The parties in Parviziv. Taherzadeh, 2024 BCCA 205, were in the midst of their 10-day trial when an issue arose as to the value of a property, alleged by Mesbah Taherzadeh to be excluded property. The issue on appeal was whether Taherzadeh bore the onus of proving both that the property was excluded, and the value of the exclusion based on the property’s value at the date the relationship commenced.
When the parties commenced cohabitation in 2007, Taherzadeh owned a property in Whistler in joint tenancy with his daughter, a home he had purchased with his first wife in 1988. A year before he and Fatomah Parvizi separated, he sold the Whistler property for $2 million dollars, netting $1.3 million. He used these funds to purchase a property in White Rock, in his name alone, for $1.9 million. At the date of separation in 2019, the White Rock property clearly fit the Family Law Act definition of family property, being property owned by a spouse at the date of separation.
Not surprisingly, Taherzadeh took the position that the funds from the sale of the Whistler property, which could be traced into the White Rock property, were excluded property, limited to the value of his interest in Whistler at the time of the commencement of the marriage-like relationship.
Section 84(2) (g) of the Act provides:
(2) Without limiting subsection (1), family property includes the following:
(g) the amount by which the value of excluded property has increased since the later of the date
(i) the relationship between the spouses began, or (ii) the excluded property was acquired.
Unfortunately, and apparently inadvertently, a joint expert opinion of the value of the Whistler property at the commencement date of the parties’ cohabitation had not been secured. However, Taherzadeh had listed an appraisal he alone obtained in 2007; however, that document did not find its way into the trial brief of documents. The evidence did include copies of the 2007 property notice of assessment for Whistler.
On day five of the trial, Taherzadeh’s counsel sought to introduce his client’s 2007 appraisal into evidence, albeit he acknowledged that it was not in the form of an expert opinion or a joint opinion, as required by the Supreme Court Family Rules. Parvizi objected, arguing that Taherzadeh had the onus to prove his excluded property claim and had not discharged that duty as he had not provided admissible evidence to establish the value of Whistler at the date of cohabitation. She submitted that her husband’s excluded property claims should be dismissed.
The Court of Appeal recognized the merits of her argument and referred to a case regarding the onus of proof that supported her position. In Brazinski v. Brazinski, 2023 BCCA 359, the court said:
“… The estimate of value for the Vancouver Properties in 2003 was not “simply required”f or the division of a family asset. The value was the starting point for the excluded property claim. Mr. Brazinski bore the onus of proving that claim. Accordingly, he had the burden of proof to show the value of that claim in 2003. He failed to meet that burden.”
However, the trial judge did not have the benefit of the Brazinski case, and several trial decisions held that the onus of establishing excluded property was on the party claiming it, but the increase in value of the excluded property lay with the party asserting the increase (J.S.F. v. W.W.F., 2015 BCSC2375).
The onus issue became more confusing when counsel for Parvizi submitted that the Whistler property was family property on the date it was sold, a clear misnomer, as the definition of family property is “property owned by a spouse at the date of separation” and the Whistler property had been sold a year prior to the separation date.
A discussion between trial counsel and the court ensued, with the trial judge stating that it was likely that Whistler was excluded property at the date cohabitation commenced because it was not disputed that Taherzadeh owned the property in 2007. She stated that regardless of the issue of the onus, she was obliged to quantify the increase in value to determine the amount of the exclusion.
At that point, Taherzadeh’s counsel suggested that the trial judge order a joint historical appraisal of the Whistler property. Parvizi objected, but the judge made that order, acknowledging that the trial would not complete and additional trial days, some 11 weeks away, were to be arranged, providing plenty of time to obtain the ordered appraisal.
The joint appraisal was done and provided a 2007 value of $1 million dollars. After deducting the balance of the mortgage, and deducting Taherzadeh’s one-half interest in the property, the court determined that the exclusion amounted to approximately $400,000.
The appeal court rejected Parvizi’s assertions that the trial judge erred in ordering the joint appraisal mid-trial by “acting on her own motion” and assisting Taherzadeh in making out a claim that he had failed to establish on the admissible evidence. She also asserted that the trial judge misunderstood the onus of proof issue, leading to a decision that was procedurally unfair and an abuse of her discretion.
The appeal court noted that Parvizi had acknowledged a legitimate $250,000 excluded property claim related to the Whistler property, and the trial judge could not have known whether the excluded value would increase or decrease with a fresh appraisal or whom the appraisal would benefit.
The appeal court referred extensively to the trial transcript in their appeal decision, focusing on the discussions between the trial judge and counsel. Notably, the issue of the onus and the judge’s order for a joint appraisal was not mentioned in the trial reasons and was not part of the entered order.
However, the appeal court pointed out that while those discussions informed the issues on appeal, care must be taken not to put too much weight on them, recognizing that discussions with counsel often involved a judge testing propositions and arguments and not necessarily reflecting the underlying rationale of a ruling. They also affirmed the trite law that an appeal is from an order and not from reasons for judgment.The appeal court acknowledged the informality of the order for an appraisal but affirmed that ultimately the outcome was fair and reasonable, irrespective of the onus of proof and within the trial judge’s discretion.
**This article was first published in LAW360, a publication of LexisNexis Canada.