COURT FILE NO.: FC-18-57337
DATE: 20250604
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Maria Del Bollo Applicant (Appellant) – and – Michael Todary Respondent
Steven M. Bookman and Maia Rabinovitch, for the Applicant (Appellant)
David M. Winnotoy, for the Respondent
HEARD: May 30, 2025
JUSTICE ALEX FINLAYSON
PART I: NATURE OF THIS APPEAL FROM A FAMILY ARBITRATION AWARD
[ 1 ] The parties were married on June 14, 2012 and separated on December 15, 2017. They are resolving the issues arising from their marriage and its breakdown in mediation/arbitration with Daniel Melamed.
[ 2 ] One of the husband’s assets that forms part of his net family property is an interest in a residential property in Alexandria, Egypt (the “Egypt Property”). The extent of his ownership interest in it, and its appraised value, remain disputed matters in the arbitration, yet to be decided.
[ 3 ] What is not disputed, is that the Canadian Dollar value (CAD) of the Egypt Property was lower at the valuation date than it was at the date of marriage. That is because the Egypt Pound (EGP) underwent a significant devaluation during the marriage. The parties agree that the change in exchange rates over the course of the marriage, was both significant, and the primary cause of the decrease in value of the Egypt Property, when expressed in CAD.
[ 4 ] As the arbitrator noted in his Award dated March 7, 2024 (the “Award”) by way of example only, a financial statement of the husband’s placed the value of his interest in the Egypt Property at 38,000,000 EGP on the date of marriage, and 40,000,000 EGP on the valuation date. When expressed in CAD, the property declined from $3,147,000.00 CAD to $1,440,000.00 CAD because of the currency devaluation. The effect of this, when considered alongside the husband’s position about his other assets and liabilities, renders his net family property negative and therefore zero, by operation of section 4(5) of the Family Law Act, R.S.O. 1990, c. F.3 , as amended .
[ 5 ] The wife brought a motion before the arbitrator prior to the commencement of the arbitration for a determination of a question of law. [1] The wife argued before the arbitrator, as she does before this Court, that the value of the Egypt Property should instead be calculated using the same exchange rate at both the date of marriage and the valuation date. That would remove what she characterizes as a “phantom loss” from the equalization calculation. Alternatively, she argues that the arbitrator should calculate the “increase” in value of the Egypt Property expressed in EGP first (i.e. on the above example, that would be $2,000,000 EGP), convert that net “growth” from EGP into CAD using the valuation date exchange rate only, and then insert this particular “growth” calculation, expressed in CAD (rather than a loss), into the husband’s net family property to calculate the equalization payment.
[ 6 ] The arbitrator rejected both of the wife’s proposed approaches in the Award. He found that the value of the husband’s interest in the Egypt Property, whatever it is later determined to be, must be converted into CAD at the relevant dates, using the applicable exchanges rates as at those dates, to accurately capture the decline in the property’s value in the equalization calculation. He found that any recourse that the wife may have to remedy the impact of the currency devaluation lies in the unequal division provisions of section 5(6) of the Family Law Act .
[ 7 ] The thrust of the wife’s several grounds of appeal are that there is more than one way to calculate an equalization payment under sections 4 and 5 of the Family Law Act , without needing to have resort to section 5(6) . She says the arbitrator erred in finding otherwise. Both counsel agree that the standard of review respecting these arguments is correctness.
[ 8 ] In advancing her various, but related grounds of appeal respecting this core argument, the wife relies on the preamble to the Family Law Act . She says the equalization provisions in the legislation need to be interpreted through the lens of “fairness, reasonableness and equity”, principles which are part of the preamble . She says the arbitrator did not do that correctly, by overemphasizing the need for orderliness or certainty, to the detriment of fairness or equity. The standard of review applicable to this constituent argument, is also correctness.
[ 9 ] Furthermore, if this Court finds in the result, that there is more than one way to undertake the calculation, then the wife also says the arbitrator’s reasons are insufficient. She argues this because he chose one approach, having found there to be only one methodology available, as opposed to explaining why he selected one approach from several available methodologies. This ground of appeal engages the law about sufficiency of reasons, although I ultimately do not need to address this, given the disposition of this appeal.
[ 10 ] Likewise, the wife initially argued that it is open to this Court to substitute its decision for that of the arbitrator and select a different approach to be used in the arbitration, if it finds multiple calculation approaches exist. By the end of submissions, it was generally agreed that the selection of which methodology to use should be remitted to the arbitrator, since he subsequently heard all the evidence in the arbitration and he would be best suited to pick one. That assumes the Court is giving effect to the wife’s other grounds of appeal. This too is not a remedial option that I need to decide ultimately, given the disposition of this appeal.
[ 11 ] By contrast, the husband argued before the arbitrator, as he does again now, that the property needs to be converted to CAD on the date of marriage and valuation date, using the applicable exchange rates on those dates, just as the arbitrator found should be done. He says the arbitrator did not err. He further submits that the only remedial option available to the wife lies in section 5(6) of the Family Law Act , as the arbitrator has already found too (although he doesn’t think the circumstances of this case rise to the threshold required by section 5(6)). [2]
[ 12 ] For the reasons that follow, the wife’s appeal is dismissed. The arbitrator did not commit a reversible error. The arbitrator correctly articulated the approach to the calculation of the husband’s net family property and the equalization payment, and the possibility of a remedy under section 5(6) . The wife’s sufficiency of reasons argument also fails, because there are no other methodologies for me to choose amongst, or to remit to the arbitrator to choose, in the circumstances of this case. The husband is entitled to costs of the appeal in the amount of $7,500.00. Counsel agreed that this amount of costs was appropriate at the end of their submissions.
PART II: MATTERS NOT IN DISPUTE ON APPEAL
[ 13 ] Although the Court heard several arguments from the parties about the subject matter of this appeal, this is essentially a single-issue appeal on a question of law. There are a number of agreed facts or matters not in dispute.
[ 14 ] Specifically:
(a) Despite the arbitrator’s reference to the parties’ Mediation-Arbitration Agreement permitting “interim proceedings” in ¶1 of the Award, the Award is in fact final in nature;
(b) There were no facts in dispute before the arbitrator that rendered the wife’s motion for the determination of a question of law inappropriate. Any disputes about the husband’s ownership interest in the Egypt Property or its appraised value were not relevant to the precise issue that was put before the arbitrator on that motion. They will be decided in due course in the arbitration;
(c) The parties even agree on the applicable exchange rates at the date of marriage and the valuation date, I am told. They just disagree about whether those rates should be used in the manner that the arbitrator found they should be used, or whether one or both of the different approaches argued for by the wife are available options;
(d) This appeal on a question of law is allowed as of right by virtue of the parties’ Mediation-Arbitration Agreement. It is authorized by section 45(2) of the Arbitration Act, 1991, S.O. 1991 c. 17 , as amended, also;
(e) The parties received incorrect information from court staff about where this appeal had to be brought. That confusion was later resolved by way of 14B Motion. This contributed to some unfortunate delay. That said, there is no dispute (or confusion any longer) about the fact that this appeal lies to this Court;
(f) It is agreed that the standard of review is correctness, as already indicated. The wife also argues sufficiency of reasons, but again this need not be addressed, given outcome of this appeal;
(g) Arguments about a standard of review based on mixed fact and law, such as the one listed in ground #9 of the wife’s Notice of Appeal dated April 8, 2024, were not pursued. Nor was the wife’s procedural fairness argument (ground #10) argued;
(h) In fact, after the release of the Award, the parties proceeded with the arbitration, even though this appeal was pending. I was told that the parties are waiting for the outcome of this appeal to make their closing submissions. Despite that, the parties agreed on the record in this appeal, that the evidence called at the arbitration would not have been different, even if this Court were now to accept the wife’s arguments and find more than one approach to the calculation of the husband’s net family property is available; and
(i) Counsel agreed that the successful party on this appeal shall receive costs of $7,500.00 as already indicated.
PART III: ANALYSIS
[ 15 ] The crux of this appeal boils down to a matter of statutory interpretation. While it can be resolved on that basis, I will address all of the parties’ various arguments.
A. The Equalization Provisions in the Family Law Act
[ 16 ] The modern principle or approach to statutory interpretation requires the Court to read the words in legislation in their entire context, in their grammatical and ordinary sense harmoniously with the scheme of the legislation, its object, and the intention of the legislature: see R. Sullivan, “The Construction of Statutes”, 7 th ed., chapter 2; see also Re Rizzo & Rizzo Shoes Ltd. ¶ 21 .
[ 17 ] Section 4(1) of the Family Law Act provides that “net family property means the value of all the property [except excluded property] that a spouse owns on the valuation date, after deducting,
(a) the spouse’s debts and other liabilities, and
(b) the value of property, other than a matrimonial home, that the spouse on the date of marriage, after deducting the spouse’s debts and other liabilities, other than the debts or liabilities related directly to the acquisition or significant improvement of a matrimonial home, calculated as of the date of marriage.
[ 18 ] There are definitions of “property” and “valuation date” in section 4(1). There is also a definition of “excluded property” in section 4(2). The meanings of these terms are not in dispute or relevant to the issue on this appeal. Nor is section 4(5) , which deems a spouse’s net family property to be zero, if after undertaking the calculation it ends up in the negative. [3]
[ 19 ] Section 4(4) of the Family Law Act contains a very clear direction. It provides that when a value is to be calculated as of a given date, it shall be calculated as of the close of business on that date. The meaning of “value” in section 4(1) is not otherwise legislated. Below, I return to this absence of a statutory definition for “value” to analyze the wife’s various arguments on appeal fully.
[ 20 ] Once the parties’ net family properties are calculated under section 4 , section 5(1) provides for a monetary payment to the spouse with the lesser net family property, of one half the difference between the two net family properties.
[ 21 ] Then, there is section 5(6) . It provides for a variation of the equalization payment, if there is unconscionability, having regard to one or more of eight enumerated circumstances.
[ 22 ] At ¶ 37 of Serra v. Serra, 2009 ONCA 105 , the Ontario Court of Appeal explained the proper approach to applying sections 4, 5(1) and 5(6) of the statute. The Court’s explanation follows the aforementioned structure. In other words, the spouses’ net family properties are determined first under section 4 . The section 5(1) calculation is then done. If an unequal division is pursued, then before making an order for an equalization payment under section 5(1), a judge or in this case, the arbitrator, decides whether to deviate from section 5(1) under section 5(6) if “equalizing the net family properties would be unconscionable”.
[ 23 ] The arbitrator correctly identified this well-known approach . At ¶ 23 of the Award, the arbitrator also specifically recognized that that the wife may not be without a potential remedy under section 5(6) , but relief does not lie in the sections 4 and 5(1) calculations.
B. The Family Law Act ’ s Preamble Does Not Provide for the Interpretation of the Equalization Provisions Argued By the Wife In this Case
[ 24 ] Unlike some of the other terms in Part I of the Family Law Act , the meaning of “value” [of all property], that forms part of one’s net family property in section 4(1), is not defined. There is not a singular concept of “value” recognized in the case law either. Courts have broadly defined what “value” means: see for example A. Freedman et al., “Financial Principles of Family Law”, available on CarswellOnt (Westlaw), Index Updated May 2025, chapter 2 .1.
[ 25 ] But there are limits to its breadth. For instance, it is not disputed that the calculation of net family property is done in Canadian dollars: see Kelly v. Kelly, 2017 ONSC 7609 ¶ 116 . Indeed, neither side has even taken the position that the Egypt Property shouldn’t be converted into CAD at all. Rather, they simply disagree upon what rate to use and at what time period, or alternatively whether just to convert the change or delta, initially expressed in EGP.
[ 26 ] The wife’s arguments about the interpretation of the legislation can be distilled into the following question: Is the meaning of “value” in section 4(1) sufficiently broad, when interpreted through the lens of the Family Law Act ’s preamble, for this Court to find the two alternative approaches argued for by the wife exist? I find that it is not in the circumstances of this case.
[ 27 ] The preamble of the Family Law Act recognizes the equal position of spouses as individuals within marriage and to recognize marriage as a form of partnership. The preamble also comments on the necessity to provide in law for the orderly and equitable settlement of the affairs of the spouses upon the breakdown of the partnership, and to provide for other mutual obligations in family relationships [my emphasis added]. It is this reference to “orderly and equitable settlement” upon which the wife relies, in seeking to import notions of “fairness, reasonableness and equity” into the definition of “value” in these very specific and somewhat unusual set of circumstances.
[ 28 ] As stated in chapter 9.01[1] of “The Construction of Statutes”, legislative purpose must be taken into account in every case and at every stage of interpretation. Interpretations that are consistent with or promote legislative purpose should be adopted, and those which defeat or undermine legislative purpose should be avoided. The latter two principles apply only in so far as the language of the text permits.
[ 29 ] The interpretation advocated for by the wife in the circumstances of this case runs counter both to other, specific statutory language in the Family Law Act , and to the overall structure of the equalization regime, articulated above. Again, section 4(4) of the FLA specifically provides that when a value is to be calculated as of a given date, it shall be calculated as of the close of business on that date. I fail to see how either approach argued for by the wife, if adopted, wouldn’t run afoul of the specific direction in section 4(4).
[ 30 ] As the authors of “Financial Principles of Family Law” write at chapter 2.3, in an open market transaction, the parties do not have knowledge of future events, or the impact of future events. In the notional market, hindsight facts or evidence are not considered, except in limited circumstances. Only information that was known or knowable at the relevant date(s) can be considered.
[ 31 ] The subsequent drop in the value of the EGP was unforeseen at the date of marriage. Had there been some indication at the date of marriage that the significant devaluation was coming and that it could be valued, then perhaps the situation might have been different, but that is not how this case was presented. [4] , [5] This is not a situation where hindsight evidence is being used to test the reasonableness of an assumption made on the date of marriage: see “Financial Principles of Family Law”, chapter 9.1; see also Grant v. Grant ¶ 29 ; and see Lazarevic v. Lazarevic, 2014 ONSC 7348 at ¶ 103 (on this question of hindsight). [6] As such, the wife’s proposed approaches require the inappropriate use of hindsight.
[ 32 ] Moreover, the arbitrator was rightly concerned that the wife’s purported use of the preamble undermines other specific statutory language found within the equalization structure, quite apart from the section 4(4) that I have already mentioned. At ¶ 24-26 of his Award, the arbitrator writes that “to import the concept of fairness, in valuing an asset in an arbitrary way and one that does not provide for a real value to the owner of an asset at the specific moment in time as specified by the FLA would subvert the very specific equalization regime under the FLA.” This writing is with particular reference to the requirements of section 5(6) .
[ 33 ] The arbitrator refers to the preamble’s use of the word “orderly” in support of this conclusion. He writes that there is “always a tension between predictability (orderly) and uncertainty (fairness)”, but the legislature chose “orderly” as the primary approach when it adopted the equalization scheme, while yielding some of that predictability for flexibility in section 5(6) .
[ 34 ] I disagree with the wife’s argument, that the arbitrator overemphasized the preamble’s reference to “orderly” in these passages, while placing insufficient weight on its reference to an “equitable settlement”. What the arbitrator did in the aforementioned paragraphs of his Award, is explain how the legislation achieves both goals, with certainty or orderliness applying at the section 4 and 5(1) stages, and with some flexibility being available later on, at the section 5(6) stage (albeit the higher unconscionability standard is there used).
[ 35 ] Incidentally, although the arbitrator says that there is always a tension between the concepts of certainty and fairness, when I return the specific wording of the preamble, it actually refers to the concept of “orderly” and “equitable settlement” (although fairness is part of equity). The concept of certainty (or orderliness as it is expressed in the preamble), is not necessarily always in tension with the concept of an “equitable settlement”. As stated in “The Construction of Statutes”, chapter 14.03[1], “[t]he primary function of a preamble is to recite the circumstances and considerations that gave rise to the need for legislation or the “mischief” the legislation is designed to cure”. The enactment of the equalization scheme in the Family Law Act provided an “equitable settlement” for spouses that once upon a time didn’t exist. The goal of orderliness (i.e. the predictability of the equalization scheme itself) isn’t automatically in tension with what is equitable, just because it is certain and mathematical. There is room for some discretion in the “value” concept in section 4(1) , to a point. Still, one could say that the certainty the equalization scheme actually creates equity for both sides. Separating spouses are treated similarly and now know what to expect regarding how their property will be dealt with after a marriage breakdown.
[ 36 ] I share the same concerns that the arbitrator expressed at ¶ 24 of the Award, that the preamble should not be used to undo the very specific language of unconscionability in section 5(6) , and that the wife’s proposes approaches risk that in the circumstances of this case. Differently stated by the husband on this appeal, the approaches argued for by the wife, if permitted at the sections 4 and 5(1) stages, risk watering down the more stringent application of section 5(6) that is supposed to come later on . To this I add again, that they also conflict with the very specific direction about the time to determine value, in section 4(4), in the circumstances of this case.
[ 37 ] This valid concern about the watering down of section 5(6) , is reinforced by the wording of the other, specific legislated purpose of equalization located in section 5(7). Section 5(7) reads:
The purpose of this section is to recognize that child care, household management and financial provision are the joint responsibilities of the spouses and that inherent in the marital relationship there is equal contribution, whether financial or otherwise, by the spouses to the assumption of these responsibilities, entitling each spouse to the equalization of the net family properties, subject only to the equitable considerations set out in subsection (6) [my emphasis added] .
[ 38 ] In other words, departure from the equalization regime is the exception under 5(6) (according to a stricter test), not the norm.
[ 39 ] Lastly but relatedly, I note that even where some equitable remedies, like unjust enrichment, still co-exist with the equalization regime, their use has been curtailed. It is now only in “rare” cases that the usual application of the equalization scheme will not suffice to remedy an inequity (i.e. where unjust enrichment is claimed): see Martin v. Sansome, 2014 ONCA 14 ¶ 66 , 67 ; see also the most recent re-statement of this principle by Law J., at ¶54 of Korie v. Korie, 2025 ONSC 2530 .
[ 40 ] The arbitrator did not err by overemphasizing one part of the preamble and underemphasizing another part of it.
C. The Wife’s Reliance on Williams v. Williams and Devathasan v. Devathasan
[ 41 ] Counsel for the wife submitted that he had undertaken an exhaustive search for case law on point to support the wife’s arguments. Unhelpfully, there is a dearth of case law. Counsel found only two specific cases upon which the wife relies in particular.
[ 42 ] Before addressing these two particular authorities, the Court observes that neither party really made reference to the existence of the several cases that apply the same methodology that the arbitrator adopted (i.e. the use of exchange rates at the date of marriage for date of marriage conversions, the use of valuation date exchange rates for valuation date conversions, or both where applicable, without much concern for any fluctuation in between). This has been done in a number of cases, whether on consent of the parties or otherwise, and typically without much analysis: see for example Abaza v. Abaza ¶ 68 , El Ouazzani v. Chabini, 2022 ONSC 5773 ¶ 40 ; Hamernik v. Hamernik, 2017 ONSC 1261 ¶ 37Merchant v. Amir Ali, 2024 ONSC 2522 ¶ 70 ; Meydaner v. Meydaner, 2020 ONSC 3587 ¶ 201 , 211; and Rezel v. Rezel ¶ 10 . [7]
[ 43 ] It may very well be, that the absence of analysis in those cases, and the dearth of authorities supporting the wife’s positions, is an indication that the methodology the arbitrator said he will apply in the arbitration proper is so well established that it has not been subject to very much litigation otherwise. In any event, I still address here, the two cases submitted by the wife, that take different approaches.
[ 44 ] At ¶ 27-28 of Williams v. Williams, the Court did use the valuation date exchange rate to convert the value of an asset (in that case a vehicle), at both the date of marriage and the valuation date. The wife relies on Williams v. Williams to argue that this is therefore an available alternative methodology.
[ 45 ] At ¶ 132-136 of Devathasan v. Devathasan, 2019 BCSC 661 , the Court did calculate the growth on a piece of real estate located in Singapore, in local currency, and then it converted that growth using the later exchange rate only, finding this approach to be “fairer”. The wife relies on Devathasan v. Devathasan in support of her alternative argument, that there is a third, available methodology.
[ 46 ] The arbitrator distinguished both cases. At ¶15 of the Award the arbitrator writes that Williams v. Williams “… is the only Ontario case cited under the FLA where the Court used the same currency exchange rate on both the date of marriage and date of separation”. Then, beginning at ¶16, the arbitrator offers a number of reasons as to why he disagreed with the approach taken in Williams , rooted in what he viewed to be the correct interpretation of the statute and the operation of Ontario’s equalization regime.
[ 47 ] At ¶ 28 of the Award, the arbitrator notes Devathasan v. Devathasan is a decision under the British Columbia’s statute, not Ontario’s. He distinguishes that case saying that British Columbia’s legislation permits the importation of “a fairness concept” into the analysis, whereas Ontario’s does not.
[ 48 ] On the one hand, I do not entirely agree with the arbitrator’s treatment of these two cases. There is some merit to some of the wife’s arguments in this regard.
[ 49 ] For instance, one reason that the arbitrator declined to follow Williams v. Williams , was his preference for the comments of Mesbur J. in Lazarevic v. Lazarevic , 2014 ONSC 7348 . At ¶ 21 of the Award, the arbitrator writes that Mesbur J. “specifically and correctly rejected” the approach taken in Williams v. Williams .
[ 50 ] In Lazarevic v. Lazarevic , the husband owned a property on the date of marriage, expressed in USD. Mesbur J. used the exchange rate at midnight on the Friday (i.e. the day before the parties’ wedding day; they had married on a Saturday). It is true that at ¶ 103 she did reject “the wife’s argument that [the Court] should use the exchange rate at the date of separation” writing “there is absolutely no basis for that argument”. But while that is some rejection of the approach taken in Williams v. Williams , it is an overstatement to say that the approach taken in Williams v. Williams was “specifically” rejected.
[ 51 ] Williams v. Williams was not referred to by Mesbur J. and Lazarevic v. Lazarevic is also not squarely on point with this case before the arbitrator and now this Court on appeal. The property in question in Lazarevic v. Lazarevic was sold after the date of marriage. Mesbur J. was not asked to use a singular exchange rate on two different dates, since the property did not exist on the two dates (although her comments at ¶ 103 would likely preclude such an approach). It is not even clear to me on what basis the wife took the position she took in Lazarevic v. Lazarevic . [8]
[ 52 ] Nor was Mesbur J. asked to equalize the asset separately due to a significant change in the exchange rates.
[ 53 ] Finally, Mesbur J.’s comments about there being “absolutely no basis” to use a later exchange rate to convert an asset that no longer existed are not elaborated upon and explained with reference to the statutory provisions, however consistent those comments may now be with the interpretation adopted in this case at this later time.
[ 54 ] Regarding Devathasan v. Devathasan , there is some merit to the wife’s argument at ¶ 45 of her Factum, that the arbitrator misapprehended the process that was actually employed by the Court in that case. Although the arbitrator discounted the case based on differences in British Columbia’s and Ontario’s legislation, the “fairness concept” the arbitrator cited is engaged when a British Columbia court considers ordering an unequal division under section 95 of British Columbia’s Family Law Act, S.B.C. 2011, c. 25 as amended. [9] As the wife argues, the Court in Devathasan v. Devathasan was not considering section 95 though; it was determining how to use exchange rates as part of the regular valuation exercise under section 87.
[ 55 ] Despite these subtleties and any disagreement I may have with the arbitrator’s treatment of the aforementioned cases, he still did not commit a reversible error. I find neither Williams v. Williams nor Devathasan v. Devathasan to be dispositive, because:
(a) Neither are binding appellate authorities;
(b) There is little analysis in Williams v. Williams , justifying the approach taken . The Court merely found it was “reasonable” to use a singular exchange rate, because otherwise the husband would be benefitted by a decline in the exchange rate. Exactly how this accords with the statute is not explained in the decision;
(c) The Court in Williams v. Williams also relied on the fact that both vehicles were situated in Canada to arrive at this outcome, but why that is a relevant consideration was likewise not explained;
(d) Even if it has not been as definitively rejected by Lazarevic v. Lazarevic as the arbitrator suggests, neither the Williams v. Williams decision itself, nor the approach taken in it, has been followed by any other Ontario Court that I am aware of (at least not in any reported decision) ; and
(e) Likewise, in addition to the fact that Devathasan v. Devathasan is a trial level decision from another province, it contains little explanation in its pertinent paragraphs as to why removing an asset, calculating its growth in foreign currency and then converting it into CAD at the end of the relationship only, either accords with the governing legislation in British Columbia, or is “fairer”. There is no explanation in the case as to whether what is “fairer” is even an appropriate consideration under section 87 of British Columbia’s Family Law Act. And even if it is, that decision does not speak to why a similar approach should be adopted in Ontario.
[ 56 ] It was open to the arbitrator to explain why he found one case of equal level of Court ( Lazarevic v. Lazarevic ) more applicable than another ( Williams v. Williams ). Although I do not completely agree with the arbitrator’s read of all three cases, there is still no error in the arbitrator’s articulation of the methodology that he will apply in the arbitration proper.
D. The Wife’s Additional Authorities Are All Distinguishable
[ 57 ] The wife relies on several other decisions. They are all factually different, yet the wife says they nevertheless aid in the interpretation of the statute. Specifically, the wife relies on the courts’ references to the principles of fairness and equity contained in these cases. But just as the arbitrator found respecting the cases that were put before him, I also find the cases put before the arbitrator (and anything additional supplied to me for this appeal) to be distinguishable.
[ 58 ] The wife relies on Klean v. Clausi, 2010 ONSC 2583 . At ¶ 20 the Court used the value in an investment account at the date of trial (as opposed to on the valuation date) to calculate the wife’s net family property, citing that was the best way to achieve a “fair, just and equitable result”. The wife cites the use of these words in the decision, to argue by analogy that equitable principles should permit the adoption of the other methodologies she proposes about the use of exchange rates.
[ 59 ] However in Klean v. Clausi , the money in that investment account came from the refinancing of a matrimonial home. The investment account was placed into the wife’s name, but the Court found that all investment decisions were made by the husband alone. The value of the investment account declined post-separation. It was in this specific context that the Court made its comments about what was “fair, just and equitable”. Very importantly this deviation from the approach in sections 4 and 5(1) was part of an unequal division claim under section 5(6). In the end result, this case does not represent a departure from the normal approach to the determination of equalization claims set out in Serra v. Serra ; it more or less follows it.
[ 60 ] Likewise, the wife points to the Court’s use of the words “grossly inequitable and clearly unjust” at ¶ 13 of Mehmeti v. Mehmeti, [1999] O.J. No. 3534 (S.C.J.) . But once again, these words were used in the context of a claim for an unequal division, not for the purposes of calculating net family properties and the equalization payment in sections 4 and 5(1).
[ 61 ] Perhaps closer to the situation in this matter, the wife relies on Kelly v. Kelly , cited earlier. At ¶ 113 of that decision, the parties agreed that the Court should select an exchange rate that was “fair” (although they disagreed as to what “fair” meant).
[ 62 ] However just like in Lazarevic v. Lazarevic , the valuation date in Kelly v. Kelly fell on a weekend. There was no exchange rate from that date to apply, as the currency exchange was closed. The Court was called upon to choose between the exchange rate on the Friday before or the Monday after the weekend, or something in between. The Court adopted the mid-point between the two.
[ 63 ] The Court’s decision in Kelly v. Kelly makes reference to section 121 of the Courts of Justice Act, to which the wife’s counsel pointed this Court during oral argument . That section provides that where a person obtains an order to enforce an obligation in a foreign currency, the Court’s order requires payment of an amount in Canadian currency sufficient to purchase the amount of the obligation in the foreign currency, at a bank in Ontario, at the close of business on the first day on which the bank quotes a Canadian dollar rate, for the purchase of the foreign currency before the day payment of the obligation is received by the creditor. There is discretion to vary the exchange rate though, contained in section 121(3).
[ 64 ] But this is not a situation of the enforcement of an obligation in a foreign currency. Rather, as the decision in Kelly v. Kelly itself recognizes at ¶ 116 , there is no foreign judgment in an equalization case; equalization is calculated in CAD to begin with. And despite the fact that the Court in Kelly v. Kelly looked to section 121 to help it resolve the precise conundrum before it, the situation before the arbitrator, and now this Court on appeal, is not one where the arbitrator will have to choose an exchange rate from a different date due to a currency exchange being closed on the weekend.
[ 65 ] I do not go as far as to find that there is never discretion respecting exchange rates. For example and notably, Mesbur J. adopted a different approach at ¶ 103 of Lazarevic v. Lazarevic , when she too was confronted with a closed currency exchange on a weekend. As indicated earlier, she opted to use the exchange rate from the Friday before the Saturday wedding. This is a slightly different approach from the situation in Kelly v. Kelly , and perhaps more closely aligned with the requirements of section 4(4).
[ 66 ] Another example in family law, concerns circumstances where foreign earned income has to be converted to CAD for the purposes of determining income and calculating child support (by virtue of section 20(1) of the Federal Child Support Guidelines, Reg. 97-175, as amended). Different methodologies have in fact employed in the case law . [10] Notably though, there is no comparable provision like section 4(4), in the income determination context.
[ 67 ] I also recognize that there situations where statutory provisions apply, in which courts have more discretion as to which rates to use. For example, there is statutory discretion in section 121 of the Courts of Justice Act, already discussed, although not strictly applicable in equalization cases. There is statutory discretion in the Courts of Justice Act respecting the rates of prejudgment and postjudgement interest as another example. But the authority to deviate in these latter instances emanates from the statute: see again section 121(3) of the Courts of Justice Act; see also section 130(1) of the Courts of Justice Act. That is very different from extracting principles from a preamble and then recognizing a standalone discretion, where no statutory provision provides for this.
[ 68 ] I find that where different approaches are taken, there is discretion to do so either under a statute, or the discretion exists to overcome a situation that is not clearly defined in legislation, such as a legislative gap. [11] To the extent that some discretion exists when determining what “value” means in a particular case (which may very well require expert evidence, if exchange fluctuation is even possible to value), then the decision-maker would still need to make assumptions at a relevant date and not inappropriately use of hindsight. None of which means that the boundaries of any such discretion can be stretched to the point of sanctioning the use of an exchange rate from one point in time that is a materially different date, and not at all proximate in time , or somehow reasonably connected, to the relevant date to determine value. Discretion does not allow the Court to do this, in the face of clear legislative provisions to the contrary, like section 4(4), or where to do so would undermine the thresholds that apply for other remedies, like that in section 5(6) .
[ 69 ] The wife pointed neither the arbitrator, nor this Court, to any statutory provision in either the Family Law Act or otherwise, nor to any other legal basis, that would confer upon it the discretion she suggests exists in the valuation exercise in the circumstances of this case. Nor for that matter, was either the arbitrator or this Court pointed to any statutory authority, nor to any other legal basis, for the proposition that the Court can equalize separately, the Egypt Property in EGP, and then apply a valuation date exchange rate on the “growth” portion only, otherwise expressed in EGP.
[ 70 ] Finally, the wife supplied this Court with an additional authority, Starkman v. Starkman, 1990 CarswellOnt 284 (C.A.) . There, the Ontario Court of Appeal cited similar principles as those that the wife points to, to find that there is flexibility respecting the deductibility (or not) of notional tax and disposition costs in the calculation of net family property. However there are a three points worthy of note that make that situation distinguishable and not supportive of the wife’s proposes approaches in this case.
[ 71 ] First, notional tax and other disposition costs are “debts and liabilities” to be deducted in the calculations required by sections 4 and 5(1); they are not part of the top line calculation of “value of all the property” per se. Section 4(1.1) of the Family Law Act now makes this clear respecting continent tax liabilities.
[ 72 ] Second, the calculation and consequently the deduction of these liabilities requires a court (or an arbitrator) to consider whether or not the asset in question would likely be sold: see ¶ 23 of Starkman v. Starkman . Although a discretionary decision, it still requires the consideration of the circumstances as at the relevant date. Expert evidence is sometimes required as to their calculation. And as I explain later when addressing the wife’s “phantom loss” argument, it is also unnecessary to find that a property will likely be disposed of in the future, to calculate and include its value in net family property and the equalization calculation.
[ 73 ] Third, most importantly and similarly to the other analysis in this Judgment, nowhere in Starkman v. Starkman does the Ontario Court of Appeal permit an arbitrator or a court to calculate notional tax and disposition costs as at a different, and artificial point in time, and then deduct that sum at date of marriage or as at the valuation date.
[ 74 ] In conclusion, the arbitrator did not err because the references to fairness and equity in these other authorities somehow warrant a different result. Nor does the wife’s reference to Starkman v. Starkman on this appeal change my view of that.
E. The Wife’s “Phantom Loss” Argument
[ 75 ] I end with the wife’s “phantom loss” argument. In a nutshell, she says what has occurred here is a mere paper loss, that has yet to be realized. She says it may never be realized if the property is not sold.
[ 76 ] In support of this argument, the wife relies on Imperial Oil Ltd. v. Canada, 2006 SCC 46 , which disallowed a deduction for a foreign currency loss under a particular section of the Income Tax Act. She also relies on Triad Gestco Ltd. v. Canada, 2012 FCA 258 , in which the Federal Court of Appeal dismissed an appeal from a decision of the Tax Court of Canada, dismissing an appeal of the Minister of National Revenue’s denial of a claimed capital loss (for tax purposes). In that case, a tax planning scheme had been engaged in, to create a paper loss, not an actual economic loss.
[ 77 ] But these decisions turn on the interpretation of particular provisions of the Income Tax Act that apply in a different context . I was not pointed to the particular provisions of the Income Tax Act or told why their interpretations from these cases should have some analogous application to interpreting the relevant provisions of the Family Law Act . Moreover, it is well known that just because the Canada Revenue Agency treats a tax matter in a certain way does not mean that approach always apply similarly in family law. One example of this can be found in section 19(2) of the Federal Child Support Guidelines.
[ 78 ] At ¶ 30 of Cosentino v. Cosentino, 2015 ONSC 271 (citing ¶ 3 of Brinkos v. Brinkos ), Perkins J. wrote that the “general intention of the net family property equalization scheme of the FLA is that “each [spouse] will share equally in the monetary product of the marriage”. Notably, at ¶ 39 of Triad Gestco Ltd. v. Canada , the Federal Court of Appeal wrote that the appellant “was neither richer nor poorer after this disposition”. That is not the case here. The Egypt Property was in reality worth less on the valuation date than it was on the date of marriage, even if the appraisal evidence shows an extra 2,000,000 of EGPs of “growth”. That is because of a simple fact: the monetary value of the EGP was less. The value of the EGP declined far more than the appraised value of the Egypt Property, when expressed in EGP, increased.
[ 79 ] Paragraph 24 of the Award characterizes the wife’s proposed approaches to value as “arbitrary”. I agree. Paragraph 31 identifies that in equalization cases, losses do not have to be realized, before they can form part of a value calculation. I also agree as alluded to already. Even if fairness, reasonableness and equity are principles that should factor into the equation at the sections 4 and 5(1) stages as the wife argues, then those concepts would certainly apply equally to both sides. The wife’s position, if adopted, would require the husband to equalize, without any finding of unconscionability, certain “monetary product of the marriage”, that did not exist by the separation. If for example he needed to actually monetize the property (on separation) to pay the award, he would have had less “monetary product” as at the valuation date than he would have had at the date of marriage.
[ 80 ] The arbitrator did not err in his treatment of the wife’s arguments based on “phantom loss”.
PART IV: CONCLUSION AND ORDER
[ 81 ] In conclusion, the proper approach in the statute is to determine the spouses’ net family properties under section 4 first. In this case, the exchanges rates at the date of marriage and the date of separation are to be used. To the extent that there is some discretion to do otherwise with exchange rates, it does not apply in the circumstances of this case.
[ 82 ] Once done, the equalization payment will be calculated under section 5(1). The arbitrator can then consider whether to award a remedy under section 5(6) , if that is pursued.
[ 83 ] This is the exact methodology that the arbitrator said he intended to apply in the arbitration. There is no error here.
[ 84 ] I make the following Orders:
(a) The wife’s appeal of the Award dated March 7, 2024 is dismissed;
(b) The wife shall pay costs of the appeal to the husband, in the amount of $7,500.00; and
(c) A copy of this Judgment shall be sent to counsel for the parties, and to Mr. Melamed.
[ 85 ] I wish to thank counsel for their assistance with this matter.
Justice Alex Finlayson
Released: June 4, 2025
COURT FILE NO.: FC-18-57337
DATE: 20250604
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Maria Del Bollo Applicant (Appellant) – and – Michael Todary Respondent
REASONS FOR JUDGMENT ON AN APPEAL FROM A FAMILY ARBITRATION AWARD
Justice Alex Finlayson
Released: June 4, 2025
[1] Such motions may be brought under rule 16(9) (a) of the Family Law Rules, O. Reg. 114/99 as amended. The parties agreed before the arbitrator that it was appropriate to proceed in this fashion, rather than leaving all issues to be decided in due course.
[2] I am not deciding whether the threshold of section 5(6) is in fact met. That is not an issue for the appeal. It remains a live issue in the arbitration, and it is the arbitrator’s decision to make.
[3] Section 4(5) may be engaged in the arbitration proper.
[4] The wife filed an article in a documents brief entitled “Analysis on Changes in Exchange Rate of Egypt over Past Decades”. This article was not referred to by the arbitrator and not argued on appeal. The opinion contained in an article is usually inadmissible without a properly qualified expert. The wife’s original factum before the Arbitrator does not argue that a contingency at the date of marriage should be valued. This was not an argument pursued on appeal either.
[5] It is also not appropriate for this Court to say one way or the other whether this would be an appropriate contingency, in the absence of expert evidence as to how such an event would even be valued.
[6] I discuss Lazarevic v. Lazarevic later, for other reasons.
[7] This is not intended to be an exhaustive list, but my quick search on brought up these examples.
[8] The issue may not have even been fully explained or well argued before Mesbur J.; both parties were self-represented.
[9] To be precise, section 95 (a) provides that British Columbia’s Supreme Court may order an unequal division of family property or family debt, or both if it would be “significantly unfair” to (a) equally divide family property or family debt, or both…
[10] For instance, some decisions use an annual exchange rate, whereas others engage in some averaging to account for the fact that income is earned periodically over the year. There may be other approaches.
[11] For instance, respecting Kelly v. Kelly and Lazarevic v. Lazarevic , section 4(4) again requires “value” to be calculated as of the close of business on the date of marriage and the valuation date. Section 4(4) does not contemplate the inability to do so due to either of those dates occurring on a weekend and there being no rate due to market closure.