“The court of appeal dealt with contingent liabilities in Greenglass v. Greenglass, 2010 ONCA 675, 99 R.F.L. (6th) 271. In Greenglass, at the valuation date, the husband faced contingent legal costs associated with litigation that had begun during the marriage. In determining how to value this contingent liability, Epstein J.A., writing for the court, made the following observations, at paras. 26-27:
[C]ontingent liabilities are to be taken into account so long as they are reasonably foreseeable. See Leslie v. Leslie (1987), 1987 CanLII 8321 (ON SC), 9 R.F.L. (3d) 82 (Ont. H.C.); Nicol v. Nicol (1989), 1989 CanLII 8825 (ON SC), 21 R.F.L. (3d) 236 (Ont. H.C.); Crutchfield v. Crutchfield (1987), 1987 CanLII 8303 (ON SC), 10 R.F.L. (3d) 247 (Ont. H.C.); and Drysdale v. Drysdale (1994), 1994 CanLII 7453 (ON SC), 9 R.F.L. (4th) 20 (Ont. U.F.C.J.).
In determining the present value of a contingent liability, courts have looked at what was reasonably foreseeable on the valuation date: Johnston v. Johnston, [1998] O.J. No. 5495 (Gen. Div.), at para. 59, aff’d on other grounds 2000 CanLII 14718 (ON C.A.), leave to appeal to S.C.C. refused [2000] S.C.C.A. No. 234. In Drysdale, at paras. 14-17, Beckett J. noted that where courts have found no or a very low risk that a guarantee would be called at the valuation date, the value of the contingent liability has been determined to be nil. However, in Drysdale it was found that there was a real possibility that the guarantee would be called upon, though the amount could not be predicted with any certainty. Finding it unrealistic to value the liability at either zero or the full amount of $200,000, Beckett J. valued the liability at 50 percent of the amount in question: see also Salamon v. Salamon, [1997] O.J. No. 852 (S.C.J.). This approach was approved by this Court in Cade v. Rotstein (2002), 2004 CanLII 24269 (ON CA), 181 O.A.C. 226 (C.A.). [Emphasis added].
For equalization purposes, the court is to value a contingent debt based on the probability that it would be collected. Courts are frequently called upon to assess the actual worth of a claim, asset or liability, by discounting its face value where the evidence indicates it is unlikely that the debtor will ever be called upon to pay: see Zavarella v. Zavarella, 2013 ONCA 720, 117 O.R. (3d) 641, at para. 38. To fairly calculate equalization, the court must make a realistic determination of the value of debt in a net family property calculation, and that determination is based on the reasonable likelihood that the debt will ever be paid: Zavarella, at para. 39.
This court has observed that it may be necessary to have expert opinion evidence to arrive at the present value of a future judgment on the valuation date: see Sheikh v. Sheikh, 2010 ONSC 1407, at para 47. While hindsight evidence may not be permissible under any circumstances, it does not even arise in this case since the estate litigation was no further ahead at trial than it was on the valuation date. This lack of progress may inform the assessment of the foreseeability or probability of the applicant being found liable to pay anything in the estate litigation.”