2023 MBKB 89, 2023 MBKB 89

Date: 20230529 Docket: FD 17-01-16990 (Winnipeg Centre) Indexed as: Ali v.

Ali Cited as: 2023 MBKB 89 COURT OF KING’S BENCH OF MANITOBA B E T W E E N: ) AZAHIR ABDULRAHMAN MOHAMED ALI, ) ) ) Azahir Abdulrahman Mohamed Ali Appearing on her own behalf ) petitioner, ) ) -and- ) ) ) ADIL ALI MOHAMED ALI, ) ) Adil Ali Mohamed Ali Appearing on his own behalf respondent. ) ) ) ) REPORT ISSUED: May 29, 2023 ) ) DEEMED CONFIRMATION DATE: ) July 3, 2023 ) MASTER BERTHAUDIN MASTER’S REPORT ON FAMILY PROPERTY ACT ACCOUNTING [ 1 ] This family property accounting proceeded pursuant to the reference order of MacPhail J. granted on November 9, 2021 (the reference order), which required valuation of the assets and liabilities of the parties, including determination of whether the assets and liabilities are shareable or non-shareable.

For the respondent, 14 specific assets and liabilities are referred, in addition to the catch-all phrase “all other assets”. For the petitioner, the reference order does not specify any assets or liabilities, but refers “all personal and real property”, “all interests in any corporation”, and “all debts and liabilities”.

The date of closing and valuation, otherwise known as the separation date, noted in the reference order is January 1, 2015. [ 2 ] In addition, the jointly owned family home, joint mortgage and other liabilities secured by the family home, and jointly owned household contents are referred for valuation. The reference order states that the valuation date is “January 1, 2015 for liabilities and the date of hearing for assets and liabilities”.

At a case conference on April 19, 2022, this was clarified, and the valuation date for the jointly owned family home was amended by MacPhail J. to be “within six months of the date of the hearing” and the joint liabilities “within two months of the date of the hearing”. [ 3 ] Both parties were self-represented at the hearing of this matter, although the petitioner has been represented by counsel at various times during this litigation. Not having the benefit of counsel for the hearing was quite unfortunate.

The parties did not follow several of the directions given throughout the hearing for directions process, often did not obtain expert reports where required, and

struggled to focus on the issues for determination, despite direction by the court. The assistance of counsel, with the value of some of the assets of the parties being substantial, would have been of great benefit to the parties and the court. The hearing was scheduled for five days, completed in four days, and is more notable for the evidence and submissions overlooked or poorly presented by the parties than that which was helpful to the court. HISTORY [ 4 ] By all accounts, this family was once prosperous. Both the petitioner and respondent are educated and trained as pharmacists.

Both operate or operated successful pharmacies in Winnipeg. Both operated storefront pharmacies, although the petitioner’s had a substantial internet pharmacy component. It is evident that the family finances were under the control of the respondent during the marriage, including the funds generated by the petitioner’s pharmacy business. The four children of the parties were all put through private schools, with the three older children now at various stages of university studies, and the youngest finishing high school. The breakdown of their marriage, however, has wreaked havoc on their financial situation.

Their family home, which I was advised was once valued at $2.1 million, was foreclosed upon and sold by the bank in 2022. Commercial properties owned by the respondent are now said to be at various stages of foreclosure by another financial institution. Their pharmacy businesses, especially that of the petitioner, are struggling.

To a large extent, however, these more recent financial struggles are irrelevant to the primary purpose of this accounting; to value the assets and liabilities as of the valuation date of January 1, 2015. [ 5 ] The valuation date was a source of consternation to the respondent, expressed relentlessly throughout his evidence and submissions. He believes the separation date of the parties to be in early 2006, with the parties thereafter living separate and apart in the same home.

The respondent says he did not appreciate the significance of the separation date chosen when the reference order was granted at a case conference on November 9, 2021. [ 6 ] The parties attended at four hearings for direction on May 16, 2022, June 7, 2022, October 5, 2022, and January 17, 2023. During these hearings for direction, the various assets and liabilities were discussed, with attempts made to narrow issues, resolve matters and direct disclosure. At each of these hearings, the importance of the valuation date was stressed.

For example, the memorandum provided to the parties after the first hearing for directions noted (with respect to one of the respondent’s commercial properties): The respondent indicated that it is currently in foreclosure status, but it was clarified that the valuation of this property will be as of the valuation date of January 1, 2015. [ 7 ] Later in the same memorandum, when discussing the respondent’s liabilities, the following is stated: It became apparent on commencing discussion on the many liabilities listed by the respondent that he misunderstood this part of the accounting.

That is, many of the debts and liabilities listed by the respondent are current debts or liabilities that did not exist in 2015. There may be some exceptions to this statement. The respondent agreed to redraft

Part 9 of his

summary such that the debts and liabilities are only those that existed as of January 1, 2015. [ 8 ] In the memorandum provided to the parties after the second hearing for directions, there were discussions about various of the respondent’s commercial properties, and whether renovations completed after the valuation date, or property purchased after the valuation date, were to be considered at the formal hearing.

It was pointed out that the properties were required to be owned on January 1, 2015, and would be valued based on their condition on January 1, 2015. [ 9 ] In the memorandum arising out of the third hearing for directions, the valuation date of January 1, 2015, is noted throughout, including for the conclusion that one of the respondent’s commercial properties (441 Henderson Highway), was purchased after the valuation date, and thus excluded from the family property accounting. [ 10 ] Finally, in the memorandum arising out of the fourth hearing for directions, the valuation date was mentioned in several respects, including that the appraisal reports obtained by the petitioner contained the wrong valuation date.

The respondent noted that he would be retaining counsel and seeking an adjournment, and the following was stated on that topic in the memorandum: As noted earlier, the formal hearing dates are scheduled for April 17 to 21, 2023, beginning at 10:00 a.m. each day, in-person at the courthouse. The respondent suggested that he may be retaining counsel and seeking an adjournment of the formal hearing. I advised him that the formal hearing dates were scheduled such that the master’s report on family property accounting would be completed in time for the trial to proceed.

As such, there would be no adjournment of the family property accounting trial unless the September trial was itself adjourned. The respondent suggested that he would be retaining counsel to seek an adjournment. I advised that unless and until the trial is adjourned, the parties should be proceeding as though the family property accounting hearing is proceeding on April 17 to 21, 2023. [ 11 ] The formal hearing of this matter began on April 17, 2023, three months after the fourth hearing for directions.

On March 21, 2023, the respondent filed a request for motion or subsequent case conference, seeking to change the separation date from 2015 to 2006. Permission to hold a motion or subsequent case conference on the separation date issue was denied by MacPhail J. [ 12 ] The respondent also wrote to the court seeking an adjournment of the trial for various reasons, but this request was denied by Hatch, ACJ on April 14, 2023. [ 13 ] As the master’s jurisdiction on a family property accounting reference arises entirely out of the reference order, the valuation date is January 1, 2015.

Despite the respondent’s insistence that the date is wrong, the terms of the reference order guide this reference.

ANALYSIS [ 14 ] The evidence, such as it was, and my conclusions reached for purposes of valuation of the various assets and liabilities are set out hereafter. Documentary evidence was scant for the most part, and in some cases, it was impossible to confirm the existence of an asset, let alone reach a conclusion on valuation. In other cases, the valuations are made on the basis of the best or only evidence available. The parties were asked to inform the court during final submissions of their position on value for each and every asset at issue. They did not do so.

Instead, the submissions were focused on irrelevant issues such as who had been responsible for driving the children to school during the marriage, who contributed to family expenses, and their current financial situation. None of the submissions were of assistance in completing the task of valuation of the assets and liabilities as of January 1, 2015. Joint assets and liabilities [ 15 ] At the first hearing for directions, the parties advised that the “division of the household contents had been settled and this will not be an issue raised in the family property accounting”.

As such, household contents are not addressed in this decision. [ 16 ] With respect to the family home and mortgage/secured liabilities, these are now moot. The home was foreclosed upon and sold by the bank in 2022. Apparently there is litigation surrounding the claim by the bank. No details were provided, other than that the petitioner appealed the vacant possession order to the Manitoba Court of Appeal, with her appeal recently dismissed.

As the parties have not owned the home since 2022, and with the net amount owing by the parties to be determined in the civil proceeding, it will not be decided in this matter. No documentary evidence whatsoever was filed with respect to the family home and mortgage. Respondent’s assets and liabilities [ 17 ] It is accepted that the respondent or his holding corporations were on title on January 1, 2015, as owners of 900 Main Street, 906 Main Street and 634 Selkirk Avenue, all in the City of Winnipeg.

The Court of King’s Bench revised practice direction re: New model for scheduling and case flow management practice before the masters (dated February 28, 2019 and revised February 3, 2020) states the following: …where the parties do not obtain a joint appraisal, it will be the initial responsibility of the party who owns the asset to obtain the independent appraisal, and only if the other party disputes that value will the other party be required to obtain his or her own appraisal. [ 18 ] Given that they were alleged to be his assets, at the first hearing for directions on May 16, 2022, the respondent was directed to obtain an appraisal or opinion of value for the valuation date for all three properties.

At the second hearing for directions on June 7, 2022, the discussion focussed mainly on the petitioner’s assets, but it was clarified for the respondent that the valuation of his commercial properties should be as of January 1, 2015. [ 19 ] At the third hearing for directions on October 5, 2022, the respondent had not yet produced appraisals or opinions of value for his properties. He advised that no one would perform appraisals for a date in the past. He was advised that the court commonly receives retrospective appraisals and that he should make better efforts to obtain them.

The memorandum for that hearing then states “The respondent agreed that he would obtain a retrospective appraisal or opinion of value for the valuation date”. [ 20 ] By the fourth hearing for directions, the respondent still had not obtained appraisals or opinions of value.

He advised that he would not be obtaining any opinion evidence relating to his commercial real estate and, instead would rely on what he described as the standard protocol of relying on the City of Winnipeg property assessment value plus ten percent. [ 21 ] By that time, the petitioner had obtained appraisals of the three commercial properties from a certified appraiser, but the properties were appraised as of December, 2020, rather than the valuation date of January 1, 2015.

The petitioner was informed that the court could not rely on a 2020 appraisal to value the properties as of 2015. [ 22 ] When the petitioner began her direct evidence on the first morning of the formal hearing, she produced updated reports from the appraiser which properly appraised the properties for the valuation date. She had received the reports the week prior to the hearing and had not served them on the respondent. She said she was not aware that she had to serve them in advance. The respondent opposed the introduction of the appraisal reports into evidence.

I heard submissions on the issue and determined that I would allow the reports into evidence, subject to an allowance for the weight to be applied to the reports. In short, I allowed them into evidence as the assets were alleged to belong to the respondent and he failed to obtain any valuation evidence on which the court could rely, despite directions to do so in conformity with the masters’ practice direction referred to previously herein. The petitioner had previously obtained and served appraisals for the wrong date, and updated them as directed by the court.

If the appraisal reports were not allowed into evidence, there would have been no probative evidence at all with respect to three commercial properties of significant value. Ultimately, the appraiser attended to give evidence at trial and was cross-examined by the respondent. 5400962 Manitoba Ltd. [ 23 ] This is the respondent’s holding corporation whose sole asset is the commercial building at 906 Main Street. This is the address from which the petitioner conducted her pharmacy business.

As noted earlier, the respondent did not obtain an appraisal or opinion of value, and simply relies on what he says is the standard protocol of using the City of Winnipeg property assessment for the property, plus ten percent. The City of Winnipeg statement dated May 7, 2015, establishes an assessed value of $676,000 for this property. Using the respondent’s ten percent increase, his position is that this property should be valued at $743,600. [ 24 ] The petitioner relies on the report prepared by Marjorie Dane-Newton, AACI P.App, of Altus Group. Ms.

Dane-Newton is a former property assessor with the City of Winnipeg Property Assessment Department, has been in private practice as a certified appraiser for 21 years and is a senior consultant with Altus Group’s research, valuation and advisory team. She viewed the interior and exterior of 906 Main Street on December 7, 2020, and assumed for purposes of her report that the condition was similar as of January 1, 2015. She

was not able to obtain leasing information due to the acrimonious domestic relationship between the parties, and thus relied on market information to arrive at a rental rate for the property. Ms. Dane-Newton used the income approach as the primary valuation methodology, given that the most likely purchaser would use it as an income property. She also valued the property using the direct comparison approach as a support to the conclusion reached with the income approach. [ 25 ] Ms. Dane-Newton’s conclusion on the value of this property using the income approach was $830,000.

Her conclusion using the direct comparison approach was $860,000. Given that she was not provided leasing information for the property, she considered the income approach to be “somewhat less reliable”, and gave the greatest weight to the direct comparison approach. As such, her conclusion as to fair market value is $860,000. [ 26 ] Ms. Dane-Newton’s evidence was not shaken in any way on cross-examination and I consider her appraisal of the property to be far superior to the respondent’s position of adding ten percent to the City of Winnipeg assessment.

The respondent’s position has no basis in fact or law of which I am aware. There was also no suggestion that the condition of the property was materially different on the valuation date as compared with the date Ms. Dane-Newton viewed it. [ 27 ] I conclude that the fair market value for 906 Main Street as of January 1, 2015 is $860,000. I was not provided with any evidence of a mortgage or other secured liability associated with the property as of the valuation date.

Hakim Holdings Ltd. [ 28 ] This is the respondent’s holding corporation which, as of January 1, 2015, owned two commercial properties, one being 900 Main Street and the other being 634 Selkirk Avenue. 900 Main Street [ 29 ] As noted, the respondent did not obtain an expert report relating to this property. His evidence is that, as of the valuation date of January 1, 2015, this building was in poor condition, and being used essentially as a warehouse to store items belonging to the family and the businesses operated by the respondent and petitioner.

He says that it was effectively an empty shell at that time, and was not connected to utilities such as water and heat. [ 30 ] The petitioner disagrees with the respondent’s characterization of the condition of the property on the valuation date. Neither party produced any evidence, such as photographs, to depict the condition. [ 31 ] It is clear that substantial renovations were performed on this property in 2017. It was upgraded such that it could be used as a pharmacy, dental office and/or medical office. Ultimately, it was leased to a dentist and used as a dental office.

Given that these renovations occurred after January 1, 2015, they do not impact the value as of that date. [ 32 ] The respondent’s position once again relies on the City of Winnipeg property assessment for the property as of the valuation date. The City of Winnipeg assessment statement dated May 7, 2015, sets the assessed value of the property as $194,000. Using the respondent’s position that ten percent be added to arrive at the fair market value, his proposed value is $213,400. [ 33 ] Ms. Dane-Newton prepared an appraisal report for the property dated April 11, 2023.

The appraisal was based on her inspection of the interior and exterior of the property completed on December 19, 2020, and an assumption that the condition of the property on the valuation date was similar to that which existed during her inspection of the property. In other words, she was not informed that between the valuation date and the date of her inspection, substantial renovations were completed. As it was the petitioner who retained Ms. Dane-Newton, it was she who failed to provide the correct information to her. [ 34 ] Ms.

Dane-Newton conducted a similar analysis for 900 Main Street as she did for 906 Main Street. Once again, she was not provided with the lease for the existing tenant (in 2020), so made certain assumptions about market rates. Once again the income approach was used as the primary method of valuation, with the direct comparison method also completed to support the conclusions reached with the income approach. [ 35 ] Ms. Dane-Newton’s conclusion using the income approach is that the fair market value of 900 Main Street was $400,000 on the valuation date.

Using the direct comparison approach, the conclusion reached was a fair market value of $390,000 on that date. Without having the leasing information for the property, she considered the income approach to be somewhat less reliable. She therefore relied on the direct comparison approach for her ultimate conclusion that the fair market value of the property was $390,000 on the valuation date. [ 36 ] Unfortunately, due to no fault of Ms. Dane-Newton, her assumption about the condition of the property being the same on the valuation date as it was on her inspection date in December, 2020, was incorrect.

This leads to her appraisal report being unreliable for the purposes of establishing the value of 900 Main Street on January 1, 2015. [ 37 ] I am left then with an unreliable appraised value of $390,000. There is no dispute that the condition of the property was changed significantly between the valuation date and the date of Ms. Dane-Newton’s inspection. The inescapable conclusion is that the value on the valuation date was less than $390,000.

But by how much? [ 38 ] Without in any way endorsing the appropriateness of the respondent’s method of calculation, I am accepting his position of $213,400 as the fair market value of the property on January 1, 2015. I have no information to suggest that adding ten percent to the City of Winnipeg’s assessed value is a standard or accepted method of calculation. I do not believe it to be. That was simply the respondent’s personal opinion. But the respondent accepts this amount as the fair market value of 900 Main Street. This amount is approximately 55 percent of the fair market value calculated by Ms.

Dane-Newton post-renovations. Although no documentation related to the renovations was entered into evidence, the respondent claimed that the work done was quite significant, including increasing the square footage of the property. Given the amount of work alleged, it stands to reason that the pre-renovation value was nearly doubled. I therefore accept the fair market value of 900 Main Street to be $213,400 as of January 1, 2015. I was not provided with any evidence of

a mortgage or secured liability associated with this property as of the valuation date. 634 Selkirk Avenue [ 39 ] It is accepted that the respondent’s holding corporation was on title on January 1, 2015 as the owner of this property. This is the property from which the respondent operated and continues to operate his storefront pharmacy. There is also a doctor’s office operating from this space, with Dr. Ravi Kaushal being the resident doctor. The respondent alleges that his holding corporation is holding the property in trust for Dr. Kaushal or his corporation Jasmine Enterprises Ltd.

Thus, there are two issues to be determined; who owns the property for family property purposes, and what is the fair market value? [ 40 ] I will deal first with whether this property is an asset of the respondent for the purposes of the accounting, or whether it is excluded as being held in trust for another party. The circumstances surrounding the allegations of trust are unusual to say the least. [ 41 ] The respondent says he began operating his pharmacy out of 634 Selkirk Avenue in 1998, with Dr.

Kaushal as the resident doctor on premises and his holding corporation, Jasmine Enterprises Ltd. as the owner of the building and landlord. The respondent paid rent, and it was increasing over the years thereafter. [ 42 ] In 2006, the respondent testified that Dr. Kaushal approached him with a proposal. Dr. Kaushal was about to be married in an arranged marriage and wanted to protect his assets. Apparently he had already been through a contentious divorce proceeding with his previous wife. There was also a suggestion that Dr. Kaushal’s health was poor.

The proposal was for the respondent to hold title to 634 Selkirk Avenue, and take ownership of Dr. Kaushal’s operating and holding corporations, McKenzie Family Medical Centre Ltd. and Jasmine Enterprises Ltd., respectively, in trust for Dr. Kaushal. In essence, this appears to be a proposal for Dr. Kaushal to hide his assets. The respondent testified that Dr. Kaushal “had his own reasons” for doing this. The respondent said that he and Dr.

Kaushal were close friends after years of working together, and trusted each other. [ 43 ] The respondent testified that they approached a lawyer to document the arrangement, but the quoted fees to do so were too high. So the respondent prepared his own document called “Declaration of Trust”. This document was entered as an exhibit at the hearing. After listing the land and two corporations at issue, the document states: All of the above said properties are owned by Dr. Kaushal and for some reason Dr.

Kaushal wishes to transfer the ownership of the above said properties to the name of Adil Ali Mohammed Ali to keep the properties safe and unencumbered for all times. The land, 634 Selkirk Avenue is transferred to Adil Ali Mohammed Ali’s name and the price is settled for the purposes of land title office. This property will remain the property of Dr. Kaushal, and Adil Ali Mohammed Ali has no right to refinance/mortgage or sell the property at any time. The taxes will be paid by Dr. Kaushal throughout the life of this declaration. Adil Ali Mohammed Ali will transfer the property back to Dr.

Kaushal or his company name or his successor whenever demand is made by Dr. Kaushal. Adil Ali Mohammed Ali will not deny the transfer and will prepare the transfer documents on demand and all cost to prepare the legal documents will be paid by Dr. Kaushal. . . . [ 44 ] The two-page document contains signatures on the second page for the respondent, Dr. Kaushal and a witness, Dr. Bedi, and the date August 1, 2006, has been handwritten below the signatures. The handwriting suggested to be the signature for Dr. Bedi has the words “Dr. Bedi” in cursive handwriting, rather than his full name.

The petitioner alleged that this was not Dr. Bedi’s signature as she was familiar with it due to having filled prescriptions he wrote in the past. Dr. Bedi was unavailable to testify as he is now deceased. [ 45 ] There is no evidence that anything was done with the declaration of trust, such as registration of a caveat on title to the property. Title to 634 Selkirk Avenue was transferred from Jasmine Enterprises Ltd. to Hakim Holdings Ltd., and remains in the name of Hakim Holdings Ltd. to this day, without any reference on title to it being held in trust.

The respondent says that all costs related to the property, including property taxes, utilities and maintenance costs, are paid by Dr. Kaushal, or Jasmine Enterprises Ltd. [ 46 ] The respondent suggested that after the trust document was signed, he continued to provide rent cheques to Dr. Kaushal for the following rental year, but Dr. Kaushal did not deposit them. He has not paid rent for his space in 634 Selkirk Avenue since then, a period of seventeen years.

His pharmacy continues to operate from that location. [ 47 ] The petitioner suggested that the transaction in 2006 was a purchase of 634 Selkirk Avenue by the respondent from Dr. Kaushal for $150,000, but when that was put to the respondent on cross-examination, he denied it. The petitioner stated that financial matters during the marriage were handled by the respondent and kept secret from her, so she did not have any further details of the transaction to provide. [ 48 ] As the legitimacy of this transaction was being questioned, it was suggested that the respondent have Dr.

Kaushal testify regarding this transaction. Thus, on the final day of the hearing, Dr. Kaushal attended to testify. Unfortunately, Dr. Kaushal’s evidence was far from illuminating. [ 49 ] When asked if the respondent bought 634 Selkirk Avenue from him in 2006, Dr. Kaushal said he did not know. Later he suggested that he owned the building. In response to further questioning, he said he would talk with the accountant to see who owned the building. He said it was in trust with the respondent at some point in time. He could not remember if he was paid $150,000 by the

respondent in 2006. [ 50 ] When he was shown the declaration of trust document and given a chance to read it, he said that he was the owner of the building. He confirmed that he signed the document, and that Dr. Bedi was present and signed it. His reasons for his need for the trust document were that he had serious health problems, had a wife in India, and “personal reasons”. [ 51 ] Regarding rent from the respondent, he said he did not deposit the rent cheques after the declaration of trust was signed because he is disorganized and misplaced the cheques. He said he is not adept financially.

He said that he has been asking for rent from the respondent since 2009, but it has not been paid. While he feels that rent is owing by the respondent, he does not even request it anymore as he feels he has enough money in the bank. [ 52 ] Dr. Kaushal gave the impression on the witness stand of confusion and uncertainty. His evidence as to the arrangement between him and the respondent was not helpful.

Whether this was due to poor memory and confusion, or an attempt to downplay the inappropriateness of an arrangement to hide his assets, or deny a sale of the property took place, is difficult to discern. [ 53 ] It is notable that the timeframe when the trust arrangement was proposed and the document signed was 2006. It is notable because that is the year that the respondent repeatedly suggested he and the petitioner truly separated, early in that year after his mother’s death.

Whether there was a true separation or not at that time, it seems clear from the respondent’s evidence that there was disharmony in the relationship, at the very least. While the reasons for documenting the transfer of the land in this fashion were said to originate with Dr. Kaushal, it stands to reason that the respondent himself had his own reasons to document a land acquisition with a trust document to suggest he did not actually own it, for purposes of his own potential marital litigation. It is at least as plausible as the reasons given by the respondent and Dr. Kaushal in their testimony.

I found the evidence to be unclear, confused and ultimately, unconvincing, as to the ownership of 634 Selkirk Avenue. The lack of any rent paid by the respondent since the arrangement was made suggests that the respondent is no longer a tenant, but an owner of the land. [ 54 ] In any event, the respondent has the onus to convince the court that he/his holding corporation does not own the land, such that it should be excluded from the family property accounting. He has not met that onus.

I conclude that 634 Selkirk Avenue is the respondent’s property for family property accounting purposes. [ 55 ] I will deal next with the value of 634 Selkirk Avenue. The respondent once again relies on the City of Winnipeg assessment plus ten percent. The City of Winnipeg assessment statement dated May 7, 2015, shows an assessed value of $148,000. Adding ten percent to this leads to the respondent’s position of fair market value of $162,800. [ 56 ] Ms. Dane-Newton prepared an appraisal report for this property dated April 11, 2023. She viewed the property on December 19, 2020.

Unlike the other two properties, she was not given access to the interior of the building. Thus, she relied on a description of the interior of the building provided by the petitioner, who had not been inside the property for several years prior to the site visit. There was no suggestion made that renovations were done after the valuation date, or that the condition was anything other than assumed by Ms. Dane-Newton. [ 57 ] As she was not provided with a lease for the property, Ms.

Dane-Newton once again researched and relied on market rates, choosing to use the income approach to valuation, with the direct comparison approach used as support. Her analysis using the income approach led her to conclude that fair market value was $210,000. Using the direct comparison approach, her conclusion was $220,000. Similar to the other properties, and not having been provided with leasing information, the income approach was thought to be somewhat less reliable. As such, she concluded that the fair market value of the property was $220,000. [ 58 ] In my view, Ms.

Dane-Newton’s approach to valuation is far preferred over the speculative use of the City of Winnipeg property assessment value, as suggested by the respondent. Therefore, I find that the fair market value of 634 Selkirk Avenue was $220,000 as of the valuation date of January 1, 2015. For the purposes of the family property accounting, 634 Selkirk Avenue will be considered an asset of the respondent at the value of $220,000.

I was not provided with any evidence of a mortgage or secured liability associated with this property as of the valuation date. 7158638 Manitoba Ltd . [ 59 ] This is another holding corporation of the respondent whose sole asset is 441 Henderson Highway, in the City of Winnipeg. While this corporation was referred for valuation in the reference order, it was determined that this land was purchased subsequent to the valuation date, such that it is excluded from the family property accounting.

Hakim Enterprises Inc./Good Neighbour Pharmacy [ 60 ] Hakim Enterprises Inc. is the corporation through which the respondent operates his pharmacy, under the business name Good Neighbour Pharmacy. As it is his asset, he was directed during the hearing for directions process to produce financial statements for 2014 and 2015, and obtain a business valuation. He resisted obtaining a business valuation and, at the third hearing for directions, advised that he would be relying on his own opinion in respect of the value of the corporation.

Both he and the petitioner were forewarned that the ability of the court to value the businesses will be severely impaired if proper opinion evidence was not obtained. [ 61 ] Very little evidence was given about the nature and value of the respondent’s pharmacy business. The respondent’s expressed position was that the value of a pharmacy was connected to there being a doctor on the premises issuing prescriptions. In his view, if the doctor leaves, the pharmacy business has no value.

He was prepared to agree that the petitioner’s pharmacy business had a value of nil as of the valuation date, and his pharmacy business had the same value. [ 62 ] His position has two obvious problems. First, his pharmacy had a resident doctor as at the valuation date (Dr. Kaushal), and the petitioner’s did not. The petitioner did not have a resident doctor as the respondent convinced the doctors who had been practicing at 906 Main Street with her to move out of those premises. She was left without a resident doctor issuing prescriptions.

Although the evidence was not entirely clear, some or all of those doctors may have moved from the building occupied by the petitioner’s pharmacy at

906 Main Street to that occupied by the respondent’s pharmacy at 634 Selkirk Avenue. [ 63 ] As noted, the respondent filed no documentary evidence whatsoever relating to the value of his pharmacy business, despite his onus to obtain opinion evidence to establish a value.

The petitioner said she could not afford to hire a business valuator to value the respondent’s business, especially when he had not done so himself. [ 64 ] The only document entered into evidence relating to the respondent’s pharmacy business which was relevant to value was the RBC business account statement for Hakim Enterprises Ltd. for the period of November 28, 2014 to December 31, 2014 (one day before the valuation date). The petitioner put this document to the respondent on cross-examination, and he confirmed the authenticity of the document.

The statement shows an opening balance of $23,461.71, deposits and credits of $317,931.02, cheques and debits of $78,137.16, and a closing balance on December 31, 2014 of $263,255.57. No evidence was given by either party relating to that balance or the various transactions set out on the statement. [ 65 ] The question is what to do with the information that the respondent’s business had $263,255.57 in the bank as of the valuation date?

If the respondent had produced opinion evidence related to the value of his business, no doubt I would have heard that the cash in the bank is only one component in the process of determining value. But I did not have that evidence. The court is not an expert business valuator, and relies on opinion evidence from experts in that regard. The evidence I received is that the respondent’s business was in operation on the valuation date with one or more resident doctors writing prescriptions in the same building, and had $263,255.57 in the bank.

The respondent was directed to obtain opinion evidence through the hearing for directions process and decided instead to rely on his own opinion. He was forewarned that opinion evidence given by a party is of little value, but chose to rely on it anyway. This is similar to his position relating to his commercial real estate, in which he relied on his knowledge of the “standard protocol” for valuing commercial real estate. [ 66 ] If anyone is to suffer as a result of the lack of proper evidence (save for the bank statement), it must be the party who had the onus to establish the value of his asset, but did not.

With no contrary evidence led, I am valuing the respondent’s interest in Hakim Enterprises Ltd. as of the valuation date in the amount of $263,255.57. [ 67 ] There was one further issue raised in respect of this corporation. The respondent alleged during the hearings for direction that the petitioner is a 50 percent shareholder in the corporation. This first occurred at the third hearing for directions on October 5, 2022. The petitioner denied she is or was a shareholder.

The respondent was directed at that time to produce any documentation he intended to rely on to establish her shareholdings, over and above the articles of incorporation, which had already been produced. This same direction was given at the final hearing for directions on January 17, 2023. [ 68 ] Nothing more was produced by the respondent. The document entered into evidence on this issue was the articles of incorporation filed March 4, 1998. The document shows the parties as the two first directors of Hakim Enterprises Ltd.

It also names them as the incorporators, and has signatures of both of them on the document. Regarding the classes and any maximum number of shares that the corporation is authorized to issue, the document states in handwriting “unlimited number of common shares”. [ 69 ] There is nothing in the document to establish that shares were issued to any party.

The respondent advised that the corporation did not hold meetings or prepare minutes, so there is no minute book to assist with the determination. [ 70 ] For her part, the petitioner denies that she had any role in Hakim Enterprises Ltd., let alone any shares, nor did she receive any dividends or financial benefit. She says that when the business started, she worked there as a pharmacist to help out from time to time, but that was all. She does not recall being involved with signing the articles of incorporation.

The first time she heard that the respondent alleged she was a 50 percent shareholder was during the hearings for direction. [ 71 ] In my view, the articles of incorporation establish nothing in relation to the shareholdings of the corporation. There is no doubt that Hakim Enterprises Ltd. is the respondent’s corporation with which he operates his pharmacy business.

Much more than an unsupported allegation would be required to establish that the petitioner was a 50 percent shareholder of the corporation, unbeknownst to her. [ 72 ] Thus, the valuation of $263,557.57 is for the respondent’s interest in the corporation. It has not been established that the petitioner has an interest in the corporation. Nappra Consulting Ltd./Nappra Consulting [ 73 ] It is accepted that this corporation and business name belong to the respondent. The respondent’s position throughout has been that the corporation was inactive since 2009 or 2010, and the business name was registered, but unused.

Financial disclosure as of the valuation date was directed. The petitioner disputed the “inactivity” of the corporation on the valuation date. The respondent filed no documents to support his claim of inactivity.

The petitioner tendered an RBC business account statement for Nappra Consulting Ltd. for the period of January 2, 2015 to February 2, 2015, on cross-examination and authenticity was confirmed by the respondent. [ 74 ] The statement shows an opening balance on January 2, 2015 (the day after the valuation date) of $5,615.99, deposits and credits of $111,700, cheques and debits of $15,126.30, and a closing balance of $102,189.69. The statement does not depict an inactive corporation, as suggested by the respondent.

The nature of the transactions set out in the statement are unknown, as the respondent did not give any evidence thereon. [ 75 ] For reasons identical to the valuation of Hakim Enterprises Ltd., and without any opinion evidence or any evidence, other than this bank statement, I value the respondent’s interest in Nappra Consulting Ltd. to be $5,615.99, the balance shown in the business account statement on January 2, 2015. Main Street Medical Centre Ltd. [ 76 ] During the hearing for directions process, the respondent produced copies of the 2014 and 2015 income tax returns and notices of

assessment pursuant to directions from the court. The respondent gave no evidence with respect to this corporation and his position on its value is unknown. The petitioner filed a balance sheet for the corporation for December 31, 2014. The author of the document is not stated thereon. The balance sheet shows assets of $87,400 and liabilities of $87,400 as of December 31, 2014.

The financial statements which would normally accompany a balance sheet were not filed in evidence. [ 77 ] As noted previously, the court is not an expert business valuator, and the provision of a balance sheet showing an equal amount of assets and liabilities for the corporation does not allow a valuation to be made. Since a value has not been established for the family property accounting, a nil value will be used for the respondent. RxBudget Ltd./RxBudget.com [ 78 ] During the hearing for directions, the respondent advised that while he incorporated this corporation, it did not operate or conduct any business.

The petitioner disputed the respondent’s contention. No evidence relating to these entities was given at the formal hearing, so a nil value will be used for the respondent. McKenzie Family Medical Centre Ltd./Jasmine Enterprises Ltd. [ 79 ] These are the two corporations previously mentioned as having been involved in the trust arrangement with Dr. Kaushal, as discussed relating to 634 Selkirk Avenue earlier in this decision. They are the operating corporation and holding corporation of Dr. Kaushal, respectively.

As of the valuation date, the respondent was registered at the Companies Office as the sole officer, director and shareholder of McKenzie Family Medical Centre Ltd. He is the only officer of Jasmine Enterprises Ltd. on that date, and was a director and equal shareholder together with Premlata Kaushal. The evidence is that Premlata Kaushal is the wife of Dr. Kaushal. [ 80 ] While the same concerns with respect to the trust arrangement exist here, there is a difference. That is, I was provided no evidence whatsoever with which to assign a value to these two corporations.

Without any evidence at all, let alone the expert evidence that would likely have been required, I cannot value these corporations. A nil value will be used for these corporations for the respondent. All other assets [ 81 ] There was one other asset of the respondent alleged by the petitioner. She alleged that the Law Society of Manitoba was holding $500,000 of the respondent’s money in trust “around 2014 or 2015”. She testified that she found out about this from an unnamed lawyer and has no documents related to this alleged asset.

She said she made inquiries of the Law Society of Manitoba, and was referred to a lawyer named Paul Shawa for any further questions about this issue. Mr. Shawa referred her to the respondent. When asked on cross- examination whether he had $500,000 in trust with the Law Society on the valuation date, he denied that he had such funds on that date or any other date. He professed to know nothing about it at all. [ 82 ] The petitioner questioned Dr. Kaushal about this issue, and he provided some additional information.

He said there was a dispute between himself and the respondent on an unknown date about funds held by Mr. Shawa. He believes the amount to have been $390,000 or $490,000. He said the Law Society became involved and the matter went to court. When asked what happened to the funds, he said all of it was paid out to himself or his operating corporation, McKenzie Family Medical Centre Ltd., with none of it going to the respondent. [ 83 ] While it appears the respondent was purposefully vague in his responses to questioning on this issue, especially given Dr.

Kaushal’s answers, I do not have probative evidence with which to conclude that this was an asset of the respondent’s at all, let alone on the valuation date. The petitioner herself could only say it happened in “2014 or 2015”. Even if she was precise on the date, there is no evidence on which I could conclude that the Law Society was holding the respondent’s funds on that date. The most expansive evidence on the issue was that given by Dr. Kaushal, and he said the funds belonged to him or his corporation. I will enter a nil value for this asset for the respondent.

Visa and credit card debts and other liabilities [ 84 ] The respondent confirmed at the third hearing for directions on October 5, 2022, that he had no debts and liabilities in his own name as of the valuation date. I did not hear any evidence on this at the formal hearing. A nil value will be entered under this heading. Petitioner’s assets and liabilities Cyber Med Ltd. [ 85 ] This was the petitioner’s operating corporation for her pharmacy. While the petitioner suggested at the second hearing for direction that she would obtain a business valuation, she did not do so.

At the third hearing for directions, she advised that she could not afford to obtain one, and would be taking the position that there was no value to the business as of the valuation date. By the time of the fourth hearing for direction, the respondent agreed that her business had no value on the valuation date, conditional on his business receiving the same valuation. This was not agreed by the petitioner. [ 86 ] No documentary evidence whatsoever relating to the value of Cyber Med Ltd. was led at the formal hearing of this matter.

I was provided with nothing with which to place a value on the petitioner’s interest in the corporation. As such, a nil value will be used for the petitioner’s interest in Cyber Med Ltd. Property in the Republic of Sudan (Sudan) (both parties) [ 87 ] The reference order provided that there was to be a valuation of “property in the Sudan” for the respondent. No such specific valuation was ordered for the petitioner, but the reference order required valuation of “all personal and real property” of the petitioner.

For purposes of completeness, the positions of the parties on property in Sudan was dealt with at the hearings for direction as follows:

First hearing for directions memorandum 3.4.14 – Property in The Sudan There are two properties listed in

Part 10 and the respondent takes the position that they are excluded from the family property accounting as they are outside the jurisdiction of Canada and that Islamic law applies to them. The petitioner disputes this position. As the hearing for direction was drawing to a close, the respondent seemed to be suggesting that there are other properties owned by the parties in The Sudan, including income earning properties. The parties are directed to disclose any and all properties owned in The Sudan as of the valuation date of January 1, 2015, and produce documentary evidence of the value of the property.

Second hearing for directions memorandum The respondent then raised the issue he had mentioned at the end of the first hearing for directions, which is that the petitioner has other property in The Sudan which has not been disclosed, including a commercial pharmacy. The petitioner denied that she has any other property in The Sudan. As noted in the first hearing for directions memo, the respondent is to produce documentary evidence of any such property he is alleging that either party has in The Sudan, and produce evidence of the value of the property.

Third hearing for directions memorandum 3.4.14 – Property in The Sudan There are two properties listed in

Part 10 located in The Sudan. The respondent had suggested at the previous hearing for directions that the parties have other properties in that country. They were directed to disclose any such property and include the documentary evidence. No further evidence has been produced. The respondent continues to allege that there are additional properties of the parties in The Sudan, while the petitioner denies same and suggests the only two properties are those listed in

Part 10. To the extent that either party is alleging additional properties located in The Sudan as of the valuation date, evidence is required. Allegations that funds were sent to individuals in The Sudan and there must be properties as a result will not be sufficient. The respondent suggests that he may subpoena someone from The Sudan to give such evidence at the hearing of this matter. The petitioner suggests that she has obtained an appraisal of the respondent’s two properties in The Sudan as of the valuation date.

She is awaiting the original appraisal to be brought to her, but in the meantime she will obtain a scanned copy of the document and produce it to the respondent. Should this matter proceed to hearing, unless the respondent agrees to the valuation, the author of the report will be required to attend and give evidence at trial. Upon receipt of the report, if the respondent intends to contest the valuation, he may take steps to obtain his own valuation of the property.

Fourth hearing for directions memorandum 3.4.14 – Property in The Sudan Petitioner’s position: $2,000,000 USD for Khartoum 2, Khartoum-Sudan; $2,100,000 UDS for Emarate, Khartoum-Sudan (valuation reports by Al Gamhuriya Real Estate). Respondent’s position: Outside the jurisdiction of Canada/Islamic law applies/declines to obtain an appraisal. The petitioner has obtained an appraisal of the property in The Sudan. The respondent objects to the appraiser chosen by the petitioner as being related in some fashion to the petitioner. He argues that the appraiser is not impartial and has a conflict of interest.

I advised the parties that the issue of whether the appraiser can give expert evidence will be determined at the formal hearing. In the meantime, both parties were given a deadline of March 13, 2023, for any further appraisal report relating to the respondent’s property in The Sudan. [ 88 ] With that background, on the first day of the formal hearing, the petitioner produced what appeared to be a one-page document said to be an appraisal report of the respondent’s property in Sudan. This document had not been previously provided to the respondent.

It was obtained in response to the respondent’s position that the petitioner’s earlier appraisal report for property in Sudan was prepared by someone related to her by marriage. As it turned out, the petitioner acknowledged during cross-examination that the initial appraisal report obtained by her was authored by her sister’s husband. [ 89 ] The respondent opposed introduction of the second appraisal report into evidence. The petitioner advised that the author of the report would not be present to give evidence at the hearing.

On the basis of his non-availability to give evidence and the late provision of the second appraisal report during the formal hearing, I denied the introduction of the second appraisal report into evidence. [ 90 ] Presumably on the basis that her brother-in-law prepared the first appraisal report, the petitioner did not seek to tender the first

report into evidence. Thus, there was no evidence led by the parties as to the value of any property of the respondent in Sudan, nor was there any proof that the respondent owned property in Sudan. [ 91 ] The respondent had raised throughout the hearings for direction that the petitioner also had property in Sudan. His request to adjourn the formal hearing was based in large part on his stated need for more time to find proof that the petitioner owned property in Sudan.

As mentioned earlier in this decision, his request for an adjournment was denied by Hatch ACJ. [ 92 ] While there was much cross-examination of both parties relating to property in Sudan, probative evidence of the existence of the property and the value of the property was not tendered. As such, and assuming that such property even exists, I am not able to assign a value to property in Sudan for either party. As such, a nil value will be entered for purposes of the accounting.

CONCLUSION [ 93 ] As a result of the conclusions noted in this decision, the family property account is set out below: FPA Accounting Respondent’s Assets Value 5400961 Manitoba Ltd. *906 Main Street $ 860,000.00 Hakim Holdings Ltd. *900 Main Street *634 Selkirk Avenue $ 213,400.00 $ 220,000.00 7158638 Manitoba Ltd. *441 Henderson Hwy. Excluded Hakim Enterprises Inc./Good Neighbour Pharmacy $ 263,557.57 Nappra Consulting Ltd./Nappra Consulting $ 5,615.99 Main Street Medical Ltd. Nil RX Budget Ltd./RX Budget.com Nil McKenzie Family Medical Centre Ltd./Jasmine Enterprises Ltd.

Nil Funds held by Law Society Nil Property in Sudan Nil Total Assets $1,562,573.56 Respondent’s Liabilities Nil Visa and credit card debts and other liabilities Nil Net Equity $1,562,573.56 Petitioner’s Assets Value CyberMed Ltd.

Nil Property in Sudan Nil Total Assets Nil Petitioner’s Liabilities Nil Net Equity Nil Total Equity $1,562,573.56 ½ of total equity Respondent owes petitioner $ 781,286.78 [ 94 ] The result of the family property accounting is that the respondent owes the petitioner the amount of $781,286.78. [ 95 ] The petitioner was clearly more successful on the contested issues herein and is successful overall in obtaining a significant equalization payment from the respondent. As a result, she is entitled to costs and disbursements of the family property accounting based on Class 4 of the tariff.

S. D. Berthaudin Master IMPORTANT NOTICE THIS REPORT BECOMES AN ORDER OF THE COURT OF KING’S BENCH ON CONFIRMATION. A REPORT WILL BE AUTOMATICALLY CONFIRMED UNLESS CONFIRMATION IS OPPOSED. YOU ARE RESPONSIBLE FOR INFORMING YOURSELF ABOUT THE CONFIRMATION PROCESS WHICH IS GOVERNED BY KING’S BENCH RULE 54.06

(2) AND RULES 54.08 THROUGH 54.10