Analysis of the Assets on the Date of Separation

Cheng v. Sze, 2020 ONSC 937 by Justice Charney continues to provide excellent guidance on various issues of matrimonial law.

In this blog I would like to look into the issue of the analysis of the assets of one of the parties on the date of separation. In the previous blog in the same case the court had decided on the date of separation. The next step then is to understand and decide on what the assets of the parties are on that date.

Respondent’s Assets on Date of Marriage

Facts: [42] The respondent takes the position that he had an investment account worth $200,000 on the date of marriage.

[43] The respondent testified that in 1995 he began to invest in the stock market, and has continued to invest since that time. Between 1995 and 1999, his mother lent him a total of $200,000 for this purpose. He has provided a copy of a loan agreement, signed by him and his mother, and dated September 6, 1999, which states: I, David Sze…hereby promise to pay back in full the borrowed amount of $200,000 from (his mother). The money will be used for the purpose of investing in stock market with TD Waterhouse account, all stocks can be sold at any time with the direction of (his mother) to pay back in full as requested.

[44] As indicated, the money was lent over a period of five years, and there is no evidence how much was lent at any time during those five years.

[45] The respondent testified that there was no fixed date for the repayment, but he repaid his mother from his TD Waterhouse account in September and October 2013. He stated that these dates had nothing to do with the events of September 5, 2013, but just happened to be when his mother asked for repayment of the loan.

[46] The respondent also testified that on the date of marriage he had $200,000 in his TD Waterhouse investment account, but he has no bank records to confirm this. He testified that he asked the bank for records, but the bank told him that they cannot obtain any records prior to 2008. He does not, however, have any affidavit or even any correspondence from his bank to confirm his efforts to obtain records or to confirm that he was informed by the bank that the records from 2000 are not available.

[47] The applicant points out that in the respondent’s first Financial Statement dated May 25, 2017, the respondent swore that on the date of marriage the estimated value of the TD Waterhouse account was $120,000. This was repeated in his sworn Financial Statement filed with the court and dated November 10, 2017. There was no reference to the $200,000 TD Waterhouse account on the date of marriage in the respondent’s sworn Financial Statement dated October 22, 2019.

[48] When asked to explain why, in 2017, he swore that there was only $120,000 in the TD Waterhouse account on the date of marriage, the respondent explained it was because he had already paid back $80,000 to his mother before the marriage.

[49] This evidence was entirely inconsistent with the evidence in the respondent’s affidavit, where he testified that that he took $200,000 from that account in September and October of 2013 to pay back his mother. It was clear on cross-examination that the respondent was generally confused about his financial affairs. His story kept changing. He could not explain many of his financial documents, answering that he did not prepare the financial information and the questions should be directed to his accountant.

[50] The respondent also explained that he had two investment accounts with TD Waterhouse, an investment account, and a margin account. The margin account was money borrowed to purchase stocks, and in order to calculate the value of his investment account you have to know what is owed in the margin account.

[51] While the applicant accepts the fact that the respondent’s mother lent him $200,000 over a five year period prior to the marriage, and that the loan was paid back in September/October of 2013, she disputes the respondent’s claim that he had $200,000 in his investment account as of the date of marriage.

Analysis: [52] Pursuant to s. 4(3) of the Family Law Act, the onus is on the respondent to prove the value of his assets on the date of marriage. See: Jacobs v. Jacobs, 2011 ONSC 2699, at paras. 41 – 43; May v. May, 2013 ONSC 4819, at paras. 103 – 110; Colivas v. Colivas, 2017 ONSC 4730, at para. 177. The respondent has provided no documentary evidence to confirm the value of his investment account in 2000. He has provided no evidence from his bank that they are unable to access bank records from the year 2000. The evidence that he provided at the hearing is inconsistent with his sworn financial statements from 2017. He has provided no evidence as to what he owed in his margin account in October 2000, which would have to be deducted from the amount in his investment account.

Conclusion re: Assets on Date of Marriage [53] Given the unreliability of the respondent’s testimony on this point, I am not prepared to accept his evidence of value, or his evidence that the bank is unable to access records from 2000, without some corroboration from the bank. As such, I find that the respondent has not met his onus under s. 4(3), and assign no value to the TD Waterhouse investment account on the date of marriage. Blog analysis of the above: The most important take away from this section of the case is that when a witness gives testimony in court and at trial, there ought not to be any inconsistency between what the witnesses swears as truth on the witness stand and what the witness has actually given in writing in the financial statement which again is a sworn document.

Inconsistency is exactly what happened in the above case. The financial statement responded never mentioned the $200,000. However, he insisted that he had $200,000 on the date of separation. Unfortunately he had no bank records to prove it and even worse, as the judge noted, he did not even obtain an affidavit or other documents from the bank to show that he had made efforts to get those records from the bank that they said were unable to obtain. What do clients need to show the property sits on the date of separation? The clients need a solid lawyer who will help them with trial preparation to ensure there is no inconsistency between the financial statement and what they are going to testify. Clients also need a solid lawyer to ensure that proper analysis of the facts are done and that there is a thorough preparation and presentation to the court. We will ensure that this is done for you at Shankar law. At Shankar Law, we are happy to assist and guide you through your spousal, matrimonial and divorce challenges. We work mainly in three counties: Huron, Bruce, and Grey and span several cities (Southampton, Kincardine, Goderich, Wiarton, Hanover, Dundalk, Walkerton, Meaford, Markdale, Chatsworth), through our two locations in Port Elgin and in Owen Sound.