Husband says he received shares as gift during marriage, inherited them from late father
In a case involving equalization issues following a divorce, the Ontario Court of Appeal affirmed a judge’s rejection of the ex-husband’s requested exclusion of corporate shares, allegedly gifted during the marriage, from the former couple’s net family property.
In Najm v. Najm, 2026 ONCA 13, the parties married in Pakistan in 1985 and resided in Saudi Arabia for six years. After immigrating to Canada in 1992, they relocated permanently to Ontario in 2000.
By early 2005, troubles marred the parties’ marriage. According to the husband, they separated on Sept. 20, 2005. In October 2005, he signed a talaq nama, a religious divorce decree, which he later admitted lacked legal effect in Canada.
On Nov. 1, 2005, the ex-husband’s father swore a declaration in Pakistan, where he resided. The document itemized the gifts he and his late wife had given the ex-husband, along with their values. According to the declaration, the gifts benefited only the ex-husband and should not be part of the net family property.
Also in November 2005, the ex-husband altered his will to remove his ex-wife as a beneficiary. That month, they resumed cohabiting until Sept. 26, 2015, which the court later designated as the valuation date.
In March 2006, the ex-husband, his brother, and their now deceased father incorporated Safina Investments Inc. (Safina Canada) and became its listed directors.
At a family law trial involving equalization issues, both parties requested multiple exclusions from their net family property under s. 4(2) of Ontario’s Family Law Act, 1990. The respondent ex-wife asked for an unequal division of the net family property.
The appellant ex-husband sought an exclusion in connection with his 50 percent interest in Safina Canada. He alleged that he received the Safina Canada shares during the marriage as a gift and inheritance from his late father.
On Apr. 8, 2024, Justice David Jarvis of the Ontario Superior Court of Justice ordered the ex-husband to pay his ex-wife an equalization payment of $353,752, plus prejudgment interest from Sept. 26, 2015.
The trial judge determined that the ex-husband failed to establish that the Safina Canada shares constituted a valid gift and inheritance from his father, who had allegedly paid for them.
The ex-husband challenged the denial of the exclusion concerning the shares. He asserted that the judge should have excluded the shares’ value, as of the valuation date, from the net family property.
The Court of Appeal for Ontario dismissed the ex-husband’s appeal, rejected his arguments, and awarded the ex-wife costs of $25,000, the agreed inclusive amount.
First, the appeal court ruled that the trial judge did not err in requiring the ex-husband to prove the source of the funds for acquiring the Safina Canada shares.
The appeal court saw no error in the judge’s finding that the ex-husband failed to prove that the shares had belonged to his father, such that his father could have given and bequeathed them to the ex-husband as part of his father’s estate.
The appeal court noted that the judge – not limited to the law of fraudulent conveyance – had to determine, as a foundational issue, whether the ex-husband received specific property he owned as a gift or inheritance during the marriage.
Second, the appeal court held that the judge did not rely on speculation in reaching his factual findings. Instead, the appeal court explained that the judge:
Third, the appeal court decided that the judge did not overlook pertinent evidence supporting that the father had used his own money to acquire the Safina Canada shares.
The appeal court pointed out that it was too late for the ex-husband to attempt at the appeal stage to prove the source of his father’s funds to purchase the shares.
The appeal court noted that the ex-husband’s testimony did not address relevant documents in the record. The appeal court added that the experts found no documentary evidence corroborating the ex-husband’s assertion regarding the source of the funds.
