Najm v Najm 2026 ONCA 13

BACKGROUND

The appellant husband, Mr. Najm and the respondent wife, Ms. Najm married in 1985 in Pakistan and moved to Canada permanently in 2000. The parties experienced problems with their marriage around March 2005 when Mr. Najm’s mother passed away. In November of 2005, Mr. Najm’s father swore a declaration outlining itemized gifts (and their values) by him and his late spouse to Mr. Najm, and further, the father signed an affidavit affirming this.

In March 2006, Safina Canada was incorporated in Ontario. This company was incorporated by Mr. Najm, his brother, and his father. Mr. Najm indicated that his father issued shares of the company to him. Once Mr. Najm’s father died in July 2011, Mr. Najm and his brother each inherited 50% of the balance of their father’s shares in Safina Canada. Mr. Najm’s net interest in the company was valued at $530,000.

At trial, the judge refused to allow Mr. Najm an exclusion with respect to his 50% interest in Safina Canada because there was not enough “documentary evidence to corroborate the source of the funding for the company when it was incorporated.” The judge ordered Mr. Najm to pay an equalization payment to Ms. Najm of about $350,000.

ISSUES

1. Whether the trial judge erred in imposing an evidentiary burden requiring Mr. Najm to establish that his father was the source of the funds used to establish Safina Canada before giving effect to the clear documentary evidence supporting a gift and inheritance.
2. Whether the trial judge’s findings were based on speculative, unproven inferences not supported by evidence.
3. Whether the trial judge erred in concluding that there was no documentary evidence to support that the father was the source of the funds for the incorporation of Safina Canada when there was such evidence in the record.

ANALYSIS

The court cites Cronier v Cusack 2023 ONCA 178 and Hickey v Hickey [1999] 2 SCR 518 in outlining that when there is an appeal of an order resolving financial disputes in a family law case, the appeal court should only intervene when there is a “material error, a serious misapprehension of the evidence, or an error in law.” This was considered in each issue of the case as summarized below.

Requiring Mr. Najm to prove the source of funds for the father’s shares in the company was not an error in law

Mr. Najm argued that the trial judge erred in law by adding an additional component to the test for the establishment of an exclusion order under s. 4(2) of the Family Law Act. He considered that component to be “proof of the absence of fraud or other misconduct meant to evade the operation of the Family Law Act.” Mr. Najm submitted that unless there are allegations and proof of a fraudulent conveyance, the court should not look further into a properly documented gift/conveyance in the context of exclusions.

The court disagreed. In several exclusion cases, the focus is usually on tracing property back to a gift or inheritance and proof of the funds used by the donor to acquire the asset is not necessary. However, in this case, the trial judge was concerned that Mr. Najm structured his assets in efforts to avoid potential property claims by Ms. Najm. These findings were supported by evidence that Mr. Najm had taken steps at the time of the company’s incorporation to protect himself from a future equalization claim.

The court decided that the trial judge was not limited to the law of fraudulent conveyance in refusing to recognize the proposed gift and inheritance. Mr. Najm failed to establish that his shares in Safina Canada had belonged to his father such that they had ability to be gifted as part of his father’s estate.

The trial judge’s factual findings did not rely on speculation

Mr. Najmargued that the trial judge had a theory, but no evidence, that his father had not paid for his shares in Safina Canada. The Court of Appeal stated that judges are encouraged to take a “common sense” approach when it comes to considering evidence since not all documents can be obtained.

In this case, the trial judge believed that much like Mr. Najm had done with other exclusions claimed, he should have been able to provide evidence that his father’s funds were used to subscribe for the Safina Canada shares. This specific missing evidence “[stood] in sharp contrast” to the Mr. Najm’s other meticulously documented exclusions.

As Mr. Najm has the burden of proof to establish an exclusion, the Court of Appeal decided that the trial judge did not reach an opinion based on speculation.

The trial judge did not ignore the evidence that Mr. Najm’s father’s money was used to purchase the company’s shares

Mr. Najm argued against the finding that there was an “absence of any documentary evidence” linking the funding of the company to his father. The father produced bank statements in his and his father’s names from June 2005 to June 2006 and outlined that those statements were before the trial judge even though they were addressed in “different evidentiary contexts.” Essentially, these statements were not used in relation to Mr. Najm’s exclusion claim of the Safina Canada shares.

The court decided there was no merit to this argument. The trial judge did not overlook evidence that should have satisfied him that the father’s funds were used to subscribe to the shares. It was too late to attempt to prove the source of his father’s funds to obtain the shares on appeal when the evidence was in the record at trial.

CONCLUSION

Mr. Najm’s appeal was dismissed as the court found that there was no “material error, a serious misapprehension of the evidence, or an error in law.” Mr. Najm was not permitted to exclude the value of his 50% interest in Safina Canada from the equalization of the parties’ net family property. The order for Mr. Najm to pay Ms. Najm an equalization payment of approximately $350,000 was upheld and Mr. Najm was further ordered to pay costs in the amount of $25,000.