Credibility Helps Court Determine Ownership and Value of Jewelry in Separation

November 18, 2022
Jewellery

written on behalf of Feigenbaum Law

Dealing with family law matters can create significant stress for those going through a separation or divorce. For those with high-value assets, issues such as property division or fears over hidden assets might create additional concerns. A large issue with asset division is the lack of subjective value some items may have, which can create disagreements between spouses over the value of those assets. 

Jewelry, for example, may fluctuate in value and is often determined by the assessment of a professional. Further, there may be questions regarding whether or not jewelry is an asset shared by former spouses or whether it was a gift from one spouse to another. A recent Ontario Superior Court of Justice decision canvasses this issue and sheds light on how courts may approach these issues. 

Jewelry is outstanding issue in divorce

In Siddiqui v. Siddiqui, the parties were married in Pakistan in 2002 through arranged marriage. The wife remained in Pakistan for one month after the wedding before joining the husband in the United States. They both moved to Canada in 2007. 

The couple separated two years after moving to Canada but reconciled in 2011. The parties separated permanently in 2018, after which the wife left the family home with the parties’ three children. 

The husband was employed as an accountant. The wife worked as a medical doctor in Pakistan and had been unsuccessful in her attempts to pass the tests to obtain a license to practice medicine in Canada, therefore she was working as an ultrasound technician. Both of the parties agreed that the wife wass not financially sophisticated. 

Wife says jewelry was gifted to her by family

At trial, the wife claimed that she owned jewelry worth $14,680 which was gifted to her by her family and was included in her net family property. She stated that she also owned jewelry that was gifted to her by the husband’s family which was worth $8,470 and was included in his net family property. The wife submitted that the jewelry gifted to her should be considered a pre-marriage asset and therefore deducted from her net family property. The wife’s brother presented evidence stating that a portion of the jewelry in dispute belonged to their sister. 

The husband stated that all of the jewelry gifted to the parties was worth $125,000 and argued that because the wife had maintained possession of the jewelry, it should be inserted as her net family property. The husband stated that he arrived at his valuation of the jewelry by calculating the value of the gold at the time it was purchased and taking into account the increase in value. He also claimed that the wife was hiding some of the jewelry. 

Regarding the location of the jewelry, the wife stated that it remained in Pakistan since their marriage, while the husband claimed that the wife brought it to Canada. 

Issues with wife’s credibility

The Court began its analysis by assessing the credibility of the witnesses. The Court did not accept the wife’s evidence that she could not bring the jewelry to Canada, or that she owned some of the jewelry before their wedding. The Court also did not accept the evidence of the wife’s brother claiming that the parties’ sister was the true owner of some of the wife’s jewelry. The Court referenced the wife’s statements admitting her difficulty with financial literacy in determining that the husband’s valuation was more believable. 

The Court was conscious of the cultural significance of the parties having been married in Pakistan, highlighting the Indian tradition of gifting jewelry to a couple on their wedding day, with the intention that the jewelry is to serve as an insurance policy if the couple requires financial assistance. Further, the wife’s religious beliefs prevented her from obtaining a life insurance policy. 

Court orders sale of jewelry 

The Court agreed with the husband’s evidence concerning the value of the jewelry and the jewelry being part of the marital property. However, Justice Piccoli stated that she could not make a finding regarding the husband’s allegation that the wife had undisclosed jewelry “out there” as the husband did not provide any evidence to support this claim. The husband was also unable to recall exactly what pieces remained outstanding and simply claimed that he believed pieces were not accounted for. 

Since the jewelry was an asset of the marriage, the Court held that the only fair way to determine the appropriate valuation was to sell it at market value. Therefore, Justice Piccoli ordered a sale of the jewelry, adding that the proceeds would be divided equally between the parties. However, the Court left it to the parties to agree on how the jewelry would be sold. 

Feigenbaum Consulting can provide you with legal advice on high-net-worth separations

At Feigenbaum Consulting, our family law team has unparalleled experience in accounting and family law, allowing us to help our clients navigate the complexities of dividing high-value property and assets during a separation or divorce. Our expertise in accounting will enable clients to be informed when making tax management decisions. To schedule a confidential consultation with a member of our family law team, please reach out to us online or by phone at 1-877-275-4792

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