Reasons for Decision on Uncontested Trial

Court File No.: FS-23-00033584
Date: 2025-01-17
Ontario Superior Court of Justice
Between:
Harumi Komuro, Applicant
– and –
Chunsheng Lu, Respondent

Applicant Counsel: D. Eddenden
Respondent Counsel: Ran Tao (not appearing)
Heard: January 13, 2025

Justice P. Tamara Sugunasiri

Overview

[1] The parties were married on December 25, 1998. They have no children. After being married for 23 years, the parties separated on January 16, 2021 following an alleged physical assault by Mr. Lu at their home. At the time of separation, Ms. Komuro was 60 years old, and Mr. Lu was 66. They are now 64 and 70. They had a traditional relationship with Mr. Lu being the primary breadwinner and Ms. Komuro being the homemaker, but for a part-time job at Tim Hortons for the last 14 years.

[2] Ms. Komuro filed an application for divorce and other relief on January 4, 2023. Mr. Lu responded by filing an Answer on February 6, 2023. On December 16, 2024, Justice Vella struck Mr. Lu’s Answer due to significant failures to comply with court orders. This trial proceeds uncontested. This means that Mr. Lu is not entitled to participate in this trial pursuant to rules 1(8) and 1(8.4) of the Family Law Rules, O. Reg. 114/99 and as noted by Justice Vella in her endorsement. He observed the proceedings via Zoom.

[3] Ms. Komuro seeks five substantive orders plus costs:

a. Fix Mr. Lu’s income as $90,000 for the purpose of spousal support;
b. Order Mr. Lu to pay $2,467/month retroactive to the date of separation and going forward indefinitely in the form of a lump sum payment of $400,445;
c. Fix the equalization payment owing by Mr. Lu as $558,755.30;
d. Declare that Mr. Lu holds 50% of the matrimonial home in trust for Ms. Komuro; and
e. Grant Ms. Komuro a vesting order over Mr. Lu’s legal and equitable interest in the matrimonial home.

[4] For the reasons that follow, I grant Ms. Komuro all the requested orders plus costs of $36,000.

Analysis

[5] Ms. Komuro delivered a Request to Admit (“RTA”) on December 2, 2024, at a time when Mr. Lu was still permitted to participate in the proceeding. He did not respond. Pursuant to rule 22(4) of the Family Law Rules, Mr. Lu is deemed to admit the truth of the facts stated in the RTA and the “genuineness” of the documents listed. Ms. Komuro also filed a Trial Affidavit, marked as Exhibit 1, and testified. I accept her evidence and the deemed admissions from the RTA.

Ms. Komuro is entitled to spousal support

[6] Ms. Komuro was 60 years old on the date of separation (January 16, 2021). The parties were married for 22 years. They immigrated to Canada in 2006. Ms. Komuro took some English language training but was otherwise a homemaker. For the duration of their marriage, she was entirely dependant on Mr. Lu financially, except for the income she received from part-time employment at Tim Hortons used to pay for some household expenses. Ms. Komuro was required to babysit her brother-in-law’s children as part of her domestic responsibilities and her role in the marriage. Ms. Komuro’s total income from all sources in 2023 was $16,452.58. In 2022, 2021 and 2020, it was $15,411.85, $15,756.35, and $25,993. As at January 9, 2025, she has a property in Japan with minimal value, $43,616.89 in cash sitting in various bank accounts and credit card debt of $11,058.

[7] Mr. Lu was 66 years old at the time of separation. He has had minimum wage jobs from time to time but largely derives income from investments, including two condominiums in China. His sworn financial statement of December 16, 2024 states that he is unemployed and earned $30,838 from all income sources in 2023. He claims he has only $7,792.25 in savings. He denies an interest in two condominiums in China, claiming they belong to his brother or were gifted by his brother. He further claims that he owes his brother a debt of $680,000. These representations in his sworn financial statement are contradicted by his deemed admissions in the RTA that he purchased the properties on July 13, 2003, that he holds substantial assets outside of Canada and that he has bank accounts in both China and Japan. I accept the facts set out in the RTA at Schedule “A” when it conflicts with Mr. Lu’s sworn statements which predate the RTA. Mr. Lu had ample opportunity to respond to the RTA. He chose not to do so.

[8] Sections 15.2(1) and (3) of the Divorce Act, RSC 1985, c 3 (“DA”) set out the court’s jurisdiction to make a final order requiring a spouse to pay such spousal support as the court considers reasonable. The general objectives of spousal support found in s. 15.2(6) of the DA are to:

a. recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;
b. apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;
c. relieve any economic hardship of the spouses arising from the breakdown of the marriage; and
d. in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.

[9] Section 15.2(4) of the DA outlines the factors that the court must consider in making a spousal support order, which are the condition, means, needs and other circumstances of each spouse, including: (a) the length of time the spouses cohabited; (b) the functions performed by each spouse during cohabitation; and (c) any order, agreement or arrangement relating to support of either spouse.

[10] The overall goal of the spousal support provisions is to effect “a fair and equitable distribution of resources to alleviate the economic consequences of marriage or marriage breakdown for both spouses, regardless of gender”: Moge v. Moge, [1992] 3 S.C.R. 813, at p. 849. Formulating an appropriate spousal support award is a highly individual and discretionary exercise that requires the court to carefully balance the numerous support objectives and factors set out in the DA in the context of the particular facts of the case: Racco v. Racco, 2014 ONCA 330, 373 D.L.R. (4th) 240, at para. 25.

[11] Given the 22-year duration of the marriage, the role Ms. Komuro assumed in managing the household and helping with her brother-in-law’s children, and her limited income as a Tim Hortons worker with little prospect of securing more lucrative work given her age, training, and life experience, I find that she has both a compensatory and needs-based entitlement to spousal support.

Ms. Komuro is entitled to “indefinite” spousal support

[12] Having determined entitlement, the next step is to determine quantum and duration. I turn first to duration. The Spousal Support Advisory Guidelines (“SSAGs”) suggest the appropriate duration and range for spousal support. Ms. Komuro has provided those calculations. Duration under the SSAGs for relationships over 20 years is “indefinite” – this is often referred to as the “rule of 65”. “Indefinite” support does not necessarily mean permanent. Rather, it means that the court does not set a time limit for the order. These orders can be subject to variation and review. I find that Ms. Komuro is entitled to “indefinite” support from Mr. Lu.

I impute income to Mr. Lu of $90,000 for the purpose of calculating support

[13] The next issue is what income I should base Mr. Lu’s spousal support payment on. Ms. Komuro seeks to impute income to him of $90,000. Below I explain why I agree with her submission.

[14] The issue of Mr. Lu’s income was addressed by Justice Hood for the purpose of setting interim spousal support. On April 17, 2024, his Honour ordered Mr. Lu to pay interim spousal support based on an imputed income of $90,000 and gave detailed reasons for imputing that amount. Justice Hood had a more robust hearing on the issue than I had at trial because Mr. Lu participated and responded through counsel. Having no new information on the issue of Mr. Lu’s income, I agree with Justice Hood’s observations and analysis of Mr. Lu’s finances. I fix $90,000 as Mr. Lu’s income for the purpose of calculating support based on Justice Hood’s analysis and for three additional reasons.

[15] First, Mr. Lu has not provided full financial disclosure despite three court orders to do so. Ms. Komuro has had to piece together his financial picture from the limited disclosure he did provide, his sworn financial statements and an affidavit from her former sister-in-law, Ms. Crabtree, who was married to Mr. Lu’s brother Kevin. Ms. Crabtree’s affidavit is Exhibit 3. What Mr. Lu has revealed are incomplete bits and pieces, leaving Ms. Komuro to chase the information.

[16] For example, in an affidavit sworn on June 29, 2023 Mr. Lu disclosed statements for two CIBC bank accounts and four CIBC credit cards, swearing that there were no other domestic or international accounts or credit cards. Later, in September of that year, it was discovered that at least one of the Japanese accounts remained open. In March of 2024, Mr. Lu produced some account statements for another Japanese account for the first time, after stating in June of 2023 that there were no others. In May of 2024, Mr. Lu produced statements from January 2021 and May 2024 of a Bank of China account. This account is purportedly for his daughter, but he did not provide any evidence of this despite an undertaking to do so in a June 5, 2024 affidavit. Mr. Lu owns condo units in Beijing, but it was not until his fifth financial statement filed on May 24, 2024 that he disclosed them. I do not find Mr. Lu’s financial statements or sworn testimony credible or reliable.

[17] Second, based on the little information Ms. Komuro did find, it is more likely than not that Mr. Lu has far greater income than the minimum wage or no income that he claims. Mr. Lu is deemed to admit that he is the titled landlord of two condominiums in China valued at $978,719.40. He purchased the property on July 13, 2003. The two properties are mortgage free. Ms. Komuro attests, and I accept, that Mr. Lu used to track the dates on which he would receive rental payments on a calendar displayed in the matrimonial home. He is deemed to admit that he has substantial assets outside Canada and has bank accounts in both China and Japan. Mr. Lu is deemed to admit that in anticipation of the parties’ separation he depleted his bank accounts by transferring funds to his family and related parties. Ms. Crabtree confirms in her affidavit that Mr. Lu loaned her family and her company, Riverstone Investment Ltd., substantial sums of money.

[18] Ms. Komuro attests to other surreptitious sources of income that she was aware of during the marriage. I accept her evidence. She states that Mr. Lu worked for his brother in construction and received cash income. Ms. Komuro added up the cash deposits made to the two known CIBC bank accounts, and it totals $19,542. Ms. Crabtree also confirms that Mr. Lu worked with her husband on construction projects and that he was paid in cash.

[19] Third, Ms. Komuro has reviewed the CIBC bank accounts 80-885353 and 63-19394 found at trial Exhibit 2. At paragraph 28 of her Trial Affidavit (trial Exhibit 1), she summarizes, and I accept, that between 2019 and 2021 Mr. Lu deposited $422,339.51 and withdrew $489,897.20. The three-year average for deposits is $140,689.83. The three-year average for withdrawals is $163,299.07.

[20] Based on the available information, I accept Ms. Komuro’s submission that Mr. Lu’s income is largely rental and investment income, of which we may only know the tip of the iceberg. Simply put, Mr. Lu has chosen to present a financial picture that is inconsistent and murky. I draw an adverse inference from Mr. Lu’s conduct that he is hiding assets and income. I draw this inference not only from his brazen failure to comply with the Family Law Rules and court orders, but also from the way he has disclosed information. He leaves the court no choice but to impute income for the purpose of calculating support.

[21] I agree with Ms. Komuro that imputing $90,000 of annual income is fair and just. It is substantially less than the average deposits found in his bank accounts in the two years leading up to separation and in the year of separation, and likely far less than Mr. Lu’s actual income.

[22] Using a mid-range SSAG calculation, this puts his spousal support obligation to $2,467/month from the date of separation.

Mr. Lu shall pay lump sum spousal support of $400,445 rather than periodic support

[23] Ms. Komuro is entitled to spousal support of $2,467/month for an indefinite period commencing January 16, 2021, based on Mr. Lu’s annual imputed income of $90,000 or a lump sum payment of $400,445. She is concerned about her ability to collect periodic payments of $2,467/month due to Mr. Lu’s significant non-compliance so far. Justice Hood ordered him to pay this amount on an interim basis, less carrying costs of the matrimonial home, until the issue was decided at trial. Instead, Mr. Lu has chosen to pay the lesser amount of $638, as previously agreed to on an interim basis by consent order of Justice Brownstone. In other words, Mr. Lu believes he should only pay what he agreed to rather than what the court ordered. It appears that he believes court orders to be optional. They are not.

[24] The court has discretion to fix a lump sum payment where there is a real risk that periodic payments would not be made: Davis v. Crawford, 2011 ONCA 294, 106 O.R. (3d) 221, at para. 29. In Davis, the Court of Appeal upheld a trial judge’s award of a lump sum payment where the trial judge had real concern that the payer would not pay periodic support and it was necessary to affect a clean break between the parties.

[25] The same concern and goal apply in this case. Mr. Lu does not respect court orders. He has the assets and income to make this payment to Ms. Komuro now so that she can plan for her future and be free of Mr. Lu. Mr. Lu was charged with assault on January 16, 2021, which triggered the separation. I have no evidence of what happened to those charges. On a criminal standard, Mr. Lu is innocent until proven guilty. That said, I find Ms. Komuro credible and reliable when she says that she is afraid of Mr. Lu and does not want to deal with him. A lump sum payment will alleviate her concerns and leave her immediately independent of him.

[26] For these reasons, I order Mr. Lu to pay lump sum support of $400,445 as reflected in the SSAG calculation for mid-range support in full satisfaction of support owing from the date of separation. I credit Mr. Lu for support payments already made.

Mr. Lu shall pay Ms. Komuro $558,755.30 as an equalization payment

[27] Pursuant to s. 5(1) of the Family Law Act, RSO 1990, c F.3 (“FLA”), the spouse with the higher net family property (“NFP”) owes the other spouse one-half of the difference between the two parties’ NFPs, which is referred to as an equalization payment (“EP”). Ms. Komuro has prepared her NFP and has used the best information she has to prepare a comparative one for Mr. Lu. Ms. Komuro is thorough, clear, concise, and meticulous in presenting her evidence. The discrepancies in the parties’ NFP calculations largely relate to the differing views on Mr. Lu’s two condo properties in China, which he believes should be excluded, and the attribution of the matrimonial home. Ms. Komuro argues that its value should be divided and not attributed solely to Mr. Lu. Ms. Komuro is correct in law. Section 4(1) and Part II of the FLA treats the matrimonial home differently than other property in the equalization process. The titled spouse cannot take a date of marriage deduction as he would for other properties. In other words, regardless of title, each married spouse is entitled to half the value of the matrimonial home and not just half the value accrued during marriage.

[28] Ms. Komuro has gone to the trouble of obtaining expert valuation reports for the two condos in China and her Japanese property. I accept those valuations. The valuator for her property, Mr. Watarai, unfortunately died in December of 2024. However, I accept his report because I find it both necessary and reliable. Ms. Komuro came to know Mr. Watarai through her husband who had contacted him in the past to try and sell the property. Mr. Watarai has attempted to sell the property several times and has served as a property manager for it. Neither Ms. Komuro nor her family has a personal relationship with Mr. Watarai. He also signed his acknowledgement of his expert’s duty prior to his death.

[29] I accept Ms. Komuro’s equalization calculation. Mr. Lu shall pay her an equalization payment of $558,755.30.

Ms. Komuro has a 50% beneficial interest in the matrimonial home

[30] The matrimonial home is a condo unit at 508-800 Kennedy Road in Scarborough. Mr. Lu is deemed to admit that he holds 50% of the matrimonial home in trust for Ms. Komuro. The basis of this submission and request to admit is that when the couple arrived in Canada in 2006, Ms. Komuro came with $100,000. She gave Mr. Lu $50,000 of it to purchase the matrimonial home. They purchased the home for $93,000 on August 30, 2007. Her understanding was that the home would be put in both names. It was ultimately put solely in Mr. Lu’s name. She claims a resulting trust over the matrimonial home.

[31] A resulting trust can also be referred to as a presumptive trust or an implied trust: Holtby v. Draper, 2015 ONSC 7160, 2015 CarswellOnt 17824, at para. 45.

[32] In Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, at para. 20, the Supreme Court held that: “A resulting trust arises when title to property is in one party’s name, but that party, because he or she is a fiduciary or gave no value for the property, is under an obligation to return it to the original title owner.” A resulting trust can arise in the domestic context where there has been a gratuitous transfer of property: Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, at para. 16; Shwartz v. Schwartz, 2012 ONCA 239, 349 D.L.R. (4th) 326, at para. 41. The presumption of resulting trust is a general rule which applies to gratuitous transfers: Pecore, at para. 24.

[33] Section 14 of the Family Law Act codifies the common law on the presumption of a resulting trust: Holtby, at para. 46.

14 The rule of law applying a presumption of a resulting trust shall be applied in questions of the ownership of property between spouses, as if they were not married, except that,

(a) the fact that property is held in the name of spouses as joint tenants is proof, in the absence of evidence to the contrary, that the spouses are intended to own the property as joint tenants; and

(b) money on deposit in the name of both spouses shall be deemed to be in the name of the spouses as joint tenants for the purposes of clause (a).

[34] Once it is established that no consideration was given for the transfer of property, it is presumed in law that there was a resulting trust. The onus is on the transferee to demonstrate on a balance of probabilities that a gift of the property was intended by the transferor: Holtby, at para. 48; Paddock v. Paddock, 2009 ONCA 264, 2009 CarswellOnt 1593; Pecore, at paras. 20-25. The onus of demonstrating that a gift was intended is on the person receiving the transfer: Kerr, at para. 19; Shwartz, at para. 51. The actual intention of the transferor is the governing consideration: Kerr, at paras. 43-44; Shwartz, at para. 42.

[35] Earlier case law held that a resulting trust could only arise where the parties had a common intention that an interest in the property should accrue to the party without legal title. In Kerr, at para. 15, the Supreme Court stated that common intention had no continuing role in the resolution of domestic property disputes.

[36] In this case, I accept that Mr. Lu gave Ms. Komuro no consideration for her half interest of the matrimonial home, nor did Ms. Komuro intend for her $50,000 contribution to be a gift to Mr. Lu. There is a presumption of resulting trust. The onus would have been on Mr. Lu to rebut this presumption. He cannot do so because he is excluded from participating in this trial due to his failures to comply with court orders and meet his disclosure obligations. On the detailed record before me, I see nothing that Mr. Lu might have relied on to rebut the presumption.

[37] Whether based on Mr. Lu’s deemed admission or by imposing a resulting trust over the matrimonial home, Ms. Komuro has a 50% beneficial interest in it.

Ms. Komuro is entitled to a vesting order over the matrimonial home

[38] As at January 16, 2021 it was appraised at $285,000. Its current value is between $340,000 and $360,000. Ms. Komuro suggests using $350,000 and I agree. Mr. Lu’s interest is $175,000. Ms. Komuro seeks an order vesting Mr. Lu’s interest in the matrimonial home to her in partial satisfaction of his debt. I agree that this is an appropriate order. Even without considering retroactive spousal support, Mr. Lu owes Ms. Komuro more than the value of his share in the matrimonial home.

[39] The court can grant a vesting order under s. 9(1)(d)(i) and s. 34(1)(c) of the Family Law Act and s. 100 of the Courts of Justice Act, RSO 1990, c C.43 where the requesting party demonstrates that the order is necessary to ensure payment of support or equalization: Lynch v. Segal, 82 O.R. (3d) 641, at para. 32.

[40] Mr. Lu has an outstanding spousal support debt because he has failed to comply with Justice Hood’s order. Mr. Lu has been excluded from this trial because he failed to comply with multiple court orders. Mr. Lu does what he wants when he wants to. For the same reason that I have ordered lump sum spousal support, I also vest Mr. Lu’s legal and equitable interest in the matrimonial home in Ms. Komuro’s name in partial satisfaction of the payment owing to her. Ms. Komuro shall have a vesting order in the amount of $175,000 to be deducted against the equalization payment owing from Mr. Lu.

[41] I make no adjustments for outstanding payments Mr. Lu owes for his share of the carrying costs of the condominium post separation.

Costs

[42] Ms. Komuro has been billed $50,888 as the cost of counsel pursuing her application to the end of trial. Given the outcome, this is extremely reasonable. There is always a cost to litigation. Even if Mr. Lu had been more cooperative, Ms. Komuro would have spent some money on lawyers to seek spousal support and equalization. She might have had to spend more than she needed to due to Mr. Lu’s conduct.

[43] Ms. Komuro has been successful in this litigation. Because I find that she would have had to spend some money on lawyers even if Mr. Lu was cooperative, I do not find it appropriate for Mr. Lu to fully indemnify her. After reviewing counsel’s bill of costs, I conclude that the appropriate award of costs is $36,000.

Disposition

[44] I order as follows:

I. Mr. Lu shall pay lump sum spousal support of $400,445 in full satisfaction of his spousal support obligation to Ms. Komuro from January 16, 2021, with credit for support payments Mr. Lu has already made;
II. Ms. Komuro has a 50% beneficial interest in 508-800 Kennedy Road, Toronto, ON M1K 2C9;
III. Mr. Lu shall pay Ms. Komuro $558,755.30 as an equalization payment;
IV. Mr. Lu’s interest in the matrimonial home is vested in Ms. Komuro with its current value as $175,000 in partial satisfaction of his equalization obligation; and
V. Mr. Lu shall pay Ms. Komuro costs of $36,000.

Justice P. Tamara Sugunasiri
Released: January 17, 2025