CITATION: Borutski v. Borutski, 2011 ONSC 7099 COURT FILE NO.: 08/D1051 Pembroke

DATE: 2011/12/08

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN: ) )

Duncan A. R. Crosby, counsel for the Applicant

Mary Ann Borutski

Applicant

– and –

Basil Joseph Borutski

Respondent

) ) ) ) ) ) ) ) ))))

) ) ) HEARD: November 18th, 21st , 22nd, 23rd

and 25th, 2011 LEROY, J.

REASONS FOR JUDGMENT

[1] The applicant, Mary Ann Borutski, (Mary Ann) seeks relief arising from the breakdown

of her marriage to Basil Joseph Borutski (Basil). All legal issues were resolved by agreement save for the equalization of their net family property. The child care and child support issues are settled. The parties agreed to exclude Mary Ann’s WSIB pension fund and the hunt camp property registered to Basil from the equalization process. Mary Ann retains the pension free of any claim by Basil. Basil retains the hunt camp lands and premises free of any claim by Mary Ann. Although Basil advanced a claim for spousal support through the trial he, correctly, withdrew during argument. The issue for trial involved the applicant’s claim for an equalization of the net family property of the parties.

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[2] The equalization claim is complicated by Basil’s reliance on handwritten documents from 1994. He advances the position that these documents immunize him from the equalization claim. The first document is titled “marriage contract’. It was handwritten by and signed by Mary Ann on July 25, 1994. The second is a court order made by Mr. Justice E. R. Millette on September 7th, 1994 pursuant to minutes of settlement printed by Basil and signed by both.

[3] Neither document withstands scrutiny. My analysis looks at:

i. Interpretation of the “marriage contract” and the Minutes; and ii. The process that parties used to achieve the agreements alleged.

[4] Beyond that issue, the equalization calculation is relatively straightforward. Although the

parties devoted significant testimony to the ownership and value of various chattels retained by Basil after separation, the values are not significant. The only significant asset of the parties is the matrimonial home and they agreed to its valuation date value.

[5] From what the witnesses said at trial, this was a wretched marital relationship. I am unable to discern whether the parties are victims of unfortunate circumstances, of their own foibles, or a combination of both.

Background

[6] As the documents were compiled in 1994 the circumstances of the parites at the time and today pertain.

[7] Mary Ann is 49 years of age. Basil is 54. They raised two children and the third, Sahra is 16. Sahra resides with her mother. Candace, age 30 is a child of another union; however, Basil engaged in a care giving role beginning when she was one or two years of age. Amanda is 25 and independent. Basil called Candace and Amanda as witnesses in his cause.

[8] Mary Ann alleges a steady regimen of domestic violence. Basil denies and points to the fact that he has never been convicted of such charges in relation to Mary Ann. Basil’s lament is that he was falsely accused by Mary Ann on three occasions. He lived in constant fear of false allegation. Curiously, Basil advances the same lament in respect to charges arising in circumstances unrelated to Mary Ann.

[9] The relationship began in 1982. Although both parties are native to this area, Basil was working in Kitchener at the time, later training as a millwright. They lived there for eight or ten years. Amanda was born in Kitchener on September 17, 1986.

[10] Mary Ann alleged domestic assault in 1985. Basil incurred legal fees in the amount of $20,000.00 successfully defending the charges. He suffered a serious work related injury and was unable to work for some time. He states that he was forced to liquidate ownership of another lot in Round Lake to pay the legal fees. Save for the first trial, the

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pattern that repeated itself over the years is that after reporting an assault (true or not) they would patch things up and Mary Ann recanted, either before trial or at trial.

[11] Basil purchased 2177 Round Lake Road on July 11, 1989. They constructed a home on the land by salvaging a log cabin from a nearby property and moved in 1989.

[12] Events in their lives escalated in 1993.

[13] They separated in December 1993 and Basil was charged with assaulting Mary Ann in February 1994. Mary Ann brought an action against Basil seeking family law relief at the time. Basil suffered significant personal injuries in a car accident in May 1994. The parties reconciled in June 1994. They married on June 29, 1994. They conceived Sahra in July 1994. Mary Ann signed the document titled “Marriage Contract” on July 25, 1994. Basil was acquitted of the assault charges on August 4, 1994. The consent order was issued September 7, 1994. They separated in December 1994 for three or four years.

[14] Basil received compensation arising from the injuries and residual disabilities resulting from the MVA. The disability insurer advanced $60,000 to construct a shop on the home lands so Basil could work at home at his own pace. The third party insurer advanced the sum of $90,000.00 in damages in 1998 and 1999. He used that money to buy a Harley Davidson motorcycle for $28,000 and a used Dodge truck for $60,000. Amanda received $10,000 for loss of companionship under the FLA. He says that the balance of the insurance proceeds was invested in the matrimonial home. As the result of the disability from the accident, the mortgage payments on the home were paid by an insurance company. Both parties were awarded retroactive WSIB and CPP benefits, the proceeds of which went into living expenses or legal fees along the way.

[15] The parties resumed cohabitation in 1999. Basil acquired title to a twenty acre parcel (hunt camp) nearby the matrimonial home land on December 17, 1999 for $3,500.00. They separated for the last time on August 27, 2008.

[16] The parties settled the issues of custody and child support. Mary Ann has an order for custody of the child, Sahra by order dated June 28, 2010. Basil pays guideline child support to Mary Ann for Sahra’s support in the amount of $137.00 per month based on total annual income of $15,854.00 per year. Basil’s income derives from WSIB and CPP disability benefits and amounts to $16,568 per year. Mary Ann’s income is derived from WSIB, CPP, child tax benefits and child support and amounts to $25,433 per year.

[17] Both parties are disabled from gainful employment.

[18] Mary Ann experienced carpal tunnel symptoms in both wrists arising from repetitive employment tasks in Kitchener. Surgical intervention did not provide relief. She contracted breast cancer in 2001, leading to immediate intervention that included a mastectomy, radiation and chemotherapy. She is symptom free in respect to breast cancer for 10 years. She reports that a tumour attached to her pituitary gland was diagnosed in 2003 but that she remains asymptomatic. Cancer medication caused uterine cancer symptoms in 2006 resolved by a full hysterectomy. She has fibromyalgia.

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Symptoms include chronic pain and fatigue. A stroke caused permanent left side hearing impairment and loss of sensation. She takes prescribed medications that include Demorol, Tylenol #3 and Lyrica. She confirmed that pain management clinic palliative method involves daily pain medication as an essential component.

[19] Basil suffered at least two major physical injuries that leave permanent residual impairment. His right hand was detached and re-attached following a job-site injury in Kitchener. The fine and gross motor skills in respect to the right hand are affected. He states that he can print but not write. It was after that he returned to school to qualify as a millwright. As noted, he was injured in an MVA in 1994, resulting in permanent residual disability. His back is compromised. That said, he is very good with equipment and has, over the years, purchased used, sometimes ancient chattels, for purposes of refurbishment and resale.

[20] The parties bring disparate narratives forward.

[21] Basil vehemently denies having ever assaulted Mary Ann. He asserts that she is vindictive and manipulates the justice system by making false charges. He believes she suffers from mental health issues that disable her from effective parenting, from responsible financial management and that distort her reality. He states that the “marriage contract” and Minutes were Mary Ann’s initiative. He stated that he knew nothing of the “marriage contract” until they attended court on September 7, 1994. He recalls that Mary Ann dictated the Minutes and he transcribed with minimal input. The Will was her idea.

[22] Mary Ann states that Basil destroyed her spirit by relentless threats and abuse. She explained the sequence after the December 1993 charges. She states that he stalked her, constantly pestered her to recant, insisted that it did not happen, told her that no one would believe her in court having regard to the acquittal in Kitchener, that he would take the girls from her and she would never see them again. She says she believed he would succeed and capitulated.

[23] She states that the marriage and Sahra’s conception were Basil’s strategies to manipulate the court. His mission was to marry and conceive another child thinking that no judge would send a married expectant father to jail, particularly when the expectant wife was in support. Mary Ann’s mantra throughout her testimony was that she did what she was told because the underlying message was that no one would believe her and the threat that if she disappointed he would take the children. Resistance was futile.

[24] Mary Ann states that by the time she wrote the “marriage contract”, the Minutes and the Will her spirit was inert to the extent that she complied with Basil’s bidding without question. She recalls that Basil wrote the marriage contract and will out for her to copy, which she did.

[25] She recalls that the will document, written in 1995 giving custody of the children to Basil, was imposed in the circumstance of the breast cancer and the real concern that her

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family would intervene after her decease, knowing how incompetent, volatile and abusive they thought Basil to be.

Credibility

[26] In every family file each party’s assumptions, conclusions and recollections are tainted by the patina of their own virtue and the ugliness of the marriage breakdown. The parties dedicated significant trial time to establishing that their version to be the right one. The analysis that I applied to the validity of the impugned documents, for the most part, eliminates the credibility or reliability of the parties from prominence in my decision.

[27] Although Basil called Candace and Amanda, their testimony was unfavourable to his cause. Until a witness’ credibility is made an issue by the opposing party, witnesses are assumed to be trustworthy and of good character. Their credibility is untarnished. They verified their mother’s version of the dysfunction in the marriage and confirmed that Basil was violent, easily agitated and tyrannical toward his family members. Amanda confirmed that the equipment depicted in the photographs – TR tab 8 belonged to the family. Candace testified to having vivid memory of Basil’s violence toward Mary Ann dating back to the early years in the vehicle that included hair pulling, slapping and an attempt to push Mary Ann from the moving vehicle. She recalls that she was horrified, as was Amanda who was a baby – age 3 at the time. Candace confirmed the assault in 1993 and that she called 911. Amanda confirmed the observation that her mother was bloodied and dirty on her arrival at the home in August 2008 when the parties finally separated. Basil states those injuries were self-inflicted.

[28] The inconsistencies in Basil’s evidence were ubiquitous to the extent that it seemed to be conjured for best effect at any given point in the trial and deserves comment. Where there is a material difference in recollection, Mary Ann’s recall is preferred. I do not intend to highlight every incongruity in Basil’s evidence. That would be fruitless and I would overlook others. A few will suffice to make the point:

i. Respondent witness, Amanda recalls the mooning incident, the repeated threats to burn the home should Mary Ann secure exclusive possession, Basil’s marijuana cultivation, possession and dealing and ownership of the yard chattels. Basil denies all of those incidents. In terms of evidentiary effect, respondent’s testimony tend to cancel one another out on those issues.

ii. Respondent witness, Candace confirms the assaults in the Bronco and December 1993. Basil asserts victimization and wrongful allegation. In terms of evidentiary effect, respondent’s testimony tends to cancel one another out on those issues.

iii. Mary Ann asserts that the three daughters were in her care throughout the period of separation between 1994 and 1998 and that she drove Amanda to the school bus pick up every day. Basil at one point in testimony stated that Amanda remained in his care through that period. Later, on two occasions, when trying to

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explain the grounds for reconciliation in 1999 he said that he missed the children and wanted them back in the home. I have no doubt that Amanda lived with Mary Ann throughout. Basil needed evidence of Amanda in the home to complete the FLA derivative damages claim awarded to Amanda’s account in the amount of $10,000 so the school bus records needed to confirm her home address as his;

iv. Basil consistently took the position that the $20,000 referred to in paragraph 7 of the Minutes pertained to accumulated legal fees he incurred arising from the domestic assault trial in Kitchener and possibly for money he was out of pocket to replace furniture Mary Ann removed from the house coincident with the 1993 separation. When he realized that paragraph 7 is not an indemnification clause and that paragraph does not achieve that purpose, he backpedalled and took the position that he had no idea what the paragraph or the $20,000 pertained to.

v. At trial Basil, repeatedly declared that he was unaware of the “marriage contract” until September 7, 1994 and that he was an innocent bystander to the Minutes when they were compiled. In his Answer he emphasizes that the “marriage contract” and Minutes were the price of reconciliation – paragraphs 8, 9. His evidence was that the lawyer misunderstood.

vi. Basil dismissed the significance of his oath in relation to the sworn financial statement dated December 10, 2010. He denied a review of the financial statement at the time of deposition and that it constituted an accurate financial statement at the time.

Immunity from Equalization

[29] Basil relies on two documents as follows:

“Marriage contract

I Mary Ann Borutski being of sound mind and body give my husband Basil J. Borutski full control of any assets that courts may say I have the right to. I also give full custody of both girls Candace Anna Rose Mask and Amanda Dawn Borutski to Basil J. Borutski. I am doing this because of a mental disorder which in the past on many occasions because of another personality that comes out in me. I’ve tried to take the children from him not allowing any access whatsoever. I have made false statements about him to convince authorities he should not have custody. I have destroyed the children's lives unknowingly. This has gone on for 12 years. I am now facing reality. I am seeing many counsellors, doctors and using self-help techniques to fight my dissociation problem but until I have completed this healing process and while I am in a state of mind where I recognize what I've done I want to make sure my husband has the right to take care of the children and all financial decisions. I believe he's the only person that I can trust to do what is right and fair for everyone concerned. I am doing this on my own free will and I am not being

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coerced or threatened. This is my choice. We have already lost one home and heavily indebted our present home because of my irrational choices. This is my way of not allowing myself and my destructive ways from destroying what's left. Signed: Mary Ann Borutski – Witnessed by a Justice of the Peace. (Emphasis added by writer)

The minutes of settlement relied on by Basil were incorporated into a consent order endorsed by Mr. Justice Millette on September 7, 1994. The order states that “This court orders that this matter is settled in accordance with the Minutes of Settlement attached.”

The Minutes are as follows:

1. We agree that Basil J. Borutski will have full custody of Amanda Dawn Borutski

and that Candace Anna Rose Mask because of age can decide for herself which parent she wants to have custody.

2. As far as division of assets we both agree that because this was a common-law relationship there was no constructive trust and that all assets left belong to Basil J. Borutski fully and entirely and that Mary Ann Mask has no claim to any assets in the name of Basil J. Borutski.

3. The 1987 Ford Bronco which was transferred to Mary Ann Mask will be returned to Basil J. Borutski at her expense, if any.

4. As far as visitation rights Mary Ann Mask gives the right to Basil J. Borutski to deal fairly so that the children have as much time with their mother as possible.

5. It is agreed that there will be no support payments unless communication breaks down or either party's financial situation changes. And then only through mutual agreement or court order.

6. It is mutually agreed that all debts incurred by either party because of court proceedings or problems arising from disagreements will be the responsibility of the party who creates such debts.

7. It is understood that Mary Ann Mask has incurred debts in the approximate amount of $20,000 and that is agreed mutually that Mary Ann Mask will be responsible for those debts solely.

8. And any other fair settlement that the courts may feel would apply after reading these minutes and that the parties mutually agree on.

9. And that a copy of marriage contract made up and signed by Mary Ann Burutski and Basil J. Burutski be attached to these minutes to explain how we came to this agreement.

10. It is also mutually agreed that the home on lot 15, concession 13, Hagarty Township is owned solely by Basil J. Borutski as per deed and that he obtained the home from funds previous to the relationship with Mary Ann Mask and that she has no claim on it other than if she from this day forward can show documentation that she is now contributing towards it.

11. It is agreed that all interim agreements court orders are now null and void that were procured by either party for this document.

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Minutes signed by the parties – the document referred to by the parties as a “marriage contract” was attached to the order. (emphasis and strikeout added by writer)”

Interpretation of the marriage contract and minutes of settlement

[30] The contents of the “marriage contract” document do not address the rights or obligations of the parties in respect to the ownership in or division of property. On its face the document declares that Mary Ann suffered from mental disorder – dissociation and multiple personalities. In a lucid moment, pending recovery, she entrusted management and care of her children and assets to the one person she trusted, Basil. The implication is that if Basil chose to act in the capacity of his wife’s attorney, he would be obliged to protect her interests in a fashion comparable to a fiduciary. The parties had recently reconciled and married. The document indicates, on its face, that Mary Ann trusted Basil to maximize their collective best interest when she could not.

[31] The Minutes of Settlement (Minutes) were intended to further the purport or purpose of the “marriage contract”. Paragraph 9 explicitly incorporates the marriage contract into the Minutes as a foundational document. The parties were recently married and were cohabiting as spouses at the time. The tenor of the “marriage contract” requires that the Minutes accommodate the objective of protecting the net family properties of both parties. Paragraph 10 protects the Borutski family assets from third party creditors of Mary Ann. In all the circumstances, it is my view that the substance of paragraph 10 does not foreclose Mary Ann’s beneficial interest in the presumptive legal right to equalization of the net family property of the parties contemplated by the Family Law Act.

Rick/Brandsema Review

[32] If that analysis is not dispositive, the process and outcome analysis leads to the same disposition. For the reasons that follow the Minutes cannot stand.

[33] The Minutes are subject to review. The consent order made by Mr. Justice Millette did not involve a determination of factual and legal issues on merit. Minutes were filed and the endorsement followed. It is impossible to know what information was imparted to Justice Millette at the time. Transcripts are unavailable.

[34] A core principal in the practice of family law is that the best way to ensure the finality of any negotiated agreement is to ensure both its procedural and substantive integrity in accordance with the scheme of the FLA. – Rick v. Brandsema, [2009] S.C.J. No. 10.

[35] The review involves a two stage process – circumstances and substance at the time of formation of the agreement and if that appears to be satisfactory then the review moves to current circumstances.

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Circumstances of execution (signing)

[36] The process employed by the parties leading to the Minutes was flawed. For different

reasons, both parties agree that the Minutes were not the result of a negotiation. In all the circumstances, I do not need to select one version over the other. Mary Ann recalls that Basil imposed all terms in the context that if she did not sign she would be ousted from the home and isolated from the children. Basil recalls that while Mary Ann was enjoying a temporary moment of lucidity emerging after periods of psychosis involving delusion, dissociation and different personality she determined to right all past wrongs and she dictated the terms of the Minutes.

[37] If Mary Ann’s recall is accurate, the power imbalance vitiated the bargaining process such that the Minutes should not be read as an expression of the parties’ notion of equitable sharing in their circumstances and is accorded little weight.

[38] If Basil’s recall is accurate, Mary Ann lacked requisite capacity. The fact of the acknowledgements contained in the “marriage contract” is decisive. The excerpts of the letters attributed to Mary Ann in that time period, that Basil insisted on reading into the trial record, reveal Mary Ann to be in the throes of profound depression.

[39] In either state of affairs the bargaining process was compromised to such an extent that the Minutes should not be read as an expression of the parties’ notion of equitable sharing in their circumstances. Mary Ann was extremely vulnerable whether as the result of abuse or organic mental illness, much more so than the degree contemplated by the Supreme Court of Canada in Miglin.

[40] Neither adverted to the value of financial disclosure. Basil argues that it is of no consequence. I disagree. The process of compiling and reading financial statements allows the parties opportunity to assess. The party needs to know what asset base might potentially grow, in order to determine what he or she is being asked to give up in the agreement.

[41] Mary Ann did not have the benefit of independent legal advice.

[42] Fundamental to a choice to opt out of the legislative scheme is a clear understanding of what one's rights and obligations might be if there was no contract. Coupled with financial disclosure is the notion of understanding legal rights and obligations under the legislative scheme. The second carries with it the concept of independent legal advice. The party must know what assets and liabilities exist at the date of the contract, and must understand the general legislative scheme in order to know what he or she is giving up in the proposed agreement. Dubin v. Dubin (2002), 34 R.F.L. (5th) 227.

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Substance of the Minutes

[43] The terms of the Minutes fail to address the requisite factors and objectives of the FLA. The entitlement of spouses to equalization under the FLA is a substantive right independent from right of ownership. For a contract to oust the legislated legal remedy it must deal explicitly or by necessary implication with a matter akin to the equalization provisions of the FLA. An agreement as to ownership of property without more is insufficient. For the marriage contract to prevail over the equalization provisions of the Act, the contract must contain provisions which address in their intent if not in their explicit language the relative economic position of the parties upon dissolution of the marriage through the distribution of assets between them on the basis of ownership or otherwise. Bosch v. Bosch (1991), 36 R.F.L. (3d) 302 (ONCA).

[44] Basil misapprehended reasonable expectations. He acknowledged that his duty under the “marriage contract” was to be fair in his dealings. His stated understanding of fairness was egocentric. He blames Mary Ann for reporting domestic assaults. Fairness, from Basil’s perspective, dictates that Mary Ann exhausted the presumptive benefits of the equal partnership inherent in a marital relationship to the extent that she forfeited her presumptive marital FLA property entitlement.

[45] Basil’s perspective does not stand scrutiny. If he felt that way, why did he marry Mary Ann in June 1994? The very significance of marriage is the public display of the marital commitment. The Minutes fail to come close to substantial compliance with the purpose, spirit and objectives of the FLA.

[46] If the Minutes amount to a release of an equalization interest, they fail because the parties neglected the constellation of considerations that drive valid family law agreements.

Current Circumstances

[47] If the flaws in the negotiation process do not denude the Minutes of efficacy, then the

party’s circumstances today and over the last ten years represent a significant departure from reasonable outcomes anticipated by the parties collectively.

[48] One premise for the FLA property division scheme is that contributions to the costs of the household in one area by one party frees up funds from the other to dedicate to household improvement. Basil stood in the position of fiduciary under the “marriage contract” obliged to further their collective best interests. Basil did not pay child support at any time during the three or four year separation beginning at the end of 1994. The evidence is that the Borutskis receive comparable income after netting out the child tax credit. They contributed all of their respective incomes the household for the ten years before August 2008. They improved the matrimonial home over that time.

[49] A result that denies one party any benefit to equalization after ten years of equal contribution to the family finances is an unacceptable outcome in these circumstances. The overall objectives of the FLA include certainty, finality and autonomy. When the

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circumstances and vulnerabilities surrounding execution of the minutes are compensated by independent legal advice or other professionals or both there is a stronger basis for considering the agreement as a genuine mutual desire to finalize the marriage terms and indicative of their substantive intentions. In these circumstances the imbalance vitiated the bargaining process and they trump the objectives of certainty, finality and autonomy.

Excluded Property

[50] Benefits that are invested in the matrimonial home are not protected. Basil argues that the mortgage was paid by the matrimonial home mortgage disability insurer and that the garage was paid for by another disability insurer. The FLA protects property other than the matrimonial home into which personal injury damages can be traced. Accordingly the truck and motor cycle are excluded from the equalization accounting.

Conclusion

[51] The Minutes cannot stand. Mary Ann is entitled to the equalization remedies contained in the FLA.

Net Family Property Values and Calculation

[52] NFP Applicant Respondent

Assets Land $193,500 Home contents $2,000 4,000 Personal Tools 1,000 Chip truck 15,000 Harley Davidson and truck 19,000 By date of separation, the Harley Davidson declined in value to $8161 and the truck was in disrepair. Baler and tractor – Craig – wife states $11,500, Husband states $6,000 – no reliable valuations – split difference 8,500 Other “yard equipment” – ownership and valuations is unclear – wife assesses at $33,000 – husband assesses at $670 – any number is arbitrary. The onus is on respondent to establish value of his assets - Homsi v. Zaya, [2009] 0NCA 322. Respondent denies ownership of most of the equipment in the yard – His witness, Amanda testified that he owned all of it – the photographs show the Hi-hoe, motorcycle, snow blower, trailers, snow mobiles, wood pile, rototiller, International tractor, horse trailer, 4 wheeler, argo, other snow mobiles – Value is less than $33,000. In default of a reliable opinion I rely on the photographs and assign a value of $10,000 to the yard equipment.

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10,000

Grand Am 500 _______

$2,500 $251,000 Bank Accounts/Saving 39 455

$2,539 $251,455 Debts Chip Wagon Loan $17,420 Tax arrears 2,340 Scotia bank – Visa 14,750 HBC MC 4,000 Legal aid lien 6,000 Sears 2,100 Walmart 800 The Source 1,000

$3,900 $44,510

Assets and Liabilities on date of marriage

Vehicles $8,000 Debt – Legal aid lien (6,000) Net deduction $2000 Excluded property traced to assets other than matrimonial home Motorcycle and truck $19,000 Net Family properties Applicant - $2,539-$3,900=$00.00 Respondent - $251,455-$44,510-$2,000-$19,000=$185,945 Payment owing - $92,972

Unconscionability of an equal division

[53] The matrimonial home burned to the ground on January 21, 2011. It was vacant, the utilities were disconnected and the propane tank had been removed. Basil cancelled the insurance effective July 15, 2010. The fair mark value of the matrimonial home is significantly less without the house and the necessary outstanding clean up expenses.

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[54] The respondent relies upon paragraph FLA 5(6)(h). He says that the marked post-separation date decline in value of the matrimonial home relates to its disposition, preservation and maintenance. He argues that in these circumstances, it would be “unconscionable” to order an equalization of net family properties based upon a separation-date valuation of his interest in the matrimonial home; to do so would be to require him to make an equalization payment equal to his current net worth.

[55] The limited exception to the general equalization rule is a situation that leads to an unconscionable result, whether that result flows from fault-based conduct or not.

[56] The first step is to ascertain the net family property of each spouse, by determining and valuing the property each owned on the valuation date (subject to the deductions and exemptions set out in s. 4). Next, the court applies s. 5(1) and determines the equalization payment. Finally – and before making an order under s. 5(1) – the court must decide whether the equalization of net family properties would be unconscionable under s. 5(6), having regard to the factors listed in paragraphs 5(6)(a) through (h) - Serra v. Serra 2009 ONCA 105.

[57] A court may take into account a post-separation date change in the value of a spouse’s assets, and the circumstances surrounding such a change, for purposes of determining under s. 5(6) of the Family Law Act whether equalizing net family properties would be unconscionable. An order for an unequal division of net family properties is exceptional, however, and may only be made on such a basis (i) where the circumstances giving rise to the change in value relate (directly or indirectly) to the acquisition, disposition, preservation, maintenance or improvement of property (s. 5(6)(h)), and (ii) where equalizing the net family property would be unconscionable, having regard to those circumstances (taken alone or in conjunction with other factors mentioned in s. 5(6)).

[58] In this regard, the threshold of “unconscionability” under s. 5(6) is exceptionally high. The jurisprudence is clear that circumstances which are “unfair”, “harsh” or “unjust” alone do not meet the test. To cross the threshold, an equal division of net family properties in the circumstances must “shock the conscience of the court” Serra v. Serra 2009 ONCA 105.

[59] The true target of the limited exception to the general rule is a situation that leads to an unconscionable result, whether that result flows from fault-based conduct or not.

[60] In Serra the equalization of net family property required Mr. Serra to pay more than his total net worth because of a marked decline in the value of his major asset post-separation – over which he had no control and in spite of his best efforts to save the business in the face of Ms. Serra’s trust claims, the preservation order and the need to comply with his support obligations was considered unconscionable. The court observed that Ms. Serra was not a woman without means. The trial judge found she left the marriage “with assets worth a considerable amount.” She had net family property of about $1 million in addition to her interest in the Florida property. She lived, and continued to live, a life of relative luxury, 6 months in Canada and 6 months in Florida.

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The trial judge found she had been “very well compensated” for her contributions to the business during the course of the marriage.

[61] Basil decided to self-insure the matrimonial home. The Borutski facts are similar in terms of reduction in value after separation. The comparison ends there. The litigation process severely restricted Mr. Serra’s ability to react to changing market circumstances. He did everything he could to protect his business and lost to market forces beyond his control. Here, Basil unilaterally and without notice to Mary Ann terminated the fire insurance and vacated the property while resisting every initiative Mary Ann took to re-occupy and protect the premises.

[62] While it was reasonable and just that the Serras ought to share somewhat in the market forced value reductions there is little merit in imposing a reduction on Mary Ann. The loss was occasioned by the risk Basil assumed by his own actions. The result does not have the effect of shocking the conscience of the court.

Vesting Order

[63] How does Mary Ann collect on this award? Mary Ann is entitled to judgment against Basil for payment in the amount $92,972 together with prejudgment interest commencing September 2008 in accordance with the Courts of Justice Act. The only exigible asset is the matrimonial home and its current value could be less than the judgment.

[64] It is the interest of the parties to realize the highest return on the sale of the matrimonial home. Mr. Crosbie seeks an order placing management of the sale of the matrimonial home in Mary Ann’s care. He argues that enforcement under the Execution Act will result in a significantly discounted sale price.

[65] The FLA contemplates issues of enforcement efficiency in section 9. The rationale for a vesting order is to permit the court to direct the parties to deal with the property in accordance with the judgment in situations where the one is necessary to ensure compliance with the obligation. Mary Ann would take title subject to outstanding encumbrances.

[66] I agree that a sheriff’s sale would lead to a compromised sale price. Round Lake is a small, insular community. An order vesting legal title to the matrimonial home in Mary Ann’s name significantly increases the opportunity of realizing as much as possible on the liquidation. Accordingly, an order is to issue vesting title to the matrimonial home in Mary Ann’s name. Mary Ann shall deliver an accounting in respect to the sale and disposition of sale proceeds. Any surplus realized is properly payable to Basil.

Costs

2011

ON

SC

709

9 (C

anLI

I)

Page: 15

[67] The parties exchanged offers to settle which were provided to the court in sealed envelopes at the end of submissions. Their contents reveal that the applicant offered significantly less than achieved at trial. The respondent offered significantly less than the applicant achieved at trial. The applicant is the successful party. In terms of setting the amount of costs I invite the parties’ submissions. The Applicant shall have costs against the Respondent on a partial indemnity basis. The parties are to deliver their costs submissions within fifteen days of release.

[68] Accordingly order to issue:

1. The respondent shall pay an equalization payment to the applicant in the amount of $92,972;

2. The applicant shall have prejudgment interest in accordance with the Courts of Justice Act from September 1, 2008 to December 1, 2011. Post judgment interest to accrue from December 1, 2011 pursuant to the Courts of Justice Act.

3. Pursuant to subsection 9(1)(d) of the FLA title to 2177 Round Lake Road, Hagarty Township, Renfrew County, being part lot 15, Concession 13 as in R306425 PIN 57525-003 (LT) subject to executions is vested in Mary Ann Borutski and Basil Borutski’s consent to alienation pursuant to s, 21 of the FLA is dispensed with;

4. Mary Ann Barutski shall have exclusive possession of the aforesaid lands and premises effective December 1, 2011;

5. The applicant’s WSIB pension accumulation is exempted from the equalization process;

6. The hunt camp lands and premises are exempted from the equalization process. When Basil Borutski applies to alienate title, any outstanding writs of execution in respect to this proceeding are to be lifted to accommodate the transfer;

7. The applicant shall have costs against the respondent on a partial indemnity basis. The parties are to make submissions on quantification within fifteen days of release.

Justice Rick Leroy

Released: December 8th, 2011

2011

ON

SC

709

9 (C

anLI

I)

CITATION: Borutski v. Borutski, 2011 ONSC 7099

COURT FILE NO.: 08/D1051 Pembroke DATE: 2011/12/08

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Mary Ann Borutski

Applicant

– and –

Basil Joseph Borutski Respondent

REASONS FOR JUDGMENT

Justice Rick Leroy

Released: December 8th, 2011

2011

ON

SC

709

9 (C

anLI

I)