Zentner v. Katz

2021 BCSC 1079 Zentner v. Katz

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Zentner v. Katz, 2021 BCSC 1079 Date: 20210604 Docket: E182503 Registry: Victoria Between: Beatriz Cornelia Augusta Zentner Claimant And: Alec Zelig Katz Respondent Before: The Honourable Mr. Justice Verhoeven Reasons for Judgment Counsel for Claimant: E. Walker Counsel for Respondent: B.E. Bate J. Murray, Articled Student Place and Dates of Trial: Victoria, B.C. May 17-21, 2021 Place and Date of Judgment: Victoria, B.C. June 4, 2021 Table of Contents Introduction. 3 Issues. 3 Background. 4 Statutory Provisions. 6 Excluded Property Claims. 11 Claimant's Excluded Property Claims. 11 Respondent's Excluded Property Claims. 11 Templeton Avenue - Inheritance. 11 SunLife Shares - Gift 11 SunLife Insurance Death Benefit, and MVA Settlement Proceeds. 11 St. Charles Hotel 13 Babkat Inc. Investment Litigation Proceeds. 14 Cabin Loan. 17 Pre-relationship RRSP Savings. 18 Debt to Sister. 18 Respondent's Unequal Division Claim.. 19 Legal Principles. 20 Analysis. 21 Agreement for Separate Property and Debt 21 Valuation Date. 24 Claimant's Terminal Illness. 25 Excluded Property Used for Joint Purposes. 26 Assessment of the Factors. 26 Adjustments. 29 Other Property Orders. 29 Vice-Versa Developments Ltd. 29 Pinawa Lands. 30 Conclusion and Costs. 30 Introduction [1] This action involves the division of family property and debt between the

parties, after a common law relationship of 37 years, from approximately 1981 to 2017. [2] At trial, the assets of the parties are valued in excess of $17.5 million. This consists of real estate assets valued in excess of $5 million, and financial investments valued in excess of $12 million. [3] The claimant is now 71 years of age, and the respondent is 76 years of age. [4] Sadly, the claimant was diagnosed with cancer on March 10, 2020. Her condition soon became terminal. By the time of trial, she was receiving end of life, palliative care in Winnipeg. She was unable to attend the trial in person. She testified, with great difficulty, via video link from Winnipeg. [5] The most valuable single real estate asset of the parties is a luxury penthouse condominium located on Dunsmuir Road, Esquimalt ("Dunsmuir"). At the outset of the trial the respondent agreed to buy out the claimant's interest in Dunsmuir for an amount equivalent to a third-party offer of $4,850,000. The ultimate amount of the claimant's payment for her interest in Dunsmuir depends upon the outcome of this action. [6] The respondent advances a number of excluded property claims, and also contends that equal division of the family property and debt would be significantly unfair, within the meaning of s. 95(1) of the Family Law Act, S.B.C. 2011, c. 25 [FLA]. Issues [7] The claimant concedes inheritance exclusion

claims of the respondent that total $414,457. The respondent concedes an inheritance exclusion claim of the claimant in the amount of $829,000. [8] The claimant seeks equal division of the property and debts of the parties, resulting in an equalization payment to her of $2,873,119, including RRSP or RRIF rollovers, based on values as at March 31, 2021, the closest available date to the date of trial, May 17, 2021. [9] The respondent claims exclusions of property totalling $2,562,287.75, inclusive of the $414,457 that the claimant concedes. He also seeks unequal division of the investment financial assets in his name, contending that these should be valued at the date of separation rather than the date of trial. The respondent contends that $120,000 is owing to his sister, Patsy Telpner, as a family debt. Background [10] The parties began dating each other in 1979, when the claimant was 29, and the respondent was 35 years of age. Both had children from previous marriages. The claimant has a daughter, Rayna, and a son, Lev, who were about six and three years of age respectively in 1979, and who are now 48 and 45 years of age. The respondent has a daughter, Jennifer, who was about eight years of age in 1979, and is now about 50 years of age. [11] The parties were never married. In their pleadings, the parties agree that they began living together in a marriage-like relationship on

March 1, 1979, and separated on December 31, 2017. [12] At trial, the respondent's evidence is that the marriage-like relationship actually began somewhat later than 1979. He says that the marriage-like relationship began in or about 1984, when the parties purchased a residence together, on Grenfell Boulevard, Winnipeg ("Grenfell"). [13] However, it is clear that the marriage-like relationship began prior to that. [14] When they began dating in 1979, the claimant lived with her two children in a house on Assiniboine Avenue, Winnipeg. She had retained that residence from her marriage. The respondent was living in a house on Montrose Street. The claimant sold her house on Assiniboine Avenue and moved with her two children into the respondent's home on Montrose Street approximately two years before the parties purchased Grenfell, which was in or about 1984. [15] The evidence from both parties, however, is that they were living together at least part of each week, well before the claimant and her children moved into the respondent's Montrose Street home. [16] Given the length of the relationship, and in the circumstances of this case, the precise date that the parties began a marriage-like relationship is not very significant. [17] For purposes of these reasons, I conclude that a marriage-like relationship was established between them not later than January 1, 1981. [18] While

growing up, the claimant's two children resided with the parties, for the most part. The respondent's daughter Jennifer resided with them for a brief time, but usually resided with her mother. The respondent saw Jennifer on weekends. The claimant received minimal child support from her former spouse. The respondent has a good relationship with the claimant's daughter Rayna, who now lives in Calgary, with her son. The respondent states that he attempted to form a father and son bond with Lev but it never really happened. Lev sees it differently. He says he did not have a good relationship with his own father, and that the respondent was a father figure to him. The respondent and Lev are now estranged. I infer that the separation and this litigation are factors. Lev is assisting his mother with this litigation, due to her illness and his position as her financial advisor. [19] As noted, in their pleadings the parties agree that the date of separation was December 31, 2017. In fact, however, the claimant hired legal counsel, who sent a letter to the respondent dated July 18, 2017 advising him that the relationship was at an end. At trial the parties agree that they separated December 31, 2017, which matches the pleadings. I will use that date for purposes of these reasons. Therefore, the length of the relationship was 37 years. [20] Although they separated December 31, 2017, the

claimant continued to reside with the respondent at Dunsmuir until April 2020. [21] When the parties began dating in 1979, the claimant was the owner and operator of a children's clothing store called "Oma's". The respondent graduated as an architect in 1969, and was practising as an architect. He continued to work as an architect, until he suffered a heart attack in or about 2005, which caused him to retire from the practice of architecture. The respondent's heart attack was also one of the reasons for the claimant closing down her children's clothing retail business at or about the same time. [22] During the relationship, the respondent, and to a lesser extent the claimant, were involved in various real estate investments and projects. [23] The parties moved from Winnipeg, Manitoba to Victoria, British Columbia at some point in time between 2005 and 2010. The evidence about the date is imprecise. They purchased a condominium residence together in 2008, located at 1400 Lynburne Place, Victoria ("Lynburne"), so this may coincide with their relocation to Victoria. Again, the precise date they moved to Victoria is not a critical fact. In April 2012 the parties purchased Dunsmuir. [24] They sold Lynburne in early 2019, post separation. Statutory Provisions [25] The relevant statutory provisions of the FLA are as follows: Equal entitlement and responsibility 81 Subject to an

agreement or order that provides otherwise and except as set out in this Part and Part 6 [Pension Division], (a) spouses are both entitled to family property and responsible for family debt, regardless of their respective use or contribution, and (b) on separation, each spouse has a right to an undivided half interest in all family property as a tenant in common, and is equally responsible for family debt. [ ] Family property 84 (1) Subject to section 85 [excluded property], family property is all real property and personal property as follows: (a) on the date the spouses separate, (i) property that is owned by at least one spouse, or (ii) a beneficial interest of at least one spouse in property; (b) after separation, (i) property acquired by at least one spouse if the property is derived from property referred to in paragraph (a) (i) or from a beneficial interest referred to in paragraph (a) (ii), or from the disposition of either, or (ii) a beneficial interest acquired by at least one spouse in property if the beneficial interest is derived from property referred to in paragraph (a) (i) or from a beneficial interest referred to in paragraph (a) (ii), or from the disposition of either. (2) Without limiting subsection (1), family property includes the following: (a) a share or an interest in a corporation; (b) an interest in a partnership, an association, an organization, a

business or a venture; (c) property owing to a spouse (i) as a refund, including an income tax refund, or (ii) in return for the provision of a good or service; (d) money of a spouse in an account with a financial institution; (e) a spouse's entitlement under an annuity, a pension plan, a retirement savings plan or an income plan; (f) property, other than property to which subsection (3) applies, that a spouse disposes of after the relationship between the spouses began, but over which the spouse retains authority, to be exercised alone or with another person, to require its return or to direct its use or further disposition in any way; (g) the amount by which the value of excluded property has increased since the later of the date (i) the relationship between the spouses began, or (ii) the excluded property was acquired. (2.1) For the purposes of subsection (2) (g), any increase in value of a beneficial interest in property held in a discretionary trust does not include the value of any property received from the trust. (3) Despite subsection (1) of this section and subject to section 85 (1) (e), family property includes that part of trust property contributed by a spouse to a trust in which (a) the spouse is a beneficiary, and has a vested interest in that part of the trust property that is not subject to divestment, (b) the spouse has a power to transfer to himself or

herself that part of the trust property, or (c) the spouse has a power to terminate the trust and, on termination, that part of the trust property reverts to the spouse. Excluded property 85 (1) The following is excluded from family property: (a) property acquired by a spouse before the relationship between the spouses began; (b) inheritances to a spouse; (b.1) gifts to a spouse from a third party; (c) a settlement or an award of damages to a spouse as compensation for injury or loss, unless the settlement or award represents compensation for (i) loss to both spouses, or (ii) lost income of a spouse; (d) money paid or payable under an insurance policy, other than a policy respecting property, except any portion that represents compensation for (i) loss to both spouses, or (ii) lost income of a spouse; (e) property referred to in any of paragraphs (a) to (d) that is held in trust for the benefit of a spouse; (f) a spouse's beneficial interest in property held in a discretionary trust (i) to which the spouse did not contribute, and (ii) that is settled by a person other than the spouse; (g) property derived from property or the disposition of property referred to in any of paragraphs (a) to (f). (2) A spouse claiming that property is excluded property is responsible for demonstrating that the property is excluded property. Family debt 86 Family debt includes all financial

obligations incurred by a spouse (a) during the period beginning when the relationship between the spouses begins and ending when the spouses separate, and (b) after the date of separation, if incurred for the purpose of maintaining family property. Valuing family property and family debt 87 Unless an agreement or order provides otherwise and except in relation to a division of family property under Part 6, (a) the value of family property must be based on its fair market value, and (b) the value of family property and family debt must be determined as of the date (i) an agreement dividing the family property and family debt is made, or (ii) of the hearing before the court respecting the division of property and family debt. [ ] Agreements respecting property division 92 Despite any provision of this Part but subject to section 93 [setting aside agreements respecting property division], spouses may make agreements respecting the division of property and debt, including agreements to do one or more of the following: (a) divide family property or family debt, or both, and do so equally or unequally; (b) include as family property or family debt items of property or debt that would not otherwise be included; (c) exclude as family property or family debt items of property or debt that would otherwise be included; (d) value family property or family debt differently than it would be

valued under section 87 [valuing family property and family debt]. Unequal division by order 95 (1) The 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, or (b) divide family property as required under Part 6 [Pension Division]. (2) For the purposes of subsection (1), the Supreme Court may consider one or more of the following: (a) the duration of the relationship between the spouses; (b) the terms of any agreement between the spouses, other than an agreement described in section 93 (1) [setting aside agreements respecting property division]; (c) a spouse's contribution to the career or career potential of the other spouse; (d) whether family debt was incurred in the normal course of the relationship between the spouses; (e) if the amount of family debt exceeds the value of family property, the ability of each spouse to pay a share of the family debt; (f) whether a spouse, after the date of separation, caused a significant decrease or increase in the value of family property or family debt beyond market trends; (g) the fact that a spouse, other than a spouse acting in good faith, (i) substantially reduced the value of family property, or (ii) disposed of, transferred or converted property that is or would have been family property, or

exchanged property that is or would have been family property into another form, causing the other spouse's interest in the property or family property to be defeated or adversely affected; (h) a tax liability that may be incurred by a spouse as a result of a transfer or sale of property or as a result of an order; (i) any other factor, other than the consideration referred to in subsection (3), that may lead to significant unfairness. (3) The Supreme Court may consider also the extent to which the financial means and earning capacity of a spouse have been affected by the responsibilities and other circumstances of the relationship between the spouses if, on making a determination respecting spousal support, the objectives of spousal support under section 161 [objectives of spousal support] have not been met. Division of excluded property 96 The Supreme Court must not order a division of excluded property unless (a) family property or family debt located outside British Columbia cannot practically be divided, or (b) it would be significantly unfair not to divide excluded property on consideration of (i) the duration of the relationship between the spouses, and (ii) a spouse's direct contribution to the preservation, maintenance, improvement, operation or management of excluded property. Excluded Property Claims Claimant's Excluded Property Claims [26] As noted above, the

respondent concedes the claimant's claim for exclusion of $829,000 she received as an inheritance from her step-mother, Kathleen Horvath, who died September 27, 2018, therefore after the date of separation. Respondent's Excluded Property Claims [27] Since all of the contested exclusions are claimed by the respondent, he carries the onus of proof in each instance: FLA s. 85(2). Templeton Avenue - Inheritance [28] The claimant concedes the respondent's claim of $383,100 ($300,000 plus $83,100) received by the respondent as an inheritance from the estate of his father, derived from the sale of a property, which I will refer to as "Templeton Avenue". The respondent's father's name was Hersch (or Harry) Katz. For convenience I will refer to him as Hersch Katz. SunLife Shares - Gift [29] The claimant concedes the respondent's exclusion claim for $31,352.97 representing the proceeds of disposition of shares in SunLife he received as a gift from his father. The claimant conceded this exclusion claim pre-trial on the understanding that the proceeds were kept separate by the respondent. However, the evidence at trial is that the respondent used the funds to fund the purchase of Dunsmuir. Nevertheless, the claimant does not resile from her concession. SunLife Insurance Death Benefit, and MVA Settlement Proceeds [30] The respondent claims an exclusion of $70,150.93 he received July 6, 2016

as a death benefit from a SunLife life insurance policy held by his father. [31] The respondent also claims an exclusion of $42,056 for personal injury settlement proceeds received in August 2016 resulting from a motor vehicle accident that occurred October 25, 2013 (the "MVA settlement proceeds"). The claimant was injured in the same accident but makes no claim for an exclusion of the proceeds of settlement she received. [32] The respondent deposited the SunLife death benefit funds to an RBC day-to-day banking account that he used for various joint expenses such as mortgage payments on Dunsmuir and strata fees. He transferred $66,339 to pay down a joint (claimant and respondent) RBC home line of credit account. Similarly, the respondent deposited the MVA settlement proceeds to his RBC day-to-day banking account and then transferred $40,000 to pay down the joint RBC home line of credit. [33] The joint line of credit was a financial obligation of both parties. It was secured by a mortgage on their jointly owned Lynburne residence. The mortgage was paid out prior to trial. The parties sold Lynburne, post separation, in early 2019, and divided the net sale proceeds between them by agreement. Both were represented by former legal counsel. For some reason not revealed in the evidence, pursuant to the agreement, the respondent received $20,000 more than the claimant. Whether this

extra $20,000 has anything to do with the contributions now claimed as exclusions is unknown. Certainly, that would have been the appropriate stage at which to resolve these claims, and in fact that may have occurred, but there is no way for me to know. [34] The respondent took no steps to keep these particular receipts separate from the claimant, or to document that no gift of excluded property was intended, as he might have: Cook v. Cook, 2021 BCCA 194 at para. 8; V.J.F. v. S.K.W, 2016 BCCA 186 at para. 78; Pisarski v. Piesik, 2019 BCCA 129 at para.

32. There is no evidence that would allow me to conclude that the respondent intended to treat these monies as excluded property, or of an agreement between the parties to this effect at the time. On the contrary, the respondent used the funds to pay down a joint obligation, which is some evidence that he intended the claimant to benefit from the monies received. [35] As I will explain, I reject the overall submission of the respondent that the parties agreed to keep their finances separate throughout the relationship. [36] It is not necessary for me to rely on the presumption of advancement, as I find, considering all of the circumstances, that the respondent intended these funds to be used for the benefit of both parties, and did so: Namdarpour v. Vahman, 2019 BCCA 153 [Namdarpour] at para. 40. [37] I conclude that the respondent has not met the onus of demonstrating these exclusions. St. Charles Hotel [38] The respondent claims an exclusion of $220,550 in this regard. [39] The respondent's father Hersch Katz owned a hotel called the St. Charles Hotel in Winnipeg. At some point in the past Hersch Katz gifted interests in the hotel investment to the respondent and his sister and brother. The respondent and his sister acquired their brother's interest after he died. The details of all this are undocumented and vague, but it appears that in the result the respondent had a

one-third interest in the hotel, directly or indirectly, based upon the one-third share of the mortgage payout the respondent later received. The hotel was sold in 2005 for $850,000, with a $700,000 mortgage owed to Hersch Katz. The sale of the hotel occurred at about the same time as the respondent suffered a heart attack and retired from architectural practice. [40] From 2005-2010 the respondent solely received the benefit of the mortgage payments from the buyer of the hotel, initially of $4,375 per month, interest only, for just over a year, and then of $5,120 per month, principal and interest, to January 2010. The payments were deposited to a joint bank account in the names of Hersch Katz and the respondent. The respondent used these funds to pay for day-to-day living expenses. The total of these receipts is approximately $300,000. The respondent alleges that he owes $120,000 to his sister in relation to these receipts. I will address this below. [41] The mortgage was paid out in 2010. The respondent received one-third of the mortgage payout. His share was approximately $220,000. (On examination for discovery he said the payment he received was $219,908, but at trial he stated that he received one-third of $661,649, or in other words, $220,550.) As noted, the evidence about this is vague, but I can infer that this payment was either a gift from Hersch Katz or payment of an

interest the respondent held, that was a gift from Hersch Katz in the past. [42] The respondent has no actual recollection of what he used the money for. At his examination for discovery he stated that he likely used the money for living expenses. At trial he stated that he could not recall what he used the money for, but most likely he used the money to pay expenses associated with Vice-Versa Developments Ltd. ("Vice-Versa"), a company jointly owned by the parties. He also states that he may have used the money for "investments", but was unspecific about what investments he meant. [43] I conclude that the funds were likely used for joint living expenses of the parties or used to pay expenses for their joint investment in Vice-Versa, or some combination of these uses. Once again, the evidence indicates that the respondent did not intend to maintain a separate and exclusive interest in these funds; there is no evidence that the respondent took steps to keep these funds separate, nor to document that they were to be treated as separate, or that he did not intend a gift. Considering all of the evidence, I find that the respondent has not established this exclusion claim. Babkat Inc. Investment Litigation Proceeds [44] The respondent claims two exclusions based upon the proceeds of a real estate investment he made in Manitoba, referred to as "Babkat Inc.": a) $500,000 deposited to

an investment (margin) account in October 2012; and b) $1,056,430 put toward the purchase of Dunsmuir. [45] Babkat Inc. was the name of a company in which the respondent and a contractor were partnered. The contractor was Armen Babakhanians. [46] The respondent states that he invested about $40,000 to $42,000 into the Babkat Inc. investment sometime before 2002. His partner invested the same amount. No documents are in evidence. The company purchased a former Indian residential school, from Canada. [47] The respondent states that he funded the Babkat Inc. investment with the proceeds of sale of a property called "Treherne", which consisted of a one quarter section of land (160 acres) that he purchased pre-relationship, in or about 1975. He paid $5,000 for it. He sold the Treherne property and received proceeds of about $42,000 to $45,000, which he invested in Babkat Inc. The date of sale of Treherne is not in evidence. However, I can safely infer that Treherne was sold many years after the relationship began, sometime around the time the respondent invested in Babkat Inc. The only date in evidence is that the investment was made before 2002. I infer that the value of Treherne when the relationship began in 1981 would have been much closer to $5,000 than to the $42,000 to $45,000 it sold for many years later. [48] In addition to his monetary investment, the respondent

contributed architectural services to the Babkat Inc. project, and other efforts, such as searching for tenants. [49] The project and investment were very successful. The respondent spent a year searching for tenants. He succeeded in finding a tenant who leased the entire building for a call centre, and entered into a 15-year lease. [50] There was a dispute between the respondent and his partner, who took control of the property. Ten years of litigation ensued. After failed efforts to mediate and arbitrate the dispute, the respondent brought corporate oppression proceedings. He was very successful. In 2012 he received a payment of about $1.975 million, either as proceeds of a judgment or as a settlement of his claims. He argues that these proceeds are excluded pursuant to s. 85(1)(c) of the FLA. [51] However, under s. 85(1)(c)(i) and (ii), settlements or awards representing compensation for (i) loss to both spouses, or (ii) lost income of a spouse are not excluded. [52] Under s. 85(1)(g), excluded property includes property derived from excluded property or the disposition of excluded property. [53] Under s. 84(2)(g), family property includes the amount by which excluded property has increased in value since the later of the date the relationship began, or the excluded property was acquired. [54] By virtue of these sections, therefore, the exclusion of property is only

approximately $5,000, representing the value of the Treherne property when the relationship began. The increase in value of the excluded property since that time is family property, pursuant to s. 84(2)(g)(i). The settlement or award represents compensation for a loss to both parties, since it represents compensation for a loss of family property. [55] The exception under s. 85(1)(c)(ii) also applies. Babkat Inc. was not merely a passive investment. Some of the settlement or award related to payment for the respondent's architectural fees. In addition, the payment is attributable to the respondent's successful business efforts. Therefore, it also, at least in part, represents lost income of a spouse. [56] Finally, and in addition, the respondent made no effort to keep the proceeds separate from the claimant, insofar as the amount used for Dunsmuir is concerned. Once again, there is no evidence that he intended to keep this money separate from the claimant, or took any steps to do so, or of an agreement between the parties to this effect. He used the money to pay for the residence in which both parties would live and which was jointly owned by them. The claimant contributed $239,000 to the purchase of Dunsmuir. Again, it is unnecessary for me to turn to the presumption of advancement, as I find, considering all of the circumstances, that the respondent intended, and in fact used

these funds for the benefit of both parties. [57] In the result, the respondent has established an exclusion of $5,000 in respect of the proceeds of the Babkat Inc. settlement, based on the tracing of the excluded portion of the Treherne property into the Babkat Inc. investment. Cabin Loan [58] The respondent claims an exclusion for $90,000 received from his father in connection with a purchase of a recreational property at Clearwater Bay, in northwest Ontario. The parties purchased the property during the relationship. The purchase price was approximately $128,000. The parties owned it jointly. There is no evidence as to the date it was purchased. I infer that it was long ago, as there is some evidence to indicate that it was enjoyed as a family recreational property for some considerable length of time before 2010. Hersch Katz enjoyed visiting there with the family on many occasions. The property became important to the claimant's son Lev. [59] Rather than obtaining a commercial mortgage, the respondent borrowed $90,000 from his father. He gave his father a promissory note for the debt. When the parties moved to Victoria, the claimant's son Lev, who resides in Winnipeg, purchased the property from them. The respondent received $222,000 for his share of the property, including a small amount for a boat. The claimant gifted her interest to Lev. [60] The respondent did not repay

the loan from his father. He argues that the loan should be considered a gift to him, and thus should be considered excluded property. [61] The respondent has not established that the loan was a gift. On the evidence it was a loan at its inception. His father never formally forgave the loan, but also never pressed him for payment. The respondent testified that his father was pleased to share experiences with the family at the cabin on many occasions. If the loan was informally forgiven, this may have been implicitly a gift to both parties, or to the family generally. [62] I can safely infer the loan is no longer collectible. Ms. Telpner, the respondent's sister, who is or was the executor of the respondent's father's estate, did not indicate that it remains owing to the estate. It seems likely that collection would have been statute-barred long ago. [63] There is no specific evidence as to what the respondent did with his share of the proceeds of sale. There is also no evidence he kept $90,000 or any part of the proceeds separate, or that he intended to maintain a separate an exclusive interest in these funds. I can infer that he used the money for joint purposes such as, most likely, the purchase and costly renovation of Dunsmuir. Therefore, even if the respondent received a gift of $90,000 from his father, the exclusion is not established. Pre-relationship RRSP Savings [64]

The respondent claims that he held $200,000 in RRSP savings when the relationship began. The claim is not proven. The respondent could only guess as to when he began making RRSP contributions, and could only guess at the amount of RRSP holdings at the inception of the relationship. He put the beginning of the relationship as at least two years later than my finding. There are no documents in evidence with respect to this claim. The claimant argues that it was open to the respondent to obtain information from the CRA as to his RRSP contributions in the relevant time frame, which would have been at least some evidence to support his claim. I do not have sufficient confidence in the respondent's evidence to rely on his guess regarding the amount of RRSPs he held. In summary, the exclusion is not established. Debt to Sister [65] The respondent asserts that he owes his sister Patsy Telpner $120,000 in relation to the $300,000 in mortgage payments on the St. Charles Hotel vendor mortgage he received from his father between 2005 and 2010, and which he used to pay day-to-day living expenses. [66] As stated above, Ms. Telpner is or was the executor of the estate of Hersch Katz, who died in or about 2016. Ms. Telpner states that in 2007 the respondent assured her verbally that he would repay the money to their father or to his estate at some point. She states that the respondent said he

would pay the debt off in his will. The respondent says he assured her verbally that he would settle the matter at some point when he was financially able to do so. Ms. Telpner states that she received $60,000 from the estate, so as she sees it, the respondent owes her $120,000. The respondent asserts that this is a family debt. [67] However, Ms. Telpner concedes that she could have demanded payment of the money from her brother in December 2017 when he was paid $383,100 from the estate on the sale of the Templeton Avenue property. She concedes that she is only asserting the claim because she wants to make sure the money does not go to the claimant or her family. [68] The respondent did not list this debt in his sworn financial statement. If the debt was truly owing, he could have paid it long ago. [69] I conclude that the respondent has not proven the asserted family debt of $120,000. This is a contrived obligation, asserted only for the purpose of reducing the claimant's share of family property. Respondent's Unequal Division Claim [70] The respondent argues that equal division of the family property and debt would be significantly unfair, within the meaning of s. 95 of the FLA. [71] On an equal division of the family property and debt, each party's share is approximately $8,000,000. [72] The respondent makes several arguments in support of his contention that equal division

would be significantly unfair: a) an agreement between the parties for separate property and debt; b) the date of separation should be used for valuation; c) the claimant's terminal illness; and d) excluded property contributed to family property. Legal Principles [73] The test of "significant unfairness" under the FLA imposes a more stringent threshold than the mere "unfairness" test of the former governing statute, the Family Relations Act, R.S.B.C. 1996, c. 128, which was repealed effective March 18, 2013. In order to establish the grounds for unequal division, the Court must find that the unfairness is compelling or meaningful having regard to the factors set out in s. 95(2): Remmem v. Remmem, 2014 BCSC 1552 at para. 44. [74] Notably, unlike the former legislation, the FLA does not list circumstances relating to the acquisition, preservation, maintenance, or improvement of family property during the relationship as a factor to be considered under s. 95(2). If relative contribution in respect of the property was intended to be a significant factor in determining whether equal division is significantly unfair, the Legislature would have said so: Jaszczewska v. Kostanski, 2016 BCCA 286 at paras. 40-44. [75] The legislature intended the general rule of equal division to prevail unless persuasive reasons can be shown for a different result. The threshold for "significant

unfairness" is high. There must be a real sense of injustice that would permeate the result if the court did not deviate from the presumptive equal division: Singh v. Singh, 2020 BCCA 21 at para. 134. [76] Entitlement to an equal share in the net family property is not dependant on use or contribution to the family property: Kumagai v. Campbell Estate, 2018 BCCA 24 at para. 81 [Kumagai]. Cases in which unequal contribution was found to reach the significantly unfair threshold have involved marked, prolonged, and intentional or unexplained disparities in contribution to family burdens: Khan v. Gilbert, 2019 BCCA 80 at para. 32. [77] Departure from the presumptive date for valuation of family property is effectively a reapportionment or unequal division of the family property, which can only be done under s. 95 of the FLA: Kumagai, at para. 76; Namdarpour, at paras. 59-61. Therefore, utilizing a date for valuation other than the date of trial requires a finding of "significant unfairness" within the meaning of the authorities I have referred to. Analysis Agreement for Separate Property and Debt [78] The respondent argues that the parties agreed to keep their property and debt separate. He argues that this was an oral agreement respecting the division of property and debt within the meaning of s. 92, which can be considered in support of his unequal division argument pursuant to

s. 95(2)(b). [79] He testified that the parties had separate financial arrangements, and that at times they were almost like business partners. He says that he always treated the claimant like a business partner. [80] The claimant denies any agreement between the parties for separate property and debt. She says that the respondent simply refused to allow her to be involved in his financial affairs. She says that from her point of view, all of their property was jointly owned, no matter whose name was on the title. [81] I accept the claimant's evidence about this. There was no agreement between the parties to keep their property separate. The respondent largely controlled the finances and was able to do so because he had a much larger income. He refused to involve the claimant, except where it suited him to do so. He kept his financial information to himself. These were not mutual decisions. The respondent simply refused to allow the claimant to be involved in some aspects of his financial affairs. An agreement respecting property and debt within the meaning of s. 92 cannot be unilaterally imposed by one party on the other. [82] In some areas the parties had separate finances. They had separate bank accounts, and some separate investments. These arrangements were imposed by the respondent, leaving the claimant with no choice in the matter. [83] However, on a more general level,

the parties had a high degree of economic integration and cooperation. This is far from surprising, given the length of their relationship and the general circumstances of it. In most respects their relationship was a typical domestic partnership that endured for a very long time. [84] The claimant was substantially economically dependant on the respondent throughout. He concedes that over the years the vast majority of her financial resources came from him. She only had the income from her store. [85] However, the claimant contributed directly and indirectly to the family property, and the parties' financial affairs were in fact closely intertwined. So, for example: a) After the relationship began, the claimant sold her home on Assiniboine Avenue, and used the net proceeds to help buy Grenfell, where the parties continued to reside until the early 2000s. The claimant thought she contributed $70,000 to $80,000. The respondent says her contribution was only about $12,000, to the purchase price of $272,000. The actual amounts are not material. The fact that they jointly purchased their residence and both contributed to the purchase demonstrates their intention to combine their resources, at this early and important stage in their relationship; b) Subsequent residences were also jointly owned, such as Lynburne and Dunsmuir. The claimant contributed what she could to the

purchases; c) After the sale of Grenfell, the parties purchased together two other properties, Pond's Landing and Grosvenor. They used the proceeds of sale of these properties to purchase Lynburne; d) As stated above, when the relationship began, the claimant owned and operated a children's clothing store, Oma's. The respondent invested in the business, and received 49% of the shares in it. The claimant worked full time in this business until she closed it in approximately 2005, when the respondent had a heart attack and ceased working as an architect. The business had lost a major account, but the respondent's heart attack was the catalyst for the claimant to close the business; e) The claimant paid for day-to-day household expenses, such as groceries, using her own income from her business or other income. All of her income went to pay for household expenses; f) The parties did not track their expenses. In other words, they did not keep books of account between themselves; g) Although the details are not in evidence, I accept the claimant's evidence that she supported the respondent in relation to the 10 years of Babkat Inc. litigation; h) The parties invested together in several other real estate holdings or projects. These include the properties owned by Vice-Versa, the Pinawa properties, and others; and i) The parties planned to and did retire together in Victoria. The

respondent contributed to the claimant's RRSPs through spousal contributions, and financed or helped finance some of her investments. I infer that tax considerations such as income splitting played a role in the manner in which investments and savings were structured. [86] I have no doubt that over the course of this long relationship the parties supported each other and contributed to the family property in a myriad of direct and indirect ways. The presumptive equal sharing of property and debt under the FLA recognizes this ordinary reality: Venables v. Venables, 2019 BCCA 281 at para. 85 [Venables]. [87] In summary, I reject the respondent's contention that the parties mutually agreed to keep their finances separate. Valuation Date [88] The respondent argues that, by way of unequal division under s. 95, financial investment values should be assessed at the date of separation, December 31, 2017, rather than the date of trial. [89] The argument is driven primarily by one factor, which is the extraordinary rise in the value of the respondent's shareholdings in Apple Inc. [90] At separation, the respondent's investments were valued at approximately $3,065,000 (registered and non-registered). They are recently (as of March 31, 2021) valued at approximately $9,037,000. This tremendous increase is due solely to the fact that he has almost 100% of his investments in Apple stock. Most

of this increase has been relatively recent. [91] By contrast, the claimant's investments have increased only modestly. They totalled approximately $2,387,000 in December 2017, and are valued at approximately $2,414,000 recently. She has made some RRSP withdrawals or de-registrations in the amount of about $600,000. She has enjoyed good returns on her investments. However, on the advice of her son, Lev, who is a professional financial advisor, she reduced her holdings in Apple post separation. As he explained, she had over 80% of her investments in one stock, as a result of exceptional growth in that stock's value over the years. This was a very risky position to be in for a single retiree. She accepted his advice that she should reduce her holdings in Apple and her equity investments in general. She also needed the money to buy her Island Falls condominium, which is family property to be shared, and believed the Apple shares could go down in value. By contrast, the respondent refused Lev's advice, and enjoyed a spectacular gain in the value of his Apple investment. [92] He argues that he chose to continue to take large risks with his portfolio, while the claimant chose to reduce her risk. He argues that he should retain the benefit of his decision. [93] The respondent concedes that he did not do anything with the Apple investments other than continue to hold them. He claims no

special skill, diligence, or effort in this respect. He does not deny that his decision was highly risky. He does not suggest that the claimant's different decision was unwise or imprudent. [94] In short, the claimant followed reasonable advice and made prudent decisions. The respondent took an enormous risk, that paid off. [95] Since the claimant was, presumptively, an equal owner of the investments held by the respondent, the respondent was risking her money as much as his own. By the same token, the claimant's more prudent approach benefited him, indirectly. If his Apple shares had crashed in value, he would not be asking for unequal division. [96] I am not persuaded that the respondent's good fortune is a factor that deserves any weight in the analysis. Claimant's Terminal Illness [97] The respondent argues that the claimant's terminal illness should be a factor. He argues that due to her illness, she does not personally need money. He argues that her share of the property will go to her estate, not to her. [98] However, on an equal division, the respondent will still be very comfortable financially. He has no real need for a larger share of the property. Bearing his age in mind, it is reasonable to suppose that a larger share of the assets in his favour would also ultimately benefit his estate. [99] At separation, the claimant was presumptively entitled to an equal share

of the family property. She should not be disentitled after the fact due to her tragic illness, subject to the respondent meeting the high threshold for establishing significant unfairness. [100] In the circumstances, I place no weight on this factor. Excluded Property Used for Joint Purposes [101] The respondent argues that a relevant factor should be his contributions to family property of what might otherwise have been excluded property. He relies on Venables, in which Justice Griffin states: [112] In not expressly dealing with the question of what happens when excluded property becomes family property, but by providing for reapportionment if equal division of family property would be significantly unfair, the FLA left it open to the court to consider, as a factor justifying reapportionment, the origins of family property as formerly‑excluded property contributed by one spouse. The degree of attention paid to this factor will, as in all property division matters, depend on all the circumstances. [102] The respondent also relies on my decision in McGrail v. McGrail, 2016 BCSC 104 at para. 85. [103] However, on the facts of this case, this is not a significant factor. The amount potentially relevant is approximately $420,000 (in respect of the SunLife death benefit, the MVA settlement proceeds, the St. Charles Hotel, and the cabin loan). In the context of the division of

approximately $16 million, and the circumstances of the parties, this cannot be a weighty factor. Assessment of the Factors [104] Having regard to s. 95 factors, and the meaning of significant unfairness as set out in the authorities, the respondent has not established that equal division is significantly unfair. [105] The respondent has no need that will not be met by equal division. He will retain very substantial assets and live comfortably for the rest of his life. None of the circumstances he identifies deserve significant weight in the analysis. [106] In specific reference to the s. 95(2) factors: a) the duration of the relationship between the spouses: This factor weighs very strongly in favour of equal division. Although made with reference to issues of excluded property, nonetheless of the comments of Justice Choi in C.P. v. K.W.A., 2018 BCSC 332 are apposite: [96] While the FLA does allow parties to keep "what is theirs", it also accepts that families are a joint endeavour, not a business between arm's-length parties. As a relationship grows longer, the responsibilities, capacities, and assets of the spouses will often grow more intertwined. This is recognised in other areas of family law, such as awards for spousal support. The role of the court on the breakdown of a relationship is not to tease apart these threads and restore the parties ab initio, but rather to

address the consequences of the relationship's breakdown and seek fairness in that light. b) the terms of any agreement between the spouses: I have rejected the respondent's contention in this respect. c) a spouse's contribution to the career or career potential of the other spouse: This is not a major factor in this case. No doubt both parties benefited in many ways from the relationship. They each had their spheres of responsibility within the relationship, as one would expect. d) whether family debt was incurred in the normal course of the relationship between the spouses: This is not a relevant factor in this case. e) if the amount of family debt exceeds the value of family property, the ability of each spouse to pay a share of the family debt: This is not a relevant factor in this case. f) whether a spouse, after the date of separation, caused a significant decrease or increase in the value of family property or family debt beyond market trends: As noted, the respondent has been very fortunate that his Apple investments have grown enormously in value, but for the reasons I have stated, this does not lead to significant unfairness in the circumstances of this case. g) the fact that a spouse, other than a spouse acting in good faith, (i) substantially reduced the value of family property, or (ii) disposed of, transferred or converted property that is or would have been

family property, or exchanged property that is or would have been family property into another form, causing the other spouse's interest in the property or family property to be defeated or adversely affected: This factor is inapplicable. There is no basis to conclude that anything done by the claimant post separation was not done in good faith. In global terms, she did not dissipate assets. h) a tax liability that may be incurred by a spouse as a result of a transfer or sale of property or as a result of an order: This factor is not applicable in this case. i) any other factor, other than the consideration referred to in subsection (3), that may lead to significant unfairness: This is a broad category. I have rejected the respondent's arguments about the effect of the claimant's terminal illness, and regarding contributions of potentially excluded property. Adjustments [107] There is one matter that should be adjusted for under s.

95. The claimant withdrew $130,000 from the parties' joint line of credit on December 28, 2016, and deposited this money into her own separate bank account. [108] This money was simply taken by the claimant unilaterally. It appears that she did so in anticipation of the separation of the parties, and in order to protect her financial position. She used most of this money towards the purchase of a condominium at 2208 Island Falls Place, Victoria, in late February 2020. This property will remain with the claimant but its value will be divided between the parties. The claimant should compensate the respondent for one-half of these funds, representing the respondent's share of them. Other Property Orders Vice-Versa Developments Ltd. [109] The parties have equal shareholdings in this company, which owns two properties in Winnipeg. The two properties are on opposite sides of a river, and are connected by an old railway bridge. The company purchased the properties and the bridge from CNR in approximately 2003 or 2004 with the aim of developing the properties. The company applied for rezoning, which was granted. However, the City failed to draft a required zoning agreement within time, and so the zoning change was lost. The company is suing the City. The company paid $250,000 for the properties. $90,000 of this was financed by a mortgage on a property owned by the claimant, Swindon.

The respondent paid the rest. He has been paying taxes and significant litigation expenses. A trial of the action is scheduled for the spring of 2022. [110] The respondent states the lands could only be sold at a great loss presently. [111] The respondent seeks an order that he buy out the claimant's 50% share interest based upon the current assessed values for the two properties, of $85,000, in total. He argues that he cannot get along with Lev Zentner, who will control the claimant's shares in the future. [112] The claimant opposes this, and seeks no order. [113] There has been no valuation of the company. I have no reason to infer that the assessed values of the lands for tax purposes bears any relation to the value of the claimant's shares. Therefore, I decline to make the order the respondent seeks. Pinawa Lands [114] The parties own an 84 lot subdivision in Pinawa, Manitoba. Seven lots are serviced. They paid $55,000 for the property. They have agreed to sell the lands and to divide the proceeds equally. Conclusion and Costs [115] The parties will need to prepare orders that conform with these reasons. They are granted liberty to apply if there are matters they are unable to resolve in working out the details of the orders necessary. I wish to emphasize, however, that this is not an invitation to seek reconsideration of the issues, to raise new issues, or to adduce

further evidence, except to the extent that may be strictly necessary to determine the precise orders required to conform with these reasons. [116] The claimant has been substantially successful. Subject to the effect of any relevant offers to settle, the claimant is awarded costs of the proceedings. [117] Any applications to address outstanding matters or costs must be initiated within 30 days of the date of these reasons. "Verhoeven J."