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CITATION: Dawson v. Dawson, 2025 ONSC 1924 COURT FILE NO.: FS-22-29851 DATE: 20250401

BETWEEN:

OLUWATOSIN DAWSON

Applicant

– and –

TREVOR DAWSON

Respondent

Jessica Cohen for the Applicant

Laura E. Oliver and Max Katz - Agents, for the Respondent

HEARD: January 27 - 31, 2025 followed by written argument, and oral argument on March 24, 2025

REASONS FOR DECISION

STEVENSON J.

Introduction

1The applicant wife (A/W) and respondent husband (R/H) were married on August 30, 2011. They separated on either January 14, 2021 or May 24, 2021. The separation date is one of the issues in this trial. The parties shall be divorced. The court must also decide:

(a) Certain parenting issues;

(b) How to divide s.7 expenses;

(d) what date should child support commence?

(e) Equalization.

Background

2The A/W is currently 40 years old and the R/H is 47 years old.

3They have two children, O. Dawson born March 17, 2013, 12 years old, and N. Dawson born October 9, 2014, 10 years old.

4The daughters have both resided with their mother, the A/W, more than 60% of the time since they relocated from the former matrimonial home on May 16, 2021. The children continue to reside with their mother in the finished basement of their grandmother’s house.

Parenting Issues

5To their credit the parties have been able to settle most of the parenting issues. The R/H (father) has parenting time on a schedule which was agreed before trial. That agreement is in minutes of settlement dated December 21, 2023.

6There is only one remaining parenting issue, which is whether the A/W (mother) should have sole decision-making responsibility with respect to extra-curricular activities for the children.

7The mother already has sole decision-making authority, on consent, with respect to the children for everything other than extra-curricular activities.

8I have decided that it is in the best interests of the children that the mother shall also have sole decision-making responsibility for their daughters’ extra-curricular activities, essentially for two reasons.

9First, although the father takes no issue with the extracurricular activities the daughters participated in at school for minimal or no charge, he was unreasonable in two respects. First, he adamantly opposes them participating in dance classes because, so he told the A/W, he believes this is akin to training to be strippers. This view has no basis in fact. While he would not acknowledge on cross examination that he called dance a “stripper activity” he did not deny it. Furthermore, he acknowledges that his view is that dance unnecessarily adultifies and objectifies young girls. He did not explain how all dance classes have this effect.

10Secondly, he is unusually sensitive to this potential extra cost, for which he will only have to pay his fair share and only if the dance classes are subject to s. 7 of the Federal Child Support Guidelines, SOR/97-175 (“Guidelines”). His financial concern is unwarranted given that the wife sensibly testified to being cost conscious and both parents have adequate financial means for this type of expense; which, again, is payable only where it qualifies as a s.7 extraordinary expense.

11The mother said she will act in the best interests of the children and that she will ensure the costs of any dance classes are reasonable and not extravagant. She also said she will not enroll the children in activities which encroach on the father’s time with the children without his consent.

12I find that enrolling the children for dance classes, including any that may qualify as extraordinary under s.7, shall be within her prerogative and if these classes are indeed extraordinary and add some additional cost, the husband must pay his fair share in the ratio determined in the next section.

13His financial concerns about the potential cost of special or extra dance classes were unreasonable given that he had previously paid about $3,000 per year towards the extracurricular costs for his son Isaac (from an earlier relationship) to play higher level soccer for some years. He should be prepared to make a similar contribution to each of his children in this marriage, even if he disapproves of dance as an activity for his daughters.

14Secondly, this result is consistent with the recommendation of the Office of the Children’s Lawyer in its report dated December 13, 2024. The parties agreed this recommendation was properly before me as part of the record for this issue.

15The terms of the judgment concerning parenting decisions shall be in accordance with paras. 2-4 of the draft judgment filed by the A/W.

Section 7 Expenses

16How should the s. 7 expenses be allocated between the parties?

17The A/W proposed capping the R/H’s contribution for s.7 expenses at $2,500 per annum per child and that these expenses would be shared equally, rather than on a pro rata basis. I decide that these expenses should be divided in the ratio 5 wife: 6 husband. The ratio is based on attributing income of $100,000 to the A/W for these purposes and, for reasons set out below, imputing $120,000 income to the R/H. There is no reason to cap the amount payable. This will depend on the best interests of the children each year.

18The reason why I have allocated to $100,000 annual income to the A/W for this limited purpose is that her last financial statement referred to employment income of $96,942 in 2023 plus she has rental income from 1426 Noel Court (she has bought out the R/H). The A/W has proposed I only consider her employment income of $96,942 and the R/H has proposed $150,000 as her income. As noted, I consider $100,000 to be the appropriate number for this purpose.

19It appears there are no arrears of s. 7 expenses.

20Judgment on this and related issues shall issue in accordance with paras. 8, 9 (adjusted to the R/H’s imputed income of $120,000, discussed below), 10, 11-21 (adjusted in accordance with paragraph 18 of these reasons) and 24. Other paragraphs from the draft judgment will be dealt with below.

Other parenting issue which was not pursued at trial

21In her opening statement, the A/W raised the issue of whether she should be at liberty to move her home within an 80km radius without the R/H’s permission or a further court order. No evidence was led directly on this issue and no argument was made in closing. That potential issue is left for another day. If this issue is claimed in the Application, it shall be dismissed without prejudice; it can be argued if and when it becomes a “live” issue.

Child Support and Imputing Income to the R/H

22The R/H was initially delinquent in paying child support. The Order of Brownstone J. dated December 22, 2022 required him to pay $449 per month on a temporary, without prejudice basis from June 2021 based on the R/H’s declared 2021 taxable income of $29,256 per year. The arrears at that time were $4,351.

23This monthly payment was varied later, again without prejudice, by the Order of Horkins J. dated June 9, 2023 which required the R/H to pay $915 per month from January 1, 2023 based on imputed income of $60,000 per year.

24The A/W argues both that the R/H is intentionally underemployed and that his actual income is substantially higher than $60,000 per year. The A/W argues that income should be imputed to him pursuant to s. 19(1)(a) of the Guidelines, in addition to his admitted income of $60,000.

25The A/W says the R/H has always made more than $60,000 per year and that his tax returns do not reflect his real income and earning capacity. She points to their relatively high standard of living during marriage, which was based in part on his income being significantly higher than the income he declared for tax purposes. The A/W says that the R/H has continued to enjoy a high standard of living post-separation and she points to his numerous vacations and motor vehicles, which will be discussed below.

26While I am prepared to impute income to the R/H it will not be the annual income of $200,000 sought by the A/W. The A/W tried to justify imputing that amount, based partly on purchases by him that she claimed were consistent with his position on a much more limited earing capacity. The A/W argues that his high expenses are sufficient to prove he must be earning about $200,000.

27I don’t accept that the evidence of the R/H’s expenses establishes he makes in the order of $200,000 per year. I will consider some of these expenses.

28One example the A/W relied on is the R/H’s purchase of a $50,000 engagement ring for her around the date of marriage. But the R/H denied it cost this much, there is no purchase receipt or appraisal and, significantly, the A/W sold it after separation to her brother for $26,200.

29As another example, the A/W relied on the R/H’s purchase, before marriage, of a trip to space with Virgin Intergalactic for $200,000-$250,000. I accept his evidence this was a placeholder booking which cost him just $1000, and this deposit was recently re-imbursed to him when he decided not to proceed with the purchase.

30The A/W also relied on the R/H having made a deposit on a Tesla Cybertruck, which she said would cost some $150,000. But the R/H said this truck was listed at $59,000 and he has not yet committed to it. No evidence of price was filed by either side, other than these assertions. Delivery has been delayed.

31More significantly, the A/W points to the R/H’s purchase in June-August 2020 of a 2016 Bentley Continental GT for $182,510.00 (total cost $206,236.30) some five months prior to separation. He made a down-payment of $40,000 and financed $166,236.30. I accept that this purchase demonstrates questionable financial judgment and it does tend to establish the higher income normally associated with such a high-priced vehicle, but it doesn’t by itself support a particular income amount.

32More pertinently, however, in his August 7, 2020 credit application for the car financing, The A/F said he made $200,000 from rental and investment income and $100,000 as a realtor. He says now that he did not earn that kind of money and he only put these numbers in the loan application because his broker told him to do so. This is compelling evidence of a significant income. I rely on this to support my conclusion, discussed further below, that an income of $120,000 should be allocated to him.

33The car debt at the date of separation (2021) was $151,735.55. The R/H managed to pay off that entire debt by the time of trial (January 2025). His ability to retire this debt in that timeframe tends to support the argument that his income is higher than the $60,000 per year he was previously prepared to concede, or the $75,000 per year he was prepared at trial to accept as his imputed income.

34The R/H argued that his imputed income should be $75,000 based on his average income from 2021-2024 (although he also refers back to 2016), adjusted by adding back some of his business expenses.

35The Bentley purchase demonstrates that the R/H regarded his income as sufficient to borrow and carry a $150,000+ loan on a mere car, and that he expected to re-pay this, and cover his other regular expenses including investing in the stock market, based on his earning capacity. I readily conclude his annual earning capacity is significantly greater than $75,000 per year. Batte v. Batte 2021 ONSC 2847 at para. 35.

36My conclusion is supported in part by the R/H’s admission that he had sufficient funds to lend his son’s mother $14,850 in August 2021, a friend $98,000 in August 2023 and someone else $100,000 in April 2024. In my opinion he would not likely be lending such sums of money, and thereby depleting his capital, if he did not have significant income, well in excess of $75,000 per year to support himself at the same time.

37A review of the R/H’s bank accounts shows total debits of $97,009.97 in 2021, $194,100.27 in 2022 and $119,345.85 for eight months in 2024. This is also consistent with the fact that he makes more than $75,000 per year, because his savings do not appear to have been substantially depleted other than the loans mentioned above.

38The A/W also relies on the R/H’s history of investing successfully in real estate as a basis for imputing income of $200,000+ to him. The best that can be said of this argument is that the R/H has been a reasonably successful real estate investor in prior years and this is consistent with him having a higher income than what he reported for tax purposes (his reported income is much less than $75,000 in any given year). The financial return on his occasional real estate transactions does not prove his income is in the order of $200,000+ per year, although it is relevant to establishing both the type of work the R/H can do to make money and to show that he has the capacity to earn substantial sums from time to time.

39The A/W acknowledges the R/H told her he preferred to invest in real estate rather than to save money, which explains in part the lack of regular savings accounts, RESPs and RRSPs. He is, however, no longer active in real estate investments due to market conditions.

40The A/W points out that the R/H has reported significant business-related expenses which sometimes exceeded his declared income. He agrees that his income needs to be adjusted upwards to recognize only reasonable expenses. Szitas v. Szitas, 2012 ONSC 1548 at para. 60.

41The R/H acknowledges that he has been able to take advantage of certain tax driven opportunities, for example, by offsetting substantial capital losses from his securities trading in 2020 and 2023 against capital gains he made from selling his rental real estate in the same years. This reduced his taxable income. It can not be used to artificially reduce his income for child and spousal support calculations. This is why the R/H is prepared to accept an annual imputed income of $75,000.

42No expert evidence was filed which might have established normalized or average income based on the sporadic and historical real estate investments or his spending patterns.

43The evidence of expenses and of his real estate and other earnings is insufficient by itself to demonstrate that his imputed income should be any particular number, although it certainly supports an upward adjustment to his declared income, as he readily acknowledges.

44The A/W asks the court to conclude that the R/H’s actual annual expenses are in the order of $204,434.00 and this should be grossed up to $346,380. In the alternative, the A/W argues that the court should rely on his self reported expenses of $128,460, in which case the grossed-up income to be imputed to him would be $188,743.00.

45I do not accept these amounts. I believe they would overstate the R/H’s earning capacity and his ability to pay. He does make larger amounts of money on a sporadic basis, and he does use the tax system to his advantage. I agree that an income higher than shown on his tax returns should be imputed to him, but this should be at a lower level than the amount sought by the A/W.

46Compelling evidence of income can be found in the August 2020 credit application for the Bentley loan in which the R/H said he made $200,000 rental and investment income and $100,000 as a realtor. I take these figures with a grain of salt given that the R/H was not then working as a realtor and the rental income was probably gross rather than net.

47But the R/H also made a December 3, 2020 credit application (seeking a $86,000 line of credit) to Meridian Credit Union. In that application the R/H represented that he was making $11,250 a month, or $135,000 per year. Even if one deducted the expenses he mentions ($751 p.m.) his net income would be $126,000 per year. While the R/H argues this figure is also a gross rather than a net figure, it is a number he used in a credit application and it is also more consistent with the R/H’s standard of living and his true earning capacity than his proposed figure of $75,000 per year.

48Having regard to all these circumstances, I impute an annual income of $120,000 to the R/H. I base this primarily on the applicant’s self declared income of about $120,000 per year in his December 2020 loan application, and the fact that this level of income is more consistent with his lifestyle (as evidenced in his expenses, including the cost of Bentley ownership, and numerous vacations), and his ability and willingness to lend money to third parties.

49While the R/H says he accessed capital to fund his expenses, to the extent that is true it is a choice he is making to fund his own lifestyle, to the detriment of his children who have not been paid fair child support.

50Another point was raised by the A/W in closing when she sought to rely on the median income in Ontario for residential real estate agents, which is $62,400 (Government of Canada Job Bank data). This number was not proven in evidence. I will not take judicial notice of this number, and it is not useful in determining the outcome in any event.

51The A/W’s draft judgment shall be amended to reflect the R/H’s imputed income of $120,000. The judgment shall otherwise include paras. 6, 7 (I decide that the life insurance shall be no less than $150,000), 9, and 26-28.

Deliberate Underemployment

52The A/W also says the R/H is deliberately underemployed. It is the R/H’s position that he works 5-10 hours per day on a combination of his investments and his entrepreneurial activities. Although he has previously worked as a real estate agent, he stopped that work in 2016 due to being burnt out (he says), although he maintains his licence.

53He gave evidence about having invested shortly after January 2021in crypto mining, but apparently that has failed and the business has no current value. He says that he had a partner who held an undocumented 60% in that business. I accept that is probably the case given that the R/H does not have any technology expertise and would have needed a partner to set up and operate the technology during the period it was in operation. This is not, however, relevant to the final equalization because the business was started after the date of separation (January 14, 2021).

54The other investment projects he described, including a “Virtual Reality” travel related project, sounded vague and speculative, although he would likely say that is a narrow-minded view of his high-minded intentions. The R/H is an admirer of Elon Musk and studies the mindset and recommendations of other billionaires. He aspires to achieve great financial wealth, although he admits that, as a grade 10 drop-out, his lack of education holds him back to some degree.

55He also admitted that he does not foresee earning income from his start-up projects for at least the next two years. Those projects have involved a fair amount of travel and meeting with tourist promotion boards in Italy and elsewhere. The R/H did not file even a pro forma financial statement for this business and there is no evidence on which to find he is likely to make any significant money from this or any other entrepreneurial activity in the foreseeable future.

56The A/W relies on Drygala v Pauli, 2002 CanLII 41868 (ONCA) at para 28 where the Court of Appeal held that a parent:

“is intentionally under-employed if that parent chooses to earn less than he or she is capable of earning. That parent is intentionally unemployed when he or she chooses not to work when capable of earning an income.”

57I agree that this principle should be applied here. The R/H has an obligation to support his children. Since 2020 he spent $38,338.80 per year on car payments, yet he only paid $10,980.00 per year in child support.

58Whether his entrepreneurial aspirations are more akin to “Walter Mitty” (i.e., wild dreams with no basis in reality) or likely to make him the next Elon Musk, he must make reasonable efforts to make an income in order to properly support his children.

59While the R/H is uncertain if can get back into real estate investing given the current market, and while he may not enjoy being a real estate agent, he can work as a realtor or real estate consultant or find other employment, perhaps in the investing/consulting world, while still pursing his entrepreneurial investments.

60This may require him to work harder than he wants, and to travel less, but working for a regular income is reasonable and appropriate, so that he can support his children.

61The R/H states that he is “earning at his capacity (or slightly more) from investing”. He argues that he would have to give up his investing activities to return to real estate. He says that if he switched direction, he would be unlikely to earn more than the $75,000 he accepts should be imputed to him.

62I don’t agree. It is clear that his share trading activity is not a full-time job. He may be studying investing in his spare time, but there is no reason why he cannot continue his share trading while taking on work or projects that are more likely to be remunerative than his speculative entrepreneurial aspirations. His share investing gains can and should be supplemented by finding paid employment or consulting/advisory work. This should allow him in the future to make the $120,000 I have imputed to him as income.

Conclusion on imputed income and the starting date for child support

63I have decided that the R/H’s imputed income should be $120,000 per year from the June 1, 2021 date the parties used as the starting date on the first interim support motion.

64$120,000 per year represents the R/H’s true earning capacity. This is the fair and reasonable amount for calculating his child support obligations. Child support, including arrears, should be calculated accordingly. (For purposes of calculating arrears, I note that he has already paid $2,694.00 in 2021, $5.288.00 in 2022, $10,980.00 in 2023 and $10,980.00 in 2024).

Date of Separation

65The A/W says that the parties separated on January 14, 2021 but acknowledges that she and the children only left the matrimonial home on May 16, 2021.

66She presented a series of texts to support her position that the marriage ended on January 14, 2021.

67The husband disputed the reliability of these texts and suggested, without any independent or corroborating evidence, that this series of texts had somehow been deleted from his phone. To his recollection, these texts had either not been sent as claimed, or were selective and incomplete. He blamed the A/W for having done this but provided no evidence to this effect.

68I do not accept his vague and unsubstantiated allegations in this regard. He acknowledged that the tone of the text messages was likely accurate. The texts are admissible and provide contemporaneous and reliable evidence, which I accept is accurate.

69The context for these texts was that the husband left in January 2021 with his son for a two-week vacation in the Dominican Republic, to contemplate the state of the marriage. He wanted to be somewhere far removed from the immediacy of the marital conflict.

70Both sides acknowledge a history of conflict and temporary separations. The question is whether the events in January 2021 show just another temporary set back or a complete and irreparable breakdown in the marriage? I find that it was the latter.

71On January 14, 2021 the wife texted the husband:

“Did you just say that you don’t want to me married to me and hang up?” (sic).

The husband replied acknowledging he had hung up. Later he texted that their differences were: “just causing me to hate you”.

He continued in another long email:

“…I have 0 control with you know. It only works if both can accept each others flaws. WE DON’T!! And can’t.”…”I honestly don’t want a relationship with anyone if we divorce…Everything we fight about everything we talk about everything and all the little problems an knickknack he pushing back stupid fights all the little bullshit it’s all extremely common with billionaires.”…”I can’t be in a toxic relationship were the best version of me is nowhere in sight and NOR can you.

“I’ve spent 100s of hours researching our marriage with billionaires who battle the same shit…

But truth is I’m hurting really bad inside because I know it won’t work…

I tried to say to myself it was true love now I’m comparing it to insanity.”

72On January 17, 2021 the wife texted the husband:

“…It crushed me when you said you didn’t want to be married to me…”

“…Then you tell me that I don’t meet your standards and dump me…You failed me.

We promised that we would never abandon each other and cause such heartache. Now I’m crying and grieving the death of our marriage.”

…We didn’t get help. You gave up. I surrender!

What started in the Dominican has ended there…

73I accept the evidence of the A/W that she and the R/H did not discuss reconciliation after the R/H returned from the Dominican later in January 2021. They lived separate and apart within the matrimonial home. The A/W took steps to enrol their older daughter in a school in Toronto, rather than in Pickering, for the next school year. This was done in anticipation of moving to her mother’s home in Toronto, after basement renovations were finished, and out of the Pickering matrimonial home. The parties agreed to prepare the matrimonial home for sale. Around February 4, 2021 the A/W cancelled the cruise they had already booked, and they divided up the refund equally.

74On February 27, 2021 the A/W texted the R/H… “its disgusting and that’s why we are divorcing…” and “Your idea to divorce is very well received”… “Lets stay focused on the sale of this house…I recommend we go through family services to settle the separation agreement…”.

75The A/W finally moved out of the home, before it was sold, on May 16, 2021. This was because of a specific incident in which she had to lock herself in a closet while the R/H threatened and berated the A/W and told her she should kill herself.

76The R/H maintains they separated on May 24, 2021. This was the date of another unsavoury incident, but I accept the parties had already separated on January 14, 2021. By May 24, 2021 the A/W had been living with the children at her mother’s home for a few days. She had agreed, unwisely in hindsight, to bring the children as part of a parenting arrangement on May 24, 2021. She agreed to pick up the R/H and his son, Isaac, from the former matrimonial home in order to attend together at a pool party arranged by former family friends, connected to the R/H. That pool party ended badly with the R/H damaging the A/W’s car, with her and the children in it. This led to a subsequent complaint by the A/W to the police. No charges were laid.

77In conclusion, the date of separation is January 14, 2021.

Equalization:

78Again to the parties’ credit, they have resolved many of the items which were originally in dispute and shown in each side’s comparison of their net family property statements. The remaining areas of dispute are considered below in light of my finding that the date of separation is January 14, 2021.

Cars

79The parties disagree about the value of two cars owned by the R/H at the date of separation.

80The first is a Dodge Viper which was purchased as a used car in 2012 for $59,000. The A/W says it is a collectible which has been upgraded and was worth $65,000 at the date of separation. She admits, however, she does not know any details about the car nor has she any knowledge of its resale value. I accept the R/H’s estimate of value of $50,000 at the date of separation. He used the car for racing and did not preserve it as an investment. It may be an unusual car but there is nothing to suggest it has an unusual (in the higher sense) value. It has depreciated with age and use. The husband’s ascribed value is reasonable. I do not rely on what he may have ascribed to his cars in his tax returns which have dubious probative value in light of the way he minimized his taxable income.

81The second is the Bentley which was purchased by the R/H as a used car in June/August 2020 for $182,150. The A/W says it should be valued at $180,000. This is based on the purchase price having been paid only a few months prior to the valuation date (date of separation) and the R/H’s tax returns. No expert, or any other evidence was filed. The R/H’s valuation was $155,125 but no good explanation was given why the value would have declined so much (the car was already four years old) in a few months. I will attribute a value of $170,000 to the Bentley at the date of separation.

Cash in the house

82The A/W went through the R/H’s closet in January 2021 when he was out. She photographed an envelope of cash. The photo was not date stamped. She counted it at time. It totalled $1100. The R/H at trial denied the cash had existed, or that he kept large sums of cash in the house, or that he had any significant cash at the date of separation. There is no evidence of what cash may have been present on January 14, 2021.

83I can not find on the balance of probabilities that the husband had $1100 (or any other precise amount) cash on hand at the actual date of separation.

Dreamfund

Introduction

84This is the most significant valuation issue. Dreamfund is a generic name which I will use to reference a series of investments promoted by one Isaac Olowolafe (Olowolafe) who offered them through various corporate vehicles (usually incorporating the name, Dreamfund) to the public on a periodic basis since at least 2009.

85The valuation issue arises because Dreamfund defaulted after the date of separation on the last two investments made by the A/W during the course of the marriage. She says she will never collect this money, and these investments should be ascribed zero value for the purposes of her net family property statement at the date of separation. The R/H disagrees and says that at the date of separation they were still collectible and should be included at a value of 100 cents on the dollar.

Background

86The A/W met Olowolafe around 2009 when he acted as a real estate agent on her first property purchase, a condominium unit at 700 Humberwood. He later acted for her at another condominium unit purchase at 5101 Dundas.

87Olowolafe and the A/W became friendly. When Olowolafe became a developer and a promoter he encouraged her, and her family, to invest in his Dreamfund projects.

88The A/W’s first investment was $15,000 in a Dreamfund project in July 2009. She was re-paid $21,000 five years later in 2014. The A/H got her mother and brother involved in later Dreamfund investments. All three made a series of successful Dreamfund investments in the next few years, culminating in the two investments in dispute, which the wife made in 2018 and 2019 respectively.

89The two Dreamfund investments in dispute were referred to as deal 5 and deal 6 at the trial.

90Deal 5 is also known as Dreamfund Altona Woods. In summary, the wife invested $140,000 in Dreamfund’s deal 5 by rolling over $116,000 which was the notional payout on her prior Dreamfund investment (deal 4) and adding another $24,000 in capital. The A/W’s expectation, based on what I readily describe as Dreamfund’s inadequate and unprofessional legal documents, was that she would be paid $148,400 on the maturity date of September 30, 2020, plus $1400 per month “cash flow” in the interim. She also understood, incorrectly as it turned out, that she had security over a townhouse which was under construction as part of the Altona Woods development.

91The A/W did get paid $1400 per month for the duration of the term, plus two additional monthly payments totalling $2400 after the maturity date of September 30, 2020. She was not, however, paid her expected $148,400 at maturity. It remains unpaid despite demand.

92The question is how to value this investment at the date of separation, January 14, 2021. Was it worthless as the A/W argues, or was it worth $140,000 as the R/H maintains?

93The R/H had also invested in Dreamfund’s deal 5 on the same terms as the A/W. But when the maturity date passed without repayment the R/H was vociferous with Olowolafe, demanding that he be paid. He got his money. The A/W says the R/H physically threatened Olowolafe. The R/H denies any threat. The R/H says that he was paid because he insisted on repayment, whereas the A/W did not. The R/H says the fact that he was paid shows that the A/W’s interest in deal 5 was still viable and valuable on the date of separation.

94The R/H says his argument is strengthened by the A/W’s working relationship with Olowolafe, which continued long after the date she did not get her money.

95He also points out that Dreamfund made some, admittedly small, payments to the A/W after Dreamfund’s original default on deal 5 (September 30, 2021). He argues that this further supports his claim that the A/W still reasonably expected repayment on January 14, 2021.

96The A/W admits she received the small payments and that she did some paid work for Dreamfund companies, in addition to her fulltime employment with her employer. She says she was desperate for some additional income and for practical reasons she had to set aside her annoyance with Olowolafe. She says that all that Olowolafe offered her was some paid employment and occasional ad hoc monthly payments.

97She says she repeatedly demanded payment of the $140,000, including by way of a lawyer’s letter (although none was put in evidence), but Dreamfund and Olowolafe rebuffed her demands.

98Deal 6 is also known as Dreamfund Salem Road. In summary, the A/W invested $50,000 (rolled over from the proceeds of deal 2) on November 1, 2019 (along with $155,000 from her mother) in the expectation that she would be repaid her principal plus a bonus, for a total of $66,006.40 due on maturity, October 31, 2021 i.e. just over a year later than the September 30, 2020 maturity date on deal 5 and some 10 months after the date of separation.

99The wife’s investment in deal 6 was again based on Dreamfund’s inadequate and unprofessional legal documents. This time she expected $500 per month “cash flow” in the interim, pending the balloon payout at maturity. She also understood, incorrectly again, that she had security over a townhouse which was under construction as part of this Salem Road development.

100The A/W did get paid $500 per month for the duration of the term plus some small ad hoc payments after maturity. The latter totalled $9000 and ceased entirely on September 18, 2023. She was not paid her $66,006.40 on maturity, October 31, 2021. The debt remains unpaid despite demand. (Her mother was not paid either).

101The question is how to value this investment at the date of separation, January 14, 2021. Was it worthless as the wife argues, or was it worth $66,006.40 as the husband maintains?

102The wife discovered after separation that the condominium unit she thought secured her deal 6 investment had been sold by Olowolafe prior to January 2021, without her consent or knowledge.

103Dreamfund’s corporate vehicle for deal 6 was placed in receivership by its primary corporate lender, Centurion Mortgage Capital Corp., by court order dated around January 2021. The notice of motion in the receivership is dated December 4, 2020. The notice of motion refers to the lender’s demands for repayment on May 21, 2020 and November 18, 2020.

104The wife was unaware of any of this until recently.

105The wife had, however, known since September 30, 2020 (deal 5’s maturity date) that Dreamfund had defaulted in paying out the deal 5 balloon payment.

106She had communications with Olowolafe between September 30, 2020 and the end of the year about that default. Although Olowolafe proposed some options in December, 2020, she had rejected them because they did not include payment of the amount owed.

107The A/W could not settle with Dreamfund. This was because Dreamfund refused to honour its legal obligations to pay.

Analysis

108I conclude that there is no reasonable prospect that the A/W will recover any of the monies she put in deal 5 or deal 6. Even if Olowolafe was sued personally for fraud (and there may be limitation period issues) it is unknown if he would be found liable personally and if he has any eligible assets. There is no reasonable prospect of collecting from any of the relevant Dreamfund entities as evidenced by the receivership on deal 6 and the fact that other investors have been unable to recover their funds. I readily find that these assets (the deal 5 and 6 investments) are worthless at the date of trial. But how should they be valued at the date of separation?

109I conclude that the value of both the deal 5 and deal 6 investments at the date of separation was zero.

110It would have been obvious to anyone in late 2020, especially in light of the financial impact of Covid 19 on real estate (which both the husband and the wife was familiar with given their own real estate background) that Dreamfund was in a serious financial predicament and that both their investments in Dreamfund were at risk. This risk became certainty on Dreamfund’s September 30, 2020 default on deal 5. At that time the A/W may have been hopeful she would still be paid on deal 5, but objectively her money was lost.

111If she, or anyone, had investigated with any reasonable forensic vigour in October 2020, she would have quickly found out she had no security (the legal documents were inadequate and did not grant a security interest in any real estate or existing condominium unit) on either deal 5 or deal 6. Although deal 6’s maturity date had not yet been reached, any competent investigation in late 2020 would, on the balance of probabilities, have concluded that there was no reasonable prospect of any Dreamfund entity or of Olowolafe repaying investors, even at that time.

112The fact that Olowowafe strung the A/W along with some monthly payments and some employment income, together with her friendly personal relationship with him, may explain why she did not sue Dreamfund or Olowowafe, but it does not support a conclusion that the deal 5 or 6 investments were collectible at the date of separation.

113The A/W did not sue either Dreamfund entity or Olowolafe. She testified this was because she did not have the funds to do so, while going through the separation and with minimal financial support from the R/H. I accept this explanation. It is also clear in hindsight there was little if any prospect of collecting anything through the legal system.

114I note that the condominium unit that A/W thought she had security on was sold by Dreamfund on June 18, 2020. The unit the R/H thought he had security on was sold on December 1, 2020, which is around the time he received payment.

115The fact that the R/H recovered his investment in deal 5 is good for him but does not change the fact that he was fortunate in getting paid; because his investment was also objectively valueless. Fortunately for him, he found some means to persuade Olowolafe to prefer him over all the other investors and other creditors. There is no evidence that any other investors in deal 5 or deal 6 got repaid and we know now that deal 6 went into receivership and the underlying real estate project was assumed by third party builders; which is consistent with investors not recovering their money.

116The R/H alleged that the A/W had such a close relationship with Olowolafe that she has either already received undisclosed monies from him on account of deal 5 or deal 6 through her Bank of Montreal account or she will receive the monies at a later date. This is idle speculation and no evidence other than the R/H’s opinion supports either contention. The details of the A/W’s BMO bank account may not be crystal clear, but I do not find the deposits on which she was cross examined represent payments by Olowolafe or Dreamfund, whether on account of deal 5 or 6 or as part of any improper arrangement.

117I note that the A/W deposited into her BMO account (and transferred out concurrently) $15,000 on August 20, 2020, $12,000 on September 4, 2020 and $12,000 on September 8, 2020. These transactions predate the September 30, 2020 maturity date on deal 5 and do not raise any suspicions. The A/W also deposited (and transferred out concurrently) $54,240 on February 24, 2022 but that was payment of a real estate commission earned by the A/W.

118There is no evidence that the A/W agreed to reinvest in subsequent Dreamfund deals or that she took other options offered by Olowolafe to her and other investors to postpone or replace their existing debts. Although the R/H also alleges that the A/W took the place of her mother in reinvesting there was no evidence to support this bald allegation which makes no commercial sense. Neither the mother nor Olowolafe were called as witnesses.

119My conclusion is that by January 14, 2021 any objective observer would have valued the A/W’s interests in deal 5 and deal 6 at zero. There is no need to assess value using hindsight. I do not need to consider events after the date of separation, although later Dreamfund details are consistent with my conclusion. An objective analysis of the debt/investment and related “security” on or shortly prior to January 14, 2021 would have established, on the balance of probabilities, that the value of the A/W’s interest at the date of separation, January 14, 2021 was zero.

120This therefore is the value of both deals 5 and 6 for the purposes of determining her net family property at that date. Greenglass v. Greenglass 2010 ONCA 675; Zavarella v. Zavarella 2013 ONCA 720 at para. 34.

121In the alternative, the A/W argued that she should be entitled to unequal division of property pursuant to section 5(6) of the Family Law Act. She argued that it would be unconscionable for the R/H to benefit from the value of deals 5 and 6 when the value of this asset ultimately has been confirmed to be zero. The A/W never received the monies she was owed. (The A/W has properly acknowledged and accounted for the small amounts she was paid). This argument is not relevant given my decision above but I would not have applied s. 5(6) because these circumstances would not meet the test of being “harsh and shocking to the conscience and repugnant to anyone’s sense of justice” if I had to include these valueless debts on her side of the ledger. Serra v. Serra 2009 ONCA 105 at paras. 48-49. See also s. 5(6)(h) of the Family Law Act.

The Value of Certain Assets and Liabilities at Date of Marriage August 30, 2011 (DoM)

122The contested items in this category are relatively minor items which can be dealt with summarily.

123Dundas Street condo owned by the A/W. I accept the unchallenged (in the sense of there having been no other expert) valuation evidence of appraiser Mr. Cupido that the value at the DoM was $307,000. The cross examination did not impact Mr. Cupido’s opinion in any material way. I am not making a deduction for notional disposition costs in the absence of proof of a likely disposition date and that such costs were inevitable. The gain to be included is $80,100 (valuation minus purchase price), not $102,790 claimed by the A/W (the latter number is based on the valuation minus the purchase price plus deposit but this calculation would effectively double count the deposit).

124Pinehurst property owned by the R/H. I accept the unchallenged expert valuation evidence of appraiser Mr. Van Andel that the value at the DoM was $220,000. Again, this appraiser’s valuation was not challenged in any material way in respect of either this property or the next one, the Courvier property.

125Courvier property owned by the R/H. I accept the unchallenged expert valuation evidence of appraiser Mr. Van Andel that the value at the DoM was $510,000.

126Savings and liabilities of the R/H. R/H had a Meridian savings account, and it is properly included. No other savings account was disclosed. The R/H wants to add an additional $40,000 in alleged savings which is referenced in the December 3, 2020 credit application (which sought $86,000) referenced earlier. This $40,000 can not be identified in any bank or credit union statements. The reference in the credit application to this sum is not satisfactory proof of that alleged asset in the absence of any account details which would support this allegation. It is odd that the R/H doesn’t concurrently seek to deduct the liabilities listed in that credit application. The existence of this additional sum has not been proven on a balance of probabilities. The only relevance of that credit application has already been noted above; namely, that as of December 3, 2020 the R/H represented that he was making $11,250 a month, or $135,000 per year.

127Similarly, there are no account details showing a debt the R/H says he had at the DoM based on a credit application and Equifax report. That report by itself does not prove the debt existed and the extensive production of bank statements does not identify it. This alleged debt may not be deducted.

128Oluwatosin’s BMW car. The A/W wants to value this at $54,500 which is higher than the $40,000 she used in an earlier financial statement. She has no material evidence to support changing that value. I accept, however, that the proper value should be $45,000 as the R/H suggests in the comparative Net Family Property statement.

129Humberwood parking space. The A/W owned a second condominium unit parking space. I accept that its value is $9,500. I am not making a deduction for notional disposition costs without proof of a likely disposition date and that such costs were inevitable.

130Jewellery. As noted above the A/W relies on the R/H’s purchase of a $50,000 engagement ring around the date of marriage. The R/H denied it cost this much and the A/W sold it later, after separation, to her brother for $26,200. I find that its value at both the DoM and DoS was $26,200. There was no evidence it was worth more at the DoM, except what the R/H may have said to his future wife at the time of engagement. I do not accept that statement had any probative value. No expert valuation evidence was filed by either side.

131Money owed by a Mr. Douglas to the A/W. At the DoS (January 14, 2021) the A/W says Douglas owed her $3,600. The R/H says the correct debt is $8,000. I do not agree with either valuation. I ascribe a value of zero to this debt at the DoS.

132The origin of this issue is a $4,000 loan by the A/W to Douglas in 2010 prior to marriage. Douglas had promised to repay $6,000. He failed to repay the loan. The A/W got a small claims judgment against Douglas in 2012 for $3600 plus costs plus interest. There was no reason to believe the proper loan amount ($4000 minus repayment of $400 = $3,600 was uncollectible at the DoM (August 2011). It was, however, objectively speaking, uncollectible and worth zero almost 10 years later in January 2021 when the parties separated. There was no reason at that stage to think that judgment debt would be repaid.

133Unexpectedly Douglas came out of the woodwork in August 2021 and paid the A/W $8000. This was a gratuitous recovery and does not affect the value that should be ascribed to the debt ($ 0) at the DoS, January 14, 2021.

134BMO savings account 8365. This account was in the A/W’s name at the DoM. I accept that it held $401.57 at the DoM based on the transfer from her Tangerine account into this account on August 17, 2011, 13 days prior to the DoM.

Conclusion

135A judgment should be prepared in accordance with these reasons. The parties shall jointly submit to the court office a net family property statement which incorporates the details above and calculates the equalization payment. The parties shall also submit a child support calculation showing the arrears and prospective monthly payments. These documents will be added as a schedule to these reasons.

136After I have approved the calculations and any other outstanding minor issues, each side will be given an opportunity to address the issue of costs of the application.

__________________________ Justice C. Stevenson

Released: April 01, 2025