Epshtein v. Shvartzman, 2025 ONSC 821
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ANASTASYA EPSHTEIN
Applicant
– and –
EDUARD SHVARTZMAN
Respondent
Alexandra Abramian, for the Applicant
James D. Singer, for the Respondent
HEARD: June 10 – June 14, 2024
HOOD J.
REASONS FOR DECISION
Introduction
1The parties married on February 20, 2020. They separated on December 1, 2020. They have no children. There is basically one asset owned by either of them, a matrimonial home in the name of the respondent. The applicant states that the parties agree that there is equity in the matrimonial home of over $300,000.
2However, in opening argument, I was not asked to determine how much was owed in equalization as between the parties. I was instead asked by the parties to make a determination as to whether the applicant was entitled to equalization at all, based upon a document signed by the parties in Israel on September 14, 2012, years before their marriage (the “Agreement”). The respondent argues that the document was a prenuptial agreement, enforceable as a domestic contract under the Family Law Act, R.S.O. 1990, c. F.3 (the “FLA”) and that it ousts the equalization provisions of the FLA, The applicant argues that the document was no such thing, that it lacked formal validity, that it failed to oust the equalization provisions of the FLA, and that she, the applicant, failed to appreciate the nature and consequences of what she was signing.
3The respondent, despite the very brief marriage, makes a claim for spousal support. He acknowledges that if the document is a valid prenuptial agreement, then he is not entitled to support. He argues that if the document is not a valid domestic contract, he is entitled to support on both a compensatory and a non-compensatory or needs basis. Despite making this claim, the respondent provided no DivorceMate calculations and made no submissions as to what an appropriate support amount would be and for what duration. The applicant argues that there is absolutely no entitlement for any spousal support on either basis.
4During closing, in contrast to the opening, the applicant argued as to the amount of equalization that she was owed. She was the only one who put a Net Family Property Statement (“NFP Statement”) into evidence as Exhibit 14. Based on it, she is owed $150,269.42 by the respondent. The respondent chose not to put his own NFP Statement into evidence. He did however argue that the applicant’s NFP Statement was deficient in that she failed to include any costs of disposition of the matrimonial home. While making this argument, he failed to provide any calculation as to what these costs might be.
Decision
5In my view, the document signed in Israel on September 14, 2012, does not oust the applicant’s claim for equalization. If I am wrong in this, I also find that the document should be set aside in accordance with s. 55(1) and s. 56(4) of the FLA. Accordingly, the applicant is entitled to equalization.
6I am also of the view that the respondent has not made out any claim for spousal support on either basis.
7Rather than only determining whether the September 2012 document was enforceable as a domestic contract, I have also decided to determine what the equalization amount is, if any, rather than sending the issue back to the parties for resolution or for a further determination by the court. Based upon the evidence given and the position of the parties, I have no confidence that the parties would be able to reach any agreement, which would result in the need for a further court hearing.
8To have a further court hearing on the amount of equalization would be contrary to the primary objective of the Family Law Rules, O. Reg. 114/99, to deal with cases justly. Not only would such a hearing require further time and expense, it would take away court resources from other cases. The applicant provided a NFP Statement. The respondent chose not to do so for reasons best known to himself. The only valid issue he raised was that of disposition costs.
9While the applicant correctly pointed out that no amount for disposition costs was put into evidence by the respondent, the uncontradicted evidence of the respondent was that if the matrimonial home was equalized, then he would have to sell it in order to come up with the payment amount.
10Moreover, disposition costs are typically included in net family property calculations and no argument was made as to why this would not be the case here.
11The applicant also carried out a calculation of post separation adjustments arguing that she owed the respondent $4,093.57 based upon these adjustments. The respondent provided no such calculations, other than in a very general way and which were premised upon his argument that the applicant took all of the cash that was in the matrimonial home and that she took more from the corporation, Crystal Appliance, than what she admitted to.
12Without calculations from the respondent and preferring the applicant’s evidence over the respondent’s where there is a difference, I accept the applicant’s calculations with the exception of there being no disposition costs. I fix those at a 5% agent’s commission plus legal costs of $1500. With a value of $535,000, the commission amounts to $26,750 and with legal costs of $1500 the net value of the matrimonial home amounts to $506,750 or a total reduction of $28,250 to the respondent’s property on valuation date so that the respondent is to pay the applicant $136,144.42 for equalization. With the applicant’s acknowledged post-separation adjustments of $4,093.57, the total owing amounts to $132,050.85.
Credibility
13Much of the evidence before me, such as the evidence concerning the dog and the car and the immigration issues, had nothing to do with the ultimate issue of equalization per se, but was tendered for the purpose of credibility.
14Throughout the trial the evidence of the applicant and respondent conflicted. In the weighing of their evidence and in making the assessment of them, I adopt the statements referenced by Newbould, J. in Springer v. Aird & Berlis LLP (2009), 2009 CanLII 15661 (ON SC), 96 O.R. (3d) 325 (S.C.), at paras. 14-17.
15All in all, I have difficulty in accepting the respondent’s evidence as credible or reliable when weighed against the documentary evidence and the evidence of the applicant. If there is a conflict, I accept the evidence of the applicant over the respondent’s. By the conclusion of the trial, I was left with the impression that his evidence had been reconstructed or rationalized to coincide with his interest in this action.
16In his evidence in chief, he often gave prepared speeches as opposed to simply answering the questions asked. In cross-examination he either provided answers before the question had been asked or it took multiple questions to give an answer that he did not want to give. He constantly exaggerated, again if he thought it was going to help him. For example, in relation to Crystal Appliance, he said that he worked seven days per week from early morning to late at night, and in relation to his new company, CN Appliance, he said that there was money in its account because he worked harder than five people combined. He had a story to tell, and a position to put forward, and he did so regardless of what the other evidence disclosed.
17When asked about CN Appliance and the fact that he was working for it without his permanent residency status, he at one point acknowledged that he was working illegally because without this status he was not able to live or work in Canada. To him, however, this was not the same as lying or telling a mistruth because he was paying taxes. Yet he also acknowledged that he was paid by customers in cash, the very purpose of which was to evade taxes. He had no financial records or tax returns for CN Appliance because according to him no one had asked for them, yet by making a claim for spousal support, he had an obligation to produce anything that provided evidence of his income. Despite previously acknowledging, somewhat reluctantly, that he was working illegally without his permanent residency status, he later refused to acknowledge this under cross-examination stating that because he was not being paid by CN Appliance, which allegedly was his sister’s company, then he was not working, despite also saying that he was working harder than five people.
18The applicant also had some credibility issues based upon her past conduct. She admitted in chief that when Crystal Appliance was set up, she was the shareholder and director in order to prevent government detection of the respondent, knowing that his permanent residency had been revoked, and that he was not supposed to work. She benefited from this work, but in evidence before me she at least acknowledged this.
19This is in contrast to the respondent who maintained throughout no wrongdoing. When he received Exhibit 18, the letter from the Government of Canada, stating that his permanent residency had been revoked, he stated that this letter only revoked his permanent resident card and not his status. As a result, in his view, he could still work legally in Canada because he still had his status, and the only consequence was that he had to enter Canada thereafter as a visitor.
The Agreement
20The applicant’s evidence, which I accept, is that she and the respondent started dating in August 2012. The respondent was attending Technion University in Haifa, Israel. They moved in together and initially rented an apartment. They realized however that they could save money by living in one of the Technion dormitories for unmarried couples. On September 13, 2012, they signed a Declaration as part of their application to the dormitory (Exhibit 16). The Declaration at paragraph 2.3 provided that if they attached a financial agreement between them then they would score additional points in support of their application. Because they had no such agreement this paragraph was initially crossed out.
21The next day, on September 14, 2012, the parties were having lunch and the respondent brought up the fact that, if they had a financial agreement as part of their application to obtain dormitory housing, they would score additional points which would increase their chances of obtaining the inexpensive housing. They noticed a lawyer’s office across the street and decided that they should see if the lawyer could help them prepare a financial agreement.
22The lawyer was not prepared to draft any agreement but allowed them into his office and gave them access to the internet on one of his computers. Both parties agreed that he gave no advice to them, and they subsequently signed the agreement. I accept the applicant’s evidence, over the respondent’s, that the lawyer did not witness their signatures to the agreement but merely signed it after they had done so. They then submitted the agreement as part of their application, and ultimately, were granted housing in the dormitory.
23There was much argument over whether the document prepared in the lawyer’s office was entitled a Financial Agreement or a Prenuptial Agreement. The translator, Mr. Gavriely, who certified the translation of the document from Hebrew to English, initially entitled it as a Financial Agreement on January 2, 2021 (Exhibit 2). Later, at the behest of the respondent himself, in an email from him to Mr. Gavriely of April 12, 2024 (Exhibit 42), Mr. Gavriely again certified the translation of the document, but this time entitled it as a Prenuptial Agreement, also on April 12, 2024 (Exhibit 17).
24Leaving aside the issue of one of the parties themselves, rather than his counsel, directly contacting an expert witness, without the knowledge or consent of the other party or their counsel, nothing turns on the heading of the document.
25Mr. Gavriely testified that the two headings were in his view synonymous and either heading could be used in a situation where two people started to live together.
26In any event, in my view it is not the heading of the document that matters but the body of the document itself.
27In my view, the document is unclear on its face. Among other things there is no definition of “the common property” and there is no timing with respect to paragraphs 3, 4, 5 and 7. It is unclear whether these paragraphs refer to September 2012 or some other point in time. The use of the words “and/or” in paragraph 7 makes the whole paragraph unclear as to when it is supposed to apply.
28The FLA provides at s. 52 that parties who intend to marry may enter into a marriage contract or agreement in which they agree on their respective rights on separation including the division of property. There are numerous grounds upon which the Agreement in issue before me is unenforceable.
29While in writing and signed by the parties I accept the evidence of the applicant that it was not witnessed. The lawyer signed the Agreement after the fact and as a result it does not comply with the requirement of s. 55(1) of the FLA which provides that a domestic contract is unenforceable unless witnessed.
30The Agreement makes no mention as to when any of the provisions are to apply. It is unclear whether it applies to existing property only or property in the future. It is unclear as to whether it applies to the concept of equalization, separate and apart from ownership. It fails to address the economic position of the parties upon dissolution of any marriage. The document is also silent with respect to the issue before me – the matrimonial home. The Agreement if it purports to oust the substantive right to equalization and the specific provisions of the FLA is not irrefutably clear in its intention to do so.
31But the most compelling reason to find the Agreement to be unenforceable is that the applicant did not understand the nature or consequences of the Agreement.
32The preparation of the Agreement must be considered in context. The parties were signing it in order to submit it as part of their application for inexpensive dormitory housing in hopes that the Agreement would assist their application, not to create an agreement as to equalization of property if and when the parties ever married.
33The parties had only started dating. There was no talk of marriage. There were no assets to disclose. The whole concept of equalization of future property was not even a consideration.
34I do not accept for a moment the respondent’s evidence that he required an agreement to protect him from any future financial claims by the applicant because his mother was going through a difficult separation and he did not want the same thing to happen to him. This was a story concocted after the fact by the respondent in the hopes of establishing some basis for the Agreement.
35If he wished to create an Agreement that would protect him, why would he allow the applicant to draft it, as he testified? Why would it be so poorly drafted and unclear if this was its intention? Why would he need such an agreement when they had just started dating? I find the respondent’s position and evidence to be preposterous.
36The Agreement was hastily created, not for the purposes of ousting the applicant’s claim for equalization, but for another reason completely. Most of the caselaw deals with a situation where a marriage is fairly imminent or at least on the horizon. In that situation it can at least be argued that there was an understanding that that is what the agreement was for - something to do with the parties’ marriage. Here that is not even possible.
Other Issues
37With respect to spousal support, I see no basis for any support being paid by the applicant to the respondent. The respondent provided no DivorceMate calculations. His income numbers were highly suspect, but from the very little amount of evidence before me, it would appear that he had a higher income than the applicant. That he was paid in cash and was working illegally is between him and governmental authorities, not him and the applicant. His claimed inability to earn any income, despite the evidence to the contrary, was a result of his illegal status in Canada and not from anything caused by the applicant. Any illegal status was due to his own decisions.
38The respondent on his own evidence continues to work illegally, now allegedly for his sister’s corporation. Whether he is paid out of the revenue generated by him for this new company is between him and his sister and has nothing to do with the applicant.
39Finally, the respondent asks for an order in relation to the dog, Molly. The parties have already entered into a settlement concerning the dog and no compelling evidence or reason was provided to me, by the respondent, as to why the settlement should be changed or how the applicant was in breach of the settlement.
Costs
40Being the successful party, the applicant is presumptively entitled to costs. The parties filed their respective Bill of Costs. The total figures for each party are practically identical. I would hope that the parties would be able to reach an agreement on costs. If they do so, they are to inform my assistant of the fact of the agreement at maria.kolliopoulos@ontario.ca. If unable to reach an agreement, the applicant is to provide her cost submissions of no more than 4 typed double-spaced pages along with any attachments, such as offers to settle, within 20 days of today’s date. No caselaw is to be provided. The submissions are to be uploaded to Case Center and provided to my assistant at the above-mentioned email address. The respondent is to provide his submissions, subject to the same directions within 20 days thereafter. There are to be no reply submissions.
Justice K. Hood
Released: February 05, 2025
COURT FILE NO.: FS-21-00022952
DATE: 20250205
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ANASTASYA EPSHTEIN
Applicant
– and –
EDUARD SHVARTZMAN
Respondent
REASONS FOR DECISION
Hood J.
Released: February 05, 2025