After a 10-day trial, Justice Ward Branch mused that the marital and financial relationship between Ying Zi Shen and Rongren He was likely designed, in whole or in part, to mislead Canadian immigration authorities and/or Chinese currency regulators, a reasonable conclusion assisted by the evasive testimony of the parties, and the financial quagmire presented in the evidence.
In Shen v. He [2023] B.C.J. No. 1620, we learn that the parties met in December 2016, started living together in April 2017, married in August 2017, and separated in December 2018, making theirs a two-year relationship. They met through an immigration consultant, which heightened the court’s suspicions about their marital union.
The claimant and her first husband signed an agreement at the end of their marriage and the wife received six real properties located in China, although her Property and Financial Statement listed only one property and little to no evidence was provided as to its value when she acquired it: at the date she separated from He or at the trial date.
A second agreement between Shen and husband No. 1 evidenced a loan of $9 million from her to him, the details of which were vague. The claimant immigrated to Canada with her son in December 2007 and became a Canadian citizen in April 2017.
The respondent had divorced his first wife in 2017 and testified that he gave all the family property to her, although the assets he left with his wife and young son were not particularized. Oddly enough, 14 days after his divorce, his first wife loaned him $600,000 at a very low interest rate, a sum he disclosed as an outstanding debt in his Property and Financial Statement. This transaction added to the court’s suspicion that the respondent still maintained an interest in property in China and the so-called “loan” may have been a vehicle to extract funds from China without attracting the attention of Chinese currency regulators.
Shortly after the parties met, the respondent incorporated a company giving Shen 75 per cent of the shares, dissolving the company in 2019.
In March 2017 the respondent purchased a home on Berton Avenue in Vancouver for $1.1 million, which coincided with the claimant’s sale of her home for $700,000. The claimant was considering a move to Toronto, where her now adult son was attending university.
The respondent testified that the plan had been that the claimant would contribute funds to the purchase of the Berton Avenue home, but he ended up funding the purchase, although the home was registered 99 per cent to the claimant and one per cent to the respondent.
The respondent told the court that the claimant advised him that since he was on a tourist visa he could not hold more than a one-per-cent interest. The claimant testified that the respondent purchased the home and registered it in her name to induce her to marry him and not move to Toronto.
Just prior to the parties’ marriage in August 2017 the respondent signed a deed of gift in which he purported to transfer to his son a variety of assets in China, including investment accounts and real properties. Title searches revealed that the properties were registered in the names of He, his first wife and his son. This despite his evidence that he had no property in China.
Over the course of their relationship Shen received an additional $328,000 from the respondent. The respondent testified that these moneys were gifts from friends who felt sorry for him because he was destitute, and that Ms. Shen had unilaterally withdrawn these funds, without his consent.
When the claimant left the Berton Avenue home, which the court accepted as the separation date, she allegedly took with her approximately $80,000 worth of jewelry that had been gifted to her by the respondent. In accusatory text messages between the parties about the jewelry and its whereabouts, the respondent wrote, “I gave you all the money I brought from China.” The court noted that this evidence was in stark contrast to earlier testimony that the respondent gave all his property to his wife in China when they divorced.
Meanwhile, Shen testified that she did not have the jewelry.
Citing Faryna v. Chorny [1951] B.C.J. No. 152 and Cunha v. da Cunha [1994] B.C.J. No. 2573, the court ultimately determined that both parties had significant credibility issues, pointing out that the wife’s testimony at trial differed from her examination for discovery evidence; she had unreported income and likely unreported assets; her evidence about the jewelry was suspect; and she failed to produce relevant financial documents.
With respect to He’s evidence, the court found him to be argumentative, defensive and unco-operative; he failed to disclose assets he owned; he could not adequately explain why individuals would make large gifts of money to him; and his testimony about a $600,000 loan from his wife was not believable.
The court then considered whether its suspicions about the nature of the Shen-He marriage prevented the court from granting a divorce to the parties. Relying on Kaur v. Brar 2003 Canlii 2452 (ONSC) and Grewal v. Kaur [2011] O.J. No. 1413, where the Ontario courts considered “sham” marriages, the following principles emerge:
- A finding that a marriage was entered into solely for immigration purposes may, but not must, be considered as a basis for a finding of collusion.
- A marriage entered into for immigration purposes does not, by itself, invalidate the marriage.
- If the court only suspects a “marriage of convenience,” the court may still issue a divorce under appropriate circumstances.
- Courts are more likely to accept the validity of a “marriage of convenience” at least for the purpose of granting a divorce, where there was at least an intention to continue the marriage from the outset.
While the trial judge had serious concerns about whether the parties’ marriage was not simply a commercial arrangement driven by immigration issues, he found that the evidence did not provide any certainty that the marriage was a sham.
Moreover, he could not find that the parties had a settled intention to divorce from the outset of their marriage, based on the conflicts they wrestled with during their relationship in an attempt to stay together, rather than simply biding their time, pending a planned divorce.
The claimant’s request for spousal support was denied based on the short length of the marriage; the lack of compensatory factors; little evidence of needs-based entitlement; and evidence that the claimant worked before, during and after the marriage.
The major asset at issue was the Berton Avenue home, which the husband argued was excluded property, as it was derived from property owned exclusively by him, an argument that was accepted by the court. However, the court then examined the respondent’s gift to his wife of a 99 per cent interest in the property to determine if the exclusion was subsequently lost after the transfer to Shen, based on the presumption of advancement. The court adopted the reasoning in Hofmann v. Miller [2022] B.C.J. No. 750, Namdarpour v. Vahman [2019] B.C.J. No. 765, and Venables v. Venables[2019] B.C.J. No. 1400, and found that the presumption of advancement applied, even though the parties were not legally married, but in a marriage-like relationship when the Berton Avenue home was purchased, albeit the court noted that several British Columbia Supreme Court decisions espoused a contrary view, such as Price v. Price [2020] B.C.J. No. 1649 and H.C.F. v. D.T.F., [2017] B.C.J. No. 1398.
The court also stated that despite a finding that the presumption of advancement applied, the court was also convinced that the respondent’s intention to give Shen 99 per cent was proven based on the consideration of the claimant remaining in Vancouver and marrying the respondent in exchange for her substantial interest in the home.
The court rejected the respondent’s suggestion that he only retained one per cent of the property because the claimant told him that his status in Canada would not permit greater ownership, dismissing the notion that he, as a sophisticated businessman, would be that gullible.
Each of the parties sought reapportionment in their favour, with the court determining that the proceeds of Berton Avenue should be divided 75 per cent to the respondent and 25 per cent to the claimant. Shen was ordered to pay He $40,000 for the jewelry she retained and all other property claims were dismissed.
This case is yet another illustration of Sir Walter Scott’s adage, “Oh, what a tangled web we weave/When first we practise to deceive.”
Georgialee Lang has practised family law for 35 years, recently focusing primarily on arbitration and appellate litigation. Lang is a writer, speaker and media commentator whose publications range from the Huffington Post to the National Post , The Advocate , The Verdict, and Law360 Canada. For fun she pens a blog (lawdiva.wordpress.com). Connect with her at georgialeelang.com or on Twitter.
**This article was first published in Law360, a publication of LexisNexis Canada.