt; and (b) none of the condo titles were ever transferred to Ms. Yang and all of them have since sold. The parties agree that Mr. Luo was to transfer an amount equivalent to the deposits for Pacific Mall to Ms. Yang. While I have not found on a balance of probabilities that there was a similar agreement for the preconstruction condos, the parties’ real argument over the condos is about money.

[85] At this point, it is necessary to consider whether Mr. Luo’s transfer of $535,200 CAD to the parties’ joint TD chequing account ending in *67883 (“joint account”) satisfies any of Mr. Luo’s obligations under Clause III.

[86] The parties disagree about the transfer’s purpose. Mr. Luo argues that it was at least partially in satisfaction of the separation agreement. Ms. Yang says that it was for “family expenses” including monies disbursed by Mr. Luo himself. Mr. Luo admitted on cross-examination that he continued to make withdrawals from the parties’ joint account after separation.

[87] Over the course of the trial, Mr. Luo’s account of the purpose of this transfer shifted. At times he described the funds as relating to condo transfers. At other times he said it was for child support (even though, as I discuss below, he denies owing any child support to Ms. Yang). When it comes down to it, Mr. Luo wants to be given credit for transferring this sum.

[88] I do not find Mr. Luo’s testimony about the purpose of these transfers credible. Mr. Luo changed the alleged purpose of the transfers over the course of the trial to whatever was most suitable to the argument he was making at the time. In addition, I am persuaded that he had access to the funds after he transferred them to the parties’ joint account and made at least some withdrawals from that account. I need not decide whether, as Ms. Yang suggests, the transfers were for “family expenses”. It suffices that I am not persuaded that Mr. Luo made the transfer of $535,200 CAD in satisfaction of Clause III of the separation agreement.

iii. Remedy

[89] Taking all of the foregoing into consideration, Mr. Luo’s request for a declaration that he satisfied Clause III with respect to the preconstruction condos and Pacific Mall storefronts is dismissed.

[90] That leaves the question of the appropriate remedy. As stated above, the total deposits for the preconstruction condos and Pacific Mall stores are $360,693 CAD. Ms. Yang asks for $1,184,593, consisting of (a) the original deposits made on the Pacific Mall stores; and (b) the original deposit paid for each condo plus, for each condo, the increase in value from the final purchase price to its appraised value on June 26, 2020.

[91] Ms. Yang’s request for the amount of the Pacific Mall deposits is granted.

[92] Ms. Yang’s request in relation to the four condos is not straightforward. She must persuade me that it is appropriate to award her each condo’s increase in value from its purchase price to 2020. Ms. Yang did not cite the law supporting such a remedy. Ms. Yang asks this Court to assume that, but for Mr. Luo’s actions, she would have maintained ownership of all four properties through their final construction and for several years afterwards. Other than alluding to the fact that Ms. Yang is a “woman of means” who easily could have assumed such a financial responsibility, her counsel presented no evidence to support this assumption. I find this argument speculative and legally unclear. Therefore, I am not persuaded that Ms. Yang is owed recompense based on the value of the four condos post-construction.

[93] Mr. Luo must compensate Ms. Yang based on the preconstruction deposits. The total amount owing is $360,693. Prejudgment interest shall be added to this amount.

Did Mr. Luo pay off the mortgage on the matrimonial home under Clause III of the separation agreement?

[94] In addition to the condos and Pacific Mall stores, Clause III of the separation agreement states:

III: ... The parties' current jointly-owned house at 13 orchid crt shall belong to Party B, and Party A shall cooperate with Party B's handling of the change matters. The remaining mortgage on this property ($930,000 Canadian dollars in total) shall be repaid by Party A. ...

i. 13 Orchid Court Letter of Commitment

[95] Mr. Luo says that the parties subsequently varied this term. He bears the burden of proof for any alleged variation and for his requested declaration that he satisfied this portion of Clause III.

[96] In support of the alleged variation, Mr. Luo points to a letter of commitment signed on January 19, 2012. The letter states (translated from Chinese):

Ms. Yang Ping promises that one set of house property situated in 13 orchid crt in Toronto, Canada was transferred to Luo Renxing at the price of CAD two million voluntarily, which belonged to Yang Ping previously as agreed in the Separation Agreement signed between Yang Ping and Luo Renxing on November 25, 2011. And Ms. Yang Ping also agreed that the above payment can be made by installment in the form of RMB within one and half year after the signing of this Letter of Commitment under the condition of non-dissolution of marriage. After receiving all the payments from Luo Renxing, the actual ownership of the above house property will be owned by Luo Renxing. But property transfer procedure will not be handled temporarily as long as the marriage is not dissolved for the sake of not influencing on children who will continue to live with Ms. Yang Ping in this house property. Once the marriage is dissolved, Ms. Yang Ping makes commitment to cooperate with Luo Renxing without preconditions to handle the whole transfer procedure for 13 orchid crt in one year after dissolution of marriage, and Luo Renxing will afford all the acquisition fees.

[97] “Promisee: Yang Ping” is typed at the bottom of this letter. A signature in Chinese characters appears.

ii. Finding

[98] I am not persuaded that the 13 Orchid Court letter of commitment is genuine. In her examination-in-chief, Ms. Yang firmly denied signing it. This is one of the documents for which Mr. Luo’s witness, Hui Chen, purportedly declared that he had witnessed Ms. Yang’s signature on it. As I have already noted, Hui would not adopt this declaration under oath, stating inter alia that the event in question had “happened too long ago”.

[99] Mr. Luo did not explain why he would want to keep the matrimonial home when the evidence shows he had already vacated it and established a residence elsewhere.

[100] Therefore, I am not satisfied on a balance of probabilities that the parties agreed to vary Clause III’s terms with respect to Mr. Luo paying the outstanding mortgage on 13 Orchid Court. As there is no evidence that Mr. Luo actually paid the mortgage, Mr. Luo’s request for a declaration that he satisfied Clause III is dismissed.

iii. Remedy

[101] Ms. Yang seeks $845,816.44 consisting of: the original $930,000 mortgage on 13 Orchid Court minus $84,183.86 in mortgage payments that Mr. Luo paid after 2011. Ms. Yang’s requested relief is granted.

Does Mr. Luo owe retroactive child support, including under Clause V of the separation agreement?

[102] Mr. Luo argues that he satisfied Clause V of the separation agreement and seeks a declaration to that effect. He bears the burden of proof on this issue.

[103] Ms. Yang claims retroactive child support in the amount of $250,000 per year from 2013 to 2020, for a total of $1,750,000. In the alternative, she asks for child support based on an imputed annual income to Mr. Luo of 10M RMB ($1,887,000) leading to a total of $1,706,589.60. Ms. Yang bears the burden of proof on this issue.

[104] Recall that under Clause VI of the separation agreement, the agreement lapsed on the dissolution of the parties’ marriage, which occurred on October 19, 2015. Therefore, to the extent that Clause V applies it is only until October 19, 2015.

[105] At the time of separation, Manshu Luo was 20 and Chen Luo was 15.

[106] Ms. Yang made a claim for child support in her first Answer filed in 2013. At that time, Manshu was 22 years old.

[107] Resolving the parties’ competing claims raises the following issues:

a. What if anything does Clause V of the separation agreement provide regarding child support between January 1, 2013, and October 19, 2015?

b. Did the parties make a separate agreement that Mr. Luo would pay child support in the amount of $250,000 per year?

c. If there was no separate verbal agreement, is it nevertheless appropriate to impute to Mr. Luo an annual income of 10M RMB, or some other amount, for the purpose of determining child support?

i. What does Clause V provide?

[108] Clause V of the separation agreement states, inter alia:

V: The children shall be jointly raised by the parties, who shall take turns to look after them.

[109] While Clause V does not specifically mention child support, during the trial the parties agreed that they understood the term “jointly raise” to mean that each of them would contribute to the children’s support.

[110] Mr. Luo argues that he satisfied Clause V by forwarding money to the children directly. Ms. Yang does not dispute that Mr. Luo forwarded money to Manshu and Chen, but says it was not enough. Given Ms. Yang’s acknowledgment, combined with Clause V’s ambiguous language, I find on a balance of probabilities that under Clause V Mr. Luo was entitled to forward monies directly to the children rather than to Ms. Yang.

[111] That leaves the question of whether Mr. Luo forwarded sufficient monies to satisfy his obligation to “jointly raise” the children. The parties did not provide guidance about how to interpret that term in this context. Mr. Luo did not elaborate on how much money he forwarded to the children. Ms. Yang was more focused on her claim for retroactive support (discussed below).

[112] I find that the term “jointly raise” means that the parties were to contribute a roughly comparable amount towards the children’s support.

[113] Mr. Luo provided no evidence of exactly how much money he directly forwarded to Manshu and Chen between 2013 and 2015. He simply testified that he sent them substantial amounts. However, in her examination-in-chief, Ms. Yang stated that Mr. Luo forwarded $26,000 to the children with $16,000 of that going to Chen. While the paucity of information regarding this support is unfortunate, I am satisfied on a balance of probabilities that, in total, Mr. Luo paid $26,000 directly to the two children, and that $16,000 of this was to Chen.

[114] Conversely, Ms. Yang said that she contributed at least $40,000 per year, per child. While Ms. Yang did not have documentation of this, her descriptions credibly suggests that those expenses were at least $40,000 per year for both children together. I find Ms. Yang credible on this issue, not least because she forthrightly acknowledged that Mr. Luo did forward monies to the children. I am therefore not persuaded on a balance of probabilities that Mr. Luo paid a roughly comparable amount in support to the children.

[115] Therefore, I do not find on a balance of probabilities that Mr. Luo satisfied Clause V’s requirement that he would “jointly raise” the children between the years 2013 and 2015. He paid some support to the children, but not enough to satisfy Clause V. His request for a declaration to that effect is dismissed.

ii. Did the parties make a separate verbal agreement regarding child support?

[116] Ms. Yang argues that the parties had a separate, verbal agreement that Mr. Luo would pay $250,000 per year in child support for both children. She says that he failed to comply with this agreement.

[117] In order for Ms. Yang to prevail, I must be persuaded on a balance of probabilities that the parties had the required “meeting of the minds” necessary to establish a true verbal agreement: Spencer v. Hutchings, 2022 ONSC 1555, 70 R.F.L. (8th) 368 at para. 35.

[118] I only have Ms. Yang’s word as evidence for this purported agreement. While I find Ms. Yang more credible than Mr. Luo, on this point I do not find her reliable.

[119] Ms. Yang’s testimony regarding this verbal agreement is part of a broader narrative she presented throughout the trial of “trusting” Mr. Luo. For example, she states that even though she signed the separation agreement in 2011, she did not believe that the parties were actually separating. Ms. Yang did not clearly explain an alternative reason for signing the separation agreement. Nor did she explain why she continued to trust Mr. Luo after the parties signed it.

[120] It is possible that Ms. Yang misunderstood some of her conversations with Mr. Luo. It is also possible, however, that Ms. Yang could not accept the breakdown of the parties’ marriage and came to believe what she wished was true.

[121] There is not enough reliable evidence before me to establish that the parties reached a verbal agreement about child support separate from Clause V of the separation agreement.

[122] Therefore, I am not persuaded on a balance of probabilities that the parties had a verbal agreement that Mr. Luo would pay Ms. Yang child support of $250,000 per year between 2013 and 2020.

iii. In the alternative to (ii), how much, if any, income should be imputed to Mr. Luo?

[123] In the alternative to finding a verbal agreement for $250,000 in child support, Ms. Yang asks me to impute to Mr. Luo an annual income of 10 million RMB. Ms. Yang’s argument requires me to infer Mr. Luo’s income from the asserted value of Mr. Luo’s companies and holdings. While Mr. Luo’s financial statements for 2014 and 2018 do list the value of his companies in the millions of dollars, aside from a rough “back of the napkin” calculation Ms. Yang did not provide a reliable formula for imputing the requested amount over the seven-year period that I am being asked to consider.

[124] Imputing income to a party requires evidence. A judge may not simply pick a number: Drygala v. Pauli, 2002 CanLII 41868 (ON CA), 219 D.L.R. (4th) 319, 164 O.A.C. 241 at para. 44. I find that imputing the income requested by Ms. Yang would be arbitrary.

[125] Having said that, given the fundamental importance of child support (D.B.S. v. S.R.G., 2006 SCC 37, [2006] 2 S.C.R. 231; Michel v. Graydon, 2020 SCC 24, [2020] 2 S.C.R. 763), I may impute a different income to Mr. Luo if it is supported by the evidence. While there are some challenges to doing so in this case, I find that the evidence permits me to make reasonable inferences about Mr. Luo’s income between 2013 and 2020. Mr. Luo testified that he did not think he had to pay any support to Ms. Yang but could do so directly to the children. I have already found that he paid $26,000 in this manner, of which $16,000 went to Chen Luo.

[126] I note, first, that I am unable to award Ms. Yang retroactive child support for Manshu Luo. Manshu was already 20 when the parties separated, and 22 in 2013. I am not persuaded that she was a child of the marriage during the relevant time period. Ms. Yang’s claim with respect to Manshu Luo is dismissed without prejudice to Manshu should she wish at some point to bring her own claim.

[127] The situation is different for Chen Luo who, between 2013 and 2020, was either a minor residing with Ms. Yang or pursuing a Bachelor of Commerce degree at the University of Toronto. I find on a balance of probabilities that Chen was a child of the marriage until the end of June 2020 when he would have received his degree.

[128] I find on a balance of probabilities that Mr. Luo was obligated to pay child support for Chen Luo to Ms. Yang from January 1, 2013 until June 30, 2020. By his own admission, Mr. Luo paid Ms. Yang no child support during this time. I have accepted as a fact that he paid $16,000 to Chen directly.

[129] Ms. Yang claims retroactive child support for the years 2013 to 2020. The parties’ separation agreement was in effect until October 19, 2015. I have already found that Clause V’s use of the term “jointly raise” means that the parties were to contribute in a roughly comparable manner to support. Therefore, between January 2013 and October 2015, whatever child support is owing from Mr. Luo to Ms. Yang based on his income is reduced by 50%.

[130] There is no evidence before this Court that, after the parties’ divorce in 2015, they had an agreement about child support. During this period, Chen resided primarily with Ms. Yang in Toronto. I find that between October 19, 2015, and June 30, 2020, Mr. Luo was obligated to pay the entire table amount for one child corresponding to his income. As I will shortly address, Mr. Luo may be owed credit for the direct payments to Chen.

[131] For the purpose of determining Mr. Luo’s income, I turn to his sworn financial statements.

[132] Mr. Luo filed two financial statements for the years in question:

2017 (FS 2018) – gross income of $51,092 with annual expenses of $314,492.64
2020 (FS 2021) – gross income of $13,567 but annual income of $51,096 and annual expenses of $314,492.64

[133] In 2013, Mr. Luo filed a financial statement for 2012 showing a gross income of $33,226.71 and annual expenses of $197,144.52.

[134] The financial statements show such a tremendous disparity between Mr. Luo’s annual income and his expenses that I am unable to accept them at face value. The financial statements for the years 2017 and 2020 show the exact same amount for expenses: $314,492.64. Mr. Luo’s gross income in 2017 is within four dollars of his “annual income” for 2020.

[135] At the relevant times, Mr. Luo owned at least two highly profitable businesses in China. He was engaged in numerous real estate ventures in Canada.

[136] I am persuaded on a balance of probabilities that Mr. Luo had substantial financial resources available from 2013 to 2020, when he had an obligation to pay child support for Chen Luo.

[137] I do not accept that Mr. Luo’s gross income in 2020 was $13,576 given that he lists an annual income for that year of $51,096.

[138] In the circumstances, I find it reasonable to impute to Mr. Luo an income for 2013-2020 that is the average of $33,226.71 and $51,092: $42,159. His actual income is likely higher than this, but given the caution with which I must approach imputation, I find it prudent to stay within figures that are, at least, related to the statements filed with the Court.

[139] Consequently, Mr. Luo is liable for retroactive child support based on the table amounts applied to an imputed income of $42,159 from January 1, 2013 to June 30, 2020. Between January 1, 2013 and October 19, 2015, the amount owing shall be reduced by 50% to take account of the parties’ obligations, under Clause V, to “jointly raise” the children by contributing roughly comparable sums to the children’s support.

[140] I have found that Mr. Luo paid $16,000 directly to Chen between 2013 and 2015. Mr. Luo is owed some credit for that amount in these calculations. The question is: how much credit?

[141] My primary duty under the Family Law Rules is to deal with cases in a just manner. For the following reasons, I do not think that giving Mr. Luo full credit would be just:

As stated above, I am not persuaded on a balance of probabilities that Mr. Luo satisfied his obligation under Clause V to “jointly raise” Chen.
Nothing in Clause V required Mr. Luo to pay money directly to Chen rather than Ms. Yang. Between 2013 and 2015, Chen was a minor residing primarily with Ms. Yang in Ontario. Mr. Luo did not explain his decision to send money directly to his son rather than the mother who was primarily raising him.
Chen was not called as a witness, and there is no evidence of how the money sent to him was spent.
I have imputed an income to Mr. Luo that is almost certainly less than his actual income.
Mr. Luo provided no documentation for his payments to Chen. It is only through the forthrightness of Ms. Yang that I am able to make a finding about them at all.

[142] In the circumstances, I find it just to give Mr. Luo a credit of 50%: $8,000.

[143] The child support guidelines were updated on November 22, 2017. For the purpose of calculating retroactive support, the table amount owing at the beginning of a given month shall be used for the entire month. Any increase in payable child support shall take effect on the first day of the following month.

[144] Based on the above parameters, I calculate child support as follows (rounded to the nearest dollar):

Year (mths)	Income	Table CS	Adjustment	Total
2013 (12)	$42,159	$380 x 12	50% $4560	$2280
2014 (12)	$42,159	$380 x 12	50% $4560	$2280
2015 (10)	$42,159	$380 x 10	50% $3800	$1900
2015 (Nov-Dec) Parties’ divorce	$42,159	$380 x 2	none	$760
2016 (12)	$42,159	$380 x 12	none	$4560
2017 (Jan-Nov)	$42,159	$380 x 11	none	$4180
2017 (Dec) CSG update	$42,159	$383 x 1	none	$383
2018 (12)	$42,159	$383 x 12	none	$4596
2019 (12)	$42,159	$383 x 12	none	$4596
2020 (Jan-Jun)	$42,159	$383 x 6	none	$2298

[145] Mr. Luo owes Ms. Yang $27,833 in retroactive child support for Chen Luo. Given his credit of $8,000, Mr. Luo shall pay to Ms. Yang $19,833.

Did Mr. Luo pay dividends pursuant to Clause VII of the separation agreement?

[146] Clause VII of the separation agreement states:

VII. The various investment dividends for this year shall be split fifty-fifty, with all dividends thereafter divided in accordance with the respective parties' shares.

[147] Mr. Luo bears the burden of proof on this issue. He argues that he satisfied this clause through a 16 million RMB payment to Ms. Yang in 2011.

[148] Ms. Yang acknowledges receiving the 16 million RMB dividend for the company TJ PAWN in 2011. Ms. Yang says that she immediately loaned this money back to the company. She says she subsequently received millions of RMB as loan payments.

[149] I mention Ms. Yang’s account of the loan simply to provide context for her response. Whether she made such a loan is irrelevant to whether Mr. Luo made a dividend payment as required under Clause VII. The parties agree that there was a dividend payment. I therefore grant Mr. Luo’s request for a declaration that he satisfied Clause VII.

Does Mr. Luo owe Ms. Yang for the purchase of Manshu Luo’s Condo?

[150] Ms. Yang claims repayment of monies she forwarded to Manshu Luo, in 2014, to fulfil Mr. Luo’s “broken promise” to buy Manshu a condo located at 1907-170 Fort York Boulevard (“1907”). Ms. Yang bears the burden of proof.

[151] Mr. Luo states that he fulfilled his promise to Manshu. Ms. Yang says he did not. Because of how I have decided this issue, I will accept Ms. Yang’s claims at face value, that is, that Mr. Luo broke his promise and, as a result, Ms. Yang forwarded to Manshu’s bank account transfers totaling $200,925.34.

[152] The purchase of 1907 is unrelated to the parties’ separation agreement. The problem for Ms. Yang’s claim is that, assuming that Mr. Luo did make such a promise, he made it to Manshu, not Ms. Yang. At the time of the condo purchase, Manshu was an adult.

[153] There is no evidence before me that Ms. Yang had any ownership or other financial interest in unit 1907.

[154] I appreciate that Ms. Yang believes that Mr. Luo promised something to Manshu and that, as Manshu’s mother, she felt an obligation to fulfil that promise when he did not. But that was Ms. Yang’s choice. Manshu Luo was neither a party to this proceeding, nor called as a witness.

[155] This trial is a dispute between Mr. Luo and Ms. Yang. The Court cannot hold Mr. Luo accountable to Ms. Yang based on a promise he made to someone else.

[156] Ms. Yang’s claim is therefore dismissed.

III. ORDER

[157] In conclusion, I make the following orders.

a. Mr. Luo’s request for a declaration that he satisfied the separation agreement signed by the parties on November 25, 2011, is granted in part:

i. I find that Mr. Luo did satisfy Clause VII of the separation agreement.

ii. I find that Mr. Luo did not satisfy Clause II of the separation agreement.

iii. I find that Mr. Luo did not satisfy Clause III of the separation agreement.

iv. For want of sufficient evidence, I find that Mr. Luo did not satisfy Clause V of the separation agreement.

b. Mr. Luo shall pay to Ms. Yang $360,693 plus prejudgment interest in relation to the preconstruction condos and Pacific Mall storefronts mentioned in Clause III of the separation agreement.

c. Mr. Luo shall pay to Ms. Yang $845,816.44 in relation to Clause III of the separation agreement regarding the parties’ former matrimonial home located at 13 Orchid Court, Toronto.

d. Ms. Yang’s request to impute to Mr. Luo an income of 10M RMB is denied.

e. Ms. Yang’s claim for retroactive child support for Manshu Luo is dismissed, without prejudice to Manshu Luo should she wish to bring a claim for retroactive child support.

f. Ms. Yang’s claim for retroactive child support for Chen Luo is granted. Mr. Luo shall pay Ms. Yang retroactive child support for Chen Luo in the amount of $19,333. A Support Deduction Order shall issue.

g. Ms. Yang’s claim for $200,925.34 in relation to the condo located at 1907-170 Fort York Blvd, Toronto is dismissed.

[158] Within 21 days of this decision the parties shall submit their arguments regarding costs (no longer than five pages each), their Bills of Costs and their prior Offers to Settle. The parties shall create a new bundle in Case Center, entitled “Costs”, and upload to it the required materials.

Mathen, J.

Released: October 27, 2024

Luo v. Yang , 2024 ONSC 5884

Case Summary

I. INTRODUCTION

II. BACKGROUND

III. ANALYSIS

III. ORDER

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Financial Outcomes

Issues