Nature of the Motion

1The respondent, Mr. Boston (the “husband”) seeks leave to appeal the interim order of Justice Mullins dated July 10, 2013, whereby Justice Mullins granted the applicant exclusive possession of a condominium owned exclusively by the husband and located in Florida, for one week per month. He also seeks an order staying the interim exclusive possession order pending the hearing of the appeal.

Order From Which Leave is Sought

2Mrs. Potter (the “wife) brought a motion seeking continued use of the condominium located in Naples, Florida, U.S.A.. She was not asking for an order for exclusive possession. Mullins, J. granted the wife exclusive possession of the condominium for one week per month. In her reasons, she wrote:

[T]he applicant has, I am satisfied, adequately raised the issue of her entitlement to exclusive possession/use of the condo in keeping with the status quo before separation.

Issues

3The husband’s counsel has framed the issues as follows:

i) Did the Honourable Justice Mullins properly apply the legal definition of a “matrimonial home” outlined in section 18(1) of the Family Law Act?

ii) If the condominium is a “matrimonial home” pursuant to section 18(1) of the Family Law Act, did the Honourable Justice Mullins act beyond the scope of her jurisdiction outlined in section 28(1) of the Family Law Act by granting exclusive possession of a property located outside of the Province of Ontario?

iii) In accordance with section 62.02(4)(a) or (b) of the Rules of Civil Procedure, is there a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal, and/or is there good reason to doubt the correctness of the order in question, and does the proposed appeal involve matters of such importance that leave to appeal should be granted?

4However, the wife’s counsel is in agreement that no finding was made by Mullins, J. with respect to whether the condominium was a matrimonial home. She asserts that the issue for argument is whether the Ontario court has jurisdiction to enforce rights to the Florida property by way of its in personam jurisdiction.

5It is clear from transcript that this argument and the associated authorities were not raised before Justice Mullins, even though she questioned her jurisdiction to make an order with respect to the wife’s use of the Florida property. On page 15 of the transcript of the motion proceeding, the motions judge asked counsel:

The Court: My question is, under what authority would the court make an order compelling one party to allow the other party access to a real property that’s not a matrimonial home?

And at page 16 she continued:

The Court: …it were, it’s out of the jurisdiction of the Province of Ontario. Where does that authority come from?

6Accordingly, Mullins, J. was alive to the question of her jurisdiction to make an order affecting out-of-province property.

Position of the Parties

7It is the position of the appellant that pursuant to s. 28 of the Family Law Act, R.S.O. 1990 c.F.3, as amended (the “Act”), Justice Mullins did not have jurisdiction to order the wife to have interim exclusive possession of a property located outside of Ontario. The husband’s counsel argues that she failed to apply the proper legal test to determine whether the Florida condominium is a matrimonial home pursuant to s. 24 of the Act, and if so, whether exclusive possession under s. 24 can be awarded in respect of a property situated outside of Ontario.

8It is the position of the wife’s counsel that the decision of Justice Mullins is an exercise of in personam jurisdiction and does not affect title to a property in a foreign jurisdiction. Accordingly, her ruling does not offend the provisions of s. 28(1) of the Act.

Relevant Facts

9The parties are spouses. They married in 1982 and had a 26 or 28 ½ year marriage; the separation date is in dispute. During the marriage they acquired the condominium in question, which was placed in the husband’s name alone, and remains so. They have one child, Lexi, who is 11 years old.

10By consent order of July 10, 2013, the applicant is paying interim spousal support of $20,000 per month and interim child support of $7,000 per month.

11The parties’ primary residence is in Stouffville, Ontario, which the wife described in her affidavit as the parties’ matrimonial home. She did not claim in her affidavit that the Naples condominium is another matrimonial home.

12In the years preceding the motion, the parties had gone to the condominium together as a family only three times. The last time was in 2011, when the parties slept in separate bedrooms. The wife’s evidence is that during the marriage it was used frequently by herself and Lexi together, and the wife habitually went there once per month for approximately one week. She deposed in her affidavit that the applicant never used the property.

Analysis

13Pursuant to s. 18(1) of the Act, a matrimonial home can only be one which was, at the time of separation, ordinarily occupied by the spouses as their family residence. The facts may not support a finding that the condominium was used as a family residence at the time of separation. As described by Steinberg, J. in Taylor v. Taylor (1978), 6 R.F.L. (2d) 341 (Ont. U.F.C.), at para. 54, the term “family residence” as set out in the definition of “matrimonial home” in the Act connotes something more than the simple occupation of a dwelling. It must be the residence around which a couple’s normal family life revolves. In Taylor, it was found that occupying a condominium a “few times” by one or both spouses would not qualify it as a matrimonial home. The same would appear to apply to the condominium at issue in this case, on the evidence that was before Justice Mullins. However, as I interpret her endorsement, she did not make a finding that the condominium was a matrimonial home. At page five of her handwritten endorsement, under the heading “Use of the Florida Condo” she wrote:

Should the condo be considered a matrimonial home, the respondent contends that the parties have not ever occupied the home as a matrimonial home. [emphasis added]

In my mind, such an endorsement indicates that the issue remained open for debate and future determination.

14This is significant because the authority of the court to grant exclusive possession of the matrimonial home or part of it to a spouse pursuant to s. 24(1)(b) of the Act applies only to matrimonial homes that are in Ontario. This is mandated by s. 28(1) of the Act, which provides:

28.(1) This Part applies to matrimonial homes that are situated in Ontario.

15Accordingly, properties located outside of the province can never be a matrimonial home as defined in the Act. In Shoukri v. Mishriki [2012] CarswellOnt. 16517 (Ont. S.C.J.), Mesbur, J. decided that a property located in Cairo, Egypt was “not the parties’ matrimonial home since it is neither situate in Ontario”, and that it was also not a property ordinarily occupied by them at the date of separation.

16As indicated at page 16 of the transcript of the motion, Justice Mullins again makes queries of counsel with respect to her authority to make an order granting the wife the use of the property. She stated:

What I am troubled by is where I would derive the jurisdiction as a Justice sitting in the Province of Ontario to order a party to use a property that’s out of jurisdiction, unless it’s the matrimonial home, assuming for the moment a matrimonial home can be a matrimonial home out of the Province of Ontario and maintained – or have that status…

I’d be more than happy to consider any authority that assists me to appreciate how I can do that.

17Although counsel for the wife was unable at that time to provide the court with authority for the use by the wife of property outside of Ontario, Justice Mullins deemed the wife’s request for “continued use” to be a request for the remedy of exclusive possession. At page 23 of the transcript she stated:

It would be exclusive possession for a month – the week of every month, really.

18Accordingly, unless alternative authority exists for the order made by Justice Mullins, I do find that there is good reason to doubt the correctness of the order, given that the property in question is located outside of Ontario, and because the preponderance of evidence reveals that its use during the marriage may not qualify it to be a matrimonial home.

19However, the central question raised by this motion is whether the in personam jurisdiction of this court can be applied to grant exclusive possession of a foreign property. It would seem from the preceding discussion that an in personam remedy would be the only means, if applicable, by which the court could require the husband to continue to allow the wife to use the condominium.

20Generally speaking, Canadian courts do not have the jurisdiction to make an order concerning right, title or interest to a foreign property: Tezcan v. Tezcan, [1987], 11 R.F.L. (3d) 113 (B.C.C.A.); Macedo v. Macedo, [1996], 19 R.F.L., 4th 65 (Ont. S.C.J.). There are no reported cases that analyze and clarify the scope of the court’s powers in respect of foreign immovables within the context of the Act. Specifically, there are no cases that have ever fully considered whether the remedy of exclusive possession is an in personam right. In Macedo, Beaulieu, J. found he did not have jurisdiction to make an order vesting property located in Portugal in the non-titled wife, but because the court retained in personam jurisdiction against the husband, the court could, and did, order him to sell the property and share the next proceeds equally. In his annotation to Macedo, the late Professor James G. McLeod expressed why the case should be approached with caution. He wrote:

If the husband refused to sell the land, the court could not make an order selling the land or vesting title: Duke v. Andler, [1932] S.C.R. 734. The scope of the courts’ power over foreign immovables and the possible orders in matrimonial property proceedings have not been fully considered under the Family Law Act. Nor has there been a comprehensive analysis by the Supreme Court of Canada on the effect of the jurisdictional limitation from British South Africa Co. v. Mocambique, [1893] A.C. 602 (H.L.) on proceedings under any of the current matrimonial property statutes. It is unfortunate that given the opportunity Beaulieu J. did not deal more fully with the point.

Beaulieu. J. noted that the order concerning the land in Portugal might be difficult to enforce. A court should not make an in personam order that affects foreign land unless it is able to supervise and enforce the order: Penn v. Baltimore (Lord), supra. As well, a court should not make an in personam order concerning foreign land if the act ordered would be prohibited in the lex situs of the land: cf. Norton v. Florence Land & Public Works Co. (1877), 7 Ch. Div. 332. There is no indication that the latter point was even considered in the case.

In Macedo v. Macedo the court could enforce its sale and rental orders only through its contempt powers. If that is not an effective means of enforcing the order, it is questionable whether there is any value to the order.

21While it is clear that the Ontario court does not have jurisdiction to make orders that affect the title of lands in a foreign jurisdiction, the Ontario Court of Appeal has confirmed that Canadian courts do have jurisdiction to enforce rights affecting land in foreign countries if those rights are based on contract, trust or equity, and the defendant resides in Canada. Enforcing this jurisdiction is an exercise of in personam jurisdiction, which is the exception to the general rule that our courts have no jurisdiction to decide title to foreign lands: Catania v. Giannattasio, [1999] CarswellOnt. 950, 174 D.L.R. (4th) 170 (Ont. C.A.). See also Webster v. Webster, [1997] 37 R.F.L. (4th) 347 (Ont. Ct. Gen. Div.) at para. 87. In Catania, the Court of Appeal confirmed that four criteria must be met before an Ontario court may exercise its in personam jurisdiction. These prerequisites are as follows:

The court must have in personam jurisdiction over the defendant. The plaintiff must accordingly be able to serve the defendant with originating process, or the defendant must submit to the jurisdiction of the court.

There must be some personal obligation running between the parties. The jurisdiction cannot be exercised against strangers to the obligation unless they have become personally affected by it…

An equity between the parties may arise in various contexts. In all cases, however, the relationship between the parties must be such that the defendant’s conscience would be affected if he insisted on his strict legal rights…

The jurisdiction cannot be exercised if the local court cannot supervise the execution of the judgment…

Finally, the court will not exercise jurisdiction if the order would be of no effect in the situs…The mere fact, however, that the lex situs would not recognize the personal obligation upon which jurisdiction is based will not be a bar to the granting of the order.

22It is clear that Justice Mullins was not referred to the above mentioned prerequisites and principles and thus they are absent from her endorsement. She did not indicate in her endorsement that an in personam order was being made against the husband. Her order simply states “the applicant shall exclusive possession of the condo located at 970 Egrets Run #201, Naples, Florida, USA for one week per month”.

23Although the wife’s counsel argues that the four prerequisites have been met in the order of Mullins, J., there was no analysis done to determine that was the case. There was no evidence that the order would have effect in Florida. There was no analysis of the second criteria, which is whether there is a personal obligation running between the parties. The wife’s counsel argued that there is a personal obligation between them for the continuation of the agreement made during the marriage, that the wife would have monthly access to the property for a period of one week each visit. In order to establish such a personal obligation, it seems to me that the wife would have had to prove the existence of a contract between the two spouses, as opposed to a domestic arrangement that worked for the parties’ lifestyle during the marriage. No evidence was proffered that could lead to a finding that the parties had the intention to form an agreement having legal effect in the terms advanced by the wife.

24Therefore, not only does this case stand alone as authority for the proposition that an order can be made for exclusive possession of property outside of Ontario, there is good reason to doubt its correctness because Justice Mullins was not given the opportunity to expressly consider the possibility of an in personam order and factors that may have affected the exercise of her authority.

25The wife also argues in her factum that the use ordered was a consequence of spousal support. The same day that Mullins, J. made her ruling, the parties had filed a consent to a temporary order for support which settled that issue on a temporary basis. The request for continued use of the condo as an incident of support was not fully argued before Mullins, J. The order for use was not framed as a support order. Further, pursuant to s. 15.2 of the Divorce Act, the presumption is that support is a payment of money.

26Rule 62.02(4)(a) and (b) of the Rules of Civil Procedure provides that:

Leave to appeal shall not be granted unless,

(a) there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; or

(b) there appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.

27As earlier indicated, there are many decision rendered by the courts in Ontario and throughout Canada which cast doubt upon the jurisdiction of a court to order a legal interest in property located outside of Canada. It is the general rule that courts do not have the jurisdiction to deal with rights in foreign property. Second, there are cases in which in personam orders have been made that affect property rights in foreign jurisdictions, although no case has dealt with such an order in the context of exclusive possession. These conflicting decisions must be analyzed to provide clarity to the issue of whether an Ontario court is entitled to order exclusive possession of a property located in a foreign jurisdiction, and to reconcile s. 28(1) of the Act in such a decision if necessary.

28It is desirable, in my view, to have clarification of these important issues.

29For the reasons outlined above there is good reason to doubt the correctness of the order. I further find that the issues to be decided on this appeal are of significant general importance to Ontario law and go beyond the interests of these parties. If the decision is not subject to appeal, then it will stand as authority that Ontario courts may grant exclusive possession of matrimonial homes outside the province of Ontario, which is in direct violation of s. 28(1) of the Act.

Stay of the Order of Mullins, J.

30Pursuant to section 63.02 (1) of the Rules of Civil Procedure:

An interlocutory or final order may be stayed on such terms as are just,

(a) by an order of a judge of the court to which a motion for leave to appeal has been made or to which an appeal has been taken.

31The husband’s counsel argued that he will be prejudiced if the interim exclusive possession order is not stayed, because it is his intention to rent the condominium in order to obtain rental income. However, prior to the argument of the motion before Mullins J., Mr. Boston had never rented the condominium. Mullins J. also noted that the amount of child and spousal support could increase as a result of this proposed additional income.

32While I do not agree with the submissions of the wife’s counsel that renting the property would amount to an encumbrance of the condominium, I decline to grant the stay because the husband’s evidence has not met the test for granting a stay.

33In Circuit World Corp. v. Lesperance (1997), 100 O.A.C. 221, 33 O.R. (3d) 674 (C.A.), it was determined that the test for staying an order pending appeal is the same as the test for an interlocutory injunction, applying the three criteria in RJR-Macdonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, of serious question to be tried, irreparable harm, and balance of convenience. Although there is a serious question to be tried in this appeal, irreparable harm will not occur, as the husband has available the possibility of making a claim for occupation rent of the condominium post-separation. The parties have sufficient assets to offset such amount in an equalization payment, or in a future spousal support payment. Further, the balance of convenience does not suggest that a stay should be imposed. There is no dispute that the status quo throughout the relationship has been that the use of the condominium by the wife precluded any possibility of using it as a rental property, and the husband’s income is at a level where being deprived of rental income will not cause him to suffer hardship. His asset is preserved even if the order continues pending the appeal. Accordingly, the request for a stay of the order pending appeal is dismissed.

34An order shall issue:

Granting leave to the husband to appeal the order of Mullins J. dated July 10, 2013;
Dismissing the motion for a stay of the order pending appeal; and
Reserving the costs of the motion for leave to appeal to the Divisional Court.

HEALEY J.

Released: April 14, 2014

Potter v. Boston, 2014 ONSC 2361

Case Summary

Nature of the Motion

Order From Which Leave is Sought