COURT FILE NO.: FS-23-45784
DATE: 2025-01-21
ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:
Syed Mahabub Zunnurain, Applicant
– and –
Sarat Salma Chowdhury, Respondent

Michael Tweyman, for the applicant
David Tobin, for the respondent

HEARD: December 9, 2024

SUPPLEMENTARY REASONS FOR JUDGMENT
Ranjan K. Agarwal

I. INTRODUCTION

[1] On October 7, 2024, I released reasons for judgment in this family law application. See Zunnurain v. Chowdhury, 2024 ONSC 5552. Following the release of my reasons, the parties submitted that I should change parts of my order because it contained several mistakes or because I didn’t decide a matter that was before the court.

[2] As I discuss below, I accept that I either made a mistake or didn’t decide any issue submitted at trial. As a result, I order that:

(a) Sarahat shall pay $492,538.07 to Syed for his share of the Bashundhara plot;
(b) Syed’s claim for his share of the Australian properties is limitations-barred;
(c) Sarahat is entitled to $72,726.44 as agreed-upon damages;
(d) the proceeds from the sale of the matrimonial home shall be used to pay the judgment;
(e) paragraph 119 of the reasons for decision is deleted;
(f) Syed is only entitled to a 50 percent interest in the Bashundhara plot; and
(g) Syed is only liable for 50 percent of the mortgage on the matrimonial home as of the valuation date.

II. BACKGROUND

[3] The court may, on a motion, change an order that contains a mistake or needs to be changed to deal with a matter that was before the court but that it didn’t decide. See Family Law Rules, r 25(19).

[4] Trial judges sometimes make mistakes in their orders. They have a time-limited opportunity, between making an order and entering it, to change it to rectify those mistakes, either on their own initiative or on a party’s request. See SS&C Technologies Canada Corp. v. The Bank of New York Mellon Corporation, 2024 ONCA 675, para 69.

[5] Though trial judges have a broad discretion to change an order until it’s entered, that discretion isn’t unlimited. The order should be changed only if the trial judge overlooks “outcome-determinative matters”. Trial judges also have to explain changes to orders. See SS&C Technologies, at paras 70-71.

III. ANALYSIS AND DISPOSITION

[6] The parties identified seven issues that one or both say requires a change:

(a) what results from the order at paragraph 6(d) of the reasons that “Syed was the beneficial owner of half of the Bashundhara plot on the valuation date, which had a value of C$985,076.14”?
(b) what results from the order at paragraph 6(e) that “the value of the property that Sarahat and Syed owned on the valuation date includes $470,867.19 each in the proceeds from the sale of the Australian properties”?
(c) the reasons for judgment did not decide the (i) Den Mahr, or (ii) Sarahat’s “pre-payment” of $50,000 to Syed under Justice Emery’s order, dated July 11, 2023;
(d) if it was my intention that Syed receive compensation for his beneficial interests in paragraphs 6(d) and (e), Syed seeks to vary paragraph 102(b) of the decision so that Sarahat’s share of the sale proceeds are paid to him to compensate him in part for what is owing;
(e) what, if any, adjustments need to be made to the order as result of the alleged mistake made by me, at paragraph 119, that C$308,067.89 in bonds still exist?
(f) given the findings made, did I turn my mind to Syed’s position that he was entitled to 100 percent trust interest in the Bashundhara property versus the 50 percent ordered?
(g) what is the effect of the increase to the mortgage on matrimonial home after separation?

A. What results from the order at paragraph 6(d) of the reasons that “Syed was the beneficial owner of half of the Bashundhara plot on the valuation date, which had a value of C$985,076.14”?

B. What results from the order at paragraph 6(e) that “the value of the property that Sarahat and Syed owned on the valuation date includes $470,867.19 each in the proceeds from the sale of the Australian properties”?

[7] Paragraphs 103 to 113 discuss the ownership of the Bashundhara plot. Syed transferred the plot to Sarahat in July 2019, before they separated. She sold the property in 2022, after they separated. Because Sarahat was the only titleholder to the plot, she could sell it without Syed’s consent. I found that Syed had a beneficial interest in half of the plot on the valuation date. I also found that the plot’s value was $985,076.14.

[8] Paragraphs 114 to 128 discuss the ownership of the proceeds from the sale of the Australian properties. These properties were sold in late 2019, before the parties separated. The sale proceeds were transferred to Sarahat’s bank accounts. On the valuation date, she had C$941,734.37 in bonds. These funds were eventually transferred to Sarahat’s Canadian bank accounts. Again, she didn’t need Syed’s consent for these transactions because she held the bonds in her name only. I found that Syed had a beneficial interest in half of this asset on the valuation date.

[9] As a result, I found that each of Syed’s and Sarahat’s net family property on the valuation date included $492,538.07 for Bashundhara plot and $470,867.19 for the bonds. Because of my findings about the parties’ business debts at paragraphs 138-151, the addition of these assets to Syed’s net family property didn’t affect either party’s equalization claim.

[10] Syed argues that I didn’t decide whether he’s entitled to payment in compensation for these amounts. I agree. Though this issue wasn’t focused on in his closing submissions, he pleaded it and it was a term requested in his draft order. But my reasons only deal with the equitable calculation, division, and distribution of the value of net family property. I didn’t deal with his equitable trust claim. The resolution of this issue is outcome-determinative: if Syed is correct, he will have a significant monetary judgment.

[11] Sarahat submits that I did deal with this claim, and rejected it. She points to paragraph 122 of my reasons (which deal with the Australian properties): “The parties’ submissions disclose that Syed’s claim is for equalization. As a result, Syed’s claim isn’t statute-barred. It’s not a claim for a resulting trust so the basic limitation period doesn’t apply—the properties have long been sold, and such a claim is outside my jurisdiction.”

[12] In paragraph 122, I was responding to Sarahat’s argument that Syed’s equalization claims were: (a) limitations-barred; and (b) outside this court’s jurisdiction. I didn’t appreciate that Syed was also making an equitable trust claim about the properties. I’ve amended paragraph 122 to correct this mistake, and released amended reasons for judgment.

[13] As I now understand that Syed is also seeking payment in compensation for his share of the sale proceeds, I must determine those claims. Sarahat makes three arguments why I should dismiss Syed’s claims: (a) Syed didn’t plead unjust enrichment; (b) this court has no jurisdiction over foreign assets; and (c) Syed’s claim for the proceeds from the sale of the Australian properties is limitations-barred.

1. The claim was properly pleaded.

[14] Syed’s application claims for an order “on the basis of resulting or constructive trust, that Syed is the 100% beneficial owner of the properties and the proceeds of sale from the properties….” In his draft order, he seeks an order that Sarahat “transfer” a sum equivalent to the value of the Bashundhara plot and the Australian properties to him. Sarahat submits that Syed didn’t plead unjust enrichment and, as a result, can’t claim an equitable trust remedy.

[15] Under section 10(1) of the Family Law Act, RSO 1990, c F.3, the court can make a determination “as the ownership or right to possession of a particular property”, and “order payment in compensation for the interest of either party” if the property has been disposed of. The FLA incorporates the trust remedy used in family law to allocate proprietary interests. See Bakhsh v. Merdad, 2022 ONCA 130, para 19.

[16] Alternatively, the “underlying notion of the resulting trust” is that it’s imposed “to return property to the person who gave it and is entitled to it beneficially, from someone else who has title to it.” See Kerr v. Baranow, 2011 SCC 10, para 16. There’s no need for the claimant to expressly plead, or prove, unjust enrichment to claim a resulting trust. In family law cases, if the court concludes that the claimant intended to create a trust, the remedy is that the beneficial interest “‘results’ (jumps back) to the true owner”. See Kerr, at para 16. The equitable basis for the claim is the court’s finding that the transferor intended to create a trust rather than make a gift.

[17] Under both the FLA and the common law, Syed didn’t need to expressly plead unjust enrichment. Because the assets have since been disposed of, I can order payment in compensation for Syed’s interest.

2. The court has jurisdiction to enforce equity-based rights from foreign property.

[18] Sarahat argues that because the assets were outside Ontario on the valuation date, I have no jurisdiction to make this order. I disagree. It would be different if Syed was asking me to rectify the title to the asset—in that case, I have no jurisdiction to determine title or an interest in foreign land. See Catania v. Giannattasio, para 10. Instead, Syed is asking me to order compensation following my determination that he had a beneficial interest in the properties.

[19] The court’s power under section 10(1) of the FLA isn’t limited to properties in Ontario. As a result, under the statute, I can make an order for compensation.

[20] Alternatively, Syed is asking me to make an equitable order that traces the sale proceeds to Sarahat, which she holds in Ontario. Canadian courts have jurisdiction to enforce rights affecting land in foreign countries if these rights are based on trust or equity. See Catania, at para 12. There’s no dispute that this court has jurisdiction over Sarahat, any judgment against Sarahat would be subject to Ontario law, and that this court can supervise the execution of a monetary judgment. Further, as I’ve already found, there’s a “personal obligation running between the parties”.

[21] As a result, I order and adjudge that Sarahat shall pay $492,538.07 to Syed for his share of the proceeds of the Bashundhara plot. He held a 50 percent interest in the plot. Sarahat shouldn’t have sold it without compensating Syed for his share.

3. Syed’s claim for proceeds from the Australian properties is limitations-barred.

[22] Sarahat also argues that Syed’s claims about the Australian properties are limitations-barred. As I discuss in the reasons at paragraph 120, there are two non-equalization limitation periods: the basic two-year limitation period under the Limitations Act, 2002, SO 2002, c 24, Sched B, s 4, and the ten-year limitation period under the Real Property Limitations Act, RSO 1990, c L.15, s 4.

[23] In McConnell v. Huxtable, 2014 ONCA 86, the Court of Appeal held that an equitable trust claim for an ownership interest in a house is covered by the 10-year limitation period. The Court also held that an alternative award for a monetary claim is covered by the same limitation period. In that case, the house hadn’t been sold at the time of separation. See also Bakhsh, at para 12.

[24] In Studley v. Studley, 2022 ONCA 810, para 35, the Court expanded McConnell to include monetary claims related to properties sold after separation: “an otherwise tenable trust claim in land, one that would be sheltered by s. 4 of the RPLA, cannot be defeated by the sale of that land” (at para 35). In that case, the applicant, using joint funds, bought three properties during the parties’ marriage and sold them after separation. It didn’t matter that one of them was outside Ontario.

[25] The difference here is that Syed is seeking a trust claim over sale proceeds realized before the parties separated. The RPLA limitation period only applies to “an action to recover any land or rent”. Syed is seeking an interest in the cash or bonds that existed at the time of separation. His claim isn’t to recover land or an alternative claim for a monetary remedy. As a result, the RPLA is irrelevant.

[26] If the RPLA doesn’t apply, the basic limitation period is two years from when the claim is “discovered”. See Limitations Act, s 4. Under section 5(2), a claim is discovered on the day that a claimant knew or ought reasonably to have known the material facts—the occurrence of an injury, loss, or damage that was caused or contributed to by an act or omission of the other party.

[27] At paragraph 124, I found that the sale proceeds were from the parties’ joint assets, and intended to support the parties’ settlement in Canada. As a result, Syed couldn’t have discovered his claim until Sarahat purported to deal in the assets unilaterally, without his consent or acquiescence.

[28] In McConnell, at para 52, the Court of Appeal held that in remedial constructive trust claims, the elements may “typically” crystallize on the date of separation, “when shared assets, including real property, are divided and the possibility therefore arises of one party holding onto more than a fair share.”

[29] Syed argues that he didn’t discover his claim about the Australian properties until May 2021, when he returned to Canada. Syed originally said that the parties divorced in April 2021, when he obtained a divorce in Bangladesh. He submits that from September 2020 to May 2021, he believed the parties were still married, so he couldn’t have discovered his claim until then.

[30] Sarahat argues that Syed has conceded that they separated in September 2020, and the two-year limitation period runs from that date. Syed’s concession has to mean something. He’s admitted that, as of that date, there was no prospect of resumption of cohabitation. At that point, Sarahat was holding all of the proceeds from the sale of the Australian properties in bonds in her name. Their “joint family venture” was, as of then, over. Syed had all of the material facts he needed to make an equitable trust claim: Sarahat had sole title to the sale proceeds, and Syed claimed that they were his.

[31] Sarahat started family law proceedings against Syed in January 2021. Syed answered that case in May 2021 with help from a lawyer—he could’ve sought a remedy for resulting trust in his answer, which would’ve tolled the limitation period. But he didn’t initiate that claim until January 2023, when he started this proceeding, and the limitation period was expired. Syed is a sophisticated businessperson with access to lawyers on three continents. He hasn’t rebutted the presumption that his resulting trust claim was discoverable when they separated.

[32] As a result, Syed’s claim for a judgment for his share of the Australian properties is dismissed as limitations-barred.

C. The reasons for judgment did not decide the (i) Den Mahr; or (ii) Sarahat’s “pre-payment” of $50,000.00 to Syed under Justice Emery’s order, dated July 11, 2023.

[33] The parties agree that Sarahat is entitled to $72,526.35, which consists of: (a) $50,000 under Justice Emery’s order; (b) $16,741.01 for the Der Mahr; and (c) $5,785.34 for funds that Syed removed from AA’s RESP. I order and adjudge accordingly.

D. If it was my intention that Syed receive compensation for his beneficial interests in paragraphs 6(d) and (e), Syed seeks to vary paragraph 102(b) of the decision so that Sarahat’s share of the sale proceeds are paid to him to compensate him in part for what is owing

[34] The parties ask me to vary paragraph 102 of my reasons for decision as follows, which I endorse:

The proceeds from the sale of the matrimonial home shall be disbursed according to the net result of the ultimate judgment of the court, such that any amounts owing to either party as a result of the judgment shall first be paid from the other person’s share of the proceeds.

[35] As a result, I’ve amended paragraph 102 in the amended reasons for judgment. The parties have agreed among themselves that this order doesn’t affect any orders subject to an automatic stay as a result of an appeal and it’s without prejudice to any motions to lift the automatic stay that may be considered. The parties have also asked me to remain seized of any dispute from the disbursement of these funds, which I agree to.

E. What, if any, adjustments need to be made to the order as result of the mistake made by me, at paragraph 119, that C$308,067.89 in bonds still exist?

[36] The parties agree that no evidence supported this finding. As a result, I’ve deleted paragraph 119 in the amended reasons for judgment.

F. Given the findings made, did I turn my mind to Syed’s position that he was entitled to 100 percent trust interest in the Bashundhara property versus the 50 percent ordered?

[37] Syed seeks to relitigate the issue of his ownership of the Bashundhara plot. At trial, he argued that he held a 100 percent interest in the plot. Sarahat argued that she had a 100 percent interest.

[38] The order doesn’t contain a mistake. I decided this issue. As a result, there’s no basis to change the order.

[39] The evidence, as stated in paragraph 108, was that the instalment payments were paid “on behalf of ‘Mr./Ms. Syed Mahabub Zunnurain’”. The transfer was a “family decision”. It’s implicit in my findings that Sarahat and Syed held their family assets jointly when they were married, regardless of whose name was on title. In paragraph 111, I found: “Syed’s intention was to protect the plot from their creditors so they had an asset they could sell” (emphasis added).

G. What is the effect of the increase to the mortgage on matrimonial home after separation?

[40] At paragraph 102 of the reasons, I found that Syed is a beneficial owner of one-half interest in the matrimonial home. I ordered that the home be sold.

[41] On the separation date, the value of the matrimonial home was $1,275,000. The mortgage was $684,000. If the parties had the sold the matrimonial home then, each of them would’ve received around $300,000 (less closing costs).

[42] But in November 2021, Sarahat refinanced the matrimonial home. She received $1,072,500 from RBC—from these funds, she paid $661,468.32 to discharge the first mortgage. Sarahat received the remaining $400,000 in funds.

[43] Syed and Sarahat, when they sell the home, will share the proceeds. But, of course, Sarahat’s mortgage has to be paid first. And she alone had the use of the $400,000 that RBC loaned her.

[44] Sarahat argues that she made the mortgage payments between 2021 and now. Usually, if one party has been paying the matrimonial home’s carrying costs, there will be an offset for the other party’s post-separation share of those costs. In that case, Syed should get a credit for half of the 2021 loan proceeds but a set-off for his share of the carrying costs. Instead, Sarahat proposes that Syed receive $257,221.25, which is half of the equity at the valuation date. In effect, he will pay off half of the 2021 mortgage from his share of the sale proceeds.

[45] Syed proposes a different formula. He says he should get half the sale price, less only half of the mortgage on the valuation date. In other words, Sarahat should be responsible for discharging the balance of the mortgage since she benefitted from the loan proceeds.

[46] I prefer Syed’s proposal. Sarahat hasn’t persuaded me that there’s a basis for her keeping all of the loan proceeds. She has had the use of that money since 2021. Though the fairest result would be also to calculate the post-separation carrying costs, neither party introduced that evidence.

[47] As a result, I order that Syed should receive 50 per cent of the net sale price (i.e., sale price less closing costs) less $344,568 (i.e., half the mortgage on the separation date).

IV. CONCLUSION

[48] Along with releasing these supplementary reasons for decisions, I have, at the same time, released amended reasons for decision to align with this order. At the parties’ request, I’ve provided them a draft order.

[49] The parties will engage in meaningful discussions and negotiations respecting the costs of this trial. If they can’t resolve costs, any party seeking costs will serve, file, and upload to Case Center costs submissions (2500 words), any relevant offers to settle, and their bill of costs by February 4, 2025, 4pm. The other party’s responding submissions (2500 words) will be served, filed, and uploaded to Case Center by February 18, 2025, 4pm.

Ranjan K. Agarwal

Released: January 21, 2025