Stefanou v. Stefanou, 2009 ONCA 204

CITATION: Stefanou v. Stefanou, 2009 ONCA 204

DATE: 20090305

DOCKET: C48488

COURT OF APPEAL FOR ONTARIO

Rosenberg, MacPherson and Rouleau JJ.A.

BETWEEN

Setsuko Stefanou

Applicant (Appellant)

and

George Stefanou

Respondent (Respondent)

Phyllis Brodkin and Kristy Maurina, for the appellant

Aaron Franks and Roslyn Tsao, for the respondent

Heard: February 5, 2009

On appeal from the judgment of Justice Thea P. Herman of the Superior Court of Justice dated February 13, 2008 and reported at 2008 5117 (ON S.C.).

MacPherson J.A.:

A. INTRODUCTION

[1] The appellant, Setsuko Stefanou (the “wife”), appeals from the judgment of Herman J. dated February 13, 2008 on the trial of an issue, namely, whether Greece or Ontario was the more appropriate forum for the adjudication of the wife’s claims for equalization of net family property and spousal support in matrimonial proceedings. The trial judge held that Ontario was a forum non conveniens for the proceedings and, accordingly, that the appropriate forum was Greece, where the parties had habitually resided from 1993 to the date of their separation in 2004.

[2] The main issue on the appeal is whether the fresh evidence – the application filed by George Stefanou (the “husband”) in matrimonial proceedings he initiated in Greece after the trial decision in Ontario – should be admitted and, further, whether it should serve as a basis for allowing the appeal to set aside the trial judge’s decision in favour of an order that the matrimonial proceedings continue in Ontario.

[3] At the conclusion of the appeal hearing, this court allowed the appeal on the basis of the fresh evidence only, with reasons to follow. These are the reasons.

B. FACTS

(1) The parties and events

[4] The husband came to Canada from Greece in 1970. The wife came to Canada from Japan in 1972. The parties met in 1975 and were married in Toronto in 1979. They both subsequently became Canadian citizens.

[5] The husband was an electrical engineer. He worked in Toronto in 1979, Nova Scotia from 1980 to 1982, Israel from 1982 to 1984, Toronto from 1984 to 1986, and Germany from 1986 to 1993. The wife quit her job and accompanied the husband on all of these postings. She was not employed during these years. Throughout this period, the parties regarded Toronto as their home base. There were no children of the marriage.

[6] In 1993, the husband retired and the parties’ primary residence became the island of Rhodes in Greece. The parties had a home, to which they made substantial improvements, and also owned an olive grove and a vineyard on the island. They spent about one month a year in Toronto, where they stayed with the husband’s sister and brother-in-law.

[7] In 2004, the parties separated. The husband initiated divorce proceedings in Greece in February 2005. The wife did not contest these proceedings and the divorce was granted by a Greek court in May 2006.

[8] In April 2005, the wife brought an application in Ontario for equalization of net family property and spousal support. The parties’ property consists of the home, land, and a yacht in Greece, as well as bank accounts and investments in Canada and the United States worth approximately $2,000,000. Most of the money located in Canada has been frozen by a series of court orders, many of which were made on consent of both parties.

[9] In September 2005, the husband brought a motion to dismiss the wife’s claims on the basis that Ontario did not have jurisdiction simpliciter and was a forum non conveniens for the matrimonial proceedings. Paisley J. ordered the trial of an issue. However, on the eve thereof, the husband abandoned the issue of jurisdiction simpliciter.

(2) The litigation

[10] Herman J. presided over the trial of an issue. Early in her judgment, she pointed out that the parties agreed that the property issues are governed by the laws of Greece. This is so because of s. 15 of the Family Law Act, R.S.O. 1990, c. F. 3, which provides, in part, that:

[t]he property rights of spouses arising out of the marital relationship are governed by the internal law of the place where both spouses had their last common habitual residence….[Emphasis added.]

[11] The parties do not dispute that between 1993 and their separation in 2004, their “last common habitual residence” was Greece.

[12] The trial judge then reviewed and applied the various factors set out by Sharpe J.A., writing for this court in Muscutt v. Courcelles (2002), 2002 44957 (ON CA), 60 O.R. (3d) 20, for determining the issue of forum non conveniens. After balancing these factors, the trial judge concluded as follows:

On weighing these factors, it is my opinion that the balance tips in favour of this matter proceeding in Greece. In coming to this conclusion, I do not want to minimize Ms. Stefanou’s sincerity in not wanting this matter to proceed in Greece. I accept that it may be difficult for her. However, a determination of the value of the Greek properties and Ms. Stefanou’s contribution to them is a more complicated issue from an evidentiary standpoint than is the other major issue in dispute, that is, whether there was a loan to Mr. Stefanou’s brother-in-law. Added to this is the fact that an Ontario court would have to apply Greek law in order to determine Ms. Stefanou’s interest in these properties. Finally, the jurisdiction of the Greek court to deal with both property and spousal support claims in clear.

[13] Accordingly, the trial judge granted the husband’s motion and stayed the wife’s application in Ontario. She also ordered a continuation of the freeze on the parties’ assets in North America “until and unless the parties agree otherwise or until further order of a court of competent jurisdiction.” Finally, in a costs endorsement dated April 7, 2008, the trial judge awarded the husband costs fixed at $45,000, inclusive of GST and disbursements. However, she suspended the payment of those costs until “the parties’ respective interests have been determined”, presumably at the conclusion of the proceedings in the Greek courts.

[14] The wife appeals from the trial judge’s forum non conveniens ruling. The husband seeks leave to cross-appeal the trial judge’s suspension of the payment of the costs award until the conclusion of the case.

(3) The fresh evidence

[15] In support of her appeal, the wife brings a motion to introduce fresh evidence, namely, the application filed by the husband in a Greek court after the trial judge’s decision was released in Ontario. The wife submits that this application casts a very different light on the legal proceedings relating to the parties’ matrimonial property that was not properly before the trial judge when she determined that Greece was the appropriate forum for the proceedings.

C. ISSUES

[16] The issues on the appeal are:

(1) Did the trial judge err by staying the wife’s application in Ontario on the basis of forum non conveniens principles?

(2) If the answer to (1) is “No”, should the fresh evidence proposed by the wife be admitted, with the result that the appeal is allowed and, accordingly, the stay of the wife’s application in Ontario should be lifted?

[17] The issue on the cross-appeal is:

(3) Did the trial judge err by suspending the payment of the costs award in favour of the husband until the conclusion of the proceedings?

D. ANALYSIS

The appeal

(1) The trial judgment

[18] The wife submits that the trial judge committed a palpable and overriding error in staying her application in Ontario for equalization of net family property and spousal support. The wife submits that, in so doing, the trial judge not only made findings that conflicted with the evidence or which were based on a misapprehension of the evidence, but also made several processing errors in assessing the evidence that affected the result. More specifically, the wife submits that the trial judge considered evidence in error, reached a conclusion that was not based logically on her own findings, and gave inappropriate weight to the evidence tendered.

[19] I disagree. In my view, the trial judge’s reasons are a model of clarity, care, and balance. She comprehensively and carefully applied the Muscutt factors and reached a conclusion that is fully supported both by her analysis and by the record. Accordingly, I would not give effect to this ground of appeal.

(2) The fresh evidence

[20] The wife seeks to introduce fresh evidence on the appeal, namely, the application filed by the husband in the Greek court after the trial of the issue in Ontario. The wife wants this application admitted on the appeal because, in her submission, it demonstrates a glaring inconsistency between the husband’s current position in the Greek legal proceedings and the position he took before the trial judge in the Ontario proceedings. The wife contends that the husband made several new claims about the marriage and the property in his application in Greece that were not disclosed at the Ontario trial, as well as new representations that directly contradict the evidence he tendered at trial. The wife submits that these new developments meet all of the criteria set out in R. v. Palmer, 1979 8 (SCC), [1980] 1 S.C.R. 759, for the admission of fresh evidence. Simply put, the wife’s submission is that if the trial judge had known then what this court can see now, her decision on the forum non conveniens issue would invariably have been different.

[21] I agree. The difference between the husband’s position about the marriage and property issues before the trial judge in Ontario in December 2007 and his position about those same issues in his April 2008 application in the Greek court is, in my view, quantitatively significant and, quite frankly, qualitatively shocking.

[22] At the trial of the issue in Ontario, the husband’s position encompassed the following propositions:

(1) The parties had a very good marriage for 25 years, except for disagreements about money.

(2) There was no live issue with respect to the approximately $2,000,000 in various bank and investment accounts in North America, except for a dispute involving the husband’s withdrawal of approximately $169,000 from the parties’ joint bank account between August 2004 and February 2005 purportedly to repay his brother-in-law for a loan. According to the husband, he should keep the money in his personal accounts, his wife should keep the money in her personal accounts, and, in the husband’s words, “it’s a better idea to split the joint account in half”.

(3) “The only dispute” between the parties related to the Greek property owned by the husband. However, even on that issue, the husband acknowledged that the parties made substantial improvements to the property and that the wife was entitled to something in respect of her contribution to the improvements.

(4) The wife should receive half of the value of the jointly owned yacht.

[23] Less than five months later, in April 2008, in his application for corollary relief in the Greek court[^1], the husband’s position encompassed the following propositions:

(1) The wife caused the deterioration of the marriage relationship.

(2) The husband is entitled to all the money in his personal accounts, the wife’s personal accounts, and their joint accounts.

(3) The husband is the owner of the Greek property and the wife contributed nothing to the improvements.

(4) The wife is not entitled to half of the value of the yacht.

[24] The test for the admission of fresh evidence on appeal involves a consideration of four criteria: see Palmer at p. 775. All four criteria must be satisfied in order for this court to admit the fresh evidence. These criteria are as follows:

(1) Could the evidence have been adduced at trial with due diligence?

(2) Is the evidence relevant, in the sense that it bears upon a decisive or potentially decisive issue in the trial?

(3) Is the evidence credible, in the sense that it is reasonably capable of belief?

(4) If believed, could the evidence reasonably, when taken with the other evidence adduced at trial, be expected to have affected the result at trial?

[25] The husband’s application in the Greek court was made almost five months after the trial in Ontario and therefore could not possibly have been adduced at trial. The evidence is clearly relevant, as it relates to the same property that was in issue in the Ontario trial. The evidence is also credible – it is found in a sworn court document and there is no suggestion that the husband is not responsible for its contents.

[26] That leaves only the fourth Palmer criterion. In my view, it is obvious that, when taken with the other evidence adduced at trial, the fresh evidence could reasonably have affected the result at the trial. In the trial judge’s analysis, the Muscutt factors were quite evenly balanced. The trial judge expressly recognized that her decision on the forum non conveniens issue was a close one and stated near the end of her reasons that “the balance tips in favour of this matter proceeding in Greece.”

[27] In her application of the forum non conveniens factors, the trial judge singled out the need to value the Greek properties (favouring Greece as the appropriate forum) and the loan to the husband’s brother-in-law (favouring Ontario). She chose to emphasize the former, in part because it was agreed that Greek law would have to be applied to determine the wife’s interest in the Greek properties.

[28] The fresh evidence tendered does not change the requirement that Greek law govern the determination of the property issues in this litigation. However, it has radically changed the parameters of the property issues. Although the Greek home and land are still in play, with an estimated combined value in the hundreds of thousands of dollars, in light of the husband’s pleadings in the Greek court the more significant property issue is now the roughly $2,000,000 in various North American bank and investment accounts. There can be no question that, in addition to the quantum involved, a need will invariably arise, if the parties continue to disagree about who had responsibility for retaining their investment advisor and for overseeing their financial affairs, to hear evidence from bank officials, accountants, tax advisers and officials, and perhaps other experts, to determine this issue. Because the money is located in Canadian financial institutions, nearly all of the evidence will likely come from witnesses in Canada.

[29] In my view, in these new circumstances, the balance tips heavily in favour of Ontario as the appropriate forum for resolving the parties’ property issues. Moreover, in my view, the new state of affairs is so different from that which was before the trial judge, that it is appropriate for this court to dispose of the matter on the basis of the record before us, rather than order a new trial of the issue: see R. v. Stolar, 1988 65 (SCC), [1988] 1 S.C.R. 480, at p. 492. Accordingly, I would conclude that Ontario is the appropriate forum for dealing with the property issues in this matrimonial litigation.

(3) The cross-appeal

[30] In light of my conclusion on the appeal, the costs issue in the husband’s cross-appeal does not arise.

E. DISPOSITION

[31] For the foregoing reasons, I would allow the appeal on the basis of the fresh evidence only, set aside the order of the trial judge, and reinstate the wife’s application in Ontario.

[32] Accordingly, I would dismiss the cross-appeal.

[33] I would award the wife her costs of the appeal fixed at $20,000 inclusive of GST and disbursements, payable out of the husband’s share of the frozen funds. I would also reverse the trial judge’s costs order and award the wife her costs of the trial fixed at $45,000 inclusive of GST and disbursements, also payable out of the husband’s share of the frozen funds.

RELEASED: March 5, 2009 (“M.R.”)

“J.C. MacPherson J.A.”

“I agree M. Rosenberg J.A.”

“I agree Paul Rouleau J.A.”

[^1]: In Greece, it appears that corollary relief is dealt with only after the final order for divorce has been granted.