Court File and Parties
CITATION: Levina v. Levine 2014 ONSC 2774
DIVISIONAL COURT FILE NO.: DC-11-0358-00
DATE: 20140506
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
S.F.J.S.C. Czutrin, Kiteley and Aston JJ.
BETWEEN:
NATALIA GRIGORIEVNA LEVINA
Appellant
(Respondent in main action)
– and –
VLADIMIR KONSTANTINOVICH LEVINE
Respondent
(Applicant in main action)
Alexei Goudimenko, for the Appellant and Respondent (in main action)
Michael Deverett, for the Respondent and Applicant (in main action)
HEARD at Toronto: March 27, 2014
G. CZUTRIN S.F.J.S.C.
Overview
[1] When we dismissed the Appellant’s (the “wife”) appeal, we advised that reasons would follow. We also reserved on the issue of costs.
[2] As a result of discussion with counsel on the hearing of the appeal and having regard to the disposition of the motion granting leave to appeal, we find that the only issue remaining on this appeal is Kaufman J.’s (the “motions judge”) decision that the wife pay the Respondent (the “husband”) $100,000 for interim disbursements of legal fees, and that the husband provide a promissory note to secure the repayment of the $100,000 awaiting the outcome of the case.
[3] Lauwers J. (as he then was) granted the wife leave to appeal. Leave was required because the motions judge’s order was a temporary order.
[4] Lauwers J. described the wife’s leave request regarding the $100,000 at para. 1. He stated that the wife seeks leave to appeal the order that she “be obliged to loan to [the husband] … $100,000 to fund his interim disbursements and legal fees.” Though we have some reservations about the jurisdiction to make an order that the husband sign a promissory note to secure repayment, we note there is no cross appeal. We therefore refrain from addressing that aspect of the order.
[5] Lauwers J. considered the order regarding the $100,000 at paras. 10-14. The wife’s counsel at the time clearly focused her appeal grounds on Rule 24(12) of the Family Law Rules, O. Reg. 114/99.[^1] Family Law Rule 24(12) addresses the issue of interim costs and disbursements.
[6] New counsel appeared for the wife to argue this appeal. Her new counsel raised an additional ground of appeal: lack of procedural fairness. Counsel pointed out that the husband’s Notice of Motion dated October 20, 2011 did not specifically raise a request for interim disbursements. Instead, it sought an order that “half the net proceeds of sale … of 167 Rebecca Court, Maple, Ontario (‘Matrimonial Home’) be forthwith paid” by the wife to the husband.
[7] We are not satisfied that the motion heard by the motions judge proceeded in a manner that denied procedural fairness to either side.
[8] We also find that the motions judge did not err in exercising his discretion in ordering that the wife pay the husband $100,000 for interim disbursements of legal fees.
Background
[9] The husband commenced this case on March 15, 2011. His claims included divorce, equalization, and freezing assets.
[10] He alleged that the parties were married for 22 years, immigrated to Canada from Russia in May 2000, and separated on February 15, 2011. He alleged that the wife transferred the jointly held matrimonial home into her name alone, sold it without his consent, and kept all of the sale proceeds of approximately $1,300,000. He also alleged that, over several years, he transferred approximately $4,000,000 from Russia to jointly held Canadian bank accounts, and the wife has taken it all.
[11] The wife filed her Answer on April 18, 2011. She made identical claims of divorce, equalization, and freezing of assets. However, she claimed that the parties separated in May 2003 or June 2005. She raised limitation period issues and questioned Ontario’s jurisdiction, although her counsel on the appeal was reconsidering that position.
[12] The husband obtained a without notice preservation order that has been continued.
[13] The wife does not deny the transfer of at least $4,600,000 to her. She claims that the funds were intended as support for her and their daughter, but the large transfer amounts stopped in 2005.
[14] She sets out the history of real estate purchases and sales. She claims that, while they jointly owned a home that she transferred to herself using a power of attorney, it was never a matrimonial home because they never lived there together. She also claims that the husband knew and never objected to the sale.
[15] The wife maintains that the husband has considerable wealth remaining in Russia. The husband denies this.
[16] These allegations and cross-allegations set the background for the motions heard by the motions judge of the Superior Court of Justice (Family Court) in Newmarket.
[17] On November 9, 2011, the motions judge made temporary orders as follows:
The wife’s motion for security of costs was to be adjourned to a date arranged with the trial coordinator. The motions judge was satisfied that the husband had not breached any orders for costs or otherwise. The balance of Family Law Rule 24(13) was not yet in play. The court needed the wife to better establish her allegations that she would be unable to recover from the husband because his assets are in Russia.
The parties were to deliver an affidavit of documents within 60 days.
The parties were to arrange a conference call or attend before McGee J. to organize and schedule how the case was to proceed.
The wife was to advance to the husband $100,000 as a loan for legal costs and disbursements but not for his living expenses, aside from his transportation costs to Canada.
The husband was not to alienate, encumber, or dissipate the specified equity.
[18] The wife sought leave to appeal the motions judge’s temporary order. The wife’s original grounds of appeal included submissions that the motions judge erred in fact and law by,
Declining to order the husband to post security for costs immediately
Adjourning the wife’s motion for security for costs
Requiring the wife to pay the husband $100,000 for interim disbursements of legal fees
Requiring a rigid schedule for exchange of information, and creation of a timetable in the absence of an order for security for costs.
[19] Lauwers J. granted the wife leave to appeal on January 18, 2012, but stayed the leave pending the husband’s motion for summary judgment with respect to the sale proceeds and the wife’s cross-motion for security for costs.
[20] Rogers J. heard these motions and ruled that the husband could not recover the sale proceeds until the net family property had been determined; also, the wife could not move for security for costs until her claim that Ontario is not the proper jurisdiction had been determined.
[21] The appeal was scheduled for March 6, 2014 before the panel in Oshawa. The wife’s counsel was unable to appear on that date. The wife’s counsel wrote to the Registrar of the Divisional Court and to the panel, seeking to adjourn the appeal.
[22] At first, the wife’s counsel informed the court that he was on a “limited scope retainer” to request the adjournment of the appeal. In a letter addressed to the panel dated March 3, 2014, counsel advised that he was retained by the wife on February 14, 2014 “to represent her at and argue the motion for adjournment of the above appeal.”
[23] In that same letter, counsel advised that he had previously represented the wife on a limited scope retainer from July 11, 2013 to January 30, 2014. He also advised that he represented the wife on one motion brought by her former counsel, Ms. Alla Koren.
[24] Ms. Koren was the wife’s counsel on the motion before the motions judge. She also prepared the original Notice of Appeal dated January 24, 2012.
[25] On March 6, 2014, the panel in Oshawa did not deal with the merits of the appeal. Instead, the panel adjourned the appeal to allow the wife’s counsel to appear and file additional material and a fresh factum. The panel adjourned the appeal to Toronto so that the appeal would not be delayed and would be heard prior to a scheduled motion in Newmarket. The panel was concerned that this appeal of a temporary order had bogged down the case.
[26] The wife’s counsel for the first time raised the issue of procedural fairness in that the Notice of Motion before the motion’s judge did not specifically seek interim disbursements. The husband’s affidavit however deposed that without what he alleged was his share of the net proceeds the home he alleged was a matrimonial home, and originally registered in joint names of the parties, he could not fund his case. The wife’s Notice of Appeal and earlier filed material did not raise issues of procedural fairness.
Analysis
The order adjourning the wife’s motion for security of costs
[27] We find that this order was an appropriate exercise of discretion. Furthermore, the issue became moot because a subsequent motion disposed of the issue.
The orders that the parties submit an affidavit of documents and schedule a call or attend before McGee J. to organize how to proceed with the case
[28] Similarly, the motions judge appropriately exercised discretion by ordering that the parties deliver an affidavit of documents and schedule a call or attend before McGee J. to organize how to proceed with the case. These orders were consistent with the Family Law Rule 2 objectives to deal with cases justly and to manage cases.[^2] The orders were also consistent with efforts to improve access to justice.
[29] The wife’s allegations about separation and the husband’s actions are at odds and raise serious credibility issues between the parties.
[30] This case clearly requires documentary disclosure, questioning, and likely a trial to assist in determining the serious credibility issues. The motions judge was very alive to the credibility issues and appropriately ordered the exchange of affidavit of documents. Delay might prevent the parties from being able to recover documents from third parties (e.g., Banks and Government Institutions in both Canada and Russia).
The order requiring the wife to advance $100,000 to the husband as a loan for legal costs and disbursements
[31] As stated above, at the appeal hearing, the wife’s counsel raised issues of procedural fairness. He suggested that the husband’s motion before the motions judge was framed as an advance on equalization, rather than a request for payment of expenses.
[32] We are not satisfied that either party failed to receive procedural fairness on the motion before the motions judge. Counsel for the wife failed to establish how the motion proceeded and what oral arguments or oral motions were made before the motions judge. We were unable to determine whether the husband’s counsel’s oral argument was framed as an advance on fees before the motion’s judge. Ms. Koren did not raise procedural fairness issues at the motion, nor claim to be unaware of the relief.
[33] The order was discretionary in nature and based upon findings of fact that were open to the motions judge. There is no basis for appellate intervention.
[34] According to the husband, the wife submitted a bill of costs before the motions judge for $47,405.69 and future anticipated fees and disbursements of $164,920. The quantum fixed by the motions judge therefore seems reasonable.
The Non-Depletion Order
[35] We also find that the non-depletion order was an appropriate exercise of discretion.
Costs
[36] The husband has been successful on the appeal and is presumed to be entitled to costs. However, the unique circumstances demand an unusual order. The wife shall pay costs of the appeal fixed in the amount of $5000 which she shall pay if, following a trial, the husband is successful in sustaining the valuation date as on or about February 15, 2011.
Next Steps
[37] If not yet done, counsel shall within 10 days of receipt of this endorsement make reasonable efforts to schedule the conference call with McGee J. to organize and schedule how the case is to proceed.
S.F.J.S.C. CZUTRIN
KITELEY J.
ASTON J.
Released: May 6, 2014
[^1]: PAYMENT OF EXPENSES (12) The court may make an order that a party pay an amount of money to another party to cover part or all of the expenses of carrying on the case, including a lawyer’s fees.
[^2]: PRIMARY OBJECTIVE (2) The primary objective of these rules is to enable the court to deal with cases justly. DEALING WITH CASES JUSTLY (3) Dealing with a case justly includes, (a) ensuring that the procedure is fair to all parties; (b) saving expense and time; (c) dealing with the case in ways that are appropriate to its importance and complexity; and (d) giving appropriate court resources to the case while taking account of the need to give resources to other cases. DUTY TO PROMOTE PRIMARY OBJECTIVE (4) The court is required to apply these rules to promote the primary objective, and parties and their lawyers are required to help the court to promote the primary objective. DUTY TO MANAGE CASES (5) The court shall promote the primary objective by active management of cases, which includes, (a) at an early stage, identifying the issues, and separating and disposing of those that do not need full investigation and trial; (b) encouraging and facilitating use of alternatives to the court process; (c) helping the parties to settle all or part of the case; (d) setting timetables or otherwise controlling the progress of the case; (e) considering whether the likely benefits of taking a step justify the cost; (f) dealing with as many aspects of the case as possible on the same occasion; and (g) if appropriate, dealing with the case without parties and their lawyers needing to come to court, on the basis of written documents or by holding a telephone or video conference.